Document:

EXHIBIT
4.7

     

    
      
  

    
      

    

     

    LOAN
SERVICING AGREEMENT

    Dated
and effective as of __________ __, 20__

    

    RWT
HOLDINGS, INC.

    (Owner)

    

    and

    

    [_______________________]

    (Servicer)

     

    
      
 

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      	
                                                              ARTICLE
      I

                                                            	
                                                              DEFINITIONS

                                                            	 
      	
                                                              1

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      1.01

                                                            	
                                                              Definitions

                                                            	 
      	
                                                              1

                                                            
	 
      	 
      	 
      	 
      
	
                                                              ARTICLE
      II POSSESSION OF MORTGAGE LOAN SERVICING FILES

                                                            	 
      	
                                                              10

                                                            
	 
      	 
      	 
      
	
                                                              Section
      2.01

                                                            	
                                                              Servicing
      of Mortgage Loans.

                                                            	 
      	
                                                              10

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      2.02

                                                            	
                                                              Conveyance
      of Mortgage Loan Servicing Files; Possession of Mortgage Loan Servicing
      Files.

                                                            	 
      	
                                                              10

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      2.03

                                                            	
                                                              Books
      and Records.

                                                            	 
      	
                                                              10

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      2.04

                                                            	
                                                              Custodial
      Agreement: Delivery of Documents.

                                                            	 
      	
                                                              10

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      2.05

                                                            	
                                                              Tax
      Service/Flood Service.

                                                            	 
      	
                                                              11

                                                            
	 
      	 
      	 
      	 
      
	
                                                              ARTICLE
      III REPRESENTATIONS AND WARRANTIES

                                                            	 
      	
                                                              11

                                                            
	 
      	 
      	 
      
	
                                                              SECTION
      3.01

                                                            	
                                                              GENERAL
      REPRESENTATIONS AND WARRANTIES OF THE SERVICER AND OWNER.

                                                            	 
      	
                                                              11

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      3.02

                                                            	
                                                              Representations,
      Warranties and Covenants of Owner.

                                                            	 
      	
                                                              12

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      3.03

                                                            	
                                                              Survival.

                                                            	 
      	
                                                              13

                                                            
	 
      	 
      	 
      	 
      
	
                                                              ARTICLE
      IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

                                                            	 
      	
                                                              13

                                                            
	 
      	 
      	 
      
	
                                                              Section
      4.01

                                                            	
                                                              Standards
      of Servicer.

                                                            	 
      	
                                                              13

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      4.02

                                                            	
                                                              Liquidation
      of Mortgage Loans; Servicing Advances and Foreclosure.

                                                            	 
      	
                                                              15

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      4.03

                                                            	
                                                              Collection
      of Mortgage Loan Payments.

                                                            	 
      	
                                                              16

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      4.04

                                                            	
                                                              Establishment
      of Custodial Account; Deposits in Custodial Account.

                                                            	 
      	
                                                              16

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      4.05

                                                            	
                                                              Withdrawals
      From the Custodial Account.

                                                            	 
      	
                                                              17

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      4.06

                                                            	
                                                              Establishment
      of Escrow Account; Deposits in Escrow Account.

                                                            	 
      	
                                                              19

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      4.07

                                                            	
                                                              Withdrawals
      From Escrow Account.

                                                            	 
      	
                                                              19

                                                            
	 
      	 
      	 
      	 
      
	
                                                              Section
      4.08

                                                            	
                                                              Payment
      of Taxes, Insurance and Other Charges.

                                                            	 
      	
                                                              20

                                                            

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  	
                                                                          Section
      4.09

                                                                        	
                                                                          Transfer
      of Accounts.

                                                                        	 
      	
                                                                          20

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.10

                                                                        	
                                                                          Maintenance
      of Hazard Insurance.

                                                                        	 
      	
                                                                          20

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.11

                                                                        	
                                                                          Maintenance
      of Blanket Insurance Policy.

                                                                        	 
      	
                                                                          21

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.12

                                                                        	
                                                                          Maintenance
      of Mortgage Impairment Insurance Policy.

                                                                        	 
      	
                                                                          21

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.13

                                                                        	
                                                                          Fidelity
      Bond; Errors and Omissions Insurance.

                                                                        	 
      	
                                                                          21

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.14

                                                                        	
                                                                          Title,
      Management and Disposition of REO Property.

                                                                        	 
      	
                                                                          22

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.15

                                                                        	
                                                                          Transfer
      Notices.

                                                                        	 
      	
                                                                          24

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.16

                                                                        	
                                                                          Restoration
      of Mortgaged Property.

                                                                        	 
      	
                                                                          25

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.17

                                                                        	
                                                                          Maintenance
      of PMI Policy; Claims.

                                                                        	 
      	
                                                                          25

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.18

                                                                        	
                                                                          Privacy.

                                                                        	 
      	
                                                                          26

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      4.19

                                                                        	
                                                                          Compliance
      with REMIC Provisions.

                                                                        	 
      	
                                                                          26

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          ARTICLE
      V PAYMENTS TO THE OWNER

                                                                        	 
      	
                                                                          27

                                                                        
	 
      	 
      	 
      
	
                                                                          Section
      5.01

                                                                        	
                                                                          Distributions.

                                                                        	 
      	
                                                                          27

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      5.02

                                                                        	
                                                                          Statements
      to the Owner.

                                                                        	 
      	
                                                                          27

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      5.03

                                                                        	
                                                                          P&I
      Advances by the Servicer.

                                                                        	 
      	
                                                                          28

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          ARTICLE
      VI GENERAL SERVICING PROCEDURE

                                                                        	 
      	
                                                                          28

                                                                        
	 
      	 
      	 
      
	
                                                                          Section
      6.01

                                                                        	
                                                                          Assumption
      Agreements.

                                                                        	 
      	
                                                                          28

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      6.02

                                                                        	
                                                                          Release
      of Mortgage Files; Wrongful Satisfaction of Mortgages.

                                                                        	 
      	
                                                                          29

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      6.03

                                                                        	
                                                                          Servicing
      Compensation.

                                                                        	 
      	
                                                                          29

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      6.04

                                                                        	
                                                                          Annual
      Statement as to Compliance.

                                                                        	 
      	
                                                                          29

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      6.05

                                                                        	
                                                                          Annual
      Independent Public Accountants’ Servicing Report.

                                                                        	 
      	
                                                                          30

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      6.06

                                                                        	
                                                                          Owner’s
      Right to Examine Servicer Records.

                                                                        	 
      	
                                                                          30

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      6.07

                                                                        	
                                                                          Rate
      Adjustment.

                                                                        	 
      	
                                                                          30

                                                                        
	 
      	 
      	 
      	 
      
	
                                                                          Section
      6.08

                                                                        	
                                                                          Maintenance
      of Licenses and Ratings.

                                                                        	 
      	
                                                                          31

                                                                        

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          	
                                                                  Section
      6.09

                                                                	
                                                                  Quality
      Control.

                                                                	 
      	
                                                                  31

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      6.10

                                                                	
                                                                  Compliance
      and Performance Reviews.

                                                                	 
      	
                                                                  31

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      6.11

                                                                	
                                                                  Access
      to Documents and Employees.

                                                                	 
      	
                                                                  31

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      6.12

                                                                	
                                                                  Notices.

                                                                	 
      	
                                                                  31

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      6.13

                                                                	
                                                                  Contingency
      Plans.

                                                                	 
      	
                                                                  32

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  ARTICLE
      VII REPORTS TO BE PREPARED BY SERVICER

                                                                	 
      	
                                                                  32

                                                                
	 
      	 
      	 
      
	
                                                                  Section
      7.01

                                                                	
                                                                  Servicer
      Shall Provide Access and Information as Reasonably
    Required.

                                                                	 
      	
                                                                  32

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      7.02

                                                                	
                                                                  Financial
      Statements.

                                                                	 
      	
                                                                  32

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  ARTICLE
      VIII THE SERVICER

                                                                	 
      	
                                                                  33

                                                                
	 
      	 
      	 
      
	
                                                                  Section
      8.01

                                                                	
                                                                  Indemnification;
      Third Party Claims.

                                                                	 
      	
                                                                  33

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      8.02

                                                                	
                                                                  Limitation
      on Liability

                                                                	 
      	
                                                                  34

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      8.03

                                                                	
                                                                  Merger
      or Consolidation of the Servicer.

                                                                	 
      	
                                                                  35

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  ARTICLE
      IX DEFAULT

                                                                	 
      	
                                                                  36

                                                                
	 
      	 
      	 
      
	
                                                                  Section
      9.01

                                                                	
                                                                  Events
      of Default.

                                                                	 
      	
                                                                  36

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  ARTICLE
      X TERMINATION; RECONSTITUTION

                                                                	 
      	
                                                                  37

                                                                
	 
      	 
      	 
      
	
                                                                  Section
      10.01

                                                                	
                                                                  (
      Reserved )

                                                                	 
      	
                                                                  37

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      10.02

                                                                	
                                                                  Termination
      Without Cause

                                                                	 
      	
                                                                  37

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      10.03

                                                                	
                                                                  Removal
      of Mortgage Loans From Inclusion Under This Agreement

                                                                	 
      	
                                                                  38

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  ARTICLE
      XI MISCELLANEOUS PROVISIONS

                                                                	 
      	
                                                                  41

                                                                
	 
      	 
      	 
      
	
                                                                  Section
      11.01

                                                                	
                                                                  Successor
      to the Servicer.

                                                                	 
      	
                                                                  41

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      11.02

                                                                	
                                                                  No
      Waiver.

                                                                	 
      	
                                                                  41

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      11.03

                                                                	
                                                                  Amendment.

                                                                	 
      	
                                                                  42

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      11.04

                                                                	
                                                                  No
      Solicitations.

                                                                	 
      	
                                                                  42

                                                                
	 
      	 
      	 
      	 
      
	
                                                                  Section
      11.05

                                                                	
                                                                  Duration
      of Agreement.

                                                                	 
      	
                                                                  42

                                                                

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      Section
      11.06

                                    	
                                      Governing
      Law.

                                    	 
      	
                                      42

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.07

                                    	
                                      Notices.

                                    	 
      	
                                      43

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.08

                                    	
                                      Severability
      of Provisions.

                                    	 
      	
                                      43

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.09

                                    	
                                      No
      Partnership.

                                    	 
      	
                                      43

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.10

                                    	
                                      Counterparts.

                                    	 
      	
                                      43

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.11

                                    	
                                      Successors
      and Assigns.

                                    	 
      	
                                      43

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.12

                                    	
                                      Time
      of Payment.

                                    	 
      	
                                      44

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.13

                                    	
                                      General
      Interpretive Principles.

                                    	 
      	
                                      44

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.14

                                    	
                                      Entire
      Agreement.

                                    	 
      	
                                      44

                                    
	 
      	 
      	 
      	 
      
	
                                      Section
      11.15

                                    	
                                      Force
      Majeure.

                                    	 
      	
                                      45

                                    

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    EXHIBITS

     

    
      
        	
                Exhibit
      A

              	
                Eligibility
      Criteria for Residential Mortgage Loans

              
	
                Exhibit
      B

              	
                Reserved

              
	
                Exhibit
      C

              	
                Mortgage
      File and Mortgage Loan Servicing File Contents

              
	
                Exhibit
      D

              	
                Transfer
      Instructions

              
	
                Exhibit
      E

              	
                Form
      of Limited Corporate Resolution

              
	
                Exhibit
      F

              	
                Custodial
      Account Letter Agreement

              
	
                Exhibit
      G

              	
                Escrow
      Account Letter Agreement

              
	
                Exhibit
      H

              	
                Form
      of Remittance Schedule

              
	
                Exhibit
      I

              	
                Servicer’s
      Responsibilities Upon Transfer of Servicing

              
	
                Exhibit
      J

              	
                List
      of Reports

              
	
                Exhibit
      K

              	
                Form
      of Custodial Agreement

              
	
                Exhibit
      L

              	
                Reconstitution
      Form Opinion

              

      

    

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    LOAN
SERVICING AGREEMENT

     

    THIS LOAN SERVICING AGREEMENT
dated as of [_________ __, 20__] (the “Agreement”) by and between RWT Holdings,
Inc. and/or its assigns (“Owner”), a Delaware corporation with its principal
office located at One Belvedere Place, #310 Mill Valley, California, 94941, and
[______________], a [_________]corporation with its principal office located at
[______________________](“Servicer”).

     

    Recitals

     

    A.          Owner
desires to retain Servicer from time to time to service certain residential
mortgage loans that Owner may make or acquire; and

     

    B.           Owner
and Servicer desire to establish the terms and conditions on which Servicer
shall service mortgage loans on behalf of Owner.

     

    NOW,
THEREFORE, in consideration of the mutual promises contained herein and for
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:

     

    ARTICLE
I

    DEFINITIONS

     

    Section
1.01   Definitions

     

    Whenever
used herein, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:

     

    “Agreement”:  This
Loan Servicing Agreement, including all exhibits hereto, and all amendments
hereof and supplements hereto.

     

    “Ancillary
Income”: All income derived from the Mortgage Loans other than servicing fees
and prepayment fees, including without limitation late charges and other
incidental fees and fees, commissions or expense reimbursements relating to the
placement of insurance, and such other income defined as Ancillary Income in
this Agreement.

     

    “Applicable
Requirements”:  As of the time of reference, with respect to the
Mortgage Loans, REO Property and the servicing of the Mortgage Loans, all of the
following: (i) all contractual obligations of Owner under the Mortgage Loan, for
which Owner or, by virtue of this Agreement, Servicer is responsible for or at
any time was or hereafter will be responsible; (ii) all applicable federal,
state and local legal and regulatory requirements (including, without
limitation, statutes, rules, regulations and ordinances and including the
Privacy Requirements) binding upon Owner or Servicer; (iii) all other applicable
requirements and guidelines of each governmental agency, board, commission,
instrumentality and other governmental body or officer having jurisdiction; (iv)
all other applicable judicial and administrative judgments, orders,
stipulations, awards, writs and injunctions; (v), the applicable provisions of
the Fannie Mae Servicing Guide for whole loan servicing that would apply if
Fannie Mae were the Investor for such Mortgage Loans, to the extent not
otherwise inconsistent with this Agreement; and (vi) Customary Servicing
Procedures.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    “Assignment
of Mortgage”:  An assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form (but not recorded) that, when properly
completed and recorded, is sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the sale of the
Mortgage Loan to the Owner.

     

    “Assumed
Principal Balance”:  As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan outstanding as of
the Determination Date after application of payments due on or before the
Determination Date, whether or not received, minus (ii) all amounts previously
distributed to the Owner with respect to the Mortgage Loan pursuant to Section
5.01 and representing payments or other recoveries of principal.

     

    “Business
Day”:  Any day other than (i) a Saturday or Sunday, (ii) a day on
which banking or savings and loan institutions in the Commonwealth of
Pennsylvania or the States of California, Iowa or Connecticut are authorized or
obligated by law or executive order to be closed, or (iii) a day that is a
company holiday at the location of the main offices of either Owner or
Servicer.

     

    “Condemnation
Proceeds”:  All awards or settlements in respect of a taking of an
entire Mortgaged Property by exercise of the power of eminent domain or
condemnation.

     

    “Custodial
Account”:  The separate account or accounts created and maintained
pursuant to Section 4.04.

     

    “Custodial
Agreement”:  The agreement governing the retention of the originals of
each Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents, a form of which is annexed hereto as Exhibit K.

     

    “Custodian”:  The
custodian under the Custodial Agreement, or its successor in interest or
assigns, or any successor to the Custodian under the Custodial Agreement as
provided therein.

     

    “Customer
Information”:  Any personally identifiable information in any form
(written electronic or otherwise) relating to a Mortgagor, including, but not
limited to: a Mortgagor’s name, address, telephone number, Mortgage Loan number,
Mortgage Loan payment history, delinquency status, insurance carrier or payment
information, tax amount or payment information; the fact that the Mortgagor has
a relationship with the servicer of such Mortgagor’s Mortgage Loan; and any
other non-public personally identifiable information.

     

    “Customary
Servicing Procedures”:  Those mortgage servicing practices of mortgage
lending institutions that service mortgage loans of the same type as such
Mortgage Loan in the jurisdiction where the related Mortgage Property is
located, exercising the same care in performing those practices that the
Servicer customarily employs and exercises in servicing and administering
mortgage loans for its own account (including compliance with all applicable
federal, state and local laws).

     

    “Cutoff
Date”:  The last Business Day of the month.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    “Determination
Date”:  The 15th day (or
if such last day is not a Business Day, the Business Day immediately preceding
such 15th day) of the month immediately preceding the related Remittance
Date.

     

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

     

    “Due
Period”:  With respect to each Remittance Date, the period beginning
on the second day of the month preceding the month of the Remittance Date, and
ending on the first day of the month of the Remittance Date.

     

    “Effective
Date”:  The date that Servicer physically assumes in accordance with
the Transfer Instructions.

     

    “Eligibility
Criteria”:  The eligibility criteria for residential mortgage loans to
be delivered by Owner after the initial Effective Date to be serviced by
Servicer under this Agreement, as specified in Exhibit A hereto, as the same
may be amended from time to time with the mutual consent of both
parties.

     

    “Eligible
Depository Institution”:  An account or accounts maintained with a
depository institution which is acceptable to Fannie Mae for establishment of
custodial accounts.

     

    “Eligible
Investments”:  Any one or more of the following obligations or
securities:

     

    (i)           
obligations of or guaranteed as to principal and interest by the (a) United
States, Freddie Mac, Fannie Mae or any agency or instrumentality of the United
States when such obligations are backed by the full faith and credit of the
United States; provided, that such obligations of Freddie Mac or Fannie Mae
shall be limited to senior debt obligations and mortgage participation
certificates except that investments in mortgage-backed or mortgage
participation securities with yields evidencing extreme sensitivity to the rate
of principal payments on the underlying mortgages shall not constitute Eligible
Investments hereunder;

     

    (ii)           repurchase
agreements (which must be fully collateralized) on obligations specified
in clause (i) maturing not more than one month from the date of acquisition
thereof;

     

    (iii)          federal
funds, certificates of deposit, demand deposits, time deposits and bankers’
acceptances (which shall each have an original maturity of not more than 90 days
and, in the case of bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state thereof or
of any domestic branch of a foreign depository institution or trust
company;

     

    (iv)          commercial
paper (having original maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state thereof which are
rated at least A-1 or P-1 by S & P Corporation (“S & P”) and Moody’s
Investor Services, Inc. (“Moody’s”), respectively;

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (v)           obligations
of major foreign commercial banks, limited to Eurodollar deposits, time
deposits, certificate of deposits, bankers acceptances, Yankee Bankers
acceptances and Yankee certificate of deposits;

     

    (vi)          obligations
of major foreign corporations limited to commercial paper, auction rate
preferred stock, medium term notes, master notes and loan
participations;

     

    (vii)         money
market funds comprised of securities described in the aforementioned clauses
(i-iv) and having a stated policy of maintaining a set net asset value per share
(a “Money Market Fund”).  All Money Market Funds will conform to Rule
2a-7 of the Investment Company Act of 1940;

     

    (viii)        [_______]Variable
Denomination Demand Note Program which constitutes unsecured, senior debt
obligations of _____________as outlined in the Prospectus dated __________ __,
20__ (the “Demand Note Program”). Investments in the Demand Note Program are
subject to:

     

    (a)           ______’s
short term unsecured debt must be rated (i) at least A-1 by S & P and at
least P-2 by Moody’s or (ii) at least A-2 by S & P and at least P-1 by
Moody’s; and

     

    (b)           ______’s
long term unsecured debt must be rated (i) not less than A- by S & P and
(ii) not less than A3 by Moody’s;

     

    provided,
however, that no instrument shall be an Eligible Investment if it represents,
either (1) the right to receive only interest payments with respect to the
underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest with respect to such instrument provide a yield to
maturity greater than 120% of the yield to maturity at par of such underlying
obligations.

     

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

     

    “Escrow
Payments”:  The amounts constituting taxes, assessments, mortgage
insurance premiums, fire and hazard insurance premiums and other payments
required to be escrowed by the Mortgagor with the mortgagee pursuant to any
Mortgage Loan.

     

    “Event of
Default”:  Any one of the conditions or circumstances enumerated in
Section 9.01.

     

    “Fannie
Mae”:  The Federal National Mortgage Association or any successor
organization.

     

    “FDIC”:  The
Federal Deposit Insurance Corporation or any successor
organization.

     

    “Fidelity
Bond”:  A fidelity bond required to be maintained by the Servicer
pursuant to Section 4.13.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    “Freddie
Mac”:  The Federal Home Loan Mortgage Corporation or any successor
organization.

     

    “High
Cost Loan”:  A residential mortgage loan that is subject to the
anti-predatory prohibitions of state or local laws and regulations by virtue of
the loan’s high interest rate or total points and fees.

     

    “HOEPA”:  The
Home Ownership Equity Protection Act.

     

    “HUD”:  The
Department of Housing and Urban Development or any successor
organization.

     

    “Index”:  With
respect to any Adjustable Rate Mortgage Loan, the index set forth in the
applicable Mortgage Note which is added to the gross margin to determine the
Mortgage Interest Rate on each interest adjustment date.

     

    “Insurance
Proceeds”:  Proceeds of any Primary Insurance Policy, title policy,
hazard policy or other insurance policy covering a Mortgage Loan, if any, to the
extent such proceeds are not to be applied to the restoration of the related
Mortgaged Property or released to the Mortgagor in accordance with Customary
Servicing Procedures or in accordance with the terms of the related Mortgage
Loan or applicable law.

     

    “Investor”:  An
assign (including any trustee) of RWT Holdings, Inc.’s legal interest in a
Mortgage Loan.

     

    “Liquidation
Proceeds”:  Cash, other than Insurance Proceeds, Condemnation Proceeds
or REO Disposition Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of the Mortgage
Loan, trustee’s sale, foreclosure sale or otherwise.

     

    “Loss
Mitigation Activity”:  To the extent not ordinary to the servicing
function, an initiative taken by the Servicer (sometimes on cooperation with the
Mortgagor), with the prior written consent of Owner if the Servicer reasonably
expects the impact to the Owner to be greater than $5,000 (which consent shall
be deemed to have been provided if no response from Owner is provided within ten
(10) Business Days after written notice to Owner of Servicer’s intent to
undertake such initiative), that might result in a less costly alternative to
the Owner than foreclosure.  Loss Mitigation Activity can include
temporary forbearance, pre-sales, loan modifications, loan repayments, accepting
a deed-in-lieu and deficiency judgments.

     

    “Monthly
Payment”:  The scheduled monthly payment of principal and interest on
a Mortgage Loan which is payable by a Mortgagor under the related Mortgage
Note.

     

    “Mortgage”:  The
mortgage, deed of trust or other instrument creating a first lien on or first
priority ownership interest in an estate in fee simple, or a leasehold estate,
in real property securing a Mortgage Note, including any rider incorporated by
reference therein.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    “Mortgage
File”:  The items pertaining to a particular Mortgage Loan referred to
in Exhibit C annexed
hereto, which are delivered to the Custodian and not otherwise contained in the
Mortgage Loan Servicing File, and any additional documents required to be added
to the Mortgage File pursuant to this agreement.

     

    “Mortgage
Interest Rate”:  The annual rate at which interest accrues on any
Mortgage Loan in accordance with the provisions of the related Mortgage
Note.

     

    “Mortgage
Loan”:  An individual mortgage loan that is the subject of this
Agreement, and those that are made subject to this Agreement after the initial
Effective Date pursuant to the provisions specified herein.

     

    “Mortgage
Loan Documents”:  With respect to a Mortgage Loan, the original
related Mortgage Note with applicable addenda, riders allonges or modifications,
the original related Mortgage and the originals of any required addenda, riders
allonges or modifications, the original related Assignment and any original
intervening related Assignments, the original related title insurance policy,
related PMI policy, if any, and the related appraisal report.

     

    “Mortgage
Loan Remittance Rate”:  With respect to each Mortgage Loan, the annual
rate of interest remitted to the Owner, which shall be equal to the related
Mortgage Interest Rate minus the Servicing Fee.

     

    “Mortgage
Loan Servicing File”: With respect to each Mortgage Loan, the file retained by
the Servicer consisting of originals of all documents in the Mortgage File which
are not delivered to the Custodian and copies of the Mortgage Loan Documents
listed in the Custodial Agreement the originals of which are delivered to the
Custodian pursuant to Section 2.04 as more fully set forth in Exhibit C.

     

    “Mortgage
Note”:  The note or other evidence of the indebtedness of a Mortgagor
secured by the related Mortgage.

     

    “Mortgaged
Property”:  The real property and improvements subject to a Mortgage,
constituting security for repayment of the debt evidenced by the related
Mortgage Note.

     

    “Mortgagor”:  The
obligor on a Mortgage Note.

     

    “New Loan
Data File”: With respect to each Mortgage Loan delivered after the initial
Effective Date by Owner to be serviced by Servicer under this Agreement, the
data file produced by Owner pursuant to the Transfer Instructions that is used
to enable Servicer to set up each Mortgage Loan on its servicing
system.

     

    “Officers’
Certificate”:  A certificate signed by the President, a Senior Vice
President or a Vice President and by the Treasurer or the Secretary or one of
the Assistant Secretaries of the Servicer, or by other duly authorized officers
or agents of the Servicer, and delivered to the Owner as required by this
Agreement.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    “Opinion
of Counsel”:  A written opinion of counsel, who may be salaried
counsel employed by the Servicer.

     

    “Owner”:  RWT
Holdings, Inc. and/or its assigns.

     

    “P&I
Advance”:  As to any Mortgage Loan, any advance made by the Servicer
pursuant to Section 5.03

     

    “Pass-Through
Transfer”:  The sale or transfer of some or all of the Mortgage Loans
by the Owner to a trust to be formed as part of a publicly issued or privately
placed mortgage-backed securities transaction.

     

    “Person”:  Any
individual, corporation, partnership, joint venture, association, joint-stock
Servicer, trust, unincorporated organization or government or any agency or
political subdivision thereof.

     

    “Prepayment
Interest Shortfall”:  With respect to any Remittance Date, for each
Mortgage Loan that was the subject of a Principal Prepayment during the related
Principal Prepayment Period, an amount equal to the excess of one month’s
interest at the applicable Mortgage Loan Remittance Rate on the amount of such
Principal Prepayment over the amount of interest (adjusted to the Mortgage Loan
Remittance Rate) actually paid by the related Mortgagor with respect to such
Principal Prepayment Period.

     

    “Primary
Insurance Policy”:  With respect to each Mortgage Loan, the primary
policy of mortgage insurance in effect, or any replacement policy therefore
obtained by the Servicer pursuant to Section 4.08.

     

    “Principal
Prepayment”:  Any payment or other recovery of principal on a Mortgage
Loan, full or partial, which is received in advance of its scheduled Due Date,
and which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.

     

    “Principal
Prepayment Period”:  The calendar month preceding the month of the
applicable Remittance Date.

     

    “Privacy
Requirements”: Means the obligations imposed by (i) Title V of the
Gramm-Leach-Bliley Act, 15 U.S.C. § 6801 et seq.; (ii) the applicable federal
regulations implementing such act and codified at 12 CFR Parts 40, 216,
332,  573, and/or 16 CFR Part 313; (iii) Interagency Guidelines
Establishing Standards For Safeguarding Borrower Information published in final
form on February 1, 2001 (such final guidelines and/or rules the “Interagency
Guidelines”) to establish and maintain an information Security Program; and (iv)
other applicable federal, state and local laws, rules, regulations, and orders
relating to the privacy and security of Customer Information, including the
federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., and similar state
laws.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    “Qualified
Insurer”:  A mortgage guaranty insurance Insurer duly authorized and
licensed where required by law to transact mortgage guaranty insurance business
and approved as an insurer by Fannie Mae or Freddie Mac.

     

    “Rating
Agencies” or “Rating Agencies” means any nationally recognized statistical
credit agency that at the time of any determination thereof has outstanding a
rating on one or more classes of mortgage-backed securities or asset-backed
securities at the request of any issuer of mortgage-backed securities or
asset-backed securities.

     

    “Reconstitution”:  Either
a Whole Loan Transfer or a Pass-Through Transfer.

     

    “Reconstitution
Date”:  The date on which any or all of the Mortgage Loans serviced
under this Agreement shall be removed from this Agreement and reconstituted as
part of a Whole Loan Transfer or Pass Through Transfer pursuant to Section 10.03
hereof.  The Reconstitution Date shall be such date designated by the
Owner with thirty (30) days prior notice to Servicer.

     

    “Record
Date”:  The close of business of the last Business Day of the month
preceding the month of the related Remittance Date.

     

    “REMIC”:
A real estate mortgage investment conduit, as such term is defined by the
Internal Revenue Code of 1986, as amended.

     

    “Remittance
Date”:  The 18th day of
any month, beginning on the 18th day of
the month after the month of the applicable Transfer Date, or if such 18th day is
not a Business Day, the first Business Day immediately preceding.

     

    “REO
Disposition”:  The final sale by the Servicer of a Mortgaged Property
acquired by the Servicer in foreclosure or by deed in lieu of
foreclosure.

     

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

     

    “REO
Property”:  A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure, as described in Section
4.14.

     

    “Servicer”:  [________________],
a Pennsylvania corporation, or its successor in interest or any successor to the
Servicer under this Agreement appointed as herein provided.

     

    “Servicing
Advances”:  All customary, reasonable and necessary “out of pocket”
costs and expenses incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
judicial proceedings, including foreclosures, (c) the management and liquidation
of REO Property pursuant to Section 4.14, and (d) compliance with the Servicer’s
obligations described in Sections 4.08 and 4.10.

     

    “Servicing
Compensation “:  The amount of fees payable to the Servicer for the
services provided in this Agreement.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    “Servicing
Fee”: With respect to each Mortgage Loan, the amount the Owner shall pay to the
Servicer, which shall, for a period of one full month, be equal to one-twelfth
of the product of (a) the Servicing Fee Rate and (b) the Assumed Principal
Balance as of the first day of the related Due Period.  The obligation
of the Owner to pay the Servicing Fee is limited to, and the Servicing Fee is
payable solely from, the interest portion (including recoveries with respect to
interest from Liquidation Proceeds, to the extent permitted hereunder) of
Monthly Payments collected by the Servicer, or as otherwise provided
hereunder.

     

    “Servicing
Fee Rate”: The Servicing Fee Rate shall be 0.375%.

     

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

     

    “Servicing
Rights”:  With respect to each Mortgage Loan, any and all of the
following:  (a) all rights to service the Mortgage Loan; (b) all
rights to receive servicing fees, additional servicing compensation (including
without limitation any late fees, assumption fees, penalties or similar payments
with respect to the Mortgage Loan, and income on escrow accounts or other
receipts on or with respect to the Mortgage Loan, but excluding all prepayment
penalties), reimbursements or indemnification for servicing the Mortgage Loan,
and any payments received in respect of the foregoing and proceeds thereof; (c)
the right to collect, hold and disburse escrow payments or other similar
payments with respect to the Mortgage Loans and any amounts actually collected
with respect thereto and to receive interest income on such amounts to the
extent permitted by applicable law; (d) all accounts and other rights to payment
related to any of the property described in this paragraph; (e) possession and
use of any and all Mortgage Loan Servicing Files pertaining to the Mortgage
Loans or pertaining to the past, present or prospective servicing of the
Mortgage Loans; (f) all rights and benefits relating to the direct solicitation
of the related Mortgagors for products and services or modification of the
Mortgage Loans and attendant right, title and interest in and to the list of
such Mortgagors and data relating to their respective Mortgage Loans; (g) all
rights, powers and privileges incident to any of the foregoing; and (h) all
agreements or documents creating, defining or evidencing any of the foregoing
rights to the extent they relate to such rights.

     

    “Transfer
Instructions”:  The instructions set forth on Exhibit D, detailing the
procedures pursuant to which Servicer and Owner shall effect the assumption of
the servicing obligations by Servicer, as the same may be amended or
supplemented from time to time with respect to Mortgage Loans delivered on or
after the initial Effective Date to be serviced by Servicer under this
Agreement.

     

    “WILMA
File”:  A schedule annexed to each New Loan Data File as specified in
the Transfer Instructions.

     

    “Whole
Loan Transfer”:  Any sale or transfer of some or all of the Mortgage
Loans by the Owner to a third party, which transfer is not a Pass Through
Transfer.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    ARTICLE
II

    POSSESSION
OF MORTGAGE LOAN SERVICING FILES

     

    Section
2.01   Servicing of Mortgage
Loans.

     

    From and
after each related Effective Date, the Servicer does hereby agree to service the
Mortgage Loans on behalf of the Owner pursuant to the terms of this
Agreement.  The rights of the Owner to receive payments with respect
to the Mortgage Loans shall be as set forth in this
Agreement.  Servicer shall be deemed to be the owner of the Servicing
Rights.

     

    Section
2.02   Conveyance of Mortgage Loan
Servicing Files; Possession of Mortgage Loan Servicing
Files.

     

    The Owner
shall deliver the Mortgage Loan Servicing Files to the Servicer in accordance
with the Transfer Instructions. The contents of each Mortgage Loan Servicing
File are and shall be held in trust by the Servicer for the benefit of the Owner
as the owner thereof and the Servicer’s possession of each Mortgage Loan
Servicing File so retained is at the will of the Owner for the sole purpose of
servicing the related Mortgage Loan, and such retention and possession by the
Servicer is in a custodial capacity only. The Mortgage Loan Servicing File may
be retained in microfilm, microfiche, optical storage or magnetic media in lieu
of hard copy.  The Servicer shall maintain records confirming the
Owner’s ownership interest in the Mortgage Loan Servicing File.  The
Servicer shall release from its custody the contents of any Mortgage Loan
Servicing File only in accordance with written instructions from the Owner,
unless such release is required as incidental to the Servicer’s servicing of the
Mortgage Loans.  Owner may request the release of the contents of any
Mortgage Loan Servicing File at any time; Servicer shall deliver the requested
contents within five (5) business days of its receipt of Owner’s written
request, and Owner shall reimburse Servicer for Servicer’s reasonable out of
pocket expenses in connection with such delivery.

     

    Section
2.03   Books and
Records.

     

    Record
title to each Mortgage and the related Mortgage Note shall continue in the name
of the Owner, provided, however, that, subject to Customary Servicing
Procedures, Servicer shall have no responsibility or liability under this
Agreement for acts, errors or omissions resulting from Servicer’s lack of record
title in each Mortgage and the related Mortgage Notes.  All rights
arising out of the Mortgage Loans including, but not limited to, all funds
received on or in connection with a Mortgage Loan shall be held by the Servicer
in trust for the benefit of the Owner as the owner of the Mortgage Loans,
subject to subsequent deduction of amounts to which the Servicer is entitled
pursuant to the terms of this Agreement.

     

    Section
2.04   Custodial
Agreement: Delivery of Documents.

     

    The Owner
shall deliver to the Custodian those Mortgage Loan Documents as required by
Exhibit C to this
Agreement with respect to each Mortgage Loan.  The Custodian will
certify its receipt of all such Mortgage Loan Documents required to be delivered
pursuant to the Custodial Agreement, as evidenced by the Initial Certification
of the Custodian in the form annexed to the Custodial Agreement.  The
Owner will be responsible for the fees and expenses of the
Custodian.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    The
Servicer shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with Section 4.01 within one (1) week of their
execution, provided, however, that the Servicer shall provide the Custodian with
a certified true copy of any such document submitted for recordation within ten
(10) days of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within sixty days of its submission for recordation.

     

    Section
2.05   Tax Service/Flood
Service.

     

    The
Servicer shall obtain, at Owner’s cost and expense, a valid fully paid, freely
transferable, life of loan, tax service contract and flood service contract for
each Mortgage Loan with a vendor selected by the Servicer as specified in the
Transfer Instructions.  If Owner delivers, or causes to be delivered,
existing tax service contracts or flood service contracts for any Mortgage Loan,
the Servicer may convert such contracts, at Owner’s cost and expense, to one
issued by the vendor selected by Servicer.

     

    ARTICLE
III

    REPRESENTATIONS
AND WARRANTIES

     

    Section
3.01   General Representations and
Warranties of the Servicer and Owner.

     

    Each of
the Servicer and Owner hereby represents and warrants to the other that, as of
the initial and each Effective Date:

     

    (a)           Due Organization and
Authority.  With respect to Servicer, it is a corporation duly
organized, validly existing and in good standing under the laws of the state of
incorporation and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each state
where a Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type conducted by
it, and in any event it is in compliance with the laws of any such state to the
extent necessary to ensure the enforceability of the related Mortgage Loan and
the servicing of such Mortgage Loan in accordance with the terms of this
Agreement.  With respect to Owner, it is a corporation, organized,
existing and in good standing under the laws of the State of
Delaware.  With respect to each, it has the full corporate power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement by it and
the consummation of the transactions contemplated hereby have been duly and
validly authorized; With respect to each, this Agreement evidences the valid,
binding and enforceable obligation of it; and all requisite corporate action has
been taken by it to make this Agreement valid and binding upon it in accordance
with its terms;

     

    (b)           No
Conflicts.  Neither the execution and delivery of this
Agreement, or the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement will conflict with or
result in a breach of any of its terms, articles of incorporation or by-laws or
any legal restriction or any agreement or instrument to which it is now a party
or by which it is bound, or constitute a default or result in the violation of
any law, rule, regulation, order, judgment or decree to which it or its property
is subject;

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (c)           Ability to
Service.  With respect to the Servicer only, the Servicer is an
approved seller/servicer of conventional residential mortgage loans for Fannie
Mae or Freddie Mac, with the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as the
Mortgage Loans.  The Servicer is in good standing to service mortgage
loans for Fannie Mae or Freddie Mac and no event has occurred with respect to
the Servicer which would make the Servicer unable to comply with eligibility
requirements or which would require notification to either Fannie Mae or Freddie
Mac;

     

    (d)           No Litigation
Pending.  There is no action, suit, proceeding or investigation
pending or threatened against it which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of it, or in any material
impairment of the right or ability of it to carry on its business substantially
as now conducted, or in any material liability on the part of it, or which would
draw into question the validity of this Agreement or the Mortgage Loans or of
any action taken or to be contemplated herein, or which would be likely to
impair materially the ability of it to perform under the terms of this
Agreement; and

     

    (e)           No Consent
Required.  No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by it of or compliance by it with this Agreement, or if required,
such approval has been obtained prior to the applicable Effective
Date.

     

    Section
3.02   Representations, Warranties
and Covenants of Owner.

     

    The Owner
hereby represents and warrants as of the applicable Effective Date with respect
to each Mortgage loan, and covenants to the Servicer that:

     

    (a)           Mortgage Loans as
Described.  The information set forth in WILMA File attached to
each New Loan Data File is true and correct in all material
respects.

     

    (b)           Delivery of Books and
Records.  Owner will, on or before the applicable Effective
Date, deliver, or cause to be delivered, to the Servicer or any custodian, as
applicable, all of the books, records, data, files and Mortgage Loan Servicing
Files, including records on microfiche or its equivalent, reasonably required by
the Servicer to document and service each Mortgage Loan; such books, records,
data, files and documents shall contain all of the items (including but not
limited to hazard insurance policies, flood insurance policies and private
mortgage insurance policies) which are required by applicable law and Customary
Servicing Procedures to service the Mortgage Loans, are true, accurate and
complete in all material respects.

     

    (c)           Flood
Insurance.  If any of the Mortgage Loans are secured by
Mortgaged Properties located in Federal Emergency Management Agency designated
flood areas, then (to the extent required by Applicable Requirements) flood
insurance policies are or will be in full force and effect in the amounts
required by Owner under Applicable Requirements.

     

    (d)           Hazard
Insurance.  All Mortgaged Properties are insured against fire
and have extended coverage insurance in the amounts required by [Fannie Mae];
all insurance premiums on such insurance policies have been or will have been
paid in a timely manner; and there have been no fire losses on the Mortgaged
Properties where Owner’s estimate of loss is materially greater than the net
recovery from the fire insurance carrier.  To Owner’s knowledge, there
have been no fire losses on the Mortgaged Properties as to which there is a
pending coinsurance claim.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (e)           High Cost
Loans.  No Mortgage Loan is a High Cost Loan or subject to
HOEPA.

     

    (f)           Tax
Contracts.  All Mortgage Loans have a fully paid, freely
transferable tax service contract.  If a tax service contract is not
provided, Owner shall reimburse Servicer for its cost to obtain such a
contract.  Owner shall reimburse Servicer for any expenses incurred
for transferring existing tax contracts.

     

    Section
3.03   Survival.

     

    The
representations and warranties of the Owner and the Servicer in this Article III
shall survive the applicable Effective Date.

     

    ARTICLE
IV

    ADMINISTRATION
AND SERVICING OF MORTGAGE LOANS

     

    Section
4.01   Standards of
Servicer.

     

    The
Servicer, as independent contract servicer, shall service and administer the
Mortgage Loans for the benefit of the Owner in accordance with the terms of this
Agreement, Applicable Requirements and in conformity with Customary Servicing
Procedures.  In performing its obligations hereunder, the Servicer
shall exercise no less than the same care that it customarily employs and
exercises in servicing and administering mortgage loans for its own account, but
shall perform such obligations without regard to the Servicer’s obligation to
make Servicing Advances, or to the Servicer’s right to receive compensation for
its services hereunder.

     

    From and
after the initial Effective Date, the Servicer shall assume responsibility under
this Agreement to service and administer additional Mortgage Loans upon the
delivery, in accordance with the Transfer Instructions, of the related New Loan
Data File and all related Mortgage Loan documentation by the Owner, provided
that any new Mortgage Loans that the Owner desires to make subject to this
Agreement meet the Eligibility Criteria then in effect.  The Owner
shall provide the New Loan Data File for each Mortgage Loan to the Servicer
promptly upon purchase or origination of the Mortgage Loan by the Owner, as
specified in the Transfer Instructions.  The Owner shall notify the
Servicer of any changes in the information contained in the New Loan Data File
as specified in the Transfer Instructions.  The Owner agrees to
provide the Servicer, within two (2) Business Days after the Servicer’s request,
copies of the Mortgage Note, the Mortgage or any other documents the Owner has
with respect to a Mortgage Loan that the Servicer deems reasonably necessary in
connection with its performance of the servicing of said Mortgage
Loan.  The Servicer shall cooperate with the Owner in connection with
any transfer of the Servicing Rights with respect to the Mortgage
Loans.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    Subject
to the above-described servicing standards, the specific requirements and
prohibitions of this Agreement and the respective Mortgage Loans, and the
provisions of any Primary Insurance Policy and applicable law, the Servicer
shall have full power and authority, acting alone, to do any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Servicer shall, and is hereby authorized and empowered to (i) execute and
deliver on behalf of itself and the Owner, any and all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loan and with respect
to the Mortgaged Property and (ii) waive, modify or vary any term of any
Mortgage Loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to the related Mortgagor if in the
Servicer’s reasonable and prudent determination such waiver, modification,
postponement or indulgence is in the interests of the Owner and is not
prohibited by a Primary Insurance Policy; provided, however, that the Servicer
may not, unless it has obtained the consent of the Owner, permit any
modification with respect to any Mortgage Loan that would vary the Mortgage
Interest Rate, defer or forgive the payment of interest or of any principal,
reduce the outstanding principal amount (other than as a result of its actual
receipt of payment of principal on), extend the final maturity date of such
Mortgage Loan, or accept substitute or additional collateral or release any
collateral for a Mortgage Loan.  Notwithstanding anything to the
contrary in the this Agreement, in the event of a Pass-Through Transfer for
which Servicer continues to service any Mortgage Loan, the Servicer shall not
make or permit any modification, waiver or amendment of any term of a Mortgage
Loan that could cause any REMIC holding such Mortgage Loan to fail to qualify as
a REMIC or result in the imposition of any tax under Section 860F(a) or 860G(d)
of the Code on any REMIC holding such Mortgage Loan.  The Owner shall
furnish the Servicer with a corporate resolution executed by the Board of
Directors of Owner and appointing certain employees of Servicer to be officers
of Owner for the limited purpose of executing certain documents in connection
with Servicer’s performance of its obligations under this Agreement, in the form
of Exhibit E hereto, no
later than the initial Effective Date and if reasonably required by the
Servicer, such other documents necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties under this
Agreement.

     

    The
Servicer shall perform all of its servicing responsibilities hereunder and may
cause a subservicer to perform any of its responsibilities on its behalf, but
the use by the Servicer of a subservicer shall not release the Servicer from any
of its obligations hereunder and the Servicer shall remain responsible hereunder
for all acts and omissions of each subservicer as fully as if such acts and
omissions were those of the Servicer.  The Servicer shall pay all fees
and expenses of each subservicer from its own funds.

     

    At the
cost and expense of the Servicer, without any right of reimbursement from the
Custodial Account, the Servicer shall be entitled to terminate the rights and
responsibilities of a subservicer and arrange for any servicing responsibilities
to be performed by a successor subservicer, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Servicer, at the
Servicer’s option, from electing to service the related Mortgage Loans
itself.  In the event that the Servicer’s responsibilities and duties
as servicer under this Agreement are terminated pursuant to Section 8.03, 9.01
or 10.01, and if requested to do so by the Owner, the Servicer shall at its own
cost and expense terminate the rights and responsibilities of each subservicer
effective as of the date of termination of the Servicer.  The Servicer
shall pay all fees, expenses or penalties necessary in order to terminate the
rights and responsibilities of each subservicer from the Servicer’s own funds
without reimbursement from the Owner.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    Notwithstanding
any of the provisions of this Agreement relating to agreements or arrangements
between the Servicer and a subservicer or any reference herein to actions taken
through a subservicer or otherwise, the Servicer shall not be relieved of its
obligations to the Owner and shall be obligated to the same extent and under the
same terms and conditions as if it alone were servicing and administering the
Mortgage Loans.  The Servicer shall be entitled to enter into an
agreement with a subservicer for indemnification of the Servicer by the
subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.

     

    Any
subservicing agreement, and any other transactions or services relating to the
Mortgage Loans involving a subservicer shall be deemed to be between such
subservicer and Servicer alone, and the Owner shall have no obligations, duties
or liabilities with respect to such subservicer including no obligation, duty or
liability of Owner to pay such subservicer’s fees and expenses.  For
purposes of distributions and advances by the Servicer pursuant to this
Agreement, the Servicer shall be deemed to have received a payment on a Mortgage
Loan when a subservicer has received such payment.

     

    Section
4.02   Liquidation of Mortgage
Loans; Servicing Advances and Foreclosure.

     

    If any
payment due under any Mortgage Loan and not postponed pursuant to Section 4.01
is not paid when the same becomes due and payable, or if the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as it shall deem to be in the best interests of the
Owner.  If any payment due under any Mortgage Loan and not postponed
pursuant to Section 4.01 remains delinquent for a period of 90 days or more, the
Servicer shall (a) act in the best interests of the Owner, and such action may
include the commencement of foreclosure proceedings or the sale of such Mortgage
Loan, (b) if the Servicer commences foreclosure proceedings, notify the Owner
thereof on the monthly remittance report delivered pursuant to Section 5.02 on
the first Remittance Date following such commencement and (c) respond to
reasonable inquiries of the Owner with respect to the Mortgage Loan or related
REO Property.  Notwithstanding the foregoing, the Servicer may not
sell a delinquent Mortgage Loan unless it has obtained the consent of the
Owner.  The Owner may instruct the Servicer to commence foreclosure
proceedings on any Mortgage Loan for which any payment remains delinquent for a
period of 120 days or more. If the Servicer has commenced foreclosure
proceedings, it shall notify the Owner as above provided and thereafter
periodically advise the Owner of the status of the foreclosure proceedings and
follow the Owner’s instructions in connection therewith.

     

    Whether
in connection with the foreclosure of a Mortgage Loan or otherwise and prior to
such time as title to such Mortgaged Property is liquidated, the Servicer shall
from its own funds make all necessary and proper Servicing Advances; provided,
however, that the Servicer is not required to make a Servicing Advance unless
the Servicer determines in the exercise of its good faith reasonable judgment
that such Servicing Advance would ultimately be recoverable from REO
Dispositions, Insurance Proceeds or Condemnation Proceeds (with respect to each
of which the Servicer shall have the priority described in Section 4.05 for
purposes of withdrawals from the Custodial Account).  In the event
that any Servicing Advance or any commitment to pay a Servicing Advance in
connection with any Mortgage Loan exceeds $5,000, the Servicer shall secure the
written approval of the Owner.

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    Notwithstanding
anything to the contrary contained herein, in connection with a foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall have no
obligation to commence foreclosure proceedings or obtain title to Mortgage
Property securing a Mortgage Loan as a result of or in lieu of foreclosure or
otherwise if (i) such Mortgage Loan is subject to the HOEPA or any regulations
related thereto, (ii) such Mortgage Loan qualifies as a High Cost Loan under a
state anti-predatory lending law or regulation, or (iii) a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes. If the Owner requests
an environmental inspection or review of such Mortgaged Property, such an
inspection or review is to be conducted by a qualified inspector at the Owner’s
expense.  Upon completion of the inspection, the Servicer shall
promptly provide the Owner with a written report of the environmental
inspection.  In the event (a) the environmental inspection report
indicates that the Mortgaged Property is contaminated by hazardous or toxic
substances or wastes and (b) the Owner directs the Servicer to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Servicer shall
be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental clean
up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the Custodial
Account pursuant to Section 4.05 hereof.  In the event the Owner
directs the Servicer not to proceed with foreclosure or acceptance of a deed in
lieu of foreclosure, the Servicer shall be reimbursed for all Servicing Advances
made with respect to the related Mortgaged Property from the Custodial Account
pursuant to Section 4.05 hereof.

     

    Section
4.03   Collection of Mortgage Loan
Payments.

     

    Continuously
from the date hereof until the principal and interest on all Mortgage Loans are
paid in full, the Servicer will use reasonable efforts, in accordance with this
Agreement, to collect all payments due under each of the Mortgage Loans when the
same shall become due and payable, and will take reasonable care in ascertaining
and estimating annual taxes, assessments, fire and hazard insurance premiums,
mortgage insurance premiums, and all other charges that, as provided in any
Mortgage, will become due and  payable in order that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.

     

    Section
4.04   Establishment of Custodial
Account; Deposits in Custodial Account.

     

    The
Servicer shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan and REO Property separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts (collectively, the “Custodial Account”), in the form of time deposit or
demand accounts.  The Custodial Account shall be established with an
Eligible Depository Institution.  The creation of any Custodial
Account shall be evidenced by a letter agreement in the form of Exhibit F hereto.  A
copy of such certification or letter agreement shall be furnished to the Owner
upon request.

     

    The
Servicer shall deposit in a mortgage clearing account on a daily basis and in
the Custodial Account no later than the second Business Day thereafter and
retain therein:

     

    (i)           all
scheduled payments due and collected under the Mortgage Note after the Effective
Date on account of principal, including Principal Prepayments collected after
the Effective Date (and with respect to each full or partial Principal
Prepayment, any Prepayment Interest Shortfall to the extent of the Servicer’s
aggregate Servicing Fee received with respect to the related Prepayment Period),
on the Mortgage Loans;

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    (ii)           all
payments collected on account of interest on the Mortgage Loans;

     

    (iii)          all
Liquidation Proceeds;

     

    (iv)          all
Insurance Proceeds, including amounts required to be deposited pursuant to
Section 4.10 and Section 4.11, other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with Customary Servicing Procedures, the
Mortgage Loan documents or applicable law;

     

    (v)           all
Condemnation Proceeds with respect to any Mortgaged Property which are not
released to the Mortgagor in accordance with Customary Servicing Procedures, the
Mortgage Loan documents or applicable law;

     

    (vi)          any
P&I Advances; and

     

    (vii)        
any amount required to be deposited in the Custodial Account pursuant to
Sections 4.01, 4.11, 4.14, 4.17, 5.01 and 6.02.

     

    The
foregoing requirements for deposit in the Custodial Account shall be
exclusive.    Any interest paid and investment income on
funds deposited in the Custodial Account by the Eligible Depository Institution
shall accrue to the benefit of the Servicer and shall be considered Ancillary
Income (excluding prepayment penalties) payable in accordance with the terms of
this Agreement.  Payments in the nature of late payment charges, fees
for special services provided to a Mortgagor, assumption fees and all other
Ancillary Income may be retained by the Servicer and do not need to be deposited
in the Custodial Account..

     

    The
Servicer may invest the funds in the Custodial Account in Eligible Investments
designated in the name of the Servicer for the benefit of the Owner, which shall
mature not later than the Business Day next preceding the Remittance Date next
following the date of such investment (except that (i) any investment in the
institution with which the Custodial Account is maintained may mature on such
Remittance Date and (ii) any other investment may mature on such Remittance Date
if the Servicer shall advance funds on such Remittance Date, pending receipt
thereof to the extent necessary to make distributions to the Owner) and shall
not be sold or disposed of prior to maturity.  Notwithstanding
anything to the contrary herein and above, all income and gain realized from any
such investment shall be for the benefit of the Servicer and shall be considered
Ancillary Income payable in accordance with the terms of this
Agreement.  The amount of any losses incurred in respect of any such
investments shall be deposited in the Custodial Account by the Servicer out of
its own funds immediately as realized.

     

    Section
4.05   Withdrawals From the
Custodial Account.

     

    The
Servicer shall, from time to time, withdraw funds from the Custodial Account for
the following purposes:

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (i)          
 to make payments to the Owner in the amounts and in the manner provided
for in Section 5.01;

     

    (ii)           to
reimburse itself for P&I Advances, the Servicer’s right to reimburse itself
pursuant to this subclause (ii) being limited to amounts received on the related
Mortgage Loan that represent payments of principal and/or interest respecting
which any such P&I Advance was made;

     

    (iii)           to
reimburse itself first for
unreimbursed Servicing Advances and second for
unreimbursed P&I Advances, the Servicer’s right to reimburse itself pursuant
to this subclause (iii) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, REO
Disposition Proceeds and such other amounts as may be collected by the Servicer
from the Mortgagor or otherwise relating to the Mortgage Loan, it being
understood that, in the case of any such reimbursement, the Servicer’s right
thereto shall be prior to the rights of the Owner;

     

    (iv)           to
reimburse itself for unreimbursed Servicing Advances and advances of Servicer
funds made pursuant to Section 5.03 of this Agreement to the extent that such
amounts are nonrecoverable by the Servicer pursuant to subclause (iii)
above

     

    (v)           to
reimburse itself for all expenses necessary for the proper operation, management
and maintenance of each REO Property, including the cost of maintaining any
hazard insurance pursuant to Section 4.10 and the fees of any managing agent of
the Servicer or a subservicer, it being understood that, in the case of any such
expenditure or withdrawal related to a particular REO Property, the amount of
such expenditure or withdrawal from the Custodial Account shall be limited to
amounts on deposit in the Custodial Account with respect to the related REO
Property;

     

    (vi)          to
pay itself with respect to each Mortgage Loan the Servicing Compensation
pursuant to Section 6.03;

     

    (vii)         to
transfer funds to another Eligible Depository Institution in accordance with
Section 4.09 hereof;

     

    (viii)        to
remove funds inadvertently placed in the Custodial Account in error by the
Servicer; and

     

    (ix)           to
clear and terminate the Custodial Account upon the termination of this
Agreement.

     

    On each
Remittance Date, the Servicer shall withdraw all funds from the Custodial
Account.  The Servicer may use such withdrawn funds only for the
purposes described in this Section 4.05.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    Section
4.06   Establishment of Escrow
Account; Deposits in Escrow Account.

    The
Servicer shall segregate and hold all funds collected and received pursuant to
each Mortgage Loan which constitute Escrow Payments separate and apart from any
of its own funds and general assets and shall establish and maintain one or more
Escrow Accounts (collectively, the “Escrow Account”), in the form of time
deposit or demand accounts.  The Escrow Account shall be established
with an Eligible Depository Institution.  The creation of any Escrow
Account shall be evidenced by a letter agreement in the form of Exhibit G
hereto.  Upon request, the Servicer shall provide the Owner with a
copy of a letter agreement evidencing the establishment of each Escrow
Account.

     

    The
Servicer shall deposit in a mortgage clearing account on a daily basis and no
later than the second Business Day thereafter in the Escrow Account and retain
therein: (i) all Escrow Payments held or collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement, (ii) all Insurance Proceeds that are to be
applied to the restoration or repair of any Mortgaged Property and (iii) all
revenues received with respect to the management, conservation, protection and
operation of the REO Properties pursuant to Section 4.14.  The
Servicer shall make withdrawals therefrom only to effect such payments as are
required under this Agreement, and for such other purposes as shall be set forth
in or in accordance with Section 4.07.  Any interest paid on funds
deposited in an Escrow Account by the Eligible Depository Institution other than
interest on escrowed funds required by law to be paid to the Mortgagor shall
accrue to the benefit of the Servicer and shall be considered Ancillary Income
payable in accordance with the terms of this Agreement. To the extent required
by law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that interest
paid thereon is insufficient for such purposes.

     

    
      Section
4.07   Withdrawals From Escrow
Account.

    

     

    Withdrawals
from the Escrow Account may be made by the Servicer only (a) to effect timely
payments of taxes, assessments, Primary Insurance Policy premiums, fire and
hazard insurance premiums or other items constituting Escrow Payments for the
related Mortgage, (b) to reimburse the Servicer for any Servicing Advance made
by Servicer pursuant to Sections 4.08 and 4.10 hereof with respect to a related
Mortgage Loan, but only from amounts received on the related Mortgage Loan which
represent late payments or collections of Escrow Payments thereunder, (c) to
refund to any Mortgagor any funds found to be in excess of the amounts required
under the terms of the related Mortgage Loan, (d) upon default of a Mortgagor or
in accordance with the terms of the related Mortgage Loan and if permitted by
applicable law, for transfer to the Custodial Account of such amounts as are to
be applied to the indebtedness of a Mortgage Loan in accordance with the terms
thereof, (e) for application to restoration or repair of the Mortgaged Property,
(f) to pay to the Owner in accordance with the terms of this Agreement , or to
the Mortgagor to the extent required by law, any interest paid on the funds
deposited in the Escrow Account, (g) to deposit into the Custodial Account the
funds required to be deposited therein pursuant to Section 4.14, (h) to pay to
itself amounts to which it is entitled pursuant to Section 4.14, (i) to remove
funds inadvertently placed in an Escrow Account in error by the Servicer, (j) to
transfer funds to another Eligible Depository Institution in accordance with
Section 4.09 hereof or (k) to clear and terminate the Escrow Account upon the
termination of this Agreement.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    Section
4.08   Payment of Taxes, Insurance
and Other Charges.

    With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of taxes, assessments, and other charges for which an
escrow is maintained and the status of Primary Insurance Policy premiums and
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) and shall
effect payment thereof employing for such purpose deposits of the Mortgagor in
the Escrow Account which shall have been estimated and accumulated by the
Servicer in amounts sufficient for such purposes, as allowed under the terms of
the Mortgage or applicable law.  To the extent that a Mortgage does
not provide for Escrow Payments, or the Servicer has waived the escrow of Escrow
Payments or the Servicer is prohibited by applicable state law from requiring
the escrow of Escrow Payments, the Servicer shall use commercially reasonable
efforts to seek to determine that any such payments are made by the
Mortgagor.  The Servicer assumes full responsibility for the timely
payment of all such bills and shall effect timely payments of all such bills
irrespective of each Mortgagor’s faithful performance in the payment of same or
the making of the Escrow Payments and shall make Servicing Advances from its own
funds to effect such payments, subject to reimbursement pursuant to Section 4.07
hereof.

     

    Section
4.09   Transfer of
Accounts.

     

    The
Servicer may from time to time transfer the Custodial Account and the Escrow
Account to an Eligible Depository Institution, provided that the Servicer
provides written notice of such transfer within 14 Business Days
thereafter.

     

    Section
4.10   Maintenance of Hazard
Insurance.

     

    The
Servicer shall cause to be maintained for each Mortgage Loan, fire and hazard
insurance with extended coverage customary in the area where the Mortgaged
Property is located, in an amount which is, subject to applicable law, at least
equal to the lesser of (i) the maximum insurable value of the improvements
securing the related Mortgage Loan and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan and (b) the minimum amount necessary to
prevent the Mortgagor and/or the mortgagee from becoming a
co-insurer.  If the Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having special
flood hazards, and that has federally-mandated flood insurance requirements (and
such flood insurance has been made available) the Servicer will cause to be
maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the full
insurable value of the Mortgaged Property, or (iii) the maximum amount of
insurance available under the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, each as amended.  The Servicer shall
also maintain on any REO Property, fire and hazard insurance with extended
coverage in an amount which is at least equal to the maximum insurable value of
the improvements which are a part of such property, liability insurance and, to
the extent required and available under the National Flood Insurance Act of 1968
and the Flood Disaster Protection Act of 1973, each as amended, flood insurance
in an amount required above.  Any amounts collected by the Servicer
under any such policies (other than amounts to be deposited in the Escrow
Account and applied to the restoration or repair of the related Mortgaged
Property, REO Property, or released to the Mortgagor in accordance with
Customary Servicing Procedures or in accordance with the terms of the Mortgage
Loan or applicable law) shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05.  It is understood and agreed that
no earthquake or other additional insurance need be required by the Servicer of
any Mortgagor or maintained on property acquired in respect of a Mortgage Loan,
other than pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance.  All
policies required hereunder shall be endorsed with standard mortgagee clauses
with loss payable to the Servicer, its successors and its assigns, or, upon
request of the Owner, to the Owner, and shall provide for at least 30 days prior
written notice to the Servicer of any cancellation thereof.  The
Servicer shall not accept or obtain any such insurance policy from an insurance
company that does not at that time maintain a General Policy Rating of B-III or
better in Best’s Key Rating Guide.  Servicing Advances made under this
Section 4.10 shall be eligible for reimbursement pursuant to Section 4.10
hereof.

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    Section
4.11   Maintenance of Blanket
Insurance Policy.

     

    If the
Servicer obtains and maintains a blanket insurance policy that is issued by an
insurer generally acceptable to Fannie Mae and Freddie Mac and that insures
against hazard losses on all of the Mortgage Loans, then, to the extent such
policy provides coverage in an amount equal to the coverage required pursuant to
Section 4.10 and otherwise complies with all other requirements of Section 4.10,
the Servicer shall be deemed to have satisfied its obligations as set forth in
Section 4.10.  Such policy may contain a clause providing for a
reasonable deductible, in which case the Servicer shall, if there shall not have
been maintained on the related Mortgaged Property a policy complying with
Section 4.10, and if there shall have been a loss that would have been covered
by such policy, deposit in the Custodial Account the amount not otherwise
payable under the blanket policy because of such deductible clause.

     

    Section
4.12   Maintenance of Mortgage
Impairment Insurance Policy.

     

    The
Servicer may satisfy its obligations under Section 4.10 and 4.11 pertaining to
physical storage of insurance policies and general policy rating requirements by
maintaining a mortgage impairment or other form of blanket policy that will
protect the Servicer and/or Owner in the event of uninsured loss, insolvency of
an insurance carrier or any other loss normally to be covered by a mortgage
impairment policy.  It is agreed that any expense incurred by the
Servicer in maintaining any such insurance shall be borne by the
Servicer.  This shall be deemed to include any loss or any expense as
a result of a deductible clause in such a policy.

     

    Section
4.13   Fidelity Bond; Errors and
Omissions Insurance.

     

    The
Servicer at its own expense shall maintain with responsible companies throughout
the term of this Agreement a blanket fidelity bond and an errors and omissions
insurance policy, with broad coverage on all officers, employees and other
individuals acting on behalf of the Servicer in connection with its activities
under this Agreement.  The amount of coverage shall be at least equal
to the coverage that would be required of the Servicer by Fannie Mae or Freddie
Mac, if the Servicer were servicing the Mortgage Loans for Fannie Mae or Freddie
Mac, and such policy shall be issued by a company that is acceptable to Fannie
Mae or Freddie Mac.  The Fidelity Bond and errors and omissions
insurance shall be in the form of the Mortgage Banker’s Blanket Bond and shall
protect and insure the Servicer against losses caused by such individuals,
including losses from forgery, theft, embezzlement, fraud, errors and omissions
and negligent acts of such individuals.  Such Fidelity Bond shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby.  No provision of this
Section 4.13 requiring such fidelity bond and errors and omissions insurance
shall diminish or relieve the Servicer from its duties and obligations as set
forth in this Agreement.

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    Section
4.14   Title, Management and
Disposition of REO Property.

     

    Subject
to Section 4.02, if title to a Mortgaged Property is acquired in foreclosure or
by deed in lieu of foreclosure, the deed or certificate of sale shall be taken
in the name of the Servicer or its nominee, in either case as nominee, for the
benefit of the Owner on the date of acquisition of title (the “REO Owner”);
provided, however, that the Servicer shall not be required to take title in its
own name if it reasonably determines that such record ownership could harm the
interests of the Owner or the Servicer.  In the event the Servicer is
not authorized or permitted or elects not to hold title to real property in the
state in which the REO Property is located, or would be adversely affected under
the “doing business” or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of such Person or Persons as
shall be consistent with an opinion of counsel obtained by the Servicer, at
expense of the REO Owner, from an attorney duly licensed to practice law in the
state where the REO Property is located.  The Person or Persons
holding such title other than the REO Owner shall acknowledge in writing that
such title is being held as nominee for the REO Owner.

     

    In the
event of a Pass-Through Transfer for which Servicer continues to service any
Mortgage Loan, the REO Property must be sold within three years following the
end of the calendar year of the date of acquisition if a REMIC election has been
made with respect to the arrangement under which the Mortgage Loans and REO
Property are held, unless (i) the Purchaser shall have been supplied with an
Opinion of Counsel (at the Owner’s expense) to the effect that the holding by
the related trust of such Mortgaged Property subsequent to such three-year
period (and specifying the period beyond such three-year period for which the
Mortgaged Property may be held) will not result in the imposition of taxes on
“prohibited transactions” of the related trust as defined in Section 860F of the
Code, or cause the related REMIC to fail to qualify as a REMIC, in which case
the related trust may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel), or (ii) the Purchaser (at the
Owner’s expense) or the Servicer shall have applied for, prior to the expiration
of such three-year period, an extension of such three-year period in the manner
contemplated by Section 856(e)(3) of the Code, in which case the three-year
period shall be extended by the applicable period.  If a period longer
than three years is permitted under the foregoing sentence and is necessary to
sell any REO Property, the Servicer shall report monthly to the Purchaser as to
progress being made in selling such REO Property.

     

    Notwithstanding
any other provision of this Agreement, if a REMIC election has been made, no
Mortgaged Property held by a REMIC shall be rented (or allowed to continue to be
rented) or otherwise used for the production of income by or on behalf of the
related trust or sold in such a manner or pursuant to any terms that would (i)
cause such Mortgaged Property to fail to qualify at any time as “foreclosure
property” within a meaning of Section 860G(a)(8) of the Code, (ii) subject to
the related trust to the imposition of any federal or state income taxes on “net
income from foreclosure property” with respect to such Mortgaged Property within
the meaning of Section 860G(c) of the Code, or (iii) cause the sale of such
Mortgaged Property to result in the receipt by the related trust or any income
from non-permitted assets as described in Section 860F(a) (2)(B) of the Code,
unless the Servicer has agreed to indemnify and hold harmless the related trust
with respect to the imposition of any such taxes.

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    The
Servicer, either itself or through an agent selected by the Servicer, shall
manage, conserve, protect and operate each REO Property for the REO Owner solely
for the purpose of its prompt disposition and sale, and in same manner that it
would be required to manage, conserve, protect and operate foreclosed property
for its own account (subject to the condition described in the second paragraph
of Section 4.02); provided, however, that the Servicer’s obligations with
respect to such REO Property shall in no way limit the right of the REO Owner to
assume responsibility for the maintenance and sale of properties obtained
through foreclosure proceedings or through other means in lieu of foreclosure
proceedings. The Servicer shall attempt to sell the same (and may temporarily
rent the same) on such terms and conditions as the Servicer deems to be in the
reasonable interest of the REO Owner in accordance with Customary Servicing
Procedures.  If Owner has notified the Servicer in writing that an REO
Property is held as part of a REMIC, the Servicer will make reasonable efforts
to sell such REO Property within the time necessary to preserve such REMIC
status as advised by Owner in the notice thereof.

     

    The
Servicer shall cause to be deposited in the Escrow Account, on a daily basis
upon receipt thereof, all revenues received with respect to the conservation and
disposition of the related REO Property and shall withdraw therefrom funds
necessary for the proper operation, management and maintenance of the related
REO Property, including the cost of maintaining any hazard insurance pursuant to
Section 4.10 hereof and the fees of any managing agent acting on behalf of the
Servicer.  Any disbursement in excess of $5,000 shall be made only
with the written approval of the REO Owner.  For purposes of the
preceding sentence, any approval given by the Owner shall constitute approval by
the REO Owner.  On or before each Determination Date, the Servicer
shall withdraw from the Escrow Account and deposit into the Custodial Account
the net income from the REO Property on deposit in the Escrow Account less any
reserves required to be maintained in the Escrow Account from time to time to
satisfy reasonably anticipated expenses.  The Servicer shall furnish
to the Owner on each Remittance Date, an operating statement for each REO
Property covering the operation of each REO Property for the previous month and
the Servicer’s efforts in connection with the sale of that REO
Property.  Such statement shall be accompanied by such other
information as the Owner shall reasonably request.

     

    Each REO
Disposition shall be carried out by the Servicer at such price, and upon such
terms and conditions, as the Servicer deems to be in the reasonable interests of
the REO Owner consistent with Customary Servicing Procedures; provided, however,
that the Servicer, prior to any such disposition, shall notify the REO Owner in
writing of such price, terms and conditions and shall proceed with such
disposition only if the Servicer is not otherwise directed by the REO Owner in a
writing delivered to the Servicer not later than the tenth Business Day
following the Servicer’s delivery of such notice to the REO
Owner.  For purposes of the preceding sentence, any direction given by
the Owner shall constitute a direction by the REO Owner.  If upon the
acquisition of title to the Mortgaged Property by foreclosure sale or deed in
lieu of foreclosure or otherwise, there remain outstanding unreimbursed P&I
Advances pursuant to Section 5.03 with respect to the Mortgage Loan or if, upon
liquidation as provided in this Section 4.14, there remain outstanding any
unreimbursed Servicing Advances with respect to the Mortgaged Property or the
Mortgage Loan, the Servicer shall be entitled to reimbursement from the proceeds
received in connection with the disposition of the Mortgaged Property, and from
the Owner if such proceeds are insufficient, for any related unreimbursed
Servicing Advances or related unreimbursed P&I Advances pursuant to Section
5.03.  On the Remittance Date immediately following the Principal
Prepayment Period in which REO Disposition Proceeds are received, the net cash
proceeds of such REO Disposition shall be distributed to the REO
Owner.  In the event that the Servicer is billed for expenses related
to an REO Property subsequent to the date on which the net cash proceeds of such
REO Disposition are distributed to the REO Owner, the Servicer shall pay such
expenses and shall thereupon be entitled to reimburse itself therefore by
withdrawing the amount of such expenses from the Custodial
Account.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    Section
4.15   Transfer
Notices.

     

    (a)           Within
fifteen (15) days before the applicable Effective Date with respect to the
Mortgage Loans, the Owner shall cause any required notices (“Goodbye Letters”)
to the Mortgagors of the transfer of the servicing function contemplated herein
to be delivered to the Mortgagors. Such Goodbye Letters shall be prepared and
delivered by or on behalf of the Owner in accordance with applicable law and the
Transfer Instructions.  Within fifteen (15) days before the applicable
Effective Date with respect to the Mortgage Loans, the Servicer shall cause any
required notices (“Hello Letters”) to the Mortgagors of the Servicer’s
assumption of the servicing function contemplated herein to be delivered to the
Mortgagors.  Such Hello Letters shall be prepared and delivered by the
Servicer in accordance with applicable law and the Transfer
Instructions.  The parties shall cooperate to accomplish such
notification in a timely and efficient manner as will best facilitate the
assumption by the Servicer of the servicing responsibilities.  The
form of the Goodbye Letters and Hello Letters to be sent to Mortgagors shall be
approved by the Owner and the Servicer before mailing.

     

    (b)           The
Owner shall notify, or cause to be notified, all Insurers, by overnight or
registered mail, that all insurance premium billings for the Mortgage Loans must
be sent to the Servicer.  Additionally, the Owner shall, prior to the
applicable Effective Date, obtain the written consent of any Insurers that have
the contractual right to approve the assumption of the servicing
responsibilities by the Servicer.

     

    (c)           The
Owner, with the reasonable assistance of the Servicer, shall notify the
applicable taxing authorities (except as such is handled through the tax service
company on any tax service contracts procured by the Servicer) of the assumption
of the servicing responsibilities by the Servicer and include instructions to
deliver all notices and tax bills to the Servicer or the applicable tax service
provider, as the case may be, from and after the Effective Date.

     

    (d)           The
Owner shall notify all attorneys who, on the Effective Date, are providing legal
services to or on behalf of the Owner in connection with pending foreclosure or
litigation involving one or more of the Mortgage Loans, of the transfer of the
servicing function with respect to the Mortgage Loans to the
Servicer.

     

    (e)           The
costs and expenses related to the notices required to be provided under
Subsections (b), (c) and (d) above shall be paid by the Owner.  Each
of Owner and Servicer shall be responsible for their respective costs incurred
in connection with subsection (a) above.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    Section
4.16   Restoration of Mortgaged
Property.

     

    The
Servicer need not obtain the approval of the Owner prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Customary Servicing Procedures.  For claims greater
than $15,000, at a minimum the Servicer shall comply with the following
conditions in connection with any such release of Insurance Proceeds or
Condemnation Proceeds:

     

    (i)        
   The Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required approvals
with respect thereto;

     

    (ii)           the
Servicer shall take all steps necessary to preserve the priority of the lien of
the Mortgage, including, but not limited to requiring waivers with respect to
mechanics’ and materialmen’s liens;

     

    (iii)           the
Servicer shall verify that the Mortgage Loan is not in default; and

     

    (iv)           pending
repairs or restoration, the Servicer shall place the Insurance Proceeds or
Condemnation Proceeds in the Escrow Account.

     

    If the
Owner is named as an additional loss payee, the Servicer is hereby empowered to
endorse any loss draft issued in respect of such a claim in the name of the
Owner.

     

    Section
4.17   Maintenance of PMI Policy;
Claims.

     

    With
respect to each Mortgage Loan with an LTV in excess of 80%, the Servicer shall
maintain or cause the Mortgagor to maintain in full force and effect a PMI
Policy insuring the portion over 78% until terminated pursuant to the Homeowners
Protection Act of 1998, 12 UCS §4901, et seq.  In the event that such
PMI Policy shall be terminated other than as required by law, the Servicer shall
obtain from another Qualified Insurer a comparable replacement policy, with a
total coverage equal to the remaining coverage of such terminated PMI
Policy.  If the insurer shall cease to be a Qualified Insurer, the
Servicer shall determine whether recoveries under the PMI Policy are jeopardized
for reasons related to the financial condition of such insurer, it being
understood that the Servicer shall in no event have any responsibility or
liability for any failure to recover under the PMI Policy for such
reason.  If the Servicer determines that recoveries are so
jeopardized, it shall notify the Owner and the Mortgagor, if required, and
obtain from another Qualified Insurer a replacement insurance
policy.  The Servicer shall not take any action which would result in
noncoverage under any applicable PMI Policy of any loss which, but for the
actions of the Servicer would have been covered thereunder.  In
connection with any assumption or substitution agreement entered into or to be
entered into pursuant to Section 6.01, the Servicer shall promptly notify the
insurer under the related PMI Policy, if any, of such assumption or substitution
of liability in accordance with the terms of such PMI Policy and shall take all
actions which may be required by such insurer as a condition to the continuation
of coverage under such PMI Policy.  If such PMI Policy is terminated
as a result of such assumption or substitution of liability, the Servicer shall
obtain a replacement PMI Policy as provided above.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

     

    In
connection with its activities as servicer, the Servicer agrees to prepare and
present, on behalf of itself and the Owner, claims to the insurer under any PMI
Policy in a timely fashion in accordance with the terms of such PMI Policy and,
in this regard, to take such action as shall be necessary to permit recovery
under any PMI Policy respecting a defaulted Mortgage Loan.  Pursuant
to Section 4.04, any amounts collected by the Servicer under any PMI Policy
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 4.05.

     

    Section
4.18   Privacy.

     

    In
connection with servicing of Mortgage Loans hereunder, the Servicer shall
comply, and cause its third party service providers to comply, with the Privacy
Requirements, subject to the applicability of such Privacy Requirements to the
Servicer as the result of the Servicer’s provision of the services under this
Agreement.  The foregoing obligation to comply with the Privacy
Requirements may include the following: (A) the Servicer shall not disclose any
Customer Information to any person or entity, other than to the extent necessary
to carry out the Servicer’s express obligations under the Agreement, and for no
other purpose.  The Servicer shall ensure that each person or entity
to whom or to which the Servicer intends to disclose Customer Information shall,
prior to any such disclosure of information, agree to: (i) keep confidential any
such Customer Information, (ii) use or disclose such Customer Information only
to the extent necessary to carry out the Servicer’s express obligations under
this Agreement: (B) the Servicer shall not use Customer Information for any
purpose, including but not limited to the marketing of products or services to,
or the solicitation of business from the Mortgagors.  The Servicer may
use the Customer Information to the extent necessary to carry out the Servicer’s
express obligations under the Agreement and as required by state or federal law
or regulation.  The Servicer may also use the Customer Information as
expressly permitted by the Owner in writing, to the extent that such express
permission is in accordance with the Privacy Requirements; (C) the Servicer
shall assess, manage, and control (and cause its service providers to assess,
manage and control) risks relating to the security and confidentiality of
Customer Information, shall implement the standards relating to such risks in
the manner set forth in the FFIEC Interagency Guidelines Establishing Standards
for Safeguarding Customer Information set forth in 12 CFR Parts 30, 208, et al,
and shall maintain at all times an Information Security Program; (D) without
limiting the scope of the above, the Servicer shall use at least the same
physical and other security measures to protect all Customer Information in the
Servicer’s possession or control, as the Servicer uses for its own confidential
and proprietary information; and (E) the Servicer shall deliver a privacy notice
during the term of this Agreement if required of the Servicer by law or
regulation in compliance with Privacy Requirements.

     

    Section
4.19   Compliance with REMIC
Provisions.

     

    If a
REMIC election has been made with respect to the arrangement under which the
Mortgage Loans and REO Property are held, the Servicer shall not take any
action, cause the REMIC to take any action or fail to take (or fail to cause to
be taken) any action that, under the REMIC Provisions, if taken or not taken, as
the case may be could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on “prohibited transactions” as defined in Section 860F(a)(2) of the
Code and the tax on “contribution” to a REMIC set forth in Section 860G(d) of
the Code unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such actions) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.”

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    ARTICLE
V

    PAYMENTS
TO THE OWNER

     

    Section
5.01   Distributions.

     

    (a)     On
each Remittance Date, the Servicer shall remit to the Owner of record on the
preceding Record Date (i) all amounts credited to the Custodial Account as of
the close of business on the preceding Determination Date (net of the other
charges against or withdrawals from the Custodial Account pursuant to Section
4.05(ii)-(x)), plus (ii) the aggregate amount of P&I Advances, if any, minus
(iii) any amounts attributable to Principal Prepayments received after the
expiration of related Principal Prepayment Period (except to the extent that,
pursuant to Section 5.03, any funds described in this clause are remitted to
Owner in lieu of advances by the Servicer of its own funds), and minus (iv) any
amounts that represent early receipts of Monthly Payments due on a Due Date or
Due Dates subsequent to the Due Date occurring in the month of such Remittance
Date (except to the extent that, pursuant to Section 5.03, any funds described
in this clause are remitted to Owner in lieu of advances by the Servicer of its
own funds).

     

    (b)     Each
remittance pursuant to this Section 5.01 shall be made by wire transfer of
immediately available funds to, or by other means of transmission or transfer
that causes funds to be immediately available in, the account which shall have
been designated by the Owner, for distributions pursuant to Section
5.01(a).

     

    The
Servicer shall ten days prior to the Remittance Date on which the final
distribution of funds to Owner is to be made hereunder, notify Owner of the
pendency of such distribution and such distribution shall be made to
Owner.

     

    Section
5.02   Statements to the
Owner.

     

    Not later
than the Business Day immediately following each Remittance Date, the Servicer
shall deliver to the Owner: (a)(i) a monthly remittance statement with respect
to distributions to the Owner under Section 5.01, and (ii) in the event of a
Pass-Through Transfer for which Servicer continues to service any Mortgage Loan,
a monthly remittance statement with respect to distributions to such Investor,
each in a form set forth on Exhibit H hereto; and (b)(i) a
monthly default report with respect to Mortgage Loans owned by the Owner and
(b)(ii) in the event of a Pass-Through Transfer for which Servicer continues to
service any Mortgage Loan, a monthly default report with respect to Mortgage
Loans owned by such Investor.

     

    In
addition, not more than 60 days after the end of each calendar year, upon
receipt of written request by the Owner, the Servicer will furnish to each
Person who was an Owner at any time during such calendar year, a listing of the
principal balances of the Mortgage Loans outstanding at the end of such calendar
year.

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    The
Servicer shall prepare and file any and all tax returns, information statements
or other filings required to be delivered to any governmental taxing authority
(other than those required to be filed by the Owner) or to the Owner pursuant to
any applicable law with respect to the Mortgage Loans and the transactions
contemplated hereby.

     

    Section
5.03   P&I Advances by the
Servicer.

     

    Not later
than the close of business on the Business Day preceding each Remittance Date,
the Servicer shall from its own funds deposit in the Custodial Account an amount
equal to all Monthly Payments (adjusted to the Mortgage Loan Remittance Rate)
that were due on the related Due Date and that were delinquent at the close of
business on the related Cutoff Date; provided, however, that to the extent there
are funds on deposit in the Custodial Account that are not otherwise required to
be distributed to the Owner on such Remittance Date, the Servicer may remit such
funds in lieu of making advances of its own funds; and further provided that any
such funds held for future distribution and so used shall be appropriately
reflected in the Servicer’s records and replaced by the Servicer by deposit into
the Custodial Account on or before each successive Remittance Date to the extent
that funds on deposit in the Custodial Account for the related Remittance Date
(determined without regard to P&I Advances required to be made on such
Remittance Date) shall be less than the aggregate amount required to be
distributed to the Owner pursuant to Section 5.01 on such related Remittance
Date.  For purposes of this Section 5.03, any Monthly Payment or
portion thereof deferred pursuant to Section 4.01 shall be considered delinquent
until paid.  The Servicer’s obligation to make P&I Advances as to
any Mortgage Loan shall continue through the later to occur of
(a)  the last Monthly Payment due prior to the payment in full of the
Mortgage Loan or (b) the Remittance Date following acquisition or disposition of
title to the related Mortgaged Property through foreclosure or by delivery of a
deed in lieu of foreclosure.

     

    Notwithstanding
the provisions of this Section 5.03, the Servicer shall not be required to make
any advance of principal and interest if, in the good faith judgment of the
Servicer, such advance of principal and interest will not ultimately be
recoverable from the related Mortgagor, from Liquidation Proceeds or
otherwise.  In such event, the Servicer shall deliver to the Owner an
Officer’s Certificate of the Company to the effect that an officer of the Owner
has reviewed the related Mortgage File and has made the reasonable determination
that any additional advances are Nonrecoverable. In the event that Servicer
ceases making P&I advances to the Owner pursuant to this provision, Servicer
shall (i) transfer the Mortgage Loan to an actual/actual remittance type for the
remaining life of the loan and (ii) remit actual collections on such Mortgage
Loan on each subsequent Remittance Date.

     

    ARTICLE
VI

    GENERAL SERVICING
PROCEDURE

     

    Section
6.01   Assumption
Agreements.

     

    The
Servicer shall use its best efforts to enforce any “due-on-sale” provision
contained in each Mortgage or Mortgage Note to the extent permitted by law and
provided that such enforcement would not impair any recovery under any related
Primary Insurance Policy.  Any assumption fee collected by the
Servicer for entering into an assumption agreement shall be treated as Ancillary
Income under this Agreement.

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    Section
6.02   Release of Mortgage Files;
Wrongful Satisfaction of Mortgages.

     

    Upon the
payment in full of any Mortgage Loan, the Servicer will prepare and process any
required satisfaction or release of the Mortgage and notify the Owner as
provided in Section 5.02.

     

    If the
Servicer satisfies or releases the lien of a Mortgage without having obtained
payment in full of the indebtedness secured by the Mortgage, the Servicer, upon
written demand, shall remit to the Owner the then Assumed Principal Balance of
the related Mortgage Loan by deposit thereof in the Custodial
Account.  The Servicer shall maintain the Fidelity Bond as provided
for in Section 4.13 insuring the Servicer against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.

     

    Section
6.03   Servicing
Compensation.

     

    As
consideration for Servicer’s performance of servicing obligations pursuant to
this Agreement and subject to the terms and conditions of this Agreement,
Servicer shall, in accordance with the terms of this Agreement, withdraw from
the Custodial Account, pursuant to Section 4.05, or otherwise retain the
Servicing Compensation With respect to any calendar month and each Mortgage
Loan, an amount equal to one-twelfth of the product of the Servicing Fee Rate
(.375 %) and the Assumed Principal Balance as of the first day of the related
Due Period.

     

    The
Servicer shall be entitled to reimbursement for additional services,
including

     

    (a)           express
and other delivery charges, recordation fees and any other reasonable
out-of-pocket expenses incurred by the Servicer with respect to a Mortgage Loan
to the extent not ordinary to the servicing function (but not including
salaries, rent and other general operating expenses of Servicer normally
classified as overhead);

     

    (b)           for
preparation and delivery of any special reports, magnetic tapes, disks, or
transmission outside the normal monthly accounting reports; and

     

    (c)           to
the extent not ordinary to the servicing function, any action taken by the
Servicer which the Servicer reasonably determines to be necessary or appropriate
in order to protect the rights of the Owner (including property preservation)
with respect to any Mortgage Loan, and including Loss Mitigation Activity per
Fannie Mae’s then current compensation guidelines.

     

    Section
6.04   Annual Statement as to
Compliance.

     

    The
Servicer shall deliver to the Owner, on or before March 31 of each year,
beginning March 31, 20__, an Officers’ Certificate stating that (i) a review of
the activities of the Servicer during the preceding calendar year and of the
Servicer’s performance under this Agreement has been made under such officer’s
supervision, and (ii) to the best of such officer’s knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such Servicing Officer
and the nature and status thereof and the action being taken by the Servicer to
cure such default.

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    Section
6.05   Annual Independent Public
Accountants’ Servicing Report.

     

    On or
before March 31 of each year, beginning March 31, 20__, the Servicer, at its
expense, shall cause a firm of independent public accountants that is a member
of the American Institute of Certified Public Accountants to furnish a statement
to the Owner to the effect that such firm has examined certain documents and
records relating to the servicing of mortgage loans in the Servicer’s
portfolio.  On the basis of this examination, the CPA firm will
disclose any exceptions or errors relating to the servicing of mortgage loans,
as required by paragraph four (4) of “The Uniform Single Audit Program for
Mortgage Bankers.”

     

    Section
6.06   Owner’s Right to Examine
Servicer Records.

     

    The Owner
shall have the right, at its expense, upon reasonable notice to the Servicer,
during business hours or at such other times as might be reasonable under
applicable circumstances and on the Servicer’s premises, to examine and audit
any and all of the books, records or other information of the Servicer whether
held by the Servicer or by another on behalf of the Servicer, which relate to
the performance or observance by the Servicer of the terms, covenants or
conditions of this Agreement, and to discuss such books, records or other
information with an officer or employee of the Servicer who is knowledgeable
about the matters contained therein, upon Owner’s reasonable
request.

     

    Section
6.07   Rate
Adjustment.

     

    As to
each Adjustable Rate Mortgage Loan, the Servicer shall make periodic Mortgage
Interest Rate and Monthly Payment adjustments, as applicable, in strict
compliance with (i) the terms of the Mortgage and Mortgage Note, (ii) all
applicable law, and (iii) Customary Servicing Procedures.  Servicer
shall establish procedures to monitor the Index in order to ensure that it uses
the appropriate value for the Index in determining an interest rate
change.  Servicer shall execute all and deliver all appropriate
notices required by (i) the terms of the Mortgage and Mortgage note, (ii) all
applicable law, and (iii) Customary Servicing Procedures regarding such Mortgage
Interest Rate adjustments and Monthly Payment adjustments.  Upon
request by the Owner, Servicer shall deliver to the Owner copies of such
adjustment notification, and shall describe the values and methods used to
calculate and implement such adjustments.  If Servicer fails to make a
timely and correct Mortgage Interest Rate adjustment or Monthly Payment
adjustment, Servicer shall deposit in the Custodial Account out of its own funds
any amounts necessary to satisfy any shortage in the Mortgagor’s Monthly Payment
for so long as such shortage continues.  In the event the Index, as
specified in the related Mortgage Note, becomes unavailable for any reason,
Servicer shall select an alternative index, in accordance with the terms of the
Mortgage Note provide written notice to the Owner of such alternative index, and
such alternative index shall thereafter be the Index for such Mortgage Loan
unless otherwise directed by the Owner to select a specified index in accordance
with the terms of the Mortgage Loan.  The Servicer shall use any
alternative index as specified by the Owner so long as such index is in
accordance with the terms of the Mortgage Note.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    Section
6.08   Maintenance of Licenses and
Ratings.

    The
Servicer shall, at its own cost and expense, obtain and maintain in good
standing without impairment any and all permits, approvals, licenses and
registrations, and cause any of its employees to obtain any and all permits,
approvals, licenses and registrations, that are necessary for the performance of
the Servicing to be provided by the Servicer pursuant to the terms of this
Agreement.

     

    Section
6.09   Quality
Control.

     

    The
Servicer shall perform quality control and internal audit procedures with
respect to the Servicing in accordance with Applicable
Requirements.  To the extent such procedures include any Mortgage Loan
serviced by Servicer hereunder, the Servicer shall share with Owner its quality
control, internal audit findings and any third party reports with respect to
Mortgage Loans serviced hereunder, including the Servicer’s plans for corrective
actions should any be required.  Where required, the Servicer shall
take prompt corrective action with respect to such findings, including those
undisputed and final written findings that Owner may identify through its own
internal/third party audit reviews which may involve third party
contractors.

     

    Section
6.10   Compliance and Performance
Reviews.

     

    The
Owner, its officers, employees and agents, including third-party attorneys and
accountants and auditors, and regulatory officials with regulatory authority
over the Owner may, from time to time, and at their sole cost and expense,
perform reviews, including, but not limited to, onsite visits to ensure that the
Servicer is conducting its activities and performing its obligations under this
Agreement in accordance with all Applicable Requirements, including, without
limitation, the Privacy Requirements.  The Servicer shall provide,
during normal business hours and upon reasonable advance written notice from the
Owner, access to such documents, books, reports, policies and procedures,
personnel and systems and other support and assistance as the Owner may
reasonably request for the purpose of carrying out such reviews.

     

    Section
6.11   Access to Documents and
Employees.

     

    The
Servicer hereby agrees that it shall, at its sole cost and expense, make
available, or cause to be made available, to the Owner or any person designated
by the Owner, in a timely manner, all documents or materials in the possession
of the Servicer that the Owner is required to supply to any federal or state
regulatory body with respect to the matters contemplated by this
Agreement.  In furtherance of the foregoing, the Servicer shall, at
its sole cost and expense, make available, or cause to be made available, during
normal business hours and upon reasonable advance written notice from the Owner,
to the Owner or any person designated by the Owner, resources, including, but
not limited to, access to employees, sufficient to respond adequately to any
issue or concern raised by such federal or state authorities.

     

    Section
6.12   Notices.

     

    The
Servicer shall give prompt written notice to the Owner of (a) any material
action, suit or proceeding instituted by or against the Servicer or any of its
subsidiaries related to Mortgage Loans in any federal or state court or before
any commission or other regulatory body (federal, state or local, domestic or
foreign), or any such proceeding to the Servicer’s knowledge threatened against
the Servicer or any of its subsidiaries related to Mortgage Loans in a writing
containing the details thereof, including any putative class action complaint
involving its servicing of mortgage loans; (b) the occurrence of any fact or
circumstance that would constitute an Event of Default hereunder following the
giving the notice or the expiration of any cure period or both; and (c) any
notice of facts or circumstances that reasonably could be anticipated to result
in a material adverse change in the Servicer’s ability to meet its obligations
under this Agreement.

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    Section
6.13   Contingency
Plans.

     

    The
Servicer represents and warrants that it has in place a contingency plan that
will enable it to (i) materially perform its servicing obligations within 48
hours in the event its primary location is rendered inoperative as a result of a
natural or other disaster or emergency, and once the Servicer relocates to its
backup site, it shall make arrangements to provide continued service as stated
in this Agreement.  The Servicer covenants and agrees to (i) test such
contingency plan at least once annually and, upon request of Owner, provide the
results of such test to the Owner, and (ii) upon request of Owner, provide the
Owner with copies of its operating procedures in the event that such contingency
plan is put into effect.  If Owner determines in its reasonable
discretion, that such contingency plan is inadequate, the Owner shall have the
right to make reasonable recommendations consistent with those required by its
regulators, and the Servicer shall take commercially reasonable efforts to
implement such recommendations.

     

    ARTICLE
VII

    REPORTS TO BE PREPARED BY
SERVICER

     

    Section
7.01   Servicer Shall Provide
Access and Information as Reasonably Required.

     

    The
Servicer shall furnish to the Owner the reports specified on Exhibit J and, upon written
request, during the term of this Agreement, such periodic, special or other
reports or information, whether or not provided for herein, as shall be
necessary, reasonable or appropriate with respect to the purposes of this
Agreement.  The Servicer may negotiate with the Owner for a reasonable
fee for providing such report or information, unless (i) the Servicer is
required to supply such report or information pursuant to any other section of
this Agreement, or (ii) the report or information has been requested in
connection with Internal Revenue Service requirements.  The Servicer
agrees to execute and deliver all such instruments as the Owner, from time to
time, may reasonably request in order to effectuate the purposes and to carry
out the terms of this Agreement.

     

    
      Section
7.02   Financial
Statements.

    

     

    The
Servicer understands that, in connection with marketing the Mortgage Loans
and/or the Servicing Rights, the Owner may make available to a prospective
purchaser of the Mortgage Loans a consolidated Statement of Operations of
Servicer for the most recently completed five fiscal years for which such a
statement is available as well as a Consolidated Statement of Condition at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations.  The Servicer, if it has not already done so, agrees to
promptly furnish to Owner copies of the statements specified
above.

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

    The
Servicer also agrees to make available upon reasonable notice and during normal
business hours to any prospective Owner a knowledgeable financial or accounting
officer for the purposes of answering questions respecting recent developments
affecting the Servicer or the financial statements of the Servicer and to permit
upon reasonable notice and during normal business hours any prospective
purchaser to inspect the Servicer’s servicing facilities for the purpose of
satisfying such prospective purchaser that the Servicer has the ability to
service the Mortgage Loans in accordance with this Agreement.

     

    ARTICLE
VIII

    THE
SERVICER

     

    Section
8.01   Indemnification; Third Party
Claims.

     

    The
Servicer shall indemnify and hold harmless the Owner, its directors, officers,
agents, employees, and assignees (each, an “Owner Indemnified Party”) from and
against any costs, damages, expenses (including reasonable attorneys’ fees and
costs, irrespective of whether or not incurred in connection with the defense of
any actual or threatened action, proceeding, or claim), fines, forfeitures,
injuries, liabilities or losses (“Losses”) suffered or sustained in any way by
any such Person, no matter how or when arising (including in connection with any
judgment, award, or settlement), in connection with or relating to (i) a breach
by Servicer of any of its representations and warranties contained in Article
III or (ii) a breach by Servicer of any of its covenants and other obligations
contained herein (including any failure to service the Mortgage Loans in
compliance with the terms hereof); provided, however, that Servicer shall not
indemnify Owner for any and all Losses for which Owner is required to indemnify
Servicer hereunder.

     

    The Owner
shall indemnify and hold the Servicer, its directors, officers, agents,
employees and assignees (each, a “Servicer Indemnified Party”) harmless from and
shall reimburse the Servicer for any Losses suffered or sustained in any way by
the Servicer, no matter how or when arising (including in connection with any
judgment, award, or settlement), in connection with or relating to (directly or
indirectly, in whole or in part):

     

    (i)           a
breach by the Owner of any of its representations, warranties and covenants
under this Agreement, included, without limitation, any representation, warranty
and/or covenant with respect to High Cost Loans or Mortgage Loans subject to
HOEPA;

     

    (ii)           any
limitation on the liability of the Servicer pursuant to Section 8.02
hereof;

     

    (iii)           Servicer’s
compliance with the instructions of Owner or Servicer taking and initiating any
legal actions with respect to any Mortgage Loans and Mortgaged Properties on
behalf of the Owner in the name of Servicer or an affiliate thereof (in each
case, unless such action or omission is taken with a standard of care in
contravention of any standard of care required under the Agreement and such
contravention is the proximate cause of the Loss);

     

    (iv)           any
actions or omissions of any former servicer, owner, sub-servicer or originator
of a Mortgage Loan or Mortgaged Property (or acts or omissions of any other
person or entity) prior to the service transfer date, including without
limitation, any data integrity issue (and any related costs of correcting such
issues; provided, however, should Servicer have
actual knowledge of any data integrity error which is likely to materially
affect the servicing of any Mortgage Loan in any of the loan portfolios being
serviced under this Agreement, Servicer will take reasonable efforts to correct
the error;

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    (v)           for
a period of one year after the applicable Effective Date, the perpetuation by
Servicer of the acts or omissions of prior servicers; unless Servicer knew or
reasonably should have known consistent with Customary Servicing Procedures that
such acts or omissions violate Applicable Requirements or the requirements of
Servicer under this Agreement;

     

    (vi)          any
outstanding Servicing Advance or P&I Advance as to which Servicer is
not reimbursed in accordance with Article IV hereof;

     

    (vii)         Owner
and/or any prior servicer’s failure to comply with Servicer’s Transfer
Instructions; or

     

    (viii)        the
refusal of Owner or any trustee or custodian in possession of an original
Mortgage loan Document to provide Servicer the originals of any Mortgage Loan
Documents within a reasonable amount of time after a request for such documents
has been received in order to allow Servicer sufficient time to process
satisfaction, payoffs and releases.

     

    Notwithstanding
the foregoing, Owner shall not indemnify Servicer for any Losses for which
Servicer is required to indemnify Owner hereunder.  The Owner or
Servicer required to indemnify under this Section 8.01 (the “Indemnitor”) shall
immediately (i) notify the Owner or Servicer Indemnified Party if a claim
is made by a third party with respect to this Agreement, any Mortgage Loan
and/or any REO Property, (ii) assume the defense of any such claim and pay
all expenses in connection therewith, including attorneys’ fees, and
(iii) promptly pay, discharge and satisfy any judgment, award, or decree
that may be entered against it or the Indemnified Party in respect of such
claim.  Nothing contained herein shall prohibit the Owner Indemnified
Party or Servicer Indemnified Party, at its expense, from retaining its own
counsel to assist in any such proceedings or to observe such proceedings; provided that neither
party shall be obligated to pay or comply with any settlement to which it has
not consented.  All amounts required to be paid or reimbursed by the
Indemnitor hereunder shall be paid or reimbursed as and when incurred by the
Owner or Servicer Indemnified Party, upon demand therefore by such Owner
Indemnified Party or Servicer Indemnified Party.

     

    Section
8.02       Limitation on
Liability

     

    Neither
the Servicer nor any of the officers, employees or agents of the Servicer shall
be under any liability to the Owner for any action taken or for refraining from
the taking of any action in good faith pursuant to this Agreement or in
accordance with applicable law, or for errors in judgment made in good faith;
provided, however, that this provision shall not protect the Servicer or any
such person against any breach of warranties or representations made herein, or
failure to perform the Servicer’s obligations in compliance with the provisions
of this Agreement, or any liability which would otherwise be imposed by reason
of negligence or any breach of the terms and conditions of this
Agreement.  The Servicer and any officer, employee or agent of the
Servicer may rely in good faith on any document of any kind prima facie properly
executed and submitted by the Owner respecting any matters arising
hereunder.  The Servicer shall not be under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its duties
to service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expenses or liability.

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    Section
8.03   Merger or Consolidation of
the Servicer.

     

    The
Servicer shall keep in full effect its existence, rights and franchises as a
corporation, and shall preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or the
ability of the Servicer to perform its duties under this Agreement.

     

    Any
Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, or any Person succeeding to the business of the Servicer
hereunder, shall be the successor of the Servicer hereunder without the
execution or filing of any paper or any further act on the part of either of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall be an institution (i) that
is qualified to service mortgage loans on behalf of Fannie Mae or Freddie Mac
and (ii) that has a net worth of not less than $15,000,000.

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    ARTICLE
IX

    DEFAULT

     

    Section
9.01   Events of
Default.

     

    Event of
Default, whenever used herein, means any one or more of the following
events:

     

    (i)           any
failure by either Party to remit to the other Party any payment required to be
made under the terms of this Agreement that continues unremedied for a period of
two days after the date upon which written notice of such failure, requiring the
same to be remedied, shall have been received by the defaulting Party from the
non-defaulting Party; or

     

    (ii)           any
failure on the part of either Party duly to observe or perform in any material
respect any other of the covenants or agreements on the part of such Party, or a
breach of the representations and warranties of such Party in any material
respect, set forth in this Agreement  that continues unremedied for a
period of 30 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been received by the defaulting
Party from the non-defaulting Party; or

     

    (iii)           a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a trustee in bankruptcy, conservator,
receiver or liquidator in any bankruptcy, reorganization, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against a Party and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or

     

    (iv)           with
respect to Servicer only, the Servicer ceases to meet the qualifications of a
Fannie Mae/Freddie Mac servicer and such approvals are not reinstated within
thirty (30) days; or

     

    (v)           failure
by a Party to maintain the material licenses to do business in any jurisdiction
where the Mortgaged Property is located, but only to the extent such
non-qualification materially and adversely affects such Party’s ability to
perform its obligations hereunder.

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    If an
Event of Default shall occur, then so long as such Event of Default shall not
have been remedied, the non-defaulting Party may, by notice in writing to the
defaulting Party, in addition to whatever rights the non-defaulting Party may
have at law or equity to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the defaulting Party
under this Agreement; provided, however, if the defaulting Party is the Owner,
the effective date of termination shall be the earlier of ninety (90) days and
the effective date that a successor shall have assumed the Servicer’s
responsibilities and obligations hereunder in the manner provided in Section
11.01, but not less than thirty (30) days after notice of termination is
delivered to the Owner.  Termination of this Agreement by the Servicer
shall not impair the Owner’s right, title and interest in and to the Mortgage
Loans.  Further, if the defaulting party is the Owner, Owner shall be
required to pay all reasonable costs and expenses associated with the transfer
of the servicing function upon termination by Servicer.  If the Event
of Default involves the Servicer, on or after the receipt by the Servicer of
such written notice subject to any effective date specified therein, but subject
to any applicable right to be reimbursed for undisputed outstanding Servicing
Advances, P&I Advances, Servicing Fees, and amounts otherwise due to
Servicer under this Agreement, all authority and power of the Servicer under
this Agreement, whether with respect to the Mortgage Loans or otherwise, shall
pass to and be vested in the successor appointed pursuant to Section 11.01, it
being specifically understood and agreed that an element of damages to the Owner
in the event of termination and transfer shall include the difference between
the Servicing Compensation and the negotiated fee for servicing charged by the
successor servicer, which negotiated fee with the successor servicer shall be
reasonable and customary fee to secure quality servicing of the portfolio in
full compliance with this Agreement.  Any transfer of the servicing
obligations pursuant to this paragraph shall not release or otherwise reduce,
waive, modify or diminish the liabilities of the defaulting Party to the
non-defaulting Party hereunder.  Upon written request from the Owner,
the Servicer shall prepare, execute and deliver, any and all documents and other
instruments, place in such successor’s possession all Mortgage Files, and do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the sole expense of the defaulting Party; provided, however, that
the Servicer shall not have to pay the cost to complete the transfer and
endorsement or assignment of the Mortgage Loans if it does not have record title
thereto.  The Servicer shall cooperate with the Owner and such
successor in effecting the termination of the Servicer’s responsibilities and
rights hereunder, including, without limitation, the transfer to such successor
for administration by it of all cash amounts (less any amounts due the Servicer
pursuant to the terms of this Agreement) which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.

     

    ARTICLE
X

    TERMINATION;
RECONSTITUTION

     

    Section
10.01     ( Reserved
)

     

    Section
10.02     Termination Without
Cause

     

    (a)           The
Owner may, at its sole option, terminate with respect to some or all of the
Mortgage Loans, any rights the Servicer may have hereunder, without cause, upon
sixty (60) days prior written notice and the payment to the Servicer of the
purchase price paid by Servicer for the Servicing Rights with respect to each of
the affected Mortgage Loans.

     

    It is
understood and agreed that the foregoing termination fee, and the “deboarding
fee” included within the definition of Servicing Compensation, are intended to
cover all of Servicer’s costs and expenses associated with the transfer of the
servicing function upon termination pursuant to this Section 10.02(a) for the
transfer responsibilities set forth on Exhibit I hereto, including
without limitation, the forwarding by Servicer to any successor servicer, by
overnight mail for the thirty (30) day period immediately following the transfer
and thereafter by respect to the Mortgage Loan or the Mortgaged
Property.  The termination fee shall not cover the costs of (1) any
MERS transfer fee, necessitated by or payable in connection with the transfer of
the servicing function, or (2) retrieval and physical delivery of the Mortgage
Loan Servicing Files to the successor servicer by a vendor selected by the
Owner.  Such costs shall be payable by the
Owner.  Notwithstanding anything contained herein to the contrary, in
the event that there are costs and expenses associated with such transfer of the
servicing function in addition to those costs and expenses associated with the
Servicer responsibilities set forth in Exhibit I and with the Owner
responsibilities set forth in this Section 10.02, the parties agree to negotiate
in good faith to allocate responsibility for such costs and expenses in a fair
and reasonable manner.

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    Upon such
termination, any right of the Servicer to the Servicing Compensation with
respect to the affected Mortgage Loans shall terminate on the Effective
Termination Date (as defined below), except as otherwise provided
herein.  Any such notice of termination shall be in writing and
delivered to the Servicer by Owner as provided in Section 11.07 of this
Agreement.  Owner shall not adversely select the Mortgage Loans with
respect to which this Agreement is terminated such that the costs and burdens of
servicing pursuant to this Agreement are materially increased.

     

    Termination
pursuant to this Section 10.02(a) shall be effective on the date on which the
Servicer transfers all responsibilities, rights, duties and obligations under
this Agreement to the successor appointed pursuant to Section 11.01 and sixty
(60) days from the date of notice of termination (for purposes of this Section
10.02(a) only, the “Effective Termination Date.”).

     

    (b)           Following
twelve (12) months after the applicable Effective Date, Servicer may terminate,
at its sole option, the Agreement with respect to some or all of the Mortgage
Loans or REO Property, without cause.  Such termination shall not
become effective until the earlier of: (i) one hundred twenty (120) days after
the date on which notice of termination is provided by the Servicer in writing
and delivered to the Owner by registered mail, or (ii) a successor shall have
assumed the Servicer’s responsibilities and obligations hereunder in the manner
provided in Section 11.01.  In the event the Servicer terminates the
Agreement without cause with respect to some or all of the Mortgage Loans, the
Owner shall not be required to pay to the Servicer the applicable deboarding fee
included within the definition of Servicing Compensation and Servicer shall pay
all its costs and expenses of transfer; provided, however, that the Servicer
shall be entitled to reimbursement of the Servicing Advances in the same
timeframe as if Servicer had not terminated this Agreement.

     

    (c)           If
Owner or its employees appear on or are members of any organization that appears
on any government list, including, but not limited to, the Control List prepared
by the Office of Foreign Assets Control (“OFAC”) of the Department of the
Treasury, then Servicer may take all measures authorized under applicable law
and may, by giving written notice thereof to Consultant, terminate this
Agreement upon the date specified in the notice, which date may be the date of
the notice.

     

    Section
10.03     Removal of Mortgage Loans
From Inclusion Under This Agreement

     

    The
Servicer and the Owner agree that with respect to some or all of the Mortgage
Loans, the Owner may effect either:

     

    (1)           one
or more Whole Loan Transfers;

     

    (2)           one
or more Pass-Through Transfers;

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    provided,
however, that no Mortgage Loan shall be reconstituted more than four (4)
times.

     

    The
Servicer and the Owner acknowledge and agree that the Servicer is not obligated
hereunder to act as servicer in any Reconstitution that is inconsistent with the
provisions of this Section 10.03 . The Owner is not obligated hereunder to offer
the Servicer the opportunity to act as servicer in any Reconstitution; provided
however that in the event the Owner does not offer such opportunity to the
Servicer the Owner will pay to the Servicer an amount equal to the purchase
price paid by the Servicer for the Servicing Rights with respect to each of the
affected Mortgage Loans.

     

    The
Servicer shall reasonably cooperate with the Owner in connection with any Whole
Loan Transfer or Pass-Through Transfer contemplated by the Owner pursuant to
this Section 10.03, provided, however, that under no circumstances and in no
event shall such cooperation include any act of the Servicer or any event
affecting the Servicer that would materially increase the Servicer’s liabilities
or obligations beyond those liabilities and obligations contained in this
Agreement (except as otherwise set forth in this Section 10.03).

     

    In
connection with any Reconstitution in which the Owner and the Servicer have
agreed that the Servicer shall act as the servicer in the Reconstitution, the
Owner shall deliver any agreement (the “Reconstitution Agreement”) or other
document related to the Whole Loan Transfer or Pass Through Transfer to the
Servicer at least 10 Business Days prior to such transfer; the Servicer’s
refusal to cooperate with Owner based on late delivery of such documents shall
result in no liability to the Servicer.  Such Reconstitution Agreement
may, in the Owner’s discretion, contain contractual provisions not set forth in
this Agreement, including, but not limited to, (i) customary certificate payment
delays, (ii) servicer advance requirements for the advancing of delinquent
scheduled payments of principal and interest through liquidation (unless deemed
non-recoverable), (iii) servicer obligations to pay compensating interest for
prepayment interest shortfalls (to the extent of the monthly servicing fee
payable to the servicer), (iv) representations and warranties (dated as of the
Reconstitution Date) of the Servicer conforming in all material respects to the
representations and warranties in this Agreement, and (v) such provisions with
regard to servicing responsibilities, investor reporting, segregation and
deposit of principal and interest payments, custody of the Mortgage Loans, and
other provisions that conform to secondary market standards for mortgage-backed
securities backed by mortgage loans similar to the Mortgage Loans or as may be
required by one or more Rating Agencies. The Servicer shall promptly review such
Reconstitution Agreement and/or related documents, and provided that such
Reconstitution Agreement contains servicing provisions substantially similar to
those herein or otherwise acceptable to the Servicer in its sole discretion,
shall execute such Reconstitution Agreement and/or related
documents.  The Servicer’s refusal to execute any Reconstitution
Agreement or related documents may be based on any provision that materially (a)
increases the liability of the Servicer and/or (b) affects Servicer’s
profitability from that contemplated herein.  The Owner hereby agrees
to reimburse the Servicer for reasonable out-of-pocket expenses incurred by the
Servicer that relate to reviewing and commenting on the Reconstitution Agreement
for such Whole Loan Transfer or Pass-Through Transfer.  Any
cooperation from the Servicer in connection with any Whole Loan Transfer or
Pass-Through Transfer contemplated by this Section shall include, upon request
by the Owner, delivery of a legal opinion relating to the Servicer substantially
similar to that attached hereto as Exhibit L and the furnishing
of customary information for use in an offering document for such Pass-Through
Transfer, for Pass-Through Transfers of this type, relating to the Servicer and
its servicing practices and portfolio, which in form and substance is reasonably
acceptable to the Servicer (the “Servicer Information”).  The Servicer
shall indemnify the Owner, each Affiliate of the Owner participating in any such
Reconstitution and each Person who controls the Owner or such Affiliate, and
their respective officers and directors, and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain arising directly from Servicer
Information; provided, however, that any numerical information regarding
Servicer, including delinquency statistics, appearing in table format or
otherwise, is confirmed by an independent accounting firm selected by Servicer
at the Owner’s expense. The Owner shall indemnify the Servicer and each Person
who controls the Servicer or such Affiliate and hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any Reconstitution
other than any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain as a result of the Servicer
Information.

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

     

    If
requested by the Owner in connection with any Reconstitution, the Servicer and
the Owner shall execute a letter agreement setting forth the indemnification
obligations set forth in this Section 10.03. In the event that the Servicer is
not the master servicer, servicer or sub-servicer with respect to a
Reconstitution, any and all reasonable costs, fees and expenses incurred by
Servicer in connection with the foregoing shall be reimbursed by Owner after
receipt of an invoice therefor.  Any execution of a subservicing
agreement or pooling and servicing agreement by the Servicer shall be
conditioned on the Servicer receiving servicing compensation that is reasonably
acceptable to Servicer based on providing reasonably equivalent economic value
to the total Servicing Compensation under this
Agreement.  Notwithstanding any provision to the contrary in this
Agreement, in the event that the Servicer is the master servicer, servicer or
sub-servicer with respect to a Reconstitution, the Owner agrees that in such
Reconstitution any servicing performance termination triggers shall be approved
by the Servicer in its reasonable discretion; provided, that in the event that
the Servicer does not approve any servicing performance termination triggers,
the Owner shall, with respect to the Reconstitution, have the right to terminate
the Servicer hereunder (a “Servicing Performance Trigger Termination”) and
designate a successor servicer to act as master servicer, servicer or
sub-servicer upon payment to the Servicer of the purchase price paid by the
Servicer for the Servicing Rights with respect to each of the affected Mortgage
Loans .

     

    All
Mortgage Loans not sold or transferred pursuant to a Whole Loan Transfer or
Pass-Through Transfer shall be subject to this Agreement and shall continue to
be serviced in accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect.

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    

      ARTICLE
XI

      MISCELLANEOUS
PROVISIONS

       

      Section
11.01   Successor to the
Servicer.

       

      Prior to
termination of the Servicer’s responsibilities and duties under this Agreement
pursuant to Section 8.03, 9.01, or 10.02, the Owner shall (i) succeed to and
assume all of the Servicer’s responsibilities, rights, duties and obligations
under this Agreement, or (ii) appoint a successor which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement prior to the termination of Servicer’s
responsibilities, duties and liabilities under this Agreement.  In
connection with such appointment and assumption, the Owner may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree.  The Servicer shall
discharge its duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence that it is obligated to exercise under
this Agreement.

       

      Any
successor appointed as provided herein shall execute, acknowledge and deliver to
the Servicer and to the Owner an instrument accepting such appointment,
whereupon such successor shall become fully vested with all the rights, powers,
duties, responsibilities, obligations and liabilities of the Servicer, with like
effect as if originally named as a party to this Agreement.  No
termination of the Servicer or this Agreement shall affect any claims that the
Owner may have against the Servicer or that Servicer may have against Owner
arising prior to any such termination or resignation.

       

      The
Servicer shall timely deliver to its successor the funds in the Custodial
Account and the Escrow Account (less any amounts to which the Servicer is
entitled pursuant to the terms of this Agreement) and all Mortgage Loan
Servicing Files and related documents and statements held by it hereunder and
the Servicer shall account for all funds.  The Servicer shall execute
and deliver such instruments and do such other things all as may reasonably be
required to more fully and definitely vest and confirm in the successor all such
rights, powers, duties, responsibilities, obligations and liabilities of the
Servicer, including without limitation, the requirements set forth in Exhibit I
hereto.  Servicer and Owner shall be liable for the costs and expenses
associated with the transfer of the servicing function as set forth throughout
this Agreement.

       

      Upon a
successor’s acceptance of appointment as such, the Servicer shall notify by mail
the Owner of such appointment.

       

      Section 11.02   No
Waiver.

       

      No delay
or omission by either party in exercising any right or remedy hereunder shall
operate as a waiver or estoppel thereof or of any other right or remedy, and no
single or partial exercise thereof shall preclude any other or further exercise
thereof or the exercise of any other right or remedy.  The failure at
any time or times hereafter to require strict performance by either party of any
of the provisions, terms and conditions contained in this Agreement, or any
other agreement, document or instrument now or hereafter executed by the
parties, shall not waive, affect, or diminish any right of the other party
hereafter to demand strict compliance or performance therewith and with respect
to any provisions, terms and conditions contained in such
agreements,  documents and instruments at any other time, and waiver
of any default shall not waive or affect any other default, whether prior or
subsequent thereto, and whether of the same or a different type.  None
of the warranties, conditions, provisions, and terms contained in this Agreement
or any other agreement, document or instrument now or hereafter executed by the
parties shall be deemed to have been waived by any act or knowledge of a party,
its agents, officers or employees, unless the other party is so advised by
written instrument signed by an elected officer of said party and is directed to
the other party specifying each waiver.

      
        
           

        

        
          41

          
            

          

        

        
           

        

      

      Section
11.03   Amendment.

       

      This
Agreement may be amended only by written agreement signed by the Servicer and
Owner hereunder.

       

      Section
11.04   No
Solicitations.

       

      Servicer
agrees that it will not take any action or permit or cause any action to be
taken by Servicer, any of its agents or affiliates, or by any independent
contractors on Servicer’s behalf, personally, by telephone, the internet, mail,
or otherwise, to solicit any Mortgagor either to refinance such Mortgagor’s
Mortgage Loan, in whole or in part, or for any other product or service without
the prior written consent of the Owner.  It is understood and agreed
that all rights and benefits relating to the solicitation of any Mortgagor to
refinance such Mortgagor’s Mortgage Loan and the attendant rights, title and
interest in and to the list of such Mortgagor and data relating to such
Mortgagor’s Mortgage Loans shall be retained by Owner pursuant hereto and
Servicer shall take no action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that promotions
undertaken by or on behalf of the Servicer or any affiliate of the Servicer
which are directed to the general public at large, or segments thereof, provided
that no segment shall consist primarily of the Mortgage Loans, including,
without limitation, mass mailing, newspaper, radio and television
advertisements, website ads, monthly account statements or “VRU” recorded
communications or from serving the refinancing needs of a Mortgagor who, without
solicitation, contacts the Servicer in connection with the refinance of such
Mortgage or Mortgage Loan shall not constitute solicitation under this section.
Servicer shall use its best efforts to prevent the sale of the name of any
Mortgagor to any person.

       

      Section
11.05   Duration of
Agreement.

       

      This
Agreement shall continue in existence and effect until terminated as herein
provided.

       

      Section
11.06   Governing
Law.

       

      This
Agreement shall be construed in accordance with the laws of the Commonwealth of
Pennsylvania, except to the extent preempted by Federal law but without regard
to principles of conflicts of laws, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such
laws.

      
        
           

        

        
          42

          
            

          

        

        
           

        

      

      Section
11.07   Notices.

       

      Any
communications provided for or permitted hereunder shall be in writing and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given if (a) personally delivered, (b) mailed by registered mail, postage
prepaid, return receipt requested, and received by the addressee, (c) sent by
express courier delivery service and received by the addressee, or (d)
transmitted by telex, telecopy or telegraph and confirmed by a writing delivered
by means of (a), (b) or (c), to:  (i) in the case of the Servicer,
[_________________, Attn: ___________] or such other address as may hereafter be
furnished to the Owner in writing by the Servicer, with a copy to the Servicer
General Counsel at the same address and (ii) in the case of the Owner, One
Belvedere Place, #310, Mill Valley, California, 94941.

       

      Section
11.08   Severability of
Provisions.

       

      If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be held invalid for any reason whatsoever, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no way
affect the validity or enforceability of the other provisions of this
Agreement.  Any part, provision, representation or warranty of this
Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction.

       

      Section
11.09   No
Partnership.

       

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

       

      Section
11.10   Counterparts.

       

      This
Agreement may be executed in any number of counterparts and by different parties
hereto on separate counterparts, each of which shall be deemed to be an
original. Such counterparts shall constitute one and the same
agreement.

       

      Section
11.11   Successors and
Assigns.

       

      The
Servicer may not assign this Agreement or delegate a material portion of its
duties hereunder (except to any affiliate or subsidiary of the Servicer) to any
transferee servicer without the written consent of Owner, which consent shall
not be unreasonably withheld or delayed.  Any transferee servicer
(including any affiliate or subsidiary of the Servicer) must meet the
eligibility requirements for a successor servicer pursuant to Section 8.03
hereof.  This Agreement shall inure to the benefit of and be binding
upon the Servicer and the Owner and their respective successors and
assigns.

      
        
           

        

        
          43

          
            

          

        

        
           

        

      

      Section
11.12   Time of
Payment.

       

      Unless
otherwise specifically set forth in this Agreement, any amount due to Owner or
Servicer under this Agreement will be due and payable thirty (30) days following
receipt by the paying Party of the invoice from the other Party.  All
amounts will be payable by wire transfer, in accordance with payment
instructions provided from time to time.

       

      Any
amount not paid when due as set forth in this Agreement will bear interest until
paid at a rate of interest equal to the prime rate established from time to time
by The Wall Street Journal, “Money Rates.”  If any portion of an
amount due to a Party under this Agreement is subject to a bona fide dispute
between the Parties, the other Party will pay to that Party on the date such
amount is due all amounts not disputed in good faith.

       

      Section
11.13   General Interpretive
Principles.

       

      For
purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:

       

      (a)           the
terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other gender;

       

      (b)           accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;

       

      (c)           references
herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs, Clauses and other subdivisions of this
Agreement;

       

      (d)           a
reference to a Subsection without further reference to a Section is a reference
to such Subsection as contained in the same Section in which the reference
appears, and this rule shall also apply to Paragraphs, Clauses, and other
subdivisions;

       

      (e)           the
words “herein”, “hereof”, “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular provision; and

       

      (f)           the
term “include” or “including” shall mean without limitation by reason of
enumeration.

       

      Section
11.14   Entire
Agreement.

       

      Each of
the Servicer and the Owner acknowledge that no representations, agreements or
promises were made to it by the other party or any of its employees other than
those representations, agreements or promises specifically contained
herein.  This Agreement between the Servicer and the Owner set forth
the entire understanding between the parties hereto with respect to the matters
set forth herein and shall be binding upon all successors of both
parties.

      
        
           

        

        
          44

          
            

          

        

        
           

        

      

      Section
11.15   Force
Majeure.

       

      The
Servicer and the Owner shall be excused for the period of any delay in the
performance of any obligations under this Agreement when prevented from
performing such obligations by cause or causes beyond their reasonable control,
including, without limitation, civil commotion, war invasions, rebellion,
hostilities, military or usurped power, sabotage, pestilence, riots fire or
other casualty or acts of God.

       

      [SIGNATURES
CONTAINED ON THE FOLLOWING PAGE]

      
        
           

        

        
          45

          
            

          

        

        
           

        

      

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

      

      
        
          	 
      	
                  [______________________],

                
	 
      	
                  Servicer

                
	 
      	 
      
	 
      	
                  By:

                	
                     

                	 
      
	 
      	
                  Name:

                	
                     

                	 
      
	 
      	
                  Title:

                	
                     

                	 
      
	 
      	 
      
	 
      	
                  RWT
      HOLDINGS, INC.,

                
	 
      	
                  Owner

                
	 
      	 
      
	 
      	
                  By:

                	
                     

                	 
      
	 
      	
                  Name:

                	
                     

                	 
      
	 
      	
                  Title:

                	
                     

                	 
      

        

      

       

      
        
           

        

        
          46

          
            

          

        

        
           

        

      

      

      
        
          
            	
                    COMMONWEALTH
      OF

                  	 
      	 
      	
                    )

                  
	 
      	 
      	
                    )
      SS.

                  
	
                    COUNTY
      OF

                  	 
      	 
      	
                    )

                  

          

        

      

      

      On the
______ day of ___________ before me, a Notary Public in and for said State,
personally appeared ________________________ known to me to be
______________________ of [________________], that executed the within
instrument and also known to me to be the person who executed it on behalf of
said association, and acknowledged to me that such association executed the
within instrument.

      

      IN
WITNESS WHEREOF, I have hereunto set my hand affixed my official seal the day
and year in this certificate first above written.

      

      
        	 
      	 
      	
                    

              
	 
      	 
      	
                Notary
      Public

              
	 
      	 
      	 
      
	 
      	 
      	
                My
      Commission expires

              	
                     

              
	 
      	 
      	 
      
	
                STATE
      OF

              	
                    

              	
                )

              	 
      
	 
      	
                )
      SS.

              	 
      
	
                COUNTY
      OF

              	
                    

              	
                )

              	 
      

      

      

      On the
______ day of ___________ before me, a Notary Public in and for said State,
personally appeared ________________________ known to me to be a
______________________ of RWT Holdings, Inc., that executed the within
instrument and also known to me to be the person who executed it on behalf of
RWT Holdings, Inc., and acknowledged to me that RWT Holdings, Inc. executed the
within instrument.

      

      IN
WITNESS WHEREOF, I have hereunto set my hand affixed my official seal the day
and year in this certificate first above written.

      

      
        	 
      	
                    

              
	 
      	
                Notary
      Public

              
	 
      	 
      
	 
      	
                My
      Commission expires

              	
                    

              

      

       

      
        
           

        

        
          47

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      ELIGIBILITY
CRITERIA FOR RESIDENTIAL MORTGAGE LOANS

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
B

      

      [RESERVED]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
C

      

      MORTGAGE
FILE AND MORTGAGE LOAN SERVICING FILE CONTENTS

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
D

      

      TRANSFER
INSTRUCTIONS

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
E

      

      FORM
OF LIMITED CORPORATE RESOLUTION

      

      RESOLUTION
OF THE BOARD OF DIRECTORS OF RWT HOLDINGS, INC.

      

      APPOINTMENT
OF CERTAIN OFFICERS

      

      FOR
PURPOSES OF EXECUTING CERTAIN DOCUMENTS

      

      WHEREAS,
RWT Holdings, Inc. (the “Company”) desires to execute documents necessary to
perfect the release of mortgage loans and the initiation of foreclosure actions
(the “Releases” and “Foreclosures”) regarding certain Mortgage Loans serviced by
[________________] on behalf of RWT Holdings, Inc., and that these Releases and
Foreclosures may be best and most efficiently accomplished by the appointment of
certain officers of the Company with special power to execute the individual
documents to be recorded on behalf of the Company.

      

      NOW,
THEREFORE, BE IT RESOLVED, that the persons named on Exhibit A attached hereto
be, and each of them hereby are appointed as officers of the Company to be
effective as of the first day of _________, 20__ and terminating upon
[________________]’s receipt of the last recorded assignment, as indicated below
with full power to execute on behalf of the Company, by actual or facsimile
signature, all documents in connection with the Releases and Foreclosures;
and

      

      FURTHER
RESOLVED, that the Board is informed and aware that the persons named on Exhibit
A attached hereto are employees of [________________], and that they may from
time to time be named as officers by other corporations for purposes similar to
that set forth in these resolutions; and

      

      FURTHER
RESOLVED, that the foregoing appointments and grants of power and authority are
revocable upon completion of the project related to the Releases and
Foreclosures; and the authority of the persons so appointed is specifically and
strictly limited to the execution of the specific documents referred to above
for the purposes herein authorized; and

      

      FURTHER
RESOLVED, that the foregoing appointments and grants of power and authority
shall not be deemed to (i) entitle any of the persons so appointed to receive
any compensation or other benefits from the Company or any of its affiliates or
(ii) create any employer-employee relationship between the Company or any of its
affiliates any such persons; and

      

      FURTHER
RESOLVED, that the Secretary and each Assistant Secretary (other than any
Assistant Secretary appointed by these resolutions) of the Company are hereby
authorized and directed from time to time to certify copies of these
resolutions, the incumbency of the officers appointed pursuant to these
resolutions, and the actual facsimile signatures of said
officers.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      CERTIFICATE
OF RESOLUTION

      

      I, THE
UNDERSIGNED, Secretary of RWT Holdings, Inc., a ____________, having its
principal place of business at One Belvedere Place, #300, Mill Valley,
California, 94941, hereby certify that the attached is a true copy of a certain
resolution duly adopted by the Board of Directors of RWT Holdings, Inc. in
accordance with its Bylaws at, and recorded in the minutes of, a meeting of the
Board duly held on ___________, 20__ as taken from the minutes of the meeting
and compared by me with the original of the resolution recorded in the
minutes.  I further certify that the resolution is in full force and
effect and has not been revoked.

      

      IN
WITNESS WHEREOF, I set my hand and caused the seal of _____________ to be
affixed hereto on this _____ day of ____________________, 20__.

      

      
        
          
            	 
      	
                        

                  
	 
      	
                    Name,
      title

                  

          

        

      

      

      Subscribed
and sworn to before me this ____ day of ____________, 20__

      

      
        
          
            	 
      	
                        

                  
	 
      	
                    Notary
      Public

                  
	 
      	 
      
	 
      	
                    My
      commission expires:

                  	
                        

                  

          

        

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      Exhibit
A

      

      
        
          
            	
                    Name

                  	 	
                    Title to Which Appointed

                  
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      

          

        

      

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      EXHIBIT
F

      

      CUSTODIAL
ACCOUNT LETTER AGREEMENT

      

      To:         _____________________________________

      _____________________________________

      _____________________________________

      (the “Depository”)

      

      As
“Servicer” under the Loan Servicing Agreement, dated as of _____________,
______________ (the “Agreement”), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 4.04 of the
Agreement, to be designated as “[________________], in trust for the Owner
-______________ Mortgage Loans - Group No. ______ and various
Mortgagors.”  All deposits in the account shall be subject to
withdrawal there from by order signed by the Servicer.  This letter is
submitted to you in duplicate.  Please execute and return one original
to us.

      

      
        
          
            
              	 
      	
                      [________________]

                    	 
	 
      	 
      	 
	 
      	
                      By

                    	
                          

                    	 

            

          

        

      

      

      The
undersigned, as “Depository”, hereby certifies that the above described account
has been established under Account Number ___________________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above.  The amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation to the extent
available under applicable law.

      

      
        
          
            
              	 
      	
                          

                    	 
	 
      	
                      (name
      of Depository)

                    	 
	 
      	 
      	 
	 
      	
                      By

                    	
                          

                    	 

            

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
G

      

      ESCROW
ACCOUNT LETTER AGREEMENT

      

      To:         _____________________________________

      _____________________________________

      _____________________________________

      (the “Depository”)

      

      As
“Servicer” under the Loan Servicing Agreement, dated as of _____________,
__________ Mortgage Loans (the “Agreement”), we hereby authorize and request you
to certify that an account exists titled “[________________], in trust for the
Owner as indicated on [________________]’s records and various
mortgagors.”  All deposits in the account shall be subject to
withdrawal there from by order signed by the Servicer.  This letter is
submitted to you in duplicate.  Please execute and return one original
to us.

      

      
        
          
            	 
      	
                    [__________________]

                  	 
	 
      	 
      	 
	 
      	
                    By

                  	
                        

                  	 

          

        

      

      

      The
undersigned, as “Depository”, hereby certifies that the above described account
has been established under Account Number ___________________, at the office of
the Depository indicated above, and agrees to honor withdrawals on such account
as provided above.  The amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation to the extent
available under applicable law.

      

      
        
          
            
              	 
      	
                          

                    	 
	 
      	
                      (name
      of Depository)

                    	 
	 
      	 
      	 
	 
      	
                      By:

                    	
                          

                    	 

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
H

      

      FORM
OF MONTHLY REMITTANCE STATEMENT

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
I

      

      SERVICER’S
RESPONSIBILITIES UPON TRANSFER OF SERVICING

      

      With
respect to a transfer of servicing responsibilities to a successor servicer, the
obligations of the Servicer under Section 11.01 shall consist of the
following:

       

      
        	
                 
      

              	
                ·

              	
                furnishing
      to the successor electronic records in an industry standard format
      reasonably acceptable to the successor reflecting the status of payments,
      balances and other pertinent information with respect to the Mortgage
      Loans as of such date mutually agreed upon by Owner and Servicer,
      including, but not limited to: (i) master file; (ii) escrow file; (iii)
      payee file, which includes comprehensive tax and insurance information
      identifying payee, payee address, next payment due date, next amount
      payable and policy number/parcel number; (iv) automatic payment draft
      file, which includes loan identifying information; (v) Adjustable Rate
      Mortgage Loan master file; (vi) Adjustable Rate Mortgage Loan history; and
      (vii) any other information reasonably requested by Owner to be furnished
      to the successor.

              

      

      

      
        	
                 
      

              	
                ·

              	
                delivering
      written notice to:  (1) all hazard, flood and earthquake
      insurance companies and/or their agents, all taxing authorities, flood
      determination companies and tax servicers and/or their agents, of the
      transfer of servicing, and (2) any and all mortgage insurance companies
      providing any Primary Mortgage Insurance Policy of the change in insured’s
      name on each such policy to Owner’s name in care of the
      successor.

              

      

      

      With
respect to Mortgage Loans secured by Mortgaged Properties located in Federal
Emergency Management Agency designated flood areas, as of the date of transfer
flood insurance policies will be in full force and effect in the amounts
required by Owner under Applicable Requirements.

      

      As of the
date of transfer all Mortgaged Properties will be insured against fire and have
extended coverage insurance in the amounts required by Fannie Mae all insurance
premiums on such insurance policies will have been paid in a timely
manner.  Servicer will notify Owner of any fire losses on the
Mortgaged Properties where Servicer’s estimate of loss is materially greater
than the net recovery from the fire insurance carrier and fire losses on the
Mortgaged Properties as to which there is a pending coinsurance
claim.

      

      
        	
                 
      

              	
                ·

              	
                transferring
      all tax service contracts to the successor and providing  the
      successor with an electronic file identifying (i) tax type, payment
      frequency, payee code, tax amount last paid, next due date, parcel number,
      and (ii) each such tax contract, if any, by contract number subject to
      Owner’s payment obligations under Section 2.04
  hereof.

              

      

      

      
        	
                 
      

              	
                ·

              	
                delivering
      the “Goodbye Letter” in accordance with applicable law to each related
      Mortgagor.

              

      

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                ·

              	
                providing
      the successor with (a) copies of all assumption agreements generated by or
      on behalf of the Owner within the sixty (60) days preceding such Servicing
      Transfer Date and (b) a list of all assumptions in
  process.

              

      

       

      
        	
                 
      

              	
                ·

              	
                furnishing
      electronic copies of all accounting reports relating to the Mortgage Loan
      as of the related Servicing Transfer Date including, but not limited to, a
      trial balance and reports of collections, delinquencies, prepayments in
      full, curtailments, escrow payments, escrow balances, partial payments,
      partial payment balances and other like information with respect to each
      Mortgage Loan.

              

      

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      EXHIBIT
J

      

      LIST
OF REPORTS

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
K

      

      FORM
OF CUSTODIAL AGREEMENT

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
L

      

      RECONSTITUTION
FORM OPINION

       

      [Date]

       

      To the
Addresses identified on Schedule A attached hereto

       

      Re:

       

      Ladies
and Gentlemen:

       

      I am
associate counsel of [_______________], a [___________]corporation (the “Company”), and have
represented the Company in connection with the preparation, execution and
delivery of the following documents:

       

      In this
connection, I have examined, or caused to be examined, originals, or copies
certified to my satisfaction, of the  [________________]
(collectively, the “Agreements”), and
such other documents, certificates and instruments which I have deemed necessary
or appropriate in connection with this opinion.  As to matters of
fact, I have examined and relied upon representations, warranties and covenants
of parties to the above documents contained therein and, where I have deemed
appropriate, representations or certifications of officers of parties to the
Agreements or public officials.  In rendering this opinion letter, I
have assumed (i) the authenticity of all documents submitted to me as
originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents submitted to me as
copies, (ii) with respect to parties other than the Company, the due
authorization, execution and delivery of such documents, and the necessary
entity power with respect thereto, and the enforceability of such documents,
(iii) the conformity of the Mortgage Loans and the documents set forth in
Section [__________] of the Pooling and Servicing Agreement to the requirements
of the Agreements and (iv) that there is not and will not be any other
agreement that modifies or supplements the agreements expressed in the
Agreements.

       

      In
rendering this opinion letter, I do not express any opinion concerning any law
other than the law of the Commonwealth of Pennsylvania and the federal law of
the United States, and I do not express any opinion concerning the application
of the “doing business” laws.  To the extent that any of the matters
upon which I am opining herein are governed by laws (“Other Laws”) other
than the laws identified in the preceding sentence, I have assumed with your
permission and without independent verification or investigation as to the
reasonableness of such assumption, that such Other Laws and judicial
interpretation thereof do not vary in any respect material to this opinion from
the corresponding laws of the Commonwealth of Pennsylvania and judicial
interpretations thereof.  I do not express any opinion on any issue
not expressly addressed below.

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      My
opinions set forth below are subject to the qualification that enforceability of
each of the respective obligations of the parties under the Agreements is
subject to (i) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law, (ii) the
availability of equitable remedies, (iii) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar laws
affecting the rights of creditors, (iv) implied or express covenants of
good faith, and (v) limitations of public policy under applicable
securities laws as to rights of indemnity and contribution
thereunder.  My opinions are subject to the further qualification that
enforceability of each of the parties’ respective obligations under the
Agreements is subject to the effect of certain laws, regulations and judicial or
other decisions upon the availability and enforceability of the remedies of
specific performance and self help. Capitalized terms used herein, but not
defined herein, shall have the meanings assigned to them in the
Agreements.

       

      Based
upon the foregoing, but subject to the assumptions, exceptions, qualifications
and limitations herein expressed, I am of the opinion that:

       

      1. 1.           The
Company is duly incorporated and validly existing as a corporation in good
standing under the laws of the Commonwealth of Pennsylvania and has the
requisite power to own its properties, to conduct its business as presently
conducted by it and to enter into and perform its obligations under the
respective Agreements to which it is a party.

       

      2.           Each
of the Agreements to which it is a party has been duly authorized, executed and
delivered by the Company, and, assuming the authorization, execution and
delivery by the other parties thereto (other than the Company), is the legal,
valid and binding agreement of the Company, enforceable against it in accordance
with its terms.

      

      The
opinions set forth herein are intended solely for the benefit of the addressees
hereof in connection with the transactions contemplated herein and shall not be
relied upon by any other person or for any other purpose without my prior
written consent.  Except for reproductions for inclusion in
transcripts of the documentation relating to the transactions contemplated
herein, this opinion may not be copied or otherwise reproduced or quoted from,
in whole or in part, without my prior written consent.

       

      
        
          
            	 
      	
                    Very
      truly yours,

                  	 
	 
      	 
      	 
      	 
	 
      	
                    By:

                  	
                        

                  	 
	 
      	
                    Name:

                  	 
      	 
	 
      	
                    Title:

                  	
                    Corporate
      Counsel,

                  	 
	 
      	 
      	
                    [__________________]

                  	 

          

        

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      REGULATION
AB COMPLIANCE ADDENDUM

      

      Dated
as of [___________ __, 20__]

      

      between

      

      [_______________________]

      

      and

      

      RWT
HOLDINGS, INC.

      to
the

      

      LOAN

       SERVICING
AGREEMENT,

      Dated
as of [__________ __, 20__]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      REGULATION AB COMPLIANCE ADDENDUM (the
“Reg AB Addendum”), dated as of [_________ __, 20__], by and between RWT
Holdings, Inc. (the “Owner”) and [________________], a [_________] limited
liability company/corporation (the “Servicer”), to that certain Loan Servicing
Agreement, dated as of [___________ __, 20__], by and between the Owner and
[______________](the “Existing Agreement”). The Servicer agrees to be bound by
the Existing Agreement as if it was a party thereto on the date the same was
executed.  The Owner accepts the conversion of the Servicer from a
Pennsylvania corporation to a Delaware limited liability company.

      

      WITNESSETH

      

      WHEREAS, the Owner and the Servicer
have agreed to, subject to the terms and conditions of this Reg AB Addendum,
adopt an addendum to the Existing Agreement to reflect the intention of the
parties to comply with Regulation AB.  The Existing Agreement shall be
referred to herein as “the Agreement”.

      

      NOW, THEREFORE, in consideration of the
mutual promises and mutual obligations set forth here, the Owner and the
Servicer hereby agree as follows:

      

      ARTICLE
I

      DEFINED
TERMS

      

      Capitalized terms used but not
otherwise defined herein shall have the meanings assigned to them in the
Existing Agreement.  The Existing Agreement is hereby amended by
adding the following definitions in their proper alphabetical
order:

      

      Commission:  The United
States Securities and Exchange Commission.

      

      Servicer Information:  As
defined in Section 2.07(a).

      

      Depositor:  The depositor, as
such term is defined in Regulation AB, with respect to any Securitization
Transaction.

      

      Exchange Act:  The Securities
Exchange Act of 1934, as amended.

      

      Master Servicer: With respect to a
Securitization Transaction, the “master servicer”, if any, identified by the
Owner and identified in related transaction documents.

      

      Reconstitution:  Any
Securitization Transaction or Whole Loan Transfer.

      

      Reconstitution Agreement:  An
agreement or agreements entered into by the Servicer and the Owner and/or
certain third parties in connection with a Reconstitution with respect to any or
all of the Mortgage Loans serviced under the Agreement.

      

      Regulation AB:  Subpart
229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to
time.

       

      
        
           

        

        
          1 of
13

          
            

          

        

        
           

        

      

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

      

      Securitization
Transaction:  Any transaction involving either (1) a sale or other
transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.

      

      Servicer:  As defined in
Section 2.03(c).

      

      Servicing Criteria:  The
“servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be
amended from time to time.

      

      Subcontractor:  Any vendor,
subcontractor or other Person that is not responsible for the overall servicing
(as “servicing” is commonly understood by participants in the mortgage-backed
securities market) of Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under
the direction or authority of the Servicer or a Subservicer.

      

      Subservicer:  Any Person that
services Mortgage Loans on behalf of the Servicer or any Subservicer and is
responsible for the performance (whether directly or through Subservicers or
Subcontractors) of a substantial portion of the material servicing functions
required to be performed by the Servicer under the Agreement or any
Reconstitution Agreement that are identified in Item 1122(d) of Regulation
AB.

      

      Whole Loan Transfer:  Any
sale or transfer of some or all of the Mortgage Loans, other than a
Securitization Transaction.

      

      ARTICLE
II

      COMPLIANCE
WITH REGULATION AB

      

      Section 2.01.  Intent of
the Parties; Reasonableness.

      

      
        The Owner
and the Servicer acknowledge and agree that the purpose of Article II of this
Addendum is to facilitate compliance by the Owner and any Depositor with the
provisions of Regulation AB and related rules and regulations of the
Commission.

         

      

      
        
           

        

        
          2 of
13

          
            

          

        

        
           

        

      

      Neither the Owner nor any Depositor
shall exercise its right to request delivery of information or other performance
under these provisions other than in good faith, or for purposes other than
compliance with the Securities Act, the Exchange Act and the rules and
regulations of the Commission thereunder (or the provision in a private offering
of disclosure comparable to that required under the Securities
Act).  The Servicer acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Owner, any Master Servicer or any
Depositor in good faith for delivery of information under these provisions on
the basis of evolving interpretations of Regulation AB.  In connection
with any Securitization Transaction, the Servicer shall cooperate fully with the
Owner and any Master Servicer to deliver to the Owner (including any of its
assignees or designees), any Master Servicer and any Depositor, any and all
statements, reports, certifications, records and any other information necessary
in the good faith determination of the Owner, any Master Servicer or any
Depositor to permit the Owner, such Master Servicer or such Depositor to comply
with the provisions of Regulation AB, together with such disclosures relating to
the Servicer or any Subservicer and the Mortgage Loans, or the servicing of the
Mortgage Loans, reasonably believed by the Owner or any Depositor to be
necessary in order to effect such compliance.

      

      The Owner (including any of its
assignees or designees) shall cooperate with the Servicer by providing timely
notice of requests for information under these provisions and by reasonably
limiting such requests to information required, in the Owner’s reasonable
judgment, to comply with Regulation AB.

      

      The Owner and the Servicer agree that
the provisions set forth in Article II shall only apply to Securitization
Transactions that close on or after January 1, 2006.  However,
delivery by the Servicer of an Attestation under Section 2.05 of this Reg AB
Addendum shall be deemed to comply with the requirement under Section 6.05 of
the Existing Agreement to deliver an Annual Independent Public Accountants’
Servicing Report.

      

      In the event that (i) the Servicer does
not reasonably believe that certain information requested under this Article II
is required to be disclosed pursuant to Regulation AB, and (ii) the Servicer has
not provided such information for any of its own securitizations, the Owner
shall pay all reasonable documented costs incurred by the Servicer in connection
with the preparation and delivery of such information and the Servicer shall
promptly deliver such information after expiration of a reasonable period of
time for establishing the necessary systems and procedures to produce such
information.

      

      Section 2.02.  Additional
Representations and Warranties of the Servicer.

      

      (a)           The
Servicer hereby represents to the Owner, any Master Servicer and  any
Depositor, as of the date on which information is first provided to the Owner,
any Master Servicer or any Depositor under Section 2.03 that, except as
disclosed in writing to the Owner, such Master Servicer or such Depositor prior
to such date:  (i) the Servicer is not aware and has not received
notice that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or failure to
act of the Servicer; (ii) the Servicer has not been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing default or
to application of a servicing performance test or trigger; (iii) no material
noncompliance with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Servicer as servicer
has been disclosed or reported by the Servicer; (iv) no material changes to the
Servicer’s policies or procedures with respect to the servicing function it will
perform under the Agreement and any Reconstitution Agreement for mortgage loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (v) there
are no aspects of the Servicer’s financial condition that could have a material
adverse effect on the performance by the Servicer of its servicing obligations
under the Agreement or any Reconstitution Agreement; (vi) there are no material
legal or governmental proceedings pending (or known to be contemplated) against
the Servicer or any Subservicer ; and (vii) there are no affiliations,
relationships or transactions relating to the Servicer or any Subservicer with
respect to any Securitization Transaction and any party thereto identified by
the related Depositor of a type described in Item 1119 of Regulation
AB.

      
        
           

        

        
          3 of
13

          
            

          

        

        
           

        

      

      (b)           If
so requested by the Owner, any Master Servicer or any Depositor on any date
following the date on which information is first provided to the Owner or any
Depositor under Section 2.03, the Servicer shall, within five Business Days
following such request, confirm in writing the accuracy of the representations
and warranties set forth in paragraph (a) of this Section or, if any such
representation and warranty is not accurate as of the date of such request,
provide reasonably adequate disclosure of the pertinent facts, in writing, to
the requesting party.

      

      Section 2.03.  Information
to Be Provided by the Servicer.

      

      In connection with any Securitization
Transaction the Servicer shall (i) make best efforts within five Business Days,
but no less than ten Business Days, following request by the Owner or any
Depositor, provide to the Owner and such Depositor, to the extent not previously
provided, (or cause each Subservicer to provide), in writing and in form and
substance reasonably satisfactory to the Owner and such Depositor, the
information and materials specified in paragraphs (a), (b), (c) and (f) of this
Section, and (ii) as promptly as practicable following notice to or discovery by
the Servicer, provide to the Owner and any Depositor (in writing and in form and
substance reasonably satisfactory to the Owner and such Depositor) the
information specified in paragraph (d) of this Section.

      

      (a)           If
so requested by the Owner or any Depositor, the Servicer shall provide such
information regarding the Servicer, as servicer of the Mortgage Loans, and each
Subservicer (each of the Servicer and each Subservicer, for purposes of this
paragraph, a “Servicer”), as is requested for the purpose of compliance with
Item 1108, 1117 and 1119 of Regulation AB.  Such information shall
include, at a minimum:

      

      (A)          the
Servicer’s form of organization;

       

      (B)          a
description of how long the Servicer has been servicing residential mortgage
loans; a general discussion of the Servicer’s experience in servicing assets of
any type as well as a more detailed discussion of the Servicer’s experience in,
and procedures for, the servicing function it will perform under the Agreement
and any Reconstitution Agreements; information regarding the size, composition
and growth of the Servicer’s portfolio of residential mortgage loans of a type
similar to the Mortgage Loans and information on factors related to the Servicer
that may be material, in the good faith judgment of the Owner or any Depositor,
to any analysis of the servicing of the Mortgage Loans or the related
asset-backed securities, as applicable, including, without
limitation:

      
        
           

        

        
          4 of
13

          
            

          

        

        
           

        

      

       

      (1)           whether
any prior securitizations of mortgage loans of a type similar to the Mortgage
Loans involving the Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing during the three-year
period immediately preceding the related Securitization
Transaction;

       

      

      (2)           the
extent of outsourcing the Servicer utilizes;

      

      (3)           whether
there has been previous disclosure of material noncompliance with the applicable
servicing criteria with respect to other securitizations of residential mortgage
loans involving the Servicer as a servicer during the three-year period
immediately preceding the related Securitization Transaction;

      

      (4)           whether
the Servicer has been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; and

      

      (5)           such
other information as the Owner or any Depositor may reasonably request for the
purpose of compliance with Item 1108(b)(2) of Regulation AB;

       

      (C)          a
description of any material changes during the three-year period immediately
preceding the related Securitization Transaction to the Servicer’s policies or
procedures with respect to the servicing function it will perform under the
Agreement and any Reconstitution Agreements for mortgage loans of a type similar
to the Mortgage Loans;

       

      (D)          information
regarding the Servicer’s financial condition, to the extent that there is a
material risk that an adverse financial event or circumstance involving the
Servicer could have a material adverse effect on the performance by the Servicer
of its servicing obligations under the Agreement or any Reconstitution
Agreement;

       

      (E)          information
regarding advances made by the Servicer on the Mortgage Loans and the Servicer’s
overall servicing portfolio of residential mortgage loans for the three-year
period immediately preceding the related Securitization Transaction, which may
be limited to a statement by an authorized officer of the Servicer to the effect
that the Servicer has made all advances required to be made on residential
mortgage loans serviced by it during such period, or, if such statement would
not be accurate, information regarding the percentage and type of advances not
made as required, and the reasons for such failure to advance;

      
        
           

        

        
          5 of
13

          
            

          

        

        
           

        

      

       

      (F)          a
description of the Servicer’s processes and procedures designed to address any
special or unique factors involved in servicing loans of a similar type as the
Mortgage Loans;

      

      (G)          a
description of the Servicer’s processes for handling delinquencies, losses,
bankruptcies and recoveries, such as through liquidation of mortgaged
properties, sale of defaulted mortgage loans or workouts;

      

      (H)          information
as to how the Servicer defines or determines delinquencies and charge-offs,
including the effect of any grace period, re-aging, restructuring, partial
payments considered current or other practices with respect to delinquency and
loss experience;

      

      (I)           a
description of any material legal or governmental proceedings pending (or known
to be contemplated) against the Servicer;

      

      (J)           a
description of any affiliation or relationship between the Servicer and any of
the following parties to a Securitization Transaction, as such parties are
identified to the Servicer by the Purchaser or any Depositor in writing in
advance of such Securitization Transaction:

      

      (1)           the
sponsor

      (2)           the
Depositor

      (3)           the
issuing entity;

      (4)           any
servicer;

      (5)           any
trustee;

      (6)           any
originator;

      (7)           any
significant obligor;

      (8)           any
enhancement or support provider; and

      (9)           any
other material transaction party.

      

      (b)           for
the purpose of satisfying reporting obligations under the Exchange Act with
respect to any class of asset-backed securities, the Servicer shall (or shall
cause each Subservicer to) (i) provide prompt notice to the Owner, any Master
Servicer and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Servicer or any Subservicer, (B)
any affiliations or relationships that develop following the closing date of a
Securitization Transaction between the Servicer or any Subservicer and any of
the parties specified in clause (D) of paragraph (a) of this Section (and any
other parties identified in writing by the requesting party) with respect to any
Securitization Transaction, (C) any Event of Default under the terms of the
Agreement or any Reconstitution Agreement, (D) any merger, consolidation or sale
of substantially all of the assets of the Servicer, and (E) the Servicer’s entry
into an agreement with a Subservicer to perform or assist in the performance of
any of the Servicer’s obligations under the Agreement or any Reconstitution
Agreement and (ii) provide to the Owner and any Depositor a description of such
proceedings, affiliations or relationships.

      
        
           

        

        
          6 of
13

          
            

          

        

        
           

        

      

      (c)           As
a condition to the succession to the Servicer or any Subservicer as servicer or
subservicer under the Agreement or any Reconstitution Agreement by any Person
(i) into which the Servicer or such Subservicer may be merged or consolidated,
or (ii) which may be appointed as a successor to the Servicer or any
Subservicer, the Servicer shall provide to the Owner, any Master Servicer and
any Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Owner and any Depositor of
such succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor, all information
reasonably requested by the Owner or any Depositor in order to comply with
reporting obligations under Item 6.02 of Form 8-K with respect to any class of
asset-backed securities.

      

      (d)           In
addition to such information as the Servicer, as servicer, is obligated to
provide pursuant to other provisions of the Agreement or this Addendum not later
than ten days prior to the deadline for the filing of any distribution report on
Form 10-D in respect of any Securitization Transaction that includes any of the
Mortgage Loans serviced by the Servicer or any Subservicer, the Servicer or such
Subservicer, as applicable, shall (but only to the extent the Servicer or such
Subservicer has knowledge), provide to the party responsible for filing such
report (including, if applicable, the Master Servicer) notice of the occurrence
of any of the following events along with all information, data and materials
related thereto as may be required to be included in the related distribution
report on Form 10-D (as specified in the provisions of Regulation AB referenced
below):

      

      (i)           any
material modifications, extensions or waivers of pool asset terms, fees,
penalties or payments during the distribution period or that have cumulatively
become material over time (Item 1121(a) (11) of Regulation AB); and

      

      (ii)          information
regarding any material pool asset changes (such as, additions substitutions or
repurchases (Item 1121 (a) (14) of Regulation AB).

      

      (e) The Servicer shall provide to the
Owner, any Master Servicer and any Depositor, evidence of the authorization of
the person signing any certification or statement, copies or other evidence of
Fidelity Bond Insurance and Errors and Omission Insurance policy, financial
information and reports, and such other information related to the Owner or any
Subservicer or the Owner or the Owner’s or such Subservicer’s performance
hereunder.

      

      Section 2.04.  Servicer
Compliance Statement.

      

      On or before March 15 of each calendar
year, commencing in 20__, the Servicer shall deliver to the Owner, any Depositor
and any Master Servicer a statement of compliance addressed to the Owner ,such
Depositor and such Master Servicer and signed by an authorized officer of the
Servicer, to the effect that (i) a review of the Servicer’s activities during
the immediately preceding calendar year (or applicable portion thereof) and of
its performance under the Agreement and any applicable Reconstitution Agreement
during such period has been made under such officer’s supervision, and (ii) to
the best of such officers’ knowledge, based on such review, the Servicer has
fulfilled all of its obligations under the Agreement and any applicable
Reconstitution Agreement in all material respects throughout such calendar year
(or applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status
thereof.

      
        
           

        

        
          7 of
13

          
            

          

        

        
           

        

      

      Section 2.05.  Report on
Assessment of Compliance and Attestation.

      

      (a)           On
or before March 15 of each calendar year, commencing in 20__, the Servicer
shall:

      

      (i)           deliver
to the Owner ,any Depositor and any Master Servicer a report (in form and
substance reasonably satisfactory to the Owner, such Depositor and such Master
Servicer) regarding the Servicer’s assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required under Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation
AB.  Such report shall be addressed to the Owner, such Depositor, and
such Master Servicer and signed by an authorized officer of the Servicer, and
shall address each of the applicable Servicing Criteria specified on of Exhibit
B hereto (wherein “Investor” shall mean the Master Servicer on behalf of the
trust);

      

      (ii)          deliver
to the Owner, any Depositor and any Master Servicer a report of a registered
public accounting firm reasonably acceptable to the Owner, such Depositor and
such Master Servicer that attests to, and reports on, the assessment of
compliance made by the Servicer and delivered pursuant to the preceding
paragraph.  Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act;

      

      (iii)         cause
each Subservicer, and each Subcontractor determined by the Servicer pursuant to
Section 2.06(b) to be “participating in the servicing function” within the
meaning of Item 1122 of Regulation AB, to deliver to the Owner, any Depositor
and any Master Servicer an assessment of compliance and accountants’ attestation
as and when provided in paragraphs (a) and (b) of this Section; and

      

      (iv)         deliver,
and cause each Subservicer and Subcontractor described in Clause (iii) to
deliver,  to the Owner, any Depositor, any Master Servicer and any
other Person that will be responsible for signing the certification (a “Sarbanes
Certification”) required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act
(pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of an
asset-backed issuer with respect to a Securitization Transaction a certification
in the form attached hereto as Exhibit A.

      

      The Servicer acknowledges that the
parties identified in clause (a)(iv) above may rely on the certification
provided by the Servicer pursuant to such clause in signing a Sarbanes
Certification and filing such with the Commission.

      

      (b)           Each
assessment of compliance provided by a Subservicer pursuant to Section
2.05(a)(iii) shall address each of the applicable Servicing Criteria specified
on Exhibit B hereto or, in the case of a Subservicer subsequently appointed as
such, on or prior to the date of such appointment.  An assessment of
compliance provided by a Subcontractor pursuant to Section 2.05(a)(iii) need not
address any elements of the Servicing Criteria other than those specified by the
Servicer pursuant to Section 2.06.

      
        
           

        

        
          8 of
13

          
            

          

        

        
           

        

      

      Section 2.06.  Use of
Subservicers and Subcontractors.

      

      The Servicer shall not hire or
otherwise utilize the services of any Subservicer to fulfill any of the
obligations of the Servicer as servicer under the Agreement or any
Reconstitution Agreement unless the Servicer complies with the provisions of
paragraph (a) of this Section.  The Servicer shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Servicer as servicer under the Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (b) of this Section.

      

      (a)           It
shall not be necessary for the Servicer to seek the consent of the Owner, any
Depositor or any Master Servicer to the utilization of any
Subservicer.  The Servicer shall cause any Subservicer used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of this Section and with Sections 2.02, 2.03(c)
and (e), (f) and (g), 2.04, 2.05 and 2.07 of this Addendum to the same extent as
if such Subservicer were the Servicer, and to provide the information required
with respect to such Subservicer under Section 2.03(d) of this
Addendum.  The Servicer shall be responsible for obtaining from each
Subservicer and delivering to the Owner and any Depositor any servicer
compliance statement required to be delivered by such Subservicer under Section
2.04, any assessment of compliance and attestation and other certification
required to be delivered by such Subservicer under Section 2.05 and any
certification required to be delivered to the Person that will be responsible
for signing the Sarbanes Certification under Section 2.05 as and when required
to be delivered.

      

      (b)           It
shall not be necessary for the Servicer to seek the consent of the Owner, any
Depositor or any Master Servicer to the utilization of any
Subcontractor.  The Servicer shall promptly upon request provide to
the Owner, any Depositor (or any designee of the Depositor, such as a Master
Servicer or administrator) a written description (in form and substance
satisfactory to the Owner and such Depositor) of the role and function of each
Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are “participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.

      

      As a condition to the utilization of
any Subcontractor determined to be “participating in the servicing function”
within the meaning of Item 1122 of Regulation AB, the Servicer shall cause any
such Subcontractor used by the Servicer (or by any Subservicer) for the benefit
of the Owner and any Depositor to comply with the provisions of Sections 2.05
and 2.07 of this Addendum to the same extent as if such Subcontractor were the
Servicer.  The Servicer shall be responsible for obtaining from each
Subcontractor and delivering to the Owner and any Depositor any assessment of
compliance and attestation and the other certifications required to be delivered
by such Subcontractor under Section 2.05, in each case as and when required to
be delivered.

      
        
           

        

        
          9 of
13

          
            

          

        

        
           

        

      

      Section 2.07.  Indemnification;
Remedies.

      

      (a)           The
Servicer shall indemnify the Owner, each affiliate of the Owner, and each of the
following parties participating in a Securitization Transaction (and each shall
be an “Owner Indemnified Party”):  each sponsor and issuing entity;
each Person (including, but not limited to, any Master Servicer if applicable)
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction; each
broker dealer acting as underwriter, placement agent or initial Owner, each
Person who controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees, agents and
affiliates of each of the foregoing and of the Depositor, and shall hold each of
them harmless from and against any claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and any other
costs, fees and expenses that any of them may sustain arising out of or based
upon:

      

      (i)(A)     any
untrue statement of a material fact contained or alleged to be contained in any
information, report, certification, data, accountants’ letter or other material
provided under this Article II by or on behalf of the Servicer, or provided
under this Article II by or on behalf of any Subservicer or Subcontractor
(collectively, the “Servicer Information”), or (B) the omission or alleged
omission to state in the Servicer Information a material fact required to be
stated in the Servicer Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, by way
of clarification, that clause (B) of this paragraph shall be construed
solely by reference to the Servicer Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard
to whether the Servicer Information or any portion thereof is presented together
with or separately from such other information;

      

      (ii)          any
breach by the Servicer of its obligations under this Article II, including
particularly any failure by the Servicer, any Subservicer or any Subcontractor
to deliver any information, report, certification, accountants’ letter or other
material when and as required under this Article II, including any failure by
the Servicer to identify pursuant to Section 2.06(b) any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB;

      

      (iii)         any
breach by the Servicer of a representation or warranty set forth in Section
2.02(a) or in a writing furnished pursuant to Section 2.02(b) and made as of a
date prior to the closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or any breach by the
Servicer of a representation or warranty in a writing furnished pursuant to
Section 2.02(b) to the extent made as of a date subsequent to such closing
date;

      

      provided,
however, that in no event shall the Servicer be liable for any consequential,
indirect or punitive damages, whatsoever, whether in contract, tort (including
negligence and strict liability) or an other legal or equitable principle;
provided, however, that such limitation shall not be applicable with respect to
third party claims made against the Owner.

      
        
           

        

        
          10 of
13

          
            

          

        

        
           

        

      

      (b)           The
Owner shall indemnify the Servicer, each Person who controls the Servicer
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing (each, a “Servicer
Indemnified Party), and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that nay of them may sustain arising out of or based upon any untrue statement
contained or alleged to be contained in any filing with the Commission or the
omission or alleged omission to state in any filing with the Commission a
material fact required to be stated or necessary to be stated in order to make
the statement therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
such untrue statement, alleged untrue statement, omission, or alleged omission
arose out of or was based upon any information or statement, other than the
Servicer Information, in a filing with the Commission.

      

      (c)           (i)
The indemnification provided for in Sections 2.07(a) and (b) shall survive the
termination of this Reg AB Addendum or any party to this Reg AB
Addendum.

      

      (ii) If the indemnification provided
for in Section 2.07(a) is unavailable or insufficient to hold harmless an Owner
Indemnified Party, then the Servicer agrees that is shall contribute to the
amount paid or payable by such Owner Indemnified Party as a result of any
claims, losses, damages or liabilities incurred by such Indemnified Party in
such proportion as is appropriate to reflect the relative fault of such Owner
Indemnified Party on the one hand and the Servicer on the other.

      

      (iii) In the case of any failure of
performance described in clause (a)(ii) of this Section, the Servicer shall
promptly reimburse the Owner, any Depositor, as applicable, and each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction, for all
costs reasonably incurred by each such party in order to obtain the information,
report, certification, accountants’ letter or other material not delivered as
required by the Servicer, any Subservicer or any Subcontractor.

      
        
           

        

        
          11 of
13

          
            

          

        

        
           

        

      

      
        
          
            	
                     
      

                  	
                    (d)

                  	
                    (i)           Any
      failure by the Servicer, any Subservicer or any Subcontractor to deliver
      any information, report, certification, accountants’ letter or other
      material when and as required under this Article II, including any failure
      to identify pursuant to Section 2.06(b) any Subcontractor “participating
      in the servicing function” within the meaning of Item 1122 of Regulation
      AB, or any breach by the Servicer of a representation or warranty set
      forth in Section 2.02(a) or in a writing furnished pursuant to Section
      2.02(b) and made as of a date prior to the closing date of the related
      Securitization Transaction, to the extent that such breach is not cured by
      such closing date, or any breach by the Servicer of a representation or
      warranty in a writing furnished pursuant to Section 2.02(b) to the extent
      made as of a date subsequent to such closing date, shall immediately and
      automatically, without notice or grace period, constitute an Event of
      Default with respect to the Servicer under the Agreement and any
      applicable Reconstitution Agreement, and shall entitle the Owner, or any
      Depositor, as applicable, in its sole discretion to terminate the rights
      and obligations of the Servicer as servicer under the Agreement and/or any
      applicable Reconstitution Agreement without payment (notwithstanding
      anything in the Agreement or any applicable Reconstitution Agreement to
      the contrary) of any compensation to the Servicer (and if the Servicer is
      servicing any of the Mortgage Loans in a Securitization Transaction,
      appoint a successor servicer reasonably acceptable to any Master Servicer
      for such Securitization Transaction); provided that to the
      extent that any provision of the Agreement and/or any applicable
      Reconstitution Agreement expressly provides for the survival of certain
      rights or obligations following termination of the Servicer as servicer,
      such provision shall be given effect.  Neither the Owner, any
      Master Servicer nor any Depositor shall be entitled to terminate the
      rights and obligations of the Servicer pursuant to this subparagraph
      (d)(i) if a failure of the Servicer to identify a Subcontractor
      “participating in the servicing function” within the meaning of Item 1122
      of Regulation AB was attributable solely to the role or functions of such
      Subcontractor with respect to mortgage loans other than the Mortgage
      Loans.

                  

          

        

      

      

      (ii)          The
Servicer shall promptly reimburse the Owner (or any designee of the Owner, such
as a Master Servicer) and any Depositor, as applicable, for all reasonable
expenses incurred by the Owner (or such designee) or such Depositor, as such are
incurred, in connection with the termination of the Servicer as servicer and the
transfer of servicing of the Mortgage Loans to a successor
servicer.  The provisions of this paragraph shall not limit whatever
rights the Owner or any Depositor may have under other provisions of the
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.

      

      2.08.  Interpretation.

      

      To the extent any provision or
requirement of this Reg AB Addendum conflicts with a provision or requirement of
the Agreement, the terms of this Addendum shall govern and shall be deemed to
supercede the conflicting provision or requirement of the
Agreement.

      

      2.09  Third Party
Beneficiary

      

      For purposes of this Article II, the
Master Servicer shall be considered a third-party beneficiary of the Reg AB
Addendum, entitled to all the rights and benefits hereof as if it were a direct
party to this Reg AB Addendum.

      

      2.10  Counterparts.

      

      This Reg AB may be executed in one or
more counterparts and by different parties hereto on separate counterparts, and
each of which, when so executed shall constitute one and the same
agreement.

      
        
           

        

        
          12 of
13

          
            

          

        

        
           

        

      

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

      

      
        	 
      	
                RWT
      HOLDINGS, INC..

              
	 
      	 
      
	 
      	
                By:

              	
                    

              	 
      
	 
      	 
      
	 
      	
                Name:

              
	 
      	 
      
	 
      	
                Title:

              
	 
      	 
      
	 
      	
                [_________________]

              
	 
      	 
      
	 
      	
                By:
      :

              	
                    

              	 
      
	 
      	 
      
	 
      	
                Name:

              
	 
      	 
      
	 
      	
                Title:

              

      

       

      
        
           

        

        
          13 of
13

          
            

          

        

        
           

        

      

      

      EXHIBIT
A

       

      FORM
OF ANNUAL CERTIFICATION

       

      Re:                     The
[                   ]
agreement dated as of [      ], 200[ ] (the
“Agreement”), among [IDENTIFY PARTIES]

       

      I, ________________________________,
the _______________________ of [NAME OF SERVICER], certify to [the Owner], [the
Depositor], and the [Master Servicer] [Securities Administrator] [Trustee], and
their officers, with the knowledge and intent that they will rely upon this
certification, that:

       

      (1)           I
have reviewed the servicer compliance statement of the Servicer provided in
accordance with Item 1123 of Regulation AB (the “Compliance Statement”), the
report on assessment of the Servicer’s compliance with the servicing criteria
set forth in Item 1122(d) of Regulation AB (the “Servicing Criteria”), provided
in accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of
1934, as amended (the “Exchange Act”) and Item 1122 of Regulation AB (the
“Servicing Assessment”), the registered public accounting firm’s attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the “Attestation Report”), and all
servicing reports, officer’s certificates and other information relating to the
servicing of the Mortgage Loans by the Servicer during 200[ ] that were
delivered by the Servicer to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the “Servicer
Servicing Information”);

       

      (2)           Based
on my knowledge, the Servicer Servicing Information, taken as a whole, does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in the light of the circumstances under
which such statements were made, not misleading with respect to the period of
time covered by the Servicer Servicing Information;

       

      (3)           Based
on my knowledge, all of the Servicer Servicing Information required to be
provided by the Servicer under the Agreement has been provided to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee];

       

      (4)           I
am responsible for reviewing the activities performed by the Servicer as
servicer under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Compliance Statement, the Servicing Assessment or the Attestation Report,
the Servicer has fulfilled its obligations under the Agreement in all material
respects; and

       

      (5)           The
Compliance Statement required to be delivered by the Servicer pursuant to the
Agreement, and the Servicing Assessment and Attestation Report required to be
provided by the Servicer and by any Subservicer and Subcontractor pursuant to
the Agreement, have been provided to the [Depositor] [Master
Servicer].  Any material instances of noncompliance described in such
reports have been disclosed to the [Depositor] [Master Servicer].  Any
material instance of noncompliance with the Servicing Criteria has been
disclosed in such reports.

      
        
           

        

        
          -1

          
            

          

        

        
           

        

      

      

      
        	
                Date:

              	
                    

              	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      
	 
      	 
      	 
      
	
                Name:

              	
                    

              	 
      
	 
      	 
      	 
      
	
                Title:

              	
                    

              	 
      

      

      
        
           

        

        
          A-2

          
            

          

        

        
           

        

      

      EXHIBIT
B

      SERVICING
CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

      The
assessment of compliance to be delivered by [the Servicer] [Name of Subservicer]
shall address, at a minimum, the criteria identified as below as “Applicable
Servicing Criteria”:

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                	
                                                                        SERVICING CRITERIA

                                                                      	 	
                                                                        APPLICABLE

                                                                        SERVICING

                                                                        CRITERIA

                                                                      
	 
      	 	 
      
	
                                                                        Reference

                                                                      	 	
                                                                        Criteria

                                                                      	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	
                                                                        General
      Servicing Considerations

                                                                      	 	 
      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(1)(i)

                                                                      	 	
                                                                        Policies
      and procedures are instituted to monitor any performance or other triggers
      and events of default in accordance with the transaction
      agreements.

                                                                      	 	
                                                                        ü

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(1)(ii)

                                                                      	 	
                                                                        If
      any material servicing activities are outsourced to third parties,
      policies and procedures are instituted to monitor the third party’s
      performance and compliance with such servicing activities.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(1)(iii)

                                                                      	 	
                                                                        Any
      requirements in the transaction agreements to maintain a back-up servicer
      for the mortgage loans are maintained.

                                                                      	 	 
      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(1)(iv)

                                                                      	 	
                                                                        A
      fidelity bond and errors and omissions policy is in effect on the party
      participating in the servicing function throughout the reporting period in
      the amount of coverage required by and otherwise in accordance with the
      terms of the transaction agreements.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	 
      	 	
                                                                        Cash
      Collection and Administration

                                                                      	 	 
      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(2)(i)

                                                                      	 	
                                                                        Payments
      on mortgage loans are deposited into the appropriate custodial bank
      accounts and related bank clearing accounts no more than two business days
      following receipt, or such other number of days specified in the
      transaction agreements.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(2)(ii)

                                                                      	 	
                                                                        Disbursements
      made via wire transfer on behalf of an obligor or to an investor are made
      only by authorized personnel.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(2)(iii)

                                                                      	 	
                                                                        Advances
      of funds or guarantees regarding collections, cash flows or distributions,
      and any interest or other fees charged for such advances, are made,
      reviewed and approved as specified in the transaction
      agreements.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(2)(iv)

                                                                      	 	
                                                                        The
      related accounts for the transaction, such as cash reserve accounts or
      accounts established as a form of overcollateralization, are separately
      maintained (e.g., with respect to commingling of cash) as set forth in the
      transaction agreements.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(2)(v)

                                                                      	 	
                                                                        Each
      custodial account is maintained at a federally insured depository
      institution as set forth in the transaction agreements. For purposes of
      this criterion, “federally insured depository institution” with respect to
      a foreign financial institution means a foreign financial institution that
      meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange
      Act.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(2)(vi)

                                                                      	 	
                                                                        Unissued
      checks are safeguarded so as to prevent unauthorized
    access.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      
	 
      	 	 
      	 	 
      
	
                                                                        1122(d)(2)(vii)

                                                                      	 	
                                                                         Reconciliations
      are prepared on a monthly basis for all asset-backed securities related
      bank accounts, including custodial accounts and related bank clearing
      accounts. These reconciliations are (A) mathematically accurate; (B)
      prepared within 30 calendar days after the bank statement cutoff date, or
      such other number of days specified in the transaction agreements; (C)
      reviewed and approved by someone other than the person who prepared the
      reconciliation; and (D) contain explanations for reconciling items. These
      reconciling items are resolved within 90 calendar days of their original
      identification, or such other number of days specified in the transaction
      agreements.

                                                                      	 	
                                                                        
                                                                          ü

                                                                        

                                                                      

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
          -1

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        	
                                                                                SERVICING CRITERIA

                                                                              	 	
                                                                                APPLICABLE

                                                                                SERVICING

                                                                                CRITERIA

                                                                              
	 
      	 	 
      
	
                                                                                Reference

                                                                              	 	
                                                                                Criteria

                                                                              	 	 
      
	 
      	 	 
      	 	 
      
	 
      	 	
                                                                                Investor
      Remittances and Reporting

                                                                              	 	 
      
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(3)(i)

                                                                              	 	
                                                                                Reports
      to investors, including those to be filed with the Commission, are
      maintained in accordance with the transaction agreements and applicable
      Commission requirements. Specifically, such reports (A) are prepared in
      accordance with timeframes and other terms set forth in the transaction
      agreements; (B) provide information calculated in accordance with the
      terms specified in the transaction agreements; (C) are filed with the
      Commission as required by its rules and regulations; and (D) agree with
      investors’ or the trustee’s records as to the total unpaid principal
      balance and number of mortgage loans serviced by the
    Servicer.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(3)(ii)

                                                                              	 	
                                                                                Amounts
      due to investors are allocated and remitted in accordance with timeframes,
      distribution priority and other terms set forth in the transaction
      agreements.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(3)(iii)

                                                                              	 	
                                                                                Disbursements
      made to an investor are posted within two business days to the Servicer’s
      investor records, or such other number of days specified in the
      transaction agreements.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(3)(iv)

                                                                              	 	
                                                                                Amounts
      remitted to investors per the investor reports agree with cancelled
      checks, or other form of payment, or custodial bank
      statements.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	 
      	 	
                                                                                Pool
      Asset Administration

                                                                              	 	 
      
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(i)

                                                                              	 	
                                                                                 Collateral
      or security on mortgage loans is maintained as required by the transaction
      agreements or related mortgage loan documents.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(ii)

                                                                              	 	
                                                                                Mortgage
      loan and related documents are safeguarded as required by the transaction
      agreements

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(iii)

                                                                              	 	
                                                                                Any
      additions, removals or substitutions to the asset pool are made, reviewed
      and approved in accordance with any conditions or requirements in the
      transaction agreements.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(iv)

                                                                              	 	
                                                                                Payments
      on mortgage loans, including any payoffs, made in accordance with the
      related mortgage loan documents are posted to the Servicer’s obligor
      records maintained no more than two business days after receipt, or such
      other number of days specified in the transaction agreements, and
      allocated to principal, interest or other items (e.g., escrow) in
      accordance with the related mortgage loan documents.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(v)

                                                                              	 	
                                                                                The
      Servicer’s records regarding the mortgage loans agree with the Servicer’s
      records with respect to an obligor’s unpaid principal
    balance.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(vi)

                                                                              	 	
                                                                                Changes
      with respect to the terms or status of an obligor's mortgage loans (e.g.,
      loan modifications or re-agings) are made, reviewed and approved by
      authorized personnel in accordance with the transaction agreements and
      related pool asset documents.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(vii)

                                                                              	 	
                                                                                Loss
      mitigation or recovery actions (e.g., forbearance plans, modifications and
      deeds in lieu of foreclosure, foreclosures and repossessions, as
      applicable) are initiated, conducted and concluded in accordance with the
      timeframes or other requirements established by the transaction
      agreements.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(viii)

                                                                              	 	
                                                                                Records
      documenting collection efforts are maintained during the period a mortgage
      loan is delinquent in accordance with the transaction agreements. Such
      records are maintained on at least a monthly basis, or such other period
      specified in the transaction agreements, and describe the entity’s
      activities in monitoring delinquent mortgage loans including, for example,
      phone calls, letters and payment rescheduling plans in cases where
      delinquency is deemed temporary (e.g., illness or
      unemployment).

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              
	 
      	 	 
      	 	 
      
	
                                                                                1122(d)(4)(ix)

                                                                              	 	
                                                                                Adjustments
      to interest rates or rates of return for mortgage loans with variable
      rates are computed based on the related mortgage loan
      documents.

                                                                              	 	
                                                                                
                                                                                  ü

                                                                                

                                                                              

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
          B-2

          
            

          

        

        
           

        

      

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	
                                                  SERVICING CRITERIA

                                                	 	
                                                  APPLICABLE

                                                  SERVICING

                                                  CRITERIA

                                                
	 
      	 	 
      
	
                                                  Reference

                                                	 	
                                                  Criteria

                                                	 	 
      
	 
      	 	 
      	 	 
      
	
                                                  1122(d)(4)(x)

                                                	 	
                                                  Regarding
      any funds held in trust for an obligor (such as escrow accounts): (A) such
      funds are analyzed, in accordance with the obligor’s mortgage loan
      documents, on at least an annual basis, or such other period specified in
      the transaction agreements; (B) interest on such funds is paid, or
      credited, to obligors in accordance with applicable mortgage loan
      documents and state laws; and (C) such funds are returned to the obligor
      within 30 calendar days of full repayment of the related mortgage loans,
      or such other number of days specified in the transaction
      agreements.

                                                	 	
                                                  
                                                    ü

                                                  

                                                
	 
      	 	 
      	 	 
      
	
                                                  1122(d)(4)(xi)

                                                	 	
                                                  Payments
      made on behalf of an obligor (such as tax or insurance payments) are made
      on or before the related penalty or expiration dates, as indicated on the
      appropriate bills or notices for such payments, provided that such support
      has been received by the servicer at least 30 calendar days prior to these
      dates, or such other number of days specified in the transaction
      agreements.

                                                	 	
                                                  
                                                    ü

                                                  

                                                
	 
      	 	 
      	 	 
      
	
                                                  1122(d)(4)(xii)

                                                	 	
                                                  Any
      late payment penalties in connection with any payment to be made on behalf
      of an obligor are paid from the servicer’s funds and not charged to the
      obligor, unless the late payment was due to the obligor’s error or
      omission.

                                                	 	
                                                  
                                                    ü

                                                  

                                                
	 
      	 	 
      	 	 
      
	
                                                  1122(d)(4)(xiii)

                                                	 	
                                                  Disbursements
      made on behalf of an obligor are posted within two business days to the
      obligor’s records maintained by the servicer, or such other number of days
      specified in the transaction agreements.

                                                	 	
                                                  
                                                    ü

                                                  

                                                
	 
      	 	 
      	 	 
      
	
                                                  1122(d)(4)(xiv)

                                                	 	
                                                   Delinquencies,
      charge-offs and uncollectible accounts are recognized and recorded in
      accordance with the transaction agreements.

                                                	 	
                                                  
                                                    ü

                                                  

                                                
	 
      	 	 
      	 	 
      
	
                                                  1122(d)(4)(xv)

                                                	 	
                                                  Any
      external enhancement or other support, identified in Item 1114(a)(1)
      through (3) or Item 1115 of Regulation AB, is maintained as set forth in
      the transaction agreements.

                                                	 	 
      

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      
        
           

        

        
          B-3Unassociated Document

    Exhibit 10.1

    
 

    
      	
               

            	
              HARBIN
      ELECTRIC, INC.

              A
      US Public Company. Stock Symbol: HRBN

            
	 
      

    

    

                                                            June
1, 2009

    

    Gentlemen:

    

    Reference is hereby made to (i) the
Purchase Agreement dated August 29, 2006 (the “Purchase Agreement”)
by and among Citadel Equity Fund Ltd., Merrill Lynch International and Harbin
Electric, Inc., a Nevada corporation (the “Company”) and
(ii) the Indenture dated as of August 30, 2006, as supplemented (the “Indenture”) by and
among the Company, the Subsidiary Guarantors named therein and The Bank of New
York Mellon, as trustee (the “Trustee”) with
respect to the Company’s Guaranteed Senior Secured Floating Rate Notes due 2012
(the “2012
Notes”) and the Company’s Guaranteed Senior Secured Floating Rate Notes
due 2010.  Capitalized terms used herein without definition shall have
the meanings ascribed to such terms in the Purchase Agreement or the Indenture,
as the case may be.

    

    Section 8.02 of the Indenture provides,
among other things, that without the consent of each Holder, an amendment or
waiver may not (with respect to any Notes held by a non-consenting Holder)
reduce the interest or principal of any Note or impair the right of any Holder
to receive payment of principal of, premium, if any, and interest, if any, on
such Holder’s Notes.

    

    The undersigned Holder owns $26.5
million aggregate principal amount of the 2012 Notes, which represents a
majority of the principal amount of all of the 2012 Notes currently
outstanding.

    

    The undersigned Holder hereby (i)
waives each and every applicable provision of the Indenture (including without
limitation Article 3 and Sections 4.09 and 4.10 thereof) but only to the fullest
extent necessary solely to permit the Company to repurchase, at its option, all
(but not part) of the 2012 Notes held by such Holder at any time on or prior to
August 31, 2009 at the Repurchase Price (defined below), (the “Proposed 2012 Note
Repurchase”), (ii) consents to the Proposed 2012 Note Repurchase,
(iii) waives each and every provision of the Indenture (including without
limitation Article 3 and Sections 4.09 and 4.10 thereof) but only to the fullest
extent necessary solely to permit the Company to Incur up to $50 million in Debt
(the “New Debt”) on or prior to August 31, 2009; provided that the Company shall
use up to $38 million of the proceeds of the New Debt for the Proposed 2012 Note
Repurchase (the “Proposed Debt
Incurrence”) and (iv) consents to the Proposed Debt
Incurrence.

    

    The
“Repurchase Price” shall, in the sole discretion of the undersigned Holder, be
either (a) cash equal to 85% of the aggregate principal amount of the 2012 Notes
held by such Holder plus accrued and unpaid interest thereon to but excluding
the Repurchase Date (defined below) or (b) the sum of (x) any securities being
issued in the Proposed Debt Incurrence in an aggregate principal amount at par
up to 50% of the principal amount of the 2012 Notes held by such Holder and (y)
cash equal to 85% of the aggregate remaining principal amount of the 2012 Notes
held by such Holder  plus any accrued and unpaid interest thereon to
but excluding the Repurchase Date.

    
      
        
          Main
Office 

          No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China 150060

          Tel:
86-451- 8611-6757
                                             
Fax: 86-451-8611-6769 

          US
Office 

          20
Ramblewood Road, Shoreham, NY 11786 

          Tel:
631-312-8612 

          www.harbinelectric.com

          

        

         

      

      
         

        
          

        

      

      
         

      
2

    

    

    The “Repurchase Date” shall mean a
business day on which the Proposed 2012 Note Repurchase is consummated; provided
that, if the Proposed Debt Incurrence is consummated, the Repurchase Date shall
be no later than one business day following the date on which the Proposed Debt
Incurrence is consummated.

    

    Except as noted in the preceding
paragraph, the undersigned Holder hereby waives and agrees not to exercise, on
behalf of itself, until August 31, 2009, any and all rights that it may
otherwise have under Section 5A (Right to Future Stock Issuance) of the Purchase
Agreement, but only to the extent that the proceeds from the issuance of New
Securities (as defined in the Purchase Agreement) are used for the Proposed 2012
Note Repurchase.

    

    The Company hereby agrees to use its
reasonable best efforts to consummate the Proposed 2012 Note Repurchase on or
prior to August 31, 2009.

    

    In the
event that the Company proposes to issue New Debt as provided herein, the
Company shall give written notice (the “Offer Notice”) to the
undersigned Holder, stating (a) its bona fide intention to offer such New Debt,
(b) the amount of such New Debt to be offered, and (c) the price and terms upon
which it proposes to offer such New Debt; and by notification to the Company
within five business days after the Offer Notice is given, the undersigned
Holder may elect to acquire, in exchange at par for up to 50% of the principal
amount of the 2012 Notes held by such Holder, any securities representing
the New Debt at the price and on the terms specified in the Offer Notice, and
the Company shall not offer or sell the remaining portion of such securities
representing such New Debt to any other person or persons other than at a price
not less than, and upon terms no more favorable to such other person or persons
than, those specified in the Offer Notice.

    

    Any and
all consents and waivers granted by the undersigned Holder set forth above shall
expire at 5 p.m. New York time on August 31, 2009, and to the extent the Company
is in breach of any provision of the Indenture or the Notes, the undersigned
Holder reserves its rights to take any and all actions permitted under the
Indenture, the Notes or applicable law.  In the event that the
Proposed 2012 Note Repurchase is not consummated on or prior to August 31, 2009,
then the Company will pay, on or before September 2, 2009, the undersigned
Holder an amount equal to 2% of the aggregate principal amount of the 2012 Notes
listed next to such Holder’s name below, which amount shall be in addition to
any and all amounts due under the Indenture or the 2012 Notes.  Any
and all consents and waivers granted by such Holder set forth above and to the
extent not expired as specified herein shall be binding on the party hereto and
its respective successors, assigns and transferees.

    

    Except as expressly waived or otherwise
specifically provided herein, all of the terms of each of the 2012 Notes, the
Indenture and the Purchase Agreement shall remain unamended and unwaived and
shall continue to be and shall remain in full force and effect in accordance
with their respective terms.

    

    This letter is governed by the laws of
the State of New York without giving effect to the conflict of laws rules of any
jurisdiction. This letter may be signed in one or more counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same agreement.  Any signature delivered by a
party via telecopier shall be deemed to be an original signature
hereto.

    

    Kindly acknowledge receipt of this
letter and agreement to the foregoing by executing the enclosed copy of this
letter where indicated and returning it to the Company, whereupon it shall
become a binding agreement among us as of the date hereof.

    
      
        
          Main
Office 

          No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China 150060

          Tel:
86-451- 8611-6757
                                             
Fax: 86-451-8611-6769 

          US
Office 

          20
Ramblewood Road, Shoreham, NY 11786 

          Tel:
631-312-8612 

          www.harbinelectric.com

        

         

      

      
         

        
          

        

      

      
         

      
3

    

    

    

    
      	 
      	
              Very
      truly yours,

            
	 
      	 
      
	 
      	
              Harbin
      Electric, Inc.

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	
              By:

            
	 
      	 
      
	
               

            	      
              Name:  Tianfu
      Yang

            
	 
      	
              Title:  Chairman
      & CEO

            

    

    

    

    

    

    AGREED
AND ACKNOWLEDGED:

    

    Citadel
Equity Fund Ltd.

    By:
Citadel Advisors LLC, its Portfolio Manager

    

    

    By:________________________________

    Name:

    Title:

    

    Aggregate
Principal Amount of the 2012 Notes Owned and For Which Waivers and Consents As
Specified Herein Are Given: $26.5 million

    

    

    
      
        
          Main
Office 

          No. 9 Ha
Ping Xi Lu, Ha Ping Lu Ji Zhong Qu, Harbin Kai Fa Qu, Harbin, China 150060

          Tel:
86-451- 8611-6757
                                             
Fax: 86-451-8611-6769 

          US
Office 

          20
Ramblewood Road, Shoreham, NY 11786 

          Tel:
631-312-8612 

          www.harbinelectric.com

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00159-of-00352.parquet"}]]