**Exhibit 10.19**

 

**LOAN SALE AGREEMENT**

 

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**between**

 

**MORTGAGEIT, INC.**

 

**as a seller**

 

 

**and**

 

 

**MORTGAGEIT HOLDINGS, INC.**

 

**as a seller**

 

**and**

 

**MORTGAGEIT SPV I**

**acting with respect to the REITSub-Trust**

**and acting with respect to the**

**TRS Sub-Trust**

 

**as the purchaser**

 

 

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**Dated as of**

 

**August 4, 2004**

 

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**TABLE OF CONTENTS**

 
| ARTICLE I DEFINITIONS                               |                                                  |
|-----------------------------------------------------|-------------------------------------------------------|
|                                                |                                                  |   |
| SECTION 1.01                                        | Definitions                                           |   |
|                                                |                                                  |   |
| ARTICLE II SALE AND  CONTRIBUTION OF MORTGAGE LOANS |                                                  |
|                                                |                                                  |   |
| SECTION 2.01                                        | Acquisition; Capital  Contribution.                   |   |
| SECTION 2.02                                        | Delivery of Submission  Packages                      |   |
| SECTION 2.03                                        | Intention of the  Parties; Grant of Security Interest |   |
|                                                |                                                  |   |
| ARTICLE III  REPRESENTATIONS AND WARRANTIES         |                                                  |
|                                                |                                                  |   |
| SECTION 3.01                                        | Representations and  Warranties.                      |   |
| SECTION 3.02                                        | Repurchase of Mortgage  Loans by the Sellers.         |   |
|                                                |                                                  |   |
| ARTICLE IV COVENANTS                                |                                                  |
|                                                |                                                  |   |
| SECTION 4.01                                        | Covenants of Sellers                                  |   |
| SECTION 4.02                                        | Purchaser Covenants                                   |   |
| SECTION 4.03                                        | Pledge of Mortgage  Loans                             |   |
|                                                |                                                  |   |
| ARTICLE V CONDITIONS  PRECEDENT                     |                                                  |
|                                                |                                                  |   |
| SECTION 5.01                                        | Conditions to the  Trust Obligations                  |   |
|                                                |                                                  |   |
| ARTICLE VI TERMINATION                              |                                                  |
|                                                |                                                  |   |
| SECTION 6.01                                        | Termination                                           |   |
| SECTION 6.02                                        | Effect of Termination                                 |   |
|                                                |                                                  |   |
| ARTICLE VII  MISCELLANEOUS PROVISIONS               |                                                  |
|                                                |                                                  |   |
| SECTION 7.01                                        | Amendment                                             |   |
| SECTION 7.02                                        | GOVERNING LAW;  JURISDICTION.                         |   |
| SECTION 7.03                                        | Notices                                               |   |
| SECTION 7.04                                        | Severability of  Provisions                           |   |
| SECTION 7.05                                        | Assignment                                            |   |
| SECTION 7.06                                        | Further Assurances                                    |   |
| SECTION 7.07                                        | No Waiver; Cumulative  Remedies                       |   |
| SECTION 7.08                                        | Counterparts                                          |   |
| SECTION 7.09                                        | Binding Effect:  Third-Party Beneficiaries            |   |
| SECTION 7.10                                        | Merger and Integration                                |   |
| SECTION 7.11                                        | Headings                                              |   |
| SECTION 7.12                                        | Schedules and Exhibits                                |   |
| SECTION 7.13                                        | No Bankruptcy Petition  Against the Trust             |   |
| SECTION 7.14                                        | No Recourse                                           |   |

 

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**SCHEDULES & ANNEXES**

 
| Schedule 1 |   | Definitions List                                                                                                                           |   |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|
|       |   |                                                                                                                                       |   |
| Schedule 2 |   | Representations and  Warranties                                                                                                            |   |
|       |   |                                                                                                                                       |   |
| Schedule 3 |   | Seller’s Former  Names and Current or Former Trade Names, Fictitious Names, Assumed Names and  or “Doing Business As” Names |   |
|       |   |                                                                                                                                       |   |
| Schedule 4 |   | UCC Filing Jurisdictions                                                                                                                   |   |
|       |   |                                                                                                                                       |   |
| Annex 1    |   | Form of Seller’s Officer’s Certificate                                                                                           |   |
|       |   |                                                                                                                                       |   |
| Annex 2    |   | Form of Seller’s Officer’s Certificate for  Hedge Reports and Covenant Compliance                                                |   |
|       |   |                                                                                                                                       |   |
| Annex 3    |   | Form of Financial Statement Footnote                                                                                                       |   |

 

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THIS LOAN SALE AGREEMENT (as amended, supplemented or otherwisemodified from time to time, this “Loan Sale Agreement” or “Agreement”),dated as of August 4, 2004, is made between MortgageIT, Inc., a New Yorkcorporation, as a seller (“MortgageIT”), MortgageIT Holdings, Inc., aMaryland corporation, as a seller (“MortgageIT Holdings”, and togetherwith MortgageIT, the “Sellers”, and each, individually, a “Seller”),and MortgageIT SPV I, a Delaware statutory trust (the “Trust”), actingwith respect to the REIT Sub-Trust and, separately, acting with respect to theTRS Sub-Trust as the purchaser.

 

WITNESSETH:

 

WHEREAS, pursuant to the terms of a Master MortgageLoan Purchase Agreement, dated as of August 4, 2004, by and between MortgageIT,as the seller thereunder, and MortgageIT Holdings, as the purchaser thereunder(as amended, supplemented or otherwise modified and in effect from time totime, the “Originator’s Loan Sale Agreement”), MortgageIT Holdings willfrom time to time acquire REIT Mortgage Loans from MortgageIT;

 

WHEREAS, pursuant to the terms of this Loan SaleAgreement, MortgageIT Holdings desires from time to time to sell REIT MortgageLoans to the REIT Sub-Trust and MortgageIT desires from time to time to sellTRS Mortgage Loans to the TRS Sub-Trust upon the terms and conditionshereinafter set forth;

 

WHEREAS, pursuant to the terms of a Mortgage LoanRepurchase Agreement, dated as of the date hereof, between the TRS Sub-Trust,as seller thereunder, and UBS, as the purchaser thereunder, (as amended,supplemented or otherwise modified and in effect from time to time, the “LoanRepurchase Agreement”), UBS Real Estate Securities Inc. (“UBS”) willfrom time to time acquire the TRS Mortgage Loans from the TRS Sub-Trust,subject to the TRS Sub-Trust’s obligation to repurchase such TRS Mortgage Loansand upon the terms and conditions set forth therein;

 

WHEREAS, the REIT Sub-Trust, UBS, and certain otherentities are parties to the Note Purchase and Security Agreement, dated as ofthe date hereof (as amended, supplemented or otherwise modified and in effectfrom time to time, the “Note Purchase Agreement”), pursuant to whichcertain parties thereto (the “Note Purchasers”), severally, have agreed,subject to the terms and conditions of the Note Purchase Agreement, to purchasethe Notes issued thereunder by the REIT Sub-Trust (the “Notes”), whichwill be secured by the REIT Mortgage Loans owned by the REIT Sub-Trust and willbe held from time to time by the entities that are parties to the Note PurchaseAgreement as Noteholders (each a “Noteholder”) and UBS is actingthereunder as agent for the Note Purchasers and the Noteholders (in thatcapacity, the “Agent”);

 

WHEREAS, pursuant to the terms of the Note PurchaseAgreement, the REIT Sub-Trust will from time to time pledge the REIT MortgageLoans to secure the Notes;

 

WHEREAS, pursuant to the terms of a Mortgage LoanPurchase Agreement, dated as of the date hereof, between the TRS Sub-Trust andUBS (as amended, supplemented or otherwise modified and in effect from time totime, the “Loan Purchase Agreement”), and a Mortgage Loan ParticipationAgreement, dated as of the date hereof between the TRS Sub-Trust and UBS (asamended, supplemented or otherwise modified and in effect from time to time,the

 

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“LoanParticipation Agreement”) UBS will from time to time acquire TRS MortgageLoans or Participation Certificates backed by TRS Mortgage Loans from the TRSSub-Trust upon the terms and conditions set forth therein.

 

WHEREAS, each of MortgageIT, MortgageIT Holdings andthe Trust agree that all representations, warranties, covenants and agreementsmade by it herein will be for the benefit of other parties hereto and will beassigned by the Trust (1) with respect to the TRS Mortgage Loans, to UBS, and(2) with respect to the REIT Mortgage Loans, to UBS for the benefit of UBS, theNote Purchasers and the Noteholders; and

 

NOW, THEREFORE, in consideration of the mutualcovenants contained herein, and other good and valuable consideration, thereceipt and adequacy of which are hereby acknowledged, the parties hereto agreeas follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01       Definitions.  For all purposes of this Loan SaleAgreement, except as otherwise expressly provided herein or unless the contextotherwise requires, capitalized terms not otherwise defined herein shall havethe meanings assigned to such terms in the definitions contained in theDefinitions List attached as Schedule 1 to this agreement.  As used in this Loan Sale Agreement, thefollowing terms shall have the following meanings:

 

“Agency Approvals”:  As defined in Section 3.01(a)(ix) of this Agreement.

 

“Event of Default”:     Asdefined in the Loan Repurchase Agreement.

 

ARTICLE II

 

SALE AND CONTRIBUTION OFMORTGAGE LOANS

 

SECTION 2.01       Acquisition;Capital Contribution.

 

(a)           Onthe Effective Date and on any Note Purchase Date thereafter until and includingthe Termination Date, MortgageIT Holdings will sell and does hereby sell, andthe REIT Sub-Trust will purchase and does hereby purchase, REIT Mortgage Loansowned by MortgageIT Holdings, whether now existing or hereafter arising,without recourse (except as provided in Sections 3.02 and 4.01(a) hereof).  After each such sale, ownership in the REITMortgage Loans will be vested in and attributed to the REIT Sub-Trust.  In connection with such sale, to the extentthat the fair market value of the REIT Mortgage Loans sold hereby by MortgageITHoldings exceeds the cash consideration received by it in connection therewith,then simultaneously with such sale, MortgageIT Holdings shall be deemed to havemade a new contribution of capital to the REIT Sub-Trust in the amount of suchexcess, which shall be recorded by the Administrator pursuant to Section 5.06of the Trust Agreement.

 

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### As of the date hereof and on any Purchase Datethereafter until and including the date on which the Loan Repurchase Agreement,the Loan Purchase Agreement and the Loan Participation Agreement are terminatedor cease to be effective, MortgageIT will sell and does hereby sell, and theTRS Sub-Trust will purchase and does hereby purchase, the TRS Mortgage Loansowned by MortgageIT, whether now existing or hereafter arising, withoutrecourse (except as provided in Sections 3.02 and 4.01(a) hereof).  After each such sale, ownership in the TRSMortgage Loans will be vested in and attributed to the TRS Sub-Trust.  In connection with such sale, to the extentthat the fair market value of the TRS Mortgage Loans sold hereby by MortgageITexceeds the cash consideration received by it in connection therewith, thensimultaneously with such sale, MortgageIT shall be deemed to have made a newcontribution of capital to the TRS Sub-Trust in the amount of such excess,which shall be recorded by the Administrator pursuant to Section 5.06 of theTrust Agreement.

###  

(b)           Onthe Effective Date, MortgageIT shall sell, along with the TRS Mortgage Loans,all of its rights and benefits under each Takeout Commitment to the full extentpermitted by the Takeout Investor, to deliver the Mortgage Loans specifiedtherein to the Takeout Investor and to receive the Takeout Proceeds thereforefrom the Takeout Investor.  On theEffective Date, MortgageIT Holdings shall also sell all of its rights andbenefits under the Originator’s Loan Sale Agreement to the REIT Sub-Trust,along with the REIT Mortgage Loans, including its rights and benefits undereach Takeout Commitment to the full extent permitted by the Takeout Investor,to deliver the Mortgage Loans specified therein to the Takeout Investor and toreceive the Takeout Proceeds therefore from the Takeout Investor.  The REIT Sub-Trust shall have the right toexercise any and all of MortgageIT Holdings’ rights under the Originator’s LoanSale Agreement and shall be entitled to all of the benefits of MortgageITHoldings thereunder to the extent provided for in such sale.

 

(c)           Inconnection with the sale and contribution described in Section 2.01(b) above,MortgageIT Holdings agrees to record and file, at its expense, financingstatements in the relevant jurisdictions (and thereafter will file continuationstatements with respect to such financing statements) with respect to all ofthe REIT Mortgage Loans contributed and to be transferred by it to the REITSub-Trust pursuant to this Loan Sale Agreement, meeting the requirements ofapplicable state law in such manner and in such jurisdictions as are necessaryto perfect and to maintain the perfection of, the transfer, conveyance andcontribution of the Mortgage Loans from such Seller to the REIT Sub-Trust andthe pledge of the REIT Collateral from the REIT Sub-Trust to UBS, and todeliver a file-stamped copy of such financing statements or other evidence ofsuch filings to UBS on or prior to the initial Note Purchase Date; provided,however, that the related Mortgage Files (including each originalexecuted Mortgage) will not be physically delivered to UBS but instead will beheld by the Custodian.

 

### In connection with the sale and contribution describedin Section 2.01(b) above, MortgageIT agrees to record and file, at its expense,financing statements in the relevant jurisdictions (and thereafter will filecontinuation statements with respect to such financing statements) with respectto all of the TRS Mortgage Loans contributed and to be transferred by it to theTRS Sub-Trust pursuant to this Loan Sale Agreement, meeting the requirements ofapplicable state law in such manner and in such jurisdictions as are necessaryto perfect and to maintain the perfection of, the transfer, conveyance andcontribution of the Mortgage Loans from such Seller to the TRS Sub-Trust andthe sale of the TRS Collateral from the TRS Sub-Trust

 

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### to UBS, and to deliver a file-stamped copy of suchfinancing statements or other evidence of such filings to UBS on or prior tothe initial Purchase Date; provided, however, that the relatedMortgage Files (including each original executed Mortgage) will not bephysically delivered to UBS but instead will be held by the Custodian.

###  

(d)           Notwithstandinganything to the contrary, MortgageIT and the TRS Sub-Trust intend the sale andtransfer of the TRS Mortgage Loans to UBS under the Loan Repurchase Agreement,this Loan Sale Agreement or the Loan Participation Agreement to be sales of theTRS Mortgage Loans rather than borrowings secured by the Mortgage Loans forlegal purposes.

 

(e)           Ifin any enforcement suit or legal proceeding it is held that either Servicer maynot enforce a Mortgage on the ground that it is not a real party in interest orholder entitled to enforce the Mortgage, the related Sub-Trust shall, at theexpense of the related Seller, take such steps as such Servicer deems necessaryto enforce the Mortgage, including bringing suit in the such Sub-Trust’s name.

 

(f)            Pursuantto Section 2.01(a) hereof, MortgageIT Holdings from time to time may conveyadditional REIT Mortgage Loans to REIT Sub-Trust by delivering a Loan PurchaseDetail with respect to such Eligible Mortgage Loan to REIT Sub-Trust on therelated Note Purchase Date.  Pursuant toSection 2.01(a) hereof, MortgageIT from time to time may convey additional TRSMortgage Loans to TRS Sub-Trust by delivering a Loan Purchase Detail withrespect to such Eligible Mortgage Loan to TRS Sub-Trust on the related PurchaseDate.

 

(g)           Exceptfor the obligations of each Seller hereunder with respect to any breach of arepresentation, warranty or covenant made herein and except as otherwisespecified in Section 3.02(d), the sale and conveyance of the Eligible MortgageLoans will be without recourse to such Seller.

 

(h)           TheTrust acknowledges that each Seller is selling the Mortgage Loans on a“servicing released” basis, with MortgageIT, Inc. acting as the TRS Servicer,with respect to the TRS Mortgage Loans, and MortgageIT Holdings, Inc. acting asMaster Servicer, with respect to the REIT Mortgage Loans.

 

SECTION 2.02       Deliveryof Submission Packages.  Pursuant toSection 2 of the Custodial Agreement, in connection with each assignment andconveyance, the related Seller shall on behalf of and at the direction of theTrust deliver to, and deposit with the Custodian at the times contemplated bythe Custodial Agreement, the Submission Packages and a related Loan PurchaseDetail, as applicable with respect to each of the Mortgage Loans to be sold tothe Trust and pledged or sold by the Trust to UBS.

 

SECTION 2.03       Intentionof the Parties; Grant of Security Interest.  It is the intention of the parties hereto that each transfer ofthe Eligible Mortgage Loans to be made pursuant to the terms hereof shallconstitute an absolute assignment and a sale or capital contribution of suchEligible Mortgage Loan by the related Seller to the Trust and not a loan.  In the event, however, that a court ofcompetent jurisdiction were to hold that any such transfer constitutes a loanand not a sale or capital contribution, it is the intention of the partieshereto

 

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that this Loan SaleAgreement is deemed to be a security agreement and that such Seller shall bedeemed to have granted to the Trust as of the date hereof a first priorityperfected security interest in all of such Seller’s right, title and interestin, to and under each Mortgage Loan and all related Mortgage Documents whethernow or hereafter acquired and wherever located, and all income and proceedsthereof.  With respect to each REITMortgage Loan, it is the intention of the parties hereto that each transfer ofthe REIT Mortgage Loans to be made pursuant to the terms hereof shallconstitute an absolute assignment and a sale or capital contribution of suchREIT Mortgage Loan by MortgageIT Holdings to the REIT Sub-Trust and not aloan.  With respect to each TRS MortgageLoan, it is the intention of the parties hereto that each transfer of the TRSMortgage Loans to be made pursuant to the terms hereof shall constitute anabsolute assignment and a sale or capital contribution of such TRS MortgageLoan by MortgageIT to the TRS Sub-Trust and not a loan.  In the event, however, that a court ofcompetent jurisdiction were to hold that any such transfer constitutes a loanand not a sale or capital contribution, it is the intention of the partieshereto that this Loan Sale Agreement is deemed to be a security agreement andthat each Seller shall be deemed to have granted to the related Sub-Trust as ofthe date hereof a first priority perfected security interest in all of suchSeller’s right, title and interest in, to and under each Mortgage Loan and allrelated Mortgage Documents whether now or hereafter acquired and whereverlocated, and all income and proceeds thereof.

 

ARTICLE III

 

REPRESENTATIONS ANDWARRANTIES

 

SECTION 3.01       Representationsand Warranties.

 

(a)           MortgageITHoldings hereby makes the following representations and warranties to the REITSub-Trust, and understands that the benefit of these representations andwarranties will be assigned by the REIT Sub-Trust to UBS.  Such representations and warranties are madeas of the date hereof and as of any Note Purchase Date, with respect toMortgage Loans transferred to the REIT Sub-Trust on such date and shall surviveeach assignment, transfer and conveyance by MortgageIT Holdings of the REITMortgage Loans to the REIT Sub-Trust and its successors and assigns.  MortgageIT hereby makes the followingrepresentations and warranties to the TRS Sub-Trust, and understands that thebenefit of these representations and warranties will be assigned by the TRSSub-Trust to UBS.  Such representationsand warranties are made as of the date hereof and as of any Purchase Date, withrespect to TRS Mortgage Loans transferred to the TRS Sub-Trust on such date andshall survive each assignment, transfer and conveyance by MortgageIT of the TRSMortgage Loans to the TRS Sub-Trust and its successors and assigns:

###  

#### (i)            All representations and warrantiesmade and all information (including, without limitation, any financialinformation concerning MortgageIT Holdings) and documents or copies ofdocuments furnished by MortgageIT Holdings to the REIT Sub-Trust pursuant to orin connection with this Loan Sale Agreement are and will be true and correct atthe time when made and at all times thereafter or, if limited to a specificdate, as of the date to which they refer. All representations and warranties made and all information (including,without limitation, any financial information concerning MortgageIT) anddocuments or copies of documents furnished by MortgageIT to the TRS Sub-Trustpursuant to or in connection with

 

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#### this Loan Sale Agreement are and will be true andcorrect at the time when made and at all times thereafter or, if limited to aspecific date, as of the date to which they refer;

####  

#### (ii)           Such Seller is duly organized,validly existing and in good standing under the laws of the state of itsorganization or of the United States of America and has all licenses necessaryto carry on its business as now being conducted and is licensed, qualified andin good standing in the state where the Mortgaged Property is located if thelaws of such state require licensing or qualification in order to conductbusiness of the type conducted by Seller. No licenses or approvals obtained by Seller have been suspended orrevoked by any court, administrative agency, arbitrator or governmental bodyand no proceedings are pending which might result in such suspension orrevocation.  Seller has all requisitepower and authority (including, if applicable, corporate power) to execute anddeliver this Loan Sale Agreement and each Transaction Document to which it is aparty and to perform in accordance herewith and therewith; the execution,delivery and performance of this Loan Sale Agreement and each TransactionDocument to which it is a party (including all instruments of transfer to bedelivered pursuant to the Transaction Documents to which it is a party) by suchSeller and the consummation of the transactions contemplated hereby and therebyhave been duly and validly authorized. Each of the Transaction Documents to which it is a party evidences thevalid, binding and enforceable obligation of such Seller and all requisiteaction (including, if applicable, corporate action) has been taken by Seller tomake each Transaction to which it is a party valid and binding upon Seller inaccordance with its terms, except as such terms may be limited by bankruptcy,insolvency, reorganization, moratorium or other similar laws affecting therights of creditors generally and by general principals of equity.

####  

#### (iii)          No approval of the transactionscontemplated by the Transaction Documents to which it is a party from the OTS,the NCUA, the FDIC or any similar federal or state regulatory authority havingjurisdiction over such Seller is required, or if required, such approval hasbeen obtained.  There are no actions orproceedings pending or affecting such Seller which would adversely affect itsability to perform hereunder.  Thetransfers, assignments and conveyances provided for herein and therein are notsubject to the bulk transfer or any similar statutory provisions in effect inany applicable jurisdiction;

####  

#### (iv)          The consummation of the transactionscontemplated by this Loan Sale Agreement and each Transaction Document to whichit is a party are in the ordinary course of business of such Seller and willnot result in the breach of any term or provision of the charter, by-laws orother organizational document of such Seller or result in the breach of anyterm or provision of, or conflict with or constitute a default under or resultin the acceleration of any obligation under, any agreement, indenture, loan orcredit agreement or other instrument to which such Seller, the Mortgage Loansor any of such Seller’s property is subject, or result in the violation of anylaw, rule, regulation, order, judgment or decree to which such Seller, theMortgage Loans or any of such Seller’s property is subject;

####  

#### (v)           Each Transaction Document to beexecuted by such Seller pursuant hereto and thereto is and will be valid,binding and subsisting obligations of such Seller, enforceable in accordancewith its respective terms, except as such terms may be limited by bankruptcy,insolvency, reorganization, moratorium or other similar laws affecting therights of creditors generally and by general principals of equity.  No consents or approvals are required to

 

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#### be obtained by such Seller or its Parent Company forthe execution, delivery and performance of each such Transaction Document bysuch Seller;

####  

#### (vi)          MortgageIT Holdings has not pledgedany interest in any REIT Mortgage Loan to any person other than the REITSub-Trust, and upon delivery of a REIT Mortgage Loan to the REIT Sub-Trust, theREIT Sub-Trust will be the sole owner thereof, free and clear of any Lien,claim or encumbrance.  MortgageIT hasnot sold any interest in any TRS Mortgage Loan to any person other than the TRSSub-Trust, and upon delivery of a TRS Mortgage Loan to the TRS Sub-Trust, theTRS Sub-Trust will be the sole owner thereof, free and clear of any Lien, claimor encumbrance

####  

#### (vii)         All information relating to such Sellerthat such Seller has delivered or caused to be delivered to the Trust,including, but not limited to, all documents related to the TransactionDocuments to which it is a party or such Seller’s financial statements, and allsuch information hereafter furnished by such Seller, does not and will notcontain any untrue statement of a material fact or omit to state a materialfact necessary to make the statements made therein or herein in light of thecircumstances under which they were made, not misleading.  Such Seller has disclosed in writing any andall facts relating to such Seller that materially and adversely affect or maymaterially and adversely affect the business operations or financial conditionof such Seller or the ability of such Seller to perform its obligations underthe Transaction Documents to which it is party.  Since the furnishing of such documents or information, there hasbeen no change, nor any development or event involving a prospective change thatwould render any of such documents or information untrue or misleading in anymaterial respect;

####  

#### (viii)        There are no actions, suits orproceedings pending, or to the knowledge of such Seller threatened, includingany claims for which an action, suit or proceeding has not been commenced,against or affecting such Seller or any of its assets in any court or beforeany arbitrator or before any governmental commission, board, bureau or otheradministrative agency that, in any such case, if adversely determined, wouldhave a Material Adverse Effect on the financial condition or business of suchSeller or the ability of such Seller to perform under this Loan Sale Agreementand each Transaction Document to which it is a party and each FundingConfirmation;

####  

#### (ix)           If applicable, with respect to eachMortgage Loan sold by such Seller hereunder, such Seller (and each servicer) isapproved by Ginnie Mae as an approved issuer, Fannie Mae as an approved lender,Freddie Mac as an approved seller/servicer (as the case may be) and by FHA asan approved mortgagee and by VA as an approved VA lender, in each case in goodstanding (such collective approvals and conditions, “Agency Approvals”),with no event having occurred or such Seller (or any subservicer) having anyreason whatsoever to believe or suspect will occur prior to the purchase of theMortgage Loan by the related Agency, including, without limitation, a change ininsurance coverage which would either make such Seller (or any servicer) unableto comply with the eligibility requirements for maintaining all such AgencyApprovals or require notification to the relevant Agency or to HUD, FHA orVA.  Should such Seller (or anyservicer), for any reason, cease to possess all such Agency Approvals, orshould notification to the relevant Agency or to HUD, FHA or VA be required,such Seller shall so notify the Trust immediately in writing.  Notwithstanding the preceding

 

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#### sentence, such Seller shall take all necessary actionto maintain all of its (and each servicer’s) Agency Approvals at all timesduring the term of this Loan Sale Agreement. Such Seller (and any servicer) has adequate financial standing,servicing facilities, procedures and experienced personnel necessary for thesound servicing of mortgage loans of the same types as may from time to timeconstitute Mortgage Loans pursuant to the related Servicing Agreement and inaccordance with Accepted Servicing Practices;

####  

#### (x)            The Custodian is an eligiblecustodian under the Agency Guide and Agency Program;

####  

#### (xi)           Such Seller and its Subsidiaries havefiled all federal income tax returns and all other material tax returns thatare required to be filed by them and have paid all taxes due pursuant to suchreturns or pursuant to any assessment received by it or any of itsSubsidiaries, except for any such taxes as are being appropriately contested ingood faith by appropriate proceedings diligently conducted and with respect towhich adequate reserves have been provided and any taxes the failure of whichto pay would not have a Material Adverse Effect.  The charges, accruals and reserves on the books of such Sellerand its Subsidiaries in respect of taxes and other governmental charges are, inthe opinion of such Seller, adequate;

####  

#### (xii)          The consolidated Tangible Net Worth ofthe Sellers is not less than $175,000,000. The ratio of the Sellers’ consolidated Total Indebtedness to TangibleNet Worth is not greater than 20:1;

####  

#### (xiii)         Neither Seller nor any of itsSubsidiaries is an “investment company”, or a company “controlled” by an“investment company”, within the meaning of the Investment Company Act of 1940,as amended;

####  

#### (xiv)        Upon the filing of financing statementson Form UCC-1 naming the Trust as “Secured Party”, such Seller as “Debtor” anddescribing the Mortgage Loans, in the jurisdictions and recording officeslisted on Schedule 4 attached hereto, the security interests grantedhereunder in the Mortgage Loans will constitute fully perfected securityinterests under the Uniform Commercial Code in all right, title and interest ofsuch Seller in, to and under such Mortgage Loans, which can be perfected byfiling under the Uniform Commercial Code;

####  

#### (xv)         As of the date hereof, such Seller’schief executive office is located at 33 Maiden Lane, New York, New York10038.  As of the date hereof, andduring the four months immediately preceding the date hereof, such Seller’ssole jurisdiction of organization is, and has been, New York (with respect toMortgageIT) or Maryland (with respect to MortgageIT Holdings);

####  

#### (xvi)        Such Seller’s exact legal name is, andhas been, as to MortgageIT, for the immediately preceding four months and, asto MortgageIT Holdings, since its incorporation, as set forth on the signaturepage hereto;

####  

#### (xvii)       Except as listed in Schedule 3 to thisLoan Sale Agreement, such Seller has not used any trade names, fictitiousnames, assumed names or “doing business as” names since its incorporation;

 

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#### (xviii)      Such Seller has not merged with, oracquired all or substantially all of the assets of, any other person or entitywithin the immediately preceding year, excluding MortgageIT’s merger withMortgageIT Acquisition Corp. with MortgageIT as the surviving corporation, thatwas consummated on or before the date hereof;

####  

#### (xix)         The Transaction Documents to which suchSeller is a party, any other document contemplated hereby or thereby and eachsale of a Mortgage Loan have not been and will not be entered into fraudulentlyby such Seller hereunder or the Custodian, or with the intent to hinder, delayor defraud any of such Seller’s creditors or the Trust;

####  

#### (xx)          Such Seller has complied with allapplicable anti-money laundering laws and regulations, including, withoutlimitation, the USA Patriot Act of 2001 (collectively, the “Anti-MoneyLaundering Laws”); such Seller has established an anti-money launderingcompliance program as required by the Anti-Money Laundering Laws, has conductedthe requisite due diligence in connection with the origination of each MortgageLoan for purposes of the Anti-Money Laundering Laws, including with respect tothe legitimacy of the applicable Mortgagor and the origin of the assets used bythe said Mortgagor to purchase the property in question, and maintains, andwill maintain, sufficient information to identify the applicable Mortgagor forpurposes of the Anti-Money Laundering Laws. No Mortgage Loan is subject to nullification pursuant to Executive Order13224 (the “Executive Order”) or the regulations promulgated by theOffice of Foreign Assets Control of the United States Department of theTreasury (the “OFAC Regulations”) or in violation of the Executive Orderor the OFAC Regulations, and no Mortgagor is subject to the provisions of suchExecutive Order or the OFAC Regulations nor listed as a “blocked person” forpurposes of the OFAC Regulations;

####  

#### (xxi)         The consideration received by suchSeller upon the sale of each Mortgage Loan will constitute reasonablyequivalent value and fair consideration for the ownership interest in eachMortgage Loan; and

####  

#### (xxii)        With respect to each REIT Mortgage Loanas of the related Note Purchase Date, MortgageIT Holdings hereby represents andwarrants that such REIT Mortgage Loan was originated within 90 days of the datesuch REIT Mortgage Loan was first sold to the REIT Sub-Trust hereunder.  With respect to TRS Mortgage Loan as of therelated Purchase Date, MortgageIT hereby represents and warrants that such TRSMortgage Loan was originated within 30 days of the date such TRS Mortgage Loanwas first sold to the TRS Sub-Trust hereunder.

####  

(b)           MortgageIThereby represents and warrants to the TRS Sub-Trust as of the date hereof andas of each Purchase Date, (i) with respect to the Escrow Agent WireInstructions, MortgageIT received such instructions on the letterhead of theEscrow Agent and such instructions are true and correct and (ii) MortgageIT hasinserted the Closing Instruction Letter Insert in each Closing InstructionLetter for all Wet Fundings and Dry Fundings structured as ClosingTransactions.

 

(c)           MortgageIThereby represents and warrants to the TRS Sub-Trust as of the date hereof andas of each Purchase Date, with respect to each Wet Funding or Dry Fundingstructured as a Closing Transaction, an insured closing letter from each EscrowAgent that is not a title insurance company is included in the Credit File andMortgageIT shall promptly, upon

 

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### request of the TRS Sub-Trust, send to the TRSSub-Trust (i) a copy of any such insured closing letter and (ii) a completelist of all Escrow Agents MortgageIT has approved to act as an Escrow Agent.

###  

(d)           MortgageITHoldings  hereby represents, warrantsand covenants to the REIT Sub-Trust with respect to each REIT Mortgage Loan asof the related Note Purchase Date, each of the representations and warrantiesset forth on Schedule 2 hereto is true and correct in all respects.  MortgageIT hereby represents, warrants and covenants to the TRS Sub-Trust withrespect to each TRS Mortgage Loan as of the related Purchase Date, each of therepresentations and warranties set forth on Schedule 2 hereto is true andcorrect in all respects.

 

The representations and warranties of each Seller inthis Section 3.01 and Schedule 2 hereto are unaffected by and supersede anyprovision in any endorsement of any Mortgage Loan or in any assignment withrespect to such Mortgage Loan to the effect that such endorsement or assignmentis without recourse or without representation or warranty.

 

### (e)           TheTrust hereby makes the following representations and warranties for the benefitof each Seller, UBS, the Note Purchasers and the Noteholders.  Such representations and warranties are madeas of the date hereof and each Note Purchase Date or Purchase Date, asapplicable, and shall survive each sale, assignment, transfer and conveyance bysuch Seller of the Mortgage Loans to the Trust and its successors and assigns.

 

#### (i)            Existence.  The Trust (a) is a statutory trust dulyorganized, validly existing and in good standing under the laws of the jurisdictionof its organization, (b) has all requisite corporate or other power, and hasall governmental licenses, authorizations, consents and approvals necessary toown its assets and carry on its business as now being or as proposed to beconducted, except where the lack of such licenses, authorizations, consents andapprovals would not be reasonably likely to have a Material Adverse Effect; and(c) is qualified to do business and is in good standing in all otherjurisdictions in which the nature of the business conducted by it makes suchqualification necessary, except where failure so to qualify would not bereasonably likely (either individually or in the aggregate) to have a MaterialAdverse Effect;

####  

#### (ii)           Legal Name.  The legal name of the Trust is MortgageITSPV I and the Trust has not changed its name since its organization and sinceits organization the Trust did not use, nor does the Trust now use, any tradenames, fictitious names, assumed name or “doing business as” names;

####  

#### (iii)          Power and Authority.  The Trust has the power and authority toexecute and deliver this Loan Sale Agreement and each other TransactionDocument to which it is a party, and to carry out their respective terms; theTrust has duly authorized the receipt from such Seller, and the pledge or saleto UBS of all of its right, title and interest in the Eligible Mortgage Loansand other Collateral by all necessary action; and the execution, delivery, andperformance of this Loan Sale Agreement, and each other Transaction Document towhich it is a party, have been duly authorized by the Trust by all necessaryaction;

 

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#### (iv)          Due Execution and Delivery.  This Loan Sale Agreement and each otherTransaction Document to which it is a party have been duly executed anddelivered on behalf of the Trust;

####  

#### (v)           Binding Obligations. This LoanSale Agreement, and the other Transaction Documents to which the Trust is aparty, when duly executed and delivered, will constitute legal, valid, andbinding obligations of the Trust enforceable against the Trust in accordancewith their respective terms subject as to enforceability to applicablebankruptcy, reorganization, insolvency, moratorium or other laws affectingcreditors’ rights generally and to general principles of equity (regardless ofwhether enforcement is sought in a proceeding in equity or at law);

####  

#### (vi)          No Violation.  The consummation of the transactionscontemplated by and the fulfillment of the terms of this Loan Sale Agreementwill not conflict with, result in any breach of any of the terms and provisionsof, or constitute (with or without notice or lapse of time) a default under,the organizational documents of the Trust, or any material term of anyindenture, agreement, mortgage, deed of trust, or other instrument to which theTrust is a party or by which it is bound, or result in the creation orimposition of any Lien upon any of its Properties pursuant to the terms of anysuch indenture, agreement, mortgage, deed of trust, or other instrument, orviolate any law or any order, injunction, writ, rule, or regulation applicableto the Trust of any court or of any federal or state regulatory body,administrative agency, or other Governmental Authority having jurisdiction overthe Trust or any of its Properties which would have a Material Adverse Effecton the Mortgage Loans;

####  

#### (vii)         No Proceedings.  There are no proceedings or investigationspending, or, to the knowledge of the Trust, threatened, before any court,regulatory body, administrative agency, or other tribunal or GovernmentalAuthority (A) asserting the invalidity of this Loan Sale Agreement,(B) seeking to prevent the consummation of any of the transactionscontemplated by this Loan Sale Agreement, or (C) seeking any determinationor ruling that might (in the reasonable judgment of the Trust) materially andadversely affect the performance by the Trust of its obligations under, or thevalidity or enforceability of, this Loan Sale Agreement or each otherTransaction Document for which it is a party;

####  

#### (viii)        No Consent Required.  The Trust is not required to obtain theconsent of any other Person, or any consent, license, approval or authorizationor registration or declaration with, any Governmental Authority, bureau oragency in connection with the execution, delivery or performance of this LoanSale Agreement and the Transaction Documents to which it is a party, except forsuch as have been obtained, effected or made, except for filings and recordingsin respect of the Liens created pursuant to the Facility Agreements;

####  

#### (ix)           Jurisdiction of Organization.On the Effective Date, the Trust’s jurisdiction of organization is Delaware;

####  

#### (x)            Absence of Event.  No event has occurred which adverselyaffects the Trust’s operations or its ability to perform its obligations underthe Transaction Documents to which it is a party;

 

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#### (xi)           Subsidiaries.  The Trust has no subsidiaries; and

####  

#### (xii)          Non-Consolidation.  The REIT Sub-Trust is operated in such a mannerthat it would not be substantively consolidated in the bankruptcy estate ofMortgageIT Holdings such that the separate existence of the REIT Sub-Trust andMortgageIT Holdings would be disregarded in the event of a bankruptcy orinsolvency of such Seller.  The TRSSub-Trust is operated in such a manner that it would not be substantivelyconsolidated in the bankruptcy estate of MortgageIT such that the separateexistence of the TRS Sub-Trust and MortgageIT would be disregarded in the eventof a bankruptcy or insolvency of such Seller

####  

SECTION 3.02       Repurchaseof Mortgage Loans by the Sellers.

 

(a)           Upondiscovery of a breach of any of the representations or warranties set forth inSchedule 2 hereto that materially adversely affects the value or the Trust’s interestin any Mortgage Loan or materially adversely affects the related SubmissionPackage, as the case may be, or if the related Seller fails to cause deliveryof evidence of filing or copies of any UCC financing statement in accordancewith the terms of this Loan Sale Agreement (any such event, a “WarrantyEvent”), in the case of a REIT Mortgage Loan, MortgageIT Holding shallrepurchase such REIT Mortgage Loan by remitting to the REIT Sub-Trust theRepurchase Amount with respect to such Mortgage Loan as provided in Section3.02(b) and, in the case of a TRS Mortgage Loan, MortgageIT shall repurchasesuch Mortgage Loan by remitting to the TRS Sub-Trust the Repurchase Amount withrespect to such Mortgage Loan as provided in section 3.02(b).  In addition, if either the REIT Sub-Trust orthe TRS Sub-Trust is required to repurchase a Mortgage Loan that it has sold orpledged to UBS, or to take any remedy with respect to any Mortgage Loan as aresult of a Warranty Event or as a result of such Sub-Trust’s or MortgageIT, inthe case of TRS Sub-Trust, or MortgageIT Holdings’, in the case of the REITSub-Trust, breach of any of their respective representations, warranties orcovenants under any of the Transaction Documents, with respect to any TRSMortgage Loan, MortgageIT shall have a responsibility to repurchase suchMortgage Loan from the TRS Sub-Trust, and with respect to any REIT MortgageLoan, MortgageIT Holdings shall have a responsibility to repurchase suchMortgage Loan from the REIT Sub-Trust, and/or take any such remedialaction.  Notwithstanding the referencesabove to the obligations of the related Seller to take the required actions, inthe event that the related Seller does not take any such required action withinone Business Day, then the other Seller shall have the obligation to take suchaction immediately.

 

(b)           Inconsideration of its repurchase of a REIT Mortgage Loan, MortgageIT Holdingsshall remit the Repurchase Amount to the REIT Sub-Trust for application inaccordance with the Note Purchase Agreement, within one (1) Business Day ofdiscovery of any such breach or failure. In consideration of its repurchase of a TRS Mortgage Loan, MortgageITshall remit the Repurchase Amount to the TRS Sub-Trust for application inaccordance with the Loan Repurchase Agreement, as applicable, within one (1)Business Day of discovery of any such breach or failure.

 

(c)           Inthe event that MortgageIT fails to take the actions required of it by paragraph(a) or (b) above with respect to a TRS Mortgage Loan within one (1) BusinessDay of the day on which its performance is required, then MortgageIT Holdingsshall immediately take such action. Similarly, in the event that MortgageIT Holdings fails to take theactions required

 

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### of it by paragraph (a) or (b) above with respect to aREIT Mortgage Loan, within one (1) Business Day of the day on which itsperformance is required, then MortgageIT shall immediately take such action.

###  

(d)           Exceptas may be set forth in this Loan Sale Agreement, it is understood and agreedthat the obligations of each Seller with respect to a breach as provided inthis Section 3.02 constitute the sole remedy against such Seller for suchbreach available to the related Sub-Trust. The representations and warranties set forth in Section 3.01 shallsurvive the sale and contribution of the Mortgage Loans to the Trust and thepledge of the Collateral to UBS.

 

(e)           Exceptas provided in this Section 3.02 and in Section 4.01(a), upon MortgageIT’stransfer of its interests in the TRS Mortgage Loans to the TRS Sub-Trust,MortgageIT  will not bear any furtherrisk with respect to the ultimate collectibility of the TRS Mortgage Loans orthe adequacy of the collateral securing the TRS Mortgage Loans.  Except as provided in this Section 3.02 andin Section 4.01(a), upon MortgageIT Holding’s transfer of its interests in theMortgage Loans to the REIT Sub-Trust, MortgageIT Holding’s will not bear anyfurther risk with respect to the ultimate collectibility of the REIT MortgageLoans or the adequacy of the collateral securing the REIT Mortgage Loans.

 

ARTICLE IV

 

COVENANTS

 

SECTION 4.01       Covenantsof Sellers.  Each Seller herebycovenants and agrees with the Trust, UBS, the Note Purchasers and theNoteholders with respect to itself as follows:

 

(a)           MortgageITHoldings agrees that it will pay to UBS (for application in accordance with theterms of the Note Purchase Agreement), any unpaid REIT Related Limited RecourseObligations which may become due and owing under each applicable agreement, butremain unpaid on the first Business Day after the relevant amount became due,(i) on the day on which such Seller is given notice of the circumstances, ifthe notice is given at or before 10:00 a.m., New York City time, on a BusinessDay, or (ii) on the Business Day following the day such notice is given, if itis given after that time on a Business Day or on a day that is not a BusinessDay.  MortgageIT agrees that it will payto UBS (for application in accordance with the terms of the Loan RepurchaseAgreement, the Loan Purchase Agreement and the Loan Participation Agreement),any unpaid TRS Related Limited Recourse Obligations which may become due andowing under each applicable agreement, but remain unpaid on the first Business Dayafter the relevant amount became due, (i) on the day on which such Seller isgiven notice of the circumstances, if the notice is given at or before 10:00a.m., New York City time, on a Business Day, or (ii) on the Business Dayfollowing the day such notice is given, if it is given after that time on aBusiness Day or on a day that is not a Business Day.  In the event that MortgageIT Holdings does not honor in full anysuch claim relating to a REIT Related Limited Recourse Obligation within suchone (1) Business Day period, or in the event that MortgageIT does not honor infull any such claim relating to a TRS Related Limited Recourse Obligationwithin such one (1) Business Day period, then the other Seller shall have theobligation to honor such obligation within one Business Day.  In no event, however, shall the aggregateamount of the REIT Related Limited Recourse Obligations and the TRS RelatedLimited Recourse Obligations

 

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### for the Sellers, on a combined basis, exceed 10% ofthe greater of (i) the total principal amount of Notes then outstanding underthe Note Purchase Agreement plus the aggregate outstanding principal balance ofall TRS Mortgage Loans sold to UBS and (ii) the Facility Limit.

###  

(b)           SuchSeller shall deliver to the Trust:

###  

#### (i)            Within one hundred twenty (120) daysafter the end of each fiscal year of such Seller, consolidated balance sheetsof such Seller and its consolidated subsidiaries and the related consolidatedstatements of income showing the financial condition of such Seller and itsconsolidated subsidiaries as of the close of such fiscal year and the resultsof operations during such year, and a consolidated statement of cash flows, asof the close of such fiscal year, setting forth, in each case, in comparativeform the corresponding figures for the preceding year, all the foregoingconsolidated financial statements to be reported on by, and to carry the report(acceptable in form and content to the Trust) of an independent publicaccountant of national standing acceptable to the Trust;

####  

#### (ii)           Within thirty (30) days after the endof each of the first eleven months of each fiscal year of such Seller,unaudited consolidated balance sheets and consolidated statements of income,all to be in a form acceptable to the Trust, showing the financial conditionand results of operation of such Seller and its consolidated subsidiaries on aconsolidated basis as of the end of each month and for the then elapsed portionof the fiscal year, setting forth, in each case, in comparative form thecorresponding figures for the corresponding periods of the preceding fiscalyear, certified by a financial officer of such Seller (acceptable to the Trust)as presenting fairly the financial position and results of operations of suchSeller and its consolidated subsidiaries and as having been prepared inaccordance with GAAP consistently applied, in each case, subject to normalyear-end audit adjustments;

####  

#### (iii)          On the last Business Day of each month(or at any time upon the Trust’s request), a report, in a form acceptable tothe Trust, detailing the Interest Rate Protection Agreements entered into bysuch Seller.  Additionally, withinthirty (30) days after the end of each month, together with the report describedabove, such Seller shall provide a certification from a financial officer ofsuch Seller in the form attached hereto as Annex 2;

####  

#### (iv)          Promptly upon receipt thereof, a copyof each other report submitted to such Seller by its independent public accountantsin connection with any annual, interim or special audit of such Seller;

####  

#### (v)           Promptly upon becoming aware thereof,notice of (1) the commencement of, or any determination in, any legal,judicial or regulatory proceedings, (2) any dispute between such Seller orits Parent Company and any governmental or regulatory body, (3) any eventor condition, which, in any case of (1) or (2), if adversely determined, wouldhave a material adverse effect on (A) the validity or enforceability ofthis Agreement, (B) the financial condition or business operations of suchSeller, (C) the Agency Approvals of such Seller or (D) the ability of suchSeller to fulfill its obligations under this Agreement, (4) any materialadverse change in the business, operations, prospects or financial condition ofsuch Seller, including, without limitation, the insolvency of such Seller orits Parent Company or (5) any material change in any interest rate swap, cap orcollar agreements and any other applicable hedging

 

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#### arrangements providingfor protection against fluctuations in interest rates or the exchange ofnominal interest obligations;

####  

#### (vi)          Promptly upon becoming available,copies of all financial statements, reports, notices and proxy statements sentby its Parent Company, such Seller or any of such Seller’s consolidatedsubsidiaries in a general mailing to their respective stockholders and of allreports and other material (including copies of all registration statementsunder the Securities Act of 1933, as amended) filed by any of them with anysecurities exchange or with the Securities and Exchange Commission or anygovernmental authority succeeding to any or all of the functions of saidCommission;

####  

#### (vii)         Promptly upon becoming available,copies of any press releases issued by its Parent Company or such Seller andcopies of any annual and quarterly financial reports and any reports on FormH-(b)12 which its Parent Company or such Seller may be required to file withthe OTS or comparable reports which a Parent Company or such Seller may berequired to file with the FDIC or any other federal banking agency containingsuch financial statements and other information concerning such ParentCompany’s or such Seller’s business and affairs as is required to be includedin such reports in accordance with the rules and regulations of the OTS, theFDIC or such other banking agency, as may be promulgated from time to time;

####  

#### (viii)        Such supplements to the aforementioneddocuments and such other information regarding the operations, business,affairs and financial condition of its Parent Company, such Seller or any ofits consolidated subsidiaries as the Trust may request;

####  

#### (ix)           Prior to the date of the firstpurchase of a Mortgage Loan by the Trust under this Agreement, and at therequest of the Trust at any time thereafter, a copy of an Officer’s Certificatein the form attached hereto as Annex 1 together with a copy of (1) thearticles of incorporation, certificate of formation or other organizationaldocuments of such Seller and any amendments thereto certified by the Secretaryof State of such Seller’s jurisdiction of organization, (2) a copy of suchSeller’s by-laws, operating agreement or other internal governing documents,together with any amendments thereto, (3) a copy of the resolutions orother internal governing documents or other organizational document adopted bysuch Seller’s Board of Directors or a similar governing body authorizing suchSeller to enter into each Transaction Document to which it is a party andauthorizing one or more of its officers to execute the documents related toeach such Transaction Document, and (4) a certificate of incumbency andsignature of each officer of such Seller executing any document in connection withthis Agreement and each Transaction Document to which it is a party;

####  

#### (x)            Evidence that all other actionsnecessary or, in the opinion of the Trust, desirable to perfect and protect theTrust’s interest in the Mortgage Loans and other Collateral have been taken,including, without limitation, duly executed and filed Uniform Commercial Codefinancing statements on Form UCC-1; and

####  

#### (xi)           Promptly upon becoming aware thereof,notice of any name under which such Seller or any of its affiliates conductsbusiness.

 

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(c)           SuchSeller shall take all necessary action to maintain its Agency Approvals at alltimes during the term of this Agreement. If, for any reason, such Seller ceases to maintain such Agency Approvals,such Seller shall so notify the Trust immediately.

 

(d)           MortgageITwill report each sale of a TRS Mortgage Loan to the TRS Sub-Trust as a sale ofthe ownership interest in such TRS Mortgage Loan and MortgageIT Holdings willreport each sale of a REIT Mortgage Loan to the REIT Sub-Trust as a sale of theownership interest in such REIT Mortgage Loan. It is acknowledged that each such transaction shall be disregarded forfederal income tax purposes.

 

(e)           MortgageITwill be solvent at all relevant times prior to, and will not be renderedinsolvent by, any sale of a TRS Mortgage Loan to the TRS Sub-Trust.  MortgageIT Holdings will be solvent at allrelevant times prior to, and will not be rendered insolvent by, any sale of aREIT Mortgage Loan to the REIT Sub-Trust.

 

(f)            MortgageITwill not sell any TRS Mortgage Loan to the TRS Sub-Trust with any intent tohinder, delay or defraud any of its creditors. MortgageIT Holdings  will notsell any REIT Mortgage Loan to the REIT Sub-Trust with any intent to hinder,delay or defraud any of its creditors.

 

(g)           SuchSeller shall comply, in all material respects, with all laws, rules andregulations to which it is or may become subject.

 

(h)           MortgageITshall, upon request of the TRS Sub-Trust, promptly execute and deliver to theTRS Sub-Trust all such other and further documents and instruments of transfer,conveyance and assignment, and shall take such other action as the TRSSub-Trust may require to more effectively transfer, convey, assign to and vestin the TRS Sub-Trust and to put the TRS Sub-Trust in possession of the propertyto be transferred, conveyed, assigned and delivered hereunder and otherwise tocarry out more effectively the intent of the provisions under this Agreement.  MortgageIT Holdings shall, upon request ofthe REIT Sub-Trust, promptly execute and deliver to the REIT Sub-Trust all suchother and further documents and instruments of transfer, conveyance andassignment, and shall take such other action as the REIT Sub-Trust may requireto more effectively transfer, convey, assign to and vest in the REIT Sub-Trustand to put the REIT Sub-Trust in possession of the property to be transferred,conveyed, assigned and delivered hereunder and otherwise to carry out moreeffectively the intent of the provisions under this Agreement.

 

(i)            Ifapplicable, MortgageIT, as the Administrator for the Trust, shall ensure thatall Takeout Proceeds paid by a Takeout Investor resulting from a TakeoutCommitment of any Mortgage Loan are paid to UBS by the Takeout Investor inaccordance with UBS’s Wire Instructions to Trust (as defined in the CustodialAgreement).

 

(j)            SuchSeller shall pay and discharge all taxes, assessments and governmental chargesor levies imposed on it or on its income or profits or on any of its propertyprior to the date on which penalties attach thereto, except for any such tax,assessment, charge or levy the payment of which is being contested in goodfaith and by proper proceedings and against which adequate reserves are beingmaintained, and any taxes, assessments and

 

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### governmental charges or levies the failure of which topay or discharge would not have a material adverse effect.

###  

(k)           SuchSeller covenants and agrees to take all actions required of it in compliancewith the terms of the Electronic Tracking Agreement.

 

(l)            SuchSeller covenants and agrees that it will not (1) consolidate or merge or enterinto any analogous reorganization or transaction with any Person, unless suchother Person is engaged in the mortgage banking business and such Seller is thesurviving entity; (2) liquidate, wind up or dissolve (or suffer any liquidationor dissolution); (3) cease actively to engage in the business of origination,acquiring or servicing Mortgage Loans or make any other material change in thenature or scope of the business in which such Seller engaged as of the date ofthis Agreement; (4) sell, assign, lease, convey, transfer or otherwise disposeof (whether in one transaction or a series of transactions) all or anysubstantial part of such Seller’s business or assets, whether now owned oracquired after the date of this Agreement and without the prior written consentof the Trust; (5) acquire by purchase or in any other transaction all or substantiallyall of the business or property of, or stock or other ownership interests of,any Person, without the prior written consent of the Trust; (6) change itsjurisdiction of organization, without the prior written consent of the Trust;nor (7) permit any subsidiary of such Seller to do or to take any of theforegoing actions.

 

(m)          SuchSeller shall not, and shall not permit its partners, principal shareholders andowners to, guaranty, endorse or otherwise in any way become responsible or beresponsible for any obligations of such Seller or any other Person.

 

(n)           Unlesssuch Seller shall have given the Trust at least 30 days’ prior written notice,such Seller shall not (i) change its name, organizational identity orjurisdiction of organization or (ii) merge with or into, acquire all orsubstantially all of the assets of, or transfer all or substantially all of itsassets to, any other person or entity.

 

(o)           SuchSeller shall not permit, for any Test Period, Net Income for such Test Period,before income taxes for such Test Period and distributions made during suchTest Period, to be less than $1.00.

 

(p)           Theconsolidated Tangible Net Worth of the Sellers shall not be less than the sumof (A) $175,000,000 plus (B) 90% of capital contributions made since August 4,2004.  The Sellers shall not permit theratio of their consolidated Total Indebtedness to Tangible Net Worth to exceed20:1.

 

(q)           SuchSeller shall not move its chief executive office from the address referred toin Section 3.01(xv) or change its jurisdiction of organization unless it shallhave provided the Trust thirty (30) days’ prior written notice of such change.

 

(r)            Immediatelyupon notice of a Lien or any circumstance which could give rise to a Lien onthe Mortgage Loans, such Seller will defend the Mortgage Loans against, andwill take such other action as is necessary to remove, any Lien, securityinterest or claim on or to the Mortgage Loans (other than any security interestcreated under the Facility Agreements), and

 

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### such Seller will defend the right, title and interestof the Trust in and to any of the Mortgage Loans against the claims and demandsof all persons whomsoever.

###  

(s)           Ifsuch Seller gains possession of a Submission Package, such Seller shall holdsuch Submission Package in trust for the Trust, immediately notify the Trust ofthe specific Submission Package being held by such Seller and promptly deliversuch Submission Package via overnight courier in accordance with the Trust’s instructions.

 

(t)            SuchSeller, hereby agrees, jointly and severally with the other Seller, toindemnify, defend and hold the Trust, UBS, the Note Purchasers, theNoteholders, and their respective Affiliates and each of their respectiveofficers, directors, employees, agents, trustees and advisors (each, an “IndemnifiedParty”) harmless from and against any and all loss, liability, damage,judgment, claim, deficiency, or expense (including interest, penalties,reasonable attorneys’ fees and amounts paid in settlement) payable to a Personthat is not a party to any of the Transaction Documents, or payable by a partyto a Transaction Document to another party to a Transaction Document, if any ofthem may become subject thereto, insofar as such loss, liability, damage,judgment, claim, deficiency, or expense arises out of or is based upon a breachby either Seller or by the Trust of its representations, warranties orcovenants under any of the Transaction Documents to which it is a party, or anyinformation set forth in this Loan Sale Agreement or any of the TransactionDocuments or in any schedule delivered by such Seller hereunder or thereunder,being untrue in any material respect at any time or relating to or arising outof this Loan Sale Agreement or any other Transaction Document that results fromanything other than any Indemnified Party’s gross negligence or willfulmisconduct.  Such Seller, jointly andseverally with the other Seller, may offer to assume the defense of any actionbrought against any Indemnified Party; provided that the counselproposed to handle the defense be satisfactory to such Indemnified Party in itssole discretion.  If the IndemnifiedParty agrees to such an arrangement, then the Sellers shall not be liable forany separate counsel for such Indemnified Party.  In no event will an Indemnified Party be liable for a settlementeffected without its prior consent.  Theobligations of such Seller under this Section 4.01(t) shall be considered tohave been relied upon by the Trust, UBS, the Note Purchasers, the Noteholders,the Servicers, and the Custodian and shall survive the execution, delivery, andperformance of this Loan Sale Agreement regardless of any investigation made bythe Trust, UBS, any Note Purchaser, any Noteholder, the Servicers, theCustodian or on their behalf of any of them. THE INDEMNIFICATION OBLIGATIONS OF EACH SELLER PURSUANT TO THE PRECEDINGPROVISIONS OF THIS PARAGRAPH SHALL APPLY REGARDLESS OF ANY NEGLIGENCE OR OTHERFAULT ON THE PART OF THE PURCHASER, UBS, ANY NOTE PURCHASER, ANY NOTEHOLDER,THE SERVICERS, THE CUSTODIAN OR ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES,TRUSTEES OR AGENTS EXCEPT AS EXPRESSLY STATED IN THIS PARAGRAPH.

 

Such Seller also agrees to reimburse an IndemnifiedParty as and when billed by such Indemnified Party for all such IndemnifiedParty’s costs and expenses incurred in connection with the enforcement or thepreservation of such Indemnified Party’s rights (including third-partybeneficiary rights of UBS, the Note Purchasers and the Noteholders) under thisLoan Sale Agreement or any of the Transaction Documents, including, withoutlimitation, the reasonable fees and disbursements of one counsel for the NotePurchasers and the Noteholders as a group. In addition, such Seller shall pay as and when billed by UBS all of the

 

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out-of-pocketcosts and expenses (including reasonable fees and expenses of counsel) incurredby UBS in connection with the development, preparation and execution of, and anyamendment, supplement or modification to, the Transaction Documents or anyother documents prepared in connection therewith.  MortgageIT shall pay as and when billed by UBS all of theout-of-pocket costs and expenses incurred in connection with the consummationand administration of the transactions contemplated by the TransactionDocuments, including, without limitation, (i) all the fees, disbursements andexpenses of counsel to UBS and (ii) all the due diligence, inspection, testingand review costs and expenses incurred by UBS with respect to the Collateral,including, but not limited to, those costs and expenses incurred by UBSrelating to due diligence.

 

Notwithstanding anything to the contrary, any paymentsunder this Section 4.01(t) relating to a TRS Mortgage Loan, the TRSSub-Trust  or MortgageIT shall be madeby MortgageIT.  In the event suchpayment is not made within one Business Day of the date such payment is due, MortgageITHoldings shall have the obligation to make such payment immediately.  Notwithstanding anything to the contrary, anypayments under this Section 4.01(t) relating to a REIT Mortgage Loan, the REITSub-Trust  or MortgageIT Holdings shallbe made by MortgageIT Holdings.  In theevent such payment is not made within one Business Day of the date such paymentis due, MortgageIT shall have the obligation to make such payment immediately.

 

(u)           Thefinancial statements and books and records of such Seller shall reflect theseparate existence of the Trust and shall also include a footnote substantiallyto the effect set forth in Annex 3.

 

SECTION 4.02       PurchaserCovenants.  The Trust herebycovenants and agrees with each Seller, UBS, the Note Purchasers and theNoteholders as follows:

 

(a)           Mortgagor’sQuiet Enjoyment.  The Trust hereby acknowledgesand agrees that its rights in the Mortgaged Property are expressly subject tothe rights of the related Mortgagors in such Mortgaged Property pursuant to theapplicable Mortgage Loans.  The Trustcovenants and agrees that, so long as a Mortgagor shall not be in default ofany of the provisions of the applicable Mortgaged Loan, neither the Trust norany assignee of the Trust will disturb the Mortgagor’s quiet and peacefulpossession of the related Mortgaged Property and the Mortgagor’s use thereoffor its intended purpose.

 

(b)           Operationof the Trust.  The Trust shall beoperated in the following manner, with a view toward assuring that it would notbe substantively consolidated with or in the trust estate of another Person(that is, such that the separate legal existence of the Trust and such Personwould be disregarded) and in that regard, the Trust shall:

 

#### (i)            be a limited purpose statutory trustwhose primary activities are restricted as provided in the Trust Agreement asin effect on the date of this Loan Sale Agreement;

####  

#### (ii)           not engage in any action that wouldcause the separate legal identity of the Trust not to be respected, including,without limitation, (a) holding itself out as

 

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#### being liable for thedebts of any other party or (b) acting other than through its duly authorizedagents;

####  

#### (iii)          not be involved in the day-to-daymanagement of each Seller;

####  

#### (iv)          not incur, assume or guarantee anyindebtedness except for such indebtedness as may be incurred by the REITSub-Trust in connection with the issuance of the Notes;

####  

#### (v)           not commingle its funds, assets andrecords relating thereto with those of either Seller or any other entity;

####  

#### (vi)          entitle the separate creditors of theTrust to be satisfied out of the Trust’s assets and not permit its assets to bemade available to any other Person except as expressly contemplated in theTrust Agreement;

####  

#### (vii)         act solely in its own name in theconduct of its business, including business correspondence and othercommunications, and shall conduct its business so as not to mislead others asto the identity of the entity with which they are concerned;

####  

#### (viii)        maintain records and books of accountand shall not commingle its records and books of account with the records andbooks of account of any other Person;

####  

#### (ix)           not engage in any business oractivity other than in accordance with or relating to the Trust Agreement andits continuation as a Delaware statutory trust;

####  

#### (x)            not form, or cause to be formed, anysubsidiaries;

####  

#### (xi)           comply with all restrictions andcovenants in, and shall not fail to comply with the formalities established in,the Trust Agreement;

####  

#### (xii)          maintain its assets separately fromthe assets of either Seller (including through the maintenance of a separatebank account);

####  

#### (xiii)         manage its day-to-day business withoutthe involvement of either Seller;

####  

#### (xiv)        not act as an agent of either Seller,except to the limited extent provided in the Transaction Documents;

####  

#### (xv)         maintain at all times an Administrator(which may be either Seller) to perform the duties contemplated in theAdministration Agreement; and

####  

#### (xvi)        maintain a separate office from that ofeither Seller.

####  

(c)           Existence.  The Trust will keep in full effect itsexistence, rights and status as a Delaware statutory trust and, if applicable,will obtain and preserve its qualification to do business in each jurisdictionwhich permits such qualification and in which it is necessary to

 

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### protect the validity and enforceability of this LoanSale Agreement, any other Transaction Document to which it is a party or any ofthe Mortgage Loans and to perform its duties under this Loan Sale Agreement andeach other Transaction Document to which it is a party.

###  

SECTION 4.03       Pledgeof Mortgage Loans.  MortgageITHoldings understands that the REIT Sub-Trust intends to pledge and assign thebenefits of this Agreement, along with the REIT Mortgage Loans to UBS, for thebenefit of UBS, the Note Purchasers and the Noteholders pursuant to the NotePurchase Agreement.  MortgageITunderstands that the TRS Sub-Trust intends to sell the benefits of thisAgreement, along with the TRS Mortgage Loans to UBS.  Each Seller agrees that such assignee of the REIT Sub-Trust orTRS Sub-Trust, as applicable, may exercise the rights of such Sub-Trusthereunder and shall be entitled to all of the benefits of such Sub-Trusthereunder to the extent provided for in such pledge and assignment.

 

ARTICLE V

 

CONDITIONS PRECEDENT

 

SECTION 5.01       Conditionsto the Trust Obligations.  Theobligations of the REIT Sub-Trust to accept the transfer of REIT Mortgage Loanson each Note Purchase Date and the TRS Sub-Trust to accept the transfer of TRSMortgage Loans on each Purchase Date shall be subject to the satisfaction ofthe following conditions:

 

(a)           Allrepresentations and warranties of each Seller contained in this Loan SaleAgreement and in the Transaction Documents shall be true and correct on theExecution Date and on each Note Purchase Date or Purchase Date, as applicable,with the same effect as though such representations and warranties had beenmade on such date;

 

(b)           Allinformation concerning the Mortgage Loans provided to the Trust shall be trueand correct as of the related Note Purchase Date or Purchase Date, asapplicable, in all material respects;

 

(c)           EachSeller shall have delivered to the Trust a Loan Purchase Detail with respect tothe Mortgage Loans as of the related Note Purchase Date or Purchase Date, asapplicable, and shall have substantially performed all other obligationsrequired to be performed by the provisions of this Loan Sale Agreement;

 

(d)           EachSeller shall have recorded and filed, at its expense, any financing statementwith respect to the Mortgage Loans and the other Mortgage Loans to betransferred from time to time to the Trust pursuant to this Loan Sale Agreementmeeting the requirements of applicable state law in such manner and in suchjurisdictions as are necessary to perfect the transfer of the Mortgage Loansand the other Mortgage Loans from such Seller to the Trust, and shall deliver afile-stamped copy of such financing statements or other evidence of suchfilings to the Trust and UBS;

 

(e)           Allcorporate and legal proceedings and all instruments in connection with thetransactions contemplated by this Loan Sale Agreement shall be satisfactory inform and substance to the Trust, and the Trust shall have received from eachSeller copies of all

 

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### documents (including, without limitation, records ofcorporate proceedings) relevant to the transactions herein contemplated as theTrust may reasonably have requested; and

###  

(f)            Allrespective conditions necessary to vest in the Trust good title, free and clearof all Liens (other than Liens permitted in the proviso contained in Section4.01(s) hereof), to its respective Mortgage Loans shall have been satisfied.

 

ARTICLE VI

 

TERMINATION

 

SECTION 6.01       Termination.  The respective obligations and responsibilitiesof each Seller and the Trust created by this Loan Sale Agreement shallterminate upon the latest of (i) the maturity or other liquidation of thelast Mortgage Loan and the disposition of any amounts received upon dispositionof any defaulted Mortgage Loans; and (ii) the termination of the FacilityAgreements in accordance with the terms thereof; provided, however,that the indemnifications contained in Section 4.01(t) herein shall survive thetermination of this Loan Sale Agreement.

 

SECTION 6.02       Effectof Termination.  No termination orrejection or failure to assume the executory obligations of this Loan SaleAgreement in the bankruptcy of either Seller or the Trust shall be deemed toimpair or affect the obligations pertaining to any executed sale or executedobligations, including, without limitation, pre-termination breaches ofrepresentations and warranties by such Seller or the Trust.  Without limiting the foregoing, prior totermination, the failure of either Seller to pay a Repurchase Amount shall notrender such transfer or obligation executory, nor shall the continued duties ofthe parties pursuant to Article 4 or Section 7.06 of this Loan Sale Agreementrender an executed sale executory.

 

ARTICLE VII

 

MISCELLANEOUS PROVISIONS

 

SECTION 7.01       Amendment.  This Loan Sale Agreement may be amended fromtime to time by the parties hereto only with the prior written consent of UBSand, to the extent specified in the Facility Agreements.

 

SECTION 7.02       **GOVERNINGLAW; JURISDICTION.**

 

(a)           **THIS LOAN SALE AGREEMENT AND ANY AMENDMENT HEREOFPURSUANT TO SECTION 7.01 SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BYTHE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CHOICE OF LAWPRINCIPLES) APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND THEOBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS LOAN SALE AGREEMENTSHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.**

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(b)           **EACH SELLER AND THE PURCHASER HEREBY IRREVOCABLY ANDUNCONDITIONALLY:**

#####  

##### (1)           **TOTHE EXTENT PERMITTED BY LAW, SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGALACTION OR PROCEEDING RELATING TO THIS LOAN SALE AGREEMENT, OR FOR RECOGNITIONAND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE PERSONALJURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THEUNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATECOURTS FROM ANY THEREOF;**

#####  

##### (2)           **CONSENTSTHAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THEEXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVETO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCHACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEADOR CLAIM THE SAME;**

#####  

##### (3)           **AGREESTHAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BYMAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLYSIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN OR PURSUANTTO THIS LOAN SALE AGREEMENT FOR NOTICES; AND**

#####  

##### (4)           **AGREESTHAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANYOTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHERJURISDICTION.**

 

SECTION 7.03       Notices.  All demands, notices, and communicationsunder or in connection with this Loan Sale Agreement shall be in writing andshall be deemed to have been duly given, made and received (i) whendelivered against receipt of registered or certified mail or upon actualreceipt of registered or certified mail, postage prepaid, return receiptrequested; (ii) when delivered by courier with appropriate evidence ofreceipt; or (iii) upon transmission via facsimile with appropriateevidence of receipt (a) in the case of each Seller, at the followingaddress: 33 Maiden Lane, New York, NY 10038, Attention: John R. Cuti andMichael A. Zigrossi, Fax No.: (212) 651-4689 (b) in the case of the Trust, c/othe Administrator, at the following address: 33 Maiden Lane, New York, NY10038, Attention:  Larry P. Lewis, FaxNo.: (212) 651-4689, with a copy to Wilmington Trust Company, Rodney SquareNorth, 1100 North Market Street, Wilmington, Delaware 19890, facsimile number:(302) 636-4140 or (302) 636-4141; Attention: Corporate Trust Administration,and (c) in the case of the UBS, 1285 Avenue of the Americas, New York, New York10019, Attention: Robert Carpenter and George A. Mangiaracina, facsimilenumber: (212) 713-9597.  Any party mayalter the address to which communications are to be sent by giving notice ofsuch change of address in conformity with the

 

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provisions of thisSection 7.03 for giving notice and by otherwise complying with any applicableterms of this Loan Sale Agreement.

 

SECTION 7.04       Severabilityof Provisions.  If any one or moreof the covenants, agreements, provisions, or terms of this Loan Sale Agreementshall be for any reason whatsoever held invalid, then such covenants,agreements, provisions, or terms shall be deemed severable from the remainingcovenants, agreements, provisions, or terms of this Loan Sale Agreement andshall in no way affect the validity or enforceability of the other provisionsof this Loan Sale Agreement.

 

SECTION 7.05       Assignment.  Notwithstanding anything to the contrarycontained in this Loan Sale Agreement, this Loan Sale Agreement and therespective rights and duties of each Seller and the Trust hereunder may not beassigned or otherwise transferred by either Seller or the Trust (as applicable),without the prior written consent of the other parties to this Loan SaleAgreement, UBS and such of the Note Purchasers and Note Holders as are requiredunder the Note Purchase Agreement. Whether or not expressly stated, all representations, warranties,covenants and agreements of each Seller and the Trust in this Loan SaleAgreement, or in any document delivered by any of them in connection with thisLoan Sale Agreement, shall be for the benefit of, and shall be exercisable by,UBS.

 

SECTION 7.06       FurtherAssurances.  The Sellers and theTrust each agrees to do such further reasonable acts and things and to executeand deliver to UBS such additional assignments, agreements, powers andinstruments as are required by UBS in its sole reasonable discretion orpursuant to the direction of the Majority Investors to carry into effect thepurposes of this Loan Sale Agreement or to better assure and confirm unto UBS,the Note Purchasers and the Noteholders their rights, powers and remedieshereunder.

 

SECTION 7.07       NoWaiver; Cumulative Remedies.  Nofailure to exercise and no delay in exercising, on the part of the Trust oreither Seller or UBS or any Note Purchaser or Noteholder, any right, remedy,power or privilege hereunder, shall operate as a waiver thereof; nor shall anysingle or partial exercise of any right, remedy, power or privilege hereunderpreclude any other or further exercise hereof or the exercise of any otherright, remedy, power or privilege.  Therights, remedies, powers and privileges herein provided are cumulative and notexhaustive of any rights, remedies, powers and privilege provided by law.

 

SECTION 7.08       Counterparts.  This Loan Sale Agreement may be executed intwo or more counterparts (and by different parties on separate counterparts),each of which shall be an original, but all of which shall constitute one andthe same instrument.

 

SECTION 7.09       BindingEffect: Third-Party Beneficiaries. This Loan Sale Agreement will inure to the benefit of and be bindingupon the parties hereto.  UBS, the NotePurchasers and the Noteholders are intended third party beneficiaries of thisLoan Sale Agreement.

 

SECTION 7.10       Mergerand Integration.  Except asspecifically stated otherwise herein, this Loan Sale Agreement sets forth theentire understanding of the parties relating to the subject matter hereof, andall prior understandings, written or oral, relating thereto are

 

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superseded by this LoanSale Agreement.  This Loan SaleAgreement may not be modified, amended, waived or supplemented except asprovided herein.

 

SECTION 7.11       Headings.  The headings herein are for purposes ofreference only and shall not otherwise affect the meaning or interpretation ofany provision hereof.

 

SECTION 7.12       Schedulesand Exhibits.  The schedules andexhibits attached hereto and referred to herein shall constitute a part of thisLoan Sale Agreement and are incorporated into this Loan Sale Agreement for allpurposes.

 

SECTION 7.13       NoBankruptcy Petition Against the Trust. Each Seller agrees that, prior to the date that is one year and one dayafter the payment in full of the Notes and all amounts payable under theFacility Agreements, it will not institute against the Trust, or join any otherPerson in instituting against the Trust, any bankruptcy, reorganization,arrangement, insolvency or liquidation proceedings or other proceedings underthe laws of the United States or any state of the United States.  This Section 7.13 shall survive thetermination of this Loan Sale Agreement.

 

SECTION 7.14       NoRecourse.  It is expresslyunderstood and agreed by the parties hereto that (a) this Loan Sale Agreementis executed and delivered by Wilmington Trust Company, not individually orpersonally but solely as trustee of the Trust, in the exercise of the powersand authority conferred and vested in it, (b) each of the representations,undertakings and agreements herein made on the part of the Trust is made andintended not as personal representations, undertakings and agreements byWilmington Trust Company but is made and intended for the purpose of bindingonly the Trust, (c) nothing herein contained shall be construed as creating anyliability on Wilmington Trust Company, individually or personally, to performany covenant either expressed or implied contained herein, all such liability,if any, being expressly waived by the parties hereto and by an Person claimingby, through or under the parties hereto and (d) under no circumstances shallWilmington Trust Company be personally liable for the payment of anyindebtedness or expenses of the Trust or be liable for the breach or failure ofany obligation, representation, warranty or covenant made or undertaken by theTrust under this Loan Sale Agreement or any other related documents.

 

**[Signature Page Follows]**

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Loan Sale Agreement to be duly executed by their respective officers as ofthe day and year first above written.

 
|   | MORTGAGEIT, INC.                                                           |
|--------|----------------------------------------------------------------------------|
|   | as a Seller                                                                |
|   |                                                                       |   |
|   |                                                                       |   |
|   | By:                                                                        | /s/ JOHN R. CUTI |   |
|   |                                                                       | Name: John R. Cuti |
|   |                                                                       | Title: Secretary |
|   |                                                                       |   |
|   |                                                                       |   |
|   | MORTGAGEIT HOLDINGS, INC.                                                  |
|   | as a Seller                                                                |
|   |                                                                       |
|   |                                                                       |   |
|   | By:                                                                        | /s/ JOHN R. CUTI |   |
|   |                                                                       | Name: John R. Cuti |
|   |                                                                       | Title: Secretary |
|   |                                                                       |   |
|   |                                                                       |   |
|   | MORTGAGEIT SPV I, acting with respect to the  REIT Sub-Trust, as Purchaser |
|   |                                                                       |
|   | By:                                                                        | Wilmington Trust Company, |
|   |                                                                       | not in its individual capacity but solely as  Owner Trustee under the Trust Agreement |
|   |                                                                       |
|   | By:                                                                        | /s/ Janel R. Havrilla |   |
|   |                                                                       | Name: | Janel R. Havrilla |   |
|   |                                                                       | Title: | Financial Services Officer |   |
|   |                                                                       |   |
|   |                                                                       |   |
|   | MORTGAGEIT SPV I, acting with respect to the  TRS Sub-Trust, as Purchaser  |
|   |                                                                       |
|   | By:                                                                        | Wilmington Trust Company, |
|   |                                                                       | not in its individual capacity but solely as  Owner Trustee under the Trust Agreement |
|   |                                                                       |
|   |                                                                       |   |
|   | By:                                                                        | /s/ Janel R. Havrilla |   |
|   |                                                                       | Name: | Janel R. Havrilla |   |
|   |                                                                       | Title: | Financial Services Officer |   |
|        |                                                                            |  |  |  |  |  |

 

[Signature Page ToLoan Sale Agreement]

 

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Schedule 1

 

DEFINITIONS LIST

 

“1934 Act” shall mean the Securities andExchange Act of 1934, as amended.

 

“Accepted Servicing Practices” shall mean, withrespect to each Mortgage Loan, such standards which comply with the applicablestandards and requirements under: (i) an applicable Agency Program and relatedprovisions of the applicable Agency Guide pursuant to which the relatedMortgage Loan is intended to be purchased, and/or (ii) any applicable FHAand/or VA program and related provisions of applicable FHA and/or VA servicingguidelines, and (iii) the terms of the related Mortgage Loan documents andapplicable law.

 

“Acknowledgment Agreement” shall mean thedocument, similar to the attached Exhibit F to the REIT Servicing Agreement, tobe executed by the Master Servicer and the REIT Servicer on or prior to eachsubsequent Closing Date, which document shall include a Mortgage Loan Schedule,which document reflects the addition of Mortgage Loans (including thoseMortgage Loans acquired by the Master Servicer through bulk acquisitions inaccordance with Section 7.05 of the REIT Servicing Agreement) which are subjectto the terms and conditions of the REIT Servicing Agreement.

 

“Act of Insolvency” shall mean, with respect toany Person, (a) the commencement by such Person as debtor of any case orproceeding under any bankruptcy, insolvency, reorganization, liquidation,dissolution or similar law, or such Person seeking the appointment of areceiver, trustee, custodian or similar official for such Person or anysubstantial part of its property, or (b) the commencement of any such case orproceeding against such Person, or another’s seeking such appointment, or thefiling against such Person of an application for a protective decree which (1)is consented to or not timely contested by such Person, (2) results in theentry of an order for relief, such an appointment, the issuance of such aprotective decree or the entry of an order having a similar effect, or (3) isnot dismissed within sixty (60) days, (c) the making by such Person of ageneral assignment for the benefit of creditors, (d) the admission in writingby such Person that it is unable to pay its debts as they become due or thenonpayment generally by such Person of its debts as they become due, or (e) anygovernmental authority or agency or any person, agency or entity acting orpurporting to act under governmental authority shall have taken any action tocondemn, seize or appropriate, or to assume custody or control of, all or anysubstantial part of the property of such Person or of any of its Affiliates, orshall have taken any action to displace the management of such Person or of anyof its Affiliates or to curtail its authority in the conduct of the business ofsuch Person or of any of its Affiliates.

 

“Actual Note Issuance Proceeds” shall have themeaning provided in Section 3.09(d) of the Note Purchase Agreement.

 

“Adjustable Rate Mortgage Loan” shall mean aMortgage Loan which provides for the adjustment of the Mortgage Interest Ratepayable in respect thereto.

 

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“Adjustment Date” shall mean, with respect toeach Adjustable Rate Mortgage Loan, the date set forth in the related Note onwhich the Mortgage Interest Rate on the Adjustable Rate Mortgage Loan isadjusted in accordance with the terms of the Note.

 

“Administration Agreement” shall mean theAdministration Agreement dated as of August 4, 2004, between the Trust and theAdministrator, as amended, supplemented or otherwise modified from time totime.

 

“Administrator” shall mean MortgageIT, in itscapacity as administrator of the Trust pursuant to the AdministrationAgreement, or any successor in such capacity.

 

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

 

“Agency” shall mean Ginnie Mae, Freddie Mac orFannie Mae, as applicable, and their successors thereto.

 

“Agency Approvals” shall have the meaning givento such term in the Loan Repurchase Agreement, the Loan Purchase Agreement orthe Loan Participation Agreement, as applicable.

 

“Agency Eligible Mortgage Loan” shall mean amortgage loan that is in strict compliance with the eligibility requirementsfor swap or purchase by the designated Agency, under the applicable AgencyGuide and/or applicable Agency Program.

 

“Agency Guide” shall mean the Ginnie MaeMortgage-Backed Securities Guide; the Fannie Mae Selling Guide and the FannieMae Servicing Guide; the Freddie Mac Guide; as applicable, in each case as suchAgency Guide may be amended from time to time.

 

“Agency Program” shall mean the specificpurchase program under the relevant Agency Guide or as otherwise approved bythe relevant Agency.

 

“Agent’s Account” shall mean UBS’s account,Account No. 930 1 035581, for the account of UBS Real Estate Securities Inc.Conduit Funding, JPMorgan Chase Bank, ABA No. 021000021, or such other accountas may be identified as Agent’s Account by notice from UBS to the Trust and thePurchasers.

 

“ALTA” shall mean the American Land TitleAssociation or any successor thereto.

 

“Ancillary Income” shall have the meaningassigned to such term in the REIT Servicing Agreement or the TRS ServicingAgreement, as applicable.

 

“Anticipated Delivery Date” shall mean, withrespect to a Security, the date specified in the related Form HUD 11705(Schedule of Subscribers), Fannie Mae Form 2014 (Delivery Schedule), or FreddieMac Form 939 (Settlement and Information Multiple

 

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RegistrationForm), as applicable, on which it is anticipated that Delivery of the Securityby the Applicable Agency will be made, pursuant to the Loan ParticipationAgreement.

 

“Applicable Agency Documents” shall mean thedocuments listed on Exhibit B-2 or Exhibit B-3 to the Custodial Agreement, asapplicable.

 

“Applicable Covenant” shall mean any financialcovenants imposed upon the Trust, MortgageIT or MortgageIT Holdings under anyOther Financing Document.

 

“Applicable Guide” shall mean, with respect toeach Takeout Investor, the applicable guide published by such Takeout Investorsetting forth the requirements each Mortgage Loan needs to satisfy in order tobe eligible for purchase by such Takeout Investor, as such guide may be amendedor supplemented from time to time.

 

“Applicable Margin” shall be the applicablerate set forth on the Funding Confirmation.

 

“Assignee” shall mean, with respect to the LoanPurchase Agreement, the Loan Repurchase Agreement, the Custodial Agreement andany Mortgage Loan, any assignee of UBS pursuant to a sale, pledge orrehypothecation of the Mortgage Loan.

 

“Assignment of Mortgage” shall mean anassignment of the Mortgage or, with respect to Cooperative Loans, theProprietary Lease, notice of transfer or equivalent instrument, in recordableform, which when recorded is sufficient under the laws of the jurisdictionwhere the related Mortgaged Property is located to reflect of record the saleof the Mortgage Loan.

 

“Authorized Signatory” shall the meaning givento such term in the Loan Repurchase Agreement, Loan Participation Agreement andthe Loan Purchase Agreement, as applicable.

 

“Automated Boarding” shall mean, with respectto a Mortgage Loan, the successful, complete and timely electronic transfer ofthe related Electronic File to the servicing database of the Servicer.

 

“Bailee Letter” shall mean a Fannie Mae BaileeLetter or a Conduit Bailee Letter, as applicable.

 

“Bankruptcy Code” shall mean the United StatesBankruptcy Code of 1978, as amended from time to time.

 

“Best Efforts” shall mean the effortsdetermined to be reasonably diligent by the Master Servicer or the Servicer, asthe case may be, in its sole discretion. Such efforts do not require the Master Servicer or the Servicer, as thecase may be, to enter into any litigation, arbitration or other legal orquasi-legal proceeding, nor do they require the Master Servicer or theServicer, as the case may be, to advance or expend fees or sums of money inaddition to those specifically set forth in the Servicing Agreements.

 

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“Blocked Account” shall mean, both collectivelyand individually, each of the accounts established by the Servicer under theBlocked Account Agreement for the benefit of UBS, which is subject to asecurity interest in favor of UBS.

 

“Blocked Account Agreement” shall mean theBlocked Account Agreement dated as of August 4, 2004, among the Servicer, theTRS Sub-Trust, UBS and HSBC Bank as the depository bank, as amended,supplemented or otherwise modified from time to time.

 

“Borrowing Base” shall mean the aggregateCollateral Value of all Eligible Mortgage Loans.

 

“Borrowing Base Deficiency” shall have themeaning provided in Section 3.12(a) of the Note Purchase Agreement.

 

“Breakage Fee” shall mean as to any prepaymentoccurring with fewer than five (5) Business Days’ prior notice of intent toprepay (except for any prepayment expressly excepted hereunder from theBreakage Fee), an amount equal to the sum of (a) the interest that wouldotherwise accrue on an “actual/360” basis, on the principal balance of theNotes prepaid, over a period of five (5) Business Days, at a rate equal to theEurodollar Rate plus the Applicable Margin, plus (b) all reasonable losses,expenses and liabilities that arise from such prepayment, including withoutlimitation, any loss and expense on liabilities incurred by reason ofliquidating or reemployment of deposits or other funds required by theNoteholders to fund the Notes (but excluding anticipated profits).

 

“Business Day” shall mean any day other than(i) a Saturday or Sunday or other day on which banks located in the City of NewYork, New York are authorized or obligated by law or executive order to beclosed, or (ii) any day on which UBS is closed for business, provided thatnotice thereof shall have been given not less than seven calendar days prior tosuch day.

 

“Capital Lease Obligations” shall mean, for anyPerson, all obligations of such Person to pay rent or other amounts under alease of (or other agreement conveying the right to use) Property to the extentsuch obligations are required to be classified and accounted for as a capitallease on a balance sheet of such Person under GAAP and the amount of suchobligations shall be the capitalized amount thereof, determined in accordancewith GAAP.

 

“Cash Equivalents” shall mean (a) securitieswith maturities of 90 days or less from the date of acquisition issued or fullyguaranteed or insured by the United States Government or any agency thereof,(b) certificates of deposit and eurodollar time deposits with maturities of 90days or less from the date of acquisition and overnight bank deposits of anycommercial bank having capital and surplus in excess of $5,000,000, (c)repurchase obligations of any commercial bank satisfying the requirements ofclause (b) of this definition, having a term of not more than thirty days withrespect to securities issued or fully guaranteed or insured by the UnitedStates Government, (d) commercial paper of a domestic issuer rated at least“A-1” or the equivalent thereof by S&P or “P-1” or the equivalent thereofby Moody’s and in either case maturing within 90 days after the day ofacquisition, (e) securities with maturities of 90 days or less from the date ofacquisition issued or fully guaranteed by any state, commonwealth or

 

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territory of theUnited States, by any political subdivision or taxing authority of any suchstate, commonwealth or territory or by any foreign government, the securitiesof which state, commonwealth, territory, political subdivision, taxingauthority or foreign government (as the case may be) are rated at least “A” byS&P or “A” by Moody’s, (f) securities with maturities of 90 days or lessfrom the date of acquisition backed by standby letters of credit issued by anycommercial bank satisfying the requirements of clause (b) of this definition,or (g) shares of money market, mutual or similar funds which invest exclusivelyin assets satisfying the requirements of clauses (a) through (f) of thisdefinition.

 

“Cash Window Submission Package” shall mean thedocuments listed on Exhibit B-1 to the Custodial Agreement, which shall bedelivered by the Trust, MortgageIT or MortgageIT Holdings to the Custodianin connection with each Cash Window Transaction.

 

“Cash Window Transaction” shall mean atransaction initiated by UBS’s delivery of a Request for Certification whichidentifies Fannie Mae or Freddie Mac as the Takeout Investor but does notinclude a Conversion Code.

 

“Certificate of Trust” shall have the meaningassigned to that term in Section 2.1 of the Trust Agreement.

 

“Certificate Register” and “CertificateRegistrar” shall mean the register of Owner Trust Certificates maintained,and the registrar appointed, respectively, pursuant to Section 11.1 of theTrust Agreement.

 

“Certificateholder” or “Holder” shallmean, with respect to any Owner Trust Certificate, the Person in whose namesuch Owner Trust Certificate is registered on the Certificate Register.  Initially, the Depositors shall be theHolders of all the Owner Trust Certificates.

 

“Certificateholder Funds” shall mean, withrespect to any Payment Date and (i) with respect to the REIT Certificates, anamount equal to the sum of all amounts received by the REIT Servicer in respectof the REIT Mortgage Loans, minus all amounts then due and payable by the REITSub-Trust to the Noteholders, net of any amounts payable or reimbursable to theOwner Trustee relating to the REIT Mortgage Loans pursuant to Section 6.2 ofthe Trust Agreement, and (ii) with respect to the TRS Certificates, all amountsreceived by the TRS Servicer in respect of the TRS Mortgage Loans, minus allamounts then due and payable by the TRS Sub-Trust to UBS, net of any amountspayable or reimbursable to the Owner Trustee with respect to the TRS MortgageLoans pursuant to Section 6.2 of the Trust Agreement.

 

“Certification” shall mean, with respect to aMortgage Loan, the full performance by the Custodian of the procedures setforth in Sections 4(a) and 4(b) of the Custodial Agreement.

 

“Certification Code” shall mean a Mortgage LoanAbsentee Code, a Mortgage Loan Approval Code or a Mortgage Loan SuspensionCode.

 

“Certification Report” shall mean a Request forCertification to which Custodian has added its Certification Codes and, when aCertification Code indicates suspension, applicable

 

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Exception Codes,and which is transmitted by Custodian to UBS in an appropriate data layoutprovided by UBS.

 

“Closing Date” shall mean August 4, 2004, orfor any group of REIT Mortgage Loans, the date upon which such REIT MortgageLoans become subject to the REIT Servicing Agreement.

 

“Closing Instruction Letter” shall mean, withrespect to each Wet Mortgage Loan which is being originated in part by theproceeds of a Closing Transaction, the instruction letter of the Trust,MortgageIT or MortgageIT Holdings with respect to such origination which isacknowledged by the Escrow Agent.

 

“Closing Instruction Letter Insert” shall meana paragraph in the form of Exhibit S to the Loan Repurchase Agreement whichshall be inserted into the Closing Instruction Letter.

 

“ClosingLoan Purchase Detail” shall mean a loan purchase detail, prepared by aSub-Trust to UBS via electronic transmission containing all informationspecified on Exhibit A of the Loan Repurchase Agreement or Exhibit H of theNote Purchase Agreement, as applicable (as such information may be amended fromtime to time by notice from UBS to such Sub-Trust), in a form acceptable toUBS, regarding the characteristics of a Mortgage Loan being pledged by suchSub-Trust to UBS under a Closing Transaction.

 

“Closing Transaction” shall mean any sale of aMortgage Loan by a Sub-Trust to UBS, structured as either a wet funding or adry funding, wherein UBS wires the Disbursement Amount in accordance with theEscrow Agent Standing Wire Instructions, subject, in the case of a TRS MortgageLoan, to an obligation of the TRS Sub-Trust to repurchase such Mortgage Loanpursuant to the Loan Repurchase Agreement.

 

“Code” shall mean the Internal Revenue Code of1986, as amended from time to time, or any successor statute thereto.

 

“Collateral” shall mean, collectively the REITCollateral and the TRS Collateral.

 

“Collateral Receipt” shall mean with respect toeach Mortgage Loan, the receipt by Custodian on a Business Day of a SubmissionPackage relating thereto.

 

“Collateral Receipt Adjustment” shall mean theprocess initiated by Collateral Receipt wherein the Pass-Through Rate on a WetMortgage Loan is reduced, effective from the date of Collateral Receipt throughone calendar day prior to the Repurchase Date.

 

“Collateral Receipt Date” shall mean withrespect to each Mortgage Loan, the Business Day on which a Collateral Receiptoccurs.

 

“Collateral Value” shall have the meaning setforth in the Pricing Side Letter.

 

“Collection Account” shall mean the separateaccount or accounts created and maintained by the REIT Servicer pursuant toSection 3.04 of the REIT Servicing Agreement,

 

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which shall beentitled “GMAC Mortgage Corporation, as the REIT Servicer, in trust for UBSReal Estate Securities Inc. and its assignees.”

 

“Collections” shall mean, collectively, allcollections and proceeds on or in respect of the Mortgage Loans, excludingcollections required to be paid to the REIT Servicer or a Mortgagor on theMortgage Loans.

 

“Commitment” shall mean a commitment executedby Takeout Investor and MortgageIT on Takeout Investor’s letterhead evidencingTakeout Investor’s agreement to purchase one or more Mortgage Loans fromMortgageIT and MortgageIT’s agreement to sell one or more Mortgage Loans to aninvestor in a forward trade by the applicable Commitment Expiration Date.

 

“Commitment Expiration Date” shall mean withrespect to any Commitment, the expiration date thereof.

 

“Condemnation Proceeds” shall mean all awards,compensation and settlements in respect of a taking of all or part of aMortgaged Property by exercise of the power of condemnation or the right ofeminent domain, whether permanent or temporary, to the extent such awards,compensation or settlements are not required to be delivered to the relatedMortgagor in accordance with the terms of the related Mortgage.

 

“Conduit” shall mean any of the Entities listedon Schedule A to the Custodial Agreement, as amended or supplemented from timeto time.

 

“Conduit Bailee Letter” shall mean the masterbailee letter, in the form of Exhibit C-2 to the Custodial Agreement, for useby Custodian in connection with the delivery of a Conduit Submission Package; provided,however, for the purposes of delivering the related Conduit SubmissionPackage, excluding (i) a copy of the Commitment, (ii) the Warehouse Lender’sRelease or Trust’s Release, as applicable, and (iii) the original Assignment ofMortgage, in blank, to a Conduit.

 

“Conduit Funding Program” shall mean a programpursuant to the terms of the Custodial Agreement and the Loan PurchaseAgreement.

 

“Conduit Submission Package” shall mean thedocuments listed on Exhibit C-1 to the Custodial Agreement required to bedelivered by the Trust, MortgageIT or MortgageIT Holdings to Custodian underthe Conduit Funding Program.

 

“Conduit Transaction” shall mean a transactioninitiated by UBS’s delivery of a Request for Certification which identifies aConduit as the Takeout Investor but does not include a Conversion Code.

 

“Confidential Information” shall have themeaning given to such term in the Pricing Side Letter or the REIT ServicingAgreement, as applicable.

 

“Confirmation” shall mean a confirmationconfirming a trade between MortgageIT or MortgageIT Holdings and TakeoutInvestor.

 

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“Conversion Code” shall mean, with respect to aMortgage Loan, the conversion code set forth in Part II of Exhibit F to theCustodial Agreement, entered by UBS, along with the Program Code, in the “PROGCODE” column of the related Request for Certification indicating that (i) suchMortgage Loan was previously acquired by UBS in a Dry Transaction and (ii) aConversion Submission Package shall be received by Custodian on the applicableDelivery Date.

 

“Conversion Loan Purchase Detail” shall mean aloan purchase detail, prepared by the Trust and delivered by the Trust to UBSvia electronic transmission containing the information set forth on Exhibit Cto the Loan Repurchase Agreement, in a form acceptable to UBS, regarding thecharacteristics of a Mortgage Loan that is subject to repurchase and that issubsequently offered to UBS under the Conduit Funding Program.

 

“Conversion Submission Package” shall mean oneof the sets of documents listed on Exhibit D to the Custodial Agreement, whichshall be delivered by the Trust, MortgageIT or MortgageIT Holdings to Custodianin connection with each Conversion Transaction.

 

“Conversion Transaction” shall mean, withrespect to a Mortgage Loan, a transaction initiated by UBS’s delivery toCustodian of a Request for Certification containing a Conversion Code.  A Conversion Transaction shall always bepreceded by a Dry Transaction.

 

“Cooperative Apartment” shall mean a dwellingunit in a multi-dwelling building owned or leased by a Cooperative Corporation,which unit the Mortgagor has an exclusive right to occupy pursuant to the termsof a Proprietary Lease in accordance with the laws of the state in which thebuilding is located.

 

“Cooperative Corporation” shall mean the entitythat holds title (fee or an acceptable leasehold estate) to a CooperativeApartment and which governs such Cooperative Apartment, which CooperativeCorporation must qualify as a Cooperative Housing Corporation under Section 216of the Code.

 

“Cooperative Loan” shall mean a Mortgage Loanevidenced by a Mortgage Note and secured by a first lien against the CooperativeOwnership Interest in a Cooperative Apartment and by the related ProprietaryLease.

 

“Cooperative Ownership Interest” shall mean,with respect to any Cooperative Loan, the ownership interest in a singleCooperative Apartment, including (i) the shares issued by the CooperativeCorporation, (ii) the leasehold interests in the Cooperative Apartment and(iii) all attendant right, title, and interest thereto.

 

“Corporate Trust Office” shall mean theprincipal corporate trust office of the Owner Trustee at which, at anyparticular time, its corporate trust business is administered, which office atthe date hereof is located at the address of the Owner Trustee set forth inSection 12.4 of the Trust Agreement.

 

“Costs” shall have the meaning given to suchterm in Section 13.03(a) of the Note Purchase Agreement.

 

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“Covered Persons” shall have the meaning givento such term in Section 9(k) of the Note Purchase Agreement.

 

“Credit File” shall mean all papers and recordsof whatever kind or description, whether developed or originated by Servicer orothers, required to document or service the Mortgage Loan; provided however,that such Mortgage Loan papers, documents and records shall not include anyMortgage Loan papers, documents or records which are contained in the DrySubmission Package.

 

“Cross-Default Event” shall have the meaninggiven to such term in Section 9(k) of the Note Purchase Agreement.

 

“Cross-Payment” shall mean the dollar amount of(x) any REIT Related Obligation which is satisfied by either the TRS TrustEstate (including the proceeds thereof) or by MortgageIT from corporate funds,or (y) any TRS Related Obligation which is satisfied by either the REIT TrustEstate (including the proceeds thereof) or by MortgageIT Holdings fromcorporate funds.

 

“Cumulative Position File” shall mean a list ofall Mortgage Loans held by Custodian on each day which includes all informationwhich would be on a Certification Report and additionally includes the shippinginformation for each Mortgage Loan which has been released from Custodian’spossession (i.e., airbill number, federal express tracking code or otheridentifying information).

 

“Custodial Agreement” shall mean the CustodialAgreement, dated as of August 4, 2004, among the Trust, the Custodian,MortgageIT, MortgageIT Holdings and UBS, as the same shall be modified andsupplemented and in effect from time to time.

 

“Custodial Fee” shall mean, with respect to anyMortgage Loans, the amount set forth on the related Funding Confirmation as the“Custodial Fee.”

 

“Custodian” shall mean JPMorgan Chase Bank, ascustodian under the Custodial Agreement, and its successors and permittedassigns thereunder.

 

“Cut-off Date” shall mean, with respect to thetransfer of servicing by the Master Servicer to the REIT Servicer for any groupof Mortgage Loans, the date specified by the Master Servicer to the REITServicer in the related Mortgage Loan Schedule.

 

“Defective Mortgage Loan” shall have themeaning given to such term in the Loan Repurchase Agreement, the Loan PurchaseAgreement or the Loan Participation Agreement, as applicable.

 

“Deficient Valuation” shall mean, in connectionwith bankruptcy proceedings with respect to a Mortgagor, a bindingdetermination that, based upon the value of the Mortgaged Property, the lien ofthe related Mortgage secures an amount of indebtedness that is less than theoutstanding amount stated in the related Note.

 

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“Delinquent” shall mean if any payment due onthe Mortgage Loan is not made by the close of business on the Due Date for suchMortgage Loan.  A Mortgage Loan is “30days Delinquent” if such payment has not been received by the close of businesson the Due Date immediately succeeding the month in which such payment wasdue.  Similarly for “60 daysDelinquent,” “90 days Delinquent” and so on.

 

“Delivery” shall mean the later to occur of (a)the issuance of the related Security and (b) the transfer of all of the right,title and ownership interest in that Security to UBS.

 

“Delivery Date” shall mean, with respect to aMortgage Loan, the date set forth on the related Request for Certification inthe “DELIVERY DATE” column, which shall be either (1) the Note Purchase Date or(2) the Business Day on which Trust desires the applicable portion of therelated Submission Package be sent by Custodian to the Takeout Investor, i.e.,one Business Day prior to the Business Day on which Trust desires theapplicable portion of the Submission Package to be received by the TakeoutInvestor.

 

“Delivery Directive” shall mean, with respectto each Mortgage Loan being offered for sale or being pledged by Trust to UBSpursuant to a Conduit Transaction or a Cash Window Transaction, the deliverydirective, set forth in Part IV of Exhibit F to the Custodial Agreement, usedby UBS in a notice delivered via electronic transmission in the form of ExhibitM to the Custodial Agreement, to direct Custodian to deliver the relatedSubmission Package in accordance with the Delivery Instructions.

 

“Delivery Instructions” shall mean, withrespect to a Mortgage Loan, instructions prepared by the Administrator, in theform of Exhibit N to the Custodial Agreement, indicating the address for thedelivery by Custodian of the applicable portion of the related SubmissionPackage.

 

“Depositor” shall mean each of MortgageIT andMortgageIT Holdings, in its capacity as Depositors under the Trust Agreement(collectively, the “Depositors”).

 

“Designated Agent” shall mean, with respect tothe Trust, any of the individuals identified in Exhibit J to the Note PurchaseAgreement and any Responsible Officer of the Owner Trustee.

 

“Desired Funding Date” shall mean, with respectto REIT Mortgage Loans, the Business Day indicated by the REIT Sub-Trust on therelated Wet-Ink Funding Detail or Loan Purchase Detail, as applicable, on whichthe REIT Sub-Trust desires to pledge a Mortgage Loan, and with respect to TRSMortgage Loans, the Business Day indicated by the TRS Sub-Trust on the ClosingLoan Purchase Detail, on which the TRS Sub-Trust desires UBS to purchase aMortgage Loan via a Wet Funding or a Dry Funding or the Business Day indicatedby the TRS Sub-Trust on the Rewarehousing Loan Purchase Detail, on which theTRS Sub-Trust desires UBS to purchase a Mortgage Loan via a Dry Funding.

 

“Determination Date” shall mean the last day ofthe month immediately preceding the related Remittance Date (or if such day isnot a Business Day, the Business Day immediately preceding such day).

 

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“Disbursement Amount” shall mean, with respectto a Mortgage Loan, the amount set forth on the related Wet-Ink Funding Detail,Loan Purchase Detail, Closing Loan Purchase Detail or Rewarehousing LoanPurchase Detail as the “Disbursement Amount”.

 

“Discount” shall mean, with respect to eachMortgage Loan sold to UBS, the amount, determined by UBS in its solediscretion, set forth on the related Funding Confirmation as the “Discount.”

 

“Disposition Fee” shall mean the fee outlinedin Schedule II attached to and incorporated in the REIT ServicingAgreement.

 

“Distressed Mortgage Loan” shall mean anyMortgage Loan which is 60 or more days delinquent at the end of each calendarmonth.

 

“Document File” shall mean the Credit File andthe Dry Submission Package.

 

“Dollars” and “$” shall mean lawfulmoney of the United States of America.

 

“Dry Funding” shall mean either (i) a ClosingTransaction initiated by the delivery by the Trust, via electronic transmissionto UBS of a Closing Loan Purchase Detail and the receipt by Custodian of a DrySubmission Package or (ii) a Rewarehousing Transaction initiated by thedelivery by the Trust, via electronic transmission to UBS, of a RewarehousingLoan Purchase Detail, a Warehouse Lender’s or Trust’s Release and theCustodian’s receipt of a Dry Submission Package.

 

“Dry Mortgage Loan” or “Dry Ink MortgageLoan” shall mean a Mortgage Loan with respect to which (i) Custodian hasreceived a Dry Submission Package and (ii) with respect to a TRS Mortgage Loan,no Repurchase has occurred.

 

“Dry Submission Package” shall mean thedocuments listed in Exhibit A to the Custodial Agreement required to bedelivered by the Trust, MortgageIT or MortgageIT Holdings to Custodian inconnection with each Dry Transaction pursuant to the Custodial Agreement.

 

“Dry Transaction” shall mean a transactioninitiated by UBS’s delivery to Custodian of a Request for Certification, whichdoes not identify a Takeout Investor, and which does not include a ConversionCode.

 

“Due Date” shall mean the day of the month onwhich the Monthly Payment is due on the Mortgage Loan.

 

“Due Diligence Review” shall mean theperformance by UBS of any or all of the reviews permitted under Section 13.14of the Note Purchase Agreement with respect to any or all of the MortgageLoans.

 

“Due Period” shall mean, with respect to eachPayment Date, the period commencing on the first day of the month preceding themonth of the Payment Date and ending on the last day of the month preceding themonth of the Payment Date.

 

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“Effective Date” shall mean, with respect tothe REIT Mortgage Loans, the date upon which the conditions precedent set forthin Section 6.01 of the Note Purchase Agreement shall have been satisfied, and,with respect to the TRS Mortgage Loans, August 4, 2004.

 

“Electronic Agent” shall mean MERSCORP, Inc.,or its successor or assigns.

 

“Electronic Agent Agreement” shall mean thatcertain agreement (if any) between the Electronic Agent, UBS and the Trust, asamended, supplemented or otherwise modified from time to time.

 

“Electronic File” shall mean a file intransferable electronic format that includes all data essential to service aMortgage Loan, including, but not limited to, the following information withregard to each Mortgage Loan:

 

i.                                          theorigination loan number,

 

ii.                                       customername, billing address and street address (if different),

 

iii.                                    unpaidprincipal balance,

 

iv.                                   theamount of periodic installments and the date(s) to which principal, interestand any escrows have been paid,

 

v.                                      theaccrued but unpaid interest up to and including the Closing Date,

 

vi.                                   aledger history reflecting all receipts and disbursements, and

 

data, consistent with Schedule III to the REITServicing Agreement, sufficient to calculate any applicable late charge,prepayment penalty and any other applicable contractual fee, charge or penalty.

 

“Electronic Transmission” shall mean thedelivery of information in an electronic format acceptable to the applicablerecipient thereto.

 

“Electronic Tracking Agreement” shall mean theElectronic Tracking Agreement, dated as of August 4, 2004, among UBS, theTrust, MortgageIT, MortgageIT Holdings, an electronic agent and MERS, as thesame shall be amended, supplemented or otherwise modified from time to time.

 

“Eligible Account” shall mean (i) an account oraccounts maintained with a depository institution the short-term debtobligations of which are rated AA or better by S&P, or (ii) an account oraccounts the deposits in which are fully insured by the FDIC, or (iii) a trustaccount or accounts maintained with a federal or state chartered depositoryinstitution or trust company acting in its fiduciary capacity, the debtobligations of which are rated A-1 or better by S&P.

 

“Eligible Investments” shall mean any one ormore of the following obligations or securities:

 

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a.     direct obligations of, or obligations fully guaranteed as totimely payment of principal and interest by the United States of America or anyagency or instrumentality thereof, provided such obligations are backed by thefull faith and credit of the United States of America, or Freddie Mac seniordebt obligations, but excluding any of such securities whose terms do notprovide for payment of a fixed dollar amount upon maturity or call forredemption;

 

b.     c.             demand andtime deposits in, certificates of deposit of, bankers’ acceptances issued by orfederal funds sold by any depository institution or trust company (includingthe Owner Trustee or its agent acting in their respective commercialcapacities) incorporated under the laws of the United States of America or anystate thereof and subject to supervision and examination by federal and/orstate authorities, so long as, at the time of such investment or contractualcommitment providing for such investment, such depository institution or trustcompany or its ultimate parent has a short-term uninsured debt rating in one ofthe two highest available rating categories of S&P and the highestavailable rating category of Moody’s and provided that each such investment hasan original maturity of no more than 365 days;

 

d.             anyother demand or time deposit or deposit which is fully insured, by the FDIC;and

 

e.             FreddieMac participation certificates and other Freddie Mac guaranteed mortgage-backedsecurities and senior debt obligations;

 

f.      repurchase obligations with a term not to exceed 30 days withrespect to any security described in clause (i) above and entered into with adepository institution or trust company (acting as principal) rated “A” orhigher by S&P and rated “A2” or higher by Moody’s; provided, however,that collateral transferred pursuant to such repurchase obligation must be ofthe type described in clause (i) above and must (A) be valued daily at currentmarket prices’ plus accrued interest or (B) pursuant to such valuation, beequal, at all times, to 105% of the cash transferred by the Owner Trustee inexchange for such collateral and (C), be delivered to the Owner Trustee or, ifthe Owner Trustee is supplying the collateral, an agent for the Owner Trustee,in such a manner as to accomplish perfection of a security interest in thecollateral by possession of certificated securities;

 

g.     securities bearing interest or sold at a discount that areissued by any corporation incorporated under the laws of the United States ofAmerica or any State thereof and that are rated by a Rating Agency in itshighest long-term unsecured rating categories at the time of such investment orcontractual commitment providing for such investment;

 

h.     commercial paper (including both non-interest-bearing discountobligations and interest-bearing obligations payable on demand or on aspecified date not more than 30 days after the date of acquisition thereof)that is rated by a Rating Agency in its highest short-term unsecured debtrating available at the time of such investment;

 

i.      units of money market funds registered under the InvestmentCompany Act of 1940 including funds managed or advised by the Owner Trustee oran affiliate thereof having a rating by S&P of “AAA-G,” “AAA-m”, or “AA-m”,and if rated by Moody’s, rated “Aaa,” “Aa1” or “Aa2”; and

 

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j.      any other obligation or security acceptable to the Trust (ascertified by a letter from the Trust to the Servicer);

 

provided, that no such investmentshall be an Eligible Investment if such investment evidences either (a) theright to receive interest-only payments with respect to the obligationsunderlying such investments or (b) both principal and interest payments derivedfrom obligations underlying such investment where the principal and interestpayments with respect to such investment provide a yield to maturity exceeding120% of the yield to maturity at par of such underlying obligation.

 

“Eligible Mortgage Loan” shall mean a MortgageLoan as to which the representations and warranties made by the Trust inSchedule 2 to the Loan Sale Agreement are correct; provided that in noevent shall a land installment contract or similar lending arrangement be anEligible Mortgage Loan.

 

“Eligible Owner Trustee” shall mean a bank(within the meaning of Section 2(a)(5) of the Investment Company Act) thatmeets the requirements of Section 26(a)(1) of the Investment Company Act,that is not an Affiliate of either Depositor or an Affiliate of any Personinvolved in the organization or operation of either Depositor, that isorganized and doing business under the laws of any state or the United Statesof America, that is authorized under such laws to exercise corporate trustpowers and to accept the trust conferred under the Trust Agreement, that has,or whose parent corporation has, a combined capital and surplus and undividedprofits of at least $100,000,000 and that is subject to supervision orexamination by federal or state authority. If such bank publishes reports ofcondition at least annually, pursuant to law or to the requirements of theaforesaid supervising or examining authority, then for the purposes of thisdefinition the combined capital, surplus and undivided profits of suchcorporation shall be deemed to be its combined capital and surplus as set forthin its most recent report of condition so published.

 

“Entity” shall mean any individual,corporation, partnership, joint venture, association, joint stock company,trust (including any beneficiary thereof), unincorporated organization orgovernment or any agency or political subdivision thereof.

 

“ERISA” shall mean the Employee RetirementIncome Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” shall mean any corporation ortrade or business that is a member of any group of organizations (i) describedin Section 414(b) or (c) of the Code of which the Trust is a member and (ii)solely for purposes of potential liability under Section 302(c)(11) of ERISAand Section 412(c)(11) of the Code and the lien created under Section 302(f) ofERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of theCode of which the Trust is a member.

 

“Errors and Omissions Insurance Policy” shallmean an errors and omissions insurance policy to be maintained by the TRSServicer pursuant to Section 4.11 of the TRS Servicing Agreement.

 

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“Escrow Account” shall have the meaning givento such term in the TRS Servicing Agreement, with respect to the TRS MortgageLoans, and the REIT Servicing Agreement, with respect to the REIT MortgageLoans.

 

“Escrow Agent” shall mean the agent appointedby the Title Insurance Company to administer the closing of a Mortgage Loan or,with respect to a REIT Mortgage Loan, any entity set forth on Exhibit N to theNote Purchase Agreement, which has been approved by the Agent in its solediscretion or any other entity approved by the Agent in its sole discretion.

 

“Escrow Agent Standing Wire Instructions” shallmean the wire instructions of the Escrow Agent set forth in the applicable LoanPurchase Detail or Wet-Ink Funding Detail, as applicable, from the Trust,MortgageIT or MortgageIT Holdings to UBS for use when UBS wires DisbursementAmounts for Wet Fundings and Dry Fundings structured as Closing Transactions orin connection with the funding of Wet-Ink Mortgage Loans.

 

“Escrow Instruction Letter” shall mean withrespect to each Wet-Ink Mortgage Loan which is being funded with a DisbursementAmount, the instruction letter of the Note Issuer with respect to suchorigination which is acknowledged by the Escrow Agent, in substantially theform of Exhibit M to the Note Purchase Agreement.

 

“Escrow Mortgage Loans” shall mean the REITMortgage Loans for which the REIT Servicer has established an Escrow Accountfor items constituting Escrow Payments.

 

“Escrow Payment” shall mean, with respect toany Mortgage Loan, the amounts constituting any of ground-rents, taxes,assessments, water rates, sewer rents, municipal charges, mortgage insurancepremiums, fire and hazard insurance premiums, condominium charges, and anyother payments required to be escrowed by the Obligor with the Mortgageepursuant to the Mortgage or any other document.

 

“Estimated Note Issuance Proceeds” shall havethe meaning provided in Section 3.09(e) of the Note Purchase Agreement.

 

“Eurodollar Rate” shall mean, with respect toeach Interest Period a Note is outstanding, the rate per annum equal to therate appearing at page 5 of the Telerate Screen as one-month LIBOR at or about9:00 a.m., New York City time, on the first day of such Interest Period and ifsuch rate shall not be so quoted, the rate per annum at which the ReferenceBank is offered Dollar deposits at or about 9:00 a.m., New York City time, onsuch date by prime banks in the London interbank eurodollar market for deliveryon such day for a period of thirty (30) days and in an amount comparable to theamount of the Notes to be outstanding on such day.  The Eurodollar Rate shall be reset by UBS as described above andUBS’s determination of Eurodollar Rate shall be conclusive upon the partiesabsent manifest error on the part of UBS.

 

“Event of Default” shall have the meaning givento such term in the Note Purchase Agreement, the Loan Repurchase Agreement, theLoan Purchase Agreement, the Loan Sale Agreement or the REIT ServicingAgreement, as applicable.

 

“Exception Code” shall mean each of theexception codes set forth in Part V of Exhibit F to the Custodial Agreement,placed by Custodian on a Certification Report indicating

 

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missing documents,incomplete documents and deficiencies in documents reviewed by Custodian.

 

“Executive” shall mean each of the ChiefExecutive Officer and the Chief Financial Officer who are incumbent as of thedate of the Note Purchase Agreement.

 

“Existing Financing Documents” shall mean,collectively, (i) that certain Warehousing Credit  and Security Agreement,dated as of August 1, 2003, by and between MortgageIT, Inc. and ResidentialFunding Corporation, as may be amended from  time to time, and all otherdocuments or agreements executed in connection  therewith,  (ii) that  certain Amended andRestated Master Repurchase  Agreementamong MortgageIT, Inc., MortgageIT Holdings, Inc. and Merrill  Lynch Mortgage Capital Inc., dated as ofAugust 4, 2004, as may be amended from time  to  time, and  all  other documents or agreements executed in connection therewith, and (iii) thatcertain Note Purchase Agreement by and among MortgageIT, Inc. and TechnologyInvestment Capital Corp., dated as of March 29,  2004,  as may  be  amended from time to time, and all other documents or agreementsexecuted in connection therewith.

 

“Expected Delivery Date” shall mean the dateidentified on a Request for Certification as the “Expected Delivery Date ofMortgage File”, which shall be the date on which Trust, MortgageIT orMortgageIT Holdings has informed UBS that a Submission Package will be receivedby Custodian from Trust, MortgageIT or MortgageIT Holdings.

 

“Facility Agreements”shall mean the Note Purchase Agreement, the Loan Repurchase Agreement, the LoanPurchase Agreement and the Loan Participation Agreement.

 

“Facility Default”shall mean a default or Event of Default under any of the Facility Agreements.

 

“Facility Limit” shall have the meaning setforth in the Pricing Side Letter.

 

“Fannie Mae” shall mean the Federal NationalMortgage Association, or any successor thereto.

 

“Fannie Mae Bailee Letter” shall mean themaster bailee letter, in the form of Exhibit B-4, for use by Custodian inconnection with the delivery to Fannie Mae of the Cash Window SubmissionPackage, excluding (i) the original Assignment of Mortgage, in blank, (ii) theWarehouse Lender’s Release or Trust’s Release, as applicable, (iii) allmodification agreements relating to a Mortgage, (iv) the Delivery Instructionsand (v) a copy of the Commitment.

 

“Fannie Mae Commitment” shall mean a commitmentexecuted by Fannie Mae and MortgageIT evidencing Fannie Mae’s agreement topurchase one or more Mortgage Loans from MortgageIT and MortgageIT’s agreementto sell one or more Mortgage Loans to Fannie Mae by the applicable CommitmentExpiration Date under the Applicable Guide.

 

“Fatal Exception” shall mean the assignment bythe Custodian of a Mortgage Loan Absentee Code or a Mortgage Loan SuspensionCode to a Mortgage Loan.

 

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“FDIC” shall mean Federal Deposit InsuranceCorporation or any successor thereto.

 

“Federal Funds Rate” shall mean, for any day,the weighted average of the rates on overnight federal funds transactions withmembers of the Federal Reserve System arranged by federal funds brokers, aspublished on the next succeeding Business Day by the Federal Reserve Bank ofNew York, or, if such rate is not so published for any day which is a BusinessDay, the average of the quotations for the day of such transactions received byUBS from three federal funds brokers of recognized standing selected by it ingood faith.

 

“FHA” shall mean the Federal HousingAdministration, or any successor thereto.

 

“Fidelity Bond” shall mean a fidelity bond tobe maintained by the TRS Servicer pursuant to Section 4.11 of the TRSServicing Agreement.

 

“Final Recovery Determination” shall mean, withrespect to any defaulted Mortgage Loan or any REO Property, a determinationmade by the REIT Servicer that all Insurance Proceeds, Condemnation Proceeds,Liquidation Proceeds and any other payments and recoveries which the REITServicer, in its reasonable good faith judgment, expects to be finallyrecoverable in respect thereof have been so recovered.

 

“Fitch” shall mean Fitch IBCA or its successorsand assigns.

 

“Fixed Rate Mortgage Loan” shall mean aMortgage Loan which provides for a fixed Mortgage Interest Rate payable withrespect thereto.

 

“Freddie Mac” shall mean the Federal HomeMortgage Loan Mortgage Corporation, or any successor thereto.

 

“Freddie Mac Commitment” shall mean acommitment executed by Freddie Mac and MortgageIT evidencing Freddie Mac’sagreement to purchase one or more Mortgage Loans from MortgageIT andMortgageIT’s agreement to sell one or more Mortgage Loans to Freddie Mac by theapplicable Commitment Expiration Date under the Applicable Guide.

 

“Freddie Mac Guide” shall mean the Freddie MacSellers’ and Servicers’ Guide, as such may hereafter from time to time beamended.

 

“Freddie Mac Program” shall mean the FreddieMac Home Mortgage Guarantor Program or the Freddie Mac FHA/VA Home MortgageGuarantor Program, as described in the Freddie Mac Guide.

 

“Funding Confirmation” shall have the meaninggiven to such term in the Note Purchase Agreement, the Loan RepurchaseAgreement or the Loan Purchase Agreement, as applicable.

 

“Funding Percentage” shall initially mean 100%with respect to UBS, as the sole Purchaser, but if, at any time after the dateof the Note Purchase Agreement, UBS transfers all or any part of its optionhereunder to purchase Notes with the consent of the Trust, “Funding

 

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Percentage” at anytime thereafter shall mean, with respect to each Purchaser, the percentage ofall Purchasers’ funding options hereunder to purchase Notes that such Purchaserat the time retains after taking into account all prior transfers of all orpart of such option of such Purchaser.

 

“Future Financing Document” shall mean anymortgage loan warehouse financing agreement, regardless of form (e.g.,loan agreement, note purchase agreement, repurchase agreement) for performingor non-performing loans entered into by MortgageIT, MortgageIT Holdings or anyAffiliate thereof.

 

“GAAP” shall mean the generally acceptedaccounting principles as in effect from time to time in the United States ofAmerica.

 

“Ginnie Mae” or “GMNA” shall mean theGovernment National Mortgage Association or any successor thereto.

 

“Governmental Authority” shall mean, in relationto any Person, any nation or government, any state or other politicalsubdivision thereof, any entity exercising executive, legislative, judicial,regulatory or administrative functions of or pertaining to government and anycourt or arbitrator having jurisdiction over such Person, any of itsSubsidiaries or any of its Properties.

 

“Guarantee” shall mean, as to any Person, anyobligation of such Person directly or indirectly guaranteeing any Indebtednessof any other Person or in any manner providing for the payment of anyIndebtedness of any other Person or otherwise protecting the holder of suchIndebtedness against loss (whether by virtue of partnership arrangements, byagreement to keep-well, to purchase assets, goods, securities or services, or totake-or-pay or otherwise); provided that the term “Guarantee” shall notinclude (i) endorsements for collection or deposit in the ordinary course ofbusiness, or (ii) obligations to make any servicing advances, escrow advancesor other obligations in respect of a Mortgaged Property.  The amount of any Guarantee of a Personshall be deemed to be an amount equal to the stated or determinable amount ofthe primary obligation in respect of which such Guarantee is made or, if notstated or determinable, the maximum reasonably anticipated liability in respectthereof as determined by such Person in good faith.  The terms “Guarantee” and “Guaranteed” used asverbs shall have correlative meanings.

 

“Hold Directive” shall mean with respect toeach Mortgage Loan being offered by Trust for sale to UBS pursuant to a ConduitTransaction or a Cash Window Transaction, the hold directive, set forth in PartIV of Exhibit F to the Custodial Agreement, delivered by Trust via electronictransmission in a notice in the form of Exhibit M to the Custodial Agreement todirect Custodian to continue to hold the related Submission Package.

 

“HUD” shall mean the United States Departmentof Housing and Urban Development or its successors and assigns.

 

“Incomplete MERS Designated Mortgage Loan”shall have the meaning given to such term in Article XXII of theElectronic Tracking Agreement.

 

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“Incremental Pass-Through Rate” shall mean theamount by which the Pass-Through Rate is increased upon the occurrence of (i) aCommitment Expiration Date, (ii) any event giving Purchaser the right to electa remedy pursuant to Section 3 of the Loan Purchase Agreement, (iii) theScheduled Repurchase Date (as defined in the Loan Repurchase Agreement), or(iv) the occurrence of any event giving UBS the right to elect a remedypursuant to Section 7 of the Loan Repurchase Agreement, which amount shall beset forth in a Funding Confirmation as the “Incremental Pass-Through Rate.

 

“Indebtedness” shall mean, for any Person:  (a) obligations created, issued or incurredby such Person for borrowed money (whether by loan, the issuance and sale ofdebt securities or the sale of Property to another Person subject to an understandingor agreement, contingent or otherwise, to repurchase such Property from suchPerson); (b) obligations of such Person to pay the deferred purchase oracquisition price of Property or services, other than trade accounts payable(other than for borrowed money) arising, and accrued expenses incurred, in theordinary course of business so long as such trade accounts payable are payablewithin 90 days after the date the respective goods are delivered or therespective services are rendered; (c) Indebtedness of others secured by a Lienon the Property of such Person, whether or not the respective Indebtedness sosecured has been assumed by such Person; (d) obligations (contingent orotherwise) of such Person in respect of letters of credit or similarinstruments issued or accepted by banks and other financial institutions foraccount of such Person; (e) Capital Lease Obligations of such Person; (f)obligations of such Person under repurchase agreements, sale/buy-backagreements or like arrangements; (g) Indebtedness of others Guaranteed by suchPerson; (h) all obligations of such Person incurred in connection with theacquisition or carrying of fixed assets by such Person; and (i) Indebtedness ofgeneral partnerships of which such Person is secondarily or contingently liable(other than by endorsement of instruments in the course of collection), whetherby reason of any agreement to acquire such indebtedness or to supply or advancesums or otherwise.  Liabilities relatingto securitizations are not “Indebtedness,” except in the case of the Trust on anon-consolidated basis.

 

“Indemnified Party” shall have the meaninggiven to such term in Section 13.03(a) of the Note Purchase Agreement.

 

“Index” shall mean with respect to eachAdjustable Rate Mortgage Loan and with respect to each related interest rateadjustment date, the index as specified in the related Mortgage Note.

 

“Insurance Proceeds” shall mean with respect toeach Mortgage Loan, all proceeds of any insurance policy or other insurancepolicies insuring the Mortgage Loan or the related Mortgaged Property.

 

“Insured Depository Institution” shall have themeaning given to such term by Section 1813(c)(2) of Title 12 of the UnitedStates Code, as amended from time to time.

 

“Interest” shall have the meaning given to suchterm in Section 12.15(a) of the Note Purchase Agreement.

 

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“Interest Period” shall mean, with respect tothe Notes, (i) initially, the period commencing on the Note Purchase Date onwhich a Note is purchased hereunder from the REIT Sub-Trust and ending on thelast Business Day of the month in which that period commences, and (ii)thereafter, each period commencing on and including the day which immediatelyfollows the last day of the preceding Interest Period and ending on the last dayof the month which immediately follows such last day of the preceding InterestPeriod.  In addition, if the MaturityDate occurs as a result of any of the events described in clauses (i) through(iii) in the definition thereof, then the most recently commenced InterestPeriod with respect to the Notes shall end on the day prior to such MaturityDate.

 

“Interest Rate Adjustment Date” shall mean withrespect to an Adjustable Rate Mortgage Loan, the date on which the MortgageInterest Rate is adjusted with respect to such Mortgage Loan.  The first Interest Rate Adjustment Date foreach Adjustable Rate Mortgage Loan is set forth on the Mortgage Loan Schedule.

 

“Interest Rate Protection Agreement” shallmean, with respect to any or all of the Mortgage Loans, any short sale of U.S.Treasury security, or futures contract, or mortgage related security, orEurodollar futures contract, or options related contract, or interest rateswap, cap or collar agreement or similar arrangements entered into solely toprovide for protection against fluctuations in interest rates or the exchangeof nominal interest obligations, either generally or under specificcontingencies, acceptable to UBS.

 

“Interim Funder” shall mean, with respect toeach MERS Designated Mortgage Loan, the Person named on the MERS System as theinterim funder pursuant to the MERS Procedures Manual.

 

“Investment Company Act” shall mean theInvestment Company Act of 1940, as amended.

 

“IRS” shall mean the Internal Revenue Service,or any successor thereto.

 

“Issuance Date” shall mean, with respect to aSecurity, the first day of the month in which the Security is issued.

 

“Legal File” shall have the meaning given tosuch term in the REIT Servicing Agreement.

 

“Liabilities” shall have the meaning specifiedin Section 6.2(b) of the Trust Agreement.

 

“Lien” shall mean any mortgage, lien, pledge,charge, security interest or similar encumbrance.

 

“Limited Power of Attorney” shall mean alimited power of attorney, in the form of Exhibit K to the Custodial Agreement,executed by Trust and delivered to Custodian, authorizing Custodian to prepareMortgage Note endorsements in the form indicated thereon.

 

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“Liquidation Proceeds” shall mean the amounts,other than Insurance Proceeds and Condemnation Proceeds, received in connectionwith the liquidation of a defaulted Mortgage Loan through trustee’s sale,foreclosure sale or otherwise, other than amounts received following theacquisition of REO Property.

 

“Liquidation Proceeds” shall mean cash(exclusive of REO Disposition Proceeds) received in connection with theliquidation of a defaulted Mortgage Loan, whether through the sale orassignment of such Mortgage Loan, trustee’s sale, foreclosure sale orotherwise, or the sale of the related Mortgaged Property if the MortgagedProperty is acquired in satisfaction of the Mortgage Loan.

 

“Loan Identification Data” shall mean theapplicable information regarding a Mortgage Loan, set forth on a Request forCertification, which shall include UBS’s reference number, the name of UBS’sapplicable program, the Mortgage Loan number, the MERS Identification Number,the last name of the Mortgagor, the address of the Mortgaged Property, the faceamount of the Mortgage Note, the number of months to maturity of the MortgageLoan, and the interest rate borne by the Mortgage Note and, solely with respectto Cash Window Transactions, Conduit Transactions and Conversion Transactions,the name of the Takeout Investor, the sale price of the Mortgage Loan to theTakeout Investor, the commitment number, the Commitment Expiration Date, theDelivery Date, the Release Payment, and the name of the Warehouse Lender.

 

“Loan Participation Agreement” shall mean theMortgage Loan Participation Agreement, dated as of August 4, 2004, between theTRS Sub-Trust, as seller, and UBS, as participant, as amended, supplemented orotherwise modified from time to time.

 

“Loan Purchase Agreement” shall mean theMortgage Loan Purchase Agreement, dated as of August 4, 2004, between the TRSSub-Trust and UBS, as amended, supplemented or otherwise modified from time totime.

 

“Loan Purchase Detail” shall have the meaninggiven to such term in the Note Purchase Agreement or the Loan PurchaseAgreement, as applicable.  With respectto the Loan Repurchase Agreement, “Loan Purchase Detail” shall mean aConversion Loan Purchase Detail, Closing Loan Purchase Detail or RewarehousingLoan Purchase Detail, as applicable.

 

“Loan Repurchase Agreement” shall mean theMortgage Loan Repurchase Agreement, dated as of August 4, 2004, among the TRSSub-Trust and UBS, as amended, supplemented or otherwise modified from time totime.

 

“Loan Sale Agreement” shall mean the Loan SaleAgreement, dated as of August 4, 2004, among MortgageIT as a seller, MortgageITHoldings as a seller, and the Trust as purchaser, as amended, supplemented orotherwise modified from time to time.

 

“Losses” shall mean any and all losses, claims,damages, liabilities or expenses (including reasonable attorneys’ fees) incurredby any Person(s) specified.

 

“Majority Investors” shall mean MajorityPurchasers and Majority Noteholders.

 

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“Majority Noteholders” shall mean Noteholdersof Notes whose principal amount outstanding is at least equal to 51% of theoutstanding principal amount of all the Notes (not including any Notes known byUBS to be held by the REIT Sub-Trust or any of its Affiliates).

 

“Majority Purchasers” shall mean Purchaserswith Funding Percentages at least equal to 51% in the aggregate (not includingany Notes known by UBS to be held by the REIT Sub-Trust or any of itsAffiliates).

 

“Manual Boarding” shall mean, with respect to aREIT Mortgage Loan, the manual entry of REIT Mortgage Loan data onto the Servicingdatabase of the REIT Servicer, which can occur either when there is noElectronic File relating to a REIT Mortgage Loan or the related Electronic Fileis not transferred in a successful, complete and timely manner.

 

“Manufactured Housing” shall mean anymanufactured home.

 

“Market Value” shall mean, with respect to theREIT Mortgage Loans, shall have the meaning given to such term in the PricingSide Letter, and with respect to the TRS Mortgage Loans, the meaning given tosuch term in the Loan Repurchase Agreement.

 

“Master Servicer” shall mean MortgageITHoldings, in its capacity as master servicer under the REIT ServicingAgreement, or its successors or assigns.

 

“Material Adverse Effect” shall mean a materialadverse effect on (a) the Property, business, operations, financial conditionor prospects of any specified Person, (b) the ability of any specified Personto perform its obligations under any of the Note Documents to which it is aparty, (c) the validity or enforceability of any of the Note Documents, (d) therights and remedies of UBS, any of the Purchasers or any of the Noteholdersunder any of the Note Documents, (e) the timely payment of the principal of orinterest on the Notes or other amounts payable in connection therewith, (f)UBS’s security interest in the Collateral or (g) the Collateral as a whole.

 

“Maturity Date” shall mean, with respect to allNotes, the earliest to occur of (i) the Termination Date, (ii) such earlierdate as is described in the related Request for Note Purchase, which suchearlier date would be applicable to all existing and future Notes, or (iii)such earlier date on which the Note Purchase Agreement shall terminate inaccordance with the provisions thereof or by operation of law (withoutprejudice to the provisions of the Note Purchase Agreement under which a Note’smaturity, and the REIT Sub-Trust’s related obligations to pay the principalthereof and interest thereon, may be accelerated).

 

“Maximum Purchase Price” shall mean, withrespect to any TRS Mortgage Loan, the maximum price to be paid for suchMortgage Loan by UBS on the Purchase Date, which amount shall be determined byUBS in its sole discretion taking into account all relevant factors.  UBS shall notify the TRS Sub-Trust of theMaximum Purchase Price on or prior to the related Purchase Date and theacceptance by the TRS Sub-Trust of any such amount shall be deemed to indicatethe TRS Sub-Trust’s agreement with UBS’s determination of such amount.

 

“Maximum Rate” shall mean with respect to eachAdjustable Rate Mortgage Loan, the amount set forth in the Note as the maximumMortgage Interest Rate thereunder.

 

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“MBS Swap Funding Program Selection Notice”shall mean a notification that identifies Mortgage Loans intended for the MBSSwap Funding Program provided by the TRS Sub-Trust to UBS either (i) on theClosing Loan Purchase Detail or Rewarehousing Loan Purchase Detail via the “MBSSwap Funding Program Designation” field or (ii) via a facsimile transmission inthe form of Exhibit P to the Loan Repurchase Agreement, received by UBS priorto the Scheduled Repurchase Date, for any Mortgage Loans previously purchasedwithout the “MBS Swap Funding Program Designation”.

 

“MBS Swap Funding Program” shall mean a programpursuant to the terms of the Loan Participation Agreement.

 

“MBS Swap Shipment Documents” shall mean, withrespect to each Mortgage Loan for which an MBS Swap Funding Program SelectionNotice has been provided, the documents required, as listed in Exhibit R to theLoan Repurchase Agreement, to be received by UBS from the TRS Sub-Trust viafacsimile transmission, prior to UBS’s carrying out the TRS Sub-Trust’sinstructions for the Request for Mortgage Loan Shipment.

 

“MBS Swap Submission Package” shall mean thedocuments required to be provided by the TRS Sub-Trust to UBS with respect toeach purchase under the MBS Swap Funding Program, as described in the LoanParticipation Agreement.

 

“MERS” shall mean Mortgage ElectronicRegistration Systems, Inc., a Delaware corporation, or anysuccessor-in-interest thereto.

 

“MERS Designated Mortgage Loan” shall meanMortgage Loans for which (a) MERS has been designated or will be designated asthe mortgagee of record, as nominee for the Trust, in accordance with the MERSProcedure Manual and (b) UBS has been designated or will be designated as theInvestor and Interim Funder on the MERS® System.

 

“MERS Eligible Mortgage Loan” shall mean anyMortgage Loan that has been designated by the Servicer as recordable in the nameof MERS as nominee for the holder of the related Mortgage Loan.

 

“MERS Identification Number” shall mean theeighteen digit number permanently assigned to each MERS Designated MortgageLoan.

 

“MERS Member” shall mean a Person that has thestatus and rights of a member of MERS with respect to specified mortgage loansin accordance with the MERS Procedures Manual.

 

“MERS Mortgage Loan” shall mean any MortgageLoan as to which the related Mortgage, or an Assignment of Mortgage, has beenor will be recorded in the name of MERS, as nominee for the holder from time totime of the related Mortgage Note.

 

“MERS Procedures Manual” shall mean the MERSProcedures Manual attached as Exhibit B to the Electronic Tracking Agreement,as it may be amended, supplemented or otherwise modified from time to time.

 

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“MERS Report” shall mean the schedule listingMERS Designated Mortgage Loans and other information prepared by the ElectronicAgent pursuant to the Electronic Tracking Agreement.

 

“MERS® System” shall mean the ElectronicAgent’s mortgage electronic registry system, as more particularly described inthe MERS Procedures Manual.

 

“MIDANET” shall mean the Freddie Mac automatedsystem by which sellers and servicers of mortgage loans to Freddie Mac transfermortgage summary and record data or mortgage accounting and servicinginformation from their computer system or service bureau to Freddie Mac, asmore fully described in the Freddie Mac Guide.

 

“Minimum Rate” shall mean with respect to eachAdjustable Rate Mortgage Loan, the amount set forth in the Note as the minimumMortgage Rate Interest thereunder.

 

“Monthly Payment” shall mean the scheduledmonthly payment of principal and interest on a Mortgage Loan.

 

“Moody’s” shall mean Moody’s Investors Service,Inc. or its successor-in-interest.

 

“Mortgage” shall mean the mortgage, deed oftrust or other instrument securing a Mortgage Note, which creates a first orsecond lien on the real property securing the Mortgage Note or, in the case ofa Cooperative Loan, the related Security Agreement.

 

“Mortgage Documents” shall mean, with respectto a Mortgage Loan, the documents comprising the Submission Package for suchMortgage Loan.

 

“Mortgage File” shall mean, collectively, the ServicingFile and the Legal File for any Mortgage Loan.

 

“Mortgage Impairment Insurance Policy” shallmean a mortgage impairment or blanket hazard insurance policy as described inSection 4.10 of the TRS Servicing Agreement.

 

“Mortgage Interest Rate” shall mean withrespect to any Mortgage Loan, the annual rate at which interest accrues on suchMortgage Loan, as adjusted from time to time in accordance with the provisionsof the Mortgage Note in the case of an Adjustable Rate Mortgage Loan.

 

“Mortgage Interest Rate Margin” shall mean withrespect to Adjustable Rate Mortgage Loans, the percentage to be added to thespecified Index identified in the related Note for the purpose of calculatingthe applicable Mortgage Interest Rate.

 

“Mortgage Loan” shall mean a first or secondlien, residential, one to four family mortgage loan originated in accordancewith the Underwriting Guidelines, which the Custodian has been instructed tohold for UBS pursuant to the Custodial Agreement (except in the case ofMortgage Loans sold pursuant to the Loan Participation Agreement, which shallbe held by Freddie Mac), and which Mortgage Loan includes, without limitation,(i) a Mortgage Note and

 

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related Mortgageand (ii) all of the Trust’s right, title and interest in and to the MortgagedProperty covered by such Mortgage.  Theterm “Mortgage Loan” includes Cooperative Loans.

 

“Mortgage Loan Absentee Code” shall mean themortgage loan absentee code, set forth in Part III of Exhibit F to theCustodial Agreement, placed by Custodian on a Certification Report to notifyUBS that a Submission Package related to a Mortgage Loan listed on a Requestfor Certification is not in Custodian’s possession.

 

“Mortgage Loan Approval Code” shall mean themortgage loan approval code, set forth in Part III of Exhibit F to theCustodial Agreement, placed by Custodian on a Certification Report to notifyUBS that Custodian’s review of the applicable items in a Submission Package iscomplete and that such items satisfy all the applicable requirements set forthin Section 4(a) and Section 4(b).

 

“Mortgage Loan Documents” shall mean theoriginals of the Mortgage Notes evidencing the Mortgage Loans.

 

 “MortgageLoan Maturity Date” shall mean the final maturity date as set forth on theMortgage Note of a Mortgage Loan.

 

“Mortgage Loan Remittance Rate” shall mean,with respect to each Mortgage Loan, an annual rate of interest equal to theMortgage Interest Rate.

 

“Mortgage Loan Schedule” shall have the meaninggiven to such term in the REIT Servicing Agreement.

 

“Mortgage Loan Suspension Code” shall mean themortgage loan suspension code, set forth in Part III of Exhibit F to theCustodial Agreement, placed by Custodian on a Certification Report to notifyUBS that Custodian’s review of the Submission Package has determined that oneor more of the documents in the Submission Package are missing, incomplete orincorrect and/or do not satisfy one or more of the requirements set forth inSection 4(a) or Section 4(b).

 

“Mortgage Note” shall mean the originalexecuted promissory note or other original evidence of indebtedness executed bythe respective obligor to evidence such obligor’s indebtedness under therelated Mortgage Loan containing all intervening endorsements, exhibits, ridersand amendments thereto, if any, evidencing a complete chain of ownership fromthe originator to the Trust.

 

“Mortgaged Property” shall mean the realproperty (including all buildings and fixtures thereon and all additions,alterations and replacements made at any time with respect to the foregoing)and all other collateral securing repayment of the debt evidenced by a MortgageNote or, in the case of a Cooperative Loan, the related Cooperative OwnershipInterest.

 

“Mortgagee” shall mean the mortgagee orbeneficiary named in the Mortgage and the successors and assigns of suchmortgagee or beneficiary.

 

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“MortgageIT Holdings” shall mean MortgageITHoldings, Inc., a Maryland corporation.

 

“MortgageIT” shall mean MortgageIT, Inc., a NewYork corporation.

 

“Mortgagor” shall mean the obligor on aMortgage Note.

 

“Multiemployer Plan” shall mean a multiemployerplan defined as such in Section 3(37) of ERISA to which contributions have beenor are required to be made by the Trust or any ERISA Affiliate and that iscovered by Title IV of ERISA.

 

“NCUA” shall mean the National Credit UnionAdministration, or any successor thereto.

 

“Net Income” shall mean, for any period, andwith respect to a Person, the net income of the Person for such period asdetermined in accordance with GAAP.

 

“Net Worth” shall mean, with respect to anyPerson, as of any date of determination, all amounts which would be includedunder capital on a balance sheet of such Person at such date, determined inaccordance with GAAP, less amounts owing to such Person from Affiliates.

 

“Non-Escrow Mortgage Loan” shall mean anyMortgage Loan which is not an Escrow Mortgage Loan.

 

“Non-United States Person” shall mean anyPerson other than a United States Person.

 

“Nonrecoverable Advance” shall mean anyServicing Advance previously made or proposed to be made in respect of aMortgage Loan or REO Property which, in the good faith judgment of the Servicerafter taking into account other preexisting liens and claims against suchproceeds, will not or, in the case of a proposed advance, would not beultimately recoverable from related late payments, Insurance Proceeds orLiquidation Proceeds on such Mortgage Loan or REO Property as provided herein.

 

“Note” shall have the meaning provided inSection 2.01(a) of the Note Purchase Agreement.

 

“Noteholder” shall mean, in relation to anyNote, the Person holding the Note, which initially shall be UBS.

 

“Note Documents” shall mean, collectively, the NotePurchase Agreement, the Loan Sale Agreement, the Notes, the CustodialAgreement, the Electronic Tracking Agreement and the REIT Servicing Agreement.

 

“Note Purchase” shall have the meaning providedin Section 2.01(a) of the Note Purchase Agreement.

 

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“Note Purchase Agreement” shall mean the NotePurchase and Security Agreement, dated as of August 4, 2004, among the REITSub-Trust, UBS and each Person party thereto as a Purchaser or a Noteholderfrom time to time, as amended, supplemented or otherwise modified from time totime.

 

“Note Purchase Date” shall mean the date onwhich a Note Purchase is made under the Note Purchase Agreement as contemplatedin Section 2 thereto.

 

“Note Purchase Period” shall have the meaningset forth in Section 2.01(a) of the Note Purchase Agreement.

 

“Note Rate” shall mean the rate of interestborne by a Mortgage Note.

 

“Note Register” shall mean the register of theNotes maintained pursuant to Section 3.03 of the Note Purchase Agreement.

 

“Notice of Bailment” shall mean a notice, inthe form of Schedule A to Exhibit B-4 or C-2 to the Custodial Agreement, asapplicable, delivered by Custodian to Takeout Investor in connection with eachdelivery to Takeout Investor of the applicable portion of each SubmissionPackage.

 

“Obligor” shall mean any Person obligated forpayment of a Mortgage Loan or who has transferred or assigned any propertyinterest to the Master Servicer to secure payment of such Mortgage Loan.

 

“Officer’s Certificate” shall mean, withrespect to MortgageIT or MortgageIT Holdings, a certificate signed by theChairman of the Board or the Vice Chairman of the Board or a President or aVice President and by the Treasurer or the Secretary or one of the AssistantTreasurers or Assistant Secretaries of MortgageIT or MortgageIT Holdings, asapplicable, and delivered to UBS as required by the Custodial Agreement.

 

“Opinion of Counsel” shall mean a writtenopinion of counsel, who may, without limitation, but subject to therequirements of the Note Purchase Agreement, be employees or other counsel foreither Depositor which are reasonably acceptable to the Owner Trustee.  The cost of such opinion shall be born bythe Depositors, jointly and severally.

 

“Originator’s Loan Sale Agreement” shall meanthe Master Mortgage Loan Purchase Agreement, dated as of August 4, 2004,between MortgageIT, as seller, and MortgageIT Holdings, as purchaser, asamended, supplemented or otherwise modified from time to time.

 

“Other Financing Documents” shall mean,collectively, the Existing Financing Documents together with the FutureFinancing Documents.

 

“OTS” shall mean the Office of ThriftSupervision, or any successor thereto.

 

“Overestimate Amount” shall have the meaning asset forth in Section 3.09(e) of the Note Purchase Agreement.

 

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“Ownership Interest” shall mean as to any OwnerTrust Certificate, any ownership or security interest in such Owner TrustCertificate, including any interest in such Owner Trust Certificate as theHolder thereof and any other interest therein, whether direct or indirect,legal or beneficial, as owner or as pledgee.

 

“Owner Trust Certificates” or “Certificates”shall mean, collectively, the REIT Certificates and the TRS Certificates.

 

“Owner Trust Estate” shall mean, collectively,the REIT Trust Estate and the TRS Trust Estate.

 

“Owner Trustee” shall mean Wilmington TrustCompany or any successor not in its individual capacity but solely in itscapacity as Owner Trustee under the Trust Agreement.

 

“Owner Trustee Fee” shall mean an initial fee,and an annual administration fee, payable to the Owner Trustee in August ofeach calendar year beginning in 2004, each payable to the Owner Trustee ascompensation for the performance of it obligations under the Trust Agreement asset forth in the separate fee agreement between the Owner Trustee andMortgateIT, Inc.

 

“Pass-Through Rate” shall mean, with respect toeach Mortgage Loan, the rate at which interest is passed through to UBS whichinitially shall be the rate of interest specified on a Funding Confirmation asthe Pass-Through Rate.

 

“Parent Company” shall mean, with respect toany Person, a corporation or other entity owning at least 50% of theoutstanding shares of voting stock of such Person.

 

“Participation Certificate” shall mean, withrespect to a Freddie Mac Program, a certificate, in the form of Exhibit A tothe Loan Participation Agreement, issued by MortgageIT, evidencing the 100%undivided ownership interest in the Mortgage Loans that are either (a) setforth on a copy of the Freddie Mac Form 11 (Mortgage Submission Schedule)attached to such Participation Certificate or (b) identified on a computer tapecompatible with MIDANET as belonging to the mortgage loan pool described insuch Participation Certificate.

 

“Payee Number” shall mean the code used byFannie Mae to indicate the wire transfer instructions that will be used byFannie Mae to purchase a Mortgage Loan.

 

“Payment Date” shall mean the 2nd Business Dayof any month commencing in September 2004.

 

“PBGC” shall mean the Pension Benefit GuarantyCorporation or any entity succeeding to any or all of its functions underERISA.

 

“Percentage Interest” shall mean, with respectto each Sub-Trust, the percentage interest of beneficial ownership in suchSub-Trust evidenced by a Owner Trust Certificate as specified on the facethereof.

 

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“Performance Fee” shall mean, with respect toeach Mortgage Loan, an amount, if any, equal to the Discount less the CustodialFee, plus the Yield Compensation Adjustment plus or minus any other adjustmentspermitted under the Loan Purchase Agreement or the Loan ParticipationAgreement, as applicable, which amount, if any, shall be payable to the Trustby UBS as compensation to the Trust for its services under the Loan PurchaseAgreement or the Loan Participation Agreement, as applicable.

 

“Permitted Transferee” shall mean anytransferee of an Owner Trust Certificate other than a non-United States Person.

 

 “PeriodicRate Cap” shall mean with respect to each Adjustable Rate Mortgage Loan,the provision in the Mortgage Note that limits permissible increases anddecreases in the Mortgage Interest Rate on any Adjustment Date.

 

“Person” shall mean any individual,corporation, company, voluntary association, partnership, joint venture,limited liability company, trust, unincorporated association or government (orany agency, instrumentality or political subdivision thereof).

 

“Plan” shall mean an employee benefit or otherplan established or maintained by the Trust or any ERISA Affiliate and coveredby Title IV of ERISA, other than a Multiemployer Plan.

 

“Post-Default Rate” shall mean, in respect ofthe principal amount of each Note outstanding or any other amount under theNote Purchase Agreement, any Note or any other Note Document that is not paidwhen due to UBS or any Noteholder (whether at stated maturity, by acceleration,by prepayment or otherwise), a rate per annum during the period from andincluding the due date to but excluding the date on which such amount is paidin full equal to six percent (6%) per annum plus the applicableEurodollar Rate for each day such Post-Default Rate shall apply.

 

“Prepayment Charge” shall have the meaninggiven to such term in the TRS Servicing Agreement.

 

“Pricing Side Letter” shall mean the PricingSide Letter, dated as of August 4, 2004, by and among the Trust, MortgageIT andMortgageIT Holdings and acknowledged and agreed to by UBS.

 

“Prime Rate” shall mean the interest rate equalto the prime rate of United States money center commercial banks as publishedfrom time to time in The Wall Street Journal.

 

“Principal Prepayment” shall mean any paymentor other recovery of principal on a Mortgage Loan which is received in advanceof its scheduled Due Date, including any prepayment penalty or premium thereon,which is not accompanied by an amount of interest representing scheduledinterest due on any date or dates in any month or months subsequent to themonth of prepayment.

 

“Program Code” shall mean each of the codes,set forth in Part I of Exhibit F to the Custodial Agreement, placed by UBS inthe “PROG CODE” column of a Request for

 

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Certificationindicating that the Mortgage Loan is being offered by MortgageIT or MortgageITHoldings to UBS in a Dry Transaction, Cash Window Transaction or a ConduitTransaction, as applicable.

 

“Property” shall mean any right or interest inor to property of any kind whatsoever, whether real, personal or mixed andwhether tangible or intangible.

 

“Proprietary Lease” shall mean, with respect toany Cooperative Apartment, a lease or occupancy agreement between a CooperativeCorporation and a holder of the related Cooperative Ownership Interest.

 

“Prospective Owner” shall have the meaning asset forth in Section 3.07(a) of the Note Purchase Agreement.

 

“Purchase Advice” shall mean, with respect tothe Note Purchase Agreement or the Loan Purchase Agreement, an approved purchaselist delivered to UBS by the Takeout Investor via electronic or facsimiletransmission, confirming the amount of Takeout Proceeds allocable to eachMortgage Loan purchased by Takeout Investor.

 

“Purchase Date” shall mean, with respect to aMortgage Loan, the date on which UBS purchases such Mortgage Loan from the TRSSub-Trust.

 

“Purchase Price” shall have the meaning givento such term in the Loan Repurchase Agreement, the Loan Purchase Agreement orthe Loan Participation Agreement, as applicable.

 

“Purchaser” shall have the meaning provided inthe heading of the Note Purchase Agreement.

 

“Qualified Institutional Buyer” or “QIB”shall have the meaning as set forth in Rule 144A of the Securities Act, asamended from time to time.

 

“Qualified Purchaser” shall mean a “qualifiedpurchaser” as defined in Section 2(a)(51) of the Investment Company Act.

 

“Rating Agency” shall mean Moody’s, Fitch orS&P or their respective successors and assigns.  If such agency and its successors are no longer in existence,“Rating Agency” shall be such nationally recognized statistical rating agency,or other comparable Person, designated by the Trust, notice of whichdesignations shall be given to the Servicer. References herein to the two highest long-term debt rating categories ofa Rating Agency shall mean “A-2” or better and references herein to the highestshort-term debt rating of a Rating Agency shall mean “Prime-1” and in the caseof any other Rating Agency such references shall mean such rating categorieswithout regard to any plus or minus.

 

“Receipt” shall mean the Delivery of a Securityto UBS, following notice by the Trust to UBS, not later than 12:00 noon, NewYork City time, on the second business day prior to the applicable SettlementDate, of (a) the amount of any change in the principal amount of the MortgageLoans backing such Security, and (b) the Mortgage Loan pool number applicableto

 

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suchSecurity.  If the Trust fails to sonotify UBS by such time, “Receipt” shall be deemed to have occurred on thelater of (1) the second business day after the date on which the Trust providessuch notification to UBS and (2) the date on which UBS receives Delivery of theSecurity.

 

“Recognition Agreement” shall mean, withrespect to any Cooperative Loan, an agreement between the related CooperativeCorporation and the originator of such Mortgage Loan to establish the rights ofsuch originator in the related Cooperative Apartment.

 

“Record Date” shall mean, with respect to theTRS Mortgage Loans, the Business Day immediately preceding the related PaymentDate, and, with respect to the REIT Mortgage Loans, with respect to eachRemittance Date, the last Business Day of the month immediately preceding themonth in which such Remittance Date occurs.

 

“Reference Bank” shall mean the principaloffice in London, England, of UBS.

 

“Registration Statement” shall have the meaningas set forth in Section 2(a)(8) of the Securities Act.

 

“Regulations T, U and X” shall mean RegulationsT, U and X of the Board of Governors of the Federal Reserve System (or anysuccessor), as the same may be modified and supplemented and in effect fromtime to time.

 

“REIT Certificates” shall mean the certificatesevidencing beneficial ownership interest in the REIT Trust Estate issued underthe Trust Agreement.

 

“REIT Collateral” shall mean the meaning givento such term in Section 5.01(b) of the Note Purchase Agreement.

 

“REIT Mortgage Loans” shall mean the MortgageLoans sold by MortgageIT Holdings to the REIT Sub-Trust under the Loan SaleAgreement or transferred into the REIT Trust Estate under the Trust Agreement,which are subject to the terms of the Note Purchase Agreement.

 

“REIT Related Limited Recourse Obligation”shall mean the obligation of MortgageIT Holdings to fund any deficiency inamounts due from the REIT Sub-Trust and not paid timely when so due by theTrust on behalf of the REIT Sub-Trust, as a result of the credit performance ofany REIT Mortgage Loan, or as a result of any market movement.

 

“REIT Related Obligation” shall mean any REITRelated Recourse Obligation, any REIT Related Limited Recourse Obligation andany REIT Related Trust Obligation.

 

“REIT Related Recourse Obligation” shall meanany obligation of the Trust acting with respect to the REIT Sub-Trust, or anyobligation of MortgageIT Holdings, which relates to a liability arising from abreach of any representation, warranty or covenant relating to the REITMortgage Loans, the servicing thereof, or MortgageIT Holdings, including anyrelated indemnification or reimbursement obligations, as well as any obligationto pay or reimburse any party for such party’s fees or expenses.  No deficiencies arising as a result of thecredit

 

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performance of anyREIT Mortgage Loan, or as a result of any market movement, shall be a “REITRelated Recourse Obligation”.

 

“REIT Related Trust Obligation” shall mean anyobligation of the REIT Sub-Trust.

 

“REIT Servicer” shall mean GMAC Mortgage Corporationin its capacity as REIT Servicer under the REIT Servicing Agreement.

 

“REIT Servicing Agreement” shall mean the REITServicing Agreement dated as of August 4, 2004, by and among the MasterServicer, the REIT Servicer, the REIT Sub-Trust and UBS, as amended,supplemented or otherwise modified from time to time.

 

“REIT Sub-Trust” shall mean the series (as suchterm is used in Section 3806(b)(2) of the Statutory Trust Statute) of the Trustwhose corpus consists of the REIT Trust Estate and alternatively, as thecontext may require, a reference to “the REIT Sub-Trust” shall mean the Trustacting with respect to such series.

 

“REIT Trust Estate” shall mean the corpus ofthe REIT Sub-Trust created as of the date of the Trust Agreement and to beadministered under the Trust Agreement, consisting of (i) all the right, titleand interest of the REIT Sub-Trust in and to the REIT Mortgage Loans and alldistributions thereon after the date of the Trust Agreement, (ii) all theright, title and interest of the REIT Sub-Trust in and to the REIT ServicingAgreement and any accounts created thereunder, (iii) the rights of the REITSub-Trust to enforce remedies against the Administrator under theAdministration Agreement with respect to the REIT Mortgage Loans (provided thatthe REIT Sub-Trust retains the right to give instructions and directions to theAdministrator thereunder), against MortgageIT Holdings, as a seller, under theLoan Sale Agreement and against MortgageIT Holdings, as a Depositor, under theTrust Agreement, (iv) all present and future claims, demands, causes and chosesin action in respect of the foregoing, and (v) all proceeds of the foregoing ofevery kind and nature whatsoever, including, without limitation, all proceedsof the conversion thereof, voluntary or involuntary, into cash or other liquidproperty, all cash proceeds, accounts receivable, notes, drafts, acceptances,chattel paper, checks, deposit accounts, rights to payment of any and everykind and other forms of obligations and receivables, instruments and otherproperty that at any time constitute all or part of or are included in theproceeds of the foregoing.

 

“REIT UBS Cash Sub-Account” shall mean thesub-trust account of the UBS Cash Account established and maintained by theREIT Sub-Trust at UBS under the conditions set forth in Section 12.16 ofthe Trust Agreement.

 

“Release Payment” shall mean the funds referredto in a Warehouse Lender’s Release or Trust’s Release, as applicable.

 

“REO Disposition” shall mean the final sale bythe Servicer of any REO Property.

 

“REO Disposition Proceeds” shall mean allamounts received with respect to an REO Disposition pursuant to Section 4.14 ofthe TRS Servicing Agreement.

 

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“REO Property” shall mean a Mortgaged Propertyacquired by the Servicer on behalf of the Trust and the Agent (for the benefitof the Agent, the Purchasers and the Noteholders) as a result of theliquidation of a Mortgage Loan.

 

“Reportable Event” shall mean events that havebeen exempted from the reporting requirements thereunder by an exemption ofgeneral applicability issued by the Secretary of Labor under Section 110 ofERISA.

 

“Reporting Date” shall mean the Payment Date.

 

“Repurchase” shall mean, with respect to anyMortgage Loan, the transaction by which the Trust remits the Repurchase Priceto UBS and simultaneously UBS purchases the Mortgage Loan with a netting offunds resulting, governed by the terms of the applicable UBS Purchase Program.

 

“Repurchase Amount” shall mean, with respect toa Mortgage Loan to be repurchased pursuant to the Loan Sale Agreement, arepurchase price equal to the sum of the principal balance of such Mortgage asof the date of its purchase thereunder by the related Sub-Trust, plus allaccrued and unpaid interest on such principal balance computed, at the relatedinterest rate, plus the amount of any unreimbursed Servicing Advances made bythe related Servicer with respect to such Mortgage Loan, less any reductions inthe principal balance of such Mortgage Loan previously remitted in accordancewith the related Servicing Agreement, which repurchase price shall be eitherremitted directly to the Agent or deposited in the Blocked Account or anycollection or custodial account maintained by GMAC as sub-servicer (asappropriate) not later than the Business Day after any Seller learns that therepurchase is required, after deducting therefrom any amounts received inrespect of such repurchased Mortgage Loan or Mortgage Loans and being held inthe Blocked Account or any collection or custodial account maintained by GMACas sub-servicer for future payment to the extent such amounts have not yet beenapplied to principal or interest on such Mortgage Loan.

 

“Repurchase Date” shall mean, with respect toany Mortgage Loan, the date that the Trust remits the Repurchase Price to UBS.

 

“Repurchase Price” shall mean, with respect toeach Mortgage Loan, an amount equal to the Purchase Price plus the CustodialFee plus the product of the Purchase Price of the Mortgage Loan, thePass-Through Rate and the number of calendar days from the Purchase Date to theRepurchase Date divided by 360.

 

“Request for Certification” shall mean a reportdetailing Loan Identification Data supplied by MortgageIT or MortgageITHoldings to UBS, transmitted by UBS to Custodian either via facsimile in theform of Exhibit E to the Custodial Agreement or transmitted electronically inan appropriate data layout, regarding all Mortgage Loans being offered for saleor being pledged by Trust to UBS.

 

“Request for Mortgage Loan Shipment” shall meannotification provided by the Trust to UBS via facsimile transmission in theform of Exhibit Q to the Loan Repurchase Agreement, which presents MortgageLoans to be delivered by UBS to Freddie Mac.

 

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“Request for Note Purchase” shall have themeaning provided in Section 3.09(a) of the Note Purchase Agreement.

 

“Required Investors” shall have the meaninggiven to such term in Section 12.04 of the Note Purchase Agreement.

 

“Requirement of Law” shall mean as to anyPerson, the certificate of incorporation and by-laws or other organizational orgoverning documents of such Person, and any law, treaty, rule or regulation ordetermination of an arbitrator or a court or other Governmental Authority, ineach case applicable to or binding upon such Person or any of its property orto which such Person or any of its property is subject.

 

“Residential Dwelling” shall mean, except asexcluded below, any one of the following:

 

a one family dwelling, either attached or detached; or

 

a two to four family dwelling; or

 

a one family dwelling unit in a condominium projectthat meets the eligibility requirements of Fannie Mae; or

 

a one family dwelling, either attached or detached, ina planned unit development; or

 

a manufactured home recognized as a real property.

 

“RESPA” shall mean the Real Estate SettlementProcedures Act, as amended from time to time.

 

“Responsible Officer” shall mean, as to any Personother than the Owner Trustee, the chief executive officer or the chieffinancial officer of such Person, and as to the Trust, shall also mean any ofthe Designated Agents.  With respect tothe Owner Trustee, “Responsible Officer” shall have the meaning given to suchterm in the Trust Agreement.

 

“Rewarehousing Loan Purchase Detail” shall meana loan purchase detail, prepared and submitted by a Sub-Trust to UBS viaelectronic transmission containing the information specified on Exhibit B ofthe Loan Repurchase Agreement or Exhibit H of the Note Purchase Agreement, asapplicable (as such information may be amended from time to time by notice fromUBS to such Sub-Trust), in a form acceptable to UBS, regarding thecharacteristics of a Mortgage Loan being offered for sale by, such Sub-Trust toUBS under a Rewarehousing Transaction.

 

“Rewarehousing Transaction” shall mean any saleof a Mortgage Loan by a Sub-Trust to UBS structured as a Dry Funding whereinUBS wires the Disbursement Amount pursuant to the Warehouse Lender’s WireInstructions or Trust’s Wire Instructions, as applicable, and, with respect toa TRS Mortgage Loan, subject to an obligation of the TRS Sub-Trust torepurchase such Mortgage Loan pursuant to the Loan Repurchase Agreement.

 

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“Re-warehouse Lender” shall mean any lenderproviding financing (including repurchase facilities) to either MortgageIT orMortgageIT Holdings, in any fractional amount for the purpose of originating orpurchasing Mortgage Loans, which lender has a security interest in suchMortgage Loans as collateral for the obligations of such correspondent to suchlender; provided, however, that the Re-warehouse Lender shall notinclude UBS.

 

“Re-warehouse Lender’s Release” shall mean aletter, substantially in the form of Exhibit E-3 to the Note PurchaseAgreement (or such other form acceptable to UBS), from a Re-warehouse Lender toUBS, conditionally releasing all of such Re-warehouse Lender’s right, title andinterest in certain Mortgage Loans identified therein upon receipt of paymentby such Re-warehouse Lender.

 

“Second Mortgage Loan” shall mean a MortgageLoan which constitutes a second priority mortgage lien with respect to therelated Mortgaged Property.

 

“Second Mortgage Sub-Limit” shall have themeaning given to such term in the Pricing Side Letter.

 

“Secured Obligations” shall have the meaningprovided in Section 5.01(c) of the Note Purchase Agreement.

 

“Securities Act of 1933”, “Securities Act”or “1933 Act” shall mean the Securities Act of 1933, as amended.

 

“Securities Intermediary” shall have themeaning given to such term in Section 8-102(a)(14) of the UniformCommercial Code.

 

“Security” shall mean a modified pass-throughmortgage-backed participation certificate, evidenced by a book-entry creditmade by a Securities Intermediary that is a participant of the Federal ReserveBank of New York, issued and guaranteed, with respect to timely payment ofinterest and ultimate payment of principal, by Freddie Mac and backed by a poolof Mortgage Loans, in substantially the principal amount and with substantiallythe other terms as specified with respect to such Security in the relatedTakeout Commitment, if any.

 

“Security Agreement” shall mean, with respectto any Cooperative Loan, the agreement between the owner of the relatedCooperative Ownership Interest and the originator of the related Mortgage Notethat defines the terms of the security interest in such Cooperative OwnershipInterest and the related Proprietary Lease, which shall include any riders,addenda, assumption agreements, or modifications relating thereto.

 

“Servicing Termination Events” shall have themeaning given to such term in Section 4(d) of the Loan ParticipationAgreement.

 

“Servicing Transfer Date” shall mean theeffective date of transfer of servicing from the REIT Servicer to a successorservicer, as provided in Section 10 of the REIT Servicing Agreement.

 

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“Senior Lien” shall mean, with respect to anySecond Mortgage Loan, the first priority mortgage lien with respect to therelated Mortgaged Property.

 

“Servicer” shall mean the TRS Servicer, withrespect to the TRS Mortgage Loans, and the REIT Servicer, with respect to theREIT Mortgage Loans (and collectively, the “Servicers”).

 

“Servicing Advance” shall have the meaninggiven to such term in the TRS Servicing Agreement, with respect to the TRSMortgage Loans, and the REIT Servicing Agreement, with respect to the REITMortgage Loans.

 

“Servicing Agreement” shall mean the REITServicing Agreement or the TRS Servicing Agreement, as applicable (andcollectively, the “Servicing Agreements”).

 

“Servicing Compensation” shall mean theServicing Fee and other amounts of additional servicing compensation to whichthe REIT Servicer is entitled pursuant to Section 5.01 of the REIT ServicingAgreement.

 

“Servicing Fee” shall mean with respect to eachREIT Mortgage Loan and for any calendar month, an amount equal to one monthinterest (or in the event of any payment of interest which accompanies aPrincipal Prepayment in full or in part made by the Mortgagor during suchcalendar month, interest for the number of days covered by such payment ofinterest) at the Servicing Fee Rate on the same principal amount on whichinterest on such REIT Mortgage Loan accrues for such calendar month.

 

“Servicing Fee Rate” shall have the meaninggiven to such term in the REIT Servicing Agreement.

 

“Servicing File” shall mean, with respect toeach TRS Mortgage Loan, the file retained by the TRS Servicer consisting oforiginals or copies of all Mortgage Loan Documents from the Mortgage File.

 

“Servicing Officer” shall mean any officer ofthe Servicer involved in or responsible for, the administration and servicingof the Mortgage Loans whose name appears on a list of servicing officersfurnished by the Servicer to the Trust upon request, as such list may from timeto time be amended.

 

“Servicing Records” shall have the meaning asset forth in the Servicing Agreement.

 

“Servicing Rights” shall mean any and all ofthe following: (a) any and all rights to service the Mortgage Loans; (b) anypayments to or monies received by any Person for servicing the Mortgage Loans;(c) any late fees, penalties or similar payments with respect to the MortgageLoans; (d) all agreements or documents creating, defining or evidencing anysuch servicing rights to the extent they relate to the Mortgage Loans and allrights of such Person thereunder; (e) escrow payments or other similar paymentswith respect to the Mortgage Loans and any amounts actually collected by suchPerson (through the Servicer or otherwise) with

 

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respect theretosubject to any superior right to such funds held by the Mortgagor; and (f) allaccounts and other rights to payment related to any of the Mortgage Loans.

 

“Servicing Transfer Date” shall have themeaning given to such term in the TRS Servicing Agreement, with respect to theTRS Mortgage Loans, and the REIT Servicing Agreement, with respect to the REITMortgage Loans.

 

“Settlement Date” shall mean the date specifiedin a Takeout Commitment upon which the related Security is scheduled to bedelivered, against payment, to the specified Takeout Investor.

 

“Settlement Information” shall mean thePurchase Advice or group of Purchase Advices which shall identify each MortgageLoan by the Mortgagor’s name, and of which the aggregate disbursement amountequals the precise dollar amount of Takeout Proceeds to be received by UBSunder the Loan Purchase Agreement and, when applicable, a Takeout ProceedsIdentification Letter.

 

“Single Employer Plan” shall mean as to anyPerson any Plan of such Person which is not a Multiemployer Plan.

 

“Spread Fee Rate” shall mean (i) at any timeafter the occurrence of and during the continuation of a Default or an Event ofDefault, a rate per annum equal to 6% and (ii) at any other time, a rate perannum equal to 2%.

 

“Standard & Poor’s” or “S&P”shall mean Standard & Poor’s Ratings Services, a Division of McGraw-Hill,Inc., or its successor-in-interest.

 

“Statutory Trust Statute” shall have themeaning given to such term in Section 2.1 of the Trust Agreement.

 

“Strict Compliance” shall mean the complianceof MortgageIT and the Mortgage Loans subject to the Loan ParticipationAgreement with the requirements of the Freddie Mac Guide and as amended by anyagreements between the TRS Sub-Trust and Freddie Mac, sufficient to enableMortgageIT to issue and Freddie Mac to issue and guarantee a Security, providedthat until copies of any such agreements between MortgageIT and Freddie Machave been provided to UBS by MortgageIT, such agreements shall be deemed, asbetween the TRS Sub-Trust and UBS, not to amend the requirements of the FreddieMac Guide.

 

“Submission Package” shall mean, with respectto each Mortgage Loan, a Dry Submission Package, a Cash Window SubmissionPackage, a Conduit Submission Package or a Conversion Submission Package, asapplicable.

 

“Subsidiary” shall mean, with respect to anyPerson, any corporation, partnership or other entity of which at least amajority of the securities or other ownership interests having by the termsthereof ordinary voting power to elect a majority of the board of directors orother persons performing similar functions of such corporation, partnership orother entity (irrespective of whether or not at the time securities or otherownership interests of any other class or classes of such corporation,partnership or other entity shall have or might have voting power by reason

 

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of the happeningof any contingency) is at the time directly or indirectly owned or controlledby such Person or one or more Subsidiaries of such Person or by such Person andone or more Subsidiaries of such Person.

 

“Sub-Trust” shall have the meaning set forth inSection 2.1 of the Trust Agreement and shall pertain to either the REITSub-Trust or the TRS Sub-Trust.

 

“Sub-Trust Estate” shall mean either the REITTrust Estate or the TRS Trust Estate, as applicable.

 

“Successor Servicer” shall mean an entity withthe necessary Agency Approvals, as the circumstances may require, anddesignated by UBS, in accordance with the applicable Servicing Agreement, toreplace GMAC Mortgage Corporation as REIT Servicer under the REIT ServicingAgreement and/or to replace MortgageIT as the TRS Servicer under the TRSServicing Agreement.

 

“Supplemental Amount” shall mean, with respectto each Mortgage Loan, an amount equal to (i) the Disbursement Amount less (ii)the Purchase Price or the amount of the related Note Purchase, as applicable.

 

“Takeout Commitment” shall mean a commitment bya Takeout Investor in connection with a sale or securitization of one or moreMortgage Loans or Securities. MortgageIT, as Administrator, shall do or cause to be done any and allthings necessary and desirable in order to execute each Takeout Commitment,pursuant and subject to the terms of the Administration Agreement.

 

“Takeout Investor” shall mean a Person who hasentered into an agreement with MortgageIT to purchase one or more MortgageLoans on its own behalf or on behalf of a securitization trust or othersecuritization vehicle.

 

“Takeout Proceeds” shall mean the amount offunds Takeout Investor pays to UBS on a particular Business Day as identifiedby the related Settlement Information; provided,that the amount of such payment shall be calculated without regard to anyset-off, counterclaim or any other adjustment resulting from transactionsbetween MortgageIT and the Takeout Investor.

 

“Takeout Proceeds Identification Letter” shallmean a letter in the form of Exhibit K, delivered by the Administrator toUBS identifying Takeout Proceeds received UBS from an Agency or TakeoutInvestor which funds do not relate to Mortgage Loans purchased by UBS from theTrust.

 

“Tangible Net Worth” shall mean, with respectto any Person, as of a particular date,

 

(a)           allamounts which would be included under capital on a balance sheet of such Personat such date, determined in accordance with GAAP, less

 

(b)           (i)            all amounts owing to such Personfrom Affiliates thereof, and

 

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(ii)           intangible assets.

 

“Tax Return” shall have the meaning given tosuch term in Section 5.6 of the Trust Agreement.

 

“Tax Service Contract” shall mean apaid-in-full, life-of-loan tax service contract with Fidelity National TaxService or another tax service provider acceptable to the Majority Investors intheir sole discretion (exercised in good faith) with respect to a MortgageLoan.

 

“Termination Date” shall mean August 3, 2005.

 

“Test Period” shall have the meaning given tosuch term in Section 8.12 of the Note Purchase Agreement.

 

“Title Insurance Company” shall mean a titleinsurance company acceptable to UBS (from a list to be furnished by the Trust)in its sole discretion.

 

“Total Indebtedness” shall mean, for any Personand for any period, the aggregate Indebtedness of such Person during suchperiod less the amount of any nonspecific balance sheet reserves maintained inaccordance with GAAP.

 

“Trade Assignment” shall mean a lettersubstantially in the form of Exhibit B to the Loan ParticipationAgreement.

 

“Trade Price” shall mean the trade pricespecified in a Takeout Commitment at which a Takeout Investor is obligated topurchase the Security specified in such Takeout Commitment.

 

“Trade Principal” shall mean, with respect toany Mortgage Loan, the outstanding principal balance of the Mortgage Loanmultiplied by a percentage equal to the Trade Price.

 

“Transaction Documents” shall mean the NotePurchase Agreement, the Notes, the Custodial Agreement, the Loan SaleAgreement, the Originator’s Loan Sale Agreement, the Trust Agreement, theServicing Agreements, the Administration Agreement, the Pricing Side Letter,the Loan Participation Agreement, the Loan Purchase Agreement, the LoanRepurchase Agreement and the Electronic Tracking Agreement.

 

“Transaction” shall mean any sale of a TRSMortgage Loan by the TRS Sub-Trust to UBS pursuant to a Funding Confirmationunder the Loan Repurchase Agreement or Loan Purchase Agreement, as applicable.

 

“Transfer” shall mean any direct or indirecttransfer or other form of assignment of any Owner Trust Certificate.

 

“TRS Certificates” shall mean the certificatesevidencing beneficial ownership interest in the TRS Sub-Trust Estate issuedhereunder.

 

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“TRS Collateral” shall mean each of thefollowing items or types of property, whether now owned or hereafter acquired,now existing or hereafter created and wherever located:  TRS Mortgage Loans, all mortgage loandocuments (including, without limitation, all promissory notes, all servicingrecords, servicing agreements and any other collateral pledged or otherwiserelating to such TRS Mortgage Loans), together with all files, documents,instruments, surveys, certificates, correspondence, appraisals, computerprograms, computer storage media, accounting records and other books andrecords relating thereto, all mortgage guaranties and insurance (issued bygovernmental agencies or otherwise) and any mortgage insurance certificate orother document evidencing such mortgage guaranties or insurance relating to anyTRS Mortgage Loan, the Participation Certificates, the Securities issued ascontemplated by the Loan Purchase Agreement and all proceeds thereof, allServicing Rights relating to the TRS Mortgage Loans, any servicing accountsestablished pursuant to any servicing agreement and all amounts on deposittherein, from time to time, all purchase agreements (including the Loan SaleAgreement) or other agreements or contracts relating to, constituting, orotherwise governing, any or all of the foregoing to the extent they relate tothe TRS Mortgage Loans including the right to receive principal and interestpayments with respect to the TRS Mortgage Loans and the right to enforce suchpayments, the TRS UBS Cash Sub-Account and all monies from time to time ondeposit in the TRS UBS Cash Sub-Account, the Blocked Account and any otheraccount under the TRS Servicing Agreement, the Takeout Commitments, all“general intangibles,” “accounts,” “chattel paper” and “investment property” asdefined in the UCC relating to or constituting any and all of the foregoing,and any and all replacements, substitutions, distributions on or proceeds ofany and all of the foregoing, free and clear of all adverse claims.

 

“TRS Mortgage Loans” shall mean the MortgageLoans sold by MortgageIT to the TRS Sub-Trust under the Loan Sale Agreement,which may become subject to the terms of the Loan Repurchase Agreement, theLoan Purchase Agreement and/or the Loan Participation Agreement.

 

“TRS Related Limited Recourse Obligations”shall mean the obligation of MortgageIT to fund any deficiency in amounts duefrom the Trust on behalf of the TRS Sub-Trust and not paid timely when so dueby the Trust on behalf of the TRS Sub-Trust, as a result of the creditperformance of any TRS Mortgage Loan or as a result of any market movement.

 

“TRS Related Obligation” shall mean any TRSRelated Recourse Obligation, any TRS Related Limited Recourse Obligation andany TRS Related Trust Obligation.

 

“TRS Related Recourse Obligation” shall meanany obligation of the Trust on behalf of the TRS Sub-Trust, or any obligationof MortgageIT, which relates to a liability arising from a breach of anyrepresentation, warranty or covenant relating to the TRS Mortgage Loans, theservicing thereof, or MortgageIT, including any related indemnification orreimbursement obligations, as well as any obligation to pay or reimburse anyparty for such party’s fees or expenses. No deficiencies arising as a result of the credit performance of any TRSMortgage Loan or as a result of any market movement shall be a “TRS RelatedRecourse Obligation”.

 

“TRS Related Trust Obligation” shall mean anyobligation of the TRS Sub-Trust.

 

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“TRS Servicer” shall mean MortgageIT, in itscapacity as TRS Servicer under the TRS Servicing Agreement.

 

“TRS Servicing Agreement” shall mean that certainservicing agreement dated as of August 4, 2004, by and among the TRS Servicer,the TRS Sub-Trust and UBS, as amended, supplemented or otherwise modified fromtime to time.

 

“TRS Sub-Trust” shall mean the series (as suchterm is used in Section 3806(b)(2) of the Statutory Trust Statute) of the Trustwhose corpus consists of the TRS Trust Estate and alternatively, as the contextmay require, a reference to “the TRS Sub-Trust” shall mean the Trust actingwith respect to such series.

 

“TRS Trust Estate” shall mean the corpus of thetrust created as of the Closing Date and to be administered hereunder,consisting of (i) all the right, title and interest of the TRS Sub-Trust in andto the TRS Mortgage Loans and all distributions thereon after the Closing Date,(ii) all the right, title and interest of the TRS Sub-Trust in and to the TRSServicing Agreement and any accounts created thereunder and under the BlockedAccount Agreement, (iii) the rights of the TRS Sub-Trust to enforce remediesagainst the Administrator under the Administration Agreement with respect tothe TRS Mortgage Loans (provided that the TRS Sub-Trust retains the right togive instructions and directions to the Administrator thereunder), againstMortgageIT, as a Seller, under the Loan Sale Agreement and against MortgageIT,as a Depositor, under the Trust Agreement, (iv) all present and future claims,demands, causes and choses in action in respect of the foregoing, and (v) allproceeds of the foregoing of every kind and nature whatsoever, including,without limitation, all proceeds of the conversion thereof, voluntary orinvoluntary, into cash or other liquid property, all cash proceeds, accountsreceivable, notes, drafts, acceptances, chattel paper, checks, depositaccounts, rights to payment of any and every kind and other forms ofobligations and receivables, instruments and other property that at any timeconstitute all or part of or are included in the proceeds of the foregoing.

 

“TRS UBS Cash Sub-Account” shall mean thesub-trust account of the UBS Cash Account established and maintained by the TRSSub-Trust at UBS under the conditions set forth in Section 12.16 of theTrust Agreement.

 

“Trust” shall mean MortgageIT SPV I, a Delawarestatutory trust, established under the Trust Agreement.

 

“Trust Agent” shall mean any agent or attorneyof the Owner Trustee or the Trust appointed by the Owner Trustee to execute oneor more of the trust or powers hereunder, and shall include the Administrator.

 

“Trust Agreement” shall mean the TrustAgreement dated as of August 4, 2004, between MortgageIT, MortgageIT Holdings,and Wilmington Trust Company, as Owner Trustee, as amended, supplemented orotherwise modified from time to time.

 

“Trust Documents” shall mean, collectively, theTrust Agreement, the Owner Trust Certificates, the Note Purchase Agreement, theNote, the Custodial Agreement, the Servicing Agreements, the Loan SaleAgreement, the Originator’s Loan Sale Agreement, the Loan Purchase Agreement,the Loan Repurchase Agreement, the Loan Participation Agreement,

 

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the BlockedAccount Agreement, the Electronic Tracking Agreement, the Pricing Side Letterand the Administration Agreement, as each of them may be amended, supplementedor otherwise modified from time to time.

 

“Trust Estate” shall mean, collectively, theREIT Trust Estate and the TRS Trust Estate.

 

“Trust’s Release” shall have the meaning givento such term in the Note Purchase Agreement, the Loan Repurchase Agreement, theLoan Purchase Agreement or the Custodial Agreement, as applicable.

 

“Trust’s Wire Instructions” shall have themeaning given to such term in the Loan Repurchase Agreement, the Loan PurchaseAgreement or the Custodial Agreement, as applicable.

 

“UBS” shall mean UBS Real Estate SecuritiesInc. and its successors.

 

“UBS Cash Account” shall mean a separate cashaccount held by UBS under the conditions set forth in Section 12.16 of theTrust Agreement, which shall consist of the REIT UBS Cash Sub-Account and theTRS UBS Cash Sub-Account.

 

“UBS Cash Account Adjustment” shall mean anadjustment to the UBS Cash Account Balance pursuant to a UBS Cash AccountAdjustment Notice.

 

“UBS Cash Account Adjustment Notice” shall meanthe cash account adjustment notice, in the form of Exhibit L to the NotePurchase Agreement to be used by UBS to notify the related Sub-Trust of anyadjustments to the UBS Cash Account Balance.

 

“UBS Cash Account Balance” shall mean as of anydate, the net amount of funds in the REIT UBS Cash Sub-Account or the TRS UBSCash Sub-Account, as applicable, on such date.

 

“UBS Cash Account Interest Accrual” shall meanthe simple interest calculation posted on the last Business Day of each monthresulting from the product of each Business Day’s UBS Cash Account Balance andUBS Cash Account Interest Rate.

 

“UBS Cash Account Interest Rate” shall meanwith respect to each month, the average opening federal funds rate for suchmonth or such other rate agreed to by the Trust and UBS.  The opening federal funds rate on a BusinessDay shall be counted as the UBS Cash Account Interest Rate until the nextBusiness Day.

 

“UBS Purchase Program” shall mean UBS’s ConduitFunding Program or MBS Swap Funding Program, as applicable.

 

“UBS’s Payment” shall mean the amount set forthon the Request for Certification in the “RELEASE PAYMENT” column.

 

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“UBS’s Wire Instructions to Custodian” shallmean the wire instructions delivered by UBS to Custodian, in the form ofExhibit I-2 to the Custodial Agreement, executed by UBS, receipt of which hasbeen acknowledged by Custodian specifying the wire address where all fundsreceived in accordance with UBS’s Wire Instructions to Trust shall betransferred by Custodian.

 

“UBS’s Wire Instructions to Trust” shall meanthe wire instructions, set forth on Exhibit I-1 to the Custodial Agreement,specifying the account which shall be used for the payment of all amounts dueand payable by a Sub-Trust to UBS hereunder.

 

“UCC Financing Statement” shall mean afinancing statement executed and filed pursuant to the Uniform Commercial Code,as in effect in the relevant jurisdiction.

 

“Underwriter” shall mean any party, includingbut not limited to a mortgage loan pool insurer, who underwrites a MortgageLoan prior to its purchase by UBS.

 

“Underwriter’s Form” shall mean a Fannie Mae /Freddie Mac Form 1008/1077, HUD 92900WS, HUD92900.4, VA Form 26-6393, VA Form26-1866, or a mortgage loan pool insurance certificate, as applicable,completed by an Underwriter with respect to a Mortgage Loan, indicating thatsuch Mortgage Loan complies with its underwriting requirements.

 

“Underwriting Guidelines” shall mean theunderwriting guidelines delivered by MortgageIT to UBS on or prior to the datehereof and as may be supplemented from time to time thereafter.

 

“Unidentified/Suspension Mortgage Loan Directive”shall mean a Delivery Directive or a Hold Directive, as applicable.

 

“Unidentified Mortgage Loans List” shall mean alist of Mortgage Loans for which Custodian has received the related SubmissionPackages from Trust, MortgageIT or MortgageIT Holdings but which have not beenidentified by UBS in a Request for Certification.  Such list shall include, with respect to each Mortgage Loan, theinformation set forth in Exhibit L to the Custodial Agreement.

 

“Uniform Commercial Code” shall mean theUniform Commercial Code as in effect in any applicable jurisdiction.

 

“United States Person” shall mean a citizen orresident of the United States, a corporation, partnership or other entitycreated or organized in, or under the laws of, the United States or anypolitical subdivision thereof (except, in the case of a partnership, to theextent provided in regulations), or an estate whose income is subject to UnitedStates federal income tax regardless of its source, or a trust other than a“foreign trust” within the meaning of Section 7701(a)(31) of the Code.

 

“Voting Rights” shall mean, with respect toeach Sub-Trust, that portion of the voting rights of all Owner TrustCertificates for such Sub-Trust which is allocated to any particular OwnerTrust Certificate based on the percentage interest of such Owner TrustCertificate out of the total interests in such Sub-Trust.

 

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“VA” shall mean the Department of VeteransAffairs or any successor thereto.

 

“Warehouse Gestation Lender” shall mean, withrespect to each MERS Designated Mortgage Loan, the Person named on the MERS®System as the warehouse gestation lender pursuant to the MERS ProceduresManual.

 

“Warehouse Lender” shall mean any lenderproviding financing (including repurchase facilities) to either MortgageIT orMortgageIT Holdings in any fractional amount for the purpose of originating orpurchasing Mortgage Loans, which lender has a security interest in suchMortgage Loans as collateral for the obligations of MortgageIT or MortgageITHoldings to such lender; provided, however, that the WarehouseLender shall not include UBS.

 

“Warehouse Lender’s Release” shall have themeaning given to such term in any of the Facility Agreements or the CustodialAgreement, as applicable.

 

“Warehouse Lender’s Wire Instructions” shallhave the meaning given to such term in any of the Facility Agreements or theCustodial Agreement, as applicable.

 

“Warehousing Transaction” shall mean any saleof a Mortgage Loan by the REIT Sub-Trust to the Agent structured as a wetfunding wherein the Agent wires the purchase price of each Note Purchase in theform of immediately available funds to the account(s) identified by the REITSub-Trust in the related Request for Note Purchase for the payoff to aWarehouse Lender.

 

“Wet Funding” shall mean a Closing Transactioninitiated by the delivery by a Sub-Trust, either via electronic or facsimiletransmission to UBS, of a Closing Loan Purchase Detail and a pledge by suchSub-Trust to UBS to deliver to Custodian a Dry Submission Package or ConduitSubmission Package by the Scheduled Collateral Receipt Date.

 

“Wet-Ink Funding Detail” shall mean a Wet-InkFunding Detail, prepared by the REIT Sub-Trust and delivered by the Trust tothe Agent via electronic transmission containing all information specified on ExhibitH to the Note Purchase Agreement (as such information may be amended fromtime to time by notice from the Agent to the Trust) in a form acceptable to theAgent, regarding the characteristics of a Mortgage Loan which is proposed to befunded as a Wet-Ink Mortgage Loan on or as of the Desired Funding Date.

 

“Wet-Ink Sub-Limit” shall have the meaningascribed to such term in the Pricing Side Letter.

 

“Wet Mortgage Loan” or “Wet-Ink MortgageLoan” shall mean a Mortgage Loan for which Custodian, on behalf of UBS,does not have physical possession of the related complete Submission Packageand which the related Sub-Trust has agreed to sell to UBS all right, title andinterest in, to and under such Mortgage Loan, free and clear of all Liens,pledges, charges, encumbrances or security interests of any nature pursuant tothe Loan Repurchase Agreement or to pledge to the Agent for the benefit of theAgent and the Noteholders pursuant to Section 3.09(e) of the Note PurchaseAgreement.

 

“Whole Loan Purchase Program” shall mean aprogram pursuant to the terms of the Custodial Agreement and the LoanRepurchase Agreement.

 

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“Wire Fee” shall mean with respect to eachdisbursement relating to a Closing Transaction under the Loan RepurchaseAgreement or the Note Purchase Agreement or a Transaction under the LoanPurchase Agreement, as applicable, a fee payable to UBS by the relatedSub-Trust as set forth in the Funding Confirmation.

 

“Withdrawal/Deposit Notice” shall have themeaning given to such term in the Note Purchase Agreement, the Loan RepurchaseAgreement or the Loan Purchase Agreement, as applicable.

 

“Yield Compensation Adjustment” shall have themeaning given to such term in the Loan Purchase Agreement or the LoanParticipation Agreement, as applicable.

 

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Schedule 2

 

REPRESENTATIONSAND WARRANTIES

 

PRIME; 1st and 2nd Liens

MortgageIT represents andwarrants to the TRS Sub-Trust, with respect to each TRS Mortgage Loan and as ofthe related Purchase Date, and MortgageIT Holdings represents and warrants tothe REIT Sub-Trust, with respect to each REIT Mortgage Loan and as of therelated Note Purchase Date, that:

 

(i)                    Mortgage Loans asDescribed.  The Mortgage Loan andthe related Funding Confirmation conform to the terms of this Agreement and therepresentations and warranties set forth herein are, and the Loan PurchaseDetail is, complete, true and correct in all respects;

 

(ii)                   Payments Current.  All payments required to be made up to therelated Purchase Date or Note Purchase Date, as applicable, for the MortgageLoan under the terms of the Mortgage Note have been made and credited.  No payment required under the Mortgage Loanis delinquent.  With respect to eachMonthly Payment since origination of the related Mortgage Loan, such MonthlyPayment shall be made with respect to the Mortgage Loan on or within 30 days ofits Due Date, all in accordance with the terms of the related Mortgage Note;and there has been no delinquency, exclusive of any period of grace, in anypayment by the Mortgagor thereunder during the last twelve months;

 

(iii)                  No Outstanding Charges.  There are no defaults in complying with theterms of the Mortgage securing the Mortgage Loan, and all taxes, governmentalassessments, insurance premiums, water, sewer and municipal charges, leaseholdpayments or ground rents which previously became due and owing have been paid,or an escrow of funds has been established in an amount sufficient to pay forevery such item which remains unpaid and which has been assessed but is not yetdue and payable.  Except for (A) paymentsin the nature of escrow payments and (B) interest accruing from the date of theMortgage Note or date of disbursement of the Mortgage Loan proceeds, whicheveris greater to the day which precedes by one month the Due Date of the firstinstallment of principal and interest, including, without limitation, taxes andinsurance payments, neither Seller has not advanced funds, or induced,solicited or knowingly received any advance of funds by a party other than theMortgagor, directly or indirectly, for the payment of any amount required underthe Mortgage Loan, except for interest accruing from the date of the MortgageNote or date of disbursement of the Mortgage Loan proceeds, whichever isearlier, to the day which precedes by one month the Due Date of the firstinstallment of principal and interest;

 

(iv)                  Original Terms Unmodified.  The terms of the Mortgage Note and Mortgagehave not been impaired, waived, altered or modified in any respect, except by awritten instrument which has been recorded, if necessary to protect theinterests of the Trust and which has been delivered to the Trust.  The substance of any such waiver, alterationor modification has been approved by the title insurer, to the extent requiredby the policy, and its terms are reflected on the Funding Confirmation.  No Mortgagor has been released, in whole orin part, except in

 

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connection with an assumption agreement approved bythe title insurer, to the extent required by the policy, and which assumptionagreement is part of the Credit File delivered to the Trust and the terms ofwhich are reflected in the Funding Confirmation;

 

(v)                   No Defenses.  The Mortgage Loan is not subject to anyright of rescission, set-off, counterclaim or defense, including, withoutlimitation, the defense of usury, nor will the operation of any of the terms ofthe Mortgage Note or the Mortgage, or the exercise of any right thereunder,render either the Mortgage Note or the Mortgage unenforceable, in whole or inpart, or subject to any right of rescission, set-off, counterclaim or defense,including, without limitation, the defense of usury, and no such right ofrescission, set-off, counterclaim or defense has been asserted with respectthereto, and no Mortgagor was a debtor in any state or federal bankruptcy orinsolvency proceeding at, or subsequent to, the time the Mortgage Loan wasoriginated;

 

(vi)                  Hazard Insurance.  Pursuant to the terms of the Mortgage, allbuildings or other improvements upon the Mortgaged Property are insured by a aninsurer acceptable to Fannie Mae and Freddie Mac against loss by fire, hazardsof extended coverage and such other hazards as are customary in the area wherethe Mortgaged Property is located pursuant to insurance policies conforming tothe requirements of Fannie Mae and Freddie Mac in an amount not less than thegreatest of (i) 100% of the replacement cost of all improvements to theMortgaged Property, (ii) the outstanding principal balance of the MortgageLoan, or (iii) the amount necessary to avoid the operation of any co-insuranceprovisions with respect to the Mortgaged Property, and consistent with theamount that would have been required as of the date of origination inaccordance with that required by Fannie Mae and Freddie Mac.  If the Mortgaged Property is in an areaidentified in the Federal Register by the Federal Emergency Management Agencyas having special flood hazards (and such flood insurance has been madeavailable) a flood insurance policy meeting the requirements of the currentguidelines of the Federal Flood Insurance Administration is in effect whichpolicy conforms to the requirements of Fannie Mae and Freddie Mac.  All individual insurance policies contain astandard mortgagee clause naming such Seller and its successors and assigns asmortgagee, and all premiums thereon have been paid and such policies may not bereduced, terminated or cancelled without 30 days’ prior written notice to themortgagee.  The Mortgage obligates theMortgagor thereunder to maintain the hazard insurance policy at the Mortgagor’scost and expense, and on the Mortgagor’s failure to do so, authorizes theholder of the Mortgage to obtain and maintain such insurance at suchMortgagor’s cost and expense, and to seek reimbursement therefor from theMortgagor.  Where required by state lawor regulation, the Mortgagor has been given an opportunity to choose thecarrier of the required hazard insurance, provided the policy is not a “master”or “blanket” hazard insurance policy covering the common facilities of aplanned unit development.  The hazardinsurance policy is the valid and binding obligation of the insurer, is in fullforce and effect, and will be in full force and effect and inure to the benefitof the Trust upon the consummation of the transactions contemplated by thisAgreement.  Such Seller has not engagedin, and has no knowledge of the Mortgagor’s or any subservicer’s having engagedin, any act or omission which would impair the coverage of any such policy, thebenefits of the endorsement provided for therein, or the validity and bindingeffect of either, including, without limitation, no unlawful fee, commission,kickback or other unlawful compensation or value of any kind has been or willbe received, retained or realized by any attorney, firm or other Person, and nosuch unlawful items have been received, retained or realized by such Seller;

 

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(vii)                 Compliance with ApplicableLaws.  Any and all requirements ofany federal, state or local law, including, without limitation, usury,truth-in-lending, real estate settlement procedures, consumer creditprotection, equal credit opportunity, fair housing, predatory and abusivelending laws, or disclosure laws applicable to the Mortgage Loan have beencomplied with, the consummation of the transaction contemplated hereby will notinvolve the violation of any such laws or regulations and such Seller shallmaintain in its possession, available for the Trust’s inspection, and shalldeliver to Purchaser, upon demand, evidence of compliance with all such requirements;

 

(viii)                No Satisfaction of Mortgage.  The Mortgage has not been satisfied,canceled, subordinated or rescinded, in whole or in part, and the MortgagedProperty has not been released from the lien of the Mortgage, in whole or inpart, nor has any instrument been executed that would effect any such release,cancellation, subordination or rescission. Such Seller has not waived the performance by the Mortgagor of anyaction, if the Mortgagor’s failure to perform such action would cause theMortgage Loan to be in default, nor has such Seller waived any defaultresulting from any action or inaction by the Mortgagor;

 

(ix)                   Location and Type ofMortgaged Property.  The MortgagedProperty is a single parcel of fee simple property or a leasehold estate withrespect to real property located in jurisdictions in which the use of leaseholdestates for residential properties is a widely accepted practice, the realproperty located in the state identified in the Funding Confirmation exceptthat with respect to real property located in jurisdictions in which the use ofleasehold estates for residential properties is a widely-accepted practice, themortgaged property may be a leasehold estate and consists of a single parcel ofreal property with a detached single family residence erected thereon, or atwo- to four-family dwelling, or an individual residential condominium unit ina low-rise condominium project, or an individual unit in a planned unitdevelopment, and that no residence or dwelling is (i) a mobile home or (ii) amanufactured home, except as provided below; provided, however, that anycondominium unit or planned unit development shall meet the eligibilityrequirements of Fannie Mae and Freddie Mac and shall conform with MortgageIT’sunderwriting guidelines. In the case of any Mortgaged Properties that aremanufactured homes (a “Manufactured Home Mortgage Loan”), (i) suchManufactured Home Mortgage Loan conforms with the applicable Fannie Mae orFreddie Mac requirements regarding mortgage loans related to manufactureddwellings, (ii) the related manufactured dwelling is permanently affixed to theland, (iii) the related manufactured dwelling and the related land are subjectto a Mortgage properly filed in the appropriate public recording office andnaming such Seller as mortgagee, (iv) the applicable laws of the jurisdictionin which the related Mortgaged Property is located will deem the manufactureddwelling located on such Mortgaged Property to be a part of the real propertyon which such dwelling is located, and (v) such Manufactured Home Mortgage Loanis (x) a qualified mortgage under Section 860G(a)(3) of the Code and (y)secured by manufactured housing treated as a single family residence underSection 25(e)(10) of the Code.  Noportion of the Mortgaged Property is used for commercial purposes; provided,that Mortgaged Properties which contain a home office shall not be consideredas being used for commercial purposes as long as the Mortgaged Property has notbeen altered for commercial purposes and is not storing any chemicals or rawmaterials other than those commonly used for homeowner repair, maintenanceand/or household purposes;

 

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(x)                    Valid First or SecondLien.  With respect to any MortgageLoan other than a Cooperative Loan, the Mortgage is a valid, subsistingenforceable and perfected first or second lien on the Mortgaged Property,including all buildings on the Mortgaged Property and all installations andmechanical, electrical, plumbing, heating and air conditioning systems locatedin or annexed to such buildings, and all additions, alterations andreplacements made at any time with respect to the foregoing.  The lien of the Mortgage is subject only to:

 

(1)           the lien of current real propertytaxes and assessments not yet due and payable;

 

(2)           covenants, conditions andrestrictions, rights of way, easements and other matters of the public recordas of the date of recording acceptable to prudent mortgage lending institutionsgenerally and specifically referred to in the lender’s title insurance policydelivered to the originator of the Mortgage Loan and (i) referred to orotherwise considered in the appraisal made for the originator of the MortgageLoan or (ii) which do not adversely affect the appraised value of the MortgagedProperty set forth in such appraisal;

 

(3)           other matters to which likeproperties are commonly subject which do not materially interfere with the benefitsof the security intended to be provided by the Mortgage or the use, enjoyment,value or marketability of the related Mortgaged Property; and

 

(4)           with respect to each Second LienMortgage Loan, a prior mortgage lien on the Mortgaged Property.

 

Any security agreement,chattel mortgage or equivalent document related to and delivered in connectionwith the Mortgage Loan establishes and creates a valid, subsisting andenforceable (A) first lien and first priority perfected security interest withrespect to each First Lien Mortgage Loan, or (B) second lien and secondpriority perfected security interest with respect to each Second Lien MortgageLoan, in either case, on the property described therein and such Seller hasfull right to sell and assign the same to the Trust.  The Mortgaged Property was not, as of the date of origination ofthe Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt orother security instrument creating a lien subordinate to the lien of theMortgage; With respect to any Cooperative Loan, the related Security Agreementis a valid, subsisting and enforceable first priority security interest on therelated shares issued by the Cooperative Corporation securing the MortgageNote, subject only to (1) liens of the related Cooperative Corporation forunpaid assessments representing the Mortgagor’s *pro rata* share of therelated Cooperative Corporation’s payments for its blanket mortgage, currentand future real property taxes, insurance premiums, maintenance fees and other assessmentsto which like collateral is commonly subject and (2) other matters to whichlike collateral is commonly subject which do not materially interfere with thebenefits of the security interest intended to be provided by such SecurityAgreement.

 

(xi)                   Validity of Mortgage LoanDocuments.  The Mortgage Note, theMortgage and any other agreement executed and delivered by a Mortgagor orguarantor, if applicable, in connection with the Mortgage Loan are genuine, andeach is the legal, valid and

 

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binding obligation of the maker thereof enforceable inaccordance with its terms.  All partiesto the Mortgage Note and the Mortgage and any other related agreement had legalcapacity to enter into the Mortgage Loan and to execute and deliver theMortgage Note and the Mortgage and any other related agreement, and theMortgage Note and the Mortgage and any other related agreement have been dulyand properly executed by such parties. The documents, instruments and agreements submitted for loanunderwriting were not falsified and contain no untrue statement of materialfact or omit to state a material fact required to be stated therein ornecessary to make the information and statements therein not misleading.  No fraud, error, negligence,misrepresentation or omission of fact with respect to a Mortgage Loan has takenplace on the part of such Seller, the Mortgagor, any appraiser, any builder ordeveloper, or any other party involved in the origination or servicing of theMortgage Loan or in the application of any insurance in relation to suchMortgage Loan.  Such Seller has reviewedall of the documents constituting the Credit File and has made such inquiriesas it deems necessary to make and confirm the accuracy of the representationsset forth herein;

 

(xii)                  Full Disbursement ofProceeds.  The Mortgage Loan hasbeen closed and the proceeds of the Mortgage Loan have been fully disbursed andthere is no requirement for future advances thereunder, and any and all requirementsas to completion of any on-site or off-site improvement and as to disbursementsof any escrow funds therefor have been complied with.  All costs, fees and expenses incurred in making or closing theMortgage Loan and the recording of the Mortgage were paid, and the Mortgagor isnot entitled to any refund of any amounts paid or due under the Mortgage Noteor Mortgage;

 

(xiii)                 Ownership.  Such Seller is the sole legal, beneficialand equitable owner of record and, except with respect to MERS DesignatedMortgage Loans, holder of the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and such Seller has good,indefeasible and marketable title thereto, and has full right to transfer andsell the Mortgage Loan therein to the Trust free and clear of any encumbrance,equity, participation interest, lien, pledge, charge, claim or securityinterest, and has full right and authority subject to no interest orparticipation of, or agreement with, any other party, to sell and assign eachMortgage Loan pursuant to this Agreement and following the sale of eachMortgage Loan, the Trust will own such Mortgage Loan free and clear of anyencumbrance, equity, participation interest, lien, pledge, charge, claim orsecurity interest;

 

(xiv)                Doing Business.  All parties which have had any interest inthe Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are(or, during the period in which they held and disposed of such interest, were)(1) in compliance with any and all applicable licensing requirements of thelaws of the state wherein the Mortgaged Property is located, and (2) organizedunder the laws of such state, or (3) qualified to do business in such state, or(4) federal savings and loan associations or national banks havingprincipal offices in such state, or (5) not doing business in such state;

 

(xv)                 Title Insurance.  Except with respect to any Cooperative Loan,the Mortgage Loan is covered by an ALTA lender’s title insurance policy (which,in the case of an Adjustable Rate Loan has an adjustable rate mortgageendorsement in the form of ALTA 6.0 or 6.1) or other generally acceptable formof policy of insurance acceptable to Fannie Mae or Freddie Mac, issued by atitle insurer acceptable to Fannie Mae or Freddie Mac and qualified to

 

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do business in the jurisdiction where the MortgagedProperty is located, insuring such Seller, its successors and assigns, as tothe first priority lien of the Mortgage in the original principal amount of theMortgage Loan, and against any loss by reason of the invalidity orunenforceability of the lien resulting from the provisions of the Mortgageproviding for adjustment in the Mortgage Interest Rate and Monthly Payment,subject only to the exceptions contained in clauses (a), (b), and (c), and withrespect to each Second Lien Mortgage Loan clause (d) of Paragraph (x) of thisSchedule 1.  Where required by state lawor regulation, the Mortgagor has been given the opportunity to choose thecarrier of the required mortgage title insurance.  Additionally, such lender’s title insurance policy affirmativelyinsures ingress and egress, and against encroachments by or upon the MortgagedProperty or any interest therein.  Thetitle policy does not contain any special exceptions (other than the standardexclusions) for zoning and uses and has been marked to delete the standardsurvey exception or to replace the standard survey exception with a specificsurvey reading.  Such Seller, itssuccessors and assigns is the sole insured of such lender’s title insurancepolicy, and such lender’s title insurance policy is in full force and effectand will be in force and effect upon the consummation of the transactionscontemplated by this Agreement.  Noclaims have been made under such lender’s title insurance policy, and no priorholder or servicer of the Mortgage, including such Seller, has done, by act oromission, anything which would impair the coverage of such lender’s titleinsurance policy, including, without limitation, no unlawful fee, commission,kickback or other unlawful compensation or value of any kind has been or willbe received, retained or realized by any attorney, firm or other Person, and nosuch unlawful items have been received, retained or realized by such Seller;

 

(xvi)                No Defaults.  There is no default, breach, violation orevent of acceleration existing under the Mortgage or the Mortgage Note and noevent which, with the passage of time or with notice and the expiration of anygrace or cure period, would constitute a default, breach, violation or event ofacceleration, and neither such Seller nor its predecessors have waived anydefault, breach, violation or event of acceleration.  With respect to each Second Lien Mortgage Loan, (i) the priormortgage is in full force and effect, (ii) there is no default, breach,violation or event of acceleration existing under such prior mortgage or therelated mortgage note, (iii) no event which, with the passage of time or withnotice and the expiration of any grace or cure period, would constitute adefault, breach, violation or event of acceleration thereunder, and either (A)the prior mortgage contains a provision which allows or (B) applicable lawrequires, the mortgagee under the Second Lien Mortgage Loan to receive noticeof, and affords such mortgagee an opportunity to cure any default by payment infull or otherwise under the prior mortgage;

 

(xvii)               No Mechanics’ Liens.  There are no mechanics’ or similar liens orclaims which have been filed for work, labor or material (and no rights areoutstanding that under the law could give rise to such liens) affecting therelated Mortgaged Property which are or may be liens prior to, or equal orcoordinate with, the lien of the related Mortgage;

 

(xviii)              Location of Improvements; NoEncroachments.  All improvementswhich were considered in determining the Appraised Value of the MortgagedProperty lay wholly within the boundaries and building restriction lines of theMortgaged Property and no improvements on adjoining properties encroach uponthe Mortgaged Property.  No improvement

 

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located on or being part of the Mortgaged Property isin violation of any applicable zoning and building law, ordinance orregulation;

 

(xix)                 Origination: Payment Terms.  The Mortgage Loan was originated byMortgageIT, Inc. or by a mortgagee approved by the Secretary of Housing andUrban Development pursuant to Sections 203B and 211 of the National Housing Actor a savings and loan association, a savings bank, a commercial bank or similarbanking institution which is supervised and examined by a Federal or Stateauthority.  No Mortgage Loan containsterms or provisions which would result in negative amortization. Principalpayments on the Mortgage Loan commenced no more than 60 days after funds weredisbursed in connection with the Mortgage Loan.  The Mortgage Interest Rate is adjusted, with respect to theAdjustable Rate Mortgage Loans, on each Interest Rate Adjustment Date to equalthe applicable index plus the Gross Margin (rounded up or down to nearest0.125%), subject to the Maximum Mortgage Interest Rate.  The Mortgage Note is payable on the firstday of each month in equal monthly installments of principal and interest,which installments of interest, with respect to Adjustable Rate Mortgage Loans,are subject to change due to the adjustments to the Mortgage Interest Rate oneach Interest Rate Adjustment Date, with interest calculated and payable inarrears, sufficient to amortize the Mortgage Loan fully by the stated maturitydate, over an original term of not more than thirty years from commencement ofamortization.  In the case of a BalloonLoan, monthly payments are based on a fifteen (15) or thirty (30) yearamortization schedule, as set forth in the related Mortgage Note, and a finalmonthly payment substantially greater than the preceding monthly payment whichis sufficient to amortize the remaining principal balance of the Balloon Loanand to pay interest at the related Mortgage Interest Rate.  Interest on each Mortgage Loan is calculatedon the basis of a 360-day year consisting of twelve 30-day months.  The Mortgage Note has the terms identifiedin the applicable Funding Confirmation. The due date of the first payment under the Mortgage Note is no morethan 60 days from the date of the Mortgage Note.  No Mortgage Loan is a Convertible Mortgage Loan;

 

(xx)                  Customary Provisions.  The Mortgage contains customary andenforceable provisions such as to render the rights and remedies of the holderthereof adequate for the realization against the Mortgaged Property of thebenefits of the security provided thereby, including, (i) in the case of aMortgage designated as a deed of trust, by trustee’s sale, and(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, ortrustee’s sale of, the Mortgaged Property pursuant to the proper procedures,the holder of the Mortgage Loan will be able to deliver good and merchantabletitle to the Mortgaged Property.  Thereis no homestead or other exemption available to the Mortgagor which wouldinterfere with the right to sell the Mortgaged Property at a trustee’s sale orthe right to foreclose the Mortgage subject to applicable federal and statelaws and judicial precedent with respect to bankruptcy and right of redemption;

 

(xxi)                 Original Issue Discount.  The Mortgage Loan was originated free of any“original issue discount” with respect to which the owner of the Mortgage Loancould be deemed to have income pursuant to Sections 1271 et seq. of the Code;

 

(xxii)                Conformance with UnderwritingGuidelines and Agency Standards. The Mortgage Loan was underwritten in accordance with MortgageIT’sunderwriting guidelines in effect at the time the Mortgage Loan was originated.The Mortgage Note and Mortgage are on

 

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forms acceptable to Fannie Mae or Freddie Mac and suchSeller has not made any representations to a Mortgagor that are inconsistentwith the mortgage instruments used;

 

(xxiii)               Occupancy of the MortgagedProperty.  The Mortgaged Property islawfully occupied under applicable law. All inspections, licenses and certificates required to be made or issuedwith respect to all occupied portions of the Mortgaged Property and, withrespect to the use and occupancy of the same, including but not limited tocertificates of occupancy and fire underwriting certificates, have been made orobtained from the appropriate authorities. Such Seller has not received notification from any governmentalauthority that the Mortgaged Property is in material non-compliance with suchlaws or regulations, is being used, operated or occupied unlawfully or hasfailed to have or obtain such inspection, licenses or certificates, as the casemay be.  Such Seller has not receivednotice of any violation or failure to conform with any such law, ordinance,regulation, standard, license or certificate. The Mortgagor represented at the time of origination of the MortgageLoan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’sprimary residence;

 

(xxiv)               No Additional Collateral.  The Mortgage Note is not and has not beensecured by any collateral except the lien of the corresponding Mortgage and thesecurity interest of any applicable security agreement or chattel mortgagereferred to in Paragraph (x) above;

 

(xxv)                Deeds of Trust.  In the event the Mortgage constitutes a deedof trust, a trustee, authorized and duly qualified under applicable law toserve as such, has been properly designated and currently so serves and isnamed in the Mortgage, and no fees or expenses are or will become payable bythe Trust to the trustee under the deed of trust, except in connection with atrustee’s sale after default by the Mortgagor;

 

(xxvi)               Acceptable Investment.  The Mortgagor is not in bankruptcy orinsolvent and such Seller has no knowledge of any circumstances or conditionswith respect to the Mortgage, the Mortgaged Property, the Mortgagor or theMortgagor’s credit standing that can reasonably be expected to cause theMortgage Loan to be an unacceptable investment, cause the Mortgage Loan tobecome delinquent, or adversely affect the value or marketability of theMortgage Loan.  As used herein, “knowledge”shall be deemed to include (A) knowledge of facts or conditions of which suchSeller (including, without limitation, any of its directors, officers, agentsor employees) either is actually aware or should have been aware under thecircumstances with the exercise of reasonable care, due diligence andcompetence in discharging such Seller’s duties, (B) all matters of publicrecord, and (C) the making of any representation or warranty that is inaccurateor incomplete, unless such Seller can demonstrate otherwise.  The term “due diligence” means the carewhich such Seller would exercise in obtaining and verifying information for aloan in which such Seller would be entirely dependent on the property securingsuch loan and on the borrower’s creditworthiness as security to protect itsinvestment;

 

(xxvii)              Delivery of Mortgage LoanDocuments.  The Mortgage Note, theMortgage, the Assignment of Mortgage and any other documents required to bedelivered by such Seller under this Agreement have been delivered to the Trustor its Custodian.  Such Seller is inpossession of a complete, true and accurate mortgage file in compliance withSection 2 of the Custodial Agreement, except for such documents the originalsof which have been delivered to the Trust or the Custodian;

 

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(xxviii)             Due on Sale.  The Mortgage contains an enforceableprovision for the acceleration of the payment of the unpaid principal balanceof the Mortgage Loan in the event that the Mortgaged Property is sold ortransferred without the prior written consent of the Mortgagee thereunder;

 

(xxix)               Transfer of Mortgage Loans.  The Assignment of Mortgage is in recordableform and is acceptable for recording under the laws of the jurisdiction inwhich the Mortgaged Property is located;

 

(xxx)                Consolidation of FutureAdvances.  Any future advances madeprior to the related Purchase Date or Note Purchase Date, as applicable, havebeen consolidated with the outstanding principal amount secured by theMortgage, and the secured principal amount, as consolidated, bears a singleinterest rate and single repayment term. The lien of the Mortgage securing the consolidated principal amount isexpressly insured as having first lien priority by a title insurance policy, anendorsement to the policy insuring the mortgagee’s consolidated interest or byother title evidence acceptable to Fannie Mae and Freddie Mac.  The consolidated principal amount does notexceed the original principal amount of the Mortgage Loan;

 

(xxxi)               Mortgaged Property Undamaged.  There is no proceeding pending or threatenedfor the total or partial condemnation of the Mortgaged Property.  The Mortgaged Property is free of damage andwaste that may affect adversely the value of the Mortgaged Property as securityfor the Mortgage Loan or the use for which the premises were intended and eachMortgaged Property is in good repair;

 

(xxxii)              Collection Practices; EscrowDeposits; Adjustable Rate Mortgage Loan Adjustments.  The origination and collection practicesused with respect to the Mortgage Loan have been in accordance with AcceptedServicing Practices and in all respects in compliance with all applicable lawsand regulations, and have been in all respects legal and consistent withindustry standards for mortgage loans of the same type as the MortgageLoan.  With respect to escrow depositsand escrow payments (other than with respect to Second Lien Mortgage Loans forwhich the mortgagee under the prior mortgage lien is collecting EscrowPayments), all such payments are in the possession of such Seller and thereexist no deficiencies in connection therewith for which customary arrangementsfor repayment thereof have not been made. All Escrow Payments have been collected in full compliance with stateand federal laws.  An escrow of funds isnot prohibited by applicable law and has been established in an amountsufficient to pay for every item which remains unpaid and which has beenassessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments duesuch Seller have been capitalized under the Mortgage or the Mortgage Note. AllMortgage Interest Rate adjustments have been made in strict compliance withstate and federal laws and the terms of the related Mortgage Note.  Any interest required to be paid pursuant tostate and local laws has been properly paid and credited;

 

(xxxiii)             Appraisal.  Such Seller has delivered to the Trust an appraisal of the Mortgaged Propertysigned prior to the approval of the Mortgage application by a appraiserqualified under Fannie Mae and Freddie Mac guidelines who (i) is licensed inthe state where the Mortgaged Property is located, (ii) has no interest, director indirect, in the Mortgaged Property or in any Mortgage Loan or the securitytherefore, and (iii) does not receive compensation that is

 

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affected by the approval or disapproval of theMortgage Loan.  The appraisal shall havebeen made within one hundred and eighty (180) days of the origination of theMortgage Loan, be completed in compliance with the Uniform Standards ofProfessional Appraisal Practice, and all applicable federal, state and locallaws and regulations, including but not limited to the relevant provisions ofthe Financial Institutions Reform, Recovery, and Enforcement Act of 1989.  If the appraisal was made more than onehundred and twenty (120) days before the origination of the Mortgage Loan, suchSeller shall have received and delivered to the Trust a recertification of theappraisal;

 

(xxxiv)             Servicemembers’ Civil Relief Act.  The Mortgagor has not notified such Seller,and such Seller has no knowledge of any relief requested or allowed to theMortgagor under the Servicemembers’ Civil Relief Act;

 

(xxxv)              Environmental Matters.  The Mortgaged Property is free from any andall toxic or hazardous substances, including, without limitation, asbestos, andthere exists no violation of any local, state or federal environmental law,rule or regulation.  There is no pendingaction or proceeding directly involving any Mortgaged Property of which suchSeller is aware in which compliance with any environmental law, rule orregulation is an issue; and to the best of such Seller’s knowledge, nothingfurther remains to be done to satisfy in full all requirements of each suchlaw, rule or regulation constituting a prerequisite to use and enjoyment ofsaid property;

 

(xxxvi)             No Construction Loans. NoMortgage Loan was made in connection with (a)  facilitating the trade-inor exchange of a Mortgaged Property or (b) the construction or rehabilitationof a Mortgaged Property;

 

(xxxvii)            No Denial of Insurance.  No action, inaction, or event has occurredand no state of fact exists or has existed that has resulted or will result inthe exclusion from, denial of, or defense to coverage under any applicable poolinsurance policy, PMI Policy, special hazard insurance policy, or bankruptcybond, irrespective of the cause of such failure of coverage.  In connection with the placement of any suchinsurance, no commission, fee, or other compensation has been or will bereceived by such Seller or any designee of such Seller or any corporation inwhich such Seller or any officer, director, or employee had a financialinterest at the time of placement of such insurance;

 

(xxxviii)           Value of Mortgage Property.  Such Seller has no knowledge of anycircumstances existing that should reasonably be expected to adversely affectthe value or the marketability of the Mortgaged Property or the Mortgage Loanor to cause the Mortgage Loan to prepay during any period materially faster orslower than the Mortgage Loans originated by MortgageIT generally;

 

(xxxix)              Mortgagor Acknowledgment.  The Mortgagor has executed a statement tothe effect that the Mortgagor has received all disclosure materials required byapplicable law with respect to the making of adjustable rate mortgage loans inthe case of Adjustable Rate Mortgage Loans and fixed rate mortgage loans in thecase of Fixed Rate Mortgage Loans.  SuchSeller shall maintain such statement in the mortgage file;

 

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(xl)                   UBS Purchase Program.  MortgageIT originated such Mortgage Loan inaccordance with the requirements of a UBS Purchase Program;

 

(xli)                  Servicing Agreement. Noservicing agreement other than the Servicing Agreements with Company have beenentered into with respect to the Mortgage Loan, or any such servicing agreementhas been terminated (without any termination fee) and there are norestrictions, contractual or governmental, which would impair the ability ofPurchaser or Purchaser’s designees from servicing the Mortgage Loan;

 

(xlii)                 Regarding the Mortgagor.  The Mortgagor is one or more natural personsand/or trustees for an Illinois land trust or a trustee under a “living trust”and such “living trust” is in compliance with Fannie Mae guidelines for suchtrusts;

 

(xliii)                Predatory LendingRegulations; High Cost Loans.  Noneof the Mortgage Loans are (a) subject to, covered by or in violation of theHome Ownership and Equity Protection Act of 1994 (“HOEPA”), (b) classified as“high cost,” “covered,” “high risk home”, “threshold,” or “predatory” loansunder any other applicable state, federal or local law, including any predatoryor abusive lending laws (or similarly classified loans using differentterminology under a law imposing heightened scrutiny or additional legalliability for residential mortgage loans having high interest rates, pointsand/or fees) or (c) in violation of any state law or ordinance comparable toHOEPA;

 

(xliv)               Qualified Mortgage.  The Mortgage Loan is a “qualified mortgage”within the meaning of Section 860G(a)(3) or any successor provisionthereof of the Code;

 

(xlv)                Insurance.  Such Seller has caused or will cause to beperformed any and all acts required to preserve the rights and remedies of theTrust in any insurance policies applicable to the Mortgage Loans, including,without limitation, any necessary notifications of insurers, assignments ofpolicies or interests therein, and establishments of coinsured, joint losspayee and mortgagee rights in favor of the Trust;

 

(xlvi)               Simple Interest Mortgage Loans.  None of the Mortgage Loans are simpleinterest Mortgage Loans;

 

(xlvii)              Prepayment Fee.  Except as set forth on the related LoanPurchase Detail, none of the Mortgage Loans are subject to a prepaymentfee.  With respect to each Mortgage Loanthat has a prepayment fee feature, each such prepayment fee is enforceable andwill be enforced by such Seller for the benefit of the Trust, and eachprepayment fee is permitted pursuant to federal, state and local law and isonly payable (i) with respect to a Mortgage Loan originated prior to October 1,2002, during the first 5 years of the term of the Mortgage Loan, and (ii) withrespect to a Mortgage Loan originated on or after October 1, 2002, during thefirst 3 years of the term of the Mortgage Loan.  Each such prepayment fee is in an amount equal to the maximumamount permitted under applicable law. With respect to any Mortgage Loan that contains a provision permitting impositionof a prepayment fee upon a prepayment prior to maturity: (i) prior to theloan’s origination, the Mortgagor agreed to such prepayment fee in exchange fora monetary benefit, including but not limited to a rate or fee reduction, (ii)prior to the loan’s origination, the Mortgagor was offered the option ofobtaining a Mortgage Loan that did not

 

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require payment of such a prepayment fee, (iii) theprepayment fee is disclosed to the Mortgagor in the loan documents pursuant toapplicable state and federal law, and (iv) notwithstanding any state or federallaw to the contrary, such Seller shall not impose such prepayment fee in anyinstance when the mortgage debt is accelerated as the result of the Mortgagor’sdefault in making the loan payments;

 

(xlviii)             Flood Certification Contract.  Such Seller shall have obtained a paid infull, life of loan, transferable flood certification contract for each MortgageLoan and shall assign all such contracts to the Trust.

 

(xlix)                No Equity Participation.  No document relating to the Mortgage Loanprovides for any contingent or additional interest in the form of participationin the cash flow of the Mortgaged Property or a sharing in the appreciation ofthe value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to anownership interest in the Mortgaged Property or the Mortgagor and such Sellerhas not financed nor does it own directly or indirectly, any equity of any formin the Mortgaged Property or the Mortgagor;

 

(l)                    Proceeds of Mortgage Loan.  The proceeds of the Mortgage Loan have notbeen and shall not be used to satisfy, in whole or in part, any debt owed orowing by the Mortgagor to such Seller or any Affiliate or correspondentthereof;

 

(li)                   Mortgage Submitted forRecordation.  The Mortgage eitherhas been or will promptly be submitted for recordation in the appropriategovernmental recording office of the jurisdiction where the Mortgaged Propertyis located;

 

(lii)                  Endorsements.  Each Mortgage Note has been endorsed by suchSeller for its own account and not as a fiduciary, trustee, trustor orbeneficiary under a trust agreement;

 

(liii)                 LTV, PMI Policy.  No Mortgage Loan has an LTV greater than100% or, with respect to an FHA Loan, the applicable Agency approvedlimits.  Each Mortgage Loan with an LTVin excess of 80% is and will be insured as to payment defaults by a PMI Policy,unless otherwise provided for in MortgageIT’s underwriting guidelines,acceptable to Fannie Mae and in an amount of coverage meeting the requirementsset forth with respect to such insurance policies in the Fannie Mae Guidesuntil such Mortgage Loan is no longer required under the terms of the FannieMae Guides to be so insured.  All provisionsof such PMI Policy have been and are being complied with, such policy is validand remains in full force and effect, and all premiums due thereunder have beenpaid.  No action, inaction, or event hasoccurred and no state of facts exists that has, or will result in the exclusionfrom, denial of, or defense to coverage by the PMI Policy.  Any Mortgage Loan subject to a PMI Policyobligates the Mortgagor thereunder to maintain the PMI Policy and to pay allpremiums and charges in connection therewith. The Mortgage Interest Rate for each Mortgage Loan as set forth on themortgage loan schedule is net of any such insurance premium;

 

(liv)                 Accuracy of Information.  All information provided to the Trust bysuch Seller with respect to the Mortgage Loans is accurate in all materialrespects;

 

(lv)                  Single Premium CreditInsurance.  No Mortgagor wasrequired to purchase any credit life, disability, accident or health insuranceproduct as a condition of

 

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obtaining the extension of credit.  No Mortgagor obtained a prepaid singlepremium credit life, disability, accident or health insurance policy inconnection with the origination of the Mortgage Loan; None of the proceeds ofthe Mortgage Loan were used to purchase or finance single-premium credit lifeor disability insurance policies or any comparable insurance;

 

(lvi)                 Ground Leases.  The Mortgage Loan is not secured by theMortgagor’s interest in a Ground Lease except to the extent permitted pursuantto paragraph (ix) of this Schedule 1, and if such Mortgage Loan is secured bythe Mortgagor’s interest in a Ground Lease:

 

(1)           The Ground Lease or a memorandumthereof has been duly recorded, the Ground Lease permits the interest of thelessee thereunder to be encumbered by the related Mortgage, does not restrictthe use of the Mortgaged Property by the lessee or its successors and assignsin a manner that would adversely affect the security provided by the relatedMortgage, and there has not been a material change in the terms of the GroundLease since its recordation, with the exception of written instruments whichare part of the related mortgage file;

 

(2)           The Ground Lease is not subject toany liens or encumbrances superior to, or of equal priority with, the relatedMortgage, other than the related ground lessor’s related fee interest;

 

(3)           The Ground Lease either (i) hasa term which extends not less than ten years beyond the maturity date of therelated Mortgage Loan or (ii) grants the lessee the option to extend the termof the lease for a period (in the aggregate) which exceeds ten years beyond thematurity date of the related Mortgage Loan;

 

(4)           The Ground Lease is valid, in goodstanding, and in full force and effect;

 

(5)           The lessee is not in default underany provision of the lease;

 

(6)           The mortgagee under the Mortgage Loanis given at least 30 days’ notice of any default and an opportunity to cure anydefaults under the Ground Lease or to take over the Mortgagor’s rights underthe Ground Lease;

 

(7)           The Ground Lease does not contain anydefault provisions that could give rise to forfeiture or termination of theGround Lease except for the non-payment of the Ground lease rents; and

 

(8)           The Ground Lease provides that theleasehold can be transferred, mortgaged and sublet an unlimited number of timeseither without restriction or on payment of a reasonable fee and delivery ofreasonable documentation to the lessor.

 

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(lvii)                Origination Date.   With respect to each REIT Mortgage Loan asof the related Note Purchase Date, the Origination Date is no earlier thanninety (90) days prior to the date such REIT Mortgage Loan was first purchasedby Purchaser.  With respect to each TRSMortgage Loan as of the related Purchase Date, the Origination Date is noearlier than ninety (90) days prior to the date such TRS Mortgage Loan wasfirst sold to the Trust hereunder;

 

(lviii)               No Exception.  Custodian has not noted any materialexceptions on a Certification Report (as defined in the Custodial Agreement)with respect to the Mortgage Loan which would materially and adversely affectthe Mortgage Loan or Purchaser’s ownership of the Mortgage Loan, unlessconsented to by Purchaser;

 

(lix)                  MIP Insurance.  With respect to each Mortgage Loan insuredby HUD or the VA, all insurance premiums (“MIP”) payable to HUD or the VA, asapplicable, in connection with such Mortgage Loan were paid within thetimeframe required by such Agency to avoid the imposition of any late fees or penaltyfees;

 

(lx)                   MIP Insurance Certificate.With respect to each Mortgage Loan insured by HUD or the VA, such Seller hasreceived the related insurance certificate from the applicable agencyevidencing such insurance within 60 days of the origination date of suchMortgage Loan;

 

(lxi)                  MIP Documents. Withrespect to each Mortgage Loan insured by HUD or the VA, such Seller hassubmitted all documents required by the applicable Agency to insure suchMortgage Loan (regardless of whether such documents are required to becontained in the related Document File) within 30 days of the origination dateof such Mortgage Loan;

 

(lxii)                 MIP Access. With respectto each Mortgage Loan insured by HUD or the VA, such Seller has provided accessto Purchaser to the lender number, password or any other information that maybe required by the applicable Agency or otherwise for Purchaser to verify thatthe related MIP payments have been made;

 

(lxiii)                Borrower Credit Files.With respect to each Mortgage Loan, such Seller has fully and accuratelyfurnished complete information on the related borrower credit files to Equifax,Experian and Trans Union Credit Information Company, in accordance with theFair Credit Reporting Act and its implementing regulations, on a monthly basisand such Seller for each Mortgage Loan will furnish, in accordance with theFair Credit Reporting Act and its implementing regulations, accurate andcomplete information on its borrower credit files to Equifax, Experian, andTrans Union Credit Information Company, on a monthly basis;

 

(lxiv)               Lending Practices. Nopredatory or deceptive lending practices, including but not limited to, theextension of credit to the applicable Mortgagor without regard for saidMortgagor’s ability to repay the Mortgage Loan and the extension of credit tosaid Mortgagor which has no apparent benefit to said Mortgagor, were employedby the originator of the Mortgage Loan in connection with the origination ofthe Mortgage Loan.  Each Mortgage Loanis in compliance with the anti-predatory lending eligibility for purchaserequirements of the Fannie Mae Guides;

 

(lxv)                Georgia Fair Lending Act.No Mortgage Loan is a “High Cost Home Loan” as defined in the Georgia FairLending Act, as amended (the “Georgia Act”).  No

 

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Mortgage Loan secured by real property or amanufactured home located in the State of Georgia was originated (or modified)on or after October 1, 2002 through and including March 6, 2003;

 

(lxvi)               New York “high-cost home loans”.No Mortgage Loan (a) is secured by property located in the State of New York;(b) had an unpaid principal balance at origination of $300,000 or less, and (c)has an application date on or after April 1, 2003, the terms of which MortgageLoan equal or exceed either the APR or the points and fees threshold for“high-cost home loans”, as defined in Section 6-L of the New York State BankingLaw;

 

(lxvii)              Loan Products. No Mortgagorwas encouraged or required to select a Mortgage Loan product offered by theMortgage Loan’s originator which is a higher cost product designed for lesscreditworthy borrowers, unless at the time of the Mortgage Loan’s origination,such Mortgagor did not qualify taking into account credit history and debt toincome ratios for a lower cost credit product then offered by the MortgageLoan’s originator or any affiliate of the Mortgage Loan’s originator.  If, at the time of loan application, theMortgagor may have qualified for a lower cost credit product than offered byany mortgage lending affiliate of the Mortgage Loan’s originator, the MortgageLoan’s originator referred the Mortgagor’s application to such affiliate forunderwriting consideration;

 

(lxviii)             Underwriting Methodology.The methodology used in underwriting the extension of credit for each MortgageLoan employs objective mathematical principles which relate the Mortgagor’sincome, assets and liabilities to the proposed payment and such underwritingmethodology does not rely on the extent of the Mortgagor’s equity in the collateralas the principal determining factor in approving such credit extension.  Such underwriting methodology confirmed thatat the time of origination (application/approval) the Mortgagor had areasonable ability to make timely payments on the Mortgage Loan;

 

(lxix)                Disclosure of Fees. Allfees and charges (including finance charges) and whether or not financed,assessed, collected or to be collected in connection with the origination andservicing of each Mortgage Loan have been disclosed in writing to the Mortgagorin accordance with applicable state and federal law and regulation;

 

(lxx)                 Disclosure of Points.All points and fees related to each Mortgage Loan were disclosed in writing tothe related Mortgagor in accordance with applicable state and federal law andregulation.  Except in the case of aMortgage Loan in an original principal amount of less than $60,000 which wouldhave resulted in an unprofitable origination, no related Mortgagor was charged“points and fees” (whether or not financed) in an amount greater than 5% of theprincipal amount of such loan, such 5% limitation is calculated in accordancewith Fannie Mae’s anti-predatory lending requirements as set forth in theFannie Mae Guides;

 

(lxxi)                Credit Reporting Data.Such Seller will transmit full-file credit reporting data for each MortgageLoan pursuant to Fannie Mae Guide Announcement 95-19 and for each MortgageLoan, such Seller agrees it shall report one of the following statuses eachmonth as follows: new origination, current, delinquent (30-, 60-, 90-days,etc.), foreclosed, or charged-off;

 

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(lxxii)               Arkansas Home Loan ProtectionAct. No Mortgage Loan is a “High Cost Home Loan” as defined in the ArkansasHome Loan Protection Act effective August 16, 2003 (Act 1340 or 2003);

 

(lxxiii)              Kentucky “High Cost Home Loan”.No Mortgage Loan is a “High Cost Home Loan” as defined in the Kentuckyhigh-cost loan statute effective June 24, 2003 (Ky. Rev. Stat. Section360.100);

 

(lxxiv)              Nevada “home loan”. NoMortgage Loan secured by property located in the State of Nevada is a “homeloan” as defined in the Nevada Assembly Bill No. 284;

 

(lxxv)               Oakland Home Loans. NoMortgage Loan originated in the City of Oakland is subject to the City ofOakland, California Ordinance 12361, the “Ordinance”) as a home loan;

 

(lxxvi)              Oklahoma Home Ownership andEquity Protection Act. No Mortgage Loan is a subsection 10 mortgage underthe Oklahoma Home Ownership and Equity Protection Act;

 

(lxxvii)             Illinois High Risk Home Loan Act.No Mortgage Loan is a “High-Risk Home Loan” (as defined in Illinois High RiskHome Loan Act 93-561);

 

(lxxviii)            New Jersey Home OwnershipSecurity Act. No Mortgage Loan is a “High-Cost Home Loan” under the NewJersey Home Ownership Security Act of 2002 (the “NJ Act”); and each MortgageLoan subject to the NJ Act is considered under the NJ Act as, either, a (1)purchase money Home Loan, (2) purchase money Covered Loan, or (3) a rate/termrefinance Home Loan;

 

(lxxix)              New Mexico Home Loan ProtectionAct. No Mortgage Loan is a “High-Cost Home Loan” as defined in the NewMexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Ann. §§58-21A-1 et seq.);

 

(lxxx)               Los Angeles “high-costrefinance home loan”. No Mortgage Loan originated in the city of LosAngeles, California on or after the effective date of the Los Angeles,California anti-predatory lending ordinance is a “high-cost refinance homeloan” under such ordinance;

 

(lxxxi)              CLTV.  No Second Lien Mortgage Loan has a CLTV inexcess of 100%;

 

(lxxxii)             Consent.  Either (a) no consent for the Second LienMortgage Loan is required by the holder of the related first lien or (b) suchconsent has been obtained and is contained in the mortgage file;

 

(lxxxiii)            Maine Home Loans. No MortgageLoan that is secured by property located within the State of Maine meets thedefinition of a (i) “high-rate, high-fee” mortgage loan under Article VIII,Title 9-A of the Maine Consumer Credit Code or (ii) “High-Cost Home Loan” asdefined under the Maine House Bill 383 L.D. 494, effective as of September 13,2003; and

 

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(lxxxiv)            Arbitration. No Mortgagoragreed to submit to arbitration to resolve any dispute arising out of orrelating in any way to the Mortgage Loan transaction.

 

(lxxxv)             Shares Issued by CooperativeCorporation.  With respect to aMortgage Loan that is a Cooperative Loan, the shares issued by the CooperativeCorporation that constitute a portion of the related Cooperative Ownership Interestand that are pledged as security for the Mortgage Loan are held by a person asa tenant-stockholder (as defined in Section 216 of the Code) in aCooperative Corporation (as defined in Section 216 of the Code).

 

(lxxxvi)            Cooperative Loan.  With respect to a Mortgage Loan that is aCooperative Loan, the security instruments create a valid, enforceable,subsisting, first priority and perfected security interest in the relatedcooperative shares securing the related cooperative note, subject only to (x) thelien of the related Cooperative Corporation for unpaid assessments representingthe Mortgagor’s *pro rata*share ofpayments for a blanket mortgage, if any, current and future real propertytaxes, insurance premiums, maintenance fees and other assessments to which likecollateral is commonly subject and (y) other matters to which like collateralis commonly subject and which do not materially interfere with the benefits ofthe security intended to be provided. If such Mortgage Loan is a Cooperative Loan, to such Seller’s knowledge,the Mortgage Note relating to the underlying Mortgaged Property is not indefault.

 

Defined Terms

 

In addition to termsdefined elsewhere in the Loan Sale Agreement, the following terms shall havethe following meanings when used in this Schedule 2:

 

“Adjustable RateMortgage Loan” shall mean an Adjustable Rate Mortgage Loan purchasedpursuant to this Agreement.

 

“Appraised Value”shall mean (i) With respect to any First Lien Mortgage Loan, the value of therelated Mortgaged Property based upon the appraisal made, if any, for theoriginator at the time of origination of the Mortgage Loan or the sales priceof the Mortgaged Property at such time of origination, whichever is less; provided,however, that in the case of a refinanced Mortgage Loan, such value isbased solely upon the appraisal made, if any, at the time of origination ofsuch refinanced Mortgage Loan, and (ii) with respect to any Second LienMortgage Loan, the value, determined pursuant to MortgageIT’s underwriting guidelines,of the related Mortgaged Property as of the origination date of the Second LienMortgage Loan.

 

“Assignment ofMortgage” shall mean an assignment of the Mortgage, notice of transfer orequivalent instrument in recordable form, sufficient under the laws of thejurisdiction wherein the related Mortgaged Property is located to reflect thetransfer of the Mortgage.

 

“Balloon Loan”shall mean a Mortgage Loan identified on the related Loan Purchase Detail as aballoon mortgage loan.

 

“Best’s”  shall mean Best’s Key Rating Guide, as thesame shall be amended from time to time.

 

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“Code” shall meanthe Internal Revenue Code of 1986, as amended.

 

“CombinedLoan-to-Value Ratio or CLTV” shall mean with respect to any Second LienMortgage Loan, the sum of the original principal balance of such Mortgage Loanand the outstanding principal balance of any related first lien as of the dateof origination of the Mortgage Loan, divided by the lesser of the Appraised Valueof the Mortgage Property as of the origination date or the purchase price ofthe Mortgaged Property.

 

“Convertible MortgageLoan” A Mortgage Loan that by its terms and subject to certain conditionscontained in the related Mortgage or Mortgage Note allows the Mortgagor toconvert the adjustable Mortgage Interest Rate on such Mortgage Loan to a fixedMortgage Interest Rate.

 

“Due Date” shallmean the day on which the Monthly Payment is due on a Mortgage Loan, exclusiveof any days of grace.

 

“Escrow Payments”shall mean with respect to any Mortgage Loan, the amounts constituting groundrents, taxes, assessments, water charges, sewer rents, municipal charges,mortgage insurance premiums, fire and hazard insurance premiums, condominiumcharges, and other payments as may be required to be escrowed by the Mortgagorwith the Mortgagee pursuant to the terms of any Mortgage Note, Mortgage or anyother document.

 

“Fannie Mae” shallmean Fannie Mae and its successors in interest.

 

“Fannie Mae Guides”  shall mean the Fannie Mae Sellers’ Guide andthe Fannie Mae Servicers’ Guide and all amendments or additions thereto.

 

“First Lien MortgageLoan” shall mean a Mortgage Loan secured by a first lien Mortgage on therelated Mortgaged Property.

 

“Freddie Mac”shall mean Freddie Mac and its successors in interest.

 

“Gross Margin”shall mean, with respect to each Adjustable Rate Mortgage Loan, the fixedpercentage amount set forth in the related Mortgage Note which amount is addedto the Index in accordance with the terms of the related Mortgage Note todetermine on each Interest Rate Adjustment Date the Mortgage Interest Rate forsuch Mortgage Loan.

 

“Ground Lease”shall mean the original executed instrument evidencing a leasehold estate withrespect to a Mortgaged Property.

 

“Interest RateAdjustment Date” shall mean with respect to each Adjustable Rate MortgageLoan, the date set forth in the related Mortgage Note on which the MortgageInterest Rate on the Mortgage Loan is adjusted in accordance with the terms ofthe Mortgage Note.

 

“LTV” shall mean,with respect to any Mortgage Loan, the ratio (expressed as a percentage) of theoutstanding principal amount of the Mortgage Loan as of the cut-off date(unless otherwise indicated), to the Appraised Value of the Mortgaged Property.

 

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“Maximum MortgageInterest Rate” shall mean with respect to each Adjustable Rate MortgageLoan, a rate that is set forth on the related Funding Confirmation and in therelated Mortgage Note and is the maximum interest rate to which the MortgageInterest Rate on such Mortgage Loan may be increased on any Interest RateAdjustment Date.

 

“Monthly Payment”shall mean with respect to any Mortgage Loan, the scheduled combined payment ofprincipal and interest payable by a Mortgagor under the related Mortgage Noteon each Due Date.

 

“Mortgage InterestRate” shall mean with respect to each Mortgage Loan, the annual rate atwhich interest accrues on such Mortgage Loan from time to time in accordancewith the provisions of the related Mortgage Note.

 

“Origination Date”shall mean with respect to each Mortgage Loan, the date on which the applicablelien was placed on the related Mortgaged Property.

 

“PMI Policy” shallmean a policy of primary mortgage guaranty insurance issued by a QualifiedInsurer.

 

“Qualified Insurer”shall mean an insurance company duly qualified as such under the laws of thestates in which the Mortgaged Properties are located, duly authorized andlicensed in such states to transact the applicable insurance business and towrite the insurance provided, approved as an insurer by Fannie Mae and FreddieMac and whose claims paying ability is rated in the highest rating category byany of the rating agencies with respect to primary mortgage insurance and inthe two highest rating categories by Best’s with respect to hazard and floodinsurance.

 

“Second LienMortgage Loan” shall mean a Mortgage Loan secured by a second lien Mortgageon the related Mortgaged Property.

 

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Schedule 3

 

**SELLERS’ FORMER NAMES AND CURRENT OR FORMER TRADE NAMES,FICTITIOUS NAMES, ASSUMED NAMES AND OR “DOING BUSINESS AS” NAMES**

 

1.             MortgageIT, Inc.

 
|   | k.     | Prior Name:   None |
|--------|--------|-------------------------|
|   |   |                    |   |
|   | b.     | Trade Name:             | MIT |
|   |   |                    | MIT Lending |
|   |   |                    | IPI |
|   |   |                    | IPI Skyscraper |
|   |   |                    | IPI Skyscraper Mortgage |

 

2.             MortgageITHoldings, Inc.

 
|   | l.     | Prior Name:   None |
|--------|--------|-------------------------|
|   |   |                    |   |
|   | b.     | Trade Name:   None |

 

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Schedule 4

 

**UCC FILING JURISDICTIONS**

**[SELLER’S JURISDICTION OF ORGANIZATION]**

 

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**Annex1**

 

**SELLER’S OFFICER’S CERTIFICATE**

 

I,                        ,hereby certify that I am the duly elected                        of [Seller], a[               ]corporation (the “Seller”), and further certify, on behalf of the Selleras follows:

 

1.             Attachedhereto as Attachment I is a true and correct copy of the articles ofincorporation and by-laws of the Seller as are in full force and effect on thedate hereof.

 

2.             Attachedhereto as Attachment II is a Certificate of Good Standing of the Seller, issuedby the Secretary of the State of[            ]dated [DATE]. No event has occurred since [DATE] which has affected the goodstanding of the Seller under the laws of the State of [            ].

 

3.             Eachperson who, as an officer or attorney-in-fact of the Seller, signed theTransaction Documents (as defined in the Definitions List attached as Schedule1 to the Loan Sale Agreement dated as of August 4, 2004, among MortgageIT,Inc., MortgageIT Holdings, Inc. and MortgageIT SPV I on behalf of the REITSub-Trust (the “Definitions List”) to which the Seller is a party andany other document delivered prior hereto or on the date hereof in connectionwith transactions contemplated in such Transaction Documents, was, at therespective times of such signing and delivery, and is as of the date hereof,duly elected or appointed, qualified and acting as such officer orattorney-in-fact, and the signatures of such persons appearing on such documentsare their genuine signatures.

 

4.             Attachedhereto as Attachment III is a true and correct copy of the resolutions dulyadopted by the board of directors of the Seller on [DATE] (the “Resolutions”)with respect to the authorization and approval of the transactions contemplatedin such Transaction Document; said Resolutions have not been amended, modified,annulled or revoked and are in full force and effect on the date hereof.

 

5.             Allof the representations and warranties of the Seller contained in such TransactionDocuments, were true and correct in all material respects as of the date ofeach such Transaction Documents, and are true and correct in all materialrespects as of the date hereof and Seller has complied with all of theagreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to the datehereof.

 

6.             Sellerhas performed all of its duties and has satisfied all the material conditionson its part to be performed or satisfied pursuant to such Transactions Documents,on or prior to the date hereof.

 

7.             Thereare no actions, suits or proceedings pending or, to my knowledge, threatened,against or affecting Seller which, if adversely determined either individually

 

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or in the aggregate, would adversely affect Seller’sobligations under such Transaction Documents.

 

8.             Noproceedings that could result in the liquidation or dissolution of Seller arepending or contemplated.

 

9.             Incumbencyof Officers.  The below namedpersons are duly authorized to sign on behalf of Seller, holding the respectiveoffice below set opposite his or her name, and the signature below set oppositehis or her name is his or her genuine signature.

 
| **Name** |   | **Office** |   | **Signature** |   |
|----------|--------|------------|--------|---------------|--------|
|     |   |       |   |          |   |
|     |   |       |   |          |   |
|     |   |       |   |          |   |
|     |   |       |   |          |   |
|     |   |       |   |          |   |
|     |   |       |   |          |   |

 

All capitalized terms used herein and not otherwise defined shall havethe meaning assigned to them in the Definitions List.

 

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IN WITNESS WHEREOF, I have hereunto signed my name andaffixed the seal of the Seller.

 
| Dated: |                                |   |   | ,      |   |   |   |
|--------|-------------------------------------|--------|--------|--------|--------|--------|--------|
|   | [Seal]                              |   |   |   |   |   |   |
|   |                                |   |   |   |   |   |   |
|   |                                |   |
|   |                                |
|   |                                |
|   | By:                                 |   |   |
|   | Name:                               |
|   | Title: Chief Financial Officer      |
|   |                                |
|   |                                |   |
|   |                                |
|   |                                |
|   | By:                                 |   |   |
|   | Name:                               |
|   | Title: Secondary Marketing Director |
|        |                                     |        |        |        |        |        |        |  |  |  |

 

I,                           ,  [Assistant] Secretary of                     ,hereby certify that                        and                        are the duly elected, qualified and acting Chief Financial Officer andSecondary Marketing Director, respectively, of [Seller] and that the signatureappearing above is the genuine signature of such person.

 

IN WITNESS WHEREOF, I have hereunto signed my name.

 

 
| Dated: |   |   |   | ,      |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|
|   | [Seal] |   |   |   |   |   |   |
|   |   |   |   |   |   |   |   |
|   |   |   |
|   |   |
|   |   |
|   | By:    |   |   |
|   | Name:  |
|   | Title: |
|        |        |        |        |        |        |        |        |  |  |  |

 

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**Annex 2**

 

SELLER’SOFFICER’S CERTIFICATE

 

Each of                        and                        ,hereby certify that they are the duly elected Chief Financial Officer andSecondary Marketing Director, respectively, of [Seller], a[            ]corporation (the “Seller”), and further certify on behalf of the Selleras follows:

 

1.             Thisofficer’s certificate is made in connection with the Loan Sale Agreement (the “Agreement”),dated as of August 4, 2004, by and between the Seller, [other Seller] (togetherwith the Seller, the “Sellers”) and MortgageIT SPV I acting with respectto the REIT Sub-Trust/TRS Sub-Trust (the “Purchaser”).

 

2.             Theattached report details the Seller’s complete inventory of mortgage loans thatare in the application, locked and closed stages (the “Pipeline”)together with the Interest Rate Protection Agreements entered into by theSeller associated with the Pipeline.

 

3.             Theattached report (including the mark-to-market calculations included therein) isa complete, true and accurate representation which fairly presents such hedgingarrangements, and with respect to all reports delivered to the Trust followingthe date of the most recently delivered officer’s certificate from Seller(prior to this one), such reports (including the mark-to-market calculationsincluded therein) were complete, true and accurate representations which fairlypresented such hedging arrangements as of the date thereof.

 

4.             Theexecution by the undersigned evidences each such officer’s determination thatsuch hedging agreements adequately protect Seller from interest ratefluctuations.

 

The Chief Financial Officer further certifies onbehalf of the Seller as follows:

 

5.             Theconsolidated Tangible Net Worth of the Sellers is not less than the sum of (i)$175,000,000 and (ii) 90% of capital contributions made since August 4, 2004.

 

6.             Theratio of the Sellers’ consolidated Total Indebtedness to Tangible Net Worth is[            ],which is not greater than 20:1.

 

7.             Seller’sNet Income for the last three consecutive fiscal months, before income taxesfor such Test Period and distributions made during such Test Period is$[               ],which is not less than $1.00.

 

8.             NeitherSeller nor its partners, principal shareholders and owners, guaranty, endorseor are otherwise in any way responsible for any obligations of Seller or anyother Person.

 

9.             Therehas been no change in the articles of incorporation and by-laws of Seller sincethe date such documents were provided to Purchaser and such documents are infull force and effect on the date hereof.

 

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10.           Noevent has occurred since the date of the last good standing certificate ofSeller provided to Purchaser which has affected the good standing of Seller underthe laws of the State of[            ].

 

11.           Allof the representations and warranties of Seller contained in the TransactionDocuments to which it is a party are true and correct in all material respectsas of the date hereof and Seller has complied with the Transaction Documents towhich it is a party and satisfied all of the conditions on its part to beperformed or satisfied at or prior to the date hereof.

 

12.           Sellerhas performed all of its duties and has satisfied all the material conditions onits part to be performed or satisfied pursuant to the Transaction Documents towhich it is a party on or prior to the date hereof.

 

13.           Thereare no actions, suits or proceedings pending or, to my knowledge, threatened,against or affecting Seller which, if adversely determined either individuallyor in the aggregate, would adversely affect Seller’s obligations under theTransaction Documents to which it is a party.

 

14.           Noproceedings that could result in the liquidation or dissolution of Seller arepending or contemplated.

 

15.           Tothe best of my knowledge after due inquiry and investigation, no Event ofDefault has occurred prior to the date hereof or is occurring on the datehereof.

 

All capitalized terms used herein and not otherwisedefined shall have the meaning assigned to them in the Agreement.

 

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IN WITNESS WHEREOF, I have hereunto signed my name andaffixed the seal of the Seller.

 
| Dated: |     |   |                    | ,      |   |   |   |
|--------|----------|--------|-------------------------|--------|--------|--------|--------|
|   | [Seal]   |   |                    |   |   |   |   |
|   |     |   |                    |   |   |   |   |
|   | [SELLER] |
|   |     |
|   |     |
|   | By:      |   |                    |
|   |     | Name:  |                    |   |
|   |     | Title: | Chief Financial Officer |   |

 

IN WITNESS WHEREOF, only with respect to items 1through 4 of this Seller’s Officer’s Certificate, I have hereunto signed myname and affixed the seal of the Seller.

 

 
| Dated: |     |   |                         | ,      |   |   |   |
|--------|----------|--------|------------------------------|--------|--------|--------|--------|
|   | [Seal]   |   |                         |   |   |   |   |
|   |     |   |                         |   |   |   |   |
|   | [SELLER] |
|   |     |
|   |     |
|   | By:      |   |                         |
|   |     | Name:  |                         |   |
|   |     | Title: | Secondary Marketing Director |   |

 

 

I,                           ,  [Assistant] Secretary of [Seller], herebycertify that                        and                        are the duly elected, qualified and acting Chief Financial Officer andSecondary Marketing Director, respectively, of [Seller] and that the signatureappearing above is the genuine signature of such person.

 

IN WITNESS WHEREOF, I have hereunto signed my name.

 
| Dated: |     |   |   | ,      |   |   |   |
|--------|----------|--------|--------|--------|--------|--------|--------|
|   | [Seal]   |   |   |   |   |   |   |
|   |     |   |   |   |   |   |   |
|   | [SELLER] |
|   |     |
|   |     |
|   | By:      |   |   |
|   |     | Name:  |   |   |
|   |     | Title: |   |   |

 

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**Annex 3**

 

**FORM OF FINANCIAL STATEMENT FOOTNOTE**

 

MORTGAGEIT SPV I (the “Trust”) is a Delawarestatutory trust which has been established by [MORTGAGEIT, INC./MORTGAGEITHOLDINGS, INC.] (the “Company”) as a special-purpose warehouse financesubsidiary of the Company.  The Trusthas agreed to [issue and] sell to UBS Real Estate Securities Inc. (“UBS”)[mortgage loans (“Mortgage Loans”)/ notes backed by mortgage loans (the“Notes”)].

 

Under the legal agreements which document the[issuance and] sale of the [Mortgage Loans/Notes]:

 

•                  allassets which are from time to time owned by the Trust are legally owned by theTrust and not by the Company.

 

•                  theTrust is a legal entity separate and distinct from the Company and all otheraffiliates of the Company.

 

•                  theassets of the Trust are legally assets only of the Trust, and are not legallyavailable to the Company and all other affiliates of the Company or theirrespective creditors, for pledge to other creditors or to satisfy the claims ofother creditors.

 

•                  noneof the Company or any other affiliate of the Company is legally liable on thedebts of the Trust, except for an amount limited to 10% of the greater of (i)the total principal amount of Notes then outstanding under the Note PurchaseAgreement plus the aggregate outstanding principal of all Mortgage Loans soldunder the Loan Repurchase Agreement and the Loan Sale Agreement and (ii) theFacility Limit.

 

•                  theonly assets of the Company which result from the [issuance and] sale of the[Mortgage Loans/ Notes] are:

 

1)              any cash portion ofthe purchase price paid from time to time by the Trust in consideration ofMortgage Loans sold to the Trust by the Company and

 

2)              the value of theCompany’s net equity investment in the Trust.

 

•                  Asof    /   /   , the Trust had thefollowing assets:

 

a)     whole loans:$                  

 

b)    REO Properties:$               ,and

 

c)     cash and cash equivalents: $               .

 

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•                  Asof    /   /   , the Trust had thefollowing liabilities and equity:

 

a)     short-term debt due to UBS:$               ,and

 

b)    $               in members’ equity investment.

 

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