Common use of Repurchase and Substitution Clause in Contracts

Repurchase and Substitution. The second paragraph of Section 3.04 shall be amended and replaced, to read in its entirety as follows: Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination as to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was made.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company's lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Upon the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects within 60 days, and, if such breach cannot be cured during such time period, the Company shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner's option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the related Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such repurchase obligation, the Company shall indemnify the Owner for any expenses reasonably incurred by the Owner in enforcing its remedies hereunder in connection with any breach by the Company of any representation or warranty set forth in this Agreement. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 to cure or to repurchase a defective Mortgage Loan and to indemnify the interest Owner as provided in this Section 3.03 constitute the sole remedies of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for Owner respecting a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeforegoing representations and warranties.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File and notwithstanding the fact that any such representation or warranty (other than the representation contained in clause (42) of Section 3.04 shall be amended and replaced, 3.03 above) was made to read in its entirety as follows: the best of the Seller’s knowledge. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the interest of the Purchaser (or that materially and adversely affects the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first sentence regularly scheduled payment of Section 3.03(21principal and interest) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and Sections 3.03(41is diligently pursuing same. Notwithstanding the above, (i) within thirty (30) days of the earlier of either discovery by, or notice to, the applicable Seller of any breach of the representation and warranty set forth in paragraph (52) hereofof Section 3.03, the applicable Seller shall repurchase such Mortgage Loan at the Repurchase Price, together with all expenses incurred by the Purchaser as a result of such repurchase and (ii) any breach of a Deemed Material Breach Representation shall automatically be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account. Notwithstanding the previous paragraph, with the exception of the representation and warranty set forth in paragraph (52) of Section 3.03 or any Deemed Material Breach Representation, the applicable Seller may, at the Purchaser’s option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04(3) by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04(3) to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 3.03 that are made 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s knowledgerepresentations and warranties contained in Sections 3.01, if it is discovered by either 3.02 and 3.03 shall constitute the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests sole remedies of the Purchaser thereinrespecting a breach of such representations and warranties. The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03(3) or warranty3.03(15) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination, or lack of examination, of any Mortgage File. Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination as to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser thereinLoan, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was made. The Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to the Seller of any breach of any of the representations and warranties contained in Section 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (any such Mortgage Loan, a “Defective Mortgage Loan”; provided that the term “Defective Mortgage Loan” shall also include any Mortgage Loan treated or designated as such in accordance with Section 2.04) within which to correct or cure such breach. Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within such 60 day period, then Seller shall either (i) repurchase the Defective Mortgage Loan at the applicable Repurchase Price or (ii) except for a breach of the representation and warranty in Section 3.03(52), make an indemnification payment to Purchaser in an amount equal to the reduction in value of such Mortgage Loan as a result of such breach. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 30 Business Days following the delivery of any such written notice from the Purchaser, the Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefore by wire transfer of immediately available funds directly to the Purchaser’s Account. In the event that a breach of a representation or warranty set forth in either Section 3.01 or Section 3.02 that materially and adversely affects the value of one or more of the Mortgage Loans or the interest of the Purchaser in such Mortgage Loans, and such breach is not cured within 60 days of the earlier of either discovery by or notice to the Seller or Servicer of such breach, all such affected Mortgage Loans shall, at the option of the Purchaser, be repurchased by the Seller at the Repurchase Price. Any such repurchase shall be accomplished by wire transfer of the amount of the Repurchase Price to an account designated by the Purchaser. If the breach of representation and warranty that gave rise to the obligation to repurchase or substitute a Mortgage Loan pursuant to this Section 3.04 was the representation and warranty set forth in clause (9) or (41) of Section 3.03, then the Seller shall pay to the Purchaser, concurrently with and in addition to the remedies provided in this Section 3.04, an amount equal to any liability, penalty or expense that was actually incurred and paid out of or on behalf of the Purchaser, and that directly resulted from such breach, or if incurred and paid by the Purchaser thereafter, concurrently with such payment. Notwithstanding the previous paragraph, the Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, and with Purchaser's prior written consent, within 2 years from the related Funding Date, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2.02. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Seller and Servicer shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the Seller on the date of such substitution by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price on or before the Remittance Date applicable to the Due Period of which such repurchase transaction has occurred by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase or substitute for the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. In the event of a repurchase, indemnification payment or substitution, the Seller shall, simultaneously with such repurchase, indemnification payment or substitution, give written notice (by telecopier, electronically or otherwise) to the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) this Agreement. In the event that any Mortgage Loan is held by a REMIC, notwithstanding any contrary provision of this Agreement, with respect to any Mortgage Loan that is not in default or as to which no default is imminent, Purchaser may, in connection with any repurchase or substitution of a Defective Mortgage Loan pursuant to this Section 3.04, reasonably require that the Seller deliver, at the Seller’s expense, an Opinion of Counsel to the effect that such repurchase or substitution will not (i) result in the imposition of taxes on “prohibited transactions” of such REMIC (as defined in Section 860F of the Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify as a REMIC at any time. The parties agree that the resolution of any controversy or claim arising out of or relating to an obligation or alleged obligation of the Seller to repurchase a Mortgage Loan due to a breach of a representation or warranty contained in Section 3.03 hereof shall be by Arbitration. If any allegation of a breach of a representation or warranty made in Section 3.03 has not been resolved to the satisfaction of both the Purchaser and the Seller, either party may commence Arbitration to resolve the dispute; provided that a party may commence Arbitration with respect to one or more unresolved allegations only during the months of January, April, July and October, and all matters with respect to which Arbitration has been commenced in any such month shall be heard in a single Arbitration in the immediately following month or as soon as practicable thereafter. To commence Arbitration, the moving party shall deliver written notice to the other party that it has elected to pursue Arbitration in accordance with this Section 3.04, provided that if the Seller has not responded to the Purchaser's notification of a breach of a representation and warranty, the Purchaser shall not commence Arbitration with respect to that breach before 60 days following such notification in order to provide the Seller with an opportunity to respond to such notification. Within 10 Business Days after a party has provided notice that it has elected to pursue Arbitration, each party may submit the names of one or more proposed Arbitrators to the other party in writing. If the parties have not agreed on the selection of an Arbitrator within five Business Days after the first such submission, then the party commencing Arbitration shall, within the next 5 business days, notify the American Arbitration Association in New York, NY and request that it appoint a single Arbitrator with experience in arbitrating disputes arising in the financial services industry. It is the intention of the parties that Arbitration shall be conducted in as efficient and cost-effective a manner as is reasonably practicable, without the burden of discovery. Accordingly, the Arbitrator will resolve the dispute on the basis of a review of the written correspondence between the parties (including any supporting materials attached to such correspondence) conveyed by the parties to each other in connection with the dispute prior to the delivery of notice to commence Arbitration; however, upon a showing of good cause, a party may request the Arbitrator to direct the production of such additional information, evidence and/or documentation from the parties that the Arbitrator deems appropriate. If requested by the Arbitrator or any party, any hearing with respect to an Arbitration shall be conducted by video conference or teleconference except upon the agreement of both parties or the request of the Arbitrator. The finding of the Arbitrator shall be final and binding upon the parties. Judgment upon any arbitration award rendered may be entered and enforced in any court of competent jurisdiction. The costs of the Arbitrator shall be shared equally between both parties. Each party, however, shall bear its own attorneys fees and costs in connection with the Arbitration.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (which breach shall be determined without regard to language qualifying such representation or warranty as being made to the Company’s best knowledge), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Upon the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects within 60 days, and, if such breach cannot be cured during such time period, the Company shall, at the Owner’s option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner’s option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans in the related Mortgage Loan Package, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, with the consent of the Owner, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the Closing Date and only with respect to those Mortgage Loans that have not been transferred to a securitization trust. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related Mortgage Loan and date of substitution, the interest of the Purchaser therein. With respect to the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.03 that are made 3.02 relates to an expressly specified percentage of the Mortgage Loans. If pursuant to the Seller’s knowledgeforegoing provisions the Company repurchases a Mortgage Loan that is a MERS Mortgage Loan, if it is discovered by the Company shall either the Seller or the Purchaser that the substance of such representation (i) cause MERS to execute and warranty is inaccurate and such inaccuracy materially and adversely affects the value deliver an assignment of the related Mortgage Loan or in recordable form to transfer the interests Mortgage from MERS to the Company on behalf of the Purchaser thereinOwner, and shall cause such Mortgage to be removed from registration on the Purchaser shall be entitled MERS® System in accordance with MERS’ rules and regulations or (ii) cause MERS to all designate on the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, MERS® System the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge Company as the beneficial holder with respect to such Mortgage Loan. For any month in which the inaccuracy at Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the time Company will determine the representation or warranty was madeamount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall.

Repurchase and Substitution. The second paragraph (1) It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. (2) Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination . (3) Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a "Defective Mortgage Loan"; provided that "Defective Mortgage Loan" shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be entitled to all required. Within 10 Business Days following the remedies to which it would be entitled for a breach delivery of any such representation or warranty, including, without limitationwritten notice from the Purchaser, the applicable Seller shall repurchase requirements contained hereinthe specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser's Account. Notwithstanding the previous paragraph, notwithstanding Seller’s lack the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan ("Deleted Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided that in no event may any such substitution be made later than the second anniversary after the Cut-off Date. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of knowledge this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the inaccuracy at date of substitution, the time covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the representation applicable Seller substitutes one or warranty was more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser's Account.

Repurchase and Substitution. The second paragraph (a) It is understood and agreed that the representations and warranties set forth in Sections 3.1 and 3.2 shall survive the sale of Section 3.04 Mortgage Loans by each Seller to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Collateral File or Credit File. (b) Upon discovery by a Seller (the "Breaching Seller, the Servicer ") or the Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.01, 3.02 3.1 or 3.03 3.2 made by the Breaching Seller that materially and adversely affects the value of any Mortgage Loan or the interest of the Purchaser in any Mortgage Loan sold by the Breaching Seller hereunder (or, in the case of the representations and warranties set forth in Section 3.2, the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects sold by the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage LoanBreaching Seller hereunder), the party discovering such breach shall give prompt written notice to the other. Each determination as The Breaching Seller shall use its best efforts to whether there has been promptly cure in all material respects any such breach or defect within 90 days of the earlier of either discovery by or notice to the Breaching Seller of such breach or defect, and, if such breach or defect cannot be or is not cured within such 90-day period, the Breaching Seller shall, at the option of the Purchaser, in the case of a breach of a representation and warranty set forth in Section 3.1, repurchase the affected Mortgage Loan(s), and, in the case of a breach of a representation and warranty set forth in Section 3.2, repurchase either (1) all of the Mortgage Loans or (2) such of the Mortgage Loans selected by the Purchaser so that, after such repurchase, such breach or defect is cured in all material respects. Notwithstanding the foregoing, upon discovery of a breach of any representation or warranty which would cause a Mortgage Loan to be other than a "qualified mortgage" within Section 860G(a)(3) of the Code, the Breaching Seller shall either cure or repurchase the affected Mortgage Loan within 75 days. Any such repurchase shall be conducted at a price equal to the applicable Repurchase Price, shall occur on the next Monthly Remittance Date (as defined in the Servicing Agreement) and shall be accomplished by deposit in the Account of the amount of the Repurchase Price pursuant to Section 2.4(c) of the Servicing Agreement. Notwithstanding the foregoing, if the Breaching Seller discovers or receives notice of any such breach or defect, and if the affected Mortgage Loan has not been subject to a Pass-Through Transfer, the Breaching Seller may remove any such Mortgage Loan (a "Deleted Mortgage Loan-by-"), rather than repurchase any such Mortgage Loan basisas provided above, and substitute in its place a Qualified Substitute Mortgage Loan(s). A breach of representations and warranties If the Breaching Seller has no Qualified Substitute Mortgage Loan(s), then the Breaching Seller shall repurchase the Mortgage Loan or Mortgage Loans, as the case may be, in the first sentence manner provided in this Section 3.3(b). (c) For each of the Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage Loan, the Breaching Seller shall deliver to the Custodian the documents specified in Section 2.2(a), with the Mortgage Note endorsed as required by Section 2.2(a) and, where applicable, original documents having evidence of recording thereon. The Breaching Seller shall also take such actions with respect to the documents pertaining to each such Qualified Substitute Mortgage Loan as are required to be taken pursuant to Section 2.2(d) with respect to the Mortgage Loans originally subject to this Agreement. For purposes of applying the requirements of Section 3.03(212.2(d) and Sections 3.03(41) and (52) hereofto any Qualified Substitute Mortgage Loan, references in such Section to the related Closing Date shall be deemed to materially be references to the applicable date of substitution of such Qualified Substitute Mortgage Loan. The Breaching Seller shall deposit in the Account the Monthly Payment due on each Qualified Substitute Mortgage Loan in the month following the date of such substitution (with the interest portion thereof adjusted to the applicable Net Rate), and adversely affect the value Monthly Payment due with respect to such Qualified Substitute Mortgage Loan in the month of substitution shall be retained by the Breaching Seller. For the month of substitution, distributions to the Purchaser shall include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and the Breaching Seller shall thereafter be entitled to retain all amounts subsequently received by the Breaching Seller in respect of such Deleted Mortgage Loan. The Breaching Seller shall amend the related Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the interest substitution of the Qualified Substitute Mortgage Loan(s) and shall give written notice to the Purchaser thereinthat such substitution has taken place, which notice shall have attached thereto a copy of such amended Mortgage Loan Schedule in hard copy or "read-only" electronic format (as reasonably acceptable to such Breaching Seller and the Purchaser). With Upon such substitution, each such Qualified Substitute Mortgage Loan shall be subject to the terms of this Agreement in all respects, and the Breaching Seller shall make and shall be deemed to have made, with respect to such Qualified Substitute Mortgage Loan(s), as of the date of substitution, the representations and warranties contained set forth in Sections 3.1 and 3.2 (and, for purposes of applying such representations and warranties to each such Qualified Substitute Mortgage Loan, references in such Sections to the related Closing Date shall be deemed to be references to such date of substitution of such Qualified Substitute Mortgage Loan). (d) The Purchaser shall immediately take all steps necessary to effect the reconveyance of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all documentation with respect thereto, to the Breaching Seller. The Breaching Seller shall pay all costs and expenses incurred in connection with the repurchase of any Mortgage Loan and the substitution for any Deleted Mortgage Loan. If, in accordance with Section 3.3(b), a Breaching Seller repurchases any MERS Loan or substitutes a Qualified Substitute Mortgage Loan for any MERS Loan, the Servicer shall be authorized to (i) cause the MERS(R) System to reflect such repurchase or substitution, as the case may be, or (ii) cause MERS to remove the repurchased or replaced Mortgage Loan from registration on the MERS(R) System and execute and deliver an Assignment of Mortgage to reflect the transfer of such Mortgage Loan to the Breaching Seller or its designee. The Breaching Seller shall bear any and all fees of MERS relating to the actions authorized under this Section 3.3(d). (e) For any month in which a Breaching Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, such Breaching Seller shall determine the amount, if any, by which the aggregate outstanding principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Breaching Seller on the Monthly Remittance Date (as defined in the Servicing Agreement) following the date of the substitution pursuant to Section 3.1 of the Servicing Agreement. Accordingly, pursuant to Section 2.4(c) of the Servicing Agreement, the Breaching Seller shall deposit from its own funds (and without any right of reimbursement therefor) into the Account an amount equal to the amount of such shortfall. (f) It is understood and agreed that the obligations of a Breaching Seller set forth in this Section 3.3 constitute the sole remedies available to the Purchaser respecting a breach of the representations and warranties by such Breaching Seller set forth in Section 3.03 that are made 3.1 and Section 3.2. (g) Any cause of action against a Breaching Seller relating to or arising out of the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance breach of such any representation and warranty made by such Breaching Seller in Sections 3.1 and 3.2 shall accrue as to any Mortgage Loan only upon (i) discovery of such breach by the Purchaser or notice thereof by such Breaching Seller to the Purchaser, (ii) failure by such Breaching Seller to cure such breach or repurchase or substitute a Qualified Substitute Mortgage Loan(s) for such Mortgage Loan as specified above and (iii) demand upon such Breaching Seller by the Purchaser for all amounts payable in respect of such Mortgage Loan. (h) In addition to the repurchase obligations set forth above in this Section 3.3, each Seller shall also be required to repurchase, in the manner provided in Section 3.3(b) but without any right of such Seller to cure, any Mortgage Loan sold by such Seller hereunder that is inaccurate paid in full on or prior to the related Cut-off Date. Any such Mortgage Loan will be repurchased by such Seller at the Repurchase Price. (i) In addition to such cure, repurchase and such inaccuracy materially substitution obligation, each Seller shall indemnify the Purchaser and adversely affects hold it harmless against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from the value defense of any claim against the Purchaser by a third party resulting from a breach of the related Mortgage Loan or representations and warranties made by such Seller in this Article 3 ; provided, that in no case is any Seller to be liable with respect to any claims made against the interests Purchaser unless the Purchaser shall have notified said Seller in writing, giving notice of the Purchaser thereinnature of the claim, within a reasonable time after service of a summons or other first legal process that shall have been served upon the Purchaser, but failure to notify said Seller of any such claim shall not relieve said Seller from any liability which it may have to the Purchaser otherwise than on account of this indemnity. Each relevant Seller shall be entitled to all participate at its own expense in the remedies defense, or, if said Seller so elects, to which it assume the defense of any suit brought to enforce any such liability, but, if said Seller elects to assume the defense, such defense shall be conducted by counsel chosen by it. In the event said Seller elects to assume the defense of any such suit and retain such counsel, the Purchaser may retain additional counsel but shall bear the fees and expenses of such counsel unless (i) said Seller and the Purchaser shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both said Seller and the Purchaser and representation of both said Seller and the Purchaser by the same counsel would be entitled inappropriate due to actual or potential differing interests between them. It is understood that said Seller shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one counsel based on this indemnification and that all such fees and expenses shall be reimbursed as they are incurred. No relevant Seller shall be liable to indemnify any person for any settlement of any claim effected without said Seller's consent, which consent shall not be unreasonably withheld. Said Seller shall not, without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding in respect of which the Purchaser is or could have been a breach party and indemnity is or could have been sought hereunder by the Purchaser unless such settlement includes an unconditional release of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack Purchaser from all liability on claims that are the subject matter of knowledge with respect to the inaccuracy at the time the representation or warranty was madesuch proceeding.

Repurchase and Substitution. The second paragraph of Section 3.04 shall be amended and replaced, to read in its entirety as follows: Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination as to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, and in the first sentence of Section 3.03(22) and Sections 3.03(42) and (53) of the Purchase Agreement, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was made.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of the Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File and notwithstanding the fact that any such representation or warranty (other than the representation contained in clause (42) of Section 3.04 shall be amended and replaced, 3.03 above) was made to read in its entirety as follows: the best of the Seller’s knowledge. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account. Notwithstanding the previous paragraph, with the exception of paragraphs (24), (40), (49), (52), (54) and (59) of Section 3.03, the applicable Seller may, at the Purchaser’s option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04(3) by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04(3) to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03(3) or warranty3.03(15) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company's lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Upon the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects within 60 days, and, if such breach cannot be cured during such time period, the Company shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner's option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such repurchase obligation, the Company shall indemnify the Owner for any expenses reasonably incurred by the Owner in enforcing its remedies hereunder in connection with any breach by the Company of any representation or warranty set forth in this Agreement. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 to cure or to repurchase a defective Mortgage Loan and to indemnify the interest Owner as provided in this Section 3.03 constitute the sole remedies of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for Owner respecting a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeforegoing representations and warranties.

Repurchase and Substitution. The second paragraph of Section 3.04 shall be amended It is understood and replaced, to read in its entirety as follows: Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of agreed that the representations and warranties contained set forth in these Sections 3.01, 3.01 and 3.02 or 3.03 that materially shall survive the sale and adversely affects the value delivery of the Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the interest examination of the Purchaser in the any Mortgage Loans (or File. It is further understood and agreed that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination as to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With with respect to the representations and warranties contained in Section 3.03 that are which were made to the Sellerbest of the Company’s knowledge, if it is discovered by either the Seller Company or the Purchaser that the substance of such representation and or warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser Purchaser’s interest therein, the Purchaser shall will be entitled to all the remedies to which it would be entitled for a breach of such a representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Sellerthe Company’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was made. Upon discovery by either the Company or the Purchaser of a breach of any of the foregoing representations and warranties which materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in any Mortgage Loan, the party discovering such breach shall give prompt written notice to the other. The Company shall have a period of sixty days from its discovery or its receipt of notice of any such breach within which to correct or cure such breach. The Company hereby covenants and agrees that if any such breach cannot be corrected or cured within such sixty day period, the Company shall, not later than ninety days of its discovery or its receipt of notice of such breach, repurchase such Mortgage Loan at a price equal to (i) the Stated Principal Balance of the Mortgage Loan plus (ii) accrued interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate from the date to which interest has last been paid and distributed to the Purchaser to the date of repurchase. In the event that any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within sixty days of the earlier discovery or receipt of notice by the Company of such breach, all Mortgage Loans shall, at the option of the Purchaser, be repurchased by the Company at prices and amounts as computed above. Any such repurchase shall be accomplished by deposit in the Custodial Account of the amount of the repurchase price, after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan and being held in the Custodial Account for future distribution. If the Company is required to repurchase any Mortgage Loan pursuant to the preceding paragraph within one hundred and twenty days from the Closing Date, the Company may, with the consent of the Purchaser, assuming that the Company has a Qualified Substitute Mortgage Loan, remove such deficient Mortgage Loan from the terms of this Agreement and within such one hundred and twenty day period substitute a Qualified Substitute Mortgage Loan for such deficient Mortgage Loan, in lieu of repurchasing such deficient Mortgage Loan. The Purchaser may reasonably require, prior to any substitution into a REMIC pass-through entity, that the Company provide the Purchaser with an Opinion of Counsel that the substitution of the applicable Qualified Substitute Mortgage Loan will not effect the status of the pass-through entity as a REMIC. If the Company has no Qualified Substitute Mortgage Loan and is unable to obtain an Opinion of Counsel, it must repurchase the deficient Mortgage Loan.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding the above sentence, within 30 days of the earlier of either discovery by, or notice to, the Sellers of any breach of the representations or warranties set forth in clauses (24), (54), (56), (57), (60), (61) and (64) of Section 3.03, the Sellers shall repurchase such Mortgage Loan at the Repurchase Price, together with all expenses incurred by the Purchaser as a result of such repurchase. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides written evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account. Notwithstanding the previous paragraph, the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(15) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph (1) It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. (2) Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination . (3) Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, or becomes delinquent after the Funding Date and remains delinquent for a period of 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account. Notwithstanding the previous paragraph, the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided that in no event may any such substitution be made later than the second anniversary after the Cut-off Date. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. (4) Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04(3) by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04(3) to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. (5) The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(15) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) in the event that (i) the first due date for a Mortgage Loan is subsequent to the Cut-off Date and the initial monthly payment is not made by the last day of the month in which such payment was due, or (ii) the first monthly payment due following the Cut-off Date on any Mortgage Loan is not made by the last day of the month in which such payment was due will be repurchased by the applicable Seller at the Repurchase Price. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then, at the option of the Purchaser, the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due to the Purchaser under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan at the Repurchase Price. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account. Notwithstanding the previous paragraph, the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. If set forth in the related Purchase Price and Terms Letter, in the event that the principal balance due on a Mortgage Loan is paid in full within six months following the related Funding Date, the Seller shall reimburse Purchaser the amount (if any) by which the Purchase Price paid by Purchaser to Seller exceeded 100% of the Unpaid Principal Balance of the Mortgage Loan as of the date of such prepayment in full, within ten days of such payoff. In the event of a repurchase or substitution, the Seller shall, simultaneously with such repurchase or substitution, give written notice (by telecopier, electronically or otherwise) to the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) this Agreement. The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(16) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph (a) It is understood and agreed that the representations and warranties set forth in Sections 3.1 and 3.2 shall survive the sale of Section 3.04 Mortgage Loans by each Seller to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Collateral File or Credit File. (b) Upon discovery by a Seller (the “Breaching Seller, the Servicer ”) or the Purchaser of a Qualification Defect with respect to a Mortgage Loan sold by the Breaching Seller or a breach of any of the representations and warranties contained set forth in Sections 3.013.1 or 3.2 made by the Breaching Seller, 3.02 or 3.03 in each case, that materially and adversely affects the value of any Mortgage Loan or the interest of the Purchaser in any Mortgage Loan sold by the Breaching Seller hereunder (or, in the case of the representations and warranties set forth in Section 3.2, the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects sold by the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage LoanBreaching Seller hereunder), the party discovering such breach shall give prompt written notice to the other. Each determination as The Breaching Seller shall either (A) cure in all material respects any such breach or defect within 90 days (75 days with respect to whether there has been a Qualification Defect) of the earlier of either discovery by or notice to the Breaching Seller of such breach or defect, or (B) in the case of a breach of a representation and warranty set forth in Section 3.1 or a Qualification Defect, repurchase the affected Mortgage Loan(s), and, in the case of a breach of a representation and warranty set forth in Section 3.2, repurchase either (1) all of the Mortgage Loans or (2) such of the Mortgage Loans selected by the Purchaser so that, after such repurchase, such breach or defect is cured in all material respects. Any such repurchase shall be conducted at a price equal to the applicable Repurchase Price, shall occur on the next Monthly Remittance Date and shall be accomplished by deposit in the Account of the amount of the Repurchase Price pursuant to Section 2.4 of the Servicing Agreement. Notwithstanding the foregoing, if the Breaching Seller discovers or receives notice of any such breach or defect, and if the affected Mortgage Loan has not been subject to a Pass-Through Transfer, the Breaching Seller may remove any such Mortgage Loan (a “Deleted Mortgage Loan-by-”), rather than repurchase any such Mortgage Loan basisas provided above, and substitute in its place a Qualified Substitute Mortgage Loan(s). A If the Breaching Seller has no Qualified Substitute Mortgage Loan(s) or if the Breaching Seller discovered or received notice of such breach of representations and warranties or defect no earlier than one year after the related Closing Date, then the Breaching Seller shall repurchase the Mortgage Loan or Mortgage Loans, as the case may be, in the first sentence manner provided in this Section 3.3(b). (c) For each of the Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage Loan, the Breaching Seller shall deliver to the Custodian the documents specified in Section 2.2(a), with the Mortgage Note endorsed as required by Section 2.2(a) and, where applicable, original documents having evidence of recording thereon. The Breaching Seller shall also take such actions with respect to the documents pertaining to each such Qualified Substitute Mortgage Loan as are required to be taken pursuant to Section 2.2(d) with respect to the Mortgage Loans originally subject to this Agreement. For purposes of applying the requirements of Section 3.03(212.2(d) and Sections 3.03(41) and (52) hereofto any Qualified Substitute Mortgage Loan, references in such Section to the related Closing Date shall be deemed to materially be references to the applicable date of substitution of such Qualified Substitute Mortgage Loan. The Breaching Seller shall deposit in the Account the Monthly Payment due on each Qualified Substitute Mortgage Loan in the month following the date of such substitution (with the interest portion thereof adjusted to the applicable Net Rate), and adversely affect the value Monthly Payment due with respect to such Qualified Substitute Mortgage Loan in the month of substitution shall be retained by the Breaching Seller. For the month of substitution, distributions to the Purchaser shall include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and the Breaching Seller shall thereafter be entitled to retain all amounts subsequently received by the Breaching Seller in respect of such Deleted Mortgage Loan. The Breaching Seller shall amend the related Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the interest substitution of the Qualified Substitute Mortgage Loan(s) and shall give written notice to the Purchaser thereinthat such substitution has taken place, which notice shall have attached thereto a copy of such amended Mortgage Loan Schedule in hard copy or “read-only” electronic format (as reasonably acceptable to such Breaching Seller and the Purchaser). With Upon such substitution, each such Qualified Substitute Mortgage Loan shall be subject to the terms of this Agreement in all respects, and the Breaching Seller shall make and shall be deemed to have made, with respect to such Qualified Substitute Mortgage Loan(s), as of the date of substitution, the representations and warranties contained set forth in Sections 3.1 and 3.2 (and, for purposes of applying such representations and warranties to each such Qualified Substitute Mortgage Loan, references in such Sections to the related Closing Date shall be deemed to be references to such date of substitution of such Qualified Substitute Mortgage Loan). (d) The Purchaser shall immediately take all steps necessary to effect the reconveyance of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all documentation with respect thereto, to the Breaching Seller. The Breaching Seller shall pay all costs and expenses incurred in connection with the repurchase of any Mortgage Loan and the substitution for any Deleted Mortgage Loan. If, in accordance with Section 3.3(b), a Breaching Seller repurchases any MERS Loan or substitutes a Qualified Substitute Mortgage Loan for any MERS Loan, the Servicer shall be authorized to (i) cause the MERS® System to reflect such repurchase or substitution, as the case may be, or (ii) cause MERS to remove the repurchased or replaced Mortgage Loan from registration on the MERS® System and execute and deliver an Assignment of Mortgage to reflect the transfer of such Mortgage Loan to the Breaching Seller or its designee. The Breaching Seller shall bear any and all fees of MERS relating to the actions authorized under this Section 3.3(d). (e) For any month in which a Breaching Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, such Breaching Seller shall determine the amount, if any, by which the aggregate outstanding principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Breaching Seller on the Monthly Remittance Date following the date of the substitution pursuant to Section 3.1 of the Servicing Agreement. Pursuant to Section 2.4 of the Servicing Agreement, the Breaching Seller shall deposit from its own funds (and without any right of reimbursement therefor) into the Account an amount equal to the amount of such shortfall. (f) It is understood and agreed that the obligations of a Breaching Seller set forth in this Section 3.3 constitute the sole remedies available to the Purchaser respecting a breach of the representations and warranties by such Breaching Seller set forth in Section 3.03 that are made 3.1 and Section 3.2. (g) Any cause of action against a Breaching Seller relating to or arising out of the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance breach of such any representation and warranty made by such Breaching Seller in Sections 3.1 and 3.2 shall accrue as to any Mortgage Loan only upon (i) discovery of such breach by the Purchaser or notice thereof by such Breaching Seller to the Purchaser, (ii) failure by such Breaching Seller to cure such breach or repurchase or substitute a Qualified Substitute Mortgage Loan(s) for such Mortgage Loan as specified above and (iii) demand upon such Breaching Seller by the Purchaser for all amounts payable in respect of such Mortgage Loan. (h) In addition to the repurchase obligations set forth above in this Section 3.3, each Seller shall also be required to repurchase, in the manner provided in Section 3.3(b) but without any right of such Seller to cure, any Mortgage Loan sold by such Seller hereunder that is inaccurate paid in full on or prior to the related Cut-off Date. Any such Mortgage Loan shall be repurchased by such Seller at the Repurchase Price. (A) In addition to the cure, repurchase or substitution obligation set forth above in this Section 3.3, each Seller shall indemnify the Purchaser and such inaccuracy materially hold it harmless against any losses, damages, penalties, fines, forfeitures, reasonable and adversely affects necessary legal fees and related costs, judgments, and other costs and expenses resulting from the value defense of any claim against the Purchaser by a third party resulting from a breach of the related Mortgage Loan representations and warranties made by such Seller in this Article 3; provided, however, that in no event shall such Seller have any liability for any indirect, special or the interests of consequential damages, losses, costs or expenses incurred by Purchaser. (B) No applicable Seller shall be liable for any costs and expenses pursuant to this Section 3.3(i) unless the Purchaser thereinprovides written notice to the Seller that describes the nature of such claim within a reasonable time after service of a summons or other first legal process upon the Purchaser; provided, however, that the Purchaser’s failure to notify such Seller pursuant to this paragraph shall not relieve such Seller from any liability that such Seller may have to the Purchaser otherwise than on account of this indemnity. (C) Each applicable Seller shall be entitled to all participate at its own expense in the remedies defense, or, if such Seller so elects, to which it would be entitled for assume the defense of any suit against the Purchaser by a third party resulting from a breach of the representations and warranties made by such Seller in this Article 3. If such Seller elects to assume the defense of a suit against the Purchaser, such defense shall be conducted by counsel chosen by such Seller. In the event such Seller elects to assume the defense of any such suit and retain such counsel, the Purchaser may retain additional counsel but shall bear the fees and expenses of such counsel unless (x) such Seller and the Purchaser have mutually agreed to the retention of such counsel or (y) the named parties to such suit (including any impleaded parties) include both such Seller and the Purchaser and representation of both such Seller and the Purchaser by the same counsel would be inappropriate due to actual or warrantypotential differing interests between them. It is understood that such Seller shall not, includingin connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one counsel (separate from its own counsel) for the Purchaser. (D) No applicable Seller shall be required to indemnify any person for any settlement of any claim effected without such Seller’s consent, which consent shall not be unreasonably withheld. Such Seller shall not, without limitationthe prior written consent of the Purchaser, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding to which the repurchase requirements contained herein, notwithstanding Seller’s lack Purchaser is a party and indemnity is sought hereunder by the Purchaser unless such settlement includes an unconditional release of knowledge with respect to the inaccuracy at Purchaser from all liability on claims that are the time the representation or warranty was madesubject matter of such proceeding.

Repurchase and Substitution. The second paragraph of Section 3.04 shall be amended and replaced, to read in its entirety as follows: Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination as to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was made.

Repurchase and Substitution. The second paragraph of Section 3.04 shall be amended and replaced, to read in its entirety as follows: Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 3.01 or 3.03 that materially shall not be impaired by any review and adversely affects examination of the value of Mortgage Files or other documents evidencing or relating to the Mortgage Loans or any failure on the interest part of the Sellers, the Purchaser in or the Mortgage Loans (Custodian to review or that materially examine such documents and adversely affects shall inure to the value benefit of any assignee, transferee or designee of the related Mortgage Loan or Purchaser, including the interests Trustee for the benefit of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination as to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser thereinCertificateholders. With respect to the representations and warranties contained in Section 3.03 that are made herein as to which the Seller’s Sellers have no knowledge, if it is discovered by either the Seller or the Purchaser that the substance of any such representation and warranty is was inaccurate as of the date such representation and warranty was made or deemed to be made, and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests interest therein of the Purchaser thereinor the Purchaser’s assignee, transferee or designee, then notwithstanding the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge by the Sellers with respect to the inaccuracy substance of such representation and warranty being inaccurate at the time the representation or and warranty was made, the Sellers shall take such action described in the following paragraph in respect of such Mortgage Loan. It is understood and agreed that the representations and warranties set forth in Sections 3.01 and 3.03 shall survive the sale of the Mortgage Loans to the Purchaser and from the Purchaser to the Trustee for the benefit of the Certificateholders and shall inure to the benefit of the Purchaser and the Trustee for the benefit of the Certificateholders, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Sellers or the Purchaser or the Trustee for the benefit of the Certificateholders of any materially defective document in, or that any material document was not transferred by the applicable Seller (as listed on the related Custodian’s preliminary exception reports, as described in the Custodial Agreement) as part of any Mortgage File or of a breach of any of the representations and warranties contained in Sections 3.01 or 3.03 that materially and adversely affects the interests of the Purchaser or the Trustee for the benefit of the Certificateholders, as assignee of the Purchaser, in the related Mortgage Loan, the party discovering such breach shall give prompt written notice to the other. Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser or the Trustee as assignee of the Purchaser to the Seller of any such missing documentation that was not transferred by the Seller as described above, or of a materially defective document or of any breach of any of the representations and warranties contained in Sections 3.01 or 3.03 that materially and adversely affects the interests of the Purchaser or the Trustee as assignee of the Purchaser in the related Mortgage Loan (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include any Mortgage Loan treated or designated as such in accordance with Section 2.04) within which to deliver such missing document or correct or cure such defect or breach. If such missing document cannot be delivered or such defect or breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser or the Trustee as assignee of the Purchaser to cure such breach provided that such Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any missing document cannot be delivered or any breach or defect relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser or Trustee as assignee of the Purchaser, then such Seller shall, at the direction of the Purchaser or Trustee as assignee of the Purchaser, either (i) repurchase the Defective Mortgage Loan at the applicable Repurchase Price or (ii) remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans, if any. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or the Trustee as assignee of the Purchaser for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Collection Account or the Trustee as assignee of the Purchaser. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Collection Account. It is understood and agreed that the obligations of a Seller set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01 and 3.03 or to repurchase the Defective Mortgage Loan(s) shall constitute the sole remedies of the Purchaser and its assignees respecting a breach of such representations and warranties. In the event of a repurchase or substitution, the Seller shall, simultaneously with such repurchase or substitution, give written notice (by telecopier, electronically or otherwise) to the Purchaser or the Trustee as assignee of the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) this Agreement. The parties further agree that, in recognition of Xxxxxx’x Gate’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 or the Trustee as assignee of 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 Xxxxxx’x Gate of Section 3.03 (3) or 3.03(16) hereof, in which case the Purchaser or the Trustee as assignee of the Purchaser shall have the right to cause Xxxxxx’x Gate to repurchase directly the Defective Mortgage Loan) acquired hereunder by the Purchaser from Xxxxxx’x Gate.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02, shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by the Seller, the Servicer Company or the Purchaser an Owner of a breach (including any occurrence, condition, act or omission that would be a breach in the event that the Company were to have knowledge thereof) (a "Repurchase Event") of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company's lack of knowledge of such representation and warranty), 3.02 or 3.03 that which Repurchase Event materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach Repurchase Event shall give prompt written notice to the other. Each determination Within ninety (90) days of the earlier of either discovery by or notice to the Company of any such Repurchase Event, the Company shall use its best efforts to promptly cure such Repurchase Event in all material respects and, if such Repurchase Event cannot be cured during such ninety (90) day period, the Company shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within ninety (90) days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner's option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there which a Repurchase Event has been occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such a breach substitution shall be conducted on effected not later than 120 days after the related Closing Date. If the Company has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan within ninety (90) days after the written notice of the Repurchase Event. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Owner the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related Mortgage Loan and date of substitution, the interest of the Purchaser therein. With respect to the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.03 that are made 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance amount of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeshortfall.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company’s lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Within 90 days of the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects and, if such breach cannot be cured during such 90 day period, the Company shall, at the Owner’s option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 90 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner’s option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related Mortgage Loan and date of substitution, the interest of the Purchaser therein. With respect to the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.03 that are made 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance amount of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeshortfall.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first, second or third regularly scheduled payment of principal and interest due to the Purchaser after the Closing Date within 30 days of its Due Date) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first, second or third regularly scheduled payment of principal and interest due to the Purchaser after the Closing Date under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. Within 5 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account. Notwithstanding the previous paragraph, the applicable Seller may, at the sole option of the Purchaser, and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. In the event of a repurchase or substitution, the Seller shall, simultaneously with such repurchase or substitution, give written notice (by telecopier, electronically or otherwise) to the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) this Agreement. The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(16) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Seller or the an Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Seller’s lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that which materially and adversely affects the value of the related Mortgage Loan or the interests interest of the Purchaser in the related Mortgage Loan, Loan in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Within 90 days of the earlier of either discovery by or notice to the Seller of any such breach, the Seller shall use its best efforts to promptly cure such breach in all material respects and, if such breach cannot be cured during such 90 day period, the Seller shall, at the Purchaser’s option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 90 days of the earlier of either discovery by or notice to the Seller of such breach, all the Mortgage Loans shall, at the Purchaser’s option, be repurchased by the Seller at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Seller shall repurchase only the Mortgage Loans to which such breach relates. However, the Seller may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the Funding Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Seller shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Seller shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Seller. For the month of substitution, distributions to the Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Seller shall thereafter be entitled to retain all amounts subsequently received by the Seller in respect of such Deleted Mortgage Loan. The Seller shall give written notice to the Purchaser that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Seller shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related Mortgage Loan and date of substitution, the interest of the Purchaser therein. With respect to the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.03 that are made 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Seller in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Seller will deposit from its own funds into the Custodial Account an amount equal to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance amount of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeshortfall.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the a Mortgage Loans Loan or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in or the value of the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Any such breach or Defect (as to whether there has been such a breach shall be conducted on defined in Section 2.04 herein) that causes a Mortgage Loan-by-Mortgage Loan basis. A breach of representations and warranties in not to be a “qualified mortgage” within the first sentence meaning of Section 3.03(21860G(a)(3) and Sections 3.03(41) and (52) hereof, of the Code shall be deemed to materially and adversely affect the value interests of the related Mortgage Loan and Purchaser. Unless permitted a greater period of time to cure as set forth in Section 2.04, the interest applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser therein. With respect to the Seller of any breach of any of the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related a Mortgage Loan or the interest of the Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin or the value of the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest within 30 days of its Due Date) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time (not to exceed an additional 30 days), if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding the previous paragraph, the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. Notwithstanding any of the foregoing, if a breach or Defective Document would cause the Mortgage Loan to be other than a “qualified mortgage,” as defined in Section 860G(a)(3) of the Code, any such repurchase or substitution must occur within forty-five (45) days from the date the breach or Defective Document was discovered unless such breach is cured during such period. If pursuant to the foregoing provisions the Seller repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Servicer shall either (i) cause MERS to execute and deliver an assignment of the Mortgage in recordable form to transfer the Mortgage from MERS to the Seller and shall cause such Mortgage to be removed from registration on the MERS® System in accordance with MERS’s rules and regulations or (ii) cause MERS to designate on the MERS® System the Seller as the beneficial holder of such Mortgage Loan. In the event of a repurchase or substitution, the Seller shall, simultaneously with such repurchase or substitution, give written notice (by telecopier, electronically or otherwise) to the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) this Agreement. The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(16) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained hereindirectly the Defective Mortgage Loan) acquired hereunder by the Purchaser from the Trust. In the event that any Mortgage Loan is held by a REMIC, notwithstanding Seller’s lack any contrary provision of knowledge this Agreement, with respect to any Mortgage Loan that is not in default or as to which no default is imminent, the inaccuracy Purchaser may, in connection with any repurchase or substitution of a Mortgage Loan pursuant to this Section 3.03, require that the Seller deliver, at the time Seller’s expense, an Opinion of Counsel to the representation effect that such repurchase or warranty was madesubstitution will not (i) result in the imposition of taxes on “prohibited transactions” of such REMIC (as defined in Section 860F of the Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to qualify as a REMIC at any time.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company’s lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Within 90 days of the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects and, if such breach cannot be cured during such 90 day period, the Company shall, at the Owner’s option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 90 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner’s option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting there from any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related Mortgage Loan and date of substitution, the interest of the Purchaser therein. With respect to the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.03 that are made 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance amount of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeshortfall.

Repurchase and Substitution. The second paragraph of Section 3.04 shall be amended and replaced, to read in its entirety as follows: (a) Upon discovery by the Seller, the Servicer or the Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.01, 3.02 3.1 or 3.03 3.2 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related any Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach Purchaser shall give prompt written notice to the otherSeller. Each determination as to whether there has been The Seller shall promptly cure in all material respects any such a breach shall or defect within 90 days of notice of such breach or defect and, if such breach or defect cannot be conducted on a Mortgage Loancured within such 90-by-day period, the Seller shall, either (i) repurchase the affected Mortgage Loan basis. A breach of representations and warranties or (ii) reimburse the Purchaser an amount (the "Purchase Price Adjustment") equal to the reduction in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related affected Mortgage Loan based upon the breach; provided, that, if the Seller and the interest Purchaser are unable to agree upon the Purchase Price Adjustment, the Seller shall repurchase such Mortgage Loan. Any such repurchase shall be at a price equal to the applicable Repurchase Price, and shall occur on the next Monthly Remittance Date and shall be accomplished by deposit in the Account of the amount of the Repurchase Price pursuant to Section 2.4 of the Servicing Agreement. Notwithstanding anything to the contrary in this Agreement, the Seller is under no obligation to repurchase any Mortgage Loan or pay any Purchase Price Adjustment if the Purchaser therein. With or its designee has renewed, renegotiated, modified, compromised, settled, released, sold or transferred the Mortgage Loan, Mortgaged Property, or Mortgagor in whole or in part in any material respect to or impaired such Mortgage Loan in any material respect. (b) It is understood and agreed that the representations and warranties contained set forth in Sections 3.1 and 3.2 shall survive for a period of three years following the related Closing Date and shall inure to the benefit of the Purchaser; provided, that the representations and warranties under Sections 3.1(b), (c), (f), (h), (k), (m), (n) and (q) shall survive for the life of the Mortgage Loans. It is further understood and agreed that to the extent the Seller discloses, in writing, any information that would otherwise constitute a breach of a Section 3.03 3.1 or 3.2 representation or warranty prior to the Purchaser's purchase of a related Mortgage Loan, such disclosed information shall not constitute a breach which requires that are made the Seller cure the condition, repurchase the Mortgage Loan or pay any Purchase Price Adjustment. The Seller and the Purchaser may agree, however, to reprice any Mortgage Loan or remove such Mortgage Loan once the Seller discloses such breach in writing to the Purchaser. (c) The Purchaser shall immediately take all steps necessary to effect the reconveyance of any repurchased Mortgage Loan, including all documentation with respect thereto, to the Seller’s knowledge. If, if it is discovered by either in accordance with Section 3.3(a), a Seller repurchases any MERS Loan, the Servicer shall be authorized to (i) cause the MERS(R)System to reflect such repurchase, or (ii) cause MERS to remove the repurchased Mortgage Loan from registration on the MERS(R)System and execute and deliver an Assignment of Mortgage to reflect the transfer of such Mortgage Loan to the Seller or its designee. (d) It is understood and agreed that the obligations of a Seller set forth in this Section 3.3 constitute the sole remedies available to the Purchaser that respecting a breach of the substance representations and warranties by such Seller set forth in Section 3.1 and Section 3.2. In no event shall Seller be liable for any additional damages, including without limitation, consequential, punitive, or exemplary damages, with respect to any breach. (e) Any cause of such action against a Seller relating to or arising out of the breach of any representation and warranty is inaccurate made by such Seller in Sections 3.1 and such inaccuracy materially and adversely affects the value of the related 3.2 shall accrue as to any Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach only upon (i) discovery of such representation breach by the Purchaser, (ii) failure by such Seller to cure such breach or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge or pay any Purchase Price Adjustment with respect to such Mortgage Loan(s) as specified above and (iii) demand upon such Seller by the inaccuracy at the time the representation or warranty was madePurchaser for all amounts payable in respect of such Mortgage Loan.

Repurchase and Substitution. The second paragraph 33- It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a "Defective Mortgage Loan"; provided that "Defective Mortgage Loan" shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides written evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser's Account. Notwithstanding the previous paragraph, the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan ("Deleted Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser's Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser's Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller's representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller's representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. The parties further agree that, in recognition of the Trust's rights against Cendant Mortgage with respect to the Mortgage Loans acquired by it from Cendant Mortgage and conveyed to the Purchaser hereunder, the Purchaser shall be entitled have the right to all the remedies cause Cendant Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(15) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second representations and warranties contained in Sections 3.01, 3.02 or 3.03 shall not be impaired by any review and examination of the Mortgage Files or other documents evidencing or relating to the Mortgage Loans or any failure on the part of the Sellers or the Purchaser to review or examine such documents and shall inure to the benefit of any assignee, transferee or designee of the Purchaser, including the Trustee for the benefit of the Certificateholders. With respect to the representations and warranties contained herein as to which the Sellers have no knowledge, if it is discovered that the substance of any such representation and warranty was inaccurate as of the date such representation and warranty was made or deemed to be made, and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interest therein of the Purchaser or the Purchaser’s assignee, transferee or designee, then notwithstanding the lack of knowledge by the Sellers with respect to the substance of such representation and warranty being inaccurate at the time the representation and warranty was made, the Sellers shall take such action described in the following paragraph in respect of Section 3.04 such Mortgage Loan. It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall be amended survive the sale of the Mortgage Loans to the Purchaser and replacedshall inure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of any materially defective document in, or that any material document was not transferred by the Seller (as listed on the related Custodian’s preliminary exception reports, as described in the Custodial Agreement) as part of, any Mortgage File or of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been the Seller of any such missing documentation that was not transferred by the Seller as described above, or of a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A materially defective document or of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include any Mortgage Loan treated or designated as such in accordance with Section 2.04) within which to deliver such missing document or correct or cure such defect or breach. If such missing document cannot be delivered or such defect or breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any missing document cannot be delivered or any breach or defect relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, either (i) repurchase the Defective Mortgage Loan at the applicable Repurchase Price or (ii) remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans, if any. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. In the event of a repurchase or substitution, the Seller shall, simultaneously with such repurchase or substitution, give written notice (by telecopier, electronically or otherwise) to the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) this Agreement. The parties further agree that, 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 be entitled have the right to all cause PHH Mortgage to repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of Section 3.03 (3) or 3.03(16) hereof, in which case the Purchaser shall have the right to cause the Trust to repurchase directly the Defective Mortgage Loan) acquired hereunder by the Purchaser from the Trust. It is understood and agreed that the obligations of the Seller set forth in this Section 3.04 to cure or repurchase a defective Mortgage Loan constitute the sole remedies to which it would be entitled for of the Purchaser against the Seller respecting a missing document or a breach of the representations and warranties contained in Sections 3.01, 3.02 or 3.03. (x) Section 6.02 of the Servicing Agreement is hereby amended by deleting the first sentence in the first paragraph of such representation section in its entirety and replacing it with the following: On or warranty, including, without limitationbefore the 5th Business Day following the Accounting Cut-off Date of each month during the term hereof, the repurchase requirements contained hereinServicer shall deliver to the Purchaser monthly accounting reports substantially in the formats in Exhibits 6.02(a) through (i), notwithstanding Seller’s lack of knowledge as previously delivered to the Master Servicer, and including the information set forth on Exhibit 6A, and in such other forms and contents as may be mutually agreed upon by Servicer and Master Servicer, with respect to the inaccuracy at most recently ended Due Period. (y) Subsection 6.03(2) of the time Servicing Agreement is hereby amended by deleting such section in its entirety and replacing it with the representation or warranty was made.following:

Repurchase and Substitution. The second paragraph (a) It is understood and agreed that the representations and warranties referenced in Annex 1 hereto shall survive the conveyance of Section 3.04 shall be amended the Loans to the Indenture Trustee on behalf of the Issuer, and replaced, the delivery of the Securities to read in its entirety as follows: the Securityholders. Upon discovery by the SellerDepositor, the Servicer Servicer, the Loan Originators, the Custodian, the Issuer, the Indenture Trustee or the Purchaser any Securityholder of a breach of any of such representations and warranties or the representations and warranties contained of the Loan Originators set forth in Sections 3.01, Section 3.02 or 3.03 that which materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser Securityholders in the related Mortgage LoanLoan (notwithstanding that such representation and warranty was made to the related Loan Originator's best knowledge) or which, as a result of the attributes of the aggregate Loan Pool, constitutes a breach of the representations and warranties set forth in the case of a representation or warranty relating to a particular Mortgage Loan)Annex 1, the party discovering such breach shall give prompt written notice to the otherothers. Each determination as The related Loan Originator shall within 5 Business Days of any breach of a representation or warranty, promptly cure such breach in all material respects. If within 5 Business Days after the earlier of the related Loan Originator's discovery of such breach or the related Loan Originator's receiving notice thereof such breach has not been remedied by the related Loan Originator and such breach materially and adversely affects the interests of the Securityholders or in the related Loan (the "Unqualified Loan"), the related Loan Originator shall promptly either (i) remove such Unqualified Loan from the Trust (in which case it shall become a Deleted Loan) and substitute one or more Qualified Substitute Loans in the manner and subject to the conditions set forth in this Section 3.06 or (ii) repurchase such Unqualified Loan at a purchase price equal to the Repurchase Price with respect to such Unqualified Loan by depositing such Repurchase Price in the Collection Account; provided, however, that if there is not an Overcollateralization Shortfall on the date of such repurchase (after giving effect to such repurchase) the Loan Originator shall remit the Alternate Repurchase Price in accordance with Section 5.01(c)(4)(i). The related Loan Originator shall provide the Servicer, the Indenture Trustee, the Initial Noteholder and the Issuer with a certification of a Responsible Officer on the Determination Date next succeeding the end of such 5 Business Days period indicating whether there the related Loan Originator is purchasing the Unqualified Loan or substituting in lieu of such Unqualified Loan a Qualified Substitute Loan. To the extent that a Wet Funded Loan is repurchased by the related Loan Originator by means of a withdrawal of the Sales Price therefor from the Reserve Account and distribution of such amount to the Noteholders, the related Loan Originator shall pay an additional amount equal to the Note Interest Rate on the Principal Balance of such Wet Loan, computed for the period of time that the Wet Funded Any substitution of Loans pursuant to this Section 3.06(a) shall be accompanied by payment by the related Loan Originator of the Substitution Adjustment, if any, to be deposited in the Collection Account pursuant to Section 5.01(b)(1) hereof. It is understood and agreed that the obligation of the Loan Originator to repurchase or substitute any such Loan pursuant to this Section 3.06 shall constitute the sole remedy against it with respect to such breach of the foregoing representations or warranties or the existence of the foregoing conditions. (b) As to any Deleted Loan for which the related Loan Originator substitutes a Qualified Substitute Loan or Loans, the related Loan Originator shall effect such substitution by delivering (i) to the Indenture Trustee and Initial Noteholder a certification executed by a Responsible Officer of the related Loan Originator to the effect that the Substitution Adjustment, if any, has been remitted to the Noteholders or, if an Overcollateralization Shortfall exists on the date of substitution (after giving effect to such substitution), credited to the Collection Account and (ii) to the Custodian the documents constituting the Custodial Loan File for such Qualified Substitute Loan or Loans. The Servicer shall deposit in the Collection Account all payments received in connection with such Qualified Substitute Loan or Loans after the date of such substitution. Monthly Payments received with respect to Qualified Substitute Loans on or before the date of substitution will be retained by the related Loan Originator. The Issuer will be entitled to all payments received on the Deleted Loan on or before the date of substitution and the related Loan Originator shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Loan. The Servicer shall give written notice to the Issuer, the Indenture Trustee and Initial Noteholder that such substitution has taken place and the Servicer shall amend the Loan Schedule to reflect (i) the removal of such Deleted Loan from the terms of this Agreement and (ii) the substitution of the Qualified Substitute Loan. The related Loan Originator shall promptly deliver to the Issuer, the Servicer, the Indenture Trustee and Initial Noteholder, a breach copy of the amended Loan Schedule. Upon such substitution, such Qualified Substitute Loan or Loans shall be conducted on a Mortgage Loan-by-Mortgage subject to the terms of this Agreement in all respects, and the related Loan basis. A breach of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, Originator shall be deemed to materially have made, as of the date of substitution, the covenants, representations and adversely affect warranties set forth in Section 3.05 hereof with respect to such Qualified Substitute Loan or Loans. On the value date of such substitution, the Servicer shall cause the Indenture Trustee to release the Deleted Loan from the lien of the Indenture and the Servicer will cause such Qualified Substitute Loan to be pledged to the Indenture Trustee under the Indenture as part of the Trust Estate. (c) With respect to all Unqualified Loans or other Loans repurchased by the related Loan Originator pursuant to this Agreement, upon the deposit of the Repurchase Price therefor into the Collection Account or, if there is not an Overcollateralization Shortfall on the date of such repurchase (after giving effect to such repurchase) upon the remittance of the Alternate Repurchase Price by the Loan Originator in accordance with Section 5.01(c)(4)(i), (d) It is understood and agreed that the obligations of the related Mortgage Loan Originator set forth in this Section 3.06 to cure, repurchase or substitute for an Unqualified Loan constitute the sole remedies hereunder of the Depositor, the Issuer, the Indenture Trustee, the Owner Trustee and the interest Securityholders respecting a breach of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance 3.05 hereof. Any cause of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of action against the related Mortgage Loan Originator relating to or arising out of a defect in a Custodial Loan File as contemplated by Section 2.05 hereof or against the interests related Loan Originator relating to or arising out of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of any representations and warranties made in Section 3.05 hereof shall accrue as to any Loan upon (i) discovery of such representation defect or warrantybreach by any party and notice thereof to the related Loan Originator, including(ii) failure by the related Loan Originator to cure such defect or breach or purchase or substitute such Loan as specified above, without limitationand (iii) demand upon the related Loan Originator, as applicable, by the Issuer or the Majority Noteholders for all amounts payable in respect of such Loan. (e) Neither the Issuer nor the Indenture Trustee shall have any duty to conduct any affirmative investigation other than as specifically set forth in this Agreement as to the occurrence of any condition requiring the repurchase requirements contained herein, notwithstanding Seller’s lack or substitution of knowledge with respect any Loan pursuant to this Section or the inaccuracy at the time the representation or warranty was madeeligibility of any Loan for purposes of this Agreement.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstand-ing any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Seller or the an Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Seller’s lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that which materially and adversely affects the value of the related Mortgage Loan or the interests interest of the Purchaser in the related Mortgage Loan, Loan in the case of a representation or repre-sentation and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Within 90 days of the earlier of either discovery by or notice to the Seller of any such breach, the Seller shall use its best efforts to promptly cure such breach in all material respects and, if such breach cannot be cured during such 90 day period, the Seller shall, at the Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any represent-ation or warranty set forth in Section 3.01, and such breach cannot be cured within 90 days of the earlier of either discovery by or notice to the Seller of such breach, all the Mortgage Loans shall, at the Purchaser's option, be repurchased by the Seller at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Seller shall repurchase only the Mortgage Loans to which such breach relates. However, the Seller may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substi-tute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the Funding Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodi-al Account for future distribution). The Seller shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Seller shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Seller. For the month of substitution, distributions to the Purchaser will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Seller shall thereafter be entitled to retain all amounts subsequently received by the Seller in respect of such Deleted Mortgage Loan. The Seller shall give written notice to the Purchaser that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitu-tion of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Seller shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related Mortgage Loan and date of substitu-tion, the interest of the Purchaser therein. With respect to the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.03 that are made 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Seller in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Seller will deposit from its own funds into the Custodial Account an amount equal to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance amount of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeshortfall.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01 and 3.02 shall survive delivery of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery (including receipt of notice to such effect from the Purchaser) by either the Seller, the Servicer Company or the Purchaser of a breach of any of the foregoing representations and warranties contained warranties, without regard to any limitation set forth in Sections 3.01such representation or warranty concerning the knowledge of the Company as to the facts stated therein, 3.02 or 3.03 that which materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related any Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt notice to the other parties. Within 90 days of the earlier of either discovery by or notice to the Company of any breach of a representation or warranty, the Company shall use its best efforts to promptly cure such breach in all material respects and, if such breach cannot be cured, the Company shall repurchase such Mortgage Loan at a price equal to (i) the Stated Principal Balance of the Mortgage Loan, plus (ii) interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate from the date to which interest has last been paid by the Mortgagor to the first day of the month in which such purchase price is to be distributed which purchase price shall be deposited in the Custodial Account on the next succeeding Determination Date (after deducting therefrom any principal and interest amounts received in respect of such repurchased Mortgage Loan and being held in the Custodial Account for future distribution). However, the Company may, at its option and assuming that the Company has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan ("Deleted Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided, however, that (i) if the Purchaser exercises its rights under Section 2.05, the Company may not effect a substitution without the prior written consent of the Purchaser and (ii) any such substitution shall be effected not later than 120 days after the related Closing Date. If the Company has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the repurchase price set forth above (after deducting therefrom any principal and interest amounts received in respect of such repurchased Mortgage Loan or Loans and being held in the Custodial Account for future distribution). If the representation made by the Company in Section 3.02(g) is breached, the Company shall not have the right or obligation to cure, substitute or repurchase the affected Mortgage Loan but shall deposit in the Custodial Account, prior to the next succeeding Remittance Date, the amount of the Prepayment Charge indicated on the applicable part of the Mortgage Loan Schedule to be due from the Mortgagor in the circumstances less any amount collected and paid by the Company into the Custodial Account; provided, however, that if a representation in addition to that set forth in Section 3.01(g) is breached with respect to a Mortgage Loan or Mortgage Loans, the Company shall both deposit the applicable Prepayment Charge as provided in this paragraph and cure, substitute or repurchase the affected Mortgage Loan or Mortgage Loans as provided in this Section 3.03. In addition, if the covenant made by the Company in Section 3.02(h) is breached, the Company shall pay into the Custodial Account the amount of the waived Prepayment Charge. As to any Deleted Mortgage Loan for which the Company substitutes a Qualified Substitute Mortgage Loan or Loans, the Company shall effect such substitution by delivering to the Custodian for such Qualified Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment of Mortgage and such other documents and agreements as are required by Section 2.04, with the Mortgage Note endorsed as required by Section 2.04. No substitution will be made in any calendar month after the Determination Date for such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Purchaser will include the Monthly Payment less the Servicing Fee due on such Deleted Mortgage Loan or Loans in the month of substitution, and the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the otherPurchaser that such substitution has taken place and shall amend the related Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans. Each determination as to whether there has been Upon such a breach substitution, such Qualified Substitute Mortgage Loan or Loans shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach subject to the terms of representations this Agreement in all respects, and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.02. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loan and or Loans for one or more Deleted Mortgage Loans, the interest Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the Purchaser thereindate of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans. With respect The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such cure, repurchase and substitution obligation, the Company shall indemnify the Purchaser and hold it harmless against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach of the Company's representations and warranties contained in this Article III. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller cure or repurchase a defective Mortgage Loan and to indemnify the Purchaser that as provided in this Section 3.03 constitute the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests sole remedies of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for respecting a breach of the foregoing representations and warranties. Any cause of action against the Company relating to or arising out of the breach of any representations and warranties made in Sections 3.01 or 3.02 shall accrue as to any Mortgage Loan upon (i) discovery of such representation breach by the Purchaser or warranty, including, without limitation, notice thereof by the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect Company to the inaccuracy at Purchaser, (ii) failure by the time Company to cure such breach or repurchase such Mortgage Loan as specified above, and (iii) demand upon the representation or warranty was madeCompany by the Purchaser for all amounts payable in respect of such Mortgage Loan.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company's lack of knowledge of such representation and warranty), or the substance of a representation and warranty by the seller pursuant to Section 3.02 (xviii) has been breached and the breach and the damage occurred prior to the related Closing date as a direct result of the wildfires which struck the counties of San Diego, San Bernardino, Los Angeles, Riverside or 3.03 that Ventura in the State of California in late October and early November, 2003, which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Upon the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects within 60 days, and, if such breach cannot be cured during such time period, the Company shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner's option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the related Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such repurchase obligation, the Company shall indemnify the Owner for any expenses reasonably incurred by the Owner in enforcing its remedies hereunder in connection with any breach by the Company of any representation or warranty set forth in this Agreement. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 to cure or to repurchase a defective Mortgage Loan and to indemnify the interest Owner as provided in this Section 3.03 constitute the sole remedies of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for Owner respecting a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeforegoing representations and warranties.

Repurchase and Substitution. The second paragraph (a) It is understood and agreed that the representations and warranties set forth in Sections 3.1 and 3.2 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. That fact that Purchaser has conducted or has failed to read in its entirety conduct any partial or complete examination of any Mortgage File either prior to the Closing Date or thereafter shall not affect Purchaser's rights to demand repurchase, substitution or other relief as follows: provided herein. (b) Upon discovery by the Seller, the Servicer Seller or the Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.01, 3.02 or 3.03 3.1 and 3.2 that materially and adversely affects the value of any Mortgage Loan or the interest of the Purchaser in any Mortgage Loan (or, in the case of the representations and warranties set forth in Section 3.2, the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage LoanLoans), the party discovering such breach shall give prompt written notice to the other. Each determination as The Seller shall use its best efforts to whether there has been promptly cure in all material respects any such breach or defect within 90 days of the earlier of either discovery by or notice to the Seller of such breach or defect, and, if such breach or defect cannot be or is not cured within such 90-day period, the Seller shall, except in the case Section 3.2, at the option of the Purchaser, repurchase the affected Mortgage Loan, or in the case of a breach of a representation and warranty set forth in Section 3.2, repurchase such of the affected Mortgage Loans so that, after such repurchase, such breach or defect is cured in all material respects. Any such repurchase shall be conducted at a price equal to the Stated Principal Balance on the date of such repurchase of each Mortgage Loan to be repurchased, plus (y) interest on each such Stated Principal Balance at the applicable Pass-Through Rate from the date to which interest has last been paid and distributed to the Purchaser to the date of such repurchase, plus (z) for any repurchase requested by Purchaser within two months after the Closing Date, the product of the Stated Principal Balance times the excess (if any) by which the Purchase Price Percentage exceeds par (the "Repurchase Price"). Any such repurchase shall be accomplished by deposit in the Collection Account of the amount of the Repurchase Price. Notwithstanding the foregoing, if the Seller discovers or receives notice of any such breach or defect, the Seller may, with the prior written consent of the Purchaser, rather than repurchase any Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted Mortgage Loan-by-") and substitute in its place a Qualified Substitute Mortgage Loan basisor Qualified Substitute Mortgage Loans; provided, however, such substitution shall be completed within 120 days after the related Closing Date. A If the Seller has no Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage Loans, it shall repurchase the Mortgage Loan or Mortgage Loans, as the case may be, in the manner provided in this Section 3.3(b). It is understood by the parties hereto that a breach of the representations and warranties made in the first sentence of Section 3.03(21Sections 3.1 (ccc), (ddd), (fff), (hhh) and Sections 3.03(41or (www) and (52) hereof, shall will be deemed to materially and adversely affect the value of the related Mortgage Loan and or the interest of the Purchaser therein. (c) For each of the Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage Loan, the Seller shall deliver to the Purchaser the documents specified in Section 2.3(a), with the Mortgage Note endorsed as required by Section 2.3(a)(i) and, where applicable, original documents having evidence of recording thereon. With The Seller shall also take such actions with respect to the documents pertaining to each such Qualified Substitute Mortgage Loan as are required to be taken pursuant to Sections 2.3(c) with respect to the Mortgage Loans originally subject to this Agreement (and, for purposes of applying the requirements of Sections 2.3(c) to any Qualified Substitute Mortgage Loan, references in such Sections to the Closing Date shall be deemed to be references to the applicable date of substitution of such Qualified Substitute Mortgage Loan). The Seller shall not effect such substitution until it has received the written consent of the Purchaser, which consent shall not be unreasonably withheld. The Seller shall deposit in the Collection Account the Monthly Payment due on each Qualified Substitute Mortgage Loan in the month following the date of such substitution (with the interest portion thereof adjusted to the applicable Pass-Through Rate), and the Monthly Payment due with respect to such Qualified Substitute Mortgage Loan in the month of substitution shall be retained by the Seller. For the month of substitution, distributions to the Purchaser shall include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and the Seller shall thereafter be entitled to retain all amounts subsequently received by the Seller in respect of such Deleted Mortgage Loan. The Seller shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage Loans and shall give written notice to the Purchaser that such substitution has taken place, which notice shall have attached thereto a copy of such amended Mortgage Loan Schedule. Upon such substitution, each such Qualified Substitute Mortgage Loan 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 Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage Loans, as of the date of substitution, the representations and warranties set forth in Sections 3.1 and 3.2 (and, for purposes of applying such representations and warranties to each such Qualified Substitute Mortgage Loan, references in such Sections to the Closing Date shall be deemed to be references to such date of substitution of such Qualified Substitute Mortgage Loan). (d) The Purchaser shall immediately take all steps necessary to effect the reconveyance of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all documentation with respect thereto, to the Seller. The Seller shall pay all costs and expenses incurred in connection with the repurchase of any Mortgage Loan and the substitution for any Deleted Mortgage Loan. (e) For any month in which the Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller shall determine the amount, if any, by which the aggregate outstanding principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Seller in the month of substitution pursuant to Section 5.1. Accordingly, on the date of such substitution, the Seller shall deposit from its own funds into the Collection Account an amount equal to the amount of such shortfall. (f) In addition to such cure, repurchase and substitution obligations of the Seller set forth in this Section 3.3, the Seller shall indemnify and hold harmless the Purchaser against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees actually incurred and related costs, judgments and other costs and expenses resulting from any claim, demand, defense, or assertion grounded upon, or resulting from a breach of any of the Seller's representations and warranties contained in this Agreement. It is understood and agreed that the obligations of the Seller set forth in this Section 3.03 that are made 3.3 to cure, repurchase, or substitute for a defective Mortgage Loan and to indemnify the Purchaser pursuant to this sub-section constitute the sole remedies available to the Seller’s knowledge, if it is discovered by either Purchaser respecting a breach of the representations and warranties set forth in Sections 3.1. (g) Any cause of action against the Seller relating to or arising out of the Purchaser that the substance breach of such any representation and warranty is inaccurate made in Sections 3.1 and 3.2 shall accrue as to any Mortgage Loan upon (i) discovery of such inaccuracy materially and adversely affects breach by the value of Purchaser or notice thereof by the related Seller to the Purchaser, (ii) failure by the Seller to cure such breach or repurchase or substitute a Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage Loans for such Mortgage Loan as specified above, and (iii) demand upon the interests of Seller by the Purchaser thereinfor all amounts payable in respect of such Mortgage Loan. (h) With respect to any Mortgage Loan, if the related Mortgagor has not made the Monthly Payment due under the Mortgage Note within 30 days after the first Due Date following the Closing Date, then the Seller agrees to repurchase such Mortgage Loan from the Purchaser as provided herein. Within ten Business Days after the Purchaser's request for repurchase of any such Mortgage Loan, the Purchaser Seller shall be entitled repurchase at the Repurchase Price any Mortgage Loan that meets such condition. (i) With respect to all any Mortgage Loan that prepays in full within 60 days after the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitationClosing Date, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect Seller shall repay to the inaccuracy at Purchaser, within 10 Business Days afer request from the time Purchaser, any premium over par originally paid by the representation or warranty was madePurchaser for such Mortgage Loan.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest within 30 days of its Due Date) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 30 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account. Notwithstanding the previous paragraph, the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser’s Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01(1) to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. In the event of a repurchase or substitution, the Seller shall, simultaneously with such repurchase or substitution, give written notice (by telecopier, electronically or otherwise) to the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) this Agreement. The parties further agree that, 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 be entitled have the right to all the remedies cause PHH Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(16) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph (a) It is understood and agreed that the representations and warranties set forth in Sections 3.1 and 3.2 shall survive the sale of Section 3.04 Mortgage Loans by the Company to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Collateral File. (b) Upon discovery by the Seller, the Servicer Company or the Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.01, 3.02 3.1 or 3.03 3.2 made by the Company that materially and adversely affects the value of any Mortgage Loan or the interest of the Purchaser in any Mortgage Loan sold by the Company hereunder (or, in the case of the representations and warranties set forth in Section 3.2, the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects sold by the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage LoanCompany hereunder), the party discovering such breach shall give prompt (in no event less than sixty (60) days after discovery of such breach) written notice to the other. Each determination as The Company shall either (i) cure in all material respects any such breach or defect within 90 days of the earlier of either discovery by or notice to whether there has been the Company of such breach or defect, or (ii) in the case of a breach of a representation and warranty set forth in Section 3.1, repurchase the affected Mortgage Loan(s), and, in the case of a breach of a representation and warranty set forth in Section 3.2, repurchase either (A) all of the Mortgage Loans, or (B) such of the Mortgage Loans selected by the Purchaser so that, after such repurchase, such breach or defect is cured in all material respects. Any such repurchase shall be conducted at a price equal to the applicable Repurchase Price, shall occur on the next Monthly Remittance Date and shall be accomplished by deposit in the Remittance Account the amount of the Repurchase Price pursuant to Section 2.7(b)(xii) of the Servicing Agreement. Notwithstanding the foregoing, if the Company discovers or receives notice of any such breach or defect, and if the affected Mortgage Loan has not been subject to a Securitization Transaction, the Company may remove any such Mortgage Loan (a "Deleted Mortgage Loan-by-"), rather than repurchase any such Mortgage Loan basisas provided above, and substitute in its place a Qualified Substitute Mortgage Loan(s). A breach of representations and warranties If the Company does not replace the defective Mortgage Loan(s) with Qualified Substitute Mortgage Loan(s), then the Company shall repurchase the Mortgage Loan or Mortgage Loans, as the case may be, in the first sentence of manner provided in this Section 3.03(213.3(b). (c) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value For each of the related Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage Loan, the Company shall deliver to the Custodian the documents specified in Section 2.2(a), with the Mortgage Note endorsed as required by Section 2.2(a) and, where applicable, original documents having evidence of recording thereon. The Company shall also take such actions with respect to the documents pertaining to each such Qualified Substitute Mortgage Loan as are required to be taken pursuant to Section 2.2 with respect to the Mortgage Loans originally subject to this Agreement. For purposes of applying the requirements (d) The Purchaser shall promptly take all steps necessary to effect the reconveyance of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all documentation with respect thereto, to the Company. The Company shall pay all costs and expenses incurred in connection with the repurchase of any Mortgage Loan and the interest substitution for any Deleted Mortgage Loan. If, in accordance with Section 3.3(b), the Company repurchases any MERS Loan or substitutes a Qualified Substitute Mortgage Loan for any MERS Loan, the Servicer shall be authorized to (i) cause the MERS(R) System to reflect such repurchase or substitution, as the case may be, or (ii) cause MERS to remove the repurchased or replaced Mortgage Loan from registration on the MERS(R) System and execute and deliver an Assignment of Mortgage to reflect the transfer of such Mortgage Loan to the Company or its designee. The Company shall bear any and all fees of MERS relating to the actions authorized under this Section 3.3(d). (e) For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company shall determine the amount, if any, by which the aggregate outstanding principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company on the Monthly Remittance Date following the date of the substitution. Pursuant to Section 2.7(b)(xii) of the Servicing Agreement, the Company shall deposit from its own funds (and without any right of reimbursement therefor) into the Remittance Account an amount equal to the amount of such shortfall. (f) It is understood and agreed that the obligations of the Company set forth in this Section 3.3 constitute the sole remedies available to the Purchaser therein. With respect to respecting a breach of the representations and warranties contained by the Company set forth in Section 3.03 that are made 3.1 and Section 3.2. (g) Any cause of action against the Company relating to or arising out of the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance breach of such any representation and warranty is inaccurate made by the Company in Sections 3.1 and 3.2 shall accrue as to any Mortgage Loan only upon (i) discovery of such inaccuracy materially breach by the Purchaser or notice thereof by the Company to the Purchaser, (ii) failure by the Company to cure such breach or repurchase or substitute a Qualified Substitute Mortgage Loan(s) for such Mortgage Loan as specified above, and adversely affects (iii) demand upon the value Company by the Purchaser for all amounts payable in respect of such Mortgage Loan. (A) In addition to the cure, repurchase or substitution obligation set forth above in this Section 3.3, the Company shall indemnify the Purchaser and hold it harmless against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses resulting from the defense of any claim against the Purchaser by a third party resulting from a breach of the related Mortgage Loan representations and warranties made by the Company in this Article 3; provided, however, that in no event shall the Company have any liability for any indirect, special or the interests of consequential damages, losses, costs or expenses incurred by Purchaser. (B) The Company shall not be liable for any costs and expenses pursuant to this Section 3.3(h) unless the Purchaser thereinprovides written notice to the Company that describes the nature of such claim within a reasonable time after service of a summons or other first legal process upon the Purchaser; provided, however, that the Purchaser's failure to notify the Company pursuant to this paragraph shall not relieve the Company from any liability that the Company may have to the Purchaser otherwise than on account of this indemnity. (C) The Company shall be entitled to all participate at its own expense in the remedies defense, or, if the Company so elects, to which it would be entitled for assume the defense of any suit against the Purchaser by a third party resulting from a breach of the representations and warranties made by the Company in this Article 3. If the company elects to assume the defense of a suit against the Purchaser, such defense shall be conducted by counsel chosen by the Company. In the event the Company elects to assume the defense of any such suit and retain such counsel, the Purchaser may retain additional counsel but shall bear the fees and expenses of such counsel unless (x) the Company and the Purchaser have mutually agreed to the retention of such counsel or (y) the named parties to such suit (including any impleaded parties) include both the Company and the Purchaser and representation of both the Company and the Purchaser by the same counsel would be inappropriate due to actual or warrantypotential differing interests between them. It is understood that the Company shall not, includingin connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one counsel (separate from its own counsel) for the Purchaser. (D) The Company shall not be required to indemnify any person for any settlement of any claim effected without the Company's consent, which consent shall not be unreasonably withheld. The Company shall not, without limitationthe prior written consent of the Purchaser, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding to which the repurchase requirements contained herein, notwithstanding Seller’s lack Purchaser is a party and indemnity is sought hereunder by the Purchaser unless such settlement includes an unconditional release of knowledge with respect to the inaccuracy at Purchaser from all liability on claims that are the time the representation or warranty was madesubject matter of such proceeding.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a “Defective Mortgage Loan”; provided that “Defective Mortgage Loan” shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due any Mortgage Loan or the first regularly scheduled payment due after the Funding Date under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. For any Mortgage Loan purchased by the Purchaser that have been prepaid-in full within 30 days from the Funding Date (“Prepaid Loan”), the Seller shall repurchase the Mortgage Loan at the Repurchase price. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser’s Account, or as otherwise directed by the Purchaser. Notwithstanding the previous paragraph, the applicable Seller may, at Purchaser’s option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (“Deleted Mortgage Loan”) and substitute in its place a Qualified Substitute Mortgage Loan or Loans. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans the Legal Documents as are required by Section 2 and an amended Mortgage Loan Schedule. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser’s Account, or as otherwise directed by the Purchaser. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04(3) by wire transfer of immediately available funds directly to the Purchaser’s Account, or as otherwise directed by the Purchaser. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04(3) to cure any breach of such Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller’s representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. All costs of repurchase/substitution shall be borne by the Sellers. The parties further agree that, in recognition of the Trust’s rights against Cendant Mortgage with respect to the Mortgage Loans acquired by it from Cendant Mortgage and conveyed to the Purchaser hereunder, the Purchaser shall be entitled have the right to all cause Cendant Mortgage to repurchase directly and indemnify the remedies to which it would be entitled for Purchaser as set forth in section 9.01 with respect any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03 (3) or warranty3.03(15) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph (a) It is understood and agreed that the representations and warranties set forth in Sections 3.1 and 3.2 shall survive the sale of Section 3.04 Mortgage Loans by each Seller to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Collateral File or Credit File. (b) Upon discovery by a Seller (the “Breaching Seller, the Servicer ”) or the Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.01, 3.02 3.1 or 3.03 3.2 made by the Breaching Seller that materially and adversely affects the value of any Mortgage Loan or the interest of the Purchaser in any Mortgage Loan sold by the Breaching Seller hereunder (or, in the case of the representations and warranties set forth in Section 3.2, the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects sold by the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage LoanBreaching Seller hereunder), the party discovering such breach shall give prompt written notice to the other. Each determination as The Breaching Seller shall either (A) cure in all material respects any such breach or defect within 120 days of the earlier of either discovery by or notice to whether there has been the Breaching Seller of such breach or defect, or (B) in the case of a breach of a representation and warranty set forth in Section 3.1, repurchase the affected Mortgage Loan(s), and, in the case of a breach of a representation and warranty set forth in Section 3.2, repurchase either (1) all of the Mortgage Loans or (2) such of the Mortgage Loans selected by the Purchaser so that, after such repurchase, such breach or defect is cured in all material respects. Any such repurchase shall be conducted at a price equal to the applicable Repurchase Price, shall occur on the next Monthly Remittance Date and shall be accomplished by deposit in the Account of the amount of the Repurchase Price pursuant to Section 2.4 of the Servicing Agreement. Notwithstanding the foregoing, if the Breaching Seller discovers or receives notice of any such breach or defect, and if the affected Mortgage Loan has not been subject to a Pass-Through Transfer, the Breaching Seller may remove any such Mortgage Loan (a “Deleted Mortgage Loan-by-”), rather than repurchase any such Mortgage Loan basisas provided above, and substitute in its place a Qualified Substitute Mortgage Loan(s). A breach of representations and warranties If the Breaching Seller has no Qualified Substitute Mortgage Loan(s), then the Breaching Seller shall repurchase the Mortgage Loan or Mortgage Loans, as the case may be, in the first sentence manner provided in this Section 3.3(b). (c) For each of the Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage Loan, the Breaching Seller shall deliver to the Custodian the documents specified in Section 2.2(a), with the Mortgage Note endorsed as required by Section 2.2(a) and, where applicable, original documents having evidence of recording thereon. The Breaching Seller shall also take such actions with respect to the documents pertaining to each such Qualified Substitute Mortgage Loan as are required to be taken pursuant to Section 2.2(d) with respect to the Mortgage Loans originally subject to this Agreement. For purposes of applying the requirements of Section 3.03(212.2(d) and Sections 3.03(41) and (52) hereofto any Qualified Substitute Mortgage Loan, references in such Section to the related Closing Date shall be deemed to materially be references to the applicable date of substitution of such Qualified Substitute Mortgage Loan. The Breaching Seller shall deposit in the Account the Monthly Payment due on each Qualified Substitute Mortgage Loan in the month following the date of such substitution (with the interest portion thereof adjusted to the applicable Net Rate), and adversely affect the value Monthly Payment due with respect to such Qualified Substitute Mortgage Loan in the month of substitution shall be retained by the Breaching Seller. For the month of substitution, distributions to the Purchaser shall include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and the Breaching Seller shall thereafter be entitled to retain all amounts subsequently received by the Breaching Seller in respect of such Deleted Mortgage Loan. The Breaching Seller shall amend the related Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the interest substitution of the Qualified Substitute Mortgage Loan(s) and shall give written notice to the Purchaser thereinthat such substitution has taken place, which notice shall have attached thereto a copy of such amended Mortgage Loan Schedule in hard copy or “read-only” electronic format (as reasonably acceptable to such Breaching Seller and the Purchaser). With Upon such substitution, each such Qualified Substitute Mortgage Loan shall be subject to the terms of this Agreement in all respects, and the Breaching Seller shall make and shall be deemed to have made, with respect to such Qualified Substitute Mortgage Loan(s), as of the date of substitution, the representations and warranties contained set forth in Sections 3.1 and 3.2 (and, for purposes of applying such representations and warranties to each such Qualified Substitute Mortgage Loan, references in such Sections to the related Closing Date shall be deemed to be references to such date of substitution of such Qualified Substitute Mortgage Loan). (d) The Purchaser shall immediately take all steps necessary to effect the reconveyance of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all documentation with respect thereto, to the Breaching Seller. The Breaching Seller shall pay all costs and expenses incurred in connection with the repurchase of any Mortgage Loan and the substitution for any Deleted Mortgage Loan. If, in accordance with Section 3.3(b), a Breaching Seller repurchases any MERS Loan or substitutes a Qualified Substitute Mortgage Loan for any MERS Loan, the Servicer shall be authorized to (i) cause the MERS® System to reflect such repurchase or substitution, as the case may be, or (ii) cause MERS to remove the repurchased or replaced Mortgage Loan from registration on the MERS® System and execute and deliver an Assignment of Mortgage to reflect the transfer of such Mortgage Loan to the Breaching Seller or its designee. The Breaching Seller shall bear any and all fees of MERS relating to the actions authorized under this Section 3.3(d). (e) For any month in which a Breaching Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, such Breaching Seller shall determine the amount, if any, by which the aggregate outstanding principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Breaching Seller on the Monthly Remittance Date following the date of the substitution pursuant to Section 3.1 of the Servicing Agreement. Pursuant to Section 2.4 of the Servicing Agreement, the Breaching Seller shall deposit from its own funds (and without any right of reimbursement therefor) into the Account an amount equal to the amount of such shortfall. (f) It is understood and agreed that the obligations of a Breaching Seller set forth in this Section 3.3 constitute the sole remedies available to the Purchaser respecting a breach of the representations and warranties by such Breaching Seller set forth in Section 3.03 that are made 3.1 and Section 3.2. (g) Any cause of action against a Breaching Seller relating to or arising out of the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance breach of such any representation and warranty made by such Breaching Seller in Sections 3.1 and 3.2 shall accrue as to any Mortgage Loan only upon (i) discovery of such breach by the Purchaser or notice thereof by such Breaching Seller to the Purchaser, (ii) failure by such Breaching Seller to cure such breach or repurchase or substitute a Qualified Substitute Mortgage Loan(s) for such Mortgage Loan as specified above and (iii) demand upon such Breaching Seller by the Purchaser for all amounts payable in respect of such Mortgage Loan. (h) In addition to the repurchase obligations set forth above in this Section 3.3, each Seller shall also be required to repurchase, in the manner provided in Section 3.3(b) but without any right of such Seller to cure, any Mortgage Loan sold by such Seller hereunder that is inaccurate paid in full on or prior to the related Cut-off Date. Any such Mortgage Loan shall be repurchased by such Seller at the Repurchase Price. (A) In addition to the cure, repurchase or substitution obligation set forth above in this Section 3.3, each Seller shall indemnify the Purchaser and such inaccuracy materially hold it harmless against any losses, damages, penalties, fines, forfeitures, reasonable and adversely affects necessary legal fees and related costs, judgments, and other costs and expenses resulting from the value defense of any claim against the Purchaser by a third party resulting from a breach of the related Mortgage Loan representations and warranties made by such Seller in this Article 3; provided, however, that in no event shall such Seller have any liability for any indirect, special or the interests of consequential damages, losses, costs or expenses incurred by Purchaser. (B) No applicable Seller shall be liable for any costs and expenses pursuant to this Section 3.3(i) unless the Purchaser thereinprovides written notice to the Seller that describes the nature of such claim within a reasonable time after service of a summons or other first legal process upon the Purchaser; provided, however, that the Purchaser’s failure to notify such Seller pursuant to this paragraph shall not relieve such Seller from any liability that such Seller may have to the Purchaser otherwise than on account of this indemnity. (C) Each applicable Seller shall be entitled to all participate at its own expense in the remedies defense, or, if such Seller so elects, to which it would be entitled for assume the defense of any suit against the Purchaser by a third party resulting from a breach of the representations and warranties made by such Seller in this Article 3. If such Seller elects to assume the defense of a suit against the Purchaser, such defense shall be conducted by counsel chosen by such Seller. In the event such Seller elects to assume the defense of any such suit and retain such counsel, the Purchaser may retain additional counsel but shall bear the fees and expenses of such counsel unless (x) such Seller and the Purchaser have mutually agreed to the retention of such counsel or (y) the named parties to such suit (including any impleaded parties) include both such Seller and the Purchaser and representation of both such Seller and the Purchaser by the same counsel would be inappropriate due to actual or warrantypotential differing interests between them. It is understood that such Seller shall not, includingin connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one counsel (separate from its own counsel) for the Purchaser. (D) No applicable Seller shall be required to indemnify any person for any settlement of any claim effected without such Seller’s consent, which consent shall not be unreasonably withheld. Such Seller shall not, without limitationthe prior written consent of the Purchaser, which consent shall not be unreasonably withheld, effect any settlement of any pending or threatened proceeding to which the repurchase requirements contained herein, notwithstanding Seller’s lack Purchaser is a party and indemnity is sought hereunder by the Purchaser unless such settlement includes an unconditional release of knowledge with respect to the inaccuracy at Purchaser from all liability on claims that are the time the representation or warranty was madesubject matter of such proceeding.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01 and 3.02 shall survive delivery of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery (including receipt of notice to such effect from the Purchaser) by either the Seller, the Servicer Company or the Purchaser of a breach of any of the foregoing representations and warranties contained warranties, without regard to any limitation set forth in Sections 3.01such representation or warranty concerning the knowledge of the Company as to the facts stated therein, 3.02 or 3.03 that which materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related any Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt notice to the other parties. Within 90 days of the earlier of either discovery by or notice to the Company of any breach of a representation or warranty, the Company shall use its best efforts to promptly cure such breach in all material respects and, if such breach cannot be cured, the Company shall repurchase such Mortgage Loan at a price equal to (i) the Stated Principal Balance of the Mortgage Loan, plus (ii) interest on such Stated Principal Balance at the Mortgage Loan Remittance Rate from the date to which interest has last been paid by the Mortgagor to the first day of the month in which such purchase price is to be distributed which purchase price shall be deposited in the Custodial Account on the next succeeding Determination Date (after deducting therefrom any principal and interest amounts received in respect of such repurchased Mortgage Loan and being held in the Custodial Account for future distribution). However, the Company may, at its option and assuming that the Company has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan ("Deleted Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided, however, that (i) if the Purchaser exercises its rights under Section 2.05, the Company may not effect a substitution without the prior written consent of the Purchaser and (ii) any such substitution shall be effected not later than 120 days after the related Closing Date. If the Company has no Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the repurchase price set forth above (after deducting therefrom any principal and interest amounts received in respect of such repurchased Mortgage Loan or Loans and being held in the Custodial Account for future distribution). As to any Deleted Mortgage Loan for which the Company substitutes a Qualified Substitute Mortgage Loan or Loans, the Company shall effect such substitution by delivering to the Custodian for such Qualified Substitute Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment of Mortgage and such other documents and agreements as are required by Section 2.04, with the Mortgage Note endorsed as required by Section 2.04. No substitution will be made in any calendar month after the Determination Date for such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Purchaser will include the Monthly Payment less the Servicing Fee due on such Deleted Mortgage Loan or Loans in the month of substitution, and the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the otherPurchaser that such substitution has taken place and shall amend the related Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans. Each determination as to whether there has been Upon such a breach substitution, such Qualified Substitute Mortgage Loan or Loans shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A breach subject to the terms of representations this Agreement in all respects, and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.02. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loan and or Loans for one or more Deleted Mortgage Loans, the interest Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the Purchaser thereindate of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans. With respect The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such cure, repurchase and substitution obligation, the Company shall indemnify the Purchaser and hold it harmless against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach of the Company's representations and warranties contained in this Article III. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 that are to cure or repurchase a defective Mortgage Loan and to indemnify the Purchaser as provided in this Section 3.03 constitute the sole remedies of the Purchaser except as provided in the last paragraph of Section 3.03 respecting a breach of the foregoing representations and warranties. Any cause of action against the Company relating to or arising out of the breach of any representations and warranties made in Sections 3.01 or 3.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the Purchaser or notice thereof by the Company to the Seller’s knowledgePurchaser, if it is discovered (ii) failure by either the Seller Company to cure such breach or repurchase such Mortgage Loan as specified above, and (iii) demand upon the Company by the Purchaser that the substance for all amounts payable in respect of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects Mortgage Loan. In the value event of a breach of the related representation in Section 3.01(nn), the Company shall not have the right or obligation to cure, substitute or repurchase the affected Mortgage Loan but shall deposit in the Custodial Account, prior to the next succeeding Remittance Date, the amount of the Prepayment Charge indicated on the applicable part of the Mortgage Loan Schedule to be due from the Mortgagor in the circumstances; provided, however, that if a representation in addition to that set forth in Section 3.01(nn) is breached with respect to a Mortgage Loan or the interests of the Purchaser thereinMortgage Loans, the Purchaser Company shall be entitled to all both deposit the remedies to which it would be entitled for applicable Prepayment Charge as provided in this paragraph and cure, substitute or repurchase the affected Mortgage Loan or Mortgage Loans as provided in this Section 3.03. In the instance of a breach of such representation or warrantysubstitution, including, without limitation, any prepayment charge available under the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect substitute Mortgage Loan shall belong to the inaccuracy at the time the representation or warranty was madeCompany.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall inure to the benefit of Section 3.04 shall be amended the Purchaser and replacedPurchaser's successors, to read in its entirety as follows: assignees or transferees, notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Seller or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 and 3.03 that materially and adversely affects the interest of the Purchaser (or that materially and adversely affects the interests of the Purchaser in the related Revolving Credit Loan, in the case of a representation or warranty relating to a particular Revolving Credit Loan), the party discovering such breach shall give prompt written notice to the other. Unless Purchaser has granted a greater period of time to cure as set forth in Section 2.04, the Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to the Seller of any breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Revolving Credit Loan, in the case of a representation or warranty relating to a particular Mortgage Revolving Credit Loan)) within which to correct or cure such breach (each, a "Defective Revolving Credit Loan"; provided that "Defective Revolving Credit Loan" shall also include (a) any Revolving Credit Loan treated or designated as such in accordance with Section 2.04 and (b) any Revolving Credit Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest due to Purchaser hereunder within 30 days of the date upon which such Monthly Payment initially became due, provided further that it is hereby acknowledged by the parties hereto that there shall be no cure period for such defects. Seller hereby covenants and agrees with respect to each Revolving Credit Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is granted by the Purchaser, then Seller shall, at the direction of the Purchaser, repurchase the Defective Revolving Credit Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due to Purchaser hereunder with respect to any Revolving Credit Loan has been delinquent more than 30 days, the party discovering such breach shall give prompt Purchaser may, by written notice to the otherSeller, require that the Seller repurchase the related Revolving Credit Loan at the Repurchase Price. Each determination as However, if the Seller provides evidence that the delinquency was due to whether there has been such a breach servicing setup error, no repurchase shall be conducted on a Mortgage Loan-by-Mortgage required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the Seller shall repurchase the specified Revolving Credit Loan basis. A breach by paying the Repurchase Price therefor by wire transfer of representations and warranties in the first sentence of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect immediately available funds directly to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madePurchaser's Account.

Repurchase and Substitution. The second paragraph (a) It is understood and agreed that the representations and warranties set forth in Sections 3.1 and 3.2 shall survive the sale of Section 3.04 Mortgage Loans by each Seller to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Collateral File or Credit File. (b) Upon discovery by a Seller (the “Breaching Seller, the Servicer ”) or the Purchaser of a breach of any of the representations and warranties contained set forth in Sections 3.01, 3.02 3.1 or 3.03 3.2 made by the Breaching Seller that materially and adversely affects the value of any Mortgage Loan or the interest of the Purchaser in any Mortgage Loan sold by the Breaching Seller hereunder (or, in the case of the representations and warranties set forth in Section 3.2, the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects sold by the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage LoanBreaching Seller hereunder), the party discovering such breach shall give prompt written notice to the other. Each determination as The Breaching Seller shall either (A) cure in all material respects any such breach or defect within 90 days of the earlier of either discovery by or notice to whether there has been the Breaching Seller of such breach or defect, or (B) in the case of a breach of a representation and warranty set forth in Section 3.1, repurchase the affected Mortgage Loan(s), and, in the case of a breach of a representation and warranty set forth in Section 3.2, repurchase either (1) all of the Mortgage Loans or (2) such of the Mortgage Loans selected by the Purchaser so that, after such repurchase, such breach or defect is cured in all material respects. Any such repurchase shall be conducted at a price equal to the applicable Repurchase Price, shall occur on the next Monthly Remittance Date and shall be accomplished by deposit in the Account of the amount of the Repurchase Price pursuant to Section 2.4 of the Servicing Agreement. Notwithstanding the foregoing, if the Breaching Seller discovers or receives notice of any such breach or defect, and if the affected Mortgage Loan has not been subject to a Pass-Through Transfer, the Breaching Seller may remove any such Mortgage Loan (a “Deleted Mortgage Loan-by-”), rather than repurchase any such Mortgage Loan basisas provided above, and substitute in its place a Qualified Substitute Mortgage Loan(s). A breach of representations and warranties If the Breaching Seller has no Qualified Substitute Mortgage Loan(s), then the Breaching Seller shall repurchase the Mortgage Loan or Mortgage Loans, as the case may be, in the first sentence manner provided in this Section 3.3(b). (c) For each of the Qualified Substitute Mortgage Loans substituted for a Deleted Mortgage Loan, the Breaching Seller shall deliver to the Custodian the documents specified in Section 2.2(a), with the Mortgage Note endorsed as required by Section 2.2(a) and, where applicable, original documents having evidence of recording thereon. The Breaching Seller shall also take such actions with respect to the documents pertaining to each such Qualified Substitute Mortgage Loan as are required to be taken pursuant to Section 2.2(d) with respect to the Mortgage Loans originally subject to this Agreement. For purposes of applying the requirements of Section 3.03(212.2(d) and Sections 3.03(41) and (52) hereofto any Qualified Substitute Mortgage Loan, references in such Section to the related Closing Date shall be deemed to materially be references to the applicable date of substitution of such Qualified Substitute Mortgage Loan. The Breaching Seller shall deposit in the Account the Monthly Payment due on each Qualified Substitute Mortgage Loan in the month following the date of such substitution (with the interest portion thereof adjusted to the applicable Net Rate), and adversely affect the value Monthly Payment due with respect to such Qualified Substitute Mortgage Loan in the month of substitution shall be retained by the Breaching Seller. For the month of substitution, distributions to the Purchaser shall include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and the Breaching Seller shall thereafter be entitled to retain all amounts subsequently received by the Breaching Seller in respect of such Deleted Mortgage Loan. The Breaching Seller shall amend the related Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the interest substitution of the Qualified Substitute Mortgage Loan(s) and shall give written notice to the Purchaser thereinthat such substitution has taken place, which notice shall have attached thereto a copy of such amended Mortgage Loan Schedule in hard copy or “read-only” electronic format (as reasonably acceptable to such Breaching Seller and the Purchaser). With Upon such substitution, each such Qualified Substitute Mortgage Loan shall be subject to the terms of this Agreement in all respects, and the Breaching Seller shall make and shall be deemed to have made, with respect to such Qualified Substitute Mortgage Loan(s), as of the date of substitution, the representations and warranties contained set forth in Sections 3.1 and 3.2 (and, for purposes of applying such representations and warranties to each such Qualified Substitute Mortgage Loan, references in such Sections to the related Closing Date shall be deemed to be references to such date of substitution of such Qualified Substitute Mortgage Loan). (d) The Purchaser shall immediately take all steps necessary to effect the reconveyance of any repurchased Mortgage Loan or Deleted Mortgage Loan, including all documentation with respect thereto, to the Breaching Seller. The Breaching Seller shall pay all costs and expenses incurred in connection with the repurchase of any Mortgage Loan and the substitution for any Deleted Mortgage Loan. If, in accordance with Section 3.3(b), a Breaching Seller repurchases any MERS Loan or substitutes a Qualified Substitute Mortgage Loan for any MERS Loan, the Servicer shall be authorized to (i) cause the MERS® System to reflect such repurchase or substitution, as the case may be, or (ii) cause MERS to remove the repurchased or replaced Mortgage Loan from registration on the MERS® System and execute and deliver an Assignment of Mortgage to reflect the transfer of such Mortgage Loan to the Breaching Seller or its designee. The Breaching Seller shall bear any and all fees of MERS relating to the actions authorized under this Section 3.3(d). (e) For any month in which a Breaching Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, such Breaching Seller shall determine the amount, if any, by which the aggregate outstanding principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Unpaid Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Breaching Seller on the Monthly Remittance Date following the date of the substitution pursuant to Section 3.1 of the Servicing Agreement. Pursuant to Section 2.4 of the Servicing Agreement, the Breaching Seller shall deposit from its own funds (and without any right of reimbursement therefor) into the Account an amount equal to the amount of such shortfall. (f) It is understood and agreed that the obligations of a Breaching Seller set forth in this Section 3.3 constitute the sole remedies available to the Purchaser respecting a breach of the representations and warranties by such Breaching Seller set forth in Section 3.03 that are made 3.1 and Section 3.2. (g) Any cause of action against a Breaching Seller relating to or arising out of the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance breach of such any representation and warranty made by such Breaching Seller in Sections 3.1 and 3.2 shall accrue as to any Mortgage Loan only upon (i) discovery of such breach by the Purchaser or notice thereof by such Breaching Seller to the Purchaser, (ii) failure by such Breaching Seller to cure such breach or repurchase or substitute a Qualified Substitute Mortgage Loan(s) for such Mortgage Loan as specified above and (iii) demand upon such Breaching Seller by the Purchaser for all amounts payable in respect of such Mortgage Loan. (h) In addition to the repurchase obligations set forth above in this Section 3.3, each Seller shall also be required to repurchase, in the manner provided in Section 3.3(b) but without any right of such Seller to cure, any Mortgage Loan sold by such Seller hereunder that is inaccurate and such inaccuracy materially and adversely affects the value of paid in full on or prior to the related Cut-off Date. Any such Mortgage Loan or shall be repurchased by such Seller at the interests of Repurchase Price. (A) Each Seller agrees to indemnify the Purchaser thereinand hold it harmless from and against any and all losses, damages, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses resulting from the defense of any claim against the Purchaser shall be entitled by a third party in any way related to all any act or omission on the remedies part of such Seller or any other person or entity in the origination, processing or funding of any Mortgage Loan prior to which it would be entitled for the related Closing Date, provided that such act or omission constitutes a breach of such representation Seller’s representations, warranties, or warrantycovenants under this Agreement. Notwithstanding anything to the contrary in this Agreement, includingin no event shall any Seller have any liability for any indirect, special or consequential damages, losses, costs or expenses incurred by the Purchaser. (B) The related Seller or the Purchaser, as applicable, shall promptly provide notice to the Purchaser or the related Seller, as applicable, if a claim is made by a third party with respect to this Agreement or the Mortgage Loans. The applicable Seller shall assume (with counsel reasonably satisfactory to the Purchaser) the defense of any such claim and pay all expenses in connection therewith, including counsel fees, and promptly pay, discharge and satisfy any final judgment or decree that may be entered against it or the Purchaser in respect of such claim and from which such Seller may not appeal or otherwise further contest. The related Seller’s failure to so notify the Purchaser shall not limit its obligations hereunder, and the Purchaser’s failure to notify the related Seller shall not relieve such Seller from any liability that such Seller may have to the Purchaser otherwise than on account of this indemnity. Each Seller agrees that it will not enter into any settlement of any such claim without limitationthe consent of the Purchaser (which consent shall not be unreasonably withheld or delayed) unless such settlement includes an unconditional release of the Purchaser from all liabilities that is the subject matter of such claim. In addition to the obligations of each Seller set forth in this section, the repurchase requirements contained hereinPurchaser may, notwithstanding Seller’s lack of knowledge subject to the limitation set forth in Section 3.3(f) with respect to the inaccuracy breach of a representation and warranty, pursue any and all remedies otherwise available at law or in equity, including, but not limited to, the time the representation or warranty was maderight to seek damages. The provisions of this Section 3.3(i) shall survive termination of this Agreement.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company's lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Upon the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects within 60 days, and, if such breach cannot be cured during such time period, the Company shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner's option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the related Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such repurchase obligation, the Company shall indemnify the Owner for any expenses reasonably incurred by the Owner in enforcing its remedies hereunder in connection with any breach by the Company of any representation or warranty set forth in this Agreement. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 to cure or to repurchase a defective Mortgage Loan and to indemnify the interest Owner as provided in this Section 3-03 constitute the sole remedies of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for Owner respecting a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeforegoing representations and warranties.

Repurchase and Substitution. The second paragraph It is understood and agreed that the representations and warranties set forth in Sections 3.01, 3.02 and 3.03 shall survive the sale of Section 3.04 the Mortgage Loans to the Purchaser and shall be amended and replacedinure to the benefit of the Purchaser, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment or the examination of any Mortgage File. Upon discovery by either of the Seller, the Servicer Sellers or the Purchaser of a breach of any of the representations and warranties contained in Sections 3.01, 3.02 or 3.03 that materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans (or that materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Unless permitted a greater period of time to cure as set forth in Section 2.04, the applicable Seller shall have a period of 60 days from the earlier of either discovery by or receipt of written notice from the Purchaser to whether there has been such a breach shall be conducted on a Mortgage Loan-by-Mortgage Loan basis. A the Seller of any breach of representations and warranties in the first sentence any of Section 3.03(21) and Sections 3.03(41) and (52) hereof, shall be deemed to materially and adversely affect the value of the related Mortgage Loan and the interest of the Purchaser therein. With respect to the representations and warranties contained in Section Sections 3.01, 3.02 or 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value interest of the related Mortgage Loan Purchaser (or that materially and adversely affects the interests of the Purchaser thereinin the related Mortgage Loan, in the case of a representation or warranty relating to a particular Mortgage Loan) (a "Defective Mortgage Loan"; provided that "Defective Mortgage Loan" shall also include (a) any Mortgage Loan treated or designated as such in accordance with Section 2.04 and (b) any Mortgage Loan regarding which the Mortgagor fails to make the first regularly scheduled payment of principal and interest within 30 days of its Due Date) within which to correct or cure such breach. If such breach can ultimately be cured but is not reasonably expected to be cured within the 60-day period, then the applicable Seller shall have such additional time, if any, as is reasonably determined by the Purchaser to cure such breach, provided that the Seller has commenced curing or correcting such breach and is diligently pursuing same. Each Seller hereby covenants and agrees with respect to each Mortgage Loan conveyed by it that, if any breach relating thereto cannot be corrected or cured within the applicable cure period or such additional time, if any, as is reasonably determined by the Purchaser, then such Seller shall, at the direction of the Purchaser, repurchase the Defective Mortgage Loan at the applicable Repurchase Price. Notwithstanding anything to the contrary contained herein, if the first regularly scheduled payment of principal and interest due under any Mortgage Loan has been delinquent more than 30 days, the Purchaser may, by written notice to the applicable Seller, require that the Seller repurchase the related Mortgage Loan. However, if the Seller provides evidence that the delinquency was due to a servicing setup error, no repurchase shall be required. Within 10 Business Days following the delivery of any such written notice from the Purchaser, the applicable Seller shall repurchase the specified Mortgage Loan by paying the Repurchase Price therefor by wire transfer of immediately available funds directly to the Purchaser's Account. Notwithstanding the previous paragraph, the applicable Seller may, at its option and assuming that such Seller has a Qualified Substitute Mortgage Loan or Loans, rather than repurchase the Mortgage Loan as provided above, remove such Mortgage Loan ("Deleted Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan or Loans, provided that no such substitution shall be effected after the Mortgage Loan has been conveyed as part of a Sale transaction as described in Section 3.05 hereof and no such substitution shall be effected more than 180 days after the related Funding Date. If the applicable Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the Defective Mortgage Loan. As to any Deleted Mortgage Loan for which the applicable Seller substitutes a Qualified Substitute Mortgage Loan or Loans, the applicable Seller shall effect such substitution by delivering to the Purchaser or its designee for such Qualified Substitute Mortgage Loan or Loans -38- the Legal Documents as are required by Section 2. In the event of a repurchase or substitution, the Seller shall, simultaneously with such reassignment, give written notice (by telecopier, electronically or otherwise) to the Purchaser that such repurchase or substitution has taken place, amend the related Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and, in the case of substitution, identify the Qualified Substitute Mortgage Loan(s) and amend the related Mortgage Loan Schedule to reflect the addition of such Qualified Substitute Mortgage Loan(s) to this Agreement. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the applicable Seller shall be deemed to have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of substitution, the covenants, representations and warranties set forth in Sections 3.01, 3.02 and 3.03. The Seller shall effect such substitution by delivering to the Custodian for such Qualified Substitute Mortgage Loan the documents required by Section 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date for such month. For any month in which the applicable Seller substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the applicable Seller will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution (after application of scheduled principal payments due in the month of substitution which have been received or as to which an advance has been made) is less than the aggregate outstanding principal balance of all such Deleted Mortgage Loans. The amount of such shortfall shall be paid by the applicable Seller on the date of such substitution) by wire transfer of immediately available funds directly to the Purchaser's Account. Any repurchase of a Defective Mortgage Loan required hereunder shall be accomplished by payment of the applicable Repurchase Price within 3 Business Days of expiration of the applicable time period referred to above in paragraph 3.04 by wire transfer of immediately available funds directly to the Purchaser's Account. It is understood and agreed that the obligations of a Seller (a) set forth in this Section 3.04 to cure any breach of such Seller's representations and warranties contained in Sections 3.01, 3.02 and 3.03 or to repurchase the Defective Mortgage Loan(s) and (b) set forth in Section 9.01 to indemnify the Purchaser in connection with any breach of a Seller's representations and warranties contained in Sections 3.01, 3.02 and 3.03 shall constitute the sole remedies of the Purchaser respecting a breach of such representations and warranties. The parties further agree that, in recognition of the Trust's rights against Cendant Mortgage with respect to the Mortgage Loans acquired by it from Cendant Mortgage and conveyed to the Purchaser hereunder, the Purchaser shall be entitled have the right to all the remedies cause Cendant Mortgage to which it would be entitled for repurchase directly any Defective Mortgage Loan (other than as a result of a breach by the Trust of such representation Section 3.03(3) or warranty3.03(16) hereof, including, without limitation, in which case the Purchaser shall have the right to cause the Trust to repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to directly the inaccuracy at Defective Mortgage Loan) acquired hereunder by the time Purchaser from the representation or warranty was madeTrust.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstanding any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company's lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or repre- sentation and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Upon the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects within 60 days, and, if such breach cannot be cured during such time period, the Company shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any representation or warranty set forth in Section 3.01, and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner's option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substitute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the related Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodial Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitution, the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such repurchase obligation, the Company shall indemnify the Owner for any expenses reasonably incurred by the Owner in enforcing its remedies hereunder in connection with any breach by the Company of any representation or warranty set forth in this Agreement. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 to cure or to repurchase a defective Mortgage Loan and to indemnify the interest Owner as provided in this Section 3.03 constitute the sole remedies of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for Owner respecting a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeforegoing representations and warranties.

Repurchase and Substitution. The second paragraph representations and warranties set forth in Sections 3.01 and 3.02 shall survive the sale of Section 3.04 the Mortgage Loans and shall be amended and replacedinure to the benefit of the Owner, to read in its entirety as follows: notwithstand-ing any restrictive or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the examination of any Mortgage File. Upon discovery by either the Seller, the Servicer Company or the Purchaser an Owner of a breach of any of the representations and warranties contained set forth in Sections 3.013.01 and 3.02 (notwithstanding the Company’s lack of knowledge of such representation and warranty), 3.02 or 3.03 that which breach materially and adversely affects the value of the Mortgage Loans or the interest of the Purchaser in the Mortgage Loans Owner (or that which materially and adversely affects the value interest of the Owner in the related Mortgage Loan or the interests of the Purchaser in the related Mortgage Loan, in the case of a representation or repre-sentation and warranty relating to a particular Mortgage Loan), the party discovering such breach shall give prompt written notice to the other. Each determination Upon the earlier of either discovery by or notice to the Company of any such breach, the Company shall use its best efforts to promptly cure such breach in all material respects within 60 days, and, if such breach cannot be cured during such time period, the Company shall, at the Owner's option, repurchase such Mortgage Loan at the Repurchase Price. If any such breach shall involve any represent-ation or warranty set forth in Section 3.01, and such breach cannot be cured within 60 days of the earlier of either discovery by or notice to the Company of such breach, all the Mortgage Loans shall, at the Owner's option, be repurchased by the Company at the Repurchase Price; provided, however, that in the event of a breach of representation and warranty set forth in Section 3.01 that relates to less than all of the Mortgage Loans, the Company shall repurchase only the Mortgage Loans to which such breach relates. However, the Company may, at its option, replace a Mortgage Loan as to whether there has been such which a breach of representation of warranty has occurred as described in the foregoing sentences of this Section 3.03 and substi-tute in its place with a Qualified Substitute Mortgage Loan or Loans, provided, however, that any such substitution shall be conducted on effected not later than 120 days after the related Closing Date. Any repurchase of a Mortgage Loan-by-Loan or Loans pursuant to the foregoing provisions of this Section 3.03 shall be accomplished by deposit in the Custodial Account of the amount of the Repurchase Price (after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan basis. A breach of representations or Loans and warranties being held in the first sentence Custodi-al Account for future distribution). The Company shall effect any substitution of a Qualified Substitute Mortgage Loan by delivering to the Custodian the documents as are required to be delivered by Section 3.03(21) 2.03, with the Mortgage Note endorsed as required by Section 2.03. No substitution will be made in any calendar month after the Determination Date occurring in such month. The Company shall deposit in the Custodial Account the Monthly Payment less the Servicing Fee due on such Qualified Substitute Mortgage Loan or Loans in the month following the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution will be retained by the Company. For the month of substitution, distributions to the Owner will include the Monthly Payment due on such Deleted Mortgage Loan in the month of substitution, and Sections 3.03(41) the Company shall thereafter be entitled to retain all amounts subsequently received by the Company in respect of such Deleted Mortgage Loan. The Company shall give written notice to the Owner that such substitution has taken place and (52) hereofshall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitu-tion of the Qualified Substitute Mortgage Loan. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of this Agreement in all respects, and the Company shall be deemed to materially and adversely affect the value have made with respect to such Qualified Substitute Mortgage Loan or Loans, as of the related date of substitu-tion, the covenants, representations and warranties set forth in Sections 3.01 and 3.02, except to the extent a representation contained in Section 3.02 relates to an expressly specified percentage of the Mortgage Loans. For any month in which the Company substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Company will determine the amount (if any) by which the aggregate principal balance of all such Qualified Substitute Mortgage Loans as of the date of substitution is less than the aggregate Assumed Principal Balance of all such Deleted Mortgage Loans (after application of scheduled principal payments due in the month of substitution). The amount of such shortfall shall be distributed by the Company in the month of substitution pursuant to Section 5.01. Accordingly, on the date of such substitution, the Company will deposit from its own funds into the Custodial Account an amount equal to the amount of such shortfall. In addition to such repurchase obligation, the Company shall indemnify the Owner for any expenses reasonably incurred by the Owner in enforcing its remedies hereunder in connection with any breach by the Company of any representation or warranty set forth in this Agreement. It is understood and agreed that the obligations of the Company set forth in this Section 3.03 to cure or to repurchase a defective Mortgage Loan and to indemnify the interest Owner as provided in this Section 3.03 constitute the sole remedies of the Purchaser therein. With respect to the representations and warranties contained in Section 3.03 that are made to the Seller’s knowledge, if it is discovered by either the Seller or the Purchaser that the substance of such representation and warranty is inaccurate and such inaccuracy materially and adversely affects the value of the related Mortgage Loan or the interests of the Purchaser therein, the Purchaser shall be entitled to all the remedies to which it would be entitled for Owner respecting a breach of such representation or warranty, including, without limitation, the repurchase requirements contained herein, notwithstanding Seller’s lack of knowledge with respect to the inaccuracy at the time the representation or warranty was madeforegoing representations and warranties.