EXECUTION COPY

SCHEDULE
to the
Master Agreement
 
dated as of May 31, 2007
 
between
 
JPMorgan Chase Bank, N.A.
(“Morgan”)
and
LaSalle Bank National Association, not in its individual capacity but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
with respect to C-BASS 2007-CB5 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2007-CB5
(“Counterparty”)

 
Part 1

 
Termination Provisions
 
In this Agreement:
 
(1)
“Specified Entity” shall not apply.

 
(2)
The “Breach of Agreement” provisions of Section 5(a)(ii) will apply to Morgan
and will not apply to the Counterparty.

 
(3)
The “Credit Support Default” provisions of Section 5(a)(iii) will apply to
Morgan and will not apply to the Counterparty, except that Section 5(a)(iii)(1)
will apply to Counterparty in respect of Counterparty’s obligations under
Paragraph 3(b) of the Approved Credit Support Document.

 
(4)
The “Misrepresentation” provisions of Section 5(a)(iv) will apply to Morgan and
will not apply to the Counterparty.

 
(5)
The “Default Under Specified Transaction” provisions of Section 5(a)(v) will
apply to Morgan and will not apply to the Counterparty.

 
(6)
The “Cross Default” provisions of Section 5(a)(vi) will not apply to the
Counterparty. The “Cross Default” provisions of Section 5(a)(vi) will apply to
Morgan and for such purpose:

 

 
(a)
“Specified Indebtedness” will have the meaning specified in Section 14, except
that such term shall not include obligations in respect of deposits received in
the ordinary course of such party’s banking business.

 

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(b)
“Threshold Amount” means, with respect to Morgan, an amount equal to three
percent of the shareholders’ equity of the applicable Relevant Entity (as
defined below in Part 6).

 
(7)
The “Bankruptcy” provisions of Section 5(a)(vii) shall apply to Morgan and the
Counterparty provided that:

 

 
(a)
Section 5(a)(vii)(2), (7) and (9) will not apply to the Counterparty;

 

 
(b)
Section 5(a)(vii)(4) will not apply to the Counterparty to the extent that it
refers to proceedings or petitions instituted or presented by Morgan or any of
Morgan’s Affiliates;

 

 
(c)
Section 5(a)(vii)(6) will not apply to the Counterparty to the extent that it
refers to (i) any appointment that is contemplated or effected by any document
to which the Counterparty is, as of the date of this Agreement, a party in
connection with the transactions contemplated by the Pooling Agreement or (ii)
any such appointment to which the Counterparty has not yet become subject to;
and

 

 
(d)
Section 5(a)(vii)(8) will apply to the Counterparty but only to the extent that
it applies to Sections 5(a)(vii)(2), (4), (6) and (7) as they apply with respect
to the Counterparty).

 
(8)
The “Merger Without Assumption” provisions of Section 5(a)(viii) will apply to
Morgan and will not apply to the Counterparty.

 
(9)
The “Tax Event” provisions of Section 5(b)(ii) will apply to Morgan and to the
Counterparty, provided that the words “(x) any action taking by a taxing
authority, or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y)” shall be
deleted.

 
(10)
The “Tax Event Upon Merger” provisions of Section 5(b)(iii) will apply, provided
that Morgan shall not be entitled to designate an Early termination Date by
reason of a Tax event Upon Merger in respect of which it is the Affected Party.

 
(11)
The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to
Morgan and will not apply to the Counterparty.

 
(12)
The “Automatic Early Termination” provisions of Section 6(a) will not apply to
Morgan and will not apply to the Counterparty.

 
(13)
The “Transfer to Avoid Termination Event” provisions of 6(b)(ii) will apply to
Morgan and the Counterparty, provided that, with respect to Morgan, (a) the
words “or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party” shall be deleted and (b) the words “(any such transfer to an
Affiliate shall be effected by a Qualifying Novation)” shall be added after the
word “exist” in the first paragraph of Section 6(b)(ii).

 
(14)
“Termination Currency” means United States Dollars.

 
(15)
For purposes of computing amounts payable on early termination:

 

 
(a)
Market Quotation will apply to this Agreement; and

 
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(b)
The Second Method will apply to this Agreement.

 
(16)
The occurrence of any of the following events shall constitute an “Additional
Termination Event” for purposes of Section 5(b)(v):

 
(a) Optional Termination of Securitization. Solely with respect to the
Transaction confirmed by the Confirmation identified by the reference number
6900037652779/0095008862, an Additional Termination Event shall occur upon the
notice to Certificateholders of an Optional Termination becoming unrescindable
in accordance with Article X of the Pooling Agreement (such notice, the
“Optional Termination Notice”). With respect to such Additional Termination
Event: (A) Counterparty shall be the sole Affected Party and the Transaction
referenced in the preceding sentence shall be the sole Affected Transaction; (B)
notwithstanding anything to the contrary in Section 6(b)(iv) or Section 6(c)(i),
the final Distribution Date specified in the Optional Termination Notice is
hereby designated as the Early Termination Date for this Additional Termination
Event in respect of all Affected Transactions; (C) Section 2(a)(iii)(2) shall
not be applicable to any Affected Transaction in connection with the Early
Termination Date resulting from this Additional Termination Event;
notwithstanding anything to the contrary in Section 6(c)(ii), payments and
deliveries under Section 2(a)(i) or Section 2(e) in respect of the Terminated
Transactions resulting from this Additional Termination Event will be required
to be made through and including the Early Termination Date designated as a
result of this Additional Termination Event; provided, for the avoidance of
doubt, that any such payments or deliveries that are made on or prior to such
Early Termination Date will not be treated as Unpaid Amounts in determining the
amount payable in respect of such Early Termination Date; (D) notwithstanding
anything to the contrary in Section 6(d)(i), (I) if, no later than 4:00 pm New
York City time on the day that is four Business Days prior to the final
Distribution Date specified in the Optional Termination Notice, the Trustee
requests the amount of the Estimated Swap Termination Payment, Morgan shall
provide to the Trustee in writing (which may be done in electronic format) the
amount of the Maximum Swap Termination Payment no later than 2:00 pm New York
City time on the following Business Day and (II) if the Trustee provides written
notice (which may be done in electronic format) to Morgan no later than two
Business Days prior to the final Distribution Date specified in the Optional
Termination Notice that all requirements of the Optional Termination have been
met, then Morgan shall, no later than one Business Day prior to the final
Distribution Date specified in the Optional Termination Notice, make the
calculations contemplated by Section 6(e) of the ISDA Master Agreement (as
amended herein) and provide to the Trustee in writing (which may be done in
electronic format) the amount payable by either Counterparty or Morgan in
respect of the related Early Termination Date in connection with this Additional
Termination Event; provided, however, that the amount payable by Counterparty,
if any, in respect of the related Early Termination Date shall be the lesser of
(x) the amount calculated to be due from Counterparty pursuant to Section 6(e)
and (y) the Estimated Swap Termination Payment; and (E) notwithstanding anything
to the contrary in this Agreement, any amount due from Counterparty to Morgan in
respect of this Additional Termination Event will be payable on the final
Distribution Date specified in the Optional Termination Notice and any amount
due from Morgan to Counterparty in respect of this Additional Termination Event
will be payable one Business Day prior to the final Distribution Date specified
in the Optional Termination Notice.
 
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Solely with respect to the Transaction confirmed by the Confirmation identified
by the reference number 2000005092465, an Additional Termination Event shall
occur upon the notice to Certificateholders of an Optional Termination becoming
unrescindable in accordance with Article X of the Pooling Agreement. The
Counterparty shall be the sole Affected Party with respect to such Additional
Termination Event; provided, however, that notwithstanding anything to the
contrary in Section 6(b)(iv), only the Counterparty may designate an Early
Termination Date in respect of this Additional Termination Event.

The Trustee shall be an express third party beneficiary of this Agreement as if
a party hereto to the extent of the Trustee’s rights specified herein.

“Maximum Swap Termination Payment” means, with respect to an Early Termination
Date, an amount determined by Morgan in good faith and in a commercially
reasonable manner as the maximum payment that could be owed by Counterparty to
Morgan in respect of such Early Termination Date pursuant to Section 6(e) of the
ISDA Master Agreement.

   
(b) Solely with respect to the Transaction confirmed by the Confirmation
identified by the reference number 6900037652779/0095008862 if any provision of
the Pooling Agreement is amended unless Morgan has consented in writing to such
amendment (such consent not to be unreasonably withheld, delayed or conditioned)
where such consent is required under the Pooling Agreement. If this Additional
Termination Event occurs, the Counterparty shall be the sole Affected Party and
all Transactions then outstanding between the parties shall be Affected
Transactions.

     

(c) Solely with respect to the Transaction confirmed by the Confirmation
identified by the reference number 6900037652779/0095008862 if (i) any
supplemental trust instrument is given effect and (ii) Morgan has not consented
in writing to such supplemental trust instrument (such consent not to be
unreasonably withheld, delayed or conditioned) prior to the date on which such
supplemental trust instrument takes effect where such consent is required under
the Pooling Agreement. If this Additional Termination Event occurs, then the
Counterparty shall be the sole Affected Party and all Transactions then
outstanding between the parties shall be Affected Transactions; or

(d) the occurrence of an Additional Termination Event as forth in Part 6 hereof.
If this Additional Termination Event occurs, Morgan shall be the sole Affected
Party and all Transactions then outstanding between the parties shall be
Affected Transactions.

(17)
Morgan and Counterparty hereby agree that the terms of the Item 1115 Agreement,
dated as of May 31, 2007 (the “Item 1115 Agreement”), among Credit-Based Asset
Servicing and Securitization LLC (“Sponsor”), Asset Backed Funding Corporation
(“Depositor”) and JPMorgan Chase Bank, N.A. (the “Derivative Provider”) shall be
incorporated by reference into this Agreement and Counterparty shall be an
express third party beneficiary of the Item 1115 Agreement. A copy of the Item
1115 Agreement is annexed hereto at Appendix D.

 
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Part 2

 
Tax Representations
 
(1)
Payer Tax Representation:

 
For the purpose of Section 3(e) of this Agreement, Morgan makes the following
representation:

 
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to
be made by it to the other party under this Agreement. In making this
representation, it may rely on:

 
(i)
the accuracy of any representations made by the other party pursuant to Section
3(f) of this Agreement;

 
(ii)
the satisfaction of the agreement of the other party contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of
this Agreement; and

 
(iii)
the satisfaction of the agreement of the other party contained in Section 4(d)
of this Agreement,

provided that it shall not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) of this Agreement by reason of material prejudice to its
legal or commercial position.
 
(2)
Payee Tax Representation:

 
For the purpose of Section 3(f), Morgan represents that it is a United States
Person.

(3) Gross Up:
 
Section 2(d)(i)(4) shall not apply to Counterparty as X, and Section 2(d)(ii)
shall not apply to Counterparty as Y, in each case such that Counterparty shall
not be required to pay any additional amounts referred to therein.
 
Part 3

 
Agreement to Deliver Documents
 
For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver the
following documents, as applicable:
 
(1)
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, Counterparty
agrees to deliver an Internal Revenue Service Form W-9 as applicable or any
successor form, accurately completed and in a manner reasonably satisfactory to
Morgan, and will deliver any other tax forms relating to the beneficial owner of
payments to Counterparty under this Agreement from time to time in a manner
reasonably satisfactory to Morgan on or before the first payment date, or upon
any form previously provided becoming obsolete or upon reasonable request by
Morgan.

 
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(2)
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, Morgan agrees to
deliver a correct, complete and duly executed U.S. Internal Revenue Service Form
W-9 (or successor thereto), upon the execution and delivery of this Agreement,
or upon any form previously provided becoming obsolete.

 
(3)
Morgan will, on demand, deliver a certificate specifying the name(s), title(s)
and specimen signature(s) of the person(s) executing this Agreement and each
Confirmation on its behalf.

 
(4)
The Counterparty will, on demand, deliver a certificate (or, if available, the
current authorized signature book of the Counterparty) specifying the names,
title and specimen signatures of the persons authorized to execute this
Agreement and each Confirmation on its behalf.

 
(5)
The Counterparty will, promptly upon filing with the Securities and Exchange
Commission, deliver a conformed copy of the Pooling Agreement.

 
(6)
Each party will, upon execution of this Agreement, deliver a legal opinion of
counsel in form and substance satisfactory to the other party regarding this
Agreement and any other matters as such other party may reasonably request.

 
(7)
The Counterparty shall make available to Morgan via its website, currently
located at www.etrustee.net with copies of all accountings and reports required
to be supplied to a party that is an investor. Assistance with using the website
can be obtained by calling the transaction manager at (312) 904-4373.

 
Each of the foregoing documents (other than the legal opinions described in (6)
above) is covered by the representation contained in Section 3(d) of this
Agreement.
 
Part 4
 
Miscellaneous
 
(1)
Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York without reference to choice of law
doctrine other than New York General Obligations Law Sections 5-1401 and 5-1402.

 
(2)
Notices.

 

 
(a)
In connection with Section 12(a), all notices to Morgan shall, with respect to
any particular Transaction, be sent to the address, telex number or facsimile
number specified in the relevant Confirmation and any notice for purposes of
Sections 5 or 6 of the Agreement shall be sent to the address or telex number
specified below:

 
JPMorgan Chase Bank, N.A.
Attention: Legal Department-Derivatives Practice Group
270 Park Avenue, 41st Floor
New York, New York 10017-2070
Telex No.: 232337; Answerback: CBC UR
Facsimile No.: (212) 270-3620
 
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(b)
In connection with Section 12(a), all notices to the Counterparty shall, with
respect to any particular Transaction, be sent to the address, telex number or
facsimile number specified in the relevant Confirmation and any notice for
purposes of Sections 5 or 6 of the Agreement shall be sent to the address or
telex number specified below:

 
LaSalle Bank National Association
135 South LaSalle Street, Suite 1511
Chicago, IL 60603
Attention: Kimberly Sturm -- CBASS 2007-CB5
Phone: 312-904-4373
Fax: 312-904-1368

 
(3)
Netting of Payments. Section 2(c)(ii) of this Agreement will apply, with the
effect that payment netting will not take place with respect to amounts due and
owing in respect of more than one Transaction.

 
(4)
Offices; Multibranch Party. For purposes of Section 10:

 

 
(a)
Section 10(a) will apply; and

 

 
(b)
For the purpose of Section 10(c):

 

 
(i)
Morgan is a Multibranch Party and may act through its London and New York
Offices.

 

 
(ii)
The Counterparty is not a Multibranch Party.

 
(5)
Credit Support Documents.

 
With respect to Morgan, if applicable, any Eligible Guarantee delivered by
Morgan shall constitute a Credit Support Document.
 
With respect to Morgan and the Counterparty, the Approved Credit Support
Document (as defined herein) entered into between Morgan and the Counterparty
shall constitute a Credit Support Document. An Approved Credit Support Document
shall be executed and delivered contemporaneously with this Agreement.
 
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(6)
Credit Support Provider.

 
With respect to Morgan, the party guaranteeing Morgan’s obligations pursuant to
an Eligible Guarantee, if any, shall be a Credit Support Provider.
 
(7)
Process Agents. The Counterparty appoints as its Process Agent for the purpose
of Section 13(c): Not Applicable.

 
Part 5

 
Other Provisions
 
(1)
ISDA Definitions. Reference is hereby made to the 2000 ISDA Definitions (the
“ISDA Definitions”) each as published by the International Swaps and Derivatives
Association, Inc., which are hereby incorporated by reference herein. Any terms
used and not otherwise defined herein, which are contained in the ISDA
Definitions, shall have the meaning set forth therein, except that any
references in the ISDA Definitions to a “Swap Transaction” shall be deemed
references to a “Transaction” for purposes of this Agreement, and references to
a “Transaction” in this Agreement shall be deemed references to a “Swap
Transaction” for purposes of the ISDA Definitions. Each term capitalized but not
defined in this Agreement shall have the meaning assigned thereto in the Pooling
Agreement.

 
(2)
Scope of Agreement. Notwithstanding anything contained in the Agreement to the
contrary, if the parties enter into any Specified Transaction, such Specified
Transaction shall be subject to, governed by and construed in accordance with
the terms of this Agreement unless the Confirmation relating thereto shall
specifically state to the contrary. Each such Specified Transaction shall be a
Transaction for the purposes of this Agreement.

 
(3)
Inconsistency. In the event of any inconsistency between any of the following
documents, the relevant document first listed below shall govern: (i) a
Confirmation; (ii) the Schedule; (iii) the ISDA Definitions; and (iv) the
printed form of ISDA Master Agreement.

 
(4)
Calculation Agent. The Calculation Agent will be Morgan; provided, however, that
if an Event of Default shall have occurred with respect to which Morgan is the
Defaulting Party, Counterparty shall have the right to designate as Calculation
Agent an independent party, reasonably acceptable to Morgan, the cost of which
shall be borne by Morgan.

 
(5)
Waiver of Jury Trial. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any suit,
action or proceeding relating to this Agreement or any Credit Support Document.
Each party (i) certifies that no representative, agent or attorney of the other
party or any Credit Support Provider has represented, expressly or otherwise,
that such other party would not, in the event of such a suit, action or
proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it
and the other party have been induced to enter into this Agreement and provide
for any Credit Support Document, as applicable, by, among other things, the
mutual waivers and certifications in this Section.

 
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(6)
No Petition; Limited Recourse. Until a period of one year and one day (or if
longer, the applicable preference period) after all rated liabilities of the
Trust have been indefeasibly paid in full, no Relevant Entity shall institute
against, or join any other person in instituting against the Counterparty any
bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation
proceedings or other proceedings under U.S. federal or state or other bankruptcy
or similar laws. Notwithstanding the foregoing, nothing herein shall prevent
Morgan from participating in any such proceeding once commenced. This provision
shall survive termination of this Agreement.

 
Morgan hereby acknowledges and agrees that the Counterparty’s obligations
hereunder will be solely the limited recourse obligations of the Counterparty
payable solely from the Supplemental Interest Trust and the proceeds thereof, in
accordance with the priority of payments set out in the Pooling Agreement, and
that Morgan will not have any recourse to any of the agents, directors,
officers, employees, shareholders or affiliates of the Counterparty with respect
to any claims, losses, damages, liabilities, indemnities or other obligations in
connection with any transactions contemplated hereby. Notwithstanding any other
provisions hereof, recourse in respect of any obligations of the Counterparty to
Morgan hereunder or thereunder will be limited to the Supplemental Interest
Trust and on the exhaustion thereof all claims against the Counterparty arising
from this Confirmation or any other transactions contemplated hereby or thereby
shall be extinguished.
 
(7)
Additional Representations. 

 
(a) Section 3 is hereby amended by adding at the end thereof the following
paragraphs:
 
“(g) It is an “eligible contract participant” under, and as defined in, Section
1a(12) of the Commodity Exchange Act, as amended.
 
(h) Each party will be deemed to represent to the other party on the date on
which it enters into a Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):
 
(i) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
 
(ii) Assessment and Understanding. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the risks of that
Transaction.
 
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(iii) Status of Parties. The other party is not acting as a fiduciary for or an
adviser to it in respect of that Transaction.”
 
  (b) The additional representation shall be given by Morgan only:
 
“(i)  Pari Passu. Its obligations under this Agreement rank equal and ratably
with all of its other unsecured, unsubordinated obligations except those
obligations preferred by operation of law.” 
 
(8)
Amendment to Section 9(b) of the Agreement. Section 9(b) of the Agreement is
amended by adding the following sentence immediately following the end of the
first sentence thereof:

 
“In addition, no amendment, modification or waiver in respect of this Agreement
will be effective unless Moody’s has been provided prior written notice of the
same and the Rating Agency Condition is satisfied with respect to S&P and DBRS.”
 
(9)
Set-off. Notwithstanding any provision of this Agreement or any other existing
or future agreement, but subject to Section 2(c), Section 6 and Part 6(3)(viii)
of this Schedule, each party irrevocably waives any and all rights it may have
to set off, net, recoup or otherwise withhold or suspend or condition payment or
performance of any obligation between it and the other party hereunder against
any obligation between it and the other party under any other agreements. The
provisions for Set-off set forth in Section 6(e) of the Agreement shall not
apply to this Agreement.

 
(10)
Amendment to Section 6(e) of the Agreement. Section 6(e) of the Agreement is
amended by deleting the last sentence of the introductory paragraph thereof.

 
(12)
Modification to Definition of Indemnifiable Tax. Notwithstanding the definition
of "Indemnifiable Tax" in Section 14, in relation to payments by Morgan, any Tax
shall be an Indemnifiable Tax, and in relation to payments by the Counterparty,
no Tax shall be an Indemnifiable Tax. For the avoidance of doubt, the foregoing
sentence shall not by itself modify either party's right to terminate a
Transaction based on the occurrence of a Tax Event or a Tax Event Upon Merger.

 
(13)
Waiver of Tax Confidentiality. Notwithstanding anything herein to the contrary,
any party subject to confidentiality obligations hereunder or under any other
related document (and any employee, representative or other agent of such party)
may disclose to any and all persons, without limitation of any kind, the U.S.
federal income tax treatment and the U.S. federal income tax structure of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to it relating to such tax
treatment and tax structure. However, no such party shall disclose any
information relating to such tax treatment or tax structure to the extent
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.

(14)
Rating Agency Notifications. Notwithstanding any other provision of this
Agreement, this Agreement shall not be amended, no Early Termination Date shall
be effectively designated by the Counterparty, and no transfer of any rights or
obligations under this Agreement shall be made (other than a transfer of all of
Morgan’s rights and obligations with respect to this Agreement in accordance
with Part 6(2)(a) below) unless Moody’s, S&P and DBRS have each been given prior
written notice of such amendment, designation or transfer.

 
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(15)
Trustee Capacity. It is expressly understood and agreed by the parties hereto
that (i) this Agreement is executed and delivered by LaSalle Bank National
Association not individually or personally but solely as Supplemental Interest
Trust Trustee of the supplemental interest trust created under the Pooling
Agreement (the “Supplemental Interest Trust”) in the exercise of the powers and
authority conferred and vested in it under the terms of the Pooling Agreement,
(ii) each of the representations, undertakings and agreements herein made on the
part of the Counterparty is made and intended not as personal representations,
undertakings and agreements by LaSalle Bank National Association but is made and
intended for the purpose of binding only the Supplemental Interest Trust, (iii)
nothing herein contained shall be construed as creating any liability on the
part of LaSalle Bank National Association, 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 any
Person claiming by, through or under the parties hereto, and (iv) under no
circumstances shall LaSalle Bank National Association be personally liable for
the payment of any indebtedness or expenses of the Counterparty or be liable for
the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Counterparty under this Agreement or any other related
documents, as to all of which recourse shall be had solely to the assets of the
Supplemental Interest Trust in accordance with the terms of the Pooling
Agreement.

(16)
Limitation on Events of Default. Notwithstanding the provisions of Sections 5
and 6, if at any time and so long as Counterparty has satisfied in full all its
payment obligations under Section 2(a)(i) in respect of the Transaction with the
reference number 2000005092465 (the “Cap Transaction”) and has at the time no
future payment obligations, whether absolute or contingent, under such Section
in respect of such Cap Transaction, then unless Morgan is required pursuant to
appropriate proceedings to return to Counterparty or otherwise returns to
Counterparty upon demand of Counterparty any portion of any such payment in
respect of such Cap Transaction, (a) the occurrence of an event described in
Section 5(a) with respect to Counterparty shall not constitute an Event of
Default or Potential Event of Default with respect to Counterparty as Defaulting
Party in respect of such Cap Transaction and (b) Morgan shall be entitled to
designate an Early Termination Date pursuant to Section 6 in respect of such Cap
Transaction only as a result of the occurrence of a Termination Event set forth
in either Section 5(b)(i) or 5(b)(ii) with respect to Morgan as the Affected
Party, or Section 5(b)(iii) with respect to Morgan as the Burdened Party. For
purposes of the Transaction identified by the reference number 2000005092465,
Morgan acknowledges and agrees that Counterparty’s only payment obligation under
Section 2(a)(i) in respect of the Cap Transaction is to pay the Premium Amount
on the Fixed Rate Payer Payment Date.

(17)
Timing of Payments by Counterparty upon Early Termination. Notwithstanding
anything to the contrary in Section 6(d)(ii), to the extent that all or a
portion (in either case, the “Unfunded Amount”) of any amount that is calculated
as being due in respect of any Early Termination Date under Section 6(e) from
Counterparty to Morgan will be paid by Counterparty from amounts other than any
upfront payment paid to Counterparty by an Eligible Replacement that has entered
a Replacement Transaction with Counterparty, then such Unfunded Amount shall be
due on the next subsequent Distribution Date following the date on which the
payment would have been payable as determined in accordance with Section
6(d)(ii), and on any subsequent Distribution Dates until paid in full (or if
such Early Termination Date is the final Distribution Date, on such final
Distribution Date); provided, however, that if the date on which the payment
would have been payable as determined in accordance with Section 6(d)(ii) is a
Distribution Date, such payment will be payable on such Distribution Date.

 
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Part 6

Downgrade Provisions; Transfer; Payments on Early Termination;

(1) Ratings Downgrade Provisions.  
 
Following the occurrence of a Ratings Event I and/or a Ratings Event II, for as
long as such Ratings Event I or Ratings Event II is continuing, the parties
shall comply with the following provisions, as applicable.
 
I. Ratings Event I:
 
A. Actions upon Ratings Event 1: Not later than 30 calendar days after a Ratings
Event I has occurred and is continuing, Morgan shall, at its own expense:
 
(A) provide, or cause to be provided, an Eligible Guarantee to Counterparty in
respect of all Morgan’s present and future obligations under this Agreement;
 
or
 
(B) transfer Morgan’s rights and obligations under the Agreement and all
Confirmations pursuant to a Qualifying Novation;
 
or
 
(C) deliver Eligible Collateral to Counterparty in accordance with the terms of
the Approved Credit Support Document and, following such delivery, maintain
Eligible Collateral as required under the Approved Credit Support Document;
 
Morgan’s obligations under this Part 6(1)(I) shall cease, solely with respect to
such occurrence, if (A) there is no Ratings Event I or (B) Morgan has either
provided an Eligible Guarantee in respect of all Morgan’s present and future
obligations under this Agreement or transferred its rights and obligations
pursuant to a Qualifying Novation in accordance with the terms of this Schedule.
 
B. Eligible Guarantee or Eligible Replacement below Ratings Event I Levels
 
If a Qualifying Novation is made to an Eligible Replacement or an Eligible
Guarantee (in respect of all Morgan’s present and future obligations under this
Agreement) is provided and, immediately after the execution of such Qualifying
Novation or Eligible Guarantee (as applicable), there is a Ratings Event I, then
(so long as such Ratings Event I is continuing) Part 6(1)(I.A.) above shall
apply without regard to the 30 calendar day time period referred to therein.
 
II. Ratings Event II
 
A. Actions upon Ratings Event II
 
If a Ratings Event II has occurred and is continuing, the following shall occur.
 
12

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Morgan shall, at its own expense, use commercially reasonable efforts to, as
soon as reasonably practicable:
 
(A) provide, or cause to be provided, an Eligible Guarantee to Counterparty in
respect of all Morgan’s present and future obligations under this Agreement;
 
or
 
(B) transfer Morgan’s rights and obligations under the Agreement and all
Confirmations pursuant to a Qualifying Novation.
 
If, immediately prior to such Ratings Event II, Morgan is required to deliver
and maintain Eligible Collateral following a Ratings Event I, Morgan shall
continue to maintain Eligible Collateral under the Approved Credit Support
Document.
 
If, immediately prior to such Ratings Event II, Morgan is not required to
deliver and maintain Eligible Collateral following a Ratings Event I, then
Morgan shall post Eligible Collateral in accordance with the terms of the
Approved Credit Support Document until Morgan has provided an Eligible Guarantee
in respect of all Morgan’s present and future obligations under this Agreement
or transferred its rights and obligations pursuant to a Qualifying Novation in
accordance with terms of this Schedule. In addition, Morgan shall continue to
use commercially reasonable efforts to either transfer its rights and
obligations pursuant to a Qualifying Novation or to provide an Eligible
Guarantee (in respect of all Morgan’s present and future obligations under this
Agreement) in accordance with terms of this Schedule.
 
Morgan’s obligations under this Part 6(1)(II) shall cease, solely with respect
to such occurrence, if (A) there is no Rating Events II or (B) Morgan has either
provided an Eligible Guarantee in respect of all Morgan’s present and future
obligations under this Agreement or transferred its rights and obligations
pursuant to a Qualifying Novation, in either case in accordance with the terms
of this Schedule.
 
B. Ratings Event II Event of Default/Additional Termination Event
 
Failure by Morgan to comply with the requirement of this Part 6(1)II to use
commercially reasonable efforts to obtain an Eligible Guarantee in respect of
all Morgan’s present and future obligations under this Agreement or Qualifying
Novation shall constitute an Event of Default with respect to Morgan.
 
If Morgan has not, within 10 Business Days of the occurrence of a Ratings Event
II, obtained an Eligible Guarantee in respect of all Morgan’s present and future
obligations under this Agreement or effected a Qualifying Novation, it shall
constitute an Additional Termination Event in respect of which Morgan is the
sole Affected Party and all Transactions are Affected Transactions, but only if:
 
1. (a) one or more Eligible Replacements has made a Firm Offer (in response to
solicitation either by Morgan or the Counterparty) to be the transferee of a
transfer pursuant to a Qualifying Novation and/or (b) at least one entity has
made a Firm Offer to provide an Eligible Guarantee in respect of all Morgan’s
present and future obligations under this Agreement;
 
13

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and
 

 
2.
such Ratings Event II is continuing.

 
Failure by Morgan to post or maintain Eligible Collateral in accordance with the
Approved Credit Support Document shall be an Event of Default under Section
5(a)(iii).
 
III. Definitions
 
As used herein:
 
“Approved Credit Support Document” means the 1994 ISDA Credit Support Annex
(ISDA Agreements Subject to New York Law Only), as modified by the Paragraph 13
thereto, in the form annexed hereto. An Approved Credit Support Document will be
executed and delivered contemporaneously with this Agreement.
 
“Business Day” shall have the meaning given to this term in the Confirmation.
 
“DBRS” means Dominion Bond Rating Service, or any successor thereto.
 
“Eligible Guarantee” means an unconditional and irrevocable guarantee that is
provided by a guarantor as principal debtor rather than as surety and directly
enforceable by the Counterparty and that meets the following conditions:
 

 
1.
either (A) a law firm has given a legal opinion confirming that none of the
guarantor’s payments to the Counterparty will be subject to withholding tax or
(B) such guarantee provides that, in the event that any of such guarantor’s
payments to the Counterparty are subject to withholding for tax, such guarantor
is required to pay such additional amount as is necessary to ensure that the net
amount actually received by the Counterparty will equal the full amount the
Counterparty would have received had no such withholding been required; and

 

2.
the guarantor must meet the Ratings Event I Required Ratings and/or Ratings
Event II Required Ratings, provided that if such guarantor does not meet the
Ratings Event I Required Ratings, such guarantee shall not be an Eligible
Guarantee unless either the guarantor or Morgan delivers Eligible Collateral in
accordance with the Approved Credit Support Document at the time such Eligible
Guarantee is provided; and

 

 
3.
the Rating Agency Condition has been met with respect to S&P, Moody’s, and DBRS.

 
“Eligible Replacement” means (i) an entity that satisfies the Ratings Event I
Required Ratings and/or the Ratings Event II Required Ratings (provided that if
such entity does not meet the Ratings Event I Required Ratings, such entity
shall not be an Eligible Replacement unless such entity delivers Eligible
Collateral in accordance with the Approved Credit Support Document at the time
such replacement) or (ii) an entity whose present and future obligations owing
to the Counterparty are guaranteed pursuant to an Eligible Guarantee.
 
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“Firm Offer” means an offer which, when made, was capable of becoming legally
binding upon acceptance.
 
“Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.
 
“Pooling Agreement” means the Pooling and Servicing Agreement dated May 1, 2007
among Asset Backed Funding Corporation, as depositor, Credit-Based Asset
Servicing and Securitization LLC, as sponsor, Litton Loan Servicing LP, as
servicer, and LaSalle Bank National Association, as trustee;
 
“Qualifying Novation” means a transfer of all rights and obligations of Morgan
under all Transactions that are the subject of this Agreement (which may include
a transfer of this Agreement) to an Eligible Replacement that is party to a
Replacement Agreement with the Counterparty that meets the following conditions:
 

 
1.
Morgan and the Eligible Replacement are both “dealers in notional principal
contracts” within the meaning of Treasury regulations section 1.1001-4;

 

 
2.
as of the date of such transfer the Eligible Replacement would not be required
to withhold or deduct on account of Tax from any payments under this Agreement
or would be required to gross up for such Tax under Section 2(d)(i)(4);

 

 
3.
an Event of Default or Termination Event would not occur as a result of such
transfer;

 

 
4.
pursuant to a written instrument (the “Transfer Agreement”), the Eligible
Replacement acquires and assumes all rights and obligations of Morgan under the
Agreement and the relevant Transaction;

 

 
5.
Counterparty shall have determined, in its sole discretion, acting in a
commercially reasonable manner, that such Transfer Agreement is effective to
transfer to the Eligible Replacement all, but not less than all, of Morgan’s
rights and obligations under the Agreement and all relevant Transactions;

 

 
6.
Morgan will be responsible for any costs or expenses incurred in connection with
such transfer (including any replacement cost of entering into a replacement
transaction);

 

 
7.
either (A) Moody’s has been given prior written notice of such transfer and the
Rating Agency Condition is satisfied with respect to S&P and DBRS or (B) each of
the Rating Agencies has been given prior written notice of such transfer and
such transfer is in connection with the assignment and assumption of this
Agreement without modification of its terms, other than party names, dates
relevant to the effective date of such transfer, tax representations (provided
that the representations in Part 2(a)(i) are not modified) and any other
representations regarding the status of the substitute counterparty of the type
included in Part 5(b)(iv), Part 5(v)(i)(2) or Part 5(v)(ii), notice information
and account details; and (i) such transfer otherwise complies with the terms of
the Pooling Agreement.

 
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“Rating Agencies” means each of S&P, Moody’s and DBRS to the extent that each
such rating agency is then providing a rating for any of the C-BASS Mortgage
Loan Asset-Backed Certificates, Series 2007-CB5 (the “Certificates”) or any
notes backed by the Certificates (the “Notes”).
 
“Rating Agency Condition” means, with respect to any particular proposed act or
omission to act hereunder that the party acting or failing to act must consult
with each of the Rating Agencies (unless otherwise specified) then providing a
rating of the Certificates and receive from each Rating Agency a prior written
confirmation that the proposed action or inaction would not cause a downgrade or
withdrawal of the then-current rating of the Certificates or Notes.
 
“Ratings Event I” shall occur with respect to S&P or Moody’s if no Relevant
Entity has the Ratings Event I Required Ratings as specified under paragraph (a)
or (b) thereof, as appicable.
 
An entity will have “Ratings Event I Required Ratings” (a) with respect to
Moody’s, (i) if such entity is the subject of Moody’s Short-term Rating, such
rating is “Prime-1” and its long-term, unsecured and unsubordinated debt
obligations are rated A2 or above by Moody’s and (ii) if such entity is not the
subject of a Moody’s Short-term Rating, its long-term, unsecured and
unsubordinated debt obligations are rated “A1” or above by Moody’s and (b) with
respect to S&P, (i) the S&P short-term senior unsecured debt rating of such
entity is A-1 or above or (ii) if such entity is not the subject of an S&P
short-term rating, if its long-term senior unsecured debt rating is A+ or above.
 
“Ratings Event II” shall occur with respect to S&P or Moody’s if no Relevant
Entity has the Ratings Event II Required Ratings under paragraph (a) or (b)
thereof, as applicable.

An entity will have “Ratings Event II Required Ratings” (a) with respect to
Moody’s, (i) if such entity is the subject of a Moody’s Short-term Rating, if
such rating is “Prime-2” or above and its long-term, unsecured and
unsubordinated debt obligations are rated “A3” or above by Moody’s and (ii) if
such entity is not the subject a Moody’s Short-term Rating, if its long-term,
unsecured and unsubordinated debt obligations are rated “A3” by Moody’s and (b)
with respect to S&P, such entity’s long-term senior unsecured S&P debt rating is
BBB- or above.
 
"Relevant Entity" means Morgan or any guarantor under an Eligible Guarantee in
respect of all Morgan's present and future obligations under this Agreement.
 
“Replacement Agreement” means either (i) this Agreement, if this Agreement is
transferred to an Eligible Replacement in the course of a Qualifying Novation or
(ii) an agreement on substantially the same terms as this Agreement, including
ratings triggers, credit support documentation and other provisions of this
Agreement.
 
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“S&P” means by Standard & Poor’s Ratings Service or any successor thereto.
 
“Supplemental Interest Trust” shall have the meaning set forth in the Pooling
Agreement.
 
(2) Amendment to Section 7 of the Agreement. 
 
The following provisions shall be added to the end of Section 7:
 
A. Qualifying Novations
 

 
I.
The Counterparty shall determine in it sole discretion, acting in a commercially
reasonable manner, whether or not a transfer is a Qualifying Novation.

 

 
II.
If an Eligible Replacement has made a Firm Offer (which remains capable of
becoming legally binding upon acceptance) to be the transferee of a Qualifying
Novation, the Counterparty shall at Morgan’s written request and cost, take any
reasonable steps required to be taken by it to effect such transfer.

 
III.
No consent from the Counterparty is required for a transfer that is a Qualifying
Novation and is required pursuant to Part 6(1) above.

B. Other Transfers
 
Transfers other than Qualifying Novations or transfers under Section 7(a) of
this Agreement shall be effective only if (i) Rating Agency Condition has been
met with respect to S&P and DBRS, and (ii) the prior written consent of the
other party is obtained.

(3) Termination Amounts
 
Notwithstanding Section 6 of this Agreement, so long as Morgan is (A) the
Affected Party in respect of a Termination Event or (B) the Defaulting Party in
respect of any Event of Default, paragraphs (i) to (viii) below shall apply:
 
(i) The Counterparty shall not designate as an Early Termination Date a date
earlier than 10 Business Days after the notice designating such Early
Termination Date becomes effective.
 

 
(ii)
The definition of “Market Quotation” shall be deleted in its entirety and
replaced with the following:

 
““Market Quotation” means, with respect to one or more Terminated Transactions,
a Firm Offer (which may be solicited by either the Counterparty or Morgan) which
is (1) made by a Reference Market-maker that is an Eligible Replacement, (2) for
an amount that would be paid to the Counterparty (expressed as a negative
number) or by the Counterparty (expressed as a positive number) in consideration
of an agreement between Counterparty and such Reference Market-maker to enter
into a transaction (the “Replacement Transaction”) that would have the effect of
preserving for such party the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the parties under
Section 2(a)(i) in respect of such Terminated Transactions that would, but for
the occurrence of the relevant Early Termination Date, have been required after
that date, (3) made on the basis that Unpaid Amounts in respect of the
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included and (4) made in respect of a
Replacement Transaction with terms substantially the same as those of this
Agreement (save for the exclusion of provisions relating to Transactions that
are not Terminated Transactions).”
 
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(iii) The definition of “Settlement Amount” shall be deleted in its entirety and
replaced with the following:
 
“Settlement Amount” means, with respect to any Early Termination Date, an amount
(as determined by the Counterparty) equal to the Termination Currency Equivalent
of the amount (whether positive or negative) of any Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions that is
accepted by the Counterparty so as to become legally binding, provided that:
 

(a)
If, on or before the day falling ten Local Business Days after the day on which
the Early Termination Date is designated or such later day as Counterparty may
specify in writing to Morgan, (but in either case no later than the Early
Termination Date) (such day, the “Latest Settlement Amount Determination Date”),
no Market Quotation for the relevant Terminated Transaction or group of
Terminated Transactions has been accepted by Counterparty so as to become
legally binding and one or more Market Quotations have been made and remain
capable of becoming legally binding upon acceptance, the Settlement Amount shall
equal the Termination Currency Equivalent of the amount (whether positive or
negative) of the lowest of such Market Quotation; or

 

(b)
If on the Latest Settlement Amount Determination Date no Market Quotation for
the relevant Terminated Transaction or group of Terminated Transactions is
accepted by the Counterparty so as to become legally binding and no Market
Quotations have been made and remain capable of becoming legally binding upon
acceptance, the Settlement Amount shall equal the Counterparty’s Loss (whether
positive or negative and without reference to any Unpaid Amounts) for the
relevant Terminated Transaction or group of Terminated Transactions.”

 
(iv) For the purpose of paragraph (4) of the definition of Market Quotation, the
Counterparty shall determine in its sole discretion, acting in a commercially
reasonable manner, whether a Firm Offer is made in respect of a Replacement
Transaction with commercial terms substantially the same as those of this
Agreement (save for the exclusion of provisions relating to Transactions that
are not Terminated Transactions).
 
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(v) At any time on or before the Latest Settlement Amount Determination Day at
which two or more Market Quotations remain capable of becoming legally binding
upon acceptance, the Counterparty shall be entitled to accept only the lowest of
such Market Quotations.
 
(vi) If the Counterparty requests Morgan in writing to obtain Market Quotations,
Morgan shall use its reasonable efforts to do so on or before the Latest
Settlement Amount Determination Day.
 
(vii) Morgan may also elect to obtain Market Quotations without a request from
the Counterparty.
 
(viii) If the Settlement Amount is a negative number, Section 6(e)(i)(3) of this
Agreement shall be deleted in its entirety and replaced with the following:
 
“Second Method and Market Quotation. If Second Method and Market Quotation
apply, (1) the Counterparty shall pay to Morgan an amount equal to the absolute
value of the Settlement Amount in respect of the Terminated Transactions, (2)
the Counterparty shall pay to Morgan the Termination Currency Equivalent of the
Unpaid Amounts owing to Morgan and (3) Morgan shall pay to the Counterparty the
Termination Currency Equivalent of the Unpaid Amounts owing to the Counterparty,
provided that, (i) the amounts payable under (2) and (3) shall be subject to
netting in accordance with Section 2(c) of this Agreement and (ii)
notwithstanding any other provision of this Agreement, any amount payable by
Morgan under (3) shall not be netted-off against any amount payable by the
Counterparty under (1).”
 
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Please confirm your agreement to the terms of the foregoing Schedule by signing
below.

       
JPMORGAN CHASE BANK, N.A.
 
   
   
  By:   /s/ Robert Mock  

--------------------------------------------------------------------------------

Name: Robert Mock
Title: Vice President

 

       
LaSalle Bank National Association, not in its individual capacity but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
with respect to C-BASS 2007-CB5 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2007-CB5
 
   
   
  By:   /s/ Susan L. Feld  

--------------------------------------------------------------------------------

Name: Susan L. Feld
Title: Vice President

 
20

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ANNEX A
 
PARAGRAPH 13 TO
CREDIT SUPPORT ANNEX
 
to the Schedule to the
Master Agreement
 
dated as of May 31, 2007
 
between
 
JPMorgan Chase Bank, N.A.
(“Morgan”)
and
LaSalle Bank National Association, not in its individual capacity but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
with respect to C-BASS 2007-CB5 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2007-CB5 (“Counterparty”)

 
Paragraph 13. Elections and Variables
 
(a) Security Interest for “Obligations”. The term “Obligations” as used in this
Annex includes no additional obligations with respect to either party.
 
(b) Credit Support Obligations.
 

 
(i)
Delivery Amount, Return Amount and Credit Support Amount.

 

 
(A)
“Delivery Amount” has the meaning specified in Paragraph 3(a), except that the
words “upon a demand made by the Transferee on or promptly following a Valuation
Date” shall be deleted and replaced by the words “not later than the close of
business on each Valuation Date”.

 

 
(B)
“Return Amount” has the meaning specified in Paragraph 3(b).

 

 
(C)
“Credit Support Amount” shall mean the Independent Amount.

 

 
(ii)
Eligible Collateral. The items specified on Appendix A attached hereto will
qualify as “Eligible Collateral” with the lower of the specified Valuation
Percentages to apply.

 

 
(iii)
Other Eligible Support. There shall be no “Other Eligible Support” for purposes
of this Annex, unless agreed in writing between the parties.

 

 
(iv)
Thresholds.

 

 
(A)
“Independent Amount” shall mean the greater of (i) the S&P Independent Amount
and (ii) the Moody’s Independent Amount.

 
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(B)
“Threshold” means with respect to Morgan: infinity, provided that if delivery of
Eligible Collateral is required following a Ratings Event I or a Ratings Event
II pursuant to the Schedule, the Threshold shall be zero.

 

   
“Threshold” means with respect to Counterparty: infinity.

 

 
(C)
“Minimum Transfer Amount”, with respect to a party on any Valuation Date, means
U.S. $100,000 (unless the notional amount is less than U.S. $50,000,000, in
which case the Minimum Transfer Amount shall be U.S.$50,000).

 

 
(D)
Rounding. The Delivery Amount, rounded up, and with respect to the Return
Amount, rounded down, to the nearest integral multiple of $1,000 respectively.

 

 
(v)
“Exposure” has the meaning specified in Paragraph 12, except that after the word
“Agreement” the words “(assuming , for this purpose only, that Part 6(3) of the
Schedule is deleted)” shall be inserted and (2) on the last line of the
definition of Exposure, the words “with terms substantially the same as those of
this Agreement after the words “Replacement Transaction.”

 
(c) Valuation and Timing.
 

(11)(i)
“Valuation Agent” means Morgan; provided, however, that if an Event of Default
shall have occurred with respect to which Morgan is the Defaulting Party,
Counterparty shall have the right to designate as Valuation Agent an independent
party, reasonably acceptable to Morgan, the cost of which shall be borne by
Morgan. The Valuation Agent’s calculations shall be made in accordance with
standard market practices using commonly accepted third party sources such as
Bloomberg or Reuters.

 

 
(ii)
“Valuation Date” means weekly on the last Local Business Day of each week.

 

 
(iii)
“Valuation Time” means the close of business in the city of the Valuation Agent
on the Valuation Date or date of calculation, as applicable.

 

 
(iv)
“Notification Time” means 12:00 p.m., New York time, on a Local Business Day.

 

 
(v)
Standard & Poor’s Mark-to-market Procedures. This Agreement and the Posted
Collateral shall be marked-to-market no less than once per week and additional
collateral should be posted if necessary. For as long as the Morgan’s rating is
A-2/BBB+ or higher, the mark-to-market valuations can be based upon internal
marks. If Morgan’s rating is BBB or lower, Morgan shall get an external
verification of its mark on a monthly basis. The verification of the mark can be
obtained by an independent third party (i.e. trustee, administrator, manager),
and cannot be verified by the same entity more than four times in any 12-month
period. In addition, the external mark-to-market valuations should reflect the
higher of two bids from counterparties that would be eligible and willing to
provide the swap in the absence of the current provider. The collateral
requirement should be based on the greater of the internal and external marks,
and any deficiencies in collateral value must be cured within three days. Morgan
shall submit to Standard & Poor’s the internal mark-to-market calculations. Once
Morgan has verified the mark-to-market valuation, it shall submit to Standard &
Poor’s the two bids provided by external parties.

 
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(d)
Conditions Precedent. Not applicable.

 
(e)
Substitution.

 

 
(i)
“Substitution Date” has the meaning specified in Paragraph 4(d)(ii).

 

 
(ii)
Consent. Inapplicable.

 
(f) Dispute Resolution.
 

 
(i)
“Resolution Time” means 1:00 p.m., New York time, on the Local Business Day
following the date on which the notice is given that gives rise to a dispute
under Paragraph 5.

 

 
(ii)
Value. For the purposes of Paragraphs 5(i)(C) and 5(ii), the Value of Posted
Credit Support other than Cash will be calculated as follows:

 

 
(A)
with respect to any Eligible Collateral except Cash, the sum of (I) (x) the mean
of the high bid and low asked prices quoted on such date by any principal market
maker for such Eligible Collateral chosen by the Disputing Party, or (y) if no
quotations are available from a principal market maker for such date, the mean
of such high bid and low asked prices as of the first day prior to such date on
which such quotations were available, plus (II) the accrued interest on such
Eligible Collateral (except to the extent Transferred to a party pursuant to any
applicable provision of this Agreement or included in the applicable price
referred to in (I) of this clause (A)) as of such date; multiplied by the
applicable Valuation Percentage.

 

 
(iii)
Alternative. The provisions of Paragraph 5 will apply.

 
(g) Holding and Using Posted Collateral.
 

 
(i)
Eligibility to Hold Posted Collateral; Custodians. Counterparty and its
Custodian will be entitled to hold Posted Collateral pursuant to Paragraph 6(b);
provided that the following conditions applicable to it are satisfied:

 

 
(1)
Counterparty is not a Defaulting Party; and

 

 
(2)
Posted Collateral may be held only in the following jurisdictions:

 

   
New York State or such other state in the United States in which the
Counterparty is located; and

 

 
(3)
the account is segregated from all other accounts held by the Counterparty and
its Custodian.

 

   
(4)
Counterparty may appoint as Custodian (A) the entity then serving as Trustee
under the Pooling Agreement or (B) any other entity if such entity (or, to the
extent applicable, the parent company or credit support provider) shall have a
long-term senior unsecured debt rating by S&P of at least “A” or a short-term
senior unsecured debt rating of at least “A-1” by S&P.

 
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Initially, the Custodian for Counterparty is: The Supplemental Interest Trust
Trustee
 

 
(ii)
Use of Posted Collateral. The provisions of Paragraph 6(c)(i) will not apply to
Counterparty but the provisions of Paragraph 6(c)(ii) will apply to the
Counterparty.

 
(h) Distributions and Interest Amount.
 

 
(i)
Interest Rate. “Interest Rate” will be the annualized rate of return actually
achieved on the Posted Collateral in the form of Cash during the related posting
period.

 

 
(ii)
Transfer of Interest Amount. The Transfer of the Interest Amount will be made
monthly on the second Local Business Day of each calendar month; provided that
the Counterparty shall not be obliged to so transfer any Interest Amount unless
and until it has earned and received such interest.

 

 
(iii)
Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii) will apply.

 
(i) Additional Representation(s). Not Applicable.
 
(j) Other Eligible Support and Other Posted Support.
 

 
(i)
“Value” with respect to Other Eligible Support and Other Posted Support means:
Not Applicable.

 

 
(ii)
“Transfer” with respect to Other Eligible Support and Other Posted Support
means: Not Applicable

 
(k) Demands and Notices.
 
All demands, specifications and notices under this Annex will be made pursuant
to the Notices Section of this Agreement, unless otherwise specified here:
 
Counterparty:

LaSalle Bank National Association
135 South LaSalle Street, Suite 1511
Chicago, IL 60603
Attention: Kimberly Sturm -- CBASS 2007-CB5
Phone: 312-904-4373
Fax: 312-904-1368
 
(l) Addresses for Transfers.
 
Counterparty:
 
With respect to the Transaction referenced by the number 2000005092465:
 
LaSalle Bank National Association
ABA Number: 071000505
Account Number: 724770.5
Reference: C-BASS 2007-CB5 Supplemental Interest Trust - Cap Collateral Account
 
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With respect to the Transaction referenced by the number
6900037652779/0095008862:

LaSalle Bank National Association
ABA Number: 071000505
Account Number: 724770.3
Reference: C-BASS 2007-CB5 Supplemental Interest Trust - Swap Collateral Account
Morgan: as set forth in notices to Counterparty from time to time.

(m) Morgan as Pledgor and Counterparty as Secured Party.
 

 
(i)
Modification to Paragraph 1: The following subparagraph (b) is substituted for
subparagraph (b) of this Annex:

 
(b) Secured Party and Pledgor. All references in this Annex to the “Secured
Party” will be to Counterparty and all corresponding references to the “Pledgor”
will be to Morgan.
 

 
(ii)
Modification to Paragraph 2: The following Paragraph 2 is substituted for
Paragraph 2 of this Annex:

 
Paragraph 2. Security Interest. The Pledgor hereby pledges to the Secured Party,
as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-Off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
 

 
(iii)
Modification to Paragraph 9: The following first clause of Paragraph 9 is
substituted for the first clause of Paragraph 9 of this Annex:

 
Paragraph 9. Representations. The Pledgor represents to the Secured Party (which
representations will be deemed to be repeated as of each date on which it
Transfers Eligible Collateral) that:
 
(iv)  Modification to Paragraph 10: Clauses “10(a)” and “10(b)” are amended by
adding the following sentence to the end of that paragraph:
 
“Notwithstanding the preceding sentence, the Pledgor shall pay all reasonable
costs incurred by the Secured Party in connection with any exchange pursuant to
this Credit Support Annex.” 

 
(iv)
Modifications to Paragraph 12: The following definitions of “Pledgor” and
“Secured Party” are substituted for the definitions of those terms contained in
Paragraph 12 of this Annex:

 
“Pledgor” means Morgan
 
25

--------------------------------------------------------------------------------

 
“Secured Party” means Counterparty
 

 
(v)
Events of Default. Paragraph 7 will not apply to cause any Event of Default to
exist with respect to Counterparty except that Paragraph 7(i) and 7(ii) will
apply to Counterparty solely in respect of Counterparty’s obligations under
Paragraph 3(b) of the Credit Support Annex.

 

 
(vi)
Withholding. Paragraph 6(d)(ii) is hereby amended by inserting immediately after
“the Interest Amount” in the fourth line thereof the words “less any applicable
withholding taxes.”

 
(n) Independent Amounts
 
(i) Addition to Paragraph 12: The “S&P Independent Amount” means, for any
Valuation Date, (i) if a Ratings Event I with respect to S&P has not occured,
zero, or (ii) otherwise, the sum of (x) the Secured Party’s Exposure for such
Valuation Date and (y) the sum of the Volatility Buffers determined by the
Valuation Agent with respect to each Transaction subject to the Agreement.
 
“Volatility Buffer” means, with respect to a Transaction, an amount equal to the
product of (a) the Factor applicable to the Transaction and (b) the Notional
Amount of such Transaction for the Calculation Period of such Transaction which
includes such Valuation Date of the Transaction.
 
“Factor” means, with respect to a Transaction, a percentage dependent on
Morgan’s Counterparty Rating by S&P, and the original maturity of the
Transaction and determined by the Valuation Agent by reference to the following
table:
 
S&P Counterparty Rating
 
Maturities up to 5 years (%)
 
Maturities up to 10 years (%)
 
Maturities up to 30 years (%)
 
A-2 or higher
   
3.25
   
4.00
   
4.75
 
A-3
   
4.00
   
5.00
   
6.25
 
BB+ or lower
   
4.50
   
6.75
   
7.50
 

(ii) Addition to Paragraph 12: The “Moody’s Independent Amount” means, for any
Valuation Date,
 
(i) for so long as the no Ratings Event I has occurred and is continuing, zero;
 
(ii) If a Ratings Event I with respect to Moody’s has been continuing for at
least 30 Business Days and either:

(a) no Ratings Downgrade Event II with respect to Moody’s has occurred and is
continuing; or
 
26

--------------------------------------------------------------------------------

(b) a Ratings Downgrade Event II with respect to Moody’s has been continuing for
less than 30 Business Days,

then the Ratings Event I Collateral Amount specified in Appendix B hereto; and

(iii) If neither (i) nor (ii) is applicable, the Ratings Event II Collateral
Amount specified in Appendix C hereto.
(o) Other Provisions
 

(i)
Modification to Paragraph 7: Clause “(iii)” of Paragraph 7 shall be deleted in
its entirety.

 

(ii)
Modification to Paragraph 10: Clauses “10(a)” and “10(b)” are amended by adding
the following sentence to the end of that paragraph:

 
“Notwithstanding the preceding sentence, the Pledgor shall pay all reasonable
costs incurred by the Secured Party in connection with any exchange pursuant to
this Credit Support Annex.” 
 

 
(iii)
Modification to Paragraph 12: Clause “(B)” of the definition of “Value” will be
substituted to read in its entirety as follows:

 
“(B) a security, the bid price obtained by the Valuation Agent from one of the
Pricing Sources multiplied by the applicable Valuation Percentage, if any;”
 

 
(iv)
Addition to Paragraph 12: The following definition of “Pricing Sources” shall be
added immediately after the definition of the term “Posted Credit Support” and
immediately prior to the definition of the term “Recalculation Date” in
Paragraph 12 of this Annex:

 
“Pricing Sources” means the sources of financial information commonly known as
Bloomberg, Bridge Information Services, Data Resources Inc., Interactive Data
Services, International Securities Market Association, Merrill Lynch Securities
Pricing Service, Muller Data Corporation, Reuters, Wood Gundy, Trepp Pricing, JJ
Kenny, S&P and Telerate.
 

 
(v)
Morgan and Counterparty agree that the text of the body of this Annex is
intended to be the exact printed form of ISDA Credit Support Annex (Bilateral
Form-ISDA Agreements Subject to New York Law Only) as published and Copyrighted
by the International Swaps and Derivatives Association, Inc.

 

 
(vi)
“Notional Amount” means, with regard to an interest rate swap, the notional
amount set forth in the confirmation thereof, and, with respect to a currency
swap, including a cross-currency interest rate swap, the notional amount, as set
forth in the confirmation, of that leg of the transaction that is denominated in
the same currency as the relevant rated Certificates.

 

 
(vii)
“Transaction-Specific Hedge” means (A) any Transaction that is a cap, floor or
swaption, or (B) any Swap Transaction in which (x) the Notional Amount of the
Transaction is “balance guaranteed” or (y) the Notional Amount for any
Calculation Period otherwise is not a specific dollar amount that is fixed at
the inception of the Transaction.

 
27

--------------------------------------------------------------------------------

 

 
(viii)
“Next Payment” means, in respect of each Next Payment Date, the greater of (i)
the amount of any payments due to be made by Morgan under Section 2(a) on such
Next Payment Date less any payments due to be made by Counterparty under Section
2(a) on such Next Payment Date (in each case, after giving effect to any
applicable netting under Section 2(c)) and (ii) zero.

 

 
(ix)
“Next Payment Date” means each date on which the next scheduled payment under
any Transaction is due to be paid.

 

 
(x)
Form of Annex. Morgan and Counterparty hereby agree that the text of Paragraphs
1 through 12, inclusive, of this Annex is intended to be the printed form of
ISDA Credit Support Annex (Bilateral Form - ISDA Agreements Subject to New York
Law Only version) as published and copyrighted in 1994 by the International
Swaps and Derivatives Association, Inc.

 
[Remainder of Page Intentionally Blank]
 
28

--------------------------------------------------------------------------------

 
Accepted and Agreed:
 
JPMORGAN CHASE BANK, N. A.
 
 
By:  /s/ Robert Mock 

--------------------------------------------------------------------------------

Name: Robert Mock
Title: Vice President
 
 
LaSalle Bank National Association, not in its individual capacity but solely as
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust
with respect to C-BASS 2007-CB5 Trust, C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2007-CB5
 
 
By:  /s/ Susan L. Feld 

--------------------------------------------------------------------------------

Name: Susan L. Feld
Title: Vice President

29

--------------------------------------------------------------------------------

Appendix A
Valuation Percentages
 
Applicable if the rated Certificates issued by the Counterparty are U.S.$
Denominated
 

   
 MOODY’S RATINGS EVENT I
 
MOODY’S RATINGS EVENT II
 
S&P  
 
INSTRUMENT
             
U.S. Dollar Cash
 
100%
 
100%
 
100
 
EURO Cash
 
97%
 
93%
 
89.8
 
Sterling Cash
 
97%
 
94%
 
91.9
 
Fixed-Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department with
Remaining Maturity
 
<1 year
 
100%
 
100%
 
98.6
 
1 to 2 years
 
100%
 
99%
 
97.3
 
2 to 3 years
 
100%
 
98%
 
95.8
 
3 to 5 years
 
100%
 
97%
 
93.8
 
5 to 7 years
 
100%
 
95%
 
91.4
 
7 to 10 years
 
100%
 
94%
 
90.3
 
10 to 20 years
 
100%
 
89%
 
87.9
 
>20 years
 
100%
 
87%
 
84.6
 
Floating-Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department
 
All Maturities
 
100%
 
99%
 
N/A
 
Fixed-Rate U.S. Agency Debentures with Remaining Maturity
 
<1 year
 
100%
 
99%
 
98
 
1 to 2 years
 
100%
 
98%
 
96.8
 
2 to 3 years
 
100%
 
97%
 
96.3
 
3 to 5 years
 
100%
 
96%
 
94.5
 
5 to 7 years
 
100%
 
94%
 
90.3
 
7 to 10 years
 
100%
 
93%
 
86.9
 
10 to 20 years
 
100%
 
88%
 
82.6
 
>20 years
 
100%
 
86%
 
77.9
 
Floating-Rate U.S. Agency Debentures -
 
All Maturities
 
100%
 
98%
 
N/A
 
Floating-Rate Euro-Zone Government Bonds Rated Aa3 or Above and AAA by S&P with
Remaining Maturity
 
<1 year
 
97%
 
93%
 
98
 
1 to 2 years
 
97%
 
92%
 
96.3
 
2 to 3 years
 
97%
 
91%
 
95.8
 
3 to 5 years
 
97%
 
89%
 
89.3
 
5 to 7 years
 
97%
 
87%
 
85.7
 
7 to 10 years
 
97%
 
86%
 
80.7
 
10 to 20 years
 
97%
 
82%
 
72.5
 
>20 years
 
97%
 
80%
     
Floating-Rate Euro-Zone Government Bonds Rated Aa3 or Above
 
All Maturities
 
97%
 
92%
     
Fixed-Rate United Kingdom Gilts with Remaining Maturity
 
<1 year
 
97%
 
93%
     
1 to 2 years
 
97%
 
92%
     
2 to 3 years
 
97%
 
91%
     
3 to 5 years
 
97%
 
90%
     
5 to 7 years
 
97%
 
89%
     
7 to 10 years
 
97%
 
88%
     
10 to 20 years
 
97%
 
84%
     
>20 years
 
97%
 
82%
     
Floating-Rate United Kingdom Gilts
 
All Maturities
 
97%
 
93%
     

 
For purposes of Appendix A:
 
(a) “Agency Debentures” means negotiable debt obligations which are fully
guaranteed as to both principal and interest by the Federal National Mortgage
Association, the Government National Mortgage Association or the Federal Home
Loan Mortgage Corporation, but excluding (i) interest only and principal only
securities and (ii) Collateralized Mortgage Obligations, Real Estate Mortgage
Investment Conduits and similar derivative securities.
 
30

--------------------------------------------------------------------------------

 
Appendix B
Ratings Event I Collateral Amounts
 
The Ratings Event I Collateral Amount will be equal to the greater of (A) zero
and (B) the sum of (x) the Secured Party’s Exposure for such Valuation Date and
(y) the aggregate of the Additional Ratings Event I Collateral Amounts for all
Transactions.
 
“Additional Ratings Event I Collateral Amount” means, for each Transaction, the
Notional Amount for such Transaction (for the Calculation Period of such
Transaction which includes such Valuation Date) multiplied by the applicable
percentage as specified below.
 
Potential Increase of Mid-Market Valuation of Swaps, Caps, Floors & Transaction
Specific Hedges

 
Weighted Average
Life of Hedge
in Years
 
Interest Rate Hedges
 
Currency Hedges
           
1 or less
   
0.25
%
 
2.20
%
2 or more but less than 3
   
0.50
%
 
2.40
%
3 or more but less than 4
   
0.70
%
 
2.60
%
4 or more but less than 5
   
1.00
%
 
2.80
%
5 or more but less than 6
   
1.20
%
 
2.90
%
6 or more but less than 7
   
1.40
%
 
3.10
%
7 or more but less than 8
   
1.60
%
 
3.30
%
8 or more but less than 9
   
1.80
%
 
3.40
%
9 or more but less than 10
   
2.00
%
 
3.60
%
10 or more but less than 11
   
2.20
%
 
3.80
%
11 or more but less than 12
   
2.30
%
 
3.90
%
12 or more but less than 13
   
2.50
%
 
4.00
%
13 or more but less than 14
   
2.70
%
 
4.10
%
14 or more but less than 15
   
2.80
%
 
4.30
%
15 or more but less than 16
   
3.00
%
 
4.40
%
16 or more but less than 17
   
3.20
%
 
4.50
%
17 or more but less than 18
   
3.30
%
 
4.60
%
18 or more but less than 19
   
3.50
%
 
4.80
%
19 or more but less than 20
   
3.60
%
 
4.905
 
20 or more but less than 21
   
3.70
%
 
5.00
%
21 or more but less than 22
   
3.90
%
 
5.00
%
22 or more but less than 23
   
4.00
%
 
5.00
%
23 or more but less than 24
   
4.00
%
 
5.00
%
24 or more but less than 25
   
4.00
%
 
5.00
%
25 or more but less than 26
   
4.00
%
 
5.00
%
26 or more but less than 27
   
4.00
%
 
5.00
%
27 or more but less than 28
   
4.00
%
 
5.00
%
28 or more but less than 29
   
4.00
%
 
5.00
%
29 or more but less than 30
   
4.00
%
 
5.00
%
30 or more
   
4.00
%
 
5.00
%

31

--------------------------------------------------------------------------------

Appendix C
Ratings Event II Collateral Amount

The Ratings Event II Collateral Amount will be equal to the greater of (A) zero,
(B) the sum, for each Transaction, of the Next Payment, owed by Morgan under
each such Transaction or (C) the sum of (x) the Secured Party’s Exposure for
such Valuation Date and (y) the aggregate of the Additional Ratings Event II
Collateral Amounts for all Transactions.
 
“Additional Ratings Event II Collateral Amount” means, for each Transaction, the
Notional Amount for such Transaction for the Calculation Period of such
Transaction which includes such Valuation Date, multiplied by the applicable
percentage as specified below.
 

   
Swaps Only
 
Transaction Sepcific Hedges 
 
Weighted Average
Life of Hedge
in Years
 
Interest Rate Swap
 
Currency Swap
 
Interest Rate Swap
 
Currency Swap
                                   
1 or less
   
0.60
%
 
7.25
%
 
0.75
%
 
7.40
%
2 or more but less than 3
   
1.20
%
 
7.50
%
 
1.50
%
 
7.80
%
3 or more but less than 4
   
1.70
%
 
7.70
%
 
2.20
%
 
8.20
%
4 or more but less than 5
   
2.30
%
 
8.00
%
 
2.90
%
 
8.50
%
5 or more but less than 6
   
2.80
%
 
8.20
%
 
3.60
%
 
8.90
%
6 or more but less than 7
   
3.30
%
 
8.40
%
 
4.20
%
 
9.20
%
7 or more but less than 8
   
3.80
%
 
8.60
%
 
4.80
%
 
9.60
%
8 or more but less than 9
   
4.30
%
 
8.80
%
 
5.40
%
 
9.90
%
9 or more but less than 10
   
4.80
%
 
9.00
%
 
6.00
%
 
10.20
%
10 or more but less than 11
   
5.30
%
 
9.20
%
 
6.60
%
 
10.50
%
11 or more but less than 12
   
5.60
%
 
9.30
%
 
7.00
%
 
10.70
%
12 or more but less than 13
   
6.00
%
 
9.50
%
 
7.50
%
 
11.00
%
13 or more but less than 14
   
6.40
%
 
9.70
%
 
8.00
%
 
11.30
%
14 or more but less than 15
   
6.80
%
 
9.80
%
 
8.50
%
 
11.50
%
15 or more but less than 16
   
7.20
%
 
10.00
%
 
9.00
%
 
11.80
%
16 or more but less than 17
   
7.60
%
 
10.00
%
 
9.50
%
 
12.00
%
17 or more but less than 18
   
7.90
%
 
10.00
%
 
9.90
%
 
12.00
%
18 or more but less than 19
   
8.30
%
 
10.00
%
 
10.40
%
 
12.00
%
19 or more but less than 20
   
8.60
%
 
10.00
%
 
10.80
%
 
12.00
%
20 or more but less than 21
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
21 or more but less than 22
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
22 or more but less than 23
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
23 or more but less than 24
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
24 or more but less than 25
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
25 or more but less than 26
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
26 or more but less than 27
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
27 or more but less than 28
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
28 or more but less than 29
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
29 or more but less than 30
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%
30 or more
   
9.00
%
 
10.00
%
 
11.00
%
 
12.00
%

32

--------------------------------------------------------------------------------

Appendix D
Item 1115 Agreement
 
 
 
 
 
 
33

--------------------------------------------------------------------------------

 
 

ITEM 1115 AGREEMENT
 
Item 1115 Agreement (this “Agreement”), dated as of May 31, 2007, among
Credit-Based Asset Servicing and Securitization LLC (“Sponsor”), Asset Backed
Funding Corporation (“Depositor”) and JPMorgan Chase Bank, N.A. (the “Derivative
Provider”).
 
RECITALS
 
WHEREAS, the Depositor has filed Registration Statement on Form S-3 (each, a
“Registration Statement”) with the U.S. Securities and Exchange Commission (the
“Commission”) for purposes of offering mortgage-backed or asset-backed notes
and/or certificates (the “Securities”) through special purpose vehicles (each,
an “Issuing Entity”);
 
WHEREAS, from time to time, on or prior to the closing date of a securitization
(the “Closing Date”) pursuant to which Securities are offered (each, a
“Securitization”), the Derivative Provider enters into certain derivative
agreements with the Issuing Entity (or a trustee or securities or swap
administrator or other person acting in a similar capacity in connection with
such Securitization (each, an “Administrator”)), or the Derivative Provider
enters into certain derivative agreements with Sponsor or an affiliate of the
Sponsor and such derivative agreements are assigned to the Issuing Entity or
Administrator (each, in either case, a “Derivative Agreement”);
 
WHEREAS, the Derivative Provider agrees and acknowledges that the Depositor is
required under Regulation AB (as defined herein) to disclose certain financial
data and/or financial statements with respect to the Derivative Provider,
depending on the applicable “significance percentage” for each Derivative
Agreement as calculated from time to time in accordance with Item 1115 of
Regulation AB;
 
WHEREAS, the Sponsor, on behalf of itself and each Issuing Entity through which
it effects Securitizations, the Depositor and the Derivative Provider, desire to
set forth certain rights and obligations with regard to financial data and/or
financial statements which the Sponsor and Depositor are required to disclose in
accordance with Regulation AB (as defined herein) and certain related matters.
 
NOW, THEREFORE, in consideration of the mutual agreements set forth herein and
for other good and valuable consideration the receipt and adequacy of which is
hereby acknowledged, the parties hereby agree as follows:
 
Section 1.
Definitions.

 
Additional Termination Event: With respect to any Derivative Agreement, as
defined in the related Master Agreement.
 
Affected Party: With respect to any Derivative Agreement, as defined in the
related Master Agreement.
 
Company Information: As defined in Addendum A.
 
Company Financial Information: With respect to each Securitization, the
financial data described in Item 1115(b)(1) of Regulation AB or the financial
statements described in Item 1115(b)(2) of Regulation AB, in either case with
respect to the Derivative Provider and any affiliated entities providing
derivative instruments to the related Issuing Entity and/or Administrator;
provided, that the Derivative Provider shall not be required to calculate the
“significance percentage” for purposes of this Agreement.
 

 
 

--------------------------------------------------------------------------------

 

GAAP: As defined in Section 3(a)(ii).
 
Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
 
Exchange Act Reports: With respect to an Issuing Entity, all Distribution
Reports on Form 10-D, Current Reports on Form 8-K and Annual Reports on Form
10-K and any amendments thereto, required to be filed by Depositor with respect
to such Issuing Entity pursuant to the Exchange Act.
 
Free Writing Prospectus: With respect to each Securitization, the free writing
prospectus or prospectuses prepared in connection with the public offering and
sale of the related Securities and used to price such Securities.
 
Master Agreement: With respect to any Derivative Agreement, the ISDA Master
Agreement referenced in such Derivative Agreement, together with any Schedule,
Credit Support Annex and Confirmations forming a part thereof or incorporated
therein, or, if no such ISDA Master Agreement exists, the ISDA Master Agreement
deemed to apply to such Derivative Agreement pursuant to its terms, together
with any Schedule, Credit Support Annex and Confirmations deemed to form a part
thereof or to be incorporated therein.
 
Prospectus Supplement: With respect to each Securitization, the prospectus
supplement prepared in connection with the public offering and sale of the
related Securities.
 
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17
C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,631 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
 
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
 
Section 2.
Information to be Provided by the Derivative Provider.

 

 
(a)
Prior to printing the Free Writing Prospectus and/or Prospectus Supplement
relating to each Securitization, the Derivative Provider, at its own expense,
shall:

 

 
(i)
provide to the Depositor such information as is reasonably requested by the
Depositor for the purpose of compliance with Item 1115(a)(1) of Regulation AB or
the Securities Act in respect of such Securitization, which information shall
include, at a minimum:

 

 
(A)
the Derivative Provider’s legal name (and any d/b/a),

 

 
(B)
the organizational form of the Derivative Provider,

 

 
(C)
a description of the general character of the business of the Derivative
Provider,

 

 
2

--------------------------------------------------------------------------------

 

 
(D)
a description of any affiliation or relationship (as set forth in Item 1119(a))
between the Derivative Provider and any of the following parties:

 

 
(1)
the Sponsor (or any other sponsor identified to the Derivative Provider by
Sponsor),

 

 
(2)
the Depositor,

 

 
(3)
the Issuing Entity,

 

 
(4)
the servicer (or other person acting in a similar capacity) identified to the
Derivative Provider by Sponsor,

 

 
(5)
the trustee (or other person acting in a similar capacity) identified to the
Derivative Provider by Sponsor,

 

 
(6)
any originator identified to the Derivative Provider by the Sponsor,

 

 
(7)
any enhancement or support provider identified to the Derivative Provider by the
Sponsor, and

 

 
(8)
any other material Securitization party identified to the Derivative Provider by
the Sponsor;

 

 
(E)
information relating to any legal or governmental proceedings; and

 

 
(F)
any other information that is material or otherwise required for the purpose of
compliance (as determined by the Depositor in its sole discretion) with the
Securities Act; and

 

 
(ii)
if reasonably requested by the Depositor for the purpose of compliance with Item
1115(b) of Regulation AB with respect to such Securitization, provide to the
Depositor the Company Financial Information described in Item 1115(b)(1) of
Regulation AB or Item 1115(b)(2) of Regulation AB (as specified by the
Depositor).

 

 
(b)
Following the Closing Date with respect to each Securitization:

 

 
(i)
for so long as the Depositor is required to file Exchange Act Reports in respect
of the related Issuing Entity, the Derivative Provider, at its own expense,
shall no later than the 25th calendar day of each month, notify the Depositor in
writing of any known material affiliations or relationships that develop
following the Closing Date between the Derivative Provider and any of the
parties specified in Section 2(a)(i)(D) (and any other parties identified in
writing by the Depositor), and provide to the Depositor a description of such
affiliations or relationships;

 

 
(ii)
if, on any Business Day for so long as the Depositor is required to file
Exchange Act Reports in respect of the related Issuing Entity, the Depositor
provides written notice to the Derivative Provider that the “significance
percentage” for any Derivative Agreement relating to such Securitization
(calculated separately or in the aggregate with other Derivative Agreements for
such Securitization, such aggregation as determined by the Depositor in its sole
discretion), is (x) 10% or more (but less than 20%) or (y) 20% or more, in each
case based on a reasonable good-faith determination by the Depositor of the
“significance percentage” in accordance with Item 1115 of Regulation AB (the
providing of such notice, a “Derivative Disclosure Event”), the Derivative
Provider, at its own expense, shall:

 

 
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(A)
provide to the Depositor the Company Financial Information described in (x) Item
1115(b)(1) of Regulation AB or (y) Item 1115(b)(2) of Regulation AB,
respectively,

 

 
(B)
with respect to each Derivative Agreement entered into in connection with such
Securitization, cause another entity to replace the Derivative Provider as a
party to such Derivative Agreement or, if such replacement cannot be effected,
to enter into a replacement derivative agreement on terms substantially
identical to such Derivative Agreement (as determined by the Depositor in its
sole discretion), which entity (1) meets or exceeds (or a guarantor, as
applicable, for such entity meets or exceeds) any rating agency criteria set
forth in, or otherwise applicable to, such Derivative Agreement (as determined
by the Depositor in its sole discretion), (2) has entered into an agreement with
Sponsor and Depositor substantially in the form of this Agreement, (3) has
agreed to comply with the immediately preceding clause (A) and Section
2(b)(iii), and (4) has been approved by the Depositor (which approval shall not
be unreasonably withheld),

 

 
(C)
obtain a guaranty of the Derivative Provider’s obligations under the Derivative
Agreement from an affiliate of the Derivative Provider, which affiliate (1)
meets or exceeds any rating agency criteria set forth in, or otherwise
applicable to, such Derivative Agreement (as determined by the Depositor in its
sole discretion), (2) has entered into an agreement with the Sponsor and
Depositor substantially in the form of this Agreement, (3) has agreed to comply
with the immediately preceding clause (A) and Section 2(b)(iii) such that the
information provided in respect of such affiliate will satisfy any requirements
under Item 1115 of Regulation AB that are applicable to the Derivative Provider
(as determined by the Depositor in its sole discretion), and (4) has been
approved by the Depositor (which approval shall not be unreasonably withheld),
or

 

 
(D)
post collateral in an amount sufficient to reduce the “significance percentage”
for purposes of Item 1115 of Regulation AB with respect to any Derivative
Agreement relating to such Securitization, calculated separately or in the
aggregate with other Derivative Agreements for such Securitization (such
aggregation and calculation of the “significance percentage” as determined by
the Depositor in its sole discretion) (1) to 8% if the Depositor has notified
the Derivative Provider that the “significance percentage” is 10% or more (but
less than 20%) or (2) to 18% if the Depositor has notified the Derivative
Provider that the “significance percentage” is 20% or more; and

 

 
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(iii)
for so long (A) as the Depositor is required to file Exchange Act Reports in
respect of the related Issuing Entity and (B) the “significance percentage” for
any Derivative Agreement relating to such Securitization (calculated separately
or in the aggregate with other Derivative Agreements for such Securitization) is
(x) 10% or more (but less than 20%) or (y) 20% or more, in each case based on a
reasonable good-faith determination by the Depositor of the significance
percentage in accordance with Item 1115 of Regulation AB, if the Derivative
Provider has provided Company Financial Information to the Depositor pursuant to
Section 2(a)(ii) or Section 2(b)(ii), the Derivative Provider, at its own
expense, shall within five (5) days of the release of any updated Company
Financial Information, provide to the Depositor such updated Company Financial
Information.

 

 
(c)
The Derivative Provider shall provide all Company Financial Information provided
pursuant to this Section 2 in Microsoft Word® format, Microsoft Excel® format or
another format suitable for conversion to the format required for filing by the
Depositor with the Commission via the Electronic Data Gathering and Retrieval
System (EDGAR) (for avoidance of doubt, Company Financial Information shall not
be provided in .pdf format); alternatively, if permitted by Regulation AB (as
determined by the Sponsor in its sole discretion), the Derivative Provider may
provide such Company Financial Information by providing to the Depositor written
consent to incorporate by reference in Exchange Act Reports of the Depositor
such Company Financial Information from reports filed by the Derivative Provider
pursuant to the Exchange Act. In addition, the Derivative Provider shall also
provide Company Financial Information provided pursuant to Section 2(a)(ii) in a
format appropriate for use in the related Free Writing Prospectus and Prospectus
Supplement. If any Company Financial Information provided pursuant to this
Section 2 has been audited, the Derivative Provider shall cause its outside
accounting firm to provide to the Depositor such accounting firm’s written
consent to the filing or incorporation by reference in the Exchange Act Reports
of the Depositor of such accounting firm’s report relating to its audits of such
Company Financial Information.

 
Section 3.
Representations and Warranties of the Derivative Provider.

 
The Derivative Provider represents and warrants to the Depositor, as of the date
on which the Derivative Provider first provides Company Financial Information to
the Depositor under Section 2(a)(ii), Section 2(b)(ii) or Section 2(b)(iii),
that, except as disclosed in writing to the Depositor prior to such date:
 

 
(a)
the outside accounting firm that certifies the financial statements and
supporting schedules included in Company Financial Information, or which
provides a procedures and/or comfort letter with respect to such Company
Financial Information, (as applicable) is an independent registered public
accounting firm as required by the Securities Act;

 

 
(b)
the selected financial data and summary financial information included in the
Company Financial Information present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements of the Derivative Provider;

 

 
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(c)
the financial statements included in the Company Financial Information present
fairly the consolidated financial position of the Derivative Provider and its
consolidated subsidiaries as of the dates indicated and the consolidated results
of their operations and cash flows for the periods specified; except as
otherwise stated in the Company Financial Information, such financial statements
have been prepared in conformity with United States generally accepted
accounting principles (“GAAP”) applied on a consistent basis; and the supporting
schedules included in the Company Financial Information present fairly in
accordance with GAAP the information required to be stated therein; and

 

 
(d)
the Company Financial Information and other Company Information included in any
Free Writing Prospectus or Prospectus Supplement or referenced via a website
link or incorporated by reference in the Registration Statement (including
through filing on an Exchange Act Report), at the time they were or hereafter
are filed with the Commission, complied in all material respects with the
requirements of Item 1115(b) of Regulation AB (in the case of the Company
Financial Information), and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.

 
Section 4.
Third Party Beneficiaries.

 
The Derivative Provider agrees that the terms of this Agreement shall be
incorporated by reference into any Derivative Agreement so that each Issuing
Entity or Administrator that is a party to a Derivative Agreement shall be an
express third party beneficiary of this Agreement.
 
Section 5.
Indemnification.

 
The Derivative Provider indemnification set forth in Addendum A hereto is
incorporated by reference herein.
 
Section 6.
Additional Termination Events.

 

 
(a)
(i) Any breach by the Derivative Provider of a representation or warranty set
forth in Section 3 to the extent made as of a date prior to a Closing Date,
which is not cured by such Closing Date (or, in the case of information required
under Section 2(a), the date of printing of the Free Writing Prospectus or
Prospectus Supplement, as applicable), or (ii) any breach by the Derivative
Provider of a representation or warranty pursuant to Section 3 to the extent
made as of a date subsequent to such Closing Date, or (iii) any failure by the
Derivative Provider to comply with the requirements of Section 2(a) or so much
of Section 2(b)(iii) as relates to Section 2(a), shall immediately and
automatically, without notice, constitute an Additional Termination Event under
each Derivative Agreement, with respect to which the Derivative Provider shall
be the sole Affected Party.

 

 
(b)
Any failure of the Derivative Provider to satisfy the requirements of Section
2(b)(ii) or so much of Section 2(b)(iii) as relates to Section 2(b)(ii) within
ten (10) calendar days of any Derivative Disclosure Event shall constitute an
Additional Termination Event under each Derivative Agreement, which respect to
which the Derivative Provider shall be the sole Affected Party.

 

 
(c)
Following a termination of a Derivative Agreement resulting from an Additional
Termination Event set forth in this Section 6, a termination payment (if any)
shall be payable under such Derivative Agreement by the applicable party as
determined under Section 6(e)(ii) of the related Master Agreement, with Market
Quotation and Second Method being the applicable method for determining such
termination payment (notwithstanding anything in such Derivative Agreement to
the contrary).

 

 
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(d)
In the event that a replacement entity or replacement derivative agreement has
been secured in accordance with Section 2(b)(ii)(B), or a guarantor has been
secured in accordance with Section 2(b)(ii)(C), the Derivative Provider shall
promptly reimburse the Issuing Entity for all reasonable incidental expenses
incurred by the Issuing Entity in connection with the replacement of the
Derivative Provider or Derivative Agreement or addition of such guarantor. The
provisions of this paragraph shall not limit whatever rights the Issuing Entity
may have under other provisions of this Agreement or otherwise, whether in
equity or at law, such as an action for damages, specific performance or
injunctive relief.

 
Section 7.
Miscellaneous.

 

 
(a)
Construction. Throughout this Agreement, as the context requires, (i) the
singular tense and number includes the plural, and the plural tense and number
includes the singular, (ii) the past tense includes the present, and the present
tense includes the past, and (iii) references to parties, sections, schedules,
and exhibits mean the parties, sections, schedules, and exhibits of and to this
Agreement. The section headings in this Agreement are inserted only as a matter
of convenience, and in no way define, limit, extend, or interpret the scope of
this Agreement or of any particular section.

 

 
(b)
Assignment. No party to this Agreement may assign its rights under this
Agreement without the prior written consent of the other parties hereto. Subject
to the foregoing, this Agreement shall be binding on and inure to the benefit of
the parties and their respective successors and permitted assigns.

 

 
(c)
Notices. All notices and other communications hereunder will be in writing
(including by facsimile) and effective only upon receipt, and, if sent to the
Derivative Provider will be mailed or delivered to JPMorgan Chase Bank, N.A. 270
Park Avenue, 10th Floor New York, New York 10017, Attn: Robert Mock, if sent to
the Sponsor will be mailed or delivered to Credit-Based Asset Servicing and
Securitization LLC, 335 Madison Avenue, 19th Floor, New York, New York 10017,
Fax: (212) 850-7762, Attn: General Counsel, and if sent to the Depositor will be
mailed or delivered to Asset Backed Funding Corporation, 214 North Tryon Street,
Charlotte, North Carolina 28255, Attn: Chris Schiavone.

 

 
(d)
Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without regard to the conflict
of laws principles thereof (other than Sections 5-1401 and 5-1402 of the New
York General Obligations Law).

 

 
(e)
Additional Documents. Each party hereto agrees to execute any and all further
documents and writings and to perform such other actions which may be or become
necessary or expedient to effectuate and carry out this Agreement.

 

 
(f)
Amendment and Waiver. This Agreement may not be modified or amended except by an
instrument in writing signed by the parties hereto. No waiver of any provision
of this Agreement or of any rights or obligations of any party under this
Agreement shall be effective unless in writing and signed by the party or
parties waiving compliance, and shall be effective only in the specific instance
and for the specific purpose stated in that writing.

 

 
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(g)
Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, all of which together shall constitute one
and the same instrument.

 

 
(h)
Severability. Any provision hereof which is prohibited or unenforceable shall be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.

 

 
(i)
Integration. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof. There are no restrictions,
agreements, promises, representations, warranties, covenants or undertakings
with respect to the subject matter hereof other than those expressly set forth
or referred to herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter.

 

 

 
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IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
 
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC
 
By:  /s/ Chris Schiavone            
Name: Chris Schiavone
Title: Principal
 
ASSET BACKED FUNDING CORPORATION
 
By:  /s/ Juanita L. Deane-Warner        
Name: Juanita L. Dean-Warner
Title: Vice President
 
JPMORGAN CHASE BANK, N.A.
 
By:  /s/ Robert Mock              
Name: Robert Mock
Title: Vice President
 

 
 

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Addendum A
 
[Insert Regulation AB indemnification language]

 
 

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