Document:

NOMURA ASSET ACCEPTANCE CORPORATION,

Depositor

 

NOMURA CREDIT & CAPITAL, INC.,

Seller

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

Master Servicer and Securities Administrator

 

And

 

HSBC BANK USA, NATIONAL ASSOCIATION

Trustee

____________________

POOLING AND SERVICING AGREEMENT

Dated as of May 1, 2005

________________________________________

 

NOMURA ASSET ACCEPTANCE CORPORATION

MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-WF1

 

 

 

 

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 Seller and the Master Servicer.
 	
             

	
            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 Class R Certificates.
 	
             

	
            Section 2.07
 	
            Conveyance of the REMIC I Regular Interests.
 	
             

	
            Section 2.08
 	
            Issuance of Residual Certificates.
 	
             

	
            Section 2.09
 	
            Establishment of Trust.
 	
             

										

ARTICLE III

 

ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS

	
            Section 3.01
 	
            The Master Servicer.
 	
             

	
            Section 3.02
 	
            REMIC-Related Covenants.
 	
             

	
            Section 3.03
 	
            Monitoring of Servicer.
 	
             

	
            Section 3.04
 	
            Fidelity Bond.
 	
             

	
            Section 3.05
 	
            Power to Act; Procedures.
 	
             

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

	
            Section 3.07
 	
            Release of Mortgage Files.
 	
             

	
            Section 3.08
 	
            Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee.
 
	
            Section 3.09
 	
            Standard Hazard Insurance and Flood Insurance Policies.
 	
             

	
            Section 3.10
 	
            Presentment of Claims and Collection of Proceeds.
 	
             

	
            Section 3.11
 	
            Maintenance of the Primary Mortgage Insurance Policies.
 	
             

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

	
            Section 3.13
 	
            Realization Upon Defaulted Loans.
 	
             

	
            Section 3.14
 	
            Compensation for the Master Servicer.
 	
             

	
            Section 3.15
 	
            REO Property.
 	
             

	
            Section 3.16
 	
            Annual Officer’s Certificate as to Compliance.
 	
             

	
            Section 3.17
 	
            Annual Independent Accountant’s Servicing Report.
 	
             

	
            Section 3.18
 	
            Reports Filed with Securities and Exchange Commission.
 	
             

	
            Section 3.19
 	
            UCC.
 	
             

	
            Section 3.20
 	
            Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls.
 	
             

	
            Section 3.21
 	
            Reserved.
 	
             

	
            Section 3.22
 	
            Protected Accounts.
 	
             

	
            Section 3.23
 	
            Distribution Account.
 	
             

																							

 

 

 

	
            Section 3.24
 	
            Permitted Withdrawals and Transfers from the Distribution Account.
 
	
            Section 3.25
 	
            Optional Purchase of Defaulted Mortgage Loans.
 	
             

	
            Section 3.26
 	
            Enforcing Obligations of the Servicer.
 	
             

	
            Section 3.27
 	
            Duties of the Credit Risk Manager; Termination.
 	
             

	
            Section 3.28
 	
            Limitation Upon Liability of the Credit Risk Manager.
 	
             

						

ARTICLE IV

 

RESERVED

ARTICLE V

 

ADVANCES AND DISTRIBUTIONS

	
            Section 5.01
 	
            Advances.
 	
             

	
            Section 5.02
 	
            Reserved.
 	
             

	
            Section 5.03
 	
            REMIC Distributions.
 	
             

	
            Section 5.04
 	
            Distributions.
 	
             

	
            Section 5.05
 	
            [Reserved].
 	
             

	
            Section 5.06
 	
            Allocation of Realized Losses.
 	
             

	
            Section 5.07
 	
            Monthly Statements to Certificateholders.
 	
             

	
            Section 5.08
 	
            REMIC Designations and REMIC Allocations.
 
	
            Section 5.09
 	
            Class P Certificate Account.
 	
             

	
            Section 5.10
 	
            Net WAC 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 AND THE MASTER SERVICER

	
            Section 7.01
 	
            Liabilities of the Depositor and the Master Servicer.
 	
             

	
            Section 7.02
 	
            Merger or Consolidation of the Depositor or the Master Servicer.
 	
             

	
            Section 7.03
 	
            Indemnification of the Depositor.
 	
             

	
            Section 7.04
 	
            Limitations on Liability of the Depositor, the Master Servicer and Others.
 
	
            Section 7.05
 	
            Limitation on Resignation of the Master Servicer.
 	
             

	
            Section 7.06
 	
            Assignment of Master Servicing.
 	
             

	
            Section 7.07
 	
            Rights of the Depositor in Respect of the Master Servicer.
 	
             

								

 

 

 

ARTICLE VIII

 

DEFAULT; TERMINATION OF MASTER SERVICER

	
            Section 8.01
 	
            Master Servicer Events of Default.
 	
             

	
            Section 8.02
 	
            Trustee to Act; Appointment of Successor.
 
	
            Section 8.03
 	
            Notification to Certificateholders.
 	
             

	
            Section 8.04
 	
            Waiver of Master Servicer Defaults.
 	
             

					

ARTICLE IX

 

CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

	
            Section 9.01
 	
            Duties of Trustee and Securities Administrator.
 	
             

	
            Section 9.02
 	
            Certain Matters Affecting 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-A Certificates
 	
             

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

	
            Exhibit A-3
 	
            Form of Class II-M-[1][2][3] 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
 	
            Schedule of Mortgage Loans with Lost Notes
 	
             

	
            Exhibit K
 	
            Prepayment Charge Schedule
 	
             

	
            Exhibit L
 	
            Appendix E of the Standard & Poor’s Glossary For File
 
																

Format For LEVELS® Version 5.6 Revised

 

 

POOLING AND SERVICING AGREEMENT, dated as of May 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 (“Master Servicer”) and securities administrator (“Securities Administrator”) 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 (other than the Net WAC Reserve Fund and the Cap Contracts) 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 Class 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
 	
      $       236,984,440.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-IA
 	
            $              900,115.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-IIA1A
 	
            $              282,655.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-IIA1B
 	
            $              375,000.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-IIA2
 	
            $              333,425.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-IIA3
 	
            $              102,865.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-IIA4
 	
            $              127,200.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-IIA5
 	
            $              145,810.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-M1
 	
            $                60,455.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-M2
 	
            $                48,365.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-M3
 	
            $                35,060.00 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-ZZ
 	
      $           2,425,467.14 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-P
 	
            $                     100.00 
 	
            (3)
 	
            March 25, 2035
 
	
            LTI-1SUB
 	
            $                  1,200.23 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-1GRP
 	
            $                19,202.54 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-2SUB
 	
            $                  1,822.53 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-2GRP
 	
            $                29,161.63 
 	
            (2)
 	
            March 25, 2035
 
	
            LTI-XX
 	
      $        241,769,470.21
 	
            (2)
 	
            March 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)
 	
      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 Class 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 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
 	
      $    180,023,000.00
 	
            Class I-A Pass-Through Rate
 	
            March 25, 2035
 
	
            Class II-A-1A
 	
            $      56,531,000.00
 	
            Class II-A-1A Pass-Through Rate
 	
            March 25, 2035
 
	
            Class II-A-1B
 	
            $      75,000,000.00
 	
            Class II-A-1B Pass-Through Rate
 	
            March 25, 2035
 
	
            Class II-A-2
 	
            $      66,685,000.00
 	
            Class II-A-2 Pass-Through Rate
 	
            March 25, 2035
 
	
            Class II-A-3
 	
            $      20,573,000.00
 	
            Class II-A-3 Pass-Through Rate
 	
            March 25, 2035
 
	
            Class II-A-4
 	
            $      25,440,000.00
 	
            Class II-A-4 Pass-Through Rate
 	
            March 25, 2035
 
	
            Class II-A-5
 	
            $      29,162,000.00
 	
            Class II-A-5 Pass-Through Rate
 	
            March 25, 2035
 
	
            Class M-1
 	
            $      12,091,000.00
 	
            Class M-1 Pass-Through Rate
 	
            March 25, 2035
 
	
            Class M-2
 	
            $        9,673,000.00
 	
            Class M-2 Pass-Through Rate
 	
            March 25, 2035
 
	
            Class M-3
 	
            $        7,012,000.00
 	
            Class M-3 Pass-Through Rate
 	
            March 25, 2035
 
	
            Class X(2)
 	
            $        1,451,714.29
 	
            Class X Pass-Through Rate
 	
            March 25, 2035
 
	
            Class P
 	
            $                  100.00
 	
            N/A(3)
 	
            March 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 Seller, the Master Servicer, the Securities Administrator 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).

Account: Any of the Distribution Accounts or Protected Accounts.

Accrual Period: With respect to the Certificates (other than the Class II-A-1A, Class II-A-1B, Class P and Class R Certificates) and any Distribution Date, the calendar month immediately preceding the calendar month in which such Distribution Date occurs. With respect to the Class II-A-1A Certificates and Class II-A-1B Certificates and any Distribution Date, the period from and including the 25th day of the calendar month preceding the calendar month in which such Distribution Date occurs (or with respect to the first Accrual Period, the Closing Date) to and including the 24th day of the calendar month in which such Distribution Date occurs.  All calculations of interest on the Certificates (other than the Class II-A-1A, Class II-A-1B, Class P and Class R
Certificates) will be based on a 360-day year consisting of twelve 30-day months. All calculations of interest on the Class II-A-1A Certificates and Class II-A-1B Certificates will be made based on a 360-day year and the actual number of days elapsed in the related Accrual Period.

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

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

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.

Amount Held for Future Distribution: As to any Distribution Date, the aggregate amount held in the Distribution 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 related Mortgage Loans due after the related Due Period and (ii) Principal Prepayments and Liquidation Proceeds received in respect of the related Mortgage Loans after the last day of the related Prepayment Period.

 

 

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.

Assignment Agreement: Shall mean the Assignment, Assumption and Recognition Agreement, dated as of May 26, 2005, among the Seller, the Depositor and the Servicer, pursuant to which the Servicing Agreement was assigned to the Depositor.

Assumed Final Distribution Date: The Distribution Date in March 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 by the Servicer on the Closing Date, as such list may from time to time be amended.

Available Distribution Amount: shall mean the sum of the Interest Remittance Amount and Principal Funds.

Bankruptcy Code: Title 11 of the United States Code.

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 State of Maryland, the State of Minnesota, the city in which any Corporate Trust Office of the Trustee is located are authorized or obligated by law or executive order to be closed.

Cap Contracts:  The cap contract between the Trustee and the Cap Provider, for the benefit of the Holders of the Class II-A-1A Certificates and the cap contract between the Trustee and the Cap Provider, for the benefit of the Holders of the Class II-A-1B Certificates.

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

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

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 $483,641,614.29.

 

 

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 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 and (b) with respect to 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 Subordinate Certificates, any Subsequent Recoveries added to the Certificate Principal Balance of any such Certificate pursuant to Section 5.06(e), in each case up to the amount of Realized Losses previously allocated to such Class.  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 Certificate: Any Certificate designated as a “Class I-A Certificate” on the face thereof, in the form of Exhibit A-1 hereto, representing the right to the Percentage Interest of distributions provided for the Class I-A Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class I-A Pass-Through Rate:  With respect to any Distribution Date, a per annum rate equal to the weighted average of the Net Mortgage Rates of the Group I Mortgage Loans.

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

Class II-A-1A Pass-Through Rate:  With respect to any Distribution Date, the lesser of (i) One-Month LIBOR plus 0.10% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

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

Class II-A-1B Pass-Through Rate:  With respect to any Distribution Date, the lesser of (i) One-Month LIBOR plus 0.11% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

 

 

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-2 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 any Distribution Date, the lesser of (i) 4.786% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

Class II-A-3 Certificate: Any Certificate designated as a “Class II-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 II-A-3 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class II-A-3 Pass-Through Rate:  With respect to any Distribution Date, the lesser of (i) 5.100% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

Class II-A-4 Certificate: Any Certificate designated as a “Class II-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 II-A-4 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class II-A-4 Pass-Through Rate:  Shall mean the lesser of (i)(a) with respect to any Distribution Date which occurs on or prior to the Optional Termination Date, 5.593%] per annum and (b) with respect to each Distribution Date which occurs thereafter, 5.093% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

Class II-A-5 Certificate: Any Certificate designated as a “Class II-A-5 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 II-A-5 Certificates as set forth herein and evidencing a Regular Interest in REMIC II.

Class II-A-5 Pass-Through Rate:  Shall mean the lesser of (i)(a) with respect to any Distribution Date which occurs on or prior to the Optional Termination Date, 5.159% per annum and (b) with respect to each Distribution Date which occurs thereafter, 5.659% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

Class II-A-5 Lockout Principal Distribution Amount: With respect to any Distribution Date will be an amount equal to the lesser of (i) the Group II Senior Principal Distribution Amount for such Distribution Date and (ii) the Class II-A-5 Lockout Distribution Percentage for that Distribution Date multiplied by the product of (x) a fraction, the numerator of which is the Certificate Principal Balance of the Class II-A-5 Certificates and the denominator of which is the aggregate Certificate Principal Balance of all of the Group II Certificates, in each case immediately prior to such Distribution Date and (y) the Group II Senior Principal Distribution Amount for such Distribution Date.

 

 

Class II-A-5 Lockout Distribution Percentage: With respect to each Distribution Date, the applicable percentage set forth below:

	
            
Distribution Dates
 
 	
            
Class II-A-5 Lockout
 Distribution
 Percentage
 
 
	
            June 2005 through and including May 2008                                                                                                                                                                                                            
 	
            0%
 
	
            June 2008 through and including May 2010                                                                                                                                                                                                            
 	
            45%
 
	
            June 2010 through and including May 2011                                                                                                                                                                                                            
 	
            80%
 
	
            June 2011 through and including May 2012                                                                                                                                                                                                            
 	
            100%
 
	
            June 2012 and thereafter                                                                                                                                                                                                                                                                                                                    
 	
            300%
 

 

Class M-1 Certificate: Any Certificate designated as a “Class M-1 Certificate” on the face thereof, in the form of 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:  Shall mean the lesser of (i)(a) with respect to each Distribution Date which occurs on or prior to the Optional Termination Date, 5.457% per annum and (b) with respect to each Distribution Date which occurs thereafter, 5.957% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

Class M-1 Principal Distribution Amount: With respect to any Distribution Date which occurs (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date, the Principal Distribution Amount for that Distribution Date remaining after distribution of the Senior Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of (i) the Principal Distribution Amount for that Distribution Date remaining after distribution of the Senior Principal Distribution Amount and (ii) the excess, if any, of (A) the aggregate Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date over (B) the positive difference between (1) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (2) the sum of (x) the aggregate Certificate Principal Balance of the Senior Certificates after taking into account the payment of the Senior Principal Distribution Amount for such Distribution Date) and (y) the product of (a) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (b) the sum of 6.90% and the Required Overcollateralization Percentage.

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:  Shall mean the lesser of (i)(a) with respect to each Distribution Date which occurs on or prior to the Optional Termination Date, 5.755% per annum and (b) with respect to each Distribution Date which occurs thereafter, 6.255% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

 

 

Class M-2 Principal Distribution Amount: With respect to any Distribution Date which occurs (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date, the Principal Distribution Amount for that Distribution Date remaining after distribution of the Senior Principal Distribution Amount and the Class M-1 Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of (i) the Principal Distribution Amount for that Distribution Date remaining after distribution of the Senior Principal Distribution Amount and the Class M-1 Principal Distribution Amount and (ii) the excess, if any, of (A) the aggregate Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution Date over (B) the
positive difference between (1) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (2) the sum of (x) the aggregate Certificate Principal Balance of the Senior Certificates and the Class M-1 Certificates (after taking into account the payment of the Senior Principal Distribution Amount and the Class M-1 Principal Distribution Amount for such Distribution Date) and (y) the product of (a) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (b) the sum of 2.90% and the Required Overcollateralization Percentage.

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:  Shall mean the lesser of (i)(a) with respect to each Distribution Date which occurs on or prior to the Optional Termination Date, 6.000% per annum and (b) with respect to each Distribution Date which occurs thereafter, 6.500% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.

Class M-3 Principal Distribution Amount: With respect to any Distribution Date which occurs (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect for that Distribution Date, the Principal Distribution Amount for that Distribution Date remaining after distribution of the Senior Principal Distribution Amount, the Class M-1 Principal Distribution Amount and the Class M-2 Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of (i) the Principal Distribution Amount for that Distribution Date remaining after distribution of the Senior Principal Distribution Amount, the Class M-1 Principal Distribution Amount and the Class M-2 Principal Distribution Amount and (ii) the excess, if any, of (A) the aggregate Certificate Principal Balance of
the Class M-3 Certificates immediately prior to that Distribution Date over (B) the positive difference between (1) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (2) the sum of (x) the aggregate Certificate Principal Balance of the Senior Certificates, the Class M-1 Certificates and the Class M-2 Certificates (after taking into account the payment of the Senior Principal Distribution Amount, the Class M-1 Principal Distribution Amount and the Class M-2 Principal Distribution Amount for such Distribution Date) and (y) the product of (a) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (b) the Required Overcollateralization Percentage.

 

 

Class P Certificate: Any Certificate designated as a “Class P Certificate” on the face thereof, in the form of Exhibit A-4 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 5.10.

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

Class X Pass-Through Rate:  With respect to 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 (L) 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3 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-IA minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IA;

(C)        the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIA1A minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA1A;

(D)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIA1B minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA1B;

 

 

(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-IIA3, minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA3;

(G)        the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIA4, minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA4;

(H)       the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular Interest LTI-IIA5, minus the Marker Rate, applied to an amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest LTI-IIA5;

(I)         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;

(J)         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;

(K)       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; and

(L)        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 11.01.

Closing Date:  May 26, 2005.

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

Compensating Interest:  An amount to be deposited in the Distribution Account by the Servicer pursuant to the Servicing Agreement or the Master Servicer pursuant to this Agreement to offset a Prepayment Interest Shortfall on a Mortgage Loan subject to this Agreement; provided, however that the amount of Compensating Interest required to be paid in respect of any Mortgage Loan shall not exceed the Servicing Fee payable to the Servicer or the Master Servicing Compensation payable to the Master Servicer, as applicable.

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-WF1, 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 (NAAC 2005-WF1), and for all other purposes is located at Wells Fargo Bank, N.A., P.O. Box 98, Columbia, Maryland 21046, Attention: Corporate Trust (NAAC 2005-WF1) (or for overnight deliveries, at 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust (NAAC 2005-WF1)).

Corresponding Certificate: With respect to:

	
            (i)
 	
            REMIC I Regular Interest LTI-IA, the Class I-A Certificates;
 
	
            (ii)
 	
            REMIC I Regular Interest LTI-IIA1A, the Class II-A-1A Certificates;
 
	
            (iii)
 	
            REMIC I Regular Interest LTI-IIA1B, the Class II-A-1B Certificates;
 
	
            (iv)
 	
            REMIC I Regular Interest LTI-IIA2, the Class II-A-2 Certificates;
 
	
            (v)
 	
            REMIC I Regular Interest LTI-IIA3, the Class II-A-3 Certificates;
 
	
            (vi)
 	
            REMIC I Regular Interest LTI-IIA4, the Class II-A-4 Certificates;
 
	
            (vii)
 	
            REMIC I Regular Interest LTI-IIA5, the Class II-A-5 Certificates;
 
	
            (viii)
 	
            REMIC I Regular Interest LTI-M1, the Class M-1 Certificates;
 
	
            (ix)
 	
            REMIC I Regular Interest LTI-M2, the Class M-2 Certificates;
 
	
            (x)
 	
            REMIC I Regular Interest LTI-M3, the Class M-3 Certificates; and
 
	
            (x)
 	
            REMIC I Regular Interest LTI-P, the Class P Certificates.
 

Credit Enhancement Percentage:  With respect to any Distribution Date and any Class of Publicly Offered Certificates, the percentage obtained by dividing (x) the sum of (i) the aggregate Certificate Principal Balance of the Class or Classes of Publicly Offered Certificates subordinate thereto and (ii) the Overcollateralization Amount by (y) the aggregate Stated Principal Balance of the Mortgage Loans, calculated after taking into account distributions of principal on the Mortgage Loans and distribution of the Principal Distribution Amount to the holders of the Certificates then entitled to distributions of principal on such Distribution Date.

Credit Risk Management Agreement:  The agreement between the Credit Risk Manager and the Servicer and/or Master Servicer, dated as of May 26, 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 3.24(a)(x) and 3.27(b).

Credit Risk Management Fee Rate: 0.015% per annum.

Credit Risk Manager:  The Murrayhill Company, a Colorado corporation.

Custodial Agreement: The Custodial Agreement dated as of May 1, 2005 among the Custodian, the Servicer and the Trustee.

 

 

Custodian:  JPMorgan Chase Bank, N.A., a national banking association.

Cut-off Date:  May 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: Means a reduction in the amount of the monthly payment due on a Mortgage Loan as established by a bankruptcy court in a bankruptcy of the related Mortgagor, except a reduction constituting a Deficient Valuation or any reduction that results in permanent forgiveness of principal.

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.

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: The Business Day immediately preceding the related Remittance Date.

Distribution Account: The separate Eligible Account created and maintained by the Securities Administrator pursuant to Section 3.23 in the name of the Securities Administrator for the benefit of the Certificateholders and designated “Wells Fargo Bank, National Association, in trust for registered holders of Nomura Asset Acceptance Corp., Mortgage Pass-Through Certificates, Series 2005-WF1. 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 twenty-fifth (25th) day is not a Business Day, the next succeeding Business Day, commencing in June 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.

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 Cap Contracts with respect to the Class II-A-1A Certificates and Class II-A-1B Certificates over (2) the amount of the unpaid Net WAC Rate Carryover Amounts attributable to the Class II-A-1A Certificates or the Class II-A-1B Certificates 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.

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

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

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

Group I Senior Principal Distribution Amount: Shall mean with respect to any Distribution Date, an amount equal to the product of (x) the Senior Principal Distribution Amount and (y) a fraction, the numerator of which is the Principal Remittance Amount of the Group I Mortgage Loans and the denominator of which is the Principal Remittance Amount of the Group I Mortgage Loans and Group II Mortgage Loans.

Group II Certificates: The Class II-A-1A, Class II-A-1B, Class II-A-2, Class II-A-3, Class II-A-4 and Class  II-A-5 Certificates.

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

Group II Senior Principal Distribution Amount: Shall mean with respect to any Distribution Date, an amount equal to the product of (x) the Senior Principal Distribution Amount and (y) a fraction, the numerator of which is the Principal Remittance Amount of the Group II Mortgage Loans and the denominator of which is the Principal Remittance Amount of the Group I Mortgage Loans and Group II Mortgage Loans.

Indemnified Persons: The Trustee, the Master Servicer, the Securities Administrator, the Custodian, 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.

 

 

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 Carry Forward Amount: With respect to any Class of Certificates (other than the Class X, Class P and Class R Certificates) and any Distribution Date, the amount, if any, by which the Interest Distribution Amount for that Class of Certificates for the immediately preceding Distribution Date exceeded the actual amount distributed on such Class in respect of interest on the immediately preceding Distribution Date, together with any Interest Carry Forward Amount with respect to such Class remaining unpaid from the previous Distribution Date.

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

Interest Distribution Amount: With respect to any Class of Certificates (other than the Class P Certificates and Class R Certificates) and any Distribution Date, an amount equal to the interest accrued during the related Accrual Period at the applicable Pass-Through Rate on the Certificate Principal Balance (or Certificate Notional Balance) of such Certificate immediately prior to such Distribution Date less such Certificate’s share of any Net Interest Shortfall and the interest portion of any Realized Losses on the Mortgage Loans allocated to such Certificate pursuant to Section 1.02.  The Interest Distribution Amount with respect to each class of Certificates (other than the Class II-A-1A Certificates and Class II-A-1B Certificates) is calculated on the basis of a 360-day year consisting of twelve 30-day months. The Interest Distribution Amount with
respect to the Class II-A-1A Certificates and the Class II-A-1B Certificates is calculated on the basis of a 360-day year and the actual number of days elapsed in the related Accrual Period. No Interest Distribution Amount will be payable with respect to any Class of Certificates after the Distribution Date on which the outstanding Certificate Principal Balance of such Certificate has been reduced to zero.

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 pursuant to the Servicing Agreement and 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 minus (ii) all amounts relating to interest required to be reimbursed pursuant to Sections 3.24 and 9.05 or as otherwise set forth in this 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.

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

Latest Possible Maturity Date: The 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 a day on which banks are open for dealing in foreign currency and exchange in London.

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 that it has received all amounts it expects to receive in connection with such liquidation.

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 or Loan Group II.

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 Publicly 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3 and REMIC I Regular Interest LTI-ZZ, with the per annum rate on REMIC I Regular Interest LTI-IA subject to a cap equal to the weighted average of the Net Mortgage Rates of the Group I Mortgage Loans for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-IIA1A subject to a cap equal to
the Class II-A-1A Pass-Through Rate for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-IIA1B subject to a cap equal to the Class II-A-1B Pass-Through Rate for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-IIA2 subject to a cap equal to the Class II-A-2 Pass-Through Rate for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-IIA3 subject to a cap equal to the Class II-A-3 Pass-Through Rate for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-IIA4 subject to a cap equal to the Class II-A-4 Pass-Through Rate for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-IIA5 subject to a cap equal to the Class II-A-5 Pass-Through Rate for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-M1 subject to a cap equal to the Class M-1 Pass-Through Rate for the
purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-M2 subject to a cap equal to the Class M-2 Pass-Through Rate for the purpose of this calculation; with the per annum rate on REMIC I Regular Interest LTI-M3 subject to a cap equal to the Class M-3 Pass-Through Rate 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 REMIC I Regular Interest LTI-IIA1A and REMIC I Regular Interest LTI-IIA1B 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.

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

Master Servicer Compensation: As defined in Section 3.14 of this Agreement.

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

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

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

MOM Loan: 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 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 May 26, 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-1, setting forth the following information with respect to each Mortgage Loan:

	
            (i)
 	
            the loan number;
 
	
            (ii)
 	
            the Mortgage Rate in effect as of the Cut-off Date;
 
	
            (iii)
 	
            the Servicing Fee Rate;
 
	
            (iv) 
 	
            the Net Mortgage Rate in effect as of the Cut-off Date;
 
	
            (v)
 	
            the maturity date;
 
	
            (vi)
 	
            the original principal balance;
 
	
            (vii) 
 	
            the Cut-off Date Principal Balance;
 
	
            (viii)
 	
            the original term;
 
	
            (ix)
 	
            the remaining term;
 
	
            (x)
 	
            the property type;
 
	
            (xi)
 	
            with respect to each MOM Loan, the related MIN;
 
	
            (xii)
 	
            the Servicer; and
 
	
            (xiii)
 	
            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.
 

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.

Mortgaged Property: The underlying property securing a Mortgage Loan.

Mortgagor: The obligors on a Mortgage Note.

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

Net Liquidation Proceeds: With respect to a Mortgage Loan are Liquidation Proceeds net of unreimbursed advances by the servicer and advances and expenses incurred by the Servicer in connection with the liquidation of such Mortgage Loan and the related Mortgaged Property.

Net Monthly Excess Cashflow: With respect to any Distribution Date, the sum of (a) any Overcollateralization Reduction Amount and (b) the excess of (x) the Available Distribution Amount 

 

for such Distribution Date over (y) the sum for such Distribution Date of (A) the aggregate amount of Senior Interest Distribution Amounts payable to the Senior Certificates and the Interest Distribution Amounts payable to the Subordinate Certificates and (B) the Principal Remittance Amount.

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, (iii) the Master Servicer Fee Rate and (iv) the rate at which the fee payable to any provider of lender-paid mortgage insurance is calculated, if applicable.

Net WAC Pass-Through Rate:  With respect to the Group II Certificates and each Distribution Date, the weighted average of the Net Mortgage Rates of the Group II Mortgage Loans as of the first day of the month preceding the month in which such Distribution Date occurs. With respect to the Subordinate Certificates and each Distribution Date, the weighted average of the Net Mortgage Rates of all of the Mortgage Loans as of the first day of the month preceding the month in which such Distribution Date occurs, weighted in proportion to the results of subtracting from the aggregate principal balance of the Group I Mortgage Loans, the Certificate Principal Balance of the Class I-A Certificates and subtracting from the aggregate principal balance of the Group II Mortgage Loans, the aggregate Certificate Principal Balance of the Group II Certificates.  The Net WAC
Pass-Through Rate for the Class II-A-1A Certificates and Class II-A-1B Certificates shall be adjusted for the actual number of days elapsed in the related Accrual Period.

Net WAC Rate Carryover Amount: With respect the Group II Certificates and the Subordinate Certificates and any Distribution Date on which the related Pass-Through Rate is limited to the applicable Net WAC Pass-Through Rate, an amount equal to the sum of (i) the excess of (x) the amount of interest such Class would have been entitled to receive on such Distribution Date if the Pass-Through Rate applicable to such Class would not have been limited to the Net WAC Pass-Through Rate on such Distribution Date over (y) the amount of interest paid on such Distribution Date to such Class plus (ii) the related Net WAC Rate Carryover Amount for the previous Distribution Date not previously distributed to such Class.

Net WAC Reserve Fund: Shall mean the segregated non-interest bearing trust account created and maintained by the Securities Administrator pursuant to Section 5.10 hereof.

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 the Servicing Agreement, or the Trustee as Successor Servicer, that, in the good faith judgment of the Servicer or the Trustee 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 the Servicing 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 the Servicing 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 Class II-A-1A Certificates and Class II-A-1B 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 3.0900% per annum.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the Seller, the Depositor or the Master Servicer, reasonably acceptable to each addressee of such opinion; provided that with respect to Section 2.05, 7.05 or 10.01, or the interpretation or application of the REMIC Provisions, such counsel must (i) in fact be independent of the Seller, the Depositor, the Master Servicer and the Servicer, (ii) not have any direct financial interest in the Seller, the Depositor or the Master Servicer or in any affiliate of any of them, and (iii) not be connected with the Seller, the Depositor or the Master Servicer as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

Optional Termination: The termination of the Trust Fund as a result of the purchase of all of the Mortgage Loans and any related REO Property pursuant to the last paragraph of 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 by the Securities Administrator and delivered by the Trustee 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 Stated Principal Balances of the Mortgage Loans as of the last day of the related Due Period 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 Increase Amount: With respect to any Distribution Date, the excess, if any, of (a) the Required Overcollateralization Amount over (b) the Overcollateralization Amount on such Distribution Date.

Overcollateralization Reduction Amount: With respect to any Distribution Date, the lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the excess, if any, of (i) the Overcollateralization Amount for such Distribution Date over (ii) the Required 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: With respect to each Class of Certificates, the applicable Pass-Through Rate for each Class as set forth in the Preliminary Statement.

Payoff: Any voluntary payment of principal on a Mortgage Loan by a Mortgagor equal to the entire outstanding Stated Principal Balance of such Mortgage Loan, if received in advance of the last scheduled Due Date for such Mortgage Loan and is not accompanied by scheduled interest due on any date or dates in any month or months subsequent to the month of such payment-in-full.

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.

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 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 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 the 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).

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, attached hereto as Exhibit K (including the prepayment charge summary attached thereto).  The Depositor shall deliver or cause the delivery of the Prepayment Charge Schedule to the Master Servicer, the 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, 3.25 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 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 Distribution Amount: With respect to each Distribution Date, the sum of (i) Principal Funds, plus (ii) the Extra Principal Distribution Amount for such Distribution Date minus (iii) the amount of any Overcollateralization Reduction Amount for such Distribution Date.  In no event will the Principal Distribution Amount with respect to any Distribution Date be (x) less than zero or (y) greater than the then outstanding aggregate Certificate Principal Balance of the Publicly Offered Certificates.

Principal Funds: With respect to any Distribution Date, (i) the sum, without duplication, of (a) all scheduled principal collected during the related Due Period, (b) all Advances relating to principal made on or prior to the Remittance Date or, with respect to the Trustee on the Distribution Date, (c) Principal Prepayments exclusive of prepayment charges or penalties collected during the related Prepayment Period, (iii) the Stated Principal Balance of each Mortgage Loan that was repurchased by the Seller pursuant to Sections 2.02, 2.03 and 3.25, (d) the aggregate of all Substitution Adjustment Amounts 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 paid 

 

by the Master Servicer pursuant to Section 10.01, (f) all Liquidation Proceeds and Subsequent Recoveries 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 the Servicing Agreement and (g) all Subsequent Recoveries minus (ii) all amounts required to be reimbursed pursuant to Sections 3.24 and 9.05 or as otherwise set forth in this Agreement to the extent not reimbursed from the Interest Remittance Amount.

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 each Distribution Date an amount equal to the Principal Funds for such Distribution Date

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

Prospectus Supplement: The Prospectus Supplement dated May 24, 2005 relating to the offering of the Publicly Offered Certificates.

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

Publicly Offered Certificates:  Any of the Senior Certificates and the Subordinate 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 or 2.03 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 of the 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 S&P and Moody’s. 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 the Servicing Agreement or this Agreement.  

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 Class II-A-1A Certificates and Class II-A-1B 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 Class II-A-1A Certificates and Class II-A-1B Certificates and any Distribution Date, so long as the Class II-A-1A Certificates and Class II-A-1B 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 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 Class II-A-1A Certificates and Class II-A-1B 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 Class II-A-1A Certificates  and Class II-A-1B Certificates for such Accrual Period.

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.

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 Protected 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 Net WAC 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) twelve (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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-

 

IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-M3, 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) one (1) minus a fraction, the numerator of which is two times the aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest LTI-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-M3 and the denominator of which is the aggregate of the Uncertificated Principal Balances of REMIC I Regular Interest LTI-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I
Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3 and REMIC I Regular Interest LTI-ZZ.

REMIC I Regular Interests:  REMIC I Regular Interest LTI-AA, REMIC I Regular Interest LTI-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, 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 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-IA:  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-IA 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-IIA1A: 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-IIA1A 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-IIA1B: 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-IIA1B 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-IIA3: 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-IIA3 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-IIA4:  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-IIA4 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-IIA5:  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-IIA5 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-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-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 and prepayment charges, 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-M3 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 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 and Group II 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.

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 succeeding Business Day.

REO Property: A Mortgaged Property acquired by the related 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 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 a fixed 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) not permit conversion of the Mortgage Rate from a fixed rate to a variable rate; (vii) be secured by a first lien on the related Mortgaged Property; (viii) constitute the same occupancy type as the Deleted Mortgage Loan or be owner occupied; and (ix) 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.

Required Overcollateralization Amount:  With respect to any Distribution Date prior to the Stepdown Date, 0.70% of the Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, and with respect to any Distribution Date thereafter, the greater of (i) 1.40% of the Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period) and (ii) 0.35% of the Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

Required Overcollateralization Percentage: With respect to any Distribution Date, a percentage equal to (a) the Required Overcollateralization Amount divided by (b) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period, and after reduction for Realized Losses incurred during the related Prepayment Period).

Residual Certificates:  The Class R Certificates.

 

 

Responsible Officer: With respect to the Trustee, 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 specified by the Trustee 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.

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, Class II-A-1A, Class II-A-1B, Class II-A-2, Class II-A-3, Class II-A-4 and Class II-A-5  Certificates.

Senior Interest Distribution Amount: With respect to any Distribution Date and any Class of Senior Certificates will be an amount equal to the Interest Distribution Amount for such Distribution Date for such Class and the Interest Carry Forward Amount, if any, for such Distribution Date for such Class.

Senior Principal Distribution Amount: With respect to any Distribution Date which occurs (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect, the Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for that Distribution Date, the lesser of (x) the Principal Distribution Amount for that Distribution Date and (y) the excess, if any, of (A) the aggregate Certificate Principal Balance of the Senior Certificates immediately prior to that Distribution Date over (B) the positive difference between (1) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (2) the product of (a) the aggregate Stated Principal Balance of the Mortgage Loans
as of the last day of the related Due Period (after reduction for Realized Losses incurred during the related Prepayment Period) and (b) the sum of 11.90% and the Required Overcollateralization Percentage.

Servicer:  Shall mean Wells Fargo Bank, National Association or any successor thereto appointed hereunder in connection with the servicing and administration of the Mortgage Loans.

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

 

 

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 Agreement:  The Seller’s Warranties and Servicing Agreement, dated as of February 1, 2005 between the Seller and the Servicer (as modified pursuant to the Assignment Agreement).

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:  0.25% per annum.

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

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 the Servicing 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 June 2008 and (y) the first Distribution Date on which the Credit Enhancement Percentage of the Senior Certificates (calculated for this purpose only after taking into account distributions of principal on the Mortgage Loans, but prior to any distribution of the Principal Distribution Amount to the holders of the Certificates then entitled to distributions of principal on the Distribution Date) is greater than or equal to approximately 13.30%.

 

 

Subordinate Certificates: Means, collectively, the Class M-1, Class M-2 and Class M-3 Certificates.

Subsequent Recoveries: With respect to each Mortgage Loan, the amount recovered by the Servicer (net of reimbursable expenses) with respect to a defaulted Mortgage Loan with respect to which a Realized Loss was incurred, after the liquidation or disposition of such Mortgage Loan

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).

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.

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 (x) the percentage obtained by dividing (i) the aggregate Stated Principal Balance of Mortgage Loans delinquent sixty (60) days or more (including Mortgage Loans in foreclosure or discharged in bankruptcy or any REO Property) by (ii) the aggregate Stated Principal Balance of the Mortgage Loans, in each case, as of the last day of the previous calendar month, exceeds 50% of the Credit Enhancement Percentage of the Senior Certificates for the prior Distribution Date, or (y) the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Due Period divided by the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set forth below with respect to such Distribution Date:

	
            
Distribution Date
 
 	
            
Percentage
 
 
	
            June 2008 to May 2009                                                                                                                                                                       
 	
            0.75%
 
	
            June 2009 to May 2010                                                                                                                                                                       
 	
            1.10%
 
	
            June 2010 to May 2011                                                                                                                                                                       
 	
            1.30%
 
	
            June 2011 and thereafter                                                                                                                                                              
 	
            1.40%
 

 

*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 Net WAC 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 or Uncertificated Notional Amount, as applicable, 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 Section 1.02).

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 5.08 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 5.08. 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3, REMIC I Regular Interest LTI-ZZ, REMIC I Regular Interest LTI-1SUB, REMIC I Regular Interest LTI-2SUB and REMIC I Regular Interest LTI-XX, the weighted average of the Net Mortgage Rates of the Mortgage Loans. With respect to REMIC I Regular Interest LTI-1GRP, the weighted average of the Net Mortgage Rates of the Group I Mortgage Loans. With respect to REMIC I Regular Interest LTI-2GRP, the weighted average of the Net Mortgage Rates
of the Group II Mortgage Loans.  REMIC I Regular Interest LTI-P will not accrue interest.

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.

	
            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 Subordinate 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3 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 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.  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 the 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 Custodian pursuant to the Custodial Agreement the documents with respect to each Mortgage Loan as described under Section 2 of the Custodial Agreement (the “Mortgage Loan Documents”). In connection with such delivery and as further described in the Custodial Agreement, the 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 Custodial Agreement) with respect to such review with exceptions noted thereon.  In addition, under the 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 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 Custodian pursuant to the terms and conditions of the 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 Custodian, such documents including the mortgagee policy of title insurance and any Mortgage Loan Documents upon return from the recording office.  The Master Servicer shall not be responsible for any custodian fees or other costs incurred in obtaining such documents and the Depositor shall cause the Master Servicer to be reimbursed for any 

 

such costs the Master Servicer may incur in connection with performing its obligations under this Agreement.

	
            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 Custodial Agreement. In conducting such review, the Custodian on the Trustee’s behalf and in accordance with the terms of the 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 Custodian on the Trustee’s behalf has received either an original or a copy thereof, as required in the Custodial Agreement. If the 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 to 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 Protected Account and shall provide written notice to the Securities Administrator detailing the components of the Purchase Price, signed by an authorized officer, 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 Protected Account. In addition, following such deposit of the Purchase Price, and upon receipt by the Trustee from the
Master Servicer or the Securities Administrator of a copy of the Servicer’s monthly remittance report certifying that the Purchase Price has been deposited in the Protected Account, receipt of an Opinion of Counsel if required by Section 2.05, and the receipt of a Request for Release with respect to such Mortgage Loan, 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 Protected 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 Seller and the Master Servicer.
 

(a)        The Seller hereby represents and warrants to and covenants with, the Depositor, the Master Servicer 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 the then current Appendix E of the Standard & Poor's Glossary For File Format For LEVELS® Version 5.6 Revised (attached hereto as Exhibit N) 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.

(b)        The Master Servicer hereby represents, warrants and covenants with the 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.

(c)        Upon discovery by any of the parties hereto of a breach of a representation or warranty set forth in Section 2.03(a)(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(a)(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 

 

Custodian of a request for release in accordance with the 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 Custodian for the benefit of the Certificateholders such documents and agreements as are required by Section 2 of the 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. 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 Distribution Account of the amount required to be deposited therein in connection with such substitution as described in the following paragraph and receipt by the Custodian of a request for release for such Mortgage Loan in accordance with the Custodial Agreement, the 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 Master Servicer 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 Protected 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 Protected 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 Protected Account. In addition, upon such deposit of the Purchase Price, the delivery of an Officer’s Certificate by the Servicer to the Trustee (with a copy to the Securities Administrator) certifying that the Purchase Price has been deposited in the Protected 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 and is continuing shall constitute the sole remedies against the Seller respecting such breach available to Certificateholders, the Depositor or the Trustee.

(d)        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 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 Master Servicer, the Seller 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 Custodian for the benefit of the Certificateholders. Upon discovery by the Depositor, the Master Servicer, the 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 Class R Certificates.
 

The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery to the 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 Residual 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 and authenticated, and the Trustee has 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-WF1” 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 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 the Servicing Agreement and shall have full power and authority to do any and all things which it may deem necessary or desirable in connection with such master servicing and administration.  In performing its obligations hereunder, the Master Servicer shall act in a manner consistent with Accepted Master Servicing Practices.  Furthermore, the Master Servicer shall oversee and consult with the Servicer as necessary from time-to-time to carry out the Master Servicer’s obligations hereunder, shall receive, review and evaluate all reports, information and other data provided to the Master Servicer by the Servicer and shall cause the Servicer to perform and observe the covenants, obligations and conditions to be performed or
observed by the Servicer under the Servicing 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, prepare the statements specified in Section 5.07 and any other information and statements required to be provided by the Master Servicer hereunder.  The Master Servicer shall reconcile the results of its Mortgage Loan monitoring with the actual remittances of the Servicer to the Distribution Account pursuant to the Servicing Agreement.

Notwithstanding anything in this Agreement or the Servicing 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 Custodian and the Securities Administrator shall provide access to the records and documentation in possession of the Trustee, the Custodian 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 Custodian or the Securities Administrator; provided, however, that, unless otherwise required by law, none of the Trustee, the Custodian 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 Custodian 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 Custodian’s 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 3.02
 	
            REMIC-Related Covenants.  
 

For as long as each REMIC shall exist, the Trustee and the Securities Administrator shall 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 to assure such continuing treatment.  In particular, the Trustee shall not (a) sell or permit the sale of all or any portion of the Mortgage Loans or of any investment of deposits in an Account unless such sale is as a result of a repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has received an Opinion of Counsel stating that such sale will not cause either REMIC I or REMIC II 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) prepared at the expense of the Trust Fund; and (b) other than with respect to a substitution pursuant to the Mortgage Loan Purchase Agreement, the Assignment Agreement or Section 2.03 of this Agreement, as applicable, accept any contribution to any REMIC after the Startup Day without receipt of an Opinion of Counsel stating that such contribution will not either REMIC I or REMIC II 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).

	
            Section 3.03
 	
            Monitoring of Servicer.
 

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

(b)        The Master Servicer, for the benefit of the Trustee and the Certificateholders, shall enforce the obligations of the Servicer under the Servicing Agreement, and shall, in the event that the Servicer fails to perform its obligations in accordance with the Servicing Agreement, subject to the preceding paragraph, notify the Trustee and the Trustee shall terminate the rights and obligations of 

 

the Servicer thereunder and act as servicer of the Mortgage Loans or enter in to a new servicing agreement with a successor servicer selected by the Trustee; provided, however, it is understood and acknowledged by the parties hereto that there will be a period of transition (not to exceed 90 days) before the actual servicing functions can be fully transferred to such successor servicer.  Such enforcement, including, without limitation, the legal prosecution of claims 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.

(c)        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 Trustee with respect to the Servicing Agreement (including, without limitation, (i) all legal costs and expenses and all due diligence costs and expenses associated with an evaluation of the potential termination of the Servicer as a result of an event of default by the Servicer and (ii) all costs and expenses associated with the complete transfer of servicing, including all servicing files and all servicing data and the completion, correction or manipulation of such servicing data as may be required by the successor servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the successor servicer to service the Mortgage Loans in
accordance with the Servicing Agreement) are not fully and timely reimbursed by the terminated Servicer, the Trustee shall be entitled to reimbursement of such costs and expenses from the Distribution Account.

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

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

	
            Section 3.04
 	
            Fidelity Bond.  
 

The Master Servicer, at its expense, shall maintain in effect a blanket fidelity bond and an errors and omissions insurance policy 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 3.05
 	
            Power to Act; Procedures.  
 

The Master Servicer shall master service the Mortgage Loans and shall have full power and authority, subject to the REMIC Provisions and the provisions of 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 and the Servicing Agreement, as applicable; provided, however, that the Master Servicer shall not (and, consistent with its responsibilities under Section 3.03, shall not permit the Servicer to) knowingly or intentionally take any action, or fail to take (or fail to cause to be taken) any action reasonably within its control and the scope of duties more specifically set forth herein, that, under the REMIC Provisions, if taken or not taken, as the case may be, would cause any REMIC to fail to qualify as a REMIC or result in the imposition of a tax upon the Trust Fund (including but not limited to the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) unless the Master Servicer has received an Opinion of Counsel (but not at the expense of the Master Servicer) to the effect that the contemplated action 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 the Servicing Agreement and 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 3.06
 	
            Due-on-Sale Clauses; Assumption Agreements.  
 

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

	
            Section 3.07
 	
            Release of Mortgage Files.
 

(a)        Upon becoming aware of  Payoff with respect to 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), if required under the Servicing Agreement, promptly furnish to the Custodian, on behalf of the Trustee, two copies of a request for release substantially in 

 

the form attached to the Custodial Agreement, and signed by an Authorized Servicer Representative or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from an 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 Protected Account maintained by the Servicer pursuant to the Servicing Agreement have been or will be so deposited) and shall request that the Custodian, on behalf of the Trustee, deliver to the Servicer  the related Mortgage File.  Upon receipt of such certification and request, the Custodian, on behalf of the Trustee, shall promptly release the related Mortgage File to the Servicer and the Trustee and Custodian shall have no further responsibility with regard to such Mortgage File.  Upon any such Payoff, the
Servicer  is authorized to give, as agent for the Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an instrument of satisfaction (or assignment of mortgage without recourse) regarding the Mortgaged Property subject to the Mortgage, which instrument of satisfaction or assignment, as the case may be, shall be delivered to the Person or Persons entitled thereto against receipt therefor of such payment, it being understood and agreed that no expenses incurred in connection with such instrument of satisfaction or assignment, as the case may be, shall be chargeable to the Distribution Account.

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

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

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

 

 

provide access to information and documentation regarding the Mortgage Loans to the Trustee, its agents and accountants at any time upon reasonable request and during normal business hours, and to Certificateholders that are savings and loan associations, banks or insurance companies, the 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.

(b)        All Mortgage Files and funds collected or held by, or under the control of, the Master Servicer, in respect of any Mortgage Loans, whether from the collection of principal and interest payments or from Liquidation Proceeds 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 or the Servicing Agreement.

	
            Section 3.09
 	
            Standard Hazard Insurance and Flood Insurance Policies.
 

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

(b)        Pursuant to Section 3.23, any amounts collected by the Master Servicer or by the Servicer, under any insurance policies (other than amounts to be applied to the restoration or repair of the property subject to the related Mortgage or released to the Mortgagor in accordance with the Servicing Agreement) shall be deposited into the Distribution Account, subject to withdrawal pursuant to Section 3.24.  Any cost incurred by the Master Servicer or the Servicer in maintaining any such insurance if the Mortgagor defaults in its obligation to do so shall be added to the amount owing under the Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however, that the addition of any such cost shall not be taken into account for purposes of calculating the distributions to be made to Certificateholders and shall be recoverable by
the Master Servicer or the Servicer pursuant to Section 3.24.

	
            Section 3.10
 	
            Presentment of Claims and Collection of Proceeds.  
 

The Master Servicer shall (to the extent provided in the Servicing Agreement) cause the Servicer 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 3.11
 	
            Maintenance of the Primary Mortgage Insurance Policies.
 

(a)        The Master Servicer shall not take, or permit the Servicer (to the extent such action is prohibited under the Servicing 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 the extent required under the Servicing Agreement) to keep in force and effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain such insurance), primary mortgage insurance applicable to each Mortgage Loan in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable.  The Master Servicer shall not, and shall not permit the Servicer  (to the extent required
under the Servicing Agreement) to, cancel or refuse to renew any primary mortgage insurance policy that is in effect at the date of the initial issuance of the Mortgage Note and is required to be kept in force hereunder except in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable.

(b)        The Master Servicer agrees to cause the Servicer (to the extent required under the Servicing Agreement) to present, on behalf of the Trustee and the Certificateholders, claims to the insurer under any primary mortgage insurance policies and, in this regard, to take such reasonable action as shall be necessary to permit recovery under any primary mortgage insurance policies respecting defaulted Mortgage Loans.  Pursuant to Sections 3.22 and 3.23, any amounts collected by the Master Servicer or the Servicer under any primary mortgage insurance policies shall be deposited by the Servicer in its Protected Account or by the Master Servicer in the Distribution Account, subject to withdrawal pursuant to Section 3.22 or 3.24, as applicable.

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

The Trustee or the 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 otherwise has fulfilled its obligations under this Agreement, the Trustee or the 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 Custodial Agreement. The Master Servicer shall promptly deliver or cause to be delivered to the Trustee or the 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 3.13
 	
            Realization Upon Defaulted Loans.  
 

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

 

 

	
            Section 3.14
 	
            Compensation for the Master Servicer.
 

(a)        All income and gain realized from any investment of funds in the Distribution Account shall be for the benefit of the Master Servicer as compensation (the “Master Servicing Compensation”).  Servicing compensation in the form of assumption fees, if any, late payment charges, as collected, if any, or otherwise (but not including any Prepayment Charges) shall be retained by the Servicer and shall not be deposited in the Protected Account.  The Master Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder and shall not be entitled to reimbursement therefor except as provided in this Agreement.

(b)        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 3.20.

	
            Section 3.15
 	
            REO Property.
 

(a)        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, to the extent provided in the Servicing Agreement, cause the Servicer to sell any REO Property as expeditiously as possible and in accordance with the provisions of this Agreement and the Servicing Agreement, as applicable.  Further, the Master Servicer shall, to the extent provided in the Servicing Agreement, 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 the extent provided in the Servicing Agreement) to protect and conserve, such REO Property in the manner and to the extent required by the Servicing Agreement, in accordance with the REMIC Provisions and in a
manner that does not result in a tax on “net income from foreclosure property” or cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code.

(b)        The Master Servicer shall, to the extent required by the Servicing Agreement, cause the Servicer to deposit all funds collected and received in connection with the operation of any REO Property in the Protected Account.

(c)        The Master Servicer and the Servicer, upon the final disposition of any REO Property, shall be entitled to reimbursement for any related unreimbursed Advances and other unreimbursed advances as well as any unpaid Servicing Fees or 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 Servicing Fees or 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.

 

 

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

	
            Section 3.16
 	
            Annual Officer’s Certificate as to Compliance.
 

(a)        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 Servicer has failed to perform any of its duties, responsibilities and obligations under its Servicing Agreement in all material respects throughout such year, or, if there has been a material default in the performance or fulfillment of any such duties, responsibilities or obligations, specifying each such default known to such Servicing Officer and the nature and status thereof.

(b)        Copies of such statements shall be provided to any 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 3.17
 	
            Annual Independent Accountant’s Servicing Report.  
 

If the Master Servicer has, during the course of any fiscal year, directly serviced any of the 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, commencing on March 15, 2006 to the effect that, with respect to the most recently ended fiscal year, such firm has examined certain records and documents relating to the Master Servicer’s performance of its servicing obligations under this Agreement and pooling and servicing and trust agreements in material respects similar to this Agreement and to each other and that, on the basis of such examination conducted substantially in compliance with the audit program for mortgages serviced for Freddie Mac or the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Master Servicer’s activities have been conducted in compliance with this Agreement, or that such examination has disclosed no material items of noncompliance except for (i) such exceptions as such firm believes to be immaterial, (ii) such other exceptions as are set forth in such statement and (iii) such exceptions that the Uniform Single Attestation Program for Mortgage Bankers or the Audit Program for Mortgages Serviced by Freddie Mac requires it to report.  Copies of such statements shall be provided to any Certificateholder upon request by the Master Servicer, or by the 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 3.18
 	
            Reports Filed with Securities and Exchange Commission.
 

(a)        Within 15 days after each Distribution Date, the Master Servicer 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 to be furnished by the Securities Administrator to the Certificateholders for such Distribution Date as an exhibit thereto.  Prior to January 30, 2006, the Master Servicer 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 Master Servicer 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 the Servicing Agreement, (ii) the Servicer’s accountant’s report described under the Servicing Agreement, (iii) the Master Servicer’s accountant’s report described in Section 3.17, if applicable, in each case to the extent timely delivered, if applicable, to the Master Servicer, and (iv) a written certification signed by an officer of the Master Servicer that complies with the Sarbanes-Oxley Act of 2002 as in effect on the date of this Agreement and the February 3, 2003, Statement by the Staff of the Division of Corporation Finance of the Commission Regarding Compliance by Asset-Backed Issuers with Exchange Act Rules 13a-14 and 15d-14 as in effect as of the date of this Agreement.  The Depositor hereby grants to the Master Servicer 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 Master Servicer 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 Master Servicer, 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 Master Servicer reasonably deems appropriate to prepare and file all necessary reports with the Commission.  The Master Servicer 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 Master Servicer under the Exchange Act shall be sent to the Depositor.

(b)        The Master Servicer 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 Master Servicer’s obligations under this Section 3.18 or the Master Servicer’s negligence, bad faith or willful misconduct in connection therewith.  Fees and expenses incurred by the Master Servicer in connection with this Section 3.18(b) shall not be reimbursable from the Trust Fund.

	
            Section 3.19
 	
            UCC.  
 

The Depositor shall file any financing statements or amendments thereto required by any change in the Uniform Commercial Code.  The Depositor agrees to file continuation statements for 

 

any such Uniform Commercial Code financing statements which the Seller or the Depositor filed in connection with the Trust Fund. 

	
            Section 3.20  
 	
            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 the Servicing 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.

	
            Section 3.21
 	
            Reserved.
 	
             

	
            Section 3.22
 	
            Protected Accounts.
 

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

(b)        To the extent provided in the Servicing Agreement, amounts on deposit in a Protected Account may be invested in Permitted Investments in the name of the Trustee for the benefit of Certificateholders and, except as provided in the preceding paragraph, not commingled with any other funds, such Permitted Investments to mature, or to be subject to redemption or withdrawal, no later than the date on which such funds are required to be withdrawn for deposit in the Distribution Account, and shall be held until required for such deposit.  The income earned from Permitted Investments made pursuant to this Section 3.22 shall be paid to the Servicer under the Servicing Agreement, and the amount required to be distributed to the Certificateholders resulting from the loss of monies on such investments shall be borne by and be the risk of the
Servicer.  The Servicer (to the extent provided in the Servicing Agreement) shall deposit the amount of any such loss in the Protected Account within two Business Days of receipt of notification of such loss but not later than the second Business Day prior to the date on which the moneys so invested are required to be remitted to the Master Servicer or the Securities Administrator.

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

 

 

(i)         Scheduled Payments on the Mortgage Loans received or any related portion thereof advanced by the Servicer pursuant to the Servicing Agreement which were due on or before the related Due Date, net of the amount thereof comprising the Servicing Fees;

(ii)         Principal Prepayments, Liquidation Proceeds, Insurance Proceeds and Subsequent Recoveries received by the Servicer with respect to the Mortgage Loans in the related Prepayment Period, payments in respect of Prepayment Interest Shortfalls and the amount of any related Prepayment Charges; and

	
            (iii)
 	
            Any amount to be used as an Advance.
 

(d)        Withdrawals may be made from an Account only to make remittances as provided in Section 3.22(c), 3.23 and 3.24 or as otherwise provided in the Servicing Agreement; to reimburse the Master Servicer or the Servicer for Advances which have been recovered by subsequent collection from the related Mortgagor; to remove amounts deposited in error; to remove fees, charges or other such amounts deposited on a temporary basis; or to clear and terminate the account at the termination of this Agreement in accordance with Section 10.01.  As provided in Sections 3.22(c) and 3.23(b) or as otherwise provided in the Servicing Agreement certain amounts otherwise due to the Servicer may be retained by the Servicer and need not be deposited in the Distribution Account.

	
            Section 3.23
 	
            Distribution Account.
 

(a)        The Securities Administrator shall establish and maintain, a Distribution Account with respect to the Mortgage Loans as a segregated trust account or accounts.  The Master Servicer shall deposit in the Distribution Account as identified by the Master Servicer and as received by the Master Servicer, the following amounts with respect to the Mortgage Loans for the benefit of the Certificateholders:

	
            (i)
 	
            Any amounts withdrawn from a Protected Account;
 	
             

	
            (ii)
 	
            Any Advance and any amounts in respect of Prepayment Interest Shortfalls;
 

(iii)        Any Insurance Proceeds, Liquidation Proceeds or Subsequent Recoveries received by or on behalf of the Master Servicer;

(iv)        The Purchase Price with respect to any Mortgage Loans purchased by the Seller pursuant to Section 2.03 and all proceeds of any Mortgage Loans or property acquired with respect thereto purchased by the Master Servicer pursuant to Section 10.01;

(v)        Any amounts required to be deposited by the Master Servicer or any Servicer with respect to losses on investments of deposits in an Account; and

(vi)        Any other amounts received by or on behalf of the Master Servicer 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 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 Master Servicer or the Servicer to the Distribution Account.  In the event that the Master Servicer shall deposit or cause to be deposited to the Distribution Account any amount not required to be credited thereto, the Securities Administrator, upon receipt of a written request therefor signed by a Servicing Officer of the Master Servicer, shall promptly transfer such amount to the Master Servicer, any provision herein to the contrary notwithstanding.

(c)        The Distribution Account shall constitute a trust account of the Trust Fund segregated on the books of the Securities Administrator and held by the Securities Administrator in trust in its Corporate Trust Office, and the Distribution Account and the funds deposited therein shall not be subject to, and shall be protected from, all claims, liens, and encumbrances of any creditors or depositors of the Securities Administrator (whether made directly, or indirectly through a liquidator or receiver of the Securities Administrator).  The amount at any time credited to the Distribution Account shall be invested in the name of the Master Servicer, in such Permitted Investments selected by the Master Servicer or deposited in demand deposits with such depository institutions as selected by the Master Servicer, provided that time deposits of such
depository institutions would be a Permitted Investment.  All Permitted Investments shall mature or be subject to redemption or withdrawal on or before, and shall be held until, the Distribution Date following the date of the investment of such funds (the “Investment Withdrawal Distribution Date”) if the obligor for such Permitted Investment is the Securities Administrator or, if such obligor is any other Person, the Business Day preceding such Investment Withdrawal Distribution Date.  All investment earnings on amounts on deposit in the Distribution Account from time to time shall be for the account of the Master Servicer.  The Master Servicer shall be permitted to receive distribution of any and all investment earnings from the Distribution Account on each Distribution Date.  If there is any loss on a Permitted Investment or demand deposit, the Master Servicer shall deposit such amount in the Distribution Account immediately as realized.  With respect to the Distribution
Account and the funds deposited therein, the Securities Administrator shall take such action as may be necessary to ensure that the Certificateholders shall be entitled to the priorities afforded to such a trust account (in addition to a claim against the estate of the Securities Administrator) as provided by 12 U.S.C. § 92a(e), and applicable regulations pursuant thereto, if applicable, or any applicable comparable state statute applicable to state chartered banking corporations.

	
            Section 3.24
 	
            Permitted Withdrawals and Transfers from the Distribution Account.
 

(a)        The Securities Administrator shall, from time to time on demand of the Master Servicer, make or cause to be made such withdrawals or transfers from the Distribution Account as the Master Servicer has designated for such transfer or withdrawal pursuant to the Servicing Agreement or this Agreement for the following purposes, not in any order of priority:

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

(ii)         to reimburse the Master Servicer or the Servicer from Insurance Proceeds or Liquidation Proceeds relating to a particular Loan for amounts expended by the Master Servicer or the Servicer in good faith in connection with the restoration of the related 

 

Mortgaged Property which was damaged by an Uninsured Cause or in connection with the liquidation of such Mortgage Loan;

(iii)        to reimburse the Master Servicer or the Servicer from Insurance Proceeds relating to a particular Mortgage Loan for Insured Expenses incurred with respect to such Mortgage Loan and to reimburse the Master Servicer or the Servicer from Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses incurred with respect to such Mortgage Loan;

(iv)        to pay the Master Servicer or the Servicer, as appropriate, from Liquidation Proceeds or Insurance Proceeds received in connection with the liquidation of any Mortgage Loan, the amount which the Master Servicer or the Servicer would have been entitled to receive under subclause (vii) of this Subsection (a) as servicing compensation on account of each defaulted scheduled payment on such Mortgage Loan if paid in a timely manner by the related Mortgagor;

(v)        to pay the Master Servicer or the Servicer from the Purchase Price for any Mortgage Loan, the amount which the Master Servicer or such Servicer would have been entitled to receive under subclause (vii) of this Subsection (a) as servicing compensation;

(vi)        to reimburse the Master Servicer or the Servicer for any Nonrecoverable Advance, after a Realized Loss has been allocated with respect to the related Mortgage Loan if the Advance or Servicing Advance has not been reimbursed pursuant to clause (i);

(vii)        to pay the Master Servicing Compensation to the Master Servicer, the Servicing Fee to the Servicer (to the extent such Servicing Fee was not retained by the Servicer pursuant to the Servicing Agreement) and to reimburse the Master Servicer for expenses, costs and liabilities incurred by and reimbursable to it pursuant to Sections 3.03, 7.04, 9.05 and 10.01.

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

(ix)        to reimburse the Trustee, the Custodian and the Securities Administrator for expenses, costs and liabilities, if any, incurred by or reimbursable to such parties pursuant to this Agreement;

(x)        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 3.26 (b) 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

	
             
	
            (xi)
 	
            to remove amounts deposited in error; and
 	
             

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

(b)        The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any reimbursement from the Distribution Account pursuant to subclauses (i) through (vi), inclusive, or with respect to any such 

 

amounts which would have been covered by such subclauses had the amounts not been retained by the Master Servicer without being deposited in the Distribution Account under Section 3.23(b).

(c)        On each Distribution Date, the Securities Administrator shall distribute the Available Distribution Amount to the Holders of the Certificates in accordance with Section 5.04.

	
            Section 3.25
 	
            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 Protected Account and remitted by the Servicer to the Master Servicer on the Remittance Date in the month immediately following the month in which the Purchase Price was deposited in the Protected Account.

If at any time the Seller remits to the Servicer a payment for deposit in the Protected Account covering the amount of the Purchaser 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 Protected 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.

	
            Section 3.26
 	
            Enforcing Obligations of the Servicer.
 

Notwithstanding anything in this Agreement or the Credit Risk Management Agreements to the contrary, the Trustee and the Master Servicer 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.  To the extent that the costs and expenses of the Trustee related to any termination of the Servicer, appointment of a Successor Servicer or the transfer and assumption of servicing by the Trustee with respect to this Agreement (including, without limitation, (i) all legal costs and
expenses and all due diligence costs and expenses associated with an evaluation of the potential termination of the Servicer as a result of an event of default by such Person 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 Servicer, the Trustee shall be entitled to reimbursement of such costs and expenses from the Distribution Account.

	
            Section 3.27
 	
            Duties of the Credit Risk Manager; Termination.
 

(a)        The Depositor appoints The Murrayhill Company 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 Credit Risk Management Agreements 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 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 this Section 3.27(a) shall not become effective until the appointment of a successor Credit Risk Manager.

(b)        Within six (6) 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 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 and the Credit Risk Manager.

If the Credit Risk Manager is terminated pursuant to this Section 3.27(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 3.24(a)(x).

	
            Section 3.28
 	
            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 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 under the 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 pursuant to the Credit Risk Management Agreement in the performance of its duties thereunder and hereunder.

 

 

 

ARTICLE IV

 

RESERVED

 

 

 

ARTICLE V

 

ADVANCES AND DISTRIBUTIONS

	
            Section 5.01
 	
            Advances.
 

If the Scheduled Payment on a Mortgage Loan or a portion thereof is delinquent as of its Due Date, other than as a result of interest shortfalls due to bankruptcy proceedings or application of the Relief Act, and the Servicer fails to make an advance of the delinquent amount pursuant to the Servicing Agreement, then the Master Servicer (in its capacity as successor servicer) shall deposit in the Distribution Account on the Remittance Date on which such Advance was required to be remitted by the Servicer, from its own funds an amount equal to such delinquency, net of the Servicing Fee for such Mortgage Loan except to the extent the Master Servicer determines any such advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds, or future payments on the Mortgage Loan for which such Advance was made; provided, however, that if the Master Servicer is prohibited by law or
regulation from obligating itself to make advances regarding delinquent mortgage loans, then the Master Servicer shall not be obligated to make Advances pursuant to this Section 5.01; and provided further, that any failure to perform such duties or responsibilities caused by the Servicer’s failure to provide information required by the Master Servicer in connection with the making of any such required Advance shall not be considered a default by the Master Servicer as successor to the Servicer; provided, however, that (1) 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 any successor Servicer and (2) any failure to perform such duties or responsibilities caused by the Servicer’s failure to provide information required by the Master Servicer in connection with the making of any such Advance shall not be
considered a default by the Master Servicer as successor to the Servicer

	
            Section 5.02
 	
            Reserved.
 	
             

	
            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 5.08 hereof.

	
            Section 5.04
 	
            Distributions.
 
	
             
	
            (a)
 	
            [Reserved]
 	
             

					

(b)        On each Distribution Date, the Available Distribution Amount for such Distribution Date shall be withdrawn by the Securities Administrator to the extent of funds on deposit in the Distribution Account, 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 with respect to the Group I Mortgage Loans, first (x) to the holders of the Class I-A Certificates, the Senior Interest Distribution Amount allocable to the Class I-A Certificates for such distribution date and (y) then concurrently, to the holders of the Group II 
 

 

Certificates, on a pro rata basis, based on the entitlement of each such Class, the Senior Interest Distribution Amount (or any portion thereof) allocable to each such Class and remaining unpaid on such Distribution Date after taking into account the distribution of the Senior Interest Distribution Amount in clause (2) below;

	
            (2)
 	
            from the Interest Remittance Amount with respect to the Group II Mortgage Loans, first (x) to the Group II Certificates, on a pro rata basis, based on the entitlement of each such Class, the Senior Interest Distribution Amount allocable to each such Class, and then (y) to the holders of the Class I-A Certificates, the Senior Interest Distribution Amount (or any portion thereof) allocable to the Class I-A Certificates and remaining unpaid on such Distribution Date after taking into account the distribution of the Senior Interest Distribution Amount in clause (1) above;
 
	
            (3)
 	
            to the extent of the Interest Remittance Amount remaining after distribution of the Senior Interest Distribution Amount to the holders of the Senior Certificates, to the holders of the Class M-1 Certificates, the Interest Distribution Amount for such Class for such Distribution Date;
 
	
            (4)
 	
            to the extent of the Interest Remittance Amount remaining after distribution of the Senior Interest Distribution Amount to the holders of the Senior Certificates and the Interest Distribution Amount to the holders of the Class M-1 Certificates, to the holders of the Class M-2 Certificates, the Interest Distribution Amount for such Class for such Distribution Date; and
 
	
            (5)
 	
            to the extent of the Interest Remittance Amount remaining after distribution of the Senior Interest Distribution Amount to the holders of the Senior Certificates, the Interest Distribution Amount to the holders of the Class M-1 Certificates and the Interest Distribution Amount to the holders of the Class M-2 Certificates, to the holders of the Class M-3 Certificates, the Interest Distribution Amount for such Class for such Distribution Date.
 

(ii)         On each Distribution Date, the Principal Distribution Amount will be paid to the Publicly Offered Certificates, to the extent of the Available Distribution Amount remaining on each Distribution Date,  as follows:

	
            (1)
 	
            From the Group I Senior Principal Distribution Amount, to the Class I-A Certificates until the Certificate Principal Balance thereof has been reduced to zero;
 
	
            (2)
 	
            From the Group II Senior Principal Distribution Amount, to the Group II Certificates in the following order:
 
	
             
	
            (a)
 	
            first, to the Class II-A-5 Certificates, in an amount up to the Class II-A-5 Lockout Principal Distribution Amount for such Distribution Date, until the Certificate Principal Balance thereof has been reduced to zero; and
 

	
            (b)
 	
            second, in the following order of priority:
 

 

 

 

1.   concurrently, to the Class II-A-1A Certificates and Class II-A-1B Certificates, on a pro rata basis based on the Certificate Principal Balance of each such Class, until the Certificate Principal Balance of each such Class has been reduced to zero;

2.   to the Class II-A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

3.   to the Class II-A-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

4.   to the Class II-A-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and

5.   to the Class II-A-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

	
            (3)
 	
            From the Group I Senior Principal Distribution Amount remaining after the Certificate Principal Balance of the Class I-A Certificates has been reduced to zero, to the Group II Certificates in the following order:
 
	
             
	
            (a)
 	
            first, to the Class II-A-5 Certificates, in an amount up to the Class II-A-5 Lockout Principal Distribution Amount for such Distribution Date, until the Certificate Principal Balance thereof has been reduced to zero; and
 

	
            (b)
 	
            second, in the following order of priority:
 

1.   concurrently, to the Class II-A-1A Certificates and Class II-A-1B Certificates, on a pro rata basis based on the Certificate Principal Balance of each such Class, until the Certificate Principal Balance of each such Class has been reduced to zero;

2.   to the Class II-A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

3.   to the Class II-A-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

4.   to the Class II-A-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and

5.   to the Class II-A-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

	
            (4)
 	
            From the Group II Senior Principal Distribution Amount remaining after the Certificate Principal Balances of the Group II Certificates have been reduced to zero, to the Class I-A Certificates, until the Certificate Principal Balance thereof has been reduced to zero.
 

 

 

 

	
            (5)
 	
            To the Class M-1 Certificates, in an amount equal to the Class M-1 Principal Distribution Amount for such Distribution Date, until the Certificate Principal Balance thereof has been reduced to zero.
 
	
            (6)
 	
            To the Class M-2 Certificates, in an amount equal to the Class M-2 Principal Distribution Amount for such Distribution Date, until the Certificate Principal Balance thereof has been reduced to zero.
 
	
            (7)
 	
            To the Class M-3 Certificates, in an amount equal to the Class M-3 Principal Distribution Amount for such Distribution Date, until the Certificate Principal Balance thereof has been reduced to zero.
 

provided, however, on any distribution date after the Certificate Principal Balance of the Subordinate Certificates have been reduced to zero, distributions of principal to the Senior Certificates will be allocated among such Senior Certificates concurrently on a pro rata basis, based on the Certificate Principal Balances thereof.

(iii)        After the payment of interest and principal to the Certificates as described in clauses (i) and (ii) above, any Net Monthly Excess Cashflow for such Distribution Date will be distributed as follows:

	
            (1)
 	
            To the holders of the Publicly Offered Certificates in an amount equal to any Extra Principal Distribution Amount for such Distribution Date, payable to such holders as part of the Principal Distribution Amount in accordance with clause Second above;
 
	
            (2)
 	
            To the holders of the Class M-1 Certificates, then to the holders of the Class M-2 Certificates and then to the holders of the Class M-3 Certificates, the related Interest Carry Forward Amount on such Distribution Date;
 
	
            (3)
 	
            To the Net WAC Reserve Fund, an amount equal to (i) with respect to the Publicly Offered Certificates other than the Class I-A, Class II-A-1A and Class II-A1B Certificates, the sum of the related Net WAC Rate Carryover Amounts, if any, (ii) with respect to the Class II-A-1A Certificates, the amount by which the sum of the Net WAC Rate Carryover Amounts with respect to the Class II-A-1 Certificates exceeds the amount received by the Securities Administrator with respect to the related Cap Contract since the prior Distribution Date and (iii) with respect to the Class II-A-1B Certificates, the amount by which the sum of the Net WAC Rate Carryover Amounts with respect to the Class II-A-1B Certificates exceeds the amount received by the Securities Administrator with respect to the related Cap Contract since the prior Distribution
Date;
 
	
            (4)
 	
            To the holders of the Class X Certificates, the Class X Distribution Amount; and
 
	
            (5)
 	
            To the Holders of the Class R Certificates, in respect of the Class R-II Interest, any remaining amounts.
 

 

 

 

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 Net Monthly Excess Cashflow as described in clause (iii) above, will withdraw from the Net WAC Reserve Fund the amounts on deposit therein and distribute such amounts to the Senior Certificates (other than the Class I-A Certificates) and the Subordinate Certificates in respect of any Net WAC Rate Carryover Amounts due to each such Class in the following manner and order of priority: first, concurrently to the Group II Senior Certificates, on a pro rata basis, based on the entitlement of each such Class, the related Net WAC Rate Carryover Amount (after taking into account payments made pursuant to the Cap Contracts with
respect to the Class II-A-1A Certificates and Class II-A-1B Certificates) for such Distribution Date for each such Class; second, to the Class M-1 Certificates, the related Net WAC Rate Carryover Amount for such Distribution Date for such Class; third, to the Class M-2 Certificates, the related Net WAC Rate Carryover Amount for such Distribution Date for such Class; and fourth, to the Class M-3 Certificates, the related Net WAC Rate Carryover Amount for such Distribution Date for such Class.

(c)        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 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.

(d)        Subject to Section 10.02 hereof respecting the final distribution, on each Distribution Date the Securities Administrator shall make distributions to each Certificateholder 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 Certificates registered in the name of a Depository shall be made to such Depository in immediately available funds

(e)        On each Distribution Date, the Securities Administrator shall prepare the Monthly Statement to Certificateholders for the related Distribution Date (the “Monthly Statement”).

	
            Section 5.05
 	
            [Reserved].
 	
             

	
            Section 5.06
 	
            Allocation of Realized Losses.
 
				

(a)        On or prior to each Determination Date, the Servicer shall determine the amount of any Realized Loss in respect of each Mortgage Loan that occurred during the immediately preceding calendar month.

(b)        The interest portion of Realized Losses 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 Net 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-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and fifth, to the Class M-1 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 all such Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date.

Any allocation of the principal portion of Realized Losses to 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 the Class X Certificates shall be made by reducing the amount otherwise payable in respect thereof pursuant to Section 5.04(b) clause Third. No allocations of any Realized Losses shall be made to the Certificate Principal Balances of the Senior Certificates 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)        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-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; 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-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; fifth, 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.

(e)        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 the Servicing Agreement or this Agreement, that any Subsequent Recoveries have been collected by the Servicer with respect to a Mortgage Loan, the amount of such Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the Class of Subordinate Certificates with the highest payment priority to which Realized Losses have been allocated, but not by more than the amount of Realized Losses previously allocated to that Class of Subordinate 

 

Certificates pursuant to this Section 5.06. The amount of any remaining Subsequent Recoveries will be applied to sequentially 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 5.06. 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 Subordinate Certificate of such Class in accordance with its respective Percentage Interest.

	
            Section 5.07
 	
            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 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 Extra Principal Distribution Amount (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 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 Group I Mortgage Loans and Group II Mortgage Loans 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 Balances of the Subordinate Certificates have all been reduced to zero, the cumulative amount of any Realized Losses that have not been allocated to any Certificates;

(viii)      the number and aggregate principal amounts of Group I Mortgage Loans and Group II Mortgage Loans in (A) Delinquent (exclusive of Mortgage Loans in foreclosure and bankruptcy) (1) thirty-one (31) to sixty (60) days, (2) sixty-one (61) to ninety (90) days and (3) ninety-one (91) or more days, (B) in foreclosure and delinquent (1) thirty-one (31) to sixty (60) days, (2) sixty-one (61) to ninety (90) days and (3) ninety-one (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 Loans that were liquidated during the preceding calendar month, the loan number and the aggregate of the Stated Principal Balances of, and Realized Losses on, such Mortgage Loans (on a Loan Group basis) as of the close of business on the last day of the calendar month preceding such Distribution Date;

(x)        the total number and principal balance of any real estate owned or REO Properties as of the close of business on the last day of the calendar month preceding such Distribution Date;

(xi)        the three-month rolling average of the percent equivalent of a fraction, the numerator of which is the aggregate stated Principal Balance of the Group I Mortgage Loans or Group II Mortgage Loans, as applicable, 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 Stated Principal Balance of all of the Group I Mortgage Loans or Group II Mortgage Loans, as applicable, as of the close of business on the last day of the calendar month preceding 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 Net WAC Rate Carryover Amount for each Class of Certificates and the amount on deposit in the Net WAC Reserve Fund; and

	
            (xiv)
 	
            amounts payable in respect of the Cap Contracts.
 

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 also 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).

As a condition to access the Securities Administrator’s internet website, the Securities Administrator may require registration and the acceptance of a disclaimer.  The Securities Administrator will not be liable for the dissemination of information in accordance with this Agreement.

(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. 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 5.08
 	
            REMIC Designations and REMIC 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 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2, REMIC I Regular Interest LTI-M3 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-IA, REMIC I Regular Interest LTI-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-M3 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 May 2008 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-IIA1A, REMIC I Regular Interest LTI-IIA1B, REMIC I Regular Interest LTI-IIA2, REMIC I Regular Interest LTI-IIA3, REMIC I Regular Interest LTI-IIA4, REMIC I Regular Interest LTI-IIA5, REMIC I Regular Interest LTI-M1, REMIC I Regular Interest LTI-M2 and REMIC I Regular Interest LTI-M3, 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);

(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 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 Distribution 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.

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 May 2008, at which point such amount shall be distributed to REMIC I Regular Interest LTI-P, until $100 has been distributed pursuant to this clause.

	
            Section 5.09
 	
            Class P Certificate Account.
 

The Securities Administrator shall establish and maintain with itself a separate, segregated trust account titled “Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series Alternative Loan Trust 2005-WF1 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 May 2008 Distribution Date, the Trustee 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
 	
            Net WAC Reserve Fund.
 

(a)        The Securities Administrator shall establish a Net WAC Reserve Fund on behalf of the holders of the Publicly Offered Certificates.  The Net WAC Reserve Fund must be an Eligible 

 

Account.  The Net WAC Reserve Fund shall be entitled “Net WAC Reserve Fund, Wells Fargo Bank, N.A. for the benefit of holders of Nomura Asset Acceptance Corporation, Mortgage Pass-Through Certificates, Series 2005-WF1, Class II-A-1A, Class II-A-1B, Class II-A-2, Class II-A-3, Class II-A-4, Class II-A-5, Class M-1, Class M-2 and Class M-3”.  Any payments received by the Securities Administrator under the Cap Contracts shall be deposited into the Net WAC Reserve Fund for the benefit of the Class II-A-1A Certificates and Class II-A-1B Certificates; 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 the Closing Date, the Depositor will deposit, or cause to be deposited, into the Net WAC Reserve Fund $5,000. On each Distribution Date as to which there
is a Net WAC Rate Carryover Amount  payable to any Class of Certificates, the Securities Administrator shall deposit the amounts pursuant to Section 5.04(b)(3)(iii) into the Net WAC Reserve Fund and the Securities Administrator has been directed by the Majority Class X Certificateholder to distribute such amounts to the Holders of the Offered Certificates up to the Net WAC Carryover Amount payable to each such Class, first to the Senior Certificates on a pro rata basis, based on the entitlement of each such Class and then to the Class M-1, Class M-2 and Class M-3 Certificates, in that order.

(b)        The Net WAC Reserve Fund shall be 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 Net WAC Reserve Fund.  The Class X Certificateholders shall be the beneficial owners of the Net WAC Reserve Fund, subject to the power of the Securities Administrator to transfer amounts under Section 5.04(b).  Amounts in the Net WAC 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 Net WAC Reserve Fund shall be taxable to the Majority Class X Certificateholder.  Any losses on such investments shall be deposited in the Net WAC 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 Net WAC 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 II-A-1A Certificates and the Class II-A-1B Certificates to receive payments from the Net WAC Reserve Fund shall be $25,000 and $36,000, respectively, and the amount allocated to the right of the Holders of the Offered Certificates (other than the Class II-A-1A Certificates and Class II-A-1B Certificates) to receive payments from the Net WAC Reserve Fund in respect of any Net WAC Rate Carryover Amount 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
 	
            $25,000
 	
            $1
 	
            $    180,023,000.00
 	
            Class I-A-1 Pass-Through Rate
 
	
            II-A-1A
 	
            $25,000
 	
            $1
 	
            $      56,531,000.00
 	
            Class II-A-1A Pass-Through Rate
 
	
            II-A-1B
 	
            $25,000
 	
            $1
 	
            $      75,000,000.00
 	
            Class II-A-1B Pass-Through Rate
 
	
            II-A-2
 	
            $25,000
 	
            $1
 	
            $      66,685,000.00
 	
            Class II-A-2 Pass-Through Rate
 
	
            II-A-3
 	
            $25,000
 	
            $1
 	
            $      20,573,000.00
 	
            Class II-A-3 Pass-Through Rate
 
	
            II-A-4
 	
            $25,000
 	
            $1
 	
            $      25,440,000.00
 	
            Class II-A-4 Pass-Through Rate
 
	
            II-A-5
 	
            $25,000
 	
            $1
 	
            $      29,162,000.00
 	
            Class II-A-5 Pass-Through Rate
 
	
            M-1
 	
            $25,000
 	
            $1
 	
            $      12,091,000.00
 	
            Class M-1 Pass-Through Rate
 
	
            M-2
 	
            $25,000
 	
            $1
 	
            $        9,673,000.00
 	
            Class M-2 Pass-Through Rate
 
	
            M-3
 	
            $25,000
 	
            $1
 	
            $        7,012,000.00
 	
            Class M-3 Pass-Through Rate
 

 

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 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 Servicers 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 Subordinate 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 investor, (ii) it has acquired and is holding such certificates in reliance on the Prohibited Transaction Exemption 2002-41 or successor (“PTE 2002-41”), and that it understands that there are certain conditions to the availability of the PTE 2002-41, including that such certificates must be rated, at the time of purchase, not lower than “BBB-” (or its equivalent) by Fitch Ratings, Moody’s or Standard & Poor’s, 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 PTCE 95-60, and (3)
the conditions in Sections I and III of PTCE 95-60 have been satisfied.

 

 

If any Certificate or any interest therein is acquired or held in violation of the conditions described in this Section 6.02(c), the next preceding permitted beneficial owner will be treated as the beneficial owner of that Certificate, retroactive to the date of transfer to the purported beneficial owner. Any purported beneficial owner whose acquisition or holding of any certificate or interest therein was effected in violation of the conditions described in this Section 6.02(c) shall indemnify and hold harmless the Depositor, the Trustee, the Servicer, the Master Servicer, the Securities Administrator and the Trust Fund from and against any and all liabilities, claims, costs or expenses incurred by those parties as a result of that acquisition or holding.

(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 to have irrevocably authorized the Securities Administrator or its designee under clause (iii)(A) below to deliver payments to a Person other than such Person and to negotiate the terms of any mandatory sale under clause (iii)(B) below and to execute all instruments of Transfer and to do all other things necessary in connection with any such sale. The rights of each Person acquiring any Ownership Interest in a Residual Certificate are expressly subject to the following provisions:

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

(B)        In connection with any proposed Transfer of any Ownership Interest in a Residual Certificate, the 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 B-3) 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 B-2) 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 it to save it harmless, then, in the absence of notice to the Securities Administrator that such Certificate has been acquired by a bona fide purchaser, the Securities Administrator shall execute, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of 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 agent of any of them  may treat the person in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions 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 or any agent of any of them\ 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 (10) 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, 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 an Event of Default, 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 AND THE MASTER SERVICER

	
            Section 7.01
 	
            Liabilities of the Depositor and the Master Servicer.
 

The Depositor and the Master Servicer each shall be liable in accordance herewith only to the extent of the obligations specifically imposed by this Agreement upon them in their respective capacities as Depositor and Master Servicer and undertaken hereunder by the Depositor and the Master Servicer herein.

	
            Section 7.02
 	
            Merger or Consolidation of the Depositor or the Master Servicer.
 

(a)        Subject to subsection (b) below, the Depositor will keep in full effect its existence, rights and franchises as a corporation under the laws of the jurisdiction of its incorporation.  Subject to the following paragraph, the Master Servicer will keep in full effect its existence, rights and franchises as a national banking association. The Depositor and the Master Servicer each will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Agreement, the Certificates or any of the Mortgage Loans and to perform its respective duties under this Agreement.

(b)        The Depositor or the Master Servicer may be merged or consolidated with or into any Person, or transfer all or substantially all of its assets to any Person, in which case any Person resulting from any merger or consolidation to which the Depositor or the Master Servicer shall be a party, or any Person succeeding to the business of the Depositor or the Master Servicer, shall be the successor of the Depositor or the Master Servicer, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

	
            Section 7.03
 	
            Indemnification of the Depositor.
 

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.

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

Subject to the obligation of the Depositor to indemnify the Indemnified Persons pursuant to Section 7.03:

 

 

(a)        None of the Depositor, the Securities Administrator, the Master Servicer or any of the directors, officers, employees or agents of the Depositor, the Securities Administrator, the Master Servicer shall be under any liability to the Trust Fund or the Certificateholders for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the 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 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 which, prima facie, is properly executed and submitted by any Person respecting any matters arising hereunder.

(c)        The Depositor, the Securities Administrator, the Master Servicer and any director, officer, employee or agent of the Depositor, the Securities Administrator or the Master Servicer shall be indemnified and held harmless by the Trust Fund against any loss, liability or expense incurred in connection with any legal action relating to this Agreement, the Certificates or any Credit Risk Management Agreement or any loss, liability or expense incurred other than 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.

(d)        None of the Depositor, the Securities Administrator or the Master Servicer shall be under any obligation to appear in, prosecute or defend any legal action unless such action is related to its respective duties under this Agreement and, in its opinion, does not 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 from the Distribution Account as and to the extent provided in Article III, any such right of reimbursement being prior to the rights of the Certificateholders to receive any amount in the Distribution Account.  Nothing in this Subsection 7.04(d) shall affect the Trustee’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, the Master Servicer, the Securities Administrator.

 

 

	
            Section 7.05
 	
            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 7.06 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 7.06
 	
            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 accept in writing such assignment and delegation and assume 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 and selling 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 7.07
 	
            Rights of the Depositor in Respect of the Master Servicer.
 

The Master Servicer shall afford the Depositor and the Trustee, upon reasonable notice, during normal business hours, access to all records maintained by the Master Servicer in respect of the Master Servicer’s rights and obligations hereunder and access to officers of the Master Servicer responsible for such obligations. Upon request, the Master Servicer shall furnish to the Depositor and the Trustee its most recent financial statements and such other information relating to the Master Servicer’s capacity to perform its obligations under this Agreement as it 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 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 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 7.07 shall limit the obligation of the Master Servicer to comply with any applicable law prohibiting disclosure of information regarding the Mortgagors and the failure of the Master Servicer to provide access as provided in this Section 7.07 as a result of such obligation shall not constitute a breach of this Section.  Nothing in this Section 7.07 shall require the Master Servicer to collect, create, collate or otherwise generate any information that it does not generate in its usual course of business.  The Master 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 under this Agreement and may, but is not obligated to, perform, or cause a designee to perform, any defaulted obligation of the Master Servicer under this
Agreement or exercise the rights of the Master Servicer under this Agreement; provided that the Master Servicer shall not 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 and is not obligated to supervise the performance of the Master Servicer under this Agreement or otherwise.

 

 

 

ARTICLE VIII

 

DEFAULT; TERMINATION OF MASTER SERVICER

	
            Section 8.01
 	
            Master Servicer Events of Default.
 

(a)        “Master Servicer Event of Default,” wherever used herein, means any one of the following events:

(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 2.04, 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 Event of Default shall occur, then, and in each and every such case, so long as such Master Servicer Event of 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 Event of 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 Event of 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 Event of 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 Event of 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
 	
            Trustee to Act; Appointment of Successor.
 

On and after the time the Master Servicer receives a notice of termination, the Trustee shall be the successor in all respects to the Master Servicer (and, if applicable, the Securities Administrator) under this Agreement and the transactions set forth or provided for herein, and all the responsibilities, duties and liabilities relating thereto and arising thereafter shall be assumed by the Trustee (except for any representations or warranties of the Master Servicer under this Agreement, the responsibilities, duties and liabilities contained in Section 2.03 and the obligation to deposit amounts in respect of losses pursuant to Section 3.23(c)) by the terms and provisions hereof. As compensation therefor, the Trustee shall be entitled to the Master Servicing Compensation and all funds relating to the Mortgage Loans to which the terminated Master Servicer would have been entitled
if it had continued to act hereunder. Notwithstanding the above and subject to the immediately following paragraph, the Trustee may, if it shall be unwilling to so act, or shall, if it is unable to so act or if it is prohibited by law from making advances regarding delinquent mortgage loans or if the Holders of Certificates evidencing, in aggregate, not less than 51% of the Certificate Principal Balance of the Certificates so request in writing, promptly appoint or petition a court of competent jurisdiction to appoint an established mortgage loan servicing institution acceptable to 

 

each Rating Agency and having a net worth of not less than $15,000,000, as the successor to the Master Servicer under this Agreement in the assumption of all or any part of the responsibilities, duties or liabilities of the Master Servicer under this Agreement.

No appointment of a successor to the Master Servicer (and, if applicable, the Securities Administrator) under this Agreement shall be effective until the assumption by the successor of all of the Master Servicer’s (and, if applicable, the Securities Administrator’s) responsibilities, duties and liabilities hereunder.  In connection with such appointment and assumption described herein, the Trustee may make such arrangements for the compensation of such successor out of payments on the Mortgage Loans as it and such successor shall agree; provided, however, that no such compensation shall be in excess of that permitted the Master Servicer (and, if applicable, the Securities Administrator) as such hereunder.  The Depositor, the Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession.  Pending
appointment of a successor to the Master Servicer (and, if applicable, the Securities Administrator) under this Agreement, the Trustee shall act in such capacity as hereinabove provided.  The transition costs and expenses incurred by the Trustee in connection with the replacement of the Master Servicer (and, if applicable, the Securities Administrator) shall be reimbursed out of the Trust.

	
            Section 8.03
 	
            Notification to Certificateholders.
 

(a)        Upon any termination of the Master Servicer pursuant to Section 8.01 or any appointment of a successor to the Master Servicer pursuant to Section 8.02, the Trustee shall give prompt written notice thereof to the Certificateholders at their respective addresses appearing in the Certificate Register, and to each Rating Agency.

(b)        Not later than the later of sixty (60) days after the occurrence of any event, which constitutes or which, with notice or lapse of time or both, would constitute a Master Servicer Event of Default or five (5) days after a Responsible Officer of the Trustee becomes aware of the occurrence of such an event, the Trustee shall transmit by mail to all Holders of Certificates notice of each such occurrence, unless such default or Master Servicer Event of Default shall have been cured or waived.

	
            Section 8.04
 	
            Waiver of Master Servicer Defaults.
 

The Holders representing at least 66% of the Voting Rights evidenced by all Classes of Certificates affected by any Master Servicer Event of Default hereunder may waive such default. Upon any such waiver of a default or Master Servicer Event of Default, such default or Master Servicer Event of Default shall cease to exist and shall be deemed to have been remedied for every purpose hereunder. No such waiver shall extend to any subsequent or other default or Master Servicer Event of Default or impair any right consequent thereon except to the extent expressly so waived.

 

 

ARTICLE IX

 

CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR

	
            Section 9.01
 	
            Duties of Trustee and Securities Administrator.
 

The Trustee, prior to the occurrence of a Master Servicer Event of Default and after the curing or waiver of all Master Servicer Events of Default which may have occurred, and the Securities Administrator each undertake to perform such duties and only such duties as are specifically set forth in this Agreement as duties of the Trustee and the Securities Administrator, respectively. During the continuance of a Master Servicer Event of Default, 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 its 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.

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.

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.

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 Event of Default, and after the curing or waiver of all such Master Servicer Events of Default 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 shall be determined solely by the express provisions of this Agreement, neither the Trustee nor the Securities Administrator shall be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee or the Securities Administrator and, in the absence of bad faith on the part of the Trustee or the 

 

Securities Administrator, respectively, the Trustee or the Securities Administrator, respectively, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee or the Securities Administrator, respectively, that conform to the requirements of this Agreement;

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

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

	
            Section 9.02
 	
            Certain Matters Affecting Trustee and Securities Administrator.
 
	
             
	
            (a)
 	
            Except as otherwise provided in Section 9.01:
 	
             

					

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

(ii)         The Trustee and the Securities Administrator may consult with counsel of its selection and any advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith and in accordance 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 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 Event of Default (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 such person’s own affairs;

 

 

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

(v)        Prior to the occurrence of a Master Servicer Event of Default hereunder and after the curing or waiver of all Master Servicer Events of Default 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 the Holders of Certificates entitled to at least 25% of the Voting Rights; provided, however, that if the payment within a reasonable time to the Trustee or 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 by such Certificateholders, the Trustee or the Securities Administrator, as applicable, may require reasonable indemnity satisfactory to it against such expense, or liability from such Certificateholders as a condition to taking any such action;

(vi)        The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;

(vii)       The Trustee shall not be liable for any loss resulting from the investment of funds held in the Distribution Account, for any loss resulting from the investment of funds held in the Reserve Fund or for any loss resulting from the redemption or sale of any such investment as therein authorized;

(viii)      The Trustee shall not be deemed to have notice of any default, Master Servicer Event of Default or Servicer Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Certificates and this Agreement; and

(ix)        The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, each agent, custodian and other Person employed to act hereunder.

(b)        All rights of action under this Agreement or under any of the Certificates, enforceable by the Trustee, may be enforced by it without the possession of any of the Certificates, or the production thereof at the trial or other proceeding relating thereto, and any such suit, action or proceeding instituted by the Trustee shall be brought in its name for the benefit of all the Holders of such Certificates, subject to the provisions of this Agreement.

(c)        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.

(d)        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 acknowledgments 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 of this Agreement (other than as specifically set forth in Section 9.12) or of the Certificates (other than the signature of the Securities Administrator and authentication of the Securities Administrator on the Certificates) or of any Mortgage Loan or related document. 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 or the Master Servicer in respect of the Mortgage Loans, other than with respect to the Securities Administrator any funds held by it or on behalf of the Trustee in accordance with Section 3.23 and 3.24.

	
            Section 9.04
 	
            Trustee and Securities Administrator May Own Certificates.
 

Each of the Trustee and the Securities Administrator in its individual capacity or any other capacity may become the owner or pledgee of Certificates and may transact business with other interested parties and their Affiliates with the same rights it would have if it were not 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 Custodian and any director, officer, employee or agent of the Trustee,  the Securities Administrator and the Custodian 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 Custodian or the Securities Administrator in connection with any claim or legal action or 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 Custodian. 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.

	
            Section 9.07
 	
            Resignation and Removal of Trustee and Securities Administrator.
 

The Trustee and the Securities Administrator may at any time resign 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 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 shall execute, acknowledge and deliver to the Depositor and its predecessor trustee or predecessor securities administrator an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee or predecessor securities administrator shall become effective and such successor trustee or successor securities administrator without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with the like effect as if originally named as trustee 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 unless at the time of such acceptance such successor trustee or successor securities administrator shall be eligible under the provisions of Section 9.06 and the appointment of 

 

such successor trustee or successor securities administrator shall not result in a downgrading of any Class of Certificates by any Rating Agency, as evidenced by a letter from each Rating Agency.

Upon acceptance of appointment by a successor trustee or successor securities administrator as provided in this Section, the Depositor shall mail notice of the succession of such trustee hereunder to all Holders of Certificates at their addresses as shown in the Certificate Register. If the Depositor fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee or successor securities administrator, the successor trustee or successor securities administrator shall cause such notice to be mailed at the expense of the Depositor.

	
            Section 9.09
 	
            Merger or Consolidation of Trustee or Securities Administrator.
 

Any corporation or association into which the Trustee or the Securities Administrator may be merged or converted or with which it may be consolidated or any corporation or association resulting from any merger, conversion or consolidation to which the Trustee or the Securities Administrator shall be a party, or any corporation or association succeeding to the business of the Trustee or the Securities Administrator shall be the successor of the Trustee or the Securities Administrator hereunder, provided such corporation or association shall be eligible under the provisions of Section 9.06, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

	
            Section 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 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 ten (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-3 Certificates, second, to the Class M-2 Certificates, third, to the Class M-1 Certificates, and fourth, 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 Residual 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 statement to Certificateholders pursuant to Section 5.07 hereof instructions as to 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 unreimbursed costs and expenses of the Trustee payable pursuant
to Section 9.05.

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 not earlier than the tenth (10th) day and no later than the fifteenth (15th) day of the month immediately preceding 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.
 

(a)        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.
 

(b)        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.

(c)        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(a)(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 the 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 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, 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 fifty percent (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.

	
            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 Master Servicer Event of Default that has not been cured;

(iii)        The resignation or termination of 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 3.16; and
 

(ii)         Each annual independent public accountants’ servicing report described in Section 3.17.

(b)        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-WF1; (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-WF1 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 Securities Administrator, its Corporate Trust Office; (iv) 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 NAAC 2005-WF1); (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 

 

Custodian, JPMorgan Chase Bank Mortgage Banking Custody Services, 1111 Fannin Street, 12th Floor, Houston, Texas 77002 and (vi) in the case of the Rating Agencies, (x) Standard & Poor’s, 55 Water Street, 41st Floor, New York, New York 10041, Attention: Mortgage Surveillance Group and (y) 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 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/ John P. Graham
 
	
            Name: John P. Graham
 
	
            Title: Managing Director
 
	
            WELLS FARGO BANK, NATIONAL ASSOCIATION,
 
	
            as Master Servicer and Securities Administrator
 
	
            By: /s/ Peter J. Masterman
 
	
            Name: Peter J. Masterman
 
	
            Title: Vice President
 
	
            HSBC BANK USA, NATIONAL ASSOCIATION,
 
	
            as Trustee
 
	
            By: /s/ Wendy Zhang
 
	
            Name: Wendy Zhang
 
	
            Title: Assistant Vice President
 
	
            With respect to Sections 3.27 and 3.28
 
	
            THE MURRAYHILL COMPANY
 
	
            By: /s/ Kevin J. Kanouff
 
	
            Name: Kevin J. Kanouff
 
	
            Title: President and General Counsel
 

 

 

 

	
            STATE OF NEW YORK
 	
            )
 
	
             
 	
            ) ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 
	
             
 	
             
 

On this ___ day of May 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 May 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 NEW YORK
 	
            )
 
	
             
 	
            ) ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 
	
             
 	
             
 

On this ____ day of May 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, 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 May 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]

 

 

 

 

 

EXHIBIT A-1

 

FORM OF CLASS I-A CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE PRINCIPAL PAYMENTS HEREON. 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. [__]
 	
            Initial Pass-Through Rate:  [____]%
 
	
             
 	
             
 
	
            Class I-A Senior
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement
  and Cut-off Date: May 1, 2005

 
 	
            Aggregate Initial Certificate Principal Balance of the Class I-A Certificates as of the Cut-off Date:

$
 
	
            Trustee: HSBC Bank USA, National Association
 	
             
 
	
            First Distribution Date: June 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:

March 25, 2035
 	
            CUSIP: [______________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-WF1

evidencing a fractional undivided interest in the distributions allocable to the Class I-A Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family fixed 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, fixed 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, as 

 

seller, Wells Fargo Bank, N.A., as master servicer (“Master Servicer”) and securities administrator (“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 the Initial Pass-Through Rate set forth on the face hereof for the First Distribution Date and the weighted average of the Net Mortgage Rates of the Group I Mortgage Loans for each Distribution Date thereafter.  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 (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.

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 Classes 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:  May __, 2005
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class I-A Certificates referred to in the within-mentioned Agreement.

	
            Dated:  May __, 2005
 	
             
 	
             
 	
             
 	
            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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

EXHIBIT A-2

 

FORM OF CLASS II-A-[1A][1B][2][3][4][5] 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. 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. [__]
 	
            Initial Pass-Through Rate:  [_____]%
 
	
             
 	
             
 
	
            Class II-A-[1A][1B][2][3][4][5] Senior
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement
  and Cut-off Date: May 1, 2005

 
 	
            Aggregate Initial Certificate Principal Balance of the Class II-A-[1A][1B][2][3][4][5] Certificates as of the Cut-off Date:

$
 
	
            Trustee: HSBC Bank USA, National Association
 	
             
 
	
            First Distribution Date: June 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:

March 25, 2035
 	
            CUSIP: [______________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-WF1

evidencing a fractional undivided interest in the distributions allocable to the Class II-A-[1A][1B][2][3][4][5] Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family fixed 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, fixed 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, as seller, Wells Fargo Bank, N.A., as master servicer (“Master Servicer”) and securities 

 

administrator (“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 [FOR CLASS II-A-1A CERTIFICATES AND CLASS II-A-1B CERTIFICATES][the period from and including the 25th day of the calendar month preceding the calendar month in which such Distribution Date occurs (or with respect to the first Accrual Period, the Closing Date) to and including the 24th day of the calendar month in which such Distribution Date occurs on the immediately preceding Distribution Date] [FOR CLASS II-A-2, CLASS II-A-3, CLASS II-A-3, CLASS II-A-4 AND CLASS II-A-5 CERTIFICATES][the calendar month immediately preceding the calendar month in which such Distribution Date occurs] on the Certificate Principal Balance hereof at a per annum Pass-Through Rate equal to the Initial Pass-Through Rate set forth on the face hereof for the first
Distribution Date and, for each Distribution Date thereafter, [FOR CLASS II-A-1A CERTIFICATES AND CLASS II-A-1B CERTIFICATES][the lesser of (i) One-Month LIBOR plus [______]% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date] [FOR CLASS II-A-2 CERTIFICATES AND CLASS II-A-3 CERTIFICATES][ the lesser of (i) [______]% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date] [FOR CLASS II-A-4 CERTIFICATES AND CLASS II-A-5 CERTIFICATES][the lesser of (i)(a) with respect to any Distribution Date which occurs on or prior to the Optional Termination Date, [_____]% per annum and (b) with respect to each Distribution Date which occurs thereafter, [_____]% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date].  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.

 

 

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 Classes 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:  May __, 2005
 	
             
 	
             
 	
             
 	
            WELLS FARGO BANK, N.A.,

as Securities Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class II-A-[1A][1B][2][3][4][5] Certificates referred to in the within-mentioned Agreement.

	
            Dated:  May __, 2005
 	
             
 	
             
 	
             
 	
            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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

EXHIBIT A-3

FORM OF CLASS M-[1][2][3] 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] 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:  [____]%
 
	
             
 	
             
 
	
            Class M-[1][2][3] Subordinate
 	
             
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement and Cut-off Date:

May 1, 2005
 	
            Aggregate Initial Certificate Principal Balance of the Class M-[1][2][3] Certificate as of the Cut-off Date:

$ 
 
	
            Trustee: HSBC Bank USA, National Association
 	
             
 
	
            First Distribution Date:

June 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:

March 25, 2035
 	
            CUSIP:   [__________________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-WF1

evidencing a fractional undivided interest in the distributions allocable to the Class M-[1][2][3] Certificates with respect to a Trust Fund consisting primarily of a pool of conventional one- to four-family fixed 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, fixed 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, as seller, Wells Fargo Bank, N.A., as master servicer (“Master Servicer”) and securities 

 

administrator (“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 the Initial Pass-Through Rate set forth on the face hereof for the first Distribution Date and, for each Distribution Date thereafter, the lesser of (i)(a) with respect to each Distribution Date which occurs on or prior to the Optional Termination Date, [____]% per annum and (b) with respect to each Distribution Date which occurs thereafter, [____]% per annum and (ii) the applicable Net WAC Pass-Through Rate for such Distribution Date.  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:  May __, 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] Certificates referred to in the within-mentioned Agreement.

	
            Dated:  May __, 2005
 	
             
 	
             
 	
             
 	
            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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as 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 TRUSTEE 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 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: [___]%
 
	
             
 	
             
 
	
            Class X
 	
            Variable Pass-Through Rate
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement and Cut-off Date:

May 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:

June 25, 2005
 	
             
 
	
             
 	
             
 
	
            Assumed Final Distribution Date:

March 25, 2035
 	
            CUSIP: [_____________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-WF1

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 fixed 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, fixed 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, as seller, Wells Fargo Bank, N.A., as master servicer (“Master
Servicer”) and securities administrator (“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 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 Trustee 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 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 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 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 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:  May __, 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.

	
            Dated:  May __, 2005
 	
             
 	
             
 	
             
 	
            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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as 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 TRUSTEE 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 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:

May 1, 2005
 	
            Aggregate Initial Certificate Principal Balance of the Class P Certificates as of the Cut-off Date:

$100
 
	
             
 	
             

Initial Certificate Principal Balance of the Certificate as of the Cut-off Date:

$100

 
 
	
            Trustee: HSBC Bank USA, National Association
 	
             
 
	
            First Distribution Date:

June 25, 2005
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.
 
	
             
 	
             
 
	
            Assumed Final Distribution Date:

March 25, 2035
 	
            CUSIP:  [________________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-WF1

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 fixed 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, fixed 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, as seller, Wells Fargo Bank, N.A., as master servicer (“Master Servicer”) and securities administrator (“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 Trustee 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 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 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 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 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 on 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:  May __, 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.

	
            Dated:  May __, 2005
 	
             
 	
             
 	
             
 	
            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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as 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: [__]
 
	
             
 	
             
 
	
            Date of Pooling and Servicing Agreement 
 and Cut-off Date: May 1, 2005

 
 	
             
 
	
             
 	
             
 
	
            First Distribution Date:

June 25, 2005
 	
             
 
	
             
 	
             
 
	
            Trustee: HSBC Bank USA, National Association
 	
            Master Servicer and Securities Administrator: Wells Fargo Bank, N.A.

 
 
	
             
 	
             
 
	
            Assumed Final Distribution Date:

March 25, 2035
 	
            CUSIP:  [_______________]
 
	
             
 	
             
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

SERIES 2005-WF1

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 fixed 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, fixed 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, as seller, Wells Fargo Bank, N.A., as master servicer 

 

(“Master Servicer”) and securities administrator (“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 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:  May __, 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__________________, the assignee named above, or ________________________, as 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; and
 	
             

												

(l)                        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-WF1, 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

HSBC Bank USA, National Association

Institutional Trust Services

4 New York Plaza, 6th Floor

New York, New York 10004-2477

Attention: Nomura Asset Acceptance

 Corporation, Alternative Loan Trust, Series 2005-WF1

	
            Re:
 	
            Nomura Asset Acceptance Corporation
 

Mortgage Pass-Through Certificates, Series 2005-WF1, 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-WF1, Class _____ (the “Certificates”), issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of May 1, 2005, among Nomura Asset Acceptance Corporation, as depositor (the “Depositor”), Nomura Credit & Capital, Inc., as seller, Wells Fargo Bank, N.A., as master servicer (“Master Servicer”) and securities administrator (“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 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

HSBC Bank USA, National Association

Institutional Trust Services

4 New York Plaza, 6th Floor

New York, New York 10004

Attention: Nomura Asset Acceptance Corporation,

 Alternative Loan Trust, 2005-WF1

	
            Re:
 	
            Nomura Asset Acceptance Corporation, Alternative Loan Trust,
 

Mortgage Pass-Through Certificates, Series 2005-WF1

Ladies and Gentlemen:

_______________ (the “Purchaser”) intends to purchase from ____________ (the “Seller”) $_________ Initial Certificate Principal Balance of Mortgage Pass-Through Certificates, Series 2005-WF1, Class _____ (the “Certificates”), issued pursuant to the Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”), dated as of May 1, 2005, among Nomura Asset Acceptance Corporation, as depositor (the “Depositor”), Nomura Credit & Capital, Inc., as seller, Wells Fargo Bank, N.A., as master servicer (“Master Servicer”) and securities administrator (“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 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

HSBC Bank USA, National Association

Institutional Trust Services

4 New York Plaza, 6th Floor

New York, New York 10004

	
            Re:
 	
            Nomura Asset Acceptance Corporation, Alternative Loan Trust, Mortgage Pass-Through Certificates, Series 2005-WF1 (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 (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 TRUSTEE 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 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 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 TRUSTEE 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 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 May 1, 2005, between Nomura Asset Acceptance Corporation, as depositor, Nomura Credit & Capital, Inc., as seller, Wells Fargo Bank, N.A., as master servicer (“Master Servicer”) and securities administrator (“Securities Administrator”), and HSBC Bank USA, National Association, as 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

SCHEDULE OF MORTGAGE LOANS WITH LOST NOTES

[None]

 

 

EXHIBIT K

PREPAYMENT CHARGE SCHEDULE

 

 

EXHIBIT L

APPENDIX E – Standard & Poor’s Anti-Predatory Lending Categorization

Standard & Poor’s has categorized loans governed by anti-predatory lending laws in the Jurisdictions listed below into three categories based upon a combination of factors that include (a) the risk exposure associated with the assignee liability and (b) the tests and thresholds set forth in those laws. Note that certain loans classified by the relevant statute as Covered are included in Standard & Poor’s High Cost Loan Category because they included thresholds and tests that are typical of what is generally considered High Cost by the industry.

 

 

	
            Standard & Poor’s High Cost Loan Categorization
	
            State/Jurisdiction	
            Name of  Anti-Predatory Lending Law/Effective  Date	
            Category under Applicable Anti-Predatory Lending Law
	
            Arkansas	
            Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et  seq.Effective July 16, 2003	
            High Cost Home Loan
	
            Cleveland Heights, OH	
            Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et  seq.Effective June 2, 2003 	
            Covered Loan
	
            Colorado	
            Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et  seq.Effective for covered loans offered or entered into on or after January 1, 2003. Other provisions of the Act took effect on June 7, 2002	
            Covered Loan
	
            Connecticut	
            Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746 et  seq. Effective October 1, 2001	
            High Cost Home Loan
	
            District of Columbia	
            Home Loan Protection Act, D.C. Code §§ 26-1151.01 et  seq.Effective for loans closed on or after January 28, 2003	
            Covered Loan
	
            Florida	
            Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et  seq.Effective October 2, 2002	
            High Cost Home Loan
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et  seq.Effective October 1, 2002 – March 6, 2003	
  High Cost Home Loan

 

 

 

 

	
            Georgia as amended (Mar. 7, 2003 – current)	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et  seq.Effective for loans closed on or after March 7, 2003	
            High Cost Home Loan
	
            HOEPA Section 32	
            Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R. §§ 226.32 and 226.34Effective 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 July 1, 1999 	
            High Loan to Value Consumer Loan (id. § 16a-3-207) and;
	
            High APR Consumer Loan (id. § 16a-3-308a)
	
            Kentucky	
            2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et  seq.Effective June 24, 2003	
            High Cost Home Loan
	
            Maine	
            Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et  seq.Effective September 29, 1995 and as amended from time to time	
            High Rate High Fee Mortgage
	
            Massachusetts	
            Part 40 and Part 32, 209 C.M.R. §§ 32.00 et  seq. and 209 C.M.R. §§ 40.01 et  seq.Effective March 22, 2001 and amended from time to time	
  High Cost Home Loan

 

 

 

 

	
            Nevada	
            Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et  seq.Effective October 1, 2003	
            Home Loan
	
            New Jersey	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et  seq.Effective for loans closed on or after November 27, 2003	
            High Cost Home Loan
	
            New Mexico	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et  seq.Effective as of January 1, 2004; Revised as of February 26, 2004	
            High Cost Home Loan
	
            New York	
            N.Y. Banking Law Article 6-lEffective for applications made on or after April 1, 2003	
            High Cost Home Loan
	
            North Carolina	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et  seq.Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)	
            High Cost Home Loan
	
            Ohio	
            H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code Ann. §§ 1349.25 et  seq.Effective May 24, 2002	
            Covered Loan
	
            Oklahoma	
            Consumer Credit Code (codified in various sections of Title 14A)Effective July 1, 2000; amended effective January 1, 2004	
  Subsection 10 Mortgage
 

 

 

 

 

	
            South Carolina
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004
 	
            High Cost Home Loan
 
	
            West Virginia 
 	
            West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code Ann. §§ 31-17-1 et seq.

Effective June 5, 2002
 	
  West Virginia Mortgage Loan Act Loan
 

 

 

	Standard & Poor’s Covered Loan Categorization
	
            State/Jurisdiction
 	
            Name of Anti-Predatory Lending Law/Effective Date
 	
            Category under Applicable Anti-Predatory Lending Law
 
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            Covered Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective November 27, 2003 – July 5, 2004
 	
  Covered Home Loan
 

 

	
            Standard  & Poor’s Home Loan Categorization

  
	
            State/Jurisdiction
  	
            Name of  Anti-Predatory Lending Law/Effective Date
  	
            Category under  Applicable Anti-Predatory Lending Law
  
	
            Georgia (Oct. 1, 2002 – Mar. 6, 2003)
 	
            Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003
 	
            Home Loan
 
	
            New Jersey
 	
            New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective for loans closed on or after November 27, 2003
 	
  Home Loan
 

 

 

 

 

	
            New Mexico
 	
            Home Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.

Effective as of January 1, 2004; Revised as of February 26, 2004
 	
            Home Loan
 
	
            North Carolina
 	
            Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E et seq.

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)
 	
            Consumer Home Loan
 
	
            South Carolina
 	
            South Carolina High Cost and Consumer Home Loans Act, S.C. Code Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004
 	
  Consumer Home LoanEXHIBIT 4.1

 

 

 

	
             
 

 

 

PHH MORTGAGE CAPITAL LLC,

Depositor

PHH MORTGAGE CORPORATION,

Master Servicer

CITIBANK, N.A.,

Trustee

POOLING AND SERVICING AGREEMENT

Dated as of May 1, 2005

PHHMC Mortgage Pass-Through Certificates, Series 2005-3

 

 

	
             
 

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I  DEFINITIONS

	
            Section 1.01
 	
            Defined Terms.
 
	
            Section 1.02
 	
            Accounting.
 	
             

 

 

ARTICLE II  CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES

	
            Section 2.01
 	
            Conveyance of Mortgage Loans.
 	
             

	
            Section 2.02
 	
            Acceptance of Trust Fund by the Trustee.
 	
             

	
            Section 2.03
 	
            Repurchase or Substitution of Mortgage Loans by the Sellers- Assignment of Interest in Additional Collateral.
 
	
            Section 2.04
 	
            Representations, Warranties and Covenants of the Master Servicer.
 	
             

	
            Section 2.05
 	
            Representations and Warranties of the Depositor.
 	
             

	
            Section 2.06
 	
            Purpose and Powers of the Trust.
 	
             

	
            Section 2.07
 	
            Issuance of Certificates.
 	
             

								

 

 

ARTICLE III  ADMINISTRATION AND SERVICING OF THE TRUST FUND

	
            Section 3.01
 	
            Master Servicer to Act as Master Servicer.
 	
             

	
            Section 3.02
 	
            Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers.
 	
             

	
            Section 3.03
 	
            Successor Sub-Servicers.
 	
             

	
            Section 3.04
 	
            Liability of the Master Servicer.
 	
             

	
            Section 3.05
 	
            No Contractual Relationship Between Sub-Servicers and Trustee or Certificateholders.
 	
             

	
            Section 3.06
 	
            Assumption or Termination of Sub-Servicing Agreements by Trustee.
 	
             

	
            Section 3.07
 	
            Collection of Certain Mortgage Loan Payments.
 	
             

	
            Section 3.08
 	
            Sub-Servicing Accounts.
 	
             

	
            Section 3.09
 	
            Collection of Taxes, Assessments and Similar Items; Servicing Accounts.
 	
             

	
            Section 3.10
 	
            Collection Account and Distribution Account.
 	
             

	
            Section 3.11
 	
            Withdrawals from the Collection Account and Distribution Account.
 	
             

	
            Section 3.12
 	
            Investment of Funds in the Collection Account, Servicing Accounts and the Distribution Account.
 
	
            Section 3.13
 	
            Maintenance of the Primary Insurance Policies; Collections Thereunder.
 	
             

	
            Section 3.14
 	
            Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage.
 	
             

	
            Section 3.15
 	
            Enforcement of Due-On-Sale Clauses. Assumption Agreements.
 	
             

	
            Section 3.16
 	
            Realization Upon Defaulted Mortgage Loans.
 	
             

	
            Section 3.17
 	
            Trustee to Cooperate; Release of Mortgage Files.
 	
             

	
            Section 3.18
 	
            Servicing Compensation.
 	
             

	
            Section 3.19
 	
            Reports to the Trustee; Collection Account Statements.
 	
             

	
            Section 3.20
 	
            Statement as to Compliance.
 	
             

	
            Section 3.21
 	
            Independent Public Accountants’ Servicing Report.
 	
             

	
            Section 3.22
 	
            Access to Certain Documentation.
 	
             

	
            Section 3.23
 	
            Title, Management and Disposition of REO Property.
 	
             

	
            Section 3.24
 	
            Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls.
 	
             

	
            Section 3.25
 	
            Administration of Buydown Funds.
 	
             

	
            Section 3.26
 	
            Obligations of the Master Servicer in Respect of Loan Rates and Monthly Payments.
 	
             

																										

 

 

ARTICLE IV  PAYMENTS TO CERTIFICATEHOLDERS

	
            Section 4.01
 	
            Distribution Account; Distributions.
 	
             

	
            Section 4.02
 	
            Statements to Certificateholders.
 	
             

	
            Section 4.03
 	
            Remittance Reports; Advances by the Master Servicer.
 	
             

	
            Section 4.04
 	
            Allocation of Realized Losses.
 	
             

	
            Section 4.05
 	
            Information Reports to Be Filed by the Master Servicer.
 
						

 

 

 

	
            Section 4.06
 	
            Compliance with Withholding Requirements.
 
	
            Section 4.07
 	
            [Reserved].
 	
             

	
            Section 4.08
 	
            Limited Purpose Surety Bond.
 	
             

				

 

 

ARTICLE V  THE CERTIFICATES

	
            Section 5.01
 	
            The Certificates.
 	
             

	
            Section 5.02
 	
            Registration of Transfer and Exchange of Certificates.
 
	
            Section 5.03
 	
            Mutilated. Destroyed. Lost or Stolen Certificates.
 	
             

	
            Section 5.04
 	
            Persons Deemed Owners.
 	
             

	
            Section 5.05
 	
            Appointment of Paying Agent.
 	
             

						

 

 

ARTICLE VI  THE MASTER SERVICER AND THE DEPOSITOR

	
            Section 6.01
 	
            Liability of the Master Servicer and the Depositor.
 	
             

	
            Section 6.02
 	
            Merger or Consolidation of or Assumption of the Obligations of the Master Servicer or the Depositor.
 
	
            Section 6.03
 	
            Limitation on Liability of the Master Servicer and Others.
 	
             

	
            Section 6.04
 	
            Master Servicer Not to Resign.
 	
             

	
            Section 6.05
 	
            Delegation of Duties.
 	
             

						

 

 

ARTICLE VII  DEFAULT

	
            Section 7.01
 	
            Master Servicer Events of Termination.
 	
             

	
            Section 7.02
 	
            Trustee to Act: Appointment of Successor.
 	
             

	
            Section 7.03
 	
            Waiver of Master Servicer Events of Termination.
 
	
            Section 7.04
 	
            Notification to Certificateholders.
 	
             

	
            Section 7.05
 	
            Survivability of Master Servicer Liabilities.
 	
             

						

 

 

ARTICLE VIII  THE TRUSTEE

	
            Section 8.01
 	
            Duties of Trustee.
 	
             

	
            Section 8.02
 	
            Certain Matters Affecting the Trustee.
 	
             

	
            Section 8.03
 	
            Trustee Not Liable for Certificates or Mortgage Loans.
 	
             

	
            Section 8.04
 	
            Trustee May Own Certificates.
 	
             

	
            Section 8.05
 	
            Master Servicer to Pay Trustee Expenses; Trustee Fees.
 	
             

	
            Section 8.06
 	
            Eligibility Requirements for Trustee.
 	
             

	
            Section 8.07
 	
            Resignation or Removal of Trustee.
 	
             

	
            Section 8.08
 	
            Successor Trustee.
 	
             

	
            Section 8.09
 	
            Merger or Consolidation of Trustee.
 	
             

	
            Section 8.10
 	
            Appointment of Co-Trustee or Separate Trustee.
 	
             

	
            Section 8.11
 	
            Limitation of Liability.
 	
             

	
            Section 8.12
 	
            Trustee May Enforce Claims Without Possession of Certificates.
 	
             

	
            Section 8.13
 	
            Suits for Enforcement.
 	
             

	
            Section 8.14
 	
            Waiver of Bond Requirement.
 	
             

	
            Section 8.15
 	
            Waiver of Inventory. Accounting and Appraisal Requirement.
 	
             

	
            Section 8.16
 	
            Right of Trustee in Capacity of Certificate Registrar or Paying Agent.
 
	
            Section 8.17
 	
            Periodic Filings.
 	
             

																		

 

 

ARTICLE IX  REMIC ADMINISTRATION

	
            Section 9.01
 	
            REMIC Administration.
 	
             

	
            Section 9.02
 	
            Prohibited Transactions and Activities.
 	
             

	
            Section 9.03
 	
            Master Servicer and Trustee Indemnification.
 
				

 

 

 

ARTICLE X  TERMINATION

	
            Section 10.01
 	
            Termination.
 	
             

	
            Section 10.02
 	
            Additional Termination Requirements.
 

 

 

ARTICLE XI  [RESERVED] 

 

ARTICLE XII  MISCELLANEOUS PROVISIONS

	
            Section 12.01
 	
            Amendment.
 	
             

	
            Section 12.02
 	
            Recordation of Agreement: Counterparts.
 	
             

	
            Section 12.03
 	
            Limitation on Rights of Certificateholders.
 
	
            Section 12.04
 	
            Governing Law: Jurisdiction.
 	
             

	
            Section 12.05
 	
            Notices.
 	
             

	
            Section 12.06
 	
            Severability of Provisions.
 	
             

	
            Section 12.07
 	
            Article and Section References.
 	
             

	
            Section 12.08
 	
            Notice to the Rating Agency.
 	
             

	
            Section 12.09
 	
            Further Assurances.
 	
             

	
            Section 12.10
 	
            Benefits of Agreement.
 	
             

	
            Section 12.11
 	
            Acts of Certificateholders.
 	
             

										

 

 

 

 

EXHIBITS:

	
            Exhibit A
 	
            Form of Class A Certificates
 	
             

	
            Exhibit B
 	
            [reserved]
 	
             

	
            Exhibit C-1
 	
            Form of Class R Certificates
 	
             

	
            Exhibit C-2
 	
            Form of Class B Certificates
 	
             

	
            Exhibit D
 	
            Mortgage Loan Schedule
 	
             

	
            Exhibit E
 	
            Form of Request for Release
 	
             

	
            Exhibit F-1
 	
            Form of Rule 144A Representation Letter
 	
             

	
            Exhibit F-2
 	
            Form of Transferor Certificate
 	
             

	
            Exhibit F-3
 	
            Form of Transferee Representation Letter
 	
             

	
            Exhibit F-4
 	
            Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit
 	
             

	
            Exhibit G-1
 	
            Form of ERISA Representation Letter (Class B-4, Class B-5 and Class B-6)
 	
             

	
            Exhibit G-2
 	
            Form of ERISA Representation Letter (Class B-1, Class B-2 and Class B-3)
 	
             

	
            Exhibit H
 	
            Form of Lost Note Affidavit
 	
             

	
            Exhibit I-1
 	
            Form of Trustee’s Initial Certification
 	
             

	
            Exhibit I-2
 	
            Form of Trustee’s Final Certification
 	
             

	
            Exhibit J
 	
            Mortgage Loan Purchase Agreement
 	
             

	
            Exhibit K
 	
            Assignment, Assumption and Recognition Agreement (Additional Collateral Servicing Agreement)
 
	
            Exhibit L
 	
            Planned Principal Balances
 	
             

	
            Exhibit M
 	
            Form of Form 10-K Certificate
 	
             

	
            Exhibit N
 	
            Form of Back-up Certification to Form 10-K Certificate
 	
             

																	

 

 

 

This Pooling and Servicing Agreement is dated as of May 1, 2005 (the “Agreement”), among PHH MORTGAGE CAPITAL LLC, as depositor (the “Depositor”), PHH MORTGAGE CORPORATION, as master servicer (the “Master Servicer”) and CITIBANK, N.A., as trustee (the “Trustee”).

PRELIMINARY STATEMENT:

The Depositor intends to sell mortgage pass-through certificates (collectively, the “Certificates”), to be issued hereunder in multiple classes, which in the aggregate will evidence the entire beneficial ownership interest in the Mortgage Loans (as defined herein). As provided herein, the Trustee will make, in accordance with Section 9.01, an election to treat the entire segregated pool of assets described in the definition of Trust Fund (as defined herein), and subject to this Agreement (including the Mortgage Loans), as two real estate mortgage investment conduits (each a “REMIC”) for federal income tax purposes.

REMIC I

The following table sets forth (or describes) the Class designation, Pass-Through Rate and Uncertificated Principal Balance, for each Class of REMIC I Regular Interest comprising the interests in REMIC I created hereunder:

 

	
            REMIC I Regular Interest
 	
             
 	
            Uncertificated
 Principal Balance
 	
             
 	
            Uncertificated
 Pass-Through Rate(1)
 	
             
 	
            Assumed Final
 Maturity Date(2)
 	
             
 
	
            A-1                                                                                                                       
 	
             
 	
            $
 	
            30,050,902.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-2                                                                                                                       
 	
             
 	
            $
 	
            22,669,193.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-3                                                                                                                       
 	
             
 	
            $
 	
            25,484,438.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-4                                                                                                                       
 	
             
 	
            $
 	
            3,017,516.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-5                                                                                                                       
 	
             
 	
            $
 	
            5,074,024.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-6                                                                                                                       
 	
             
 	
            $
 	
            1,302,106.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-7                                                                                                                       
 	
             
 	
            $
 	
            13,222,397.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            R-II Interest                                                                           
 	
             
 	
            $
 	
            100.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-1                                                                                                                         
 	
             
 	
            $
 	
            7,547,785.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-2                                                                                                                         
 	
             
 	
            $
 	
            716,213.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-3                                                                                                                         
 	
             
 	
            $
 	
            385,653.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-4                                                                                                                         
 	
             
 	
            $
 	
            275,467.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-5                                                                                                                         
 	
             
 	
            $
 	
            220,373.00
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-6                                                                                                                         
 	
             
 	
            $
 	
            220,373.13
 	
             
 	
            Variable Rate
 	
             
 	
            June 18, 2035
 	
             
 

 

	
            (1)
 	
            Calculated in accordance with the definition of “Uncertificated Pass-Through Rate” herein.
 
	
             
 	
             
 
	
            (2)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the month following the month of 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.
 

 

 

 

 

REMIC II

The following table sets forth (or describes) the Class designation, Pass-Through Rate and Original Certificate Principal Balance for each Class of Certificates comprising the interests in the Trust Fund created hereunder:

 

	
            Class
 	
             
 	
            Original Certificate
 Principal Balance
 	
             
 	
            Initial Pass-
 Through Rate
 	
             
 	
            Assumed Final
 Maturity Dates(5)
 	
             
 
	
            A-1                                                                                                                       
 	
             
 	
            $
 	
            30,050,902.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-2                                                                                                                       
 	
             
 	
            $
 	
            22,669,193.00
 	
             
 	
            Variable Rate(2)
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-3                                                                                                                       
 	
             
 	
            $
 	
            25,484,438.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-4                                                                                                                       
 	
             
 	
            $
 	
            3,017,516.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-5                                                                                                                       
 	
             
 	
            $
 	
            5,074,024.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-6                                                                                                                       
 	
             
 	
            $
 	
            1,302,106.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            A-7(4)                                                                                                         
 	
             
 	
            $
 	
            13,222,397.00
 	
             
 	
            Variable Rate(3)
 	
             
 	
            June 18, 2035
 	
             
 
	
            R-I                                                                                                                           
 	
             
 	
            $
 	
            100.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            R-II                                                                                                                       
 	
             
 	
            $
 	
            100.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-1                                                                                                                         
 	
             
 	
            $
 	
            7,547,785.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-2                                                                                                                         
 	
             
 	
            $
 	
            716,213.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-3                                                                                                                         
 	
             
 	
            $
 	
            385,653.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-4                                                                                                                         
 	
             
 	
            $
 	
            275,467.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-5                                                                                                                         
 	
             
 	
            $
 	
            220,373.00
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 
	
            B-6                                                                                                                         
 	
             
 	
            $
 	
            220,373.13
 	
             
 	
            Variable Rate(1)
 	
             
 	
            June 18, 2035
 	
             
 

 

	
            (1)
 	
            Varies according to the weighted average of the Net Mortgage Rate on each Mortgage Loan.
 
	
             
 	
             
 
	
            (2)
 	
            Varies according to (i) the weighted average of the Net Mortgage Rate on each Mortgage Loan minus (ii) 0.98% per annum.
 
	
             
 	
             
 
	
            (3)
 	
            Varies according to the sum of (i) the weighted average of the Net Mortgage Rate on each Mortgage Loan and (ii) 0.98% per annum multiplied by a fraction, the numerator of which is the Certificate Principal Balance of the Class A-2 Certificates and the denominator of which is the Certificate Principal Balance of the Class A-7 Certificates.
 
	
             
 	
             
 
	
            (4)
 	
            For federal income tax purposes, the Class A-7 Certificates represent ownership of two components which are regular interests in REMIC II: the Class A-7A Component and the Class A-7B Component. The Class A-7A Component has a principal balance equal to the Certificate Principal Balance of the Class A-7 Certificates and a Pass-Through Rate as set forth herein. The Class A-7B Component is an interest only component which has a Pass-Through Rate as set forth herein and a notional amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest A-2.
 
	
             
 	
             
 
	
            (5)
 	
            For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date in the month following the month of the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each Regular Certificate.
 

 

 

 

 

ARTICLE I

 

DEFINITIONS

	
            Section 1.01
 	
            Defined Terms.
 

Whenever used in this Agreement or in the Preliminary Statement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. Unless otherwise specified, interest will be calculated for all Certificates on the basis of a 360-day year consisting of twelve 30-day months.

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

“Account”: Any of the Collection Account and Distribution Account.

“Accretion Termination Date”: With respect to the Class A-4 Certificates, the Class A-4 Accretion Termination Date, with respect to the Class A-5 Certificates, the Class A-5 Accretion Termination Date, with respect to the Class A-6 Certificates, the Class A-6 Accretion Termination Date and with respect to the Class A-7 Certificates, the Class A-7 Accretion Termination Date.

“Accrual Distribution Amount”: With respect to the Class A-4 Certificates, the Class A-4 Accrual Distribution Amount, with respect to the Class A-5 Certificates, the Class A-5 Accrual Distribution Amount, with respect to the Class A-6 Certificates, the Class A-6 Accrual Distribution Amount and with respect to the Class A-7 Certificates, the Class A-7 Accrual Distribution Amount.

“Additional Collateral”: (i) With respect to any Mortgage 100 K Loan, the Securities Account and the financial assets held therein subject to a security interest pursuant to the related Mortgage 100 K Pledge Agreement, or (ii) with respect to any Parent Power® Mortgage Loan, the related Parent Power® Agreement and collateral pledged pursuant thereto.

“Additional Collateral Agreements”: Each Mortgage 100 K Pledge Agreement, Parent Power® Guaranty and Security Agreement for Securities Account and Control Agreement, as applicable, for each Additional Collateral Mortgage Loan.

“Additional Collateral Mortgage Loan”: A Mortgage Loan that is supported by Additional Collateral.

“Additional Collateral Servicer”: MLCC.

“Additional Collateral Servicing Agreement”: The Additional Collateral Transfer and Servicing Agreement, dated as of November 1, 2001, between MLCC and the Master Servicer.

“Advance”: As to any Mortgage Loan or REO Property, any advance made by the Master Servicer in respect of any Distribution Date pursuant to Section 4.03.

“Adverse REMIC Event”: As defined in Section 9.01(f) hereof.

 

 

“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.

“Agreement”: This Pooling and Servicing Agreement and all amendments and supplements hereto.

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

“Assumed Final Maturity Date”: As to each Class of Certificates, the date set forth as such in the Preliminary Statement.

“Available Distribution Amount”: With respect to any Distribution Date and the Mortgage Loans, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on or prior to the related Determination Date, (b) Liquidation Proceeds, Insurance Proceeds, Subsequent Recoveries and other unscheduled recoveries of principal and interest in respect of the Mortgage Loans, and Principal Prepayments during the related Prepayment Period, (c) the aggregate of any amounts received in respect of a related REO Property withdrawn from any REO Account and deposited in the Collection Account for such Distribution Date, (d) the aggregate of any amounts deposited in the Collection Account by the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date and (e) the aggregate of any related Advances made by the Master
Servicer for such Distribution Date, over (ii) the sum of (a) related amounts reimbursable or payable to the Master Servicer pursuant to Section 3.10, (b) related Stayed Funds, (c) related amounts deposited in the Collection Account or the Distribution Account, as the case may be, in error, (d) any Extraordinary Trust Fund Expenses and (e) the Trustee Fee. The Available Distribution Amount shall also be increased by any Required Surety Payment.

“Bankruptcy Amount”: As of any date of determination prior to the first anniversary of the Cut-off Date, an amount equal to the excess, if any, of (A) $50,000 over (B) the aggregate amount of Bankruptcy Losses allocated solely to one or more specific Classes of Certificates in accordance with Section 4.02. As of any date of determination on or after the first anniversary of the Cut-off Date, an amount equal to the excess, if any, of (1) the lesser of (a) the Bankruptcy Amount calculated as of the close of business on the Business Day immediately preceding the most recent anniversary of the Cut-off Date coinciding with or preceding such date of determination (or, if such date of determination is an anniversary of the Cut-off Date, the Business Day immediately preceding such date of determination) (for purposes of this definition, the “Relevant Anniversary”) and (b) the greater of:

(A)       the greater of (i) 0.0006 times the aggregate principal balance of all the Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary having a Loan-to-Value Ratio at origination which exceeds 75% and (ii) $50,000; and (B) the greater of (i) the product of (x) an amount equal to the largest difference in the related Monthly Payment for any Non-Primary Residence Loan remaining in the Mortgage Pool which 

 

had an original Loan-to-Value Ratio greater than 80% that would result if the Net Mortgage Rate thereof was equal to the greater of (I) 5% or (II) the weighted average (based on the principal balance of the Mortgage Loans as of the Relevant Anniversary) of the Net Mortgage Rates of all Mortgage Loans as of the Relevant Anniversary less 1.25% per annum, (y) a number equal to the weighted average remaining term to maturity, in months, of all Mortgage Loans with a Loan-to-Value Ratio of greater than 80% remaining in the Mortgage Pool as of the Relevant Anniversary, and (z) one plus the quotient of the number of all Non-Primary Residence Loans with a Loan-to-Value Ratio of greater than 80% remaining in the Mortgage Pool divided by the total number of outstanding Mortgage Loans in the Mortgage Pool as of the Relevant Anniversary, and (ii) $50,000,

over (2) the aggregate amount of Bankruptcy Losses allocated solely to one or more specific Classes of Certificates in accordance with Section 4.02 since the Relevant Anniversary.

The Bankruptcy Amount may be further reduced by the Master Servicer (including accelerating the manner in which such coverage is reduced) provided that prior to any such reduction, the Master Servicer shall (i) obtain written confirmation from the Rating Agency that such reduction shall not reduce the rating assigned to any Class of Certificates by the Rating Agency below the lower of the then current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency and (ii) provide a copy of such written confirmation to the Trustee.

“Bankruptcy Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.

“Bankruptcy Losses”: Losses that are incurred as a result of Debt Service Reductions and Deficient Valuations.

“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 5.02 hereof). On the Closing Date, the Certificates (other than the Class R, Class B-4, Class B-5 and Class B-6 Certificates) shall be Book-Entry Certificates.

“Business Day”: Any day other than (a) a Saturday or Sunday, (b) a legal holiday in the State of New Jersey or the State of New York, or (c) a day on which banking or savings and loan institutions in the State of New Jersey or the State of New York are authorized or obligated by law or executive order to be closed.

“Buydown Account”: The custodial account or accounts created and maintained pursuant to Section 3.25.

“Buydown Agreement”: An agreement between the applicable originator and a Mortgagor, or an agreement among such originator, a Mortgagor and an employer of a relocated Mortgagor which, in each case, provides for the application of Buydown Funds.

 

 

“Buydown Funds”: In respect of any Buydown Mortgage Loan, any amount contributed by the related originator or the employer of a relocated borrower in order to enable the Mortgagor to reduce the payments required to be made from the Mortgagor’s funds during the Buydown Period. The Buydown Funds are not part of the Trust Fund prior to deposit into the Collection Account or the Distribution Account.

“Buydown Mortgage Loan”: Any Mortgage Loan in respect of which, pursuant to a Buydown Agreement, (i) the Mortgagor pays less than the full monthly payment specified in the Mortgage Note during the Buydown Period and (ii) the difference between the payments required under such Buydown Agreement and the Mortgage Note is paid from the related Buydown Funds.

“Buydown Period”: The period during which Buydown Funds are required to be applied to the related Buydown Mortgage Loans as provided in Section 3.25.

“Cash-Out Refinancing”: A Refinanced Mortgage Loan the proceeds of which were more than 2% or $2,000 in excess of the principal balance of any existing first mortgage or seasoned subordinate mortgage on the related Mortgaged Property and related closing costs.

“Cash Liquidation”: As to any defaulted Mortgage Loan other than REO Property which has been acquired by the Master Servicer on behalf of the Trustee for the benefit of the Certificateholders, a determination by the Master Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and other payments or cash recoveries which the Master Servicer reasonably or in good faith expects to be finally recoverable with respect to such Mortgage Loan, plus, with respect to a defaulted Mortgage Loan that is an Additional Collateral Mortgage Loan, the amount realized on the related Additional Collateral with respect to such Mortgage Loan in accordance with Section 3.16.

“Certificate”: Any Regular Certificate or Class R Certificate.

“Certificateholder” or “Holder”: The Person in whose name a Certificate is registered in the Certificate Register, except that a Disqualified Organization or non-U.S. Person shall not be a Holder of a Class R Certificate for any purpose hereof.

“Certificate Owner”: With respect to each Book-Entry Certificate, any beneficial owner thereof.

“Certificate Principal Balance”: With respect to any Certificate as of any date of determination, (x) the Certificate Principal Balance of such Certificate on the Distribution Date immediately prior to such date of determination, plus (y) (i) in the case of the Class A-4 Certificates, an amount equal to the Monthly Interest Distributable Amount added to the Certificate Principal Balance of the Class A-4 Certificates on the Distribution Date immediately prior to such date of determination on or prior to the Class A-4 Accretion Termination Date, (ii) in the case of the Class A-5 Certificates, an amount equal to the Monthly Interest Distributable Amount added to the Certificate Principal Balance of the Class A-5 Certificates on the Distribution Date immediately prior to such date of determination on or prior to the Class A-5 Accretion Termination Date, (iii) in the case of the
Class A-6 Certificates, an amount equal to the Monthly Interest Distributable Amount added to the Certificate Principal Balance of the Class A-

 

6 Certificates on the Distribution Date immediately prior to such date of determination on or prior to the Class A-6 Accretion Termination Date and (iv) in the case of the Class A-7 Certificates, an amount equal to the Monthly Interest Distributable Amount added to the Certificate Principal Balance of the Class A-7 Certificates on the Distribution Date immediately prior to such date of determination on or prior to the Class A-7 Accretion Termination Date plus (z) in the case of the Class B Certificates, any Subsequent Recoveries added to the Certificate Principal Balance of any such Certificate pursuant to Section 4.01(g), reduced by the aggregate of (a) all distributions of principal made thereon on such immediately prior Distribution Date and (b) without duplication of amounts described in clause (a) above, reductions in the Certificate Principal Balance thereof in connection with allocations thereto of
Realized Losses on the Mortgage Loans and Extraordinary Trust Fund Expenses on such immediately prior Distribution Date (or, in the case of any date of determination up to and including the initial Distribution Date, the initial Certificate Principal Balance of such Certificate, as stated on the face thereon); provided, however, that the Certificate Principal Balance of each Subordinate Certificate of the Class of Subordinate Certificates outstanding with the highest numerical designation at any given time shall be calculated to equal the Percentage Interest evidenced by such Certificate multiplied by the excess, if any, of (A) the then aggregate Stated Principal Balance of the Mortgage Loans over (B) the then aggregate Certificate Principal Balances of all other Classes of Certificates then outstanding.

“Certificate Register” and “Certificate Registrar”: The register maintained and registrar appointed pursuant to Section 5.02 hereof.

“Class”: Collectively, Certificates which have the same priority of payment and bear the same class designation and the form of which is identical except for variation in the Percentage Interest evidenced thereby.

“Class A Certificate”: Any of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6 or Class A-7 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit A, executed by the Trustee and authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and therein.

“Class A Certificateholder”: Any Holder of a Class A Certificate.

“Class A-4 Accretion Termination Date”:  The earlier to occur of (i) the Distribution Date on which the aggregate Certificate Principal Balance of the Class A-2 Certificates and Class A-3 Certificates has been reduced to zero and (ii) the Credit Support Depletion Date.

“Class A-4 Accrual Distribution Amount”:  With respect to each Distribution Date prior to the Class A-4 Accretion Termination Date, an amount equal to the aggregate amount of Monthly Interest Distributable Amount on the Class A-4 Certificates, for such date, to the extent added to the Certificate Principal Balance thereof pursuant to Section 4.01(i); provided that, with respect to each Distribution Date on or after the Class A-4 Accretion Termination Date, the Monthly Interest Distributable Amount on the Class A-4 Certificates for such date remaining after reduction of the aggregate Certificate Principal Balance of the Class A-2 Certificates and Class A-3 Certificates to zero on the Class A-4 Accretion Termination Date will be payable to the Class A-4 Certificateholders pursuant to Section 4.01(c)(i) hereof; and provided further, that if the Class A-4 Accretion Termination Date
is the Credit Support Depletion Date, the entire 

 

amount of Monthly Interest Distributable Amount on the Class A-4 Certificates for that date will be payable to the Class A-4 Certificateholders pursuant to Section 4.01(c)(i) hereof.

“Class A-5 Accretion Termination Date”:  The earlier to occur of (i) the Distribution Date on which the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates has been reduced to zero and (ii) the Credit Support Depletion Date.

“Class A-5 Accrual Distribution Amount”:  With respect to each Distribution Date prior to the Class A-5 Accretion Termination Date, an amount equal to the aggregate amount of Monthly Interest Distributable Amount on the Class A-5 Certificates, for such date, to the extent added to the Certificate Principal Balance thereof pursuant to Section 4.01(j); provided that, with respect to each Distribution Date on or after the Class A-5 Accretion Termination Date, the Monthly Interest Distributable Amount on the Class A-5 Certificates for such date remaining after reduction of the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates to zero on the Class A-5 Accretion Termination Date will be payable to the Class A-5 Certificateholders pursuant to Section 4.01(c)(i) hereof; and provided further, that if the Class A-5 Accretion
Termination Date is the Credit Support Depletion Date, the entire amount of Monthly Interest Distributable Amount on the Class A-5 Certificates for that date will be payable to the Class A-4 Certificateholders pursuant to Section 4.01(c)(i) hereof.

“Class A-6 Accretion Termination Date”:  The earlier to occur of (i) the Distribution Date on which the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates has been reduced to zero and (ii) the Credit Support Depletion Date.

“Class A-6 Accrual Distribution Amount”:  With respect to each Distribution Date prior to the Class A-6 Accretion Termination Date, an amount equal to the aggregate amount of Monthly Interest Distributable Amount on the Class A-6 Certificates, for such date, to the extent added to the Certificate Principal Balance thereof pursuant to Section 4.01(k); provided that, with respect to each Distribution Date on or after the Class A-6 Accretion Termination Date, the Monthly Interest Distributable Amount on the Class A-6 Certificates for such date remaining after reduction of the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates to zero on the Class A-6 Accretion Termination Date will be payable to the Class A-6 Certificateholders pursuant to Section 4.01(c)(i) hereof; and provided further, that if the Class A-6
Accretion Termination Date is the Credit Support Depletion Date, the entire amount of Monthly Interest Distributable Amount on the Class A-6 Certificates for that date will be payable to the Class A-6 Certificateholders pursuant to Section 4.01(c)(i) hereof.

“Class A-7 Accretion Termination Date”:  The earliest to occur of (i) the Distribution Date on which the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6 Certificates has been reduced to zero, (ii) the Credit Support Depletion Date and (iii) the Distribution Date occurring in June 2010.

“Class A-7 Accrual Distribution Amount”:  With respect to each Distribution Date prior to the Class A-7 Accretion Termination Date, an amount equal to the aggregate amount of Monthly Interest Distributable Amount on the Class A-7 Certificates, for such date, to the extent added to the Certificate Principal Balance thereof pursuant to Section 4.01(l); provided that, with 

 

respect to each Distribution Date on or after the Class A-7 Accretion Termination Date, the Monthly Interest Distributable Amount on the Class A-7 Certificates for such date remaining after reduction of the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6 Certificates to zero on the Class A-7 Accretion Termination Date will be payable to the Class A-7 Certificateholders pursuant to Section 4.01(c)(i) hereof; and provided further, that if the Class A-7 Accretion Termination Date is the Credit Support Depletion Date or the Distribution Date occurring in June 2010, the entire amount of Monthly Interest Distributable Amount on the Class A-7 Certificates for that date will be payable to the Class A-7 Certificateholders pursuant to Section 4.01(c)(i) hereof.

“Class A-7A Component”: A regular interest in REMIC II which has a principal amount which will at all times be equal to the Certificate Principal Balance of the Class A-7 Certificates and a per annum Pass-Through Rate as set forth herein.

“Class A-7A Component Principal Amount”: An amount equal to the Certificate Principal Balance of the Class A-7 Certificates.

“Class A-7B Component”: A regular interest in REMIC II which has a notional amount which will at all times be equal to the Uncertificated Principal Balance of REMIC I Regular Interest A-2, a per annum Pass-Through Rate as set forth herein, and no principal amount.

“Class A-7B Component Notional Amount”: An amount equal to the Uncertificated Principal Balance of REMIC I Regular Interest A-2.

 “Class B Certificate”: Any one of the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Certificates as designated on the face thereof substantially in the form annexed hereto as Exhibit C-2, executed by the Trustee and authenticated and delivered by the Trustee, representing the right to distributions as set forth herein and therein.

“Class B Certificateholder”: Any Holder of a Class B Certificate.

“Class B Percentage”: The Class B-1 Percentage, Class B-2 Percentage, Class B-3 Percentage, Class B-4 Percentage, Class B-5 Percentage or Class B-6 Percentage.

“Class B-1 Percentage”: With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of the Class B-1 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date. The initial Class B-1 Percentage is approximately 6.85%.

“Class B-2 Percentage”: With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of the Class B-2 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date. The initial Class B-2 Percentage is approximately 0.65%.

 

 

“Class B-3 Percentage”: With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of the Class B-3 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date. The initial Class B-3 Percentage is approximately 0.35%.

“Class B-4 Percentage”: With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of the Class B-4 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date. The initial Class B-4 Percentage is approximately 0.25%.

“Class B-5 Percentage”: With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of the Class B-5 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date. The initial Class B-5 Percentage is approximately 0.20%.

“Class B-6 Percentage”: With respect to any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of the Class B-6 Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date. The initial Class B-6 Percentage is approximately 0.20%.

“Class R Certificates”: The Class R-I Certificates and Class R-II Certificates executed by the Trustee, and authenticated and delivered by the Certificate Registrar, substantially in the form annexed hereto as Exhibit C-1 and each evidencing the ownership of an interest designated as the Residual Interest in the related REMIC.

“Class Subordination Percentage”: With respect to any Distribution Date and each Class of Subordinate Certificates, the fraction (expressed as a percentage) the numerator of which is the Certificate Principal Balance of such Class of Subordinate Certificates immediately prior to such Distribution Date and the denominator of which is the aggregate of the Certificate Principal Balances of all Classes of Certificates immediately prior to such Distribution Date.

“Closing Date”: May 26, 2005.

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

“Collection Account”: The account or accounts created and maintained by the Master Servicer pursuant to Section 3.10, which shall be entitled “PHH Mortgage Corporation, as Master Servicer for Citibank, N.A., as Trustee, in trust for registered Holders of PHHMC Mortgage Pass-Through Certificates, Series 2005-3”, and which must be an Eligible Account.

 

 

“Commission”: The Securities and Exchange Commission.

“Compensating Interest”: As defined in Section 3.24 hereof.

“Condemnation Proceeds”: All awards or settlements in respect of a taking of a Mortgaged Property by exercise of the power of eminent domain or condemnation.

“Control Agreement”: With respect to each Mortgage 100 K Loan, the Merrill Lynch Pledged Collateral Account Control Agreement between the guarantor or mortgagor, as applicable, the Additional Collateral Servicer and Merrill Lynch, Pierce, Fenner & Smith Incorporated, pursuant to which the guarantor or mortgagor, as applicable, has granted a security interest in a Securities Account.

“Cooperative”: A corporation that has been formed for the purpose of cooperative apartment ownership.

“Cooperative Assets”: Shares issued by Cooperatives, the related Cooperative Lease and any other collateral securing the Cooperative Loans.

“Cooperative Building”: The building and other property owned by a Cooperative.

“Cooperative Lease”: With respect to a Cooperative Loan, the proprietary lease or occupancy agreement with respect to the Cooperative Apartment occupied by the Mortgagor and relating to the related Cooperative Assets, which lease or agreement confers an exclusive right to the holder of such Cooperative Assets to occupy such apartment.

“Cooperative Loan”: The indebtedness of a Mortgagor evidenced by a Mortgage Note which is secured by Cooperative Assets and which is being sold to the Depositor pursuant to this Agreement, the Mortgage Loans so sold being identified in the Mortgage Loan Schedule.

“Cooperative Unit”: A specific dwelling unit in a Cooperative Building as to which exclusive occupancy rights have been granted pursuant to a Lease.

“Corporate Trust Office”: The principal corporate trust office of the Trustee at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located, for Certificate transfer purposes, at 111 Wall Street, 15th Floor, Attn: Securities Window, New York, New York 10005, Attention: PHHMC, Series 2005-3, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor and the Master Servicer.

“Corresponding Certificated Interests”:  With respect to each REMIC I Regular Interest, the Class with the same designation.

“Credit Support Depletion Date”: The first Distribution Date on which the Senior Percentage equals 100%.

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

 

 

“Cut-off Date”: May 1, 2005.

“Cut-off Date Principal Balance”: With respect to any Mortgage Loan, the unpaid principal balance thereof as of the Cut-off Date (or as of the applicable date of substitution with respect to a Eligible Substitute Mortgage Loan).

“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 resulting from a Deficient Valuation.

“Defective Mortgage Loan”: A Mortgage Loan replaced or to be replaced by one or more Eligible Substitute Mortgage Loans.

“Deficient Valuation”: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

“Definitive Certificates”: As defined in Section 5.02(c) hereof.

“Delinquent”:  As used herein, a Mortgage Loan is considered to be: “one month” delinquent when a payment due on any scheduled due date remains unpaid as of the close of business on the last Business Day immediately prior to the next following monthly scheduled due date; “two months” delinquent when a payment due on any scheduled due date remains unpaid as of the close of business on the last Business Day immediately prior to the second following monthly scheduled due date; and so on. The determination as to whether a Mortgage Loan falls into these categories is made as of the close of business on the last Business Day of each month. For example, a Mortgage Loan with a payment due on July 1 that remained unpaid as of the close of business on July 31 would then be considered to be one month delinquent. Delinquency information as of the Cut-off Date is
determined and prepared as of the close of business on the last Business Day immediately prior to the Cut-off Date.

“Depositor”: PHH Mortgage Capital LLC, a Delaware limited liability company, or any successor in interest.

“Depository”: The initial Depository shall be The Depository Trust Company, whose nominee is Cede & Co., or any other organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. 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(3) of the Uniform Commercial Code of the State of New York.

“Depository Agreement”: With respect to any Book-Entry Certificates, either of the agreements among the Depositor, the Trustee and the initial Depository, to be dated on or about the Closing Date.

 

 

“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 8th day of the calendar month in which such Distribution Date occurs or, if such 8th day is not a Business Day, the Business Day immediately preceding such 8th day.

“Directly Operate”: With respect to any REO Property, the furnishing or rendering of services to the tenants thereof, the management or operation of such REO Property, the holding of such REO Property primarily for sale to customers, the performance of any construction work thereon or any use of such REO Property in a trade or business conducted by the Trust Fund other than through an Independent Contractor, provided, however, that the Trustee (or the Master Servicer on behalf of the Trustee) shall not be considered to Directly Operate an REO Property solely because the Trustee (or the Master Servicer on behalf of the Trustee) establishes rental terms, chooses tenants, enters into or renews leases, deals with taxes and insurance, or makes decisions as to repairs or capital expenditures with respect to such REO Property.

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

“Distribution Account”: The trust account or accounts created and maintained by the Trustee pursuant to Section 3.10(b) which shall be entitled “Distribution Account, Citibank, N.A., as Trustee, in trust for the registered Holders of the PHHMC Mortgage Pass-Through Certificates, Series 2005-3” and which must be an Eligible Account.

“Distribution Date”: The 18th day of any calendar month, or if such 18th day is not a Business Day, the Business Day immediately following such 18th day, commencing in June 2005.

 

 

“Due Date”: With respect to each Mortgage Loan and any Distribution Date, the first day of the calendar month in which such Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was due, exclusive of any days of grace.

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

“Effective Loan-to-Value Ratio”: With respect to an Additional Collateral Mortgage Loan, the ratio, expressed as a percentage, of (A) the principal amount of the Mortgage Loan at origination less the value of any Additional Collateral securing the Mortgage Loan, to (B) the lesser of (1) the appraised value determined in an appraisal or other collateral assessment tool obtained at origination of the Mortgage Loan and (2) the sales price for the related Mortgaged Property.

“Eligible Account”: Any of (i) an account or accounts maintained with a depository institution the short-term debt obligations of which have been rated by the Rating Agency in its highest rating available, (ii) in a depository institution in which such accounts are fully insured to the limits established by the FDIC, provided that any deposits not so insured shall, to the extent acceptable to the Rating Agency, as evidenced in writing, be maintained such that (as evidenced by an Opinion of Counsel delivered to the Trustee and the Rating Agency) the registered Holders of Certificates have a claim with respect to the funds in such account or a perfected first 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 with which such
account is maintained, (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity, (iv) an account or accounts of a depository institution acceptable to the Rating Agency (as evidenced in writing by the Rating Agency that use of any such account will not reduce the rating assigned to any Class of Certificates by the Rating Agency below the lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency) or (v) an account or accounts maintained with a federal or state chartered depository institution or trust company that meet the depository requirements of Fannie Mae or Freddie Mac. Eligible Accounts may bear interest.

 “Eligible Substitute Mortgage Loan”: A mortgage loan substituted for a Defective Mortgage Loan pursuant to the terms of this Agreement which must, on the date of such substitution, (i) have an outstanding principal balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of the outstanding principal balance of the Defective Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs, the amount of any shortfall to be deposited by the Master Servicer in the Collection Account in the month of substitution, (ii) have a Loan Rate, not less than the Loan Rate of the Defective Mortgage Loan and not more than 1% in excess of the Loan Rate of such Defective Mortgage Loan, (iii) have a remaining term to maturity not greater than (and not more than one year less than)
that of the Defective Mortgage Loan, (iv) be current as of the date of substitution, (v) have a Loan-to-Value Ratio as of the date of substitution equal to or lower than the Loan-to-Value Ratio of the Defective Mortgage Loan as of such date and (vi) conform to each representation and warranty set forth in Section 2.04 

 

hereof applicable to the Defective Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more Defective Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate principal balances, the Loan Rates described in clause (ii) hereof shall be determined on the basis of weighted average Loan Rates, the terms described in clause (iii) hereof shall be determined on the basis of weighted average remaining term to maturity, the Loan-to-Value Ratios described in clause (v) hereof shall be satisfied as to each such mortgage loan and, except to the extent otherwise provided in this sentence, the representations and warranties described in clause (vi) hereof must be satisfied as to each Eligible Substitute Mortgage Loan or in the aggregate, as the case may be. Any Mortgage Loan substituted for a Mortgage Loan which has an arrearage due to
the application of any related forbearance plan with respect to such Mortgage Loan, will be treated as having such an arrearage due to the application of any related forbearance plan with respect to such Mortgage Loan.

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

“ERISA-Restricted Certificates”: Any of the Class B-4, Class B-5, Class B-6 and Class R Certificates.

“Escrow Payments”: The amounts constituting ground rents, taxes, assessments, water rates, mortgage insurance premiums, fire and hazard insurance premiums and other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage Loan.

“Estate in Real Property”: A fee simple estate in a parcel of real property.

“Excess Losses”: (i) Special Hazard Losses in excess of the Special Hazard Amount, (ii) Bankruptcy Losses in excess of the Bankruptcy Amount, (iii) Fraud Losses in excess of the Fraud Loss Amount and (iv) Extraordinary Losses.

“Excess Subordinate Principal Amount”:  With respect to any Distribution Date on which the Certificate Principal Balance of the Class or Classes of Certificates then outstanding with the Lowest Priority is to be reduced to zero and on which Realized Losses are to be allocated to that Class or those Classes, the amount, if any, by which (i) the amount of principal that would otherwise be distributable on that Class or those Classes of Certificates on such Distribution Date is greater than (ii) the excess, if any, of the aggregate Certificate Principal Balance of that Class or those Classes of Certificates immediately prior to such Distribution Date over the aggregate amount of Realized Losses to be allocated to that Class or those Classes of Certificates on such Distribution Date.

“Exchange Act”: The Securities and Exchange Act of 1934, as amended.

“Extraordinary Loss”: Any Realized Loss or portion thereof caused by or resulting from:

(i)         nuclear or chemical reaction or nuclear radiation or radioactive or chemical contamination, all whether controlled or uncontrolled and whether such loss be direct or indirect, proximate or remote or be in whole or in part caused by, contributed to or aggravated by a peril covered by the definition of the term “Special Hazard Loss”

 

 

(ii)         hostile or warlike action in time of peace or war, including action in hindering, combating or defending against an actual, impending or expected attack by any government or sovereign power, de jure or de facto, or by any authority maintaining or using military, naval or air forces, or by military, naval or air forces, or by an agent of any such government, power, authority or forces;

(iii)        any weapon of war employing atomic fission or radioactive forces whether in time of peace or war, and

(iv)        insurrection, rebellion, revolution, civil war, usurped power or action taken by governmental authority in hindering, combating or defending against such an occurrence, seizure or destruction under quarantine or customs regulations, confiscation by order of any government or public authority, or risks of contraband or illegal transactions or trade.

“Extraordinary Trust Fund Expenses”: Any amounts reimbursable to the Master Servicer or the Depositor pursuant to Section 6.03, any amounts reimbursable to the Trustee from the Trust Fund pursuant to this Agreement, including but not limited to Section 8.05, and any other costs, expenses, liabilities and losses borne by the Trust Fund (exclusive of any cost, expense, liability or loss that is specific to a particular Mortgage Loan or REO Property and is taken into account in calculating a Realized Loss in respect thereof) for which the Trust Fund has not and, in the reasonable good faith judgment of the Trustee, shall not, obtain reimbursement or indemnification from any other Person.

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

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

“Fidelity Bond”: Shall have the meaning assigned thereto in Section 3.14.

“Final Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased by a Seller or the Master Servicer pursuant to or as contemplated by Section 2.03 or 10.01), a determination made by the Master Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which the Master Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered. The Master Servicer shall maintain records, prepared by a Servicing Officer, of each Final Recovery Determination made thereby.

“Fitch”: Fitch, Inc., doing business as Fitch Ratings, and any successor thereto or its successor in interest.

“Foreclosure Price”: The amount reasonably expected to be received from the sale of the related Mortgaged Property net of any expenses associated with foreclosure proceedings.

“Foreclosure Profits”:  As to any Distribution Date or related Determination Date and any Mortgage Loan, the excess, if any, of Liquidation Proceeds, Insurance Proceeds and proceeds from any REO Disposition (net of all amounts reimbursable therefrom pursuant to Section 3.11(a)(iii)) in respect of each Mortgage Loan or REO Property for which a Cash Liquidation or 

 

REO Disposition occurred in the related Prepayment Period over the sum of the unpaid principal balance of such Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in accordance with Section 3.16) plus accrued and unpaid interest at the Mortgage Rate on such unpaid principal balance from the Due Date to which interest was last paid by the Mortgagor to the first day of the month following the month in which such Cash Liquidation or REO Disposition occurred.

“Fraud Loss Amount”: As of any date of determination after the Cut-off Date, prior to the third anniversary of the Cut-off Date, an amount equal to 1.00% of the aggregate outstanding principal balance of all of the Mortgage Loans as of the Cut-off Date minus the Fraud Losses allocated solely to one or more specific Classes of Certificates in accordance with Section 4.02 since the most recent anniversary of the Cut-off Date up to such date of determination. On and after the third anniversary of the Cut-off Date, the Fraud Loss Amount shall be zero.

The Fraud Loss Amount may be further reduced by the Master Servicer (including accelerating the manner in which such coverage is reduced) provided that prior to any such reduction, the Master Servicer shall (i) obtain written conformation from the Rating Agency that such reduction shall not reduce the rating assigned to any Class of Certificates by such Rating Agency below the lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency and (ii) provide a copy of such written conformation to the Trustee.

“Fraud Losses”: Losses sustained on a Liquidated Mortgage Loan by reason of a default arising from fraud, dishonesty or misrepresentation.

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

“Highest Priority”: As of any date of determination, the Class of Subordinate Certificates then outstanding with the earliest priority for payments pursuant to Section 4.01(c), in the following order: Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.

“HUD”: The United States Department of Housing and Urban Development, or any successor thereto and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.

“Independent”: When used with respect to any specified Person, any such Person who (a) is in fact independent of the Depositor, the Master Servicer and their respective Affiliates, (b) does not have any direct financial interest in or any material indirect financial interest in the Depositor or the Master Servicer or any Affiliate thereof, and (c) is not connected with the Depositor or the Master Servicer or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided, however, that a Person shall not fail to be Independent of the Depositor or the Master Servicer or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of securities issued by the Depositor
or the Master Servicer or any Affiliate thereof, as the case may be.

 

 

“Independent Contractor”: Either (i) any Person (other than the Master Servicer) that would be an “independent contractor” with respect to the Trust Fund within the meaning of Section 856(d)(3) of the Code if the Trust Fund were a real estate investment trust (except that the ownership tests set forth in that section shall be considered to be met by any Person that owns, directly or indirectly, 35 percent or more of any Class of Certificates), so long as the Trust Fund does not receive or derive any income from such Person and provided that the relationship between such Person and the Trust Fund is at arm’s length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Master Servicer) if the Trustee has received an Opinion of Counsel, which Opinion of Counsel shall be an expense of the Trust Fund, to the
effect that the taking of any action in respect of any REO Property by such Person, subject to any conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor will not cause such REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code (determined without regard to the exception applicable for purposes of Section 860D(a) of the Code), or cause any income realized in respect of such REO Property to fail to qualify as rents from real property.

“Initial Certificate Principal Balance”: With respect to any Regular Certificate, the amount designated “Initial Certificate Principal Balance” on the face thereof.

“Insurance Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan, to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Master Servicer would follow in servicing mortgage loans held for its own account, subject to the terms and conditions of the related Mortgage Note and Mortgage.

“Interest Accrual Period”: With respect to any Distribution Date and any Class of Certificates, the calendar month immediately preceding the month in which such Distribution Date occurs.

“Late Collections”: With respect to any Mortgage Loan, all amounts received subsequent to the Determination Date immediately following any related Due Period, whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late payments or collections of principal and/or interest due (without regard to any acceleration of payments under the related Mortgage and Mortgage Note) but delinquent on a contractual basis for such Due Period and not previously recovered.

“Limited Purpose Surety Bond”: The Limited Purpose Surety Bond (Policy No. AB0039BE), dated February 28, 1996 in respect to certain Additional Collateral Mortgage Loans, issued by Ambac Assurance Corporation (f/k/a Ambac Indemnity Corporation) for the benefit of certain beneficiaries, including the Trustee for the benefit of the Certificateholders, but only to the extent that such Limited Purpose Surety Bond covers any Additional Collateral Mortgage Loans.

“Liquidated Mortgage Loan”: As to any Distribution Date, any Mortgage Loan in respect of which the Master Servicer has determined, in accordance with the servicing procedures specified herein, as of the end of the related Due Period, that all Liquidation Proceeds and 

 

Insurance Proceeds which it expects to recover with respect to the liquidation of the Mortgage Loan or disposition of the related REO Property have been recovered.

“Liquidation Event”: With respect to any Mortgage Loan, any of the following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is removed from the Trust Fund by reason of its being purchased, sold or replaced pursuant to or as contemplated by Section 2.03 or Section 10.01. With respect to any REO Property, either of the following events: (i) a Final Recovery Determination is made as to such REO Property; or (ii) such REO Property is removed from the Trust Fund by reason of its being sold or purchased pursuant to Section 3.23 or Section 10.01.

“Liquidation Proceeds”: The amount (other than amounts received in respect of the rental of any REO Property prior to REO Disposition) received by the Master Servicer in connection with (i) the taking of all or a part of a Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan by means of a trustee’s sale, foreclosure sale or otherwise (including, with respect to a defaulted Mortgage Loan that is an Additional Collateral Mortgage Loan, the amount realized on the related Additional Collateral with respect to such Mortgage Loan in accordance with Section 3.16), or (iii) the repurchase, substitution or sale of a Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03, Section 3.16 or Section 10.01.

“Loan Balance”: As of any date, the aggregate Stated Principal Balance of all of the Mortgage Loans as of such date.

“Loan-to-Value Ratio”: As of any date and Mortgage Loan (other than an Additional Collateral Mortgage Loan), the fraction, expressed as a percentage, the numerator of which is the Stated Principal Balance of the Mortgage Loan, and the denominator of which is the Value of the related Mortgaged Property. As of any date and any Additional Collateral Mortgage Loan, the related Effective Loan-to-Value Ratio.

“Loan Rate”: With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note, which rate shall remain constant at the rate set forth in the Mortgage Loan Schedule as the Loan Rate in effect immediately following the Cut-off Date. 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.

“Lockout Percentage”: With respect to any Distribution Date, the Certificate Principal Balance of the Class A-7 Certificates, divided by the aggregate Certificate Principal Balance of the Senior Certificates, in each case immediately prior to any allocations of losses or distributions on that Distribution Date.

“Lockout Prepayment Percentage”: With respect to any Distribution Date, the product of (i) the Lockout Percentage and (ii) the Stepdown Percentage.

“Lockout Scheduled Percentage”: With respect to any Distribution Date (i) occurring prior to June 2010, 0% and (ii) occurring in or after June 2010, the Lockout Percentage.

 

 

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

“Lower Priority”: As of any date of determination and with respect to any Class of Subordinate Certificates, any other Class of Subordinate Certificates then outstanding with a later priority for payments pursuant to Section 4.01(c).

“Lowest Priority”: As of any date of determination, the Class of Subordinate Certificates then outstanding with the latest priority for payments pursuant to Section 4.01(c), in the following order: Class B-6, Class B-5, Class B-4, Class B-3, Class B-2 and Class B-1 Certificates.

“Majority Certificateholders”: The Holders of Certificates evidencing at least 51% of the Voting Rights.

“Master Servicer Affiliate”: A Person (i) controlling, controlled by or under common control with the Master Servicer or which is 50% or more owned by the Master Servicer and (ii) which is qualified to service residential mortgage loans.

“Master Servicer Event of Termination”: One or more of the events described in Section 7.01.

“Master Servicer Remittance Date”: With respect to any Distribution Date, the Business Day prior to such Distribution Date.

“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.

“MLCC”: Merrill Lynch Credit Corporation and its successors in interest.

“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 Interest Distributable Amount”: An amount equal to the interest accrued during the related Interest Accrual Period on the Certificate Principal Balance of each Class of Certificates at the then-applicable Pass-Through Rate. The Monthly Interest Distributable Amount on any Class of Certificates will be reduced by the amount of (i) Prepayment Interest Shortfalls (to the extent not offset by the Master Servicer with a payment of Compensating 

 

Interest as provided in Section 3.24), (ii) the interest portion (adjusted to the Net Mortgage Rate) of Realized Losses (including Excess Losses and Extraordinary Losses) not allocated solely to one or more specific Classes of Certificates pursuant to Section 4.02, (iii) the interest portion of Advances previously made with respect to a Mortgage Loan or REO Property which remained unreimbursed following the Cash Liquidation or REO Disposition of such Mortgage Loan or REO Property that were made with respect to delinquencies that were ultimately determined to be Excess Losses or Extraordinary Losses and (iv) any other interest shortfalls not covered by the subordination provided by the Class B Certificates, including Relief Act Shortfalls, with all such reductions allocated among all of the Certificates in proportion to their respective amounts of Monthly Interest Distributable Amount payable on such
Distribution Date which would have resulted absent such reductions.

“Monthly Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act; (b) without giving effect to any extension granted or agreed to by the Master Servicer pursuant to Section 3.01; and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.

“Mortgage”: The mortgage, deed of trust or other instrument creating a first lien on, or first priority security interest in, a Mortgaged Property securing a Mortgage Note.

“Mortgage 100 K Loan”: A Mortgage Loan secured by Additional Collateral in the form of a security interest in the Securities Account and the financial assets held therein and having a value, as of the date of origination of such Mortgage Loan, of at least equal to the related Original Additional Collateral Requirement.

“Mortgage 100 K Pledge Agreement”: With respect to each Mortgage 100 K Loan, the Pledge Agreement for Securities Account between the related mortgagor and the Additional Collateral Servicer pursuant to which such mortgagor granted a security interest in the related securities and other financial assets held therein.

“Mortgage File”: The mortgage documents listed in Section 2.01(A) and (B) pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement.

“Mortgage Loan”: Each mortgage loan (including the Cooperative Loans) transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.03(d) as from time to time held as a part of the Trust Fund, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.

“Mortgage Loan Purchase Agreement”: The mortgage loan purchase agreement, dated as of May 1, 2005, among the Sellers and the Depositor, regarding the transfer of the Mortgage Loans.

 

 

“Mortgage Loan Schedule”: As of any date, the list of Mortgage Loans identifying the Mortgage Loans transferred from the Sellers, and attached hereto as Exhibit D. The Mortgage Loan Schedule shall set forth the following information with respect to each Mortgage Loan:

	
             
 	
            (i)
 	
             
 	
            the Sellers’ Mortgage Loan identifying number;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (ii)
 	
             
 	
            [reserved];
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (iii)
 	
             
 	
            the zip code of the related Mortgaged Property;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (iv)
 	
             
 	
            a code indicating whether the Mortgaged Property is owner-occupied;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (v)
 	
             
 	
            the type of Residential Dwelling constituting the Mortgaged Property;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (vi)
 	
             
 	
            the original months to maturity;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (vii)
 	
             
 	
            the original date of the mortgage;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (viii)
 	
             
 	
            the Loan-to-Value Ratio or Effective Loan-to-Value Ratio, as applicable, at origination;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (ix)
 	
             
 	
            the loan rate;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (x)
 	
             
 	
            the date on which the first Monthly Payment was due on the Mortgage Loan;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xi)
 	
             
 	
            the stated maturity date;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xii)
 	
             
 	
            the amount of the Monthly Payment at origination;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xiii)
 	
             
 	
            the amount of the Monthly Payment as of the Cut-off Date;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xiv)
 	
             
 	
            the next Due Date on which a Monthly Payment is due;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xv)
 	
             
 	
            the original principal amount of the Mortgage Loan;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xvi)
 	
             
 	
            the unpaid principal balance of the Mortgage Loan as of the close of business on the Cut-off Date;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xvii)
 	
             
 	
            a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xviii)
 	
             
 	
            a code indicating the documentation style (i.e., full, alternative or reduced);
 

 

 

 

	
             
 	
            (xix)
 	
             
 	
            a code indicating if the Mortgage Loan is subject to a Primary Insurance Policy;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xx)
 	
             
 	
            the name of the Qualified Insurer and the certificate number for any Primary Insurance Policy, if applicable;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xxi)
 	
             
 	
            the depth of coverage of any Primary Insurance Policy, if applicable;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xxii)
 	
             
 	
            the Value of the Mortgaged Property;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xxiii)
 	
             
 	
            the sale price of the Mortgaged Property, if applicable;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xxiv)
 	
             
 	
            the Servicing Fee;
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xxv)
 	
             
 	
            whether the Mortgage Loan is a Buydown Mortgage Loan; and
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
            (xxvi)
 	
             
 	
            the amount of the Original Additional Collateral Requirement, if any.
 

 

The Mortgage Loan Schedule shall set forth the following information with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current principal balance of the Mortgage Loans; (3) the weighted average Loan Rate of the Mortgage Loans; and (4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to time by the Master Servicer in accordance with the provisions of this Agreement. With respect to any Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan, determined in accordance with the definition of Cut-off Date herein.

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

“Mortgage Pool”: The pool of Mortgage Loans, identified on Exhibit D from time to time, and any REO Properties acquired in respect thereof.

“Mortgaged Property”: The underlying property securing a Mortgage Loan, including any REO Property, consisting of an Estate in Real Property improved by a Residential Dwelling.

“Mortgagor”: The obligor on a Mortgage Note.

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

“Net Mortgage Rate”: With respect to any Mortgage Loan, (x) the Loan Rate minus (y) the Servicing Fee Rate and the Trustee Fee Rate.

 

 

“New Lease”: Any lease of REO Property entered into on behalf of the Trust, including any lease renewed or extended on behalf of the Trust if the Trust has the right to renegotiate the terms of such lease.

“Nonrecoverable Advance”: Any Advance or Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Master Servicer, will not or, in the case of a proposed Advance or Servicing Advance, would not be ultimately recoverable from Late Collections on such Mortgage Loan or REO Property as provided herein.

“Officers’ Certificate”: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a vice president (however denominated), and by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Master Servicer or the Depositor, as applicable.

“Opinion of Counsel”: A written opinion of counsel, who may, without limitation, be a salaried counsel for the Depositor or the Master Servicer, acceptable to the Trustee, except that any opinion of counsel relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.

“Optional Termination Date”: The first Distribution Date on which the Master Servicer may opt to terminate the Trust Fund pursuant to Section 10.01.

“Original Additional Collateral Requirement’: With respect to any Additional Collateral Mortgage Loan, an amount equal to the Additional Collateral required at the time of the origination of such Additional Collateral Mortgage Loan in order to achieve an Effective Loan-to-Value Ratio for such Additional Collateral Mortgage Loan, generally equal to seventy percent (70%); for purposes of the Required Surety Payment, in no event shall the Original Additional Collateral Requirement for an Additional Collateral Mortgage Loan exceed thirty percent (30%) of its original principal balance.

“Original Certificate Principal Balance”: With respect to each Class of the Certificates, the Certificate Principal Balance thereof on the Closing Date, as set forth opposite such Class above in the Preliminary Statement.

“Original Subordinated Principal Balance”: The aggregate of the Certificate Principal Balances of the Subordinate Certificates as of the Cut-off Date.

“Other Insurance Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan, other than the Primary Insurance Policy, if any, to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Master Servicer would follow in servicing mortgage loans held for its own account.

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

 

 

“Parent Power® Agreement”: With respect to each Parent Power® Mortgage Loan, a Parent Power® Guaranty and Security Agreement for Securities Account.

“Parent Power® Guaranty and Security Agreement for Securities Account”: With respect to a Parent Power® Mortgage Loan, an agreement between the Additional Collateral Servicer and a guarantor on behalf of the mortgagor under such Parent Power® Mortgage Loan pursuant to which such guarantor guarantees the payment of certain losses under such Parent Power® Mortgage Loan and has granted a security interest to the Additional Collateral Servicer in certain marketable securities to collateralize such guaranty. The required amount of such collateral is at least equal to the Original Additional Collateral Requirement for such Parent Power® Mortgage Loan.

“Parent Power® Mortgage Loan”: A Mortgage Loan having at the time of origination a Loan-to-Value Ratio generally in excess of the Master Servicer’s maximum acceptable Loan-to-Value Ratio for such Mortgage Loan as set forth in the Underwriting Guide, which Mortgage Loan is supported by a Parent Power® Agreement.

“Pass-Through Rate”: With respect to the Certificates (other than the Class A-2 Certificates and Class A-7 Certificates) and any Distribution Date, a per annum rate equal to the weighted average of the Net Mortgage Rates on each Mortgage Loan. With respect to the Class A-2 Certificates and any Distribution Date, a per annum rate equal to (i) the weighted average of the Net Mortgage Rate on each Mortgage Loan minus (ii) 0.98%. For federal income tax purposes, however, the Class A-2 Certificates will have a per annum rate equal to (i) the Uncertificated Pass-Through Rate on the REMIC I Regular Interest A-2 minus (ii) 0.98%. With respect to the Class A-7 Certificates and any Distribution Date, a per annum rate equal to the sum of (i) the weighted average of the Net Mortgage Rate on each Mortgage Loan and (ii) 0.98% per annum multiplied by a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-2 Certificates and the denominator of which is the Certificate Principal Balance of the Class A-7 Certificates. For federal income tax purposes, the Class A-7 Certificates will represent ownership of the Class A-7A Component and Class A-7B Component; the Pass-Through Rate with respect to the Class A-7A Component is a per annum rate equal to the Uncertificated Pass-Through Rate on REMIC I Regular Interest A-7, which will be applied to the Class A-7A Component Principal Amount and the Pass-Through Rate with respect to the Class A-7B Component is 0.98% per annum, which will be applied to the Class A-7B Component Notional Amount.

“Paying Agent”: Any paying agent appointed pursuant to Section 5.05.

“Percentage Interest”: With respect to any Certificate (other than a Class R Certificate), a fraction, expressed as a percentage, the numerator of which is the Initial Certificate Principal Balance, represented by such Certificate and the denominator of which is the Original Certificate Principal Balance of the related Class. With respect to any Class of Class R Certificates, the portion of such Class evidenced thereby, expressed as a percentage, as stated on the face of such Certificate; provided, however, that the sum of all such percentages for each such Class totals 100%.

“Permitted Investments”: Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, regardless of whether issued or managed by 

 

the Depositor, the Master Servicer, the Trustee or any of their respective Affiliates or for which an Affiliate of the Trustee serves as an advisor:

(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 the 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 S&P, 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 the Rating Agency in its highest short-term rating available; and provided further that, if the only Rating Agency is S&P 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 S&P if S&P is the Rating Agency;

(iv)        commercial paper and demand notes (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 the Rating Agency in its highest short-term rating 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 the Rating Agency in its highest long-term rating available; and

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

provided, 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 a Disqualified Organization, an “electing large partnership” as defined in Section 775(a) of the Code, or a non-U.S. Person.

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

“Planned Principal Balance”: With respect to the Class A-2 Certificates and each Distribution Date, the amount set forth for such Distribution Date on Exhibit L hereto.

“Prepayment Distribution Trigger”: With respect to any Distribution Date and any Class of Subordinate Certificates (other than the Class B-1 Certificates), a test that shall be satisfied if the fraction (expressed as a percentage) equal to the sum of the Certificate Principal Balances of such Class and each Class of Subordinate Certificates with a Lower Priority than such Class immediately prior to such Distribution Date divided by the aggregate Stated Principal Balance of all of the Mortgage Loans (or related REO Properties) immediately prior to such Distribution Date is greater than or equal to the sum of the related initial Class B Percentages of such Classes of Subordinate Certificates.

“Prepayment Interest Shortfall”: As to any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in Full during the related Prepayment Period, an amount equal to the excess of one month’s interest at the Net Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for such Prepayment Period to the date of such Principal Prepayment in Full or (b) a Curtailment during the prior calendar month, an amount equal to one month’s interest at the Net Mortgage Rate on the amount of such Curtailment. The obligations of the Master Servicer in respect of any Prepayment Interest Shortfall are set forth in Section 3.24.

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

“Primary Insurance Policy”: Each policy of primary guaranty mortgage insurance issued by a Qualified Insurer in effect with respect to any Mortgage Loan, or any replacement policy therefor obtained by the Master Servicer pursuant to Section 3.13.

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

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

 

 

“Private Certificates”: Any of the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.

“Property Insurance Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan, to the extent such proceeds are received by the Master Servicer and are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the Master Servicer’s servicing procedures, subject to the terms and conditions of the related Mortgage Note and Mortgage.

“Purchase Price”: With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as confirmed by an Officers’ Certificate from the Master Servicer to the Trustee, an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of purchase (or such other price as provided in Section 10.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated Principal Balance at the applicable Loan Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an advance by the Master Servicer, which payment or advance had as of the date of purchase been distributed pursuant to Section 4.01, through the end of the calendar month in which the purchase is to be effected, and (y) an REO Property, the sum of (1) accrued
interest on such Stated Principal Balance at the applicable Loan Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an advance by the Master Servicer through the end of the calendar month immediately preceding the calendar month in which such REO Property was acquired, plus (2) REO Imputed Interest for such REO Property for each calendar month commencing with the calendar month in which such REO Property was acquired and ending with the calendar month in which such purchase is to be effected, net of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had been distributed as or to cover REO Imputed Interest pursuant to Section 4.07, (iii) any unreimbursed Servicing Advances and Advances and any unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Section 3.23, and (v) in the case of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the Master Servicer or the Trustee in respect of the breach or defect giving rise to the purchase obligation.

“Qualified Insurer”: Any insurance company acceptable to Fannie Mae or Freddie Mac.

“Rate/Term Refinancing”: A Refinanced Mortgage Loan which is not a Cash-Out Refinancing.

“Rating Agency”: Fitch or its successor. If such agency or its successor is no longer in existence, “Rating Agency” shall be such nationally recognized statistical rating agency, or other comparable Persons, designated by the Depositor, notice of which designation shall be given to the Trustee and Master Servicer.

“Realized Loss”: With respect to a Liquidated Mortgage Loan, the amount by which the remaining unpaid principal balance of the Mortgage Loan exceeds the amount of Liquidation Proceeds applied to the principal balance of the related Mortgage Loan. To the extent the Master Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of the 

 

Realized Loss with respect to that Mortgage Loan will be reduced to the extent such recoveries are applied to reduce the Certificate Principal Balance of any Class of Certificates on any Distribution Date.

“Record Date”: With respect to all of the Certificates, the last Business Day of the month immediately preceding the month in which the related Distribution Date occurs.

“Refinanced Mortgage Loan”: A Mortgage Loan the proceeds of which were used to satisfy an existing mortgage loan on the Mortgaged Property.

“Regular Certificate”: Any of the Class A Certificates and Class B Certificates.

“Related Documents”: With respect to any Mortgage Loan, the related Mortgage Notes, Mortgages and other related documents.

“Relief Act”: The Servicemembers Civil Relief Act.

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

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

“REMIC I”: The segregated pool of assets, with respect to which a REMIC election is to be made, consisting of: (i) each Mortgage Loan (exclusive of payments of principal and interest due on or before the Cut-off Date, if any, received by the Master Servicer which shall not constitute an asset of the Trust Fund) as from time to time are subject to this Agreement and all payments under and proceeds of such Mortgage Loans (exclusive of any prepayment fees and late payment charges received on the Mortgage Loans), together with all documents included in the related Mortgage File, subject to Section 2.01; (ii) such funds or assets as from time to time are deposited in the Collection Account or the Distribution Account and belonging to the Trust Fund; (iii) any REO Property; (iv) the Primary Hazard Insurance Policies, if any, the Primary Insurance Policies, if any, and all other
Insurance Policies with respect to the Mortgage Loans; (v) the Depositor’s rights in respect of the Additional Collateral and the Limited Purpose Surety Bond, including the assignment of the Depositor’s rights under the Additional Collateral Servicing Agreement; and (vi) the Depositor’s interest in respect of the representations and warranties made by the Sellers in the Mortgage Loan Purchase Agreement as assigned to the Trustee pursuant to Section 2.04 hereof. The Trust Fund shall not include the Buydown Account.

“REMIC I Regular Interests”: The uncertificated partial undivided beneficial ownership interests in REMIC I, designated as REMIC I Regular Interests A-1, A-2, A-3, A-4, A-5, A-6, A-7, B-1, B-2, B-3, B-4, B-5, B-6 and R-II, with respect to which a REMIC election is to be made.

 

 

“REMIC II”:  The segregated pool of assets consisting of the REMIC I Regular Interests conveyed in trust to the Trustee for the benefit of the holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6 and Class R-II Certificates pursuant to Section 9.01, with respect to which a separate REMIC election is to be made pursuant to Section 9.01.

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

“Remittance Report”: A report prepared by the Master Servicer and delivered to the Trustee pursuant to Section 4.03.

“Rents from Real Property”: With respect to any REO Property, gross income of the character described in Section 856(d) of the Code.

“REO Account”: The account or accounts maintained by the Master Servicer in respect of an REO Property pursuant to Section 3.23.

“REO Disposition”: The sale or other disposition of an REO Property on behalf of the Trust Fund.

“REO Imputed Interest”: As to any REO Property, for any calendar month during which such REO Property was at any time part of the Trust Fund, one month’s interest at the applicable Net Mortgage Rate on the Stated Principal Balance of such REO Property (or, in the case of the first such calendar month, of the related Mortgage Loan if appropriate) as of the close of business on the Distribution Date in such calendar month.

“REO Principal Amortization”: With respect to any REO Property, for any calendar month, the excess, if any, of (a) the aggregate of all amounts received in respect of such REO Property during such calendar month, whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Termination Price paid in connection with a purchase of all of the Mortgage Loans and REO Properties pursuant to Section 10.01 that is allocable to such REO Property) or otherwise, net of any portion of such amounts (i) payable pursuant to Section 3.23 in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or reimbursable to the Master Servicer pursuant to Section 3.23 for unpaid Servicing Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of such REO Property or the
related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property for such calendar month.

“REO Property”: A Mortgaged Property acquired by the Master Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure, as described in Section 3.23 hereto.

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

 

 

“Required Surety Payment”: With respect to any Additional Collateral Mortgage Loan that becomes a Liquidated Mortgage Loan, the lesser of (i) the principal portion of the Realized Loss with respect to such Mortgage Loan and (ii) the excess, if any, of (a) the Original Additional Collateral Requirement with respect to such Mortgage Loan over (b) the net proceeds realized by the Additional Collateral Servicer from the related Additional Collateral as set forth in Section 3.16.

“Residential Dwelling”: Any one of the following: (i) an attached or detached one-family dwelling unit, (ii) two- to four-family dwelling unit, (iii) condominium, (iv) townhouse, (v) row house, or (vi) individual unit in a planned unit development.

“Residual Certificate”: Any of the Class R Certificates.

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

“Responsible Officer”: When used with respect to the Trustee, any officer, including any Vice President, Assistant Vice President, Trust Officer, any Assistant Secretary, any trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and in each case having direct responsibility for the administration of this Agreement.

“Restricted Classes”: With respect to any Class of Certificates, any Classes of Certificates with a lower priority of payment relative to such Class.

“S&P”: Standard & Poor’s, a division of The McGraw-Hill Companies, Inc., and its successors.

“Securities Account”: With respect to any Additional Collateral Mortgage Loans, the account, together with the financial assets held therein, that is the subject of the related Mortgage 100 K Pledge Agreement.

“Security Agreement”: With respect to a Cooperative Loan, the agreement creating a security interest in favor of the originator in the related Cooperative Assets.

“Seller”: Either of (i) PHH Mortgage Corporation, a New Jersey corporation, or any successor in interest or (ii) Bishop’s Gate Residential Mortgage Trust, a Delaware business trust, or any successor in interest.

“Senior Certificates”: The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7 and Class R Certificates.

“Senior Interest Distribution Amount”: With respect to each Distribution Date, the aggregate amount of the Monthly Interest Distributable Amount to be distributed to the Holders of the Senior Certificates for such Distribution Date.

“Senior Percentage”: As of any Distribution Date, the lesser of 100% and a fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of the Class A Certificates and Class R Certificates immediately prior to such Distribution Date 

 

and the denominator of which is the aggregate Stated Principal Balance of all of the Mortgage Loans or related REO Properties immediately prior to such Distribution Date.

“Senior Prepayment Percentage”: With respect to any Distribution Date, the percentage indicated below:

	
            Distribution Date
 	
            Senior Prepayment Percentage
 
	
            June 2005 through May 2010
 	
            100%
 
	
            June 2010 through May 2011
 	
            Senior Percentage, plus 70% of the  Subordinate Percentage
 
	
            June 2011 through May 2012
 	
            Senior Percentage, plus 60% of the  Subordinate Percentage
 
	
            June 2012 through May 2013
 	
            Senior Percentage, plus 40% of the  Subordinate Percentage
 
	
            June 2013 through May 2014
 	
            Senior Percentage, plus 20% of the  Subordinate Percentage
 
	
            June 2014 and thereafter
 	
            Senior Percentage
 

 

provided, however, (i) that any scheduled reduction to the Senior Prepayment Percentage described above shall not occur as of any Distribution Date unless either (a)(1)(x) the outstanding principal balance of Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in foreclosure and REO Property) averaged over the last six months as a percentage of the aggregate outstanding Certificate Principal Balance of the Class B Certificates as of such Distribution Date, is less than 50%, or (y) the outstanding principal balance of Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans as of such Distribution Date, does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date if occurring during the
sixth, seventh, eighth, ninth or tenth year (or any year thereafter) after the Closing Date are less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the Initial Certificate Principal Balances of the Class B Certificates or (b) (1) the aggregate outstanding principal balance of the Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in foreclosure and REO Property) averaged over the last six months, as a percentage of the aggregate outstanding principal balance of all Mortgage Loans as of such Distribution Date, does not exceed 4% and (2) Realized Losses on the Mortgage Loans to date for such Distribution Date if occurring during the sixth, seventh, eighth, ninth or tenth year (or any year thereafter) after the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of the sum of the Initial Certificate Principal Balances of the Class B Certificates and (ii) that for any Distribution Date on which the  Senior Percentage is greater than the
Original  Senior Percentage, the  Senior Prepayment Percentage for such Distribution Date shall be 100%. Notwithstanding the foregoing, upon the reduction of the aggregate Certificate Principal Balance of the Senior Certificates to zero, the Senior Prepayment Percentage will equal 0%.

“Senior Principal Distribution Amount”: As to any Distribution Date, the lesser of (a) the balance of the Available Distribution Amount remaining after the distribution of all amounts required to be distributed pursuant to Section 4.01(c)(i) and (b) the sum of the following:

 

 

(A)       the Senior Percentage for such Distribution Date times the sum of the following:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan whether or not received on or prior to the related Determination Date, minus the principal portion of any Debt Service Reduction, which together with other Bankruptcy Losses exceeds the Bankruptcy Amount;

(2)        the Stated Principal Balance of any Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02, 2.03, 3.15 or 3.16; and

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with a Cash Liquidation or REO Disposition of a  Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and REO Proceeds), received during the related Prepayment Period to the extent applied by the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to Section 3.16;

(B)        with respect to each  Mortgage Loan for which a Cash Liquidation or a REO Disposition occurred during the related Prepayment Period and did not result in any Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal to the lesser of (a) the  Senior Percentage for such Distribution Date times the Stated Principal Balance of such  Mortgage Loan and (b) the  Senior Prepayment Percentage for such Distribution Date times the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to Section 3.16;

(C)       the Senior Prepayment Percentage for such Distribution Date times the aggregate of all Principal Prepayments in Full and Curtailments received in the related Prepayment Period with respect to the  Mortgage Loans;

	
            (D)
 	
            any Excess Subordinate Principal Amount for such Distribution Date; and
 

(E)        any amounts described in clauses (A), (B) or (C) of this definition, as determined for any previous Distribution Date, which remain unpaid after application of amounts previously distributed pursuant to this clause (E) to the extent that such amounts are not attributable to Realized Losses which have been allocated to the Class B Certificates;

“Servicing Account”: The account or accounts created and maintained pursuant to Section 3.09.

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

 

 

“Servicing Advances”: The reasonable “out-of-pocket” costs and expenses incurred by the Master Servicer in connection with a default, delinquency or other unanticipated event by the Master Servicer in the performance of its servicing obligations, including, but not limited to, (a) reasonable attorneys’ fees and (b) the cost of (i) the preservation, restoration and protection of a Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, in respect of a particular Mortgage Loan, including any expenses incurred in relation to any such proceedings that result from the Mortgage Loan being registered on the MERS System, (iii) the management (including reasonable fees in connection therewith) and liquidation of any REO Property, and (iv) the performance of its obligations under Section 3.01, Section 3.09, Section 3.13, Section 3.14,
Section 3.16 and Section 3.23. The Master Servicer shall not be required to make any Servicing Advance in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Master Servicer, would not be ultimately recoverable from related Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

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

“Servicing Fee”: With respect to each Mortgage Loan and for any calendar month, an amount equal to one month’s interest (or in the event of any payment of interest which accompanies a Principal Prepayment in Full made by the Mortgagor during such calendar month, interest for the number of days covered by such payment of interest) at the applicable Servicing Fee Rate on the same principal amount on which interest on such Mortgage Loan accrues for such calendar month.

“Servicing Fee Rate”: With respect to each Mortgage Loan, a rate equal to 0.25% per annum.

“Special Hazard Amount”: As of any Distribution Date, an amount equal to $617,045 minus the sum of (i) the aggregate amount of Special Hazard Losses allocated solely to one or more specific Classes of Certificates in accordance with Section 4.02 and (ii) the Adjustment Amount (as defined below) as most recently calculated. For each anniversary of the Cut-off Date, the Adjustment Amount shall be equal to the amount, if any, by which the amount calculated in accordance with the preceding sentence (without giving effect to the deduction of the Adjustment Amount for such anniversary) exceeds the greater of (A) the greatest of (i) twice the outstanding principal balance of the Mortgage Loan in the Trust Fund which has the largest outstanding principal balance on the Distribution Date immediately preceding such anniversary, (ii) the product of 1.00% multiplied by the outstanding
principal balance of all Mortgage Loans on the Distribution Date immediately preceding such anniversary and (iii) the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of the Mortgage Loans in any single five-digit California zip code area with the largest amount of Mortgage Loans by aggregate principal balance as of such anniversary and (B) the greater of (i) the product of 0.50% multiplied by the outstanding principal balance of all Mortgage Loans on the Distribution Date immediately preceding such anniversary multiplied by a fraction, the numerator of which is equal to the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of all of the Mortgage Loans secured by Mortgaged 

 

Properties located in the State of California divided by the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of all of the Mortgage Loans, expressed as a percentage, and the denominator of which is equal to 20.81% (which percentage is equal to the percentage of Mortgage Loans initially secured by Mortgaged Properties located in the State of California) and (ii) the aggregate outstanding principal balance (as of the immediately preceding Distribution Date) of the largest Mortgage Loan secured by a Mortgaged Property located in the State of California.

The Special Hazard Amount may be further reduced by the Master Servicer (including accelerating the manner in which coverage is reduced) provided that prior to any such reduction, the Master Servicer shall (i) obtain written confirmation from the Rating Agency that such reduction shall not reduce the rating assigned to any Class of Certificates by such Rating Agency below the lower of the then-current rating or the rating assigned to such Certificates as of the Closing Date by such Rating Agency and (ii) provide a copy of such written confirmation to the Trustee.

“Special Hazard Losses”: Realized Losses in respect of Special Hazard Mortgage Loans.

“Special Hazard Mortgage Loan”: A Liquidated Mortgage Loan as to which the ability to recover the full amount due thereunder was substantially unpaired by a hazard not insured against under a standard hazard insurance policy.

“Startup Day”: As defined in Section 9.01(b) hereof.

“Stated Principal Balance”: With respect to any Mortgage Loan and Due Date, the unpaid principal balance of such Mortgage Loan as of such Due Date, as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period), after giving effect to any previous partial prepayments and Liquidation Proceeds received and to the payment of principal due on such Due Date and irrespective of any delinquency in payment by the related Mortgagor.

“Stayed Funds”: If the Master Servicer is the subject of a proceeding under the federal Bankruptcy Code and the mailing of a remittance by the Master Servicer pursuant to this Agreement is prohibited by Section 362 of the federal Bankruptcy Code, funds which are in the custody of the Master Servicer, a trustee in bankruptcy or a federal bankruptcy court and should have been the subject of such remittance absent such prohibition.

“Stepdown Percentage”: With respect to any Distribution Date, the percentage indicated below:

	
            Distribution Date
 	
            Stepdown Percentage
 
	
            June 2005 through May 2010
 	
            0%
 
	
            June 2010 through May 2011
 	
            30%
 
	
            June 2011 through May 2012
 	
            40%
 
	
            June 2012 through May 2013
 	
            60%
 
	
            June 2013 through May 2014
 	
            80%
 
	
            June 2014 and thereafter
 	
            100%
 

 

 

“Subordinate Certificates”: The Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.

“Subordinate Percentage”: For any Distribution Date, the difference between 100% and the Senior Percentage for such date.

“Subordinate Prepayment Percentage”: With respect to any Distribution Date and each Class of Subordinate Certificates, under the applicable circumstances set forth below, the respective percentages set forth below:

	
            (i)
 	
            For any Distribution Date prior to the Distribution Date in June 2010, 0%.
 

(ii)         For any Distribution Date for which clause (i) does not apply, and on which any Class of Subordinate Certificates are outstanding:

(a)        in the case of the Class of Subordinate Certificates then outstanding with the Highest Priority and each other Class of Subordinate Certificates for which the related Prepayment Distribution Trigger has been satisfied, a fraction, expressed as a percentage, the numerator of which is the Certificate Principal Balance of such Class immediately prior to such date and the denominator of which is the sum of the Certificate Principal Balances immediately prior to such date of (1) the Class of Subordinate Certificates then outstanding with the Highest Priority and (2) all other Classes of Subordinate Certificates for which the respective Prepayment Distribution Triggers have been satisfied; and

(b)        in the case of each other Class of Subordinate Certificates for which the Prepayment Distribution Triggers have not been satisfied, 0%; and

(iii)        Notwithstanding the foregoing, if the application of the foregoing percentages on any Distribution Date as provided in Section 4.01(c) of this Agreement (determined without regard to the proviso to the definition of “Subordinate Principal Distribution Amount”) would result in a distribution in respect of principal of any Class or Classes of Subordinate Certificates in an amount greater than the remaining Certificate Principal Balance thereof (any such class, a “Maturing Class”), then: (a) the Subordinate Prepayment Percentage of each Maturing Class shall be reduced to a level that, when applied as described above, would exactly reduce the Certificate Principal Balance of such Class to zero; (b) the Subordinate Prepayment Percentage of each other Class of Subordinate Certificates (any such Class, a
“Non-Maturing Class”) shall be recalculated in accordance with the provisions in paragraph (ii) above, as if the Certificate Principal Balance of each Maturing Class had been reduced to zero (such percentage as recalculated, the “Recalculated Percentage”); (c) the total amount of the reductions in the Subordinate Prepayment Percentages of the Maturing Class or Classes pursuant to clause (a) of this sentence, expressed as an aggregate percentage, shall be allocated among the Non-Maturing Classes in proportion to their respective Recalculated Percentages (the 

 

portion of such aggregate reduction so allocated to any Non-Maturing Class, the “Adjustment Percentage”); and (d) for purposes of such Distribution Date, the Subordinate Prepayment Percentage of each Non-Maturing Class shall be equal to the sum of (1) the Subordinate Prepayment Percentage thereof, calculated in accordance with the provisions in paragraph (ii) above as if the Certificate Principal Balance of each Maturing Class had not been reduced to zero, plus (2) the related Adjustment Percentage.

“Subordinate Principal Distribution Amount”: With respect to any Distribution Date and each Class of Class B Certificates, the sum of the following:

(i)         the product of (x) the related Class B Percentage for such Class and (y) the aggregate of the following amounts:

(1)        the principal portion of each Monthly Payment due during the related Due Period on each Outstanding Mortgage Loan, whether or not received on or prior to the related Determination Date minus the principal portion of any Debt Service Reduction, which together with other Bankruptcy Losses exceeds the Bankruptcy Amount;

(2)        the Stated Principal Balance of any Mortgage Loan repurchased during the related Prepayment Period pursuant to Section 2.02, 2.03, 3.15 or 3.16; and

(3)        the principal portion of all other unscheduled collections (other than Principal Prepayments in Full and Curtailments and amounts received in connection with a Cash Liquidation or REO Disposition of a Mortgage Loan, including without limitation Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries and REO Proceeds) received during the related Prepayment Period to the extent applied by the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to Section 3.16;

(ii)         such Class’s pro rata share, based on the Certificate Principal Balance of each Class of Class B Certificates then outstanding, of, with respect to each Mortgage Loan, for which a Cash Liquidation or a REO Disposition occurred during the related Prepayment Period and did not result in any Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, an amount equal to the related unscheduled collections (including without limitation Insurance Proceeds, Liquidation Proceeds and REO Proceeds) to the extent applied by the Master Servicer as recoveries of principal of the related Mortgage Loan pursuant to Section 3.16, to the extent such collections are not otherwise distributed to the Senior Certificates;

(iii)        the product of (x) the related Subordinate Prepayment Percentage for such Distribution Date and (y) the aggregate of all Principal Prepayments in Full and Curtailments on the Mortgage Loans received in the related Prepayment Period, to the extent not payable to the Senior Certificates; and

(iv)        if such Class is the Class of Class B Certificates then outstanding with the Highest Priority, an amount equal to the Excess Subordinate Principal Amount; and

 

 

(v)        any amounts described in clauses (i), (ii) and (iii) as determined for any previous Distribution Date, that remain undistributed to the extent that such amounts are not attributable to Realized Losses which have been allocated to a Class of Subordinate Certificates;

provided, however, that such amount shall in no event exceed the outstanding Certificate Principal Balance of such Class of Certificates immediately prior to such date.

“Subsequent Recoveries”: Any amount recovered by the Master Servicer (net of reimbursable expenses) with respect to a Liquidated Mortgage Loan with respect to which a Realized Loss was incurred after the liquidation or disposition of such Mortgage Loan.

“Sub-Servicer”: Any Person with which the Master Servicer has entered into a Sub-Servicing Agreement and which meets the qualifications of a Sub-Servicer pursuant to Section 3.02.

“Sub-Servicing Account”: An account established by a Sub-Servicer which meets the requirements set forth in Section 3.08 and is otherwise acceptable to the Master Servicer.

“Sub-Servicing Agreement”: The written contract between the Master Servicer and a Sub-Servicer relating to servicing and administration of certain Mortgage Loans as provided in Section 3.02.

“Substitution Shortfall Amount”: As defined in Section 2.03(c) hereof.

“Tax Matters Person”: The tax matters person appointed pursuant to Section 9.01(c) hereof.

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

“Termination Price”: As defined in Section 10.01(a) hereof.

“Transition Cost: Any documented fees, expenses and allocated costs reasonably incurred by a successor master servicer or the Trustee in connection with a transfer of servicing from the Master Servicer to a successor master servicer, including without limitation, any costs or expenses associated with the complete transfer of all master servicing data and the completion, correction or manipulation of such master servicing data as may be required by the Trustee to correct any errors or insufficiencies in the master servicing data or otherwise to enable the Trustee to master service the Mortgage Loans properly and effectively.

“Trustee Fee”: With respect to each Mortgage Loan and for any calendar month, an amount equal to one month’s interest at the applicable Trustee Fee Rate on the same principal 

 

amount on which interest on such Mortgage Loan accrues for such calendar month. Notwithstanding the foregoing, in no event shall the aggregate Trustee Fee in a calendar year be less than $7,000.

“Trustee Fee Rate”: With respect to any Mortgage Loan, a rate equal to 0.0125% per annum.

“Trust Fund”: REMIC I and REMIC II.

“Uncertificated Monthly Interest Distributable Amount”: An amount equal to the interest accrued during the related Interest Accrual Period on the Uncertificated Principal Balance of each Class of REMIC I Regular Interest at the then-applicable Uncertificated Pass-Through Rate. The Uncertificated Monthly Interest Distributable Amount on any Class of REMIC I Regular Interest will be reduced by the amount of (i) Prepayment Interest Shortfalls (to the extent not offset by the Master Servicer with a payment of Compensating Interest as provided in Section 3.24), (ii) the interest portion (adjusted to the Net Mortgage Rate) of Realized Losses (including Excess Losses) not allocated solely to one or more specific Classes of Certificates pursuant to Section 4.02, (iii) the interest portion of Advances previously made with respect to a Mortgage Loan or REO Property which remained
unreimbursed following the Cash Liquidation or REO Disposition of such Mortgage Loan or REO Property that were made with respect to delinquencies that were ultimately determined to be Excess Losses and (iv) any other interest shortfalls not covered by the subordination provided by the Class B Certificates, including Relief Act Shortfalls, with all such reductions allocated among all of the REMIC I Regular Interests in proportion to their respective amounts of Uncertificated Monthly Interest Distributable Amount payable on such Distribution Date which would have resulted absent such reductions.

“Uncertificated Pass-Through Rate”: With respect to each REMIC I Regular Interest and any Distribution Date, a per annum rate equal to the weighted average of the Net Mortgage Rates on each mortgage loan as of the Due Date in the related Due Period, weighted on the basis of the respective Stated Principal Balances of such Mortgage Loans as of the day immediately preceding such Distribution Date (or, with respect to the initial Distribution Date, at the close of business on the Cut-off Date).

“Uncertificated Principal Balance”: The principal amount of any REMIC I Regular Interest outstanding as of any date of determination. The Uncertificated Principal Balance of each REMIC I Regular Interest initially shall be equal to the amount set forth in the Preliminary Statement with respect to such REMIC I Regular Interest, and thereafter shall be reduced by all distributions of principal made on such REMIC I Regular Interest and shall be further reduced by Realized Losses allocated thereto. The Uncertificated Principal Balance of each REMIC I Regular Interest shall never be less than zero.

“Underwriting Guide”: The underwriting guide of the Master Servicer, as revised from time to time.

“Uninsured Cause” Any cause of damage to property subject to a Mortgage such that the complete restoration of such property is not fully reimbursable by the hazard insurance policies.

 

 

“United States Person” or “U.S. Person”: A citizen or resident of the United States, 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, for purposes solely of the Class R Certificates, no partnership or other entity treated as a partnership for United States federal income tax purposes shall be treated as a United States Person unless all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are United States Persons, or an estate whose income is subject to United States federal income tax
regardless of its source, or a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more such United States Persons have the authority to control all substantial decisions of the trust or (ii) it is a trust which was in existence on August 20, 1996, and was treated as a United States person, for federal income tax purposes, on the previous day, and elected to continue to be so treated.

“Value”: With respect to any Mortgaged Property, the value thereof as determined by an independent appraisal (or other collateral assessment, permitted by the Underwriting Guide) made at the time of the origination of the related Mortgage Loan; except that, with respect to any Mortgage Loan that is a purchase money mortgage loan, the lesser of (i) the value thereof as determined by an independent appraisal (or other collateral assessment, permitted by the Underwriting Guide) made at the time of the origination of such Mortgage Loan, if any, and (ii) the sales price of the related Mortgaged Property.

“Voting Rights”: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. The Voting Rights allocated among Holders of such Certificates outstanding shall be the fraction, expressed as a percentage, the numerator of which is the aggregate Certificate Principal Balance of all the Certificates of such Class then outstanding and the denominator of which is the aggregate Certificate Principal Balance of all the Certificates then outstanding. 99% of all Voting Rights will be allocated among all holders of the Certificates (other than the Class R Certificates) in proportion to their then outstanding Certificate Principal Balances, 0.50% and 0.50% of all Voting Rights will be allocated to the holders of the Class R-I Certificates and Class R-II Certificates, respectively, in proportion to the Percentage Interests evidenced by their respective
Certificates; provided, however, that any Certificate registered in the name of the Master Servicer, the Depositor or the Trustee or any of their respective affiliates shall not be included in the calculation of Voting Rights.

“Written Order to Authenticate”: A written order by which the Depositor directs the Trustee to issue the Certificates.

	
            Section 1.02
 	
            Accounting.
 

Unless otherwise specified herein, for the purpose of any definition or calculation, whenever amounts are required to be netted, subtracted or added or any distributions are taken into account such definition or calculation and any related definitions or calculations shall be determined without duplication of such functions.

 

 

 

ARTICLE II

 

CONVEYANCE OF MORTGAGE LOANS;

ORIGINAL ISSUANCE OF CERTIFICATES

	
            Section 2.01
 	
            Conveyance of Mortgage Loans.
 

The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of the Depositor under the Mortgage Loan Purchase Agreement (except Section 3.2 thereof), the interest in the Limited Purpose Surety Bond transferred to the Trustee pursuant to Section 2.03(e) and all other assets included or to be included in the Trust Fund. Such assignment includes all interest and principal received by the Depositor or the Master Servicer on or with respect to the Mortgage Loans (but excluding any payments of principal and interest due on or prior to the Cut-off
Date). The Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase Agreement.

The parties hereto agree that it is not intended that any mortgage loan be included in the Trust that is (i) a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003, (ii) a “High-Cost Home Loan” as defined in the New Mexico Home Loan Protection Act effective January 1, 2004, (iii) a “High Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home Practices Act effective November 7, 2004 or (iv) a “High-Cost Home Loan” as defined in the Indiana High Cost Home Loan Law effective January 1, 2005.

In connection with the transactions contemplated by this Agreement, PHH Mortgage Corporation and the Trustee shall enter into an Assignment, Assumption and Recognition Agreement with MLCC, in the form of Exhibit K hereto, pursuant to which PHH Mortgage Corporation shall assign to the Trustee, for the benefit of the Certificateholders, all of its right, title and interest in and to the Additional Collateral Servicing Agreement with respect to the Additional Collateral Mortgage Loans, and the Trustee shall assume all of PHH Mortgage Corporation’s obligations under the Additional Collateral Servicing Agreement with respect to the Additional Collateral Mortgage Loans from and after the date hereof.

In connection with the transfer and assignment described herein, the Master Servicer on behalf of the Depositor, shall deliver to, and deposit with, the Trustee, the following documents or instruments:

	
            (A)
 	
            with respect to each Mortgage Loan, other than a Cooperative Loan:
 

(i)         the original Mortgage Note endorsed “Pay to the order of Citibank, N.A., as Trustee for the registered holders of the PHHMC Mortgage Pass-Through Certificates, Series 2005-3, without recourse”, or endorsed “Pay to the order of_____________________ without recourse,” and signed in the name of the last named endorsee by an authorized officer, together with all prior and intervening 

 

endorsements showing a complete chain of endorsement from the originator to the Person so endorsing to the last endorsee;

(ii)         the original Mortgage, noting the presence of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan,  with evidence of recording thereon which have been recorded, with evidence of recording thereon or a copy of the Mortgage certified by the public recording office in which such Mortgage has been recorded;

(iii)        Unless the Mortgage Loan is registered on the MERS® System, an original Assignment of the Mortgage (A) executed in the following form “Citibank, N.A., as Trustee for the registered holders of the PHHMC Mortgage Pass-Through Certificates, Series 2005-3”, or (B) in blank, which assignment appears to be in form and substance acceptable for recording;

(iv)        the original recorded Assignment or Assignments of the Mortgage showing a complete chain of assignment from the originator to the Person assigning the Mortgage to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System and noting the presence of a MIN) as contemplated by the immediately preceding clause (iii), if applicable and only to the extent available to the Depositor with evidence of recording thereon;

(v)        the originals of all assumption, modification, consolidation or extension agreements, with evidence of recording thereon, if any;

(vi)        a copy of any guarantee (other than Additional Collateral) executed in connection with the Mortgage Note;

(vii)       the original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage;

	
            (viii)
 	
            the original power of attorney, if applicable; and
 

(ix)        if such Mortgage Loan is a Buydown Mortgage Loan (as shown in the Mortgage Loan Schedule), the original Buydown Agreement or a copy thereof; and

(B)        in addition, with respect to each Mortgage Loan that is an Additional Collateral Mortgage Loan (as indicated on the Mortgage Loan Schedule):

(i)         a copy of the related Mortgage 100 K Pledge Agreement or Parent Power Agreement, as applicable; and

(ii)         a copy of the related UCC-1, to the extent that MLCC was required to deliver such UCC-1 to the Master Servicer, and an original form UCC-3, if applicable, to the extent that MLCC was required to deliver such UCC-3 to the Master Servicer; or

(C)       with respect to each Mortgage Loan that is a Cooperative Loan (as indicated on the Mortgage Loan Schedule):

 

 

(i)         the original Mortgage Note endorsed “Pay to the order of Citibank, N.A., as Trustee for the registered holders of the PHHMC Mortgage Pass-Through Certificates, Series 2005-3, without recourse”, or endorsed “Pay to the order of _____________________ without recourse,” and signed in the name of the last named endorsee by an authorized officer, together with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the Person so endorsing to the last endorsee;

(ii)         the original duly executed assignment of Security Agreement to the Trustee;

(iii)        the acknowledgment copy of the original executed Form UCC-1 (or certified copy thereof) with respect to the Security Agreement, and any required continuation statements;

(iv)        the acknowledgment copy of the original executed Form UCC-3 with respect to the security agreement, indicating the Trustee as the assignee of the secured party;

(v)        the stock certificate representing the Cooperative Assets allocated to the cooperative unit, with a stock power in blank attached;

(vi)        the original collateral assignment of the proprietary lease by Mortgagor to the originator;

	
            (vii)
 	
            a copy of the recognition agreement;
 

(viii)      if applicable and to the extent available, the original intervening assignments, including warehousing assignments, if any, showing, to the extent available, an unbroken chain of the related Mortgage Loan to the Trustee, together with a copy of the related Form UCC-3 with evidence of filing thereon; and

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

provided, however, that in lieu of the foregoing, the Depositor may deliver the following documents, under the circumstances set forth below: (x) in lieu of the original Mortgage, assignments to the Trustee or intervening assignments thereof which have been delivered, are being delivered or will, upon receipt of recording information relating to the Mortgage required to be included thereon, be delivered to recording offices for recording and have not been returned to the Depositor within 270 days of the Closing Date, the Depositor may deliver a true copy thereof with an Officer’s Certificate certifying that such Mortgage, assignment to the Trustee or intervening assignment has been delivered to the appropriate recording office for recording; and (y) in lieu of the Mortgage, assignment to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the originals of such
documents (as evidenced by a certification from the Depositor or the Master Servicer, to such effect) the Depositor may deliver photocopies of such documents containing an original certification by the judicial or other governmental authority of the jurisdiction where such documents were recorded; and provided, further, 

 

however, that in the case of Mortgage Loans which have been prepaid in full after the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of delivering the above documents, may deliver to the Trustee a certification to such effect and shall deposit all amounts paid in respect of such Mortgage Loans in the Distribution Account on the Closing Date. The Depositor shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) to the Trustee promptly after they are received.

The Depositor may, in lieu of delivering the original of the documents set forth in Section 2.01(A), (B) and (C) (other than Section 2.01(A)(i) and Section 2.01(C)(i)) (or copies thereof as permitted by this Section 2.01) to the Trustee, deliver such documents to the Master Servicer, and the Master Servicer shall hold such documents in trust for the use and benefit of all present and future Certificateholders until such time as is set forth in the next sentence. Within 60 days following the earlier of (i) the receipt of the original of all of the documents or instruments set forth in Section 2.01(A), (B) and (C) (other than Section 2.01(A)(i) and Section 2.01(C)(i)) (or copies thereof as permitted by such Section) for any Mortgage Loan and (ii) a written request by the Trustee to deliver those documents with respect to any or all of the Mortgage Loans then being held by the Master
Servicer, the Master Servicer shall deliver a complete set of such documents to the Trustee.

The Depositor shall, at its expense, cause the Assignment of the Mortgage to the Trustee to be recorded not later than 270 days after the Closing Date, unless (a) such recordation is not required by the Rating Agency or an Opinion of Counsel has been provided as set forth below in this Section 2.01 or (b) MERS is identified on the Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee of record. With respect to the Cooperative Loans, the Depositor will, promptly after the Closing Date, cause the related financing statements (if not yet filed) and an assignment thereof from the Depositor to the Trustee to be filed in the appropriate offices. The Depositor need not cause to be recorded any assignment in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Depositor to the Trustee and the Rating Agency, the recordation of
such assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of Counsel, each assignment shall be submitted for recording by the Depositor in the manner described above, at no expense to the Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable direction by the Holders of Certificates evidencing Fractional Undivided Interests aggregating not less than 25% of the Trust Fund, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the Depositor, (iv) the occurrence of a servicing transfer as described in Section 7.02 hereof and (v) with respect to any one assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage. Notwithstanding the foregoing, if the Depositor fails to pay the cost of recording the assignments, such
expense will be paid by the Trustee and the Trustee shall be reimbursed for such expenses by the Trust Fund in accordance with Section 8.05.

In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Depositor further agrees that it will cause, at the Depositor’s own expense, within 30 Business Days after the Closing Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Depositor to the Trustee in accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code in the 

 

field which identifies the specific Trustee and (b) the code in the field “Pool Field” which  identifies the series of the Certificates issued in connection with such Mortgage Loans. The Depositor  further agrees that it will not, and will not permit the Master Servicer to, and the Master Servicer agrees that it will not, alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.

If any original Mortgage Note referred to in Section 2.01(A)(i) or 2.01(C)(i) above cannot be located, the obligations of the Depositor to deliver such documents shall be deemed to be satisfied upon delivery to the Trustee of a photocopy of such Mortgage Note, if available, with a Lost Note Affidavit. If any of the original Mortgage Notes for which a Lost Note Affidavit was delivered to the Trustee is subsequently located, such original Mortgage Note shall be delivered to the Trustee within three Business Days.

	
            Section 2.02
 	
            Acceptance of Trust Fund by the Trustee.
 

Subject to the provisions of Section 2.01 and subject to any exceptions noted on the exception report described in the next paragraph below, the Trustee acknowledges receipt of the documents referred to in Section 2.01 above and declares that it holds and will hold such documents and the other documents delivered to it constituting the Mortgage File, and that it holds or will hold all such assets and such other assets included in the definition of the “Trust Fund” and the rights of the Sellers with respect to any Additional Collateral and the Limited Purpose Surety Bond assigned to the Trustee pursuant to Section 2.03(e) in trust for the exclusive use and benefit of all present and future Certificateholders.

The Trustee agrees, for the benefit of the Certificateholders, to review each Mortgage File on or before the Closing Date and to certify on the Closing Date in substantially the form attached hereto as Exhibit I-1 that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents constituting part of such Mortgage File required to be delivered to it pursuant to this Agreement are in its possession, provided that with respect to the documents described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix) to the extent the Trustee has actual knowledge that such documents exist, (ii) such documents have been reviewed by it and are not torn, mutilated, defaced or otherwise altered (except if initialed
by the obligor) and relate to such Mortgage Loan, (iii) based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule that corresponds to items (i) through (iii) (except the ZIP Code), (ix) and (xv) of the definition of “Mortgage Loan Schedule” accurately reflects information set forth in the Mortgage File. Notwithstanding anything to the contrary in this Agreement, it is herein acknowledged that, in conducting such review, the Trustee is under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine whether they are genuine, enforceable, or appropriate for the represented purpose or whether they have actually been recorded or that they are other than what they purport to be on their face, or to determine whether any Person executing any documents is authorized to do so or whether any signature is genuine.

The Trustee agrees, for the benefit of the Certificateholders, to review each Mortgage File within 60 days following the Closing Date and to certify in substantially the form attached 

 

hereto as Exhibit I-2 that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents constituting part of such Mortgage File (other than such documents described in Section 2.01(A)(v)) required to be delivered to it pursuant to this Agreement are in its possession, provided that with respect to the documents described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix) to the extent the Trustee has actual knowledge that such documents exist, (ii) such documents have been reviewed by it and are not tom, mutilated, defaced or otherwise altered (except if initialed by the obligor) and appear regular on their face and relate to such Mortgage Loan, (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items (i) through (iii)(except the ZIP code), (ix) and (xv) of the definition of “Mortgage Loan Schedule” accurately reflects information set forth in the Mortgage File. It is herein acknowledged that, in conducting such review, the Trustee is under no duty or obligation (i) to inspect, review or examine any such documents, instruments, certificates or other papers to determine whether they are genuine, enforceable, or appropriate for the represented purpose or whether they have actually been recorded or that they are other than what they purport to be on their face, or to determine whether any Person executing any documents is authorized to do so or whether any signature is genuine.

Prior to the first anniversary date of this Agreement the Trustee shall deliver to the Depositor and the Master Servicer a final certification in the form annexed hereto as Exhibit I-2 evidencing the completeness of the Mortgage Files, with any applicable exceptions noted thereon, except with respect to the documents described in Section 2.01(A)(v), (vi) and (vii) and 2.01(C)(ix), to the extent the Trustee has actual knowledge that such documents exist.

If in the process of reviewing the Mortgage Files and making or preparing, as the case may be, the certifications referred to above, the Trustee finds any document or documents constituting a part of a Mortgage File to be missing or defective in any material respect, at the conclusion of its review the Trustee shall so notify the Depositor and the Master Servicer. In addition, upon the discovery by the Depositor, the Master Servicer or the Trustee of a breach of any of the representations and warranties made by the Sellers in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects such Mortgage Loan or the interests of the related Certificateholders in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties.

The Trustee shall, at the written request and expense of any Certificateholder, provide a written report to such Certificateholder of all Mortgage Files released to the Master Servicer for servicing purposes.

	
            Section 2.03
 	
            Repurchase or Substitution of Mortgage Loans by the Sellers- Assignment of Interest in Additional Collateral.
 

(a)        Upon discovery or receipt of notice of any materially defective document in, or that a document is missing from, a Mortgage File or of the breach by a Seller of any representation, warranty or covenant under the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan which materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders, by the Trustee, the Master Servicer or the Depositor shall promptly notify such Seller and the Trustee, the Master Servicer and the Depositor of such 

 

defect, missing document or breach and request that such Seller deliver such missing document or cure such defect or breach within 90 days from the date such Seller was notified of such missing document, defect or breach, and if such Seller does not deliver such missing document or cure such defect or breach in all material respects during such period, the Master Servicer (or, in accordance with Section 3.02(b), the Trustee) shall enforce the obligations of such Seller under the Mortgage Loan Purchase Agreement to repurchase such Mortgage Loan from the Trust Fund at the Purchase Price within 90 days after the date on which such Seller was notified (subject to Section 2.03(d)) of such missing document, defect or breach, if and to the extent that such Seller is obligated to do so under the Mortgage Loan Purchase Agreement. If such defect or breach can ultimately be cured but is not reasonably expected to be
cured within the 90-day period, then the applicable Seller shall have such additional time, if any, as is reasonable, to cure such defect or breach, provided that the applicable Seller has commenced curing or correcting such defect or breach and is diligently pursuing same. The Purchase Price for the repurchased Mortgage Loan shall be deposited in the Collection Account, within three Business Days of expiration of the applicable time period referred to above, and the Trustee, upon receipt of written certification from the Master Servicer of such deposit, shall release to the applicable Seller the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as such Seller shall furnish to it and as shall be necessary to vest in such Seller any Mortgage Loan released pursuant hereto, and the Trustee shall have no further responsibility with regard to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as
provided above, if so provided in the related Mortgage Loan Purchase Agreement, a Seller may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a Defective Mortgage Loan) and substitute one or more Eligible Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 2.03(d). If the breach of representation and warranty that gave rise to the obligation to repurchase or substitute a Mortgage Loan pursuant to Section 3.2 of the Mortgage Loan Purchase Agreement was the representation and warranty set forth in clause (xlvi) of Section 3.1 thereof, then the Master Servicer shall request that PHH Mortgage pay to the Trust Fund, concurrently with and in addition to the remedies provided in the preceding four sentences, an amount equal to any liability, penalty or expense that was actually incurred and paid out of or on behalf of the Trust Fund, and that directly resulted from such breach, or if incurred and paid by the
Trust Fund thereafter, concurrently with such payment. In furtherance of the foregoing, if the Seller that repurchases the Mortgage Loan is not a member of MERS and the Mortgage is registered on the MERS® System, the Master Servicer, at its own expense and without any right of reimbursement, shall cause MERS to execute and deliver an assignment of the Mortgage in recordable form to transfer the Mortgage from MERS to such Seller and shall cause such Mortgage to be removed from registration on the MERS® System in accordance with MERS’ rules and regulations. It is understood and agreed that the obligation of a Seller to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy respecting such omission, defect or breach available to the Depositor, the Master Servicer or the Trustee on behalf of
the Certificateholders.

(b)        Within 90 days of the earlier of discovery by the Master Servicer or receipt of notice by the Master Servicer of the breach of any representation, warranty or covenant of the Master Servicer set forth in Section 2.04 which materially and adversely affects the interests of 

 

the Certificateholders in any Mortgage Loan, the Master Servicer shall cure such breach in all material respects.

(c)        Any substitution of Eligible Substitute Mortgage Loans for Defective Mortgage Loans made pursuant to Section 2.03(a), in the case of a Seller, must be effected prior to the date which is two years after the Closing Date.

As to any Defective Mortgage Loan for which a Seller substitutes a Eligible Substitute Mortgage Loan or Loans, such substitution shall be effected by such Seller delivering to the Trustee, for such Eligible Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other documents and agreements, with all necessary endorsements thereon, as are required by Section 2.01, together with an Officers’ Certificate providing that each such Eligible Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Shortfall Amount (as described below), if any, in connection with such substitution. The Trustee shall acknowledge receipt of the original Mortgage Note for such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days thereafter, review such documents in the manner specified in Section 2.02
and deliver to the Depositor and the Master Servicer, with respect to such Eligible Substitute Mortgage Loan or Loans, a certification substantially in the form attached hereto as Exhibit I-1, with any applicable exceptions noted thereon. Within one year of the date of substitution, the Trustee shall deliver to the Depositor and the Master Servicer a certification substantially in the form of Exhibit I-2 hereto with respect to such Eligible Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon. Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the month of substitution are not part of the Trust Fund and will be retained by the related Seller. For the month of substitution, distributions to Certificateholders will reflect the Monthly Payment due on such Defective Mortgage Loan on or before the Due Date in the month of substitution, and the related Seller shall thereafter be entitled to retain all amounts subsequently received in
respect of such Defective Mortgage Loan. The Depositor shall give or cause to be given written notice to the Certificateholders that such substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such Defective Mortgage Loan from the terms of this Agreement and the substitution of the Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such substitution, such Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in all respects to the terms of this Agreement and, in the case of a substitution effected by a Seller, the Mortgage Loan Purchase Agreement, including, in the case of a substitution effected by a Seller, all applicable representations and warranties thereof included in the Mortgage Loan Purchase Agreement in each case as of the date of substitution.

For any month in which a Seller substitutes one or more Eligible Substitute Mortgage Loans for one or more Defective Mortgage Loans, the Master Servicer will determine the amount (the “Substitution Shortfall Amount”), if any, by which the aggregate principal balance of all such Eligible Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of all such Defective Mortgage Loans (in each case after application of the principal portion of the Monthly Payments due in the month of substitution that are to be distributed to the Certificateholders in the month of substitution). On the date of such substitution, the applicable Seller will deliver or cause to be delivered to the Master Servicer for deposit in the Collection Account an amount equal to the Substitution Shortfall Amount, if any, and the Trustee, upon receipt of the
related Eligible Substitute Mortgage Loan or 

 

Loans and certification by the Master Servicer of such deposit, shall release to the applicable Seller the related Mortgage File or Files and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as such Seller shall deliver to it and as shall be necessary to vest therein any Defective Mortgage Loan released pursuant hereto.

In addition, the applicable Seller shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code, or (b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.

(d)        Upon discovery by the Depositor, a Seller, the Master Servicer or the Trustee 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 within two Business Days give written notice thereof to the other parties. In connection therewith, the related Seller shall repurchase or, subject to the limitations set forth in Section 2.03(c), substitute one or more Eligible Substitute Mortgage Loans for the affected Mortgage Loan within 60 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Such repurchase or substitution shall be made by the related Seller, as the case may be, if the affected Mortgage Loan’s status as a non-qualified mortgage is or results from a breach of any
representation, warranty or covenant made by the related Seller under the Mortgage Loan Purchase Agreement. Any such repurchase or substitution shall be made in the same manner as set forth in Sections 2.03(a), if made by the related Seller. The Trustee shall reconvey to the related 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.

(e)        The Depositor hereby assigns to the Trustee its security interest in and to any Additional Collateral, its right to receive amounts due or to become due in respect of any Additional Collateral, all of its rights in each Additional Collateral Agreement, and its rights as beneficiary under the Limited Purpose Surety Bond in respect of any Additional Collateral Mortgage Loans. With respect to any Additional Collateral Mortgage Loan, the Additional Collateral Servicer shall cause to be filed in the appropriate recording office a Form UCC-3 giving notice of the assignment of the related security interest to the Trust Fund and shall thereafter cause the timely filing of all necessary continuation statements with regard to such financing statements.

	
            Section 2.04
 	
            Representations, Warranties and Covenants of the Master Servicer.
 

The Master Servicer hereby represents, warrants and covenants to the Trustee, for the benefit of each of the Trustee and the Certificateholders, and to the Depositor, that as of the Closing Date or as of such date specifically provided herein:

(i)         The Master Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of New Jersey and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer 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 and to service the Mortgage Loans in accordance with the terms of this Agreement;

(ii)         The Master Servicer 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 the part of the Master Servicer the execution, delivery and performance of this Agreement; and this Agreement, assuming the due authorization, execution and delivery thereof by the Depositor and the Trustee, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with its terms, except to the extent that (a) the enforceability thereof 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 the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought;

(iii)        The execution and delivery of this Agreement by the Master Servicer, the servicing of the Mortgage Loans by the Master Servicer hereunder, the consummation 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 the charter or 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 is an approved seller/servicer for Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee pursuant to Section 203 of the National Housing Act;

(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 service the Mortgage Loans or to perform any of its other obligations hereunder 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 Master Servicer of, or compliance by the Master Servicer with, this Agreement or the consummation 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; and

(vii)       The Master 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.

It is understood and agreed that the representations, warranties and covenants set forth in this Section 2.04 shall survive delivery of the Mortgage Files to the Trustee and shall inure to the benefit of the Trustee, the Depositor and the Certificateholders. Upon discovery by any of the Depositor, the Master Servicer or the Trustee of a breach of any of the foregoing representations, warranties and covenants which materially and adversely affects the value of any Mortgage Loan or the interests therein of the Certificateholders, the party discovering such breach shall give prompt written notice (but in no event later than two Business Days following such discovery) to the Trustee. Subject to Section 7.01, the obligation of the Master Servicer set forth in Section 2.03(c) to cure breaches shall constitute the sole remedies against the Master Servicer available to the Certificateholders,
the Depositor or the Trustee on behalf of the Certificateholders respecting a breach of the representations, warranties and covenants contained in this Section 2.04.

	
            Section 2.05
 	
            Representations and Warranties of the Depositor.
 

The Depositor represents and warrants to the Trust and the Trustee on behalf of the Certificateholders as follows:

(i)         This agreement constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);

(ii)         Immediately prior to the sale and assignment by the Depositor to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had good and marketable title to each Mortgage Loan (insofar as such title was conveyed to it by a Seller, as set forth in the Mortgage Loan Purchase Agreement) subject to no prior lien, claim, participation interest, mortgage, security interest, pledge, charge or other encumbrance or other interest of any nature;

(iii)        As of the Closing Date, the Depositor has transferred all right, title and interest in the Mortgage Loans to the Trustee on behalf of the Trust;

(iv)        The Depositor has not transferred the Mortgage Loans to the Trustee on behalf of the Trust with any intent to hinder, delay or defraud any of its creditors;

 

 

(v)        The Depositor has been duly formed and is validly existing as a limited liability company in good standing under the laws of Delaware, with full corporate power and authority to own its assets and conduct its business as presently being conducted;

(vi)        The Depositor is not in violation of its certificate of formation or limited liability company agreement or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Depositor is a party or by which it or its properties may be bound, which default might result in any material adverse changes in the financial condition, earnings, affairs or business of the Depositor or which might materially and adversely affect the properties or assets, taken as a whole, of the Depositor;

(vii)       The execution, delivery and performance of this Agreement by the Depositor, and the consummation of the transactions contemplated thereby, do not and will not result in a material breach or violation of any of the terms or provisions of, or, to the knowledge of the Depositor, constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Depositor is a party or by which the Depositor is bound or to which any of the property or assets of the Depositor is subject, nor will such actions result in any violation of the provisions of the certificate of formation or limited liability company agreement of the Depositor or, to the best of the Depositor’s knowledge without independent investigation, any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Depositor or any of its properties or assets (except for such conflicts, breaches, violations and defaults as would not have a material adverse effect on the ability of the Depositor to perform its obligations under this Agreement);

(viii)      To the best of the Depositor’s knowledge without any independent investigation, no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body of the United States or any other jurisdiction is required for the issuance of the Certificates, or the consummation by the Depositor of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, registrations or qualifications as (a) may be required under State securities or Blue Sky laws, (b) have been previously obtained or (c) the failure of which to obtain would not have a material adverse effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement; and

(ix)        There are no actions, proceedings or investigations pending before or, to the Depositor’s knowledge, threatened by any court, administrative agency or other tribunal to which the Depositor is a party or of which any of its properties is the subject: (a) which if determined adversely to the Depositor would have a material adverse effect on the business, results of operations or financial condition of the Depositor; (b) asserting the invalidity of this Agreement or the Certificates; (c) seeking to prevent the issuance of the Certificates or the consummation by the Depositor of any of the transactions contemplated by this Agreement, as the case may be; (d) which might 

 

materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement.

	
            Section 2.06
 	
            Purpose and Powers of the Trust.
 

The purpose of the trust, as created hereunder, is to engage in the following activities:

(i)         to issue the Certificates to or at the direction of the Depositor in exchange for the Mortgage Loans;

(ii)         to perform the activities of the trust that are expressly set forth in this Agreement;

(iii)        to engage in those activities that are reasonably necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and

(iv)        subject to compliance with this Agreement, to engage in such other activities as may be required in connection with conservation of the Trust Fund and the making of distributions to the Certificateholders.

The trust is hereby authorized to engage in the foregoing activities.

	
            Section 2.07
 	
            Issuance of Certificates.
 

(a)        The Trustee acknowledges the assignment to it on behalf of the Trust Fund of the Mortgage Loans and the other assets comprising the Trust Fund and, concurrently therewith, has signed, and authenticated and delivered to the Depositor, in exchange therefor, Certificates in such authorized denominations representing such Percentage Interests as the Depositor has requested. The Trustee agrees that it will hold the Mortgage Loans and such other assets as may from time to time be delivered to it segregated on the books of the Trustee in trust for the benefit of the Certificateholders.

(b)        The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the assets of REMIC I for the benefit of the holders of the REMIC I Regular Interests. The Trustee acknowledges receipt of the assets of REMIC I and declares that it holds and will hold the same in trust for the exclusive use and benefit of the holders of the REMIC I Regular Interests.

(c)        The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse all the right, title and interest of the Depositor in and to the REMIC I Regular Interests and the other assets of REMIC II for the benefit of the Certificateholders. The Trustee acknowledges receipt of the REMIC I Regular Interests (which are uncertificated) and the other assets of REMIC II and declares that it holds and will hold the same in trust for the exclusive use and benefit of the Certificateholders.

 

 

 

ARTICLE III

 

ADMINISTRATION AND SERVICING OF THE TRUST FUND

	
            Section 3.01
 	
            Master Servicer to Act as Master Servicer.
 

The Master Servicer shall service and administer the Mortgage Loans on behalf of the Trustee and in the best interests of and for the benefit of the Certificateholders (as determined by the Master Servicer in its reasonable judgment) in accordance with the terms of this Agreement and the respective Mortgage Loans and, to the extent consistent with such terms, in the same manner in which it services and administers similar mortgage loans for its own portfolio, giving due consideration to customary and usual standards of practice of prudent mortgage lenders and loan servicers administering similar mortgage loans but without regard to:

(i)         any relationship that the Master Servicer, any Sub-Servicer or any Affiliate of the Master Servicer or any Sub-Servicer may have with the related Mortgagor;

(ii)         the ownership of any Certificate by the Master Servicer or any Affiliate of the Master Servicer;

(iii)        the Master Servicer’s obligation to make Advances or Servicing Advances; or

(iv)        the Master Servicer’s or any Sub-Servicer’s right to receive compensation for its services hereunder or with respect to any particular transaction.

To the extent consistent with the foregoing, the Master Servicer shall also seek to maximize the timely and complete recovery of principal and interest on the Mortgage Notes. Subject only to the above-described servicing standards and the terms of this Agreement and of the respective Mortgage Loans, the Master Servicer shall have full power and authority, acting alone or through Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all things in connection with such servicing and administration which it may deem necessary or desirable. Without limiting the generality of the foregoing, the Master Servicer in its own name or in the name of a Sub-Servicer is hereby authorized and empowered by the Trustee when the Master Servicer believes it appropriate in its best judgment in accordance with the servicing standards set forth above, to execute and deliver, on behalf of the
Certificateholders and the Trustee, and upon notice to the Trustee, 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 the Mortgaged Properties and to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as to convert the ownership of such properties, and to hold or cause to be held title to such properties, on behalf of the Trustee and Certificateholders. The Master Servicer shall service and administer the Mortgage Loans in accordance with applicable state and federal law and shall provide to the Mortgagors any reports required to be provided to them thereby. The Master Servicer shall also comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under each Primary Insurance Policy and any standard hazard insurance policy. Subject to Section 3.17, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any Sub-Servicer such documents as are 

 

necessary or appropriate to enable the Master Servicer or any Sub-Servicer to carry out their servicing and administrative duties hereunder, and the Trustee hereby grants to the Master Servicer a power of attorney to carry out such duties. The Trustee shall not be liable for the actions of the Master Servicer or any Sub-Servicers under such powers of attorney.

In accordance with the standards of the preceding paragraph, the Master Servicer shall advance or cause to be advanced funds as necessary for the purpose of effecting the timely payment of taxes and assessments on the Mortgaged Properties, which advances shall be Servicing Advances reimbursable in the first instance from related collections from the Mortgagors pursuant to Section 3.09, and further as provided in Section 3.11. Any cost incurred by the Master Servicer or by Sub-Servicers in effecting the timely payment of taxes and assessments on a Mortgaged Property shall not, for the purpose of calculating distributions to Certificateholders, be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.

The Master Servicer further is authorized and empowered by the Trustee, on behalf of the Certificateholders and the Trustee, in its own name or in the name of the Sub-Servicer, when the Master Servicer or the Sub-Servicer, as the case may be, believes it is appropriate in its best judgment to register any Mortgage Loan on the MERS® System, or cause the removal from the registration of any Mortgage Loan on the MERS® System, to execute and deliver, on behalf of the Trustee and the Certificateholders or any of them, any and all instruments of assignment and other comparable instruments with respect to such assignment or re-recording of a Mortgage in the name of MERS, solely as nominee for the Trustee and its successors and assigns. Any expenses incurred in connection with the actions described in the preceding sentence shall be borne by the Master Servicer in accordance with Section
3.18, with no right of reimbursement; provided, that if, as a result of MERS discontinuing or becoming unable to continue operations in connection with the MERS System, it becomes necessary to remove any Mortgage Loan from registration on the MERS System and to arrange for the assignment of the related Mortgages to the Trustee, then any related expenses shall be reimbursable to the Master Servicer.

Notwithstanding anything in this Agreement to the contrary, the Master Servicer may not make any future advances with respect to a Mortgage Loan (except as provided in Section 4.06) and the Master Servicer shall not (i) permit any modification with respect to any Mortgage Loan that would change the Loan Rate, reduce or increase the principal balance (except for reductions resulting from actual payments of principal) or change the final maturity date on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Master Servicer, reasonably foreseeable) or (ii) permit any modification, waiver or amendment of any term of any Mortgage Loan that would both (A) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed Treasury
regulations promulgated thereunder) and (B) cause either the Trust Fund to fail to qualify as a REMIC under the Code or the imposition of any tax on “prohibited transactions” or “contributions after the startup date” under the REMIC Provisions.

Notwithstanding any other provision of this Agreement or the Additional Collateral Servicing Agreement to the contrary, except as provided below, the Master Servicer shall have no duty or obligation to service and administer the Additional Collateral and the Master Servicer shall not be deemed to be the Additional Collateral Servicer, unless and until MLCC’s 

 

obligations to administer the Additional Collateral under the Additional Collateral Servicing Agreement have been terminated with respect to the Additional Collateral Mortgage Loans, in which case, the Master Servicer shall be bound to service and administer the Additional Collateral and the Limited Purpose Surety Bond in accordance with the provisions of this Agreement and the related Additional Collateral Agreements from the date of such termination. The Trustee, as assignee of the Additional Collateral Servicing Agreement, shall enforce the obligations of MLCC to service and administer the Additional Collateral as provided in the Additional Collateral Servicing Agreement, and shall take appropriate action thereunder if MLCC fails to substantially comply with its obligations to administer the Additional Collateral. In the event the Trustee receives an indemnification payment from MLCC under Section 3 of
the Additional Collateral Servicing Agreement that is attributable to losses resulting from MLCC’s failure to administer the Additional Collateral in accordance with the terms of the Additional Collateral Servicing Agreement in connection with Additional Collateral Mortgage Loans, the Trustee shall deposit such amount in the Collection Account.

The Master Servicer may delegate its responsibilities under this Agreement; provided, however, that no such delegation shall release the Master Servicer from the responsibilities or liabilities arising under this Agreement.

	
            Section 3.02
 	
            Sub-Servicing Agreements Between the Master Servicer and Sub-Servicers.
 

(a)        The Master Servicer may enter into Sub-Servicing Agreements (provided that such agreements would not result in a withdrawal or a downgrading by any Rating Agency of the rating on any Class of Certificates) with Sub-Servicers, for the servicing and administration of the Mortgage Loans. Notwithstanding any other provision of this Agreement, the Master Servicer shall not be precluded from selling all or part of the Servicing Fee relating to any Mortgage Loans to any Sub-Servicer, provided that with respect to any Mortgage Loan as to which the Master Servicer sells all or a part of the related Servicing Fee, the Master Servicer shall retain full responsibility under this Agreement for the servicing activities relating to such Mortgage Loan.

Each Sub-Servicer shall be (i) authorized to transact business in the state or states in which the related Mortgaged Properties it is to service are situated, if and to the extent required by applicable law to enable the Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing Agreement, (ii) an institution approved as a mortgage loan originator by the Federal Housing Administration or an institution the deposit accounts of which are insured by the FDIC and (iii) a Freddie Mac or Fannie Mae approved mortgage servicer. Each Sub-Servicing Agreement must impose on the Sub-Servicer requirements conforming to the provisions set forth in Section 3.08 and provide for servicing of the Mortgage Loans consistent with the terms of this Agreement. The Master Servicer will examine each Sub-Servicing Agreement and will be familiar with the terms thereof. The terms of any
Sub-Servicing Agreement will not be inconsistent with any of the provisions of this Agreement. The Master Servicer and the Sub-Servicers may enter into and make amendments to the Sub-Servicing Agreements or enter into different forms of Sub-Servicing Agreements; provided, however, that any such amendments or different forms shall be consistent with and not violate the provisions of this Agreement, and that no such amendment or different form shall be made or entered into which could be reasonably expected to be materially adverse to the interests of the 

 

Certificateholders, without the consent of the Holders of Certificates entitled to at least 66% of the Voting Rights. Any variation without the consent of the Holders of Certificates entitled to at least 66% of the Voting Rights from the provisions set forth in Section 3.08 relating to insurance or priority requirements of Sub-Servicing Accounts, or credits and charges to the Sub-Servicing Accounts or the timing and amount of remittances by the Sub-Servicers to the Master Servicer, are conclusively deemed to be inconsistent with this Agreement and therefore prohibited. The Master Servicer shall deliver to the Trustee copies of all Sub-Servicing Agreements, and any amendments or modifications thereof, promptly upon the Master Servicer’s execution and delivery of such instruments.

(b)        As part of its servicing activities hereunder, the Master Servicer (except as otherwise provided in the last sentence of this paragraph), for the benefit of the Trustee and the Certificateholders, shall enforce the obligations of each Sub-Servicer under the related Sub-Servicing Agreement and of each Seller under the Mortgage Loan Purchase Agreement, including, without limitation, any obligation to make advances in respect of delinquent payments as required by a Sub-Servicing Agreement, or to purchase a Mortgage Loan on account of missing or defective documentation or on account of a breach of a representation, warranty or covenant, as described in Section 2.03(a). Such enforcement, including, without limitation, the legal prosecution of claims, termination of Sub-Servicing Agreements, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the Master Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Master Servicer shall pay the costs of such enforcement at its own expense, and shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement, to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loans, or (ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against whom such enforcement is directed. Enforcement of the obligations under the Mortgage Loan Purchase Agreement against the Sellers shall be effected by the Master Servicer, in accordance with the foregoing provisions of this paragraph.

	
            Section 3.03
 	
            Successor Sub-Servicers.
 

The Master Servicer shall be entitled to terminate any Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in accordance with the terms and conditions of such Sub-Servicing Agreement. In the event of termination of any Sub Servicer, all servicing obligations of such Sub-Servicer shall be assumed simultaneously by the Master Servicer without any act or deed on the part of such Sub-Servicer or the Master Servicer, and the Master Servicer either shall service directly the related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a successor Sub-Servicer which qualifies under Section 3.02.

Any Sub-Servicing Agreement shall include the provision that such agreement may be immediately terminated by the Trustee without fee, in accordance with the terms of this Agreement, in the event that the Master Servicer shall, for any reason, no longer be the Master Servicer (including termination due to a Master Servicer Event of Termination).

 

 

	
            Section 3.04
 	
            Liability of the Master Servicer.
 

Notwithstanding any Sub-Servicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between the Master Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise, the Master Servicer shall remain obligated and primarily liable to the Trustee and the Certificateholders for the servicing and administering of the Mortgage Loans in accordance with the provisions of Section 3.01 without diminution of such obligation or liability by virtue of such Sub-Servicing Agreements or arrangements or by virtue of indemnification from the Sub-Servicer and to the same extent and under the same terms and conditions as if the Master Servicer alone were servicing and administering the Mortgage Loans. The Master Servicer shall be entitled to enter into any agreement with a Sub-Servicer for indemnification of the Master Servicer by such
Sub-Servicer and nothing contained in this Agreement shall be deemed to limit or modify such indemnification.

	
            Section 3.05
 	
            No Contractual Relationship Between Sub-Servicers and Trustee or Certificateholders.
 

Any Sub-Servicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Sub-Servicer in its capacity as such shall be deemed to be between the Sub-Servicer and the Master Servicer alone, and the Trustee and Certificateholders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect to the Sub-Servicer except as set forth in Section 3.06. The Master Servicer shall be solely liable for all fees owed by it to any Sub-Servicer, irrespective of whether the Master Servicer’s compensation pursuant to this Agreement is sufficient to pay such fees.

	
            Section 3.06
 	
            Assumption or Termination of Sub-Servicing Agreements by Trustee.
 

In the event the Master Servicer shall for any reason no longer be the master servicer (including by reason of the occurrence of a Master Servicer Event of Termination), the Trustee or its designee or the successor master servicer as appointed pursuant to Section 7.02 herein, shall thereupon assume all of the rights and obligations of the Master Servicer under each Sub-Servicing Agreement that the Master Servicer may have entered into, unless the Trustee elects to terminate any Sub-Servicing Agreement in accordance with its terms as provided in Section 3.03. Upon such assumption, the Trustee, its designee or the successor servicer for the Trustee appointed pursuant to Section 7.02 shall be deemed, subject to Section 3.03, to have assumed all of the Master Servicer’s interest therein and to have replaced the Master Servicer as a party to each Sub-Servicing Agreement to the same
extent as if each Sub-Servicing Agreement had been assigned to the assuming party, except that (i) the Master Servicer shall not thereby be relieved of any liability or obligations under any Sub-Servicing Agreement and (ii) none of the Trustee, its designee or any successor master servicer shall be deemed to have assumed any liability or obligation of the Master Servicer that arose before it ceased to be the Master Servicer.

The Master Servicer at its expense shall, upon request of the Trustee, deliver to the assuming party all documents and records relating to each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an accounting of amounts collected and held by or on 

 

behalf of it, and otherwise use its best efforts to effect the orderly and efficient transfer of the Sub-Servicing Agreements to the assuming party.

	
            Section 3.07
 	
            Collection of Certain Mortgage Loan Payments.
 

The Master Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be consistent with this Agreement and the terms and provisions of any related Primary Insurance Policy and any other applicable insurance policies, follow such collection procedures as it would follow with respect to mortgage loans comparable to the Mortgage Loans and held for its own account. Consistent with the foregoing, the Master Servicer may in its discretion (i) waive any late payment charge or, if applicable, penalty interest, only upon determining that the coverage of such Mortgage Loan by the related Primary Insurance Policy, if any, will not be affected, or (ii) extend the due dates for Monthly Payments due on a Mortgage Note for a period of not greater than 180 days; provided that any
extension pursuant to clause (ii) above shall not affect the amortization schedule of any Mortgage Loan for purposes of any computation hereunder, except as provided below. In the event of any such arrangement pursuant to clause (ii) above, the Master Servicer shall make timely advances on such Mortgage Loan during such extension pursuant to Section 4.06 and in accordance with the amortization schedule of such Mortgage Loan without modification thereof by reason of such arrangements. Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or, in the judgment of the Master Servicer, such default is reasonably foreseeable, the Master Servicer, consistent with the standards set forth in Section 3.01, may also, waive, modify or vary any term of such Mortgage Loan (including modifications that would change the Loan Rate, forgive the payment of principal or interest or extend the final maturity date of such Mortgage Loan), accept payment from the related Mortgagor
of an amount less than the Stated Principal Balance in final satisfaction of such Mortgage Loan (such payment, a “Short Pay-off”) or consent to the postponement of strict compliance with any such term or otherwise grant indulgence to any Mortgagor.

	
            Section 3.08
 	
            Sub-Servicing Accounts.
 

In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a Sub-Servicing Agreement, the Sub-Servicer will be required to establish and maintain one or more accounts (collectively, the “Sub-Servicing Account”). The Sub-Servicing Account shall be an Eligible Account and shall comply with all requirements of this Agreement relating to the Collection Account. The Sub-Servicer shall deposit in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections 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 Sub-Servicer’s receipt thereof, all proceeds of Mortgage Loans received by the Sub-Servicer less its servicing compensation to the extent permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more than two Business Days after the deposit of such funds into the clearing account. The Sub-Servicer shall thereafter deposit such proceeds in the Collection Account or remit such proceeds to the Master Servicer for deposit in the Collection Account not later than two Business Days after the deposit of such amounts in the Sub-Servicing Account. For purposes of this Agreement, the Master Servicer shall be deemed to have received payments on the Mortgage Loans when the Sub-Servicer receives such payments.

 

 

	
            Section 3.09
 	
            Collection of Taxes, Assessments and Similar Items; Servicing Accounts.
 

The Master Servicer shall establish and maintain one or more accounts (the “Servicing Accounts”), into which all collections from the Mortgagors (or related advances from Sub-Servicers) for the payment of ground rents, taxes, assessments, fire and hazard insurance premiums, Primary Insurance Policy premiums, water charges, sewer rents and comparable items for the account of the Mortgagors (“Escrow Payments”) shall be deposited and retained. Servicing Accounts shall be Eligible Accounts. The Master Servicer shall deposit in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections 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 Master Servicer’s receipt thereof, all Escrow Payments collected on account
of the Mortgage Loans and shall thereafter deposit such Escrow Payments in the Servicing Accounts, in no event more than two Business Days after the deposit of such funds in the clearing account, for the purpose of effecting the payment of any such items as required under the terms of this Agreement. Withdrawals of amounts from a Servicing Account may be made only to (i) effect payment of Escrow Payments; (ii) reimburse the Master Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out of related collections for any advances made pursuant to Section 3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as may be determined to be overages; (iv) make Permitted Investments as provided in Section 3.12; (v) pay interest, to the Master Servicer or to the Mortgagor if required and as described below, on balances in the Servicing Account; (vi) clear and terminate the
Servicing Account at the termination of the Master Servicer’s obligations and responsibilities in respect of the Mortgage Loans under this Agreement in accordance with Article IX; or (vii) recover amounts deposited in error. As part of its servicing duties, the Master Servicer or Sub-Servicers shall pay to the Mortgagors interest on funds in Servicing Accounts, to the extent required by law and, to the extent that interest earned on funds in the Servicing Accounts is insufficient, to pay such interest from its or their own funds, without any reimbursement therefor. To the extent that a Mortgage does not provide for Escrow Payments, the Master Servicer shall determine whether any such payments are made by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged Property due to a tax sale or the foreclosure of a tax lien. The Master Servicer assumes full responsibility for the payment of all such bills and shall effect payments of all such bills irrespective of
the Mortgagor’s faithful performance in the payment of same or the making of the Escrow Payments and shall make advances from its own funds to effect such payments. The Master Servicer shall be entitled to retain any interest paid on funds deposited in the Servicing Account to effect Escrow Payments other than interest on escrowed funds required by law to be paid to the Mortgagor.

	
            Section 3.10
 	
            Collection Account and Distribution Account.
 

(a)        On behalf of the Trust Fund, the Master Servicer shall establish and maintain one or more accounts (such account or accounts, the “Collection Account”), held in trust for the benefit of the Trustee and the Certificateholders. On behalf of the Trust Fund, the Master Servicer shall deposit or cause to be deposited in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections 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 Master Servicer’s receipt thereof, and shall thereafter deposit in the Collection Account, in no event more than two Business Days after the deposit of such funds 

 

into the clearing account, as and when received or as otherwise required hereunder, the following payments and collections received or made by it subsequent to the Cut-off Date (other than in respect of principal or interest on the related Mortgage Loans due on or before the Cut-off Date), or payments (other than Principal Prepayments) received by it on or prior to the Cut-off Date but allocable to a Due Period subsequent thereto:

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

(ii)         all payments on account of interest (net of the related Servicing Fee) on each Mortgage Loan;

(iii)        all Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries (other than proceeds collected in respect of any particular REO Property and amounts paid by the Master Servicer in connection with a purchase of Mortgage Loans and REO Properties pursuant to Section 9.01);

(iv)        any amounts required to be deposited pursuant to Section 3.12 in connection with any losses realized on Permitted Investments with respect to funds held in the Collection Account;

(v)        any amounts required to be deposited by the Master Servicer pursuant to the second paragraph of Section 3.14(a) in respect of any blanket policy deductibles;

(vi)        all proceeds of any Mortgage Loan repurchased or purchased in accordance with Section 2.03 or Section 9.01;

(vii)       all amounts required to be deposited in connection with shortfalls in principal amount of Eligible Substitute Mortgage Loans pursuant to Section 2.03;

(viii)      any amounts required to be transferred from any Buydown Account pursuant to Section 3.25; and

(ix)        any (x) amounts realized by MLCC or (y) Required Surety Payments received by the Trustee or the Master Servicer in respect of any Additional Collateral.

For purposes of the immediately preceding sentence, the Cut-off Date with respect to any Eligible Substitute Mortgage Loan shall be deemed to be the date of substitution.

The foregoing requirements for deposit in the Collection 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 need not be deposited by the Master Servicer in the Collection Account and shall be retained by the Master Servicer as additional servicing compensation. In the event the Master Servicer shall deposit in the Collection Account any amount not required to be deposited therein, it may at any time withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding.

(b)        On behalf of the Trust Fund, the Trustee shall establish and maintain one or more accounts (such account or accounts, the “Distribution Account”), held in trust for the benefit of 

 

the Certificateholders. On behalf of the Trust Fund, the Master Servicer shall deliver to the Trustee in immediately available funds for deposit in the Distribution Account on or before 5:00 p.m. New York time on the Master Servicer Remittance Date, that portion of the Available Distribution Amount for the related Distribution Date then on deposit in the Collection Account.

(c)        Funds in the Collection Account and the Distribution Account may be invested in Permitted Investments in accordance with the provisions set forth in Section 3.12. The Master Servicer shall give notice to the Trustee and the Depositor of the location of the Collection Account maintained by it when established and prior to any change thereof. The Trustee shall give notice to the Master Servicer and the Depositor of the location of the Distribution Account when established and prior to any change thereof.

(d)        Funds held in the Collection Account at any time may be delivered by the Master Servicer to the Trustee for deposit in an account (which may be the Distribution Account and must satisfy the standards for the Distribution Account as set forth in the definition thereof) and for all purposes of this Agreement shall be deemed to be a part of the Collection Account; provided, however, that the Trustee shall have the sole authority to withdraw any funds held pursuant to this subsection (d). In the event the Master Servicer shall deliver to the Trustee for deposit in the Distribution Account any amount not required to be deposited therein, it may at any time request that the Trustee withdraw such amount from the Distribution Account and remit to it any such amount, any provision herein to the contrary notwithstanding. In addition, the Master
Servicer shall deliver to the Trustee from time to time for deposit, and upon written notification from the Master Servicer, the Trustee shall so deposit, in the Distribution Account:

	
            (i)
 	
            any Advances, as required pursuant to Section 4.06;
 

(ii)         any amounts required to be deposited pursuant to Section 3.23(d) or (f) in connection with any REO Property;

(iii)        any amounts to be paid by the Master Servicer in connection with a purchase of Mortgage Loans and REO Properties pursuant to Section 9.01;

(iv)        any amounts required to be deposited pursuant to Section 3.24 in connection with any Prepayment Interest Shortfalls; and

(v)        any Stayed Funds, as soon as permitted by the federal bankruptcy court having jurisdiction in such matters.

(e)        Promptly upon receipt of any Stayed Funds, whether from the Master Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source, the Trustee shall deposit such funds in the Distribution Account.

	
            Section 3.11
 	
            Withdrawals from the Collection Account and Distribution Account.
 

(a)        The Master Servicer shall, from time to time, make withdrawals from the Collection Account for any of the following purposes or as described in Section 4.06:

 

 

(i)         to remit to the Trustee for deposit in the Distribution Account the amounts required to be so remitted pursuant to Section 3.10(b) or permitted to be so remitted pursuant to the first sentence of Section 3.10(d);

	
            (ii)
 	
            subject to Section 3.16(d), to reimburse the Master Servicer for Advances;
 

(iii)        subject to Section 3.16(d), to pay the Master Servicer or any Sub-Servicer any unpaid Servicing Fees and reimburse any unreimbursed Servicing Advances with respect to each Mortgage Loan, but only to the extent of any Liquidation Proceeds, Insurance Proceeds or other amounts as may be collected by the Master Servicer;

(iv)        to pay to the Master Servicer as servicing compensation (in addition to the Servicing Fee) on the Master Servicer Remittance Date any interest or investment income earned on funds deposited in the Collection Account, any Foreclosure Profits and any prepayment penalties or premiums relating to any Principal Prepayments; provided, however, that no such amounts shall be payable as servicing compensation to the extent they relate to a Mortgage Loan with respect to which a default, breach, violation or event of acceleration exists or would exist but for the lapse of time, the giving of notice, or both;

(v)        to pay to the Master Servicer, the Depositor or a Seller, as the case may be, with respect to each Mortgage Loan that has previously been purchased or replaced pursuant to Section 2.03 or Section 3.16(c) all amounts received thereon subsequent to the date of purchase or substitution, as the case may be;

(vi)        to reimburse the Master Servicer for any Advance previously made which the Master Servicer has determined to be a Nonrecoverable Advance in accordance with the provisions of Section 4.06;

(vii)       to reimburse the Master Servicer or the Depositor for expenses incurred by or reimbursable to the Master Servicer or the Depositor, as the case may be, pursuant to Section 6.03;

(viii)      to reimburse the Master Servicer or the Trustee, as the case may be, for expenses reasonably incurred in respect of the breach or defect giving rise to the purchase obligation under Section 2.03 or Section 2.04 of this Agreement that were included in the Purchase Price of the Mortgage Loan, including any expenses arising out of the enforcement of the purchase obligation;

(ix)        to pay, or to reimburse the Master Servicer for advances in respect of, expenses incurred in connection with any Mortgage Loan pursuant to Section 3.16(b); and

	
            (x)
 	
            to clear and terminate the Collection Account pursuant to Section 10.01;
 
	
            (xi)
 	
            to reimburse the Master Servicer for amounts deposited in error.
 	
             

The Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from the Collection Account, 

 

to the extent held by or on behalf of it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above. The Master Servicer shall provide written notification to the Trustee, on or prior to the next succeeding Master Servicer Remittance Date, upon making any withdrawals from the Collection Account pursuant to subclause (vii) above.

(b)        The Trustee shall, from time to time, make withdrawals from the Distribution Account, for any of the following purposes, without priority:

(i)         to make distributions to Certificateholders in accordance with Section 4.01;

	
            (ii)
 	
            to pay to itself amounts to which it is entitled pursuant to Section 8.05;
 

(iii)        to pay itself any interest income earned on funds deposited in the Distribution Account pursuant to Section 3.12(c);

	
            (iv)
 	
            to reimburse itself pursuant to Section 7.02 and 7.01(b);
 	
             

	
            (v)
 	
            to pay any amounts in respect of taxes pursuant to 10.01(g)(iii); and
 	
             

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

	
            Section 3.12
 	
            Investment of Funds in the Collection Account, Servicing Accounts and the Distribution Account.
 

(a)        The Master Servicer may direct any depository institution maintaining the Collection Account or Servicing Accounts (for purposes of this Section 3.12, an “Investment Account’), and the Trustee, in its individual capacity, may direct any depository institution maintaining the Distribution Account (for purposes of this Section 3.12, also an “Investment Account’), to invest the funds in such Investment Account in one or more Permitted Investments bearing interest or sold at a discount, and maturing, unless payable on demand, (i) no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if a Person other than the Trustee is the obligor thereon, and (ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Trustee is the obligor thereon. All such Permitted Investments shall be held to maturity, unless payable on demand. Any investment of funds in an Investment Account shall be made in the name of the Trustee (in its capacity as such) or in the name of a nominee of the Trustee. The Trustee shall be entitled to sole possession (except with respect to investment direction of funds held in the Collection Account or Servicing Accounts, as applicable, and any income and gain realized thereon) over each such investment, and any certificate or other instrument evidencing any such investment shall be delivered directly to the Trustee or its agent, together with any document of transfer necessary to transfer title to such investment to the Trustee or its nominee. In the event amounts on deposit in an Investment Account are at any time invested in a Permitted Investment payable on demand, the Trustee shall:

	
            (x)
 	
            consistent with any notice required to be given thereunder, demand that payment thereon be made on the last day such Permitted Investment may 
 

 

otherwise mature hereunder in an amount equal to the lesser of (1) all amounts then payable thereunder and (2) the amount required to be withdrawn on such date; and

	
            (y)
 	
            demand payment of all amounts due thereunder promptly upon determination by a Responsible Officer of the Trustee that such Permitted Investment would not constitute a Permitted Investment in respect of funds thereafter on deposit in the Investment Account.
 

(b)        All income and gain realized from the investment of funds deposited in the Collection Account or Servicing Accounts, as applicable, held by or on behalf of the Master Servicer, shall be for the benefit of the Master Servicer and shall be subject to its withdrawal in accordance with Section 3.11. The Master Servicer shall deposit in the Collection Account or Servicing Accounts, as applicable, the amount of any loss of principal incurred in respect of any such Permitted Investment made with funds in such accounts immediately upon realization of such loss.

(c)        All income and gain realized from the investment of funds deposited in the Distribution Account held by or on behalf of the Trustee, shall be for the benefit of the Trustee and shall be subject to its withdrawal at any time. The Trustee shall deposit in the Distribution Account, the amount of any loss of principal incurred in respect of any such Permitted Investment made with funds in such accounts immediately upon realization of such loss.

(d)        Except as otherwise expressly provided in this Agreement, if any default occurs in the making of a payment due under any Permitted Investment, or if a default occurs in any other performance required under any Permitted Investment, the Trustee may and, subject to Section 8.01 and Section 8.02(a)(v), upon the request of the Holders of Certificates representing more than 50% of the Voting Rights allocated to any Class of Certificates, shall take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate proceedings.

	
            Section 3.13
 	
            Maintenance of the Primary Insurance Policies; Collections Thereunder.
 

The Master Servicer will maintain or cause the related Sub-Servicer, if any, to maintain in full force and effect, if required under the Mortgage Loan Purchase Agreement and to the extent available, a Primary Insurance Policy conforming in all respects to the description set forth in Section 2(vii) of the Mortgage Loan Purchase Agreement with respect to each Mortgage Loan so insured as of the Closing Date (or, in the case of a Eligible Substitute Mortgage Loan, on the date of substitution). Such coverage will be maintained with respect to each such Mortgage Loan for so long as it is outstanding, subject to any applicable laws or until the related Loan-to-Value Ratio is reduced to less than or equal to 80% based on Mortgagor payments. The Master Servicer shall cause the premium for each Primary Insurance Policy to be paid on a timely basis and shall pay such premium out of its own funds
if it is not otherwise paid. The Master Servicer or the related Sub-Servicer, if any, will not cancel or refuse to renew any such Primary Insurance Policy in effect on the Closing Date (or, in the case of a Eligible Substitute Mortgage Loan, on the date of substitution) that is required to be kept in force under this Agreement unless a replacement Primary Insurance Policy for such canceled or non-renewed policy is obtained from and maintained with an insurer.

 

 

The Master Servicer shall not take, or permit any Sub-Servicer to take, any action which would result in non-coverage under any applicable Primary Insurance Policy of any loss which, but for the actions of the Master Servicer or Sub-Servicer, would have been covered thereunder. The Master Servicer will comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under each Primary Insurance Policy. In connection with any assumption and modification agreement or substitution of liability agreement entered into or to be entered into pursuant to Section 3.15, the Master Servicer shall promptly notify the insurer under the related Primary Insurance Policy, if any, of such assumption in accordance with the terms of such policies and shall take all actions which may be required by such insurer as a condition to the continuation of coverage under the
Primary Insurance Policy. If any such Primary Insurance Policy is terminated as a result of such assumption, the Master Servicer or the related Sub-Servicer shall obtain a replacement Primary Insurance Policy as provided above.

In connection with its activities as administrator and servicer of the Mortgage Loans, the Master Servicer agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims to the insurer under any Primary Insurance Policy in a timely fashion in accordance with the terms of such policies and, in this regard, to take such action as shall be necessary to permit recovery under any Primary Insurance Policy respecting a defaulted Mortgage Loan. Any amounts collected by the Master Servicer under any Primary Insurance Policy shall be deposited in the Collection Account, subject to withdrawal pursuant to Section 3.11; and any amounts collected by the Master Servicer under any Primary Insurance Policy in respect of any REO Property shall be deposited in the Collection Account, subject to withdrawal pursuant to Section 3.23. In those cases in which a Mortgage Loan
is serviced by a Sub-Servicer, the Sub-Servicer, on behalf of itself, the Trustee, and the Certificateholders, will present claims to the insurer under any Primary Insurance Policy and all collections thereunder shall be deposited initially in the Sub-Servicing Account.

	
            Section 3.14
 	
            Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage.
 

(a)        The Master Servicer shall cause to be maintained for each Mortgage Loan fire insurance with extended coverage on the related Mortgaged Property in an amount which is at least equal to the least of (i) the current principal balance of such Mortgage Loan, (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 and (iii) the maximum insurable value of the improvements which are a part of such Mortgaged Property, 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 Master Servicer shall also cause to be maintained fire 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 property and (ii) the outstanding principal balance of the related Mortgage Loan at the time it became an REO Property, plus accrued interest at the Loan Rate and related Servicing Advances. The Master Servicer will comply in the performance of this Agreement with all reasonable rules and requirements of each insurer under any such hazard policies. Any amounts to be collected by the Master 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 Master Servicer would follow in servicing loans held for its own account, subject to the terms and conditions of the related Mortgage and Mortgage 

 

Note) shall be deposited in the Collection Account, within two Business Days after receipt thereof, subject to withdrawal pursuant to Section 3.11, if received in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal pursuant to Section 3.23, if received in respect of an REO Property. Any cost incurred by the Master Servicer in maintaining any such insurance shall not, for the purpose of calculating distributions to Certificateholders, be added to the unpaid principal balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit. It is understood and agreed that no earthquake, windstorm 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 the 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, the Master Servicer will cause to be maintained a flood insurance policy in respect thereof. Such flood insurance shall be in an amount equal to the lesser of (i) the unpaid principal balance of the related 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).

If the Master Servicer shall obtain and maintain a blanket fire insurance policy with extended coverage 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 3.14, it being understood and agreed that such policy may contain a deductible clause, in which case the Master 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 3.14, and there shall have been one or more losses which would have been covered by such policy, deposit to the Collection Account 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 Master 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 Master 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 Master 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 Master Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The Master 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 Master Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie Mac. The Master Servicer shall provide the Trustee (upon the Trustee’s reasonable request) with copies
of any such insurance policies and fidelity bond. The Master Servicer shall be deemed to have complied with this provision if an Affiliate of the Master 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 Master 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 Trustee. The Master Servicer shall also cause each Sub-Servicer to 

 

maintain a policy of insurance covering errors and omissions and a fidelity bond which would meet such requirements.

	
            Section 3.15
 	
            Enforcement of Due-On-Sale Clauses; Assumption Agreements.
 

The Master Servicer will, to the extent it has knowledge of any conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by absolute conveyance or by contract of sale, and whether or not the Mortgagor remains or is to remain liable under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan under the “due-on-sale” clause, if any, applicable thereto; provided, however, that the Master Servicer shall not exercise any such rights if prohibited by law from doing so or if the exercise of such rights would impair or threaten to impair any recovery under the related Primary Insurance Policy or Limited Purpose Surety Bond, if any. If the Master Servicer reasonably believes it is unable under applicable law to enforce such “due-on-sale” clause, or if any of the other conditions set forth in
the proviso to the preceding sentence apply, the Master Servicer will enter into an assumption and modification agreement from or with the person to whom such property has been conveyed or is proposed to be conveyed, pursuant to which such person becomes liable under the Mortgage Note and, to the extent permitted by applicable state law, the Mortgagor remains liable thereon. The Master Servicer is also authorized to enter into a substitution of liability agreement with such person, pursuant to which the original Mortgagor is released from liability and such person is substituted as the Mortgagor and becomes liable under the Mortgage Note, provided that no such substitution shall be effective unless such person satisfies the underwriting criteria of the Master Servicer and has a credit risk rating at least equal to that of the original Mortgagor. In connection with any assumption or substitution, the Master Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual in its general mortgage servicing activities and as it applies to other mortgage loans owned solely by it. The Master Servicer shall not take or enter into any assumption and modification agreement, however, unless (to the extent practicable in the circumstances) it shall have received confirmation, in writing, of the continued effectiveness of any applicable Primary Insurance Policy or hazard insurance policy, or a new policy meeting the requirements of this Section is obtained. Any fee collected by the Master Servicer in respect of an assumption or substitution of liability agreement will be retained by the Master Servicer as additional servicing compensation. In connection with any such assumption, no material term of the Mortgage Note (including but not limited to the related Loan Rate and the amount of the Monthly Payment) may be amended or modified, except as otherwise required pursuant to the terms thereof. The Master Servicer shall
notify the Trustee that any such substitution or assumption agreement has been completed by forwarding to the Trustee the executed original of such substitution or assumption agreement, which document shall be added to the related Mortgage File and shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof.

Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Master Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or by the terms of the Mortgage Note or any assumption which the Master Servicer may be restricted by law from preventing, for any reason whatever. For purposes of this Section 3.15, the term 

 

“assumption” is deemed to also include a sale (of the Mortgaged Property) subject to the Mortgage that is not accompanied by an assumption or substitution of liability agreement.

	
            Section 3.16
 	
            Realization Upon Defaulted Mortgage Loans.
 

(a)        The Master Servicer shall, consistent with the servicing standard set forth in Section 3.01, foreclose upon or otherwise comparably convert the ownership of properties securing such of the Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.07. The Master Servicer shall be responsible for all costs and expenses incurred by it in any such proceedings; provided, however, that such costs and expenses will be recoverable as Servicing Advances by the Master Servicer as contemplated in Section 3.11 and Section 3.23. The foregoing is subject to the provision that, in any case in which Mortgaged Property shall have suffered damage from an Uninsured Cause, the Master Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its discretion that such restoration will increase the proceeds of liquidation of the related Mortgage Loan after reimbursement to itself for such expenses.

(b)        Notwithstanding the foregoing provisions of this Section 3.16 or any other provision of this Agreement, with respect to any Mortgage Loan as to which the Master Servicer has received actual notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the related Mortgaged Property, the Master Servicer shall not, on behalf of the Trustee, either (i) obtain title to such Mortgaged Property as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any other action with respect to, such Mortgaged Property, if, as a result of any such action, the Trustee, the Trust Fund or the Certificateholders would be considered to hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator” of such Mortgaged Property within
the meaning of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, or any comparable law, unless the Master Servicer has also previously determined, based on its reasonable judgment and a report prepared by a Person who regularly conducts environmental audits using customary industry standards, that:

(1)        such Mortgaged Property is in compliance with applicable environmental laws or, if not, that it would be in the best economic interest of the Trust Fund to take such actions as are necessary to bring the Mortgaged Property into compliance therewith; and

(2)        there are no circumstances present at such Mortgaged Property relating to the use, management or disposal of any hazardous substances, hazardous materials, hazardous wastes, or petroleum-based materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any federal, state or local law or regulation, or that if any such materials are present for which such action could be required, that it would be in the best economic interest of the Trust Fund to take such actions with respect to the affected Mortgaged Property.

The cost of the environmental audit report contemplated by this Section 3.23 shall be advanced by the Master Servicer, subject to the Master Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 3.11(a)(ix), such right of reimbursement 

 

being prior to the rights of Certificateholders to receive any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.

If the Master Servicer determines, as described above, that it is in the best economic interest of the Trust Fund to take such actions as are necessary to bring any such Mortgaged Property into compliance with applicable environmental laws, or to take such action with respect to the containment, clean-up or remediation of hazardous substances, hazardous materials, hazardous wastes or petroleum based materials affecting any such Mortgaged Property, then the Master Servicer shall take such action as it deems to be in the best economic interest of the Trust Fund. The cost of any such compliance, containment, cleanup or remediation shall be advanced by the Master Servicer, subject to the Master Servicer’s right to be reimbursed therefor from the Collection Account as provided in Section 3.11(a)(ix), such right of reimbursement being prior to the rights of Certificateholders to receive
any amount in the Collection Account received in respect of the affected Mortgage Loan or other Mortgage Loans.

(c)        The Master Servicer may at its option purchase from the Trust Fund any Mortgage Loan that is 90 days or more Delinquent, which the Master Servicer determines in good faith will otherwise become subject to foreclosure proceedings (evidence of such determination to be delivered in writing to the Trustee prior to purchase), at a price equal to the sum of the outstanding Stated Principal Balance of such Mortgage Loan and accrued and unpaid interest thereon at the Loan Rate through the end of the Due Period preceding the last Distribution Date, less unreimbursed Servicing Advances, Advances and any unpaid Servicing Fees allocable to such Mortgage Loan. The purchase price for any Mortgage Loan purchased hereunder shall be deposited in the Collection Account, and the Trustee, upon receipt of written certification from the Master Servicer of
such deposit, shall release or cause to be released to the Master Servicer the related Mortgage File and shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Master Servicer shall furnish and as shall be necessary to vest in the Master Servicer title to any Mortgage Loan released pursuant hereto.

(d)        Proceeds received in connection with any Final Recovery Determination, as well as any recovery resulting from a partial collection of Insurance Proceeds or Liquidation Proceeds, in respect of any Mortgage Loan, will be applied in the following order of priority: first, to reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed Servicing Advances and Advances, pursuant to Section 3.11(a)(ii) or (a)(iii); second, to accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery Determination, or to the Due Date prior to the Distribution Date on which such amounts are to be distributed if not in connection with a Final Recovery Determination; third, as a recovery of principal of the Mortgage Loan; and fourth, to Foreclosure Profits. If the amount of the recovery so allocated to interest is less
than the full amount of accrued and unpaid interest due on such Mortgage Loan, the amount of such recovery will be allocated by the Master Servicer as follows: first, to unpaid Servicing Fees; and second, to the balance of the interest then due and owing. The portion of the recovery so allocated to unpaid Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to Section 3.11(a)(iii).

(e)        In addition to the foregoing, the Trustee, as assignee of the Additional Collateral Servicing Agreement, shall enforce the obligations of the Additional Collateral Servicer to use its best reasonable efforts to realize upon any Additional Collateral for such of the Additional 

 

Collateral Mortgage Loans as come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.11; provided that pursuant to the Additional Collateral Servicing Agreement, the Additional Collateral Servicer shall not, on behalf of the Trustee, obtain title to any such Additional Collateral as a result of or in lieu of the disposition thereof or otherwise; and provided further that (i) the Additional Collateral Servicer, pursuant to the Additional Collateral Servicing Agreement, shall not proceed with respect to such Additional Collateral in any manner that would impair the ability to recover against the related Mortgaged Property, and (ii) the Master Servicer shall proceed with any acquisition of REO Property in a manner that preserves the ability to apply the proceeds of such Additional Collateral against amounts owed
under the defaulted Mortgage Loan. Any proceeds realized from such Additional Collateral (other than amounts to be released to the Mortgagor or the related guarantor in accordance with procedures that the Master 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 to the terms and conditions of any security agreement, guarantee agreement, mortgage or other agreement governing the disposition of the proceeds of such Additional Collateral) shall be deposited in the Distribution Account, subject to withdrawal pursuant to Section 3.11; provided, that such proceeds shall not be so deposited if the Required Surety Payment in respect of such Additional Collateral Mortgage Loan has been deposited in the Collection Account (except to the extent of any such proceeds taken into account in calculating the amount of the Required Surety Payment). Any other payment received by a Seller in respect of such
Additional Collateral shall be deposited in the Distribution Account subject to withdrawal pursuant to Section 3.11.

	
            Section 3.17
 	
            Trustee to Cooperate; Release of Mortgage Files.
 

(a)        Upon the payment in full of any Mortgage Loan, or the receipt by the Master Servicer of a notification that payment in full shall be escrowed in a manner customary for such purposes, the Master Servicer will immediately notify the Trustee by delivering a certification in duplicate (one of which will be returned to the Master Servicer with the Mortgage File) in the form of Exhibit E which shall be signed by a Servicing Officer or in a mutually agreeable electronic format which will in lieu of a signature be deemed to originate from a Servicing Officer (which certification shall include a statement to the effect that all amounts received or to be received in connection with such payment which are required to be deposited in the Collection Account pursuant to Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File. Upon receipt of such certification and request, the Trustee shall promptly release the related Mortgage File to the Master Servicer. No expenses incurred in connection with any instrument of satisfaction or deed of reconveyance shall be chargeable to the Collection Account or the Distribution Account.

(b)        From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan, including, for this purpose, collection under any Primary Insurance Policy or any other insurance policy relating to the Mortgage Loans, the Trustee shall, upon request of the Master Servicer and delivery to the Trustee in duplicate (one of which will be returned to the Master Servicer with the Mortgage File) of a Request for Release in the form of Exhibit E, which shall be signed by a Servicing Officer or in a mutually agreeable electronic format which will in lieu of a signature be deemed to originate from a Servicing Officer release the related Mortgage File to the Master Servicer, and the Trustee shall, at the direction of the Master Servicer, and in the form provided by the Master Servicer execute such documents as shall be necessary to the 

 

prosecution of any such proceedings. Such Request for Release shall obligate the Master Servicer to return each and every document previously requested from the Mortgage File to the Trustee when the need therefor by the Master Servicer no longer exists, unless the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been deposited in the Collection Account or the Mortgage File or such document has been delivered to an attorney, or to a public trustee or other public official as required by law, for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Master Servicer has delivered to the Trustee a certificate of a Servicing Officer certifying as to the name and address of the Person to which such Mortgage File or such document was delivered and the purpose
or purposes of such delivery. Upon receipt of a certificate of a Servicing Officer stating that such Mortgage Loan was liquidated and that all amounts received or to be received in connection with such liquidation that are required to be deposited into the Collection Account have been so deposited, or that such Mortgage Loan has become an REO Property, the Master Servicer shall no longer be obligated to return the documents released by the Trustee pursuant to the related Request for Release and a copy of the Request for Release shall be released by the Trustee to the Master Servicer.

(c)        Upon written certification of a Servicing Officer, the Trustee shall execute and deliver to the Master Servicer any court pleadings, requests for trustee’s sale or other documents reasonably necessary to the foreclosure or trustee’s sale in respect of a Mortgaged Property or to any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or rights provided by the Mortgage Note or Mortgage or otherwise available at law or inequity. Each such certification shall include a request that such pleadings or documents be executed by the Trustee and a statement as to the reason such documents or pleadings are required and that the execution and delivery thereof by the Trustee will not invalidate or otherwise affect the lien of the
Mortgage, except for the termination of such a lien upon completion of the foreclosure or trustee’s sale.

	
            Section 3.18
 	
            Servicing Compensation.
 

As compensation for the activities of the Master Servicer hereunder, the Master Servicer shall be entitled to the Servicing Fee with respect to each Mortgage Loan payable solely from payments of interest and Buydown Funds in respect of such Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance Proceeds or Liquidation Proceeds to the extent permitted by Section 3.11(a)(iii) and out of amounts derived from the operation and sale of an REO Property to the extent permitted by Section 3.23. The right to receive the Servicing Fee may not be transferred in whole or in part except in connection with the transfer of all of the Master Servicer’s responsibilities and obligations under this Agreement. In the event that Liquidation Proceeds, Insurance Proceeds and proceeds from any REO Disposition (net of
amounts reimbursable therefrom pursuant to Section 3.11(a)(iii)) in respect of a Cash Liquidation or REO Disposition exceed the unpaid principal balance of such Mortgage Loan plus unpaid interest accrued thereon (including REO Imputed Interest) at a per annum rate equal to the related Net Mortgage Rate, the Master Servicer shall be entitled to retain therefrom and to pay to itself any Foreclosure Profits and any Servicing Fee considered to be accrued but unpaid.

 

 

Additional servicing compensation in the form of assumption fees, late payment charges and other similar fees and charges shall be retained by the Master Servicer (subject to Section 3.24) only to the extent such fees or charges are received by the Master Servicer. The Master Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw from the Collection Account, and pursuant to Section 3.23(b) to withdraw from any REO Account, as additional servicing compensation, interest or other income earned on deposits therein, subject to Section 3.12 and Section 3.24. The Master Servicer shall be required to pay all expenses incurred by it in connection with its servicing activities hereunder (including premiums for the insurance required by Section 3.14, to the extent such premiums are not paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of each
Sub-Servicer, and to the extent provided herein in Section 8.05, the fees and expenses of the Trustee) and shall not be entitled to reimbursement therefor except as specifically provided herein.

	
            Section 3.19
 	
            Reports to the Trustee; Collection Account Statements.
 

Upon request from the Trustee, the Master Servicer shall forward to the Trustee and the Depositor a statement prepared by the Master Servicer setting forth the status of the Collection Account as of the close of business on such Distribution Date and showing, for the period covered by such statement, the aggregate amount of deposits into and withdrawals from the Collection Account of each category of deposit specified in Section 3.10(a) and each category of withdrawal specified in Section 3.11. Such statement may be in the form of the then current Fannie Mae Monthly Accounting Report for its Guaranteed Mortgage Pass-Through Program with appropriate additions and changes, and shall also include information as to the aggregate of the outstanding principal balances of all of the Mortgage Loans as of the last day of the calendar month immediately preceding such Distribution Date. Copies of
such statement shall be provided by the Trustee to any Certificateholder and to any Person identified to the Trustee as a prospective transferee of a Certificate, upon request at the expense of the requesting party, provided such statement is delivered by the Master Servicer to the Trustee.

	
            Section 3.20
 	
            Statement as to Compliance.
 

Not later than the earlier of (a) March 15 of each calendar year (other than the calendar year during which the Closing Date occurs) or (b) with respect to any calendar year during which the Depositor’s annual report on Form 10-K is required to filed in accordance with the Exchange Act and the rules and regulations of the Commission, 15 calendar days before the date on which the Depositor’s annual report on Form 10-K is required to filed in accordance with the Exchange Act and the rules and regulations of the Commission (or, in each case, if such day is not a Business Day, the immediately preceding Business Day), the Master Servicer will deliver to the Trustee and the Depositor an Officers’ Certificate stating, as to each signatory thereof, that (i) a review of the activities of the Master Servicer during the preceding 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 Master 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 officer and the nature and status thereof. Copies of any such statement shall be provided by the Trustee to any Certificateholder and to any Person identified to the Trustee as a prospective transferee of a Certificate, upon the request and at the expense of the requesting party, provided that such statement is delivered by the Master Servicer to the Trustee.

 

 

	
            Section 3.21
 	
            Independent Public Accountants’ Servicing Report.
 

Not later than the earlier of (a) March 15 of each calendar year (other than the calendar year during which the Closing Date occurs) or (b) with respect to any calendar year during which the Depositor’s annual report on Form 10-K is required to filed in accordance with the Exchange Act and the rules and regulations of the Commission, 15 calendar days before the date on which the Depositor’s annual report on Form 10-K is required to filed in accordance with the Exchange Act and the rules and regulations of the Commission (or, in each case, if such day is not a Business Day, the immediately preceding Business Day), the Master Servicer, at its expense, shall cause a nationally recognized firm of independent certified public accountants to furnish to the Master Servicer a report stating that (i) it has obtained a letter of representation regarding certain matters from the
management of the Master Servicer which includes an assertion that the Master 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 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 Sub-Servicers, 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 Sub-Servicers. Immediately upon receipt of such report, the Master Servicer shall furnish a copy of such report to the Trustee and the Rating Agency.

	
            Section 3.22
 	
            Access to Certain Documentation.
 

The Master Servicer shall provide to the Office of Thrift Supervision, the FDIC, and any other federal or state banking or insurance regulatory authority that may exercise authority over any Certificateholder, access to the documentation regarding the Mortgage Loans required by applicable laws and regulations. Such access shall be afforded without charge, but only upon reasonable request and during normal business hours at the offices of the Master Servicer designated by it. In addition, access to the documentation regarding the Mortgage Loans will be provided to any Certificateholder, the Trustee and to any Person identified to the Master Servicer as a prospective transferee of a Certificate, upon reasonable request during normal business hours at the offices of the Master Servicer designated by it at the expense of the Person requesting such access.

	
            Section 3.23
 	
            Title, Management and Disposition of REO Property.
 

(a)        The deed or certificate of sale of any REO Property shall be taken in the name of the Trustee, or its nominee, in trust for the benefit of the Certificateholders. The Master Servicer, on behalf of the Trust Fund, shall either sell any REO Property within three years after the end of the calendar year in which the Trust Fund acquires ownership of such REO Property for purposes of Section 860G(a)(8) of the Code or request from the Internal Revenue Service, no later than 60 days before the day on which the three-year grace period would otherwise expire, an extension of the three-year grace period, unless the Master Servicer shall have delivered to the 

 

Trustee and the Depositor an Opinion of Counsel, addressed to the Trustee and the Depositor, to the effect that the holding by the Trust Fund of such REO Property subsequent to the three-year grace period after its acquisition will not result in the imposition on the Trust Fund of taxes on “prohibited transactions” thereof, as defined in Section 860F of the Code, or cause the Trust Fund to fail to qualify as a REMIC under Federal law at any time that any Certificates are outstanding. The Master Servicer shall manage, conserve, protect and operate each REO Property for the Certificateholders solely for the purpose of its prompt disposition and sale in a manner which does not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code or result in the receipt by the Trust Fund of any “income from non-permitted assets”
within the meaning of Section 860F(a)(2)(B) of the Code, or any “net income from foreclosure property” which is subject to taxation under the REMIC Provisions.

(b)        The Master Servicer shall segregate and hold all funds collected and received in connection with the operation of any REO Property separate and apart from its own funds and general assets and shall establish and maintain with respect to REO Properties an account held in trust for the Trustee for the benefit of the Certificateholders (the “REO Account”), which shall be an Eligible Account. The Master Servicer shall be permitted to allow the Collection Account to serve as the REO Account, subject to separate ledgers for each REO Property. The Master Servicer shall be entitled to retain or withdraw any interest income paid on funds deposited in the REO Account.

(c)        The Master Servicer shall have full power and authority, subject only to the specific requirements and prohibitions of this Agreement, to do any and all things in connection with any REO Property as are consistent with the manner in which the Master Servicer manages and operates similar property owned by the Master Servicer or any of its Affiliates, all on such terms and for such period as the Master Servicer deems to be in the best interests of Certificateholders. In connection therewith, the Master Servicer shall deposit, or cause to be deposited in the clearing account (which account must be an Eligible Account) in which it customarily deposits payments and collections 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 Master
Servicer’s receipt thereof, and shall thereafter deposit in the REO Account, in no event more than two Business Days after the deposit of such funds into the clearing account, all revenues received by it with respect to an REO Property and shall withdraw therefrom funds necessary for the proper operation, management and maintenance of such REO Property including, without limitation:

	
            (i)
 	
            all insurance premiums due and payable in respect of such REO Property;
 

(ii)         all real estate taxes and assessments in respect of such REO Property that may result in the imposition of a lien thereon; and

	
            (iii)
 	
            all costs and expenses necessary to maintain such REO Property.
 

To the extent that amounts on deposit in the REO Account with respect to an REO Property are insufficient for the purposes set forth in clauses (i) through (iii) above with respect to such REO Property, the Master Servicer shall advance from its own funds such amount as is necessary for such purposes if, but only if, the Master Servicer would make such advances if the Master 

 

Servicer owned the REO Property and if in the Master Servicer’s judgment, the payment of such amounts will be recoverable from the rental or sale of the REO Property.

Notwithstanding the foregoing, neither the Master Servicer nor the Trustee shall:

(i)         authorize the Trust Fund to enter into, renew or extend any New Lease with respect to any REO Property, if the New Lease by its terms will give rise to any income that does not constitute Rents from Real Property;

(ii)         authorize any amount to be received or accrued under any New Lease other than amounts that will constitute Rents from Real Property;

(iii)        authorize any construction on any REO Property, other than the completion of a building or other improvement thereon, and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Mortgage Loan became imminent, all within the meaning of Section 856(e)(4)(B) of the Code; or

(iv)        authorize any Person to Directly Operate any REO Property on any date more than 90 days after its date of acquisition by the Trust Fund;

unless, in any such case, the Master Servicer has obtained an Opinion of Counsel, provided to the Trustee, to the effect that such action will not cause such REO Property to fail to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code at any time that it is held by the Trust Fund, in which case the Master Servicer may take such actions as are specified in such Opinion of Counsel.

The Master Servicer may contract with any Independent Contractor for the operation and management of any REO Property, provided that:

(i)         the terms and conditions of any such contract shall not be inconsistent herewith;

(ii)         any such contract shall require, or shall be administered to require, that the Independent Contractor pay all costs and expenses incurred in connection with the operation and management of such REO Property, including those listed above and remit all related revenues (net of such costs and expenses) to the Master Servicer as soon as practicable, but in no event later than thirty days following the receipt thereof by such Independent Contractor;

(iii)        none of the provisions of this Section 3.23(c) relating to any such contract or to actions taken through any such Independent Contractor shall be deemed to relieve the Master Servicer of any of its duties and obligations to the Trustee on behalf of the Certificateholders with respect to the operation and management of any such REO Property; and

(iv)        the Master Servicer shall be obligated with respect thereto to the same extent as if it alone were performing all duties and obligations in connection with the operation and management of such REO Property.

 

 

The Master Servicer shall be entitled to enter into any agreement with any Independent Contractor performing services for it related to its duties and obligations hereunder for indemnification of the Master Servicer by such Independent Contractor, and nothing in this Agreement shall be deemed to limit or modify such indemnification. The Master Servicer shall be solely liable for all fees owed by it to any such Independent Contractor, irrespective of whether the Master Servicer’s compensation pursuant to Section 3.18 is sufficient to pay such fees.

(d)        In addition to the withdrawals permitted under Section 3.23(c), the Master Servicer may from time to time make withdrawals from the REO Account for any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in respect of the related Mortgage Loan; and (ii) to reimburse itself or any Sub-Servicer for unreimbursed Servicing Advances and Advances made in respect of such REO Property or the related Mortgage Loan. On the Master Servicer Remittance Date, the Master Servicer shall withdraw from each REO Account maintained by it and deposit into the Distribution Account in accordance with Section 3.10(d)(ii), far distribution on the related Distribution Date in accordance with Section 4.01, the income from the related REO Property received during the prior calendar month, net of any withdrawals made pursuant to Section 3.23(c)
or this Section 3.23(d).

(e)        Subject to the time constraints set forth in Section 3.23(a), and further subject to obtaining the approval of the insurer under any related Primary Insurance Policy (if and to the extent that such approvals are necessary to make claims under such policies in respect of the affected REO Property), each REO Disposition shall be carried out by the Master Servicer at such price and upon such terms and conditions as the Master Servicer shall deem necessary or advisable, as shall be normal and usual in its general servicing activities for similar properties.

(f)         The proceeds from the REO Disposition, net of any amount required by law to be remitted to the Mortgagor under the related Mortgage Loan and net of any payment or reimbursement to the Master Servicer or any Sub-Servicer as provided above, shall be deposited in the Distribution Account in accordance with Section 3.10(d)(ii) on the Master Servicer Remittance Date in the month following the receipt thereof for distribution on the related Distribution Date in accordance with Section 4.01. Any REO Disposition shall be for cash only (unless changes in the REMIC Provisions made subsequent to the Startup Day allow a sale for other consideration).

(g)        The Master Servicer shall file information returns with respect to the receipt of mortgage interest received in a trade or business, reports of foreclosures and abandonments of any Mortgaged Property and cancellation of indebtedness income with respect to any Mortgaged Property as required by Sections 6050H, 6050J and 6050P of the Code, respectively. Such reports shall be in form and substance sufficient to meet the reporting requirements imposed by such Sections 6050H, 6050J and 6050P of the Code.

	
            Section 3.24
 	
            Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls.
 

The Master Servicer shall deliver to the Trustee for deposit into the Distribution Account on or before 5:00 p.m. New York time on the Master Servicer Remittance Date from its own funds an amount equal to the lesser of (i) the aggregate of the Prepayment Interest Shortfalls for 

 

the related Distribution Date resulting from Principal Prepayments in Full or Curtailments during the related Prepayment Period and (ii) the portion of its aggregate Servicing Fee which accrued at a Servicing Fee Rate for the most recently ended calendar month (“Compensating Interest”).

	
            Section 3.25
 	
            Administration of Buydown Funds.
 

The Buydown Account established and maintained by the Master Servicer with respect to each Buydown Mortgage Loan shall be an Eligible Account. Upon receipt from the Mortgagor of the amount due on a Due Date for each Buydown Mortgage Loan, the Master Servicer will withdraw from the related Buydown Account the predetermined amount that, when added to the amount due on such date from the Mortgagor, equals the Monthly Payment and will deposit that amount together with the related payment made by the Mortgagor in the Collection Account. The Buydown Account shall not be an asset of any REMIC and for federal income tax purposes shall be owned by the Master Servicer.

If any Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan in its entirety during the Buydown Period, when Buydown Funds are required to be applied to such Buydown Mortgage Loan, the Master Servicer will withdraw from the related Buydown Account and remit to such Mortgagor or any other Person in accordance with the related Buydown Agreement any Buydown Funds remaining in the Buydown Account. If a Principal Prepayment by a Mortgagor during the Buydown Period, together with any Buydown Funds in the related Buydown Account, will result in a Principal Prepayment in Full, the Master Servicer will withdraw from the related Buydown Account for deposit in the Collection Account the Buydown Funds, which together with such Principal Prepayment, will result in a Principal Prepayment in Full. If a Mortgagor defaults during the Buydown Period with respect to a Buydown Mortgage Loan and
the Mortgaged Property is sold at foreclosure or title thereto is acquired on behalf of the Certificateholders, the Master Servicer will withdraw from the Buydown Account the Buydown Funds (which shall thereupon constitute “Liquidation Proceeds” for purposes of this Agreement) for deposit in the Collection Account.

	
            Section 3.26
 	
            Obligations of the Master Servicer in Respect of Loan Rates and Monthly Payments.
 

In the event that a shortfall in any collection on or liability with respect to any Mortgage Loan results from or is attributable to a calculation of the principal balance of a Mortgage Loan that was made by the Master Servicer in a manner not consistent with the terms of the related Mortgage Note and this Agreement, the Master Servicer, upon discovery or receipt of notice thereof, immediately shall deliver to the Trustee for deposit in the Distribution Account from its own funds the amount of any such shortfall and shall indemnify and hold harmless the Trust Fund, the Trustee, the Depositor and any successor master servicer in respect of any such liability. Such indemnities shall survive the termination or discharge of this Agreement.

 

 

 

ARTICLE IV

 

PAYMENTS TO CERTIFICATEHOLDERS

	
            Section 4.01
 	
            Distribution Account; Distributions.
 

(a)        The Master Servicer shall remit to the Trustee for deposit into the Distribution Account on or before 5:00 P.M. New York time on each Master Servicer Remittance Date by wire transfer of immediately available funds an amount equal to the sum of (i) any Advance for the immediately succeeding Distribution Date, (ii) any amount required to be deposited in the Distribution Account pursuant to Sections 3.10, 3.11, 3.14 or 3.24 and (iii) all other amounts constituting the Available Distribution Amount for the immediately succeeding Distribution Date.

	
            (b)
 	
            [reserved]
 

(c)        On each Distribution Date the Trustee shall distribute to each Certificateholder of record as of the next preceding Record Date (other than as provided in Section 10.01 respecting the final distribution) either in immediately available funds (by wire transfer or otherwise) to the account of such Certificateholder at a bank or other entity having appropriate facilities therefor, if such Certificateholder has so notified the Trustee at least five (5) Business Days prior to the related Record Date, or otherwise by check mailed to such Certificateholder at the address of such Holder appearing in the Certificate Register, such Certificateholder’s share (based on the aggregate of the Percentage Interests represented by Certificates of the applicable Class held by such Holder) of the following amounts, in the following order of priority:

(i)         to the Senior Certificates, on a pro rata basis based on the Monthly Interest Distributable Amount payable on such Certificates with respect to such Distribution Date, the Monthly Interest Distributable Amount on such Classes of Certificates for such Distribution Date, plus any Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date except as provided in the last paragraph of this Section 4.01(c) (the “Senior Interest Distribution Amount”); provided that the Monthly Interest Distributable Amount on the Class A-4 Certificates, Class A-5 Certificates, Class A-6 Certificates and Class A-7 Certificates shall be distributed as provided in Section 4.01(i) through (l);

(ii)         to the Senior Certificates in the priorities and amounts set forth in Section 4.01(d)(i) through (vi), the Senior Principal Distribution Amount and the Accrual Distribution Amounts (applied to reduce the Certificate Principal Balances of such Senior Certificates, as applicable);

(iii)        if the Certificate Principal Balances of the Subordinate Certificates have not been reduced to zero, to the Master Servicer, by remitting for deposit to the Collection Account, to the extent of and in reimbursement for any Advances previously made with respect to any Mortgage Loan or REO Property which remain unreimbursed in whole or in part following the Cash Liquidation or REO Disposition of such Mortgage Loan or REO Property, minus any such Advances that were made with 

 

respect to delinquencies that ultimately constituted Excess Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses;

(iv)        to the Holders of the Class B-1 Certificates, the Monthly Interest Distributable Amount thereon for such Distribution Date, plus any Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date, except as provided below;

(v)        to the Holders of the Class B-1 Certificates, an amount equal to the Subordinate Principal Distribution Amount for such Class of Certificates for such Distribution Date, applied in reduction of the Certificate Principal Balance of the Class B-1 Certificates;

(vi)        to the Holders of the Class B-2 Certificates, the Monthly Interest Distributable Amount thereon for such Distribution Date, plus any Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date, except as provided below;

(vii)       to the Holders of the Class B-2 Certificates, an amount equal to the Subordinate Principal Distribution Amount for such Class of Certificates for such Distribution Date, applied in reduction of the Certificate Principal Balance of the Class B-2 Certificates;

(viii)      to the Holders of the Class B-3 Certificates, the Monthly Interest Distributable Amount thereon for such Distribution Date, plus any Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date, except as provided below;

(ix)        to the Holders of the Class B-3 Certificates, an amount equal to the Subordinate Principal Distribution Amount for such Class of Certificates for such Distribution Date, applied in reduction of the Certificate Principal Balance of the Class B-3 Certificates;

(x)        to the Holders of the Class B-4 Certificates, the Monthly Interest Distributable Amount thereon for such Distribution Date, plus any Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date, except as provided below;

(xi)        to the Holders of the Class B-4 Certificates, an amount equal to the Subordinate Principal Distribution Amount for such Class of Certificates for such Distribution Date, applied in reduction of the Certificate Principal Balance of the Class B-4 Certificates;

(xii)       to the Holders of the Class B-5 Certificates, the Monthly Interest Distributable Amount thereon for such Distribution Date, plus any Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date, except as provided below;

 

 

(xiii)      to the Holders of the Class B-5 Certificates, an amount equal to the Subordinate Principal Distribution Amount for such Class of Certificates for such Distribution Date, applied in reduction of the Certificate Principal Balance of the Class B-5 Certificates;

(xiv)      to the Holders of the Class B-6 Certificates, an amount equal to the Monthly Interest Distributable Amount thereon for such Distribution Date, plus any Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date, except as provided below;

(xv)       to the Holders of the Class B-6 Certificates, an amount equal to the Subordinate Principal Distribution Amount for such Class of Certificates for such Distribution Date, applied in reduction of the Certificate Principal Balance of the Class B-6 Certificates;

(xvi)      to the Senior Certificates, in the priority set forth in Section 4.01(d) of this Agreement, the portion, if any, of the Available Distribution Amount remaining after the foregoing distributions, applied to reduce the Certificate Principal Balances of such Senior Certificates, but in no event more than the aggregate of the outstanding Certificate Principal Balances of each such Class of Senior Certificates, and thereafter, to each Class of Subordinate Certificates then outstanding beginning with such Class with the Highest Priority, any portion of the Available Distribution Amount remaining after the Senior Certificates have been retired, applied to reduce the Certificate Principal Balance of each such Class of Subordinate Certificates, but in no event more than the outstanding Certificate Principal Balance of each such Class
of Subordinate Certificates; and

(xvii)     to the Class R-II Certificates, the balance, if any, of the Available Distribution Amount.

Notwithstanding the foregoing, on any Distribution Date, with respect to the Class of Subordinate Certificates outstanding on such Distribution Date with the Lowest Priority, or in the event the Subordinate Certificates are no longer outstanding, the Senior Certificates, the Monthly Interest Distributable Amount thereon remaining unpaid from any previous Distribution Date will be distributable only to the extent that such unpaid Monthly Interest Distributable Amount was attributable to interest shortfalls relating to the failure of the Master Servicer to make any required Advance, or the determination by the Master Servicer that any proposed Advance would be a Nonrecoverable Advance with respect to the related Mortgage Loan where such Mortgage Loan has not yet been the subject of a Cash Liquidation or REO Disposition or the related Liquidation Proceeds, Insurance Proceeds and REO
Proceeds have not yet been distributed to the Certificateholders.

(d)        The Senior Principal Distribution Amount and Accrual Distribution Amounts shall be distributed to the Senior Certificates as follows:

(i)         an amount equal to the Class A-4 Accrual Distribution Amount shall be distributed to the Class A-2 Certificates and Class A-3 Certificates, in accordance with the priorities set forth below in clause (vi)(B)(2)(a) through (vi)(B)(2)(c) below, in that 

 

order, in each case until the Certificate Principal Balance thereof has been reduced to zero;

(ii)         an amount equal to the Class A-5 Accrual Distribution Amount shall be distributed to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates, in accordance with the priorities set forth below in clause (vi)(B) below, in each case until the Certificate Principal Balance thereof has been reduced to zero;

(iii)        an amount equal to the Class A-6 Accrual Distribution Amount shall be distributed to the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates, in accordance with the priorities set forth below in clauses (vi)(B) and (vi)(C) below, in that order, in each case until the Certificate Principal Balance thereof has been reduced to zero;

(iv)        an amount equal to the Class A-7 Accrual Distribution Amount shall be distributed to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6 Certificates, in accordance with the priorities set forth below in clauses (vi)(B) through (vi)(D) below, in that order, in each case until the Certificate Principal Balance thereof has been reduced to zero;

(v)        the Senior Principal Distribution Amount shall be distributed to the Class R-I Certificates and Class R-II Certificates, concurrently on a pro rata basis, until the Certificate Principal Balances thereof have been reduced to zero;

(vi)        the balance of the Senior Principal Distribution Amount remaining after the distributions, if any, described in clause (v) above shall be distributed in the following manner and priority:

(A)  first, to the Class A-7 Certificates, in reduction of the Certificate Principal Balance thereof, until the Certificate Principal Balance thereof has been reduced to zero, in an amount equal to the sum of (a) the Lockout Scheduled Percentage of the aggregate of the collections described in clauses (A), (B) and (E) (to the extent clause (E) relates to clauses (A) and (B)) of the definition of Senior Principal Distribution Amount and (b) the Lockout Prepayment Percentage of the aggregate of the collections described in clauses (C) and (E) (to the extent clause (E) relates to clause (C)) of the definition of Senior Principal Distribution Amount;

(B)  second, concurrently as follows:

(1)  36.9984534618% of the Senior Principal Distribution Amount distributable under clause (vi)(B) shall be distributed to the Class A-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and

(2)  63.0015465382% of the Senior Principal Distribution Amount distributable under clause (vi)(B) shall be distributed in the following manner and priority:

 

 

(a) first, to the Class A-2 Certificates, until the Certificate Principal Balance thereof has been reduced to its Planned Principal Balance for such Distribution Date;

(b) second, to the Class A-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

(c) third, to the Class A-2 Certificates, without regard to its Planned Principal Balance for such Distribution Date, until the Certificate Principal Balance thereof has been reduced to zero; and

(d) fourth, to the Class A-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

(C) third, to the Class A-5 Certificates, until the Certificate Principal Balance thereof has been reduced to zero;

(D) fourth, to the Class A-6 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; and

(E) fifth, to the Class A-7 Certificates, until the Certificate Principal Balance thereof has been reduced to zero.

(e)        On or after the Credit Support Depletion Date, all priorities relating to distributions as described in Section 4.01(d) above in respect of principal among the various classes of Senior Certificates will be disregarded, and the Senior Principal Distribution Amount will be distributed to the remaining Senior Certificates, pro rata in accordance with their respective outstanding Certificate Principal Balances, and the Senior Interest Distribution Amount will be distributed as set forth above in Section 4.01(c)(i).

(f)         After the reduction of the Certificate Principal Balances of the Senior Certificates to zero but prior to the Credit Support Depletion Date, the Senior Certificates will be entitled to no further distributions of principal thereon and the Available Distribution Amount will be paid solely to the holders of the Class B Certificates, as described herein.

(g)        In addition to the foregoing distributions, with respect to any Subsequent Recoveries, the Master Servicer shall deposit such amounts into the Collection Account pursuant to Section 3.10(a). If, after taking into account such Subsequent Recoveries, the amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the Class of Class B Certificates with the Highest Priority to which Realized Losses have been allocated, but not by more than the amount of Realized Losses previously allocated to that Class of Class B Certificates pursuant to Section 4.04. The amount of any remaining Subsequent Recoveries will be applied to increase the Certificate Principal Balance of the Class of Class B Certificates with the next Highest Priority, up to the amount of such
Realized Losses previously allocated to that Class of Class B Certificates pursuant to Section 4.04, and so on. Subsequent Recoveries will be applied to increase, from zero, the Certificate Principal Balance of a Class of Class B Certificates pursuant to the previous sentence if the Certificate Principal Balance of such Class was reduced to zero due to the application of 

 

Realized Losses. Holders of such Certificates will not be entitled to any payment in respect of Monthly Interest Distributable Amount on the amount of such increases for any Interest Accrual Period preceding the Distribution Date on which such increase occurs. Any such increases shall be applied to the Certificate Principal Balance of each Certificate of such Class in accordance with its respective Percentage Interest.

(h)        Each distribution with respect to a Book-Entry Certificate 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 Certificate Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the Certificate Owners that it represents. None of the Trustee, the Depositor or the Master Servicer shall have any responsibility therefor except as otherwise provided by this Agreement or applicable law.

(i)         On each Distribution Date prior to the Class A-4 Accretion Termination Date, an amount equal to the Monthly Interest Distributable Amount that would otherwise be distributed on the Class A-4 Certificates shall be added to Certificate Principal Balance of the Class A-4 Certificates. On or after the related Accretion Termination Date, the entire amount of Monthly Interest Distributable Amount on the Class A-4 Certificates for such Distribution Date shall be payable to the Class A-4 Certificateholders pursuant to Section 4.01(c)(i) of this Agreement to the extent not required to reduce the aggregate Certificate Principal Balance of the Class A-2 Certificates and Class A-3 Certificates to zero on such Class A-4 Accretion Termination Date; provided that if the Class A-4 Accretion Termination Date is the Credit Support Depletion Date,
the entire amount of Monthly Interest Distributable Amount on the Class A-4 Certificates for such Distribution Date will be paid to the Class A-4 Certificateholders. Any such Monthly Interest Distributable Amount on the Class A-4 Certificates which is required to be paid to the holders of the Class A-2 Certificates and Class A-3 Certificates on such Class A-4 Accretion Termination Date will be added to the Certificate Principal Balance of the Class A-4 Certificates in the manner described in the first sentence of this Section 4.01(i).

(j)         On each Distribution Date prior to the Class A-5 Accretion Termination Date, an amount equal to the Monthly Interest Distributable Amount that would otherwise be distributed on the Class A-5 Certificates shall be added to Certificate Principal Balance of the Class A-5 Certificates. On or after the related Accretion Termination Date, the entire amount of Monthly Interest Distributable Amount on the Class A-5 Certificates for such Distribution Date shall be payable to the Class A-5 Certificateholders pursuant to Section 4.01(c)(i) of this Agreement to the extent not required to reduce the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates to zero on such Class A-5 Accretion Termination Date; provided that if the Class A-5 Accretion Termination Date is the Credit Support Depletion
Date, the entire amount of Monthly Interest Distributable Amount on the Class A-5 Certificates for such Distribution Date will be paid to the Class A-5 Certificateholders. Any such Monthly Interest Distributable Amount on the Class A-5 Certificates which is required to be paid to the holders of the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates on such Class A-5 Accretion Termination Date will be added to the Certificate Principal Balance of the Class A-5 Certificates in the manner described in the first sentence of this Section 4.01(j).

 

 

(k)        On each Distribution Date prior to the Class A-6 Accretion Termination Date, an amount equal to the Monthly Interest Distributable Amount that would otherwise be distributed on the Class A-6 Certificates shall be added to Certificate Principal Balance of the Class A-6 Certificates. On or after the related Accretion Termination Date, the entire amount of Monthly Interest Distributable Amount on the Class A-6 Certificates for such Distribution Date shall be payable to the Class A-6 Certificateholders pursuant to Section 4.01(c)(i) of this Agreement to the extent not required to reduce the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates to zero on such Class A-6 Accretion Termination Date; provided that if the Class A-6 Accretion Termination Date is the Credit Support
Depletion Date, the entire amount of Monthly Interest Distributable Amount on the Class A-6 Certificates for such Distribution Date will be paid to the Class A-6 Certificateholders. Any such Monthly Interest Distributable Amount on the Class A-6 Certificates which is required to be paid to the holders of the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5 Certificates on such Class A-6 Accretion Termination Date will be added to the Certificate Principal Balance of the Class A-6 Certificates in the manner described in the first sentence of this Section 4.01(k).

(l)         On each Distribution Date prior to the Class A-7 Accretion Termination Date, an amount equal to the Monthly Interest Distributable Amount that would otherwise be distributed on the Class A-7 Certificates shall be added to Certificate Principal Balance of the Class A-7 Certificates. On or after the related Accretion Termination Date, the entire amount of Monthly Interest Distributable Amount on the Class A-7 Certificates for such Distribution Date shall be payable to the Class A-7 Certificateholders pursuant to Section 4.01(c)(i) of this Agreement to the extent not required to reduce the aggregate Certificate Principal Balance of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6 Certificates to zero on such Class A-7 Accretion Termination Date; provided that if the Class A-7 Accretion Termination Date is the
Credit Support Depletion Date or the Distribution Date occurring in June 2010, the entire amount of Monthly Interest Distributable Amount on the Class A-7 Certificates for such Distribution Date will be paid to the Class A-7 Certificateholders. Any such Monthly Interest Distributable Amount on the Class A-7 Certificates which is required to be paid to the holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class A-6 Certificates on such Class A-7 Accretion Termination Date will be added to the Certificate Principal Balance of the Class A-7 Certificates in the manner described in the first sentence of this Section 4.01(l).

(m)       Except as otherwise provided in Section 10.01, if the Master Servicer anticipates that a final distribution with respect to any Class of Certificates will be made on the next Distribution Date, the Master Servicer shall, no later than the Determination Date in the month of such final distribution, notify the Trustee and the Trustee shall, no later than two (2) Business Days after such Determination Date, mail on such date to each Holder of such Class of Certificates a notice to the effect that: (i) the Trustee anticipates that the final distribution with respect to such Class of Certificates will be made on such Distribution Date but only upon presentation and surrender of such Certificates at the office of the Trustee or as otherwise specified therein, and (ii) no interest shall accrue on such Certificates from and after the end of the prior
calendar month.

Any funds not distributed to any Holder or Holders of Certificates of such Class on such Distribution Date because of the failure of such Holder or Holders to tender their Certificates shall, on such date, be set aside and held in trust and credited to the account of the appropriate 

 

non-tendering Holder or Holders. If any Certificates as to which notice has been given pursuant to this Section 4.01(m) shall not have been surrendered for cancellation within six months after the time specified in such notice, the Trustee shall mail a second notice to the remaining non-tendering Certificateholders to surrender their Certificates for cancellation in order to receive the final distribution with respect thereto. If within six months after the second notice all such Certificates shall not have been surrendered for cancellation, the Trustee shall take reasonable steps as directed by the Depositor, or appoint an agent to take reasonable steps, to contact the remaining non-tendering Certificateholders concerning surrender of their Certificates. The costs and expenses of maintaining the fiends in trust and of contacting such Certificateholders shall be paid out of the assets remaining in the
Trust Fund. If within nine months after the second notice any such Certificates shall not have been surrendered for cancellation, the Class R Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject hereto. No interest shall accrue or be payable to any Certificateholder on any amount held in trust as a result of such Certificateholder’s failure to surrender its Certificate(s) for final payment thereof in accordance with this Section 4.01(m).

(n)        Distributions of interest shall be deemed to be made to each REMIC I Regular Interest in an amount equal to the related Uncertificated Monthly Interest Distributable Amount. Distributions of principal shall be deemed to be made to each of the REMIC I Regular Interests in the same manner and priority as principal payments are made to Corresponding Certificated Interests.

(o)        Distributions of interest in respect of the Class A-7 Certificates shall be deemed to be made to the Class A-7A Component and Class A-7B Component, with deemed interest in respect of the Class A-7A Component equal to the amount which would be determined under the definition of Monthly Interest Distributable Amount using the Pass-Through Rate for the Class A-7A Component and a Certificate Principal Balance equal to the Class A-7A Component Principal Balance and with deemed interest in respect of the Class A-7B Component equal to the amount which would be determined under the definition of Monthly Interest Distributable Amount using the Pass-Through Rate for the Class A-7B Component and a Certificate Principal Balance equal to the Class A-7B Component Notional Amount. Distributions of principal in respect of the Class A-7 Certificates
shall be deemed to be made to the Class A-7A Component.

	
            Section 4.02
 	
            Statements to Certificateholders.
 

On each Distribution Date the Trustee shall make available to each Holder of a Certificate and to the Depositor, the Master Servicer and the Rating Agency, a statement based on information contained in the Remittance Report:

(i)         the amount of the distribution made on such Distribution Date to the Holders of each Class of Certificates, separately identified, allocable to principal;

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

(iii)        the aggregate amount of servicing compensation received by the Master Servicer during the related Due Period and such other customary information as the 

 

Trustee deems necessary or desirable, or which a Certificateholder reasonably requests, to enable Certificateholders to prepare their tax returns;

	
            (iv)
 	
            the aggregate amount of Advances for the related Due Period;
 

(v)        the aggregate Stated Principal Balance of the Mortgage Loans at the close of business at the end of the related Due Period;

(vi)        the number, weighted average remaining term to maturity and weighted average Loan Rate of the Mortgage Loans as of the related Due Date;

(vii)       the number and aggregate unpaid principal balance of Mortgage Loans (a) one month, two months or three months Delinquent on a contractual basis, (b) as to which foreclosure proceedings have been commenced and (c) in bankruptcy as of the close of business on the last day of the calendar month preceding such Distribution Date;

(viii)      with respect to any Mortgage Loan that became an REO Property during the preceding calendar month, the unpaid principal balance and the Stated Principal Balance of such Mortgage Loan as of the date it became an REO Property;

(ix)        the book value of any REO Property as of the close of business on the last Business Day of the calendar month preceding the Distribution Date, and, cumulatively, the total number and cumulative principal balance of all REO Properties as of the close of business of the last day of the preceding due period;

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

(xi)        the aggregate amount of Realized Losses incurred during the related Due Period and the cumulative amount of Realized Losses;

(xii)       the aggregate amount of Extraordinary Trust Fund Expenses withdrawn from the Collection Account for such Distribution Date;

(xiii)      the Certificate Principal Balance of each Class of Certificates, after giving effect to the distributions made on such Distribution Date;

(xiv)      the aggregate amount of interest accrued at the related Pass-Through Rate with respect to each Class during the related Interest Accrual Period and the respective portions thereof, if any, remaining unpaid following the distributions made in respect of such Certificates on such Distribution Date;

(xv)       the aggregate amount of any Prepayment Interest Shortfalls for such Distribution Date, to the extent not covered by payments of Compensating Interest by the Master Servicer pursuant to Section 3.24;

	
            (xvi)
 	
            the Available Distribution Amount; and
 

 

 

 

(xvii)     the aggregate Stated Principal Balance of Mortgage Loans purchased by the Master Servicer during the related Due Period and indicating the Section of this Agreement requiring or allowing the purchase of each such Mortgage Loan.

The Trustee will make the monthly statements described above (and, at its option, any additional files containing the same information in an alternative format) available on each Distribution Date to Certificateholders, and other parties to the Pooling and Servicing Agreement via the Trustee’s internet website and its fax-on-demand service. The Trustee’s internet website shall initially be located at “www.sf.citidirect.com”. Assistance in using the website can be obtained by calling the Trustee’s customer service desk at (212) 816-5681. 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 Trustee shall have the right to change the way monthly statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Trustee shall provide timely and adequate notification to all above parties regarding any such changes.

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

In addition, the Trustee will make available, as a convenience for interested parties (and not in furtherance of the distribution of any related prospectus or prospectus supplement under the securities laws), this Agreement, the related prospectus and prospectus supplement via the Trustee’s internet website.

The Trustee will make no representations or warranties as to the accuracy of completeness of such documents and will assume no responsibility therefor.

In connection with providing access to the Trustee’s website, the Trustee may require registration and the acceptance of a disclaimer. The Trustee shall not be liable for the dissemination of information in accordance with this Agreement which is not due to an error on the part of the Trustee with respect to such information.

In the case of information furnished pursuant to subclauses (i)-(iii) above, the amounts shall also be expressed as a dollar amount per Single Certificate.

The Trustee shall provide to each Certificateholder any written reports or other information required by the Code and regulations thereunder as from time to time are in force. In addition, upon written request, within a reasonable period of time after the end of each calendar year, the Trustee shall prepare and forward, to each Person who at any time during the calendar year was a Certificateholder, a statement containing the information set forth in subclauses (i) - (iii) above, aggregated for such calendar year or applicable portion thereof during which such person was a Certificateholder.

	
            Section 4.03
 	
            Remittance Reports; Advances by the Master Servicer.
 

(a)        On the second Business Day following each Determination Date but in no event less than five Business Days prior to the related Distribution Date, the Master Servicer shall 

 

deliver to the Trustee by telecopy (or by such other means as the Master Servicer and the Trustee may agree from time to time) a Remittance Report, and other data mutually agreed upon, with respect to the related Distribution Date. On the same date, the Master Servicer shall forward to the Trustee by overnight mail a computer readable magnetic tape or diskette or in such other medium as may be agreed between the Master Servicer and the Trustee containing the information set forth in such Remittance Report with respect to the related Distribution Date. The Master Servicer shall deliver or cause to be delivered to the Trustee in addition to the information provided on the Remittance Report, such other information reasonably available to it with respect to the Mortgage Loans as the Trustee may reasonably require to perform the calculations necessary to make the distributions contemplated by Section 4.01 and
4.06 and to prepare the statements to Certificateholders contemplated by Section 4.02. The Master Servicer shall make a good faith effort to deliver any such additional information to the Trustee within two Business Days of any such request, provided that in no event shall the Master Servicer be required to provide any such additional information to the Trustee to the extent the Trustee makes such request prior to five Business Days prior to the Master Servicer Remittance Date. The Trustee shall not be responsible to recompute, recalculate or verify any information provided to it by the Master Servicer.

(b)        The amount of Advances to be made by the Master Servicer for any Distribution Date shall equal the sum of (i) the aggregate amount of Monthly Payments (net of the related Servicing Fee), due during the related Due Period in respect of the Mortgage Loans, which Monthly Payments were delinquent on a contractual basis as of the close of business on the related Determination Date and (ii) with respect to each REO Property, which REO Property was acquired during or prior to the related Due Period and as to which REO Property an REO Disposition did not occur during the related Due Period, an amount equal to the excess, if any, of the REO Imputed Interest on such REO Property for the most recently ended calendar month, over the net income from such REO Property transferred to the Distribution Account pursuant to Section 4.01 for distribution on
such Distribution Date, less amounts held for future distributions.

Before the close of business New York time on the Master Servicer Remittance Date, the Master Servicer shall remit in immediately available funds to the Trustee for deposit in the Distribution Account an amount equal to the aggregate amount of Advances, if any, to be made in respect of the Mortgage Loans and REO Properties for the related Distribution Date either (i) from its own funds or (ii) from the Collection Account, to the extent of funds held therein for future distribution (in which case it will cause to be made an appropriate entry in the records of Collection Account that amounts held for future distribution have been, as permitted by this Section 4.03, used by the Master Servicer in discharge of any such Advance) or (iii) in the form of any combination of (i) and (ii) aggregating the total amount of Advances to be made by the Master Servicer with respect to the Mortgage Loans
and REO Properties. Any amounts held for future distribution and so used shall be appropriately reflected in the Master Servicer’s records and replaced by the Master Servicer by deposit in the Collection Account on or before any future Master Servicer Remittance Date to the extent that the Available Distribution Amount for the related Distribution Date (determined without regard to Advances to be made on the Master Servicer Remittance Date) shall be less than the total amount that would be distributed to the Classes of Certificateholders pursuant to Section 4.01 on such Distribution Date if such amounts held for future distributions had not been so used to make Advances. The Trustee will provide notice to the Master Servicer by telecopy on any Master Servicer Remittance Date or within one 

 

Business Day in the event that the amount remitted by the Master Servicer to the Trustee on such date is less than the Advances required to be made by the Master Servicer for the related Distribution Date, less amounts held for future distributions, as set forth in the related Remittance Report.

(c)        The obligation of the Master Servicer to make such Advances is mandatory, notwithstanding any other provision of this Agreement but subject to (d) below, and, with respect to any Mortgage Loan, shall continue until the Mortgage Loan is paid in full or until the recovery of all Liquidation Proceeds thereon; provided, however, that such obligation will cease if title to the Mortgaged Property is acquired by the Trust Fund in foreclosure or by deed in lieu of foreclosure.

(d)        Notwithstanding anything herein to the contrary, no Advance shall be required to be made hereunder by the Master Servicer if such Advance would, if made, constitute a Nonrecoverable Advance. The determination by the Master Servicer that it has made a Nonrecoverable Advance or that any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall be evidenced by an Officers’ Certificate of the Master Servicer delivered to the Depositor and the Trustee.

	
            Section 4.04
 	
            Allocation of Realized Losses.
 

Prior to each Distribution Date, the Master Servicer shall determine the total amount of Realized Losses, if any, that resulted from any Cash Liquidation, Debt Service Reduction, Deficient Valuation or REO Disposition that occurred during the related Prepayment Period. The amount of each Realized Loss shall be evidenced by an Officers’ Certificate. All Realized Losses, other than Excess Special Hazard Losses, Extraordinary Losses, Excess Bankruptcy Losses or Excess Fraud Losses, shall be allocated as follows: first, to the Class B-6 Certificates until the Certificate Principal Balance thereof has been reduced to zero; second, to the Class B-5 Certificates until the Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-4 Certificates until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-3 Certificates until
the Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-2 Certificates until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class B-1 Certificates until the Certificate Principal Balance thereof has been reduced to zero; and thereafter such Realized Losses will be allocated among all the Senior Certificates on a pro rata basis, as described below. Any Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses,  Extraordinary Losses on the Mortgage Loans will be allocated among the Senior Certificates and Subordinate Certificates, on a pro rata basis, as described below.

As used herein, an allocation of a Realized Loss on a “pro rata basis” among two or more specified Classes of Certificates means an allocation on a pro rata basis, among the various Classes so specified, to each such Class of Certificates on the basis of their then outstanding Certificate Principal Balances prior to giving effect to distributions to be made on such Distribution Date in the case of the principal portion of a Realized Loss or based on the Monthly Interest Distributable Amount thereon payable on such Distribution Date (without regard to any Compensating Interest for such Distribution Date) in the case of an interest portion of a Realized Loss. Any allocation of the principal portion of Realized Losses (other than Debt Service Reductions) to the Class B Certificates then outstanding with the highest numerical designation 

 

shall be made by operation of the definition of “Certificate Principal Balance” and by operation of the provisions of Section 4.01. Allocations of the interest portions of Realized Losses shall be made by operation of the definition of “Monthly Interest Distributable Amount” and by operation of the provisions of Section 4.01. Allocations of the principal portion of Debt Service Reductions shall be made by operation of the provisions of Section 4.01. All 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. Realized Losses allocated to the Regular Certificates shall be deemed allocated to the REMIC I Regular Interests in the amount and priority allocated to Corresponding Certificated Interests. For federal income tax purposes, Realized Losses
allocated to the Class A-7 Certificates in respect of principal shall be deemed allocated to the Class A-7A Component and Realized Losses allocated to the Class A-7 Certificates in respect of interest on any Distribution Date shall be allocated between the Class A-7A Component and the Class A-7B Component in proportion to each such component’s entitlement to interest on such Distribution Date.

	
            Section 4.05
 	
            Information Reports to Be Filed by the Master Servicer.
 

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

	
            Section 4.06
 	
            Compliance with Withholding Requirements.
 

Notwithstanding any other provision of this Agreement, the Trustee shall comply with all federal withholding requirements respecting payments to Certificateholders of interest or original issue discount on the Mortgage Loans, that the Trustee reasonably believes are applicable under the Code. The consent of Certificateholders shall not be required for such withholding. In the event the Trustee withholds any amount from interest or original issue discount payments or advances thereof to any Certificateholder pursuant to federal withholding requirements, the Trustee shall, together with its monthly report to such Certificateholders pursuant to Section 4.03 hereof, indicate such amount withheld.

	
            Section 4.07
 	
            [Reserved].
 	
             

	
            Section 4.08
 	
            Limited Purpose Surety Bond.
 

If a Required Surety Payment is payable pursuant to the Limited Purpose Surety Bond with respect to any Additional Collateral Mortgage Loans, as determined by the Master Servicer and the Additional Collateral Servicer, the Master Servicer shall so notify the Trustee as soon as reasonably practicable and the Trustee shall promptly complete the notice in the form of Attachment 1 to the Limited Purpose Surety Bond and shall promptly submit such notice to the surety as a claim for a Required Surety Payment. The Master Servicer shall upon request assist the Trustee in completing such notice and shall provide any information requested by the Trustee in connection therewith.

 

 

Upon receipt of a Required Surety Payment from the surety on behalf of the Certificateholders, the Trustee shall deposit such Required Surety Payment in the Distribution Account and shall distribute such Required Surety Payment, or the proceeds thereof, in accordance with the provisions of Section 4.01.

The Trustee shall (i) receive as attorney-in-fact of each Holder of a Certificate any Required Surety Payment from the surety and (ii) disburse the same to the Holders of such Certificates as set forth in Section 4.01.

 

 

 

ARTICLE V

 

THE CERTIFICATES

	
            Section 5.01
 	
            The Certificates.
 

Each of the Class A, Class B and Class R Certificates shall be substantially in the forms annexed hereto as exhibits, and shall, on original issue, be executed, authenticated and delivered by the Trustee to or upon the receipt of a Written Order to Authenticate from the Depositor concurrently with the sale and assignment to the Trustee of the Trust Fund. Each Class of the Certificates (other than the Class R Certificates) shall be initially evidenced by one or more Certificates representing a Percentage Interest with a minimum dollar denomination of $25,000 and integral dollar multiples of $1 in excess thereof. Each Class of Residual Certificates will be issued in registered, certificated form in minimum denominations of a 20% Percentage Interest except in the case of one of each of the Class R-I Certificates and Class R-II Certificates. Provided however, that one Certificate of each
such Class of Certificates may be in a different denomination so that the sum of the denominations of all outstanding Certificates of such Class shall equal the Certificate Principal Balance of such Class on the Closing Date.

The Certificates shall be executed on behalf of the Trust by manual or facsimile signature on behalf of the Trustee by a Responsible Officer. Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Trustee shall bind the Trust, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificate. No Certificate shall be entitled to any benefit under this Agreement or be valid for any purpose, unless such Certificate shall have been manually authenticated by the Trustee substantially in the form provided for herein, and such authentication upon any Certificate 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. Subject to Section 5.02(c), the Certificates, other than the Class R, Class B-4, Class B-5 and Class B-6 Certificates, shall be Book-Entry Certificates.

	
            Section 5.02
 	
            Registration of Transfer and Exchange of Certificates.
 

(a)        The Certificate Registrar shall cause to be kept at the Corporate Trust Office a Certificate Register 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 of Certificates as herein provided. The Trustee shall initially serve as Certificate Registrar for the purpose of registering Certificates and transfers and exchanges of Certificates as herein provided.

Upon surrender for registration of transfer of any Certificate at any office or agency of the Certificate Registrar maintained for such purpose pursuant to the foregoing paragraph and, in the case of a Class R Certificate, upon satisfaction of the conditions set forth below, the Trustee on behalf of the Trust shall execute, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Certificates of the same aggregate Percentage Interest.

 

 

At the option of the Certificateholders, Certificates may be exchanged for other Certificates in authorized denominations and the same aggregate Percentage Interests, upon surrender of the Certificates to be exchanged at any such office or agency. Whenever any Certificates are so surrendered for exchange, the Trustee shall execute on behalf of the Trust and authenticate and deliver the Certificates which the Certificateholder making the exchange is entitled to receive. Every Certificate presented or surrendered for registration of transfer or exchange shall (if so required by the Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer satisfactory to the Trustee and the Certificate Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing.

(b)        Except as provided in paragraphs (c) and (d) below, the Book-Entry Certificates shall at all times remain registered in the name of the Depository or its nominee and at all times: (i) registration of such Certificates may not be transferred by the Trustee except to another Depository; (ii) the Depository shall maintain book-entry records with respect to the Certificate Owners and with respect to ownership and transfers of such Certificates; (iii) ownership and transfers of registration of such Certificates on the books of the Depository shall be governed by applicable rules established by the Depository; (iv) the Depository may collect its usual and customary fees, charges and expenses from its Depository Participants; (v) the Trustee shall for all purposes deal with the Depository as representative of the Certificate Owners of the
Certificates for purposes of exercising the rights of Holders under this Agreement, and requests and directions for and votes of such representative shall not be deemed to be inconsistent if they are made with respect to different Certificate Owners; (vi) the Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants and furnished by the Depository Participants with respect to indirect participating firms and Persons shown on the books of such indirect participating firms as direct or indirect Certificate Owners; and (vii) the direct participants of the Depository shall have no rights under this Agreement under or with respect to any of the Certificates held on their behalf by the Depository, and the Depository may be treated by the Trustee and its agents, employees, officers and directors as the absolute owner of the Certificates for all purposes whatsoever.

All transfers by Certificate Owners of Book-Entry Certificates shall be made in accordance with the procedures established by the Depository Participant or brokerage firm representing such Certificate Owners. Each Depository Participant shall only transfer Book-Entry Certificates of Certificate Owners that it represents or of brokerage firms for which it acts as agent in accordance with the Depository’s normal procedures. The parties hereto are hereby authorized to execute Letters of Representations with the Depository or take such other action as may be necessary or desirable to register a Book-Entry Certificate to the Depository. In the event of any conflict between the terms of any such Letter of Representation and this Agreement, the terms of this Agreement shall control.

(c)        If (i)(x) the Depository or the Depositor advises the Trustee in writing that the Depository is no longer willing or able to discharge properly its responsibilities as Depository and (y) the Trustee or the Depositor is unable to locate a qualified successor, (ii) the Depositor, at its sole option, with the consent of the Depository Participants and the Trustee, elects to terminate the book-entry system through the Depository (with respect to some or all of the Book-Entry Certificates) or (iii) after the occurrence of a Master Servicer Event of Termination, the Certificate Owners of each Class of Book-Entry Certificates representing Percentage Interests of such Classes aggregating not less than 51% advises the Trustee and the Depository Participants 

 

in writing that the continuation of a book-entry system through the Depository to the exclusion of definitive, fully registered certificates (the “Definitive Certificates”) to Certificate Owners is no longer in the best interests of the Certificate Owners. Upon surrender to the Certificate Registrar of the Book-Entry Certificates by the Depository, accompanied by registration instructions from the Depository for registration, the Trustee shall, at the Depositor’s expense, in the case of (ii) above, or the related Seller’s expense, in the case of (i) and (iii) above, execute on behalf of the Trust and authenticate the Definitive Certificates.

In addition, if a Master Servicer Event of Termination has occurred and is continuing, each Certificate Owner materially adversely affected thereby may at its option request a Definitive Certificate evidencing such Certificate Owner’s Percentage Interest in the related Class of Certificates. In order to make such request, such Certificate Owner shall, subject to the rules and procedures of the Depository, provide the Depository or the related Depository Participant with directions for the Trustee to exchange or cause the exchange of the Certificate Owner’s interest in such Class of Certificates for an equivalent Percentage Interest in fully registered definitive form. Upon receipt by the Trustee of instruction from the Depository directing the Trustee to effect such exchange (such instructions to contain information regarding the Class of Certificates and the Certificate
Principal Balance being exchanged, the Depository Participant account to be debited with the decrease, the registered holder of and delivery instructions for the Definitive Certificates and any other information reasonable required by the Trustee), (i) the Trustee shall instruct the Depository to reduce the related Depository Participant’s account by the aggregate Certificate Principal Balance of the Definitive Certificates, (ii) the Trustee shall execute, authenticate and deliver, in accordance with the registration and delivery instructions provided by the Depository, a Definitive Certificate evidencing such Certificate Owner’s Percentage Interest in such Class of Certificates and (iii) the Trustee shall execute and authenticate a new Book-Entry Certificate reflecting the reduction in the aggregate Certificate Principal Balance of such Class of Certificates by the amount of the Definitive Certificates.

Neither the Depositor nor the Trustee shall be liable for any delay in delivery of any instruction required under this section and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Certificates, the Trustee, the Certificate Registrar, the Master Servicer, any Paying Agent and the Depositor shall recognize the Holders of the Definitive Certificates as Certificateholders hereunder.

(d)        No transfer, sale, pledge or other disposition of any Private Certificate shall be made unless such disposition is exempt from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), and any applicable state securities laws or is made in accordance with the 1933 Act and laws.

(i)         In the event of any such transfer, (A) if such transfer is made in reliance upon Rule 144A under the 1933 Act, the Trustee shall require the transferor to execute a transferor certificate in substantially the form attached hereto as Exhibit F-2 and the transferee to execute an investment letter in substantially the form attached hereto as Exhibit F-1, or (B) (1) (x) if such transfer is made to an institutional “accredited investor” within the meaning of within the meaning of Rule 501(a) promulgated pursuant to the 1933 Act (in the case of a Class B-1, Class B-2, Class B-3, Class B-4 or Class B-5 Certificate) or (y) if such transfer is made to an “accredited investor” within 

 

the meaning of Rule 501(a) promulgated pursuant to the 1933 Act (in the case of a Class B-6 Certificate), the Trustee shall require the transferor to execute a transferor certificate (in substantially the form attached hereto as Exhibit F-2) and the transferee to execute an investment letter (in substantially the form attached hereto as Exhibit F-3) acceptable to and in form and substance reasonably satisfactory to the Depositor and the Trustee certifying to the Depositor and the Trustee the facts surrounding such transfer, which investment letter shall not be an expense of the Trustee or the Depositor and (2) the Trustee and the Depositor shall require a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Trustee and the Depositor that such transfer may be made pursuant to an exemption, describing the
applicable exemption and the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or the Depositor. The Holder of a Private Certificate desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee and the Depositor 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.

(ii)         If any such transfer of a Private Certificate held by the related transferor and also to be held by the related transferee in the form of a Book-Entry Certificate is to be made without registration under the Securities Act, the transferor will be deemed to have made as of the transfer date each of the representations and warranties set forth on Exhibit F-2 hereto in respect of such Private Certificate and the transferee will be deemed to have made as of the transfer date each of the representations and warranties set forth on Exhibit F-1 hereto in respect of such Private Certificate.

(iii)        No transfer of any Private Certificate that is a Book-Entry Certificate or interest therein shall be made by any related Certificate Owner except (A) in the manner set forth in clause (ii) above and in reliance on Rule 144A under the 1933 Act to a “qualified institutional buyer” that is acquiring such Book-Entry Certificate for its own account or for the account of another “qualified institutional buyer” or (B) in the manner set forth in clause (i) above and in the form of a Definitive Certificate.

If any Certificate Owner that is required under this Section 5.02(d) to transfer its Book-Entry Certificates in the form of Definitive Certificates, (i) notifies the Trustee of such transfer or exchange and (ii) transfers such Book-Entry Certificates to the Trustee, in its capacity as such, through the book-entry facilities of the Depository, then the Trustee shall decrease the balance of such Book-Entry Certificates or, the Trustee shall use reasonable efforts to cause the surrender to the Certificate Registrar of such Book-Entry Certificates by the Depository, and thereupon, the Trustee shall execute, authenticate and deliver to such Certificate Owner or its designee one or more Definitive Certificates in authorized denominations and with a like aggregate principal amount.

Subject to the provisions of this Section 5.02(d) governing registration of transfer and exchange, Private Certificates (i) held as Definitive Certificates may be transferred in the form of Book-Entry Certificates in reliance on Rule 144A under the 1933 Act to one or more “qualified institutional buyers” that are acquiring such Definitive Certificates for their own accounts or for the accounts of other “qualified institutional buyers” and (ii) held as Definitive Certificates by a “qualified institutional buyer” for its own account or for the account of another “qualified 

 

institutional buyer” may be exchanged for Book-Entry Certificates, in each case upon surrender of such Private Certificates for registration of transfer or exchange at the offices of the Trustee maintained for such purpose. Whenever any such Private Certificates are so surrendered for transfer or exchange, either the Trustee shall increase the balance of the related Book-Entry Certificates or the Trustee shall execute, authenticate and deliver the Book-Entry Certificates for which such Private Certificates were transferred or exchanged, as necessary and appropriate. No Holder of Definitive Certificates other than a “qualified institutional buyer” holding such Certificates for its own account or for the account of another “qualified institutional buyer” may exchange such Private Certificates for Book-Entry Certificates. Further, any Certificate Owner of a Book-Entry Certificate
other than any such “qualified institutional buyers” shall notify the Trustee of its status as such and shall transfer such Book-Entry Certificate to the Trustee, through the book-entry facilities of the Depository, whereupon, and also upon surrender to the Trustee of such Book-Entry Certificate by the Depository, (which surrender the Trustee shall use reasonable efforts to cause to occur), the Trustee shall execute, authenticate and deliver to such Certificate Owner or such Certificate Owner’s nominee one or more Definitive Certificates in authorized denominations and with a like aggregate principal amount.

(e)        No purchase or transfer of an ERISA-Restricted Certificate shall be made unless the Trustee shall have received (i) a representation from the transferee of such Certificate, acceptable to and in form and substance satisfactory to the Trustee and the Depositor, (such requirement is satisfied only by the Trustee’s receipt of a representation letter from the transferee (in the case of a Class B-4, Class B-5 or Class B-6 Certificate) substantially in the form of Exhibit G-1 hereto or receipt of a representation from the transferee (in the case of a Class R Certificate) substantially in the form of paragraph (xvii) of Exhibit F-4, as appropriate), to the effect that either (a) such transferee is not an employee benefit plan or arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code, nor a person acting
on behalf of any such plan or arrangement nor using the assets of any such plan or arrangement to effect such transfer (each, a “Plan Investor”) or (b) in the case of a Class B-4, Class B-5 or Class B-6 Certificate, the purchase of such Certificate by or on behalf of such Plan is permissible under applicable law, will not subject the Depositor, the Trustee or the Master Servicer to any obligation in addition to those undertaken in the Agreement and the following conditions are satisfied: (I) the transferee is an insurance company, (II) the source of funds used to purchase such Certificates is an “insurance company general account” (as such term is defined in Prohibited Transaction Class Exemption (“PTCE”) 95-60) and (III) the conditions set forth in Section III of PTCE 95-60 and all other applicable conditions of PTCE 95-60 have been satisfied and as a result the acquisition and holding of such Certificates will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code 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 or arrangement 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 or arrangement or using such plan’s or arrangement’s assets, an Opinion of Counsel addressed to the Depositor, the Trustee and the Master Servicer, satisfactory to such entities, which Opinion of Counsel shall not be an expense of such entities, to the effect that the purchase or holding of such ERISA-Restricted Certificate is permissible under applicable law, will not result in a non-exempt prohibited transaction provisions of ERISA or Section 4975 of the Code and will not subject the Trustee, the Master Servicer or the Depositor to any obligation or liability in addition
to those expressly undertaken in this 

 

Agreement. 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 ERISA or to the Code without the delivery to the Trustee of either a representation in the form of Exhibit G-1 (in the case of a Class B-4, Class B-5 or Class B-6 Certificate) or paragraph (xvii) of Exhibit F-4 (in the case of a Class R Certificate) hereto or an Opinion of Counsel as described above shall be void and of no effect.

Any Holder of a Class B-1, Class B-2 or Class B-3 Certificate or any interest therein that is a Definitive Certificate shall represent in the form of Exhibit G-2 with respect to such Certificates, that either (i) such Holder is not a Plan Investor or (ii) such Holder is an “accredited investor” within the meaning of Rule 501(a) promulgated pursuant to the 1933 Act. Any Holder of a Class B-1, Class B-2 or Class B-3 Certificate or any interest therein that is a Book-Entry Certificate shall be deemed to have made the representations described in the preceding sentence.

If any Book-Entry Certificate (or any interest therein) is acquired or held in violation of the provisions of Section 5.02(e) above, then the last preceding Transferee that either (i) is not a Plan Investor or (ii) is in compliance with Section 5.02(e)(i)(b) shall be restored, to the extent permitted by law, to all rights and obligations as Certificate Owner thereof retroactive to the date of such Transfer of such Certificate. The Trustee shall be under no liability to any Person for making any payments due on such Certificate to such preceding Transferee.

Any purported Certificate Owner whose acquisition or holding of any Book-Entry Certificate (or interest therein) was effected in violation of the restrictions in this Section 5.02(e) shall indemnify and hold harmless the Depositor, the Trustee, the Master Servicer and the Trust Fund from and against any and all liabilities, claims, costs or expenses incurred by such parties as a result of such acquisition or holding.

(f)         Each Person who has or who acquires any Ownership Interest in a Class R Certificate shall be deemed by the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions and to have irrevocably appointed the Depositor or its designee as its attorney-in-fact to negotiate the terms of any mandatory sale under clause (v) below and to execute all instruments of transfer and to do all other things necessary in connection with any such sale, and the rights of each Person acquiring any Ownership Interest in a Class R Certificate are expressly subject to the following provisions:

(i)         Each Person holding or acquiring any Ownership Interest in a Class R Certificate shall be a Permitted Transferee and shall promptly notify the Trustee of any change or impending change in its status as a Permitted Transferee.

(ii)         No Person shall acquire an Ownership Interest in a Class R Certificate unless such Ownership Interest is a pro rata undivided interest.

(iii)        In connection with any proposed transfer of any Ownership Interest in a Class R Certificate, the Trustee shall as a condition to registration of the transfer, require delivery to it, in form and substance satisfactory to it, of each of the following:

A.         an affidavit in the form of Exhibit F-4 hereto from the proposed transferee to the effect that such transferee is a Permitted Transferee and that it is 

 

not acquiring its Ownership Interest in the Class R Certificate that is the subject of the proposed transfer as a nominee, trustee or agent for any Person who is not a Permitted Transferee; and

B.         covenant of the proposed transferee to the effect that the proposed transferee agrees to be bound by and to abide by the transfer restrictions applicable to the Class R Certificates.

(iv)        Any attempted or purported transfer of any Ownership Interest in a Class R Certificate in violation of the provisions of this Section shall be absolutely null and void and shall vest no rights in the purported transferee. If any purported transferee shall, in violation of the provisions of this Section, become a Holder of a Class R Certificate, then the prior Holder of such Class R Certificate that is a Permitted Transferee shall, upon discovery that the registration of transfer of such Class R Certificate was not in fact permitted by this Section, be restored to all rights as Holder thereof retroactive to the date of registration of transfer of such Class R Certificate. The Trustee shall be under no liability to any Person for any registration of transfer of a Class R Certificate that is in fact not permitted by
this Section or for malting any distributions due on such Class R Certificate to the Holder thereof or tatting any other action with respect to such Holder under the provisions of this Agreement so long as the Trustee received the documents specified in clause (iii). The Trustee shall be entitled to recover from any Holder of a Class R Certificate that was in fact not a Permitted Transferee at the time such distributions were made all distributions made on such Class R Certificate. Any such distributions so recovered by the Trustee shall be distributed and delivered by the Trustee to the prior Holder of such Class R Certificate that is a Permitted Transferee.

(v)        If any Person other than a Permitted Transferee acquires any Ownership Interest in a Class R Certificate in violation of the restrictions in this Section, then the Trustee shall have the right but not the obligation, without notice to the Holder of such Class R Certificate or any other Person having an Ownership Interest therein, to notify the Depositor to arrange for the sale of such Class R Certificate. The proceeds of such sale, net of commissions (which may include commissions payable to the Depositor or its affiliates in connection with such sale), expenses and taxes due, if any, will be remitted by the Trustee to the previous Holder of such Class R Certificate that is a Permitted Transferee, except that in the event that the Trustee determines that the Holder of such Class R Certificate may be liable for any
amount due under this Section or any other provisions of this Agreement, the Trustee may withhold a corresponding amount from such remittance as security for such claim. The terms and conditions of any sale under this clause (v) shall be determined in the sole discretion of the Trustee and it shall not be liable to any Person having an Ownership Interest in a Class R Certificate as a result of its exercise of such discretion.

(vi)        If any Person other than a Permitted Transferee acquires any Ownership Interest in a Class R Certificate in violation of the restrictions in this Section, then the Trustee upon receipt of reasonable compensation will provide to the Internal Revenue Service, and to the persons specified in Sections 860E(e)(3) and (6) of the Code, 

 

information needed to compute the tax imposed under Section 860E(e)(5) of the Code on transfers of residual interests to disqualified organizations.

The foregoing provisions of this Section shall cease to apply to transfers occurring on or after the date on which there shall have been delivered to the Trustee, in form and substance satisfactory to the Trustee, (i) written notification from the Rating Agency that the removal of the restrictions on Transfer set forth in this Section will not cause such Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the effect that such removal will not cause any REMIC hereunder to fail to qualify as a REMIC.

(g)        No service charge shall be made for any registration of transfer or exchange of Certificates of any Class, but the Certificate Registrar 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.

All Certificates surrendered for registration of transfer or exchange shall be cancelled by the Certificate Registrar and disposed of pursuant to its standard procedures.

	
            Section 5.03
 	
            Mutilated. Destroyed. Lost or Stolen Certificates.
 

If (i) any mutilated Certificate is surrendered to the Certificate Registrar or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Certificate and (ii) there is delivered to the Trustee, the Depositor and the Certificate Registrar such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Trustee or the Certificate Registrar that such Certificate has been acquired by a bona fide purchaser, the Trustee shall execute on behalf of the Trust, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and Percentage Interest. Upon the issuance of any new Certificate under this Section, the Trustee or the Certificate Registrar 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 Trustee and the Certificate Registrar) in connection therewith. Any duplicate Certificate issued pursuant to this Section, shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Certificate shall be found at any time.

	
            Section 5.04
 	
            Persons Deemed Owners.
 

The Master Servicer, the Depositor, the Trustee, the Certificate Registrar, any Paying Agent and any agent of the Master Servicer, the Depositor, the Certificate Registrar, any Paying Agent or the Trustee may treat the Person, including a Depository, in whose name any Certificate is registered as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 4.01 and for all other purposes whatsoever, and none of the Master Servicer, the Trust, the Trustee nor any agent of any of them shall be affected by notice to the contrary.

To the extent the Trustee, Certificate Registrar or any Paying Agent is required pursuant to this Agreement to determine the identity of the beneficial owner of a Book-Entry Certificate, any costs assessed by the Depository in making such determination shall be an expense of the party making such request, but in no event shall such cost be an expense of the Trust Fund.

 

 

	
            Section 5.05
 	
            Appointment of Paying Agent.
 

(a)        The Paying Agent shall make distributions to Certificateholders from the Distribution Account pursuant to Section 4.01 and shall report the amounts of such distributions to the Trustee. The duties of the Paying Agent may include the obligation (i) to withdraw funds from the Distribution Account pursuant to Sections 3.10 and 3.11 and for the purpose of making the distributions referred to above and (ii) to distribute statements and provide information to Certificateholders as required hereunder. The Paying Agent hereunder shall at all times be an entity duly incorporated and validly existing under the laws of the United States of America or any state thereof, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authorities. The Paying Agent shall initially be the
Trustee. The Trustee may appoint a successor to act as Paying Agent, which appointment shall be reasonably satisfactory to the Depositor and the Rating Agency.

(b)        The Trustee shall cause the Paying Agent (if other than the Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee that such Paying Agent shall hold all sums, if any, held by it for payment to the Certificateholders in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to such Certificateholders and shall agree that it shall comply with all requirements of the Code regarding the withholding of payments in respect of Federal income taxes due from Certificate Owners and otherwise comply with the provisions of this Agreement applicable to it.

 

 

 

ARTICLE VI

 

THE MASTER SERVICER AND THE DEPOSITOR

	
            Section 6.01
 	
            Liability of the Master Servicer and the Depositor.
 

The Master Servicer shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Master Servicer, as the case may be, herein. The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Depositor.

	
            Section 6.02
 	
            Merger or Consolidation of or Assumption of the Obligations of the Master Servicer or the Depositor.
 

Any entity into which the Master Servicer or Depositor may be merged or consolidated, or any entity resulting from any merger, conversion or consolidation to which the Master Servicer or the Depositor shall be a party, or any corporation succeeding to the business of the Master Servicer or the Depositor, shall be the successor of the Master Servicer or the Depositor, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the successor master servicer shall satisfy all the requirements of Section 7.02 with respect to the qualifications of a successor master servicer. In addition, the Master Servicer may assign the servicing rights with respect to any Mortgage Loans to a third party, provided that any such third party shall be an entity
that satisfies all the requirements of Section 7.02 that would be applicable to a successor master servicer.

	
            Section 6.03
 	
            Limitation on Liability of the Master Servicer and Others.
 

Neither the Master Servicer nor any of the directors or officers or employees or agents of the Master Servicer shall be under any liability to the Trust or the Certificateholders for any action taken or for refraining from the taking of any action by the Master Servicer in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Master Servicer or any such Person against any liability which would otherwise be imposed by reason of its willful misfeasance, bad faith or negligence in the performance of duties of the Master Servicer or by reason of its reckless disregard of its obligations and duties of the Master Servicer hereunder; provided, further, that this provision shall not be construed to entitle the Master Servicer to indemnity in the event that amounts advanced by the Master Servicer to retire any senior lien
exceed Liquidation Proceeds (in excess of related liquidation expenses) realized with respect to the related Mortgage Loan. The Master Servicer and any director or officer or employee or agent of the Master Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder. The Master Servicer and any director or officer or employee or agent of the Master Servicer shall be indemnified by the Trust and held harmless against any loss, liability or expense incurred in connection with any legal action relating to this Agreement or the Certificates, other than any loss, liability or expense related to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) and any loss, liability or expense incurred by reason of its willful misfeasance, bad faith or negligence in the performance of duties hereunder

 

or by reason of its reckless disregard of obligations and duties hereunder. The Master Servicer may undertake any such action which it may deem necessary or desirable in respect of this Agreement, and the rights and duties of the parties hereto and the interests of the Certificateholders hereunder. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust and the Master Servicer shall be entitled to be reimbursed therefor only pursuant to Section 3.11. The Master Servicer’s right to indemnity or reimbursement pursuant to this Section shall survive any resignation or termination of the Master Servicer pursuant to Section 6.04 or 7.01 with respect to any losses, expenses, costs or liabilities arising prior to such resignation or termination (or arising from events that occurred prior to such
resignation or termination). This paragraph shall apply to the Master Servicer solely in its capacity as Master Servicer hereunder and in no other capacities.

	
            Section 6.04
 	
            Master Servicer Not to Resign.
 

Subject to the provisions of Section 7.01 and Section 6.02, the Master Servicer shall not resign from the obligations and duties hereby imposed on it except (i) upon determination that the performance of its obligations or duties hereunder are no longer permissible under applicable law or are in material conflict by reason of applicable law with any other activities carried on by it or its subsidiaries or Affiliates, the other activities of the Master Servicer so causing such a conflict being of a type and nature carried on by the Master Servicer or its subsidiaries or Affiliates at the date of this Agreement or (ii) upon satisfaction of the following condition: the Rating Agency shall have delivered a letter to the Trustee prior to the appointment of the successor master servicer stating that the proposed appointment of such successor master servicer as Master Servicer hereunder will
not result in the reduction or withdrawal of the then current rating of the Regular Certificates or the ratings that are in effect; provided, however, that no such resignation by the Master Servicer shall become effective until such successor master servicer or, in the case of (i) above, the Trustee shall have assumed the Master Servicer’s responsibilities and obligations hereunder or the Trustee shall have designated a successor master servicer in accordance with Section 7.02. Any such resignation shall not relieve the Master Servicer of responsibility for any of the obligations specified in Sections 7.01 and 7.02 as obligations that survive the resignation or termination of the Master Servicer. Any such determination permitting the resignation of the Master Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.

	
            Section 6.05
 	
            Delegation of Duties.
 

In the ordinary course of business, the Master Servicer at any time may delegate any of its duties hereunder to any Person, including any of its Affiliates, who agrees to conduct such duties in accordance with standards comparable to those set forth in Section 3.01, including entering into Sub-Servicing Agreements with Sub-Servicers, for the servicing and administration of the Mortgage Loans, in accordance with the provisions of Section 3.02. Such delegation shall not relieve the Master Servicer of its liabilities and responsibilities with respect to such duties and shall not constitute a resignation within the meaning of Section 6.04. The Master Servicer shall provide the Trustee and the Rating Agency with 60 days prior written notice prior to the delegation of any of its duties to any Person other than any of the Master Servicer’s Affiliates or their respective successors and assigns.

 

 

ARTICLE VII

 

DEFAULT

	
            Section 7.01
 	
            Master Servicer Events of Termination.
 

(a)        If any one of the following events (“Master Servicer Events of Termination’ ) shall occur and be continuing:

(i)         (A) The failure by the Master Servicer to make any Advance (other than a Nonrecoverable Advance); or (B) any other failure by the Master Servicer to deposit in the Collection Account or Distribution Account any deposit required to be made under the terms of this Agreement which continues unremedied for a period of (i) one Business Day in the case of any such Advance that was required to be remitted to the Trustee or (ii) five Business Days in the case of any such deposit that was required to be remitted to the Trustee, provided, that, if the Master Servicer cures such failure within the applicable grace period, the amounts remitted shall include interest calculated at the applicable federal funds rate; or

(ii)         The failure by the Master Servicer duly to observe or perform, in any material respect, any other covenants, obligations or agreements of the Master Servicer as set forth in this Agreement, which failure continues unremedied for a period of 30 days, after the date (A) on which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Trustee or by any Holder of a Regular Certificate evidencing at least 25% of the Voting Rights or (B) actual knowledge of such failure by a Servicing Officer of the Master Servicer; or

(iii)        The entry against the Master Servicer of a decree or order by a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a trustee, conservator, receiver or liquidator in any insolvency, conservatorship, receivership, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 days; or

(iv)        The Master Servicer shall voluntarily go into liquidation, consent to the appointment of a conservator or receiver or liquidator or similar person in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Master Servicer or of or relating to all or substantially all of its property; or a decree or order of a court or agency or supervisory authority having jurisdiction in the premises for the appointment of a conservator, receiver, liquidator or similar person in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and such decree or order shall have remained in force undischarged, unbonded or unstayed
for a period of 60 days; or 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;

 

 

(b)        then, and in each and every such case, so long as a Master Servicer Event of Termination shall not have been remedied within the applicable grace period, (x) with respect solely to clause (i)(A) above, if such Advance is not made by 11:00 A.M., New York time, on the Business Day immediately following the Master Servicer Remittance Date (provided the Trustee shall give the Master Servicer, and the Master Servicer shall have received, notice of such failure to above by 5:00 P.M. New York time on the Master Servicer Remittance Date), the Trustee shall terminate all of the rights and obligations of the Master Servicer under this Agreement and the Trustee, or a successor master servicer appointed in accordance with Section 7.02, shall immediately make such Advance and assume, pursuant to the terms of Section 7.02, the duties of a successor
master servicer and (y) in the case of (i)(B), (ii), (iii) and (iv) above, the Trustee shall, at the direction of the Holders of each Class of Regular Certificates evidencing Percentage Interests aggregating not less than 51%, by notice then given in writing to the Master Servicer (and to the Trustee if given by Holders of Certificates), terminate all of the rights and obligations of the Master Servicer as servicer under this Agreement, to the extent permitted by law, and in and to the Mortgage Loans and the proceeds thereof. Any such notice to the Master Servicer shall also be given to the Rating Agency and the Depositor. On or after the receipt by the Master Servicer (and by the Trustee if such notice is given by the Holders) of such written notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Certificates or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee or duly appointed successor master servicer
pursuant to and under this Section; and, without limitation, the Trustee or duly appointed successor master servicer is hereby authorized and empowered to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of each Mortgage Loan and Related Documents or otherwise. The Master Servicer agrees to cooperate with the Trustee (or the applicable successor master servicer) in effecting the termination of the responsibilities and rights of the Master Servicer hereunder, including, without limitation, the delivery to the Trustee of all documents and records requested by it to enable it to assume the Master Servicer’s functions under this Agreement within ten Business Days subsequent to such notice, the transfer within one Business Day
subsequent to such notice to the Trustee (or the applicable successor master servicer) for the administration by it of all cash amounts that shall at the time be held by the Master Servicer and to be deposited by it in the Collection Account, the Distribution Account, any REO Account or any Servicing Account or that have been deposited by the Master Servicer in such accounts or thereafter received by the Master Servicer with respect to the Mortgage Loans or any REO Property received by the Master Servicer. All Transition Costs incurred in connection with transferring the Mortgage Files to the successor master servicer and amending this Agreement to reflect such succession as Master Servicer pursuant to this Section shall be paid by the predecessor Master Servicer (or if the predecessor Master Servicer is the Trustee, the initial Master Servicer) or by the Trust pursuant to Section 3.11(b)(iv) herein if the Master Servicer does not fulfill its obligations hereunder within 45 days of
presentation of reasonable documentation of such costs and expenses. For purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge of a Master Servicer Event of Termination 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 Event of Termination is received by the Trustee and such notice references the Certificates, the Trust Fund or this Agreement.

 

 

	
            Section 7.02
 	
            Trustee to Act; Appointment of Successor.
 

(a)        Within 90 days of the time the Master Servicer (and the Trustee, if notice is sent by the Holders) receives a notice of termination pursuant to Section 7.01 or 6.04, the Trustee (or such other successor master servicer as is approved in accordance with this Agreement) shall be the successor in all respects to the Master Servicer in its capacity as servicer under this Agreement and the transactions set forth or provided for herein and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Master Servicer by the terms and provisions hereof arising on and after its succession; provided, however, that if the Trustee is prohibited by law or regulation from obligating itself to make advances regarding delinquent mortgage loans, then the Trustee shall not be obligated to make Advances pursuant to
Section 4.06; and provided further, it is understood and acknowledged that by the parties hereto that there will be a period of transition (not to exceed 90 days) before the transfer of servicing obligations is fully effected and that the Trustee (i) shall be under no obligation to purchase any Mortgage Loan, and (ii) shall have no obligation whatsoever with respect to any liability (other than advances deemed recoverable and not previously made) incurred by the Master Servicer at or prior to the time of termination As compensation therefor, the Trustee (or such other successor master servicer) shall be entitled to such compensation as the Master Servicer would have been entitled to hereunder if no such notice of termination had been given. Notwithstanding the above, (i) if the Trustee is unwilling to act as successor master servicer or (ii) if the Trustee is legally unable so to act, or if the Holders of Certificates entitled to at least 51% of the Voting Rights so request in writing
to the Trustee, the Trustee shall appoint or petition a court of competent jurisdiction to appoint, any established housing and home finance institution, bank or other mortgage loan or home equity loan servicer having a net worth of not less than $50,000,000 as the successor to the Master Servicer hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the Master Servicer hereunder, provided, that the appointment of any such successor master servicer will not result in the qualification, reduction or withdrawal of the ratings assigned to the Certificates or the ratings that are in effect by the Rating Agency as evidenced by a letter to such effect from the Rating Agency. Pending appointment of a successor to the Master Servicer hereunder, unless the Trustee is prohibited by law from so acting, the Trustee shall act in such capacity as herein above provided. In connection with such appointment and assumption, the successor shall be entitled to
receive compensation out of payments on Mortgage Loans in an amount equal to the compensation which the Master Servicer would otherwise have received pursuant to Section 3.18 (or such other compensation as the Trustee and such successor shall agree, not to exceed the Servicing Fee). The appointment of a successor master servicer shall not affect any liability of the predecessor Master Servicer which may have arisen under this Agreement prior to its termination as Master Servicer to pay any deductible under an insurance policy pursuant to Section 3.13 or to indemnify the Trustee pursuant to Section 8.05, nor shall any successor master servicer be liable for any acts or omissions of the predecessor Master Servicer or for any breach by such Master Servicer of any of its representations or warranties contained herein or in any related document or agreement. The Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such
succession.

(b)        Any successor, including the Trustee, to the Master Servicer as servicer shall during the term of its service as master servicer continue to master service and administer the Mortgage Loans for the benefit of Certificateholders, and maintain in force a policy or policies of 

 

insurance covering errors and omissions in the performance of its obligations as Master Servicer hereunder and a Fidelity Bond in respect of its officers, employees and agents to the same extent as the Master Servicer is so required pursuant to Section 3.14.

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

	
            Section 7.03
 	
            Waiver of Master Servicer Events of Termination.
 

The Majority Certificateholders may, on behalf of all Certificateholders, waive any events permuting removal of the Master Servicer as servicer pursuant to this Article VII, provided, however, that the Majority Certificateholders may not waive such events or a Master Servicer Event of Termination in making a required distribution on a Certificate without the consent of the Holder of such Certificate. Upon any waiver of a past default, such default shall cease to exist and any Master Servicer Event of Termination 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 thereto except to the extent expressly so waived. Notice of any such waiver shall be given by the Trustee to the Rating Agency.

	
            Section 7.04
 	
            Notification to Certificateholders.
 

(a)        Upon any termination or appointment of a successor the Master Servicer pursuant to this Article VII or Section 6.04, the Trustee shall give prompt written notice thereof to the Certificateholders at their respective addresses appearing in the Certificate Register and the Rating Agency.

(b)        No later than 60 days after the occurrence of any event which constitutes or which, with notice or a lapse of time or both, would constitute a Master Servicer Event of Termination the Trustee shall be deemed to have actual knowledge of such Master Servicer Event of Termination five Business Days after a Responsible Officer of the Trustee becomes 

 

aware of the occurrence of such an event and the Trustee shall transmit by mail to all Certificateholders notice of such occurrence unless such default or Master Servicer Event of Termination shall have been waived or cured. Such notice shall be given to the Rating Agency promptly after any such occurrence.

	
            Section 7.05
 	
            Survivability of Master Servicer Liabilities.
 

Notwithstanding anything herein to the contrary, upon termination of the Master Servicer hereunder, any liabilities of the Master Servicer which accrued prior to such termination shall survive such termination.

 

 

 

ARTICLE VIII

 

THE TRUSTEE

	
            Section 8.01
 	
            Duties of Trustee.
 

The Trustee, prior to the occurrence of a Master Servicer Event of Termination of which a Responsible Officer of the Trustee shall have actual knowledge and after the curing of all Master Servicer Events of Termination which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Agreement. If a Master Servicer Event of Termination has occurred (which has not been cured) of which a Responsible Officer has actual knowledge, 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.

As provided in Section 4.02 hereof, on each Distribution Date, the Trustee shall provide Bloomberg Financial Markets, L.P. (“Bloomberg”) CUSIP level information for each Class of Certificates as of such Distribution Date, using a format and media mutually acceptable to the Trustee and Bloomberg.

The Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the Trustee 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; provided, however, that the Trustee shall not be responsible for the accuracy or content of any resolution, certificate, statement, opinion, report, document, order or other instrument furnished by the Master Servicer, the Additional Collateral Servicer or the Depositor hereunder. If any such instrument is found not to conform in any material respect to the requirements of this Agreement, the Trustee shall notify the Certificateholders of such instrument in the event that the Trustee, after so requesting, does not receive a satisfactorily corrected instrument.

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

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

No provision of this Agreement shall be construed to relieve the Trustee 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 Event of Termination, and after the curing of all such Master Servicer Events of Termination which may have 

 

occurred, the duties and obligations of the Trustee shall be determined solely by the express provisions of this Agreement, the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee and, in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Agreement;

(ii)         the Trustee shall not be personally liable for an error of judgment made in good faith by a Responsible Officer of the Trustee, unless it shall be proved by a court of competent jurisdiction that the Trustee was negligent in ascertaining or investigating the facts related thereto;

(iii)        the Trustee shall not be personally liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the direction of the Majority Certificateholders relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising or omitting to exercise any trust or power conferred upon the Trustee, under this Agreement; and

(iv)        the Trustee shall not be charged with knowledge of any failure by the Master Servicer to comply with the obligations of the Master Servicer referred to in clauses (i) and (ii) of Section 7.01 or any Master Servicer Event of Termination unless a Responsible Officer of the Trustee at the Corporate Trust Office obtains actual knowledge of such failure or the Trustee receives written notice of such failure from the Master Servicer or the Majority Certificateholders. In the absence of such receipt of such notice, the Trustee may conclusively assume that there is no Master Servicer Event of Termination.

The Trustee shall not be required 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 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 to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer or Additional Collateral Servicer under this Agreement, except during such time, if any, as the Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Master Servicer in accordance with the terms of this Agreement.

The Trustee shall not complete foreclosure proceedings, or accept a deed in lieu of foreclosure, with respect to any Mortgage Loan, unless the Trustee has been supplied with an Opinion of Counsel to the effect that if the related Mortgaged Property is acquired by the Trust, such Mortgaged Property from such Mortgage will qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code. In the event that the Trustee acquires possession of any Mortgaged Property in spite of the foregoing, the Trustee shall dispose of the acquired Mortgaged Property as expeditiously as possible.

 

 

The Trustee shall have no duty (A) to see any recording, filing, or depositing of this Agreement or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance or (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Fund other than from funds available in the Distribution Account to confirm or verify the contents of any reports or certificates of the Master Servicer or the Additional Collateral Servicer delivered to the Trustee pursuant to this Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties.

	
            Section 8.02
 	
            Certain Matters Affecting the Trustee.
 	
             

	
            (a)
 	
            Except as otherwise provided in Section 8.01:
 
				

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

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

(iii)        the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation hereunder or in relation hereto, at the request, order or direction of the Certificateholders pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; 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 answerable for other than its negligence or willful misconduct in the performance of any such act;

(iv)        the Trustee shall not be personally liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;

(v)        prior to the occurrence of a Master Servicer Event of Termination and after the curing of all Master Servicer Events of Termination which may have occurred, the Trustee shall not 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 documents, unless requested in writing to do so by the Majority Certificateholder; provided, however, that if the payment within a reasonable time to the Trustee 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, not reasonably assured to the Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity against such cost, expense or liability as a condition to such proceeding. The reasonable expense of every such examination shall be paid by the Master Servicer or, if paid by the Trustee, shall be reimbursed by the Master Servicer upon demand. Nothing in this clause (v) shall derogate from the obligation of the Master Servicer to observe any applicable law prohibiting disclosure of information regarding the Mortgagors;

(vi)        the Trustee shall not be accountable, shall have no liability and makes no representation as to any acts or omissions hereunder of the Master Servicer until such time as the Trustee may be required to act as Master Servicer pursuant to Section 7.02;

(vii)       the 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 and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent, attorney or custodian appointed by the Trustee with due care; and

(viii)      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 answerable for other than its negligence or willful misconduct in the performance of such act.

	
            Section 8.03
 	
            Trustee Not Liable for Certificates or Mortgage Loans.
 

The recitals contained herein and in the Certificates (other than the authentication of the Trustee on the Certificates) shall be taken as the statements of the Master Servicer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Agreement or of the Certificates (other than the signature and authentication of the Trustee on the Certificates) or of any Mortgage Loan or Related Document, or of MERS or the MERS® System. The Trustee shall not be accountable for the use or application by the Master Servicer, or for the use or application of any funds paid to the Master Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the Collection Account by the Master Servicer. The Trustee shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Trust or its ability to generate the payments to be distributed to Certificateholders under this Agreement, including, without limitation: the existence, condition and ownership of any Mortgaged Property; the existence and enforceability of any hazard insurance thereon (other than if the Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02); the validity of the assignment of any Mortgage Loan to the Trustee or of any intervening assignment; the completeness of any Mortgage Loan; the performance or enforcement of any Mortgage Loan (other than if the Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02); the compliance by the Depositor or the Master Servicer with any warranty or representation made under this
Agreement or in any related document or the accuracy of any such warranty or representation prior to the Trustee’s receipt of notice or other discovery of any noncompliance therewith or any breach thereof, any investment of monies by or at the direction of the Master Servicer or any loss resulting therefrom, it being understood that the Trustee shall remain responsible for any Trust 

 

property that it may hold in its individual capacity; the acts or omissions of any of the Master Servicer (other than if the Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02), any Sub-Servicer or any Mortgagor, any action of the Master Servicer (other than if the Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02), or any Sub-Servicer taken in the name of the Trustee; the failure of the Master Servicer or any Sub-Servicer to act or perform any duties required of it as agent of the Trustee hereunder; or any action by the Trustee taken at the instruction of the Master Servicer (other than if the Trustee shall assume the duties of the Master Servicer pursuant to Section 7.02); provided, however, that the foregoing shall not relieve the Trustee of its obligation to perform its duties under this Agreement. The Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder (unless the Trustee shall have become the successor master servicer).

	
            Section 8.04
 	
            Trustee May Own Certificates.
 

The Trustee in its individual or any other capacity may become the owner or pledgee of Certificates with the same rights as it would have if it were not Trustee and may transact any banking and trust business with the Master Servicer, the Depositor or their Affiliates.

	
            Section 8.05
 	
            Master Servicer to Pay Trustee Expenses; Trustee Fees.
 

On each Distribution Date, the Trustee shall be entitled to withdraw from the Distribution Account as compensation hereunder the Trustee Fees. The Master Servicer will pay or reimburse the Trustee (or, if the Master Servicer does not fulfill its obligations hereunder, the Trust Fund will reimburse pursuant to Section 3.11(b)(ii) herein) within 30 days upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Agreement (including the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith or which is the responsibility of the Trustee hereunder. In addition, the Master Servicer covenants and agrees to indemnify the Trustee (or, if the
Master Servicer does not fulfill its obligations hereunder within 30 days upon the Trustee’s request, the Trust Fund will indemnify pursuant to Section 3.11(b)(ii) herein) and its officers, directors, employees and agents from, and hold it harmless against, any and all losses, liabilities, damages, claims or expenses incurred in connection with any legal action relating to this Agreement or the Certificates, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence of the Trustee in the performance of its duties hereunder or by reason of the Trustee’s reckless disregard of obligations and duties hereunder. Anything in this Agreement to the contrary notwithstanding, in no event shall the Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the
form of action. The Trustee and any director, officer, employee or agent of the Trustee shall be indemnified, by the Trust Fund and held harmless against any loss, liability or expense (not including expenses, disbursements and advances incurred or made by the Trustee, including the compensation and the expenses and disbursements of its agents and its counsel, in the ordinary course of the Trustee’s performance of its regular duties in accordance with the provisions of this Agreement) incurred by the Trustee or such party arising out of or in connection with the acceptance or 

 

administration of its duties under this Agreement, other than any loss, liability or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance by the Trustee of its duties under this Agreement or by reason of the reckless disregard of the Trustee’s obligations and duties under this Agreement. This section shall survive termination of this Agreement or the resignation or removal of any Trustee hereunder.

	
            Section 8.06
 	
            Eligibility Requirements for Trustee.
 

The Trustee hereunder shall be a corporation or a national banking association, and duly organized and validly existing under the laws of the United States of America or any state thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000 and a minimum long-term debt rating of Baa3 by Moody’s Investors Service, Inc. and a short-term rating of at least A-1 by S&P and A by Fitch, and subject to supervision or examination by federal or state authority. If such entity publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 8.06, the combined capital and surplus of such entity shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so
published. The principal office of the Trustee (other than the initial Trustee) shall be in a state with respect to which an Opinion of Counsel has been delivered to such Trustee at the time such Trustee is appointed Trustee to the effect that the Trust will not be a taxable entity under the laws of such state. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 8.06, the Trustee shall resign immediately in the manner and with the effect specified in Section 8.07.

	
            Section 8.07
 	
            Resignation or Removal of Trustee.
 

The Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Depositor, the Master Servicer and the Rating Agency. Upon receiving such notice of resignation, the Depositor shall promptly appoint a successor Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee. If no successor Trustee shall have been so appointed and having accepted appointment within 60 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If at any time the Trustee shall cease to be eligible in accordance with the provisions of Section 8.06 and shall fail to resign after written request therefor by the Depositor, or if at any time the Trustee shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Depositor may remove the Trustee. If the Depositor or the Master Servicer removes the Trustee under the authority of the immediately preceding sentence, the Depositor shall promptly appoint a successor Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor Trustee.

The Majority Certificateholders may at any time remove the Trustee by written instrument or instruments delivered to the Master Servicer, the Depositor and the Trustee; the 

 

Depositor shall thereupon use its best efforts to appoint a successor Trustee in accordance with this Section.

Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to any of the provisions of this Section 8.07 shall not become effective until acceptance of appointment by the successor Trustee as provided in Section 8.08.

	
            Section 8.08
 	
            Successor Trustee.
 

Any successor Trustee appointed as provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor, the Rating Agency, the Master Servicer and to its predecessor Trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor Trustee shall become effective, and such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee. The Depositor, the Master Servicer and the predecessor Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Trustee all such rights, powers, duties and obligations.

No successor Trustee shall accept appointment as provided in this Section 8.08 unless at the time of such acceptance such successor Trustee shall be eligible under the provisions of Section 8.06 and the appointment of such successor Trustee shall not result in a downgrading of the Regular Certificates by either Rating Agency, as evidenced by a letter from the Rating Agency.

Upon acceptance of appointment by a successor Trustee as provided in this Section 8.08, the successor Trustee shall mail notice of the appointment of a successor Trustee hereunder to all Holders of Certificates at their addresses as shown in the Certificate Register and to the Rating Agency.

	
            Section 8.09
 	
            Merger or Consolidation of Trustee.
 

Any entity into which the Trustee may be merged or converted or with which it may be consolidated, or any entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any entity succeeding to the business of the Trustee, shall be the successor of the Trustee hereunder, provided such entity shall be eligible under the provisions of Section 8.06 and 8.08, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

	
            Section 8.10
 	
            Appointment of Co-Trustee or Separate Trustee.
 

Notwithstanding any other provisions of this Agreement, at anytime, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust or any Mortgaged Property may at the time be located, the Depositor and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Certificateholders, such title to the Trust, or any part 

 

thereof, and, subject to the other provisions of this Section 8.10, such powers, duties, obligations, rights and trusts as the Master Servicer and the Trustee may consider necessary or desirable. Any such co-trustee or separate trustee shall be subject to the written approval of the Master Servicer. If the Master Servicer shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, or in the case a Master Servicer Event of Termination shall have occurred and be continuing, the Trustee alone shall have the power to make such appointment. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor Trustee under Section 8.06, and no notice to Certificateholders of the appointment of any co-trustee or separate trustee shall be required under Section 8.08. The Master Servicer shall be responsible for the fees of any
co-trustee or separate trustee appointed hereunder.

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 Trustee shall be conferred or imposed upon and exercised or performed by the 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 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 (whether as Trustee hereunder or as successor to the Master Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust 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 Trustee;

(ii)         no trustee hereunder shall be held personally liable by reason of any act or omission of any other trustee hereunder; and

(iii)        the Master Servicer and the Trustee, acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee except that following the occurrence of a Master Servicer Event of Termination, the Trustee acting alone may accept the resignation or remove any separate trustee or co-trustee.

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

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.

	
            Section 8.11
 	
            Limitation of Liability.
 

The Certificates are executed by the Trustee, not in its individual capacity but solely as Trustee of the Trust, in the exercise of the powers and authority conferred and vested in it by the Trust Agreement. Each of the undertakings and agreements made on the part of the Trustee in the Certificates is made and intended not as a personal undertaking or agreement by the Trustee but is made and intended for the purpose of binding only the Trust.

	
            Section 8.12
 	
            Trustee May Enforce Claims Without Possession of Certificates.
 

(a)        All rights of action and claims under this Agreement or the Certificates may be prosecuted and enforced by the Trustee without the possession of any of the Certificates or the production thereof in any proceeding relating thereto, and such proceeding instituted by the Trustee shall be brought in its own name or in its capacity as Trustee for the benefit of all Holders of such Certificates, subject to the provisions of this Agreement. Any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursement and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Certificateholders in respect of which such judgment has been recovered.

(b)        The Trustee shall afford the Depositor, the Master Servicer and each Certificateholder upon reasonable notice during normal business hours, access to all records maintained by the Trustee in respect of its duties hereunder and access to officers of the Trustee responsible for performing such duties. The Trustee shall cooperate fully with the Master Servicer, the Depositor and such Certificateholder and shall make available to the Master Servicer, the Depositor and such Certificateholder for review and copying at the expense of the party requesting such copies, such books, documents or records as may be requested with respect to the Trustee’s duties hereunder. The Depositor, the Master Servicer and the Certificateholders shall not have any responsibility or liability for any action or failure to act by the Trustee and are not
obligated to supervise the performance of the Trustee under this Agreement or otherwise.

	
            Section 8.13
 	
            Suits for Enforcement.
 

In case a Master Servicer Event of Termination or other default by the Master Servicer or the Depositor hereunder shall occur and be continuing, the Trustee may proceed to protect and enforce its rights and the rights of the Certificateholders under this Agreement by a suit, action or proceeding in equity or at law or otherwise, whether for the specific performance of any covenant or agreement contained in this Agreement or in aid of the execution of any power granted in this Agreement or for the enforcement of any other legal, equitable or other remedy, as the Trustee, being advised by counsel, and subject to the foregoing, shall deem most effectual to protect and enforce any of the rights of the Trustee and the Certificateholders.

 

 

	
            Section 8.14
 	
            Waiver of Bond Requirement.
 

The Trustee shall be relieved of, and each Certificateholder hereby waives, any requirement of any jurisdiction in which the Trust, or any part thereof, may be located that the Trustee post a bond or other surety with any court, agency or body whatsoever.

	
            Section 8.15
 	
            Waiver of Inventory. Accounting and Appraisal Requirement.
 

The Trustee shall be relieved of, and each Certificateholder hereby waives, any requirement of any jurisdiction in which the Trust, or any part thereof, may be located that the Trustee file any inventory, accounting or appraisal of the Trust with any court, agency or body at any time or in any manner whatsoever.

	
            Section 8.16
 	
            Right of Trustee in Capacity of Certificate Registrar or Paying Agent.
 

In the event that the Trustee is also acting in the capacity of Paying Agent or Certificate Registrar hereunder, the rights, protections, indemnities and immunities afforded to the Trustee pursuant to this Article VIII shall also be afforded to the Trustee in its capacity as Paying Agent or Certificate Registrar.

	
            Section 8.17
 	
            Periodic Filings.
 

The Trustee shall, on behalf of the Trust Fund, prepare, sign (as trustee for the Trust Fund) and cause to be filed with the Commission on a timely basis any periodic reports required to be filed under the provisions of the Exchange Act, and the rules and regulations of the Commission thereunder; provided, however, that any annual report of the Depositor on Form 10-K shall be signed by the Chief Executive Officer of the Master Servicer on behalf of the Depositor and in respect of the Trust Fund. The Trustee shall provide copies of all such reports to the Depositor for approval prior to filing. In connection with the preparation and filing of such periodic reports, the Depositor and the Master Servicer shall timely provide to the Trustee all material information available to them which is required to be included in such reports. Prior to January 30 of the first year in which the Trustee
is able to do so under applicable law, the Trustee shall file a Form 15 Suspension Notification with respect to the Trust Fund. Any Form 10-K filed with the Commission in connection with this Section 8.17 shall include a certification, signed by the Chief Executive Officer of the Master Servicer, in the form attached as Exhibit M hereto or such other form as may be required or permitted by the Commission (the “Form 10-K Certification”), in compliance with Rule 13a-14 and 15d-14 under the Exchange Act and any additional directives of the Commission. In connection with the Form 10-K Certification, the Trustee shall provide the Master Servicer with a back-up certification substantially in the form attached hereto as Exhibit N.

 

 

 

ARTICLE IX

 

REMIC ADMINISTRATION

	
            Section 9.01
 	
            REMIC Administration.
 

(a)        The Trustee shall make elections to treat the Trust Fund as two REMICs under the Code and, if necessary, under applicable state law. Each such election will be made on Form 1066 or other appropriate federal tax or information return or any appropriate state return for the taxable year ending on the last day of the calendar year in which the Certificates are issued. For the purposes of the REMIC elections in respect of the Trust Fund, the REMIC I Regular Interests shall be designated as the “regular interests” in REMIC I, the Class R-I Certificates shall be designated as the sole class of “residual interest” in REMIC I, the Regular Certificates (other than the Class A-7 Certificates), the Class A-7A Component and the Class A-7B Component shall be designated as the “regular interests” in REMIC II, and the
Class R-II Certificates shall be designated as the sole class of “residual interest” in REMIC II. The Class A-7 Certificates shall represent ownership of the Class A-7A Component and the Class A-7B Component. The Master Servicer and the Trustee shall not permit the creation of any “interests” (within the meaning of Section 860G of the Code) in any REMIC other than the Regular Certificates (other than the Class A-7 Certificates), the Class A-7A Component, the Class A-7B Component and the Class R Certificates. Within 30 days after the Closing Date, the Trustee shall prepare and file with the Internal Revenue Service Form 8811, “Information Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of Collateralized Debt Obligations” for each REMIC.

The Trustee will apply for an Employee Identification Number from the IRS via form SS-4 or any other acceptable method for all tax entities.

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

(c)        The Trustee shall pay out of its own funds, without any right of reimbursement, any and all expenses relating to any tax audit of the Trust Fund other than the expense of obtaining any tax related Opinion of Counsel except as specified herein and except that the Trustee shall be entitled to be reimbursed from the Collection Account for any professional fees and expenses related to any non-routine audits or any administrative or judicial proceedings that do not result from any breach of its tax duties under this Section 9.01. The Trustee, as agent for the Trust Fund’s Tax Matters Person, shall (i) act on behalf of the Trust Fund in relation to any tax matter or controversy involving the Trust Fund and (ii) represent the Trust Fund in any administrative or judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. By their acceptance thereof, the holder of the largest Percentage Interest of the Residual Certificates of each REMIC shall be designated as the Tax Matters Person (as defined in the REMIC Provisions) hereby agrees to irrevocably appoint the Trustee or an Affiliate as its agent to perform all of the duties of the Tax Matters Person for each REMIC.

(d)        The Trustee shall prepare, sign and file all of the Tax Returns in respect of each REMIC created hereunder. The expenses of preparing and filing such returns shall be borne by the Trustee without any right of reimbursement therefor. The Master Servicer shall provide on a 

 

timely basis to the Trustee or its designee such information with respect to the assets of the Trust Fund as is in its possession and reasonably required by the Trustee to enable it to perform its obligations under this Article IX.

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

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

 

Event could occur. The Trustee may consult with counsel to make such written advice, and the cost of same shall be borne by the party seeking to take the action not permitted by this Agreement, but in no event shall such cost be an expense of the Trustee.

(g)        In the event that any tax is imposed on “prohibited transactions” of the Trust Fund created hereunder as defined in Section 860F(a)(2) of the Code, on the “net income from foreclosure property” of either REMIC as defined in Section 860G(c) of the Code, on any contributions to the Trust Fund after the Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by the Code or any applicable provisions of state or local tax laws, such tax shall be charged (i) to the Trustee pursuant to Section 9.03 hereof, if such tax arises out of or results from a breach by the Trustee of any of its obligations under this Article IX, (ii) to the Master Servicer pursuant to Section 9.03 hereof, if such tax arises out of or results from a breach by the Master Servicer of any of its obligations under Article
III or this Article IX, or otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv) against amounts on deposit in the Distribution Account and shall be paid by withdrawal therefrom to the extent not required to be paid by the Master Servicer or the Trustee pursuant to another provision of this Agreement.

(h)        On or before April 15 of each calendar year, commencing April 15, 2006, the Trustee shall deliver to the Master Servicer and the Rating Agency a Certificate from a Responsible Officer of the Trustee stating (without regard to any action taken by any party other than the Trustee) the Trustee’s compliance with this Article IX.

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

(j)         Following the Startup Day, the Trustee shall not accept any contributions of assets to the Trust Fund other than in connection with any Eligible Substitute Mortgage Loan delivered in accordance with Section 2.03 unless it shall have received an Opinion of Counsel (which shall be at the expense of the party requesting to make such contribution and not at the expense of the Trustee) to the effect that the inclusion of such assets in the Trust Fund will not cause the Trust Fund to fail to qualify as two REMICs at any time that any Certificates are outstanding or subject the Trust Fund to any tax under the REMIC Provisions or other applicable provisions of federal, state and local law or ordinances.

(k)        Neither the Trustee nor the Master Servicer shall enter into any arrangement by which the Trust Fund will receive a fee or other compensation for services nor knowingly permit the Trust Fund to receive any income from assets other than “qualified mortgages” as defined in Section 860G(a)(3) of the Code or “permitted investments” as defined in Section 860G(a)(5) of the Code.

	
            Section 9.02
 	
            Prohibited Transactions and Activities.
 

None of the Depositor, the Master Servicer or the Trustee shall sell, dispose of or substitute for any of the Mortgage Loans (except in connection with (i) the foreclosure of a Mortgage Loan, including but not limited to, the acquisition or sale of a Mortgaged Property acquired by deed in lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of the Trust Fund pursuant to Article X of this Agreement, (iv) a substitution pursuant to Article 

 

II of this Agreement or (v) a purchase of Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any assets for the Trust Fund (other than REO Property acquired in respect of a defaulted Mortgage Loan), nor sell or dispose of any investments in the Custodial Account or the Distribution Account for gain, nor accept any contributions to the Trust Fund after the Closing Date (other than an Eligible Substitute Mortgage Loan delivered in accordance with Section 2.03), unless it has received an Opinion of Counsel, addressed to the Trustee (at the expense of the party seeking to cause such sale, disposition, substitution, acquisition or contribution but in no event at the expense of the Trustee) that such sale, disposition, substitution, acquisition or contribution will not (a) affect adversely the status of the Trust Fund as two REMICs or (b) cause the Trust Fund to be subject to a tax on
“prohibited transactions” or “contributions” pursuant to the REMIC Provisions.

	
            Section 9.03
 	
            Master Servicer and Trustee Indemnification.
 

(a)        The Trustee agrees to indemnify the Trust Fund, the Depositor, and the Master Servicer for any taxes and costs including, without limitation, any reasonable attorneys fees imposed on or incurred by the Trust Fund, the Depositor or the Master Servicer, as a result of a breach of the Trustee’s covenants set forth in this Article IX, subject, however, to the provision of Sections 8.01 and 8.02 of this Agreement.

(b)        The Master Servicer agrees to indemnify the Trust Fund, the Depositor and the Trustee for any taxes and costs including, without limitation, any reasonable attorneys’ fees imposed on or incurred by the Trust Fund, the Depositor or the Trustee, as a result of a breach of the Master Servicer’s covenants set forth in Article III or this Article IX.

 

 

 

ARTICLE X

 

TERMINATION

	
            Section 10.01
 	
            Termination.
 

(a)        The respective obligations and responsibilities of the Master Servicer, the Depositor and the Trustee created hereby (other than the obligation of the Trustee to make certain payments to Certificateholders after the final Distribution Date and the obligation of the Master Servicer to send certain notices as hereinafter set forth) shall terminate upon notice to the Trustee upon the earliest of (i) the Distribution Date on which the Certificate Principal Balance of each Class of Certificates has been reduced to zero, (ii) the final payment or other liquidation of the last Mortgage Loan in the Trust, and (iii) the optional purchase by the Master Servicer of the Mortgage Loans as described below. Notwithstanding the foregoing, in no event shall the trust created hereby continue beyond the expiration of 21 years from the death of the last
survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court of St. James’s, living on the date hereof.

The Master Servicer may, at its option, terminate this Agreement on any date on which the Loan Balance is less than 10% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date or by purchasing, on the next succeeding Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a price equal to the sum of the outstanding Stated Principal Balance of the Mortgage Loans (or the fair market value of the related underlying Mortgaged Property with respect to any REO Properties, if such fair market value is less than such outstanding Stated Principal Balance) and accrued and unpaid interest thereon at the weighted average of the Loan Rates through the end of the Due Period preceding the final Distribution Date plus unreimbursed Servicing Advances, Advances and any unpaid Servicing Fees allocable to such Mortgage Loans and REO Properties (the
“Termination Price”). The Termination Price paid by the Master Servicer shall also include any amounts owed by PHH Mortgage pursuant to the last paragraph of Section 3.2(a) of the Mortgage Loan Purchase Agreement in respect of any liability, penalty or expense that resulted from a breach of the representation and warranty set forth in clause (xlvi) of such Section, that remain unpaid on the date of such purchase.

In connection with any such purchase pursuant to the preceding paragraph, the Master Servicer shall deposit in the Distribution Account all amounts then on deposit in the Collection Account (less amounts permitted to be withdrawn by the Master Servicer pursuant to Section 3.10), which deposit shall be deemed to have occurred immediately preceding such purchase.

Any such purchase shall be accomplished by deposit into the Distribution Account on the Determination Date before such Distribution Date of the Termination Price and the delivery of an opinion of counsel that such termination is a “qualified liquidation” under Section 860F of the Code.

(b)        Notice of any termination, specifying the Distribution Date (which shall be a date that would otherwise be a Distribution Date) upon which the Certificateholders may surrender their Certificates to the Trustee for payment of the final distribution and cancellation, shall be given promptly by the Trustee upon the Trustee receiving notice of such date from the Master 

 

Servicer, by letter to the Certificateholders mailed not earlier than the 15th day and not later than the 25th day of the month next preceding the month of such final distribution specifying (1) the Distribution Date upon which final distribution of the Certificates will be made upon presentation and surrender of such Certificates at the office or agency of the Trustee therein designated, (2) the amount of any such final distribution and (3) 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 or agency of the Trustee therein specified.

(c)        Upon presentation and surrender of the Certificates, the Trustee shall cause to be distributed to the Holder of the Certificates on the Distribution Date for such final distribution, in proportion to the Percentage Interests of their respective Class and to the extent that funds are available for such purpose, an amount equal to the amount required to be distributed to such Holders in accordance with the provisions of Section 4.01 for such Distribution Date.

(d)        In the event that all Certificateholders shall not surrender their Certificates for final payment and cancellation on or before such final Distribution Date, the Trustee shall promptly following such date cause all funds in the Distribution Account not distributed in final distribution to Certificateholders to be withdrawn therefrom and credited to the remaining Certificateholders by depositing such funds in a separate servicing account for the benefit of such Certificateholders, and the Master Servicer (if the Master Servicer has exercised its right to purchase the Mortgage Loans) or the Trustee (in any other case) shall give a second written notice to the remaining Certificateholders, to surrender their Certificates for cancellation and receive the final distribution with respect thereto. If within nine months after the second notice
all the Certificates shall not have been surrendered for cancellation, the Class R Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject hereto, and the Trustee upon transfer of such funds shall be discharged of any responsibility for such funds, and the Certificateholders shall look to the Class R Certificateholders for payment.

	
            Section 10.02
 	
            Additional Termination Requirements.
 

(a)        In the event that the Master Servicer exercises its purchase option as provided in Section 10.01, the Trust Fund shall be terminated in accordance with the following additional requirements, unless the Trustee shall have been furnished with an Opinion of Counsel to the effect that the failure of the Trust to comply with the requirements of this Section will not (i) result in the imposition of taxes on “prohibited transactions” of the Trust as defined in Section 860F of the Code or (ii) cause the Trust Fund constituting part of the Trust Fund to fail to qualify as two REMICs at any time that any Certificates are outstanding:

(i)         Within 90 days prior to the final Distribution Date, the Trustee shall adopt and sign a plan of complete liquidation of the Trust Fund meeting the requirements of a “qualified liquidation” under Section 860F of the Code and any regulations thereunder;

(ii)         At or after the time of adoption of such a plan of complete liquidation and at or prior to the final Distribution Date, the Trustee shall sell all of the assets of the Trust to the Master Servicer for cash pursuant to the terms of the plan of complete liquidation; and

 

 

(iii)        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 (A) to the Holders of each of the Class A Certificates and Class B Certificates, an amount equal to the sum of the related Certificate Principal Balance and one month’s interest thereon at the applicable Pass-Through Rate, and (B) to the Class R Certificateholders, all cash on hand after such payment to the Class A Certificateholders and Class B Certificateholders (other than cash retained to meet claims) and the Trust shall terminate at such time.

(b)        By their acceptance of Certificates, the Holder thereof hereby agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan of complete liquidation (and the Certificateholders hereby appoint the Trustee as their attorney in fact to sign such plan) as appropriate and (ii) to take such other action in connection therewith as may be reasonably required to carry out such plan of complete liquidation all in accordance with the terms hereof.

 

 

 

ARTICLE XI

 

[RESERVED]

 

 

 

ARTICLE XII

 

MISCELLANEOUS PROVISIONS

	
            Section 12.01
 	
            Amendment.
 

This Agreement may be amended from time to time by the Depositor, the Master Servicer and the Trustee; and without the consent of the Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be defective or inconsistent with any other provisions herein or (iii) to make any other provisions with respect to matters or questions arising under this Agreement, which shall not be inconsistent with the provisions of this Agreement; provided, however, that any such action listed in clause (i) through (iii) above shall not adversely affect in any respect the interests of any Certificateholder, as evidenced by (i) notice in writing to the Depositor, the Master Servicer and the Trustee from the Rating Agency that such action will not result in the reduction or withdrawal of the rating of any outstanding Class of Certificates with respect to which
it is a Rating Agency, or (ii) an Opinion of Counsel delivered to the Master Servicer and the Trustee.

In addition, this Agreement may be amended from time to time by the Depositor, the Master Servicer and the Trustee, with the consent of the Majority Certificateholders for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Holders of Certificates; provided, however, that no such amendment or waiver shall (x) reduce in any manner the amount of, or delay the timing of, payments on the Certificates which are required to be made on any Certificate without the consent of the Holder of such Certificate, (y) adversely affect in any material respect the interests of the Holders of any Class of Certificates in a manner other than as described in clause (x) above, without the consent of the Holders of Certificates of such Class evidencing at least a 66% Percentage Interest in such
Class, or (z) reduce the percentage of Voting Rights required by clause (y) above without the consent of the Holders of all Certificates of such Class then outstanding. Upon approval of an amendment, a copy of such amendment shall be sent to the Rating Agency. Prior to the execution of any amendment to this Agreement, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel (at the expense of the Person seeking such amendment) stating that the execution of such amendment is authorized or permitted by this Agreement. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee’s own rights, duties or immunities under this Agreement.

Notwithstanding any provision of this Agreement to the contrary, the Trustee shall not consent to any amendment to this Agreement unless it shall have first received an Opinion of Counsel, delivered by (and at the expense of) the Person seeking such Amendment, to the effect that such amendment will not result in the imposition of a federal tax on the Trust Fund pursuant to the REMIC Provisions or cause the Trust Fund constituting part of the Trust to fail to qualify as two REMICs at any time that any Certificates are outstanding and that the amendment is being made in accordance with the terms hereof.

Promptly after the execution of any such amendment the Trustee shall furnish, at the expense of the Person that requested the amendment if such Person is the Master Servicer (but in no event at the expense of the Trustee), otherwise at the expense of the Trust, a copy of such 

 

amendment and the Opinion of Counsel referred to in the immediately preceding paragraph to the Master Servicer and the Rating Agency.

It shall not be necessary for the consent of Certificateholders under this Section 11.01 to approve the particular form of any proposed amendment; instead 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.

The Trustee may, but shall not be obligated to, enter into any amendment pursuant to this 11.01 Section that affects its rights, duties and immunities under this Agreement or otherwise.

	
            Section 12.02
 	
            Recordation of Agreement: Counterparts.
 

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

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

	
            Section 12.03
 	
            Limitation on Rights of Certificateholders.
 

The death or incapacity of any Certificateholder shall not (i) operate to terminate this Agreement or the Trust, (ii) entitle such Certificateholder’s legal representatives or hens to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust, or (iii) otherwise affect the rights, obligations and liabilities of the parties hereto or any of them.

Except as expressly provided for herein, no Certificateholder shall have any right to vote or in any manner otherwise control the operation and management of the Trust, 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 person by reason of any action taken by the parties to this Agreement pursuant to any provision hereof.

No Certificateholder shall have any right by virtue of any provision of this Agreement to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Agreement, unless such Holder previously shall have given to the Trustee a written notice of default and of the continuance thereof, as hereinbefore provided, and unless also the Holders of Certificates entitled to at least 25% of the Voting Rights shall have made written request upon 

 

the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder and shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby, and the Trustee for 15 days after its receipt of such notice, request and offer of indemnity, shall have neglected or refused to institute any such action, suit or proceeding. It is understood and intended, and expressly covenanted by each Certificateholder with every other Certificateholder and the Trustee, that no one or more Holders of Certificates shall have any right in any manner whatever by virtue of any provision of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of such Certificates, or to obtain or seek to obtain priority over or preference to any other such Holder, which priority or preference is not
otherwise provided for herein, or to enforce any right under this Agreement, except in the manner herein provided and for the equal, ratable and common benefit of all Certificateholders. For the protection and enforcement of the provisions of this Section 11.03 each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

	
            Section 12.04
 	
            Governing Law: Jurisdiction.
 

This Agreement shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. With respect to any claim arising out of this Agreement, each party irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in The City of New York, and each party irrevocably waives any objection which it may have at any time to the laying of venue of any suit, action or proceeding arising out of or relating hereto brought in any such courts, irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in any inconvenient forum and further irrevocably waives the light to object, with respect to such claim, suit, action or
proceeding brought in any such court, that such court does not have jurisdiction over such party, provided that service of process has been made by any lawful means.

	
            Section 12.05
 	
            Notices.
 

All directions, demands and notices hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by first class mail, postage prepaid, or by express delivery service, to (a) in the case of the Sellers: (i) PHH Mortgage Corporation, 3000 Leadenhall Road, Mt. Laurel, New Jersey 08054 or (ii) Bishop’s Gate Residential Mortgage Trust, c/o PHH Mortgage Corporation, 3000 Leadenhall Road, Mt. Laurel, New Jersey 08054, or such other address or telecopy number as may be furnished to the Master Servicer and the Trustee in writing by either Seller; (b) in the case of the Trustee: Citibank, N.A., 388 Greenwich Street, 14th Floor, New York, New York 10013, Attention: PHHMC Series 2005-3, or such other address as may hereafter be furnished to the Depositor, the Sellers and the Master Servicer in
writing by the Trustee; (c) in the case of the Depositor: PHH Mortgage Capital LLC, 3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, New Jersey 08054, Attention: General Counsel, or such other address or telecopy number as may be furnished to the Sellers, the Master Servicer and the Trustee in writing by the Depositor; (d) in the case of the Master Servicer: PHH Mortgage Corporation, 3000 Leadenhall Road, Mail Stop LGL, Mt. Laurel, New Jersey 08054, or such other address as maybe furnished to the Sellers, the Depositor and the Trustee in writing by the Master Servicer; and (e) in the case of Fitch, Fitch Ratings, One State Street Plaza, New 

 

York, New York 10004. Any notice required or permitted to be mailed to a Certificateholder shall be given by first class mail, postage prepaid, at the address of such Holder as shown in the Certificate Register. Notice of any Master Servicer Default shall be given by telecopy and by certified mail. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have duly been given when mailed, whether or not the Certificateholder receives such notice. A copy of any notice required to be telecopied hereunder shall also be mailed to the appropriate party in the manner set forth above.

	
            Section 12.06
 	
            Severability of Provisions.
 

If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be 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 12.07
 	
            Article and Section References.
 

All article and section references used in this Agreement, unless otherwise provided, are to articles and sections in this Agreement.

	
            Section 12.08
 	
            Notice to the Rating Agency.
 

(a)        Each of the Trustee and the Master Servicer shall be obligated to use its best reasonable efforts promptly to provide notice to the Rating Agency with respect to each of the following of which a Responsible Officer of the Trustee or Master Servicer, as the case may be, has actual knowledge:

	
            (i)
 	
            any material change or amendment to this Agreement;
 

(ii)         the occurrence of any Master Servicer Event of Termination that has not been cured or waived;

	
            (iii)
 	
            the resignation or termination of the Master Servicer or the Trustee;
 
	
            (iv)
 	
            the final payment to Holders of the Certificates of any Class;
 	
             

	
            (v)
 	
            any change in the location of any Account; and
 	
             

				

(vi)        if the Trustee is acting as successor master servicer pursuant to Section 7.02 hereof, any event that would result in the inability of the Trustee to make Advances.

(b)        In addition, (i) the Trustee shall promptly furnish to the Rating Agency copies of each Statement to Certificateholders described in Section 4.06 hereof; and

(i)         the Master Servicer shall promptly furnish to the Rating Agency copies of the following:

 

 

(A)       each annual statement as to compliance described in Section 3.19 hereof;

(B)        each annual independent public accountants’ servicing report described in Section 3.20 hereof; and

(C)       each notice delivered pursuant to Section 7.01 (a) hereof which relates to the fact that the Master Servicer has not made an Advance.

Any such notice pursuant to this Section 11.08 shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by first class mail, postage prepaid, or by express delivery service to Fitch Ratings, One State Street Plaza, New York, New York 10004.

	
            Section 12.09
 	
            Further Assurances.
 

Notwithstanding any other provision of this Agreement, neither the Regular Certificateholders nor the Trustee shall have any obligation to consent to any amendment or modification of this Agreement unless they have been provided reasonable security or indemnity against their out-of-pocket expenses (including reasonable attorneys’ fees) to be incurred in connection therewith.

	
            Section 12.10
 	
            Benefits of Agreement.
 

Nothing in this Agreement or in the Certificates, expressed or implied, shall give to any Person, other than the Certificateholders and the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Agreement.

	
            Section 12.11
 	
            Acts of Certificateholders.
 

(a)        Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by the Certificateholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Certificateholders in person or by agent duly appointed in writing; and such action shall become effective when such instrument or instruments are delivered to the Trustee and the Master Servicer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “act” of the Certificateholders 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 Agreement and conclusive in favor of the Trustee
and the Trust, if made in the manner provided in this Section 12.11.

(b)        The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Whenever such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority.

 

 

(c)        Any request, demand, authorization, direction, notice, consent, waiver or other action by any Certificateholder shall bind every future Holder of such Certificate and the Holder of every Certificate issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee or the Trust in reliance thereon, whether or not notation of such action is made upon such Certificate.

 

 

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

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            PHH MORTGAGE CAPITAL LLC, as Depositor
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Peter A. Thomas
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:  Peter A. Thomas
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:    Vice President
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            PHH MORTGAGE CORPORATION, as Master Servicer
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Peter A. Thomas
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:  Peter A. Thomas
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:    Vice President
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A., as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
/s/ Kristen Driscoll
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:  Kristen Driscoll
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:    Vice President
 

 

 

 

 

	
            STATE OF NEW JERSEY
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF BURLINGTON
 	
            )
 	
             
 

 

On the 26th day of May, 2005 before me, a notary public in and for said State, personally appeared Peter A. Thomas known to me to be a Vice President of PHH Mortgage Capital LLC, a Delaware limited liability company that executed the within instrument, and also known to me to be the person who executed it on behalf of said limited liability company, and acknowledged to me that such limited liability company executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

 

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 

 

	
            STATE OF NEW JERSEY
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF BURLINGTON
 	
            )
 	
             
 

 

On the 26th day of May, 2005 before me, a notary public in and for said State, personally appeared Peter A. Thomas known to me to be a Vice President of PHH Mortgage Corporation, a New Jersey corporation, that executed the within instrument, and also known to me to be the person who executed it on behalf of said limited liability company, and acknowledged to me that such limited liability company executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

 

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 

 

	
            STATE OF NEW YORK
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF NEW YORK
 	
            )
 	
             
 

 

On the 26th day of May, 2005 before me, a notary public in and for said State, personally appeared Kristen Driscoll known to me to be a Vice President of Citibank, N.A., a corporation that executed the within instrument, and also known to me to be the person who executed it on behalf of said limited liability company, and acknowledged to me that such limited liability company executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written.

 

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 

 

 

 

 

EXHIBIT A

FORM OF CLASS A CERTIFICATE

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “REGULAR INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT”, AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE 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.

 

 

 

	
            PHHMC Mortgage Pass-Through
 Certificates,  Series 2005-3, Class A-__

Pass-Through Rate:
 Variable
 	
            Aggregate Certificate Principal
 Balance of Class A-__ Certificates as of the Issue Date: $______________
 
	
             

Date of Agreement and Cut-off Date:

May 1, 2005 
 	
            Denomination:
 $______________
 
	
             
 	
            Master Servicer:
 PHH Mortgage Corporation
 
	
            First Distribution Date: June 18, 2005
 	
            Trustee: Citibank, N.A.
 
	
             
 	
            Issue Date: May 26, 2005
 
	
            No. _
 	
            CUSIP: ___________
 

 

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting primarily of a pool of conventional, one- to four-family, fixed-rate, first lien mortgage loans (the “Mortgage Loans”) formed and sold by

PHH MORTGAGE CAPITAL LLC

PHHMC MORTGAGE PASS-THROUGH CERTIFICATES,  SERIES 2005-3

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN PHH MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.  NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

This certifies that __________ is the registered owner of a Percentage Interest (obtained by dividing the denomination of this Certificate by the aggregate Certificate Principal Balance of the Class A-_ Certificates as of the Issue Date) in that certain beneficial ownership interest evidenced by all the Class A-_ Certificates in the Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as specified above (the “Agreement”), among PHH 

 

Mortgage Capital LLC (hereinafter called the “Depositor,” which term includes any successor entity under the Agreement), the Master Servicer and the Trustee, a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, distributions will be made on the 18th day of each month or, if such 18th day is not a Business Day, the Business Day immediately following (a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered on the Record Date, in 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 Class A-_ Certificates on such Distribution Date pursuant to the Agreement.

All distributions to the Holder of this Certificate under the Agreement will be made or caused to be made by or on behalf of the Trustee by wire transfer in immediately available funds to the account of the Person entitled thereto if such Person shall have so notified the Trustee in writing at least five Business Days prior to the Record Date immediately prior to such Distribution Date and is the registered owner of Class A-_ Certificates, the aggregate initial Certificate Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal Balance of the Class A-_ Certificates, or otherwise by check mailed by first class mail to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register. Notwithstanding the above, the final distribution on this Certificate will be made
after due notice by the Trustee of the pendency of such distribution and only upon the presentation and surrender of this Certificate at the office or agency appointed by the Trustee for that purpose as provided in the Agreement.

This Certificate is one of a duly authorized issue of Certificates designated as Mortgage Pass-Through Certificates of the Series specified on the face hereof (hereinafter called the “Certificates”) and representing a Percentage Interest in the Class of Certificates specified on the face hereof equal to the denomination specified on the face hereof divided by the aggregate Certificate Principal Balance of the Class of Certificates specified on the face hereof.

The Certificates are limited in right of payment to certain collections and recoveries respecting the related Mortgage Loans, all as more specifically set forth herein and in the Agreement. As provided in the Agreement, withdrawals from the Collection Account and the Distribution Account may be made from time to time for purposes other than distributions to Holders of the Certificates, such purposes including reimbursement of advances made, or certain expenses incurred, with respect to the Mortgage Loans.

The Agreement permits, with certain exceptions and conditions provided therein, the amendment thereof and the modification of the rights and obligations of the Depositor, the Master Servicer and the Trustee and the rights of the Holders of the Certificates under the Agreement at any time by the Depositor, the Master Servicer and the Trustee, with the consent of the Holders of Certificates entitled to at least 66%, in some cases 100%, of the Voting Rights. 

 

Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon 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 set forth therein, the transfer of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies appointed by the Trustee as provided in the Agreement, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable in fully registered form only without coupons in Classes and denominations representing Percentage Interests specified in the Agreement. As provided in the Agreement and subject to certain limitations set forth therein, Certificates are exchangeable for new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No service charge will be made for any such registration of transfer or exchange of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

The Depositor, the Master Servicer, the Trustee and the Certificate Registrar and any agent of the Depositor, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby shall terminate upon payment (or provision for payment) to the Holders of the Certificates of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the Distribution Date on which the Certificate Principal Balance of each Class of Certificates has been reduced to zero, (ii) the final payment (or any advance with respect thereto) on or other liquidation of the last Mortgage Loan remaining in the Trust Fund and (iii) the optional purchase by the party designated in the Agreement at a price determined as provided in the Agreement from the Trust Fund of all the Mortgage Loans and all property acquired in respect of such Mortgage Loans remaining therein. The Agreement permits, but does not require, the party designated in the Agreement to
purchase from the Trust Fund all the related Mortgage Loans and all property acquired in respect of any related Mortgage Loan remaining therein at a price determined as provided in the Agreement. The exercise of such right will effect early retirement of the Certificates; however, such right to purchase is subject to the 

 

aggregate Loan Balance of the related Mortgage Loans at the time of purchase being less than 10% of the aggregate principal balance of the related Mortgage Loans as of the Cut-off Date.

The recitals contained herein shall be taken as statements of the Depositor and the Trustee assumes no responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the Certificate Registrar, 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 Trustee has caused this Certificate to be duly executed.

Dated: May 26, 2005 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A.
 as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Officer
 

 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class A-_ Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A.
 as Certificate Registrar
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
            TEN COM -
 	
             
 	
            as tenants in common
 	
             
 	
            UNIF GIFT MIN ACT -
 	
             
 	
            CUSTODIAN
 
	
            TEN ENT -
 	
             
 	
            as tenants by the entireties
 	
             
 	
             
 	
             
 	
            (Cust)   (Minor)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            under Uniform Gifts to
 Minors Act
 
	
            JT TEN -
 	
             
 	
            as joint tenants with right of survivorship and not as tenants in common
 	
             
 	
             
 	
             
 	
            ______________
 (State)
 

 

Additional abbreviations may also be used though not in the above list.

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto 

 

 

(Please print or typewrite name, address including postal zip code, and Taxpayer

Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through Certificate and hereby authorize(s) the registration of transfer 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 Percentage Interest 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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

EXHIBIT B

(RESERVED)

 

 

EXHIBIT C-1

FORM OF CLASS R CERTIFICATE

THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A “RESIDUAL INTEREST” IN A “REAL ESTATE MORTGAGE INVESTMENT CONDUIT” (“REMIC”), AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”).

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (EACH A “PLAN”) SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR THE CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(E) OF THE AGREEMENT.

ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE  PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE THAT (A) SUCH  TRANSFEREE IS NOT (1) THE UNITED STATES OR ANY POSSESSION  THEREOF, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) THAT 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, (3) ANY ORGANIZATION  DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (1), (2) OR (3) SHALL HEREINAFTER BE REFERRED TO AS A “DISQUALIFIED ORGANIZATION”) OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF
SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE.  NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE REGISTER OF 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 HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(F) OF THE AGREEMENT REFERRED TO HEREIN.  ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF THIS CERTIFICATE.

 

 

 

	
            Certificate No. ___
 	
             
 
	
            PHHMC Mortgage Pass-Through Certificates,  Series 2005-3, Class R-_
 	
            Percentage Interest: [___]%
 
	
            Pass-Through Rate: Variable
 	
            Master Servicer:

PHH Mortgage Corporation
 
	
            Date of Agreement and Cut-off Date:

May 1, 2005 
 	
             

Trustee: Citibank, N.A.
 
	
            First Distribution Date: June 18, 2005
 	
            Issue Date: May 26, 2005
 
	
            No. _
 	
            CUSIP: ______________
 

 

MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting primarily of a pool of conventional, one- to four-family, fixed-rate, first lien mortgage loans (the “Mortgage Loans”) formed and sold by

PHH MORTGAGE CAPITAL LLC

PHHMC MORTGAGE PASS-THROUGH CERTIFICATES,  SERIES 2005-3

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN PHH MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.  NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

This certifies that ___________________ is the registered owner of a Percentage Interest (obtained by dividing the denomination of this Certificate by the aggregate Certificate Principal Balance of the Class R-_ Certificates as of the Issue Date) in that certain beneficial ownership interest evidenced by all the Class R-_ Certificates in The Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as specified above (the “Agreement”), among PHH Mortgage Capital LLC (hereinafter called the “Depositor,” which term includes any successor entity under the Agreement), the Master Servicer and the Trustee, a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

 

 

Pursuant to the terms of the Agreement, distributions will be made on the 18th day of each month or, if such 18th day is not a Business Day, the Business Day immediately following (a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered on the Record Date, in 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 Class R-_ Certificates on such Distribution Date pursuant to the Agreement.

This Certificate is one of a duly authorized issue of Certificates designated as Mortgage Pass-Through Certificates of the Series specified on the face hereof (hereinafter called the “Certificates”) and representing a Percentage Interest in the Class of Certificates specified on the face hereof equal to the denomination specified on the face hereof divided by the aggregate Certificate Principal Balance of the Class of Certificates specified on the face hereof.

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. As provided in the Agreement, withdrawals from the Collection Account and the Distribution Account may be made from time to time for purposes other than distributions to Holders of the Certificates, such purposes including reimbursement of advances made, or certain expenses incurred, with respect to the Mortgage Loans.

The Agreement permits, with certain exceptions and conditions provided therein, the amendment thereof and the modification of the rights and obligations of the Depositor, the Master Servicer and the Trustee and the rights of the Holders of the Certificates under the Agreement at any time by the Depositor, the Master Servicer and the Trustee, with the consent of the Holders of Certificates entitled to at least 66%, in some cases 100%, of the Voting Rights. Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon 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 set forth therein, the transfer of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies appointed by the Trustee as provided in the Agreement, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable in fully registered form only without coupons in Classes and denominations representing Percentage Interests specified in the Agreement. As provided in the Agreement and subject to certain limitations set forth therein, Certificates are 

 

exchangeable for new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made except in accordance with Section 5.02(e) of the Agreement.

Prior to registration of any transfer, sale or other disposition of this Certificate, the proposed transferee shall provide to the Trustee (i) an affidavit to the effect that such transferee is any Person other than a Disqualified Organization or the agent (including a broker, nominee or middleman) of a Disqualified Organization, and (ii) a certificate that acknowledges that (A) the Class R-_ Certificates have been designated as a residual interest in a REMIC, (B) it will include in its income a pro rata share of the net income of the Trust Fund and that such income may be an “excess inclusion,” as defined in the Code, that, with certain exceptions, cannot be offset by other losses or benefits from any tax exemption, and (C) it expects to have the financial means to satisfy all of its tax obligations including those relating to
holding the Class R-_ Certificates.  Notwithstanding the registration in the Certificate Register of any transfer, sale or other disposition of this Certificate to a Disqualified Organization or an agent (including a broker, nominee or middleman) 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, including, but not limited to, the receipt of distributions in respect of this Certificate.

The Holder of this Certificate, by its acceptance hereof, shall be deemed to have consented to the provisions of Section 5.02 of the Agreement and to any amendment of the Agreement deemed necessary by counsel of the Depositor to ensure that the transfer of this Certificate to any Person other than a Permitted Transferee or any other Person will not cause the Trust Fund to cease to qualify as a REMIC or cause the imposition of a tax upon the REMIC.

No service charge will be made for any such registration of transfer or exchange of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

The Depositor, the Master Servicer, the Trustee and the Certificate Registrar and any agent of the Depositor, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby shall terminate upon payment (or provision for payment) to the Holders of the Certificates of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the Distribution Date on which the Certificate Principal Balance of each Class of Certificates has been reduced to zero, (ii) the final payment (or any advance with respect thereto) on or other liquidation of the last Mortgage Loan remaining in The 

 

Trust Fund and (iii) the optional purchase by the party designated in the Agreement at a price determined as provided in the Agreement from The Trust Fund of all the Mortgage Loans and all property acquired in respect of such Mortgage Loans remaining therein. The Agreement permits, but does not require, the party designated in the Agreement to purchase from the Trust Fund all the related Mortgage Loans and all property acquired in respect of any related Mortgage Loan remaining therein at a price determined as provided in the Agreement. The exercise of such right will effect early retirement of the Certificates; however, such right to purchase is subject to the aggregate Loan Balance of the related Mortgage Loans at the time of purchase being less than 10% of the aggregate principal balance of the related Mortgage Loans as of the Cut-off Date.

The recitals contained herein shall be taken as statements of the Depositor and the Trustee assumes no responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the Certificate Registrar, 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 Trustee has caused this Certificate to be duly

executed.

Dated: May 26, 2005

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A.
 as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Officer
 

 

 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class R-_ Certificates referred to in the within-mentioned Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A.
 as Certificate Registrar
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
            TEN COM -
 	
             
 	
            as tenants in common
 	
             
 	
            UNIF GIFT MIN ACT -
 	
             
 	
            CUSTODIAN
 
	
            TEN ENT -
 	
             
 	
            as tenants by the entireties
 	
             
 	
             
 	
             
 	
            (Cust)   (Minor)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            under Uniform Gifts to
 Minors Act
 
	
            JT TEN -
 	
             
 	
            as joint tenants with right of survivorship and not as tenants in common
 	
             
 	
             
 	
             
 	
            ______________
 (State)
 

 

Additional abbreviations may also be used though not in the above list.

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto 

 

 

(Please print or typewrite name, address including postal zip code, and Taxpayer

Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through Certificate and hereby authorize(s) the registration of transfer 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 Percentage Interest 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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

EXHIBIT C-2

FORM OF CLASS B 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”).

[[FOR CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES ONLY:] UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE 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.]

THIS CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES, THE RESIDUAL CERTIFICATES, [THE CLASS B-1 CERTIFICATES], [THE CLASS B-2 CERTIFICATES], [THE CLASS B-3 CERTIFICATES], [THE CLASS B-4 CERTIFICATES] [AND THE CLASS B-5 CERTIFICATES] TO THE EXTENT DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT (EACH A “PLAN”) SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR THE CODE WILL BE REGISTERED EXCEPT IN ACCORDANCE WITH SECTION 5.02(E) OF THE AGREEMENT.

[[FOR CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES ONLY:] NOTWITHSTANDING THE PREVIOUS PARAGRAPH, A CERTIFICATION WILL NOT BE REQUIRED WITH RESPECT TO THE TRANSFER OF THIS CERTIFICATE TO A DEPOSITORY, OR FOR ANY SUBSEQUENT TRANSFER OF THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE.  ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST HEREIN) THAT SUCH TRANSFEREE IS EITHER (I) NOT A PLAN INVESTOR OR (II) AN “ACCREDITED INVESTOR” WITHIN THE 

 

MEANING OF RULE 501(A) PROMULGATED PURSUANT TO THE 1933 ACT.]

THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS THAT ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02(D) OF THE AGREEMENT.

[[FOR CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES ONLY:] NOTWITHSTANDING THE PREVIOUS PARAGRAPH, A CERTIFICATION WILL NOT BE REQUIRED WITH RESPECT TO THE TRANSFER OF THIS CERTIFICATE TO A DEPOSITORY, OR FOR ANY SUBSEQUENT TRANSFER OF THIS CERTIFICATE FOR SO LONG AS THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE.  ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST HEREIN) THAT SUCH TRANSFEREE IS A “QUALIFIED INSTITUTIONAL BUYER” WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT.]

 

 

 

 

	
             
 	
             
 
	
            PHHMC Mortgage Pass-Through Certificates,  Series 2005-3, Class B-__
 	
            Aggregate Certificate Principal

Balance of Class B-__

Certificates as of the Issue Date: $__________
 
	
            Pass-Through Rate: Variable
 	
            Denomination: $__________

 
 
	
            Date of Agreement and Cut-off Date:

May 1, 2005 
 	
            Master Servicer:

PHH Mortgage Corporation
 
	
            First Distribution Date: June 18, 2005
 	
             
 
	
             
 	
            Trustee: Citibank, N.A.
 
	
            No. 1
 	
            Issue Date: May 26, 2005
 
	
             
 	
            CUSIP: ____________
 

 

DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN.  ACCORDINGLY, THE OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.

MORTGAGE PASS-THROUGH CERTIFICATE

evidencing a beneficial ownership interest in a Trust Fund (the “Trust Fund”) consisting primarily of a pool of conventional, one- to four-family, fixed-rate, first lien mortgage loans (the “Mortgage Loans”) formed and sold by

PHH MORTGAGE CAPITAL LLC

PHHMC MORTGAGE PASS-THROUGH CERTIFICATES,  SERIES 2005-3

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN PHH MORTGAGE CAPITAL LLC, THE MASTER SERVICER, THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES.  NEITHER THIS CERTIFICATE NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED STATES.

This certifies that _______________ is the registered owner of a Percentage Interest (obtained by dividing the denomination of this Certificate by the aggregate Certificate Principal Balance of the Class B-__ Certificates as of the Issue Date) in that certain beneficial ownership interest evidenced by all the Class B-__ Certificates in the Trust Fund created 

 

pursuant to a Pooling and Servicing Agreement, dated as specified above (the “Agreement”), among PHH Mortgage Capital LLC (hereinafter called the “Depositor,” which term includes any successor entity under the Agreement), the Master Servicer and the Trustee, a summary of certain of the pertinent provisions of which is set forth hereafter. To the extent not defined herein, the capitalized terms used herein have the meanings assigned in the Agreement. This Certificate is issued under and is subject to the terms, provisions and conditions of the Agreement, to which Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which such Holder is bound.

Pursuant to the terms of the Agreement, distributions will be made on the 18th day of each month or, if such 18th day is not a Business Day, the Business Day immediately following (a “Distribution Date”), commencing on the First Distribution Date specified above, to the Person in whose name this Certificate is registered on the Record Date, in 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 Class B-__ Certificates on such Distribution Date pursuant to the Agreement.

All distributions to the Holder of this Certificate under the Agreement will be made or caused to be made by or on behalf of the Trustee by wire transfer in immediately available funds to the account of the Person entitled thereto if such Person shall have so notified the Trustee in writing at least five Business Days prior to the Record Date immediately prior to such Distribution Date and is the registered owner of Class B-__ Certificates, the aggregate initial Certificate Principal Balance of which is in excess of the lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate Principal Balance of the Class B-__ Certificates, or otherwise by check mailed by first class mail to the address of the Person entitled thereto, as such name and address shall appear on the Certificate Register. Notwithstanding the above, the final distribution on this Certificate will be made
after due notice by the Trustee of the pendency of such distribution and only upon the presentation and surrender of this Certificate at the office or agency appointed by the Trustee for that purpose as provided in the Agreement.

This Certificate is one of a duly authorized issue of Certificates designated as Mortgage Pass-Through Certificates of the Series specified on the face hereof (hereinafter called the “Certificates”) and representing a Percentage Interest in the Class of Certificates specified on the face hereof equal to the denomination specified on the face hereof divided by the aggregate Certificate Principal Balance of the Class of Certificates specified on the face hereof.

The Certificates are limited in right of payment to certain collections and recoveries respecting the Mortgage Loans, all as more specifically set forth herein and in the Agreement. As provided in the Agreement, withdrawals from the Collection Account and the Distribution Account may be made from time to time for purposes other than distributions to Holders of the Certificates, such purposes including reimbursement of advances made, or certain expenses incurred, with respect to the Mortgage Loans.

The Agreement permits, with certain exceptions and conditions provided therein, the amendment thereof and the modification of the rights and obligations of the Depositor, the Master Servicer and the Trustee and the rights of the Holders of the Certificates under the 

 

Agreement at any time by the Depositor, the Master Servicer and the Trustee, with the consent of the Holders of Certificates entitled to at least 66%, in some cases 100%, of the Voting Rights. Any such consent by the Holder of this Certificate shall be conclusive and binding on such Holder and upon all future Holders of this Certificate and of any Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent is made upon 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 set forth therein, the transfer of this Certificate is registrable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies appointed by the Trustee as provided in the Agreement, duly endorsed by, or accompanied by an assignment in the form below or other written instrument of transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest will be issued to the designated transferee or transferees.

The Certificates are issuable in fully registered form only without coupons in Classes and denominations representing Percentage Interests specified in the Agreement. As provided in the Agreement and subject to certain limitations set forth therein, Certificates are exchangeable for new Certificates of the same Class in authorized denominations evidencing the same aggregate Percentage Interest, as requested by the Holder surrendering the same.

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, (i) if such transfer is made in reliance upon Rule 144A under the 1933 Act, the Trustee shall require the transferor to execute a transferor certificate in substantially the same form attached to the Agreement as Exhibit F-2 and the transferee to execute an investment letter in substantially the form attached to the Agreement as Exhibit F-1 or (ii) (A) the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Agreement as Exhibit F-2) and the transferee to execute an investment letter (in substantially the form attached to the Agreement as Exhibit F-3) acceptable to and in form and substance reasonably satisfactory to the Depositor and the Trustee certifying to the Depositor and the Trustee the facts surrounding such transfer, which investment letter shall not be an expense of the Trustee or the Depositor and (B) the Trustee and the Depositor shall require a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Trustee and the Depositor that such transfer may be made pursuant to an exemption, describing the applicable exemption and the basis therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel shall not be an expense of the Trustee or the Depositor. None of the Depositor, the Certificate Registrar or 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 Depositor, the Certificate Registrar and the Master Servicer against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws.

No transfer of this Certificate to a Plan subject to ERISA or Section 4975 of the Code, any Person acting, directly or indirectly, on behalf of any such Plan or any person using Plan Assets to acquire this Certificate shall be made except in accordance with Section 5.02(e) of the Agreement.

[[For Class B-1, Class B-2 and Class B-3 Certificates Only:] Notwithstanding the foregoing, the certifications described in the previous two paragraphs will not be required with respect to the transfer of this Certificate to a Depository, or for any subsequent transfer of this Certificate for so long as this Certificate is a Book-Entry Certificate.  Any Transferee of this Certificate will be deemed to have represented by virtue of its purchase or holding of this Certificate (or interest herein) that (i) either (a) such Transferee is not a Plan Investor or (b) such Transferee is an “accredited investor” within the meaning of Rule 501(a) promulgated pursuant to the 1933 Act and (ii) such Transferee is a “qualified institutional buyer” within the meaning of Rule 144A under the 1933 Act.]

No service charge will be made for any such registration of transfer or exchange of Certificates, but the Certificate Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any transfer or exchange of Certificates.

The Depositor, the Master Servicer, the Trustee and the Certificate Registrar and any agent of the Depositor, the Master Servicer, the Trustee or the Certificate Registrar may treat the Person in whose name this Certificate is registered as the owner hereof for all purposes, and none of the Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any such agent shall be affected by notice to the contrary.

The obligations created by the Agreement and the Trust Fund created thereby shall terminate upon payment (or provision for payment) to the Holders of the Certificates of all amounts held by or on behalf of the Trustee and required to be paid to them pursuant to the Agreement following the earlier of (i) the Distribution Date on which the Certificate Principal Balance of each Class of Certificates has been reduced to zero, (ii) the final payment (or any advance with respect thereto) on or other liquidation of the last Mortgage Loan remaining in The Trust Fund and (iii) the optional purchase by the party designated in the Agreement at a price determined as provided in the Agreement from The Trust Fund of all the Mortgage Loans and all property acquired in respect of such Mortgage Loans remaining therein. The Agreement permits, but does not require, the party designated in the Agreement to
purchase from the Trust Fund all the related Mortgage Loans and all property acquired in respect of any related Mortgage Loan remaining therein at a price determined as provided in the Agreement. The exercise of such right will effect early retirement of the Certificates; however, such right to purchase is subject to the aggregate Loan Balance of the related Mortgage Loans at the time of purchase being less than 10% of the aggregate principal balance of the related Mortgage Loans as of the Cut-off Date.

 

 

The recitals contained herein shall be taken as statements of the Depositor and the Trustee assumes no responsibility for their correctness.

Unless the certificate of authentication hereon has been executed by the Certificate Registrar, 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 Trustee has caused this Certificate to be duly executed.

Dated: May 26, 2005

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A.
 as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Officer
 

 

CERTIFICATE OF AUTHENTICATION

This is one of the Class B-__ Certificates referred to in the within-mentioned Agreement.

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A.
 as Certificate Registrar
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Authorized Signatory
 

 

 

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

	
            TEN COM -
 	
             
 	
            as tenants in common
 	
             
 	
            UNIF GIFT MIN ACT -
 	
             
 	
            CUSTODIAN
 
	
            TEN ENT -
 	
             
 	
            as tenants by the entireties
 	
             
 	
             
 	
             
 	
            (Cust)   (Minor)
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            under Uniform Gifts to
 Minors Act
 
	
            JT TEN -
 	
             
 	
            as joint tenants with right of survivorship and not as tenants in common
 	
             
 	
             
 	
             
 	
            ______________
 (State)
 

 

Additional abbreviations may also be used though not in the above list.

 

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto 

 

 

(Please print or typewrite name, address including postal zip code, and Taxpayer

Identification Number of assignee)

the Percentage Interest evidenced by the within Mortgage Pass-Through Certificate and hereby authorize(s) the registration of transfer 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 Percentage Interest 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
 	
            
 
 
 	
            ,
 
	
            the assignee named above, or
 	
            
 
 
 	
            ,
 
	
            as its agent.
 	
             
 	
             
 
					

 

 

 

EXHIBIT D

MORTGAGE LOAN SCHEDULE

(Filed Manually)

 

 

EXHIBIT E

REQUEST FOR RELEASE OF DOCUMENTS

	
            To:
 	
            Citibank, N.A.
 	
             

	
            Attn:
 	
            Inventory Control
 

Re:  Pooling and Servicing Agreement dated as of May 1, 2005, among

PHH Mortgage Capital LLC, as Depositor, PHH Mortgage Corporation,

as Master Servicer and Citibank, N.A., as Trustee

In connection with the administration of the Mortgage Loans held by you as Trustee for the Owner pursuant to the above-captioned Pooling and Servicing Agreement, we request the release, and hereby acknowledge receipt, of the Trustee’s Mortgage File for the Mortgage Loan described below, for the reason indicated.

MORTGAGE LOAN NUMBER:

MORTGAGOR NAME, ADDRESS & ZIP CODE:

REASON FOR REQUESTING DOCUMENTS (check one):

	
            _____
 	
             
 	
            1.
 	
             
 	
            Mortgage Paid in Full
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            _____
 	
             
 	
            2.
 	
             
 	
            Foreclosure
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            _____
 	
             
 	
            3.
 	
             
 	
            Substitution
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            _____
 	
             
 	
            4.
 	
             
 	
            Other Liquidation (Repurchases, etc.)
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
            _____
 	
             
 	
            5.
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
            Nonliquidation       Reason: ________________________
 

 

	
            Address to which Trustee should
 Deliver the Trustee’s Mortgage File:
 	
             
 	
             
 	
            ____________________________
 	
             
 
	
             
 	
             
 	
             
 	
            ____________________________
 	
             
 
	
             
 	
             
 	
             
 	
            ____________________________
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
            By:
 	
             
 	
            ____________________________
 	
             
 
	
             
 	
             
 	
             
 	
            (authorized signer)
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
            Issuer:
 	
             
 	
            ____________________________
 	
             
 
	
             
 	
            Address:
 	
             
 	
            ____________________________
 	
             
 
	
             
 	
             
 	
             
 	
            ____________________________
 	
             
 
	
             
 	
            Date:
 	
             
 	
            ____________________________
 	
             
 

 

 

 

EXHIBIT F-1

FORM OF RULE 144A REPRESENTATION LETTER

______ __, 2005

Citibank, N.A.

111 Wall Street, 14th Floor / Zone 3

New York, New York 10005

[Certificate Registrar]

________________________

________________________

	
            Re:
 	
            PHH  Mortgage Capital LLC
 

PHHMC Mortgage Pass-Through Certificates, Series 2005-3,

Class ___, Representing a ___% Class ___ Percentage Interest

Ladies and Gentlemen:

In connection with the purchase from ______________________ (the “Transferor”) on the date hereof of the captioned trust certificates (the “Certificates”), _______________ (the “Transferee”) hereby certifies as follows:

1.          The Transferee is a “qualified institutional buyer” as that term is defined in Rule 144A (“Rule 144A”) under the Securities Act of 1933 (the “1933 Act”) and has completed either of the forms of certification to that effect attached hereto as Annex 1 or Annex 2. The Transferee is aware that the sale to it is being made in reliance on Rule 144A. The Transferee is acquiring the Certificates for its own account or for the account of a qualified institutional buyer, and understands that such Certificate may be resold, pledged or transferred only (i) to a person reasonably believed to be a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from registration under the 1933 Act.

2.          The Transferee has been furnished with all information regarding (a) the Certificates and distributions thereon, (b) the nature, performance and servicing of the Mortgage Loans, (c) the Pooling and Servicing Agreement referred to below, and (d) any credit enhancement mechanism associated with the Certificates, that it has requested.

 

 

All capitalized terms used but not otherwise defined herein have the respective meanings assigned thereto in the Pooling and Servicing Agreement, dated as of May 1, 2005, among PHH Mortgage Capital LLC as Depositor, PHH Mortgage Corporation as Master Servicer and Citibank, N.A. as Trustee, pursuant to which the Certificates were issued.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [TRANSFEREE]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

	
            ANNEX 1 TO EXHIBIT F-1
 

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees Other Than Registered Investment Companies]

The undersigned hereby certifies as follows to [name of Transferor] (the “Transferor”) and Citibank, N.A., as Trustee and Certificate Registrar, with respect to the mortgage pass-through certificates (the “Certificates”) described in the Transferee Certificate to which this certification relates and to which this certification is an Annex:

1.          As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the entity purchasing the Certificates (the “Transferee”).

2.          In connection with purchases by the Transferee, the Transferee is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”) because (i) the Transferee owned and/or invested on a discretionary basis $______________________1 in securities (except for the excluded securities referred to below) as of the end of the Transferee’s most recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Transferee satisfies the criteria in the category marked below.

	
            ___
 	
            Corporation, etc. The Transferee is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or any organization described in Section 501(c)(3) of the Internal Revenue Code of 1986.
 
	
            ___
 	
            Bank. The Transferee (a) is a national bank or banking institution organized under the laws of any State, territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.
 
	
            ___
 	
            Savings and Loan. The Transferee (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar
 

 

 

_________________________

1Transferee must own and/or invest on a discretionary basis at least $100,000,000 in securities unless Transferee is a dealer, and, in that case, Transferee must own and/or invest on a discretionary basis at least $10,000,000 in securities.

 

 

institution, which is supervised and examined by a State or Federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto.

	
            ___
 	
            Broker-Dealer. The Transferee is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.
 
	
            ___
 	
            Insurance Company. The Transferee is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a State, territory or the District of Columbia.
 
	
            ___
 	
            State or Local Plan. The Transferee is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees.
 
	
            ___
 	
            ERISA Plan. The Transferee is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974.
 
	
            ___
 	
            Investment Advisor. The Transferee is an investment advisor registered under the Investment Advisers Act of 1940.
 

3.          The term “Securities” as used herein Does Not Include (i) securities of issuers that are affiliated with the Transferee, (ii) securities that are part of an unsold allotment to or subscription by the Transferee, if the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank deposit notes and certificates of deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities owned but subject to a repurchase agreement and (viii) currency, interest rate and commodity swaps.

4.          For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Transferee, the Transferee used the cost of such securities to the Transferee and did not include any of the securities referred to in the preceding paragraph. Further, in determining such aggregate amount, the Transferee may have included securities owned by subsidiaries of the Transferee, but only if such subsidiaries are consolidated with the Transferee in its financial statements prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Transferee’s direction. However, such securities were not included if the Transferee is a majority-owned, consolidated subsidiary of another enterprise and the Transferee is not itself a reporting
company under the Securities Exchange Act of 1934.

5.          

 

 

The Transferee acknowledges that it is familiar with Rule 144A and understands that the Transferor and other parties related to the Certificates are relying and will continue to rely on the statements made herein because one or more sales to the Transferee may be in reliance on Rule 144A.

	
            ___
 	
            ___
 	
            Will the Transferee be purchasing the Certificates
 
	
            Yes
 	
            No
 	
            only for the Transferee’s own account?
 	
             

6.          If the answer to the foregoing question is “no”, the Transferee agrees that, in connection with any purchase of securities sold to the Transferee for the account of a third party (including any separate account) in reliance on Rule 144A, the Transferee will only purchase for the account of a third party that at the time is a “qualified institutional buyer” within the meaning of Rule 144A. In addition, the Transferee agrees that the Transferee will not purchase securities for a third party unless the Transferee has obtained a current representation letter from such third party or taken other appropriate steps contemplated by Rule 144A to conclude that such third party independently meets the definition of “qualified institutional buyer” set forth in Rule 144A.

7.          The Transferee will notify each of the parties to which this certification is made of any changes in the information and conclusions herein. Until such notice is given, the Transferee’s purchase of the Certificates will constitute a reaffirmation of this certification as of the date of such purchase. In addition, if the Transferee is a bank or savings and loan as provided above, the Transferee agrees that it will furnish to such parties updated annual financial statements promptly after they become available.

Dated:

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Transferee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

	
            ANNEX 2 TO EXHIBIT F-1
 

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees That Are Registered Investment Companies]

The undersigned hereby certifies as follows to [name of Transferor] (the “Transferor”) and Citibank, N.A., as Trustee and Certificate Registrar, with respect to the mortgage pass-through certificates (the “Certificates”) described in the Transferee Certificate to which this certification relates and to which this certification is an Annex:

1.          As indicated below, the undersigned is the President, Chief Financial Officer or Senior Vice President of the entity purchasing the Certificates (the “Transferee”) or, if the Transferee is a “qualified institutional buyer” as that term is defined in Rule 144A under the Securities Act of 1933 (“Rule 144A”) because the Transferee is part of a Family of Investment Companies (as defined below), is such an officer of the investment adviser (the “Adviser”).

2.          In connection with purchases by the Transferee, the Transferee is a “qualified institutional buyer” as defined in Rule 144A because (i) the Transferee is an investment company registered under the Investment Company Act of 1940, and (ii) as marked below, the Transferee alone, or the Transferee’s Family of Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Transferee’s most recent fiscal year. For purposes of determining the amount of securities owned by the Transferee or the Transferee’s Family of Investment Companies, the cost of such securities was used.

	
            ____ 
 	
                  The Transferee owned $___________________ in securities (other than the excluded securities referred to below) as of the end of the Transferee’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).
 
	
            ____
 	
                   The Transferee is part of a Family of Investment Companies which owned in the aggregate $______________ in securities (other than the excluded securities referred to below) as of the end of the Transferee’s most recent fiscal year (such amount being calculated in accordance with Rule 144A).
 
			

3.          The term “Family of Investment Companies” as used herein means two or more registered investment companies (or series thereof) that have the same investment adviser or investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other).

 

 

4.          The term “Securities” as used herein does not include (i) securities of issuers that are affiliated with the Transferee or are part of the Transferee’s Family of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps.

5.          The Transferee is familiar with Rule 144A and understands that the parties to which this certification is being made are relying and will continue to rely on the statements  made herein because one or more sales to the Transferee will be in reliance on Rule 144A. In addition, the Transferee will only purchase for the Transferee’s own account.

6.          The undersigned will notify the parties to which this certification is made of any changes in the information and conclusions herein. Until such notice, the Transferee’s purchase of the Certificates will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase.

Dated:

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Transferee or Advisor
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            IF AN ADVISER:
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Print Name of Transferee
 

 

 

 

The undersigned hereby certifies on behalf of the purchaser named below (the “Purchaser”) as follows:

	
            1.
 	
            I am an executive officer of the Purchaser.
 

2.          The Purchaser is a “qualified institutional buyer”, as defined in Rule 144A, (“Rule 144A”) under the Securities Act of 1933, as amended.

3.          As of the date specified below (which is not earlier than the last day of the Purchaser’s most recent fiscal year), the amount of “securities”, computed for purposes of Rule 144A, owned and invested on a discretionary basis by the Purchaser was in excess of $100,000,000.

Name of Purchaser  ___________________________________________________________

	
            By:
 	
            (Signature)____________________________________________________________
 

Name of Signatory ____________________________________________________________

Title _______________________________________________________________________

Date of this certificate _________________________________________________________

Date of information provided in paragraph 3 _______________________________________

 

 

 

 

EXHIBIT F-2

FORM OF TRANSFEROR CERTIFICATE

_____ __, 2005

Citibank, N.A.

111 Wall Street, 14th Floor / Zone 3

New York, New York 10005

[Certificate Registrar]

________________________

________________________

	
            Re:
 	
            PHH Mortgage Capital LLC,
 	
             

	
             
	
            PHHMC Mortgage Pass-Through Certificates, Series 2005-3,
 	
             

	
             
	
            Class ___, Representing a ___% Class ___ Percentage Interest
 
				

Ladies and Gentlemen:

In connection with the transfer by ________________ (the “Transferor”) to ________________ (the “Transferee”) of the captioned mortgage pass-through certificates (the “Certificates”), the Transferor hereby certifies as follows:

Neither the Transferor 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, (e) has taken any other action, that (in the case of each of subclauses (a) through (e) above) would constitute a distribution of the Certificates under the Securities Act of 1933, as amended (the
“1933 Act”), or would render the disposition of any Certificate a violation of Section 5 of the 1933 Act or any state securities law or would require registration or qualification pursuant thereto. The Transferor will not act, nor has it authorized or will it authorize any person to act, in any manner set forth in the foregoing sentence with respect to any Certificate. The Transferor will not sell or otherwise transfer any of the Certificates, except in compliance with the provisions of that certain Pooling and Servicing Agreement, dated as of May 1, 2005, among PHH Mortgage Capital LLC as Depositor, PHH Mortgage Corporation as Master Servicer and Citibank, N.A. as Trustee (the “Pooling and Servicing Agreement”), pursuant to which Pooling and Servicing Agreement the Certificates were issued.

Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Pooling and Servicing Agreement.

 

 

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Transferor]
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 
															

 

 

 

 

EXHIBIT F-3

FORM OF TRANSFEREE REPRESENTATION LETTER

______ __, 2005

Citibank, N.A.

111 Wall Street, 14th Floor / Zone 3

New York, New York 10005

[Certificate Registrar]

________________________

________________________

	
            Re:
 	
            PHH Mortgage Capital LLC,
 	
             

	
             
	
            PHHMC Mortgage Pass-Through Certificates, Series 2005-3,
 	
             

	
             
	
            Class ___, Representing a ___% Class ___ Percentage Interest
 
				

Ladies and Gentlemen:

In connection with the transfer by ________________ (the “Transferor”) to ________________ (the “Transferee”) of the captioned mortgage pass-through certificates (the “Certificates”), the Transferee hereby certifies as follows:

1.          The Transferee understands that (a) the Certificates have not been and will not be registered or qualified under the Securities Act of 1933 (the “1933 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 Transferee 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 1933 Act or any applicable state securities laws.

3.          The Transferee is (a) a substantial, sophisticated [[For Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates Only:] 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 1933 Act.

4.          The Transferee has been furnished with all information regarding (a) the Certificates and distributions thereon, (b) the nature, performance and servicing of the Mortgage 

 

Loans, (c) the Pooling and Servicing Agreement referred to below, and (d) any credit enhancement mechanism associated with the Certificates, that it has requested.

5.          The Transferee 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 or 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, (e) take any other action, that (in the case of each of subclauses (a) through (e) above) would constitute a distribution of the
Certificates under the 1933 Act, or would render the disposition of any Certificate a violation of Section 5 of the 1933 Act or any state securities law or would require registration or qualification pursuant thereto. The Transferee will not sell or otherwise transfer any of the Certificates, except in compliance with the provisions of that certain Pooling and Servicing Agreement, dated as of May 1, 2005, among PHH Mortgage Capital LLC as Depositor, PHH Mortgage Corporation as Master Servicer and Citibank, N.A. as Trustee (the “Pooling and Servicing Agreement”), pursuant to which Pooling and Servicing Agreement the Certificates were issued.

Capitalized terms used but not defined herein shall have the meanings assigned thereto in the Pooling and Servicing Agreement.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Transferee]
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 
															

 

 

 

 

EXHIBIT F-4

FORM OF TRANSFER AFFIDAVIT AND AGREEMENT

 

	
            STATE OF_____________
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF___________
 	
            )
 	
             
 

 

________________________ , being duly sworn, deposes, represents and warrants as follows:

(i)  I am a ______________________ of ____________________________ (the “Owner”) a corporation duly organized and existing under the laws of ______________, the record owner of or ______% Percentage Interest in the PHH Mortgage Capital LLC, PHHMC Mortgage Pass-Through Certificates, Series 2005-3, Class R-I Certificates and Class R-II Certificates (together, the “Class R Certificates”), on behalf of whom I make this affidavit and agreement. Capitalized terms used but not defined herein have the respective meanings assigned thereto in the Pooling and Servicing Agreement pursuant to which the Class R Certificates were issued.

(ii)  The Owner (i) is and will be a “Permitted Transferee” as of ____________________, 200___ and (ii) is acquiring the Class R Certificates for its own account or for the account of another Owner from which it has received an affidavit in substantially the same form as this affidavit. A “Permitted Transferee” is any person other than a “disqualified organization” or a possession of the United States. For this purpose, a “disqualified organization” means the United States, any state or political subdivision thereof, any agency or instrumentality of any of the foregoing (other than an instrumentality all of the activities of which are subject to tax and, except for the Federal Home Loan Mortgage Corporation, a majority of whose board of directors is not selected by any such governmental entity) or any foreign government, international organization
or any agency or instrumentality of such foreign government or organization, any rural electric or telephone cooperative, or any organization (other than certain farmers’ cooperatives) that is generally exempt from federal income tax unless such organization is subject to the tax on unrelated business taxable income.

(iii)  The Owner is aware (i) of the tax that would be imposed on transfers of the Class R Certificates to disqualified organizations under the Internal Revenue Code of 1986 that applies to all transfers of the Class R Certificates after May 31, 1988; (ii) that such tax would be on the transferor or, if such transfer is through an agent (which person includes a broker, nominee or middleman) for a non-Permitted Transferee, on the agent; (iii) that the person otherwise liable for the tax shall be relieved of liability for the tax if the transferee furnishes to such person an affidavit that thetransferee is a Permitted Transferee and, at the time of transfer, such person does not have actual knowledge that the affidavit is false; and (iv) that each of the Class R Certificates may be a “noneconomic residual interest” within the meaning of proposed Treasury regulations promulgated
under the Code and that the transferor of a “noneconomic residual interest” will 

 

remain liable for any taxes due with respect to the income on such residual interest, unless no significant purpose of the transfer is to impede the assessment or collection of tax.

(iv)  The Owner is aware of the tax imposed on a “pass-through entity” holding the Class R Certificates if, at any time during the taxable year of the pass-through entity, a non-Permitted Transferee is the record holder of an interest in such entity. (For this purpose, a “pass-through entity”includes a regulated investment company, a real estate investment trust or common trust fund, a partnership, trust or estate, and certain cooperatives.)

(v)  The Owner is aware that the Trustee will not register the transfer of any Class R Certificate unless the transferee, or the transferee’s agent, delivers to the Trustee, among other things, an affidavit in substantially the same form as this affidavit. The Owner expressly agrees that it will not consummate any such transfer if it knows or believes that any of the representations contained in such affidavit and agreement are false.

(vi)  The Owner consents to any additional restrictions or arrangements that shall be deemed necessary upon advice of counsel to constitute a reasonable arrangement to ensure that the Class R Certificates will only be owned, directly or indirectly, by an Owner that is a Permitted Transferee.

(vii)  The Owner’s taxpayer identification number is _________________.

(viii)  The Owner has reviewed the restrictions set forth on the face of the Class R Certificates and the provisions of Section 5.02(f) of the Pooling and Servicing Agreement under which the Class R Certificates were issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the Trustee to deliver payments to a person other than the Owner and negotiate a mandatory sale by the Trustee in the event that the Owner holds such Certificate in violation of Section 5.02(f)); and that the Owner expressly agrees to be bound by and to comply with such restrictions and provisions.

(ix)  The Owner is not acquiring and will not transfer the Class R Certificates in order to impede the assessment or collection of any tax.

(x)  The Owner anticipates that it will, so long as it holds the Class R Certificates, have sufficient assets to pay any taxes owed by the holder of such Class R Certificates, and hereby represents to and for the benefit of the person from whom it acquired the Class R Certificates that the Owner intends to pay taxes associated with holding such Class R Certificates as they become due, fully understanding that it may incur tax liabilities in excess of any cash flows generated by the Class R Certificates.

(xi)  The Owner has no present knowledge that it may become insolvent or subject to a bankruptcy proceeding for so long as it holds the Class R Certificates.

(xii)  The Owner has no present knowledge or expectation that it will be unable to pay any United States taxes owed by it so long as any of the Certificates remain outstanding.

(xiii)  The Owner is not acquiring the Class R Certificates with the intent to transfer the Class R Certificates to any person or entity that will not have sufficient assets to pay any taxes 

 

owed by the holder of such Class R Certificates, or that may become insolvent or subject to a bankruptcy proceeding, for so long as the Class R Certificates remain outstanding.

(xiv)  The Owner will, in connection with any transfer that it makes of the Class R Certificates, obtain from its transferee the representations required by Section 5.02(f) of the Pooling and Servicing Agreement under which the Class R Certificates were issued and will not consummate any such transfer if it knows, or knows facts that should lead it to believe, that any such representations are false.

(xv)  The Owner will, in connection with any transfer that it makes of the Class R Certificates, deliver to the Trustee an affidavit, which represents and warrants that it is not transferring the Class R Certificates to impede the assessment or collection of any tax and that it has no actual knowledge that the proposed transferee: (i) has insufficient assets to pay any taxes owed by such transferee as holder of the Class R Certificates; (ii) may become insolvent or subject to a bankruptcy proceeding for so long as the Class R Certificates remains outstanding; and (iii) is not a “Permitted Transferee”.

(xvi)  The Owner is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in, or under the laws of, the United States or any political subdivision thereof, or an estate or trust whose income from sources without the United States may be included 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.

(xvii)  (a) The Owner is not an employee benefit plan or other plan subject to the prohibited transaction provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), or an investment manager, named fiduciary or a trustee of any such plan, or any other Person acting, directly or indirectly, on behalf of or purchasing any Certificate with “plan assets” of any such plan; or

(b)  The Owner will provide the Trustee, the Company and the Master Servicer with an opinion of counsel acceptable to and in form and substance satisfactory to such entities to the effect that the purchase of Certificates is permissible under applicable law, will not constitute or result in any non-exempt prohibited transaction under ERISA or Section 4975 of the Code and will not subject the Trustee, the Depositor or the Master Servicer to any obligation or liability (including obligations or liabilities under ERISA or Section 4975 of the Code) in addition to those undertaken in the Pooling and Servicing Agreement.

In addition, the Owner hereby certifies, represents and warrants to, and covenants with, the Depositor, the Trustee and the Master Servicer that the Owner will not transfer such Certificates to any Plan or person unless either such Plan or person meets the requirements set forth in either (a) or (b) above.

 

 

IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on its behalf, pursuant to the authority of its Board of Directors, by its [Vice] President, attested by its [Assistant] Secretary, this ____ day of __________, 200___.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [OWNER]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            [Vice] President
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            ATTEST:
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            By:
 	
            
 
 
 	
             
 	
             
 	
             
 
	
            Name:
 	
            
 
 
 	
             
 	
             
 	
             
 
	
            Title:
 	
            [Assistant] Secretary
 	
             
 	
             
 	
             
 
																

 

Personally appeared before me the above-named , known or proved to me to be the same person who executed the foregoing instrument and to be a [Vice] President of the Owner, 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 Owner.

Subscribed and sworn before me this ____ day of __________, 200___.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 
	
             
 	
             
 
	
             
 	
            County of _____________________________
 
	
             
 	
            State of _______________________________
 
	
             
 	
             
 
	
             
 	
            My Commission expires:
 

 

 

 

FORM OF TRANSFEROR AFFIDAVIT

	
            STATE OF_____________
 	
            )
 	
             
 
	
             
 	
            )
 	
            ss.:
 
	
            COUNTY OF___________
 	
            )
 	
             
 

 

________________________, being duly sworn, deposes, represents and

warrants as follows:

1.          I am a ____________________ of _____________________________ (the “Owner”), a corporation duly organized and existing under the laws of ______________, on behalf of whom I make this affidavit.

2.          The Owner is not transferring the Class R Certificates (the “Residual Certificates”) to impede the assessment or collection of any tax.

3.          The Owner has no actual knowledge that the Person that is the proposed transferee (the “Purchaser”) of the Residual Certificates: (i) has insufficient assets to pay any taxes owed by such proposed transferee as holder of the Residual Certificates; (ii) may become insolvent or subject to a bankruptcy proceeding for so long as the Residual Certificates remain outstanding and (iii) is not a Permitted Transferee.

4.          The Owner understands that the Purchaser has delivered to the Trustee a transfer affidavit and agreement in the form attached to the Pooling and Servicing Agreement as Exhibit F-4. The Owner does not know or believe that any representation contained therein is false.

5.          At the time of transfer, the Owner has conducted a reasonable investigation of the financial condition of the Purchaser as contemplated by Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that investigation, the Owner has determined that the Purchaser has historically paid its debts as they became due and has found no significant evidence to indicate that the Purchaser will not continue to pay its debts as they become due in the future. The Owner understands that the transfer of a Residual Certificate may not be respected for United States income tax purposes (and the Owner may continue to be liable for United States income taxes associated therewith) unless the Owner has conducted such an investigation.

6.          Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Pooling and Servicing Agreement

 

 

IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on its behalf, pursuant to the authority of its Board of Directors, by its [Vice] President, attested by its [Assistant] Secretary, this ____ day of ___________, 200___.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [OWNER]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            [Vice] President
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            ATTEST:
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
            By:
 	
            
 
 
 	
             
 	
             
 	
             
 
	
            Name:
 	
            
 
 
 	
             
 	
             
 	
             
 
	
            Title:
 	
            [Assistant] Secretary
 	
             
 	
             
 	
             
 
																

 

Personally appeared before me the above-named , known or proved to me to be the same person who executed the foregoing instrument and to be a [Vice] President of the Owner, 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 Owner.

Subscribed and sworn before me this ____ day of __________, 200___.

	
             
 	
            
 
 
 
	
             
 	
            Notary Public
 
	
             
 	
             
 
	
             
 	
            County of _____________________________
 
	
             
 	
            State of _______________________________
 
	
             
 	
             
 
	
             
 	
            My Commission expires:
 

 

 

 

 

EXHIBIT G-1

FORM OF ERISA REPRESENTATION LETTER

(CLASS B-4, CLASS B-5 AND CLASS B-6)

______ __, 2005

PHH Mortgage Capital LLC

3000 Leadenhall Road

Mount Laurel, New Jersey 08054

Citibank, N.A.

111 Wall Street, 14th Floor / Zone 3

New York, New York 10005

PHH Mortgage Corporation

3000 Leadenhall Road

Mount Laurel, New Jersey 08054

	
            Re:
 	
            PHH Mortgage Capital LLC
 	
             

	
             
	
            PHHMC Mortgage Pass-Through Certificates, Series 2005-3, Class
 
	
             
	
            [B-4][B-5][B-6]  
 	
            _______
 	
             

					

Ladies and Gentlemen:

__________________________________ (the “Transferee”) intends to acquire from _____________________ (the “Transferor”) $____________ Initial Certificate Principal Balance of PHH Mortgage Capital LLC, PHHMC Mortgage Pass-Through Certificates, Series 2005-3, Class ___ (the “Certificates”), issued pursuant to a Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”) dated as of May 1, 2005 among PHH Mortgage Capital LLC as depositor (the “Depositor”), PHH Mortgage Corporation as master servicer (the “Master Servicer”) and Citibank, N.A. as trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined shall have the meanings assigned thereto in the Pooling and Servicing Agreement. 

The Transferee hereby certifies, represents and warrants to, and covenants with the Depositor, the Trustee and the Master Servicer that the following statements in either (1), (2) or (3) below are accurate (please mark the applicable statement with a check (()):

_____ (1) The Certificates (i) are not being acquired by, and will not be transferred to, any employee benefit plan within the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or other retirement arrangement, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that is subject to Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986 (the “Code”) (any of the foregoing, a “Plan”), (ii) are not being acquired with “plan assets” of a Plan within the meaning of the Department of Labor (“DOL”) regulation, 29 C.F.R. ss. 2510.3-101, and (iii) will not be transferred to any entity that is deemed 

 

to be investing in plan assets within the meaning of the DOL regulation at 29 C.F.R.ss.2510.3-101; or

_____ (2) The purchase of Certificates is permissible under applicable law, will not subject the Depositor, the Trustee or the Master Servicer to any obligation in addition to those undertaken in the Pooling and Servicing Agreement and (i) the Transferee is an insurance company, (ii) the source of funds used to purchase such Certificates is an “insurance company general account” (as such term is defined in Prohibited Transaction Class Exemption (“PTCE”) 95-60) and (iii) the conditions set forth in Section III of PTCE 95-60 and all other applicable conditions of PTCE 95-60 have been satisfied and as a result, the acquisition and holding of the Certificates will not constitute or result in any prohibited transaction under ERISA or Section 4975 of the Code; or

_____ (3) The Transferee has provided the Trustee and the Master Servicer with an Opinion of Counsel, subject to the satisfaction of the Depositor in form and substance, that purchase of the Certificates (i) is permissible under applicable law, (ii) will not constitute or result in a non-exempt prohibited transaction under ERISA or Section 4975 of the Code, and (iii) will not subject the Depositor, the Trustee or the Master Servicer to any obligation or liability (including obligations or liabilities arising under ERISA or Section 4975 of the Code) in addition to those undertaken in the Pooling and Servicing Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:        
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:                   
 

 

 

 

 

 

EXHIBIT G-2

 

FORM OF ERISA REPRESENTATION LETTER

(CLASS B-1, CLASS B-2 AND CLASS B-3)

 

	
            _____ __, 2005
 

 

PHH Mortgage Capital LLC

3000 Leadenhall Road

 Mount Laurel, New Jersey 08054

 

Citibank, N.A.

111 Wall Street, 14th Floor / Zone 3

New York, New York 10005

 

PHH Mortgage Corporation

3000 Leadenhall Road

 Mount Laurel, New Jersey 08054

 

	
            Re:
 	
            PHH Mortgage Capital LLC
 

PHHMC Mortgage Pass-Through Certificates, Series 2005-3, Class [B-1]

	
            [B-2][B-3]_____________________________________________________
 

 

Ladies and Gentlemen:

 

__________________________________ (the “Transferee”) intends to acquire from _____________________ (the “Transferor”) $____________ Initial Certificate Principal Balance of PHH Mortgage Capital LLC, PHHMC Mortgage Pass-Through Certificates, Series 2005-3, Class ____ (the “Certificates”), issued pursuant to a Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”) dated as of May 1, 2005 among PHH Mortgage Capital LLC as depositor (the “Depositor”), PHH Mortgage Corporation as master servicer (the “Master Servicer”) and Citibank, N.A. as trustee (the “Trustee”). Capitalized terms used herein and not otherwise defined shall have the meanings assigned thereto in the Pooling and Servicing Agreement. 

 

The Transferee hereby certifies, represents and warrants to, and covenants with the Depositor, the Trustee and the Master Servicer that the following statements in either (1) or (2) below are accurate (please mark the applicable statement with a check (?)):

 

_____ (1) The Certificates (1) are not being acquired by, and will not be transferred to, any employee benefit plan with the meaning of section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or other retirement arrangement, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that is subject to Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986 (the “Code”) (any of the foregoing, a “Plan”), (ii) are not being acquired with “plan assets” of a Plan within the meaning of the Department of Labor (“DOL”) 

 

regulation, 29 C.F.R. ss. 2510.3-101, and (iii) will not be transferred to any entity that is deemed to be investing in plan assets within the meaning of the DOL regulation at 29 C.F.R. ss. 2510.3-101; or

 

_____ (2) The Transferee is an “accredited investor” as defined in Rule 501(a)(1) of Regulation D of the Securities and Exchange Commission under the Securities Act of 1933 (the “Securities Act”) and, so long as the Transferee (or any transferee of the Transferee’s Certificates) is required to obtain from its transferee a representation regarding compliance with the Securities Act, the Transferee will require its transferee to make such representation in writing.

 

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Very truly yours,
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:        
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:                   
 

 

 

 

 

EXHIBIT H

FORM OF LOST NOTE AFFIDAVIT

[Name of Seller], a ______________ corporation (the “Mortgage Loan Seller”), by its undersigned authorized representative, hereby certifies:

Pursuant to the Mortgage Loan Purchase Agreement, dated _______________, between the Seller [PHH Mortgage Corporation] [Bishop’s Gate Residential Mortgage Trust] and PHH Mortgage Capital LLC (the “Depositor”), the Seller is granting all of its right, title and interest in and to the Mortgage Loan identified below to the Depositor. Terms used but not defined herein have the respective meanings assigned to them in the Mortgage Loan Purchase Agreement.

Mortgage Loan Number:

Maker:

Original Principal Amount:

Original Mortgage Note Date:

Maturity Date:

The Seller is the current owner and holder of the indebtedness evidenced by the original Mortgage Note.

After diligent search, the Seller has been unable to locate the original Mortgage Note and believes it to be lost or misplaced.

A true, complete and correct photocopy of the original Mortgage Note is attached hereto.

If at any time the Seller locates the original Mortgage Note, the Mortgage Loan Seller shall endorse such original Mortgage Note in the following form: “Pay to the order of [Name of Trustee], as Trustee for the registered holders of PHH Mortgage Capital LLC, Mortgage Pass-Through Certificates, PHHMC Series 2005-3, without recourse,” and shall promptly deliver to the Trustee the original Mortgage Note so endorsed, with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the Seller.

The Seller hereby indemnifies the Depositor, the Trustee and the Certificateholders from and against any and all losses, liabilities, damages, claims or expenses of whatever kind (including without limitation attorneys’ fees and disbursements) arising from or in connection with the Seller’s failure to have delivered the original Mortgage Note (as required under the Mortgage Loan Purchase Agreement) to the Trustee as designee of the Depositor, including without limitation any such losses, liabilities, damages, claims or expenses arising from or in connection with any claim by any third party who is the holder of such indebtedness by virtue of its possession of such original Mortgage Note.

 

 

This Lost Note Affidavit shall inure to the benefit of the Depositor, the Trustee and the Certificateholders and their respective successors and permitted assigns.

Dated:

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            [Seller]
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
            
 
 
 

 

 

 

 

EXHIBIT I-1

FORM OF TRUSTEE’S INITIAL CERTIFICATION

	
            _________ __, 2005
 

PHH Mortgage Capital LLC

3000 Leadenhall Road

Mount Laurel, New Jersey 08054

PHH Mortgage Corporation

3000 Leadenhall Road

Mount Laurel, New Jersey 08054

	
            Re:
 	
            Pooling and Servicing Agreement, dated as of May 1, 2005,
 

among PHH Mortgage Capital LLC, as depositor, PHH Mortgage Corporation as master servicer and Citibank, N.A., as Trustee, PHHMC Mortgage 

Pass-Through Certificates, Series 2005-3                                          
                         

Ladies and Gentlemen:

Attached is the Trustee’s preliminary exception report delivered in accordance with Section 2.02 of the referenced Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Pooling and Servicing Agreement.

The Trustee has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the Pooling and Servicing Agreement. The Trustee makes no representations as to (i) the validity, legality, sufficiency, enforceability or genuineness of any of the documents contained in the Mortgage File pertaining to the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) whether any Mortgage File included any of the documents specified in Section 2.01 of the Pooling and Servicing Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A.
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:        
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:                   
 

 

 

 

 

EXHIBIT I-2

FORM OF TRUSTEE FINAL CERTIFICATION

	
            _________________, 2005
 

PHH Mortgage Capital LLC

3000 Leadenhall Road

Mount. Laurel, New Jersey 08054

PHH Mortgage Corporation

3000 Leadenhall Road

Mount Laurel, New Jersey 08054

	
            Re:
 	
            Pooling and Servicing Agreement, dated as of May 1, 2005,
 

among PHH Mortgage Capital LLC, as depositor, PHH Mortgage Corporation, as master servicer and Citibank, N.A., as Trustee, PHHMC Mortgage 

Pass-Through Certificates, Series 2005-3                                          
                          

Ladies and Gentlemen:

In accordance with Section 2.02 of the above-captioned Pooling and Servicing Agreement, the undersigned, hereby certifies that, except as noted on the Schedule of Exceptions attached hereto, for each Mortgage Loan listed on the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on the attachment hereto), it has received a complete Mortgage File which includes the documents required to be included in the Mortgage File as set forth in the Pooling and Servicing Agreement.

The undersigned has made no independent examination of any documents contained in each Mortgage File beyond the review specifically required in the above-referenced Pooling and Servicing Agreement. The undersigned makes no representation as to: (i) the validity, legality, sufficiency, enforceability or genuineness of any documents contained in any Mortgage File for any of the Mortgage Loans listed on the Mortgage Loan Schedule to the Pooling and Servicing Agreement, (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan or (iii) whether any Mortgage File should include any flood insurance policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement.

 

 

Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Pooling and Servicing Agreement.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A., as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
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            Name:
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 

 

 

 

 

EXHIBIT J

MORTGAGE LOAN PURCHASE AGREEMENT

This MORTGAGE LOAN PURCHASE AGREEMENT (this “Agreement”), dated as of May 1, 2005, is made between PHH Mortgage Capital LLC (the “Purchaser”), PHH Mortgage Corporation (“PHH Mortgage”) and Bishop’s Gate Residential Mortgage Trust (“BGRMT,” together with PHH Mortgage, the “Sellers” and individually, each a “Seller”).

W I T N E S S E T H:

WHEREAS, the Sellers own the Mortgage Loans indicated on the Mortgage Loan Schedule attached as Exhibit 1 hereto (the “Mortgage Loans”), including rights to (a) any property acquired by foreclosure or deed in lieu of foreclosure or otherwise, and (b) the proceeds of any insurance policies covering the Mortgage Loans;

WHEREAS, the parties hereto desire that the Sellers sell the Mortgage Loans to the Purchaser (other than the servicing rights with respect thereto), effective as of the Closing Date, and that the Sellers make certain representations and warranties and undertake certain obligations with respect to the Mortgage Loans;

WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement (the “Pooling and Servicing Agreement”) dated as of May 1, 2005 (the “Cut-off Date”), among the Purchaser, as depositor, PHH Mortgage Corporation, as master servicer (the “Master Servicer”) and Citibank, N.A., as trustee (the “Trustee”), the Purchaser will issue the PHHMC Mortgage Pass-Through Certificates, Series 2005-3 (the “Certificates”);

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

I.  

 

DEFINITIONS

A.                     Definitions.  For all purposes of this Mortgage Loan Purchase Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Pooling and Servicing Agreement. All other capitalized terms used herein shall have the meanings specified herein.

II.                

 

SALE OF MORTGAGE LOANS AND RELATED PROVISIONS

	
            A.
 	
            Sale of Mortgage Loans.
 

1.          The Sellers, by the execution and delivery of this Agreement, do hereby sell,  and in connection therewith hereby assign, to the Purchaser, effective as of the Closing 

 

Date, without recourse but subject to the terms of this Agreement, all of its right, title and interest in, to and under the Mortgage Loans identified on Exhibit 1 as of the Closing Date, whether now existing or hereafter acquired and wherever located, on the Closing Date and as of the Cut-off Date.  In addition, PHH Mortgage hereby assigns to the Purchaser all of its right, title and interest in and to the Additional Collateral Servicing Agreement with respect to the Additional Collateral Mortgage Loans, which right, title and interest shall be assigned by the Purchaser to the Trustee, for the benefit of the Certificateholders, pursuant to the Pooling and Servicing Agreement.

2.          In connection with such conveyances by each Seller, the applicable Seller shall on behalf of the Purchaser deliver to, and deposit with the Trustee (or the Master Servicer, in which case the Master Servicer shall hold such documents in trust for the use and benefit of all present and future Certificateholders until such time as set forth in Section 2.01 of the Pooling and Servicing Agreement), on or before the Closing Date, the following documents or instruments with respect to each Mortgage Loan:

	
            (i)
 	
            with respect to each Mortgage Loan, other than a Cooperative Loan:
 

(a)        the original Mortgage Note, endorsed “Pay to the order of Citibank, N.A., as Trustee for the registered holders of the PHHMC Mortgage Pass-Through Certificates, Series 2005-3, without recourse”, or endorsed “Pay to the order of _______ without recourse”,  and signed in the name of the last named endorsee by an authorized officer together with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the last endorsee;

(b)        the original Mortgage, noting the presence of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan,  with evidence of recording thereon which have been recorded, with evidence of recording thereon or a copy of the Mortgage certified by the public recording office in which such Mortgage has been recorded;

(c)        Unless the Mortgage Loan is registered on the MERS® System, an original Assignment of the Mortgage (A) executed in the following form “Citibank, N.A., as Trustee for the registered holders of the PHHMC Mortgage Pass-Through Certificates, Series 2005-3, or (B) in the blank, which assignment appears to be in form and substance acceptable for recording;

(d)        the original recorded Assignment or Assignments of the Mortgage showing a complete chain of assignment from the originator to the Person assigning the Mortgage to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System and noting the presence of a MIN) as contemplated by the immediately preceding clause (C), if applicable and only to the extent available to the Depositor with evidence of recording thereon;

 

 

(e)        the originals of all assumption, modification, consolidation or extension agreements, with evidence of recording thereon, if any;

(f)         a copy of any guarantee (other than Additional Collateral) executed in connection with the Mortgage Note;

(g)        the original of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage;

	
            (h)
 	
            the original power of attorney, if applicable; and
 

(i)         if such Mortgage Loan is a Buydown Mortgage Loan (as shown in the Mortgage Loan Schedule), the original Buydown Agreement or a copy thereof;

(ii)         in addition, with respect to each Mortgage Loan that is an Additional Collateral Mortgage Loan:

(a)        a copy of the related Mortgage 100 K Pledge Agreement or Parent Power Agreement, as applicable; and

(b)        a copy of the related UCC-1, to the extent that MLCC was required to deliver such UCC-1 to the Master Servicer, and an original form UCC-3, if applicable, to the extent that MLCC was required to deliver such UCC-3 to the Master Servicer; or

	
            (iii)
 	
            with respect to each Mortgage Loan that is a Cooperative Loan:
 

(a)        the original Mortgage Note, endorsed “Pay to the order of Citibank, N.A., as Trustee for the registered holders of the PHHMC Mortgage Pass-Through Certificates, Series 2005-3, without recourse”, or endorsed “Pay to the order of _______ without recourse”,  and signed in the name of the last named endorsee by an authorized officer together with all prior and intervening endorsements showing a complete chain of endorsement from the originator to the last endorsee;

(b)        the original duly executed assignment of Security Agreement to the Trustee;

(c)        the acknowledgment copy of the original executed Form UCC-1 (or certified copy thereof) with respect to the Security Agreement, and any required continuation statements;

(d)        the acknowledgment copy of the original executed Form UCC-3 with respect to the Security Agreement, indicating the Trustee as the assignee of the secured party;

 

 

(e)        the stock certificate representing the Cooperative Assets allocated to the cooperative unit, with a stock power in blank attached;

(f)         the original collateral assignment of the proprietary lease by Mortgagor to the originator;

	
            (g)
 	
            a copy of the recognition agreement;
 

(h)        if applicable and to the extent available, the original intervening assignments, including warehousing assignments, if any, showing, to the extent available, an unbroken chain of the related Mortgage Loan to the Trustee, together with a copy of the related Form UCC-3 with evidence of filing thereon; and

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

provided, however, that in lieu of the foregoing, the applicable Seller may deliver the following documents, under the circumstances set forth below: (x) in lieu of the original Mortgage, assignments to the Trustee or intervening assignments thereof which have been delivered, are being delivered or will, upon receipt of recording information relating to the Mortgage required to be included thereon, be delivered to recording offices for recording and have not been returned to applicable Seller within 270 days of the Closing Date, applicable Seller may deliver a true copy thereof with an Officer’s Certificate certifying that such Mortgage, assignment to the Trustee or intervening assignment has been delivered to the appropriate recording office for recording; and (y) in lieu of the Mortgage, assignment to the Trustee or intervening assignments thereof, if the applicable jurisdiction retains the
originals of such documents (as evidenced by a certification from applicable Seller, to such effect) the applicable Seller may deliver photocopies of such documents containing an original certification by the judicial or other governmental authority of the jurisdiction where such documents were recorded; and provided, further, however, that in the case of Mortgage Loans which have been prepaid in full after the Cut-off Date and prior to the Closing Date, the applicable Seller, in lieu of delivering the above documents, may deliver to the Trustee a certification to such effect and shall pay all amounts paid in respect of such Mortgage Loans to the Trustee on the Closing Date. The applicable Seller shall deliver such original documents (including any original documents as to which certified copies had previously been delivered) to the Trustee promptly after they are received.

The applicable Seller may, in lieu of delivering the original of the documents set forth in Section 2.1(b)(i), (ii) and (iii) (other than Section 2.1(b)(i)(A) and Section 2.1(b)(iii)(A)) (or copies thereof as permitted by Section 2.1) to the Trustee, deliver such documents to the Master Servicer, and the Master Servicer shall hold such documents in trust for the use and benefit of all present and future Certificateholders until such time as is set forth in the next sentence.  Within 60 days following the earlier of (i) the receipt of the original of all of the documents or instruments set forth in Section 2.1(b)(i), (ii) and (iii) (other than Section 2.1(b)(i)(A) and Section 2.1(b)(iii)(A)) (or copies thereof as permitted by such Section) for any Mortgage Loan and (ii) a written request by the Trustee to deliver those documents with respect to any or all of 

 

the Mortgage Loans then being held by the Master Servicer, the Master Servicer shall deliver a complete set of such documents to the Trustee.

The applicable Seller shall, at its expense, cause the Assignment of the Mortgage to the Trustee to be recorded not later than 270 days after the Closing Date, unless (a) such recordation is not required by the Rating Agencies or an Opinion of Counsel has been provided as set forth below in this Section 2.1 or (b) MERS is identified on the Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee of record. The applicable Seller need not cause to be recorded any assignment in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the applicable Seller to the Trustee and the Rating Agencies, the recordation of such assignment is not necessary to protect the Trustee’s interest in the related Mortgage Loan; provided, however, notwithstanding the delivery of any Opinion of Counsel, each assignment shall be submitted for recording
by the Seller in the manner described above, at no expense to the Trust Fund or the Trustee, upon the earliest to occur of: (i) reasonable direction by the Holders of Certificates evidencing Fractional Undivided Interests aggregating not less than 25% of the Trust Fund, (ii) the occurrence of a Master Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or foreclosure relating to the applicable Seller, (iv) the occurrence of a servicing transfer as described in Section 7.02 of the Pooling and Servicing Agreement and (v) with respect to any one assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

If any original Mortgage Note referred to in Section 2.1(b)(i)(A) or 2.1(b)(iii)(A) above cannot be located, the obligations of the applicable Seller to deliver such documents shall be deemed to be satisfied upon delivery to the Trustee of a photocopy of such Mortgage Note, if available, with a Lost Note Affidavit. If any of the original Mortgage Notes for which a Lost Note Affidavit was delivered to the Trustee is subsequently located, such original Mortgage Note shall be delivered to the Trustee within three Business Days.

The Purchaser hereby acknowledges its acceptance of all right, title and interest to the Mortgage Loans and other property, now existing and hereafter created, conveyed to it pursuant to this Section 2.1.

	
            B.
 	
            Payment of Purchase Price for the Mortgage Loans.
 

In consideration of the sale of the Mortgage Loans from the Sellers to the Purchaser on the Closing Date, (i) PHH Mortgage shall receive (a) the Class R-I Certificates and Class R-II Certificates (other than a de minimis portion of each such class) and (b) $[__________] by wire transfer of immediately available funds to a bank account designated by PHH Mortgage and (ii) BGRMT shall receive $[__________] by wire transfer of immediately available funds to a bank account designated by BGRMT.

 

 

III.              

 

REPRESENTATIONS AND WARRANTIES;

REMEDIES FOR BREACH

	
            A.
 	
            Sellers Representations and Warranties.
 

1.          Each Seller, as to itself, represents, warrants and covenants to the Purchaser that as of the Closing Date (or as of such date specifically provided herein) that:

(i)         Due Organization.  The Seller is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has all licenses necessary to carry on its business now being conducted and is licensed, qualified and in good standing under the laws of each state where a Mortgaged Property is located or is otherwise exempt under applicable law from such qualification or is otherwise not required under applicable law to effect such qualification; no demand for such qualification has been made upon the Seller by any state having jurisdiction and in any event the Seller is or will be in compliance with the laws of any such state to the extent necessary to enforce each Mortgage Loan;

(ii)         Due Authority.  The Seller had the full power and authority and legal right to originate the Mortgage Loans that it originated, if any, and to acquire the Mortgage Loans that it acquired.  The Seller has the full power and authority to hold each Mortgage Loan, to sell each Mortgage Loan and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement.  The Seller 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 Purchaser, constitutes a legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms, subject to applicable
bankruptcy, reorganization, receivership, conservatorship, insolvency, moratorium and other laws relating to or affecting creditors’ rights generally or the rights of creditors of banks and to the general principles of equity (whether such enforceability is considered in a proceeding in equity or at law);

(iii)        No Conflict.  The execution and delivery of this Agreement, the acquisition or origination, as applicable, of the Mortgage Loans by the Seller, the sale of the Mortgage Loans, the consummation of the transactions contemplated hereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, will not conflict with or result in a breach of any of the terms, conditions or provisions of the Seller’s organizational documents and bylaws or any legal restriction or any agreement or instrument to which the Seller is now a party or by which it is bound, or constitute a default or result in an acceleration under any of the foregoing, or result in the violation of any law, rule, regulation, order, judgment or decree to which the Seller or its
property is subject, or impair the ability of the Purchaser to realize on the Mortgage Loans;

 

 

(iv)        Ability to Perform.  The Seller does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement;

(v)        No Material Default.  Neither the Seller nor any of its Affiliates is in material default under any agreement, contract, instrument or indenture of any nature whatsoever to which the Seller or any of its Affiliates is a party or by which it (or any of its assets) is bound, which default would have a material adverse effect on the ability of the Seller to perform under this Agreement, nor, to the best of the Seller’s knowledge, has any event occurred which, with notice, lapse of time or both, would constitute a default under any such agreement, contract, instrument or indenture and have a material adverse effect on the ability of the Seller to perform its obligations under this Agreement;

(vi)        No Litigation Pending. There is no action, suit, proceeding or investigation pending or, to the best of the Seller’s knowledge, threatened, against the Seller, which, either in any one instance or in the aggregate, if determined adversely to the Seller would adversely affect the sale of the Mortgage Loans to the Purchaser or the execution, delivery or enforceability of this Agreement or result in any material liability of the Seller, or draw into question the validity of this Agreement, or have a material adverse effect on the financial condition of the Seller or the ability of the Seller to perform its obligations under this Agreement;

(vii)       No Consent Required.  No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Seller of or compliance by the Seller with this Agreement, the delivery of the Mortgage Files to the Purchaser, the sale of the Mortgage Loans to the Purchaser or the consummation of the transactions contemplated by this Agreement or, if required, such approval has been obtained prior to the Closing Date;

(viii)      Ordinary Course of Business.  The consummation of the transactions contemplated by this Agreement is in the ordinary course of business of the Seller, and the transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are not subject to the bulk transfer or any similar statutory provisions in effect in any applicable jurisdiction;

(ix)        No Broker.  The Seller has not dealt with any broker or agent or anyone else who might be entitled to a fee or commission in connection with this transaction; and

(x)        No Untrue Information.  Neither this Agreement nor any statement, report or other agreement, document or instrument furnished or to be furnished pursuant to this Agreement contains or will contain any materially untrue statement of fact or omits or will omit to state a fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

2.          With respect to each Mortgage Loan, the applicable Seller hereby makes the following representations and warranties to the Purchaser on which the Purchaser specifically 

 

relies in purchasing such Mortgage Loan.  Such representations and warranties speak as of the Closing Date (unless otherwise indicated), but shall survive any subsequent transfer, assignment or conveyance of such Mortgage Loans:

(i)         Such Mortgage Loan complies with the terms and conditions set forth herein, and all of the information set forth with respect thereto on the Mortgage Loan Schedule is true and correct in all material respects;

(ii)         The instruments and documents specified in Section 2.1 with respect to such Mortgage Loan have been delivered to the Purchaser in accordance with the requirements of Section 2.1(b).  The applicable Seller is in possession of a Mortgage File respecting such Mortgage Loan, except for such documents as have been previously delivered to the Purchaser;

(iii)        The Mortgage relating to such Mortgage Loan has been duly recorded in the appropriate recording office, and the applicable Seller is the owner of record of such Mortgage Loan and the indebtedness evidenced by the related Mortgage Note;

(iv)        All payments required to be made up to and including the Closing Date for such Mortgage Loan under the terms of the Mortgage Note have been made, such that such Mortgage Loan is not delinquent 30 days or more on the Cut-off Date. Unless otherwise disclosed in the prospectus supplement, dated May 20, 2005, relating to the public offering of the Certificates (the “Prospectus Supplement”) or the Mortgage Loan Schedule, there has been no delinquency, exclusive of any period of grace, in any payment by the Mortgagor thereunder during the twelve months preceding the Closing Date; and, if the Mortgage Loan is a Cooperative Loan, no foreclosure action or private or public sale under the Uniform Commercial Code has ever been overtly threatened or commenced with respect to the Cooperative Loan;

(v)        There are no delinquent taxes, insurance premiums, assessments, including assessments payable in future installments, or other outstanding charges affecting the Mortgaged Property related to such Mortgage Loan;

(vi)        The terms of the Mortgage Note and the Mortgage related to such Mortgage Loan (and the proprietary lease, the stock power, the Assignment of the proprietary lease, the Assignment of the Mortgage Note and the acceptance of assignment and assumption of lease agreement with respect to each Cooperative Loan), have not been impaired, waived, altered or modified in any material respect, except as specifically set forth in the Mortgage Loan Schedule;

(vii)       The Mortgage Note and the Mortgage related to such Mortgage Loan (and the acceptance of assignment and assumption of lease agreement related to each Cooperative Loan) are not subject to any right of rescission, set-off or defense, including the defense of usury, nor will the operation of any of the terms of such Mortgage Note and such Mortgage, or the exercise of any right thereunder, render such Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off or defense, 

 

including the defense of usury and no such right of rescission, set-off or defense has been asserted with respect thereto;

(viii)       (a) All buildings upon the Mortgaged Property related to such Mortgage Loan are insured by a Qualified Insurer against loss by fire, hazards of extended coverage and such other hazards as are customary in the area where such Mortgaged Property is located.  All such insurance policies (collectively, the “hazard insurance policy”) are in full force and effect and contain a standard mortgagee clause naming the originator of such Mortgage Loan, its successors and assigns, as mortgagee.  If the Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency (“FEMA”) as having special flood hazards, a flood insurance policy is in effect which met the requirements of FEMA at the time such policy was issued. Such policies are the valid and binding obligations of the
insurer, and all premiums thereon due to date have been paid.  The related Mortgage obligates the Mortgagor thereunder to maintain all such insurance at such Mortgagor’s cost and expense, and on such Mortgagor’s failure to do so, authorizes the holder of such Mortgage to maintain such insurance at such Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor; or (b) in the case of a condominium or unit in a planned unit development (“PUD”) project that is not covered by an individual policy, the condominium or PUD project is covered by a “master” or “blanket” policy and there exists and is in the Mortgage File a certificate of insurance showing that the individual unit that secures the first mortgage is covered under such policy.  The insurance policy contains a standard mortgagee clause naming the originator of such Mortgage Loan (and its successors and assigns), as insured mortgagee.  Such policies are the valid
and binding obligations of the insurer, and all premiums thereon have been paid.  The insurance policy provides for advance notice to the applicable Seller or Master Servicer if the policy is canceled or not renewed, or if any other change that adversely affects the applicable Seller’s interests is made; the certificate includes the types and amounts of coverage provided, describes any endorsements that are part of the “master” policy and would be acceptable pursuant to the Fannie Mae Guide;

(ix)        All requirements of any federal, state or local law (including usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws) applicable to the origination and servicing of such Mortgage Loan have been complied with in all material respects;

(x)        The Mortgage related to such Mortgage Loan has not been satisfied, canceled or subordinated, in whole or in part, or rescinded, and the related Mortgaged Property has not been released from the lien of such Mortgage, in whole or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission;

(xi)        The Mortgage related to such Mortgage Loan is a valid, subsisting and enforceable perfected first lien on the related Mortgaged Property, including all improvements on the related Mortgaged Property, which Mortgaged Property is free and clear of any encumbrances and liens having priority over the first lien of the Mortgage 

 

subject only to (a) the lien of current real estate taxes and special assessments not yet due and payable, (b) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording of such Mortgage which are acceptable to mortgage lending institutions generally, are referred to in the lender’s title insurance policy and do not adversely affect the market value or intended use of the related Mortgaged Property, and (c) other matters to which like properties are commonly subject which do not individually or in the aggregate materially interfere with the benefits of the security intended to be provided by such Mortgage or the use, enjoyment, or market value of the related Mortgaged Property; with respect to each Cooperative Loan, each acceptance of assignment and assumption of lease agreement creates a valid, enforceable and
subsisting first security interest in the collateral securing the related Mortgage Note subject only to (x) the lien of the related Cooperative for unpaid assessments representing the obligor’s pro rata share of the Cooperative’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (y) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the acceptance of assignment and assumption of lease agreement; provided, however, that the appurtenant proprietary lease may be subordinated or otherwise subject to the lien of any mortgage on the cooperative project;

(xii)       The Mortgage Note and the Mortgage related to such Mortgage Loan (and the acceptance of assignment and assumption of lease agreement with respect to each Cooperative Loan) are genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and general equitable principles (regardless whether such enforcement is considered in a proceeding in equity or at law);

(xiii)      All parties to the Mortgage Note and the Mortgage related to such Mortgage Loan had legal capacity to enter into such Mortgage Loan and to execute and deliver the related Mortgage Note and the related Mortgage and the related Mortgage Note and the related Mortgage have been duly and properly executed by such parties; with respect to each Cooperative Loan, all parties to the Mortgage Note and the Mortgage Loan had legal capacity to execute and deliver the Mortgage Note, the acceptance of assignment and assumption of lease agreement, the proprietary lease, the stock power, the recognition agreement, the financing statement and the Assignment of proprietary lease and such documents have been duly and properly executed by such parties; each stock power (i) has all signatures guaranteed or (ii) if all signatures are not guaranteed,
then such Cooperative Assets will be transferred by the stock transfer agent of the Cooperative if the applicable Seller undertakes to convert the ownership of the collateral securing the related Cooperative Loan;

(xiv)      Such Mortgage Loan has closed and the proceeds of such Mortgage Loan have been fully disbursed prior to the Closing Date; provided that, with respect to any Mortgage Loan originated within the previous 150 days, alterations and repairs with 

 

respect to the related Mortgaged Property or any part thereof may have required an escrow of funds in an amount sufficient to pay for all outstanding work within 150 days of the origination of such Mortgage Loan, and, if so, such funds are held in escrow by the applicable Seller, a title company or other escrow agent;

(xv)       The Mortgage Note and the Mortgage related to such Mortgage Loan have not been assigned, pledged or otherwise transferred by the applicable Seller, in whole or in part, and the applicable Seller has good and marketable title thereto, and the applicable Seller is the sole owner thereof (and with respect to any Cooperative Loan, the sole owner of the related acceptance of assignment and assumption of lease agreement) and has full right and authority to transfer and sell such Mortgage Loan, and is transferring such Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest;

(xvi)      All parties that have had any interest in such Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) in compliance with any and all applicable licensing requirements of the laws of the state wherein the related Mortgaged Property is located;

(xvii)     (a) Such Mortgage Loan is covered by an American Land Title Association (“ALTA”) lender’s title insurance policy or short form title policy acceptable to Fannie Mae and Freddie Mac (or, in jurisdictions where ALTA policies are not generally approved for use, a lender’s title insurance policy acceptable to Fannie Mae and Freddie Mac), issued by a title insurer acceptable to Fannie Mae and Freddie Mac and qualified to do business in the jurisdiction where the related Mortgaged Property is located, insuring (subject to the exceptions contained in clauses (xi)(a), (b) and (x) above) the applicable Seller or Master Servicer, its successors and assigns as to the first priority lien of the related Mortgage in the original principal amount of such Mortgage Loan.  Additionally, either such lender’s title insurance
policy affirmatively insures that there is ingress and egress to and from the Mortgaged Property or the applicable Seller warrants that there is ingress and egress to and from the Mortgaged Property and the lender’ s title insurance policy affirmatively insures against encroachments by or upon the related Mortgaged Property or any interest therein or any other adverse circumstance that either is disclosed or would have been disclosed by an accurate survey.  The applicable Seller or Master Servicer is the sole insured of such lender’s title insurance policy, and such lender’s title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement and will inure to the benefit of the Purchaser without any further act.  No claims have been made under such lender’s title insurance policy, neither the applicable Seller, nor to the best of the applicable Seller’s knowledge, any
prior holder of the related Mortgage has done, by act or omission, anything that would impair  the coverage of such lender’s insurance policy, and there is no act, omission, condition, or information that would impair the coverage of such lender’s insurance policy; (b) The mortgage title insurance policy covering each unit mortgage in a condominium or PUD project related to such Mortgage Loan meets all requirements of Fannie Mae and Freddie Mac;

 

 

(xviii)     (a) There is no default, breach, violation or event of acceleration existing under the Mortgage, the Mortgage Note, or any other agreements, documents, or instruments related to such Mortgage Loan; (b) to the best of the applicable Seller’s knowledge, there is no event that, with the lapse of time, the giving of notice, or both, would constitute such a default, breach, violation or event of acceleration; (c) the Mortgagor(s) with respect to such Mortgage Loan is (1) not in default under any other Mortgage Loan or (2) the subject of an insolvency proceeding; (d) no event of acceleration has previously occurred, and no notice of default has been sent, with respect to such Mortgage Loan; and (e) in no event has the applicable Seller waived any of its rights or remedies in respect of any default, breach, violation or event of
acceleration under the Mortgage, the Mortgage Note, or any other agreements, documents, or instruments related to such Mortgage Loan; and (f) with respect to each Cooperative Loan, there is no default in complying with the terms of the Mortgage Note, the acceptance of assignment and assumption of lease agreement and the proprietary lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been paid, and the applicable Seller has the right under the terms of the Mortgage Note, acceptance of assignment and assumption of lease agreement and recognition agreement to pay any maintenance charges or assessments owed by the Mortgagor;

(xix)      As of the date of origination of such Mortgage Loan, there were no mechanics’ or similar liens, except such liens as are expressly insured against by a title insurance policy, or claims that have been filed for work, labor or material (and no rights are outstanding that under law could give rise to such lien) affecting the related Mortgaged Property that are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage;

(xx)       As of the date of origination of such Mortgage Loan, to the best of the applicable Seller’s knowledge, all improvements that were considered in determining the Value of the related Mortgaged Property lay wholly within the boundaries and building restriction lines of such Mortgaged Property (and wholly within the project in the case of a condominium unit), and no improvements on adjoining properties encroach upon such Mortgaged Property except as permitted under the terms of the Fannie Mae Guide and the Freddie Mac Selling Guide or those which are insured against by the title insurance policy referred to in clause (xvii) above; to the best of the applicable Seller’s knowledge, no improvement located on or part of any Mortgaged Property is in violation of any applicable zoning law or regulation, and all inspections,
licenses and certificates required to be made or issued with respect to all occupied portions of such Mortgaged Property, and with respect to the use and occupancy of the same, including certificates of occupancy, have been made or obtained from the appropriate authorities;

(xxi)      Except with respect to approximately 7.41% of the Mortgage Loans for which the related Mortgage Note provides for an initial interest-only period of 15 years, principal payments on such Mortgage Loan commenced or will commence no more than 60 days after funds were disbursed in connection with such Mortgage Loan. The related 

 

Mortgage Note is payable on the first day of each month in arrears, in accordance with the payment terms described on the related Mortgage Loan Schedule;

(xxii)     Except as noted otherwise on the Mortgage Loan Schedule, the related Mortgage contains the usual and customary “due-on-sale” clause or other similar provision for the acceleration of the payment of the unpaid principal balance of such Mortgage Loan if the related Mortgaged Property or any interest therein is sold or transferred without the prior consent of the mortgagee thereunder;

(xxiii)    Except as noted otherwise on the Mortgage Loan Schedule, such Mortgage Loan is not subject to any prepayment penalty;

(xxiv)    To the best of the applicable Seller’s knowledge, as of the Closing Date, the related Mortgaged Property (and with respect to a Cooperative Loan, the related cooperative project and Cooperative Unit) is free of material damage and waste and there is no proceeding pending for the total or partial condemnation thereof;

(xxv)     The related Mortgage contains customary and enforceable provisions that render the rights and remedies of the holder thereof adequate for the realization against the related Mortgaged Property of the benefits of the security provided thereby, including, (a) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (b) in the case of a Mortgage, otherwise by judicial foreclosure;

(xxvi)    Such Mortgage Loan was underwritten in accordance with the Underwriting Guide;

(xxvii)   The Mortgage File contains an appraisal (or other collateral assessment, permitted by the Underwriting Guide) of the related Mortgaged Property on forms and with riders approved by Fannie Mae and Freddie Mac, signed prior to the approval of such Mortgage Loan application by an appraiser, duly appointed by the originator of such Mortgage Loan, whose compensation is not affected by the approval or disapproval of such Mortgage Loan and who met the minimum qualifications of Fannie Mae and Freddie Mac for appraisers.  Each appraisal of the Mortgage Loan was made in accordance with the relevant provisions of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989;

(xxviii)   If the related Mortgage constitutes a deed of trust, then a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in such Mortgage, and no fees or expenses are or will become payable by the Purchaser to the trustee under such deed of trust, except in connection with a trustee’s sale after default by the related Mortgagor;

(xxix)    Except with respect to Additional Collateral Mortgage Loans, if such Mortgage Loan had a Loan-to-Value Ratio of more than 80% at origination, such Mortgage Loan is and will be subject to a Primary Insurance Policy issued by a Qualified Insurer, which insures the applicable Seller or Master  Servicer, its successors and assigns and insureds in the amount set forth on the Mortgage Loan Schedule provided that, a 

 

Primary Insurance Policy will not be required for any Cooperative Loan if (i) the proceeds of such Cooperative Loan were used to purchase a Cooperative Unit at the “insider’s price” when the building was converted to a Cooperative, (ii) the value of the Cooperative Unit for purposes of establishing the Loan-to-Value Ratio at origination was such “insider’s price”, (iii) the principal amount of the Cooperative Loan at origination was not more than 100% of such “insider’s price” and (iv) the Loan-to-Value Ratio at origination, as calculated using the Value at origination, was less than or equal to 80%.  All provisions of such Primary Insurance Policy have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid.  Any related Mortgage subject to any such Primary Insurance Policy
(other than a “lender-paid” Primary Insurance Policy) obligates the Mortgagor thereunder to maintain such insurance for the time period required by law and to pay all premiums and charges in connection therewith.  As of the date of origination, the Loan-to-Value Ratio of such Mortgage Loan is as specified in the applicable Mortgage Loan Schedule;

(xxx)     As of the date of origination of such Mortgage Loan, to the best of the applicable Seller’s knowledge, the related Mortgaged Property (or with respect to a Cooperative Loan, the related Cooperative Unit) is lawfully occupied under applicable law and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property (or with respect to a Cooperative Loan, the related Cooperative Unit)  and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy, have been made or obtained from the appropriate authorities;

(xxxi)    Each Mortgage Loan either was (a) closed in the name of PHH Mortgage or in the name of another entity that is either a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or an institution which is supervised and examined by a federal or state authority, or a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act (any such entity and PHH Mortgage, a “HUD Approved Mortgagee”), and was so at the time such Mortgage Loan was originated (PHH Mortgage or such other entity, the “Originator”) or (b) closed in the name of a correspondent lender under the circumstances described in the following sentence.  If such Mortgage Loan was originated through a correspondent lender, such Mortgage Loan met the
Originator’s underwriting criteria at the time of origination and was originated in accordance with the Originator’s policies and procedures and the Originator acquired such Mortgage Loan from the correspondent lender contemporaneously with the origination thereof.  The Mortgage Loans that BGRMT is selling to Purchaser were originated by or on behalf of PHH Mortgage and subsequently assigned to BGRMT;

(xxxii)   All of the terms of the related Mortgage Note pertaining to interest rate adjustments, payment adjustments and adjustments of the outstanding principal balance, if any, are enforceable and such adjustments will not affect the priority of the lien of the related Mortgage; all such adjustments on such Mortgage Loan have been made properly and in accordance with the provisions of such Mortgage Loan;

 

 

(xxxiii)   To the best of the applicable Seller’s knowledge, the related Mortgagor is not the subject of any insolvency proceeding;

(xxxiv)  Unless otherwise disclosed in the Prospectus Supplement or the Mortgage Loan Schedule, no Mortgage Loan contains provisions pursuant to which Monthly Payments are (a) paid or partially paid with funds deposited in any separate account established by the applicable Seller, the Mortgagor, or anyone on behalf of the Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any other similar provisions which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature;

(xxxv)   The Assignment is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located;

(xxxvi)  Any principal advances made to the Mortgagor prior to the Cut-off Date have been  consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan;

(xxxvii)  Unless otherwise disclosed in the Prospectus Supplement or the Mortgage Loan Schedule, no Mortgage Loan has a balloon payment feature.  With respect to any Mortgage Loan with a balloon payment feature, the Mortgage Note is payable in Monthly Payments based on a thirty year amortization schedule and has a final Monthly Payment substantially greater than the preceeding Monthly Payment which is sufficient to amortize the remaining principal balance of the Mortgage Loan;

(xxxviii)             If the residential dwelling on the Mortgaged Property is a condominium unit or a unit in a planned unit development (other than a de minimis planned unit development) such condominium or planned unit development project meets the eligibility requirements of the Underwriting Guide;

(xxxix)  No Mortgage Loan is subject to the provisions of the Homeownership and Equity Protection Act of 1994;

(xl)        Unless otherwise disclosed in the Prospectus Supplement or the Mortgage Loan Schedule, no Mortgage Loan was made in connection with (a) the construction or rehabilitation of a  Mortgaged Property or (b) facilitating the trade-in or exchange of a Mortgaged Property;

(xli)       The applicable Seller has no knowledge of any circumstances or condition with respect to the Mortgage, the Mortgaged Property (or with respect to a Cooperative Loan, the acceptance of assignment and assumption of lease agreement, the Cooperative Unit or the cooperative project), the Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to cause the Mortgage Loan to be an unacceptable 

 

investment, cause the Mortgage Loan to become delinquent, or adversely affect the value of the Mortgage Loan;

(xlii)      Unless otherwise disclosed in the Prospectus Supplement or the Mortgage Loan Schedule, interest on each Mortgage Loan is calculated on the basis of a 360-day year consisting of twelve 30-day months;

(xliii)     To the best of applicable Seller’s knowledge, the Mortgaged Property is in material compliance with all applicable environmental laws pertaining to environmental hazards including, without limitation, asbestos, and neither the applicable Seller nor, to the applicable Seller’s knowledge, the related Mortgagor, has received any notice of any violation or potential violation of such law;

	
            (xliv)
 	
            No Mortgage Loan is subject to negative amortization;
 

(xlv)      No Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective November 27, 2003;

(xlvi)     Each Mortgage Loan, at the time it was made, complied in all material respects with applicable local, state and federal laws, including, but not limited to, all applicable predatory and abusive lending laws;

(xlvii)    Each Mortgage Loan is a “qualified mortgage” as defined under Section 860G(a)(3) of the Code and the Treasury regulations promulgated thereunder;

(xlviii)    None of the Mortgage Loans are “high cost loans” as defined by the applicable predatory- and abusive- lending laws;

(xlix)     With respect to each Cooperative Loan, a cooperative lien search has been made by a company competent to make the same which company is acceptable to FNMA and qualified to do business in the jurisdiction where the Cooperative Unit is located;

(l)         With respect to each Cooperative Loan, (i) the terms of the related proprietary lease is longer than the terms of the Cooperative Loan, (ii) there is no provision in any proprietary lease which requires the Mortgagor to offer for sale the Cooperative Assets owned by such Mortgagor first to the Cooperative, (iii) there is no prohibition in any proprietary lease against pledging the Cooperative Assets or assigning the proprietary lease and (iv) the recognition agreement is on a form of agreement published by the Aztech Document Systems, Inc. or includes provisions which are no less favorable to the lender than those contained in such agreement;

(li)         With respect to each Cooperative Loan, each original UCC financing statement, continuation statement or other governmental filing or recordation necessary to create or preserve the perfection and priority of the first priority lien and security interest in the Cooperative Assets and proprietary lease has been timely and properly made.  Any security agreement, chattel mortgage or equivalent document related to the Cooperative Loan and delivered to the Mortgagor or its designee establishes in the 

 

Mortgagor a valid and subsisting perfected first lien on and security interest in the Mortgaged Property described therein, and the Mortgagor has full right to sell and assign the same; and

(lii)        With respect to each Cooperative Loan, each acceptance of assignment and assumption of lease agreement contains enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization of the benefits of the security provided thereby.  The acceptance of assignment and assumption of lease agreement contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Note in the event the Cooperative Unit is transferred or sold without the consent of the holder thereof.

It is understood and agreed that the representations and warranties set forth in this Section 3.1 will inure to the benefit of the Purchaser, its successors and assigns, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or assignment of Mortgage or the examination of any Mortgage File.

	
            B.
 	
            Remedies for Breach.
 

1.          With respect to the representations and warranties contained herein that are made to the knowledge or the best knowledge of the related Seller or as to which the related Seller has no knowledge, if it is discovered that the substance of any such representation and warranty is inaccurate and the inaccuracy materially and adversely affects the value of the related Mortgage Loan, or the interest therein of the Purchaser or the Certificateholders, then notwithstanding the related Seller’s lack of knowledge with respect to the substance of such representation and warranty being inaccurate at the time the representation and warranty was made, such inaccuracy shall be deemed a breach of the applicable representation and warranty and the  related Seller shall take such action described in the following paragraph of this Section
3.2(a) in respect of such Mortgage Loan.

Upon discovery or receipt of notice of any materially defective document in, or that a document is missing from, a Mortgage File or of the breach by either Seller of any representation, warranty or covenant in Section 3.1(b) hereof in respect of any Mortgage Loan which materially adversely affects the value of such Mortgage Loan or the interest therein of the Purchaser or the Certificateholders, the applicable Seller shall deliver such missing document or cure such defect or breach within 90 days from the date such Seller was notified of such missing document, defect or breach, and if such Seller does not deliver such missing document or cure such defect or breach in all material respects during such period, the applicable Seller shall repurchase such Mortgage Loan from the Trust Fund at the Purchase Price within 90 days after the date on which such Seller was notified (subject to Section
3.2(c)) of such missing document, defect or breach. If such defect or breach can ultimately be cured but is not reasonably expected to be cured within the 90-day period, then the applicable Seller shall have such additional time, if any, as is reasonable, to cure such defect or breach, provided that the applicable Seller has commenced curing or correcting such defect or breach and is diligently pursuing the same. In lieu of repurchasing any such Mortgage Loan as provided above, the applicable Seller may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a 

 

Defective Mortgage Loan) and substitute one or more Eligible Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 3.2(c). If the breach of representation and warranty that gave rise to the obligation to repurchase or substitute a Mortgage Loan pursuant to this Section 3.2 was the representation and warranty set forth in clause (xlvi) of Section 3.1, then PHH Mortgage shall pay to the Trust Fund, concurrently with and in addition to the remedies provided in the preceding three sentences, an amount equal to any liability, penalty or expense that was actually incurred and paid out of or on behalf of the Trust Fund, and that directly resulted from such breach, or if incurred and paid by the Trust Fund thereafter, concurrently with such payment.  It is understood and agreed that the obligation of the applicable Seller to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy respecting such omission, defect or breach available to the Purchaser.  Notwithstanding the foregoing, in recognition of the Trust’s rights against PHH Mortgage with respect to the Mortgage Loans acquired by it from PHH Mortgage and conveyed to the Purchaser hereunder, the Purchaser shall have the right to cause PHH Mortgage to repurchase directly any Defective Mortgage Loan (other than as a result of a breach by BGRMT of Section 3.1(b)(iii) or 3.1(b)(xv) hereof, in which case the Purchaser shall have the right to cause BGRMT to repurchase directly the Defective Mortgage Loan) acquired hereunder by the Purchaser from BGRMT.

2.          Any substitution of Eligible Substitute Mortgage Loans for Defective Mortgage Loans made pursuant to Section 3.2(a), must be effected prior to the date which is two years after the Closing Date and in accordance with Section 2.03 of the Pooling and Servicing Agreement.

In addition, the applicable Seller shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code, or (b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.

3.          Upon discovery by the Purchaser, a Seller, the Master Servicer or the Trustee 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 within two Business Days give written notice thereof to the other parties. In connection therewith, the applicable Seller shall repurchase such Mortgage Loan from the Trust Fund at the Purchase Price or, subject to the limitations set forth in Section 2.03 of the Pooling and Servicing Agreement, substitute one or more Eligible Substitute Mortgage Loans for the affected Mortgage Loan within 60 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Such repurchase or substitution shall be made by the applicable Seller if the affected
Mortgage Loan’s status as a non-qualified mortgage is or results from a breach of any representation, warranty or covenant made by the applicable Seller. Any such repurchase or substitution shall be made in the same manner as set forth in Section 3.2(a).

 

 

C.                     Purchaser Representations and Warranties.  The Purchaser hereby represents and warrants to the Sellers as of the Closing Date (or if otherwise specified below, as of the date so specified) that:

1.          the Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware;

2.          the Purchaser has full corporate power to own its property, to carry on its business as presently conducted and to enter into and perform its obligations under this Agreement;

3.          the execution and delivery by the Purchaser of this Agreement have been duly authorized by all necessary corporate action on the part of the Purchaser; and neither the execution and delivery of this Agreement, nor the consummation of the transactions herein contemplated hereby, nor compliance with the provisions hereof, will conflict with or result in a breach of, or constitute a default under, any of the provisions of any law, governmental rule, regulation, judgment, decree or order binding on the Purchaser or its properties or the certificate of formation or limited liability company agreement of the Purchaser, except those conflicts, breaches or defaults which would not reasonably be expected to have a material adverse effect on the Purchaser’s ability to enter into this Agreement and to consummate the transactions
contemplated hereby;

4.          the execution, delivery and performance by the Purchaser of this Agreement and the consummation of the transactions contemplated hereby do not require the consent or approval of, the giving of notice to, the registration with, or the taking of any other action in respect of, any state, federal or other governmental authority or agency, except those consents, approvals, notices, registrations or other actions as have already been obtained, given or made;

5.          this Agreement has been duly executed and delivered by the Purchaser and, assuming due authorization, execution and delivery by the Sellers, constitutes a valid and binding obligation of the Purchaser enforceable against it in accordance with its terms (subject to applicable bankruptcy and insolvency laws and other similar laws affecting the enforcement of the rights of creditors generally); and

6.          except as previously disclosed in the Prospectus Supplement, there are no actions, suits or proceedings pending or, to the knowledge of the Purchaser, threatened against the Purchaser, before or by any court, administrative agency, arbitrator or governmental body (i) with respect to any of the transactions contemplated by this Agreement or (ii) with respect to any other matter which in the judgment of the Purchaser if determined adversely to the Purchaser would reasonably be expected to materially and adversely affect the Purchaser’s ability to perform its obligations under this Agreement; and the Purchaser is not in default with respect to any order of any court, administrative agency, arbitrator or governmental body so as to materially and adversely affect the transactions contemplated by this Agreement;

 

 

IV.              

 

SELLER’S COVENANTS

A.                     Covenants of the Sellers.  Each Seller hereby covenants that, except for the transfer hereunder with respect to the Mortgage Loans, each Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur or assume any Lien on, any Mortgage Loan, whether now existing or hereafter created, or any interest therein; each Seller will notify the Trustee, on behalf of the Trust Fund, of the existence of any Lien (other than as provided above) on any Mortgage Loan immediately upon discovery thereof; and each Seller will defend the right, title and interest of the Trustee, on behalf of the Trust Fund, in, to and under the Mortgage Loans, whether now existing or hereafter created, against all claims
of third parties claiming through or under the respective Seller.

V.                

 

INDEMNIFICATION BY PHH MORTGAGE

WITH RESPECT TO THE MORTGAGE LOANS

A.                     Indemnification With Respect to the Mortgage Loans.  PHH Mortgage shall indemnify and hold harmless the Purchaser  from and against any loss, liability or expense arising from the breach by either Seller of its representations and warranties in Section 3.1 of this Agreement (other than as a result of a breach by BGRMT of Section 3.1(b)(iii) or 3.1(b)(xv) hereof, in which case BGRMT shall indemnify and hold harmless the Purchaser  from and against any loss, liability or expense arising from such breach) which materially and adversely affects the Purchaser’s interest in any Mortgage Loan or from the failure by either Seller to perform its obligations under this Agreement in any material respect, provided that
neither PHH Mortgage nor BGRMT shall have any obligation to indemnify the Purchaser in respect of any loss, liability or expense that arises as a result of the Purchaser’s willful malfeasance, bad faith or gross negligence or as a result of the breach by the Purchaser of its obligations hereunder.

B.                     Limitation on Liability of the Sellers.  None of the directors, officers, employees or agents of either Seller shall be under any liability to the Purchaser, it being expressly understood that all such liability is expressly waived and released as a condition of, and as consideration for, the execution of this Agreement. Except as and to the extent expressly provided in the Pooling and Servicing Agreement or this Agreement, the Sellers shall not be under any liability to the Trust Fund, the Trustee or the Certificateholders. The Sellers and any director, officer, employee or agent of each Seller may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.

 

 

VI.              

 

TERMINATION

A.                     Termination.  The respective obligations and responsibilities of each Seller and the Purchaser created hereby shall terminate, except for each Seller’s indemnity obligations as provided herein, upon the termination of the Trust Fund pursuant to the terms of the Pooling and Servicing Agreement.

VII.            

 

MISCELLANEOUS PROVISIONS

A.                     Amendment.  This Agreement may be amended from time to time by the Sellers and the Purchaser by written agreement signed by the Sellers and the Purchaser.

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

C.                     Notices.  All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, postage prepaid, addressed as follows:

	
            (i)
 	
            if to the PHH Mortgage:
 

PHH Mortgage Corporation

3000 Leadenhall Road

Mail Stop LGL

Mt. Laurel, NJ  08054

Attention: General Counsel

or, such other address as may hereafter be furnished to the Purchaser and BGRMT in writing by PHH Mortgage.

	
            (ii)
 	
            if to BGRMT:
 

c/o PHH Mortgage Corporation, as  Administrator

3000 Leadenhall Road

Mail Stop LGL

Mt. Laurel, NJ  08054

Attention: General Counsel

or, such other address as may hereafter be furnished to the Purchaser and PHH Mortgage in writing by Trust.

 

 

	
            (iii)
 	
            if to the Purchaser:
 

PHH Mortgage Capital LLC

3000 Leadenhall Road

Mail Stop LGL

Mt. Laurel, New Jersey 08054

Attention: General Counsel

	
            or such other address
 	
            as may hereafter be furnished to the Sellers in writing by the Purchaser.
 

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

E.                     Relationship of Parties.  Nothing herein contained shall be deemed or construed to create a partnership or joint venture between the parties hereto, and the services of each Seller shall be rendered as an independent contractor and not as agent for the Purchaser.

F.                     Counterparts.  This Agreement may be executed in two or more counterparts and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original and such counterparts together shall constitute one and the same Agreement.

G.                     Further Agreements.  The Purchaser and the Sellers each agree to execute and deliver to the other such additional documents, instruments or agreements as may be necessary or appropriate to effectuate the purposes of this Agreement. The Purchaser and each Seller agrees to use its best reasonable efforts to take all actions necessary to be taken by it to cause the Certificates to be issued and rated in the highest rating category by each of the Rating Agencies, with the Certificates to be offered pursuant to the Purchaser’s shelf registration statement, and each party will cooperate with the other in connection therewith.

H.                     Intention of the Parties.  It is the intention of the parties that the Purchaser is purchasing, and the Sellers are selling, the Mortgage Loans, rather than a loan by the Purchaser to the Sellers secured by the Mortgage Loans. Accordingly, the parties hereto each intend to treat this transaction with respect to the Mortgage Loans for federal income tax purposes as a sale by the Sellers, and a purchase by the Purchaser, of the Mortgage Loans. The Purchaser will have the right to review the Mortgage Loans and the related documents to determine the characteristics of the Mortgage Loans which will affect the federal income tax consequences of owning the Mortgage Loans and the Sellers will cooperate with all reasonable
requests made by the Purchaser in the course of such review.

I.                      Successors and Assigns; Assignment of Purchase Agreement.  This Agreement shall bind and inure to the benefit of and be enforceable by the Sellers, the Purchaser and their respective successors and assigns. The obligations of the Sellers under this Agreement cannot be assigned or delegated to a third party without the consent of the Purchaser, which 

 

consent shall be at the Purchaser’s sole discretion. The parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans for the purpose of assigning the Mortgage Loans to the Trustee, on behalf of the Trust Fund, for the benefit of the Certificateholders. As an inducement to the Purchaser to purchase the Mortgage Loans, each Seller acknowledges and consents to the assignment by the Purchaser to the Trustee, on behalf of the Trust Fund of all of the Purchaser’s rights against the Sellers pursuant to this Agreement and to the enforcement or exercise of any right or remedy against the Sellers pursuant to this Agreement by the Purchaser. Such enforcement of a right or remedy by the Trustee, on behalf of the Trust Fund, shall have the same force and effect as if the right or remedy had been enforced or exercised by the Purchaser directly.

J.                      Survival.  The representations and warranties made herein by each Seller and the provisions of Article V hereof shall survive the purchase of the Mortgage Loans hereunder.

 

 

IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be signed to this Mortgage Loan Purchase Agreement by their respective officers thereunto duly authorized as of the day and year first above written.

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            PHH MORTGAGE CAPITAL LLC
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
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            PHH MORTGAGE CORPORATION
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
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            Title:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            BISHOP’S GATE RESIDENTIAL MORTGAGE TRUST
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            as Seller
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            PHH MORTGAGE CORPORATION,
 as Administrator
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 

            
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:
 	
             
 
																	

 

 

 

 

Exhibit 1

MORTGAGE LOAN SCHEDULE

(Filed Manually)

 

 

 

EXHIBIT K

ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT

(ADDITIONAL COLLATERAL SERVICING AGREEMENT)

(Available Upon Request)

 

 

EXHIBIT L

PLANNED PRINCIPAL BALANCES

 

	
            
Distribution Date
  
  	
            
Planned Principal

Balance for Class  A-2 Certificates
  
  
	
            Initial Balance                                                                                                                                       
 	
            $22,669,193.00
 
	
            June 18, 2005                                                                                                                                    
 	
            22,669,193.00
 
	
            July 18, 2005                                                                                                                                        
 	
            22,669,193.00
 
	
            August 18, 2005                                                                                                                     
 	
            22,669,193.00
 
	
            September 18, 2005                                                                                             
 	
            22,669,193.00
 
	
            October 18, 2005                                                                                                            
 	
            22,669,193.00
 
	
            November 18, 2005                                                                                              
 	
            22,669,193.00
 
	
            December 18, 2005                                                                                                
 	
            22,669,193.00
 
	
            January 18, 2006                                                                                                                 
 	
            22,669,193.00
 
	
            February 18, 2006                                                                                                        
 	
            22,669,193.00
 
	
            March 18, 2006                                                                                                                       
 	
            22,669,193.00
 
	
            April 18, 2006                                                                                                                                 
 	
            22,669,193.00
 
	
            May 18, 2006                                                                                                                                   
 	
            22,669,193.00
 
	
            June 18, 2006                                                                                                                                    
 	
            22,669,193.00
 
	
            July 18, 2006                                                                                                                                        
 	
            22,669,193.00
 
	
            August 18, 2006                                                                                                                     
 	
            22,669,193.00
 
	
            September 18, 2006                                                                                             
 	
            22,669,193.00
 
	
            October 18, 2006                                                                                                            
 	
            22,669,193.00
 
	
            November 18, 2006                                                                                              
 	
            22,290,345.63
 
	
            December 18, 2006                                                                                                
 	
            21,900,742.81
 
	
            January 18, 2007                                                                                                                 
 	
            21,500,523.10
 
	
            February 18, 2007                                                                                                        
 	
            21,089,830.36
 
	
            March 18, 2007                                                                                                                       
 	
            20,668,813.59
 
	
            April 18, 2007                                                                                                                                 
 	
            20,237,626.89
 
	
            May 18, 2007                                                                                                                                   
 	
            19,796,429.28
 
	
            June 18, 2007                                                                                                                                    
 	
            19,345,384.65
 
	
            July 18, 2007                                                                                                                                        
 	
            18,884,661.61
 
	
            August 18, 2007                                                                                                                     
 	
            18,414,433.34
 
	
            September 18, 2007                                                                                             
 	
            17,934,877.52
 
	
            October 18, 2007                                                                                                            
 	
            17,446,176.14
 
	
            November 18, 2007                                                                                              
 	
            16,948,673.34
 
	
            December 18, 2007                                                                                                
 	
            16,453,222.89
 
	
            January 18, 2008                                                                                                                 
 	
            15,959,811.90
 
	
            February 18, 2008                                                                                                        
 	
            15,468,427.52
 
	
            March 18, 2008                                                                                                                       
 	
            14,979,056.97
 
	
            April 18, 2008                                                                                                                                 
 	
            14,491,687.51
 
	
            May 18, 2008                                                                                                                                   
 	
            14,006,306.47
 
	
            June 18, 2008                                                                                                                                    
 	
            13,522,901.22
 
	
            July 18, 2008                                                                                                                                        
 	
            13,041,459.21
 
	
            August 18, 2008                                                                                                                     
 	
            12,561,967.91
 

 

 

 

 

	
            September 18, 2008                                                                                             
 	
            12,084,414.87
 
	
            October 18, 2008                                                                                                            
 	
            11,608,787.67
 
	
            November 18, 2008                                                                                              
 	
            11,135,073.98
 
	
            December 18, 2008                                                                                                
 	
            10,663,261.48
 
	
            January 18, 2009                                                                                                                 
 	
            10,193,337.93
 
	
            February 18, 2009                                                                                                        
 	
            9,725,291.13
 
	
            March 18, 2009                                                                                                                       
 	
            9,259,108.94
 
	
            April 18, 2009                                                                                                                                 
 	
            8,794,779.26
 
	
            May 18, 2009                                                                                                                                   
 	
            8,332,290.05
 
	
            June 18, 2009                                                                                                                                    
 	
            7,871,629.33
 
	
            July 18, 2009                                                                                                                                        
 	
            7,412,785.14
 
	
            August 18, 2009                                                                                                                     
 	
            6,955,745.60
 
	
            September 18, 2009                                                                                             
 	
            6,500,498.87
 
	
            October 18, 2009                                                                                                            
 	
            6,047,033.16
 
	
            November 18, 2009                                                                                              
 	
            5,595,336.71
 
	
            December 18, 2009                                                                                                
 	
            5,145,397.85
 
	
            January 18, 2010                                                                                                                 
 	
            4,697,204.92
 
	
            February 18, 2010                                                                                                        
 	
            4,250,746.32
 
	
            March 18, 2010                                                                                                                       
 	
            3,806,010.52
 
	
            April 18, 2010                                                                                                                                 
 	
            3,362,985.99
 
	
            May 18, 2010                                                                                                                                   
 	
            2,921,661.30
 
	
            June 18, 2010                                                                                                                                    
 	
            2,586,590.56
 
	
            July 18, 2010                                                                                                                                        
 	
            2,253,184.76
 
	
            August 18, 2010                                                                                                                     
 	
            1,921,433.67
 
	
            September 18, 2010                                                                                             
 	
            1,591,327.08
 
	
            October 18, 2010                                                                                                            
 	
            1,262,854.85
 
	
            November 18, 2010                                                                                              
 	
            936,006.87
 
	
            December 18, 2010                                                                                                
 	
            610,773.06
 
	
            January 18, 2011                                                                                                                 
 	
            287,143.40
 
	
            February 18, 2011 and thereafter                 
 	
            0.00
 

 

 

 

EXHIBIT M

FORM OF FORM 10-K CERTIFICATE

I, [identify the certifying individual], certify that:

1.          I have reviewed this annual report on Form 10-K, and all reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in the year covered by this annual report, of the trust (the “Trust”) created pursuant to the Pooling and Servicing Agreement dated May 1, 2005 (the “Agreement”) among PHH Mortgage Capital LLC (the “Depositor”), PHH Mortgage Corporation (the “Master Servicer”) and Citibank, N.A. (the “Trustee”);

2.          Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report;

3.          Based on my knowledge, the servicing information required to be provided to the Trustee by the Master Servicer under the Agreement for inclusion in these reports is included in these reports;

4.          I am responsible for reviewing the activities performed by the Master Servicer under the Agreement and based upon my knowledge and the annual compliance review required under the Agreement, and except as disclosed in the reports, the Master Servicer has fulfilled its obligations under the Agreement; and

5.          The reports disclose all significant deficiencies relating to the Master Servicer’s compliance with the minimum servicing standards based upon the report provided by an independent public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers as set forth in the Agreement, that is included in these reports.

In giving the certifications above, I have reasonably relied on the information provided to me by the following unaffiliated parties: the Trustee.

Date:____________

_________________________________*

[Signature]

Name:

Title:

* - to be signed by the Chief Executive Officer of the Master Servicer

 

 

EXHIBIT N

FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE

PHH Mortgage Corporation

3000 Leadenhall Road

Mt. Laurel, New Jersey 08054

	
            Re:
 	
            PHHMC Mortgage Pass-Through Certificates, Series 2005-3
 

 

Reference is made to the Pooling and Servicing Agreement, dated as of May 1, 2005 (the “Pooling and Servicing Agreement”), by and among Citibank, N.A., as trustee (the “Trustee”), PHH Mortgage Corporation, as master servicer (the “Master Servicer”) and PHH Mortgage Capital LLC, as depositor (the “Depositor”).  The Trustee, hereby certifies to the Master Servicer, and its officers, directors and affiliates, and with the knowledge and intent that they will rely upon this certification, that:

	
            (i)
 	
            The Trustee has reviewed the annual report on Form 10-K for the fiscal year _____, and all reports on Form 8-K containing distribution reports filed in respect of periods included in the year covered by that annual report, relating to the above-referenced trust;
 
	
            (ii)
 	
            Based on my knowledge, the information set forth in the reports on Form 10-K and Form 8-K referenced in (i) above (including the distribution reports) does not contain any untrue statement of material fact subject to the accuracy of the information provided to us by the Master Servicer and includes all information required to be stated therein; and
 
	
            (iii)
 	
            Based on my knowledge, all distribution information required to be provided by the Trustee under the Pooling and Servicing Agreement is included in these reports.
 

Date:

	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            CITIBANK, N.A., as Trustee
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            By:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Name:
 	
            
 
 
 
	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
             
 	
            Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]