Exhibit 10.70
EXECUTION
MERRILL LYNCH CREDIT CORPORATION
Servicer
and
PHH MORTGAGE CORPORATION
Subservicer
 
MORTGAGE LOAN SUBSERVICING AGREEMENT
Dated as of August 8, 2008
and effective as of March 31, 2008
 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED.  ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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TABLE OF CONTENTS

                      Page
ARTICLE I
  DEFINITIONS     1  
 
           
Section 1.01
  Incorporation of Recitals; Defined Terms     1  
Section 1.02
  General     15  
 
           
ARTICLE II
  SUBSERVICING OF MORTGAGE LOANS SECTION     16  
 
           
Section 2.01
  Subservicer to Subservice Mortgage Loans     16  
Section 2.02
  Collateral File and Servicing File     17  
Section 2.03
  Legal Proceedings Involving the Mortgage Loans     18  
Section 2.04
  Material Changes     18  
Section 2.05
  Subservicer Not to Resign     19  
Section 2.06
  Defaulted Mortgage Loans     19  
Section 2.07
  Title, Management and Disposition of REO Properties     20  
Section 2.08
  Establishment of and Deposits to Custodial Account     22  
Section 2.09
  Permitted Withdrawals From Custodial Account     23  
Section 2.10
  Establishment of and Deposits to Escrow Account     24  
Section 2.11
  Permitted Withdrawals From Escrow Account     25  
Section 2.12
  Payment of Taxes, Insurance and Other Charges     25  
Section 2.13
  Prepayment Charges     26  
Section 2.14
  OFAC Reporting     26  
Section 2.15
  Servicing Transfer     26  
Section 2.16
  Satisfaction of Mortgages and Release of Mortgage Files     27  
Section 2.17
  Assumption Processing     27  
Section 2.18
  Misapplied Payments and NSF     28  
Section 2.19
  Tax Reporting     28  
Section 2.20
  Limited Powers of Attorney and Limited Authorized Signatories     28  
Section 2.21
  Updated Exhibits and Schedules     29  
Section 2.22
  Maintenance of Hazard Insurance     29  
Section 2.23
  Maintenance of Mortgage Impairment Insurance     30  
Section 2.24
  Restoration of Mortgaged Property     31  
Section 2.25
  Maintenance of PMI Policy or LPMI Policy; Claims     31  
Section 2.26
  Servicer to Service Additional Collateral     32  
Section 2.27
  Transfer of Mortgage Loans     32  
Section 2.28
  Regulation AB     35  
Section 2.29
  Mortgage Loan Information     36  
Section 2.30
  Maintenance of Fidelity Bond and Errors and Omissions Insurance     36  
Section 2.31
  Subservicer Reports     37  
Section 2.32
  Use of Hardware and Software     37  
Section 2.33
  Technical Architecture Standards     37  
Section 2.34
  Compliance with Policies     37  
Section 2.35
  Continuation of MLCC Services     37  
 
           
ARTICLE III
  SERVICER REPRESENTATIONS AND WARRANTIES     38  
 
           
Section 3.01
  Organization and Good Standing     38  
Section 3.02
  Authority and Capacity: Ordinary Course     38  

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TABLE OF CONTENTS
(continued)

                      Page
Section 3.03
  Effective Agreement     38  
Section 3.04
  No Conflict     38  
Section 3.05
  Approvals and Compliance     39  
Section 3.06
  Errors and Omission Insurance     39  
Section 3.07
  Litigation     39  
Section 3.08
  Financial Condition of Servicer     39  
Section 3.09
  Indemnification of Subservicer     39  
 
           
ARTICLE IV
  SUBSERVICER REPRESENTATIONS, WARRANTIES AND COVENANTS     40  
 
           
Section 4.01
  Due Incorporation and Good Standing     40  
Section 4.02
  Authority and Capacity; Ordinary Course     40  
Section 4.03
  Effective Agreement     40  
Section 4.04
  No Conflict     40  
Section 4.05
  Approvals and Compliance     41  
Section 4.06
  Litigation     41  
Section 4.07
  Agency Approval     41  
Section 4.08
  Servicing Compliance     41  
Section 4.09
  No Inquiries     41  
Section 4.10
  Contingency Plan     41  
Section 4.11
  Licenses and Approvals     42  
Section 4.12
  Fidelity and E&O Insurance     42  
Section 4.13
  Sufficiency of Systems and Personnel     42  
Section 4.14
  Compliance with Laws     42  
Section 4.15
  Financial Condition of Subservicer     43  
Section 4.16
  MERS     43  
Section 4.17
  Indemnification of Servicer     43  
 
           
ARTICLE V
  REMITTANCES AND REPORTING     44  
 
           
Section 5.01
  Remittances     44  
Section 5.02
  Statements to Servicer     45  
Section 5.03
  Subservicer to Deliver Officer’s Certificates to Servicer     45  
 
           
ARTICLE VI
  SUBSERVICER PAYMENT PROVISIONS     46  
 
           
Section 6.01
  Effectiveness of Payment Provisions,     46  
Section 6.02
  Compensation for Loan Servicing; Allocation of Special Fees and Charges     46
 
 
           
ARTICLE VII
  SOLICITATION     47  
 
           
Section 7.01
  Solicitation     47  
 
           
ARTICLE VIII
  ASSIGNMENT OF MORTGAGES     47  
 
           
Section 8.01
  Assignments     47  
 
           
ARTICLE IX
        48    
Section 9.01
  Power of Attorney     48  

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TABLE OF CONTENTS
(continued)

                      Page
ARTICLE X
  CONDITIONS PRECEDENT TO OBLIGATIONS OF SUBSERVICER     48  
 
           
Section 10.01
  Compliance and Conditions     48  
Section 10.02
  Corporate Resolution     48  
Section 10.03
  Correctness of Representations and Warranties     48  
Section 10.04
  Litigation or Administrative Action     48  
Section 10.05
  Effective Agreements     49  
Section 10.06
  No Material Adverse Change     49  
 
           
ARTICLE XI
  CONDITIONS PRECEDENT TO OBLIGATIONS OF SERVICER     49  
 
           
Section 11.01
  Compliance with Conditions     49  
Section 11.02
  Corporate Resolution     49  
Section 11.03
  Correctness of Representations and Warranties     49  
Section 11.04
  No Material Adverse Change     49  
Section 11.05
  Litigation or Administrative Action     50  
Section 11.06
  Effective Agreements     50  
 
           
ARTICLE XII
  ANNUAL CERTIFICATIONS     50  
 
           
Section 12.01
  Annual Statement as to Compliance     50  
Section 12.02
  Annual Independent Certified Public Accountants’ Servicing Reports     50  
 
           
ARTICLE XIII
  INDEMNIFICATION     51  
 
           
Section 13.01
  Indemnification of Servicer     51  
Section 13.02
  Indemnification of Subservicer     52  
Section 13.03
  Notice and Settlement of Claims     52  
 
           
ARTICLE XIV
  DEFAULT AND TERMINATION     53  
 
           
Section 14.01
  Termination by Servicer; Events of Default     53  
Section 14.02
  Failure of Subservicer to Maintain Service Standards; Termination     56  
Section 14.03
  Waiver of Defaults     58  
Section 14.04
  Term of Agreement; Termination Without Cause     58  
Section 14.05
  Effect of Termination of Agreement     58  
 
           
ARTICLE XV
  SUCCESSOR TO THE SUBSERVICER     58  
 
           
Section 15.01
  Successor to the Subservicer     58  
 
           
ARTICLE XVI
  ANTI-MONEY LAUNDERING     59  
 
           
Section 16.01
  Compliance     59  
 
           
ARTICLE XVII
  MISCELLANEOUS     61  
 
           
Section 17.01
  Supplementary Information     61  
Section 17.02
  Access to Information; Confidentiality     61  
Section 17.03
  No Broker’s Fees     62  
Section 17.04
  Further Assurances     62  

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TABLE OF CONTENTS
(continued)

                      Page
Section 17.05
  Survival     63  
Section 17.06
  Governmental Authorities; Laws and Severability     63  
Section 17.07
  Form of Payment to Be Made     63  
Section 17.08
  Assignability     63  
Section 17.09
  Certain Costs     63  
Section 17.10
  Notices     64  
Section 17.11
  Entire Agreement; Construction     65  
Section 17.12
  Binding Effect     65  
Section 17.13
  Headings; Plurals; Genders     66  
Section 17.14
  Applicable Law     66  
Section 17.15
  Counterparts     66  
Section 17.16
  Waivers     66  
Section 17.17
  Publicity     66  
Section 17.18
  No Third Party Beneficiaries     66  
Section 17.19
  Attorney Fees, Costs, Etc     66  
Section 17.20
  Merger or Consolidation of Servicer and Subservicer     67  
Section 17.21
  Termination Assistance     67  
Section 17.22
  Incorporation by Reference     68  
Section 17.23
  Force Majeure     68  

      SCHEDULES AND EXHIBITS
Exhibit A
  Form of Officer’s Certificate for Certain Events
Exhibit B
  Schedule of Direct Competitors
Exhibit C
  Mortgage Loan Schedule
Exhibit D
  Operations Guide
Exhibit E
  Reconciliation Schedule of Subservicer Advances
Exhibit F
  [RESERVED]
Exhibit G-1
  Exposure Report

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     This MORTGAGE LOAN SUBSERVICING AGREEMENT, dated and effective as of
August 8, 2008 (this “Agreement”), between Merrill Lynch Credit Corporation, as
Servicer (the “Servicer”), and PHH Mortgage Corporation, as Subservicer (the
“Subservicer”) (each a “Party”, and collectively, the “Parties”).
W I T N E S S E T H:
     WHEREAS, the Subservicer is engaged in the business of servicing and
subservicing residential mortgage loans;
     WHEREAS, the Servicer and the Subservicer have executed an Origination
Assistance Agreement dated as of December 15, 2000, as amended, pursuant to
which the Subservicer has agreed to originate on behalf of the Servicer certain
first lien residential mortgage loans and Servicer has agreed to purchase such
mortgage loans and the related servicing rights; and
     WHEREAS, the Servicer services certain first lien residential mortgage
loans, and the parties hereto desire the Subservicer to subservice such loans
for the Servicer; and
     WHEREAS, the Servicer and the Subservicer wish to set forth the terms under
which all such loans are to be subserviced by the Subservicer for the Servicer;
     NOW, THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the Servicer and the Subservicer agree as follows:
ARTICLE I
DEFINITIONS
     Section 1.01 Incorporation of Recitals; Defined Terms
     The foregoing recitals are hereby incorporated herein by reference.
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the meaning specified therefore in this
Article:
     Account Number means an account number or similar form of access number
relating to a Mortgagor’s Mortgage Loan or other financial product or service
with or from MLCC, other than any internal identifying number assigned by PHH to
the Mortgage Loan.
     Additional Collateral means, with respect to any Mortgage 100sm Loan or
Parent Power® Mortgage Loan, the marketable securities subject to a security
interest pledged as security for the related loan.
     Additional Collateral Agreement means a Mortgage 100sm Pledge Agreement or
a Parent Power® Agreement.
     Additional Collateral Mortgage Loan means each Mortgage Loan that is either
a Mortgage 100sm Loan or Parent Power® Mortgage Loan as to which the Additional
Collateral is still required to be provided as set forth in the related Pledge
Agreement.

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     Affiliate means, with respect to any Person, any other Person that directly
or indirectly controls, is controlled by, or is under common control with, such
Person. (Capitalized terms derived from the word Affiliate (e.g., “Affiliated”)
shall have corresponding meanings.) For the purposes of this definition,
“control,” “controlled by,” and “under common control with” means the direct or
indirect possession of ordinary voting powers to elect a majority of the board
of directors or comparable body of a Person.
     Agreement means this Mortgage Loan Subservicing Agreement and all exhibits
and schedules hereto, all of which are incorporated herein by reference, as the
same may from time to time be amended or supplemented by one or more instruments
executed by all parties hereto.
     Ancillary Fees means, with respect to any Mortgage Loan, (i) all late
charges, (ii) all fees payable pursuant to Subservicer’s “Speed Pay” program,
(iii) all returned-item charges (e.g., non-sufficient funds (“NSF”) charges),
(iv) modification fees and fees payable by the related Mortgagor pursuant to the
related Mortgage or Mortgage Note, (v) out-of-pocket expenses for post-default
property inspections and (vi) any other fees mutually agreed upon by the
Servicer and Subservicer.
     Anti-Money Laundering Laws shall mean all applicable anti-money laundering
laws and regulations, including without limitation the USA Patriot Act of 2001,
as amended.
     Applicable Requirements means and includes, as of the time of reference,
collectively, (1) with respect to the Mortgage Loans, all of the following:
(a) all contractual obligations of Servicer (and any Originator) or Subservicer
contained in this Agreement, the other Transaction Agreements, the Collateral
File, the applicable guides or any agreement with any Insurer, for which
obligations Servicer (and any Originator) or Subservicer is responsible or at
any time was responsible; (b) all applicable federal, state, and local legal and
regulatory requirements (including laws, statutes, rules, regulations,
administrative interpretations and ordinances as well as any of the foregoing
requirements applicable to Servicer by virtue of its state licenses,
qualifications and exemptions and by virtue of its being a subsidiary of Merrill
Lynch Bank and Trust Company, FSB) binding upon Servicer (and any Originator) or
Subservicer; (c) all other applicable requirements and guidelines of each
governmental agency, board, commission, instrumentality, and other governmental
body or office having jurisdiction, including, but not limited to, those of any
Insurer; (d) all other applicable judicial and administrative judgments, orders,
stipulations, awards, writs, and injunctions; (e) with respect to Subservicer’s
obligations, the provisions of the Operations Guide, to the extent applicable;
(f) the reasonable and customary mortgage servicing practices of prudent
mortgage lending institutions that service mortgage loans of the same type as
the Mortgage Loans in the jurisdiction in which the related Mortgaged Properties
are located, if applicable; (g) the FNMA Servicing Guide and (h) for so long as
Servicer is the owner of the applicable Mortgage Loan, any applicable MLCC or
Merrill Lynch Bank and Trust Company, FSB internal policies and procedures, as
revised from time to time in accordance with the terms hereof, and (2) the
Foreign Corrupt Practices Act of 1977, as amended.
     Appraised Value means, with respect to any Mortgage Loan, the value of the
related Mortgaged Property based upon the lesser of (i) the appraisal made for
the Originator at the time

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of origination of the Mortgage Loan, and (ii) if applicable, the sales price of
the Mortgaged Property at such time of origination.
     ARM Loan means a Mortgage Loan with a Mortgage Rate that is adjustable
pursuant to the terms of the related Mortgage Note.
     Assignment means an assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
ownership of the Mortgage to the Servicer, or if the related Mortgage has been
recorded in the name of MERS or its designee, such actions as are necessary to
cause the Servicer to be shown as the Servicer of the related Mortgage on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS, including assignment of the MIN
Number which will appear either on the Mortgage or the Assignment of Mortgage to
MERS.
     BSA means the Bank Secrecy Act of 1970, as amended, and any regulations
promulgated thereunder, as well as any similar statutes or regulations enacted
or promulgated under state law.
     BSA Policies and Procedures shall have the meaning given in Section 16.01
hereof.
     Business Day means any day other than (i) a Saturday or Sunday, (ii) a day
on which banking institutions in the States of New Jersey, Florida or New York
are required or authorized by law or by executive order to be closed or (iii) a
day on which Servicer or Subservicer is not actually open for business.
     Code means the Internal Revenue Code of 1986, as amended.
     Collateral File means, with respect to any Mortgage Loan, the file
containing any and all original documents, instruments or agreements evidencing,
securing or relating to the loan and related Mortgage, including notes, credit
agreements, Mortgages, guarantees, and title and casualty insurance policies.
     Commission: Securities and Exchange Commission.
     Condemnation Proceeds means all awards or settlements in respect of a
taking of a partial or an entire Mortgaged Property by the exercise of the power
of eminent domain or condemnation.
     Continuing Directors means, as of any date of determination, any member of
the Board of Directors of either PHH Corporation or Subservicer, as the case may
be, who:
     (1) was a member of such Board of Directors on the date hereof; or
     (2) was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such
Board at the time of such nomination or election.

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     Co-op Lease means, with respect to a Co-op Loan, the proprietary lease with
respect to a dwelling unit occupied by the Mortgagor and relating to the stock
allocated to such dwelling unit.
     Co-op Loan means a Mortgage Loan secured by the pledge of the evidence of
ownership allocated to a dwelling unit in a residential cooperative housing
corporation and a collateral assignment of the related Co-op Lease.
     Custodian means the custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement, as therein provided.
     Custodial Account means the separate account or accounts created and
maintained pursuant to Section 2.08.
     Custodial Agreement means the agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and any other
document contained in the Collateral File.
     Deboarding Fees shall have the meaning assigned such term in
Section 6.02(g).
     Default means an Event of Default or an event that with notice or lapse of
time or both would become an Event of Default.
     Defaulted Mortgage Loan means any Mortgage Loan (i) as to which a monthly
payment is three (3) months or more past due, (ii) for which the Mortgagor has
filed for bankruptcy, or (iii) for which foreclosure proceedings have been
commenced.
     Delinquent Any Mortgage Loan with respect to which the Monthly Payment due
on the related Due Date has not been received by the end of the day immediately
preceding the next Due Date (generally the last day of the month in which the
Monthly Payment was due). For example, if a particular Mortgage Loan has a Due
Date of August 1, 2007, and the Monthly Payment has not been received by the
close of business on August 31, 2007, then such Mortgage Loan would be reported
as delinquent on September 1, 2007.
     Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Pass-Through Transfer.
     Direct Competitor shall mean any Person listed on Exhibit B hereto.
     Due Date The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
     Escrow Account means the separate account or accounts created and
maintained pursuant to Section 2.10.
     Escrow Payments means with respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, maintenance fees,
sewer rents, municipal charges,

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mortgage insurance premiums, fire and hazard insurance premiums, condominium
charges, and any other payments required to be escrowed by the Mortgagor with
the mortgagee pursuant to the Mortgage or any other related document.
     Effective Date means March 31, 2008.
     Equity Access Agreement means the Equity Access® and OmegaSM Loan
Subservicing Agreement, dated as of June 6, 2002, between Servicer and
Subservicer, as the same may be amended from time to time in accordance with the
terms thereof.
     Event of Default shall have the meaning given in Section 14.01.
     Exchange Act: The Securities Exchange Act of 1934, as amended.
     FDIC means the Federal Deposit Insurance Corporation or any successor
thereto.
     Federal Funds Rate means the per annum rate of interest (rounded upward to
the nearest 1/100 of 1%) that is the weighted average of the rates on overnight
federal funds transactions arranged on such day or, if such day is not a
Business Day, the previous Business Day, by federal funds brokers computed and
released by the Federal Reserve Bank of New York (or any successor) in
substantially the same manner as such Federal Reserve Bank currently computes
and releases the weighted average it refers to as the “Federal Funds Effective
Rate” at the date of this Agreement.
     FHA means the Federal Housing Administration or any successor thereto.
     FHLMC means the Federal Home Loan Mortgage Corporation or any successor
thereto.
     Financial Services Firm shall mean any Person that offers, directly or
indirectly, any financial services or financial product.
     First Remittance Period means the period of time beginning on the first day
of each month and ending on the sixteenth day of such month.
     FNMA means the Federal National Mortgage Association or any successor
thereto.
     FNMA Servicing Guide means the FNMA Servicing Guide, as amended from time
to time.
     FRB means the Federal Reserve Bank of New York or San Francisco, as the
case may be.
     GNMA means the Government National Mortgage Association or any successor
thereto.
     HUD means the Department of Housing and Urban Development or any successor
thereto.
     Indemnified Party shall have the meaning given in Section 13.02(b) hereof.

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     Indemnifying Party shall have the meaning given in Section 13.02(b) hereof.
     Insurance Proceeds means proceeds of any mortgage insurance policy, title
policy, hazard policy or other insurance policy covering a Mortgage Loan, if
any, to the extent such proceeds are not to be applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with the
procedures the Subservicer is required to follow in subservicing mortgage loans
pursuant to this Agreement.
     Insurer means an entity that insures or guarantees all or part of the risk
of loss on a Mortgage Loan, including but not limited to, any private mortgage
insurance provider, standard hazard insurance provider, flood insurance
provider, earthquake insurance provider or title insurance provider.
     Interim Remittance Date means with respect to each Mortgage Loan, the 5th
Business Day following the First Remittance Period.
     IRS means the Internal Revenue Service or any successor thereto.
     Knowledge means that whenever any representation, warranty or other
statement contained in this Agreement is qualified by reference to “Servicer’s
knowledge” or Subservicer’s knowledge” or “to the best of Servicer’s knowledge”
or “to the best of Subservicer’s knowledge,” that qualified reference shall be
deemed to include knowledge of facts or conditions of which Servicer or
Subservicer either is actually aware or should have been aware under the
circumstances in the discharging of Servicer’s or Subservicer’s servicing
duties. All matters contained in the public records of the courthouse or
registry with authority to maintain recording information for the subject
property that, at the time of origination of any Mortgage Loan originated by
Servicer or Subservicer, was listed in the related title insurance
policy/commitment shall be deemed to be known by Servicer or Subservicer, as the
case may be, and all matters contained or disclosed in any documents contained
in any Servicing File shall be deemed to be known by Servicer or Subservicer.
     Law means any United States federal, state or local statute, law,
ordinance, regulation, rule, code, order, requirement, judgment, decree, writ,
injunction or rule of law (including common law).
     Letter Agreement means that certain letter agreement dated as of the date
hereof by and between Servicer and Subservicer.
     Licensing Agreement means that certain License and Services Agreement,
dated as of December 15, 2000, between Servicer and Subservicer, as the same may
be amended from time to time in accordance with the terms thereof
     Liquidation Proceeds means amounts, other than Insurance Proceeds and
Condemnation Proceeds, received by the Subservicer or Servicer in connection
with the liquidation of a Defaulted Mortgage Loan through foreclosure, sale or
otherwise (including, but not limited to, amounts received by the Subservicer
from MLCC with respect to a Mortgage 100sm Pledge Agreement), other than amounts
received following the acquisition of an REO Property.

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     Loan Purchase and Sale Agreement means that certain Loan Purchase and Sale
Agreement, dated as of December 15, 2000, between Servicer and Subservicer, as
the same may be amended from time to time in accordance with the terms thereof.
     Loan Information means, with respect to any Mortgage Loan, the servicing,
loan level and other information as may from time to time be designated by
Servicer.
     Loan-to-Value Ratio means, with respect to any Mortgage Loan, as of any
date on which a determination thereof is made, the ratio on such date of the
aggregate Outstanding Principal Balance of such Mortgage Loan and the
Outstanding Principal Balance of any first lien residential mortgage loan to the
Appraised Value of the related Mortgaged Property.
     Loss means, in respect of any indemnification arising under this Agreement,
any and all losses, claims, damages, penalties, liabilities, obligations,
judgments, settlements, awards, demands, offsets, defenses, counterclaims,
actions or proceedings, reasonable out-of-pocket costs, expenses and attorneys’
fees of the Indemnified Party (including but not limited to, (a) any reasonable
costs, expenses and attorneys’ fees incurred by the Indemnified Party in
enforcing such right of indemnification against any Indemnifying Party or with
respect to any appeal and (b) interest at the Federal Funds Rate on any amount
for which the Indemnified Party is entitled to be indemnified from the date the
Indemnified Party notifies the Indemnifying Party of the expenditure of such
amounts until such amounts are paid by the Indemnifying Party; provided,
however, that in no event shall a “Loss” include a claim for consequential
damages, indirect damages or lost profits except when the Loss results from
fraud or willful misconduct of the Indemnifying Party.
     LPMI Policy means a policy of primary mortgage guaranty insurance issued by
a Qualified Insurer pursuant to which the related premium is to be paid by the
Subservicer of the related Mortgage Loan from payments of interest made by the
Mortgagor.
     Manageable Rate Mortgage Loan means an adjustable rate mortgage loan with
interest-only payments for the first 15 years followed by a 15-year period of
fully amortizing payments. During a portion of the interest-only period, the
Mortgagor has an option to convert the adjustable interest rate to a fixed rate
of interest for a set period of time.
     Material Adverse Change means with respect to a Person, any material
adverse change in the business, condition (financial or otherwise), operations,
performance, properties or prospects of such Person.
     Material Adverse Effect means (a) a Material Adverse Change with respect to
the Subservicer or any of its affiliates, which are providing services to
Servicer, taken as a whole; (b) a material impairment of the ability of the
Subservicer to perform under this Agreement and to avoid any Event of Default
(that cannot be timely cured, to the extent a cure period is applicable) or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability of this Agreement against the Subservicer.
     MERS means Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.

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     MERS Mortgage Loan means any Mortgage Loan as to which the related Mortgage
or Assignment of Mortgage has been registered with MERS on the MERS System
     MERS System means the system of recording transfers of mortgages
electronically maintained by MERS.
     MIN means the Mortgage Identification Number used to identify mortgage
loans registered under MERS.
     MLCC means Merrill Lynch Credit Corporation and its successors in interest.
     MLCC Data means any data, databases, reports and records relating to
financial products from or services with MLCC, including, without limitation,
Account Numbers, Mortgagor Information, and data derived therefrom.
     MLCC Portfolio Servicing Agreement means the Portfolio Servicing Agreement
dated as of January 28, 2000, between the Servicer, as owner, and the
Subservicer, as the company, as the same may be amended from time to time in
accordance with the terms thereof.
     MLCC Services shall mean collectively, the Origination Services and
Subservicer’s obligations under this Agreement.
     Monthly Payment means the monthly payment due on a Mortgage Loan which is
payable by a Mortgagor from time to time under the related Mortgage Note.
     Monthly Remittance Period means the period of time beginning on the first
day of each month and ending on the last day of such month.
     Mortgage means the mortgage, deed of trust or other instrument creating a
first lien interest in an estate in fee simple in real property (or, in the case
of a Co-op Loan, the applicable security agreement and financing statements), or
a leasehold that extends at least five years beyond the maturity of the related
Mortgage Loan, securing a Mortgage Note.
     Mortgage 100sm Loan means a Mortgage Loan having at the time of origination
a Loan-to-Value Ratio generally in excess of MLCC’s maximum acceptable
Loan-to-Value Ratio for such Mortgage Loan, which Mortgage Loan is secured by
Additional Collateral having a market value, as of the date of such loan’s
origination, at least equal to the related Original Additional Collateral
Requirement.
     Mortgage 100sm Pledge Agreement means, with respect to each Mortgage 100sm
Loan, the Mortgage 100sm Pledge Agreement for Securities Account between the
related Mortgagor and MLCC pursuant to which such Mortgagor granted a security
interest in various investment securities.
     Mortgage Impairment Insurance Policy means a mortgage impairment or blanket
hazard insurance policy as described in Section 2.23.

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     Mortgage Loan means an individual mortgage loan or a Co-op Loan, originated
on and after March 31, 2008 by PHH pursuant to the Origination Assistance
Agreement, which is the subject of this Agreement, each Mortgage Loan or a Co-op
Loan subject to this Agreement being identified on the Mortgage Loan Schedule,
which Mortgage Loan or a Co-op Loan includes without limitation the Monthly
Payments, Principal Prepayments, the related Servicing Rights, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan or a Co-op Loan.
     Mortgage Loan Remittance Rate means with respect to each Mortgage Loan, the
annual rate of interest remitted to the Servicer which shall be equal to the
Mortgage Rate, minus any LPMI Policy premiums, if applicable.
     Mortgage Loan Schedule means, with respect to the initial pool of Mortgage
Loans, the schedule of Mortgage Loans subserviced pursuant to this Agreement,
which has been delivered to the Subservicer, containing the information set
forth in Exhibit C attached hereto.
     Mortgage Note means the original executed note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
     Mortgage Rate means the per annum rate of interest for the applicable
period borne by the Mortgage Loan, as determined pursuant to the Mortgage Note.
     Mortgaged Property means any one- to four-family residence (at the time of
the origination of the applicable Mortgage Loan) that is encumbered by a
Mortgage, including all buildings and fixtures thereon and all accessions
thereto, and including installations of mechanical, electrical, plumbing,
heating and air conditioning systems located in or affixed to such buildings,
and all alterations, additions and replacements thereto. The term “Mortgaged
Property” shall include, to the extent the context shall permit or require, a
dwelling unit in a private, non-profit, residential cooperative housing
corporation together with the shares of stock issued by said corporation, which
are represented by a stock certificate.
     Mortgagor means any and all obligors under a Mortgage Note and/or Mortgage.
     Mortgagor Information means any personally identifiable information or
records in any form (written, electronic, or otherwise) relating to a Mortgagor,
including, but not limited to, a Mortgagor’s name, address, telephone number,
loan number, loan payment history, delinquency status, insurance carrier or
payment information, tax amount or payment information; the fact that the
Mortgagor has a relationship with MLCC; and any other personally identifiable
information.
     Normal Remittance Date means with respect to each Mortgage Loan, the 5th
Business Day following the Second Remittance Period.
     Notice of Default The notice of an Event of Default delivered to the
Subservicer by the Servicer in the form of Exhibit M hereto.

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     Officer’s Certificate means a certificate signed by a Vice President or
more senior officer of the Subservicer or the Servicer and certified by the
Secretary or Assistant Secretary.
     Operations Guide means the Operations Guide, attached hereto as Exhibit D,
as the same shall be amended from time to time by Servicer.
     Original Additional Collateral Requirement means, with respect to any
Additional Collateral Mortgage Loan, generally 30 percent of the original
principal balance of such Mortgage Loan or such other percentage thereof as is
specified by MLCC in connection with the origination of such Additional
Collateral Mortgage Loan.
     Origination Agreement means the Origination Assistance Agreement, dated as
of December 15, 2000, between Servicer and Subservicer, as the same may be
amended from time to time in accordance with the terms thereof.
     Origination Services shall mean the loan origination services to be
performed by Subservicer for and on behalf of Servicer as detailed in the
Origination Agreement.
     Originator means, with respect to any Mortgage Loan, the person(s), entity
or entities that (i) took the relevant Mortgagor’s loan application;
(ii) processed the relevant Mortgagor’s loan application; and/or (iii) closed
and/or funded such Mortgage Loan.
     Outstanding Principal Balance means the sum of all principal amounts
outstanding with respect to a Mortgage Loan as of a particular time, without
reduction for the amount of any payment received in respect of principal that
has not been cleared and credited.
     Parent Power® Agreement means a Parent Power® Guaranty and Security
Agreement for Securities Account or a Parent Power® Guaranty Agreement for Real
Estate.
     Parent Power® Guaranty Agreement for Real Estate means an agreement between
MLCC and a guarantor on behalf of a Mortgagor under a Parent Power® Mortgage
Loan pursuant to which such guarantor guarantees the payment of certain losses
under such Parent Power® Mortgage Loan, authorizes MLCC to draw on the related
Mortgage Loan to fund such guaranty, and has secured such Mortgage Loan with a
Mortgage secured by a lien on residential real estate of the guarantor.
     Parent Power® Guaranty and Security Agreement for Securities Account means
an agreement between MLCC and a guarantor on behalf of a Mortgagor under a
Parent Power® Mortgage Loan pursuant to which such guarantor guarantees the
payment of certain losses under such Parent Power® Mortgage Loan and has granted
a security interest to MLCC in certain marketable securities to collateralize
such guaranty.
     Parent Power® Mortgage Loan shall mean a Mortgage Loan that is supported by
a Parent Power® Agreement.
     Pass-Through Transfer means the sale or other transfer (which may include
one or more related, intermediate transfers in a whole loan format to one or
more Affiliates of the Servicer) of some or all of the Mortgage Loans to a
Subsequent Purchaser that is a trust or

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another Person as a part of a transaction (i) that involves (A) the sale of
securities evidencing an interest in such Mortgage Loans or (B) the public
issuance or private placement of securities evidencing an interest in such
Mortgage Loans, which securities also may evidence an interest in other mortgage
loans, may be issued through a REMIC and may, as a condition to their issuance,
be rated “AA/Aa” or higher by the Rating Agencies and (ii) for which the
Subservicer or the Servicer will act as the master servicer of the Mortgage
Loans.
     Person means an individual, association, joint stock company, corporation,
limited liability company, partnership, joint venture, trust, or unincorporated
organization, or a federal, state, city, municipal, or foreign government, or an
agency or political subdivision thereof.
     Personnel of a Party means such Party, its employees, subcontractors,
consultants, representatives and agents.
     PHH means PHH Mortgage Corporation, and its successors in interest.
     PHH Mortgage Loan means a Mortgage Loan for which Subservicer provided the
related origination services pursuant to the Origination Agreement.
     Pledge Agreement means any Mortgage 100sm Pledge Agreement related to an
Additional Collateral Mortgage Loan.
     PMI Policy means a policy of primary mortgage guaranty insurance evidenced
by an electronic form and certificate number issued by a Qualified Insurer, as
required by this Agreement with respect to certain Mortgage Loans.
     Prepayment Charge means payments calculated pursuant to the Mortgage Note
and due pursuant to the terms of any document contained in the Collateral File
as the result of a Principal Prepayment of the Mortgage Loan, not otherwise due
thereon in respect of principal or interest.
     Prime Rate means the prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal.
     Principal Prepayment means any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled due date, including
any Prepayment Charge or premium thereon and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
     Purchase and Sale Agreement means the Servicing Rights Purchase and Sale
Agreement dated as of December 15, 2000, between Servicer and Subservicer, as
the same may be amended from time to time in accordance with the terms thereof.
     Qualified Depository means a federal or state chartered depository
institution the deposits in which are insured by the FDIC to the applicable
limits and the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated A-1 by
Standard & Poor’s Ratings Services or Prime-1 by Moody’s Investors Service, Inc.
(or a

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comparable rating if another Rating Agency is specified by the Servicer by
written notice to the Subservicer) at the time any deposits are held on deposit
therein.
     Qualified Insurer means a mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by FNMA or FHLMC.
     Rating Agency means, Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc., Moody’s Investors Service, Inc., and Fitch Ratings and, in
connection with any Pass-Through Transfer, any other nationally recognized
statistical rating organization from which the Servicer or any of its Affiliates
may seek a rating with respect to such Pass-Through Transfer.
     Regulation AB means Subpart 22.1100 - 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, 1,531 (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.
     Related Agreements means the Related Pooling Agreement, Related
Indemnification Agreement and any other agreement relating to the Merrill Lynch
Mortgage Investors Trust, Series MLCC 2007-3 to which PHH is a party.
     Related Indemnification Agreement means that certain Indemnification
Agreement, dated as of August 27, 2007, by and among Merrill Lynch Mortgage
Investors, Inc., Merrill Lynch Mortgage Capital Inc., Merrill Lynch, Pierce,
Fenner and Smith Incorporated and PHH Mortgage Corporation.
     Related Pooling Agreement means that certain Pooling and Servicing
Agreement, dated as of August 1, 2007, by and among Merrill Lynch Mortgage
Investors, Inc., a Delaware corporation, as depositor, HSBC Bank USA, National
Association, a national banking association, as trustee, Wells Fargo Bank, N.A.,
as master servicer and securities administrator, and PHH Mortgage Corporation,
as Servicer, and acknowledged by Merrill Lynch Mortgage Lending, Inc. a Delaware
corporation, as sponsor.
     REMIC means a “real estate mortgage investment conduit” within the meaning
of Section 860D of the Code.
     REMIC Provisions means provisions of the federal income tax law relating to
REMICs, which appear in Sections 860A through 860G of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
     REO Disposition means the final sale of an REO Property.
     REO Property means any Mortgaged Property owned in fee simple (or if a
cooperative, the allocated shares of which are owned) by the Servicer as a
result of a foreclosure of a Mortgage Loan, or similar action.

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     RESPA means the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et
seq., and Regulation X, 24 C.F.R. § 3500.1 et seq., thereunder, as the foregoing
may be amended from time to time.
     Restricted Proceeds means all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or repair of
any Mortgaged Property.
     Second Remittance Period means the period of time beginning on the
seventeenth day of each month and ending on the last day of such month.
     Servicer means MLCC.
     Servicing Date means, with respect to any Mortgage Loan, the date on which
the Mortgage Loan was originated pursuant to the Origination Agreement, or such
other date as to which the parties may agree.
     Servicing File With respect to each Mortgage Loan, the file retained by the
Subservicer consisting of copies of any document contained in the Collateral
File, the originals of which have been or shall be delivered to the Custodian
pursuant to the Custodial Agreement.
     Servicing Rights means with respect to each Mortgage Loan, any and all of
the following: (a) all rights to service the Mortgage Loan; (b) all rights to
receive servicing fees, additional servicing compensation (including without
limitation any Ancillary Fees, any late fees, assumption fees, penalties or
similar payments with respect to the Mortgage Loan, and income on escrow
accounts or other receipts on or with respect to the Mortgage Loan),
reimbursements or indemnification for servicing the Mortgage Loan, and any
payments received in respect of the foregoing and proceeds thereof; (c) the
right to collect, hold and disburse Escrow Payments or other similar payments
with respect to the Mortgage Loans and any amounts actually collected with
respect thereto and to receive interest income on such amounts to the extent
permitted by applicable law; (d) all accounts and other rights to payment
related to any of the property described in this paragraph; (e) possession and
use of any and all Servicing Files pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans;
(f) all rights, powers and privileges incident to any of the foregoing; and
(g) all agreements or documents creating, defining or evidencing any of the
foregoing rights to the extent they relate to such rights.
     Servicing Transfer Costs means all reasonable costs and expenses incurred
by the Servicer in connection with the transfer of servicing from Subservicer,
including, without limitation, any reasonable costs or expenses associated with
the complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Servicer (or any
successor to Subservicer appointed pursuant to Section 15.01) to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Servicer (or any successor to Subservicer appointed pursuant to Section 15.01)
to service the Mortgage Loans properly and effectively.

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     Software means the proprietary computer software programs, and related
Software Documentation, listed on Exhibits A, B and C of the Licensing
Agreement, excluding any Third Party Software that may be embedded therein.
     Software Documentation means, with respect to any Software, the operating
instructions and user, installation, set-up, configuration, training and support
manuals for the Software or any part thereof, whether prepared by Servicer or
any Third Party, in any form or medium whatsoever.
     Subservicer means PHH.
     Subservicer Advance means all customary, reasonable and necessary “out of
pocket” moneys that have been advanced by the Subservicer from its funds in
connection with its servicing of a Mortgage Loan (including, but not limited to,
taxes, ground rents, assessments, insurance premiums, release fees, foreclosure
and bankruptcy fees and expenses, and other expenses) (i) that have been made by
the Subservicer in accordance with the terms and provisions herein, (ii) that
are recoverable through Liquidation Proceeds, Insurance Proceeds and/or
Condemnation Proceeds, or that are made at the direction of the Servicer or to
preserve its security interest in the related Mortgaged Properties and (iii) for
which the Subservicer has a right of reimbursement from Mortgagors, Insurers,
the Servicer and/or Subsequent Purchaser, or otherwise.
     Subservicer Change of Control means the occurrence of any of the following:
     (1) the sale, lease, transfer, conveyance or other disposition, or by way
of merger or consolidation, in one or a series of related transactions, of all
or substantially all of the assets of PHH Corporation or Subservicer (or any
successor entity to either thereof) to any “person” - as such term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, or
     (2) the adoption of a plan relating to the liquidation or dissolution of
PHH Corporation or Subservicer;
     (3) the consummation of any transaction, including, without limitation, any
merger or consolidation, the result of which is that any “person,” as defined
above, becomes the beneficial owner, directly or indirectly, of more than 50% of
the voting stock of either PHH Corporation or Subservicer; or
     (4) the first day on which a majority of the members of the Board of
Directors of PHH Corporation are not Continuing Directors.
     Subservicer Competitor Change of Control means a Subservicer Change of
Control to a Direct Competitor.
     Subservicing Fee means for each Mortgage Loan, a monthly fee payable by
MLCC to Subservicer as compensation for Subservicer’s subservicing of Mortgage
Loans pursuant to this particularly set forth in Section 6.02(a).

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     Subservicing Period means, initially, with respect to any Mortgage Loan,
the period commencing on the Effective Date and ending on the earlier
December 31, 2010 (or if such day is not a Business Day, the first Business Day
immediately following such day) (the “End Date”) or the day the obligations and
responsibilities of the Subservicer, terminate in accordance with this
Agreement. The Subservicing Period shall automatically renew for successive one
year periods (each a “Renewal Period”) commencing on the day following the End
Date unless either (i) Servicer notifies Subservicer in writing at least thirty
(30) days prior to the expiration of the End Date or the related Renewal Period,
of its intention to terminate Subservicer hereunder in its sole discretion,
provided that Servicer shall be responsible for all Deboarding Fees in
connection with any termination of the Subservicer without cause or
(ii) Servicer and Subservicer do not reach an agreement with respect to the fees
to be earned by Subservicer pursuant to this Agreement for such Renewal Period
at least thirty (30) days prior to the expiration of the End Date or the related
Renewal Period. The Subservicer shall be terminated as interim servicer at the
expiration of the current Subservicing Period if the Servicer notifies the
Subservicer of its intention not to extend the Subservicing Period or as
termination of subservicer may earlier occur in accordance with this Agreement.
     Subsequent Purchaser means any Person that acquires an interest in a
Mortgage Loan from the Servicer.
     Third Party Software means any software or program and related Software
Documentation incorporated into or used separately or in connection with the
Software, that is owned by a Third Party and licensed to Servicer.
     Transaction Agreements means this Agreement, the Equity Access Agreement,
the Loan Purchase and Sale Agreement, the MLCC Portfolio Servicing Agreement,
the Purchase and Sale Agreement and the Origination Agreement.
     Transfer and Recording Fees means (i) any fees charged by MERS and (ii) any
recording fees, incurred by Subservicer in connection with the termination or
transfer of servicing from Subservicer of any of the Mortgage Loans hereunder.
     Whole Loan Transfer means the sale or other transfer to a Subsequent
Purchaser of some or all of the Mortgage Loans by the Servicer in a whole loan
format for which the Subservicer will act as the servicer of the Mortgage Loans
pursuant to a servicing agreement with substantially the same terms and
conditions as this Agreement or another agreement mutually acceptable to the
Servicer and the Subservicer.
     Section 1.02 General.
     The terms defined herein include the plural as well as the singular and the
singular as well as the plural.

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ARTICLE II
SUBSERVICING OF MORTGAGE LOANS SECTION
     Section 2.01 Subservicer to Subservice Mortgage Loans.
     (a) During the Subservicing Period, the Subservicer, as independent
contractor, shall subservice each Mortgage Loan in accordance with all
Applicable Requirements. The Operations Guide may be amended from time to time
by Servicer with consent of the Subservicer, which consent shall not be
unreasonably withheld, upon five (5) Business Days prior written notice to
Subservicer, without formal amendment of this Agreement. To the extent of a
conflict between the Operations Guide and this Agreement, this Agreement shall
control. In the event the Operations Guide and this Agreement are silent as to
any servicing activity, Subservicer shall perform such servicing activity as is
consistent with the FNMA Servicing Guide. In the event the FNMA Servicing Guide
is silent as to such servicing activity, the Subservicer shall notify the
Servicer and follow such directions as the Servicer may reasonably provide. For
the avoidance of doubt, the Subservicer does not own the Servicing Rights
relating to any Mortgage Loan retained by the Servicer and subject to this
Agreement, and Subservicer has agreed to subservice such Mortgage Loans in
accordance with this Agreement.
     (b) The Subservicer shall be responsible for maintaining, and shall
maintain, a complete set of records for the Mortgage Loans. The Subservicer’s
books and records shall reflect the ownership of the Mortgage Loans in the name
MLCC or as MLCC may otherwise direct in order to reflect any change in the
ownership of such Mortgage Loans. All documents, records and correspondence,
regardless of the media in which they are stored or maintained shall remain the
property of the Servicer, and the Subservicer shall hold the same in a fiduciary
capacity for the Servicer for a period of time not less than as set forth in the
Merrill Lynch Records Management Policy contained in the Operations Guide.
     (c) The Subservicer shall notify the Servicer within ten (10) Business Days
of obtaining Knowledge of the Subservicer’s failure to subservice any Mortgage
Loan consistent with this Agreement and shall take all appropriate actions
required to correct any such servicing deficiencies so that such loans are
thereafter subserviced in compliance with the terms and provisions of this
Agreement. Subservicer shall be solely responsible for any costs and expenses
required to effectuate such remediation. In addition to the foregoing,
Subservicer shall take such additional corrective action as may be directed by
Servicer, the reasonable cost of which shall be the responsibility of Servicer,
and shall make Servicer whole each month for any Mortgage Rate shortfall due to
such failure.
     (d) The Subservicer may not waive, modify or vary any term of a Mortgage
Note or Mortgage without the Servicer’s prior written consent.
     (e) Notwithstanding anything herein to the contrary, Subservicer shall
follow any reasonable directions given by the Servicer with respect to the
subservicing of the Mortgage Loans.

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     (f) With the exception of Ancillary Fees, the Subservicer covenants and
agrees that it will not, without the prior written consent of the Servicer,
charge or collect from any Mortgagor, or trustee under a deed of trust, any fees
of any kind including, but not limited to charges allowed under applicable law
or charges for amounts expended by the Subservicer, regardless of the
characterization of any such fees or charges.
     (g) Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Subservicer shall proceed diligently to
collect all payments due under each of the Mortgage Loans when the same shall
become due and payable and shall ascertain and estimate Escrow Payments and all
other charges that will become due and payable with respect to the Mortgage Loan
and the Mortgaged Property in accordance with the Applicable Requirements, to
the end that the installments payable by the Mortgagors will be sufficient to
pay such charges as and when they become due and payable.
     (h) The Subservicer is authorized and empowered by the Servicer, in its own
name, when the Subservicer believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS System, or cause the removal from MERS
registration of any Mortgage Loan on the MERS System, to execute and deliver, on
behalf of the Servicer, any and all instruments of assignment and other
comparable instruments with respect to such assignment or re-recording of a
Mortgage in the name of MERS, solely as nominee for the Servicer and its
successors and assigns.
     Section 2.02 Collateral File and Servicing File.
     Subservicer shall, upon receipt of a written request from Servicer, provide
to Servicer, within five (5) Business Days, the Servicing File with respect to
any Mortgage Loan. If Subservicer delivers any Collateral File (to the extent
such Collateral File was in the possession of Subservicer) to a third party, it
shall do so under a bailment agreement and maintain in its servicing records for
presentation to the Servicer upon request, the name, address, and telephone
number of the party to whom the original document was delivered and the purpose
of such delivery. Throughout the term of this Agreement, Subservicer shall make
available during normal business hours at least one (1) managerial level PHH
employee to address and respond to all of MLCC’s requests for any Servicing File
or any document contained in the Collateral File held by Subservicer in trust
for the Servicer. Subservicer shall provide to Servicer a list of at least five
(5) responsible employees, in addition to the one (1) managerial level employee,
together with their individual telephone and facsimile numbers (the “Contact
List”), whom Servicer may contact to request any Servicing File or any document
contained in the Collateral File that may have been released to Subservicer. As
stated above, at least one (1) employee on the Contact List shall always be
available during normal business hours. Subservicer may from time to time notify
Servicer of changes to the Contact List and shall be deemed to have satisfied
its obligation so to make a managerial level employee available if at least one
(1) employee (but not necessarily the same employee) on Contact List is
available during normal business hours. In the event that Subservicer requires
possession of any document contained in the Collateral File in the possession of
Servicer in order to service such Mortgage Loan in accordance with the
Applicable Requirements, Servicer will release such document from the Collateral
File to Subservicer, who will hold such document in trust for the Servicer.
Additionally, if any documents in the Collateral File are held in the possession
of the Custodian, Servicer shall cause

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Custodian to release such documents to the Subservicer. Notwithstanding anything
contained herein to the contrary, in the event that any documents contained in
the Collateral File are in the possession of the Subservicer, Subservicer agrees
that it shall hold such documents in trust for the Servicer.
     Section 2.03 Legal Proceedings Involving the Mortgage Loans.
     The Subservicer shall commence all collection, foreclosure, bankruptcy and
eviction proceedings in the name of MLCC for all Mortgage Loans subject to this
Agreement in a manner as outlined in the Operations Guide. In the event the
Subservicer receives notice of the existence of any legal proceeding relating to
a Mortgage Loan commenced against the Servicer, the Subservicer shall promptly
notify the Servicer and follow such directions as the Servicer may reasonably
provide. The Servicer shall have the right to control any of the foregoing
matters referred to in this Section 2.03 at the Servicer’s request. The
Subservicer shall provide the Servicer, by the 15th day of each month (or next
Business Day immediately thereafter) for the preceding month, the report set
forth in Exhibit L, titled “The Mortgage Loan Litigation Tracking Report” and
with such report, any such additional written reports as the Servicer shall
reasonably request regarding such legal proceedings, provided that upon a
request for an additional written report, the parties agree to negotiate the
responsibility for any incremental costs and expenses associated with the
provision of such additional report. Changes to the form of the Mortgage Loan
Litigation Tracking Report shall only be made with the mutual consent of
Servicer and Subservicer.
     Section 2.04 Material Changes.
     The Subservicer shall promptly report to the Servicer any change in its
business operations, financial condition, properties or assets that could have a
material adverse effect on the Subservicer’s ability to perform its obligations
hereunder. Events for which the Servicer must receive notice include, but are
not limited to, the following:
     (a) any merger or consolidation, any changes in the Subservicer’s ownership
whether directly or indirectly (including any change in ownership of the
Subservicer’s parent), or any significant reorganization;
     (b) any admission by the Subservicer to the commission of, or any finding
that the Subservicer has committed, any violation of any law, regulation or
order in any proceeding or audit commenced by any governmental, or regulatory
authority, or any proceeding commenced in any court of law;
     (c) the commencement of any class action law suits against the Subservicer;
     (d) the Subservicer’s entry into any agreement with a third party that
would result in any material change in the financial status or ownership of the
Subservicer or any merger of the Subservicer; and
     (e) the occurrence of any Default hereunder.

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     Section 2.05 Subservicer Not to Resign.
     The Subservicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Subservicer and the Servicer. No
such resignation shall become effective until the Servicer or a new Subservicer
shall have assumed the Subservicer’s responsibilities and obligations hereunder
in the manner provided in Section 15.01.
     Section 2.06 Defaulted Mortgage Loans.
     (a) The Subservicer agrees to report monthly to the Servicer all Defaulted
Mortgage Loans and all REO Properties subserviced pursuant to this Agreement.
Such reporting shall consist of Subservicer’s monthly submission to Servicer of
two reports. The first report shall be provided in the form set forth on
Exhibit G-1, titled “Exposure Report.” The second report shall be provided in
the form set forth on Exhibit G-2, titled “Mortgage Loan Delinquency File.”
Subservicer shall provide all Exposure Reports by the 15th day of each month (or
next Business Day immediately thereafter if such 15th day is not a Business Day)
and Mortgage Loan Delinquency Files to Servicer by the 5th day of each month (or
next Business Day immediately thereafter if such 5th day is not a Business Day)
for the preceding month in order to ensure any Servicer related adjustments
within two Business Days of notification by the Servicer. Changes to the form of
the Exposure Report or the Mortgage Loan Delinquency File shall only be made
with the mutual consent of Servicer and Subservicer.
     (b) The Servicer reserves the right (but not the obligation) to elect to
administer certain default servicing activities relating to any Defaulted
Mortgage Loan or REO Property upon written notice to the Subservicer. As to any
REO Property, the Subservicer shall provide the Servicer with written
notification of the related foreclosure sale within one (1) Business Day after
the date of such foreclosure sale. The Servicer shall notify the Subservicer
within seven (7) Business Days after receiving such notification from the
Subservicer in the event the Servicer elects to administer default servicing
activities relating to the REO Property. Notwithstanding the foregoing, at any
time during the period in which a Mortgage Loan is Delinquent, the Servicer may
provide written notice to the Subservicer of the Servicer’s election to
administer default servicing activities in connection with an REO Property after
the foreclosure sale. If the Servicer elects to assume such activities as set
forth above, the Servicer shall be obligated for any fees or commissions due any
agent previously retained by the Subservicer or its agent, unless Servicer
notifies Subservicer that it elects to administer default servicing prior to the
foreclosure sale of said property. In accordance with such notice from the
Servicer, the Subservicer shall forward to the Servicer all relevant
documentation relating to any Defaulted Mortgage Loans or REO Properties and
shall comply with all reasonable transfer requests of Servicer. Upon the
transfer from the Subservicer to the Servicer of the relevant files and
documentation, the Servicer shall commence default servicing activities with
respect to such Defaulted Mortgage Loans or REO Properties. In the event any
Defaulted Mortgage Loans or REO Properties are reinstated and reinstatement
funds are received by the Servicer, (i) the Servicer shall remit such funds to
the Subservicer in accordance with Subservicer’s wire instructions or other
payment instructions, (ii) provided that the Servicer has complied with the
requirements of subpart (i) hereof, the Subservicer shall post such funds to the
account no later than the next Business Day, (iii) the Subservicer shall again
be fully responsible for the subservicing for such Mortgage Loan, (iv) the
Servicer shall forward the related mortgage file and all other relevant
documentation to

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Subservicer, and (v) Servicer shall comply with all reasonable transfer requests
of Subservicer. In the event any Defaulted Mortgage Loans or REO Properties
Mortgage Loan reach final disposition and Liquidation Proceeds are received by
the Servicer, (i) the Servicer shall deposit such funds, (ii) the Servicer shall
notify the Subservicer of receipt of such Liquidation Proceeds, (iii) the
Subservicer shall post non-monetary transactions to bring the account balance to
zero no later than the next Business Day, and (iv) the Servicer shall be
responsible for preparation of the Officer Certificate and shall retain the
related mortgage file and all other relevant documentation.
     (c) In connection with any expenses incurred by Servicer for any Defaulted
Mortgage Loans or REO Properties under this Section 2.06, upon receipt of any
related invoices, Servicer shall forward such invoices to Subservicer for
payment in the ordinary course of business. Subservicer shall ensure payment of
such invoices within thirty (30) Business Days of the receipt of an invoice by
Subservicer and shall be responsible for late fees incurred with respect to
invoices received by Subservicer thirty (30) or more days prior to the due date
thereof.
     (d) Subservicer Advances will be funded by Subservicer. All Subservicer
Advances shall be approved by Servicer as defined in the Operations Guide.
Servicer shall reimburse Subservicer for any Subservicer Advances on a monthly
basis. Subservicer shall provide a reconciliation schedule of Subservicer
Advances in the form of Exhibit E, in both hard copy and electronic format, to
the Servicer by the fifth Business Day of each month. Servicer shall have three
(3) Business Days to review the reconciliation and either approve it or advise
Subservicer of errors. Servicer and Subservicer shall cooperate and exert
reasonable efforts to correct any errors. Servicer and Subservicer shall remit
funds to each other as applicable, within one (1) Business Day of either the
approval of the reconciliation or the correction of errors detected by the
appropriate party. In any event, a mutually agreed upon amount must be remitted
to the appropriate party no later than the 20th day of the month (or next
Business Day immediately thereafter). Notwithstanding anything contained herein
to the contrary, upon request of the Subservicer, to the extent that Subservicer
has made a Servicing Advance with respect to a Mortgage Loan in excess of
$25,000 the Servicer shall promptly reimburse Subservicer for the amount of such
Servicing Advance, but in any event within five (5) Business Days, after receipt
of such request from Subservicer.
     (e) The Subservicer shall inspect a Mortgaged Property upon: (i) the
Mortgage Loan becoming forty-five (45) to sixty (60) days delinquent and
Subservicer is unable to contact or establish satisfactory arrangements with the
Mortgagor; (ii) the Mortgage Loan is referred to foreclosure; (iii) the
Mortgagor is delinquent under a governing bankruptcy repayment plan; or (iv) in
accordance with the Applicable Requirements and as may be required by the
primary mortgage guaranty insurer, to assure itself that the value of the
Mortgaged Property is being preserved. The Subservicer shall keep a record of
each such inspection and, upon request, shall provide the Servicer with an
electronic report fully detailing the results of each such inspection.
     Section 2.07 Title, Management and Disposition of REO Properties.
     (a) If title to a Mortgaged Property is acquired in foreclosure or by deed
in lieu of foreclosure, the deed or certificate of sale shall be taken in the
name of MLCC. The Subservicer shall not cause title to be acquired to any
Mortgaged Property, or proceed with the management of any REO Property, for
which the Subservicer has Knowledge that such Mortgaged Property or

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REO Property is affected by hazardous waste, but shall promptly notify the
Servicer of such condition, and thereafter follow such reasonable directions as
the Servicer may provide. The Subservicer shall either itself, or through an
agent approved by the Servicer (which approval shall not be unreasonably
withheld), manage, conserve, protect and operate each REO Property (and may
temporarily rent the same) in accordance with the Servicer’s direction.
     (b) The income received from the management of any REO property shall be
deposited in the Custodial Account and shall be applied as a reduction in any
existing subservicer advances for the related REO property or placed in suspense
for the related property within two (2) Business Days of receipt.
     (c) If the Subservicer elects to dispose of an REO Property without
utilizing the services of an agent, the Subservicer shall notify the Servicer of
its receipt of any and all bona fide offers to purchase that REO Property. Each
such REO Disposition shall be carried out by the Subservicer at such price, and
upon such terms and conditions, as the Servicer shall approve in writing.
     (d) If the Subservicer utilizes the services of an approved agent to
dispose of an REO Property, the Subservicer shall provide the Servicer with a
copy of such agent’s marketing plan, which shall include, but not be limited to,
(i) the marketing time period, (ii) an estimate of the costs of any repairs or
improvements, (iii) the lowest acceptable sale price for the REO Property and
(iv) other proposed terms and conditions of sale. Within seven (7) Business Days
after receipt of any such marketing plan, the Servicer shall review the plan and
notify the Subservicer in writing as to whether the terms and conditions thereof
are acceptable to the Servicer. Notwithstanding the foregoing, the Servicer’s
failure to provide such written notification to the Subservicer within such
seven (7) Business Day period shall not be deemed acceptance of the marketing
plan. If the terms, conditions, and lowest acceptable sale price set forth in
the marketing plan are acceptable to the Servicer, the REO Disposition shall be
carried out by the Subservicer in accordance with the terms thereof. If the
Subservicer receives a bona fide offer to purchase an REO Property and would
like to accept the offer, but the offer is outside the parameters of the
approved marketing plan, the Subservicer shall provide the Servicer with written
notification of the terms and conditions of the offer. Within seven (7) Business
Days after receiving the terms and conditions of such offer, the Servicer shall
review the offer and notify the Subservicer in writing as to whether such terms
and conditions are acceptable to the Servicer. Notwithstanding the foregoing,
the Servicer’s failure to provide such written notification to the Subservicer
within such seven (7) Business Day period shall not be deemed acceptance of the
offer.
     (e) The Subservicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Subservicer Advances from proceeds
received in connection with such REO Disposition. If the proceeds from an REO
Disposition are insufficient to reimburse the Subservicer for any related
unreimbursed Subservicer Advances, the Subservicer shall be entitled to
reimbursement from the Servicer by submission of an Officer Certificate as
described in the Operations Guide. All proceeds from an REO Disposition, net of
any reimbursement to the Subservicer as provided above, shall be remitted to the
Servicer with the related Officer Certificate as described in the Operations
Guide.

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     Section 2.08 Establishment of and Deposits to Custodial Account.
     The Subservicer shall segregate and hold all funds collected and received
in connection with a Mortgage Loan separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled “PHH Mortgage
Corporation, in trust for Merrill Lynch Credit Corporation, its successors and
assigns and/or subsequent Servicers of Mortgage Loans — P & I.” The account
agreement for the Custodial Account shall provide that such account is a special
deposit required to be segregated and held by the Qualified Depository
maintaining such account in a fiduciary capacity, separate and apart from the
Qualified Depository’s own funds and general assets, and that the account shall
not be held in any capacity that would create a debtor-creditor relationship
between the Qualified Depository and the Subservicer or the Servicer. The
Custodial Account shall be established with a Qualified Depository and within
ten (10) days thereof, the Subservicer shall provide the Servicer with written
confirmation of the existence of such Custodial Account in the form attached
hereto as Exhibit I. Funds deposited in the Custodial Account may be drawn on by
the Subservicer in accordance with Section 2.09.
     The Subservicer shall deposit in a mortgage clearing account on a daily
basis (such funds deposited and held in the clearing account may not be
commingled with any funds owned by the Subservicer, but may be commingled with
the proceeds of any other mortgage loans or with funds serviced for other
investors or for the Subservicer’s own portfolio), and in the Custodial Account
within two (2) Business Days of Subservicer’s receipt, and retain therein, the
following collections received by the Subservicer and any other amounts required
to be deposited by the Subservicer pursuant to this Agreement after the
Effective Date, or received by the Subservicer prior to the related Servicing
Date but allocable to a period subsequent thereto, other than payments of
principal and interest due on or before the Effective Date, as follows:
          (i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
          (ii) all payments on account of interest on the Mortgage Loans;
          (iii) all Liquidation Proceeds;
          (iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Section 2.22 (other than proceeds to be held in the Escrow Account
and applied to the restoration or repair of the Mortgaged Property or released
to the Mortgagor in accordance with Section 2.24), Section 2.23 and
Section 2.25;
          (v) all Condemnation Proceeds which are not applied to the restoration
or repair of the Mortgaged Property or released to the Mortgagor in accordance
with Section 2.24;
          (vi) any amount required to be deposited in the Custodial Account
pursuant to this Agreement;
          (vii) any amounts required to be deposited by the Subservicer pursuant
to Section 2.23 in connection with the deductible clause in any blanket hazard
insurance policy;

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          (viii) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section 2.07; and
          (ix) any amounts received with respect to Prepayment Charges as set
forth in Section 2.13.
     The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 2.17, need not be deposited by the
Subservicer into the Custodial Account. Any interest paid on funds deposited in
the Custodial Account by the depository institution shall accrue to the benefit
of the Subservicer and the Subservicer shall be entitled to retain and withdraw
such interest from the Custodial Account pursuant to Section 2.09.
     Section 2.09 Permitted Withdrawals From Custodial Account.
     The Servicer shall have the sole power and authority to withdraw funds from
the Custodial Account and reimburse Subservicer for expenses incurred by it as
subservicer pursuant to the terms of this Agreement. Notwithstanding the
foregoing, the Servicer hereby permits the Subservicer, solely for the
Servicer’s convenience and solely in a custodial and administrative capacity
only, to, unless the Servicer has revoked such permission in its sole and
absolute discretion or an Event of Default has occurred, withdraw, from time to
time, from the related Custodial Account for the following purposes:
          (i) to make payments to the Servicer in the amounts and in the manner
provided for in Section 5.01;
          (ii) to reimburse itself for unreimbursed Subservicing Advances to
extent legally recoverable, and for any unpaid Servicing Fees, the Subservicer’s
right to reimburse itself pursuant to this subclause (ii) with respect to any
Mortgage Loan being limited to related Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds and such other amounts as may be collected by the
Subservicer from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of any such reimbursement, the Subservicer’s
right thereto shall be prior to the rights of Servicer;
          (iii) to pay itself interest on funds deposited in the Custodial
Account;
          (iv) to pay any amount required to be paid pursuant to Section 2.07
related to any REO Property, it being understood that, in the case of any such
expenditure or withdrawal related to a particular REO Property, the amount of
such expenditure or withdrawal from the Custodial Account shall be limited to
amounts on deposit in the Custodial Account with respect to the related REO
Property;
          (v) to reimburse itself for any undisputed Subservicing Advances or
REO expenses after the REO Disposition or liquidation of the Mortgaged Property
not otherwise reimbursed above to the extent legally recoverable;

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          (vi) to remove funds inadvertently placed in the Custodial Account by
the Subservicer; and
          (vii) to clear and terminate the Custodial Account upon the
termination of this Agreement.
     In the event that the Custodial Account is interest bearing, on either the
Interim Remittance Date or Normal Remittance Date, as applicable, the
Subservicer shall withdraw all funds from the Custodial Account except for those
amounts which, pursuant to Section 5.01, the Subservicer is not obligated to
remit on such Interim Remittance Date or Normal Remittance Date, as applicable.
The Subservicer may use such withdrawn funds only for the purposes described in
this Section 2.09.
     Section 2.10 Establishment of and Deposits to Escrow Account
     (a) The Subservicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan constituting Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts, titled, “PHH Mortgage Corporation, in trust for the Merrill Lynch
Credit Corporation, its successors and assigns and/or subsequent Servicers of
Residential Mortgage Loans, and various Mortgagors — T & I.” The account
agreement for the Escrow Account shall provide that such account is a special
deposit required to be segregated and held by the Qualified Depository
maintaining such account in a fiduciary capacity, separate and apart from the
Qualified Depository’s own funds and general assets, and that the account shall
not be held in any capacity that would create a debtor-creditor relationship
between the Qualified Depository and the Subservicer or the Servicer. The Escrow
Accounts shall be established with a Qualified Depository, within ten (10) days
of the establishment of the Escrow Account, the Subservicer shall provide the
Servicer with written confirmation of the existence of such Escrow Account in
the form attached hereto as Exhibit K. Funds deposited in the Escrow Account may
be drawn on by the Subservicer in accordance with Section 2.11.
     (b) The Subservicer shall deposit in a mortgage clearing account on a daily
basis (such funds deposited and held in the clearing account may not be
commingled with any funds owned by the Subservicer, but may be commingled with
the proceeds of any other mortgage loans or with funds serviced for other
investors or for the Subservicer’s own portfolio) and in the Escrow Account or
Accounts within two (2) Business Days of Subservicer’s receipt, and retain
therein:
          (i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required under
the terms of this Agreement; and
          (ii) all amounts representing Restricted Proceeds.
     (c) The Subservicer shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 2.11. The Subservicer shall be entitled to retain any interest paid on
funds deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to

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the Mortgagor. To the extent required by law, the Subservicer shall pay interest
on escrowed funds to the Mortgagor.
     Section 2.11 Permitted Withdrawals From Escrow Account.
     Withdrawals from the Escrow Account or Accounts may be made by the
Subservicer only:
          (i) to effect timely payments of ground rents, taxes, maintenance
fees, assessments, water rates, mortgage insurance premiums, condominium
charges, co-op charges, fire and hazard insurance premiums or other items
constituting Escrow Payments for the related Mortgage;
          (ii) to reimburse the Subservicer for any Subservicing Advances made
by the Subservicer pursuant to Section 2.12 with respect to a related Mortgage
Loan, but only from amounts received on the related Mortgage Loan which
represent late collections of Escrow Payments thereunder;
          (iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required under the terms of the related Mortgage Loan;
          (iv) for transfer to the Custodial Account for application to reduce
the principal balance of the Mortgage Loan in accordance with the terms of the
related Mortgage and Mortgage Note;
          (v) for application to the restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 2.24;
          (vi) to pay to the Subservicer, or any Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow Account;
          (vii) to remove funds inadvertently placed in the Escrow Account by
the Subservicer; and
          (viii) to clear and terminate the Escrow Account on the termination of
this Agreement.
     Section 2.12 Payment of Taxes, Insurance and Other Charges.
     With respect to each Mortgage Loan, the Subservicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates,
sewer rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy or LPMI Policy premiums and fire, flood
and hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges (including renewal premiums) and shall effect
payment thereof prior to the applicable penalty or termination date, employing
for such purpose deposits of the Mortgagor in the Escrow Account which shall
have been estimated and accumulated by the Subservicer in amounts sufficient for
such purposes, as allowed under the terms of the Mortgage. The Subservicer
assumes full responsibility for the timely payment

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of all such bills and shall effect timely payment of all such charges
irrespective of each Mortgagor’s faithful performance in the payment of same or
the making of the Escrow Payments, and the Subservicer shall make advances from
its own funds to effect such payments.
     Section 2.13 Prepayment Charges.
     The Subservicer may not waive any Prepayment Charge unless: (i) the
enforceability thereof shall have been limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors’ rights
generally, (ii) the enforcement thereof is illegal, or any local, state or
federal agency has threatened legal action if the Prepayment Charge is enforced,
(iii) the mortgage debt has been accelerated in connection with a foreclosure or
other involuntary payment or (iv) such waiver is standard and customary in
servicing similar Mortgage Loans and relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Subservicer,
maximize recovery of total proceeds taking into account the value of such
Prepayment Charge and the related Mortgage Loan. If a Prepayment Charge is
waived, but does not meet the standards described above, then the Subservicer is
required to deposit the amount of such waived Prepayment Charge in the Custodial
Account no later than one (1) Business Day following such waiver.
     Section 2.14 OFAC Reporting.
     With respect to each Mortgagor and after the related Servicing Date, the
Subservicer will monitor applicable sanction lists pursuant to, and in
accordance with, the Anti-Money Laundering Laws, including to determine whether
any Mortgagor becomes listed as a “blocked person” for purposes of the
regulations promulgated by the Office of Foreign Assets Control of the United
States Department of the Treasury (the “OFAC Regulations”). In the event a
Mortgagor is listed as a “blocked person”, the Subservicer shall immediately
notify the Servicer.
     Section 2.15 Servicing Transfer.
     At the end of the Subservicing Period or immediately upon Subservicer’s
receipt of a Notice of Default pursuant to Section 14.01 of this Agreement, the
Servicer, or its designee, shall assume all servicing responsibilities related
to the Mortgage Loans and the Subservicer shall cease all servicing
responsibilities related to the Mortgage Loans. At the end of the Subservicing
Period or immediately upon Subservicer’s receipt of a Notice of Default pursuant
to Section 14.01, as applicable, the Subservicer shall, at its cost and expense
if terminated for cause pursuant to this Agreement, otherwise, at Servicer’s
cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Servicer, or its designee, in compliance with applicable law. The
Subservicer agrees to execute and deliver such instruments and take such actions
as the Servicer, or its designee may, from time to time, reasonably request to
carry out the servicing transfer.
     Subservicer shall pay all hazard and flood insurance premiums, Primary
Insurance Policy and LPMI Policy premiums, due within thirty (30) days after the
date of transfer of servicing. Subservicer shall pay all tax bills (including
interest, late charges and penalties in connection therewith) due, meaning
economic loss, within thirty (30) days after the date of transfer of servicing.
Servicer shall reimburse Subservicer for any advances for such premiums made by

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the Subservicer prior to the transfer of servicing within thirty (30) days of
receipt of an invoice for the same. Escrow advances are to be netted against
positive escrow balances and one wire will be sent to Servicer or successor
subservicer. For ninety (90) days after the date of transfer of servicing,
Subservicer shall deliver such tax bills as it may receive with respect to the
Mortgage Loans to the Servicer within ten (10) Business Days of receipt of the
same, thereafter Subservicer shall exercise reasonable efforts to deliver such
tax bills as it may receive with respect to the Mortgage Loans to the Servicer
within a reasonable time of its receipt of same. For ninety (90) days after the
date of transfer of servicing, Subservicer shall deliver such insurance policies
or renewals and invoices as it may receive with respect to the Mortgage Loans to
the Servicer within ten (10) Business Days of its receipt of same, thereafter
Subservicer shall exercise reasonable efforts to deliver such insurance policies
or renewals and invoices as it may receive with respect to the Mortgage Loans to
the Servicer within a reasonable time of its receipt of same.
     Section 2.16 Satisfaction of Mortgages and Release of Mortgage Files.
     Upon the payment in full of any Mortgage Loan, or the receipt by the
Subservicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Subservicer shall notify the Servicer in the
monthly remittance advice as provided in Section 5.02, and may request the
release of any documents contained in the Collateral File. If such Mortgage Loan
is a MERS Mortgage Loan, the Subservicer is authorized to cause the removal from
the registration on the MERS System of such Mortgage and to execute and deliver,
on behalf of the Servicer, any and all instruments of satisfaction or
cancellation or of partial or full release.
     If the Subservicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage (other than
as a result of a modification of the Mortgage Loan or a liquidation of the
Mortgaged Property pursuant to the terms of this Agreement) or should the
Subservicer otherwise prejudice any rights the Servicer may have under the
mortgage instruments, the Subservicer shall, upon discovery of such error, have
a period of thirty (30) days from its discovery or its receipt of notice of such
error within which to correct or cure said error or such longer period as
necessary, if the delay is due solely to a delay by the public recording office
provided that Subservicer provides an Officer Certificate certifying such delay
is due solely to a delay by the public recording office. Unless such delay is
due solely to a delay by the public recording office, if any such error cannot
be corrected or cured within such thirty-day period, Subservicer shall deposit
in the Custodial Account the entire Outstanding Principal Balance, plus all
accrued interest on such Mortgage Loan, on the day preceding the Normal
Remittance Date in the month following the date of such release. The Subservicer
shall maintain the Fidelity Bond and Errors and Omissions Insurance Policy as
provided for in Section 2.30 insuring the Subservicer against any loss it may
sustain with respect to any Mortgage Loan not satisfied in accordance with the
procedures set forth herein.
     Section 2.17 Assumption Processing.
     The Subservicer shall use its best efforts to enforce any “due-on-sale”
provision contained in any Mortgage or Mortgage Note and to deny assumption by
the Person to whom the Mortgaged Property has been or is about to be sold
whether by absolute conveyance or by

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contract of sale, and whether or not the Mortgagor remains liable on the
Mortgage and the Mortgage Note. When the Mortgaged Property has been conveyed by
the Mortgagor, the Subservicer shall, to the extent it has knowledge of such
conveyance, exercise its rights to accelerate the maturity of such Mortgage Loan
under the “due-on-sale” clause applicable thereto, provided, however, that the
Subservicer shall not exercise such rights if prohibited by law from doing so or
if the exercise of such rights would impair or threaten to impair any recovery
under the related PMI Policy or LPMI Policy, if any.
     If the Subservicer reasonably believes it is unable under applicable law to
enforce such “due-on-sale” clause, the Subservicer shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed, pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Subservicer is unable under applicable law to require that the original
Mortgagor remain liable under the Mortgage Note and the Subservicer has the
prior consent of the primary mortgage guaranty insurer, a substitution of
liability agreement shall be entered into pursuant to which the original
Mortgagor is released from liability and the person to whom such property has
been conveyed is substituted as Mortgagor and becomes liable under the Mortgage
Note. If an assumption fee is collected by the Subservicer for entering into an
assumption agreement the fee will be retained by the Subservicer as additional
servicing compensation. In connection with any such assumption, neither the
Mortgage Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the Outstanding Principal Balance of the Mortgage Loan nor any other material
terms shall be changed without Servicer’s consent.
     To the extent that any Mortgage Loan is assumable, the Subservicer shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Subservicer diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
     Section 2.18 Misapplied Payments and NSF.
     Subservicer shall be responsible for administering and correcting any
payment misapplications, and any adjustments necessary due to the return of
payments for insufficient funds.
     Section 2.19 Tax Reporting.
     Subservicer shall be responsible for the preparation and filing of all
reports required by the IRS of a mortgage loan servicer or subservicer for any
Mortgage Loan.
     Section 2.20 Limited Powers of Attorney and Limited Authorized Signatories.
     Servicer agrees to provide Subservicer on the first Servicing Date with
limited powers of attorney in the agreed upon form attached hereto as Exhibit H.

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     Section 2.21 Updated Exhibits and Schedules.
     As soon as possible, and in any event no later than five (5) Business Days
after the applicable Servicing Date, Subservicer shall have received from
Servicer updated versions of each then-relevant exhibit and schedule hereto,
certified as being true and correct on behalf of Servicer by an authorized
officer thereof, with respect to the subservicing transferred on that date.
     Section 2.22 Maintenance of Hazard Insurance.
     The Subservicer shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to FNMA or FHLMC against loss by fire, hazards of extended
coverage and such other hazards as are customary in the area where the Mortgaged
Property is located, in an amount which is at least equal to the lesser of:
(i) 100% of the insurable value on a replacement cost basis of the improvements
on the related Mortgaged Property and (ii) the greater of (a) the Outstanding
Principal Balance of the Mortgage Loan and (b) an amount such that the proceeds
of such insurance shall be sufficient to prevent the application to the
Mortgagor or the loss payee of any coinsurance clause under the policy. In the
event a hazard insurance policy shall be in danger of being terminated, or in
the event the insurer shall cease to be acceptable to FNMA or FHLMC, the
Subservicer shall notify the Servicer and the related Mortgagor, and shall use
its best efforts, as permitted by applicable law, to obtain from another
qualified insurer a replacement hazard insurance policy substantially and
materially similar in all respects to the original policy. In no event, however,
shall a Mortgage Loan be without a hazard insurance policy at any time, subject
only to Section 2.23 hereof; provided however, the Subservicer shall maintain a
blanket policy covering the Mortgage Loans during such period.
     If the related Mortgaged Property is located in an area identified by the
Federal Emergency Management Agency as having special flood hazards (and such
flood insurance has been made available) the Subservicer shall cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a generally
acceptable insurance carrier acceptable to FNMA or FHLMC in an amount
representing coverage equal to the lesser of: (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the Outstanding Principal Balance of the mortgage if
replacement cost coverage is not available for the type of building insured) and
(ii) the maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. If at any time during the term of the
Mortgage Loan, the Subservicer determines in accordance with applicable law and
pursuant to the FNMA Servicer Guide that a Mortgaged Property is located in a
special flood hazard area and is not covered by flood insurance or is covered in
an amount less than the amount required by the Flood Disaster Protection Act of
1973, as amended, the Subservicer shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Mortgagor fails
to obtain the required flood insurance coverage, the Subservicer shall force
place the required flood insurance on the Mortgagor’s behalf within thirty days
following the date of the last letter sent by Subservicer to the Mortgagor
requesting collection of such insurance premium, but in any event in accordance
with Applicable Requirements.

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     If a Mortgage is secured by a unit in a condominium project, the
Subservicer shall verify that the coverage required of the homeowner’s
association, including hazard, flood, liability, and fidelity coverage, is being
maintained in accordance with then current FNMA requirements, and secure from
the homeowner’s association its agreement to notify the Subservicer promptly of
any change in the insurance coverage or of any condemnation or casualty loss
that may have a material effect on the value of the Mortgaged Property as
security.
     In the event that any Servicer or the Subservicer shall determine that the
Mortgaged Property should be insured against loss or damage by hazards and risks
not covered by the insurance required to be maintained by the Mortgagor pursuant
to the terms of the Mortgage, the Subservicer shall communicate and consult with
the Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Subservicer shall
immediately force place the required coverage on the Mortgagor’s behalf
     All policies required hereunder shall name the Servicer as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
     The Subservicer shall not interfere with the Mortgagor’s freedom of choice
in selecting either his insurance carrier or agent, provided, however, that the
Subservicer shall not accept any such insurance policies from insurance
companies unless such companies are acceptable to FNMA and FHLMC and are
licensed to do business in the jurisdiction in which the Mortgaged Property is
located. The Subservicer shall determine that such policies provide sufficient
risk coverage and amounts, that they insure the property owner, and that they
properly describe the property address.
     Pursuant to Section 2.09, any amounts collected by the Subservicer under
any such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Subservicer’s normal servicing procedures as
specified in Section 2.24) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 2.09.
     Section 2.23 Maintenance of Mortgage Impairment Insurance.
     In the event that the Subservicer shall obtain and maintain a blanket
policy insuring against losses arising from fire, flood and hazards covered
under extended coverage on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the amount required pursuant to
Section 2.22 and otherwise complies with all other requirements of Section 2.22,
it shall conclusively be deemed to have satisfied its obligations as set forth
in Section 2.22. The Subservicer shall prepare and make any claims on the
blanket policy as deemed necessary by the Subservicer in accordance with the
Applicable Requirements. Any amounts collected by the Subservicer under any such
policy relating to a Mortgage Loan shall be deposited in the Custodial Account
subject to withdrawal pursuant to Section 2.09. Such policy may contain a
deductible clause, in which case, in the event that there shall not have been

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maintained on the related Mortgaged Property a policy complying with
Section 2.22, and there shall have been a loss which would have been covered by
such policy, the Subservicer shall deposit in the Custodial Account at the time
of such loss the amount not otherwise payable under the blanket policy because
of such deductible clause, such amount to be deposited from the Subservicer’s
funds, without reimbursement therefore. Upon request of the Servicer, the
Subservicer shall cause to be delivered to the Servicer a certificate of
insurance and a statement from the insurer thereunder that such policy shall in
no event be terminated or materially modified without 30 days’ prior written
notice to such Servicer.
     Section 2.24 Restoration of Mortgaged Property.
     The Subservicer need not obtain the approval of the Servicer prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with the Applicable Requirements. For claims greater than
$10,000, at a minimum the Subservicer shall comply with the following conditions
in connection with any such release of Insurance Proceeds or Condemnation
Proceeds:
          (i) the Subservicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required approvals
with respect thereto;
          (ii) the Subservicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics’ and materialmen’s liens;
          (iii) the Subservicer shall verify that the Mortgage Loan is not in
default; and
          (iv) pending repairs or restoration, the Subservicer shall place
Restricted Proceeds in the Escrow Account.
     If the Servicer is named as an additional loss payee, the Subservicer is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Servicer.
     Section 2.25 Maintenance of PMI Policy or LPMI Policy; Claims.
     With respect to each Mortgage Loan with an LTV in excess of [***]% at the
time of origination, the Subservicer shall, without any cost to the Servicer,
maintain or cause the Mortgagor to maintain in full force and effect a PMI
Policy insuring a portion of the Outstanding Principal Balance of the Mortgage
Loan as to payment defaults. If the Mortgage Loan is insured by a PMI Policy for
which the Mortgagor pays all premiums, the coverage will remain in place until
(i) the LTV decreases to [***]% or (ii) the PMI Policy is otherwise terminated
pursuant to the Home Owners Protection Act of 1998, 12 USC §4901, et seq. In the
event that such PMI
 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED.  ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

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Policy or an LPMI Policy shall be terminated other than as required by law, the
Subservicer shall obtain from another Qualified Insurer a comparable replacement
policy, with a total coverage equal to the remaining coverage of such terminated
PMI Policy or LPMI Policy. If the insurer shall cease to be a Qualified Insurer,
the Subservicer shall determine whether recoveries under the PMI Policy or LPMI
Policy are jeopardized for reasons related to the financial condition of such
insurer, it being understood that the Subservicer shall in no event have any
responsibility or liability for any failure to recover under the PMI Policy or
LPMI Policy for such reason. If the Subservicer determines that recoveries are
so jeopardized, it shall notify the Servicer and the Mortgagor, if required, and
obtain from another Qualified Insurer a replacement insurance policy. The
Subservicer shall not take any action which would result in noncoverage under
any applicable PMI Policy or LPMI Policy, of any loss which, but for the actions
of the Subservicer would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into pursuant
to Section 2.17, the Subservicer shall promptly notify the insurer under the
related PMI Policy or LPMI Policy, if any, of such assumption or substitution of
liability in accordance with the terms of such PMI Policy or LPMI Policy and
shall take all actions which may be required by the insurer as a condition to
the continuation of coverage under the PMI Policy or LPMI Policy. If such PMI
Policy or LPMI Policy is terminated as a result of such assumption or
substitution of liability, the Subservicer shall obtain a replacement PMI Policy
or LPMI Policy as provided above.
     In connection with its activities as Subservicer, the Subservicer agrees to
prepare and present, on behalf of itself and the Servicer, claims to the insurer
under any PMI Policy or LPMI Policy or any other primary mortgage guaranty
insurance policies obtained and paid for by the Servicer, in a timely fashion in
accordance with the terms of such PMI Policy or LPMI Policy and, in this regard,
to take such action as shall be necessary to permit recovery under any PMI
Policy or LPMI Policy or any other primary mortgage guaranty insurance policies
obtained and paid for by the Servicer respecting a defaulted Mortgage Loan.
Pursuant to Section 2.07, any amounts collected by the Subservicer under any PMI
Policy or LPMI Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 2.09.
     Section 2.26 Servicer to Service Additional Collateral.
     Notwithstanding anything to the contrary in this Agreement, Servicer shall
service and administer all Additional Collateral, it being understood and agreed
that only Servicer shall service and administer the related securities accounts
with respect to Additional Collateral Agreements.
     Section 2.27 Transfer of Mortgage Loans.
     The Subservicer acknowledges that from time to time the Servicer may choose
to sell and/or assign to various Subsequent Purchasers all or a portion of the
Mortgage Loans that are subject to this Agreement, thereby effecting one or more
Whole Loan Transfers or Pass-Through Transfers (each a “Reconstitution”) of such
Mortgage Loans. Subject to the terms and conditions contained herein and in the
Letter Agreement, the Subservicer acknowledges that the Servicer shall have the
right to sell and assign any or all of the Mortgage Loans (including any related
Servicing Rights), and the Subservicer shall recognize the related Subsequent
Purchaser as the owner of such Mortgage Loans.

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     With respect to each Reconstitution, as the case may be, entered into by
the Servicer or any affiliate of the Servicer, the Subservicer agrees:
          (i) to cooperate fully with the Servicer and any Subsequent Purchaser
with respect to all reasonable requests and due diligence procedures and with
respect to the preparation (including, but not limited to, the endorsement,
delivery, assignment, and execution) of the Servicing File and any documents
contained in the Collateral File in the possession of Subservicer and other
related documents, and with respect to servicing requirements reasonably
requested by the rating agencies and credit enhancers; provided, however, that
if the information provided by Subservicer to satisfy any such request or to
comply with any such procedure is not required by any other Transaction
Agreement, or is not contained in a standard report produced by Subservicer’s
EDP, any reasonable out-of-pocket expenses incurred by Subservicer to provide
such information shall be paid by Servicer;
          (ii) to execute (a) any amendment to this Agreement and (b) any
reconstitution agreements, provided that each of the Subservicer and the
Servicer is given an opportunity to review and reasonably negotiate in good
faith the content of such documents not specifically referenced or provided for
herein (the Servicer shall reimburse Subservicer for reasonable outside counsel
expenses to be approved by Servicer to review such amendment or reconstitution
agreement; provided that Servicer pre-approves Subservicer’s use of outside
counsel in writing). Subservicer shall, as Servicer may request, either
(A) enter into such amendment or reconstitution agreement (collectively
“Amendments”), in which case Servicer’s rights and obligations thereunder shall
be freely assignable and delegable to the Subsequent Purchaser without any
further action or consent by Subservicer, or (B) enter into such Amendment
directly with the Subsequent Purchaser; provided that, in the case of (A) or
(B), no such Amendment materially increases the existing duties of Subservicer
under the Transaction Agreements;
          (iii) with respect to any Reconstitution, the Subservicer shall
restate the representations and warranties regarding the Subservicer as of the
closing date of such Reconstitution, modified to the extent necessary to
accurately reflect the pool statistics of the Mortgage Loans as of the date of
such Reconstitution and supplemented by additional representations and
warranties that are not unreasonable under the circumstances as of the date of
such Reconstitution, to the extent that any events or circumstances, including
changes in applicable law occurring subsequent to the related Closing Date(s),
would render a related Mortgage Loan unmarketable to a material segment of the
secondary mortgage or mortgage-backed securities market; provided, however, that
Subservicer may qualify any such representation or warranty to reflect an event
or circumstance that arose after the date thereof and that would cause such
representation or warranty to be inaccurate, so long as such event or
circumstance is not a breach by Subservicer of any term or condition of any
Transaction Agreement;
          (iv) to deliver to the Servicer for inclusion in any prospectus or
other offering material such publicly available information regarding the
Subservicer, its financial condition and its mortgage loan delinquency,
foreclosure and loss experience and any additional information (including loan
information) requested by the Servicer, and to deliver to the Servicer any
similar nonpublic, unaudited financial information, in which case the Servicer
shall bear the

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cost of having such information audited by certified public accountants if the
Servicer desires such an audit, or as is otherwise reasonably requested by the
Servicer and which the Subservicer is capable of providing without unreasonable
effort or expense, and to indemnify the Servicer and its affiliates for material
misstatements, alleged material misstatements, omissions or alleged omissions
contained in any of the information provided above;
          (v) to deliver to the Servicer and to any Person designated by the
Servicer, at the Servicer’s expense, such statements and audit letters of
reputable, certified public accountants pertaining to information provided by
the Subservicer pursuant to clause 4 above as shall be reasonably requested by
the Servicer;
          (vi) to deliver to the Servicer, and to any Person designated by the
Servicer, such legal documents and in-house Opinions of Counsel as are
customarily delivered by servicers, as the case may be, and reasonably
determined by the Servicer to be necessary in connection with any
Reconstitution, as the case may be, such in-house Opinions of Counsel for a
Securitization Transaction to be in the form reasonably acceptable to the
Servicer; it being understood that the cost of any opinions of outside counsel
special counsel that may be required for a Reconstitution, as the case may be,
shall be the responsibility of the Servicer, provided that Servicer pre-approves
Subservicer’s use of outside counsel in writing;
          (vii) to negotiate in good faith and execute one or more subservicing
agreements between the Subservicer and any master servicer which is generally
considered to be a prudent master servicer in the secondary mortgage market,
designated by the Servicer in its sole discretion after consultation with the
Subservicer and/or one or more custodial and servicing agreements among the
Servicer, the Subservicer and a third party custodian/trustee which is generally
considered to be a prudent custodian/trustee in the secondary mortgage market
designated by the Servicer in its sole discretion after consultation with the
Subservicer, in either case for the purpose of pooling the Mortgage Loans with
other Mortgage Loans for resale or securitization;
          (viii) in the event that the Servicer appoints a credit risk manager
in connection with a Securitization Transaction, to execute a credit risk
management agreement and provide reports and information reasonably required by
the credit risk manager; provided, however, that if the information provided by
Subservicer to satisfy such request or to comply with any such procedure is not
required by this Agreement, or is not contained in a standard report produced by
Subservicer’s EDP, any reasonable out-of-pocket expenses incurred by Subservicer
to provide such information shall be paid by Servicer;
          (ix) in the event a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held, the
Subservicer shall not take any action, cause the REMIC to take any action or
fail to take (or fail to cause to be taken) any action that, under the REMIC
Provisions, if taken or not taken, as the case may be, could (i) endanger the
status of the REMIC as a REMIC or (ii) result in the imposition of a tax upon
the REMIC (including but not limited to the tax on “prohibited transactions” as
defined in Section 860F(a)(2) of the Code and the tax on “contributions” to a
REMIC set forth in Section 860G(d) of the Code) unless the Subservicer has
received an Opinion of Counsel (at the expense

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of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
All Mortgage Loans not sold or transferred pursuant to a Reconstitution shall be
subject to this Agreement and shall continue to be serviced for the remainder of
the Subservicing Period in accordance with the terms of this Agreement and with
respect thereto this Agreement shall remain in full force and effect. It is
agreed that Servicer shall provide notice to Subservicer of a (i) Whole Loan
Transfer at least 10 Business Days prior to the effective date of the
transaction and (ii) Pass-Through Transfer at least 10 Business Days prior to
the effective date of the transaction and/or (iii) servicing released transfer
at least 30 days prior to the date of the transfer of servicing. Such notice
shall include a loan schedule identifying the Mortgage Loans to be included in
each Whole Loan Transfer, Pass-through Transfer or servicing released transfer.
     Section 2.28 Regulation AB
     (a) In addition to Subservicer’s obligations hereunder, Subservicer agrees
to perform on behalf of Servicer or any Subsequent Purchaser the same
obligations it has agreed to perform under the Related Agreements (including but
not limited to providing the same information and services relating to
Regulation AB thereunder).
     (b) With respect to any Pass-Through Transfer, the Subservicer hereby
agrees to provide to the Servicer, upon five (5) Business Days prior notice,
disclosure with respect to the Subservicer that satisfies (in the sole
reasonable discretion of the Subservicer) the requirements of Items 1108(b),
1108(c)(2), 1108(c)(3), 1108(c)(4), 1108(c)(5), 1117 and 1119 of Regulation AB,
provided, with respect to Item 1119, that the Servicer has identified to the
Subservicer the appropriate parties with respect to the related Pass-Through
Transfer.
     (c) The Subservicer shall indemnify the Servicer, each affiliate of the
Servicer, and each of the following parties participating in a Pass-Through
Transfer: each sponsor and issuing entity; each Person (including, but not
limited to, any master servicer if applicable) responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Pass-Through Transfer, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Pass-Through Transfer; each broker dealer acting as underwriter,
placement agent or initial purchaser, each Person who controls any of such
parties or the Depositor (within the meaning of Section 15 of the Securities Act
of 1933 and Section 20 of the Exchange Act); and the respective present and
former directors, officers, employees, agents and affiliates of each of the
foregoing and of the Depositor (each, an “Indemnified Party”), and shall hold
each of them harmless from and against any claims, losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon any untrue statement of a material fact contained or alleged to be
contained in any information required to be provided pursuant to the Related
Agreements and herein by or on behalf of the Subservicer.
     (d) Subservicer hereto acknowledges and agrees that the purpose of
Section 2.28 is to facilitate compliance by Servicer with the provisions of
Regulation AB, as such may be amended or clarified from time to time. Therefore,
each of the parties agrees that the parties’ obligations

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hereunder will be supplemented and modified as necessary to be consistent with
any such amendments, interpretive advice or guidance, convention or consensus
among active participants in the asset-backed securities markets, advice of
counsel, or otherwise in respect of the requirements of Regulation AB and the
parties shall comply with requests made by Servicer, for delivery of additional
or different information as the Servicer may determine in good faith is
necessary to comply with the provisions of Regulation AB.
     Section 2.29 Mortgage Loan Information.
     (a) During the term of this Agreement, Subservicer agrees that it shall
supply on a daily basis (i) the Loan Information for each Mortgagor to Servicer
and (ii) aggregate loan information on the Mortgage Loans, on a daily basis in
accordance with the specific timing, transfer, and other requirements as may
from time to time be designated by Servicer.
     (b) Servicer and Subservicer acknowledge that, to the best of their
respective Knowledge, their respective obligations to provide information
sharing notices and to supply the Loan Information are permitted by, and comply
with, the Applicable Requirements. The parties acknowledge that in the event
that there has been a change in the Applicable Requirements that may affect
either (i) the dissemination of the Loan Information from Subservicer to
Servicer, (ii) the manner in which the Loan Information is disseminated from
Subservicer to Servicer, or (iii) the form, content, or delivery of the required
form of information sharing notices then the parties hereto shall work in good
faith to address the effect of this change in the Applicable Requirements and to
resolve the same in a manner that is reasonably acceptable in good faith to both
parties and that will allow Subservicer to continue to supply to Servicer as
much of the Loan Information as is then possible given the applicable change in
the Applicable Requirements.
     (c) Servicer acknowledges and agrees that it will not use or disseminate
the Loan Information in violation of the Applicable Requirements.
     Section 2.30 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
     The Subservicer shall maintain with responsible companies, at its own
expense, a blanket Fidelity Bond and an Errors and Omissions Insurance Policy,
with broad coverage on all officers, employees or other Persons acting in any
capacity requiring such Persons to handle funds, money, documents or papers
relating to the Mortgage Loans (“Subservicer Employees”). Any such Fidelity Bond
and Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker’s Blanket Bond and shall protect and insure the Subservicer against
losses, including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Subservicer Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Subservicer against
losses in connection with the release or satisfaction of a Mortgage Loan without
having obtained payment in full of the indebtedness secured thereby. No
provision of this Section 2.30 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Subservicer from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such Fidelity Bond and Errors and Omissions Insurance Policy shall be
at least equal to the amounts acceptable to FNMA or FHLMC. Upon the request of
the Servicer, the Subservicer shall cause to be delivered

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to the Servicer a certificate of insurance for such Fidelity Bond and Errors and
Omissions Insurance Policy and a statement from the surety and the insurer that
such Fidelity Bond and Errors and Omissions Insurance Policy shall in no event
be terminated or materially modified without 30 days’ prior written notice to
the Servicer.
     Section 2.31 Subservicer Reports
     In addition to any other reports required pursuant to the terms of this
Agreement, during the term of this Agreement, Subservicer shall furnish any
reports or documentation that the Servicer may reasonably request. Reports
requested may include reports not specified or otherwise required by this
Agreement or reports required to comply with any regulations regarding any
supervisory agents or examiners of the Servicer. All reports shall be delivered
in accordance with the Servicer’s reasonable instructions and directions. The
Subservicer agrees to execute and deliver all such instruments and take all such
action as the Servicer, from time to time, may reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
     Section 2.32 Use of Hardware and Software
     In the event that Subservicer shall be performing MLCC Services on behalf
of Servicer and any third party utilizing common hardware and/or Software,
Servicer shall have the right, on reasonable notice to Subservicer and at
Servicer’s sole cost and expense, to audit such hardware and Software to ensure
segregation of MLCC Data from third party data adequate to prevent unauthorized
disclosure of MLCC Data to third parties, and to ensure the security of MLCC
Data in accordance with normal industry practices, provided that such audit
shall not disrupt Subservicer’s ability to perform the MLCC Services.
     Section 2.33 Technical Architecture Standards
     On notice thereof, Subservicer shall comply with all reasonable Servicer
information management technical architecture standards related to interfacing
with Servicer systems, as identified and amended by Servicer from time to time.
     Section 2.34 Compliance with Policies
     Subservicer shall, upon notice thereof by Servicer, comply with all of
Servicer’s commercially reasonable policies and procedures regarding security
and safeguarding of MLCC Data.
     Section 2.35 Continuation of MLCC Services
     Subservicer acknowledges that the provision of MLCC Services is critical to
the business and operations of Servicer. In the event of a fee dispute between
Servicer and Subservicer pursuant to which either Party in good faith believes
it is entitled to withhold payment of the disputed amount or for which either
Party in good faith believes payment is due, each Party shall continue to
perform its obligations under the Transaction Agreements, including continuing
to pay undisputed amounts. Neither Party shall under any circumstances suspend
or disrupt, or seek any injunctive or other equitable relief for the purpose of
suspending or disrupting, directly

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or indirectly, provision of the services to the other Party under the
Transaction Agreements or the normal business operations of the other Party.
ARTICLE III
SERVICER REPRESENTATIONS AND WARRANTIES
     In addition to representations and warranties, if any, made elsewhere in
this Agreement, Servicer represents and warrants to Subservicer as of the date
hereof and each applicable Servicing Date, as follows:
     Section 3.01 Organization and Good Standing.
     Servicer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware. Servicer has in full force and
effect (without notice of possible suspension, revocation or impairment) all
required qualifications, permits, approvals, licenses, and registrations, or
exemptions therefrom, to conduct all activities in all jurisdictions in which
its activities with respect to the Mortgage Loans require it to be qualified or
licensed.
     Section 3.02 Authority and Capacity: Ordinary Course.
     Servicer has all requisite corporate power, authority and capacity to carry
on its business as it is now being conducted, to execute and deliver this
Agreement, and to perform all of its obligations hereunder. Servicer does not
believe, nor does it have any cause or reason to believe, that it cannot perform
each and every covenant contained in this Agreement.
     Section 3.03 Effective Agreement.
     The execution, delivery, and performance of this Agreement by Servicer and
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate, shareholder, or other action by Servicer;
this Agreement has been duly and validly executed and delivered by Servicer; and
this Agreement is a valid and legally binding agreement of Servicer, enforceable
against Servicer in accordance with its respective terms, subject to bankruptcy,
insolvency and similar laws affecting generally the enforcement of creditors’
rights and the discretion of a court to grant specific performance of contracts.
     Section 3.04 No Conflict.
     Neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated hereby, nor compliance with its respective
terms and conditions shall (a) violate, conflict with, result in the breach of,
constitute a default under, be prohibited by, or require any additional approval
under any terms, conditions, or provisions of Servicer’s Certificate of
Incorporation or by-laws, or any other similar corporate or organizational
documents of Servicer; any mortgage, indenture, deed of trust, loan or credit
agreement, or other agreement or instrument to which Servicer is now a party or
by which it is bound; or any law, ordinance, rule, regulation, order, judgment
or decree of any governmental authority applicable to Servicer; or (b) result in
the creation or imposition of any lien, charge or encumbrance of any material
nature upon any of the properties or assets of Servicer.

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     Section 3.05 Approvals and Compliance
     Servicer holds all licenses, approvals, permits, and other authorizations,
or exemptions therefrom, required under Applicable Requirements to service the
Mortgage Loans.
     Section 3.06 Errors and Omission Insurance
     Error and omissions and fidelity insurance coverage, in the amounts
required by the Applicable Requirements, is in effect with respect to Servicer
and will be maintained with respect to the related Mortgage Loans until such
time as the Servicer is no longer the servicer of the Mortgage Loans.
     Section 3.07 Litigation
     There is no litigation, claim, demand, proceeding or governmental
investigation existing or pending, or to the Knowledge of Servicer, threatened,
nor is there any order, injunction or decree outstanding against or related to
Servicer that could (1) have a material adverse effect upon the performance by
Servicer of its obligations under this Agreement or (2) to Servicer’s Knowledge,
would result in any material loss or liability to Subservicer. Further, to
Servicer’s Knowledge, there is no meritorious basis for any such litigation,
claim, demand, proceeding, or governmental investigation regarding either
clauses (1) or (2) above.
     Section 3.08 Financial Condition of Servicer
     Neither Servicer, Merrill Lynch Bank and Trust Company, FSB, nor any of
Servicer’s subsidiaries is in bankruptcy, receivership or conservatorship.
Servicer has the requisite financial resources and ability to meet its
obligations under this Agreement, including, but not limited to, any and all
indemnification and/or repurchase obligations.
     Section 3.09 Indemnification of Subservicer
     The Servicer shall indemnify the Subservicer and hold it harmless against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from a breach of the Servicer’s representations and warranties
contained in this Agreement. It is understood and agreed that the obligations of
the Servicer to indemnify the Subservicer as provided in this Section 3.09
constitute the sole remedies of the Subservicer respecting a breach of the
foregoing representations and warranties.
     Any cause of action against the Servicer relating to or arising out of the
breach of any representations and warranties made in Article III shall accrue as
to any Mortgage Loan upon (i) discovery of such breach by the Subservicer or
notice thereof by the Servicer to the Subservicer, (ii) failure by the Servicer
to cure such breach, and (iii) demand upon the Servicer by the Subservicer for
compliance with this Agreement.

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ARTICLE IV
SUBSERVICER REPRESENTATIONS, WARRANTIES AND COVENANTS
     In addition to representations and warranties, if any, made elsewhere in
this Agreement, Subservicer represents and warrants to Servicer as of the date
hereof and each applicable Servicing Date, as follows:
     Section 4.01 Due Incorporation and Good Standing.
     Subservicer is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey. Subservicer has in full
force and effect (without notice of possible suspension, revocation or
impairment) all required qualifications, permits, approvals, licenses, and
registrations, or exemption therefrom, to conduct all activities in all
jurisdictions in which its activities with respect to the Mortgage Loans require
it to be qualified or licensed.
     Section 4.02 Authority and Capacity; Ordinary Course.
     Subservicer has all requisite corporate power, authority and capacity to
carry on its business as it is now being conducted, to execute and deliver this
Agreement, and to perform all of its obligations thereunder. Subservicer does
not believe, nor does it have any cause or reason to believe, that it cannot
perform each and every covenant contained in this Agreement.
     Section 4.03 Effective Agreement.
     The execution, delivery and performance of this Agreement by Subservicer
and consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate, shareholder or other action by
Subservicer; this Agreement has been duly and validly executed and delivered by
Subservicer; and this Agreement is a valid and legally binding agreement of
Subservicer, enforceable against Subservicer in accordance with its respective
terms, subject to bankruptcy, insolvency and similar laws affecting generally
the enforcement of creditors’ rights and the discretion of a court to grant
specific performance of contracts.
     Section 4.04 No Conflict.
     Neither the execution and delivery of this Agreement, nor the consummation
of the transactions contemplated hereby, nor compliance with their respective
terms and conditions shall (a) violate, conflict with, result in the breach of,
constitute a default under, be prohibited by or require any additional approval
under any terms, conditions or provisions of Subservicer’s articles of
incorporation or by-laws or any other similar corporate or organizational
document of Subservicer; any mortgage, indenture, deed of trust, loan or credit
agreement or other agreement or instrument to which Subservicer is now a party
or by which it is bound; or any law, ordinance, rule, regulation, order,
judgment or decree of any governmental authority applicable to Subservicer; or
(b) result in the creation or imposition of any lien, charge or encumbrance of
any material nature upon any of the properties or assets of Subservicer.

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     Section 4.05 Approvals and Compliance.
     Subservicer holds all licenses, approvals, permits and other
authorizations, or exemptions therefrom, required under Applicable Requirements
to assume responsibility for subservicing the Mortgage Loans.
     Section 4.06 Litigation.
     There is no litigation, claim, demand, proceeding or governmental
investigation existing or pending, or to the Knowledge of Subservicer,
threatened, nor is there any order, injunction or decree outstanding against or
relating to Subservicer that could (i) have a material adverse effect upon the
performance by Subservicer of its obligations under this Agreement or (ii) to
Subservicer’s Knowledge, would result in any material loss or liability to
Servicer. Further, to Subservicer’s Knowledge, there is no meritorious basis for
any such litigation, claim, demand, proceeding, or governmental investigation
regarding either clauses (1) or (2) above.
     Section 4.07 Agency Approval.
     Subservicer has been approved by GNMA, FNMA and FHLMC and will remain
approved as an “eligible seller/servicer” of residential mortgage loans as
provided in GNMA, FNMA, or FHLMC guidelines and in good standing. Subservicer
has not received any notification from GNMA, FNMA or FHLMC that Subservicer is
not in compliance with the requirements of the approved “seller/servicer”
status. Subservicer is a mortgagee approved by the Secretary of HUD pursuant to
Section 203 and 211 of the National Housing Act. Subservicer has not received
any notification from HUD that Subservicer is not in compliance with the
requirements of the approved mortgagee status.
     Section 4.08 Servicing Compliance.
     The servicing practices to be used by Subservicer are and shall remain, in
all material respects in compliance with all Applicable Requirements, including
without limitation, all federal, state and local laws, rules, all regulations
and requirements in connection therewith, and FNMA Servicer Guide, as
applicable.
     Section 4.09 No Inquiries.
     Subservicer has not received written notice from or on behalf of FHA, HUD,
FDIC, FNMA, FHLMC or GNMA, advising Subservicer of its failure to comply with
applicable servicing or claims procedures, or resulted in a request for
repurchase of mortgage loans or indemnification in connection with any mortgage
loans.
     Section 4.10 Contingency Plan.
     Subservicer has in place a disaster recovery plan that will enable it to
perform its obligations under this Agreement in all material respects, at
another location within one (1) Business Day in the event its primary location
is rendered inoperative as a result of a natural or other disaster or emergency,
and once Subservicer relocates to its backup site, it shall make arrangements to
connect Servicer to Subservicer’s back-up site in order to provide continued

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service as stated in this Agreement. The Subservicer’s disaster recovery plan
shall include, at a minimum, procedures for back-up/restoration of operating and
application software, procedures for the protection of Servicer’s source
documentation; procedures and third-party agreements for replacement equipment
(e.g. computer equipment), and procedures and third-party agreements for
off-site production facilities. The Subservicer agrees to release the
information necessary to the Servicer and will have a summary of its disaster
recovery plan available for the Servicer to review upon request. The Subservicer
agrees to annually test its disaster recovery plan, shall promptly take
corrective action as necessary to comply with this Section 4.10 and, upon
request, provide a written report thereof to the Servicer. If the results of the
Servicer’s review of Subservicer’s disaster recovery plan are unsatisfactory to
the Servicer, the Servicer shall provide written notice to Subservicer of the
deficiencies it has identified, and Subservicer shall have a period of sixty
(60) days from its receipt of such notice within which to correct or cure said
deficiencies. If any such deficiencies cannot be corrected or cured within such
sixty (60) day period, Servicer may immediately terminate this Agreement and all
costs and expenses of transfer the servicing shall be paid by the Subservicer
upon presentation of reasonable documentation of such costs. The Subservicer
shall notify the Servicer immediately of any change to Subservicer’s disaster
recovery plan.
     Section 4.11 Licenses and Approvals.
     Subservicer maintains and shall maintain, in good standing, all licenses
and approvals necessary to subservice the Mortgage Loans and maintains and shall
at all times maintain the capital requirements imposed by the licensing or
approving entities having jurisdiction over Subservicer.
     Section 4.12 Fidelity and E&O Insurance.
     Subservicer maintains and shall at all times maintain error and omissions
and fidelity insurance coverage of the type and in the amounts required by the
Applicable Requirements and Section 2.30
     Section 4.13 Sufficiency of Systems and Personnel.
     On and after the Servicing Date, Subservicer shall have and shall at all
times maintain during the term of this Agreement, sufficient systems and trained
and experienced personnel in place to perform its obligations under this
Agreement.
     Section 4.14 Compliance with Laws.
     For so long as, and to the extent that, Subservicer subservices the
Mortgage Loans, Subservicer will continue to comply with each applicable
federal, state, or local, law, statute, and ordinance, and any rule, regulation,
or order issued thereunder, pertaining to the subject matter of this Agreement,
including, but not limited to, usury, RESPA, Consumer Credit Reporting Act,
Equal Credit Opportunity Act, Federal Deposit Insurance Corporation Improvement
Act, Regulation B, Fair Credit Reporting Act, Fair Debt Collection Practices
Act, Fair Housing Act, Truth in Lending Act and Regulation Z, Flood Disaster
Protection Act of 1973, and any applicable regulations related thereto, and such
other fair housing, anti-redlining, equal credit opportunity, truth-in-lending,
real estate settlement procedures, fair credit reporting, and every

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other prohibition against unlawful discrimination in residential mortgage
lending or governing consumer credit, and all state consumer credit statutes and
regulations, as amended. In the event Servicer has a reasonable good faith
belief in Subservicer’s non-compliance with this Section 4.14 and upon
Servicer’s written request, Subservicer shall deliver to Servicer reasonable
evidence of compliance with any of the requirements of this Section 4.14.
     Section 4.15 Financial Condition of Subservicer.
     Neither Subservicer, its parent, nor any of its subsidiaries is in
bankruptcy, receivership or conservatorship. Subservicer has the requisite
financial resources and ability to meet its obligations under this Agreement,
including, but not limited to, any and all indemnification.
     Section 4.16 MERS.
     The Subservicer is a member of MERS in good standing.
     Section 4.17 Indemnification of Servicer.
     The Subservicer shall indemnify the Servicer and hold it harmless against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from a breach of the Subservicer’s representations and warranties
contained in this Agreement. It is understood and agreed that the obligations of
the Subservicer to indemnify the Servicer as provided in this Section 4.17
constitute the sole remedies of the Servicer respecting a breach of the
foregoing representations and warranties.
     Any cause of action against the Subservicer relating to or arising out of
the breach of any representations and warranties made in Article IV shall accrue
as to any Mortgage Loan upon (i) discovery of such breach by the Servicer or
notice thereof by the Subservicer to the Servicer, (ii) failure by the
Subservicer to cure such breach, and (iii) demand upon the Subservicer by the
Servicer for compliance with this Agreement.
ARTICLE IVA
MUTUAL REPRESENTATIONS
     Each Party hereby represents and warrants to the other Party as follows:
     Section 4A.01. Kickbacks. No employee, agent or representative of the other
Party has been offered, shall be offered, has received, or shall receive,
directly or indirectly, from such Party, any gratuities, merchandise, cash,
services benefit, fee, commission, dividend, gift, or other inducements or
consideration of any kind in connection with this Agreement.
     Section 4A.02. Government Officials. No person employed by such Party in
connection with the performance of its obligations under this Agreement is an
official of the government of any foreign country, or of any agency thereof, and
no part of any moneys or consideration paid to such Party hereunder shall accrue
for the benefit of any such official.

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     Section 4A.03. No Relation. No individual who will receive specific
compensation from such Party as a result of the execution of this Agreement is
related to any public official or official of any issuer of municipal
securities. For purposes of this Section, the term “official of an issuer of
municipal securities” means any person who is an incumbent, candidate or
successful candidate (a) for elective office of any issuer which office is
directly or indirectly responsible for, or can influence the outcome of, the
hiring of a broker, dealer or municipal securities dealer for municipal
securities business by such issuer, or (b) for any elective office of a state or
of any political subdivision, which office has authority to appoint any
official(s) of such issuer. The term “related” applies when a person is related
by blood or marriage.
ARTICLE V
REMITTANCES AND REPORTING
     Section 5.01 Remittances.
     (a) On each Interim Remittance Date, the Subservicer shall remit by wire
transfer of immediately available funds to the Servicer all payments of
principal and interest collected by the Subservicer and deposited in the
Custodial Account as of the close of business on the last day of the First
Remittance Period (reduced by the Servicing Fee and net of charges against or
withdrawals from the Custodial Account pursuant to Section 2.09).
     (b) On each Normal Remittance Date, the Subservicer shall remit by wire
transfer of immediately available funds to the Servicer (a) all payments of
principal and interest collected by the Subservicer and deposited in the
Custodial Account as of the close of business on the last day of the Second
Remittance Period (reduced by the Servicing Fee and net of charges against or
withdrawals from the Custodial Account pursuant to Section 2.09).
     (c) Notwithstanding anything contained herein to the contrary, with respect
to any Principal Prepayments made in full regarding any Mortgage Loan, the
Subservicer shall remit such proceeds to Servicer within five (5) Business Days
of its receipt of such proceeds.
     With respect to any remittance received by the Servicer after the second
Business Day following the Business Day on which such payment was due, the
Subservicer shall pay to the Servicer interest on any such late payment at an
annual rate equal to the Prime Rate, adjusted as of the date of each change,
plus two (2) percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Subservicer on the date such late payment is made and shall cover
the period commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with the distribution payable on the next
succeeding Interim Remittance Date or Normal Remittance Date, as applicable. The
payment by the Subservicer of any such interest shall not be deemed an extension
of time for payment or a waiver of any Event of Default by the Subservicer. All
cash flows from Prepayment Charges shall be passed through to the Servicer and
shall not be waived by the Subservicer, except pursuant to Section 2.13.

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     Section 5.02 Statements to Servicer.
     (a) Not later than the Interim Remittance Date, the Subservicer shall
furnish to the Servicer, a remittance report in the form of Exhibit J-1, with a
trial balance report attached thereto, as to the First Remittance Period of such
month. The data provided in Exhibit J-1 shall be provided in Excel format.
     (b) Not later than the Normal Remittance Date, the Subservicer shall
furnish to the Servicer, (i) a remittance report in the form of Exhibit J-1,
with a trial balance report attached thereto, as to the Second Remittance Period
of the preceding month and (ii) a monthly remittance report, in the form of
Exhibit J-l, with a trial balance report attached thereto as to the Monthly
Remittance Period of the preceding month. The data provided in Exhibit J-1 shall
be provided in a text file format unless otherwise indicated in Exhibit J-1.
     (c) Notwithstanding anything set forth to the contrary in the Agreement, no
later than 12:00 p.m. (New York City time) on each Business Day, the Subservicer
shall prepare and distribute to the Servicer and its designee the information
set forth on Exhibit J-2.
     Section 5.03 Subservicer to Deliver Officer’s Certificates to Servicer.
     With respect to all Mortgage Loans, the following provisions shall apply:
     (a) Upon final disposition of a Defaulted Mortgage Loan, the Subservicer
shall deliver to the Servicer an Officer’s Certificate in the form of Exhibit A.
Copies of original proceeds checks should be attached. These documents should be
submitted within five (5) days after the date:
          (i) of receipt of any proceeds from any foreclosure sale at which a
third party purchased a Mortgage Property (Third Party sale);
          (ii) of the closing of any sale of a Mortgaged Property for an amount
less than the total outstanding indebtedness owing on the related Mortgage Loan
(Short Sale);
          (iii) of the closing of any sale of an REO Property (REO Sale);
          (iv) on which the Subservicer accepts, as payment in full on a
Mortgage Loan, an amount less than the total outstanding indebtedness owing on
such Mortgage Loan (Negotiated Payoff);
          (v) of decision to charge off the account in full (Direct Charge-Off);
          (vi) of decision to charge off the account in full due to insufficient
equity in the property (Insufficient Equity); or
          (vii) on which the Subservicer recoups previously underestimated
Subservicer Advances, or repays previously overestimated Subservicer Advances,
set forth on any Officer’s Certificate previously delivered to the Servicer.

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     (b) The Subservicer shall deliver an Officer’s Certificate to the Servicer
within three (3) Business Days after the Subservicer determines that it has
made, or would be making, a non-recoverable advance.
ARTICLE VI
SUBSERVICER PAYMENT PROVISIONS
     Section 6.01 Effectiveness of Payment Provisions,
     The Subservicing Fees payable by Servicer to Subservicer during the year
2008 shall be retroactively effective as of the Effective Date.
     Section 6.02 Compensation for Loan Servicing; Allocation of Special Fees
and Charges.
     (a) General Fee. In consideration for the servicing activities performed by
Subservicer pursuant to this Agreement, Servicer shall pay to Subservicer a sum
equal to [***] per payment actually made by the related Mortgagor for each
Mortgage Loan.
     (b) For each Mortgage Loan that is a Manageable Rate Mortgage Loan PHH
shall earn a per-payment Subservicing Fee of (i) [***] for each Mortgage Loan
subserviced by PHH, and (ii) a fee of [***] each time a borrower exercises an
interest rate swap.
     (c) With respect to any Mortgage Loan that is sold and/or assigned in whole
or in part to a Subsequent Purchaser, Servicer shall pay to Subservicer an
amount per Mortgage Loan, as applicable as follows:
          (i) agency securitizations — [***]
          (ii) Whole Loan Transfers — [***]
          (iii) non-standard product Pass-Through Transfers — [***]
          (iv) standard product Pass-Through Transfers — [***]
     (d) The fees payable under Section 6.02(a)-(c) are referred to herein as
the “Subservicing Fees”.
     (e) [Reserved]
     (f) Specific Fees and Charges Payable to Subservicer. In addition to the
fees described in Sections 6.02(a)-(c), Subservicer shall be entitled to receive
any reimbursable fee approved by the Servicer.
     (g) In addition, Servicer shall pay Subservicer an amount equal to (i) all
out of pocket, third party costs and expenses contemplated in Section 6.02(c)
subject to the applicable
 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

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limitations set forth in Section 2.27 and incurred by Subservicer to transfer
the servicing rights related to the Mortgage Loans unless otherwise mutually
agreed, and (ii) all outstanding fees, expenses and advances for which
Subservicer is entitled to reimbursement under the Agreement, including but not
limited to deboarding fees in an amount equal to [***] per Mortgage Loan
(“Deboarding Fees”) and Transfer and Recording Fees when Subservicer is
terminated: (1) without cause, (2) upon the expiration of the term of this
Agreement or (3) upon the transfer of servicing from Subservicer with respect to
any Mortgage Loans.
ARTICLE VII
SOLICITATION
     Section 7.01 Solicitation.
     Without Servicer’s prior written consent, which may be withheld by Servicer
in its sole discretion, neither Subservicer nor any Affiliate shall solicit any
Mortgagor, or cause any Mortgagor to be solicited, for subordinate financing of
any Mortgage Loan or any investment or financial services or products,
including, without limitation, insurance and brokerage account services. Neither
Servicer nor any of its Affiliates shall be prohibited from soliciting any
Mortgagor or causing any Mortgagor to be solicited for any product or service
now offered (or hereafter offered) by Servicer or any Affiliate of Servicer.
Subservicer shall not prepare or disseminate, for compensation or otherwise, any
mailing lists relating to the Mortgagors, the Mortgage Loans, the Servicing
Rights, or otherwise, including any lists of Mortgagors, without Servicer’s
prior written consent, which may be withheld by Servicer in its sole discretion.
The parties hereto nevertheless agree that (i) either Subservicer, Servicer or
their Affiliates may from time to time undertake promotions that are directed to
either their own general customer base or to the general public at large and
that do not target Mortgagors directly, including, without limitation,
newspaper, radio and television advertisements and mass mailing or telephone
solicitations and that (ii) offers by Subservicer, Servicer or their Affiliates
to refinance Mortgage Loans in response to, or as a result of, contact initiated
by such the related Mortgagors or their representatives shall not constitute
solicitation.
ARTICLE VIII
ASSIGNMENT OF MORTGAGES
     Section 8.01 Assignments.
     There shall be no Assignments to the Subservicer for any Mortgage Loans at
any time under this Agreement. Instead, the Subservicer shall register the
Mortgage Loans in the name of the Servicer on the MERS System. Servicer shall
bear any MERS cost in connection with the foregoing.
 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

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ARTICLE IX
     Section 9.01 Power of Attorney.
     The Subservicer hereby authorizes Servicer, at the Subservicer’s expense,
to perform all acts which the Servicer deems appropriate to protect, preserve
and realize upon the Mortgage Loans, including, but not limited to, the right to
take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
mortgage insurance or with respect to any Mortgage Note, complete blanks in
documents, transfer servicing (including, but not limited, to sending “good-bye
letters” to any Mortgagor) and execute assignments on behalf of the Subservicer
as its attorney in fact. This power of attorney is coupled with an interest and
is irrevocable without Servicer’s consent.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SUBSERVICER
     The obligations of Subservicer under this Agreement are subject to the
satisfaction of the following conditions:
     Section 10.01 Compliance and Conditions.
     All terms, covenants, and conditions of this Agreement required to be
complied with and performed by Servicer shall have been duly complied with and
performed by Servicer in all material respects on or before the date specified.
     Section 10.02 Corporate Resolution.
     Subservicer shall have received from Servicer on or before the first
Servicing Date a duly executed certificate of Servicer’s Secretary or Assistant
Secretary reciting the corporate approval by Servicer of the subservicing of the
Mortgage Loans by Subservicer and authorizing Servicer’s officers to execute
such documents as may be necessary to carry out the transactions contemplated
hereby.
     Section 10.03 Correctness of Representations and Warranties.
     The representations and warranties made by Servicer in this Agreement are
true and correct in all material respects as of each Servicing Date, except
where another date is specified therein.
     Section 10.04 Litigation or Administrative Action.
     As of each Servicing Date, there shall not have been commenced or, to the
knowledge of either party hereto, threatened, any action, suit or proceeding
that enjoins, or is likely to materially and adversely affect, the consummation
of the transactions contemplated hereby.

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     Section 10.05 Effective Agreements.
     As of each applicable Servicing Date, the Transaction Agreements shall be
in full force and effect and Servicer shall have complied in all material
respects with the covenants, conditions, and agreements applicable to it under
the Transaction Agreements.
     Section 10.06 No Material Adverse Change.
     As of each applicable Servicing Date, there shall not have been any
Material Adverse Change in the business or financial condition of Servicer since
the date of this Agreement (or since the immediately preceding Servicing Date,
in the case of any Servicing Date after the first Servicing Date), other than
those that result from general changes in economic conditions including but not
limited to fluctuations in interest rates, changes to Applicable Requirements,
or changes applicable to the mortgage servicing industry generally.
Notwithstanding anything contained herein, “Material Adverse Change” shall not
include the merger of Servicer with and into any of Servicer’s Affiliates.
ARTICLE XI
CONDITIONS PRECEDENT TO OBLIGATIONS OF SERVICER
     The obligations of Servicer under this Agreement are subject to the
satisfaction of the following conditions:
     Section 11.01 Compliance with Conditions.
     All terms, conditions and covenants of this Agreement required to be
complied with and performed by Subservicer shall have been duly complied with
and performed by Subservicer in all material respects on or before the date
specified.
     Section 11.02 Corporate Resolution.
     Servicer shall have received from Subservicer on or before the first
Servicing Date a duly executed certificate of Subservicer’s Secretary or
Assistant Secretary reciting the corporate approval by Subservicer of the
subservicing of the Mortgage Loans and authorizing Subservicer’s officers to
execute such documents as may be necessary to carry out the transactions
contemplated hereby.
     Section 11.03 Correctness of Representations and Warranties.
     The representations and warranties made by Subservicer in this Agreement
are true and correct in all material respects as of each applicable Servicing
Date, except where another date is specified therein.
     Section 11.04 No Material Adverse Change.
     As of each applicable Servicing Date, there shall not have been any
Material Adverse Change in the business or financial condition of Subservicer
since the date of this Agreement (or

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since the immediately preceding Servicing Date, in the case of any Servicing
Date after the first Servicing Date), other than those that result from general
changes in economic conditions including but not limited to fluctuations in
interest rates, changes to Applicable Requirements, or changes applicable to the
mortgage servicing industry generally. Notwithstanding anything contained
herein, “Material Adverse Change” shall not include the merger of Subservicer
with and into any of Subservicer’s Affiliates.
     Section 11.05 Litigation or Administrative Action.
     As of each Servicing Date, there shall not have been commenced or, to the
knowledge of either party hereto, threatened, any action, suit or proceeding
that enjoins, or is likely to materially and adversely affect, the consummation
of the transactions contemplated hereby.
     Section 11.06 Effective Agreements.
     As of each applicable Servicing Date, this Agreement shall be in full force
and effect and Subservicer shall have complied in all material respects with the
covenants, conditions, and agreements applicable to it under the Transaction
Agreements.
ARTICLE XII
ANNUAL CERTIFICATIONS
     Section 12.01 Annual Statement as to Compliance.
     The Subservicer will deliver to the Servicer on or before March 1 of each
year, beginning with March 1, 2009, a certificate signed by a senior vice
president or more senior officer stating that (i) a review of the activities of
the Subservicer during the preceding calendar year and of performance under this
Agreement has been made under such officer’s supervision, and (ii) to the best
of such officer’s knowledge, based on such review, the Subservicer has fulfilled
all of its obligations under this Agreement throughout such year in all material
respects, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
     Section 12.02 Annual Independent Certified Public Accountants’ Servicing
Reports.
     On or before March 1 of each year, beginning with March 1, 2009, the
Subservicer at its expense shall cause a nationally recognized firm of
independent certified public accountants that is a member of the American
Institute of Certified Public Accountants to furnish a report to the Servicer to
the effect that (i) all Mortgage Loans subserviced by the Subservicer were
included in the total population of mortgage loans subject to selection for
testing in such firm’s examination of certain documents and records, that such
examination was conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers and that such examination disclosed no
items of material noncompliance with the provisions of the Uniform Single
Attestation Program for Mortgage Bankers, except for such items of noncompliance
as shall be set forth in such report and (ii) such accounting firm (or another
nationally recognized firm) has reviewed the operations and control procedures
of the Subservicer and has determined

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that such system has been suitably designed to subservice the Mortgage Loans
pursuant to this Agreement.
     (a) Prior to execution of this Agreement, the Subservicer at its expense
shall have caused, and annually thereafter within 90 days after the close of the
Subservicer’s fiscal year, beginning with the close of the 2007 fiscal year, the
Subservicer at its expense shall cause, a nationally recognized firm of
independent public accountants that is a member of the American Institute of
Certified Public Accountants to furnish to the Servicer audited financial
statements of the Subservicer for the then most recently closed fiscal year,
together with an opinion thereon of such public accountants that either is
unqualified or contains only such qualifications as are acceptable to the
Servicer.
     (b) On or before March 1 of each year, beginning March 1, 2009, the
Subservicer, at its expense, shall cause the Subservicer to furnish its
Statement of Auditing Standards (“SAS”) 70 Report (Report on the Processing of
Transactions by Service Organizations) to the Servicer.
ARTICLE XIII
INDEMNIFICATION
     Section 13.01 Indemnification of Servicer.
     Subservicer shall indemnify and hold Servicer, its officers, directors,
employees and agents (the “Servicer Indemnified Parties”) harmless from, and
will reimburse the Servicer Indemnified Parties for, any and all Losses incurred
by any of the Servicer Indemnified Parties to the extent that such Losses result
from, are caused by or arise out of any one or more of the following:
     (a) Any material misrepresentations made by Subservicer in this Agreement,
or in any schedule, exhibit, or certificate furnished pursuant hereto;
     (b) Any material breach of any of the representations and warranties of
Subservicer or the nonfulfillment of any term, covenant, condition or obligation
of Subservicer set forth in this Agreement or in any schedule, statement,
exhibit, or certificate furnished pursuant hereto, or any default or failure to
perform by Subservicer hereunder;
     (c) Any failure of Subservicer to comply with the terms of the Applicable
Requirements in connection with subservicing the Mortgage Loans;
     (d) Any liabilities or obligations, contingent or otherwise, of Subservicer
of any nature whatsoever relating to Subservicer’s obligations under this
Agreement, to the extent that any related Loss to Servicer is not increased by
negligence, bad faith or willful misconduct on the part of Servicer; or
     (e) Any non-compliance with the terms of any powers of attorney or the use
thereof that results in a Loss to Servicer.

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     The indemnity provided in this Section 13.01 shall remain in full force and
effect regardless of any investigation made by Servicer or its representatives.
     Section 13.02 Indemnification of Subservicer.
     Servicer shall indemnify and hold Subservicer, its officers, directors,
employees and agents (the “Subservicer Indemnified Parties”) harmless from, and
will reimburse the Subservicer Indemnified Parties for, any and all Losses
incurred by any of the Subservicer Indemnified Parties to the extent that such
Losses result from, are caused by or arise out of any one or more of the
following:
     (a) Any material misrepresentations made by Servicer in this Agreement, or
in any schedule, exhibit, or certificate furnished pursuant hereto;
     (b) Any material breach of any of the representations and warranties of
Servicer or the nonfulfillment of any term, covenant, condition or obligation of
Servicer set forth in this Agreement or in any schedule, statement, exhibit, or
certificate furnished pursuant hereto, or any default or failure to perform by
Servicer hereunder;
     (c) Any failure of Servicer to comply with the terms of the Applicable
Requirements in connection with the Mortgage Loans;
     (d) Any liabilities or obligations, contingent or otherwise, of Servicer of
any nature whatsoever relating to Servicer’s obligations under this Agreement,
to the extent that any related Loss to Subservicer is not increased by
negligence, bad faith or willful misconduct on the part of Servicer; or
     The indemnity provided in this Section 13.02 shall remain in full force and
effect regardless of any investigation made by Servicer or its representatives.
     Section 13.03 Notice and Settlement of Claims.
     (a) In the event that either party to this Agreement becomes aware of any
material fact giving rise to any obligation of the other party under this
Article XIII, including, but not limited to, any claim or any litigation brought
by a third party which may give rise to any such obligation, such party shall
promptly, but in no event later than seven (7) Business Days, provide the other
party with a notice describing the same. Failure to provide a notice within such
seven (7) Business Day period shall not relieve such other party of its
obligations under this Article XIII unless such failure materially prejudices
the rights or increases the liability of such other party, and then, such other
party’s liability shall be reduced only by the amount that it actually has been
damaged by such failure.
     (b) The indemnifying party (the “Indemnifying Party”) may, at its own cost
and expense, assume defense of any claim, suit, action or proceeding, provided
that the counsel is satisfactory to the indemnified party (the “Indemnified
Party”) in the exercise of its reasonable discretion. The party not controlling
the defense or prosecution of any such claim, suit, action or proceeding may
participate at its own cost and expense.

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     (c) Neither the Indemnifying Party nor the Indemnified Party shall be
entitled to settle, compromise, decline to appeal, or otherwise dispose of any
claim, suit, action or proceeding without the consent of the other party (which
consent shall not be unreasonably withheld or delayed).
     (d) Following the discharge of the Indemnifying Party’s obligations under
this Article XIII the Indemnified Party shall assign to the Indemnifying Party
any and all related claims against third parties. If the Indemnifying Party
fails to discharge its obligations under this Article XIII, the Indemnified
Party shall be entitled (but not obligated) to pursue (as the assignee of the
Indemnifying Party) any and all claims against third parties which the
Indemnifying Party otherwise would have the right to pursue, including, but not
limited to, claims against loan correspondents. Within fifteen (15) days after
receipt, the Indemnified Party shall refund to the Indemnifying Party the
amounts of all recoveries the Indemnified Party received from third parties with
respect to any claim for which the Indemnified Party was reimbursed for its
Losses.
     (e) Following the receipt of written notice from the Indemnified Party of a
demand for indemnification, the Indemnifying Party shall seek to cure the
problem giving rise to the demand, if possible, without any actual or contingent
liability of the Indemnified Party, and pay the amount for which it is liable,
or otherwise take the actions which it is required to take within thirty
(30) days or such lesser time as may be required by an Insurer or third-party
claimant.
ARTICLE XIV
DEFAULT AND TERMINATION
     Section 14.01 Termination by Servicer; Events of Default.
     In case one or more of the following events (each, an “Event of Default”)
shall occur and be continuing:
     (a) any failure by the Subservicer to timely remit to the Servicer any
payment required to be made under the terms of this Agreement; or
     (b) any material breach by the Subservicer of any other term, agreement,
covenant, representation or warranty in this Agreement that has not been cured
after written notice and the expiration of the greater of (i) any cure period
expressly provided for herein or (ii) a thirty (30) day curative period; or
     (c) there shall have occurred under any Transaction Agreement a default by
the Subservicer that has not been cured after the expiration of any curative
period under such Transaction Agreement; or
     (d) following entry against the Subservicer of a decree or order of a court
or agency or supervisory authority having jurisdiction for the appointment of a
trustee, conservator, receiver, liquidator, assignee, custodian or sequestrator
(or other similar official) for the Subservicer in any federal or state
bankruptcy, insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of
Subservicer’s

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affairs, if such decree or order has remained in force undischarged or unstayed
for a period of sixty (60) days, or
     (e) upon consent by the Subservicer to the appointment of a trustee,
conservator, receiver, liquidator, assignee, custodian or sequestrator (or other
similar official) in, or commencement of a voluntary case under, any federal or
state bankruptcy insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Subservicer or of or
relating to all or substantially all of the Subservicer’s property; or
     (f) the Subservicer fails to meet a “Service Standard” set forth in
Section I of the Operations Guide as amended from time to time and the
Subservicer fails to remedy such deficiency within the ninety (90) day time
period set forth in Section 14.02(b).
     (g) the Subservicer shall (i) either fail or admit in writing its inability
to pay its debts generally as they become due, (ii) admit in writing its
inability to, or intention not to, perform any of its material obligations,
(iii) make an assignment for the benefit of its creditors, (iv) file a petition
to take advantage of any applicable insolvency or reorganization statute or (v)
voluntarily suspend payment of its obligations; or
     (h) failure by the Subservicer to be in compliance with the “doing
business” or licensing laws of any jurisdiction where a Mortgaged Property is
located if such non-compliance has resulted in a revocation or suspension of
Subservicer’s license or exemption (i.e., there is no default if revocation or
suspension has been waived or put in a suspense status based on the grant of an
extension or extensions for filing required documents); or
     (i) either (A) the Subservicer ceases to be a HUD approved mortgagee
pursuant to Section 203 of the National Housing Act or HUD suspends, rescinds,
halts, eliminates, withdraws, annuls, repeals, voids or terminates the status of
the Subservicer or a third-party subservicer used by the Subservicer as a HUD
approved mortgagee pursuant to Section 203 of the National Housing Act, (B) FNMA
and/or FHLMC suspends, rescinds, halts, eliminates, withdraws, annuls, repeals,
voids or terminates the status of the Subservicer or a third-party subservicer
used by the Subservicer, as an approved seller and/or as an approved servicer of
FNMA or FHLMC, respectively, for loans either currently being serviced or to be
serviced by the Subservicer or a third-party subservicer used by the
Subservicer, (C) Subservicer or a third-party subservicer used by the
Subservicer receives notice that HUD may take such action set forth in clause
(A), or (D) Subservicer or a third-party subservicer used by the Subservicer
receives notice that FNMA and/or FHLMC may take such action set forth in clause
(B); or
     (j) the Subservicer attempts to assign its right to servicing compensation
hereunder without the consent of the Servicer or the Subservicer attempts,
without the consent of the Servicer, to sell or otherwise dispose of all or
substantially all of its property or assets or to assign this Agreement or the
servicing responsibilities hereunder or to delegate its duties hereunder or any
portion thereof; or
     (k) failure by the Subservicer to duly perform, within the required time
period, its obligations under Subsections 12.01 or 12.02 which failure continues
unremedied for a period of ten (10) days after the date on which written notice
of such failure, requiring the same to be

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remedied, shall have been given to the Subservicer by any party to this
Agreement, unless (i) such failure is the result of a Force Majeure event and
(ii) Subservicer is not servicing any Mortgage Loans which are subject to a
Pass-Through Transfer;
     (l) Any Rating Agency lowers the Subservicer’s servicer rating anytime
after the date of this Agreement which materially and adversely effects the
value of the Mortgage Loans or interest of the Servicer therein;
     (m) any governmental authority or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any action to
condemn, seize or appropriate, or to assume custody or control of, all or any
substantial part of the property or assets of Subservicer or any of
Subservicer’s affiliates, or shall have taken any action to displace the
management of Subservicer or any of Subservicer’s affiliates or to curtail its
authority in the conduct of the business of Subservicer or any of Subservicer’s
affiliates, or takes any action in the nature of enforcement to remove, limit or
restrict the approval of Subservicer or any of Subservicer’s affiliates as an
issuer, buyer or a seller/servicer of Mortgage Loans or securities backed
thereby; or
     (n) Servicer shall reasonably request, specifying the reasons for such
request, reasonable information, and/or written responses to such requests,
regarding the financial well-being of the Subservicer and such reasonable
information and/or responses shall not have been provided within five
(5) Business Days of such request; unless the delivery of such information is
delayed or prevented by a Force Majeure event; or
     (o) An undisputed default on the part of the Subservicer shall have
occurred under any debt or repurchase obligation representing indebtedness of
over $25,000,000.00 beyond any cure period provided for in such debt or
repurchase obligation; or
     (p) the Servicer shall have reasonably determined, in good faith, that a
Material Adverse Effect shall have occurred.
then and in each and every such case, the Servicer may, by Notice of Default to
the Subservicer, terminate this Agreement and exercise any other rights and
remedies that the Servicer may have at law or in equity, including, without
limitation, the right to damages, injunctive relief and specific performance. In
addition to the foregoing, in the event that (A) a Subservicer Competitor Change
of Control shall have occurred, then at any time after Servicer shall have
received notice of such Subservicer Competitor Change of Control, Servicer may,
by giving written notice thereof to Subservicer, terminate this Agreement as of
a future date specified in such notice of termination; or (B) a Subservicer
Change of Control (other than a Subservicer Competitor Change of Control) shall
have occurred, then at any time within 30 days of such Subservicer Change of
Control, Servicer may, by giving written notice thereof to Subservicer,
terminate this Agreement as of a future date specified in such notice of
termination. On or after the receipt by the Subservicer of the Notice of Default
of this Agreement, all authority and power of the Subservicer under this
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the successor appointed pursuant to Section 15.01.
Subservicer shall immediately deliver to Servicer or its designee the Servicing
Files or Images for all Mortgage Loans subserviced by Subservicer and any and
all, including all original, copies

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or electronic versions thereof, papers, records and files relating to the
Mortgage Loans then in its possession and/or control and the Subservicer’s
transfer of the Servicing Files and the physical and contractual servicing under
this Subsection shall be in accordance with customary standards in the industry
and such transfer shall include the transfer of the gross amounts held in any
Escrow Accounts with respect to the related Mortgagors or otherwise received on
behalf of the related Mortgagors (without reduction for unreimbursed advances or
“negative escrows”). Servicer shall have the right to obtain physical possession
of the Servicing Files and all other files of Subservicer or any Subservicer
relating to the Mortgage Loans and all documents relating to the Mortgage Loans
which are then or may thereafter come into the possession of Subservicer or any
Subservicer or any third party acting for Subservicer or any Subservicer.
     It is hereby understood and agreed that Servicer may enforce its rights and
remedies hereunder without prior judicial process or hearing, and Subservicer
hereby expressly waives all rights Subservicer might otherwise have to require
Servicer to enforce their rights by judicial process. Subservicer also waives
all defenses Subservicer might otherwise have arising from use of nonjudicial
process, enforcement or from any other election of remedies. Subservicer
recognizes that nonjudicial remedies are consistent with the usages of the
trade, are responsive to commercial necessity and are the result of a bargain at
arm’s length.
     All Servicing Transfer Costs shall be paid by the Subservicer upon
presentation of reasonable documentation of such costs, if Subservicer is in
Default under this Agreement. However, if the Subservicer is not in default,
Servicer shall pay the transfer fees.
     If any of the Mortgage Loans are MERS Mortgage Loans, in connection with
the termination or resignation of the Subservicer hereunder, either (i) the
successor Subservicer shall represent and warrant that it is a member of MERS in
good standing and shall agree to comply in all material respects with the rules
and procedures of MERS in connection with the servicing of the Mortgage Loans
that are registered with MERS, or (ii) the Subservicer shall cooperate with the
successor Subservicer either (x) in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Servicer and to execute and deliver such other notices, documents and other
instruments as may be necessary to remove such Mortgage Loan(s) from the MERS®
System or (y) in causing MERS to designate on the MERS® System the successor
Subservicer as the Subservicer of such Mortgage Loan.
     Section 14.02 Failure of Subservicer to Maintain Service Standards;
Termination.
     (a) If, as evidenced by the monthly reports that Subservicer is required to
furnish to Servicer pursuant to Section II of the Operations Guide, any service
standard set forth in Section I of the Operations Guide is not satisfied (a
“Service Deficiency”) during [***], at Servicer’s request Subservicer shall
develop a plan describing the countermeasures and targets/goals Subservicer will
use to correct the Service Deficiency, and Subservicer shall present such plan
to Servicer within 15 days after Servicer has notified Subservicer of the
Service Deficiency. Within 15 days after receiving the plan from Subservicer,
Servicer shall either (x) accept the plan or (y) instruct Subservicer to modify
the plan, and, in the case of clause (y), Subservicer shall make such
modifications. Unless Servicer agrees otherwise, Subservicer shall cure the
Service Deficiency within 60 calendar days (the “Level I Curative Period”) from
the date on which
 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

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Servicer has accepted the plan or notified Subservicer of the modifications to
be made to the plan.
     (b) If Subservicer fails to correct any Service Deficiency by the end of
the Level I Curative Period, then, for a period not to exceed 90 days from the
end of any Level I Curative Period, Subservicer shall pay Servicer liquidated
damages of [***] per day for each Service Deficiency until the applicable
Service Deficiency is cured. Subservicer shall pay such liquidated damages to
Servicer by wire transfer of immediately available funds within [***] after
receipt of an invoice from Servicer. If a Service Deficiency has not been cured
within such 90-day period, Servicer may at its sole option, within sixty
(60) days thereafter, require Subservicer to solicit bids for an alternative
subservicer as provided in Section (d) below.
     (c) If a Service Deficiency has not been cured and Servicer elects not to
require Subservicer to solicit bids for an alternative subservicer as provided
for in Section (d) below, then within fifteen (15) days of Servicer’s request,
Subservicer shall develop and present a plan to Servicer describing new
countermeasures and targets/goals that Subservicer will use to correct the
Service Deficiency. Following receipt of the plan, Subservicer and Servicer
shall follow and be subject to the requirements of Section 14.02(a) and (b),
including but not limited to the liquidated damages provisions.
     (d) In the event that Servicer shall have the right to require Subservicer
to solicit bids for an alternative subservicer as provided in (b) above, then
Subservicer, upon Servicer’s written demand, shall proceed as follows:
          (i) Subservicer shall prepare a request for proposal, at Subservicer’s
expense if terminated for cause hereunder, otherwise at Servicer’s expense,
(“RFP”) for an alternative subservicer to assume Subservicer’s obligations
relating to its obligations hereunder. Subservicer shall submit such RFP to
Servicer for review within thirty (30) days of Servicer’s written demand that
Subservicer solicit bids for an alternative subservicer. Subservicer shall
incorporate Servicer’s reasonably requested revisions to such RFP within ten
(10) days of Subservicer’s receipt of Servicer’s requested revisions.
          (ii) Subservicer shall submit the final RFP to no less than three
(3) residential Mortgage Loan servicers reasonably chosen by Servicer.
          (iii) Subservicer shall select the bid requested by Servicer.
          (iv) Subservicer shall pay the Servicing Transfer Costs associated
with the entity chosen by Servicer as the alternative subservicer to assume
Subservicer’s obligations hereunder. If, however, the bid selected by Servicer
is the highest bid and such bid [***], then Servicer shall be responsible for
the difference between the selected bid and [***].
          (e) The remedies set forth in this Section 14.02 shall be in
furtherance of, and not in limitation of, Servicer’s remedies under this
Agreement.
 

[***]   INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

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     Section 14.03 Waiver of Defaults.
     The Servicer, by notice in writing to the Subservicer, may waive any
default by the Subservicer in the performance of its obligations hereunder and
its consequences. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived.
     Section 14.04 Term of Agreement; Termination Without Cause.
     (a) This Agreement shall automatically expire and terminate upon the
earlier of (i) the date upon which the Origination Agreement is terminated in
accordance with the terms thereof or (ii) upon thirty (30) days prior written
notice prior to the End Date by Servicer to Subservicer that Servicer has chosen
not to extend the Subservicing Period. The Subservicing Period shall
automatically renew for successive one year periods following each End Date
unless either (i) Servicer notifies Subservicer in writing at least thirty
(30) days prior to the expiration of the End Date or the related Renewal Period,
of its intention to terminate Subservicer hereunder in its sole discretion,
provided that Servicer shall be responsible for all Deboarding Fees and Transfer
and Recording Fees pursuant to Section 6.02(g)(l)-(3) or (ii) Servicer and
Subservicer do not reach an agreement with respect to the fees to be earned by
Subservicer pursuant to this Agreement for such Renewal Period at least thirty
(30) days prior to the expiration of the End Date or the related Renewal Period.
Notwithstanding anything to the contrary herein, in the event this Agreement has
not earlier terminated, the respective obligations and responsibilities of the
Subservicer shall terminate without cause and without payment by either party of
any penalty or termination fee (i) upon the later of the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
the disposition of all REO Properties and the remittance of all funds due
hereunder or (ii) by mutual consent of the Subservicer and the Servicer in
writing.
     Section 14.05 Effect of Termination of Agreement.
     In the event this Agreement is terminated pursuant to the provisions
hereof, this Section 14.05, Article XIII, Sections 7.01, 14.02, 17.02, 17.03,
17.05 and 17.17 shall remain in effect after such termination, and all
provisions relating to the allocation of responsibility for costs incurred by
Servicer and/or Subservicer shall remain in effect with respect to acts
occurring before such termination.
ARTICLE XV
SUCCESSOR TO THE SUBSERVICER
     Section 15.01 Successor to the Subservicer.
     Upon termination of Subservicer’s responsibilities and duties under this
Agreement, the Servicer, or successor Servicer, or successor Subservicer, shall
service or subservice the applicable Mortgage Loans under such terms and
conditions as such parties may agree.

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     (a) In the event that the Subservicer’s duties, responsibilities and
liabilities under this Agreement should be terminated, the Subservicer shall
discharge such duties and responsibilities during the period from the date it
acquires Knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of Subservicer shall not relieve the Subservicer of any representations,
warranties, covenants or agreements made in connection herewith or affect the
remedies available to the Servicer hereunder, it being understood and agreed
that such provisions shall be applicable to the Subservicer notwithstanding any
such resignation or termination of the Subservicer, or the termination of this
Agreement.
     (b) Any termination or resignation of the Subservicer or termination of
this Agreement shall not affect any claims that the Servicer may have against
the Subservicer due to any failure of the Subservicer to comply with the terms
of this Agreement prior to any such termination or resignation.
     (c) The Subservicer, in a timely and reasonable manner, but in any event no
later than three (3) Business Days after the effective date of any termination
or permitted resignation of the Subservicer or termination of this Agreement,
shall deliver to the Servicer, successor Servicer, or successor Subservicer any
funds held in connection with the Mortgage Loans. No later than five (5)
Business Days after the effective date of any termination or permitted
resignation of the Subservicer or termination of this Agreement, Subservicer
shall deliver to Servicer, successor servicer or successor subservicer, the
mortgage files and related documents and statements and computer files held by
it hereunder, and the Subservicer shall account for all funds. The Subservicer
shall execute and deliver such instruments and do such other things all as may
reasonably be required to more fully and definitely vest and confirm in the
Servicer, or successor Servicer, or successor subservicer all such rights,
powers, duties, responsibilities, obligations and liabilities of the
Subservicer. The Servicer or new subservicer shall make arrangements as it may
deem appropriate to reimburse the Subservicer for amounts the Subservicer
actually expended pursuant to this Agreement that the Servicer or successor
subservicer is entitled to retain hereunder and that would otherwise have been
reimbursable to the Subservicer pursuant to this Agreement but for the
termination of the Subservicer. The Subservicer acknowledges and agrees that its
right to subservice the Mortgage Loans during the Subservicing Period terminates
immediately in accordance with this Agreement and agrees to assist the Servicer,
at the Subservicer’s own cost and expense, with the transfer of subservicing as
provided in this Agreement if the Subservicer is in default under this
Agreement. However, if Subservicer is not in default, and such transfer takes
place at the termination of the Subservicing Period, Servicer shall bear the
cost and expense of transferring the subservicing to a subsequent subservicer.
ARTICLE XVI
ANTI-MONEY LAUNDERING
     Section 16.01 Compliance.
     (a) Subservicer shall at all times undertake and perform the requirements
set forth in Servicer’s anti-money laundering policies and procedures set forth
in the Operations Guide, as

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the same may be amended from time to time (the “BSA Policies and Procedures”).
Servicer represents and warrants that as of the date hereof, Servicer complies
with its anti-money laundering policies and procedures set forth in the
Operations Guide, as the same may be amended from time to time. Notwithstanding
the foregoing, if the representation contained in the immediately preceding
sentence is inaccurate as of the date made as to any specific part of the BSA
Policies and Procedures (the “Non-Compliant Procedure”), Subservicer shall not
be obligated to comply with such Non-Compliant Procedure to the extent that
(i) Servicer does not comply with such Non-Compliant Procedure as of the date
hereof and (ii) Subservicer is not in compliance with such Non-Compliant
Procedure as of the date such inaccuracy is discovered; provided, that upon
discovery of the inaccuracy of such representation, Subservicer shall promptly
notify Servicer in writing of such inaccuracy and shall indicate in such notice
the Non-Compliant Procedure. Within five (5) Business Days after receipt of such
notice, Servicer shall notify Subservicer of whether Servicer desires
Subservicer to follow such Non-Complying Procedure. If Servicer notifies
Subservicer that it desires Subservicer to follow such Non-Compliant Procedure,
Subservicer shall have the right to propose an adjustment to the Subservicing
Fee in accordance with the procedures set forth in Section 17.04(d). For the
avoidance of doubt, nothing contained in this Section 16.01 shall relieve
Subservicer’s obligation to subservice the Mortgage Loans in accordance with
applicable law. Subservicer shall comply with the BSA Policies and Procedures
and shall take reasonable steps to detect payments that are inconsistent with
such policies and procedures. In the event Subservicer retains the services of a
third party vendor to process the receipt of funds from Mortgagors (hereafter, a
“Lock-Box Vendor”), Subservicer shall first obtain Servicer’s consent to the
selection of such Lock-Box Vendor, which consent shall not be unreasonably
withheld. Further, Subservicer shall provide the BSA Policies and Procedures to
any such Lock-Box Vendor and ensure that such Lock-Box Vendor complies with the
same.
     (b) Subservicer shall be responsible for assuring compliance by Servicer
with Servicer’s obligations under the BSA by identifying and reporting possible
money laundering and other illegal activity to the extent set forth in the BSA
Policies and Procedures.
     (c) Prior to the date this agreement is executed, Subservicer shall have:
(i) appointed a suitable officer of Subservicer to be responsible for compliance
with the BSA Policies and Procedures; (ii) caused such officer and any other
appropriate persons to have participated in one or more training sessions on
anti-money laundering and bank secrecy act compliance which sessions will be
approved by Servicer ; and (iii) implemented policies, procedures and internal
controls to undertake the BSA Policies and Procedures and shall have provided
Servicer with photocopies of internal memoranda and other documents of
Subservicer setting forth such policies, procedures and internal controls.
     (d) Failure of Subservicer to comply with the terms of this Article XVI in
all material respects, including without limitation, the failure of Subservicer
to take any remedial action called for by Servicer as described in subsection
(f) below, shall constitute a Service Deficiency for purposes of Section 14.02.
     (e) Subservicer shall indemnify Servicer for any Losses resulting from
Subservicer’s failure to comply with the BSA Policies and Procedures.

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     (f) Servicer, upon reasonable notice, may audit and test Subservicer’s
compliance with the provisions of the BSA Policies and Procedures. Any such
audit or test may be conducted by Servicer’s internal auditors or other
employees or by an outside auditing firm. If Servicer detects weaknesses in or
exceptions to Subservicer’s compliance with the BSA Policies and Procedures,
Servicer shall notify Subservicer of its findings, and Subservicer shall
immediately undertake the remedial action suggested by Servicer and shall report
to Servicer on the action taken.
ARTICLE XVII
MISCELLANEOUS
     Section 17.01 Supplementary Information.
     From time to time before and after each applicable Servicing Date, Servicer
shall furnish to Subservicer such information supplementary to the information
contained in the documents and schedules delivered pursuant hereto which is
reasonably available to Servicer as Subservicer may reasonably request in
writing and/or which may be necessary to enable Subservicer to file any reports
or respond to Mortgagor inquiries in connection with the Mortgage Loans so long
as furnishing such information does not violate the Applicable Requirements.
     Section 17.02 Access to Information; Confidentiality.
     (a) Each party agrees that it shall comply with all applicable laws and
regulations regarding the privacy or security of Customer Information and shall
maintain appropriate administrative, technical and physical safeguards to
protect the security, confidentiality and integrity of Customer Information,
including maintaining security measures designed to meet the objectives of the
Interagency Guidelines Establishing Standards for Safeguarding Customer
Information, 66 Fed. Reg. 8616 (the “Interagency Guidelines”). For purposes of
this Section, the term “Customer Information” shall have the meaning assigned to
it in the Interagency Guidelines.
     Subservicer hereby acknowledges that Servicer is subject to the privacy
regulations under Title V of the Gramm-Leach-Bliley Act, 15 U.S.C. § 6801 et
seq., pursuant to which regulations MLCC is required to obtain certain
undertakings from Subservicer with regard to the privacy, use, and protection of
nonpublic personal financial information of Servicer’s clients or prospective
clients. Therefore, notwithstanding anything to the contrary contained in this
Agreement, Subservicer agrees that: (a) it shall not disclose or use any Client
Data except to the extent necessary to carry out its obligations under this
Agreement and for no other purpose, (b) it shall not disclose Client Data to any
third party, including, without limitation, its third party service providers
without the prior consent of Servicer and an agreement in writing from the third
party to use or disclose such Client Data only to the extent necessary to carry
out Subservicer’s obligations under this Agreement and for no other purposes,
(c) it shall maintain, and shall require all third parties approved under
subsection (b) to comply with applicable information security requirements,
including, without limitation, the obligations to implement appropriate measures
designed to meet the objectives set forth in the Interagency Guidelines
Establishing Standards For Safeguarding Mortgagor Information published in final
form on

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February 1, 2001, 66 Fed. Reg. 8616 (Feb. 1, 2001)/12 C.F.R. Part 364 App. B as
may be amended or supplemented from time, to assess, manage, and control risks
relating to the security and confidentiality of Mortgagor Information and to
maintain at all times an Information Security Program, and (d) it shall provide
Servicer with information regarding such security measures upon the reasonable
request of Servicer and promptly provide Servicer with information regarding any
failure of such security measures or any security breach related to Mortgagor
Information. The obligations set forth in this Section shall survive termination
of this Agreement. For the purposes of this Agreement, Client Data means the
nonpublic personal information (as defined in 15 U.S.C. § 6809(4)) of Servicer’s
clients or prospective clients (and/or Servicer’s parent, affiliated, or
subsidiary companies) received by Subservicer in connection with the performance
of its obligations under this Agreement, including, but not limited to (i) an
individual’s name, address, e-mail address, IP address, telephone number and/or
social security number, (ii) the fact that an individual has a relationship with
Servicer and/or its parent, affiliated, or subsidiary companies, or (iii) an
individual’s account information.
     (b) This Section 17.02 shall survive any termination of this Agreement.
     Section 17.03 No Broker’s Fees.
     Each party hereto represents and warrants to the other that it has made no
agreement to pay any agent, finder, or broker or any other representative, any
fee or commission in the nature of a finder’s or broker’s fee arising out of or
in connection with the subject matter of this Agreement. The parties hereto
covenant with each other and agree to indemnify and hold each other harmless
from and against any such obligation or liability and any Losses incurred by the
other in investigating or defending any claim based upon the other party’s
actions under this Section. This Section 17.03, shall survive any termination of
this Agreement.
     Section 17.04 Further Assurances.
     (a) Servicer and Subservicer shall cooperate in good faith to consummate
the transactions contemplated by this Agreement.
     (b) In order for the parties hereto to perform their respective obligations
hereunder, each party shall furnish to the other party such reports, information
or documentation supplementary to the information contained in the documents and
schedules delivered pursuant hereto and deliver such reports, information or
documentation as may reasonably be requested by such party and as are reasonably
normal and customary in the mortgage loan servicing industry.
     (c) Servicer and Subservicer shall each execute and deliver to each other
all such other instruments or documentation as either may reasonably request in
order to effect the transfer and delivery to Subservicer of the subservicing of
the Mortgage Loans which are subject to this Agreement.
     (d) If, after the date hereof, a material change in any Applicable
Requirement shall have had a material, negative economic impact on either Party,
then such Party may propose an adjustment to the Subservicing Fee paid to
Subservicer pursuant to Article VI. The non-proposing Party agrees to consider
such proposal in good faith, provided that the proposing Party

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provides, upon the reasonable request of the non-proposing Party, documentation
evidencing such negative economic impact.
     Section 17.05 Survival.
     Except as otherwise provided herein, all representations, warranties,
covenants, indemnities and other agreements of the parties to this Agreement set
forth herein or in any exhibit, schedule or other document or certificate
delivered or to be delivered pursuant hereto shall survive each applicable
Servicing Date regarding the Mortgage Loans the subservicing of which is
transferred on those dates.
     Section 17.06 Governmental Authorities; Laws and Severability.
     The terms and provisions of this Agreement are expressly made subject to
applicable federal and state statutes, laws, and rules and regulations
promulgated thereunder, as amended from time to time. Any rule, regulation or
administrative policy of any government agency having jurisdiction that relates
to the obligation of the Subservicer to subservice the Mortgage Loans hereunder
and that is in effect on each applicable Servicing Date shall be deemed to be
incorporated herein, and shall supersede the terms of this Agreement, unless
such incorporation shall materially impair the contemplated benefits to be
received by the parties pursuant to this Agreement, in which event the parties
shall renegotiate the terms and conditions hereof to reflect a fair allocation
of the economic benefits contemplated hereby. In the event any provision of this
Agreement is deemed by a court of competent jurisdiction to be in violation of
any of the above, such provision shall be of no force or effect, and this
Agreement shall continue as though such superseded provision were not contained
in this Agreement.
     Section 17.07 Form of Payment to Be Made.
     Unless otherwise provided herein or agreed to in writing by the parties,
all payments contemplated herein shall be made by wiring immediately available
funds to the account designated by Servicer or Subservicer, as applicable.
     Section 17.08 Assignability.
     Neither Servicer nor Subservicer shall assign this Agreement, or delegate
any duty hereunder, without the prior written consent of the other party.
Notwithstanding the above prohibition, this Agreement may be assigned by either
party to such party’s Affiliate upon thirty (30) days’ prior written notice to
the other party hereto, provided that (i) such party’s Affiliate is an Affiliate
as of the date hereof and has the ability to perform the obligations of the
Subservicer hereunder and (ii) such party has complied with all applicable
provisions of the Applicable Requirements.
     Section 17.09 Certain Costs.
     Unless otherwise set forth in this Agreement, each party shall bear their
respective costs in fulfilling their responsibilities herein.

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     Section 17.10 Notices.
     All notices, requests, demands and other communications that are required
or permitted to be given under this Agreement shall be in writing and shall be
deemed given if delivered personally, transmitted by facsimile (and
telephonically confirmed), mailed by registered or certified mail, return
receipt requested, or sent by commercial overnight courier to the other party at
the following address:
     If to Servicer:
Merrill Lynch Credit Corporation
4804 Deer Lake Drive East
Jacksonville, FL 32246-6484
Attention: Jonathan D. Kessler, President
Facsimile: 904-218-6119
Phone: 904-218-6092
with a copy to:
Merrill Lynch Credit Corporation
4804 Deer Lake Drive East
Jacksonville, FL 32246-6484
Attention: George T. Morrison, General Counsel
Facsimile: 904-218-8848
Phone: 904-218-8833
     If to Subservicer:
PHH Mortgage Corporation
Address:
Attention: Martin Foster
Facsimile:
Phone:
[Continued on next page]
with a copy to:
General Counsel’s Office
PHH Mortgage Corporation
1 Mortgage Way
Mt. Laurel, NJ 08054
Attention: William F. Brown
                 Mail Stop PCLG
Facsimile: 856-917-7295
Phone: 856-917-0903

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With a copy to:
Assistant General Counsel’s Office
PHH Mortgage Corporation
5201 Gate Parkway
Jacksonville, Florida 32256-7284
Attention: Louie W. Strum
                 Mail Stop JLGL
Facsimile: 856-917-2349
Phone: 904-445-3011
     Any notice sent by registered, certified, or overnight mail or facsimile
shall be deemed received on the actual date of delivery of the notice to the
designated address as evidenced by the applicable receipt/indication.
     Section 17.11 Entire Agreement; Construction.
     (a) This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof. Except as set forth in paragraph
(b) below, no amendments, modifications, or supplements of this Agreement shall
be binding unless executed in writing by the parties hereto. Reference to
sections, subsections, schedules, or exhibits in this Agreement are to sections
and subsections of, and schedules and exhibits to, this Agreement. The schedules
and exhibits are part of this Agreement. Accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally accepted
accounting principles. The words “herein”, “hereby”, “hereunder” and other words
of similar import refer to this Agreement as a whole and not to any particular
provision. This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications that may hereafter be
executed, (ii) documents received by any party at the closing, and
(iii) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
     (b) Subservicer agrees that Exhibit B hereto may be amended by Servicer
during the month of January 2009 and once prior to the commencement of each
Renewal Period, if any; provided, however, that each such amendment may change
no more than ten Persons on such Exhibit; provided further, that (i) Persons
added to Exhibit B shall be Persons which are Financial Services Firms and (ii)
Exhibit B shall not at any time contain more than twenty Persons.
     Section 17.12 Binding Effect.
     This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective permitted successors and permitted assigns.

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     Section 17.13 Headings; Plurals; Genders.
     Section and Article headings are for reference purposes only and shall not
be deemed to have any substantive effect. In construing the words of this
Agreement, plural constructions will include the singular, and singular
constructions will include the plural. No significance will be attached to
whether a pronoun is masculine, feminine, or neuter.
     Section 17.14 Applicable Law.
     This Agreement shall be governed by, and construed in accordance with, the
laws of the state of New York.
     Section 17.15 Counterparts.
     This Agreement may be executed in any number of counterparts, all of which,
taken together, shall constitute one and the same Agreement. The parties hereto
agree that the exchange by telefax of executed signature pages to this Agreement
shall be binding upon the parties, with original, signed Agreements to follow by
overnight mail. The parties intend that faxed signatures and electronically
imaged signatures such as .pdf files shall constitute original signatures and
are binding on all parties. The original documents shall be promptly delivered,
if requested.
     Section 17.16 Waivers.
     No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced. The waiver by either party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any other or subsequent breach.
     Section 17.17 Publicity.
     Except as required by applicable law, neither party hereto shall issue a
press release or similar announcement or communication relating to this
Agreement or the transactions contemplated herein using the other party’s name
without such other party’s prior written consent.
     Section 17.18 No Third Party Beneficiaries.
     Except as expressly provided herein, nothing in this Agreement is intended
to confer any right, remedy, obligation or liability upon any Person other than
the parties hereto and their respective successors and permitted assigns.
     Section 17.19 Attorney Fees, Costs, Etc.
     If any action at law or in equity, including an action for declaratory
relief, is brought to enforce or interpret the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorney fees and court
costs from the other party. Such fees may be set by

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the court in the trial of such action or may be enforced in a separate action
brought for that purpose. Such fees shall be in addition to any other relief
that may be awarded.
     Section 17.20 Merger or Consolidation of Servicer and Subservicer.
     The Subservicer shall keep in full effect its existence, rights and
franchises and shall obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement or any of the Mortgage
Loans and to perform its duties under this Agreement.
     Subject to Servicer’s right to terminate this Agreement upon the occurrence
of a Subservicer Competitor Change of Control, any Person into which the
Subservicer may be merged or consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Subservicer shall be a party,
or any Person succeeding to the business of the Subservicer, shall be the
successor of the Subservicer hereunder, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the successor or
surviving Person shall be an institution (i) having a net worth of not less than
$25,000,000 and (ii) which is a FNMA/FHLMC-approved seller/servicer in good
standing. Furthermore, in the event the Subservicer transfers or otherwise
disposes of all or substantially all of its assets to an affiliate of the
Subservicer, such affiliate shall satisfy the condition above, and shall also be
fully liable to the Servicer for all of the Subservicer’s obligations and
liabilities hereunder.
     Section 17.21 Termination Assistance.
     (a) Upon expiration or termination of all or part of the MLCC Services for
any reason, Subservicer shall for a period of one (1) year (the “Termination
Assistance Period”), upon Servicer’s request and at Servicer’s expense, continue
to provide the MLCC Services that were provided prior thereto (“Termination
Assistance Services”). In providing Termination Assistance Services, Subservicer
shall provide such reasonable cooperation and technical assistance to Servicer,
or to a third-party service provider designated by Servicer, as required to
facilitate the transfer of the affected MLCC Services to Servicer or such
third-party service provider. The rights of Servicer under this Section shall be
without prejudice to the Parties’ rights to pursue legal remedies for breach of
this Agreement, either for breaches prior to termination or during the period
this Agreement is continued in force post-termination. Termination Assistance
Services shall be provided for the same fees as prior to termination, and
Subservicer shall use commercially reasonable efforts to perform the MLCC
Services at the same service levels as prior to termination. MLCC hereby agrees
to continue to provide the services or meet its obligations contemplated to be
provided by it under this Agreement during the Termination Assistance Period in
order to assist Subservicer in complying with this Section 17.21(a).
     (b) If and to the extent requested by Servicer, whether prior to, upon, or
following any termination of this Agreement, Subservicer shall reasonably assist
Servicer in developing a plan which shall specify the tasks to be performed by
the Parties in connection with the Termination Assistance Services and the
schedule for the performance of such tasks. The transition plan shall include
descriptions of the MLCC Services, service levels, fees,

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documentation and access requirements that will promote an orderly transition of
the MLCC Services.
     (c) For a period of six (6) months following the Termination Assistance
Period, Subservicer shall: (i) answer all reasonable and pertinent verbal or
written questions from Servicer regarding the MLCC Services on an “as needed”
basis; and (ii) deliver to Servicer any remaining Servicer-owned reports and
documentation still in Subservicer’s possession.
     Section 17.22 Incorporation by Reference
     The terms and conditions set forth in the Letter Agreement shall be
incorporated herein. In the event of any conflict between the terms of this
Agreement and the Letter Agreement, the Letter Agreement shall control.
     Section 17.23 Force Majeure
     Neither Party shall be liable for any losses arising out of the delay or
interruption of its performance of obligations under this Agreement due to any
act of God, general act of governmental authority, act of public enemy, war,
riot, flood, civil commotion, insurrection, severe weather conditions, or any
other cause beyond the reasonable control of the Party delayed..
[Signature page follows.]

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     IN WITNESS WHEREOF, MERRILL LYNCH CREDIT CORPORATION and PHE MORTGAGE
CORPORATION have caused this Agreement to be executed by their respective
officers thereunto duly authorized as of the date first above written.

                  MERRILL LYNCH CREDIT CORPORATION    
 
           
 
  By:
Name:   /s/ Irma S. Marshall
 
Irma S. Marshall    
 
  Title:   Vice President    
 
                PHH MORTGAGE CORPORATION    
 
           
 
  By:   /s/ Martin L. Foster    
 
           
 
  Name:   Martin L. Foster    
 
  Title:   Senior Vice President    

1