Exhibit 10.24

 

 

UBS Real Estate Securities Inc.,
(UBS)

 

MortgageIT Holdings, Inc.,
(Master Servicer)

 

and

 

MortgageIT SPV I,
(Trust)

 

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REIT SERVICING AGREEMENT

 

Dated as of August 4, 2004

 

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Conventional Residential Mortgage Loans

 

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINITIONS

 

 

 

 

ARTICLE II AGREEMENT TO PURCHASE, CONVEYANCE, AND DELIVERY OF THE MORTGAGE LOANS

 

 

 

 

Section 2.01

Conveyance of Mortgage Loans; Possession of Submission Packages; Books &
Records.

 

 

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES

 

 

 

 

Section 3.01

Servicer Representations and Warranties.

 

 

 

 

ARTICLE IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

 

 

 

 

Section 4.01

REIT Servicer to Act as REIT Servicer.

 

Section 4.02

Liquidation of Mortgage Loans.

 

Section 4.03

Collection of Mortgage Loan Payments.

 

Section 4.04

Deposits to Blocked Account.

 

Section 4.05

Permitted Withdrawals from Blocked Account.

 

Section 4.06

Escrow Account.

 

Section 4.07

Payment of Taxes, Insurance and Other Charges.

 

Section 4.08

Protection of Accounts.

 

Section 4.09

Maintenance of Hazard Insurance.

 

Section 4.10

Maintenance of Mortgage Impairment Insurance.

 

Section 4.11

Maintenance of Fidelity Bond and Errors and Omissions Insurance.

 

Section 4.12

Delivery of Document in Possession of Custodian.

 

Section 4.13

Restoration of Mortgaged Property.

 

Section 4.14

Title, Management and Disposition of REO Property.

 

Section 4.15

Sub-Servicer.

 

 

 

 

ARTICLE V NOTIFICATION; STATEMENTS

 

 

 

 

Section 5.01

Notifications.

 

Section 5.02

Monthly Reports.

 

 

 

 

ARTICLE VI GENERAL SERVICING PROCEDURES

 

 

 

 

Section 6.01

Transfers of Mortgaged Property.

 

Section 6.02

Satisfaction of Mortgages and Release of Submission Packages.

 

Section 6.03

Servicing Compensation.

 

 

 

 

ARTICLE VII THE REIT SERVICER

 

 

 

 

Section 7.01

Indemnification; Third Party Claims.

 

 

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Section 7.02

Merger or Consolidation of the REIT Servicer.

 

Section 7.03

Limitation on Liability of Servicer and Others.

 

Section 7.04

Limitation on Resignation and Assignment by Servicer.

 

 

 

 

ARTICLE VIII DEFAULT

 

 

 

 

Section 8.01

Events of Default.

 

Section 8.02

Waiver of Defaults.

 

 

 

 

ARTICLE IX TERMINATION

 

 

 

 

Section 9.01

Termination.

 

Section 9.02

Retention and Termination of REIT Servicer.

 

 

 

 

ARTICLE X SUCCESSOR TO THE REIT SERVICER

 

 

 

 

Section 10.01

Successor to Servicer.

 

 

 

 

ARTICLE XI MISCELLANEOUS PROVISIONS

 

 

 

 

Section 11.01

Transfer of Servicing

 

Section 11.02

Amendment.

 

Section 11.03

Governing Law; Jurisdiction.

 

Section 11.04

Notices.

 

Section 11.05

Severability of Provisions.

 

Section 11.06

Relationship of Parties.

 

Section 11.07

Execution; Successors and Assigns.

 

Section 11.08

Recordation of Assignments of Mortgage.

 

Section 11.09

Merger and Integration.

 

Section 11.10

Headings.

 

Section 11.11

Schedules and Exhibits.

 

Section 11.12

No Bankruptcy Petition Against the REIT Sub-Trust.

 

Section 11.13

Right to Inspect.

 

Section 11.14

No Recourse.

 

 

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This is a REIT Servicing Agreement for conventional fixed-rate and
adjustable-rate residential first and second mortgage loans, dated as of
August 4, 2004 and as may be amended and/or restated from time to time (this
“Servicing Agreement” or this “Agreement”), and is executed among UBS Real
Estate Securities Inc., as purchaser under the Loan Purchase Agreement (as
defined below) (in such capacity, “UBS”), MortgageIT SPV I (the “Trust”) acting
with respect to the REIT Sub-Trust and MortgageIT Holdings, Inc. (“MortgageIT
Holdings”), as servicer (in such capacity, the “REIT Servicer”).

 

W I T N E S S E T H

 

WHEREAS, MortgageIT Holdings has agreed to sell and contribute to the REIT
Sub-Trust and the REIT Sub-Trust has agreed to purchase from time to time
certain mortgage loans pursuant to a Loan Sale Agreement, dated as of the date
hereof, between MortgageIT, Inc. (“MortgageIT”), MortgageIT Holdings and the
Trust, acting with respect to the REIT Sub-Trust (as amended, supplemented or
otherwise modified and in effect from time to time, the “Loan Sale Agreement”)
on a servicing-released basis, and on the basis that MortgageIT Holdings will
act as REIT Servicer in the case of mortgage loans sold and contributed by
MortgageIT Holdings to the REIT Sub-Trust pursuant to such agreement (the
“Mortgage Loans”);

 

WHEREAS, GMAC Mortgage Corporation (“GMAC”) has agreed to act as the
sub-servicer with respect to some or all of the Mortgage Loans;

 

WHEREAS, those Mortgage Loans shall be delivered as whole loans on various
Purchase Dates as provided herein as indicated on the Mortgage Loan Schedule,
which is to be annexed hereto on the related Purchase Date as part of Exhibit A;

 

WHEREAS, UBS, the REIT Sub-Trust and the REIT Servicer wish to prescribe the
manner of management, servicing and control of the Mortgage Loans;

 

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, UBS, the REIT Sub-Trust and the REIT Servicer agree as
follows:

 

ARTICLE I

DEFINITIONS

 

For all purposes of this Servicing Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires, capitalized terms not
otherwise defined herein shall have the meanings assigned to such terms in the
Definitions List attached as Schedule 1 to the Loan Sale Agreement (the
“Definitions List”).

 

Administration Agreement:  The Administration Agreement dated as of August 4,
2004, between the Trust and MortgageIT, as amended, supplemented or otherwise
modified from time to time.

 

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Affiliate:  With respect to any Person, any “affiliate” of such Person, as such
term is defined in the Bankruptcy Code, other than a natural person.  It is
specifically agreed that the REIT Sub-Trust, MortgageIT and MortgageIT Holdings
are “Affiliates” of each other.

 

Agreement:  This Servicing Agreement and all amendments hereof and supplements
hereto.

 

ALTA:  The American Land Title Association or any successor thereto.

 

Ancillary Income:  All fees and amounts charged to the Mortgagor by the REIT
Servicer for services necessary to the servicing of the Mortgage Loans,
including but not limited to late charges, NSF Fees, administrative charges
(e.g., copying charges for duplicate documents, and charges for opening escrow
accounts), assumption fees and release and reconveyance fees.

 

Blocked Account:  Both collectively and individually, any “blocked” or
“controlled” accounts established by the REIT Servicer at the direction of, and
for the benefit of UBS, which is subject to a security interest in favor of
UBS.  Any such Blocked Account shall be established with respect to any Mortgage
Loans which are being directly serviced by the REIT, rather than serviced by
GMAC as sub-servicer and shall be documented pursuant to a blocked account
agreement in form and substance satisfactory to UBS.

 

Condemnation Proceeds:  All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Documents.

 

Custodial Agreement:  The Custodial Agreement, dated as of August 4, 2004, among
the Trust, the Custodian, MortgageIT, MortgageIT Holdings and UBS, as the same
shall be modified and supplemented and in effect from time to time.

 

Custodian:  JPMorgan Chase Bank, as custodian under the Custodial Agreement, and
its successors and permitted assigns thereunder.

 

Due Date:  The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.

 

Due Period:  With respect to each Payment Date, the period commencing on the
first day of the month preceding the month of the Payment Date and ending on the
last day of the month preceding the month of the Payment Date.

 

Electronic Tracking Agreement:  The Electronic Tracking Agreement, dated as of
August 4, 2004, among UBS, the Trust, MortgageIT, MortgageIT Holdings, MERSCORP,
Inc. and Mortgage Electronic Registration Systems, Inc., as the same shall be
amended, supplemented or otherwise modified from time to time; provided that if
no Mortgage Loans are or will be MERS Designated Mortgage Loans, all references
herein to the Electronic Tracking Agreement shall be disregarded.

 

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Eligible Account:  (i) An account or accounts maintained with a depository
institution the short-term debt obligations of which are rated AA or better by
Standard & Poors Ratings Services, or (ii) an account or accounts the deposits
in which are fully insured by the FDIC, or (iii) a trust account or accounts
maintained with a federal or state chartered depository institution or trust
company acting in its fiduciary capacity, the debt obligations of which are
rated A-1 or better by Standard & Poors Ratings Services.

 

Errors and Omissions Insurance Policy:  An errors and omissions insurance policy
to be maintained by the REIT Servicer pursuant to Section 4.11.

 

Escrow Account:  The separate account or accounts created and maintained
pursuant to Section 4.06.

 

Escrow Payments:  With respect to any Mortgage Loan, the amounts constituting
any of ground-rents, taxes, assessments, water rates, sewer rents, municipal
charges, mortgage insurance premiums, fire and hazard insurance premiums,
condominium charges, and any other payments required to be escrowed by the
Obligor with the Mortgagee pursuant to the Mortgage or any other document.

 

Event of Default:  Any one of the conditions or circumstances enumerated in
Section 8.01.

 

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

 

Fidelity Bond:  A fidelity bond to be maintained by the REIT Servicer pursuant
to Section 4.11.

 

Insurance Proceeds:  With respect to each Mortgage Loan, proceeds of insurance
policies insuring the Mortgage Loan or the related Mortgaged Property.

 

Insured Depository Institution:  Insured Depository Institution shall have the
meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the United
States Code, as amended from time to time.

 

Liquidation Proceeds:  Cash (exclusive of REO Disposition Proceeds) received in
connection with the liquidation of a defaulted Mortgage Loan, whether through
the sale or assignment of such Mortgage Loan, trustee’s sale, foreclosure sale
or otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.

 

Monthly Payment:  The scheduled monthly payment of principal and interest on a
Mortgage Loan.

 

Mortgage Impairment Insurance Policy:  A mortgage impairment or blanket hazard
insurance policy as described in Section 4.10.

 

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Mortgage Interest Rate:  The annual rate of interest borne on a Mortgage Loan
and, with respect to adjustable rate Mortgage Loans, as adjusted from time to
time in accordance with the provisions of the Mortgage Note.

 

Mortgage Loan Maturity Date:  The final maturity date as set forth on the
Mortgage Note of a Mortgage Loan.

 

Mortgage Loan Remittance Rate:  With respect to each Mortgage Loan, an annual
rate of interest equal to the Mortgage Interest Rate.

 

Person: Any individual, corporation, company, voluntary association,
partnership, joint venture, limited liability company, trust, unincorporated
association or government (or any agency, instrumentality or political
subdivision thereof).

 

Prepayment Charge:  The fee, if any is provided for in the related Mortgage
Note, to be paid by the Mortgagor for the privilege to prepay the principal
obligation of the related Mortgage Loan prior to the related Mortgage Loan
Maturity Date; which when required by the terms of the Mortgage Note shall be
collected by the REIT Servicer upon the Mortgagor’s full and voluntary Principal
Prepayment except to the extent that: (1) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to debtors’ and creditors’ rights generally; (2) the
collectibility thereof may be limited due to acceleration in connection with a
foreclosure or other involuntary prepayment; (3) subsequent changes in state or
federal law (including decisional authority) limit or prohibit enforceability of
the applicable charge; or (4) a servicer has, in response to a default as
provided for in Section 4.01 of this Agreement, waived, altered, limited or
forgiven the Prepayment Charge provided in the related Note.

 

Principal Prepayment:  Any full and voluntary principal payment made by the
Mortgagor or other recovery of principal on a Mortgage Loan which is received in
advance of its scheduled Due Date, including any Prepayment Charge or premium
thereon, if applicable under the terms of the Mortgage Documents, and which is
not accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of prepayment.

 

Purchase Date:  With respect to a Mortgage Loan, the date on which UBS purchases
such Mortgage Loan from the REIT Sub-Trust.

 

REIT Servicer:  MortgageIT Holdings, Inc., or its successor in interest or
assigns, or any successor to the REIT Servicer under this Agreement appointed as
herein provided.

 

REO Disposition:  The final sale by the REIT Servicer of any REO Property.

 

REO Disposition Proceeds:  All amounts received with respect to an REO
Disposition pursuant to Section 4.14.

 

REO Property:  A Mortgaged Property acquired by the REIT Servicer actions with
respect to the REIT Sub-Trust and the Purchaser through foreclosure or by deed
in lieu of foreclosure, as described in Section 4.14.

 

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

 

Sellers:  MortgageIT and MortgageIT Holdings, in their capacity as sellers under
the Loan Sale Agreement.

 

Servicing Advances:  All customary, reasonable and necessary “out of pocket”
costs and expenses (including reasonable attorneys’ fees and disbursements)
incurred in the performance by the REIT Servicer of its servicing obligations,
including, but not limited to, the cost of (a) the preservation, restoration and
protection of the Mortgaged Property, (b) any enforcement or judicial
proceedings, including foreclosures, (c) the management and liquidation of any
REO Property and (d) compliance with the obligations under Section 4.07.

 

Servicing Fee: With respect to each Mortgage Loan, the amount of the annual fee
payable to the REIT Servicer from the Monthly Payment collected by the REIT
Servicer during the prior Due Period, which shall be, without pro ration or
portion thereof, equal to: one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the outstanding principal balance of the related Mortgage Loan as
of the beginning of the month balance.  The REIT Servicer’s right of
reimbursement for the earned Servicing Fee by monthly withdrawal from the
Blocked Account pursuant to Section 4.05 shall relate to funds payable as
collections and/or recoveries on the related Mortgage Loan.

 

Servicing Fee Rate:  0.50% per annum.

 

Servicing File:  With respect to each Mortgage Loan, the file retained by the
REIT Servicer consisting of originals or copies of all Mortgage Loan Documents
from the Submission Package.

 

Servicing Officer:  Any officer of the REIT Servicer involved in or responsible
for, the administration and servicing of the Mortgage Loans whose name appears
on a list of servicing officers furnished by the REIT Servicer to the REIT
Sub-Trust upon request, as such list may from time to time be amended.

 

Servicing Transfer Date:  The effective date of a transfer of servicing from the
REIT Servicer to a Successor Servicer, as provided in Section 11.01 of this
Agreement.

 

Stated Termination Date:  August 31, 2005, as such date may be extended as
provided in Section 9.01 hereof.

 

Submission Package:  With respect to each Mortgage Loan, a Dry Submission
Package, a Cash Window Submission Package, a Conduit Submission Package or a
Conversion Submission Package, as applicable, as such terms are defined in
Schedule 1 to the Loan Sale Agreement.

 

Subservicing Account:  Any collection, servicing, custodial or escrow account
established by GMAC.

 

Transaction Documents:  The Loan Sale Agreement, the Loan Repurchase Agreement,
the Loan Participation Agreement, the Loan Purchase Agreement, the Custodial

 

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Agreement, the TRS Servicing Agreement, this Agreement, the Blocked Account
Agreement, the Trust Agreement, the Electronic Tracking Agreement and the
Administration Agreement.

 

Trust:  MortgageIT SPV I, a Delaware statutory trust.

 

Trust Agreement: The Trust Agreement dated as of August 4, 2004, by and among
MortgageIT, MortgageIT Holdings, and Wilmington Trust Company, as Owner Trustee,
as amended, supplemented or otherwise modified from time to time.

 

ARTICLE II

AGREEMENT TO PURCHASE, CONVEYANCE,
AND DELIVERY OF THE MORTGAGE LOANS

 

SECTION 2.01                                CONVEYANCE OF MORTGAGE LOANS;
POSSESSION OF SUBMISSION PACKAGES; BOOKS & RECORDS.

 

(A)                                  CONVEYANCE OF MORTGAGE LOANS; DELIVERY OF
MORTGAGE LOAN DOCUMENTS.  PURSUANT TO THE LOAN SALE AGREEMENT, ON EACH PURCHASE
DATE, MORTGAGEIT HOLDINGS SHALL SELL, TRANSFER, ASSIGN, SET OVER AND CONVEY TO
THE REIT SUB-TRUST, WITHOUT RECOURSE, AND ON A SERVICING-RELEASED BASIS, BUT
SUBJECT TO THE TERMS OF THIS AGREEMENT, ALL ITS RIGHT, TITLE AND INTEREST IN AND
TO THE MORTGAGE LOANS.  PURSUANT TO THE NOTE PURCHASE AGREEMENT, THE REIT
SUB-TRUST SHALL PLEDGE TO UBS ALL ITS RIGHT, TITLE AND INTEREST IN AND TO THE
MORTGAGE LOANS.  FROM AND AFTER THE SALE OF THE MORTGAGE LOANS TO THE REIT
SUB-TRUST, ALL RIGHTS ARISING OUT OF SUCH MORTGAGE LOANS, INCLUDING BUT NOT
LIMITED TO ALL FUNDS RECEIVED ON OR IN CONNECTION WITH SUCH MORTGAGE LOANS,
SHALL BE RECEIVED AND HELD BY THE REIT SERVICER IN TRUST FOR THE BENEFIT OF UBS
AS OWNER OF SUCH MORTGAGE LOANS, AND SHOULD THE REIT SERVICER RETAIN RECORD
TITLE TO A RELATED MORTGAGE, SUCH TITLE SHALL BE HELD BY THE REIT SERVICER FOR
THE SOLE PURPOSE OF FACILITATING THE SERVICING OF THE RELATED MORTGAGE LOAN.

 

(B)                                 POSSESSION OF SUBMISSION PACKAGES.  AS OF
THE RELATED PURCHASE DATE, MORTGAGEIT HOLDINGS WILL HAVE DELIVERED AND RELEASED
TO THE RELATED CUSTODIAN THOSE MORTGAGE DOCUMENTS AS REQUIRED BY THE LOAN SALE
AGREEMENT AND THE CUSTODIAL AGREEMENT WITH RESPECT TO EACH MORTGAGE LOAN.  THE
CONTENTS OF EACH SUBMISSION PACKAGE NOT DELIVERED TO THE RELATED CUSTODIAN ARE
AND SHALL BE HELD IN TRUST BY THE REIT SERVICER FOR THE BENEFIT OF UBS AS THE
OWNER.  THE REIT SERVICER SHALL MAINTAIN A SERVICING FILE CONSISTING OF A COPY
OF THE CONTENTS OF EACH SUBMISSION PACKAGE AND THE ORIGINALS OF THE DOCUMENTS IN
EACH SUBMISSION PACKAGE NOT DELIVERED TO THE RELATED CUSTODIAN.  THE POSSESSION
OF EACH SERVICING FILE BY THE REIT SERVICER IS AT THE WILL OF UBS FOR THE SOLE
PURPOSE OF SERVICING THE RELATED MORTGAGE LOAN, AND SUCH RETENTION AND
POSSESSION BY THE REIT SERVICER IS IN A CUSTODIAL CAPACITY ONLY.  ON THE RELATED
PURCHASE DATE THE OWNERSHIP OF EACH RELATED MORTGAGE NOTE, THE RELATED MORTGAGE
AND THE RELATED MORTGAGE DOCUMENTS AND SERVICING FILE SHALL VEST IMMEDIATELY IN
THE REIT SUB-TRUST, AND THE OWNERSHIP OF ALL RECORDS AND DOCUMENTS WITH RESPECT
TO THE RELATED MORTGAGE LOAN PREPARED BY OR WHICH COME INTO THE POSSESSION OF
THE REIT SERVICER SHALL VEST IMMEDIATELY IN UBS AND SHALL BE RETAINED AND
MAINTAINED BY THE REIT SERVICER, IN TRUST, AT THE WILL OF UBS AND ONLY IN SUCH
CUSTODIAL CAPACITY.  EACH SERVICING FILE SHALL BE SEGREGATED FROM THE OTHER
BOOKS AND RECORDS OF THE REIT SERVICER AND SHALL BE MARKED APPROPRIATELY TO
REFLECT CLEARLY THE SALE OF

 

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the related Mortgage Loan to UBS.  The REIT Servicer shall release its custody
of the contents of any Servicing File only in accordance with written
instructions from UBS, unless such release is required as incidental to: (i) the
REIT Servicer’s servicing of the Mortgage Loans; or (ii) a release or
reconveyance pursuant to Section 6.02.

 

(C)                                  BOOKS & RECORDS.  TO THE EXTENT THAT THE
ORIGINAL DOCUMENTS ARE NOT REQUIRED FOR PURPOSES OF REALIZATION OF LIQUIDATION
PROCEEDS OR INSURANCE PROCEEDS, DOCUMENTS MAINTAINED BY THE REIT SERVICER MAY BE
IN THE FORM OF MICROFILM OR MICROFICHE OR SUCH OTHER RELIABLE MEANS OF
RECREATING ORIGINAL DOCUMENTS, INCLUDING BUT NOT LIMITED TO, OPTICAL IMAGERY
TECHNIQUES.  NOTWITHSTANDING THE SALE OF THE MORTGAGE LOANS TO THE REIT
SUB-TRUST, THE REIT SERVICER MAY MAINTAIN A COMPLETE COPY OF ALL MORTGAGE LOAN
FILES AT ITS OWN EXPENSE TO FULFILL STATE AND FEDERAL RECORD RETENTION
REQUIREMENTS APPLICABLE TO SUB PRIME MORTGAGE LENDERS AND/OR SERVICERS.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.01                                SERVICER REPRESENTATIONS AND
WARRANTIES.

 

The REIT Servicer represents and warrants to the REIT Sub-Trust, UBS and the
Owner Trustee that as of the date hereof, and as of each Purchase Date:

 

(A)                                  DUE ORGANIZATION AND AUTHORITY.  THE REIT
SERVICER IS A CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING
UNDER THE LAWS OF THE STATE OF MARYLAND AND HAS ALL LICENSES NECESSARY TO CARRY
ON ITS BUSINESS AS NOW BEING CONDUCTED AND IS LICENSED, QUALIFIED AND IN GOOD
STANDING IN EACH STATE WHERE A MORTGAGED PROPERTY IS LOCATED IF THE LAWS OF SUCH
STATE REQUIRE LICENSING OR QUALIFICATION IN ORDER TO CONDUCT BUSINESS OF THE
TYPE CONDUCTED BY THE REIT SERVICER, AND IN ANY EVENT THE REIT SERVICER IS IN
COMPLIANCE WITH THE LAWS OF ANY SUCH STATE TO THE EXTENT NECESSARY TO ENSURE THE
ENFORCEABILITY OF THE RELATED MORTGAGE LOAN IN ACCORDANCE WITH THE TERMS OF THIS
AGREEMENT; THE REIT SERVICER HAS THE FULL CORPORATE POWER AND AUTHORITY TO
EXECUTE AND DELIVER THIS AGREEMENT AND TO PERFORM IN ACCORDANCE HEREWITH; THE
EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT (INCLUDING ALL INSTRUMENTS
OF TRANSFER TO BE DELIVERED PURSUANT TO THIS AGREEMENT) BY THE REIT SERVICER AND
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY HAVE BEEN DULY AND
VALIDLY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION; THIS AGREEMENT EVIDENCES
THE VALID, BINDING AND ENFORCEABLE OBLIGATION OF THE REIT SERVICER; AND ALL
REQUISITE CORPORATE ACTION HAS BEEN TAKEN BY THE REIT SERVICER TO MAKE THIS
AGREEMENT VALID AND BINDING UPON THE REIT SERVICER IN ACCORDANCE WITH ITS TERMS,
EXCEPT AS SUCH TERMS MAY BE LIMITED BY BANKRUPTCY, INSOLVENCY, REORGANIZATION,
MORATORIUM OR OTHER SIMILAR LAWS AFFECTING THE RIGHTS OF CREDITORS GENERALLY AND
BY GENERAL PRINCIPALS OF EQUITY;

 

(B)                                 ORDINARY COURSE OF BUSINESS.  THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT ARE IN THE
ORDINARY COURSE OF BUSINESS OF THE REIT SERVICER, AND THE TRANSFER, ASSIGNMENT
AND CONVEYANCE OF THE MORTGAGE NOTES AND THE MORTGAGES BY THE REIT SERVICER
PURSUANT TO THIS AGREEMENT ARE NOT SUBJECT TO THE BULK TRANSFER OR ANY SIMILAR
STATUTORY PROVISIONS IN EFFECT IN ANY APPLICABLE JURISDICTION;

 

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(C)                                  NO CONFLICTS.  NEITHER THE EXECUTION AND
DELIVERY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY, NOR THE
FULFILLMENT OF OR COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS AGREEMENT,
WILL CONFLICT WITH OR RESULT IN A BREACH OF ANY OF THE TERMS, CONDITIONS OR
PROVISIONS OF THE REIT SERVICER’S CHARTER OR BY-LAWS OR ANY LEGAL RESTRICTION OR
ANY MATERIAL AGREEMENT OR INSTRUMENT TO WHICH THE REIT SERVICER IS NOW A PARTY
OR BY WHICH IT IS BOUND, OR CONSTITUTE A DEFAULT OR RESULT IN AN ACCELERATION
UNDER ANY OF THE FOREGOING, OR RESULT IN THE VIOLATION OF ANY LAW, RULE,
REGULATION, ORDER, JUDGMENT OR DECREE TO WHICH THE REIT SERVICER OR ITS PROPERTY
IS SUBJECT;

 

(D)                                 ABILITY TO PERFORM.  THE REIT SERVICER DOES
NOT BELIEVE, NOR DOES IT HAVE ANY REASON OR CAUSE TO BELIEVE, THAT IT CANNOT
PERFORM EACH AND EVERY COVENANT CONTAINED IN THIS AGREEMENT.

 

(E)                                  NO LITIGATION PENDING.  THERE IS NO ACTION,
SUIT, PROCEEDING OR INVESTIGATION PENDING OR TO THE BEST OF THE REIT SERVICER’S
KNOWLEDGE THREATENED AGAINST THE REIT SERVICER WHICH, EITHER IN ANY ONE INSTANCE
OR IN THE AGGREGATE, IS REASONABLY LIKELY TO RESULT IN ANY MATERIAL ADVERSE
CHANGE IN THE BUSINESS, OPERATIONS, FINANCIAL CONDITION, PROPERTIES OR ASSETS OF
THE REIT SERVICER, OR IN ANY MATERIAL IMPAIRMENT OF THE RIGHT OR ABILITY OF THE
REIT SERVICER TO CARRY ON ITS BUSINESS SUBSTANTIALLY AS NOW CONDUCTED, OR IN ANY
MATERIAL LIABILITY ON THE PART OF THE REIT SERVICER, OR WHICH WOULD DRAW INTO
QUESTION THE VALIDITY OF THIS AGREEMENT OR THE MORTGAGE LOANS OR OF ANY ACTION
TAKEN OR TO BE TAKEN IN CONNECTION WITH THE OBLIGATIONS OF THE REIT SERVICER
CONTEMPLATED HEREIN, OR WHICH WOULD BE LIKELY TO IMPAIR MATERIALLY THE ABILITY
OF THE REIT SERVICER TO PERFORM UNDER THE TERMS OF THIS AGREEMENT;

 

(F)                                    NO CONSENT REQUIRED.  NO CONSENT,
APPROVAL, AUTHORIZATION OR ORDER OF ANY COURT OR GOVERNMENTAL AGENCY OR BODY IS
REQUIRED FOR THE EXECUTION, DELIVERY AND PERFORMANCE BY THE REIT SERVICER OF OR
COMPLIANCE BY THE REIT SERVICER WITH THIS AGREEMENT OR THE MORTGAGE LOANS, OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR IF
REQUIRED, SUCH APPROVAL HAS BEEN OBTAINED PRIOR TO THE APPLICABLE PURCHASE DATE;
AND

 

(G)                                 NO SECURITIES REGISTRATION.  NEITHER THE
REIT SERVICER NOR ANYONE ACTING ON ITS BEHALF HAS OFFERED, TRANSFERRED, PLEDGED,
SOLD OR OTHERWISE DISPOSED OF ANY MORTGAGE LOANS, ANY INTEREST IN ANY MORTGAGE
LOANS OR ANY OTHER SIMILAR SECURITY TO, OR SOLICITED ANY OFFER TO BUY OR ACCEPT
A TRANSFER, PLEDGE OR OTHER DISPOSITION OF ANY MORTGAGE LOANS, ANY INTEREST IN
ANY MORTGAGE LOANS OR ANY OTHER SIMILAR SECURITY FROM, OR OTHERWISE APPROACHED
OR NEGOTIATED WITH RESPECT TO ANY MORTGAGE LOANS, ANY INTEREST IN ANY MORTGAGE
LOANS OR ANY OTHER SIMILAR SECURITY WITH, ANY PERSON IN ANY MANNER, OR MADE ANY
GENERAL SOLICITATION BY MEANS OF GENERAL ADVERTISING OR IN ANY OTHER MANNER, OR
TAKEN ANY OTHER ACTION WHICH WOULD CONSTITUTE A DISTRIBUTION OF THE MORTGAGE
LOANS UNDER THE 1933 ACT OR WHICH WOULD RENDER THE DISPOSITION OF ANY MORTGAGE
LOANS A VIOLATION OF SECTION 5 OF THE 1933 ACT OR REQUIRE REGISTRATION PURSUANT
THERETO, NOR WILL IT ACT, NOR HAS IT AUTHORIZED OR WILL IT AUTHORIZE ANY PERSON
TO ACT, IN SUCH MANNER WITH RESPECT TO THE MORTGAGE LOANS.

 

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ARTICLE IV

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

 

SECTION 4.01                                REIT SERVICER TO ACT AS REIT
SERVICER.

 

The REIT Servicer, as an independent contractor, shall service and administer
the Mortgage Loans and shall have full power and authority, acting alone, to do
any and all things in connection with such servicing and administration which
the REIT Servicer may deem necessary or desirable, consistent with the terms of
this Agreement and with Accepted Servicing Practices.

 

Consistent with the terms of this Agreement, the REIT Servicer may waive any
Ancillary Income or other fee that may be collected in the ordinary course of
servicing the Mortgage Loans.  The REIT Servicer shall not make any future
advances to any Mortgagor under any Mortgage Loan.  Unless the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the REIT Servicer, imminent, the REIT Servicer shall not permit any modification
of any material term of any Mortgage Loan, including any modification that would
change the Mortgage Interest Rate, defer or forgive the payment of principal or
interest, reduce or increase the outstanding principal balance, change the
Prepayment Charge, or change the Mortgage Loan Maturity Date.  Without limiting
the generality of the foregoing, the REIT Servicer shall continue, and is hereby
authorized and empowered, to execute and deliver on behalf of itself, the REIT
Sub-Trust and UBS, all instruments of satisfaction with respect to the Mortgage
Loans and with respect to the Mortgaged Properties.  Upon the request of the
REIT Servicer, the REIT Sub-Trust and UBS (on its own behalf) shall execute and
deliver to the REIT Servicer any powers of attorney or other document furnished
to it by the REIT Servicer to carry out its servicing and administrative duties
under this Agreement.

 

In servicing and administering the Mortgage Loans, the REIT Servicer shall
employ procedures and exercise the same care that it customarily employs and
exercises in servicing and administering mortgage loans for its own account,
giving due consideration to Accepted Servicing Practices.

 

SECTION 4.02                                LIQUIDATION OF MORTGAGE LOANS.

 

In the event that any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 is not paid when the same becomes due and payable, or
in the event the Mortgagor fails to perform any other covenant or obligation
under the Mortgage Loan and such failure continues beyond any applicable grace
period, the REIT Servicer shall take such action as (1) the REIT Servicer would
take under similar circumstances with respect to a similar mortgage loan held
for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, and (3) the REIT Servicer shall reasonably and in good
faith determine to be in the best interest of UBS.  In the event that any
payment due under any Mortgage Loan is not postponed pursuant to Section 4.01
and remains delinquent for a period of 90 days or any other default continues
for a period of 90 days beyond the expiration of any grace or cure period, the
REIT Servicer shall exercise reasonable efforts to foreclose upon or otherwise
comparably convert the ownership of properties securing those Mortgage Loans
which are in default and as to which no satisfactory arrangements can be made
for collection of delinquent payments.  In

 

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such connection, the REIT Servicer shall from its own funds make all necessary,
reasonable and proper Servicing Advances, provided, however, that the REIT
Servicer shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine in its sole reasonable discretion (a) that
such preservation, restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan after reimbursement to itself for such expenses
and (b) that such expenses will be recoverable by it either through Liquidation
Proceeds or through Insurance Proceeds; provided that such expenses shall be
reimbursed only to the extent that the interest on the Loans and the Notes is
paid in full, but neither event described in (a) and (b) above shall be a
condition precedent for the reimbursement of the REIT Servicer.

 

SECTION 4.03                                COLLECTION OF MORTGAGE LOAN
PAYMENTS.

 

Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the REIT Servicer shall proceed to collect all
payments due, in accordance with the standard of care it would use with respect
to similar mortgage loans held for its own account and consistent with Accepted
Servicing Practices, under each of the Mortgage Loans when the same shall become
due and payable and shall ascertain and estimate Escrow Payments in accordance
with the standard of care it would use with respect to similar mortgage loans
held for its own account and consistent with Accepted Servicing Practices.

 

SECTION 4.04                                DEPOSITS TO BLOCKED ACCOUNT.

 

If a Blocked Account is established as a result of the REIT directly servicing
any Mortgage Loans, the provisions of this Section 4.04, Section 4.05 and
Section 4.08 shall control.

 

(A)                                  THE REIT SERVICER SHALL SEGREGATE AND HOLD
ALL FUNDS COLLECTED AND RECEIVED RELATING TO THE MORTGAGE LOANS, ONCE SUCH FUNDS
HAVE BEEN RECEIVED IN THE REIT SERVICER’S MASTER LOCKBOX CLEARING ACCOUNT AND
HAVE BEEN IDENTIFIED AS RELATING TO THE MORTGAGE LOANS, SEPARATE AND APART FROM
ANY OF ITS OWN FUNDS AND GENERAL ASSETS.  THESE FUNDS SHALL BE HELD IN A BLOCKED
ACCOUNT IN THE FORM OF TIME DEPOSIT OR DEMAND ACCOUNTS, TITLED “MORTGAGEIT INC.,
AS SERVICER, IN TRUST FOR UBS REAL ESTATE SECURITIES INC. AND ITS ASSIGNEES”,
ESTABLISHED AND MAINTAINED PURSUANT TO THE BLOCKED ACCOUNT AGREEMENT.  THE
BLOCKED ACCOUNT SHALL BE ESTABLISHED WITH HSBC BANK OR ANY OTHER ENTITY APPROVED
BY UBS.  ANY FUNDS DEPOSITED IN THE BLOCKED ACCOUNT SHALL AT ALL TIMES BE FULLY
INSURED TO THE FULL EXTENT PERMITTED UNDER APPLICABLE LAW.  FUNDS DEPOSITED IN
THE BLOCKED ACCOUNT MAY BE WITHDRAWN THEREFROM BY THE REIT SERVICER IN
ACCORDANCE WITH SECTION 4.05.

 

The REIT Servicer hereby assigns, pledges and grants a security interest in all
of its right, title and interest in, to and under the Blocked Account and all
amounts credited thereto at any time to UBS.

 

(B)                                 DEPOSITS TO BLOCKED ACCOUNT.  THE REIT
SERVICER SHALL DEPOSIT IN THE BLOCKED ACCOUNT WITHIN THREE (3) BUSINESS DAYS
AFTER RECEIPT OF FUNDS, AND RETAIN THEREIN, THE FOLLOWING COLLECTIONS RECEIVED
BY THE REIT SERVICER AND REMITTED TO UBS:

 

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(I)                                     ALL PAYMENTS ON ACCOUNT OF PRINCIPAL ON
THE MORTGAGE LOANS INCLUDING PRINCIPAL PREPAYMENTS AND ALL AMOUNTS ON ACCOUNT OF
THE REPURCHASE PRICE OF MORTGAGE LOANS RECEIVED FROM MORTGAGEIT, AS SELLER
PURSUANT TO THE LOAN SALE AGREEMENT;

 

(II)                                  ALL PAYMENTS ON ACCOUNT OF INTEREST ON THE
MORTGAGE LOANS ADJUSTED TO THE MORTGAGE LOAN REMITTANCE RATE;

 

(III)                               ALL INSURANCE PROCEEDS INCLUDING AMOUNTS
REQUIRED TO BE DEPOSITED PURSUANT TO SECTION 4.10 (OTHER THAN PROCEEDS TO BE
HELD IN THE ESCROW ACCOUNT AND APPLIED TO THE RESTORATION OR REPAIR OF THE
MORTGAGED PROPERTY OR RELEASED TO THE MORTGAGOR IN ACCORDANCE WITH
SECTION 4.13), AND SECTION 4.11;

 

(IV)                              ANY AMOUNTS REQUIRED TO BE DEPOSITED BY THE
REIT SERVICER PURSUANT TO SECTION 4.11 IN CONNECTION WITH THE DEDUCTIBLE CLAUSE
IN ANY BLANKET HAZARD INSURANCE POLICY;

 

(V)                                 ALL LIQUIDATION PROCEEDS;

 

(VI)                              ALL CONDEMNATION PROCEEDS WHICH ARE NOT
APPLIED TO THE RESTORATION OR REPAIR OF THE MORTGAGED PROPERTY OR RELEASED TO
THE MORTGAGOR IN ACCORDANCE WITH SECTION 4.14;

 

(VII)                           ANY AMOUNTS RECEIVED WITH RESPECT TO OR RELATED
TO ANY REO PROPERTY AND ALL REO DISPOSITION PROCEEDS PURSUANT TO SECTION 4.14;
AND

 

(VIII)                        ANY AMOUNTS REQUIRED TO BE DEPOSITED BY THE REIT
SERVICER PURSUANT TO SECTION 4.08 IN CONNECTION WITH THE INVESTMENT IN ELIGIBLE
ACCOUNTS.

 

(C)                                  THE FOREGOING REQUIREMENTS FOR DEPOSIT INTO
THE BLOCKED ACCOUNT SHALL BE EXCLUSIVE, IT BEING UNDERSTOOD AND AGREED THAT,
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AMOUNTS REPRESENTING THE
SERVICING FEE COLLECTED FROM THE INTEREST PORTION OF THE MONTHLY PAYMENT ON THE
RELATED MORTGAGE LOAN AND ANCILLARY INCOME NEED NOT BE DEPOSITED BY THE REIT
SERVICER INTO THE BLOCKED ACCOUNT, SUBJECT TO THE FOLLOWING: IF THE REIT
SERVICER RECEIVES NOTICE FROM UBS THAT A FACILITY DEFAULT HAS OCCURRED AND IS
CONTINUING, UNTIL IT RECEIVES FURTHER NOTICE FROM UBS THAT THERE IS NO LONGER
ANY CONTINUING FACILITY DEFAULT, THE PRECEDING EXCEPTION SHALL NOT APPLY AND
ANCILLARY INCOME SHALL BE DEPOSITED BY THE REIT SERVICER INTO THE BLOCKED
ACCOUNT.

 

(D)                                 NOTWITHSTANDING ANYTHING TO THE CONTRARY IN
THIS AGREEMENT, THE REIT SERVICER SHALL NOT BE OBLIGATED TO ADVANCE FROM ITS OWN
FUNDS (I) ANY DUE OR DELINQUENT, BUT UNCOLLECTED, PRINCIPAL AND INTEREST RELATED
TO A MORTGAGE LOAN OR (II) COMPENSATING INTEREST (PREPAYMENT INTEREST
SHORTFALLS) FOR ANY MORTGAGE LOAN.

 

SECTION 4.05                                PERMITTED WITHDRAWALS FROM BLOCKED
ACCOUNT.

 

(A)                                  THE REIT SERVICER SHALL BE PERMITTED TO
REQUEST UBS TO MAKE THE FOLLOWING WITHDRAWALS FROM THE BLOCKED ACCOUNT, IT BEING
UNDERSTOOD THAT ONLY UBS SHALL, BY WRITTEN INSTRUCTION, BE PERMITTED TO DIRECT
THE BANK HOLDING THE BLOCKED ACCOUNT TO REMIT FUNDS THEREFROM:

 

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(I)                                     TO REIMBURSE ITSELF FOR ANY SERVICING
ADVANCES, BUT ONLY FROM AMOUNTS RECEIVED ON ACCOUNT OF THE CORRESPONDING
MORTGAGE LOAN;

 

(II)                                  TO PAY TO ITSELF FOR ANY INCOME OR GAIN
REALIZED FROM THE INVESTMENT OF FUNDS IN THE BLOCKED ACCOUNT IN ELIGIBLE
ACCOUNTS PURSUANT TO SECTION 4.08;

 

(III)                               TO REIMBURSE ITSELF FOR EXPENSES INCURRED
AND REIMBURSABLE TO IT PURSUANT TO SECTION 7.01;

 

(IV)                              TO PAY ANY AMOUNT REQUIRED TO BE PAID PURSUANT
TO SECTION 4.14 RELATED TO ANY REO PROPERTY, IT BEING UNDERSTOOD THAT IN THE
CASE OF ANY SUCH EXPENDITURE OR WITHDRAWAL RELATED TO A PARTICULAR REO PROPERTY,
THE AMOUNT OF SUCH EXPENDITURE OR WITHDRAWAL FROM THE BLOCKED ACCOUNT SHALL BE
LIMITED TO AMOUNTS ON DEPOSIT IN THE BLOCKED ACCOUNT WITH RESPECT TO THE RELATED
REO PROPERTY;

 

(V)                                 ON EACH PAYMENT DATE, TO PAY TO UBS, TO THE
EXTENT OF AVAILABLE FUNDS ON DEPOSIT IN THE BLOCKED ACCOUNT, AN AMOUNT EQUAL TO
ALL INTEREST DUE TO UBS, TOGETHER WITH ALL PRINCIPAL COLLECTIONS AND OTHER
RECOVERIES OF PRINCIPAL RECEIVED BY THE REIT SERVICER (INCLUDING ANY REPURCHASE
PRICES NOT RECOVERED DIRECTLY BY UBS) DURING THE PRECEDING MONTH ON THE MORTGAGE
LOANS, IN EACH CASE TO THE EXTENT NOT PREVIOUSLY REMITTED TO UBS BY THE REIT
SERVICER OR THE REIT SUB-TRUST (IT BEING ACKNOWLEDGED BY THE PARTIES THAT
AMOUNTS REPRESENTING THE PRINCIPAL PREPAYMENTS ARE EXPECTED TO BE REMITTED TO
UBS IMMEDIATELY UPON RECEIPT AND IN NO EVENT LATER THAN THE BUSINESS DAY
FOLLOWING THE DATE ON WHICH SUCH PRINCIPAL PREPAYMENTS WERE RECEIVED BY THE REIT
SERVICER);

 

(VI)                              TO WITHDRAW FUNDS DEPOSITED IN ERROR;

 

(VII)                           ON EACH PAYMENT DATE, TO PAY TO ITSELF THE
SERVICING FEE FROM ANY AMOUNTS REMAINING AFTER THE PAYMENT TO UBS REFERENCED IN
CLAUSE (V) ABOVE, SUBJECT TO SECTION 6.03 HEREOF;

 

(VIII)                        ON EACH PAYMENT DATE, FROM AMOUNTS REMAINING, TO
MAKE PAYMENTS IN ACCORDANCE WITH THE TRUST AGREEMENT; AND

 

(IX)                                TO CLEAR AND TERMINATE THE BLOCKED ACCOUNT
UPON THE TERMINATION OF THIS AGREEMENT AND THE TRUST AGREEMENT.

 

(B)                                 FOLLOWING THE REIT SERVICER’S RECEIPT OF A
WRITTEN NOTICE FROM UBS NOTIFYING THE REIT SERVICER OF THE OCCURRENCE OF A
FACILITY DEFAULT, AN ACCELERATION OF THE REIT SUB-TRUST’S OBLIGATIONS UNDER THE
LOAN REPURCHASE AGREEMENT, THE LOAN PARTICIPATION AGREEMENT, THE LOAN PURCHASE
AGREEMENT, OR AN EVENT OF DEFAULT HEREUNDER, ALL AMOUNTS DEPOSITED IN THE
BLOCKED ACCOUNT SHALL BE PAID TO UBS.

 

SECTION 4.06                                ESCROW ACCOUNT.

 

If the REIT directly services any of the Mortgage Loans, the REIT Servicer shall
establish an Escrow Account and the provisions of this Section 4.06 and of
Section 4.08 shall control.

 

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(A)                                  ESTABLISHMENT.  THE REIT SERVICER SHALL
SEGREGATE AND HOLD ALL FUNDS COLLECTED AND RECEIVED PURSUANT TO A MORTGAGE LOAN
CONSTITUTING ESCROW PAYMENTS SEPARATE AND APART FROM ANY OF ITS OWN FUNDS AND
GENERAL ASSETS AND SHALL ESTABLISH AND MAINTAIN ONE OR MORE ESCROW ACCOUNTS, IN
THE FORM OF TIME DEPOSIT OR DEMAND ACCOUNTS, ESTABLISHED IN THE NAME OF
“MORTGAGEIT HOLDINGS, INC., AS SERVICER, IN TRUST FOR UBS REAL ESTATE SECURITIES
INC. AND ITS ASSIGNEES AND VARIOUS MORTGAGORS”.  THE ESCROW ACCOUNT SHALL BE
ESTABLISHED WITH HSBC BANK, IN A MANNER THAT SHALL PROVIDE MAXIMUM AVAILABLE
INSURANCE THEREUNDER.  FUNDS DEPOSITED IN THE ESCROW ACCOUNT MAY BE DRAWN ON BY
THE REIT SERVICER IN ACCORDANCE WITH SECTION 4.06(C). 

 

(B)                                 DEPOSITS TO ESCROW ACCOUNT.  THE REIT
SERVICER SHALL DEPOSIT IN THE ESCROW ACCOUNT WITHIN THREE (3) BUSINESS DAYS
AFTER RECEIPT OF FUNDS, AND RETAIN THEREIN:

 

(I)                                     ALL ESCROW PAYMENTS COLLECTED ON ACCOUNT
OF THE MORTGAGE LOANS, FOR THE PURPOSE OF EFFECTING PAYMENT OF ANY ITEM REQUIRED
UNDER THE TERMS OF THE RELATED ESCROW AGREEMENT WITH THE MORTGAGOR; AND

 

(II)                                  ALL AMOUNTS REPRESENTING INSURANCE
PROCEEDS OR CONDEMNATION PROCEEDS THAT ARE TO BE APPLIED TO THE RESTORATION OR
REPAIR OF ANY MORTGAGED PROPERTY; AND

 

(III)                               ANY AMOUNTS REQUIRED TO BE DEPOSITED BY THE
REIT SERVICER PURSUANT TO SECTION 4.08 IN CONNECTION WITH THE INVESTMENT IN
ELIGIBLE ACCOUNTS.

 

(C)                                  WITHDRAWALS FROM ESCROW ACCOUNT. 
WITHDRAWALS FROM THE ESCROW ACCOUNT MAY BE MADE BY THE REIT SERVICER ONLY:

 

(I)                                     TO EFFECT PAYMENTS OF ITEMS CONSTITUTING
ESCROW PAYMENTS FOR THE RELATED MORTGAGE PURSUANT TO THE TERMS OF THE MORTGAGE
OR ANY OTHER RELATED DOCUMENT;

 

(II)                                  TO REIMBURSE THE REIT SERVICER FOR ANY
SERVICING ADVANCES MADE BY THE REIT SERVICER PURSUANT TO SECTION 4.07 WITH
RESPECT TO A RELATED MORTGAGE LOAN, BUT ONLY FROM AMOUNTS RECEIVED ON THE
RELATED MORTGAGE LOAN WHICH REPRESENT LATE COLLECTIONS OF ESCROW PAYMENTS
THEREUNDER;

 

(III)                               TO REFUND TO ANY MORTGAGOR ANY FUNDS FOUND
TO BE IN EXCESS OF THE AMOUNTS REQUIRED UNDER THE TERMS OF THE RELATED MORTGAGE
LOAN;

 

(IV)                              FOR TRANSFER TO THE RELATED BLOCKED ACCOUNT
AND APPLICATION TO REDUCE THE PRINCIPAL BALANCE OF THE MORTGAGE LOAN IN
ACCORDANCE WITH THE TERMS OF THE RELATED MORTGAGE AND MORTGAGE NOTE;

 

(V)                                 FOR APPLICATION TO RESTORATION OR REPAIR OF
THE MORTGAGED PROPERTY IN ACCORDANCE WITH THE PROCEDURES OUTLINED IN
SECTION 4.13;

 

(VI)                              TO PAY TO THE REIT SERVICER PURSUANT TO
SECTION 4.08, OR ANY MORTGAGOR TO THE EXTENT REQUIRED BY LAW, ANY INTEREST
EARNED ON THE FUNDS DEPOSITED IN THE ESCROW ACCOUNT;

 

(VII)                           TO CLEAR AND TERMINATE THE ESCROW ACCOUNT ON THE
TERMINATION OF THIS AGREEMENT; AND

 

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(VIII)                        TO WITHDRAW FUNDS DEPOSITED IN ERROR.

 

SECTION 4.07                                PAYMENT OF TAXES, INSURANCE AND
OTHER CHARGES.

 

With respect to each Mortgage Loan, the REIT Servicer shall maintain accurate
and customary servicing records reflecting the status of taxes, assessments,
fire and hazard insurance premiums and other charges which are or may become a
lien upon the Mortgaged Property.  As to those Mortgage Loans which are the
subject of an “impound account” for the payment of taxes and/or insurance, the
REIT Servicer shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) subject to the Escrow Account and shall
effect payment thereof prior to the applicable penalty or termination date,
employing for such purpose deposits of the Mortgagor in the Escrow Account.  To
the extent that a Mortgage does not provide for Escrow Payments, the REIT
Servicer shall use its best efforts to determine that any such payments coming
due and delinquent prior to the related Purchase Date are made by the
Mortgagor.  The REIT Servicer assumes full responsibility for the payment of all
such bills and shall effect payment of all such bills in a manner and at a time
that assures that the lien priority of the Mortgage is not jeopardized and, in
addition, with respect to the payment of taxes, in a manner and at a time that
avoids the loss of the Mortgaged Property due to a tax sale or the foreclosure
of a tax lien, irrespective of each Mortgagor’s faithful performance in the
payment of same or the making of the Escrow Payments, and, if necessary, the
REIT Servicer shall make Servicing Advances from its own funds to effect such
payments (subject to the REIT Servicer’s right of reimbursement from the Escrow
Account pursuant to Section 4.06(c)(ii) or the Blocked Account pursuant to
Section 4.05(a)(i)).

 

SECTION 4.08                                PROTECTION OF ACCOUNTS.

 

Amounts on deposit in the Blocked Account and the Escrow Account may at the
option of the REIT Servicer be invested in Eligible Accounts.  Any such Eligible
Account shall permit withdrawals therefrom no later than the day before the next
Payment Date.  Any such Eligible Account relating to the Blocked Account shall
be established in the name of “MortgageIT, Inc., as Servicer, in trust for UBS
Real Estate Securities Inc. and its assignees”; any such Eligible Account
relating to the Escrow Account shall be established in the name of the REIT
Servicer or for the benefit of UBS.  All income on or gain realized from any
such Eligible Account shall be for the benefit of the REIT Servicer and may be
withdrawn at any time by the REIT Servicer, subject to Section 4.05(b) and
Section 4.06(c).  The REIT Servicer shall be responsible for any losses incurred
in respect of any Eligible Account and any taxes imposed on the REIT Sub-Trust
on account of any Eligible Account and shall deposit in the Blocked Account or
the Escrow Account, as applicable, out of its own funds amounts equal to all
such losses and taxes immediately as such losses are realized or assessed.

 

SECTION 4.09                                MAINTENANCE OF HAZARD INSURANCE.

 

The REIT Servicer shall cause to be maintained for each Mortgage Loan, hazard
insurance such that all improvements upon the Mortgaged Property are insured by
a generally acceptable, licensed and qualified insurer against loss by fire and
hazards of extended coverage, in an amount which is at least equal to the lesser
of (i) the replacement value of the

 

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improvements securing such Mortgage Loan or (ii) the outstanding principal
balance of the Mortgage Loan.

 

If upon origination of the Mortgage Loan, the related Mortgaged Property was
located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration is in effect with a
generally acceptable, qualified insurance carrier in an amount representing
coverage equal to the lesser of (i) the replacement value of the improvements,
(ii) the maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended or (iii) the outstanding principal balance of
the Mortgage Loan securing such Mortgaged Property.  If at any time during the
term of the Mortgage Loan, the REIT Servicer determines in accordance with
applicable law that a Mortgaged Property is located in a special flood hazard
area and is not covered by flood insurance or is covered in an amount less than
the amount required by (and available under) the Flood Disaster Protection Act
of 1973, as amended, the REIT Servicer shall notify the related Mortgagor that
the Mortgagor must obtain such flood insurance coverage, and if said Mortgagor
fails to obtain the required flood insurance coverage within sixty (60) days
after such notification, the REIT Servicer shall immediately force place the
required flood insurance on the Mortgagor’s behalf (except as may be prohibited
or limited by applicable law).

 

Pursuant to Section 4.04, any amounts collected by the REIT Servicer under any
such policies or with respect to property acquired in liquidation of the
Mortgage Loan (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property or to be
released to the Mortgagor, in accordance with the REIT Servicer’s normal
servicing procedures as specified in Section 4.14) shall be deposited in the
Blocked Account subject to withdrawal pursuant to Section 4.05.

 

SECTION 4.10                                MAINTENANCE OF MORTGAGE IMPAIRMENT
INSURANCE.

 

In the event that the REIT Servicer shall obtain and maintain a blanket policy
insuring against losses arising from fire and hazards covered under extended
coverage on all of the Mortgage Loans, then, to the extent such policy provides
coverage in an amount equal to the amount required pursuant to Section 4.10 and
otherwise complies with all other requirements of Section 4.10, it shall
conclusively be deemed to have satisfied its obligations as set forth in
Section 4.10.  Any amounts collected by the REIT Servicer under any such policy
relating to a Mortgage Loan shall be deposited in the Blocked Account subject to
withdrawal pursuant to Section 4.05.  Such policy may contain a deductible
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the REIT
Servicer shall deposit in the Blocked Account at the time of such loss the
amount not otherwise payable under the blanket policy because of such deductible
clause, such amount to deposited from the REIT Servicer’s funds, without
reimbursement therefor.

 

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SECTION 4.11                                MAINTENANCE OF FIDELITY BOND AND
ERRORS AND OMISSIONS INSURANCE.

 

The REIT Servicer shall maintain, at its own expense, a blanket Fidelity Bond
and an Errors and Omissions Insurance Policy, with broad coverage on all
officers, employees or other persons acting in any capacity requiring such
persons to handle funds, money, documents or papers relating to the Mortgage
Loans (“Servicer Employees”).  Any such Fidelity Bond and Errors and Omissions
Insurance Policy shall be in the form of the Mortgage Banker’s Blanket Bond and
shall protect and insure the REIT Servicer against losses, including forgery,
theft, embezzlement, fraud, errors and omissions and negligent acts of such
Servicer Employees.  Such Fidelity Bond and Errors and Omissions Insurance
Policy also shall protect and insure the REIT Servicer against losses in
connection with the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby.  No provision of
this Section 4.11 requiring such Fidelity Bond and Errors and Omissions
Insurance Policy shall diminish or relieve the REIT Servicer from its duties and
obligations as set forth in this Agreement.  The REIT Servicer shall deliver a
copy of such fidelity bond and insurance policy to the REIT Sub-Trust and UBS
upon request.

 

SECTION 4.12                                DELIVERY OF DOCUMENT IN POSSESSION
OF CUSTODIAN.

 

The REIT Sub-Trust shall cause either Custodian to deliver to the REIT Servicer,
on a timely basis, those mortgage loan documents that the REIT Servicer may
request from such Custodian from time to time.  Should such Custodian fail to
deliver the requested mortgage loan documents on a timely basis, the REIT
Servicer shall not be liable for any related loss or expense arising therefrom. 
Any Event of Default which is attributable to the failure of such Custodian to
deliver or such Custodian’s untimely delivery of reasonably requested mortgage
loan documents shall not be chargeable to the REIT Servicer and shall be deemed
to not have occurred. 

 

SECTION 4.13                                RESTORATION OF MORTGAGED PROPERTY.

 

In the event that any Mortgaged Property is damaged as a result of an insured
act under one of the insurance policies discussed in this Agreement or subject
to a governmental taking, the REIT Servicer shall apply any Insurance Proceeds
or Condemnation Proceeds (collectively “Proceeds”) actually received by it, in
accordance with Accepted Servicing Practices, applicable law, and the terms of
the related Mortgage or Deed of Trust.  Consistent therewith the REIT Servicer
shall apply such Proceeds to reduce the principal balance of the Mortgage Loan
unless;

 

1.                                       Applicable law requires otherwise; or

 

2.                                       The REIT Servicer has determined that
restoration and/or repair of the Mortgaged Property is in the best interest of
all parties.

 

In the determination of whether to allow restoration and/or repair, the REIT
Servicer will consider the following:

 

1.                                       Whether the Mortgagor is otherwise in
default under the terms of the Mortgage or deed of trust;

 

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2.                                       Whether restoration and/or repair is
economically feasible; and

 

3.                                       Whether such restoration and/or repair
will have a material impact on the Mortgage Property’s value.

 

The REIT Servicer need not obtain the approval of UBS prior to releasing any
Insurance Proceeds or Condemnation Proceeds to be applied to the restoration or
repair of the Mortgaged Property if such release is in accordance herewith and
with Accepted Servicing Practices.  If UBS is named as an additional loss payee,
the REIT Servicer is hereby empowered to endorse any loss draft issued in
respect of such a claim in the name of UBS.

 

SECTION 4.14                                TITLE, MANAGEMENT AND DISPOSITION OF
REO PROPERTY.

 

In the event that title to any Mortgaged Property is acquired in foreclosure or
by deed in lieu of foreclosure, the deed or certificate of sale shall be taken
in the name of UBS or its designee of record on the date of acquisition of
title, for UBS.  UBS or its designee shall provide the REIT Servicer with one or
more powers of attorney, if reasonably requested, to enable the REIT Servicer to
fulfill its duties under this Agreement.

 

The REIT Servicer shall manage, conserve, protect and operate each REO Property
for the REIT Sub-Trust and UBS, solely for the purpose of its prompt disposition
and sale.  The REIT Servicer, either itself or through an agent selected by the
REIT Servicer, shall manage, conserve, protect and operate the REO Property in
the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. 

 

The REIT Servicer shall attempt to sell the REO Property (and may temporarily
rent the same) on such terms and conditions as the REIT Servicer determines in
its good faith judgment to be in the best interest of the REIT Sub-Trust and
UBS.  The proceeds of sale of the REO Property shall be deposited in the Blocked
Account within three (3) Business Days after receipt of funds.  As soon as
practical thereafter, the expenses of such sale shall be paid and the REIT
Servicer shall reimburse itself from the Blocked Account for any related
unreimbursed Servicing Advances, unpaid Servicing Fees and unreimbursed expenses
and advances made pursuant to this Agreement. 

 

With respect to each REO Property, the REIT Servicer shall deposit all funds
collected and received in connection with the operation of the REO Property in
the Blocked Account within three (3) Business Days after receipt of such funds
and shall also deposit in the Blocked Account all revenues received with respect
to the conservation and disposition of the related REO Property.

 

The REIT Servicer shall withdraw from the Blocked Account funds necessary for
the proper operation, management and maintenance of the REO Property, including
the cost of maintaining any hazard insurance pursuant to Section 4.10 and the
fees of any managing agent of the REIT Servicer, a sub servicer, or the REIT
Servicer itself.  The REO management fee shall be an amount that is reasonable
and customary in the area where the Mortgaged Property is located.

 

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SECTION 4.15                                SUB-SERVICER.

 

The REIT Servicer may, with the prior consent of UBS, appoint a sub-servicer to
perform any or all of its duties under this Agreement with respect to any
Mortgage Loan.  UBS hereby consents to the appointment of GMAC as a sub servicer
under this Agreement.  GMAC and any other sub-servicer shall service and
administer the Mortgage Loans in accordance with the terms of this Agreement,
the Accepted Servicing Practices.  The REIT Servicer shall remain liable for any
and all of its duties under this Agreement delegated to GMAC or any other
sub-servicer.  Upon appointment of any sub-servicer, or with respect to GMAC, as
of the Closing Date, all of the REIT Servicer’s rights and remedies (but none of
its obligations) under any sub-servicing agreement with respect to each Mortgage
Loan shall be automatically assigned to UBS hereunder, including, without
limitation, the ability to terminate such sub-servicer.  The REIT Servicer
hereby represents, warrants and covenants that any sub-servicing agreement
currently in existence with any such sub-servicer or hereafter entered into with
any sub-servicer does not, and will not, contain any termination fee to be paid
to any such Servicer upon termination of such entity as sub-servicer of the
Mortgage Loans.

 

ARTICLE V

NOTIFICATION; STATEMENTS

 

SECTION 5.01                                NOTIFICATIONS. 

 

The REIT Servicer will notify the REIT Sub-Trust and UBS in writing of any of
the following promptly upon learning of the occurrence thereof, describing the
same and, if applicable, any remedial steps being taken with respect thereto:

 

(I)                                               RECEIPT OF NOTICE OR KNOWLEDGE
THAT THE MORTGAGED PROPERTY RELATING TO A MORTGAGE LOAN HAS BEEN DAMAGED BY
WASTE, FIRE, EARTHQUAKE OR EARTH MOVEMENT, WINDSTORM, FLOOD, TORNADO OR OTHER
CASUALTY OR OTHERWISE DAMAGED SO AS TO AFFECT ADVERSELY ITS MARKET VALUE; AND

 

(II)                                            PROMPTLY UPON RECEIPT OF NOTICE
OR KNOWLEDGE OF (A) ANY MATERIAL DEFAULT RELATED TO ANY MORTGAGE LOAN, (B) ANY
LIEN OR SECURITY INTEREST (OTHER THAN SECURITY INTERESTS CREATED HEREBY) ON, OR
CLAIM ASSERTED AGAINST, ANY OF THE MORTGAGE LOANS WHICH, INDIVIDUALLY OR
TOGETHER WITH SUCH LIENS, SECURITY INTERESTS OR CLAIMS, IS REASONABLY LIKELY TO
HAVE A MATERIAL ADVERSE EFFECT OR (C) ANY EVENT OR CHANGE IN CIRCUMSTANCES WHICH
COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

SECTION 5.02                                MONTHLY REPORTS.

 

Not later than 5:00 p.m. New York City time on each Payment Date, the REIT
Servicer will provide to the REIT Sub-Trust and UBS, by electronic or other
format acceptable to UBS, the following information in respect of the preceding
month:

 

(I)                                               SUMMARY OF DELINQUENCY AND
LOSS EXPERIENCE;

 

(II)                                            WITH RESPECT TO ANY MERS
DESIGNATED MORTGAGE LOAN, MERS REPORTS;

 

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(III)                                         A REMITTANCE REPORT, IN HARD COPY
AND ELECTRONIC FORMAT ACCEPTABLE TO UBS, CONTAINING THE FOLLOWING INFORMATION
REGARDING FUNDS COLLECTED DURING THE PRIOR CALENDAR MONTH:

 

(1)                                       MORTGAGE LOAN NUMBER;

 

(2)                                       NOTE RATE;

 

(3)                                       REMITTANCES ALLOCABLE TO PRINCIPAL AND
INTEREST, ESCROW AND TAXES;

 

(4)                                       PAID THROUGH DATE;

 

(5)                                       MORTGAGE LOAN BALANCE;

 

(6)                                       DELINQUENCY STATUS;

 

(7)                                       WHETHER THE MORTGAGED PROPERTY IS IN
FORECLOSURE OR HAS BECOME AN REAL ESTATE OWNED PROPERTY;

 

(8)                                       WHETHER ANY MORTGAGOR IS THE SUBJECT
OF ANY BANKRUPTCY ACTION; AND

 

(9)                                       ANY OTHER INFORMATION THAT UBS MAY
REASONABLY REQUEST;

 

(IV)                                        ANY ADDITIONAL REPORTS WITH RESPECT
TO THE REIT SERVICER’S SERVICING PORTFOLIO AS UBS  MAY REASONABLY REQUEST;

 

(V)                                           ANY OTHER REPORTS AS DEEMED
NECESSARY AT SECURITIZATION AND REASONABLY PREPARED BY THE REIT SERVICER.

 

In addition, the REIT Servicer shall provide UBS with such information
concerning the Mortgage Loans as is necessary for UBS to prepare its federal
income tax returns as UBS may reasonably request from time to time.

 

ARTICLE VI

GENERAL SERVICING PROCEDURES

 

SECTION 6.01                                TRANSFERS OF MORTGAGED PROPERTY.

 

Except as limited by applicable law, the REIT Servicer shall use commercially
reasonable efforts to enforce any “due-on-sale” provision contained in any
Mortgage or Mortgage Note and to deny assumption by the Person to whom the
Mortgaged Property has been or is about to be sold whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
liable on the Mortgage and the Mortgage Note.  When the Mortgaged Property has
been conveyed by the Mortgagor, the REIT Servicer shall, to the extent it has
knowledge of such conveyance, exercise its rights to accelerate the maturity of
such Mortgage

 

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Loan under the “due-on-sale” clause applicable thereto, provided, however, that
the REIT Servicer shall not exercise such rights if prohibited by law from doing
so. 

 

If the REIT Servicer reasonably believes it is unable under applicable law to
enforce such “due-on-sale” clause, the REIT Servicer shall endeavor to enter
into (i) an assumption and modification agreement with the Person to whom such
property has been conveyed (subject to said Person meeting the REIT Servicer’s
underwriting guidelines then in existence) pursuant to which such Person becomes
liable under the Mortgage Note and the original Mortgagor remains liable thereon
or (ii) in the event the REIT Servicer is unable under applicable law to require
that the original Mortgagor remain liable under the Mortgage Note, a
substitution of liability agreement with the purchaser of the Mortgaged Property
pursuant to which the original Mortgagor is released from liability and UBS of
the Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note.  If an assumption fee is collected by the REIT Servicer for
entering into an assumption agreement such fee will be retained by the REIT
Servicer as Ancillary Income, subject to Section 4.04(c).  In connection with
any such assumption, neither the Mortgage Interest Rate borne by the related
Mortgage Note, the term of the Mortgage Loan nor the outstanding principal
amount of the Mortgage Loan shall be changed, without UBS’s written consent.

 

SECTION 6.02                                SATISFACTION OF MORTGAGES AND
RELEASE OF SUBMISSION PACKAGES.

 

Upon the payment in full of any Mortgage Loan, the REIT Servicer shall notify
UBS in the weekly Principal Prepayment Remittance and shall be authorized to
request the immediate release of any Mortgage Documents for such Mortgage Loan. 
The costs associated with the release or reconveyance shall be borne by the REIT
Sub-Trust, to the extent such amounts are not recovered from the Mortgagor.

 

Except as provided for in Section 4.01 of this Agreement, if the REIT Servicer
satisfies or releases a Mortgage without first having obtained payment in full
of the indebtedness secured by the Mortgage without the prior written consent of
UBS, upon written demand of UBS and the Majority Investors the REIT Servicer
shall repurchase the related Mortgage Loan at the Repurchase Amount.  The REIT
Servicer shall maintain the Fidelity Bond and Errors and Omissions Insurance
Policy as provided for in Section 4.11 insuring the REIT Servicer against any
loss it may sustain with respect to any Mortgage Loan not satisfied in
accordance with the procedures set forth herein.

 

SECTION 6.03                                SERVICING COMPENSATION.

 

As compensation for its services hereunder, the REIT Servicer shall be entitled
on the terms set forth herein to request withdrawals from the Blocked Account or
the Subservicing Account the amount of its Servicing Fee with respect to such
Mortgage Loan; however such withdrawal or retention shall only be permitted to
be made from the related Monthly Payment with respect to such Mortgage Loan. 
The Servicing Fee shall be payable monthly without pro ration and shall be
computed on the basis of the unpaid principal balance for such Mortgage Loan as
of the first day of the related Due Period.  For so long as no Facility Default
has occurred and is continuing, as servicing compensation, the REIT Servicer
shall be entitled to receive the Servicing Fee, as provided in
Section 4.05(a)(vii) and to retain as income all

 

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Ancillary Income and other like charges or fees, subject to Section 4.04(c);
provided that following the occurrence and during the continuance of a Facility
Default, the right of the REIT Servicer to receive any such servicing
compensation shall be suspended and such amounts shall be paid to UBS.

 

ARTICLE VII

THE REIT SERVICER

 

SECTION 7.01                                INDEMNIFICATION; THIRD PARTY CLAIMS.

 

The REIT Servicer shall indemnify the REIT Sub-Trust, UBS and the Owner Trustee
and their respective Affiliates and officers, directors, employees, agents and
advisors (each an “Indemnified Party”) harmless from and against any and all
liabilities, claims, losses, damages, penalties, fines, forfeitures, reasonable
legal fees and related costs of counsel, judgments, and any other costs, fees
and expenses (collectively, the “Costs”) that may be imposed on, incurred by or
assessed against such Indemnified Party relating to or arising out of a third
party claim related to the failure of the REIT Servicer, GMAC Mortgage
Corporation as sub servicer or any other sub servicer to perform its duties and
service the Mortgage Loans in strict compliance with the terms of this
Agreement.  If an Indemnified Party shall so request, the REIT Servicer shall
assume the defense of any such claim.  The REIT Servicer shall pay all expenses
in connection with any such claim, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
UBS in respect of such claim.  UBS promptly shall reimburse the REIT Servicer
for all amounts advanced by it pursuant to the preceding sentence except when
the claim is in any way related to the failure of the REIT Servicer to service
and administer the Mortgage Loans or otherwise to perform its obligations in
strict compliance with the terms of this Agreement.

 

The REIT Servicer shall also reimburse an Indemnified Party as and when billed
by such Indemnified Party for all such Indemnified Party’s costs and expenses
incurred in connection with the enforcement or the preservation of such
Indemnified Party’s rights against the REIT Servicer under this Agreement,
including without limitation the reasonable fees and expenses of its counsel.

 

SECTION 7.02                                MERGER OR CONSOLIDATION OF THE REIT
SERVICER.

 

The REIT Servicer shall keep in full effect its existence, rights and franchises
as a corporation, and shall obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement. 
Any Person into which the REIT Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
REIT Servicer shall be a party, or any Person succeeding to the business of the
REIT Servicer, shall be the successor of the REIT Servicer hereunder, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding.

 

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SECTION 7.03                                LIMITATION ON LIABILITY OF SERVICER
AND OTHERS.

 

Neither the REIT Servicer nor any of the directors, officers, employees or
agents of the REIT Servicer shall be under any liability to the REIT Sub-Trust
or UBS for any action taken or for refraining from the taking of any action in
good faith pursuant to this Agreement, or for errors in judgment, provided,
however, that this provision shall not protect the REIT Servicer against any
breach of warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of any
breach of the terms and conditions of this Agreement.  The REIT Servicer and any
director, officer, employee or agent of the REIT Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.  The REIT Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expense or
liability, provided, however, that the REIT Servicer may, with the consent of
UBS, undertake any such action which it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto.  In
such event, the REIT Servicer shall be entitled to reimbursement from the REIT
Sub-Trust of the reasonable legal expenses and costs of such action.

 

SECTION 7.04                                LIMITATION ON RESIGNATION AND
ASSIGNMENT BY SERVICER.

 

The Trust actions with respect to the REIT Sub-Trust and UBS have entered into
this Agreement with the REIT Servicer and the REIT Sub-Trust and UBS will
purchase the Mortgage Loans in reliance upon the independent status of the REIT
Servicer, and the representations as to the adequacy of its servicing
facilities, personnel, records and procedures, its integrity, reputation and
financial standing, and the continuance thereof.  Therefore, the REIT Servicer
shall neither assign this Agreement or the servicing hereunder or delegate its
rights or duties hereunder or any portion hereof (to other than a sub servicer)
or sell or otherwise dispose of all or substantially all of its property or
assets without the prior written consent of UBS, which consent shall not be
unreasonably withheld.  The REIT Servicer shall not resign from the obligations
and duties hereby imposed on it except by mutual consent of the REIT Servicer,
the REIT Sub-Trust and UBS or upon the determination that its duties hereunder
are no longer permissible under applicable law and such incapacity cannot be
cured by the REIT Servicer.  No such resignation shall become effective until a
successor shall have assumed the REIT Servicer’s responsibilities and
obligations hereunder in the manner provided in Section 10.01.

 

ARTICLE VIII

DEFAULT

 

SECTION 8.01                                EVENTS OF DEFAULT.

 

Each of the following shall constitute an Event of Default on the part of the
REIT Servicer:

 

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(I)                                               ANY FAILURE BY THE REIT
SERVICER TO REMIT, OR TO DEPOSIT INTO THE BLOCKED ACCOUNT, ANY PAYMENT REQUIRED
TO BE MADE UNDER THE TERMS OF THIS AGREEMENT WHICH CONTINUES UNREMEDIED (A) FOR
A PERIOD OF ONE BUSINESS DAY, IN THE CASE OF ANY SUCH DEPOSIT OF AMOUNTS
REFERRED TO IN SECTION 7(H) OF THE LOAN SALE AGREEMENT, OR (B) IN ANY OTHER
CASE, FOR A PERIOD OF THREE BUSINESS DAYS AFTER THE DATE UPON WHICH WRITTEN
NOTICE OF SUCH FAILURE, REQUIRING THE SAME TO BE REMEDIED, SHALL HAVE BEEN GIVEN
TO THE REIT SERVICER BY UBS (WHICH UBS MAY IN ITS DISCRETION GIVE); OR

 

(II)                                            FAILURE BY THE REIT SERVICER TO
OBSERVE OR PERFORM IN ANY MATERIAL RESPECT ANY OTHER OF THE COVENANTS OR
AGREEMENTS ON THE PART OF THE REIT SERVICER SET FORTH IN THIS AGREEMENT OR IN
THE CUSTODIAL AGREEMENT WHICH CONTINUES UNREMEDIED FOR A PERIOD OF 30 DAYS AFTER
THE DATE ON WHICH WRITTEN NOTICE OF SUCH FAILURE, REQUIRING THE SAME TO BE
REMEDIED, SHALL HAVE BEEN GIVEN TO THE REIT SERVICER BY UBS OR BY THE RELATED
CUSTODIAN (AND UBS MAY OR, AS THE CASE MAY BE, SHALL GIVE SUCH NOTICE AS
CONTEMPLATED IN CLAUSE (I) ABOVE); OR

 

(III)                                         FAILURE BY THE REIT SERVICER TO
MAINTAIN ITS LICENSE TO DO BUSINESS IN ANY JURISDICTION WHERE THE MORTGAGE
PROPERTY IS LOCATED EXCEPT WHERE THE FAILURE TO BE SO QUALIFIED WOULD NOT HAVE A
MATERIAL ADVERSE EFFECT ON (A) THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR ANY OF THE MORTGAGE LOANS OR (B) THE ABILITY OF THE REIT SERVICER TO PERFORM
ITS DUTIES UNDER THIS AGREEMENT;

 

(IV)                                        A DECREE OR ORDER OF A COURT OR
AGENCY OR SUPERVISORY AUTHORITY HAVING JURISDICTION FOR THE APPOINTMENT OF A
CONSERVATOR OR RECEIVER OR LIQUIDATOR IN ANY INSOLVENCY, READJUSTMENT OF DEBT,
INCLUDING BANKRUPTCY, MARSHALING OF ASSETS AND LIABILITIES OR SIMILAR
PROCEEDINGS, OR FOR THE WINDING-UP OR LIQUIDATION OF ITS AFFAIRS, SHALL HAVE
BEEN ENTERED AGAINST THE REIT SERVICER AND SUCH DECREE OR ORDER SHALL HAVE
REMAINED IN FORCE UNDISCHARGED OR UNSTAYED FOR A PERIOD OF 60 DAYS; OR

 

(V)                                           THE REIT SERVICER SHALL CONSENT TO
THE APPOINTMENT OF A CONSERVATOR OR RECEIVER OR LIQUIDATOR IN ANY INSOLVENCY,
READJUSTMENT OF DEBT, MARSHALING OF ASSETS AND LIABILITIES OR SIMILAR
PROCEEDINGS OF OR RELATING TO THE REIT SERVICER OR OF OR RELATING TO ALL OR
SUBSTANTIALLY ALL OF ITS PROPERTY; OR

 

(VI)                                        FOR SO LONG AS MORTGAGEIT HOLDINGS
IS THE REIT SERVICER, THE OCCURRENCE AND CONTINUANCE OF A FACILITY DEFAULT OR
ANY OF THE FOLLOWING CIRCUMSTANCES OR EVENTS (“SERVICING TERMINATION EVENTS”):

 

(1)                                       ANY FAILURE BY THE REIT SERVICER TO
REMIT TO UBS (OR OTHER REGISTERED HOLDER OF A PARTICIPATION CERTIFICATE) WHEN
DUE ANY PAYMENT REQUIRED TO BE MADE UNDER THIS AGREEMENT OR SUCH PARTICIPATION
CERTIFICATE;

 

(2)                                       FAILURE BY THE REIT SERVICER DULY TO
OBSERVE OR PERFORM IN ANY MATERIAL RESPECT ANY OF ITS OTHER COVENANTS OR
AGREEMENTS SET FORTH IN THIS AGREEMENT OR IN ANY OF THE OTHER TRANSACTION
DOCUMENTS TO WHICH IT IS A PARTY WHICH CONTINUES UNREMEDIED FOR A PERIOD OF ONE
(1) BUSINESS DAY (OR SUCH LONGER PERIOD PROVIDED IN THE RELEVANT NOTICE TO THE
REIT SERVICER) AFTER THE DATE ON

 

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WHICH WRITTEN NOTICE OF SUCH FAILURE, REQUIRING THE SAME TO BE REMEDIED, SHALL
HAVE BEEN GIVEN TO THE REIT SERVICER BY UBS; OR

 

(1)                                       ANY REPRESENTATION, WARRANTY OR
CERTIFICATION MADE OR DEEMED MADE HEREIN OR IN ANY OF THE OTHER TRANSACTION
DOCUMENTS BY THE REIT SERVICER OR ANY CERTIFICATE FURNISHED TO UBS PURSUANT TO
THE PROVISIONS THEREOF, SHALL PROVE TO HAVE BEEN FALSE OR MISLEADING IN ANY
MATERIAL RESPECT AS OF THE TIME MADE OR FURNISHED; OR

 

(2)                                       AN ACT OF INSOLVENCY WITH RESPECT TO
THE REIT SERVICER OR ANY OF ITS AFFILIATES; OR

 

(3)                                       THE REIT SERVICER CEASES TO MEET THE
QUALIFICATIONS FOR MAINTAINING ALL AGENCY APPROVALS (AS DEFINED IN THE LOAN
PARTICIPATION AGREEMENT); OR

 

(4)                                       THE REIT SERVICER ATTEMPTS TO ASSIGN
ITS RIGHT TO SERVICING COMPENSATION HEREUNDER OR ATTEMPTS WITHOUT THE CONSENT OF
UBS TO SELL OR OTHERWISE DISPOSE OF ALL OR SUBSTANTIALLY ALL OF ITS PROPERTY OR
ASSETS OR TO ASSIGN ITS SERVICING RESPONSIBILITIES THIS AGREEMENT OR TO DELEGATE
ITS DUTIES THEREUNDER OR ANY PORTION THEREOF (TO OTHER THAN A SUB SERVICER); OR

 

(5)                                       THE REIT SERVICER OR ANY OF ITS
AFFILIATES FAILS TO OPERATE OR CONDUCT ITS BUSINESS OPERATIONS OR ANY MATERIAL
PORTION THEREOF IN THE ORDINARY COURSE, OR THE REIT SERVICER EXPERIENCES ANY
OTHER MATERIAL ADVERSE CHANGE IN ITS BUSINESS OPERATIONS OR FINANCIAL CONDITION,
WHICH, IN UBS’S SOLE DISCRETION, CONSTITUTES A MATERIAL IMPAIRMENT OF THE REIT
SERVICER’S ABILITY TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER
RELATED DOCUMENT; OR

 

(6)                                       THE REIT SERVICER’S MEMBERSHIP IN MERS
IS TERMINATED FOR ANY REASON; OR

 

(7)                                       THE REIT SERVICER SHALL DEFAULT UNDER,
OR FAIL TO PERFORM AS REQUESTED UNDER, OR SHALL OTHERWISE MATERIALLY BREACH THE
TERMS OF ANY MATERIAL INSTRUMENT, AGREEMENT OR CONTRACT; OR

 

(8)                                       THE FAILURE OF A SECURITY (AS DEFINED
IN THE LOAN PARTICIPATION AGREEMENT) TO BE ISSUED FOR ANY REASON WHATSOEVER ON
OR BEFORE THE DATE ON WHICH SUCH SECURITY MUST BE ISSUED AND DELIVERED TO UBS);

 

(VII)                                     THE REIT SERVICER SHALL ADMIT IN
WRITING ITS INABILITY TO PAY ITS DEBTS GENERALLY AS THEY BECOME DUE, FILE A
PETITION TO TAKE ADVANTAGE OF ANY APPLICABLE INSOLVENCY, BANKRUPTCY OR
REORGANIZATION STATUTE, MAKE AN ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS,
VOLUNTARILY SUSPEND PAYMENT OF ITS OBLIGATIONS OR CEASE ITS NORMAL BUSINESS
OPERATIONS FOR THREE BUSINESS DAYS.

 

In each and every such case, so long as an Event of Default shall not have been
remedied or if UBS’s obligations to repurchase all Mortgage Loans have been
accelerated pursuant to Section 7 of the Loan Sale Agreement (regardless of
whether the related Event of

 

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Default has later been remedied), in addition to whatsoever rights UBS may have
at law or equity to damages, including injunctive relief and specific
performance, UBS, by notice in writing to the REIT Servicer (which UBS may in
its discretion give and shall give if requested to do so by the Majority
Investors), may terminate all the rights and obligations of the REIT Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
(a) immediately, in the case of any Event of Default referred to in the Loan
Sale Agreement or (b) upon payment of all monies otherwise owed hereunder to the
REIT Servicer (e.g. Servicing Advances) in any other case; provided that, if a
termination occurs immediately, pursuant to clause (a) of this sentence, the
REIT Servicer’s right to receive all monies otherwise owed hereunder to it in
respect of prior periods and, as provided in Section 10.01, all claims of any
other Person against the REIT Servicer, in respect of prior periods shall
survive the termination, subject to the following sentence.  Following the
occurrence and during the continuance of a Facility Default, the right of the
REIT Servicer to receive any monies hereunder shall be suspended and such
amounts shall be paid to UBS.  In all cases, the REIT Servicer’s right to
receive any such monies shall be reduced by all amounts, if any, which at the
time are payable by the REIT Servicer hereunder into the Deposit Account, the
Escrow Account or to the REIT Sub-Trust or otherwise.

 

Upon receipt by the REIT Servicer of such written notice, all authority and
power of the REIT Servicer under this Agreement, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the successor
appointed pursuant to Section 10.01.  Upon written request from UBS (which it
may or, as appropriate, shall give as provided above for such notice), the REIT
Servicer shall prepare, execute and deliver to the successor entity designated
by UBS any and all documents and other instruments, place in such successor’s
possession all Submission Packages, and do or cause to be done all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, including but not limited to the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the REIT Servicer to the Blocked Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.

 

SECTION 8.02                                WAIVER OF DEFAULTS.

 

UBS may waive any default by the REIT Servicer in the performance of its
obligations hereunder and its consequences.  Upon any waiver of a past default,
such default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been remedied for every purpose of this Agreement.  No
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.

 

No failure to exercise and no delay in exercising, on the part of the REIT
Sub-Trust or UBS, any right, remedy, power or privilege hereunder, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise
hereof or the exercise of any other right, remedy, power or privilege.  The
rights, remedies, powers and privileges herein provided are cumulative and not
exhaustive of any rights, remedies, powers and privilege provided by law.

 

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ARTICLE IX

TERMINATION

 

SECTION 9.01                                TERMINATION.

 

This Agreement shall terminate upon the earliest to occur of (i) the Stated
Termination Date; (ii) the later of the final payment or other liquidation of
the last Mortgage Loan or the disposition of any REO Property with respect to
the last Mortgage Loan and the remittance of all funds due hereunder; (iii) the
termination of the REIT Servicer by UBS for cause pursuant to Section 8.01 or,
upon one day’s notice from UBS, without cause; or (iv) mutual consent of the
REIT Servicer, the REIT Sub-Trust and UBS in writing.

 

Not more than 90 days nor fewer than 60 days prior to the then Stated
Termination Date, the REIT Servicer may send to UBS a written request,
requesting that UBS extend the then Stated Termination Date to a date not more
than one year from the then Stated Termination Date.  UBS shall respond, in
writing, to any such request within 15 Business Days of UBS’s receipt thereof;
provided, that if UBS does not so respond, then the request to extend shall be
deemed denied.

 

SECTION 9.02                                RETENTION AND TERMINATION OF REIT
SERVICER.

 

The REIT Servicer hereby covenants and agrees to act as REIT Servicer for an
initial term beginning on the date of this Agreement and ending on the same day
of the month two (2) months thereafter, which term shall be extendable by UBS
for successive terms thereafter of thirty days each (or, as specified in a
writing delivered by UBS to the REIT Servicer, such other term-to-term basis),
until the termination of this Agreement.  The REIT Servicer hereby agrees that,
upon its receipt of any such notice (including each notice pursuant to standing
instructions, which shall be deemed delivered at thirty day intervals for so
long as such instructions are in effect) (a “Servicer Extension Notice”), the
REIT Servicer shall become bound, for the duration of the term covered by such
Servicer Extension Notice, to continue as the REIT Servicer subject to and in
accordance with the other provisions of this Agreement.  The REIT Servicer
agrees that if as of the tenth day prior to the last day of any term it shall
not have received a Servicer Extension Notice from UBS, the REIT Servicer will,
within five days thereafter, give written notice of such nonreceipt to UBS.

 

ARTICLE X

SUCCESSOR TO THE REIT SERVICER

 

SECTION 10.01                          SUCCESSOR TO SERVICER.

 

The appointment hereunder of MortgageIT Holdings as the REIT Servicer hereunder
shall initially be for a term beginning on the date of this Agreement and ending
on the same day of the month two (2) months thereafter, which term shall be
extendable by UBS for successive terms thereafter of thirty days each (or, as
specified in a writing delivered by UBS to the REIT Servicer, such other
term-to-term basis), until the termination of this Agreement.  The term of
appointment of any Person as a successor Servicer hereunder shall begin on the
date the

 

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appointment is effective and shall end on the last day of the last term or, if
earlier, on the Stated Termination Date, as then in effect.

 

Prior to termination of the REIT Servicer’s responsibilities and duties under
this Agreement pursuant to Sections 7.04, 8.01, or 9.01 or the end of the last
term of the REIT Servicer hereunder, UBS shall, (i) succeed to and assume all of
the REIT Servicer’s responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor which shall succeed to all rights and
assume all of the responsibilities, duties and liabilities of the REIT Servicer
under this Agreement prior to the termination of Servicer’s responsibilities,
duties and liabilities under this Agreement.  In the event that the REIT
Servicer’s duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the REIT Servicer shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence which it is obligated to exercise under this Agreement.

 

Any successor appointed as provided herein shall execute, acknowledge and
deliver to the REIT Servicer and UBS an instrument accepting such appointment,
wherein, if the successor and the predecessor Servicers are different Persons,
the successor shall agree to indemnify the predecessor Servicer for any
liability arising out of the successor’s subsequent acts and omissions related
to its duties as the successor servicer, whereupon such successor shall become
fully vested with all the rights, powers, duties, responsibilities, obligations
and liabilities of the REIT Servicer, with like effect as if originally named as
a party to this Agreement.  Likewise, if the REIT Servicer and the successor are
different Persons, the REIT Servicer shall agree to indemnify the successor
Servicer for any liability arising out of the REIT Servicer’s acts and omissions
relating to its acts as REIT Servicer prior to the effective date of the
servicing transfer.  Any termination or resignation of the REIT Servicer or
termination of this Agreement pursuant to Section 7.04, 8.01, or 9.01 or arising
out of the lapse of a Servicer’s term of appointment hereunder shall not affect
any claims that UBS may have against the REIT Servicer arising out of the REIT
Servicer’s actions or failure to act prior to any such termination or
resignation.

 

The REIT Servicer shall deliver promptly to the successor servicer (if it is a
different person) all Submission Packages and related documents and statements
held by it hereunder.  In all cases, at the end of any term of its appointment
hereunder, the REIT Servicer shall account for all funds and shall execute and
deliver such instruments and do such other things as UBS may reasonably request,
at the REIT Servicer’s sole expense, to vest in any successor all such rights,
powers, duties, responsibilities, obligations and liabilities of the REIT
Servicer.

 

The REIT Servicer shall be liable for any and all fees and expenses required to
terminate the Servicing Agreement and/or to effectuate the transfer of the REIT
Servicer’s responsibilities, duties and liabilities to the successor Servicer.

 

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ARTICLE XI

MISCELLANEOUS PROVISIONS

 

SECTION 11.01                          TRANSFER OF SERVICING.  IN THE EVENT THE
REIT SERVICER IS TERMINATED PURSUANT TO THIS AGREEMENT OR ITS TERM AS SUCH
HEREUNDER LAPSES WITHOUT ITS BEING APPOINTED FOR ANOTHER, CONSECUTIVE, TERM, THE
FOLLOWING SHALL BE PERFORMED:

 

(A)                                  WITH RESPECT TO EACH MORTGAGE LOAN, ON THE
RELATED SERVICING TRANSFER DATE, UBS, OR ITS APPOINTED SUCCESSOR SERVICER
(COLLECTIVELY REFERRED TO AS “SUCCESSOR SERVICER”), SHALL ASSUME ALL SERVICING
RESPONSIBILITIES RELATED TO, AND THE REIT SERVICER SHALL CEASE ALL SERVICING
RESPONSIBILITIES RELATED TO, THE MORTGAGE LOANS.  ON OR PRIOR TO THE RELATED
SERVICING TRANSFER DATE THE REIT SERVICER SHALL TAKE SUCH STEPS AS MAY BE
NECESSARY OR APPROPRIATE TO EFFECTUATE AND EVIDENCE THE TRANSFER OF THE
SERVICING OF THE MORTGAGE LOANS TO THE SUCCESSOR SERVICER, INCLUDING BUT NOT
LIMITED TO THE FOLLOWING:

 

(I)                                               NOTICE TO MORTGAGORS.  THE
REIT SERVICER SHALL MAIL TO THE MORTGAGOR OF EACH MORTGAGE A LETTER ADVISING THE
MORTGAGOR OF THE TRANSFER OF THE SERVICING OF THE RELATED MORTGAGE LOAN TO THE
SUCCESSOR SERVICER; IN ACCORDANCE WITH THE CRANSTON-GONZALES NATIONAL AFFORDABLE
HOUSING ACT OF 1990; PROVIDED, HOWEVER, THE CONTENT AND FORMAT OF THE LETTER
SHALL HAVE THE PRIOR APPROVAL OF THE SUCCESSOR SERVICER.  THE REIT SERVICER
SHALL PROVIDE THE SUCCESSOR SERVICER WITH COPIES OF ALL SUCH NOTICES NO LATER
THAN THE RELATED SERVICING TRANSFER DATE.

 

(II)                                            NOTICE TO TAXING AUTHORITIES AND
INSURANCE COMPANIES.  THE REIT SERVICER SHALL TRANSMIT TO THE APPLICABLE
INSURANCE COMPANIES (INCLUDING PRIMARY MORTGAGE INSURANCE POLICY INSURERS, IF
APPLICABLE) AND/OR AGENTS, NOTIFICATION OF THE TRANSFER OF THE SERVICING TO THE
SUCCESSOR SERVICER, AND INSTRUCTIONS TO DELIVER ALL NOTICES AND INSURANCE
STATEMENTS, AS THE CASE MAY BE, TO THE SUCCESSOR SERVICER FROM AND AFTER THE
RELATED SERVICING TRANSFER DATE.  THE REIT SERVICER SHALL PROVIDE THE SUCCESSOR
SERVICER WITH COPIES OF ALL SUCH NOTICES NO LATER THAN THE RELATED SERVICING
TRANSFER DATE.

 

(III)                                         DELIVERY OF SERVICING RECORDS. 
THE REIT SERVICER SHALL FORWARD TO THE SUCCESSOR SERVICER, ALL SERVICING RECORDS
IN THE REIT SERVICER’S POSSESSION RELATING TO EACH MORTGAGE LOAN.

 

(IV)                                        ESCROW PAYMENTS.  ON THE SERVICING
TRANSFER DATE, THE REIT SERVICER SHALL PROVIDE THE SUCCESSOR SERVICER, WITH
IMMEDIATELY AVAILABLE FUNDS BY WIRE TRANSFER IN THE AMOUNT OF THE ESCROW ACCOUNT
BALANCE.  THE REIT SERVICER SHALL PROVIDE THE SUCCESSOR SERVICER WITH AN
ACCOUNTING STATEMENT SUFFICIENT TO ENABLE THE SUCCESSOR SERVICER TO RECONCILE
THE AMOUNT OF SUCH PAYMENT WITH THE ACCOUNTS OF THE MORTGAGE LOANS.

 

(V)                                           PAYOFFS AND ASSUMPTIONS.  THE REIT
SERVICER SHALL PROVIDE TO THE SUCCESSOR SERVICER, COPIES OF ALL ASSUMPTION
STATEMENTS GENERATED BY THE REIT SERVICER ON THE MORTGAGE LOANS FROM THE RELATED
CUT-OFF DATE TO THE RELATED SERVICING TRANSFER DATE.

 

(VI)                                        MORTGAGE PAYMENTS RECEIVED PRIOR TO
RELATED SERVICING TRANSFER DATE.  PRIOR TO THE RELATED SERVICING TRANSFER DATE
ALL PAYMENTS THERETOFORE RECEIVED BY THE REIT

 

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Servicer on each Mortgage Loan shall be properly applied by the REIT Servicer to
the account of the particular Mortgagor.

 

(VII)                                     MORTGAGE PAYMENTS RECEIVED AFTER
RELATED SERVICING TRANSFER DATE.  THE AMOUNT OF ANY MONTHLY PAYMENTS RECEIVED BY
THE REIT SERVICER AFTER THE RELATED SERVICING TRANSFER DATE AS WELL AS ANY SUCH
PAYMENTS THERETOFORE RECEIVED BUT NOT CREDITED AS OF SUCH DATE SHALL BE
FORWARDED WITHIN FIVE BUSINESS DAYS OF RECEIPT TO THE SUCCESSOR SERVICER.  THE
REIT SERVICER SHALL NOTIFY THE SUCCESSOR SERVICER OF THE PARTICULARS OF THE
PAYMENT, WHICH NOTIFICATION REQUIREMENT SHALL BE SATISFIED IF THE REIT SERVICER
FORWARDS WITH ITS PAYMENT SUFFICIENT INFORMATION TO PERMIT APPROPRIATE
PROCESSING OF THE PAYMENT BY THE SUCCESSOR SERVICER.  IN ADDITION, THE REIT
SERVICER SHALL ENDORSE TO THE SUCCESSOR SERVICER THE MONTHLY PAYMENTS RECEIVED
BY THE REIT SERVICER AFTER THE SERVICING TRANSFER DATE.

 

(VIII)                                  MISAPPLIED PAYMENTS.  MISAPPLIED
PAYMENTS SHALL BE PROCESSED AS FOLLOWS:

 

(1)                        ALL PARTIES SHALL COOPERATE IN CORRECTING
MISAPPLICATION ERRORS;

 

(2)                        THE PARTY RECEIVING NOTICE OF A MISAPPLIED PAYMENT
OCCURRING PRIOR TO THE RELATED SERVICING TRANSFER DATE AND DISCOVERED AFTER THE
RELATED SERVICING TRANSFER DATE SHALL IMMEDIATELY NOTIFY THE OTHER PARTIES;

 

(3)                        IF A PROVEN MISAPPLIED PAYMENT WHICH OCCURRED PRIOR
TO THE RELATED SERVICING TRANSFER DATE CANNOT BE IDENTIFIED AND SAID MISAPPLIED
PAYMENT HAS RESULTED IN A SHORTAGE IN THE BLOCKED ACCOUNT OR ESCROW ACCOUNT, THE
REIT SERVICER SHALL BE LIABLE FOR THE AMOUNT OF SUCH SHORTAGE.  THE REIT
SERVICER SHALL REIMBURSE THE SUCCESSOR SERVICER FOR THE AMOUNT OF SUCH SHORTAGE
WITHIN THIRTY (30) DAYS AFTER RECEIPT OF WRITTEN DEMAND THEREFOR FROM THE
SUCCESSOR SERVICER;

 

(IX)                                          RECONCILIATION.  THE REIT SERVICER
SHALL, ON OR BEFORE THE RELATED SERVICING TRANSFER DATE, RECONCILE PRINCIPAL
BALANCES AND MAKE ANY MONETARY ADJUSTMENTS NECESSARY TO COMPLETE THE
RECONCILIATION.  ANY SUCH MONETARY ADJUSTMENTS WILL BE TRANSFERRED BETWEEN THE
REIT SERVICER AND THE SUCCESSOR SERVICER AS APPROPRIATE.

 

(X)                                             IRS FORMS.  THE REIT SERVICER
SHALL PREPARE AND FILE ALL IRS FORMS 1098, 1099 AND OTHER APPLICABLE FORMS AND
REPORTS WHICH ARE REQUIRED TO BE FILED WITH RESPECT TO THE PERIOD PRIOR TO THE
RELATED SERVICING TRANSFER DATE IN RELATION TO THE SERVICING AND OWNERSHIP OF
THE MORTGAGE LOANS.  THE REIT SERVICER SHALL PROVIDE COPIES OF SUCH FORMS TO UBS
UPON REQUEST AND SHALL REIMBURSE UBS FOR ANY COSTS OR PENALTIES INCURRED BY UBS
DUE TO THE REIT SERVICER’S FAILURE TO COMPLY WITH THIS PARAGRAPH.  THE REIT
SERVICER SHALL NOT BE RESPONSIBLE FOR THE PREPARATION OR FILING OF ANY SUCH
REPORTS WITH RESPECT TO ANY PERIOD COMMENCING ON OR AFTER THE RELATED SERVICING
TRANSFER DATE.

 

(XI)                                          MERS DESIGNATED MORTGAGE LOANS. 
WITH RESPECT TO ANY MERS DESIGNATED MORTGAGE LOANS, THE MASTER SERVICER OR
SERVICER WILL MODIFY THE “SERVICER” AND ALL OTHER RELEVANT FIELDS IN THE MERS®
SYSTEM TO REFLECT THE TRANSFER OF SERVICING TO THE SUCCESSOR SERVICER, WHERE
APPLICABLE.

 

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(B)                                 WITHIN TWO (2) BUSINESS DAYS AFTER THE REIT
SERVICER DELIVERS TO THE REIT SUB-TRUST AN INVOICE STATING THE AMOUNTS THEREOF,
THE REIT SUB-TRUST SHALL, OR SHALL CAUSE THE SUCCESSOR SERVICER TO, REIMBURSE
THE REIT SERVICER FOR ALL SERVICING ADVANCES NOT PREVIOUSLY REIMBURSED AND PAY
TO THE REIT SERVICER ANY SERVICING FEES THAT WERE NOT PREVIOUSLY RETAINED BY OR
PAID TO THE REIT SERVICER.  THE REIT SERVICER SHALL PROVIDE UBS WITH A COPY OF
ANY SUCH NOTICE THAT IT DELIVERS TO THE REIT SUB-TRUST AT THE TIME IT GIVE SUCH
NOTICE.  THE REIT SERVICER SHALL BE OBLIGATED TO DELIVER THE SERVICING FILES TO
UBS OR SUCCESSOR SERVICER WHETHER OR NOT ALL SUCH SERVICING ADVANCES SHALL HAVE
BEEN REIMBURSED AND ALL SUCH SERVICING FEES SHALL HAVE BEEN PAID, UPON THE
TERMINATION OF THE APPOINTMENT OF THE REIT SERVICER IN CONNECTION WITH AN EVENT
OF DEFAULT PURSUANT TO SECTION 8.01.  ANY INVOICE DELIVERED AS PROVIDED ABOVE
MAY BE SUPPLEMENTED BY ANOTHER INVOICE SPECIFYING ANY FURTHER AMOUNTS OF
UNREIMBURSED SERVICING ADVANCES AND UNPAID SERVICING FEES, WHICH SHALL BE PAID
IN THE SAME MANNER.  IN ADDITION, IF AND TO THE EXTENT THAT FROM AND AFTER THE
SERVICING TRANSFER DATE (OR SUCH EARLIER DATE THROUGH WHICH SERVICING ADVANCES
SHALL HAVE BEEN, FOR CONVENIENCE, CALCULATED AND REIMBURSED) THE REIT SERVICER
SHOULD RECEIVE AND PAY BILLS FOR SERVICES PROPERLY RENDERED WITH RESPECT TO THE
MORTGAGE LOANS AND REO PROPERTY PRIOR TO THE SERVICING TRANSFER DATE, THEN
SERVICER SHALL BE ENTITLED TO REIMBURSEMENT FOR SUCH ADDITIONAL PAYMENTS. 
WITHIN FIVE (5) BUSINESS DAYS AFTER SERVICER MAKES A WRITTEN REQUEST TO THE REIT
SUB-TRUST FOR SUCH REIMBURSEMENT, SUPPORTED BY A COPY OF THE PERTINENT BILL FOR
SERVICES AND INCLUDING AN INDICATION OF THE MORTGAGE LOAN TO WHICH THE BILL
RELATES, THE REIT SUB-TRUST SHALL, OR SHALL CAUSE THE SUCCESSOR SERVICER TO,
REIMBURSE THE REIT SERVICER FOR SUCH PAYMENT.

 

SECTION 11.02                          AMENDMENT.

 

This Agreement may be amended from time to time by the REIT Servicer, the REIT
Sub-Trust and UBS by written agreement signed by the REIT Servicer and UBS.

 

SECTION 11.03                          GOVERNING LAW; JURISDICTION.

 

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of New York without giving effect to the conflict of law principles
thereof, and the obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws.  With respect to all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby, and any action or proceeding for recognition and
enforcement of any judgment in respect thereof, each of the REIT Servicer, the
REIT Sub-Trust and UBS irrevocably submits to the non-exclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan, City of New York, and each such party irrevocably
waives any objection which it may have at any time to the laying of venue of any
suit, action or proceeding arising out of or relating hereto brought in any such
court, irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party, provided that service of process is made by any
lawful means.  Without limiting the foregoing, each such party irrevocably
agrees that service of process in any such action or proceeding may be effected
by mailing a copy thereof to it by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to its address set forth
in or pursuant to this Agreement for notices.

 

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SECTION 11.04                          NOTICES.

 

All demands, notices and communications under or in connection with this
Agreement shall be in writing and shall be deemed to have been duly given, made
and received  (i) when delivered against receipt of registered or certified mail
or upon actual receipt of registered or certified mail, postage prepaid, return
receipt requested; (ii) when delivered by courier with appropriate evidence of
receipt; or (iii) upon transmission via facsimile with appropriate evidence of
receipt, addressed as follows:

 

(I)                                               IF TO THE REIT SERVICER:

 

MortgageIT Holdings, Inc.
33 Maiden Lane, 6th Floor
New York, NY  10038
Attention:  Michael A. Zigrossi and John R. Cuti
Fax:  (212) 651-4674

 

or such other address as may hereafter be furnished to UBS and the REIT
Sub-Trust in writing by the REIT Servicer;

 

(II)                                            IF TO THE REIT SUB-TRUST:

 

MortgageIT SPV I, acting with respect to the REIT Sub-Trust

 

c/o

 

MortgageIT Holdings, Inc., as Administrator for
MortgageIT SPV I, acting with respect to the REIT Sub-Trust
33 Maiden Lane, 6th Floor
New York, NY  10038
Attention:  Michael A. Zigrossi and John R. Cuti
Fax:  (212) 651-4674

 

with a copy to:

 

Wilmington Trust Company
Rodney Square North
1100 N. Market Street
Wilmington, DE   19890
Attention:  Corporate Trust Administration

 

or such other address as may hereafter be furnished to UBS and the REIT Servicer
in writing by the REIT Sub-Trust;

 

(III)                                         IF TO UBS:

 

UBS Real Estate Securities Inc.
1285 Avenue of the Americas

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New York, New York 10019
Attention:  Robert Carpenter

George A. Mangiaracina

 

Fax:  (212) 713-9607

 

or such other address as may hereafter be furnished to the REIT Servicer and the
REIT Sub-Trust in writing by UBS; and

 

SECTION 11.05                          SEVERABILITY OF PROVISIONS.

 

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

 

SECTION 11.06                          RELATIONSHIP OF PARTIES.

 

Nothing herein contained shall be deemed or construed to create a partnership or
joint venture between the parties hereto and the services of the REIT Servicer
shall be rendered as an independent contractor and not as agent for the REIT
Sub-Trust and UBS.

 

SECTION 11.07                          EXECUTION; SUCCESSORS AND ASSIGNS.

 

This Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute one
and the same agreement.  This Agreement shall inure to the benefit of and be
binding upon the REIT Servicer, the REIT Sub-Trust and UBS and their respective
successors and assigns. 

 

SECTION 11.08                          RECORDATION OF ASSIGNMENTS OF MORTGAGE.

 

To the extent permitted by applicable law, each of the Assignments of Mortgage
is subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation is to be effected at the
REIT Sub-Trust’s expense in the event recordation is either necessary under
applicable law or requested by UBS.

 

SECTION 11.09                          MERGER AND INTEGRATION.

 

Except as specifically stated otherwise herein, this Agreement sets forth the
entire understanding of the parties relating to the subject matter hereof, and
all prior understandings, written or oral, relating thereto are superseded by
this Agreement.  This Agreement may not be modified, amended, waived or
supplemented except as provided herein.

 

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SECTION 11.10                          HEADINGS.

 

The headings herein are for purposes of reference only and shall not otherwise
affect the meaning or interpretation of any provision hereof.

 

SECTION 11.11                          SCHEDULES AND EXHIBITS.

 

The schedules and exhibits attached hereto and referred to herein shall
constitute a part of this Agreement and are incorporated into this Agreement for
all purposes.

 

SECTION 11.12                          NO BANKRUPTCY PETITION AGAINST THE REIT
SUB-TRUST.

 

The REIT Servicer agrees that, prior to the date that is one year and one day
after the payment in full of the Notes, it will not institute against the REIT
Sub-Trust, or join any other Person in instituting against UBS, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under the laws of the United States or any state of the United
States.  This Section 11.12 shall survive the termination of this Agreement.

 

SECTION 11.13                          RIGHT TO INSPECT. 

 

The REIT Servicer agrees that UBS shall have the right to inspect its servicing
facilities for the purpose of satisfying UBS that the REIT Servicer has the
ability to service the Mortgage Loans as provided under this Agreement.

 

SECTION 11.14                          NO RECOURSE.

 

It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by Wilmington Trust Company, not
individually or personally but solely as trustee of the REIT Sub-Trust, in the
exercise of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the REIT
Sub-Trust is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
of binding only the REIT Sub-Trust, (c) nothing herein contained shall be
construed as creating any liability on Wilmington Trust Company, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by an Person claiming by, through or under the parties hereto and (d) under
no circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the REIT Sub-Trust or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the REIT Sub-Trust under this Agreement or any other
related documents.

 

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IN WITNESS WHEREOF, the REIT Servicer, the REIT Sub-Trust and UBS have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.

 

 

MORTGAGEIT SPV I,

 

acting with respect to the REIT Sub-Trust

 

 

 

By:

WILMINGTON TRUST COMPANY,

 

 

not in its individual capacity, but solely

 

 

as Owner Trustee under the Trust Agreement

 

 

 

By:

/s/ Janel R. Havrilla

 

 

Name:

Janel R. Havrilla

 

 

Title:

Financial Services Officer

 

 

 

 

MORTGAGEIT HOLDINGS, INC.,

 

as REIT Servicer

 

 

 

By:

/s/ JOHN R. CUTI

 

 

Name:

John R. Cuti

 

 

Title:

Secretary

 

 

 

 

UBS REAL ESTATE SECURITIES INC.

 

 

 

By:

/s/ ROBERT CARPENTER

 

 

Name:

Robert Carpenter

 

Title:

Director

 

 

 

By:

/s/ GEORGE A. MANGIARACINA

 

 

Name:

George A. Mangiaracina

 

 Title:

Managing Director

 

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EXHIBIT A

MORTGAGE LOAN SCHEDULE

 

On file with UBS Real Estate Securities Inc.

 

A-1

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