Exhibit 10.14

MORTGAGE LOAN PURCHASE AGREEMENT

between

ALESCO LOAN HOLDINGS TRUST

as Mortgage Loan Seller

and

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.

as Purchaser

Dated as of

June 29, 2007

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TABLE OF CONTENTS

 

          Page

SECTION 1.

   Definitions    5

SECTION 2.

   Purchase and Sale of the Mortgage Loans and Related Rights.    9

SECTION 3.

   Mortgage Loan Schedules    10

SECTION 4.

   Mortgage Loan Transfer.    10

SECTION 5.

   Examination of Mortgage Files.    11

SECTION 6.

   Recordation of Assignments of Mortgage.    14

SECTION 7.

   Representations and Warranties of Mortgage Loan Seller Concerning the
Mortgage Loans    15

SECTION 8.

   Representations and Warranties Concerning the Mortgage Loan Seller    17

SECTION 9.

   Representations and Warranties Concerning the Purchaser    18

SECTION 10.

   Conditions to Closing.    19

SECTION 11.

   Fees and Expenses    21

SECTION 12.

   Accountants’ Letters.    22

SECTION 13.

   Indemnification.    22

SECTION 14.

   Notices    24

SECTION 15.

   Transfer of Mortgage Loans    24

SECTION 16.

   Termination    25

SECTION 17.

   Representations, Warranties and Agreements to Survive Delivery    25

SECTION 18.

   Severability    25

SECTION 19.

   Counterparts    25

SECTION 20.

   Amendment    25

SECTION 22.

   Further Assurances    25

SECTION 23.

   Successors and Assigns.    25

SECTION 24.

   The Mortgage Loan Seller and the Purchaser    26

SECTION 25.

   Entire Agreement    26

SECTION 26.

   No Partnership    26

SECTION 27.

   Fiduciary Duty    26

 

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EXHIBITS AND SCHEDULE TO

MORTGAGE LOAN PURCHASE AGREEMENT

 

Exhibit 1

   Contents of Mortgage File

Exhibit 2

   Mortgage Loan Schedule Information

Exhibit 3

   Mortgage Loan Seller’s Information

Exhibit 4

   Purchaser’s Information

Exhibit 5

   Schedule of Lost Certificates

Exhibit 6

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

Schedule A

   Required Ratings for Each Class of Notes

Schedule B

   Mortgage Loan Schedule

 

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MORTGAGE LOAN PURCHASE AGREEMENT

MORTGAGE LOAN PURCHASE AGREEMENT, dated as of June 29, 2007, as amended and
supplemented by any and all amendments hereto (collectively, the “Agreement”),
by and between ALESCO LOAN HOLDINGS TRUST, a Maryland business trust (the
“Mortgage Loan Seller”) and STRUCTURED ASSET MORTGAGE INVESTMENTS II INC., a
Delaware corporation (the “Purchaser”).

Upon the terms and subject to the conditions of this Agreement, the Mortgage
Loan Seller agrees to sell, and the Purchaser agrees to purchase, certain
conventional, first lien mortgage loans secured primarily by one- to four-family
residential properties and individual condominium units (collectively, the
“Mortgage Loans”) as described herein. The Purchaser has established Bear
Stearns ARM Trust 2007-2, a Delaware statutory trust (the “Issuing Entity”)
pursuant to a Short Form Trust Agreement, dated as of June 26, 2007 between the
Purchaser and Wilmington Trust Company (the “Owner Trustee”), as amended and
restated on June 29, 2007 (the “Trust Agreement”), among the Purchaser, the
Owner Trustee and Wells Fargo Bank, N.A. (the “Securities Administrator”). The
Purchaser intends to sell the Mortgage Loans to the Issuing Entity pursuant to a
Sale and Servicing Agreement, dated as of June 29, 2007 (the “Sale and Servicing
Agreement”) among the Purchaser, the Issuing Entity, the Mortgage Loan Seller,
Citibank, N.A., as indenture trustee (the “Indenture Trustee”), the Securities
Administrator and Wells Fargo Bank, N.A. as master servicer (in such capacity,
the “Master Servicer”). The Issuing Entity, pursuant to an Indenture, dated as
of June 29, 2007 (the “Indenture”) among the Issuing Entity, the Indenture
Trustee and the Securities Administrator intends to pledge the Mortgage Loans to
the Indenture Trustee and, issue and transfer to the Purchaser the Bear Stearns
ARM Trust 2007-2, Mortgage-Backed Notes, Series 2007-2 and the Notes issued
pursuant to the Trust Agreement (the “Notes”). The Notes will be transferred by
the Purchaser to the Mortgage Loan Seller or its designee as partial
consideration for the sale of the Mortgage Loans. The Master Servicer will
master service the Mortgage Loans on behalf of the Issuing Entity pursuant to
the Sale and Servicing Agreement. The servicing of the Mortgage Loans will be
provided by Countrywide Home Loans Servicing LP and Wells Fargo Bank, N.A.
pursuant to the related Servicing Agreements as specified in Appendix A to the
Indenture which will be assigned to the Issuing Entity on the Closing Date
pursuant to the related Servicing Agreement. The representations and warranties
made by each Servicer and the remedies for breach thereof will be assigned to
the Issuing Entity on the Closing Date pursuant to, and to the extent provided
in the related Servicing Agreement. The representations and warranties made by
American Home and Countrywide Home Loans and the remedies for breach thereof
will be assigned to the Issuing Entity on the Closing Date pursuant to, and to
the extent provided in the related Sale Agreement.

The Purchaser has filed with the Securities and Exchange Commission (the
“Commission”) a registration statement on Form S-3 (Number 333-140247) relating
to its Mortgage-Backed Notes and the offering of certain series thereof
(including certain classes of the Notes) from time to time in accordance with
Rule 415 under the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder (the “Securities Act”).
Such registration statement, when it became effective under the Securities Act,
and the prospectus relating to the public offering of certain classes of the
Notes by the Purchaser (the “Public Offering”), as each may be amended or
supplemented from time to time pursuant to

 

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the Securities Act or otherwise, are referred to herein as the “Registration
Statement” and the “Prospectus,” respectively. The “Term Sheet Supplement” shall
mean the term sheet supplement, dated June 11, 2007, relating to certain classes
of the Notes. The “Term Sheet” shall mean the term sheet, dated June 28, 2007,
relating to certain classes of the Notes. The “Prospectus Supplement” shall mean
that supplement, dated June 28, 2007, to the Prospectus, dated June 28, 2007,
relating to certain classes of the Notes. With respect to the Public Offering of
certain classes of the Notes, the Purchaser and Bear, Stearns & Co. Inc. (“Bear
Stearns”) have entered into a terms agreement dated as of June 11, 2007 to an
underwriting agreement dated February 26, 2007 (together, the “Underwriting
Agreement”).

Now, therefore, in consideration of the premises and the mutual agreements set
forth herein, the parties hereto agree as follows:

SECTION 1. Definitions. Certain terms are defined herein. Capitalized terms used
herein but not defined herein shall have the meanings specified in the Sale and
Servicing Agreement. The following other terms are defined as follows:

Acquisition Price: Cash in an amount equal to
$            *            .         (plus $            *            .         in
accrued interest).

American Home: American Home Mortgage Corp.

American Home Sale Agreement: That certain Master Mortgage Loan Purchase and
Servicing Agreement, dated as of September 1, 2005, between Citigroup and
American Home, as amended by that certain Assignment, Assumption and Recognition
Agreement, dated as of February 28, 2006, among the Mortgage Loan Seller,
Citigroup and American Home.

Bear Stearns: Bear, Stearns & Co. Inc.

Citibank: Citibank, N.A.

Citibank Custodial Agreement: The custodial agreement, dated as of June 29,
2007, among Alesco, the Issuing Entity, Structured Asset Mortgage Investments II
Inc. as depositor, the Indenture Trustee, the Securities Administrator, the
Master Servicer and Citibank as custodian relating to the Mortgage Loans
identified in such custodial agreement

Citigroup: Citigroup Global Markets Realty Corp.

Citigroup Sale Agreement: Any of (i) that certain Amended and Restated Master
Mortgage Loan Purchase and Servicing Agreement, dated as of December 15, 2003,
between Citigroup and Countrywide Home Loans, as amended by that Amendment Reg
AB, dated as of February 28, 2006, and as amended by that certain Assignment,
Assumption and Recognition Agreement, dated as of December 6, 2006, among the
Mortgage Loan Seller, Citigroup and Countrywide Home Loans and (ii) that certain
Amended and Restated Master Mortgage Loan Purchase and Interim Servicing
Agreement, dated as of November 1, 2005, as amended by that

 

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* Please contact Bear Stearns for pricing information.

 

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certain Assignment, Assumption and Recognition Agreement, dated as of
February 28, 2006, among the Mortgage Loan Seller, Citigroup and MortgageIT,
Inc.

Closing Date: June 29, 2007.

Co-op Lease: With respect to a Co-op Loan, the lease with respect to a dwelling
unit occupied by the Mortgagor and relating to the stock allocated to the
related dwelling unit.

Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated to a
dwelling unit in a residential cooperative housing corporation and a collateral
assignment of the related Co-op Lease.

Co-op Stock: With respect to a Co-op Loan, the single outstanding class of
stock, partnership interest or other ownership instrument in the related
residential cooperative housing corporation.

Countrywide Home Loans: Countrywide Home Loans, Inc.

Countrywide Sale Agreement: Any of (i) that Mortgage Loan Purchase and Servicing
Agreement, dated as of December 8, 2006, between Countrywide Home Loans and the
Mortgage Loan Seller, as amended by that Amendment Reg AB, dated as of
December 8, 2006, as amended by the Assignment, Assumption and Recognition
Agreement, dated as of June 29, 2007, among Countrywide Servicing, the Mortgage
Loan Seller and the Issuing Entity, and acknowledged and agreed to by Wells
Fargo Bank, N.A., as master servicer and (ii) that Mortgage Loan Purchase and
Servicing Agreement, dated as of September 29, 2006, between Countrywide Home
Loans and the Mortgage Loan Seller, as amended by Amendment No. 1, dated as of
October 17, 2006, and as amended by that Amendment Reg AB, dated as of
October 25, 2006, as amended by the Assignment, Assumption and Recognition
Agreement, dated as of June 29, 2007, among Countrywide Servicing, the Mortgage
Loan Seller and the Issuing Entity.

Countrywide Servicing: Countrywide Home Loans Servicing LP.

Countrywide Servicing Agreement: Any of the Countrywide Sale Agreements and that
certain Amended and Restated Master Mortgage Loan Purchase and Servicing
Agreement, dated as of December 15, 2003, between Citigroup and Countrywide Home
Loans, as amended by that Amendment Reg AB, dated as of February 28, 2006, and
as amended by that certain Assignment, Assumption and Recognition Agreement,
dated as of December 6, 2006, among the Mortgage Loan Seller, Citigroup and
Countrywide Home Loans.

Custodial Agreement: Any of the Wells Fargo Custodial Agreement or the Citibank
Custodial Agreement.

Custodian: Any of Wells Fargo, as custodian under the Wells Fargo Custodial
Agreement or Citibank, as custodian under the Citibank Custodial Agreement.

Cut-off Date: June 1, 2007.

Cut-off Date Balance: $1,086,615,226.90.

 

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Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Substitute Mortgage Loan.

Due Date: With respect to each Mortgage Loan, the date in each month on which
its scheduled payment is due if such due date is the first day of a month and
otherwise is deemed to be the first day of the following month or such other
date specified in the Wells Fargo Servicing Agreement.

Fitch: Fitch, Inc., or its successors in interest.

Master Servicer: Wells Fargo Bank, N.A., in its capacity as Master Servicer
under the Sale and Servicing Agreement or any of its successors thereto.

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

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

Moody’s: Moody’s Investors Service, Inc., or its successors in interest.

Mortgage: The mortgage or deed of trust creating a first lien on an interest in
real property securing a Mortgage Note.

Mortgage File: The items referred to in Exhibit 1 pertaining to a particular
Mortgage Loan and any additional documents required to be added to such
documents pursuant to this Agreement.

Mortgage Interest Rate: The annual rate of interest borne by a Mortgage Note as
stated therein.

Mortgagor: The obligor(s) on a Mortgage Note.

Net Rate: For each Mortgage Loan, the Mortgage Interest Rate for such Mortgage
Loan less the Servicing Fee Rate and the Lender-Paid PMI Rate (if applicable)
expressed as a per annum rate.

Opinion of Counsel: A written opinion of counsel, who may be counsel for the
Mortgage Loan Seller or the Purchaser, reasonably acceptable to the Owner
Trustee.

Person: Any legal person, including any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

Purchase Price: With respect to any Mortgage Loan required to be purchased by
the Mortgage Loan Seller or Underlying Seller pursuant to the applicable
provisions of this Agreement, an amount equal to the sum of (i) 100% of the
principal remaining unpaid on such Mortgage Loan as of the date of purchase
(including if a foreclosure has already occurred, the

 

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principal balance of the related Mortgage Loan at the time the Mortgaged
Property was acquired), net of any Servicing Advances and Advances attributable
to principal and payable to the purchaser of the Mortgage Loan if such purchaser
is also the Master Servicer of such Mortgage Loan, (ii) accrued and unpaid
interest thereon at the applicable Mortgage Rate through and including the last
day of the month of such purchase, net of any portion of the Servicing Fee and
any Servicing Advances and Advances attributable to interest that is payable to
the purchaser of the Mortgage Loan if such purchaser is also the Master Servicer
of such Mortgage Loan, plus (iii) any costs and damages (if any) incurred by the
Trust in connection with any violation of such Mortgage Loan of any
anti-predatory lending laws.

Rating Agencies: Standard & Poor’s, Moody’s and Fitch, each a “Rating Agency.”

Sale Agreement: Any of American Home Sale Agreement, Citigroup Sale Agreement,
Countrywide Servicing Agreement and Wells Fargo Servicing Agreement, as
applicable.

Sale and Servicing Agreement: That certain Sale and Servicing Agreement, dated
as of June 1, 2007, among Structured Asset Mortgage Investments II Inc., as
depositor, Alesco Loan Holdings Trust, as seller, Wells Fargo Bank, N.A., as
master servicer and securities administrator, and Wilmington Trust Company, as
owner trustee.

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

Security Instrument: A written instrument creating a valid first lien on a
Mortgaged Property securing a Mortgage Note, which may be any applicable form of
mortgage, deed of trust, deed to secure debt or security deed, including any
riders or addenda thereto.

Servicer: Wells Fargo or Countrywide, as applicable.

Servicing Agreement: Any of the Countrywide Servicing Agreement or Wells Fargo
Servicing Agreement, as applicable.

Standard & Poor’s: Standard & Poor’s, a division of The McGraw-Hill Companies,
Inc. or its successors in interest.

Substitute Mortgage Loan: A mortgage loan substituted for a Deleted Mortgage
Loan which must meet, on the date of such substitution, the requirements stated
herein and in the Sale and Servicing Agreement with respect to such
substitution; upon such substitution, such mortgage loan shall be a “Mortgage
Loan” hereunder.

Underlying Seller: American Home, Countrywide Home Loans, Wells Fargo or
Citigroup, as applicable.

Value: The value of the Mortgaged Property at the time of origination of the
related Mortgage Loan, such value being the lesser of (i) the value of such
property set forth in an appraisal accepted by the applicable originator of the
Mortgage Loan or (ii) the sales price of such property at the time of
origination.

 

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Wells Fargo: Wells Fargo Bank, N.A.

Wells Fargo Custodial Agreement: The custodial agreement, dated as of June 29,
2007, among Alesco, the Issuing Entity, Structured Asset Mortgage Investments II
Inc. as depositor, the Indenture Trustee, the Securities Administrator, the
Master Servicer and Wells Fargo as custodian relating to the Mortgage Loans
identified in such custodial agreement.

Wells Fargo Sale Agreement: Any of (i) that certain Amended and Restated Master
Mortgage Loan Purchase Agreement dated as of March 1, 2006 by and between Wells
Fargo and Citigroup and (ii) those certain Assignment and Conveyance Agreements
(2006-W95, 2006-W96 and 2006-W97) dated as of November 28, 2006 between Wells
Fargo and Citigroup.

Wells Fargo Servicing Agreement: Any of (i) that certain Amended and Restated
Flow Servicing Agreement, dated as of March 1, 2006, by and between Wells Fargo
and Citigroup, as amended by the Assignment, Assumption and Recognition
Agreement, dated as of June 29, 2007 among Wells Fargo, the Mortgage Loan Seller
and the Issuing Entity, relating to the Mortgage Loans sold pursuant to the
Wells Fargo Sale Agreement and (ii) that certain Amended and Restated Flow
Servicing Agreement, dated as of March 1, 2006, by and between Wells Fargo and
Citigroup, as amended by the Assignment, Assumption and Recognition Agreement,
dated as of June 29, 2007 among Wells Fargo, the Mortgage Loan Seller and the
Issuing Entity, relating to the Mortgage Loans sold pursuant to the American
Home Sale Agreement and the Citigroup Sale Agreement.

SECTION 2. Purchase and Sale of the Mortgage Loans and Related Rights.

(a) Upon satisfaction of the conditions set forth in Section 10 hereof, the
Mortgage Loan Seller agrees to sell, and the Purchaser agrees to purchase
Mortgage Loans having an aggregate outstanding principal balance as of the
Cut-off Date equal to the Cut-off Date Balance.

(b) The closing for the purchase and sale of the Mortgage Loans and the closing
for the issuance of the Notes will take place on the Closing Date at the office
of the Purchaser’s counsel in New York, New York or such other place as the
parties shall agree.

(c) Upon the satisfaction of the conditions set forth in Section 10 hereof, on
the Closing Date, the Purchaser shall pay to the Mortgage Loan Seller the
Acquisition Price for the Mortgage Loans in immediately available funds by wire
transfer to such account or accounts as shall be designated by the Mortgage Loan
Seller and shall deliver the Notes to the Mortgage Loan Seller or its designee.

(d) In addition to the foregoing, on the Closing Date the Mortgage Loan Seller
assigns to the Purchaser all of its right, remedies, title and interest in the
Sale Agreements to the extent relating to the Mortgage Loans, notwithstanding
that with respect to the Sale Agreements (other than the Citigroup Sale
Agreement) the Mortgage Loan Seller specifically reserves and does not assign to
the Assignee any right, title and interest in, to or under the representations
and warranties. With respect to the Citigroup Sale Agreement, the Mortgage Loan
Seller assigns to the Assignee any right, title and interest in, to or under the
representations and warranties and the entitlement to enforce all of the
obligations of the Purchaser thereunder insofar as they relate to

 

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the Mortgage Loans, including, without limitation, the enforcement of the
document delivery requirements, and the ability to enforce all of the
obligations of the Purchaser thereunder insofar as they relate to the Mortgage
Loans, including without limitation, the remedies for breaches of
representations and warranties.

SECTION 3. Mortgage Loan Schedules. The Mortgage Loan Seller agrees to deliver
or cause to be delivered to the Purchaser as of the date hereof a listing of the
Mortgage Loans (the “Mortgage Loan Schedule”) setting forth the information
listed on Exhibit 2 to this Agreement with respect to each of the Mortgage Loans
being sold by the Mortgage Loan Seller. The Mortgage Loan Schedule shall be
delivered to the Purchaser on the Closing Date and shall be in form and
substance mutually agreed to by the Mortgage Loan Seller and the Purchaser.

SECTION 4. Mortgage Loan Transfer.

(a) The Purchaser will be entitled to all scheduled payments of principal and
interest on the Mortgage Loans due after the Cut-off Date (regardless of when
actually collected) and all payments thereon, other than scheduled principal and
interest due on or before the Cut-off Date but received after the Cut-off Date.
The Mortgage Loan Seller will be entitled to all scheduled payments of principal
and interest on the Mortgage Loans due on or before the Cut-off Date (including
payments collected after the Cut-off Date) and all payments thereon, other than
scheduled principal and interest due after the Cut-off Date but received on or
before the Cut-off Date. Such principal amounts and any interest thereon
belonging to the Mortgage Loan Seller as described above will not be included in
the aggregate outstanding principal balance of the Mortgage Loans as of the
Cut-off Date as set forth on the Mortgage Loan Schedule.

(b) Pursuant to various conveyancing documents to be executed on the Closing
Date and pursuant to the Sale and Servicing Agreement, the Purchaser will assign
on the Closing Date all of its right, title and interest in and to the Mortgage
Loans to the Issuing Entity and, pursuant to the Indenture, the Issuing Entity
will assign all of its right, title and interest to the Mortgage Loans to the
Indenture Trustee for the benefit of the Noteholders, to secure the Notes issued
pursuant to the Indenture. In connection with the transfer and assignment of the
Mortgage Loans, the Mortgage Loan Seller has delivered or will deliver or cause
to be delivered to the Indenture Trustee or the respective Custodian on behalf
of the Indenture Trustee by the Closing Date or such later date as is agreed to
by the Purchaser and the Mortgage Loan Seller (each of the Closing Date and such
later date is referred to as a “Mortgage File Delivery Date”), the items of each
Mortgage File; provided, however, in lieu of the foregoing, the Mortgage Loan
Seller may deliver the following documents, under the circumstances set forth
below: (a) in lieu of the original Mortgage, assignments to blank or to the
Indenture Trustee or intervening assignments thereof which have been delivered,
are being delivered or shall, upon receipt of recording information relating to
such documents required to be included thereon, be delivered to recording
offices for recording and have not been returned in time to permit their
delivery as specified above, the Mortgage Loan Seller may deliver a true copy
thereof with a certification substantially to the effect that such copy is a
true and correct copy of the original; (b) in lieu of the Mortgage, assignment
to blank or to the Indenture Trustee or intervening assignments thereof, if the
applicable jurisdiction retains the originals of such documents (as evidenced by
a certification to such effect) the Mortgage Loan Mortgage Loan Seller may
deliver photocopies of such documents containing an original certification by
the judicial or other governmental

 

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authority of the jurisdiction where such documents were recorded; and (c) in
lieu of the Mortgage Notes relating to the Mortgage Loans, the Mortgage Loan
Seller may deliver a lost note affidavit and indemnity; provided, further,
however, that in the case of the Mortgage Loans which have been prepaid in full
after the Cut-off Date and prior to the Closing Date, the Mortgage Loan Seller,
in lieu of delivering the above documents, may deliver to the Indenture Trustee,
a certification to such effect and shall deposit all amounts paid in respect of
such Mortgage Loans in the Payment Account on the Closing Date. The Mortgage
Loan Seller shall deliver such original documents (including any original
documents as to which certified copies had previously been delivered) to the
related Custodian, promptly after they are received. The Indenture Trustee shall
cause the Mortgage and intervening assignments, if any, and the assignment of
the Mortgage to be recorded not later than 180 days after the Closing Date
unless such assignment is not required to be recorded under the terms set forth
in Section 6(a) hereof.

(c) In connection with the assignment of any Mortgage Loan registered on the
MERS® System, the Indenture Trustee further agrees that it will cause, at the
Mortgage Loan Seller’s own expense, within 30 days after the Closing Date, the
MERS® System to indicate that such Mortgage Loans have been assigned by the
Mortgage Loan Seller to the Purchaser, and by the Purchaser to the Indenture
Trustee in accordance with this Agreement for the benefit of the Noteholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code in the field
which identifies the specific Indenture Trustee and (b) the code in the field
“Pool Field” which identifies the series of the Notes issued in connection with
such Mortgage Loans. The Indenture Trustee further agrees that it will not, and
will not permit any Servicer or the Master Servicer to alter the codes
referenced in this paragraph with respect to any Mortgage Loan during the term
of the Sale and Servicing Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of the Sale and Servicing Agreement.

(d) The Mortgage Loan Seller and the Purchaser acknowledge hereunder that all of
the Mortgage Loans and the related servicing will ultimately be assigned to
Citibank, N.A., as Indenture Trustee on behalf of the Noteholders, on the date
hereof.

SECTION 5. Examination of Mortgage Files.

(a) On or before the Mortgage File Delivery Date, the Mortgage Loan Seller will
have made the Mortgage Files available to the Purchaser or its agent for
examination which may be at the offices of the Indenture Trustee or the Mortgage
Loan Seller’s custodian. The fact that the Purchaser or its agent has conducted
or has failed to conduct any partial or complete examination of the Mortgage
Files shall not affect the Purchaser’s rights to demand cure, repurchase, or
substitution for as provided in this Agreement.

(b) Pursuant to the related Custodial Agreement, on the Closing Date the
respective Custodian, on behalf of the Indenture Trustee, for the benefit of the
Noteholders, will acknowledge receipt of each Mortgage Loan, by delivery to the
Master Servicer, the Depositor, the Mortgage Loan Seller and the Indenture
Trustee of an initial certification in the form attached as Exhibit One to the
related Custodial Agreement.

 

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(c) Pursuant to the related Custodial Agreement, within 90 days of the Closing
Date, the Indenture Trustee will review or shall cause the respective Custodian
to review items of the Mortgage Files as set forth on Exhibit 1 and will deliver
to the Master Servicer, the Depositor, the Mortgage Loan Seller and the
Indenture Trustee an interim certification substantially in the form of Exhibit
Two to the related Custodial Agreement. If the Indenture Trustee or respective
Custodian, as its agent, finds any document listed on Exhibit 1 not to have been
executed or received, or to be unrelated, determined on the basis of the
Mortgagor name, original principal balance and loan number, to the Mortgage
Loans identified in the Mortgage Loan Schedule or to appear defective on its
face to review criteria specified in Section 2.01 of the Sale and Servicing
Agreement (a “Material Defect”), the Indenture Trustee in accordance with the
Sale and Servicing Agreement or the respective Custodian, as its agent, shall
promptly notify the Mortgage Loan Seller and the related Underlying Seller of
such Material Defect. The Mortgage Loan Seller or the related Underlying Seller,
as applicable, shall correct or cure any such Material Defect within the number
of days specified in the Sale and Servicing Agreement or the Sale Agreement, as
applicable, from the date of notice from the Indenture Trustee or the respective
Custodian, as its agent, of the Material Defect and if the related Underlying
Seller or the Mortgage Loan Seller, as applicable, fails to correct or cure such
Material Defect within such period and such defect materially and adversely
affects the interests of the Noteholders in the Mortgage Loan, the related
Underlying Seller or the Mortgage Loan Seller, as applicable, will, in
accordance with the terms of the Sale and Servicing Agreement or related Sale
Agreement, within 90 days of the date of notice, provide the Indenture Trustee
with a Replacement Mortgage Loan or purchase the related Mortgage Loan at the
applicable Purchase Price; provided, however, that if such defect relates solely
to the inability of the related Underlying Seller or Mortgage Loan Seller, as
applicable, to deliver the Security Instrument, assignment thereof to the
Indenture Trustee, or intervening assignments thereof with evidence of recording
thereon because such documents have been submitted for recording and have not
been returned by the applicable jurisdiction, the related Underlying Seller or
Mortgage Loan Seller, as applicable, shall not be required to purchase such
Mortgage Loan if the related Underlying Seller or Mortgage Loan Seller, as
applicable, delivers such documents promptly upon receipt, but in no event later
than 360 days after the Closing Date.

(d) Pursuant to the related Custodial Agreement, within 180 days of the Closing
Date, the Indenture Trustee or the respective Custodian on its behalf will
review, for the benefit of the Noteholders, the Mortgage Files and will execute
and deliver or cause to be executed and delivered to the Master Servicer, the
Depositor, the Mortgage Loan Seller and the Indenture Trustee a Final
Certification. In conducting such review, the Indenture Trustee or the
respective Custodian on its behalf will ascertain whether each document required
to be recorded has been returned from the recording office with evidence of
recording thereon and the Indenture Trustee or the respective Custodian on its
behalf has received either an original or a copy thereof, as required in
Section 2.01 of the Sale and Servicing Agreement (provided, however, that with
respect to those documents described in subclauses (iv) and (vi) of Section 2.01
of the Sale and Servicing Agreement, such obligations shall extend only to
documents actually delivered pursuant to such subclauses). If the Indenture
Trustee or the respective Custodian on its behalf finds any document with
respect to a Mortgage Loan has not been received, or to be unrelated, determined
on the basis of the Mortgagor name, original principal balance and loan number,
to the Mortgage Loans identified in Schedule B or to appear defective on its
face, the Indenture Trustee or the respective Custodian on its behalf shall note
such defect in the exception report

 

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attached to the Final Certification and shall promptly notify the related
Underlying Seller and the Mortgage Loan Seller. The related Underlying Seller or
the Mortgage Loan Seller, as applicable, shall correct or cure any such defect
or, the related Underlying Seller or the Mortgage Loan Seller, as applicable may
substitute for the related Mortgage Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.04 of the Sale and Servicing Agreement or in the related
Sale Agreement, as applicable, or shall deliver to the Indenture Trustee an
Opinion of Counsel addressed to the Indenture Trustee to the effect that such
defect does not materially or adversely affect the interests of Noteholders in
such Mortgage Loan within the number of days specified in the Sale and Servicing
Agreement or the Sale Agreement, as applicable, from the date of notice from the
Indenture Trustee of the defect and if the related Underlying Seller or the
Mortgage Loan Seller, as applicable, is unable within such period to correct or
cure such defect, or to substitute the related Mortgage Loan with a Replacement
Mortgage Loan or to deliver such opinion, related Underlying Seller or the
Mortgage Loan Seller, as applicable, subject to Section 2.04 of the Sale and
Servicing Agreement or the related Sale Agreement, within 90 days from the
notification of the Indenture Trustee, purchase such Mortgage Loan at the
Purchase Price; provided, however, that if such defect relates solely to the
inability of related Underlying Seller or the Mortgage Loan Seller, as
applicable, to deliver the Mortgage, assignment thereof to the Indenture Trustee
or intervening assignments thereof with evidence of recording thereon, because
such documents have not been returned by the applicable jurisdiction, related
Underlying Seller or the Mortgage Loan Seller, as applicable, shall not be
required to purchase such Mortgage Loan, if related Underlying Seller or the
Mortgage Loan Seller, as applicable, delivers such documents promptly upon
receipt, but in no event later than 360 days after the Closing Date.

(e) At the time of any substitution, related Underlying Seller or the Mortgage
Loan Seller, as applicable, shall deliver or cause to be delivered the
Substitute Mortgage Loan, the related Mortgage File and any other documents and
payments required to be delivered in connection with a substitution pursuant to
the Sale and Servicing Agreement or the related Sale Agreement. At the time of
any purchase or substitution, the Indenture Trustee in accordance with the terms
of the Sale and Servicing Agreement shall (i) assign to the related Underlying
Seller or the Mortgage Loan Seller, as applicable, and shall release or cause
the respective Custodian to release the documents (including, but not limited
to, the Mortgage, Mortgage Note and other contents of the Mortgage File) in the
possession of the respective Custodian relating to the Deleted Mortgage Loan and
(ii) execute and deliver such instruments of transfer or assignment, in each
case without recourse, as shall be necessary to vest in the related Underlying
Seller or the Mortgage Loan Seller, as applicable, title to such Deleted
Mortgage Loan.

(f) It is understood and agreed that the obligation under this Agreement and the
Sale and Servicing Agreement of the Mortgage Loan Seller to cure, repurchase or
replace any Mortgage Loan as to which a breach has occurred and is continuing
shall constitute the sole remedies against the Mortgage Loan Seller respecting
such breach available to Noteholders, the Depositor or the Indenture Trustee.
Additionally, Alesco Financial Inc. shall guarantee the Mortgage Loan Seller’s
obligations to cure, repurchase or substitute Mortgage Loans as to which there
has been a breach. American Home is the Underlying Seller with respect to the
Mortgage Loans sold pursuant to the American Home Sale Agreement. Citigroup is
the Underlying Seller with respect to the Mortgage Loans sold pursuant to the
Citigroup Sale Agreement. Countrywide is the Underlying Seller with respect to
the Mortgage Loans sold pursuant to the

 

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Countrywide Sale Agreement. Wells Fargo is the Underlying Seller with respect to
the Mortgage Loans sold pursuant to the Wells Fargo Sale Agreement.

SECTION 6. Recordation of Assignments of Mortgage.

(a) The Purchaser shall cause each assignment of the Security Instrument from
the Mortgage Loan Seller to the Indenture Trustee to be recorded not later than
180 days after the Closing Date, unless (a) such recordation is not required by
the Rating Agencies or an Opinion of Counsel has been provided to the Indenture
Trustee (with a copy to the respective Custodian) which states that the
recordation of such assignments is not necessary to protect the interests of the
Noteholders in the related Mortgage Loans or (b) MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage, as the Mortgagee
of record solely as nominee for the Mortgage Loan Seller and its successors and
assigns; provided, however, notwithstanding the delivery of any such Opinion of
Counsel, each assignment of Mortgage shall be submitted for recording by the
Purchaser in the manner described above, at no expense to the Mortgage Loan
Seller or the Indenture Trustee, upon the earliest to occur of (i) reasonable
direction by the Holders of Notes aggregating at least 25% of the Certificate
Principal Balance of the Notes, (ii) the occurrence of a Master Servicer Event
of Default or an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller and, (iv) the
occurrence of a servicing transfer or an assignment of the master servicing as
described in Section 6.02 of the Sale and Servicing Agreement or (v) with
respect to any one assignment of Mortgage, the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgagor under the related Mortgage.

While each such Mortgage or assignment is being recorded, if necessary, the
Purchaser shall leave or cause to be left with the Indenture Trustee a certified
copy of such Mortgage or assignment. All customary recording fees and reasonable
expenses relating to the recordation of the assignments of mortgage to the
Indenture Trustee or the Opinion of Counsel, as the case may be, shall be borne
by the Mortgage Loan Seller as set forth in Section 11.

(b) It is the express intent of the parties hereto that the conveyance of the
Mortgage Loans by the Mortgage Loan Seller to the Purchaser, as contemplated by
this Agreement be, and be treated as, a sale. It is, further, not the intention
of the parties that such conveyance be deemed a pledge of the Mortgage Loans by
the Mortgage Loan Seller to the Purchaser to secure a debt or other obligation
of the Mortgage Loan Seller. However, in the event that, notwithstanding the
intent of the parties, the Mortgage Loans are held by a court to continue to be
property of the Mortgage Loan Seller, then (i) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
applicable Uniform Commercial Code; (ii) the transfer of the Mortgage Loans
provided for herein shall be deemed to be a grant by the Mortgage Loan Seller to
the Purchaser of a security interest in all of the Mortgage Loan Seller’s right,
title and interest in and to the Mortgage Loans and all amounts payable to the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, to the extent the Purchaser
would otherwise be entitled to own such Mortgage Loans and proceeds pursuant to
Section 4 hereof, including all amounts, other than investment earnings, from
time to time held or invested in any accounts created pursuant to the Sale and
Servicing Agreement, whether in the form of cash, instruments, securities or
other

 

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property; (iii) the possession by the Purchaser, the Issuer or the Indenture
Trustee of Mortgage Certificates and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
“possession by the secured party” for purposes of perfecting the security
interest pursuant to Section 9-313 (or comparable provision) of the applicable
Uniform Commercial Code; and (iv) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Purchaser for the purpose of perfecting such security interest under
applicable law. Any assignment of the interest of the Purchaser pursuant to any
provision hereof or pursuant to the Sale and Servicing Agreement shall also be
deemed to be an assignment of any security interest created hereby. The Mortgage
Loan Seller hereby authorizes the Purchaser, to the extent consistent with this
Agreement, to take such actions as may be reasonably necessary to ensure that,
if this Agreement were deemed to create a security interest in the Mortgage
Loans, such security interest would be deemed to be a perfected security
interest of first priority under applicable law and will be maintained as such
throughout the term of the Sale and Servicing Agreement.

SECTION 7. Representations and Warranties of Mortgage Loan Seller Concerning the
Mortgage Loans.

(a) The Mortgage Loan Seller hereby represents and warrants to the Purchaser as
of the Closing Date, or such other date as may be specified below with respect
to each Mortgage Loan being sold by it, that:

(i) The information set forth in the Mortgage Loan Schedule hereto is true and
correct in all material respects.

(ii) Immediately prior to the transfer to the Purchaser, the Mortgage Loan
Seller was the sole owner of beneficial title and holder of each Mortgage and
Mortgage Note relating to the Mortgage Loans and is conveying the same free and
clear of any and all liens, claims, encumbrances, participation interests,
equities, pledges, charges or security interests of any nature and the Mortgage
Loan Seller has full right and authority to sell or assign the same pursuant to
this Agreement.

(iii) Each Mortgage Loan and the prepayment penalty associated with the Mortgage
Loan at the time it was made complied in all material respects with applicable
local, state and federal laws, including, but not limited to, all applicable
predatory and abusive lending laws.

(iv) No mortgage loan is a “High Cost Loan” or “Covered Loan,” as applicable,
(as such terms are defined in the then current Standard & Poor’s LEVELS®
Glossary, Appendix E, in effect as of the Closing Date, attached hereto as
Exhibit 6) and no mortgage loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act.

 

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(v) With respect to each representation and warranty with respect to any
Mortgage Loan made by the Underlying Sellers in the Sale Agreements that is made
as of the related Closing Date (as defined in the applicable Sale Agreement), no
event has occurred since the related Closing Date (as defined in the applicable
Sale Agreement) that would render such representations and warranties to be
untrue in any material respect as of the Closing Date.

(b) It is understood and agreed that the representations and warranties set
forth in this Section 7 will inure to the benefit of the Purchaser, its
successors and assigns, notwithstanding any restrictive or qualified endorsement
on any Mortgage Note or assignment of Mortgage or the examination of any
Mortgage File. Upon any substitution for a Mortgage Loan, the representations
and warranties set forth above shall be deemed to be made by the Mortgage Loan
Seller as to any Substitute Mortgage Loan as of the date of substitution.

(c) Upon discovery by any of the parties hereto of a breach of a representation
or warranty set forth in Section 7 of the Mortgage Loan Purchase Agreement or in
any Sale Agreement that materially and adversely affects the interests of the
Noteholders in any Mortgage Loan, the party discovering such breach shall give
prompt written notice thereof to the other parties. The Mortgage Loan Seller
hereby covenants with respect to the representations and warranties set forth in
Section 7 of the Mortgage Loan Purchase Agreement and each Underlying Seller
covenants in the related Sale Agreement covenants with respect to the
representations and warranties set forth in the related Sale Agreement regarding
the Mortgage Loans sold pursuant to such Sale Agreement, that within 90 days of
the discovery of a breach of any representation or warranty set forth therein
that materially and adversely affects the interests of the Noteholders in any
Mortgage Loan, it shall cure such breach in all material respects and, if such
breach is not so cured, (i) remove such Mortgage Loan from the Trust Fund and
substitute in its place a Replacement Mortgage Loan, in the manner and subject
to the conditions set forth in this Section; or (ii) repurchase the affected
Mortgage Loan or Mortgage Loans from the Indenture Trustee at the Purchase
Price; provided that, any such substitution pursuant to (i) above or repurchase
pursuant to (ii) above shall not be effected prior to the delivery to the
Indenture Trustee and the Securities Administrator of an Opinion of Counsel if
required by Section 2.05 of the Sale and Servicing Agreement and any such
substitution pursuant to (i) above shall not be effected prior to the additional
delivery to the Securities Administrator and the Indenture Trustee of a Request
for Release. With respect to the representations and warranties in Section 7 of
the Mortgage Loan Purchase Agreement or the representations and warranties
contained in each Sale Agreement that are made to the best of the Mortgage Loan
Seller’s or Underlying Seller’s knowledge, as applicable, if it is discovered by
any of the Depositor, the Master Servicer, the Mortgage Loan Seller, the
Securities Administrator, the Indenture Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, notwithstanding the
Mortgage Loan Seller’s or Underlying Seller’s knowledge, as applicable, lack of
knowledge with respect to the substance of such representation or warranty, the
Mortgage Loan Seller or Underlying Seller, as applicable, shall nevertheless be
required to cure, substitute for or repurchase the affected Mortgage Loan in
accordance with the foregoing. Alesco Financial Inc. shall guarantee the
Mortgage Loan Seller’s obligations to cure, repurchase or substitute Mortgage
Loans as to which there has been a breach.

 

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(d) In the event that an Underlying Seller is obligated to repurchase a Mortgage
Loan pursuant to the related Sale Agreement, and the purchase price therefore
pursuant to the related Sale Agreement is greater than the Purchase Price, the
difference shall be paid to the Mortgage Loan Seller.

SECTION 8. Representations and Warranties Concerning the Mortgage Loan Seller.

(a) As of the Closing Date, the Mortgage Loan Seller represents and warrants to
the Purchaser as to itself in the capacity indicated as follows:

(i) the Mortgage Loan Seller (i) is a business trust duly organized, validly
existing and in good standing under the laws of the State of Maryland and
(ii) is qualified and in good standing to do business in each jurisdiction where
such qualification is necessary, except where the failure so to qualify would
not reasonably be expected to have a material adverse effect on the Mortgage
Loan Seller’s business as presently conducted or on the Mortgage Loan Seller’s
ability to enter into this Agreement and to consummate the transactions
contemplated hereby;

(ii) the Mortgage Loan Seller has full requisite power to own its property, to
carry on its business as presently conducted and to enter into and perform its
obligations under this Agreement;

(iii) the execution and delivery by the Mortgage Loan Seller of this Agreement
have been duly authorized by all necessary action on the part of the Mortgage
Loan Seller; and neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Mortgage Loan Seller or its properties
or the articles of formation or trust agreement of the Mortgage Loan Seller,
except those conflicts, breaches or defaults which would not reasonably be
expected to have a material adverse effect on the Mortgage Loan Seller’s ability
to enter into this Agreement and to consummate the transactions contemplated
hereby;

(iv) the execution, delivery and performance by the Mortgage Loan Seller of this
Agreement and the consummation of the transactions contemplated hereby do not
require the consent or approval of, the giving of notice to, the registration
with, or the taking of any other action in respect of, any state, federal or
other governmental authority or agency, except those consents, approvals,
notices, registrations or other actions as have already been obtained, given or
made and, in connection with the recordation of the Mortgages, powers of
attorney or assignments of Mortgages not yet completed;

 

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(v) this Agreement has been duly executed and delivered by the Mortgage Loan
Seller and, assuming due authorization, execution and delivery by the Purchaser,
constitutes a valid and binding obligation of the Mortgage Loan Seller
enforceable against it in accordance with its terms (subject to applicable
bankruptcy and insolvency laws and other similar laws affecting the enforcement
of the rights of creditors generally); and

(vi) there are no actions, suits or proceedings pending or, to the knowledge of
the Mortgage Loan Seller, threatened against the Mortgage Loan Seller, before or
by any court, administrative agency, arbitrator or governmental body (i) with
respect to any of the transactions contemplated by this Agreement or (ii) with
respect to any other matter which in the judgment of the Mortgage Loan Seller
will be determined adversely to the Mortgage Loan Seller and will if determined
adversely to the Mortgage Loan Seller materially and adversely affect the
Mortgage Loan Seller’s ability to perform its obligations under this Agreement;
and the Mortgage Loan Seller is not in default with respect to any order of any
court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this Agreement.

SECTION 9. Representations and Warranties Concerning the Purchaser. As of the
date hereof and as of the Closing Date, the Purchaser represents and warrants to
the Mortgage Loan Seller as follows:

(a) the Purchaser (i) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and (ii) is qualified and
in good standing to do business in each jurisdiction where such qualification is
necessary, except where the failure so to qualify would not reasonably be
expected to have a material adverse effect on the Purchaser’s business as
presently conducted or on the Purchaser’s ability to enter into this Agreement
and to consummate the transactions contemplated hereby;

(b) the Purchaser has full corporate power to own its property, to carry on its
business as presently conducted and to enter into and perform its obligations
under this Agreement;

(c) the execution and delivery by the Purchaser of this Agreement have been duly
authorized by all necessary corporate action on the part of the Purchaser; and
neither the execution and delivery of this Agreement, nor the consummation of
the transactions herein contemplated, nor compliance with the provisions hereof,
will conflict with or result in a breach of, or constitute a default under, any
of the provisions of any law, governmental rule, regulation, judgment, decree or
order binding on the Purchaser or its properties or the articles of
incorporation or by-laws of the Purchaser, except those conflicts, breaches or
defaults which would not reasonably be expected to have a material adverse
effect on the Purchaser’s ability to enter into this Agreement and to consummate
the transactions contemplated hereby;

(d) the execution, delivery and performance by the Purchaser of this Agreement
and the consummation of the transactions contemplated hereby do not require the

 

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consent or approval of, the giving of notice to, the registration with, or the
taking of any other action in respect of, any state, federal or other
governmental authority or agency, except those consents, approvals, notices,
registrations or other actions as have already been obtained, given or made;

(e) this Agreement has been duly executed and delivered by the Purchaser and,
assuming due authorization, execution and delivery by the Mortgage Loan Seller,
constitutes a valid and binding obligation of the Purchaser enforceable against
it in accordance with its terms (subject to applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of creditors
generally);

(f) there are no actions, suits or proceedings pending or, to the knowledge of
the Purchaser, threatened against the Purchaser, before or by any court,
administrative agency, arbitrator or governmental body (i) with respect to any
of the transactions contemplated by this Agreement or (ii) with respect to any
other matter which in the judgment of the Purchaser will be determined adversely
to the Purchaser and will if determined adversely to the Purchaser materially
and adversely affect the Purchaser’s ability to perform its obligations under
this Agreement; and the Purchaser is not in default with respect to any order of
any court, administrative agency, arbitrator or governmental body so as to
materially and adversely affect the transactions contemplated by this Agreement;
and

(g) the Purchaser’s Information (as defined in Section 13(b) hereof) does not
include any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading.

SECTION 10. Conditions to Closing.

(a) The obligations of the Purchaser under this Agreement will be subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:

(i) Each of the obligations of the Mortgage Loan Seller required to be performed
at or prior to the Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with in all material respects; all of the
representations and warranties of the Mortgage Loan Seller under this Agreement
shall be true and correct as of the Closing Date specified in all material
respects; and no event shall have occurred which, with notice or passage of
time, would constitute a default under this Agreement or the Sale and Servicing
Agreement; and the Purchaser shall have received certificates to that effect
signed by authorized officers of the Mortgage Loan Seller.

(ii) The Purchaser shall have received all of the following closing documents,
in such forms as are agreed upon and reasonably acceptable to the Purchaser,
duly executed by all signatories other than the Purchaser as required pursuant
to the respective terms thereof:

 

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(1) The Sale and Servicing Agreement, in form and substance reasonably
satisfactory to the Indenture Trustee and the Purchaser, and all documents
required thereby duly executed by all signatories;

(2) A certificate of an officer of the Mortgage Loan Seller dated as of the
Closing Date, in a form reasonably acceptable to the Purchaser, and attached
thereto the resolutions of the Mortgage Loan Seller authorizing the transactions
contemplated by this Agreement and the other Transaction Documents to which it
is a party, together with copies of the articles of formation or trust agreement
and certificate of good standing of the Mortgage Loan Seller;

(3) One or more opinions of counsel from the Mortgage Loan Seller’s counsel
otherwise in form and substance reasonably satisfactory to the Purchaser, the
Indenture Trustee and each Rating Agency;

(4) A letter from each of the Rating Agencies giving each Class of Notes set
forth on Schedule A hereto the rating set forth therein; and

(5) Such other documents, certificates (including additional representations and
warranties) and opinions as may be reasonably necessary to secure the intended
ratings from each Rating Agency for the Notes.

(iii) The Notes to be sold to Bear Stearns pursuant to the Underwriting
Agreement and the Purchase Agreement shall have been issued and sold to Bear
Stearns .

(iv) The Mortgage Loan Seller shall have furnished to the Purchaser such other
certificates of its officers or others and such other documents and opinions of
counsel to evidence fulfillment of the conditions set forth in this Agreement
and the transactions contemplated hereby as the Purchaser and its counsel may
reasonably request.

(b) The obligations of the Mortgage Loan Seller under this Agreement shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:

(i) The obligations of the Purchaser required to be performed by it on or prior
to the Closing Date pursuant to the terms of this Agreement shall have been duly
performed and complied with in all material respects, and all of the
representations and warranties of the Purchaser under this Agreement shall be
true and correct in all material respects as of the date hereof and as of the
Closing Date, and no event shall have occurred which would constitute a breach
by it of the terms of this Agreement, and the Mortgage Loan Seller shall have
received a certificate to that effect signed by an authorized officer of the
Purchaser.

(ii) The Mortgage Loan Seller shall have received copies of all of the following
closing documents, in such forms as are agreed upon and reasonably acceptable to
the Mortgage Loan Seller, duly executed by all

 

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signatories other than the Mortgage Loan Seller as required pursuant to the
respective terms thereof:

(1) The Sale and Servicing Agreement, in form and substance reasonably
satisfactory to the Mortgage Loan Seller, and all documents required thereby
duly executed by all signatories;

(2) A certificate of an officer of the Purchaser dated as of the Closing Date,
in a form reasonably acceptable to the Mortgage Loan Seller, and attached
thereto the written consent of the member of the Purchaser authorizing the
transactions contemplated by this Agreement and the Sale and Servicing
Agreement, together with copies of the Purchaser’s certificate of formation,
limited liability company agreement, and evidence as to the good standing of the
Purchaser dated as of a recent date;

(3) One or more opinions of counsel from the Purchaser’s counsel in form and
substance reasonably satisfactory to the Mortgage Loan Seller and the Rating
Agencies; and

(4) Such other documents, certificates (including additional representations and
warranties) and opinions as may be reasonably necessary to secure the intended
rating from each Rating Agency for the Notes.

SECTION 11. Fees and Expenses. Subject to Section 16 hereof, the Mortgage Loan
Seller shall pay on the Closing Date or such later date as may be agreed to by
the Purchaser (i) the fees and expenses of the Mortgage Loan Seller’s attorneys
and the fees and expenses of the Purchaser’s attorneys, (ii) the fees and
expenses of Deloitte & Touche LLP, (iii) the fee for the use of Purchaser’s
Registration Statement based on the aggregate original principal amount of the
Notes and the filing fee of the Commission as in effect on the date on which the
Registration Statement was declared effective, (iv) the fees and expenses
including counsel’s fees and expenses in connection with any “blue sky” and
legal investment matters, (v) the fees and expenses of the Indenture Trustee,
the Master Servicer and the Owner Trustee which shall include without limitation
the fees and expenses of its counsel with respect to (A) legal and document
review of this Agreement, the Trust Agreement, the Indenture, the Sale and
Servicing Agreement, the Notes and related agreements, (B) attendance at the
Closing and (C) review of the Mortgage Loans to be performed by the Indenture
Trustee or the respective Custodian on its behalf, (vi) the expenses for
printing or otherwise reproducing the Notes, the Prospectus, the Term Sheet
Supplement and the Prospectus Supplement, (vii) the fees and expenses of each
Rating Agency (both initial and ongoing), (viii) the fees and expenses relating
to the preparation and recordation of mortgage assignments (including
intervening assignments, if any and if available, to evidence a complete chain
of title from the originator to the Indenture Trustee) from the Mortgage Loan
Seller to the Indenture Trustee or the expenses relating to the Opinion of
Counsel referred to in Section 6(a) hereof, as the case may be and (ix) Mortgage
File due diligence expenses and other out of pocket expenses incurred by the
Purchaser in connection with the purchase of the Mortgage Loans and by Bear
Stearns in connection with the sale of the Notes. The Mortgage Loan Seller
additionally agrees to pay directly to any third party on a timely basis the
fees provided for above which are charged by such third party.

 

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SECTION 12. Accountants’ Letters.

(a) Deloitte & Touche LLP will review the characteristics of a sample of the
Mortgage Loans described in the Mortgage Loan Schedule and will compare those
characteristics to the description of the Mortgage Loans contained in the Term
Sheet. Deloitte & Touche LLP will review the characteristics of a sample of the
Mortgage Loans described in the Mortgage Loan Schedule and will compare those
characteristics to the description of the Mortgage Loans contained in the
Prospectus Supplement under the captions “Summary of Prospectus Supplement—The
Mortgage Loans” and “The Mortgage Pool” and in Schedule A thereto. The Mortgage
Loan Seller will cooperate with the Purchaser in making available all
information and taking all steps reasonably necessary to permit such accountants
to complete the review and to deliver the letters required of them under the
Underwriting Agreement. Deloitte & Touche LLP will also confirm certain
calculations as set forth under the caption “Yield On The Offered Notes” in the
Prospectus Supplement.

(b) To the extent statistical information with respect to the Master Servicer’s
or a Servicer’s servicing portfolio is included in the Term Sheet Supplement and
Prospectus Supplement under the captions “The Master Servicer and the
Servicers,” “Mortgage Loan Origination” and “Static Pool Information” a letter
from the certified public accountant for the Master Servicer and such Servicer
or Servicer’s will be delivered to the Purchaser dated the date of the
Prospectus Supplement, in the form previously agreed to by the Mortgage Loan
Seller and the Purchaser, with respect to such statistical information.

SECTION 13. Indemnification.

(a) The Mortgage Loan Seller shall indemnify and hold harmless the Purchaser and
its directors, officers and controlling persons (as defined in Section 15 of the
Securities Act) from and against any loss, claim, damage or liability or action
in respect thereof, to which they or any of them may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon (i) any untrue statement of a material
fact contained in the Mortgage Loan Seller’s Information as identified in
Exhibit 3, the omission to state in the Term Sheet Supplement, the Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Mortgage Loan Seller and in which additional Mortgage Loan
Seller’s Information is identified), in reliance upon and in conformity with
Mortgage Loan Seller’s Information a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made, not misleading, (ii) any representation or warranty made
by the Mortgage Loan Seller in Section 7 or Section 8 hereof being, or alleged
to be, untrue or incorrect, and (iii) any failure by the Mortgage Loan Seller to
perform its obligations under this Agreement; and the Mortgage Loan Seller shall
reimburse the Purchaser, and each other indemnified party for any legal and
other expenses reasonably incurred by them in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability or
action. The foregoing indemnity agreement is in addition to any liability which
the Mortgage Loan Seller otherwise may have to the Purchaser or any other such
indemnified party.

 

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(b) Pursuant to the Guarantee of Alesco Financial Inc. (“Alesco Financial”),
dated as of June 29, 2007, Alesco Financial shall guarantee the prompt, faithful
and full payment of the Mortgage Loan Seller’s indemnification obligations
described in this Section 13.

(c) The Purchaser and Bear Stearns Mortgage Capital Corporation shall jointly
and severally agree to indemnify and hold harmless the Mortgage Loan Seller and
its respective directors, officers and controlling persons (as defined in
Section 15 of the Securities Act) from and against any loss, claim, damage or
liability or action in respect thereof, to which they or any of them may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon any untrue statement
of a material fact contained in the Purchaser’s Information as identified in
Exhibit 4, the omission to state in the Term Sheet Supplement, Prospectus
Supplement or Prospectus (or any amendment thereof or supplement thereto
approved by the Purchaser and in which additional Purchaser’s Information is
identified), in reliance upon and in conformity with the Purchaser’s
Information, a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances in which they were made,
not misleading; (ii) any representation or warranty made by the Purchaser in
Section 9 hereof being, or alleged to be, untrue or incorrect, or (iii) any
failure by the Purchaser to perform its obligations under this Agreement; and
the Purchaser shall reimburse the Mortgage Loan Seller and each other
indemnified party for any legal and other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend any such
loss, claim, damage, liability or action. The foregoing indemnity agreement is
in addition to any liability which the Purchaser otherwise may have to the
Mortgage Loan Seller, or any other such indemnified party,

(d) Promptly after receipt by an indemnified party under subsection (a) or
(c) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 13 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may have
otherwise). In case any such action is brought against any indemnified party,
and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the extent it
may elect by written notice delivered to the indemnified party promptly (but, in
any event, within 30 days) after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to have charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there is a conflict of interest between itself or themselves and the
indemnifying party in the conduct of the defense of any claim or that the
interests of the indemnified party or parties are not substantially co-extensive
with those of the indemnifying party (in which case the indemnifying parties
shall not have the right to direct the defense of such action on behalf of the
indemnified

 

20

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party or parties), in any of which events such fees and expenses shall be borne
by the indemnifying parties (provided, however, that the indemnifying party
shall be liable only for the fees and expenses of one counsel in addition to one
local counsel in the jurisdiction involved. Anything in this subsection to the
contrary notwithstanding, an indemnifying party shall not be liable for any
settlement or any claim or action effected without its written consent;
provided, however, that such consent was not unreasonably withheld.

(e) If the indemnification provided for in paragraphs (a) and (c) of this
Section 13 shall for any reason be unavailable to an indemnified party in
respect of any loss, claim, damage or liability, or any action in respect
thereof, referred to in Section 13, then the indemnifying party shall in lieu of
indemnifying the indemnified party contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, in such proportion as shall be appropriate to reflect
the relative benefits received by the Mortgage Loan Seller on the one hand and
the Purchaser on the other from the purchase and sale of the Mortgage Loans, the
offering of the Notes and the other transactions contemplated hereunder. No
person found liable for a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who is not also found liable for such fraudulent misrepresentation.

(f) The parties hereto agree that reliance by an indemnified party on any
publicly available information or any information or directions furnished by an
indemnifying party shall not constitute negligence, bad faith or willful
misconduct by such indemnified party.

SECTION 14. Notices. All demands, notices and communications hereunder shall be
in writing but may be delivered by facsimile transmission subsequently confirmed
in writing. Notices to the Mortgage Loan Seller shall be directed to Alesco Loan
Holdings Trust, 2929 Arch Street, Suite 1703, Philadelphia, PA 19104, and
notices to the Purchaser shall be directed to Structured Asset Mortgage
Investments II Inc., 383 Madison Avenue, New York, New York 10179 (Telecopy:
(212-272-7206)), Attention: Baron Silverstein; or to any other address as may
hereafter be furnished by one party to the other party by like notice. Any such
demand, notice or communication hereunder shall be deemed to have been received
on the date received at the premises of the addressee (as evidenced, in the case
of registered or certified mail, by the date noted on the return receipt)
provided that it is received on a business day during normal business hours and,
if received after normal business hours, then it shall be deemed to be received
on the next business day.

SECTION 15. Transfer of Mortgage Loans. The Purchaser retains the right to
assign the Mortgage Loans and any or all of its interest under this Agreement to
the Issuer, with the understanding that the Issuer will then assign such rights
to the Indenture Trustee pursuant to the Sale and Servicing Agreement, without
the consent of the Mortgage Loan Seller, and, upon such assignment, the
Indenture Trustee, as the ultimate assignee, shall succeed to the applicable
rights and obligations of the Purchaser hereunder; provided, however, the
Purchaser shall remain entitled to the benefits set forth in Sections 11, 13 and
17 hereto and as provided in Section 2(a). Notwithstanding the foregoing, the
sole and exclusive right and remedy of the Issuer or the Indenture Trustee with
respect to a breach of representation or warranty of the Mortgage Loan Seller
shall be the cure, purchase or substitution obligations of the Mortgage Loan
Seller contained in Sections 5 and 7 hereof.

 

21

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SECTION 16. Termination. This Agreement may be terminated (a) by the mutual
consent of the parties hereto prior to the Closing Date, (b) by the Purchaser,
if the conditions to the Purchaser’s obligation to close set forth under
Section 10(a) hereof are not fulfilled as and when required to be fulfilled or
(c) by the Mortgage Loan Seller, if the conditions to the Mortgage Loan Seller’s
obligation to close set forth under Section 10(b) hereof are not fulfilled as
and when required to be fulfilled. In the event of termination pursuant to
clause (b), the Mortgage Loan Seller shall pay, and in the event of termination
pursuant to clause (c), the Purchaser shall pay, all reasonable out-of-pocket
expenses incurred by the other in connection with the transactions contemplated
by this Agreement. In the event of a termination pursuant to clause (a), each
party shall be responsible for its own expenses.

SECTION 17. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Mortgage Loan Seller submitted
pursuant hereto, shall remain operative and in full force and effect and shall
survive delivery of the Mortgage Loans to the Purchaser (and by the Purchaser to
the Owner Trustee). Subsequent to the delivery of the Mortgage Loans to the
Purchaser, the Mortgage Loan Seller’s representations and warranties contained
herein with respect to the Mortgage Loans shall be deemed to relate to the
Mortgage Loans actually delivered to the Purchaser and included in the Mortgage
Loan Schedule.

SECTION 18. Severability. If any provision of this Agreement shall be prohibited
or invalid under applicable law, the Agreement shall be ineffective only to such
extent, without invalidating the remainder of this Agreement.

SECTION 19. Counterparts. This Agreement may be executed in counterparts, each
of which will be an original, but which together shall constitute one and the
same agreement.

SECTION 20. Amendment. This Agreement cannot be amended or modified in any
manner without the prior written consent of each party.

SECTION 21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLES THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.

SECTION 22. Further Assurances. Each of the parties agrees to execute and
deliver such instruments and take such actions as another party may, from time
to time, reasonably request in order to effectuate the purpose and to carry out
the terms of this Agreement including any amendments hereto which may be
required by either Rating Agency.

SECTION 23. Successors and Assigns.

This Agreement shall bind and inure to the benefit of and be enforceable by the
Mortgage Loan Seller, the Mortgage Loan Seller and the Purchaser and their
permitted successors and assigns and, to the extent specified in Section 13
hereof, Bear Stearns, and their directors, officers and controlling persons
(within the meaning of federal securities laws). The Mortgage Loan Seller
acknowledges and agrees that the Purchaser may assign its rights under this
Agreement (including, without limitation, with respect to the Mortgage Loan
Seller’s

 

22

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representations and warranties respecting the Mortgage Loans) to the Issuer and
that the Issuer may further assign such rights to the Indenture Trustee. Any
person into which the Mortgage Loan Seller may be merged or consolidated (or any
person resulting from any merger or consolidation involving the Mortgage Loan
Seller), any person resulting from a change in form of the Mortgage Loan Seller
or any person succeeding to the business of the Mortgage Loan Seller, shall be
considered the “successor” of the Mortgage Loan Seller, as applicable, hereunder
and shall be considered a party hereto without the execution or filing of any
paper or any further act or consent on the part of any party hereto. Except as
provided in the two preceding sentences and in Section 15 hereto, this Agreement
cannot be assigned, pledged or hypothecated by either party hereto without the
written consent of the other parties to this Agreement and any such assignment
or purported assignment shall be deemed null and void.

SECTION 24. The Mortgage Loan Seller. The Mortgage Loan Seller will keep in full
effect its existence, all rights and franchises as a business trust under the
laws of the State of its formation and will obtain and preserve its
qualification to do business as a foreign business trust in each jurisdiction in
which such qualification is necessary to perform its obligations under this
Agreement.

SECTION 25. Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties with respect to the subject matter hereof, and
supersedes all prior and contemporaneous agreements, understandings, inducements
and conditions, express or implied, oral or written, of any nature whatsoever
with respect to the subject matter hereof.

SECTION 26. No Partnership. Nothing herein contained shall be deemed or
construed to create a partnership or joint venture between the parties hereto.

SECTION 27. Fiduciary Duty. Each party to this Agreement acknowledges that
(A) the terms of this Agreement were negotiated at arms length between
sophisticated parties represented by counsel, (B) no fiduciary, advisory or
agency relationship between the Depositor and the Mortgage Loan Seller has been
created as a result of any of the transactions contemplated by this Agreement,
irrespective of whether the Mortgage Loan Seller has advised or is advising the
Depositor on other matters; and (C) it has obtained such legal, tax, accounting
and other advice as it deems appropriate with respect to this Agreement and the
transactions contemplated hereby and any other activities undertaken in
connection therewith, and it is not relying on the Depositor with respect to any
such matters.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective duly authorized officers as of the date first above
written.

 

ALESCO LOAN HOLDINGS TRUST

By:

 

/s/ John Longino

      Name: John Longino   Title: Chief Financial Officer

STRUCTURED ASSET MORTGAGE INVESTMENTS II INC.

By:

 

/s/ Baron Silverstein

      Name: Baron Silverstein   Title: Vice President

 

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

Acknowledged and Agreed:

 

BEAR STEARNS MORTGAGE

CAPITAL CORPORATION

By:

 

/s/ Baron Silverstein

      Name: Baron Silverstein   Title: Assistant Vice President

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

EXHIBIT 1

CONTENTS OF MORTGAGE FILE

With respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser or its
designee, and which shall be delivered to the Purchaser or its designee pursuant
to the terms of this Agreement.

(i) the original Mortgage Note, including any riders thereto, endorsed without
recourse (A) in blank or to the order of “Citibank, N.A., as Indenture Trustee
for Noteholders of Bear Stearns ARM Trust 2007-2, Mortgage-Backed Notes, Series
2007-2,” or (B) in the case of a loan registered on the MERS system, in blank,
and in each case showing an unbroken chain of endorsements from the original
payee thereof to the Person endorsing it to the Indenture Trustee;

(ii) the original Mortgage and, if the related Mortgage Loan is a MOM Loan,
noting the presence of the MIN and language indicating that such Mortgage Loan
is a MOM Loan, which shall have been recorded (or if the original is not
available, a copy), with evidence of such recording indicated thereon (or if
clause (x) in the proviso below applies, shall be in recordable form);

(iii) unless the Mortgage Loan is either a MOM Loan or has been assigned to and
recorded in the name of MERS, the original assignment to blank, or the
assignment (either an original or a certified copy, which may be in the form of
a blanket assignment if permitted in the jurisdiction in which the Mortgaged
Property is located) to “Citibank, N.A., as Indenture Trustee, on behalf of the
Noteholders,” which shall have been recorded (or if clause (a) in the proviso
below applies, shall be in recordable form),

(iv) all intervening assignments of the Security Instrument, if applicable and
with evidence of recording thereon;

(v) the original or a copy of the policy or certificate of primary mortgage
guaranty insurance, to the extent available, if any;

(vi) the original or duplicate original lender’s title policy or, in the event
such original title policy has not been received from the insurer, such original
or duplicate original lender’s title policy will be delivered within one year of
the closing date or, in the event such original lender’s title policy is
unavailable, a photocopy of such title policy or, in lieu thereof, a current
lien search on the related property; and

(vii) originals of all modification agreements, if applicable and available;

provided, however, in lieu of the foregoing, the Mortgage Loan Seller may
deliver the following documents, under the circumstances set forth below: (a) in
lieu of the original Mortgage, assignments to the Indenture Trustee or
intervening assignments thereof which have been delivered, are being delivered
or shall, upon receipt of recording information relating to such documents
required to be included thereon, be delivered to recording offices for recording
and have not been returned in time to permit their delivery as specified above,
the Mortgage Loan Seller may deliver a true copy thereof with a certification
substantially to the effect that such

 

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copy is a true and correct copy of the original; (b) in lieu of the Mortgage,
assignment to blank or to the Indenture Trustee or intervening assignments
thereof, if the applicable jurisdiction retains the originals of such documents
(as evidenced by a certification to such effect) the Mortgage Loan Seller may
deliver photocopies of such documents containing an original certification by
the judicial or other governmental authority of the jurisdiction where such
documents were recorded; and (c) in lieu of the Mortgage Notes relating to the
Mortgage Loans, the Mortgage Loan Seller may deliver a lost note affidavit and
indemnity; provided, further, however, that in the case of the Mortgage Loans
which have been prepaid in full after the Cut-off Date and prior to the Closing
Date, the Mortgage Loan Seller, in lieu of delivering the above documents, may
deliver to the Indenture Trustee, a certification to such effect and shall
deposit all amounts paid in respect of such Mortgage Loans in the Payment
Account on the Closing Date. The Mortgage Loan Seller shall deliver such
original documents (including any original documents as to which certified
copies had previously been delivered) to the related Custodian, promptly after
they are received; provided that the Mortgage Loan Seller need not cause to be
recorded any assignment (a) in any jurisdiction under the laws of which, as
evidenced by an Opinion of Counsel delivered by the Depositor to the Indenture
Trustee and the Rating Agencies, the recordation of such assignment is not
necessary to protect the Indenture Trustee’s interest in the related Mortgage
Loan or (b) if MERS is identified on the Mortgage or on a properly recorded
assignment of the Mortgage as mortgagee of record solely as nominee for the
Mortgage Loan Seller and its successors and assigns; provided, however,
notwithstanding the foregoing, each assignment shall be submitted for recording
by the Mortgage Loan Seller in the manner described above, at no expense to the
Issuing Entity or the Indenture Trustee, upon the earliest to occur of:
(i) reasonable direction by the Holders of Notes aggregating at least 25% of the
Note Principal Balance of the Notes, (ii) the occurrence of a Master Servicer
Event of Default or an Event of Default, (iii) the occurrence of a bankruptcy,
insolvency or foreclosure relating to the Mortgage Loan Seller or the Mortgage
Loan Seller and (iv) the occurrence of a servicing transfer as described in
Section 6.02 hereof. Notwithstanding the foregoing, if the Mortgage Loan Seller
fails to pay the cost of recording the assignments, such expense shall be paid
by the Securities Administrator from funds in the Payment Account in accordance
with Section 4.05 of this Agreement. In the event that the Mortgage Loan Seller,
the Depositor or the Master Servicer gives written notice to the Indenture
Trustee that a court has recharacterized the sale of the Mortgage Loans as a
financing, the Mortgage Loan Seller shall submit or cause to be submitted for
recording as specified above or, the Mortgage Loan Seller fail to perform such
obligations, the Depositor shall cause each such previously unrecorded
assignment to be submitted for recording as specified above at the expense of
the Trust.

 

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EXHIBIT 2

MORTGAGE LOAN SCHEDULE INFORMATION

The Mortgage Loan Schedule shall set forth the following information with
respect to each Mortgage Loan:

 

  (a) the city, state and zip code of the Mortgaged Property;

 

  (b) the property type;

 

  (c) the Mortgage Rate;

 

  (d) the Servicing Fee Rate;

 

  (e) the Master Servicer’s Fee Rate;

 

  (f) the LPMI Fee, if applicable;

 

  (g) the Trustee Fee Rate, if applicable;

 

  (h) the Net Rate;

 

  (i) the maturity date;

 

  (j) the stated original term to maturity;

 

  (k) the stated remaining term to maturity;

 

  (l) the original principal balance;

 

  (m) the first payment date;

 

  (n) the principal and interest payment in effect as of the Cut-off Date;

 

  (o) the unpaid principal balance as of the Cut-off Date;

 

  (p) the Loan-to-Value Ratio at origination;

 

  (q) the insurer of any Primary Mortgage Insurance Policy;

 

  (r) the Gross Margin, if applicable;

 

  (s) the next Adjustment Date, if applicable;

 

  (t) the Maximum Lifetime Mortgage Rate, if applicable;

 

  (u) the Minimum Lifetime Mortgage Rate, if applicable;

 

  (v) the Periodic Rate Cap, if applicable;

 

  (w) the Loan Group, if applicable;

 

  (x) a code indicating whether the Mortgage Loan is negatively amortizing;

 

  (y) which Mortgage Loans adjust after an initial fixed-rate period of one,
two, three, five, seven or ten years or any other period;

 

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  (z) the Prepayment Charge, if any;

 

  (aa) lien position (e.g., first lien or second lien);

 

  (bb) a code indicating whether the Mortgage Loan is has a balloon payment;

 

  (cc) a code indicating whether the Mortgage Loan is an interest-only loan;

 

  (dd) the interest-only term, if applicable;

 

  (ee) the Mortgage Loan Seller;

 

  (ff) the original amortization term; and

 

  (gg) a code indicating whether such Mortgage Loan is a loan which has been
pre-funded.

Such schedule also shall set forth for all of the Mortgage Loans, the total
number of Mortgage Loans, the total of each of the amounts described under
(n) and (o) above, the weighted average by principal balance as of the Cut-off
Date of each of the rates described under (c) through (h) above, and the
weighted average remaining term to maturity by unpaid principal balance as of
the Cut-off Date.

 

E-2-2

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EXHIBIT 3

MORTGAGE LOAN SELLER’S INFORMATION

All information in the Term Sheet Supplement described under the following
captions: “THE MORTGAGE POOL – General,” “—Prepayment Charges on the Mortgage
Loans,” “—Special Characteristics of the Mortgage Loans,” “—Credit Scores” and
“THE SPONSOR”; all information in the Prospectus Supplement described under the
following captions: “SUMMARY OF PROSPECTUS SUPPLEMENT—The Sponsor,” “—The
Mortgage Loans,” “THE MORTGAGE POOL – General,” “—Prepayment Charges on the
Mortgage Loans,” “—Special Characteristics of the Mortgage Loans,” “THE
SPONSOR,” “MORTGAGE LOAN ASSUMPTIONS” and “SCHEDULE A”; the information in the
Mortgage Loan Schedule attached as Exhibit B to the Sale and Servicing
Agreement, and the Final Loan Tape.

 

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EXHIBIT 4

PURCHASER’S INFORMATION

All information in the Term Sheet Supplement, Prospectus Supplement and the
Prospectus, except the Mortgage Loan Seller’s Information.

 

E-4-1

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EXHIBIT 5

SCHEDULE OF LOST NOTES

Available Upon Request

 

E-5-1

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EXHIBIT 5

APPENDIX E – STANDARD & POOR’S ANTI-PREDATORY

LENDING CATEGORIZATION

REVISED March 1, 2007

APPENDIX E – Standard & Poor’s Predatory Lending Categories

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

 

Standard & Poor’s High Cost Loan Categorization

State/Jurisdiction

  

Name of Anti-Predatory Lending Law/Effective Date

  

Category under

Applicable Anti-Predatory

Lending Law

Arkansas

  

Arkansas Home Loan Protection Act, Ark. Code Ann. §§ 23-53-101 et seq.

Effective July 16, 2003

   High Cost Home Loan

Cleveland Heights, OH

  

Ordinance No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq.

Effective June 2, 2003

   Covered Loan

Colorado

  

Consumer Equity Protection, Colo. Stat. Ann. §§ 5-3.5-101 et seq.

Effective for covered loans offered or entered into on or after January 1, 2003.

Other provisions of the Act took effect on June 7, 2002

   Covered Loan

Connecticut

  

Connecticut Abusive Home Loan Lending Practices Act, Conn. Gen. Stat.

§§ 36a-746 et seq.

Effective October 1, 2001

   High Cost Home Loan

District of Columbia

  

Home Loan Protection Act, D.C. Code §§ 26-1151.01 et seq.

Effective for loans closed on or after January 28, 2003

   Covered Loan

Florida

  

Fair Lending Act, Fla. Stat. Ann. §§ 494.0078 et seq.

Effective October 2, 2002

   High Cost Home Loan

Georgia (Oct. 1, 2002 – Mar. 6, 2003)

  

Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003

   High Cost Home Loan

Georgia as amended

(Mar. 7, 2003 – current)

  

Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective for loans closed on or after March 7, 2003

   High Cost Home Loan

HOEPA Section 32

  

Home Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639,

12 C.F.R. §§ 226.32 and 226.34

Effective October 1, 1995, amendments October 1, 2002

   High Cost Loan

 

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Illinois

  

High Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et seq.

Effective January 1, 2004 (prior to this date, regulations under Residential

Mortgage License Act effective from May 14, 2001)

   High Risk Home Loan

Indiana

  

Indiana Home Loan Practices Act, Ind. Code Ann. §§ 24-9-1-1 et seq.

Effective January 1, 2005; amended by 2005 H.B. 1179, effective July 1, 2005.

   High Cost Home Loans

Kansas

  

Consumer Credit Code, Kan. Stat. Ann. §§ 16a-1-101 et seq.

Sections 16a-1-301 and 16a-3-207 became effective April 14, 1999;

Section 16a-3-308a became effective July 1, 1999

  

High Loan to Value Consumer

Loan (id. § 16a-3-207) and;

     

High APR Consumer Loan (id.

§16a-3-308a)

Kentucky

  

2003 KY H.B. 287 – High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100 et seq.

Effective June 24, 2003

   High Cost Home Loan

Maine

  

Truth in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq.

Effective September 29, 1995 and as amended from time to time

   High Rate High Fee Mortgage

Massachusetts

  

Part 40 and Part 32, 209 C.M.R. §§ 32.00 et seq. and 209 C.M.R. §§ 40.01 et seq.

Effective March 22, 2001 and amended from time to time

   High Cost Home Loan

Nevada

  

Assembly Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et seq.

Effective October 1, 2003

   Home Loan

New Jersey

  

New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22 et
seq.

Effective for loans closed on or after November 27, 2003

   High Cost Home Loan

New Mexico

  

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

Effective as of January 1, 2004; Revised as of February 26, 2004

   High Cost Home Loan

New York

  

N.Y. Banking Law Article 6-l

Effective for applications made on or after April 1, 2003

   High Cost Home Loan

North Carolina

  

Restrictions and Limitations on High Cost Home Loans, N.C. Gen. Stat.

§§ 24-1.1E et seq.

Effective July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)

   High Cost Home Loan

Ohio

  

H.B. 386 (codified in various sections of the Ohio Code), Ohio Rev. Code

Ann. §§ 1349.25 et seq.

Effective May 24, 2002

   Covered Loan

Oklahoma

  

Consumer Credit Code (codified in various sections of Title 14A)

Effective July 1, 2000; amended effective January 1, 2004

   Subsection 10 Mortgage

Rhode Island

  

Rhode Island Home Loan Protection Act, R.I. Gen. Laws §§ 34-25.2-1 et seq.

Effective December 31, 2006.

   High Cost Home Loan

 

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South Carolina

  

South Carolina High Cost and Consumer Home Loans Act, S.C. Code

Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004

   High Cost Home Loan

Tennessee

  

Tennessee Home Loan Protection Act, Tenn. Code Ann. §§ 45-20-101

et seq.

Effective January 1, 2007.

   High Cost Home Loan

West Virginia

  

West Virginia Residential Mortgage Lender, Broker and Servicer Act,
W. Va. Code Ann. §§ 31-17-1 et seq.

Effective June 5, 2002

  

West Virginia Mortgage Loan

Act Loan

Standard & Poor’s Covered Loan Categorization

State/Jurisdiction

  

Name of Anti-Predatory Lending Law/Effective Date

  

Category under

Applicable Anti-Predatory

Lending Law

Georgia (Oct. 1, 2002 –

Mar. 6, 2003)

  

Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1 et seq.

Effective October 1, 2002 – March 6, 2003

   Covered Loan

New Jersey

  

New Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat.
§§ 46:10B-22 et seq.

Effective November 27, 2003 – July 5, 2004

   Covered Home Loan Standard & Poor’s Home Loan Categorization

State/Jurisdiction

  

Name of Anti-Predatory Lending Law/Effective Date

  

Category under

Applicable Anti-Predatory

Lending Law

Georgia (Oct. 1, 2002 –

Mar. 6, 2003)

  

Georgia Fair Lending Act, Ga. Code Ann. §§ 7-6A-1

et seq.

Effective October 1, 2002 – March 6, 2003

   Home Loan

New Jersey

  

New Jersey Home Ownership Security Act of 2002,

N.J. Rev. Stat. §§ 46:10B-22 et seq.

Effective for loans closed on or after November 27, 2003

   Home Loan

New Mexico

  

Home Loan Protection Act, N.M. Rev. Stat.

§§ 58- 21A-1

et seq.

Effective as of January 1, 2004; Revised as of February 26, 2004

   Home Loan

North Carolina

  

Restrictions and Limitations on High Cost Home Loans, N.C. Gen.

Stat. §§ 24-1.1E et seq.

Effective July 1, 2000; amended October 1, 2003 (adding open-end

lines of credit)

   Consumer Home Loan

South Carolina

  

South Carolina High Cost and Consumer Home Loans Act, S.C. Code

Ann. §§ 37-23-10 et seq.

Effective for loans taken on or after January 1, 2004

   Consumer Home Loan

 

E-5-4

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

SCHEDULE A

REQUIRED RATINGS FOR EACH CLASS OF NOTES

Public Notes

 

Class

   S&P    Moody’s    Fitch

Class I-A-1

   AAA    Aaa    AAA

Class I-A-2

   AAA    Aaa    AAA

Class II-A-1

   AAA    Aaa    AAA

Class II-A-2

   AAA    Aaa    AAA

Class III-A-1

   AAA    Aaa    AAA

Class III-A-2

   AAA    Aaa    AAA

Class IV-A-1

   AAA    Aaa    AAA

Class IV-A-2

   AAA    Aaa    AAA

None of the above ratings has been lowered since the respective dates of such
letters.

 

A-1

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

Private Notes

 

Class

   S&P    Moody’s    Fitch

Class X

   —    —    AAA

Class B-1

   —    —    AA

Class B-2

   —    —    A

Class B-3

   —    —    BBB

Class B-4

   —    —    BB

Class B-5

   —    —    B

Class B-6

   —    —    —

None of the above ratings has been lowered since the respective dates of such
letters.

 

A-2

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

SCHEDULE B

MORTGAGE LOAN SCHEDULE

 

B-1