Document:

Kobex Agreement 4-3-07

    
      

    

     

     

    

     

    EXPLORATION,
      DEVELOPMENT AND

    MINE
      OPERATING AGREEMENT

     

    

    Between

    

    U.S.
      MOLY CORP., 

    U.S.
      ENERGY CORP.,

    CRESTED
      CORP.

    

    And

    

    KOBEX
      RESOURCES LTD.

     

    

     

    Lucky
      Jack Project, Colorado USA

     

    (Previously
      known as the Mt. Emmons Project)

     

    

     

    April
      3,
      2007

     

    

    

    

    
      
        
          
          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

    

     

     

    

      
        	 	
                TABLE
                  OF CONTENT

              	 
	 	 	
                Page

              
	
                PART
                  I

              	
                THE
                  TRANSACTION

              	
                1

              
	
                ARTICLE
                  I

              	
                DEFINITIONS
                  AND CROSS-REFERENCES

              	
                1

              
	
                1.1

              	
                Definitions

              	
                1

              
	
                1.2

              	
                Cross
                  References

              	
                2

              
	
                ARTICLE
                  II

              	
                NAME,
                  PURPOSES AND TERM

              	
                2

              
	
                2.1

              	
                General

              	
                2

              
	
                2.2

              	
                Option
                  Period and Joint Venture Period

              	
                2

              
	
                2.3

              	
                Purposes

              	
                2

              
	
                2.4

              	
                Limitation

              	
                2

              
	
                ARTICLE
                  III

              	
                REPRESENTATIONS
                  AND WARRANTIES; TITLE TO ASSETS

              	
                2

              
	
                3.1

              	
                Representations
                  and Warranties of all Parties

              	
                2

              
	
                3.2

              	
                Representations
                  and Warranties of the U.S. Energy Group

              	
                3

              
	
                3.3

              	
                Certificates
                  of U.S. Energy and Crested

              	
                5

              
	
                3.4

              	
                Knowledge
                  of Parties

              	
                5

              
	
                3.5

              	
                Disclosures

              	
                6

              
	
                3.6

              	
                Loss
                  of Title

              	
                6

              
	
                3.7

              	
                Royalties,
                  Production Taxes and Other Payments Based on Production

              	
                6

              
	
                3.8

              	
                Agreement
                  Subject to TSX Venture Exchange Approval

              	
                6

              
	
                ARTICLE
                  IV

              	
                RELATIONSHIP
                  OF THE PARTICIPANTS

              	
                6

              
	
                4.1

              	
                No
                  Partnership or Fiduciary Relationship

              	
                6

              
	
                4.2

              	
                Tax
                  Matters

              	
                7

              
	
                4.3

              	
                Other
                  Business Opportunities

              	
                7

              
	
                4.4

              	
                Waiver
                  of Rights to Partition or Other Division of Assets

              	
                7

              
	
                4.5

              	
                Implied
                  Covenants

              	
                7

              
	
                4.6

              	
                No
                  Third Party Beneficiary Rights

              	
                7

              
	
                4.7

              	
                Relationship
                  of U.S. Energy and Crested

              	
                7

              
	
                PART
                  II

              	
                THE
                  OPTION PERIOD

              	
                7

              
	
                ARTICLE
                  V

              	
                INITIAL
                  EXPENDITURE

              	
                7

              
	
                5.1

              	
                Initial
                  Expenditure

              	
                7

              
	
                ARTICLE
                  VI

              	
                THE
                  OPTION

              	
                8

              
	
                6.1

              	
                Option

              	
                8

              
	
                6.2

              	
                Option
                  Stages

              	
                9

              
	
                6.3

              	
                Cash
                  in Lieu and Accelerated Payments

              	
                10

              
	
                6.4

              	
                Failure
                  to Make Option Payments and Termination

              	
                10

              
	
                6.5

              	
                Wind-Up
                  upon Termination During the Option Period

              	
                10

              
	
                6.6

              	
                Discretion
                  of Kobex for Manner of Payment

              	
                11

              
	
                6.7

              	
                Bankable
                  Feasibility Study Payment

              	
                11

              

      

    

     

                                                                            
      

     

    
      
        
        

      

      
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                TABLE
                  OF CONTENT

              	
                 

              
	
                 

              	
                (continued)

              	
                Page

              
	
                6.8

              	
                Exercise
                  of Option

              	
                11

              
	
                6.9

              	
                The
                  USE/CC Election

              	
                12

              
	
                6.10

              	
                Termination
                  on Acquisition Election

              	
                14

              
	
                6.11

              	
                Covenants
                  of USE/CC

              	
                14

              
	
                6.12

              	
                Title
                  to Property on Acquisition Election

              	
                14

              
	
                6.13

              	
                Royalty

              	
                14

              
	
                ARTICLE
                  VII

              	
                RIGHTS
                  AND OBLIGATIONS DURING THE OPTION PERIOD

              	
                14

              
	
                7.1

              	
                Manager
                  During Option Period

              	
                14

              
	
                7.2

              	
                Technical
                  Committee

              	
                15

              
	
                7.3

              	
                Management
                  Committee

              	
                15

              
	
                7.4

              	
                Water
                  Treatment Facility

              	
                15

              
	
                7.5

              	
                Reports
                  During Option Period

              	
                16

              
	
                7.6

              	
                Title
                  to Property

              	
                16

              
	
                7.7

              	
                Permit
                  Obligations of Kobex During Option Period

              	
                16

              
	
                7.8

              	
                Access
                  to Property During Option Period

              	
                16

              
	
                7.9

              	
                Maintenance
                  of Property During Option Period

              	
                16

              
	
                7.10

              	
                Management
                  of Existing Underground Mine Conditions During Exploration

              	
                16

              
	
                7.11

              	
                Indemnification
                  of Manager During Option Period

              	
                17

              
	
                7.12

              	
                Programs
                  and Budgets

              	
                17

              
	
                7.13

              	
                Presentation
                  of Programs and Budgets

              	
                17

              
	
                7.14

              	
                Review
                  and Adoption of Proposed Programs and Budgets

              	
                17

              
	
                7.15

              	
                Budget
                  Overruns; Program Changes

              	
                18

              
	
                7.16

              	
                Assignment
                  During Option Period

              	
                18

              
	
                7.17

              	
                Other
                  Provisions

              	
                18

              
	
                PART
                  III

              	
                THE
                  JOINT VENTURE PERIOD

              	
                18

              
	
                ARTICLE
                  VIII

              	
                JOINT
                  VENTURE

              	
                18

              
	
                8.1

              	
                Purpose

              	
                18

              
	
                8.2

              	
                Manager

              	
                18

              
	
                8.3

              	
                Initial
                  Participating Interests and Contributions

              	
                19

              
	
                8.4

              	
                Changes
                  in Participating Interests

              	
                19

              
	
                8.5

              	
                Deemed
                  Expenditures

              	
                19

              
	
                8.6

              	
                Conversion
                  of Minority Interest.

              	
                20

              
	
                8.7

              	
                Continuing
                  Liabilities Upon Adjustments of Participating Interests

              	
                20

              
	
                8.8

              	
                Documentation
                  of Adjustments to Participating Interests

              	
                21

              
	
                8.9

              	
                Grant
                  of Lien and Security Interest

              	
                21

              
	
                8.10

              	
                Subordination
                  of Interests

              	
                22

              
	
                8.11

              	
                Indemnity

              	
                22

              
	
                8.12

              	
                Holding
                  of Property

              	
                22

              
	
                8.13

              	
                Holding
                  of Joint Venture Property

              	
                22

              
	
                8.14

              	
                Management
                  Committee

              	
                22

              

      

    

     

     

    
      
        
        

      

      
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                    TABLE
                      OF CONTENTS

                  	
                     

                  
	
                     

                  	
                    (continued)

                  	
                    Page

                  
	
                    8.15

                  	
                    Facility

                  	
                    23

                  
	
                    ARTICLE
                      IX

                  	
                    PROGRAMS
                      AND BUDGETS

                  	
                    23

                  
	
                    9.1

                  	
                    Operations
                      Pursuant to Programs and Budgets

                  	
                    23

                  
	
                    9.2

                  	
                    Presentation
                      of Programs and Budgets

                  	
                    23

                  
	
                    9.3

                  	
                    Review
                      and Adoption of Proposed Programs and Budgets

                  	
                    23

                  
	
                    9.4

                  	
                    Election
                      to Participate

                  	
                    24

                  
	
                    9.5

                  	
                    Recalculation
                      or Restoration of Reduced Interest Based on Actual
                      Expenditures

                  	
                    25

                  
	
                    9.6

                  	
                    Budget
                      Overruns; Program Changes

                  	
                    26

                  
	
                    9.7

                  	
                    Emergency
                      or Unexpected Expenditures

                  	
                    26

                  
	
                    9.8

                  	
                    Development
                      Programs and Budgets; Project Financing

                  	
                    26

                  
	
                    9.9

                  	
                    Expansion
                      or Modification Programs and Budgets

                  	
                    27

                  
	
                    ARTICLE
                      X

                  	
                    ACCOUNTS
                      AND SETTLEMENTS

                  	
                    27

                  
	
                    10.1

                  	
                    Monthly
                      Statements and Applications of this ARTICLE

                  	
                    27

                  
	
                    10.2

                  	
                    Cash
                      Calls

                  	
                    27

                  
	
                    10.3

                  	
                    Failure
                      to Meet Cash Calls

                  	
                    28

                  
	
                    10.4

                  	
                    Cover
                      Payment

                  	
                    28

                  
	
                    10.5

                  	
                    Remedies

                  	
                    28

                  
	
                    10.6

                  	
                    Audits

                  	
                    31

                  
	
                    ARTICLE
                      XI

                  	
                    DISPOSITION
                      OF PRODUCTION

                  	
                    31

                  
	
                    11.1

                  	
                    Taking
                      In Kind

                  	
                    31

                  
	
                    11.2

                  	
                    Failure
                      of Participant to Take In Kind

                  	
                    32

                  
	
                    11.3

                  	
                    Hedging

                  	
                    32

                  
	
                    ARTICLE
                      XII

                  	
                    SUPPLEMENTAL
                      BUSINESS AGREEMENT

                  	
                    32

                  
	
                    12.1

                  	
                    Supplemental
                      Business Agreement

                  	
                    32

                  
	
                    ARTICLE
                      XIII

                  	
                    TRANSFER
                      OF INTEREST; PREEMPTIVE RIGHT

                  	
                    33

                  
	
                    13.1

                  	
                    General

                  	
                    33

                  
	
                    13.2

                  	
                    Limitations
                      on Free Transferability

                  	
                    33

                  
	
                    PART
                      IV

                  	
                    PROVISIONS
                      APPLICABLE TO BOTH OPTION PERIOD AND JOINT VENTURE
                      PERIOD

                  	
                    35

                  
	
                    ARTICLE
                      XIV

                  	
                    MANAGEMENT
                      COMMITTEE

                  	
                    35

                  
	
                    14.1

                  	
                    Meetings
                      of Management Committee

                  	
                    35

                  
	
                    14.2

                  	
                    Action
                      Without Meeting in Person

                  	
                    36

                  
	
                    14.3

                  	
                    Matters
                      Requiring Approval

                  	
                    36

                  
	
                    ARTICLE
                      XV

                  	
                    MANAGER

                  	
                    36

                  
	
                    15.1

                  	
                    Powers
                      and Duties of Manager

                  	
                    36

                  
	
                    15.2

                  	
                    Standard
                      of Care

                  	
                    40

                  

          

        

         

      

       

       

      
        
          
          

        

        
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                  TABLE
                    OF CONTENTS

                	
                   

                
	
                   

                	
                  (continued)

                	
                  Page

                
	
                  15.3

                	
                  Resignation;
                    Deemed Offer to Resign

                	
                  40

                
	
                  15.4

                	
                  Administrative
                    Charges and Services Agreement

                	
                  42

                
	
                  15.5

                	
                  Transactions
                    With Affiliates

                	
                  42

                
	
                  15.6

                	
                  Activities
                    During Deadlock

                	
                  42

                
	
                  ARTICLE
                    XVI

                	
                  WITHDRAWAL
                    AND TERMINATION

                	
                  42

                
	
                  16.1

                	
                  Termination

                	
                  42

                
	
                  16.2

                	
                  Termination
                    by Deadlock

                	
                  42

                
	
                  16.3

                	
                  Withdrawal

                	
                  43

                
	
                  16.4

                	
                  Continuing
                    Obligations and Environmental Liabilities

                	
                  43

                
	
                  16.5

                	
                  Disposition
                    of Assets on Termination

                	
                  43

                
	
                  16.6

                	
                  Non-Compete
                    Covenants

                	
                  43

                
	
                  16.7

                	
                  Right
                    to Data After Termination

                	
                  44

                
	
                  16.8

                	
                  Continuing
                    Authority

                	
                  44

                
	
                  ARTICLE
                    XVII

                	
                  ACQUISITIONS
                    WITHIN AREA OF INTEREST

                	
                  44

                
	
                  17.1

                	
                  General

                	
                  44

                
	
                  17.2

                	
                  Notice
                    to Non-Acquiring Party

                	
                  44

                
	
                  17.3

                	
                  Election
                    to Acquire

                	
                  45

                
	
                  17.4

                	
                  Election
                    to Acquire Not Exercised

                	
                  45

                
	
                  ARTICLE
                    XVIII

                	
                  ABANDONMENT
                    AND SURRENDER OF PROPERTIES

                	
                  45

                
	
                  18.1

                	
                  Abandonment
                    and Surrender of Property - Option Period

                	
                  45

                
	
                  18.2

                	
                  Abandonment
                    and Surrender of Property - Joint Venture Period

                	
                  45

                
	
                  ARTICLE
                    XIX

                	
                  DISPUTES

                	
                  46

                
	
                  19.1

                	
                  Governing
                    Law

                	
                  46

                
	
                  19.2

                	
                  Dispute
                    Resolution

                	
                  46

                
	
                  19.3

                	
                  Mediation

                	
                  46

                
	
                  19.4

                	
                  Arbitration

                	
                  46

                
	
                  ARTICLE
                    XX

                	
                  CONFIDENTIALITY,
                    OWNERSHIP, USE AND DISCLOSURE OF INFORMATION

                	
                  49

                
	
                  20.1

                	
                  Business
                    Information

                	
                  49

                
	
                  20.2

                	
                  Party
                    Information

                	
                  49

                
	
                  20.3

                	
                  Permitted
                    Disclosure of Confidential Business Information

                	
                  49

                
	
                  20.4

                	
                  Disclosure
                    Required By Law

                	
                  50

                
	
                  20.5

                	
                  Permitted
                    Disclosure

                	
                  50

                
	
                  20.6

                	
                  Public
                    Announcements

                	
                  51

                
	
                  ARTICLE
                    XXI

                	
                  GENERAL
                    PROVISIONS

                	
                  51

                
	
                  21.1

                	
                  Notices

                	
                  51

                
	
                  21.2

                	
                  Currency

                	
                  52

                
	
                  21.3

                	
                  Headings

                	
                  52

                

        

      

       

       

      
        
          
          

        

        
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                  TABLE
                    OF CONTENTS

                	
                   

                
	
                   

                	
                  (continued)

                	
                  Page

                
	
                  21.4

                	
                  Waiver

                	
                  52

                
	
                  21.5

                	
                  Modification

                	
                  53

                
	
                  21.6

                	
                  Force
                    Majeure

                	
                  53

                
	
                  21.7

                	
                  Rule
                    Against Perpetuities

                	
                  54

                
	
                  21.8

                	
                  Further
                    Assurances

                	
                  54

                
	
                  21.9

                	
                  Entire
                    Agreement; Successors and Assigns

                	
                  54

                
	
                  21.10

                	
                  Memorandum

                	
                  54

                
	
                  21.11

                	
                  Counterparts

                	
                  55

                

        

      

       

       

      

        
          	
                  EXHIBIT
                    A

                	
                  Property
                    Description

                
	
                  EXHIBIT
                    B

                	
                  Accounting
                    Procedures

                
	
                  EXHIBIT
                    C

                	
                  Tax
                    Matters

                
	
                  EXHIBIT
                    D

                	
                  Definitions
                    and Interpretation

                
	
                  EXHIBIT
                    E

                	
                  Section
                    3.2(g) Disclosure

                
	
                  EXHIBIT
                    F

                	
                  Certificate
                    of Non - B.C. Resident

                
	
                  EXHIBIT
                    G

                	
                  Certificate
                    of Accredited Investor

                
	
                  EXHIBIT
                    H

                	
                  Support
                    Agreement

                
	
                  EXHIBIT
                    I

                	
                  Voting
                    Trust Agreement

                
	
                  EXHIBIT
                    J

                	
                  Marketing
                    Agreement

                
	
                  EXHIBIT
                    K

                	
                  Insurance
                    Requirements

                
	
                  EXHIBIT
                    L

                	
                  Services
                    Agreement

                
	
                  EXHIBIT
                    M

                	
                  Area
                    of Interest

                
	
                  EXHIBIT
                    N

                	
                  Escrow
                    Agreement

                
	
                  EXHIBIT
                    O

                	
                  Net
                    Profits Interest

                

        

      

       

       

       

       

      
        
        

      

      
        -v-

        
          

        

      

      
        
        

      

    

    
       

       

    

    

    EXPLORATION,
      DEVELOPMENT AND MINE OPERATING AGREEMENT

     

    This
      Exploration, Development and Mine Operating Agreement is made as of April 3,
      2007 (“Agreement
      Date”)
      by and
      between KOBEX RESOURCES LTD., a Canadian corporation (“Kobex”),
      the
      address of which is 1700 - 700 West Pender Street, Vancouver, BC V6C 1G8,
      Canada, U.S. MOLY CORP., a Wyoming corporation (the “Company”),
      the
      address of which is 877 North 8th
      West,
      Riverton, WY 82501, U.S. ENERGY CORP., a Wyoming corporation, the address of
      which is 877 North 8th
      West,
      Riverton, WY 82501, (“U.S.
      Energy”)
      and
      CRESTED CORP. a Colorado corporation, the address of which is 877 North
      8th
      West,
      Riverton, WY 82501 (“Crested”)
      (collectively the Company, U.S. Energy, and Crested are “U.S.
      Energy Group”).
      

     

    RECITALS

     

    
      	A.  	
              U.S.
                Energy and Crested (collectively “USE/CC”)
                own the Company as to 50% each.

            

    

     

    
      	B.  	
              USE/CC
                collectively own 100% of certain property in Gunnison County, Colorado,
                named the “Lucky Jack Project” (the “Property”),
                previously known as the Mt. Emmons Project, and which Property is
                described in Exhibit A.
                

            

    

     

    
      	C.  	
              The
                Parties previously entered into the Letter Agreement whereby the
                U.S.
                Energy Group granted Kobex an option to earn certain interests in
                the
                Property and provided Kobex with the right to explore and, if justified,
                develop the Property.

            

    

     

    
      	D.  	
              The
                Parties wish to formalize the terms of the Letter Agreement by entering
                into this Agreement which defines the relationship of the Parties
                for two
                distinct periods: (1) the Option Period, during which Kobex can
                choose to make certain expenditures and option payments which shall
                entitle Kobex to earn an initial 15% equity interest in the Property
                and
                subsequently during which Kobex may choose to continue with making
                certain
                expenditures and option payments in order to earn an additional 35%
                equity
                interest in the Property (for an aggregate 50%); and (2) the Joint
                Venture Period during which Kobex may enter into a joint venture
                with
                USE/CC and USE/CC may later elect to have Kobex acquire an additional
                15%
                interest in the Joint Venture or elect to have Kobex acquire all
                of
                USE/CC’s interest in the Property. 

            

    

     

    NOW
      THEREFORE, in consideration of the covenants and conditions contained herein,
      Kobex and the U.S. Energy Group agree as follows:

     

    PART
      I  

     

    THE
      TRANSACTION

     

    ARTICLE
      I  

     

    DEFINITIONS
      AND CROSS-REFERENCES

     

    1.1  Definitions.
      The
      terms defined in Exhibit D
      and
      elsewhere shall have the defined meaning wherever used in this Agreement,
      including in Exhibits.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

     

    1.2  Cross
      References.
      References to “Exhibits”,
      “Parts”,
      “Articles”
and
      “Sections”
refer
      to Exhibits,
      Parts,
      Articles and Sections of this Agreement. References to “Paragraphs”
and
      “Subparagraphs”
refer
      to paragraphs and subparagraphs of the referenced Exhibits.

     

    ARTICLE
      II  

     

    NAME,
      PURPOSES AND TERM

     

    2.1  General.
      The
      Parties hereby enter into this Agreement for the purposes hereinafter stated.
      All of the rights and obligations of the Parties in connection with the Assets
      or the Property and all Operations shall be subject to and governed by this
      Agreement.

     

    2.2  Option
      Period and Joint Venture Period.
      During
      the Option Period, the Property and Assets shall be managed and operated by
      the
      Parties pursuant to the terms of Part II of this Agreement, unless otherwise
      indicated therein. During the Joint Venture Period, the Property and Assets
      shall be managed and operated by the JV Participants pursuant to the terms
      of
      Part III of this Agreement, unless otherwise indicated therein. Part I and
      IV of
      this Agreement shall apply to both the Option Period and Joint Venture
      Period.

     

    2.3  Purposes.
      This
      Agreement is entered into for the following purposes and for no others, and
      shall serve as the exclusive means by which each of the Parties accomplishes
      such purposes:

     

    
      	(a)  	
              to
                conduct all permitting studies, work, and governmental submissions
                to
                allow the Property to be explored, developed and if appropriate
                produced;

            

    

     

    
      	(b)  	
              to
                conduct Exploration within the Property and Area of
                Interest;

            

    

     

    
      	(c)  	
              to
                evaluate the possible Development and Mining of the Property, and,
                if
                justified, to engage in Development and
                Mining;

            

    

     

    
      	(d)  	
              to
                engage in Operations on the
                Property;

            

    

     

    
      	(e)  	
              to
                engage in marketing Products, to the extent provided by this
                Agreement;

            

    

     

    
      	(f)  	
              to
                complete and satisfy all Environmental Compliance obligations affecting
                the Property; and

            

    

     

    
      	(g)  	
              to
                perform any other activity necessary, appropriate, or incidental
                to any of
                the foregoing.

            

    

     

    2.4  Limitation.
      Unless
      the Parties otherwise agree in writing, the Operations shall be limited to
      the
      purposes described in Section 2.3,
      and
      nothing in this Agreement shall be construed to enlarge such purposes or to
      change the relationships of the Parties as set forth in
      Section 4.1.

     

    ARTICLE
      III  

     

    REPRESENTATIONS
      AND WARRANTIES; TITLE TO ASSETS

     

    3.1  Representations
      and Warranties of all Parties.
      As of
      the Effective Date, each Party warrants and represents to the other
      that:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

     

    
      	(a)  	
              it
                is a body corporate duly incorporated and validly subsisting under
                the
                laws of its incorporating
                jurisdiction;

            

    

     

    
      	(b)  	
              it
                has full power and authority to own its property and assets and to
                carry
                on its business and to enter into this
                Agreement;

            

    

     

    
      	(c)  	
              neither
                the execution and delivery of this Agreement nor any of the agreements
                referred to herein or contemplated hereby shall result in the breach
                or
                accelerate the performance required by any other agreement or arrangement
                to which it is a party; 

            

    

     

    
      	(d)  	
              it
                is not subject to any governmental order, judgment, decree, debarment,
                sanction or Laws that would preclude the permitting or implementation
                of
                Operations under this Agreement; and

            

    

     

    
      	(e)  	
              this
                Agreement has been duly executed and delivered by it and is valid
                and
                binding upon it in accordance with its
                terms.

            

    

     

    3.2  Representations
      and Warranties of the U.S. Energy Group.
      As of
      the Effective Date, the U.S. Energy Group makes the following representations
      and warranties to Kobex:

     

    
      	(a)  	
              USE/CC
                collectively own a 100% interest in the Property and the Property
                is
                properly described in Exhibit
                A;

            

    

     

    
      	(b)  	
              USE/CC
                is in exclusive possession of the Property, has good marketable title
                to
                the patented mining claims which are part of the Property, subject
                only to
                the Patented Claim Litigation, and has Good Mining Title to the unpatented
                lode and millsite claims which are part of the Property, and has
                the right
                to dispose of the Property, or an interest therein, as contemplated
                in
                this Agreement;

            

    

     

    
      	(c)  	
              the
                U.S. Energy Group has delivered to or made available for inspection
                by
                Kobex all Existing Data in its possession or control, and true and
                correct
                copies, as requested by Kobex, of all permits, licenses, leases or
                other
                contracts relating to the Property;

            

    

     

    
      	(d)  	
              with
                respect to unpatented lode claims and millsite claims located by
                the U.S.
                Energy Group that are included within the Property, except as set
                forth in
                the Title Opinion and subject
                to the paramount title of the United States: (i) the unpatented
                mining claims were properly laid out and monumented; (ii) all
                required location and validation work was properly performed;
                (iii) location notices and certificates were properly recorded and
                filed with appropriate governmental agencies; (iv) all assessment
                work required to hold the unpatented mining claims has been performed
                and
                all Governmental Fees have been paid in a manner consistent with
                that
                required of the Manager pursuant to Section 15.1(j)
                through the assessment year ending September 1, 2007; (v) all
                affidavits of assessment work, evidence of payment of Governmental
                Fees,
                and other filings required to maintain the claims in good standing
                have
                been properly and timely recorded or filed with appropriate governmental
                agencies; and (vi) the U.S. Energy Group has no knowledge of
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -4-

      

    

     

                    conflicting
      mining claims from any third parties. Nothing in this Section, however, shall
      be
      deemed to be a representation or a warranty that any of the unpatented mining
      claims contains a valuable mineral deposit;

     

    
      	(e)  	
              with
                respect to unpatented lode claims and millsite claims not located
                by the
                U.S. Energy Group but which are included within the Property, except
                as
                set forth in the Title Opinion and subject to the paramount title
                of the
                United States: to the knowledge of the U.S. Energy Group (i) all
                assessment work required to hold the unpatented mining claims has
                been
                performed and all Governmental Fees have been paid in a manner consistent
                with that required of the Manager pursuant to Section 15.1(j)
                through the assessment year ending September 1, 2007; (ii) all
                affidavits of assessment work, evidence of payment of Governmental
                Fees,
                and other filings required to maintain the claims in good standing
                have
                been properly and timely recorded or filed with appropriate governmental
                agencies; (iii) the claims are free and clear of Encumbrances or
                defects in title; and (iv) the U.S. Energy Group has no knowledge of
                conflicting mining claims. Nothing in this Section, however, shall
                be
                deemed to be a representation or a warranty that any of the unpatented
                mining claims contains a valuable discovery of
                minerals;

            

    

     

    
      	(f)  	
              with
                respect to the Property, except for the Patented Claim Litigation
                as
                previously disclosed to Kobex, since the acquisition of the Property
                from
                Phelps Dodge Corporation and Mt. Emmons Mining Company (collectively
                “PD/MEMCO”),
                there are no pending or threatened actions, suits, claims or proceedings,
                and there have been no previous transactions affecting its interests
                in
                the Property which have not been for fair consideration;

            

    

     

    
      	(g)  	
              except
                as to matters otherwise disclosed in writing to Kobex prior to the
                Effective Date as set out in Exhibit
                E:

            

    

     

    
      	(i)  	
              since
                the acquisition of the Property from PD/MEMCO activities on the Property
                with respect to the Property and its ownership and operation have
                not been
                in violation of any Laws (including without limitation any Environmental
                Laws), nor caused or permitted any damage (including Environmental
                Damage,
                as defined below) or impairment to the health, safety, or enjoyment
                of any
                person at or on the Property or in the general vicinity of the Property;
                

            

    

     

    
      	(ii)  	
              since
                the acquisition of the Property from PD/MEMCO there has been no material
                spill, discharge, leak emission, ejection, escape, dumping, or any
                release
                or threatened release of any kind, of any toxic or hazardous substance
                or
                waste (as defined by any applicable Laws) from, on, in, or under
                the
                Property or into the environment, except releases permitted or otherwise
                authorized by such law; 

            

    

     

    
      	(iii)  	
              the
                U.S. Energy Group has not received inquiry from or notice of a pending
                investigation from any governmental agency or of any
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -5-

      

    

     

                           
      administrative or judicial proceeding concerning the violation of any
      Laws;

     

    
      	(iv)  	
              the
                U.S. Energy Group has no interest in any mineral interest located
                within
                two miles of the outermost boundary of the Property, with the exception
                of
                the Property itself; and

            

    

     

    
      	(v)  	
              since
                the acquisition of the Property from PD/MEMCO by the Company, the
                water
                treatment facility (the “Facility”)
                located on the Property has at all times been operated within the
                terms of
                any permits and licenses that it is operating under, and has been
                operated
                in accordance with all applicable Laws;

            

    

     

    
      	(h)  	
              except
                for patented land within the exterior boundaries of the Property,
                except
                as set forth in the Title Opinion all
                of the land within the Property is covered by at least one mining
                or
                millsite claim of the correct nature for the deposit being located
                or the
                use being contemplated (e.g.,
                a
                lode claim was used to locate a lode deposit, a placer claim was
                used to
                locate a placer deposit, and a millsite claim was used to locate
                the
                ground for mine facilities) which the mining claim records of the
                United
                States Department of Interior, Bureau of Land Management (LR-2000
                system)
                show as being an “active” claim as of December 1,
                2006;

            

    

     

    
      	(i)  	
              except
                for the Permitted Encumbrances or the Royalty, the Property is clear
                of
                all Encumbrances;

            

    

     

    
      	(j)  	
              no
                consent or approval of any third party or governmental agency is
                required
                for the execution, delivery or performance of the Agreement by the
                U.S.
                Energy Group or the transfer or acquisition of any interest in the
                Property; and

            

    

     

    
      	(k)  	
              no
                proceedings are pending for and the U.S. Energy Group is not aware
                of any
                basis for the institution of any proceedings leading to the dissolution
                or
                winding-up of the U.S. Energy Group or the placing of any company
                in the
                U.S. Energy Group into bankruptcy or subject to any other laws governing
                the affairs of insolvent persons.

            

    

     

    The
      representations and warranties set forth above shall survive the execution
      and
      delivery of any documents of Transfer provided under this Agreement.

     

    3.3  Certificates
      of U.S. Energy and Crested.
      U.S.
      Energy and Crested have each completed and executed and is delivering
      concurrently with this Agreement:

     

    
      	(a)  	
              a
                Certificate of Non-B.C. Resident in the form attached at Exhibit
                F;
                and

            

    

     

    
      	(b)  	
              a
                Certificate of Accredited Investor attached at Exhibit G.

            

    

     

    3.4  Knowledge
      of Parties. For
      a
      representation or warranty made to a Party’s “knowledge,”
the
      term “knowledge” shall mean the actual knowledge on the part of the officers and
      directors of the applicable Party, or of facts that would reasonably lead to
      the
      indicated conclusions, and it 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -6-

      

    

     

    is
      a
      requirement that such persons must have made the enquiries that are reasonably
      necessary to enable that person to make the representation, statement or
      disclosure.

     

    3.5  Disclosures.
      Each of
      the Parties represents and warrants that it is unaware of any material facts
      or
      circumstances that have not been disclosed in this Agreement, which should
      be
      disclosed to the other Parties in order to prevent the representations and
      warranties in this Article III from being materially misleading. U.S. Energy
      Group has disclosed to Kobex all information it believes to be relevant
      concerning the Assets and Property,
      and
      has
      provided to or made available for inspection by Kobex all such information,
      but
      does not make any representation or warranty, express or implied, as to the
      value of the Assets or Property. Each Party represents to the other that in
      negotiating and entering into this Agreement it has relied solely on its own
      appraisals and estimates as to the value of the Assets and Property and upon
      its
      own geologic and engineering interpretations related thereto. 

     

    3.6  Loss
      of Title.
      Any
      failure or loss of title to any of the Assets, and all costs of defending,
      curing and clarifying title, shall be charged as follows:

     

    
      	(a)  	
              all
                such costs up to the amount of $75,000 will be borne solely by the
                U.S.
                Energy Group; and

            

    

     

    
      	(b)  	
              all
                such costs greater than the initial $75,000 referred to in Section
                3.6(a)
                shall be charged to the Business Account, and Kobex shall be entitled
                to
                include such costs as Expenditures.

            

    

     

    3.7  Royalties,
      Production Taxes and Other Payments Based on Production.
      All
      required payments of production royalties, taxes and other payments to private
      parties and governmental entities, shall be determined and made by Kobex. In
      the
      event that Kobex fails to make any such required payment, the other Party shall
      have the right to make such payment and shall thereby become subrogated to
      the
      rights of such third party; provided, however, that the making of any such
      payment on behalf of Kobex shall not constitute acceptance by the paying Party
      of any liability to such third party for the underlying obligation.

     

    3.8  Agreement
      Subject to TSX Venture Exchange Approval.
      This
      Agreement shall be subject to the approval of the TSX Venture Exchange, which
      such approval Kobex shall obtain within 90 days after the execution and delivery
      of this Agreement by the Parties hereto. In the event that approval is not
      received within 90 days, this Agreement will immediately terminate, unless
      the
      Parties agree otherwise. 

     

    ARTICLE
      IV  

     

    RELATIONSHIP
      OF THE PARTICIPANTS

     

    4.1  No
      Partnership or Fiduciary Relationship.
      The
      Parties agree and declare that the Agreement must not be construed as
      constituting an association, corporation, mining partnership or any other kind
      of partnership, except for the tax partnership describe in Exhibit
      C
      and,
      except for the agency of the Manager specifically provided for in the Agreement,
      and subject to Sections 3.2(c)
      and
8.1,
      nothing
      in the Agreement shall be deemed to constitute any Party a partner, agent or
      legal representative of any other Party for any purpose whatsoever and nothing
      in the Agreement shall create or be deemed to create a fiduciary relationship
      between the Parties, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -7-

      

    

     

     

    nor
      between the Manager and the other Parties or any of them. The rights, duties,
      obligations and liabilities of the Parties shall be several and not joint or
      collective. Each Party shall be responsible only for its obligations as herein
      set out and shall be liable only for its share of the costs and expenses as
      provided herein, and it is the express purpose and intention of the Parties
      that
      their ownership of Assets and the rights acquired hereunder shall be as tenants
      in common.

     

    4.2  Tax
      Matters.
      All tax
      matters affecting the Parties under this Agreement shall be governed by the
      principals set out in Exhibit
      C.

     

    4.3  Other
      Business Opportunities.
      Except
      as expressly provided in this Agreement, each Party shall have the right to
      engage in and receive full benefits from any independent business activities
      or
      operations, whether or not competitive with this Business, without consulting
      with, or obligation to, the other Parties. The doctrines of corporate
      opportunity or business opportunity shall not be applied to this Business nor
      to
      any other activity or operation of any of the Parties. None of the Parties
      shall
      have any obligation to the other with respect to any opportunity to acquire
      any
      property outside the Property at any time, or, except as otherwise provided
      in
      Section 16.6,
      within
      the Property after the termination of the Business. Unless otherwise agreed
      in
      writing and subject to ARTICLE
      XI,
      none of
      the Parties shall have any obligation to mill, beneficiate or otherwise treat
      any Products in any facility owned or controlled by the applicable
      Party.

     

    4.4  Waiver
      of Rights to Partition or Other Division of Assets.
      The
      Parties hereby waive and release all rights of partition, or of sale in lieu
      thereof, or other division of Assets, including any such rights provided by
      Law.

     

    4.5  Implied
      Covenants.
      There
      are no implied covenants contained in this Agreement other than those of good
      faith and fair dealing. 

     

    4.6  No
      Third Party Beneficiary Rights.
      This
      Agreement shall be construed to benefit the Parties and their respective
      successors and assigns only, and shall not be construed to create third party
      beneficiary rights in any other party or in any governmental organization or
      agency, except to the extent required by Project Financing and as provided
      in
      this Agreement. 

     

    4.7  Relationship
      of U.S. Energy and Crested.
      U.S.
      Energy and Crested intend to complete a merger. For any actions occurring prior
      to the merger, or in the event that merger does not take place, U.S. Energy
      is
      authorized by Crested to act on its behalf with respect to this Agreement.
      

     

    PART
      II  

     

    THE
      OPTION PERIOD

     

    ARTICLE
      V  

     

    INITIAL
      EXPENDITURE

     

    5.1  Initial
      Expenditure. 
      Kobex
      agrees that on or before March 31, 2008, Kobex shall complete Expenditures
      not
      less than $3,500,000 (the “Initial
      Expenditure”)
      The
      cost of the Title Opinion concerning the Property provided to Kobex by the
      U.S.
      Energy Group shall be paid by Kobex and credited to this Initial Expenditure.
      In
      addition, Kobex has provided a schedule of costs attributable to due diligence
      procedures incurred by Kobex from July 10, 2006 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -8-

      

    

     

     

    until
      the
      Agreement Date which will have future utility directly related to the purposes
      of this Agreement and $100,000 of such costs shall be included as part of the
      Initial Expenditures. If Kobex determines that it does not wish to proceed
      with
      the Option prior to completing the payment of the Initial Expenditure, it may
      terminate the Agreement immediately pursuant to Section 6.4
      by
      delivering notice to the U.S. Energy Group, and the remaining balance of the
      Initial Expenditure shall be immediately due and payable to USE/CC.

     

         
      ARTICLE VI  

    THE
      OPTION

     

    6.1  Option. USE/CC
      grants to Kobex the exclusive option (the “Option”)
      to
      acquire up to an undivided 50% interest in the Property (in two stages as
      detailed in Section 6.2)
      by
      making cash payments or share issuances (of cash equivalent value) to USE/CC
      (collectively the “Option
      Payments”)
      and
      incurring Expenditures in the following manner:

     

    
      	(a)  	
              on
                or before 10 Business Days of the later of the Agreement Date or
                Canadian
                regulatory and stock exchange approval applicable to Kobex, may make
                an
                Option Payment by either:
                

            

    

     

    
      	(i)  	
              issuing
                to USE/CC common shares in the capital of Kobex having an aggregate
                value
                of $750,000, at the Market Price and using the Exchange Rate on the
                date
                the Market Price is set; or 

            

    

     

    
      	(ii)  	
              making
                a cash payment to USE/CC of
                $750,000;

            

    

     

    
      	(b)  	
              in
                addition to the Initial Expenditure (which is a firm commitment of
                Kobex),
                on or before March 31, 2008, make an Option Payment to USE/CC of
                $500,000 or issue to USE/CC common shares in the capital of Kobex
                having
                an aggregate value of $500,000 of the Market Price and using the
                Exchange
                Rate on the date the Market Price is set; and make a payment of $700,000
                in one of the following manners, to be decided by
                Kobex:

            

    

     

    
      	(i)  	
              increasing
                the Option Payment by $700,000 (or issuing to USE/CC additional common
                shares in the capital of Kobex having a value of $700,000) for an
                aggregate $1,200,000; 

            

    

     

    
      	(ii)  	
              incurring
                an additional $700,000 in Expenditures;
                or

            

    

     

    
      	(iii)  	
              apportioning
                the additional $700,000 between increased Expenditures and an increased
                Option Payment (payable in cash or shares of Kobex);
                

            

    

     

    
      	(c)  	
              on
                or before December 31, 2008:

            

    

     

    
      	(i)  	
              completing
                not less than an additional $5,000,000 (for a minimum aggregate of
                $8,500,000 and maximum of $9,200,000) in Expenditures;
                and

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -9-

      

    

     

     

    
      	(ii)  	
              making
                an Option Payment to USE/CC of $500,000 or issuing to USE/CC common
                shares
                in the capital of Kobex having an aggregate value of $500,000 of
                the
                Market Price and using the Exchange Rate on the date the Market Price
                is
                set;

            

    

     

    
      	(d)  	
              on
                or before December 31, 2009:

            

    

     

    
      	(i)  	
              completing
                not less than an additional $5,000,000 (for a minimum aggregate of
                $13,500,000 and a maximum of $14,200,000) in Expenditures;
                and

            

    

     

    
      	(ii)  	
              making
                an Option Payment to USE/CC of $500,000 or issuing to USE/CC common
                shares
                in the capital of Kobex having an aggregate value of $500,000 of
                the
                Market Price and using the Exchange Rate on the date the Market Price
                is
                set;

            

    

     

    
      	(e)  	
              on
                or before December 31, 2010:

            

    

     

    
      	(i)  	
              completing
                not less than an additional $2,500,000 (for a minimum aggregate of
                $16,000,000 and a maximum aggregate of $16,700,000) in Expenditures;
                and

            

    

     

    
      	(ii)  	
              making
                an Option Payment to USE/CC of $500,000 or issuing to USE/CC common
                shares
                in the capital of Kobex having an aggregate value of $500,000 of
                the
                Market Price and using the Exchange Rate on the date the Market Price
                is
                set;

            

    

     

    
      	(f)  	
              on
                or before December 31, 2011 making an Option Payment to USE/CC of
                $500,000
                or issuing to USE/CC common shares in the capital of Kobex having
                an
                aggregate value of $500,000 of the Market Price and using the Exchange
                Rate on the date the Market Price is set;
                and

            

    

     

    
      	(g)  	
              delivering
                to USE/CC a bankable feasibility study on the Property, including
                confirmation of advance permitting or mining permit issuance thereon
                (collectively the “Study”),
                subject to Section 6.7.

            

    

     

    Any
      excess Expenditures completed in advance of an anniversary date specified in
      this Section 6.1
      shall be
      carried over and shall qualify, and be accounted for, as Expenditures completed
      by the subsequent anniversary date. 

     

    6.2  Option
      Stages.
      The
      Option shall be exercised in two stages as follows (as further described in
      Section 6.8):

     

    
      	(a)  	
              Upon
                Kobex incurring $15,000,000 in Expenditures on the Property, Kobex
                can
                elect if it desires to earn a 15% interest in the Property, with
                such
                election being made to USE/CC within 30 days of incurring such
                Expenditures, and a failure to make such election shall be deemed
                to be an
                election by Kobex to earn the 15% interest in the Property. The documents
                reflecting this 15% interest shall be

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -10-

      

    

     

            
transferred
      through
      the procedure set forth in Section 3.2 of the Escrow Agreement;
      and

     

    
      	(b)  	
              If
                Kobex completes the remaining Option Payments and Expenditures and
                delivers the Study (subject to Section 6.7),
                it shall earn an additional 35% interest in the Property (for an
                aggregate
                50% interest). The documents reflecting this 35% interest shall be
                transferred through the procedure set forth in Section 3.3 of the
                Escrow Agreement. 

            

    

     

    6.3  Cash
      in Lieu and Accelerated Payments.
      Kobex
      may elect to pay to USE/CC (as to 50% each), on or before a date specified
      in
      Section 6.1
      the
      dollar amount equal to any shortfall in Expenditures required to be completed
      by
      Kobex by such anniversary date in lieu of completing such Expenditures, and
      such
      amounts shall thereupon be deemed to have satisfied such requirement for the
      completion of Expenditures, as applicable. Such payments shall be referred
      to as
“Shortfall
      Payments.”
In
      addition, Kobex may elect, at its discretion, to accelerate the cash payments
      and share issuances (or cash payment equivalent) in advance of the anniversary
      dates set out in Section 6.1,
      and
      such accelerated payments shall thereupon be deemed to have satisfied the
      requirements for Option Payments set out in Section 6.1,
      as
      applicable. 

     

    6.4  Failure
      to Make Option Payments and Termination. Failure
      by Kobex to make all required Option Payments and Expenditures (or Shortfall
      Payments as described in Section 6.3)
      pursuant to the schedule set forth in Section 6.1
      (subject
      to Sections 6.3
      and
21.6)
      within
      90 days of the anniversary date specified in that Section 6.1
      shall be
      deemed to be a termination of this Agreement by Kobex. If, however, Kobex fails
      to complete an Option Payment or Expenditure required by section 6.1
      (subject
      to Sections 6.3
      and
21.6)
      after
      having earned a 15% interest (by making $15,000,000 in compliance with the
      schedule set forth in Section 6.1),
      the
      Business shall continue but with the Company as Manager. Kobex may also
      terminate this Agreement by delivering written notice at any time to the U.S.
      Energy Group (including during an event of force majeure as set out in Section
      21.6)
      subject
      to paying the Initial Expenditure if not incurred yet, and upon such termination
      of this Agreement during the Option Period, the provisions of Section
6.5
      shall
      apply and Kobex must file all work and/or pay all such fees to maintain the
      Property in good standing for a period of three months after such notice, and
      deliver to the U.S. Energy Group all records, reports, studies, data, computer
      programs and other information necessary and appropriate to carrying out
      permitting and other operations on the property in a manner consistent with
      industry standards in good workmanlike practices. In addition, upon termination,
      as set forth in the Escrow Agreement, the Company (or a designated Affiliate
      of
      U.S. Energy) shall receive a blanket assignment of any permits issued in Kobex’s
      name. In addition, Kobex shall use its best efforts to take any further steps
      necessary or advisable to assign or transfer to the Company all permits related
      to the Property and operatorship of all activities on or related to the
      Property. 

     

    6.5  Wind-Up
      upon Termination During the Option Period.
      During
      the Option Period, upon termination of the Business, the Manager shall have
      the
      power and authority to do all things which are reasonably necessary or
      convenient to: (a) wind up Operations and (b) complete any transaction
      and satisfy any obligation, unfinished or unsatisfied, at the time of such
      termination or withdrawal, if the transaction or obligation arises out of
      Operations prior to such termination or withdrawal. The Manager shall have
      the
      power and authority to grant or 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -11-

      

    

     

    receive
      extensions of time or change the method of payment of an already existing
      liability or obligation, prosecute and defend actions, and take any other
      reasonable action in any matter with respect to which Kobex and the U.S. Energy
      Group continue to have, or appear or are alleged to have, a common interest
      or a
      common liability. 

     

    6.6  Discretion
      of Kobex for Manner of Payment.
      The
      determination as to the manner of payment, that is whether by cash or issuing
      shares to USE/CC, shall be at Kobex’s sole discretion. In order for Kobex to
      earn an ownership interest in the Property, the amount of payment, the schedule
      for payment, and delivery of the Study, must be performed in conformity with
      the
      requirements of Sections 6.1,
      6.2
      and
6.7.
      

     

    6.7  Bankable
      Feasibility Study Payment. 

     

    
      	(a)  	
              If
                the Option Payments and Expenditures plus the costs to prepare the
                Study
                aggregate $50,000,000 before the Study is completed and delivered,
                USE/CC
                and Kobex shall jointly fund the completion of the Study as to 50%
                USE/CC
                and 50% Kobex.

            

    

     

    
      	(b)  	
              Upon
                the completion of the Study, if the Option Payments and Expenditures
                and
                costs to prepare and complete the Study are less than $50,000,000,
                then in
                order to fully exercise the Option to obtain an aggregate 50% interest
                in
                the Property, Kobex shall pay to USE/CC concurrent with the delivery
                of
                the Study, the cash difference between $50,000,000 and the Option
                Payments
                and Expenditures plus the costs to prepare and complete the Study
                (the
                “Study
                Cash Difference”).
                If the Study is not completed on or before December 5, 2016, then
                Kobex’s
                interest in the Property shall revert to a 15% interest, and the
                Company
                shall assume operatorship of the Property, subject to force majeure
                as set
                out in Section 21.6.

            

    

     

    6.8  Exercise
      of Option. 

     

    
      	(a)  	
              Upon
                Kobex incurring an initial $15,000,000 in Expenditures, Kobex shall
                have
                earned a 15% interest in the Property.

            

    

     

    
      	(b)  	
              Upon
                Kobex incurring and paying all of the Option Payments and funding
                all of
                the Expenditures over and above the initial $15,000,000, and by completing
                and delivering the Study and the payment of any Study Cash Difference
                (if
                applicable) Kobex shall have earned an additional 35% interest in
                the
                Property (for an aggregate interest of 50%). The “50%
                Option Exercise Date”
                shall therefore be the later of the date when BOTH the Option Payments
                and
                Expenditures have been incurred and paid, and the Study has been
                delivered
                to USE/CC along with the payment to USE/CC of the Study Cash Difference
                (if any). 

            

    

     

    
      	(c)  	
              On
                the 50% Option Exercise Date, Kobex shall, by written notice to USE/CC,
                be
                entitled to either:

            

    

     

    
      	(i)  	
              form
                a Joint Venture on the terms set out in PART
                III;
                or

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -12-

      

    

     

     

    
      	(ii)  	
              within
                four months of the 50% Option Exercise Date, offer in writing to
                USE/CC a
                one time election (the “USE/CC
                Election”)
                as described in Section 6.9.
                The USE/CC Election is to be made in writing by notice to Kobex by
                USE/CC
                within 30 Business Days of such offer, and where USE/CC fails to
                make the
                USE/CC Election within such time period, USE/CC shall be deemed to
                have
                made the election set out in Section 6.9(a). 

            

    

     

    6.9  The
      USE/CC Election.
      USE/CC
      may exercise the USE/CC Election to:

     

    
      	(a)  	
              form
                a Joint Venture on the terms set out in PART
                III;
                

            

    

     

    
      	(b)  	
              form
                a Joint Venture on the terms set out in PART
                III,
                but have Kobex arrange all future financing on optimal terms available
                for
                all Operations on the Property, seeking the most appropriate blend
                of debt
                and equity in the context of the Study, and for further clarification
                Kobex shall bear all operating costs related to the Property, and
                the debt
                and equity costs related to such financing, and in return for bearing
                such
                costs, then Kobex shall earn an additional 15% Participating Interest
                in
                the Joint Venture (for an aggregate 65% Participating Interest, with
                USE/CC correspondingly reducing to a collective 35% Participating
                Interest) (the “65%
                Election”),
                with Kobex earning such additional 15% Participating Interest upon
                Kobex
                committing to arrange such financing; or 

            

    

     

    
      	(c)  	
              to
                have
                Kobex acquire, directly or indirectly, subject to Section 6.12,
                all of the then outstanding securities of Newco (the “Acquisition
                Election”)
                in consideration for the issuance of common shares of Kobex (subject
                to
                any resale restrictions, hold periods or escrow provisions that may
                be
                required or imposed by an applicable stock exchange or securities
                commission, provided, however, that Kobex shall use its best efforts
                to
                avoid or minimize such restrictions) or any successor company under
                the
                following terms:

            

    

     

    
      	(i)  	
              the
                number of shares of Kobex to be issued to the shareholders of Newco
                shall
                be based on the agreed relative values of the enterprises (after
                the
                Property, the Facility and all related permits and licenses are
                transferred to Newco), where in any event the total number of shares
                of
                Kobex issued to the shareholders of Newco shall not be greater than
                50% of
                the issued and outstanding shares of Kobex at the time the Acquisition
                Election is completed. The shares of Kobex shall be issued at the
                Market
                Price and the transaction shall be subject to stock exchange approval
                and
                structured in a manner that, to the extent possible, is tax neutral
                to the
                shareholders of Newco and Kobex.

            

    

     

    
      	(A)  	
              either
                of Kobex or USE/CC has the right to appoint an independent valuator
                to
                value Newco, with the cost of such valuator being borne equally by
                USE/CC
                collectively and Kobex. Such valuator shall be mutually acceptable
                to such
                Parties, and if such Parties cannot agree, such Parties shall utilize
                following the procedure: 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -13-

      

    

     

     

    
      	(1)  	
              when
                either Kobex or USE/CC believes that they cannot agree to a valuator,
                either such Party shall deliver written notice to the other such
                Party;

            

    

     

    
      	(2)  	
              the
                Senior Executives of Kobex or USE/CC shall meet at a mutually acceptable
                time and place within 15 days after the date of the notice required
                by
                Section 6.9(c)(i)(A)(1)
                to
                attempt to reach agreement as to a valuator. If a senior executive
                intends
                to be accompanied at the meeting by an attorney, the other Party’s’ senior
                executive shall be given at least 3 Business Days’ notice of such
                intention and may also be accompanied by an attorney;
                and

            

    

     

    
      	(3)  	
              if
                Kobex and USE/CC are unable to reach agreement on a valuator within
                30
                days of the date of the notice required by 6.9(c)(i)(A)(1),
                such Parties shall request that the Dean of the Colorado School of
                Mines
                select a valuator within 45 days from the date of the notice required
                by
                6.9(c)(i)(A)(1).
                The valuator shall determine value of Newco within 70 days of the
                notice
                required by 6.9(c)(i)(A)(1);

            

    

     

    
      	(B)  	
              if
                Newco is formed pursuant to Section 6.11(a),
                U.S. Energy and Crested shall each execute support agreements,
                substantially in the form attached as Exhibit
                H
                (each a “Support
                Agreement”),
                under which they shall agree to tender 100% of their shares of Newco
                and
                vote not less than 50% of the outstanding shares of the Newco in
                support
                of the transaction, and covenant to enter into the Voting Trust
                Agreement;

            

    

     

    
      	(C)  	
              upon
                the execution of this Agreement, in furtherance of the Acquisition
                Election, U.S. Energy and Crested Corp shall each execute and deliver
                a
                Certificate of Non-B.C. Resident in the form attached as Exhibit F
                and a Certificate of Accredited Investor attached as Exhibit G,
                and upon the issuance of shares of Kobex to the shareholders of Newco
                under this Section 6.9(c),
                U.S. Energy and Crested Corp. shall each deliver updates of the foregoing
                certificates to Kobex and USE/CC shall procure any other shareholders
                of
                Newco at such time to deliver the foregoing certificates to Kobex;
                and

            

    

     

    
      	(D)  	
              U.S.
                Energy and Crested each agree to enter into a voting trust agreement,
                substantially in the form attached as Exhibit
                I
                (the “Voting
                Trust Agreement”),
                whereby shareholders receiving shares of Kobex in the acquisition
                shall
                agree to vote not less than 50% of the shares held in Kobex in favor
                of
                the directors nominated by Kobex management to the board of directors
                of
                Kobex, or shall abstain from voting their shares held in Kobex in
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -14-

      

    

     

                           
      any voting conducted for election to the board of directors of Kobex, for the
      next five subsequent financial years after the acquisition of Newco. 

     

    6.10  Termination
      on Acquisition Election.
      If
      USE/CC selects the Acquisition Election, and upon the completion of the
      acquisition of the shares of Newco by Kobex, this Agreement will terminate,
      except for ARTICLE
      XIX,
      ARTICLE
      XX,
      Section
21.1
      and
      Section 21.8.

     

    6.11  Covenants
      of USE/CC.
      USE/CC
      covenants:

     

    
      	(a)  	
              that
                in the event the Acquisition Election is made, to form a new special
                purpose subsidiary, wholly-owned by USE/CC (“Newco”),
                to hold the Property and all permits and licenses required in connection
                with the Property;

            

    

     

    
      	(b)  	
              upon
                the formation of Newco, not to transfer or issue shares of Newco
                to any
                person other than USE/CC; and

            

    

     

    
      	(c)  	
              to
                enter into the Voting Trust Agreement upon the Acquisition Election
                being
                made and completed.

            

    

     

    6.12  Title
      to Property on Acquisition Election.
      In the
      event that USE/CC makes the Acquisition Election described in Section
6.9,
      before
      the date Newco is acquired by Kobex:

     

    
      	(a)  	
              U.S.
                Energy and Crested shall each transfer to Newco their respective
                interests
                in the Property, which shall comprise in aggregate 100% of the title
                to
                the Property, and
                all permits and licenses held in their names required in connection
                with
                the Property and the Facility; and

            

    

     

    
      	(b)  	
              the
                Company shall transfer to Newco the Facility, and all permits and
                licences
                held in its name required in connection with the Property and the
                Facility.

            

    

     

    6.13  Royalty.
      For
      further clarification, USE/CC shall retain a 6% gross overriding Royalty (the
      “Royalty”)
      pursuant
      to the Amended and Restated Royalty Deeds and Agreement dated May 29, 1987
      between U.S. Energy and Crested, respectively, and Mt. Emmons Mining Company,
      subject to adjustment pursuant to the Royalty Adjustment Agreements among the
      Parties executed contemporaneously with this Agreement. 

     

    

     

    ARTICLE
      VII  

     

    RIGHTS
      AND OBLIGATIONS DURING THE OPTION PERIOD

     

    7.1  Manager
      During Option Period.
      During
      the Option Period, Kobex shall be the Manager of all Programs on the Property,
      subject to the direction and control of the Management Committee. The provisions
      of ARTICLE
      XV
      shall
      apply to the Manager during the Option Period, including the exercise of all
      powers, the completion of all duties and the standard of care detailed in
ARTICLE
      XV,
      with
      the exception of Section 15.1(m).
      To the
      extent that any 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -15-

      

    

     

    provision
      of ARTICLE
      XV
      conflicts with the powers, duties, and standards detailed in this ARTICLE
      VII,
      this
      Article shall prevail. 

     

    7.2  Technical
      Committee.
      During
      the Option Period, a technical committee (the “Technical
      Committee”)
      shall
      be formed comprised of four members, two representatives from each of Kobex
      and
      the U.S. Energy Group. The Technical Committee shall provide technical
      assistance to the Management Committee in its review of Programs and Budgets
      and
      such other matters as the Management Committee deems appropriate. The Kobex
      appointed members, and the U.S. Energy Group appointed members, shall get an
      aggregate of one vote each, and the event of a tie, the Kobex members shall
      have
      the casting vote.

     

    7.3  Management
      Committee.
      During
      the Option Period, the Parties shall establish a “Management
      Committee”
      consisting of four members to direct and control operations and the activities
      of the Manager during the Option Period. Each of Kobex and the U.S. Energy
      Group
      shall be entitled to appoint two members, with one alternate for each, of the
      Management Committee. The Kobex appointed members, and the U.S. Energy Group
      appointed members, shall have an aggregate of one vote each, and in the event
      of
      a tie, the Kobex members shall have the casting vote. Each of Kobex and the
      U.S.
      Energy Group may appoint one or more alternates to act in the absence of a
      regular member. Any alternate so acting shall be deemed a member. The alternate
      may attend meetings of the Management Committee even if the members attend,
      provided however, they shall not have the right to vote unless the member is
      absent. Appointments by each of Kobex and the U.S. Energy Group shall be made
      or
      changed by notice to the other members. Decision making of the Management
      Committee shall be by majority vote. The Management Committee shall have the
      power and authority to approve all Programs and Budgets for the Exploration
      of
      the Property. The provisions concerning the Management Committee detailed in
      ARTICLE
      XIV
      shall
      apply during the Option Period. 

     

    7.4  Water
      Treatment Facility. 

     

    
      	(a)  	
              During
                the Option Period an independent contractor engaged by the U.S. Energy
                Group, or any subsequent independent contractor as appointed by the
                Management Committee, shall operate the Facility, and such contractor
                shall carry adequate insurance for operations and for any liabilities
                related to operations of the Facility. Kobex shall pay all operating
                costs
                for the Facility during the Option Period but shall have no decision
                making authority with respect to Facility operations and Kobex shall
                bear
                responsibility only for losses or damage caused by Kobex. Kobex,
                however,
                shall have no liability for any losses incurred or damage caused
                by the
                contractor or the Company in connection with the operation of the
                Facility. 

            

    

     

    
      	(b)  	
              After
                the Option Period, an independent contractor engaged by the Management
                Committee shall operate the Facility, and such independent contractor
                shall carry adequate insurance for operations and for any liabilities
                related to such operations. Kobex and the U.S. Energy Group (as Joint
                Venture partners) shall each be liable for the operating costs of
                the
                Facility in accordance with their Participating Interests. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -16-

      

    

     

    7.5  Reports
      During Option Period.
      No
      later than 15 days after the last day of each calendar month, Kobex shall
      provide to U.S. Energy monthly summary reports of its activities on the
      Property. No later than 45 days after the end of each calendar year ending
      December 31 Kobex shall provide to U.S. Energy an annual detailed progress
      report of all Programs and activities on the Property. These reports shall
      include monthly statements of account reflecting in reasonable detail the
      Expenditures during the previous month as well as the matters required by
      Section 15.1(n),
      as
      applicable. An itemized statement of Expenditures completed in any period during
      the Option Period certified to be correct by an officer of Kobex shall be
      conclusive evidence of making such Expenditures.

     

    7.6  Title
      to Property.

     

    
      	(a)  	
              Upon
                the execution of this Agreement, U.S. Energy and Crested shall each
                prepare executed transfer forms in registerable/recordable form for
                the
                transfer of an aggregate 15% and an additional aggregate 35% interest
                in
                the Property to Kobex, as required by the Escrow
                Agreement.

            

    

     

    7.7  Permit
      Obligations of Kobex During Option Period.
      Kobex
      shall, with the cooperation of the U.S. Energy Group as required, use its best
      efforts to obtain all appropriate permits prior to the commencement of work
      as
      well as any required reclamation resulting from Kobex’s work on the Property.
      The permits shall be in the name of the Company. During the Option Period,
      decisions and actions related to permit compliance shall be the obligation
      of
      the Management Committee, which shall direct the actions of the Manager with
      respect to permit compliance.

     

    7.8  Access
      to Property During Option Period.
      Kobex
      shall at all times during the term of the Agreement (as applicable) have the
      exclusive right to enter and explore the Property and to prospect for ores
      and
      minerals on the Property. The U.S. Energy Group shall take all steps necessary
      to permit Kobex to exercise such rights and to permit Kobex to have exclusive
      possession of all exploration and development activities, in accord with the
      provisions of the Agreement. 

     

    7.9  Maintenance
      of Property During Option Period.
      Kobex
      shall maintain the Property in good standing and free of all liens, other than
      Permitted Encumbrances, and such costs shall be included in the Expenditures
      until Kobex has fully exercised the Option, subject to Section 18.1.

     

    7.10  Management
      of Existing Underground Mine Conditions During Exploration.
The
      U.S.
      Energy Group has informed Kobex that the underground mine workings located
      on or
      beneath the Property contain liquid, semi-solid and/or
      solid material or waste associated with previous mining activities, including,
      but not limited to, metal bearing sludges and mine water present behind
      bulkheads and other underground mine containment structures (“underground mine
      materials.”) The Parties agree that the management of underground mine materials
      and waste to prevent the uncontrolled release of such waste and materials into
      the environment may be required prior to commencement of Exploration activities
      by Kobex during the Option Period. Such management may include, but not be
      limited to, removal of metal-bearing sludges or other waste materials identified
      by Kobex, and the breaching of underground bulkheads or other containment
      structures and the collection, management and treatment of waste or mine water
      

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -17-

      

    

     

     

    present
      in the underground workings in accordance with applicable Environmental Laws.
      To
      facilitate the proper management of these materials, the Company agrees to
      manage the underground mine materials existing in the underground workings
      prior
      to or in coordination with Kobex’s Exploration activities. The Parties agree
      that Kobex shall have no liability for any losses or damage, including
      Environmental Damage, related to the management of the underground mine
      materials or for any prior activities conducted at any time by prior owners
      or
      operators. As Kobex determines necessary, management of the underground waste
      and mine material shall be specified in a Program and Budget.

     

    7.11  Indemnification
      of Manager During Option Period.
      During
      the Option Period,
      the U.S. Energy Group on the one hand, and Kobex on the other hand, shall
      mutually indemnify, defend, save and hold harmless Kobex and its
      Affiliates, and their respective directors, officers, employees, agents and
      consultants for
      acts undertaken as Manager of the Property, or the Facility, from and against
      any claim, (including
      legal fees incurred in defending any claim on a full indemnity
      basis),
      in equal proportion the U.S. Energy Group on the one hand and Kobex on the
      other
      hand provided, however, that Kobex as Manager shall not be indemnified for
      acts,
      claims or losses arising from its gross negligence or wilful
      misconduct.
      During
      the Option Period, the U.S. Energy Group shall be solely responsible for and
      shall indemnify, defend and hold harmless Kobex as Manager from any claim or
      liability related to existing conditions of the Property, including
      environmental conditions, and from any claim or liability related to the
      Facility.

     

    7.12  Programs
      and Budgets.
      During
      the Option Period, except for emergency operations, all Operations shall be
      conducted, expenses shall be incurred, and Assets shall be acquired only
      pursuant to Management Committee adopted Programs and Budgets. Every Program
      and
      Budget adopted pursuant to this Agreement shall provide for accrual of
      reasonably anticipated Environmental Compliance expenses for all Operations
      contemplated under the Program and Budget. Any emergency shall be addressed
      in
      accord with Section 9.7.

     

    7.13  Presentation
      of Programs and Budgets.
      Proposed Programs and Budgets shall be prepared by the Manager for a period
      of 1
      year or any other period as approved by the Management Committee, and shall
      be
      submitted to the Management Committee for review and consideration. All proposed
      Programs and Budgets may include Exploration, securing any and all necessary
      and
      appropriate permits, a Feasibility Study, Development, Mining and Expansion
      or
      Modification Operations components, or any combination thereof, and shall be
      reviewed and adopted upon a vote of the Management Committee in accordance
      with
      Section 7.14.
      Each
      Program and Budget adopted by the Management Committee, regardless of length,
      shall be reviewed at least once a year at a meeting of the Management Committee.
      During the period encompassed by any Program and Budget, and at least 3 months
      prior to its expiration, a proposed Program and Budget for the succeeding period
      shall be prepared by the Manager and submitted to the Management Committee
      for
      review, consideration and adoption.

     

    7.14  Review
      and Adoption of Proposed Programs and Budgets. 

     

    
      	(a)  	
              Within
                20 days after submission of a proposed Program and Budget, the Management
                Committee must approve, reject or modify the proposed Program and
                Budget. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -18-

      

    

     

     

    
      	(b)  	
              Until
                a new Program and Budget is adopted, the Program and Budget from
                the prior
                year shall govern Operations on the
                Property.

            

    

     

    
      	(c)  	
              If
                no Budget has been adopted within 6 months after the expiration of
                the
                latest adopted Program and Budget, either the U.S. Energy Group or
                Kobex
                may elect to terminate the Business by giving 30 days notice of
                termination to the other Parties and complying with the termination
                procedures specified in Sections 6.4
                and 6.5.

            

    

     

    7.15  Budget
      Overruns; Program Changes.
      The
      Manager shall immediately notify the Management Committee of any material
      departure from an adopted Program and Budget. If the Manager exceeds an adopted
      Budget by more than 20% in the aggregate, then the excess over 20%, unless
      directly caused by an emergency or unexpected expenditure made pursuant to
      Section 9.7,
      unless
      related to the adopted Program and Budget, or unless directly attributable
      to
      Exploration or Development activities, must be ratified and approved by the
      Management Committee at its next scheduled meeting, and once approved shall
      be
      borne by the Business Account.

     

    7.16  Assignment
      During Option Period.
      During
      the Option Period, no Party shall assign it rights under this Agreement, and
      the
      US Energy Group shall not assign or transfer any of its rights to the Assets,
      without the approval of the non-transferring Party (not to be unreasonably
      withheld) except to an Affiliate or except as provided in Section 6.12. In
      the
      event of such transfer, the transferee shall assume all obligations and
      liabilities of the transferring Party under this Agreement. In addition, the
      US
      Energy Group covenants that if the Property is assigned to Newco pursuant to
      Section 6.12, it shall ensure that Newco does not assign the Property, the
      Facility or any related permits and licences to any party except with the
      express written consent of Kobex.

     

    7.17  Other
      Provisions.
      The
      Provision of PART
      IV
      shall
      apply during the Option Period. 

     

    PART
      III  

     

    THE
      JOINT VENTURE PERIOD

     

    ARTICLE
      VIII  

     

    JOINT
      VENTURE

     

    8.1  Purpose.
      The
      Joint Venture deemed to be formed between USE/CC and Kobex under Sections
6.8(c)(i),
      6.9(a)
      or
6.9(b)
      shall be
      for the purpose of carrying out all such acts which are necessary or
      appropriate, directly or indirectly, to hold the Property, explore the Property
      for minerals, and if feasible develop a mine thereon, and so long as it is
      feasible, operate such mine and exploit the mineral extracted from the Property,
      and for those purposes set out in Section 2.3.
      With
      respect to USE/CC, U.S. Energy is authorized to act on behalf of both parties
      and Kobex shall be entitled to deal exclusively with U.S. Energy in all matters
      related to this Agreement. Furthermore, USE/CC shall be treated as a single
      JV
      Participant for all purposes under this Agreement. The name of the Joint Venture
      shall be the “Lucky
      Jack Joint Venture.”

     

    8.2  Manager. 
      Kobex
      shall be the Manager of all Programs on the Property during the Joint Venture.
      The Provisions of ARTICLE
      XV
      shall
      apply to the Manager during the Joint Venture.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -19-

      

    

     

     

    8.3  Initial
      Participating Interests and Contributions. 

     

    
      	(a)  	
              After
                the 50% Option Exercise Date, the JV Participants shall have the
                following
                initial Participating Interests:

            

    

     

    USE/CC
      collectively  -
      50%

     

    Kobex                                      
      -
      50%

     

    
      	(b)  	
              After
                the 50% Option Exercise Date, the JV Participants, subject to the
                65%
                Election and subject to any election permitted by
                Section 9.4,
                shall be obligated to contribute funds to adopted Programs and Budgets
                in
                proportion to their respective Participating
                Interests.

            

    

     

    8.4  Changes
      in Participating Interests.
      The
      Participating Interests shall be eliminated or changed as follows:

     

    
      	(a)  	
              upon
                withdrawal or deemed withdrawal as provided in Section 8.6,
                and ARTICLE
                XIV;
                

            

    

     

    
      	(b)  	
              upon
                an election by either JV Participant pursuant to Section 9.4
                to
                contribute less to an adopted Program and Budget than the percentage
                equal
                to its Participating Interest, or to contribute nothing to an adopted
                Program and Budget; 

            

    

     

    
      	(c)  	
              in
                the event of default by either JV Participant in making its agreed-upon
                contribution to an adopted Program and Budget, followed by an election
                by
                the other JV Participant to invoke any of the remedies in
                Section 9.4;
                

            

    

     

    
      	(d)  	
              upon
                Transfer by either JV Participant of part or all of its Participating
                Interest in accordance with ARTICLE
                XIII;
                

            

    

     

    
      	(e)  	
              upon
                acquisition by either JV Participant of part or all of the Participating
                Interest of the other JV Participant, however arising;
                or

            

    

     

    
      	(f)  	
              in
                accord with the 65% Election set out in Section 6.9(b).

            

    

     

    8.5  Deemed
      Expenditures.
      Upon
      the formation of a Joint Venture hereunder for the purposes of calculating
      dilution before the presentation of the first Budget and Program after the
      formation of the Joint Venture:

     

    
      	(a)  	
              Kobex’s
                deemed expenditures to the Joint Venture shall be its percentage
                interest
                in the Joint Venture multiplied by its aggregate actual Expenditures
                incurred until the formation of the Joint Venture;
                and

            

    

     

    
      	(b)  	
              USE/CC’s
                deemed expenditures to the Joint Venture shall be its percentage
                interest
                in the Joint Venture multiplied by Kobex’s aggregate actual Expenditures
                incurred until the formation of the Joint
                Venture.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -20-

      

    

     

     

    After
      the
      presentation of the first Budget and Program after the formation of the Joint
      Venture, the provisions of Section 8.6,
      9.4,
      9.5
      and
10.5
      shall
      control the calculation of interests for dilution. 

     

    8.6  Conversion
      of Minority Interest. 

     

    
      	(a)  	
              If
                a JV Participant’s (the “Reduced
                Participant”)
                Participating Interest becomes less than 5%, that JV Participant’s
                Participating Interest shall convert to a 5% Net Profits Interest
                and
                shall be deemed to have withdrawn from the Business. Such relinquished
                Participating Interest shall be deemed to have accrued automatically
                to
                the other JV Participant. The Capital Account of the Reduced Participant
                shall be transferred to the remaining JV Participant. Subject to
                Section 15.3,
                the Reduced Participant shall thereafter have no further right, title,
                or
                interest in the Assets or under this Agreement, with the exception
                of the
                5% Net Profits Interest detailed above, and any tax partnership that
                may
                have been created shall dissolve. In such event, the Reduced Participant
                shall execute and deliver an appropriate conveyance of all of its
                right,
                title and interest in the Assets to the remaining JV
                Participant. 

            

    

     

    
      	(b)  	
              The
                relinquishment, withdrawal and entitlements for which this section
                provides shall be effective as of the effective date of the recalculation
                under Sections 9.4
                or
                10.5.
                However, if the final adjustment provided under Section 9.5
                for any recalculation under Section 9.4
                results in a Participating Interest of 5% or more: (i) the
                Participating Interest shall be deemed, effective retroactively as
                of the
                first day of the Program Period, to have automatically revested;
                (ii) the Reduced Participant shall be reinstated as a JV Participant,
                with all of the rights and obligations pertaining thereto; (iii) the
                right to a Net Profits Interest under Section 8.6(a)
                shall terminate; and (iv) the Manager, on behalf of the JV
                Participants, shall make any necessary reimbursements, reallocations
                of
                Products, contributions and other adjustments as provided in
                Section 9.5(d).
                Similarly, if such final adjustment under Section 9.5
                results in a Participating Interest for either JV Participant of
                less than
                5% for a Program Period as to which the provisional calculation under
                Section 9.4
                had not resulted in a Participating Interest of less than 5%, then
                such
                Participant, at its election within 30 days after notice of the final
                adjustment, may contribute an amount resulting in a revised final
                adjustment and resultant Participating Interest of 5%. If no such
                election
                is made, such JV Participant shall be deemed to have withdrawn under
                the
                terms of Section 8.6(a)
                as
                of the beginning of such Program Period, and the Manager, on behalf
                of the
                JV Participants, shall make any necessary reimbursements, reallocations
                of
                Products, contributions and other adjustments as provided in
                Section 9.5(d),
                including of any Net Profits Interest to which such JV Participant
                may be
                entitled for such Program Period. 

            

    

     

    8.7  Continuing
      Liabilities Upon Adjustments of Participating Interests.
      Any
      reduction or elimination of either JV Participant’s Participating Interest under
      Section 8.4
      shall
      not relieve such JV Participant of its share of any liability, including,
      without limitation, Continuing Obligations, Environmental Liabilities and
      Environmental Compliance, whether arising out of 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -21-

      

    

     

    acts
      or
      omissions occurring or conditions existing prior to the Effective Date or out
      of
      Operations conducted during the term of this Agreement but prior to such
      reduction or elimination, regardless of when any funds may be expended to
      satisfy such liability. For purposes of this Section 8.7,
      such JV
      Participant’s share of such liability shall be equal to its Participating
      Interest at the time the act or omission giving rise to the liability occurred,
      after first taking into account any reduction, readjustment and restoration
      of
      Participating Interests under Sections 8.6,
      9.4,
      9.5
      and
10.5
      (or, as
      to such liability arising out of acts or omissions occurring or conditions
      existing prior to the Effective Date, equal to such JV Participant’s initial
      Participating Interest). Should the cumulative cost of satisfying Continuing
      Obligations be in excess of cumulative amounts accrued or otherwise charged
      to
      the Environmental Compliance Account, each of the JV Participant’s shall be
      liable for its proportionate share (i.e.,
      Participating Interest at the time of the act or omission giving rise to such
      liability occurred), after first taking into account any reduction, readjustment
      and restoration of Participating Interests under Sections 8.6,
      9.4,
      9.5
      and
10.5,
      of the
      cost of satisfying such Continuing Obligations, notwithstanding that either
      JV
      Participant has previously withdrawn from the Business or that its Participating
      Interest has been reduced or converted to an interest in Net Profits Interest
      pursuant to Section 8.6(a). 

     

    8.8  Documentation
      of Adjustments to Participating Interests.
      Adjustments to the Participating Interests need not be evidenced during the
      term
      of this Agreement by the execution and recording of appropriate instruments,
      but
      each JV Participant’s Participating Interest and related Equity Account balance
      shall be shown in the accounting records of the Manager, and any adjustments
      thereto, including any reduction, readjustment, and restoration of Participating
      Interests under Sections 8.6,
      9.4,
      9.5
      and
10.5,
      shall
      be made monthly. However, either JV Participant, at any time upon the request
      of
      the other JV Participant, shall execute and acknowledge instruments necessary
      to
      evidence such adjustments in form sufficient for filing and recording in the
      jurisdiction where the Property is located.

     

    8.9  Grant
      of Lien and Security Interest. 

     

    
      	(a)  	
              Subject
                to Section 8.10,
                each JV Participant may grant to the other JV Participant a lien
                upon and
                a security interest in its Participating Interest, including all of
                its right, title and interest in the Assets, whenever acquired or
                arising,
                and the proceeds from and accessions to the foregoing. 

            

    

     

    
      	(b)  	
              The
                liens and security interests granted by Section 8.9(a)
                shall secure every obligation or liability of the JV Participant
                granting
                such lien or security interest created under this Agreement, including
                the
                obligation to repay a Cover Payment in accordance with
                Section 10.4.
                Each JV Participant hereby agrees to take all action necessary to
                perfect
                such lien and security interest and hereby appoints the other JV
                Participant its attorney-in-fact to execute, file and record all
                financing
                statements and other documents necessary to perfect or maintain such
                lien
                and security interest.

            

    

     

    
      	(c)  	
              Where
                Kobex commits to arrange all future financing for Operations on the
                Property pursuant to Section 6.9(b),
                to the extent that the Management Committee has approved any financing
                of
                the Operations, including Project Financing, each of the JV Participants
                shall pledge, charge, mortgage, grant a lien, grant a security
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -22-

      

    

     

    interest
      or otherwise encumber, as security for any
      such financing their respective Participating Interests and their respective
      interests in the Assets and Property, and as required by the terms of such
      financing.
      Security
      for any such financing will have priority over any other security granted by
      a
      JV Participant under Sections 8.9(a)
      and
8.9(b).

     

    8.10  Subordination
      of Interests.
      Each JV
      Participant may, from time to time, take all necessary actions, including
      execution of appropriate agreements, to pledge and subordinate its Participating
      Interest, any liens it may hold which are created under this Agreement other
      than those created pursuant to Sections 8.9(a)
      and
8.9(b),
      and any
      other right or interest it holds with respect to the Assets (other than any
      statutory lien of the Manager) to any secured borrowings for Operations approved
      by the Management Committee, including any secured borrowings relating to and
      financing referred to in Section 8.9(c),
      and any
      modifications or renewals thereof.

     

    8.11  Indemnity.
      Following the formation of the Joint Venture, USE/CC on the one hand, and Kobex
      on the other hand, shall mutually indemnify, defend, save and hold harmless
      the
      Manager and its Affiliates, and their respective directors, officers, employees,
      agents and consultants in proportion to their Participating Interests, for
      acts
      undertaken as Manager of the Property, the Assets, the Facility or the Joint
      Venture, from and against any claim, (including legal fees incurred in defending
      any claim on a full indemnity basis), provided, however, that Kobex as Manager
      shall not be indemnified for acts, claims or losses arising from its gross
      negligence or wilful misconduct.

     

    8.12  Holding
      of Property. 

     

    
      	(a)  	
              From
                the date of the formation of the Joint Venture, during the term of
                the
                Joint Venture, the Property must be transferred to and held in the
                names
                of the JV Participants in proportion to their respective Participating
                Interests from time to time.

            

    

     

    
      	(b)  	
              Each
                JV Participant must promptly at its own cost do all things (including
                executing and if necessary delivering all documents) necessary or
                desirable to give full effect to Section 8.12(a)
                or
                the formation of the Joint Venture.

            

    

     

    8.13  Holding
      of Joint Venture Property. Subject
      to Section 8.12,
      all
      Assets, whether acquired before or after the Effective Date, must wherever
      practicable be held by the Manager or a JV Participant who must hold it upon
      trust for the JV Participants as tenants in common in proportion to their
      respective Participating Interests for the time being and from time to time.
      All
      Assets held by the Manager or a JV Participant must be held, used, dealt with
      or
      applied solely for the purposes of the Joint Venture or as otherwise permitted
      under the Agreement.

     

    8.14  Management
      Committee.
      Upon
      the formation of the Joint Venture, the JV Participants shall establish a
      Management Committee consisting of four members to direct and control the
      operations of the Joint Venture, which may be the same Management Committee
      provided for by Section 7.3.
      Each JV
      Participant shall be entitled to appoint two members, with one alternate for
      each participant, of the Management Committee. Voting by each JV Participant’s
      representative shall be in accordance with the interest of each JV Participant
      in the Joint Venture. Each JV 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -23-

      

    

     

     

    Participant
      may appoint one or more alternates to act in the absence of a regular member.
      Any alternate so acting shall be deemed a member. The alternate may attend
      meetings of the Management Committee even if the members attend, provided
      however, they shall not have the right to vote unless the member is absent.
      Appointments by a JV Participant shall be made or changed by notice to the
      other
      members. Decision making of the Management Committee shall be by majority vote,
      and in the event of a tie, the Management Committee members representing Kobex
      shall have the deciding vote.

     

    8.15  Facility.
      During
      the Joint Venture Period, the Facility shall be operated as set out in Section
      7.4(b).

     

    ARTICLE
      IX  

     

    PROGRAMS
      AND BUDGETS

     

    9.1  Operations
      Pursuant to Programs and Budgets.
      Except
      as otherwise provided in Section 9.7,
      and
ARTICLE
      XVII,
      Operations shall be conducted, expenses shall be incurred, and Assets shall
      be
      acquired only pursuant to Management Committee adopted Programs and Budgets.
      Every Program and Budget adopted pursuant to this Agreement shall provide for
      accrual of reasonably anticipated Environmental Compliance expenses for all
      Operations contemplated under the Program and Budget.

     

    9.2  Presentation
      of Programs and Budgets.
      Proposed Programs and Budgets shall be prepared by the Manager for a period
      of 1
      year or any other period as approved by the Management Committee, and shall
      be
      submitted to the Management Committee for review and consideration. All proposed
      Programs and Budgets may include Permitting, Exploration, Feasibility Study,
      Development, Mining and Expansion or Modification Operations components, or
      any
      combination thereof, and shall be reviewed and adopted upon a vote of the
      Management Committee in accordance with Section 9.3.
      Each
      Program and Budget adopted by the Management Committee, regardless of length,
      shall be reviewed at least once a year at a meeting of the Management Committee.
      During the period encompassed by any Program and Budget, and at least 3 months
      prior to its expiration, a proposed Program and Budget for the succeeding period
      shall be prepared by the Manager and submitted to the Management Committee
      for
      review and consideration.

     

    9.3  Review
      and Adoption of Proposed Programs and Budgets.
      Except
      where Kobex bears all operating and financing costs of the Joint Venture
      pursuant to Section 6.9(b),
      then
      within 30 days after submission of a proposed Program and Budget, each JV
      Participant shall submit in writing to the Management Committee:

     

    
      	(a)  	
              notice
                that the JV Participant approves any or all of the components of
                the
                proposed Program and Budget; 

            

    

     

    
      	(b)  	
              modifications
                proposed by the JV Participant to the components of the proposed
                Program
                and Budget; or

            

    

     

    
      	(c)  	
              notice
                that the JV Participant rejects any or all of the components of the
                proposed Program and Budget.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -24-

      

    

     

     

    If
      a
      Participant fails to give any of the foregoing responses within the allotted
      time, the failure shall be deemed to be a vote by the JV Participant for
      adoption of the Manager’s proposed Program and Budget. If a JV Participant makes
      a timely submission to the Management Committee pursuant to
      Sections 9.3(a),
      (b)
      or
(c),
      then
      the Manager working with the other JV Participant shall seek for a period of
      time not to exceed 20 days to develop a complete Program and Budget acceptable
      to both JV Participants. The Manager shall then call a Management Committee
      meeting for purposes of reviewing and voting upon the proposed Program and
      Budget.

     

    9.4  Election
      to Participate. This
      Section 9.4
      only
      applies where Kobex does not bear all operating and financing costs of the
      Joint
      Venture. 

     

    
      	(a)  	
              By
                notice to the Management Committee within 20 days after the final
                vote
                adopting a Program and Budget, and notwithstanding its vote concerning
                adoption of a Program and Budget, a JV Participant may elect to
                participate in the approved Program and
                Budget:

            

    

     

    
      	(i)  	
              in
                proportion to its respective Participating
                Interest;

            

    

     

    
      	(ii)  	
              in
                some lesser amount than its respective Participating Interest,
                or

            

    

     

    
      	(iii)  	
              not
                at all.

            

    

     

    In
      case
      of an election under Sections 9.4(a)(ii)
      or
9.4(a)(iii),
      its
      Participating Interest shall be recalculated as provided in Section 9.4(b)
      below,
      with dilution effective as of the first day of the Program Period for the
      adopted Program and Budget. If a JV Participant fails to so notify the
      Management Committee of the extent to which it elects to participate, the JV
      Participant shall be deemed to have elected to contribute to such Program and
      Budget in proportion to its respective Participating Interest as of the
      beginning of the Program Period.

     

    
      	(b)  	
              If
                a JV Participant elects to contribute to an adopted Program and Budget
                some lesser amount than in proportion to its respective Participating
                Interest, or not at all, and the other JV Participant elects to fund
                all
                or any portion of the deficiency, the Participating Interest of the
                Reduced Participant shall be provisionally recalculated as
                follows:

            

    

     

    
      	(i)  	
              for
                an election made before Payout, by dividing: (A) the sum of
                (1) the total of all of the Reduced Participant’s contributions under
                Section 8.3(b),
                and (2) the amount, if any, the Reduced Participant elects to
                contribute to the adopted Program and Budget; by (B) the sum of (1)
                and (2) above for both Participants; and then multiplying the result
                by
                one hundred; or

            

    

     

    
      	(ii)  	
              for
                an election made after Payout, by reducing its Participating Interest
                in
                an amount equal to two times the amount by which it would have been
                reduced under Section 9.4(a)(i)
                if
                such election were made before
                Payout.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -25-

      

    

     

     

    The
      Participating Interest of the other JV Participant shall be increased by the
      amount of the reduction in the Participating Interest of the Reduced
      Participant, and if the other JV Participant elects not to fund the entire
      deficiency, the Manager shall adjust the Program and Budget to reflect the
      funds
      available.

     

    
      	(c)  	
              Whenever
                the Participating Interests are recalculated pursuant to this Section
                9.4,
                (i) the Equity Accounts of both JV Participants shall be revised to
                bear the same ratio to each other as their recalculated Participating
                Interests; and (ii) the portion of Capital Account attributable to
                the reduced Participating Interest of the Reduced Participant shall
                be
                transferred to the other JV Participant.

            

    

     

    9.5  Recalculation
      or Restoration of Reduced Interest Based on Actual
      Expenditures. This
      Section 9.5
      only
      applies where Kobex does not bear all operating and financing costs of the
      Joint
      Venture.

     

    
      	(a)  	
              If
                a Participant makes an election under Sections 9.4(a)(ii)
                or
                9.4(a)(iii),
                then within 30 days after the conclusion of such Program and Budget,
                the
                Manager shall report the total amount of money expended plus the
                total
                obligations incurred by the Manager for such
                Budget.

            

    

     

    
      	(b)  	
              If
                the Manager expended or incurred obligations that were more or less
                than
                the adopted Budget, the Participating Interests shall be recalculated
                pursuant to Section 9.4(a)(i)
                by
                substituting each JV Participant’s actual contribution to the adopted
                Budget for that JV Participant’s estimated contribution at the time of the
                Reduced Participant’s election under Section 9.4(a).

            

    

     

    
      	(c)  	
              If
                the Manager expended or incurred obligations of less than 80% of
                the
                adopted Budget, within 30 days of receiving the Manager’s report on
                Expenditures, the Reduced Participant may notify the other JV Participant
                of its election to reimburse the other JV Participant for the difference
                between any amount contributed by the Reduced Participant to such
                adopted
                Program and Budget and the Reduced Participant’s proportionate share (at
                the Reduced Participant’s former Participating Interest) of the actual
                amount expended or incurred for the Program, plus interest at two
                percentage points above the Prime Rate. The Reduced Participant shall
                deliver the appropriate amount (including interest) to the other
                JV
                Participant with such notice. Failure of the Reduced Participant
                to so
                notify and tender such amount shall result in dilution occurring
                in
                accordance with this ARTICLE
                XI
                and shall bar the Reduced Participant from its rights under this
                Section 9.5(c)
                concerning the relevant adopted Program and
                Budget.

            

    

     

    
      	(d)  	
              All
                recalculations under this Section 9.5
                shall be effective as of the first day of the Program Period for
                the
                Program and Budget. The Manager, on behalf of both JV Participants,
                shall
                make such reimbursements, reallocations of Products, contributions
                and
                other adjustments as are necessary so that, to the extent possible,
                each
                JV Participant shall be placed in the position it would have been
                in had
                their Participating Interests as recalculated under this section
                been in
                effect throughout the Program Period for such Program and Budget.
                If the
                JV 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -26-

      

    

     

     

    Participants
      are required to make contributions,
      reimbursements or other adjustments pursuant to this Section, the Manager shall
      have the right to purchase or sell a JV Participant’s share of Products in the
      same manner as under Section 11.2
      and to
      apply the proceeds of such sale to satisfy that JV Participant’s obligation to
      make such contributions, reimbursements or adjustments.

     

    
      	(e)  	
              Whenever
                the Participating Interests are recalculated pursuant to this Section
                9.5,
                (i) the JV Participants’ Equity Accounts shall be revised to bear the
                same ratio to each other as their recalculated Participating Interests;
                and (ii) the portion of Capital Account attributable to the reduced
                Participating Interest of the Reduced Participant shall be transferred
                to
                the other JV Participant. 

            

    

     

    9.6  Budget
      Overruns; Program Changes.
      For
      Programs and Budgets adopted by the Management Committee other than those in
      Section 9.8,
      the
      Manager shall immediately notify the Management Committee of any material
      departure from an adopted Program and Budget. If the Manager exceeds an adopted
      Budget by more than 20% in the aggregate, then the excess over 20%, unless
      directly caused by an emergency or unexpected expenditure made pursuant to
      Section 9.7,
      unless
      related to the adopted Program and Budget, or unless directly attributable
      to
      Exploration or Development activities, must be ratified and approved by the
      Management Committee at its next scheduled meeting, and once approved shall
      be
      borne by the JV Participants in proportion to their respective Participating
      Interests. 

     

    The
      Manager may amend or alter the approved Program and Budget by presenting a
      special item budget for review by the Management Committee. The Committee shall
      accept or reject the amendment within 10 Business Days of its presentation.
      If
      the Committee fails to approve or reject the proposal within 10 Business Days
      of
      the presentation, the special item budget shall be deemed approved. The JV
      Participants may approve, reject, or propose modifications for the proposed
      amendment in accordance with Section 9.3.

     

    9.7  Emergency
      or Unexpected Expenditures.
      In case
      of emergency, the Manager may take any reasonable action it deems necessary
      to
      protect life or property, to protect the Assets or to comply with Laws. The
      Manager may make reasonable expenditures on behalf of the JV Participants for
      unexpected events that are beyond its reasonable control and that do not result
      from a breach by it of its standard of care. The Manager shall promptly notify
      the JV Participants of the emergency or unexpected expenditure, and the Manager
      shall be reimbursed for all resulting costs by the JV Participants in proportion
      to their respective Participating Interests, except when USE/CC makes the 65%
      Election. 

     

    9.8  Development
      Programs and Budgets; Project Financing.

     

    
      	(a)  	
              Unless
                otherwise determined by the Management Committee, the Manager shall
                not
                submit to the Management Committee a Program and Budget including
                Development of the mine described in a completed Feasibility Study
                until
                30 days following the receipt by the Manager of the Feasibility Study.
                The
                Program and Budget, which includes Development of the mine described
                in
                the completed Feasibility Study, shall be based on the estimated
                cost of
                Development described 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -27-

      

    

     

     

    in
      the Feasibility Study for the Approved
      Alternative, unless otherwise directed by the Management Committee.

     

    
      	(b)  	
              Promptly
                following adoption of the Program and Budget, which includes Development
                as described in a completed Feasibility Study, but in no event more
                than
                30 days thereafter, the Manager shall submit to the Management Committee
                a
                report on material bids received for Development work (“Bid
                Report”).
                If bids described in the Bid Report result in the aggregate cost
                of
                Development work exceeding 10% of the Development cost estimates
                that
                formed the basis of the Development component of the adopted Program
                and
                Budget, the Program and Budget, which includes relevant Development,
                shall
                be deemed to have been re-submitted to the Management Committee based
                on
                the aggregate costs as described in the Bid Report on the date of
                receipt
                of the Bid Report and shall be reviewed and adopted in accordance
                with
                Sections 9.3
                and 14.1. 

            

    

     

    
      	(c)  	
              This
                Section 9.8(c)
                only applies where Kobex does not bear all operating and financing
                costs
                of the Joint Venture. If the Management Committee approves the Development
                of the mine described in a Feasibility Study and also decides to
                seek
                Project Financing for such mine, each Participant shall, at its own
                cost,
                cooperate in seeking to obtain Project Financing for such mine;
                provided,
                however,
                that all fees, charges and costs (including attorneys and technical
                consultants fees) paid to the Project Financing lenders shall be
                borne by
                the Participants in proportion to their Participating Interests,
                unless
                such fees are capitalized as a part of the Project
                Financing.

            

    

     

    9.9  Expansion
      or Modification Programs and Budgets.
      Any
      Program and Budget proposed by the Manager involving Expansion or Modification
      shall be based on a Feasibility Study prepared by the Manager, Feasibility
      Contractors, or both, or prepared by the Manager and audited by Feasibility
      Contractors, as the Management Committee determines. The Program and Budget,
      which include Expansion or Modification, shall be submitted for review and
      approval by the Management Committee within 30 days following receipt by the
      Manager of such Feasibility Study.

     

    ARTICLE
      X  

     

    ACCOUNTS
      AND SETTLEMENTS

     

    10.1  Monthly
      Statements and Applications of this ARTICLE.
      During
      the Joint Venture Period, the Manager shall promptly submit to the Management
      Committee monthly statements of account reflecting in reasonable detail the
      charges and credits to the Business Account during the preceding month. The
      provisions of this ARTICLE
      X
      shall
      only apply to the Joint Venture if USE/CC does not make the 65% Election, other
      than Sections 10.1
      and
10.6
      which
      shall apply in all cases.

     

    10.2  Cash
      Calls.
      On the
      basis of each adopted Program and Budget, the Manager shall submit prior to
      the
      last day of each month a billing for estimated cash requirements for the next
      month. Within 10 days after receipt of each billing, or a billing made pursuant
      to Section 9.7
      or
16.4,
      each JV
      Participant shall advance its proportionate share of such cash requirements.
      The

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -28-

      

    

     

     

    Manager
      shall record all funds received in the Business Account. The Manager shall
      at
      all times maintain a cash balance approximately equal to the rate of
      disbursement for up to 60 days. All funds in excess of immediate cash
      requirements shall be invested by the Manager for the benefit of the Business
      in
      cash management accounts and investments selected at the discretion of the
      Manager, which accounts may include, but are not limited to, money market
      investments and money market funds.

     

    10.3  Failure
      to Meet Cash Calls.
      A JV
      Participant that fails to meet cash calls in the amount and at the times
      specified in Section 10.2
      shall be
      in default, and the amounts of the defaulted cash call shall bear interest
      from
      the date due at an annual rate equal to five percentage points over the Prime
      Rate, but in no event shall the rate of interest exceed the maximum permitted
      by
      Law. Such interest shall accrue to the benefit of and be payable to the
      non-defaulting JV Participant, but shall not be deemed as amounts contributed
      by
      the non-defaulting JV Participant in the event dilution occurs in accordance
      with ARTICLE
      IX.
      In
      addition to any other rights and remedies available to it by Law, the
      non-defaulting Participant shall have those other rights, remedies, and
      elections specified in Sections 10.4
      and
10.5.

     

    10.4  Cover
      Payment.
      If a JV
      Participant defaults in making a contribution or cash call required by an
      adopted Program and Budget, the non-defaulting JV Participant may, but shall
      not
      be obligated to, advance some portion or all of the amount in default on behalf
      of the defaulting JV Participant (a “Cover
      Payment”).
      Each
      and every Cover Payment shall constitute a demand loan bearing interest from
      the
      date of the advance at the rate provided in Section 10.3.
      If more
      than one Cover Payment is made, the Cover Payments shall be aggregated and
      the
      rights and remedies described herein pertaining to an individual Cover Payment
      shall apply to the aggregated Cover Payments. The failure to repay such loan
      upon demand shall be a default.

     

    10.5  Remedies.
      The JV
      Participants acknowledge that if either JV Participant defaults in making a
      contribution required by ARTICLE
      IX
      or a
      cash call, or in repaying a loan, as required under Sections 10.2,
      10.3
      or
10.4,
      whether
      or not a Cover Payment is made, it shall be difficult to measure the damages
      resulting from such default (it being hereby understood and agreed that the
      Participants have attempted to determine such damages in advance and determined
      that the calculation of such damages cannot be ascertained with reasonable
      certainty). Both JV Participants acknowledge and recognize that the damage
      to
      the non-defaulting JV Participant could be significant. In the event of such
      default, as reasonable liquidated damages, the non-defaulting JV Participant
      may, with respect to any such default not cured within 30 days after notice
      to
      the defaulting JV Participant of such default, elect any of the following
      remedies by giving notice to the defaulting JV Participant. Such election may
      be
      made with respect to each failure to meet a cash call relating to a Program
      and
      Budget, regardless of the frequency of such cash calls, provided such cash
      calls
      are made in accordance with Section 10.2.

     

    
      	(a)  	
              The
                defaulting JV Participant grants to the non-defaulting JV Participant
                a
                power of sale as to all or any portion of its interest in any Assets
                or in
                its Participating Interest that is subject to the lien and security
                interest granted in Section 8.9
                (whether or not such lien and security interest has been perfected),
                upon
                a default under Sections 10.3
                or
                10.4.
                Such power shall be exercised in the manner provided by applicable
                Law or
                otherwise in a commercially reasonable manner and upon reasonable
                notice.
                If the non-defaulting JV Participant elects to enforce
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -29-

      

    

     

    the
      lien or security interest pursuant to the terms
      of this Section, the defaulting JV Participant shall be deemed to have waived
      any available right of redemption, any required valuation or appraisal of the
      secured property prior to sale, any available right to stay execution or to
      require a marshalling of assets, and any required bond in the event a receiver
      is appointed, and the defaulting JV Participant shall be liable for any
      deficiency. 

     

    
      	(b)  	
              The
                non-defaulting JV Participant may elect to have the defaulting JV
                Participant’s Participating Interest diluted or eliminated as
                follows:

            

    

     

    
      	(i)  	
              For
                a default occurring before Payout relating to a Program and Budget
                covering in whole or in part Permitting, Exploration, Feasibility
                Study
                Operations, the reduced JV Participant’s Participating Interest shall be
                recalculated by dividing: (X), (1) the total of all of the reduced JV
                Participant’s contributions under Section 8.3(b),
                and (2) the amount, if any, the reduced JV Participant contributed to
                the adopted Program and Budget with respect to which the default
                occurred;
                by (Y) the sum of (1) and (2) above for both JV Participants; and
                then multiplying the result by one hundred. For such a default occurring
                after Payout, the reduced JV Participant’s Participating Interest shall be
                reduced in an amount equal to two times the amount by which it would
                have
                been reduced if such default had occurred before Payout. For such
                a
                default, whether occurring before or after Payout, the Participating
                Interest
                shall then be further reduced for a default relating exclusively
                to an
                Exploration Program and Budget, by multiplying the recalculated
                Participating Interest by the following percentage: 150%.

            

    

     

    The
      Participating Interest of the other JV Participant shall be increased by the
      amount of the reduction in the Participating Interest of the reduced JV
      Participant, including the further reduction under Section 10.5(b)(i).

     

    
      	(ii)  	
              For
                a default relating to a Program and Budget covering in whole or in
                part
                Development or Mining, at the non-defaulting JV Participant’s election,
                the defaulting JV Participant shall be deemed to have withdrawn and
                to
                have automatically relinquished its interest in the Assets to the
                non-defaulting JV Participant; provided,
                however,
                the defaulting Participant shall have the right to receive only a
                10% Net
                Profits Interest, if any, and not from any other source, an amount
                equal
                to 20% of the defaulting JV Participant’s Equity Account balance at the
                time of such default. Upon receipt of such amount the defaulting
                JV
                Participant shall thereafter have no further right, title or interest
                in
                the Assets, but shall remain liable to the extent provided in
                Section 8.7.
                

            

    

     

    
      	(iii)  	
              Dilution
                under this Section 10.5(b)
                shall be effective as of the date of the original default, and
                Section 9.5
                shall not apply. The amount of any Cover Payment under
                Section 10.4
                and interest thereon, or any interest accrued in accordance with
                Section 10.3,
                shall be deemed to be amounts 

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -30-

      

    

     

     

    contributed
      by the non-defaulting JV Participant, and
      not as amounts contributed by the defaulting JV Participant.

     

    
      	(iv)  	
              Whenever
                the Participating Interests are recalculated pursuant to this
                Section 10.5(b),
                (A) the Equity Accounts of both JV Participants shall be adjusted to
                bear the same ratio to each other as their recalculated Participating
                Interests; and (B) the portion of Capital Account attributable to the
                reduced Participating Interest of the reduced JV Participant shall
                be
                transferred to the other JV
                Participant.

            

    

     

    
      	(c)  	
              If
                a JV Participant has defaulted in meeting a cash call or repaying
                a loan,
                and if the non-defaulting JV Participant has made a Cover Payment,
                then,
                in addition to a reduction in the defaulting JV Participant’s
                Participating Interest effected pursuant to Section 10.5(b),
                the non-defaulting JV Participant shall have the right, if the
                indebtedness arising from a default or Cover Payment is not discharged
                within 10 days of the default and upon not less than 30 days advance
                notice to the defaulting JV Participant, to elect to purchase all
                the
                right, title, and interest, whenever acquired or arising, of the
                defaulting JV Participant in the Assets, including but not limited
                to its
                Participating Interest or a Net Profits Interest, together with all
                proceeds from and accessions of the foregoing (collectively the
                “Defaulting
                JV Participant’s Entire Interest”)
                at a purchase price equal to 75% of the fair market value thereof
                as
                determined by a qualified independent appraiser appointed by the
                non-defaulting JV Participant. If the defaulting JV Participant conveys
                notice of objection to the person so appointed within 10 days after
                receiving notice thereof, then an independent and qualified appraiser
                shall be appointed by the joint action of the appraiser appointed
                by the
                non-defaulting JV Participant and a qualified independent appraiser
                appointed by the defaulting JV Participant; provided,
                however,
                that if the defaulting JV Participant fails to designate a qualified
                independent appraiser for such purpose within 10 days after giving
                notice
                of such objection, then the person originally designated by the
                non-defaulting JV Participant shall serve as the appraiser; provided
                further,
                that if the appraisers appointed by each of the JV Participants fail
                to
                appoint a third qualified independent appraiser within 5 days after
                the
                appointment of the last of them, then an appraiser shall be appointed
                by a
                judge of a court of competent jurisdiction in the state in which
                the
                Assets are situated upon the application of either JV Participant.
                There
                shall be withheld from the purchase price payable, upon transfer
                of the
                Defaulting Participant’s Entire Interest, the amount of any Cover Payment
                under Section 10.4
                and unpaid interest thereon to the date of such transfer, or any
                unpaid
                interest accrued in accordance with Section 14.3
                to
                the date of such transfer. Upon payment of such purchase price, the
                defaulting JV Participant shall be deemed to have relinquished all
                of the
                Defaulting JV Participant’s Entire Interest to the non-defaulting
                Participant, but shall remain liable to the extent provided in
                Section 8.7. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -31-

      

    

     

     

    10.6  Audits. 

     

    
      	(a)  	
              During
                the Joint Venture Period, within 60 days after the end of each calendar
                year an audit shall be completed by certified public accountants
                selected
                by, and independent of, the Manager. The audit shall be conducted
                in
                accordance with GAAP and shall cover all books and records maintained
                by
                the Manager pursuant to this Agreement, all Assets and Encumbrances,
                and
                all transactions and Operations conducted during such calendar year,
                including production and inventory records and all costs for which
                the
                Manager sought reimbursement under this Agreement, together with
                all other
                matters customarily included in such audits. All written exceptions
                to and
                claims upon the Manager for discrepancies disclosed by such audit
                shall be
                made not more than 3 months after receipt of the audit report, unless
                either JV Participant elects to conduct an independent audit pursuant
                to
                Section 10.6(b)which
                is ongoing at the end of such 3 month period, in which case such
                exceptions and claims may be made within the period provided in Section
                10.6(b).
                Failure to make any such exception or claim within such period shall
                mean
                the audit is deemed to be correct and binding upon the Participants.
                The
                cost of all audits under this subsection shall be charged to the
                Business
                Account. 

            

    

     

    In
      conjunction with the audit, the JV Participants shall procure a review of
      internal controls in compliance with Sarbanes-Oxley
      Act
      of 2002
      and the standards and rules of the Public Company Accounting Oversight Board.
      The contractor conducting this review shall not be an employee, officer, or
      director of the JV Participants and shall be chosen by mutual agreement.

     

    
      	(b)  	
              Notwithstanding
                the annual audit conducted by certified public accountants selected
                by the
                Manager, each JV Participant shall have the right to have an independent
                audit of all Business books, records and accounts, including all
                charges
                to the Business Account. This audit shall review all issues raised
                by the
                requesting JV Participant, with all costs borne by the requesting
                JV
                Participant. The requesting JV Participant shall give the other JV
                Participant 30 days prior notice of such audit. Any audit conducted
                on
                behalf of either JV Participant shall be made during the Manager’s normal
                business hours and shall not interfere with Operations. Neither JV
                Participant shall have the right to audit records and accounts of
                the
                Business relating to transactions or Operations more than 24 months
                after
                the calendar year during which such transactions, or transactions
                related
                to such Operations, were charged to the Business Account. All written
                exceptions to and claims upon the Manager for discrepancies disclosed
                by
                such audit shall be made not more than 3 months after completion
                and
                delivery of such audit, or they shall be deemed waived. 

            

    

     

    ARTICLE
      XI  

     

    DISPOSITION
      OF PRODUCTION

     

    11.1  Taking
      In Kind.
      Each JV
      Participant shall have the right to take in kind or separately dispose of its
      share of all Products in proportion to its Participating Interest until any
      processing 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -32-

      

    

     

     

    facility
      is built by any JV Participant to this Joint Venture. Provided however, that
      USE/CC shall have the right to require the Manager to market USE/CC’s share of
      all Products pursuant to a marketing agreement substantially in the form
      attached at Exhibit
      J
      upon
      1 year written notice to the Manager. Any extra expenditure incurred in the
      taking in kind or separate disposition by either JV Participant of its
      proportionate share of Products shall be borne by such JV Participant. Nothing
      in this Agreement shall be construed as providing, directly or indirectly,
      for
      any joint or cooperative marketing or selling of Products or permitting the
      processing of Products owned by any third party at any processing facilities
      constructed by the Participants pursuant to this Agreement. The Manager shall
      give notice in advance of the anticipated delivery date upon which Products
      shall be available.

     

    11.2  Failure
      of Participant to Take In Kind.
      If a JV
      Participant fails to take its proportionate share of Products in kind and fails
      to provide 1 year’s written notice to the Manager to market the JV Participant’s
      share of all Products, then the Manager shall have the right, but not the
      obligation, for a period of time consistent with the minimum needs of the
      industry, but not to exceed 1 year from the notice date described in
      Section 11.1,
      to
      purchase the JV Participant’s share for its own account or to sell such share as
      agent for the Participant at not less than the prevailing market price in the
      area. Subject to the terms of any such contracts of sale then outstanding,
      during any period that the Manager is purchasing or selling a JV Participant’s
      share of production, the JV Participant may elect by notice to the Manager
      to
      take in kind. The Manager shall be entitled to deduct from proceeds of any
      sale
      by it for the account of a JV Participant reasonable expenses incurred in such
      a
      sale. 

     

    11.3  Hedging.
      There
      shall be no hedging by the Joint Venture. Neither JV Participant shall have
      any
      obligation to account to the other JV Participant for, nor have any interest
      or
      right of participation in any profits or proceeds nor have any obligation to
      share in any losses from, futures contracts, forward sales, trading in puts,
      calls, options or any similar hedging, price protection or marketing mechanism
      employed by a JV Participant with respect to its proportionate share of any
      Products produced or to be produced from the Property.

     

    ARTICLE
      XII  

     

    SUPPLEMENTAL
      BUSINESS AGREEMENT

     

    12.1  Supplemental
      Business Agreement. At
      any
      time during the Joint Venture Period, the Management Committee may determine
      by
      unanimous vote of both JV Participants that it is appropriate to segregate
      the
      Area of Interest into areas subject to separate Programs and Budgets for
      purposes of conducting further Permitting, Exploration, or Feasibility Studies,
      Development, or Mining. At such time, the Management Committee shall designate
      which portion of the Property shall comprise an area of interest under a
      separate business arrangement (“Supplemental
      Business”),
      and
      the JV Participants shall enter into a new agreement (“Supplemental
      Business Agreement”)
      for
      the purpose of further exploring, analyzing, developing, and mining such portion
      of the Property. The Supplemental Business Agreement shall be in substantially
      the same form as this Agreement, with rights and interests of the JV
      Participants in the Supplemental Business identical to the rights and interests
      of the JV Participants in this Business at the time of the designation, unless
      otherwise agreed by the JV Participants, and with the JV Participants agreeing
      to new Capital and Equity Accounts and other terms necessary for the
      Supplemental Business Agreement to comply with the nature and 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -33-

      

    

     

     

    purpose
      of the designation. Following execution of the Supplemental Business Agreement,
      this Agreement shall terminate insofar as it affects the Property covered by
      the
      Supplemental Business Agreement.

     

    ARTICLE
      XIII  

     

    TRANSFER
      OF INTEREST; PREEMPTIVE RIGHT

     

    13.1  General.
      During
      the Joint Venture Period a JV Participant shall have the right to Transfer
      to a
      third party an interest in its Participating Interest, including an interest
      in
      this Agreement or the Assets, solely as provided in this Article.

     

    13.2  Limitations
      on Free Transferability.
      During
      the Joint Venture Period, any Transfer by either JV Participant under
      Section 13.1
      shall be
      subject to the following limitations:

     

    
      	(a)  	
              neither
                JV Participant shall Transfer any interest in this Agreement or the
                Assets
                (including, but not limited to, any royalty, profits, or other interest
                in
                the Products) except in conjunction with the Transfer of part or
                all of
                its Participating Interest; 

            

    

     

    
      	(b)  	
              no
                JV Participant shall Transfer any interest in this Agreement or the
                Property until the selling JV Participant offers to the other JV
                Participant the opportunity to purchase the portion of the selling
                JV
                Participant’s interest it intends to sell (“Right
                of First Refusal”)
                at a price chosen by the selling JV Participant. If the other JV
                Participant fails to purchase the interest within 20 days, the selling
                JV
                Participant may proceed with the sale of the interest pursuant to
                this
                section. The sale may not be for a price less than that offered to
                the
                non-selling JV Participant. No transferee of all or any part of a
                JV
                Participant’s Participating Interest shall have the rights of a JV
                Participant unless and until the transferring JV Participant has
                provided
                to the other JV Participant notice of the Transfer, except as provided
                in
                Section 13.2(f),
                the transferee, as of the effective date of the Transfer, has committed
                in
                writing to assume and be bound by this Agreement to the same extent
                as the
                transferring JV Participant;

            

    

     

    
      	(c)  	
              neither
                JV Participant shall make a Transfer that shall violate any Law,
                or
                without the consent of the other JV Participant, or result in the
                cancellation of any permits, licenses, or other similar
                authorization;

            

    

     

    
      	(d)  	
              no
                Transfer permitted by this Article XIII shall relieve the transferring
                JV
                Participant of its share of any liability, whether accruing before
                or
                after such Transfer, which arises out of Operations conducted prior
                to
                such Transfer or exists on the Effective
                Date;

            

    

     

    
      	(e)  	
              neither
                JV Participant, without the consent of the other JV Participant,
                shall
                make a Transfer that shall cause termination of the tax partnership
                established in Exhibit
                C.
                If such termination is caused, the transferring JV Participant shall
                indemnify the other JV Participant for, from and against any and
                all loss,
                cost, expense, damage, liability or claim therefore arising from
                the
                Transfer, including without limitation any increase in taxes, interest
                and
                penalties or decrease in 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -34-

      

    

     

    credits
      caused by such termination and any tax on
      indemnification proceeds received by the Indemnified JV
      Participant;

     

    
      	(f)  	
              if
                the Transfer is the grant of an Encumbrance in a Participating Interest
                to
                secure a loan or other indebtedness of either JV Participant in a
                bona
                fide transaction, other than a transaction approved unanimously by
                the
                Management Committee or Project Financing approved by the Management
                Committee, such Encumbrance shall be granted only in connection with
                such
                JV Participant’s financing payment or performance of that JV Participant’s
                obligations under this Agreement and shall be subject to the terms
                of this
                Agreement and the rights and interests of the other JV Participant
                hereunder (including without limitation under Section 8.10).
                Any such Encumbrance shall be further subject to the condition that
                the
                Chargee of such Encumbrance first enters into a written agreement
                with the
                other JV Participant in form satisfactory to the other JV Participant,
                acting reasonably, binding upon the Chargee, to the effect
                that:

            

    

     

    
      	(i)  	
              the
                Chargee shall not enter into possession or institute any proceedings
                for
                foreclosure or partition of the encumbering JV Participant’s Participating
                Interest and that such Encumbrance shall be subject to the provisions
                of
                this Agreement;

            

    

     

    
      	(ii)  	
              the
                Chargee’s remedies under the Encumbrance shall be limited to the sale of
                the whole (but only of the whole) of the encumbering JV Participant’s
                Participating Interest to the other JV Participant, or, failing such
                a
                sale, at a public auction to be held at least 30 days after prior
                notice
                to the other JV Participant, such sale to be subject to the purchaser
                entering into a written agreement with the other JV Participant whereby
                such purchaser assumes all obligations of the encumbering JV Participant
                under the terms of this Agreement. The price of any pre-emptive sale
                to
                the other JV Participant shall be the remaining principal amount
                of the
                loan plus accrued interest and related expenses, and such pre-emptive
                sale
                shall occur within 60 days of the Chargee’s notice to the other JV
                Participant of its intent to sell the encumbering JV Participant’s
                Participating Interest. Failure of a sale to the other JV Participant
                to
                close by the end of such period, unless failure is caused by the
                encumbering JV Participant or by the Chargee, shall permit the Chargee
                to
                sell the encumbering JV Participant’s Participating Interest at a public
                sale; and

            

    

     

    
      	(iii)  	
              the
                charge shall be subordinate to any then-existing debt, including
                Project
                Financing previously approved by the Management Committee, encumbering
                the
                transferring JV Participant’s Participating Interest;
                

            

    

     

    If
      a sale
      or other commitment or disposition of Products or proceeds from the sale of
      Products by either JV Participant upon distribution to it pursuant to
ARTICLE
      XV
      creates
      in a third party a security interest by Encumbrance in Products or proceeds
      therefrom prior to such distribution, such sales, commitment or disposition
      shall be subject to the terms and conditions of this Agreement, including
      without limitation, Section 8.10.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -35-

      

    

     

    PART
      IV  

     

    PROVISIONS
      APPLICABLE TO BOTH 

     

    OPTION
      PERIOD AND JOINT VENTURE PERIOD

     

    ARTICLE
      XIV  

     

    MANAGEMENT
      COMMITTEE

     

    14.1  Meetings of
      Management Committee. 

     

    
      	(a)  	
              The
                Management Committee shall hold regular meetings at least quarterly
                at a
                location to be mutually agreed upon. The Manager shall give 20 days
                notice
                to Kobex and USE/CC (either referred to in this ARTICLE
                XIV
                as
                an “MC
                Participant”)
                of such meetings. Additionally, either MC Participant may call a
                special
                meeting upon 7 days notice to the other MC Participant. In case of
                an
                emergency, reasonable notice of a special meeting shall suffice.
                There
                shall be a quorum if at least one member or alternate representing
                each MC
                Participant is present; provided,
                however,
                that if a MC Participant fails to attend two consecutive properly
                called
                meetings, then a quorum shall exist at the second meeting if the
                other MC
                Participant is represented by at least one appointed member, and
                a vote of
                such MC Participant shall be considered the vote required for the
                purposes
                of the conduct of all business properly noticed even if such vote
                would
                otherwise require unanimity.

            

    

     

    
      	(b)  	
              If
                business cannot be conducted at a regular or special meeting due
                to the
                lack of a quorum, either MC Participant may call the next meeting
                upon 10
                days notice to the other MC Participant.

            

    

     

    
      	(c)  	
              Each
                notice of a meeting shall include an itemized agenda prepared by
                the
                Manager in the case of a regular meeting or by the MC Participant
                calling
                the meeting in the case of a special meeting, but any matters may
                be
                considered if either MC Participant adds the matter to the agenda
                at least
                5 days before the meeting or with the consent of the other MC Participant.
                The Manager shall prepare minutes of all meetings and shall distribute
                copies of such minutes to the other MC Participant within 10 days
                after
                the meeting. Either MC Participant may electronically record the
                proceedings of a meeting with the consent of the other MC Participant.
                The
                other MC Participant shall sign and return or object to the minutes
                prepared by the Manager within 30 days after receipt, and failure
                to do
                either shall be deemed acceptance of the minutes as prepared by the
                Manager. The minutes, when signed or deemed accepted by both MC
                Participants, shall be the official record of the decisions made
                by the
                Management Committee. Decisions made at a Management Committee meeting
                shall be implemented in accordance with adopted Programs and Budgets.
                If a
                MC Participant timely objects to minutes proposed by the Manager,
                the
                members of the Management Committee shall seek, for a period not
                to exceed
                30 days from receipt by the Manager of notice of the objections,
                to agree
                upon minutes acceptable to both MC Participants. If the Management
                Committee does not reach agreement on the minutes of the meeting
                within
                such 30 day period, the minutes of the meeting as
                

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -36-

      

    

     

    prepared
      by the Manager together with the other
      Participant’s proposed changes shall collectively constitute the record of the
      meeting. If personnel employed in Operations are required to attend a Management
      Committee meeting, reasonable costs incurred in connection with such attendance
      shall be charged to the Business Account. All other costs shall be paid by
      the
      Participants individually.

     

    14.2  Action
      Without Meeting in Person.
      In lieu
      of meetings in person, the Management Committee may conduct meetings by
      telephone or video conference, so long as minutes of such meetings are prepared
      in accordance with Section 14.1.
      The
      Management Committee may also take actions in writing signed by all
      members.

     

    14.3  Matters
      Requiring Approval.
      Except
      as otherwise delegated to the Manager in Section 15.1,
      the
      Management Committee shall have exclusive authority to determine all matters
      related to overall policies, objectives, procedures, methods and actions under
      this Agreement.

     

    ARTICLE
      XV  

     

    MANAGER

     

    15.1  Powers
      and Duties of Manager.
      The
      Manager shall have the following powers and duties, which shall be discharged
      in
      accordance with adopted Programs and Budgets during the Option Period and Joint
      Venture Period, as applicable.

     

    
      	(a)  	
              The
                Manager shall manage, direct and control Operations, and shall prepare
                and
                present to the Management Committee proposed Programs and Budgets
                as
                provided in ARTICLE
                VII
                during the Option Period and ARTICLE
                IX
                during the Joint Venture Period.

            

    

     

    
      	(b)  	
              The
                Manager shall implement the decisions of the Management Committee,
                shall
                make all Expenditures necessary to carry out adopted Programs, and
                shall
                promptly advise the Management Committee if it lacks sufficient funds
                to
                carry out its responsibilities under this
                Agreement.

            

    

     

    
      	(c)  	
              The
                Manager shall use reasonable efforts to: (i) purchase or otherwise
                acquire all material, supplies, equipment, water, utility and
                transportation services required for Operations, such purchases and
                acquisitions to be made to the extent reasonably possible on the
                best
                terms available, taking into account all of the circumstances;
                (ii) obtain such customary warranties and guarantees as are available
                in connection with such purchases and acquisitions; and (iii) keep
                the Assets free and clear of all Encumbrances, except any Permitted
                Encumbrances and those Encumbrances specifically approved by the
                Management Committee.

            

    

     

    
      	(d)  	
              The
                Manager shall: (i) make or arrange for all payments required by
                leases, licenses, permits, contracts and other agreements related
                to the
                Assets; (ii) pay all taxes, assessments and like charges on
                Operations and Assets except taxes determined or measured by a JV
                Participant’s sales revenue or net income and taxes, including production
                taxes, attributable to a JV Participant’s share of Products, and shall
                otherwise promptly pay and discharge expenses incurred in Operations;
                provided,
                however,
                that if authorized by the Management Committee,

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -37-

      

    

     

    the
      Manager shall have the right to contest (in the
      courts or otherwise) the validity or amount of any taxes, assessments or charges
      if the Manager deems them to be unlawful, unjust, unequal or excessive, or
      to
      undertake such other steps or proceedings as the Manager may deem reasonably
      necessary to secure a cancellation, reduction, readjustment or equalization
      thereof before the Manager shall be required to pay them, but in no event shall
      the Manager permit or allow title to the Assets to be lost as the result of
      the
      nonpayment of any taxes, assessments or like charges; and (iii) do all
      other acts reasonably necessary to maintain the Assets.

     

    
      	(e)  	
              The
                Manager shall: (i) apply for all necessary permits, licenses and
                approvals; (ii) comply with all Laws; (iii) notify promptly the
                Management Committee of any allegations of substantial violation
                thereof;
                and (iv) prepare and file all reports or notices required for or as a
                result of Operations. The Manager shall not be in breach of this
                provision
                if a violation has occurred in spite of the Manager’s good faith efforts
                to comply consistent with its standard of care under
                Section 15.2.
                In the event of any such violation, the Manager shall timely cure
                or
                dispose of such violation on behalf of both JV Participants through
                performance, payment of fines and penalties, or both, and the cost
                thereof
                shall be charged to the Business
                Account.

            

    

     

    
      	(f)  	
              The
                Manager shall prosecute and defend on behalf of the Joint Venture,
                but
                shall not initiate without consent of the Management Committee, any
                litigation or administrative proceedings arising out of Operations.
                The
                non-managing JV Participant shall have the right to participate if
                it
                chooses to participate individually, at its own expense, in such
                litigation or administrative proceedings. The non-managing JV Participant
                shall approve in advance any settlement involving payments, commitments
                or
                obligations in excess of one hundred thousand Dollars ($100,000)
                in cash
                or value.

            

    

     

    
      	(g)  	
              The
                Manager shall provide insurance for the benefit of the JV Participants
                as
                provided in Exhibit K
                or
                as may otherwise be determined from time to time by the Management
                Committee.

            

    

     

    
      	(h)  	
              The
                Manager may dispose of Assets, whether by abandonment, surrender,
                or
                Transfer in the ordinary course of business, except that Property
                may be
                abandoned or surrendered only as provided in ARTICLE
                XVIII.
                Without prior authorization from the Management Committee, however,
                the
                Manager shall not: (i) dispose of Assets in any one transaction (or
                in any series of related transactions) having a value in excess of
                seventy
                five thousand Dollars ($75,000); (ii) enter into any sales contracts
                or commitments for Product, except as permitted in
                Section 11.2;
                (iii) begin a liquidation of the Business; or (iv) dispose of
                all or a substantial part of the Assets necessary to achieve the
                purposes
                of the Business.

            

    

     

    
      	(i)  	
              The
                Manager shall have the right to carry out its responsibilities hereunder
                through agents, Affiliates or independent
                contractors.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -38-

      

    

     

     

    
      	(j)  	
              The
                Manager shall perform or cause to be performed all assessment and
                other
                work, and shall pay all Governmental Fees, required by Law in order
                to
                maintain the unpatented mining claims, mill sites and tunnel sites
                included within the Property. The Manager shall have the right to
                perform
                the assessment work required hereunder pursuant to a common plan
                of
                exploration and continued actual occupancy of such claims and sites
                shall
                not be required. The Manager shall not be liable on account of any
                determination by any court or governmental agency that the work performed
                by the Manager does not constitute the required annual assessment
                work or
                occupancy for the purposes of preserving or maintaining ownership
                of the
                claims, provided that the work done is pursuant to an adopted Program
                and
                Budget and is performed in accordance with the Manager’s standard of care
                under Section 15.2.
                The Manager shall timely record with the appropriate county and file
                with
                the appropriate United States agency any required affidavits, notices
                of
                intent to hold and other documents in proper form attesting to the
                payment
                of Governmental Fees, the performance of assessment work or intent
                to hold
                the claims and sites, in each case in sufficient detail to reflect
                compliance with the requirements applicable to each claim and site.
                The
                Manager shall not be liable on account of any determination by any
                court
                or governmental agency that any such document submitted by the Manager
                does not comply with applicable requirements, provided that such
                document
                is prepared and recorded or filed in accordance with the Manager’s
                standard of care under Section 15.2.

            

    

     

    
      	(k)  	
              If
                authorized by the Management Committee, the Manager may: (i) locate,
                amend or relocate any unpatented mining claim or mill site or tunnel
                site,
                (ii) locate any fractions resulting from such amendment or
                relocation, (iii) apply for patents or mining leases or other forms
                of mineral tenure for any such unpatented claims or sites,
                (iv) abandon any unpatented mining claims for the purpose of locating
                mill sites or otherwise acquiring from the United States rights to
                the
                ground covered thereby, (v) abandon any unpatented mill sites for the
                purpose of locating mining claims or otherwise acquiring from the
                United
                States rights to the ground covered thereby, (vi) exchange with or
                convey to the United States any of the Property for the purpose of
                acquiring rights to the ground covered thereby or other adjacent
                ground,
                and (vii) convert any unpatented claims or mill sites into one or
                more leases or other forms of mineral tenure pursuant to any Law
                hereafter
                enacted.

            

    

     

    
      	(l)  	
              The
                Manager shall keep and maintain all required accounting and financial
                records pursuant to the procedures described in Exhibit B
                and in accordance with customary cost accounting practices in the
                mining
                industry, and shall ensure appropriate separation of accounts unless
                otherwise agreed by the JV Participants. All accounting practices
                and
                audits shall comply with the GAAP and all reports, reviews of internal
                controls, and related activities shall be conducted in compliance
                with the
                requirements of the Sarbanes
                Oxley Act of 2002.

            

    

     

    
      	(m)  	
              After
                the formation of the Joint Venture, the Manager shall maintain Equity
                Accounts for each JV Participant. Each JV Participant’s Equity Account
                shall be 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -39-

      

    

     

    credited
      with the value of such JV Participant’s
      contributions under Section 8.3(b).
      Each JV
      Participant’s Equity Account shall be charged with the cash and the fair market
      value of property distributed to such JV Participant (net of liabilities assumed
      by such JV Participant and liabilities to which such distributed property is
      subject). Contributions and distributions shall include all cash contributions
      or distributions plus the agreed value (expressed in dollars) of all in-kind
      contributions or distributions. Solely for purposes of determining the Equity
      Account balances of the JV Participants, the Manager shall reasonably estimate
      the fair market value of all Products distributed to the JV Participants, and
      such estimated value shall be used regardless of the actual amount received
      by
      each JV Participant upon disposition of such Products.

     

    
      	(n)  	
              The
                Manager shall keep the Management Committee advised of all Operations
                by
                submitting in writing to the members of the Management Committee:
                (i) monthly progress reports that include statements of expenditures
                and comparisons of such expenditures to the adopted Budget;
                (ii) periodic summaries of data acquired; (iii) copies of
                reports concerning Operations; (iv) a detailed final report within
                sixty (60) days after completion of each Program and Budget, which
                shall
                include comparisons between actual and budgeted expenditures and
                comparisons between the objectives and results of Programs; and
                (v) such other reports as any member of the Management Committee may
                reasonably request. Subject to ARTICLE
                XX,
                at all reasonable times the Manager shall provide the Management
                Committee, or other representative of a JV Participant upon the request
                of
                such JV Participant’s member of the Management Committee, access to, and
                the right to inspect and, at such Participant’s cost and expense, copy the
                Existing Data and all maps, drill logs and other drilling data, core,
                pulps, reports, surveys, assays, analyses, production reports, operations,
                technical, accounting and financial records, and other Business
                Information, to the extent preserved or kept by the Manager, subject
                to
                ARTICLE
                XX.
                In addition, the Manager shall allow the non-managing JV Participant,
                at
                the latter’s sole risk, cost and expense, and subject to reasonable safety
                regulations, to inspect the Assets and Operations at all reasonable
                times,
                so long as the non-managing JV Participant does not unreasonably
                interfere
                with Operations.

            

    

     

    
      	(o)  	
              The
                Manager shall prepare, for Management Committee approval, an Environmental
                Compliance plan for all Operations consistent with the requirements
                of any
                applicable Laws or contractual obligations and shall include in each
                Program and Budget sufficient funding to implement the Environmental
                Compliance plan and to satisfy the financial assurance requirements
                of any
                applicable Law or contractual obligation pertaining to Environmental
                Compliance. To the extent practical, the Environmental Compliance
                plan
                shall incorporate concurrent reclamation of Property disturbed by
                Operations. The Environmental Compliance plan shall not be implemented
                until approved by the Management
                Committee.

            

    

     

    
      	(p)  	
              The
                Manager shall undertake to perform Continuing Obligations when and
                as
                economic and appropriate, whether before or after termination of
                the
                Business. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -40-

      

    

     

    The
      Manager shall have the right to delegate
      performance of Continuing Obligations to persons having demonstrated skill
      and
      experience in relevant disciplines. As part of each Program and Budget
      submittal, the Manager shall specify in such Program and Budget the measures
      to
      be taken for performance of Continuing Obligations and the cost of such
      measures. The Manager shall keep the other Participant reasonably informed
      about
      the Manager’s efforts to discharge Continuing Obligations. Authorized
      representatives of each Participant shall have the right from time to time
      to
      enter the Property to inspect work directed toward satisfaction of Continuing
      Obligations and audit books, records, and accounts related thereto.

     

    
      	(q)  	
              The
                funds that are to be deposited into the Environmental Compliance
                Fund
                shall be maintained by the Manager in a separate, interest bearing
                cash
                management account, which may include, but is not limited to, money
                market
                investments and money market funds, and/or in longer term investments
                if
                approved by the Management Committee. Such funds shall be used solely
                for
                Environmental Compliance and Continuing Obligations, including the
                committing of such funds, interests in property, insurance or bond
                policies, or other security to satisfy Laws regarding financial assurance
                for the reclamation or restoration of the Property, and for other
                Environmental Compliance
                requirements.

            

    

     

    
      	(r)  	
              If
                Participating Interests are adjusted in accordance with this Agreement
                the
                Manager shall propose from time to time one or more methods for fairly
                allocating costs for Continuing
                Obligations.

            

    

     

    
      	(s)  	
              The
                Manager shall undertake all other activities reasonably necessary
                to
                fulfill the foregoing, and to implement the policies, objectives,
                procedures, methods and actions determined by the Management
                Committee.

            

    

     

    
      	(t)  	
              For
                further clarification, as set out in Section 7.4,
                during the Option Period the Manager shall not be responsible to
                operate
                the Facility and during the Joint Venture Period, the Manager shall
                be
                required to operate the Facility as directed by the Management
                Committee.

            

    

     

    15.2  Standard
      of Care.
      The
      Manager shall discharge its duties under Section 15.1
      and
      conduct all Operations in a good, workmanlike and efficient manner, in
      accordance with sound mining and other applicable industry standards and
      practices, and in accordance with Laws and with the terms and provisions of
      leases, licenses, permits, contracts and other agreements pertaining to the
      Assets. The Manager shall not be liable to the other JV Participant for any
      act
      or omission resulting in damage or loss except to the extent caused by or
      attributable to the Manager’s wilful misconduct or gross negligence. The Manager
      shall not be in default of any of its duties under Section 15.1
      if its
      inability or failure to perform results from the failure of the other
      Participant to perform acts or to contribute amounts required of it by this
      Agreement.

     

    15.3  Resignation;
      Deemed Offer to Resign.
      The
      Manager may resign upon not less than 6 months’ prior notice to the other JV
      Participant, in which case the other JV Participant may elect to become the
      new
      Manager by notice to the resigning JV Participant within 10 days after the
      

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -41-

      

    

     

     

    notice
      of
      resignation. If any of the following shall occur, the Manager shall be deemed
      to
      have resigned upon the occurrence of the event described in each of the
      following subsections, with the successor Manager to be appointed by the other
      JV Participant at a subsequently called meeting of the Management Committee,
      at
      which the Manager shall not be entitled to vote, and the other JV Participant
      may appoint itself or a third party as the Manager:

     

    
      	(a)  	
              the
                aggregate Participating Interest of the Manager and its Affiliates
                becomes
                less than 25%; 

            

    

     

    
      	(b)  	
              the
                Manager is in Material Breach of an obligation imposed upon it under
                this
                Agreement and such failure continues for a period of 60 days after
                notice
                from the other JV Participant demanding
                performance;

            

    

     

    
      	(c)  	
              the
                Manager fails to pay or contest in good faith its bills and Business
                debts
                as such obligations become due; 

            

    

     

    
      	(d)  	
              a
                receiver, liquidator, assignee, custodian, trustee, sequestrator
                or
                similar official for a substantial part of its assets is appointed
                and
                such appointment is neither made ineffective nor discharged within
                60 days
                after the making thereof, or such appointment is consented to, requested
                by, or acquiesced in by the Manager; 

            

    

     

    
      	(e)  	
              the
                Manager commences a voluntary case under any applicable bankruptcy,
                insolvency or similar law now or hereafter in effect; or consents
                to the
                entry of an order for relief in an involuntary case under any such
                law or
                to the appointment of or taking possession by a receiver, liquidator,
                assignee, custodian, trustee, sequestrator or other similar official
                of
                any substantial part of its assets; or makes a general assignment
                for the
                benefit of creditors; or takes corporate or other action in furtherance
                of
                any of the foregoing; or

            

    

     

    
      	(f)  	
              entry
                is made against the Manager of a judgment, decree or order for relief
                affecting its ability to serve as Manager or a substantial part of
                its
                Participating Interest or its other assets by a court of competent
                jurisdiction in an involuntary case commenced under any applicable
                bankruptcy, insolvency or other similar law of any jurisdiction now
                or
                hereafter in effect.

            

    

     

    Under
      Sections 15.3(d),
      15.3(e)
      or
15.3(f)
      above,
      the appointment of a successor Manager shall be deemed to pre-date the event
      causing a deemed resignation.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -42-

      

    

     

    15.4  Administrative
      Charges and Services Agreement. 

     

    
      	(a)  	
              The
                administration charges of Kobex as Manager shall be a deemed an
                Expenditure charge which is no greater than 5% of all the actual
                Expenditures incurred during both the Option Period and Joint Venture
                Period, and administrative charges on capital expenditures shall
                be no
                greater than 1% (collectively the “Administrative
                Charges”).

            

    

     

    
      	(b)  	
              Kobex
                and USE/CC shall enter into a Services Agreement to provide for
                compensation to U.S. Energy for the use of its employees to perform
                administrative and operating functions, as further provided in
                Exhibit L.

            

    

     

    15.5  Transactions
      With Affiliates.
      If the
      Manager engages Affiliates to provide services hereunder, it shall do so on
      terms no less favorable than would be the case in arm’s-length transactions with
      unrelated persons.

     

    15.6  Activities
      During Deadlock.
      If the
      Management Committee for any reason fails to adopt an Exploration, Feasibility
      Study or Development Program and Budget, the Manager shall continue Operations
      at levels sufficient to maintain the Property. If the Management Committee
      for
      any reason fails to adopt an initial Mining Program and Budget or any Expansion
      or Modification Programs and Budgets, the Manager shall continue Operations
      at
      levels sufficient to maintain the then current Operations and Property. If
      the
      Management Committee for any reason fails to adopt Mining Programs and Budgets
      subsequent to the initial Mining Program and Budget, subject to the contrary
      direction of the Management Committee and receipt of necessary funds, the
      Manager shall continue Operations at levels comparable with the last adopted
      Mining Program and Budget. All of the foregoing shall be subject to the contrary
      direction of the Management Committee and the receipt of necessary funds.

     

    ARTICLE
      XVI  

     

    WITHDRAWAL
      AND TERMINATION

     

    16.1  Termination. 

     

    
      	(a)  	
              Termination
                on Terms or by Agreement.
                This Agreement shall terminate as expressly provided herein under
                Sections
                6.4,
                6.10,
                7.14(c)
                and this ARTICLE
                XVI,
                unless earlier terminated by written agreement by the
                Parties.

            

    

     

    
      	(b)  	
              Termination
                by Notice.
                Kobex may terminate this Agreement at any time by written notice
                to USE/CC
                (including during an event of force majeure as set out in Section
                21.6),
                subject to paying the Initial Expenditure if not incurred yet. Upon
                any
                termination of this Agreement, Kobex must file all work and/or pay
                all
                such fees to maintain the Property in good standing for a period
                of three
                months after such notice, and other than filing such work or paying
                such
                fees shall have no further obligations to
                USE/CC.

            

    

     

    16.2  Termination
      by Deadlock.
      During
      the Joint Venture Period, if the Management Committee fails to adopt a Program
      and Budget six months after the expiration of the latest adopted Program and
      Budget (subject to force majeure as set out in Section 21.6),
      either
      JV 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -43-

      

    

     

     

    Participant
      may elect to terminate the Business by giving 30 days notice of termination
      to
      the other JV Participant.

     

    16.3  Withdrawal.
      During
      the Joint Venture Period, a JV Participant may elect to withdraw from the
      Business by (i) giving notice to the other JV Participant of the effective
      date of withdrawal, which shall be the later of the end of the then current
      Program Period or 30 days after the date of the notice. Upon such withdrawal,
      the Business shall terminate, and the withdrawing JV Participant shall be deemed
      to have transferred to the remaining JV Participant, all of its Participating
      Interest, including all of its interest in the Assets, without cost and free
      and
      clear of all Encumbrances arising by, through or under such withdrawing JV
      Participant, except Permitted Encumbrances and those to which both JV
      Participants have agreed. The withdrawing JV Participant shall execute and
      deliver all instruments as may be necessary in the reasonable judgment of the
      other JV Participant to effect the transfer of its interests in the Assets
      to
      the other JV Participant. If within a 60 day period both JV Participants elect
      to withdraw, then the Business shall instead be deemed to have been terminated
      by the consent of the JV Participants pursuant to Section 15.1.

     

    16.4  Continuing
      Obligations and Environmental Liabilities.
      On
      termination of the Business under Sections 16.1,
      16.2
      or
16.3,
      each
      Party shall remain liable for its respective share of liabilities to third
      persons (whether such arises before or after such withdrawal), including
      Environmental Liabilities and Continuing Obligations. During the Option Period,
      Kobex shall only be liable for the liabilities that it causes or incurs. During
      the Joint Venture Period, the withdrawing JV Participant’s share of such
      liabilities shall be equal to its Participating Interest at the time such
      liability was incurred, after first taking into account any reduction,
      readjustment, and restoration of Participating Interests under
      Sections 8.6,
      9.4,
      9.5
      and
10.5
      (or, as
      to liabilities arising prior to the Effective Date, its initial Participating
      Interest). 

     

    16.5  Disposition
      of Assets on Termination.
      Promptly after termination of this under Sections 16.1
      or
16.2,
      the
      Manager shall take all action necessary to wind up the activities of the
      Business. All costs and expenses incurred in connection with the termination
      of
      the Business shall be expenses chargeable to the Business Account. 

     

    16.6  Non-Compete
      Covenants.
      Neither
      JV Participant that withdraws pursuant to Section 16.3,
      or is
      deemed to have withdrawn pursuant to Sections 6.4,
      8.6
      or
10.5,
      nor any
      Affiliate of such a JV Participant, shall directly or indirectly acquire any
      interest or right to explore or mine, or both, on any property any part of
      which
      is within the Property for 24 months after the effective date of withdrawal.
      If
      a withdrawing JV Participant, or the Affiliate of a withdrawing JV Participant,
      breaches this Section, such JV Participant shall be obligated to offer to convey
      to the non-withdrawing JV Participant, without cost, any such property or
      interest so acquired (or ensure its Affiliate offers to convey the property
      or
      interest to the non-withdrawing JV Participant, if the acquiring party is the
      withdrawing JV Participant’s Affiliate). Such offer shall be made in writing and
      can be accepted by the non-withdrawing JV Participant at any time within 10
      days
      after the offer is received by such non-withdrawing JV Participant. Failure
      of a
      JV Participant’s Affiliate to comply with this section shall be a breach by such
      JV Participant of this Agreement.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -44-

      

    

     

     

    16.7  Right
      to Data After Termination.
      After
      termination of the Business pursuant to Sections 16.1
      or
16.2,
      each
      Party shall be entitled to make copies of all applicable information acquired
      hereunder before the effective date of termination not previously furnished
      to
      it, but a terminating or withdrawing Party shall not be entitled to any such
      copies after any other termination or withdrawal.

     

    16.8  Continuing
      Authority.
      On
      termination of the Business under Sections 16.1,
      16.2
      or
16.3
      or the
      deemed withdrawal of any Party pursuant to Sections 8.6 or
      10.5,
      the
      Party which was the Manager prior to such termination or withdrawal (or the
      other Party in the event of a withdrawal by the Manager) shall have the power
      and authority to do all things on behalf of the Parties which are reasonably
      necessary or convenient to: (a) wind up Operations and (b) complete
      any transaction and satisfy any obligation, unfinished or unsatisfied, at the
      time of such termination or withdrawal, if the transaction or obligation arises
      out of Operations prior to such termination or withdrawal. The Manager shall
      have the power and authority to grant or receive extensions of time or change
      the method of payment of an already existing liability or obligation, prosecute
      and defend actions on behalf of the Parties and the Business, and take any
      other
      reasonable action in any matter with respect to which the former Parties
      continue to have, or appear or are alleged to have, a common interest or a
      common liability. 

     

    ARTICLE
      XVII  

     

    ACQUISITIONS
      WITHIN AREA OF INTEREST

     

    17.1  General.
      Any
      interest or right to acquire any interest in real property, Mineral rights
      or
      water rights (in this Section collectively referred to as “Rights”)
      related
      thereto within the Area of Interest either acquired or proposed to be acquired
      during the term of this Agreement by or on behalf of any Party (“Acquiring
      Party”)
      or any
      Affiliate of such Party shall be subject to the terms and provisions of this
      Agreement. For further clarification a reference to “Parties”
      in this
      Article shall mean USE/CC and Kobex, and a reference to “Party”
      shall
      mean one of them. The Parties and their respective Affiliates for their separate
      account shall be free to acquire lands and interests in lands outside the Area
      of Interest and to locate mining claims outside the Area of Interest. Failure
      of
      any Affiliate of any Party to comply with this Article shall be a breach by
      such
      Party of this Agreement. 

     

    17.2  Notice
      to Non-Acquiring Party.
      Within
      15 days after the acquisition or proposed acquisition, as the case may be,
      of
      any interest or the right to acquire any interest in Rights wholly or partially
      within the Area of Interest (except Rights acquired by the Manager pursuant
      to a
      Program), the Acquiring Party shall notify the non-acquiring Party of such
      acquisition by it or its Affiliate; provided further that if the acquisition
      of
      any interest or right to acquire any interest pertains to Rights partially
      within the Area of Interest, then all such Rights (i.e.,
      the
      part within the Area of Interest and the part outside the Area of Interest)
      shall be subject to this Article. The Acquiring Party’s notice shall describe in
      detail the acquisition, the acquiring party if that party is an Affiliate,
      the
      lands and minerals covered thereby, any water rights related thereto, the cost
      thereof, and the reasons why the Acquiring Party believes that the acquisition
      (or proposed acquisition) of the interest is in the best interests of the
      Parties under this Agreement. In addition to such notice, the Acquiring Party
      shall make any and all information concerning the relevant interest available
      for inspection by the non-acquiring Party.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -45-

      

    

     

     

    17.3  Election
      to Acquire. 

     

    
      	(a)  	
              During
                the Option Period, within 30 days after receiving the Acquiring Party’s
                notice, the non-acquiring Party may notify the Acquiring Party of
                its
                election to include such acquired interest in the Property and make
                it
                subject to the terms of this Agreement. Upon such election such acquired
                interest shall be included in the Property thereafter for all purposes
                of
                this Agreement. If the Acquiring Party is USE/CC, then Kobex shall
                reimburse it for the acquisition costs that it or its Affiliate has
                incurred. When paid by Kobex in the first instance on acquisition,
                or
                reimbursed by Kobex when acquired by USE/CC, the acquisition costs
                for any
                acquired interests will be deemed to constitute Expenditures to the
                credit
                of Kobex pursuant to Section 6.1
                hereunder.

            

    

     

    
      	(b)  	
              During
                the Joint Venture Period, within 30 days after receiving the Acquiring
                Party’s notice, the non-acquiring Party may notify the Acquiring Party
                of
                its election to accept a proportionate interest in the acquired interest
                equal to its Participating Interest. Promptly upon such notice, the
                Acquiring Party shall convey or cause its Affiliate to convey to
                the
                non-acquiring Party, in proportion to their respective Participating
                Interests, by special warranty deed with title held as described
                in
                Section 8.12,
                all of the Acquiring Party’s (or its Affiliate’s) interest in such
                acquired interest, free and clear of all Encumbrances arising by,
                through
                or under the Acquiring Party (or its Affiliate) other than those
                to which
                both Parties have agreed. The acquired interests shall become a part
                of
                the Property for all purposes of this Agreement immediately upon
                such
                notice. The non-acquiring Party shall promptly pay to the Acquiring
                Party
                its proportionate share of the latter’s actual out-of-pocket acquisition
                costs.

            

    

     

    17.4  Election
      to Acquire Not Exercised.
      If the
      other Party does not give such notice within the 30 day period set forth in
      Section 17.3,
      it
      shall have no interest in the acquired interests, and the acquired interests
      shall not be a part of the Property, Assets nor continue to be subject to this
      Agreement, and the Acquiring Party shall be free to hold or deal with the
      acquired interest free of the terms of this Agreement, and such acquired
      interest shall be excluded from the Area of Interest.

     

    ARTICLE
      XVIII  

     

    ABANDONMENT
      AND SURRENDER OF PROPERTIES

     

    18.1  Abandonment
      and Surrender of Property - Option Period.
      During
      the Option Period, other than as provided in Section Error!
      Reference source not found.,
      the
      Manager may surrender or abandon any Rights comprising the Property only with
      the consent of USE/CC. If USE/CC agrees with such abandonment or surrender,
      then
      the Manager may proceed with such abandonment or surrender. If USE/CC does
      not
      agree with such abandonment or surrender, then such Rights shall not be
      abandoned.

     

    18.2  Abandonment
      and Surrender of Property - Joint Venture Period. During
      the Joint Venture Period, either JV Participant may request the Management
      Committee to authorize the Manager to surrender or abandon part or all of the
      Property. If the Management Committee does 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -46-

      

    

     

     

    not
      authorize such surrender or abandonment, or authorizes any such surrender or
      abandonment over the objection of either JV Participant, the JV Participant
      that
      desires to surrender or abandon shall assign to the objecting JV Participant,
      by
      special warranty deed and without cost to the objecting JV Participant, all
      of
      the abandoning JV Participant’s interest in the Property sought to be abandoned
      or surrendered, free and clear of all Encumbrances created by, through or under
      the abandoning JV Participant other than those to which both JV Participants
      have agreed. Upon the assignment, such properties shall cease to be part of
      the
      Property. The JV Participant that desires to abandon or surrender shall remain
      liable for its share (determined by its Participating Interest as of the date
      of
      such abandonment, after first taking into account any reduction, readjustment,
      and restoration of Participating Interests under Sections 8.6,
      9.4,
      9.5,
      and
10.5)
      of any
      liability with respect to such Property, including, without limitation,
      Continuing Obligations, Environmental Liabilities and Environmental Compliance,
      whether accruing before or after such abandonment, arising out of activities
      prior to the Effective Date and out of Operations conducted prior to the date
      of
      such abandonment, regardless of when any funds may be expended to satisfy such
      liability.

     

    ARTICLE
      XIX  

     

    DISPUTES

     

    19.1  Governing
      Law.
      Except
      for matters of title to the Property or their Transfer, which shall be governed
      by the law of their situs,
      this
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of Colorado, without regard for any conflict of laws or choice of
      laws
      principles that would permit or require the application of the laws of any
      other
      jurisdiction.

     

    19.2  Dispute
      Resolution.
      All
      disputes arising under or in connection with this Agreement which cannot be
      resolved by agreement between the Parties shall be resolved in accordance with
      Sections 19.3
      and 19.4.
      The
      dispute resolution mechanisms applicable to Section 6.9
      shall be
      pursued prior to any arbitration or legal action. If any legal action or other
      proceeding is brought for the enforcement of this Agreement, or because of
      an
      alleged dispute, breach, default, or misrepresentation in connection with any
      of
      the provisions of this Agreement, the successful or substantially prevailing
      Party shall be entitled to recover reasonable attorneys’ fees and other costs
      incurred in that action or proceeding, in addition to any other relief to which
      it or they may be entitled.

     

    19.3  Mediation.
      With
      the exception of disputes arising under Section 6.9,
      if any
      dispute has not been resolved within 30 days after the date of the Notice of
      a
      dispute, or if the Party receiving such Notice fails or refuses to meet within
      such time period, either Party may initiate mediation of the dispute by sending
      the other Party a written request that the dispute be mediated. The Party
      receiving such a written request shall promptly respond to the requesting Party
      so that all Parties can jointly select a neutral and impartial mediator and
      schedule the mediation session. The Parties shall mediate the dispute before
      a
      neutral, third party mediator within 30 days after the date of the written
      request for mediation.

     

    19.4  Arbitration.
      If
      a
      dispute has not been resolved within 60 days after the original Notice of a
      dispute or within 30 days after the date of a request for mediation, whichever
      is later, then any Party may initiate arbitration proceedings. Any dispute,
      controversy or claim, of any and 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -47-

      

    

     

     

    every
      kind or type, whether based on contract, tort, statute, regulations, or
      otherwise, arising out of, connected with, or relating in any way to this
      Agreement, the relationship of the Parties, the obligations of the Parties
      or
      the Operations carried out under this Agreement, including without limitation,
      any dispute as to the existence, validity, construction, interpretation,
      negotiation, performance, non-performance, breach, termination, or
      enforceability of this Agreement and establishment of fair market value, shall
      be settled through final and binding arbitration, it being the intention of
      the
      Parties that this is a broad form arbitration agreement designed to encompass
      all possible disputes among the Parties relating to the project that is the
      subject of the JV Participants’ agreement.

     

    The
      arbitration shall be conducted in accordance with the Arbitration Rules of
      the
      American Arbitration Association (“AAA”)
      as in
      effect on the date of commencement of the arbitration proceeding (the
“AAA
      Rules”).
      The
      arbitration panel shall apply the Federal Rules of Evidence to all evidentiary
      questions arising in the course of the arbitration, and shall apply the Federal
      Rules of Civil Procedure to the conduct of discovery in the course of the
      arbitration. 

     

    
      	(a)  	
              Number
                of Arbitrators.
                The Parties shall appoint a sole arbitrator agreeable to them to
                resolve
                any dispute; provided,
                however,
                that should the Parties fail to agree upon a sole arbitrator within
                30
                days after the initiation of the arbitration, then there shall be
                3
                arbitrators. The claimant shall name the first arbitrator within
                thirty
                days after the expiration of the above-described deadline to appoint
                a
                single arbitrator. The respondent shall appoint the second arbitrator
                within 30 days after the appointment of the first arbitrator. The
                two
                Party-appointed arbitrators shall appoint the third arbitrator within
                thirty days after the appointment of the second arbitrator. If
                (i) the respondent fails to appoint an arbitrator or (ii) the
                two Party-appointed arbitrators fail to appoint a third arbitrator
                within
                the above-described time limitations, then the AAA shall appoint
                the
                second and/or third arbitrator, as applicable.

            

    

     

    
      	(b)  	
              Place
                of Arbitration.
                Unless otherwise agreed in writing by all Parties to the arbitration,
                the
                situs of the arbitration under this Agreement shall be Denver, Colorado,
                U.S.A.

            

    

     

    
      	(c)  	
              Language.
                The arbitration proceedings shall be conducted in the English
                language.

            

    

     

    
      	(d)  	
              Entry
                of Judgment.
                Judgment on the award of the arbitral tribunal may be entered by
                any court
                of competent jurisdiction.

            

    

     

    
      	(e)  	
              Qualifications
                and Conduct of the Arbitrators.
                All arbitrators shall be and remain at all times wholly impartial
                and
                shall provide the Parties with a statement that they can and shall
                decide
                the case impartially. No arbitrator shall have any financial interest
                (directly or indirectly) in the dispute or any financial dependence
                (directly or indirectly) upon any of the Parties. All arbitrators
                shall be
                knowledgeable of the mining industry or the law applicable to such
                business. The AAA’s Rules of Ethics shall be applicable to all
                arbitrators. 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -48-

      

    

     

     

    
      	(f)  	
              Interim
                Measures.
                The arbitrators, or in an emergency the presiding arbitrator acting
                alone
                in the event one or more of the other arbitrators are unable to be
                involved in a timely fashion, may grant interim measures including
                injunctions, attachments and conservation orders in appropriate
                circumstances, which measures the Parties agree may be immediately
                enforced by the arbitrators or by court order. Hearings on requests
                for
                interim measures may be held in person, by telephone or by video
                conference, and requests for relief, responses, briefs or memorials
                may be
                sent to, and orders or awards received from, the arbitrators by facsimile
                or other similar means which include a confirmation of delivery.
                Notwithstanding the requirements for alternative dispute resolution
                procedures (such as negotiation and mediation), prior to the constitution
                of the arbitration tribunal and thereafter as necessary to enforce
                the
                arbitrators’ rulings or in the absence of the jurisdiction of the
                arbitrators to rule on interim measures in a given jurisdiction,
                any Party
                may apply to a court for interim measures, and the JV Parties agree
                that
                seeking and obtaining such measures shall not waive the right to
                arbitration.

            

    

     

    
      	(g)  	
              Costs
                and Attorney’s Fees.
                The arbitral tribunal is authorized to award attorney’s fees or allocate
                them between the Parties. The costs of the arbitration proceedings
                shall
                be borne in the manner determined by the arbitral tribunal, with
                the
                exception of the arbitrators’ fees. The Parties shall divide the cost of a
                single arbiter, with Kobex paying 50% of the fee and the U.S. Energy
                Group
                paying the remaining 50%. In the event that three arbitrators are
                appointed, each of Kobex and the U.S. Energy Group shall pay the
                fee of
                the arbitrator it appoints and 50% of the fee of the third
                arbitrator.

            

    

     

    
      	(h)  	
              Currency
                of Award.
                The arbitral award shall be made and payable in Dollars free of any
                tax or
                other deduction.

            

    

     

    
      	(i)  	
              Punitive
                Damages.
                Penal, punitive, treble, multiple, consequential, incidental or similar
                damages may not be recovered or
                awarded.

            

    

     

    
      	(j)  	
              Confidentiality.
                Except to the extent necessary to enforce the arbitration, agreement
                or
                award, to enforce other rights of the Parties, or as required by
                law, the
                Parties, their employees, officers, directors, counsel, consultants,
                and
                expert witnesses, shall maintain as confidential the fact of the
                arbitration proceeding, the arbitral award, contemporaneous or historical
                documents exchanged or produced during the arbitration proceeding,
                and
                memorials, briefs or other documents prepared for the
                arbitration.

            

    

     

    
      	(k)  	
              Waiver
                of Appeals.
                To the extent permitted by law, right to appeal from or to cause
                a review
                of any arbitral award by any court is hereby waived by the JV
                Participants.

            

    

     

    
      	(l)  	
              Summary
                Disposition.
                The arbitrators are hereby authorized, if they consider it appropriate,
                to
                decide any disputes by summary disposition on the documents and written
                testimony without hearing oral
                testimony.

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -49-

      

    

     

     

    
      	(m)  	
              Draft
                of the Proposed Award.
                Prior to rendering the final award, the arbitral tribunal shall submit
                to
                the Parties an unsigned draft of the proposed award and each Party,
                within
                10 Business Days after receipt of such draft award, may serve on
                every
                other Party and file with the tribunal a written statement commenting
                upon
                any alleged errors of fact, law, computation, or otherwise. The tribunal
                shall endeavour to render its final award within 10 Business Days
                after
                the receipt of the letter of the written statements of the
                Parties.

            

    

     

    ARTICLE
      XX  

     

    CONFIDENTIALITY,
      OWNERSHIP, 

     

    USE
      AND DISCLOSURE OF INFORMATION

     

    20.1  Business
      Information.
      Except
      as provided in Sections 20.3
      and
20.4,
      or with
      the prior written consent of the other Parties, each Party shall keep
      confidential and not disclose to any third party or the public any portion
      of
      the Business Information that constitutes Confidential Information. During
      the
      Joint Venture Period, all Business Information shall be owned jointly by the
      JV
      Participants as their Participating Interests are determined pursuant to this
      Agreement. Both before and after the termination of the Business, all Business
      Information may be used by either any Party for any purpose, whether or not
      competitive with the Business, without consulting with, or obligation to, the
      other Parties. 

     

    20.2  Party
      Information.
      In
      performing its obligations under this Agreement, no Party shall be obligated
      to
      disclose any Party Information. If a Party elects to disclose Party Information
      in performing its obligations under this Agreement, such Party Information,
      together with all improvements, enhancements, refinements and incremental
      additions to such Party Information that are developed, conceived, originated
      or
      obtained by either any Party in performing its obligations under this Agreement
      (“Enhancements”),
      shall
      be owned exclusively by the Party that originally developed, conceived,
      originated or obtained such Party Information. Each Party may use and enjoy
      the
      benefits of such Participant Information and Enhancements in the conduct of
      the
      Business hereunder, but the Parties that did not originally develop, conceive,
      originate or obtain such Party Information may not use such Party Information
      and Enhancements for any other purpose. Except a provided in Section 20.4,
      or with
      the prior written consent of the other Party, which consent may be withheld
      in
      such Party’s sole discretion, each Party shall keep confidential and not
      disclose to any third party or the public any portion of Party Information
      and
      Enhancements owned by the other Parties that constitutes Confidential
      Information.

     

    20.3  Permitted
      Disclosure of Confidential Business Information.
      Any
      Party may disclose Business Information that is Confidential
      Information:

     

    
      	(a)  	
              to
                a Party’s officers, directors, partners, members, employees, Affiliates,
                shareholders, agents, attorneys, accountants, consultants, contractors,
                subcontractors or advisors, for the sole purpose of such Party’s
                performance of its obligations under this
                Agreement;

            

    

     

    
      	(b)  	
              to
                any party to whom the disclosing Party contemplates a Transfer of
                all or
                any part of its Participating Interest, for the sole purpose of evaluating
                the proposed Transfer; 

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -50-

      

    

     

     

    
      	(c)  	
              to
                any actual or potential lender, underwriter or investor for the sole
                purpose of evaluating whether to make a loan to or investment in
                the
                disclosing Party; or 

            

    

     

    
      	(d)  	
              to
                a third party with whom the disclosing Party contemplates any independent
                business activity or operation.

            

    

     

    The
      Party
      disclosing Confidential Information pursuant to this Section 20.3,
      shall
      disclose such Confidential Information to only those parties who have a
bona
      fide
      need to
      have access to such Confidential Information for the purpose for which
      disclosure to such parties is permitted under this Section 20.3
      and who
      have agreed in writing supplied to, and enforceable by, the other Parties to
      protect the Confidential Information from further disclosure, to use such
      Confidential Information solely for such purpose and to otherwise be bound
      by
      the provisions of this ARTICLE
      XX.
      Such
      writing shall not preclude parties described in Section 20.3(b)
      from
      discussing and completing a Transfer with the other Parties. The Party
      disclosing Confidential Information shall be responsible and liable for any
      use
      or disclosure of the Confidential Information by such parties in violation
      of
      this Agreement and such other writing. 

     

    20.4  Disclosure
      Required By Law.
      Notwithstanding anything contained in this Article, a Party may disclose any
      Confidential Information if, in the opinion of the disclosing Party’s legal
      counsel:

     

    
      	(a)  	
              such
                disclosure is legally required to be made in a judicial, administrative
                or
                governmental proceeding pursuant to a valid subpoena or other applicable
                order;

            

    

     

    
      	(b)  	
              such
                disclosure is legally required to be made pursuant to the rules or
                regulations of a stock exchange or similar trading market applicable
                to
                the disclosing JV Participant;
                or

            

    

     

    
      	(c)  	
              such
                disclosure is legally required to be made by the rules and regulations
                of
                any regulatory authority.

            

    

     

    Prior
      to
      any disclosure of Confidential Information under this Section 20.4,
      the
      disclosing Party shall give the other Party at least two Business Days prior
      written notice (unless less time is permitted by such rules, regulations or
      proceeding) and, in making such disclosure, the disclosing Party shall disclose
      only that portion of Confidential Information required to be disclosed and
      shall
      take all reasonable efforts to preserve the confidentiality thereof, including,
      without limitation, obtaining protective orders and supporting the other Parties
      in intervention in any such proceeding.

     

    20.5  Permitted
      Disclosure.
      In
      addition, notwithstanding anything contained in this Article, a Party may
      disclose any Confidential Information in the following disclosure
      scenarios:

     

    
      	(a)  	
              to
                another Party or the Manager; 

            

    

     

    
      	(b)  	
              with
                the prior written consent of all the other
                Parties;

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -51-

      

    

     

     

    
      	(c)  	
              to
                a bank or other financial institution considering the provision of
                or,
                which has provided financial accommodation to, a Party or an Affiliate
                of
                a Party or to a trustee, representative or agent or such a bank or
                financial institution;

            

    

     

    
      	(d)  	
              to
                a third party, provided that such third party has first agreed in
                writing
                to maintain the confidentiality of the Confidential
                Information;

            

    

     

    
      	(e)  	
              by
                a Party to legal, financial and other professional advisers, auditors
                and
                other consultants, officers and employees of a Party or a Party’s
                Affiliate, provided that such Party or Party’s Affiliate has first agreed
                in writing to maintain the confidentiality of the Confidential
                Information; and

            

    

     

    
      	(f)  	
              to
                the extent that the Confidential Information was publicly available
                at the
                Effective Date or becomes publicly available subsequent to the Effective
                Date without breach of this
                Agreement.

            

    

     

    20.6  Public
      Announcements.
      Prior
      to making or issuing any press release or other public announcement or
      disclosure of Business Information that is not Confidential Information, a
      JV
      Participant shall first consult with the other JV Participant as to the content
      and timing of such announcement or disclosure. If the other Party from whom
      such
      approval is requested has not approved or has not reasonably refused such
      request within 3 days of receiving such request, such other Party shall be
      deemed to have approved the press release or public statement forming the
      subject matter of such request.

     

    ARTICLE
      XXI  

     

    GENERAL
      PROVISIONS

     

    21.1  Notices.
      All
      notices, payments and other required or permitted communications (“Notices”)
      to the
      Parties shall be in writing, and shall be addressed respectively as
      follows:

     

    If
      to the
      U.S. Energy Group: 

     

                877
      North
      8th
      West

                Riverton,
      WY
      82501

                Attention: Mark
      Larsen, President

                Telephone: (307)
      856-9721

                Facsimile: (307)
      856-3050

     

    With
      a
      Copy to: 

     

                U.S.
      Energy Corp.

                877
      North
      8th
      West,

                Riverton,
      WY
      82501

                Attention: Steve
      Youngbauer, General Counsel

                Telephone: (307)
      856-9721

                Facsimile: (307)
      856-3050

     

                -and-

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -52-

      

    

     

     

                Davis,
      Graham &
Stubbs LLP

                1550
      Seventeenth
      St.

                Suite
      500

                Denver,
      CO
      80206

                Attention: Scot
      Anderson, Esq.

                Telephone: (303)
      892-7383

                Facsimile: (303)
      893-1379

     

    

     

    If
      to
      Kobex Resources Ltd.:

     

                Kobex
      Resources

                1700
      - 700 West
      Pender Street

                Vancouver,
      BC V6C
      1G8

                Attention: H.
      Leo
      King, President 

                Telephone: (604)
      484-6228

                Facsimile: (604)
      688-9336

     

    With
      a
      Copy to:

     

                Aydin
      Bird Business
      Lawyers

                530
      North Office
      Tower

                650
      West
      41st
      Avenue

                Vancouver,
      BC V5Z
      2M9

                Attention: Geoff
      Bird

                Telephone: (604)
      267-2826

                Facsimile: (604)
      266-3929

     

    All
      Notices shall be given (a) by personal delivery to the Party, or
      (b) by electronic communication, capable of producing a printed
      transmission, (c) by registered or certified mail return receipt requested;
      or (d) by overnight or other express courier service. All Notices shall be
      effective and shall be deemed given on the date of receipt at the principal
      address if received during normal business hours, and, if not received during
      normal business hours, on the next business day following receipt, or if by
      electronic communication, on the date of such communication. Any Party may
      change its address by Notice to the other Parties.

     

    21.2  Currency.
      All
      references to “dollars”
or
      “$”
herein
      shall mean lawful currency of the United States of America. 

     

    21.3  Headings.
      The
      subject headings of the Parts, Articles and Sections of this Agreement and
      the
      Paragraphs and Subparagraphs of the Exhibits
      to this
      Agreement are included for purposes of convenience only, and shall not affect
      the construction or interpretation of any of its provisions. 

     

    21.4  Waiver.
      The
      failure of any Party to insist on the strict performance of any provision of
      this Agreement or to exercise any right, power or remedy upon a breach hereof
      shall not 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -53-

      

    

     

     

    constitute
      a waiver of any provision of this Agreement or limit such Parties’ right
      thereafter to enforce any provision or exercise any right.

     

    21.5  Modification.
      No
      modification of this Agreement shall be valid unless made in writing and duly
      executed by all Parties.

     

    21.6  Force
      Majeure.
      Except
      for the obligations to make payments when due hereunder, the obligations of
      a
      Party shall be suspended to the extent and for the period that performance
      is
      prevented by any cause, whether foreseeable or unforeseeable, beyond its
      reasonable control, including, without limitation, labor disputes (however
      arising and whether or not employee demands are reasonable or within the power
      of the Party to grant); acts of God; Laws, instructions or requests of any
      government or governmental entity; judgments or orders of any court; inability
      to obtain on reasonably acceptable terms any public or private license, permit
      or other authorization; curtailment or suspension of activities to remedy or
      avoid an actual or alleged, present or prospective violation of Environmental
      Laws; action or inaction by any federal state or local agency that delays or
      prevents the issuance or granting of any approval or authorization required
      to
      conduct Operations beyond the reasonable expectations of the Party seeking
      the
      approval or authorization (including, without limitation, a failure to complete
      any review and analysis required by the National Environmental Policy Act or
      any
      similar state law within thirty-six (36) months of initiation of that process);
      acts of war or conditions arising out of or attributable to war, whether
      declared or undeclared; riot, civil strife, insurrection or rebellion; fire,
      explosion, earthquake, storm, flood, sink holes, drought or other adverse
      weather condition; delay or failure by suppliers or transporters of materials,
      parts, supplies, services or equipment or by contractors’ or subcontractors’
shortage of, or inability to obtain, labor, transportation, materials,
      machinery, equipment, supplies, utilities or services; accidents; breakdown
      of
      equipment, machinery or facilities; actions by native rights groups,
      environmental groups, or other similar special interest groups; or any other
      cause whether similar or dissimilar to the foregoing. The affected Party shall
      promptly give notice to the other Party of the suspension of performance,
      stating therein the nature of the suspension, the reasons therefore, and the
      expected duration thereof. The affected Party shall resume performance as soon
      as reasonably possible. During the period of suspension the obligations of
      both
      JV Participants to advance funds pursuant to Section 10.2
      shall be
      reduced to levels consistent with then current Operations.
      For the
      avoidance of doubt, this Section 21.7 does not relieve Kobex of its obligation
      to make Option Payments pursuant to the schedule described in Section 6.1 in
      order to retain the Option to earn an interest in the Property, does not relieve
      Kobex to keep the Property in good standing, and does not relieve Kobex from
      continuing to fund the operation and maintenance of the Facility. 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -54-

      

    

     

     

    21.7  Rule
      Against Perpetuities.
      The
      Parties do not intend that there shall be any violation of the rule against
      perpetuities, the rule Against unreasonable restraints on the alienation of
      property, or any similar rule. Accordingly, if any right or option to acquire
      any interest in the Property, in a Participating Interest, in the Assets, or
      in
      any real property exists under this Agreement, such right or option must be
      exercised, if at all, so as to vest such interest within time periods permitted
      by applicable rules and law. If, however, any such violation should
      inadvertently occur, the Parties hereby agree that a court shall reform that
      provision in such a way as to approximate most closely the intent of the Parties
      within the limits permissible under such rules. 

     

    21.8  Further
      Assurances.
      Each of
      the Parties shall take, from time to time and without additional consideration,
      such further actions and execute such additional instruments as may be
      reasonably necessary or convenient to implement and carry out the intent and
      purpose of this Agreement or as may be reasonably required by lenders in
      connection with Project Financing.

     

    21.9  Entire
      Agreement; Successors and Assigns.
      This
      Agreement contains the entire understanding of the Parties and supersedes all
      prior agreements and understandings between the Parties relating to the subject
      matter hereof. This Agreement shall be binding upon and inure to the benefit
      of
      the respective successors and permitted assigns of the Parties. 

     

    21.10  Memorandum.
      At the
      request of any Party, a Memorandum or short form of this Agreement, or a
      Financing Statement(s) (to which copies of the Memorandum or short form of
      this
      Agreement shall be attached) shall be prepared by the Manager, executed and
      acknowledged by the Parties, and delivered to the Manager for recording and
      filing in those appropriate recording districts and Uniform Commercial Code
      filing offices as may be necessary to provide constructive notice of this
      Agreement and the rights and obligations of the Parties hereunder. The Manager
      shall record and file in the proper recording districts, county recording
      offices and Uniform Commercial Code filing offices, all such documents delivered
      to it by the Parties. Unless the Parties agree, this Agreement shall not be
      recorded.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -55-

      

    

     

     

    21.11  Counterparts.
      This
      Agreement may be executed in any number of counterparts, and it shall not be
      necessary that the signatures of all the Parties be contained on any
      counterpart. Each counterpart shall be deemed an original, but all counterparts
      together shall constitute one and the same instrument. 

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      Effective Date.

    

    
      	
              U.S.
                MOLY CORP.

            
	 	 
	
              Per:

            	   
/s/
              Mark J. Larsen
	 	
              President

            

    

    

    
      	
              U.S.
                ENERGY CORP.

            
	 	 
	
              Per:

            	   
/s/
              Mark J. Larsen
	 	
              President

            

    

    

    
      	
              CRESTED
                CORP.

            
	 	 
	
              Per:

            	   
/s/
              Keith G. Larsen
	 	
              Co-Chair

            

    

    

    
      	
              KOBEX
                RESOURCES LTD.

            
	 	 
	
              Per:

            	   
/s/
              Roman Shklanka
	 	
              Chairmanexv4w1

 

EXHIBIT 4.1

CHASE MORTGAGE FINANCE CORPORATION,

DEPOSITOR,

JPMORGAN CHASE BANK, N.A.,

SERVICER,

JPMORGAN CHASE BANK, N.A.,

CUSTODIAN

AND

THE BANK OF NEW YORK TRUST COMPANY, N.A.,

TRUSTEE AND PAYING AGENT

POOLING AND SERVICING AGREEMENT

Dated as of April 1, 2007

$595,210,100

Multi-Class Mortgage Pass-Through Certificates

ChaseFlex Trust Series 2007-2

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II CONVEYANCE OF MORTGAGE LOANS; TRUST FUND
	 	 	27	 
	Section 2.01 Conveyance of Mortgage Loans
	 	 	27	 
	Section 2.02 Acceptance by Trustee
	 	 	31	 
	Section 2.03 Trust Fund; Authentication of Certificates
	 	 	33	 
	Section 2.04 REMIC Elections
	 	 	33	 
	Section 2.05 Permitted Activities of Trust
	 	 	47	 
	Section 2.06 Qualifying Special Purpose Entity
	 	 	47	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE SERVICER, REPURCHASE OF MORTGAGE LOANS
	 	 	47	 
	Section 3.01 Representations and Warranties of the Depositor with respect to the Mortgage Loans
	 	 	47	 
	Section 3.02 Representations and Warranties of the Servicer
	 	 	55	 
	Section 3.03 Option to Substitute
	 	 	55	 
	 
	 	 	 	 
	ARTICLE IV THE CERTIFICATES
	 	 	56	 
	Section 4.01 The Certificates
	 	 	56	 
	Section 4.02 Registration of Transfer and Exchange of Certificates
	 	 	58	 
	Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates
	 	 	62	 
	Section 4.04 Persons Deemed Owners
	 	 	62	 
	Section 4.05 Appointment of Paying Agent and Certificate Registrar; Certificate Account
	 	 	62	 
	Section 4.06 Authenticating Agents
	 	 	63	 
	 
	 	 	 	 
	ARTICLE V ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
	 	 	64	 
	Section 5.01 Servicer to Service Mortgage Loans
	 	 	64	 
	Section 5.02 Sub-Servicing Agreements Between Servicer and Sub-Servicers; Enforcement of Sub-Servicer’s Obligations
	 	 	65	 
	Section 5.03 Successor Sub-Servicers
	 	 	65	 
	Section 5.04 Liability of the Servicer
	 	 	65	 
	Section 5.05 No Contractual Relationship Between Sub-Servicer and Trustee or Certificateholders
	 	 	66	 
	Section 5.06 Termination of Sub-Servicing Agreement
	 	 	66	 
	Section 5.07 Collection of Mortgage Loan Payments
	 	 	66	 
	Section 5.08 Establishment of Collection Account; Deposit in Collection Account
	 	 	66	 
	Section 5.09 Permitted Withdrawals from the Collection Account
	 	 	67	 
	Section 5.10 Establishment of Escrow Account; Deposits in Escrow Account
	 	 	68	 

 

 

	 	 	 	 	 
	Section 5.11 Permitted Withdrawals from Escrow Account
	 	 	69	 
	Section 5.12 Payment of Taxes, Insurance and Other Charges
	 	 	69	 
	Section 5.13 Transfer of Accounts
	 	 	69	 
	Section 5.14 [Reserved]
	 	 	69	 
	Section 5.15 Maintenance of the Primary Insurance Policies
	 	 	69	 
	Section 5.16 Maintenance of Standard Hazard Policies
	 	 	69	 
	Section 5.17 [Reserved]
	 	 	70	 
	Section 5.18 [Reserved]
	 	 	70	 
	Section 5.19 Fidelity Bond and Errors and Omissions Insurance
	 	 	70	 
	Section 5.20 Collections under Insurance Policies; Enforcement of Due-On-Sale Clauses; Assumption Agreements
	 	 	71	 
	Section 5.21 Income and Realization from Defaulted Mortgage Loans
	 	 	71	 
	Section 5.22 Trustee to Cooperate; Release of Mortgage Files
	 	 	73	 
	Section 5.23 Servicing and Other Compensation
	 	 	74	 
	Section 5.24 1934 Act Reports
	 	 	74	 
	Section 5.25 Annual Statement as to Compliance
	 	 	76	 
	Section 5.26 Assessment of Compliance and Independent Public Accountants’ Attestation; Financial Statements
	 	 	77	 
	Section 5.27 Access to Certain Documentation; Rights of the Depositor in Respect of the Servicer
	 	 	79	 
	Section 5.28 REMIC-Related Covenants
	 	 	79	 
	Section 5.29 Yield Maintenance Agreement
	 	 	80	 
	Section 5.30 The Swap Agreement; Supplemental Interest Trust
	 	 	81	 
	 
	 	 	 	 
	ARTICLE VI PAYMENTS TO THE CERTIFICATEHOLDERS
	 	 	85	 
	Section 6.01 Distributions
	 	 	85	 
	Section 6.02 Statements to the Certificateholders
	 	 	90	 
	Section 6.03 Advances by the Servicer
	 	 	93	 
	Section 6.04 Allocation of Realized Losses
	 	 	93	 
	Section 6.05 Compensating Interest; Allocation of Certain Interest Shortfalls
	 	 	94	 
	Section 6.06 Subordination
	 	 	95	 
	Section 6.07 Determination of LIBOR
	 	 	95	 
	 
	 	 	 	 
	ARTICLE VII REPORTS TO BE PREPARED BY THE SERVICER
	 	 	96	 
	Section 7.01 Servicer Shall Provide Information as Reasonably Required
	 	 	96	 
	Section 7.02 Federal Information Returns and Reports to Certificateholders
	 	 	96	 
	 
	 	 	 	 
	ARTICLE VIII THE DEPOSITOR AND THE SERVICER
	 	 	97	 

ii

 

	 	 	 	 	 
	Section 8.01 Indemnification; Third Party Claims
	 	 	97	 
	Section 8.02 Merger or Consolidation of the Depositor or the Servicer
	 	 	97	 
	Section 8.03 Limitation on Liability of the Depositor, the Servicer, the Trustee and Others
	 	 	98	 
	Section 8.04 Depositor and Servicer Not to Resign
	 	 	99	 
	Section 8.05 Successor to the Servicer
	 	 	99	 
	Section 8.06 Maintenance of Ratings
	 	 	100	 
	 
	 	 	 	 
	ARTICLE IX DEFAULT
	 	 	100	 
	Section 9.01 Events of Default
	 	 	100	 
	Section 9.02 Waiver of Defaults
	 	 	101	 
	Section 9.03 Trustee to Act; Appointment of Successor
	 	 	102	 
	Section 9.04 Notification to Certificateholders and the Rating Agencies
	 	 	102	 
	 
	 	 	 	 
	ARTICLE X CONCERNING THE TRUSTEE
	 	 	102	 
	Section 10.01 Duties of Trustee
	 	 	102	 
	Section 10.02 Certain Matters Affecting the Trustee
	 	 	103	 
	Section 10.03 Trustee Not Liable for Certificates or Mortgage Loans
	 	 	104	 
	Section 10.04 Trustee May Own Certificates
	 	 	104	 
	Section 10.05 Fees and Expenses
	 	 	104	 
	Section 10.06 Eligibility Requirements for Trustee
	 	 	104	 
	Section 10.07 Resignation and Removal of the Trustee
	 	 	105	 
	Section 10.08 Successor Trustee
	 	 	105	 
	Section 10.09 Merger or Consolidation of Trustee
	 	 	106	 
	Section 10.10 Appointment of Co-Trustee or Separate Trustee
	 	 	106	 
	Section 10.11 Appointment of Office or Agency
	 	 	107	 
	Section 10.12 Indemnification
	 	 	107	 
	 
	 	 	 	 
	ARTICLE XI TERMINATION
	 	 	107	 
	Section 11.01 Termination
	 	 	107	 
	 
	 	 	 	 
	ARTICLE XII MISCELLANEOUS PROVISIONS
	 	 	109	 
	Section 12.01 Severability of Provisions
	 	 	109	 
	Section 12.02 Limitation on Rights of Certificateholders
	 	 	109	 
	Section 12.03 Amendment
	 	 	110	 
	Section 12.04 Counterparts
	 	 	111	 
	Section 12.05 Duration of Agreement
	 	 	111	 
	Section 12.06 Governing Law
	 	 	111	 
	Section 12.07 Notices
	 	 	111	 
	Section 12.08 Further Assurances
	 	 	111	 

iii

 

	 	 	 
	EXHIBIT A

	 	MORTGAGE LOAN SCHEDULE
	EXHIBIT B

	 	CONTENTS OF MORTGAGE FILE
	EXHIBIT C

	 	FORM OF CLASS A CERTIFICATE
	EXHIBIT D

	 	FORM OF CLASS M CERTIFICATE
	EXHIBIT E

	 	FORM OF CLASS B CERTIFICATE
	EXHIBIT E-1

	 	FORM OF CLASS CE CERTIFICATE
	EXHIBIT F

	 	FORM OF CLASS A-R CERTIFICATE
	EXHIBIT G

	 	FORM OF TRUSTEE CERTIFICATION
	EXHIBIT H

	 	FORM OF INVESTMENT LETTER
	EXHIBIT I

	 	FORM OF RULE 144A INVESTMENT LETTER
	EXHIBIT J

	 	FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT
	EXHIBIT K

	 	FORM OF CLASS A-R TRANSFEREE LETTER
	EXHIBIT K-1

	 	FORM OF CLASS A-R TRANSFEROR LETTER
	EXHIBIT L

	 	REQUEST FOR RELEASE OF DOCUMENTS
	EXHIBIT M

	 	FORM OF TRANSFEREE ERISA REPRESENTATION LETTER
	EXHIBIT N

	 	[RESERVED]
	EXHIBIT O

	 	FORM OF OFFICER’S CERTIFICATE (PAYING AGENT)
	EXHIBIT P

	 	LETTER OF REPRESENTATIONS
	EXHIBIT Q

	 	[RESERVED]
	EXHIBIT R

	 	SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
	EXHIBIT S

	 	FORM OF SARBANES-OXLEY CERTIFICATION
	EXHIBIT T

	 	FORM OF ITEM 1123 CERTIFICATION OF SERVICER
	EXHIBIT U

	 	FORM OF YIELD MAINTENANCE AGREEMENT
	EXHIBIT V

	 	SCHEDULE I TO YIELD MAINTENANCE AGREEMENT
	EXHIBIT W

	 	FORM OF SWAP SCHEDULE TO MASTER AGREEMENT
	EXHIBIT W-1

	 	FORM OF SWAP CONFIRMATION
	EXHIBIT W-2

	 	FORM OF SWAP CREDIT SUPPORT ANNEX
	SCHEDULE X

	 	1934 ACT FORM 8-K REPORTING OBLIGATIONS
	SCHEDULE Y

	 	1934 ACT FORM 10-D REPORTING OBLIGATIONS
	SCHEDULE Z

	 	1934 ACT FORM 10-K REPORTING OBLIGATIONS

iv

 

     This Pooling and Servicing Agreement, dated as of April 1, 2007, is executed among Chase
Mortgage Finance Corporation, as depositor (together with its permitted successors and assigns, the
“Depositor”), JPMorgan Chase Bank, N.A. (“Chase”), as servicer (in such capacity, together with its
permitted successors and assigns, the “Servicer”), JPMorgan Chase Bank, N.A., as custodian (in such
capacity, together with its permitted successors and assigns, the “Custodian”), The Bank of New
York Trust Company, N.A., as paying agent (in such capacity, together with its permitted successors
and assigns, the “Paying Agent”) and The Bank of New York Trust Company, N.A., as trustee (in such
capacity, together with its permitted successors and assigns, the “Trustee”).

     In consideration of the premises and the mutual agreements hereinafter set forth, the
Depositor, the Servicer and the Trustee agree as follows:

ARTICLE I

DEFINITIONS

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

     ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan, those mortgage
servicing practices (including collection procedures) of prudent mortgage banking institutions
which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan) is
located, and which are in accordance with FNMA servicing practices and procedures for MBS pool
mortgages (as defined in the FNMA Guides including future updates).

     ACCRUAL PERIOD: With respect to any Distribution Date and the Lower-Tier REMIC
Interests and any Class of Certificates and their Corresponding REMIC Regular Interests, the period
from and including the 25th day of the month immediately preceding the related Distribution Date
(or in the case of the first Distribution Date, April 30, 2007) to and including the 24th day of
the month of such Distribution Date; and with respect to the SWAP REMIC Regular Interests and any
Distribution Date, the calendar month immediately preceding the month in which such Distribution
Date occurs. Interest shall accrue on all Classes of Certificates, their Corresponding REMIC
Regular Interests and on all Lower-Tier REMIC Interests on the basis of a 360-day year and the
actual number of days in each Accrual Period, and all calculations of interest on the SWAP REMIC
Regular Interests will be made on the basis of a 360-day year consisting of twelve 30-day months.

     ACCOUNTANT’S ATTESTATION: As defined in Section 5.26(b).

     ADDITIONAL FORM 10-D DISCLOSURE: As defined in Section 5.24(b).

     ADDITIONAL FORM 10-K DISCLOSURE: As defined in Section 5.24(d).

     ADVANCE: The aggregate of the advances made by the Servicer with respect to a
particular Distribution Date pursuant to Section 6.03.

     AFFILIATE: With respect to any specified Person, any other Person controlling,
controlled by or under common control with such Person. For the purposes of this definition,
“control” means the power to direct the management and policies of a Person, directly or
indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

 

 

     AGENCY & TRUST OFFICE: With respect to the Trustee, the office of the Trustee at
which at any particular time its corporate trust business shall be administered, which office at
the date of execution of this instrument is located at 601 Travis, 16th Floor, Houston,
Texas 77002; and, with respect to the Paying Agent, the office of the Paying Agent at which at any
particular time its corporate trust business shall be administered, which office at the date of
execution of this instrument is located at 601 Travis, 16th Floor, Houston, Texas 77002.

     AGREEMENT: This Pooling and Servicing Agreement and all amendments hereof and
supplements hereto.

     ALLOCATED REALIZED LOSS AMOUNT: With respect to any Class of Class A, Class M, Class
B or Class CE Certificates and any Distribution Date, an amount equal to any Realized Loss
allocated to that Class of Certificates on that Distribution Date.

     APPRAISED VALUE: The value set forth in an appraisal or recertification document made
in connection with the origination of the related Mortgage Loan as the value of the Mortgaged
Property (or the related residential dwelling unit in the Underlying Mortgaged Property, in the
case of a Co-op Loan).

     ASSESSMENT OF COMPLIANCE: As defined in Section 5.26(a).

     ASSIGNMENT OF MORTGAGE: An assignment of the Mortgage, notice of transfer (or UCC-3
assignment (or equivalent instrument) with respect to each Co-op Loan) or equivalent instrument, in
recordable form (except in the case of a Co-op Loan), sufficient under the laws of the jurisdiction
where the related Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) is located to reflect of record the sale and assignment of the Mortgage Loan to the Trustee,
which assignment, notice of transfer or equivalent instrument may, if permitted by law, be in the
form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located
in the same county.

     AUTHENTICATING AGENT: The meaning specified in Section 4.06(a).

     AVAILABLE DISTRIBUTION AMOUNT: With respect to any Distribution Date, the total
amount of all cash received by the Paying Agent on the Mortgage Loans or otherwise for deposit into
the Certificate Account in respect of such Distribution Date, including (1) all scheduled
installments of interest (net of the related Servicing Fees) and principal collected on the
Mortgage Loans and due during the Due Period related to such Distribution Date, together with any
Advances in respect thereof, (2) all Insurance Proceeds, Liquidation Proceeds and Subsequent
Recoveries from the Mortgage Loans, in each case for such Distribution Date, (3) all partial or
full Principal Prepayments, together with any accrued interest thereon, identified as having been
received from the related Mortgage Loans during the related Prepayment Period, (4) any amounts
received from the Servicers in respect of Interest Shortfalls with respect to the Mortgage Loans,
(5) the aggregate Purchase Price of all Defective Mortgage Loans in such Mortgage Pool purchased
from the Trust Fund during the related Prepayment Period and (6) on the Distribution Date on which
the Mortgage Pool is to be terminated pursuant to Article XI hereof, any amounts deposited in the
Collection Account pursuant to Article XI hereof, minus:

     (A) all related charges and other amounts payable or reimbursable to the Servicer, the Paying
Agent or the Trustee under this Agreement;

     (B) in the case of (2), (3), (4) and (5) above, any related unreimbursed expenses incurred by
the Servicer in connection with a liquidation or foreclosure and any unreimbursed Advances or
Servicing Advances due to the Servicer;

2

 

     (C) any related unreimbursed Nonrecoverable Advances due to the Servicer; and

     (D) in the case of (1) through (4) above, any related amounts collected which are determined
to be attributable to a subsequent Due Period or Principal Prepayment Period.

     BANKRUPTCY CODE: Title 11 of the United States Code, as the same may be amended from
time to time.

     BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the excess
of (i) the Principal Remittance Amount for such Distribution Date over (ii) the
Overcollateralization Release Amount, if any, for such Distribution Date.

     BASIS RISK SHORTFALL CARRYOVER AMOUNTS: For any Distribution Date and any Class of
LIBOR Certificates, an amount equal to the sum of (i) the excess, if any, of (x) the amount of
interest such Class of Certificates would have accrued on such Distribution Date had its
Certificate Rate for such Distribution Date been equal to the lesser of (a) LIBOR plus the related
Certificate Margin and (b) 11.50% per annum, over (y) the amount of interest such Class of
Certificates accrued for such Distribution Date at the Net WAC (adjusted to an actual/360 basis)
and (ii) the unpaid portion of any Basis Risk Shortfall Carryover Amount for such Class of
Certificates from prior Distribution Dates together with interest accrued on such unpaid portion
for the most recently ended Accrual Period at the lesser of (a) LIBOR plus the Certificate Margin
for such Class of Certificates for the related Accrual Period and (b) 11.50% per annum.

     BENEFICIAL HOLDER: A Person holding a beneficial interest in any Book-Entry
Certificate through a Participant or an Indirect Participant or a Person holding a beneficial
interest in any Definitive Certificate.

     BOOK-ENTRY CERTIFICATES: The Class A Certificates, Class M Certificates and Class B
Certificates, referred to collectively.

     BUSINESS DAY: Any day other than (a) a Saturday or Sunday, (b) a legal holiday in the
States of New York , Louisiana or (c) a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to be closed.

     CAP STRIKE RATE: With respect to the Yield Maintenance Agreement and the applicable
Distribution Date, the rate specified in Exhibit V under the heading “Cap Strike Rate” for that
Distribution Date.

     CASH LIQUIDATION: Recovery of all cash proceeds by the Servicer with respect to the
liquidation of any Mortgage Loan, including Insurance Proceeds and other payments or recoveries
(whether made at one time or over a period of time) which the Servicer deems to be finally
recoverable, in connection with the sale, assignment or satisfaction of such Mortgage Loan,
trustee’s sale, foreclosure sale or otherwise, but only if title to the related Mortgaged Property
(or stock allocated to a dwelling unit, in the case of a Co-op Loan) was not acquired by
foreclosure or deed in lieu of foreclosure by the Servicer pursuant to Section 5.21.

     CERTIFICATE: Any Class A, Class M, Class B, Class A-R or Class CE Certificate.

     CERTIFICATE ACCOUNT: The account created and maintained pursuant to Section 4.05.

     CERTIFICATEHOLDER or HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register, except that, solely for the purposes of giving any consent,
waiver, request or

3

 

demand pursuant to this Agreement, any Certificate registered in the name of the Depositor,
the Servicer, any Sub-Servicer, or any of their respective Affiliates shall be disregarded and the
undivided Percentage Interest evidenced thereby shall not be taken into account in determining
whether the requisite amount of Percentage Interests necessary to effect any such consent, waiver,
request or demand has been obtained. The Trustee and the Paying Agent shall be entitled to
conclusively rely upon the certificate of the Depositor or the Servicer as to the determination of
which Certificates are registered in the name of such Affiliates.

     CERTIFICATE MARGIN: With respect to any Class of LIBOR Certificates and any
Distribution Date:

	 	 	 	 	 	 	 	 	 
	 	 	Margin On or Before Optional Clean-	 	Margin After Optional Clean-Up
	Class	 	Up Call Date	 	Call Date
	A-1
	 	 	0.280	%	 	 	0.560	%
	A-2
	 	 	0.340	%	 	 	0.680	%
	M-1
	 	 	0.400	%	 	 	0.600	%
	M-2
	 	 	0.440	%	 	 	0.660	%
	M-3
	 	 	0.570	%	 	 	0.855	%
	M-4
	 	 	0.850	%	 	 	1.275	%
	M-5
	 	 	1.100	%	 	 	1.650	%
	M-6
	 	 	1.250	%	 	 	1.875	%
	B-1
	 	 	1.250	%	 	 	1.875	%
	B-2
	 	 	1.250	%	 	 	1.875	%
	B-3
	 	 	1.250	%	 	 	1.875	%

     CERTIFICATE OWNER: Any Person who is the beneficial owner of a Book-Entry Certificate
registered in the name of the Depository or its nominee.

     CERTIFICATE RATE: With respect to each Class of LIBOR Certificates and any
Distribution Date, the least of (a) One-Month LIBOR plus the related Certificate Margin, (b) the
related Net WAC, and (c) 11.50%.

     CERTIFICATE REGISTER: The register maintained pursuant to Section 4.02.

     CERTIFICATE REGISTRAR: The Person appointed by the Trustee as Certificate Registrar
pursuant to Section 4.05.

     CHASE: JPMorgan Chase Bank, N.A., a national banking association, or its successor in
interest.

     CHF: Chase Home Finance LLC, a Delaware limited liability company, or its successor in
interest.

     CLASS: Pertaining to the Class A-1, Class A-2, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class A-R, Class B-1, Class B-2, Class B-3, Class CE Certificates and
any SWAP REMIC Interest, Lower-Tier REMIC Interest or REMIC Regular Interest, as the case may be.

4

 

     CLASS A, CLASS M OR CLASS B: Pertaining to Class A Certificates, Class M Certificates
or Class B Certificates, as the case may be.

     CLASS A CERTIFICATES: The Class A-1 and Class A-2 Certificates, referred to
collectively.

     CLASS A PERCENTAGE: With respect to any Distribution Date, the percentage of
principal and interest payments that are allocable to the Class A Certificates pursuant to Section
6.01.

     CLASS A-1 CERTIFICATE: Any one of the Class A-1 Certificates, executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), senior in right of payment to the Class M and
Class B Certificates, substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.

     CLASS A-2 CERTIFICATE: Any one of the Class A-2 Certificates, executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), senior in right of payment to the Class M and
Class B Certificates, substantially in the form of the Class A Certificate set forth in Exhibit C
hereto.

     CLASS A-R CERTIFICATE: The Class A-R Certificate executed by the Depositor and
authenticated by the Trustee (or, if an Authenticating Agent has been appointed pursuant to Section
4.06, the Authenticating Agent), substantially in the form of the Class A-R Certificate set forth
in Exhibit F hereto.

     CLASS
A-R RESERVE FUND: The Eligible Account established pursuant to
Section 6.01(e).

     CLASS B CERTIFICATES: The Class B-1, Class B-2 and Class B-3 Certificates, referred
to collectively.

     CLASS B PERCENTAGE: With respect to any Distribution Date, the percentage of
principal and interest payments that are allocable to the Class B Certificates pursuant to Section
6.01.

     CLASS B-1 CERTIFICATE: Any one of the Class B-1 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A and Class M Certificates, substantially in the form of the Class B Certificate set forth in
Exhibit E hereto.

     CLASS B-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Outstanding Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount
on such Distribution Date), (4) the Outstanding Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount
on such Distribution Date), (5) the Outstanding Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount
on such Distribution Date), (6) the Outstanding Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount
on such Distribution Date), (7) the Outstanding Certificate Principal Balance of the Class M-6
Certificates (after taking into account the payment of the Class M-6 Principal

5

 

Distribution Amount on such Distribution Date) and (8) the Outstanding Certificate Principal
Balance of the Class B-1 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (1) 96.70% and (2) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period and (B) the aggregate Stated Principal
Balance of the Mortgage Loans as of the last day of the related Due Period minus the
Overcollateralization Floor.

     CLASS B-2 CERTIFICATE: Any one of the Class B-2 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A, Class M and Class B-1 Certificates, substantially in the form of the Class B Certificate set
forth in Exhibit E hereto.

     CLASS B-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Outstanding Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount
on such Distribution Date), (4) the Outstanding Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount
on such Distribution Date), (5) the Outstanding Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount
on such Distribution Date), (6) the Outstanding Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount
on such Distribution Date), (7) the Outstanding Certificate Principal Balance of the Class M-6
Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount
on such Distribution Date), (8) the Outstanding Certificate Principal Balance of the Class B-1
Certificates (after taking into account the payment of the Class B-1 Principal Distribution Amount
on such Distribution Date) and (9) the Outstanding Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(1) 97.40% and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus the Overcollateralization Floor.

     CLASS B-3 CERTIFICATE: Any one of the Class B-3 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A, Class M, Class B-1 and Class B-2 Certificates, substantially in the form of the Class B
Certificate set forth in Exhibit E hereto.

     CLASS B-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Outstanding Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount
on such Distribution Date), (4) the Outstanding Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount
on such Distribution Date), (5) the Outstanding Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount
on such Distribution Date), (6) the Outstanding Certificate Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount
on such Distribution Date), (7) the Outstanding Certificate Principal

6

 

Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6
Principal Distribution Amount on such Distribution Date), (8) the Outstanding Certificate Principal
Balance of the Class B-1 Certificates (after taking into account the payment of the Class B-1
Principal Distribution Amount on such Distribution Date), (9) the Outstanding Certificate Principal
Balance of the Class B-2 Certificates (after taking into account the payment of the Class B-2
Principal Distribution Amount on such Distribution Date) and (10) the Outstanding Certificate
Principal Balance of the Class B-3 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (1) 98.40% and (2) the aggregate Stated Principal Balance of
the Mortgage Loans as of the last day of the related Due Period and (B) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due Period minus the
Overcollateralization Floor.

     CLASS CE CERTIFICATE: Any one of the Class CE Certificates executed by the Depositor
and authenticated by the Trustee (or, if an Authenticating Agent has been appointed pursuant to
Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class A, Class M
and Class B Certificates, substantially in the form of the Class CE Certificate set forth in
Exhibit E-1 hereto.

     CLASS CE DISTRIBUTABLE INTEREST RATE: The excess, if any, of (a) the weighted average
of the interest rates on the Lower-Tier REMIC Regular Interests (other than the Class LT-IO
Interest) over (b) two times the weighted average of the interest rates on the Lower-Tier REMIC
Regular Interests (other than the Class LT-IO Interest) (treating for purposes of this clause (b)
the interest rate of each of the Lower-Tier REMIC Marker Classes as being capped at the interest
rate of the Corresponding REMIC Regular Interest of the Corresponding Certificates (as adjusted, if
necessary, to reflect the length of the Accrual Period for the LIBOR Certificates) and treating the
Class LTX Interest as being capped at zero). The averages described in the preceding sentence
shall be weighted on the basis of the respective principal balances of the Lower-Tier REMIC Regular
Interests immediately before any date of determination.

     CLASS CE INTEREST DISTRIBUTION AMOUNT: With respect to any Distribution Date
one-twelfth of the product of (x) a notional amount, equal to the aggregate Stated Principal
Balance of the Mortgage Loans as of the first day of the month immediately preceding the month of
such Distribution Date (after giving effect to Monthly Payments of principal due on such date), and
(y) the Class CE Distributable Interest Rate for such Distribution Date.

     CLASS CE INTEREST SHORTFALL: As to any Distribution Date, the amount by which (i) the
Class CE Interest Distribution Amount on all prior Distribution Dates exceeds (ii) amounts
distributed in respect thereof to the Class CE Certificates on prior Distribution Dates or added to
the aggregate Outstanding Certificate Principal Balance of the Class CE Certificates in respect of
any Overcollateralization Increase Amount (other than amounts so added attributable to Subsequent
Recoveries or proceeds of the Swap Agreement or Yield Maintenance Agreement).

     CLASS CE PERCENTAGE: With respect to any Distribution Date, the percentage of
principal and interest payments that are allocable to the Class CE Certificates pursuant to Section
6.01.

     CLASS LT-R INTEREST: The sole residual interest in the Lower-Tier REMIC.

     CLASS LTX INTEREST: The Lower-Tier REMIC Regular Interest designated as the Class LTX
Interest as described in Section 2.04.

     CLASS M CERTIFICATES: The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and
Class M-6 Certificates, referred to collectively.

7

 

     CLASS M PERCENTAGE: With respect to any Distribution Date, the percentage of
principal and interest payments that are allocable to the Class M Certificates pursuant to Section
6.01.

     CLASS M-1 CERTIFICATE: Any one of the Class M-1 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A Certificates, substantially in the form of the Class M Certificate set forth in Exhibit D hereto.

     CLASS M-1 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date) and (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(1) 92.10% and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus the Overcollateralization Floor.

     CLASS M-2 CERTIFICATE: Any one of the Class M-2 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A Certificates, substantially in the form of the Class M Certificate set forth in Exhibit D hereto.

     CLASS M-2 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date) and (3) the Outstanding Certificate Principal Balance of the Class M-2
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(1) 93.20% and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus the Overcollateralization Floor.

     CLASS M-3 CERTIFICATE: Any one of the Class M-3 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A Certificates, substantially in the form of the Class M Certificate set forth in Exhibit D hereto.

     CLASS M-3 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Outstanding Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount
on such Distribution Date) and (4) the Outstanding Certificate Principal Balance of the Class M-3
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(1) 93.90% and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus the Overcollateralization Floor.

8

 

     CLASS M-4 CERTIFICATE: Any one of the Class M-4 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A Certificates, substantially in the form of the Class M Certificate set forth in Exhibit D hereto.

     CLASS M-4 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Outstanding Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount
on such Distribution Date), (4) the Outstanding Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount
on such Distribution Date) and (5) the Outstanding Certificate Principal Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(1) 94.60% and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus the Overcollateralization Floor.

     CLASS M-5 CERTIFICATE: Any one of the Class M-5 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A Certificates, substantially in the form of the Class M Certificate set forth in Exhibit D hereto.

     CLASS M-5 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution Date), (3) the Outstanding Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount
on such Distribution Date), (4) the Outstanding Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount
on such Distribution Date), (5) the Outstanding Certificate Principal Balance of the Class M-4
Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount
on such Distribution Date) and (6) the Outstanding Certificate Principal Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(1) 95.30% and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus the Overcollateralization Floor.

     CLASS M-6 CERTIFICATE: Any one of the Class M-6 Certificates executed by the
Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been appointed
pursuant to Section 4.06, the Authenticating Agent), subordinated in right of payment to the Class
A Certificates, substantially in the form of the Class M Certificate set forth in Exhibit D hereto.

     CLASS M-6 PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
excess of (x) the sum of (1) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Senior Principal Distribution Amount on
such Distribution Date), (2) the Outstanding Certificate Principal Balance of the Class M-1
Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount
on such Distribution

9

 

Date), (3) the Outstanding Certificate Principal Balance of the Class M-2 Certificates (after
taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (4) the Outstanding Certificate Principal Balance of the Class M-3 Certificates (after
taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution
Date), (5) the Outstanding Certificate Principal Balance of the Class M-4 Certificates (after
taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (6) the Outstanding Certificate Principal Balance of the Class M-5 Certificates (after
taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (7) the Outstanding Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the product of (1) 96.00%
and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period minus the Overcollateralization Floor.

     CLASS PAYMENT SHORTFALL: As defined in Section 2.04(b)(ii) herein.

     CLASS SW-R INTEREST: The sole residual interest in the SWAP REMIC.

     CLOSING DATE: April 26, 2007.

     CODE: The Internal Revenue Code of 1986, as amended from time to time, and any
successor statutes thereto, and applicable U.S. Department of Treasury temporary or final
regulations promulgated thereunder.

     COLLECTION ACCOUNT: The account created and maintained pursuant to Section 5.08.

     COMMISSION: The United States Securities and Exchange Commission.

     COMPENSATING INTEREST: The meaning specified in Section 6.05(a).

     COMPENSATING INTEREST SHORTFALL: The meaning specified in Section 6.05(b).

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

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

     CORRESPONDING CERTIFICATES: With respect to the Class LTA-1 Interest, the Class A-1
Certificates. With respect to the Class LTA-2 Interest, the Class A-2 Certificates. With respect
to the Class LTM-1 Interest, the Class M-1 Certificates. With respect to the Class LTM-2 Interest,
the Class M-2 Certificates. With respect to the Class LTM-3 Interest, the Class M-3 Certificates.
With respect to the Class LTM-4 Interest, the Class M-4 Certificates. With respect to the Class
LTM-5 Interest, the Class M-5 Certificates. With respect to the Class LTM-6 Interest, the Class
M-6 Certificates. With respect to the Class LTB-1 Interest, the Class B-1 Certificates. With
respect to the Class LTB-2 Interest, the Class B-2 Certificates. With respect to the Class LTB-3
Interest, the Class B-3 Certificates.

     CORRESPONDING REMIC REGULAR INTEREST: For each Class of Certificates, the interest in
the Upper-Tier REMIC listed on the same row in the table entitled “Upper-Tier REMIC” in Section
2.04 hereof.

     CUSTODIAN: JPMorgan Chase Bank, N.A., and its permitted successors in interest.

     CUT-OFF DATE: April 1, 2007.

10

 

     DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction in the
scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a
proceeding under the Bankruptcy Code, other than such a reduction resulting from a Deficient
Valuation.

     DEFAULTED SWAP TERMINATION PAYMENT: Any payment required to be made by the
Supplemental Interest Trust to the Swap Counterparty pursuant to the Swap Agreement as a result of
an event of default under the Swap Agreement with respect to which the Swap Counterparty is the
defaulting party or a termination event under that agreement (other than illegality or a tax event)
with respect to which the Swap Counterparty is the sole Affected Party (as defined in the Swap
Agreement).

     DEFICIENT VALUATION: With respect to any Mortgage Loan, a valuation of the related
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) by a court
of competent jurisdiction in an amount less than the then outstanding Principal Balance of the
Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.

     DEFINITIVE CERTIFICATES: The Certificates referred to in Section 4.01(c).

     DEPOSITOR: Chase Mortgage Finance Corporation, a Delaware corporation, or its
successor in interest or any successor under this Agreement appointed as herein provided.

     DEPOSITORY: The Depository Trust Company, the nominee of which is Cede & Co.

     DEPOSITORY AGREEMENT: The agreement referred to in Section 4.01(b).

     DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial institution or
other Person for whom from time to time the Depository effects book-entry transfers and pledges of
securities deposited with the Depository.

     DETERMINATION DATE: The sixteenth day of the month in which the related Distribution
Date occurs (or, if such sixteenth day is not a Business Day, the preceding Business Day).

     DISQUALIFIED ORGANIZATION: An organization referred to in Section 860E(e)(5) of the
Code.

     DISTRIBUTION DATE: The 25th day of any month, or if such 25th day is not a Business
Day, the first Business Day immediately following, beginning with May 25, 2007.

     DUE DATE: The first day of each month, being 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 any Distribution Date, the period from the second day of
the month preceding the month in which such Distribution Date occurs through the first day of the
month in which such Distribution Date occurs.

     ELIGIBLE ACCOUNT: An account that is (i) maintained with a depository institution the
long-term unsecured debt obligations of which are rated by each Rating Agency in one of its two
highest rating categories, or (ii) maintained with the corporate trust department of a national
bank or banking corporation which (a) has a rating of at least Baa3 or P-3 by Moody’s and (b) is
either Chase or is the corporate trust department of a national bank or banking corporation which
has a rating of at least A-1 by S&P and F1 by Fitch Ratings, or (iii) an account or accounts the
deposits in which are fully insured by the FDIC, or (iv) an account or accounts in a depository
institution in which such accounts are insured by the FDIC (to the limit established by the FDIC),
the uninsured deposits in which accounts are otherwise

11

 

secured such that, as evidenced by an Opinion of Counsel delivered to and acceptable to the
Trustee and each Rating Agency, the Certificateholders have a claim with respect to the funds in
such account and a perfected first security interest against any collateral (which shall be limited
to Eligible Investments) securing such funds that is superior to claims of any other depositors or
creditors of the depository institution with which such account is maintained, provided, however,
that such uninsured deposits do not result in the reduction of the ratings assigned to the
Certificates by the Rating Agencies as evidenced by a letter from each Rating Agency or (v)
otherwise acceptable to each Rating Agency without reduction or withdrawal of the rating of any
Class of Certificates, as evidenced by a letter from each Rating Agency.

     ELIGIBLE INVESTMENTS: One or more of the following:

     (i) obligations of, or guaranteed as to principal and interest by, the United States or
obligations of any agency or instrumentality thereof when such obligations are backed by the full
faith and credit of the United States; provided that any such obligation held as a “cash flow
investment” within the meaning of section 860G(a)(6) of the Code shall mature before the next
Distribution Date;

     (ii) repurchase agreements on obligations specified in clause (i) maturing not more than two
months from the date of acquisition thereof, provided that the long-term unsecured obligations of
the party agreeing to repurchase such obligations are at the time rated by each Rating Agency with
its highest rating and the short-term debt obligations of the party agreeing to repurchase are
rated with one of the two highest ratings by Moody’s and A-1+ by S&P;

     (iii) federal funds, certificates of deposit, time deposits and bankers’ acceptances (other
than bankers’ acceptances issued by Chase or any of its Affiliates) (which shall each have an
original maturity of not more than 60 days and, in the case of bankers’ acceptances, shall in no
event have an original maturity of more than 365 days) of any United States depository institution
or trust company incorporated under the laws of the United States or any state, provided that the
long-term unsecured debt obligations of such depository institution or trust company at the date of
acquisition thereof have been rated by each Rating Agency with its highest rating and the
short-term obligations of such depository institution or trust company are rated A-1+ by S&P and
P-1 by Moody’s;

     (iv) commercial paper (other than commercial paper issued by Chase or any of its Affiliates)
(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 on the date of acquisition has been rated by
each Rating Agency in its highest short-term unsecured commercial paper rating category; provided
that such commercial paper shall have a remaining maturity of not more than 45 days;

     (v) units of taxable money market funds (including those for which the Trustee or the Servicer
or any Affiliate thereof acts as sponsor, administrator or the like and receives compensation with
respect to such investment) which may be 12b-1 funds, as contemplated under the rules promulgated
by the Commission under the Investment Company Act of 1940, as amended, and which funds have been
rated by each Rating Agency in its highest rating category or which have been designated in writing
by each Rating Agency as Eligible Investments with respect to this definition; or

     (vi) other obligations or securities (other than investments or obligations of Chase or any of
its Affiliates) acceptable to each Rating Agency rating the Certificates as an Eligible Investment
hereunder and will not result in a reduction or withdrawal in the then current rating of any Class
of Certificates, as evidenced by a letter to such effect from each Rating Agency;

     provided that no such instrument shall be an Eligible Investment if such instrument evidences
either (a) a right to receive only interest payments with respect to the obligations underlying
such instrument, or (b) both principal and interest payments derived from obligations underlying
such

12

 

instrument where the interest and principal payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such underlying
obligations; and provided further that no such instrument shall be purchased above par; and
provided further that each Eligible Investment must be a “permitted investment” within the meaning
of Section 860G(a)(5) of the Code.

     ERISA: The Employee Retirement Income Security Act of 1974, as amended from time to
time, and any successor statutes thereto, and applicable U.S. Department of Labor temporary or
final regulations promulgated thereunder.

     ERISA QUALIFYING UNDERWRITING: A best efforts or firm commitment underwriting or
private placement that would satisfy the requirements of Prohibited Transaction Exemption 2002-19,
67 Fed. Reg. 14797 (March 28, 2002), as amended, or any substantially similar administrative
exemption granted by the U.S. Department of Labor to Chase, except, in relevant part, for the
requirement that the certificates have received a rating at the time of acquisition that is in one
of the three (or four, in the case of a “designated transaction”) highest generic rating categories
by at least one of the Rating Agencies.

     ERISA RESTRICTED CERTIFICATE: Any Class CE Certificate and any other Certificate, as
long as the acquisition and holding of such Certificate is not covered by and exempt under
Prohibited Transaction Exemption 2002-19, 67 Fed. Reg. 14797 (March 28, 2002), as amended, or any
substantially similar administrative exemption granted by the U.S. Department of Labor to Chase.

     ESCROW ACCOUNT: The account or accounts created and maintained pursuant to Section
5.10.

     ESCROW PAYMENTS: The amounts constituting applicable ground rents, taxes,
assessments, water rates, Standard Hazard Policy premiums and other payments required to be
escrowed by the Mortgagor with the mortgagee pursuant to a Mortgage Loan.

     EVENT OF DEFAULT: Any of the events specified in Section 9.01.

     EXCEPTION REPORT: The report of the Custodian or Trustee, as applicable, referred to
in Section 2.02.

     EXCESS INTEREST: On any Distribution Date, for each Class of the Class A, Class M and
Class B Certificates, the excess, if any, of (1) the amount of interest such Class of Certificates
is entitled to receive on such Distribution Date over (2) the amount of interest such Class of
Certificates would have been entitled to receive on such Distribution Date at an interest rate
equal to the REMIC Pass-Through Rate.

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

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

     FHLMC: The Federal Home Loan Mortgage Corporation or any successor organization.

     FIDELITY BOND: The fidelity bond and errors and omissions insurance to be maintained
by the Servicer pursuant to Section 5.19.

     FINAL SCHEDULED DISTRIBUTION DATE: The Distribution Date in May 2037.

     FITCH RATINGS: Fitch, Inc. or its successor in interest.

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     FNMA: The Federal National Mortgage Association, or any successor organization.

     FNMA GUIDES: The FNMA Sellers’ Guide and the FNMA Servicers’ Guide, and all
amendments or additions thereto.

     INDIRECT PARTICIPANT: A broker, dealer, bank or other financial institution or other
Person that clears through or maintains a custodial relationship with a Depository Participant,
either directly or indirectly.

     INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any insurance policy
covering a Mortgage Loan, net of costs of collecting such proceeds and net of amounts released to
the Mortgagor or applied to the restoration of the Mortgaged Property (or in the underlying
Mortgaged Property, in the case of a Co-op Loan).

     INSURED EXPENSES: Expenses covered by any insurance policy.

     INTEREST DISTRIBUTION AMOUNT: With respect to each Distribution Date and each Class
of Certificates entitled to distributions of interest, an amount equal to the amount of interest
accrued during the related Accrual Period at the related Certificate Rate on the Outstanding
Certificate Principal Balance of such Class of Certificates for such Distribution Date, in each
case, reduced by any Net Interest Shortfalls allocated to such Class of Certificates as such
shortfalls are allocated.

     INTEREST REMITTANCE AMOUNT: The portion of the Available Distribution Amount not
consisting of the Principal Remittance Amount.

     INTEREST SHORTFALL: As to any Class of Certificates and any Distribution Date, (i)
the amount by which the Interest Distribution Amount for such Class on all prior Distribution Dates
exceeds (ii) amounts distributed in respect thereof to such Class on prior Distribution Dates.

     LATE COLLECTIONS: With respect to any Mortgage Loan, all amounts received during any
Due Period, whether as late payments of Monthly Payments or as Liquidation Proceeds, condemnation
proceeds, Insurance Proceeds, Subsequent Recoveries or with respect to a disposition of a Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) which has been
acquired by foreclosure or deed in lieu of foreclosure or otherwise, which represent late payments
or collections of Monthly Payments due but delinquent for a previous Due Period and not previously
recovered.

     LIBOR: With respect to any Distribution Date and the Certificate Rates on the LIBOR
Certificates, LIBOR as determined in accordance with Section 6.07.

     LIBOR BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii) a day on
which banking institutions in the city of London, England are required or authorized by law to be
closed.

     LIBOR CERTIFICATES: The Class A, Class M and Class B Certificates.

     LIQUIDATED MORTGAGE LOAN: Any Mortgage Loan (a) as to which the Servicer has
determined that all amounts which it expects to recover from or on account of such Mortgage Loan or
property acquired in respect thereof have been recovered, (b) as to which a Cash Liquidation has
taken place or (c) with respect to which the Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) has been acquired by foreclosure or deed in lieu of foreclosure
and a disposition (the term disposition shall include, for purposes of a repurchase pursuant to
Section 11.01, any repurchase of a Mortgaged Property (or stock allocated to a dwelling unit, in
the case of a Co-op Loan) pursuant to

14

 

such Section) of such Mortgaged Property (or stock allocated to a dwelling unit, in the case
of a Co-op Loan) has occurred.

     LIQUIDATION EXPENSES: Expenses which are incurred by the Servicer or any Sub-Servicer
in connection with the liquidation of any defaulted Mortgage Loan or property acquired in respect
thereof including, without limitation, legal fees and expenses, any unreimbursed amount expended by
the Servicer pursuant to Sections 5.16 and 5.21 respecting the related Mortgage Loan and any
related and unreimbursed expenditures for real estate property taxes or for property restoration or
preservation.

     LIQUIDATION PROCEEDS: Cash (including Insurance Proceeds) received by the Servicer in
connection with the liquidation of any Mortgage Loan or Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) acquired in respect thereof, whether through the sale
or assignment of such Mortgage Loan (other than pursuant to Section 5.21), trustee’s sale,
foreclosure sale or otherwise, or the sale of the Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) if the Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) is acquired in satisfaction of the Mortgage Loan other
than amounts required to be paid to the Mortgagor pursuant to law or the terms of the applicable
Mortgage Note.

     LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage, the numerator of which
is the principal amount of the related Mortgage Loan at the time of origination (or, (i) for
purposes of Section 5.15, at the time of determination and (ii) for purposes of a Mortgage Loan
with respect to which a conversion from adjustable rate to fixed rate has occurred, at the time of
initial origination) and the denominator of which is the Appraised Value of the related Mortgaged
Property (or applicable dwelling unit, in the case of a Co-op Loan) at the time of origination or,
in the case of a Mortgage Loan financing the acquisition of the Mortgaged Property (or applicable
dwelling unit, in the case of a Co-op Loan), the sales price of the Mortgaged Property (or
applicable dwelling unit, in the case of a Co-op Loan), if such sales price is less than such
appraised value; provided however, certain Mortgage Loans financing the acquisition of a Mortgaged
Property in New York will be based solely on the appraised value.

     LOWER-TIER REMIC: The Lower-Tier REMIC as described in Section 2.04.

     LOWER-TIER REMIC INTEREST: Any one of the Classes of Lower-Tier REMIC Interests
described in Section 2.04.

     LOWER-TIER REMIC MARKER CLASS: Any one of the Classes of Lower-Tier REMIC Regular
Interests other than the Class LTX Interest and other than the Class LT-IO Interest.

     LOWER-TIER REMIC REGULAR INTEREST: Any one of the Lower-Tier REMIC Interests other
than the Class LT-R Interest.

     MERS: Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any
successor in interest thereto.

     MERS MORTGAGE LOAN: Any Mortgage Loan as to which the related Mortgage, or an
Assignment of Mortgage, has been or will be recorded in the name of MERS or otherwise assigned to
MERS, as agent for the holder from time to time of the Mortgage Note.

     MODIFIED MORTGAGE LOAN: Any Mortgage Loan which the Servicer has modified pursuant to
Section 5.01.

     MONTHLY PAYMENT: The minimum required monthly payment of principal and interest due
on a Mortgage Loan as specified in the Mortgage Note for any Due Date (before any adjustment to
such

15

 

scheduled amount by reason of any bankruptcy or similar proceeding or any moratorium or
similar waiver or grace period). Monthly Payments shall be deemed due on an Outstanding Mortgage
Loan until such time as it becomes a Liquidated Mortgage Loan.

     MOODY’S: Moody’s Investors Service, Inc. or its successor in interest.

     MORTGAGE: With respect to a Mortgage Loan that is not a Co-op Loan, the mortgage,
deed of trust or other instrument creating a first lien or a first priority ownership interest in
an estate in fee simple in real property securing a Mortgage Note. With respect to a Co-op Loan,
the security agreement creating a security interest in the stock allocated to a dwelling unit in a
residential cooperative housing corporation and pledged to secure such Co-op Loan and the related
Co-op Lease.

     MORTGAGE FILE: As to each Mortgage Loan, the items referred to in Exhibit B annexed
hereto.

     MORTGAGE LOAN: An individual mortgage loan and all rights with respect thereto,
evidenced by a Mortgage and a Mortgage Note, sold and assigned by the Depositor to the Trustee and
which is subject to this Agreement and included in the Trust Fund. The Mortgage Loans originally
sold and subject to this Agreement are identified on the Mortgage Loan Schedule.

     MORTGAGE LOAN SCHEDULE: The schedule of Mortgage Loans attached hereto as Exhibit A
as it may be amended in accordance with Section 3.03, setting forth the following information as to
each Mortgage Loan: (i) the Mortgage Loan identifying number; (ii) the city, state and zip code of
the Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan); (iii) an
indication of whether the Mortgaged Property (or the related residential dwelling unit in the
Underlying Mortgaged Property, in the case of a Co-op Loan) is owner-occupied; (iv) the property
type of the Mortgaged Property (or the related residential dwelling unit in the Underlying
Mortgaged Property, in the case of a Co-op Loan); (v) the original number of months to stated
maturity; (vi) the number of months remaining to stated maturity from the Cut-off Date; (vii) the
original Loan-to-Value Ratio; (viii) the original principal balance of the Mortgage Loan; (ix) the
unpaid principal balance of the Mortgage Loan as of the close of business on the Cut-off Date; (x)
the Mortgage Rate; and (xi) the amount of the current Monthly Payment.

     MORTGAGE NOTE: The note or other evidence of the indebtedness of a Mortgagor secured
by a Mortgage.

     MORTGAGE POOL: The pool of Mortgage Loans held in the Trust Fund.

     MORTGAGE POOL PRINCIPAL BALANCE: As of any date of determination, the aggregate of
the Principal Balances of each Outstanding Mortgage Loan on such date of determination less the
principal portion of any Monthly Payment due but not paid with respect to which an Advance has not
been made, initially $600,011,458.17.

     MORTGAGED PROPERTY: The property securing a Mortgage Note.

     MORTGAGE RATE: With respect to each Mortgage Loan, the per annum rate of interest
borne by the Mortgage Loan, as specified in the Mortgage Note. The Mortgage Rate for any Mortgage
Loan shall be zero with respect to the period prior to the period during which interest accrues
with respect to such Mortgage Loan’s first Monthly Payment.

     MORTGAGOR: The obligor on a Mortgage Note.

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     NET INTEREST SHORTFALL: With respect to any Distribution Date, an amount equal to the
sum of: (i) any Compensating Interest Shortfalls for that Distribution Date, and (ii) Relief Act
Reductions for such Distribution Date.

     NET LIQUIDATION PROCEEDS: As to any Liquidated Mortgage Loan, Liquidation Proceeds
net of Liquidation Expenses.

     NET MONTHLY EXCESS CASHFLOW: With respect to any Distribution Date, the sum of (a)
any Overcollateralization Release Amount and (b) the excess of (x) the Available Distribution
Amount for such Distribution Date over (y) the sum for such Distribution Date of (A) the aggregate
of the Interest Distribution Amounts for the Class A, Class M and Class B Certificates, (B) the
Interest Shortfall for the Class A Certificates, (C) Net Swap Payments made by the Supplemental
Interest Trust and any Swap Termination Payments (unless the Swap Counterparty is the defaulting
party) and (D) the Principal Remittance Amount.

     NET MORTGAGE RATE: With respect to each Mortgage Loan, a per annum rate of interest
for the applicable period equal to the Mortgage Rate less (i) the Servicing Fee Rate and (ii) in
the case of a substitute Mortgage Loan, any excess of the Mortgage Rate on the substitute Mortgage
Loan over the Mortgage Rate on the removed Mortgage Loan.

     NET RATE: The per annum rate set forth in footnote 3 to the description of the
Lower-Tier REMIC in Section 2.04 herein (such rate being based on the weighted average of the
interest rates on the SWAP REMIC Regular Interests as adjusted and as set forth in such footnote).

     NET SWAP PAYMENT: With respect to any Distribution Date, any net payment (other than
a Swap Termination Payment or Defaulted Swap Termination Payment) made by the Supplemental Interest
Trust to the Swap Counterparty on the related Fixed Rate Payer Payment Date (as defined in the Swap
Agreement) or made by the Swap Counterparty to the Supplemental Interest Trust on the related
Floating Rate Payer Payment Date (as defined in the Swap Agreement), each determined in accordance
with the Swap Agreement. In each case, the Net Swap Payment shall not be less than zero.

     NET WAC: As of any Distribution Date, the weighted average of the Mortgage Rates of
the Mortgage Loans as of the first day of the calendar month immediately preceding the calendar
month of such Distribution Date, net of the sum of (i) the Servicing Fee Rate and (ii) any Net Swap
Payment or Swap Termination Payment (unless the Swap Counterparty is the defaulting party or the
sole affected party under the Swap Agreement) made to the Swap Counterparty for such Distribution
Date divided by the aggregate of the Stated Principal Balances of the Mortgage Loans as of the
beginning of the related Due Period, weighted on the basis of their Stated Principal Balances as of
that date, multiplied by a fraction, the numerator of which is 30 and the denominator of which is
the actual number of days in the related Accrual Period.

     NON-MERS MORTGAGE LOAN: Any Mortgage Loan other than a MERS Mortgage Loan.

     NONRECOVERABLE ADVANCE: Any Advance previously made or proposed to be made in respect
of a Mortgage Loan by the Servicer pursuant to Section 6.03 which, in the good faith judgment of
the Servicer, will not or, in the case of a proposed Advance, would not, ultimately be recoverable
by the Servicer from Late Collections or otherwise. The determination by the Servicer that it has
made, or would be making, a Nonrecoverable Advance shall be evidenced by a certificate of a
Servicing Officer of the Servicer delivered to the Trustee, any co-trustee and the Depositor and
detailing the reasons for such determination.

17

 

     OFFICERS’ CERTIFICATE: A certificate signed by two of the Chairman of the Board, the
Vice Chairman of the Board, the President or a Vice President, the Treasurer or the Secretary or
one of the Assistant Treasurers or Assistant Secretaries or any other duly authorized officer of
the Depositor or the Servicer, and delivered to the Trustee.

     OPINION OF COUNSEL: A written opinion of counsel, who may be counsel for the
Depositor or the Servicer and who is reasonably acceptable to the Trustee.

     OPTIONAL CLEAN-UP CALL DATE: The first Distribution Date following a Due Date on
which the aggregate unpaid Principal Balance of all Outstanding Mortgage Loans is less than 10% of
the aggregate unpaid Principal Balance of the Mortgage Loans on the Cut-off Date.

     ORIGINAL CERTIFICATE PRINCIPAL
 BALANCE: With respect to any Class of Certificates (other than
the Class CE Certificates),
the amount specified for such Class in Section 4.01(d) and, with
respect to the Class CE Certificates, the initial
Overcollateralized Amount.

     OUTSTANDING CERTIFICATE
 PRINCIPAL BALANCE: With respect to any Class of Certificates
and any Distribution Date, the Original Certificate Principal Balance of such Class minus
the sum of (i) any distributions of principal made on such Class prior to such Distribution Date
and (ii) any Realized Losses allocated to such Class prior to such Distribution Date; provided,
however, that on each Distribution Date, after all distributions of principal on such Distribution
Date, an amount equal to the Overcollateralization Increase Amount for such Distribution Date will
be added to the aggregate Outstanding Certificate Principal Balance of the Class CE Certificates
(on a pro rata basis); provided, further, however that on any Distribution Date on which a
Subsequent Recovery is distributed, the Outstanding Certificate Principal Balance of any Class of
Certificates then outstanding for which any Realized Loss has been applied will be increased, in
order of seniority (with the Class A-2 Certificates being deemed to be more junior than the other
Class A Certificates), by an amount equal to the lesser of (i) the amount the Class of Certificates
has been reduced by any Realized Losses which have not been previously offset by any Subsequent
Recovery pursuant to this proviso and (ii) the total amount of any Subsequent Recovery distributed
on such date to Certificateholders (as reduced (x) by increases in the Outstanding Certificate
Principal Balance of more senior Classes of Certificates on such Distribution Date and (y) to
reflect a proportionate amount of what would (but for this clause (y)) have been the increases in
the Outstanding Certificate Principal Balance of Classes of Certificates of equal seniority on such
Distribution Date).

     OUTSTANDING MORTGAGE LOAN: As to any Distribution Date, a Mortgage Loan which was not
paid in full during the related or any previous Principal Prepayment Period, which did not become a
Liquidated Mortgage Loan during the related or any previous Principal Prepayment Period and which
was not repurchased under Section 2.02, 3.01, 5.01, 5.21 or 11.01 during the related or any
previous Principal Prepayment Period.

     OVERCOLLATERALIZATION DEFICIENCY AMOUNT: With respect to any Distribution Date, the
amount, if any, by which the Overcollateralization Target Amount exceeds the Overcollateralized
Amount on such Distribution Date (after giving effect to distributions in respect of the Principal
Remittance Amount on such Distribution Date).

     OVERCOLLATERALIZATION FLOOR: With respect to any Distribution Date, an amount equal
to the product of (i) 0.50% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date.

     OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Distribution Date, the
lesser of (x) the Net Monthly Excess Cashflow for such Distribution Date and (y) the
Overcollateralization Deficiency Amount for such Distribution Date.

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     OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Distribution Date, the
lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the excess, if
any, of (1) the Overcollateralized Amount for such Distribution Date over (2) the
Overcollateralization Target Amount for such Distribution Date.

     OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any Distribution Date, (1) prior
to the Step-Down Date, 0.80% of the aggregate Stated Principal Balance of the Mortgage Loans as of
the Cut-off Date, (2) on or after the Step-Down Date, provided a Trigger Event is not in effect,
the greater of (x) 1.60% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
last day of the related Due Period and (y) the Overcollateralization Floor, and (3) on or after the
Step-Down Date, if a Trigger Event is in effect, the Overcollateralization Target Amount for the
immediately preceding Distribution Date.

     OVERCOLLATERALIZED
AMOUNT: With respect to any Distribution Date, the amount, if
any, by which (x) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the
related Due Period exceeds (y) the sum of the aggregate Outstanding Certificate Principal Balance
of the Certificates (excluding the Class CE Certificates) as of such Distribution Date (assuming
that 100% of the Principal Remittance Amount is applied as a principal payment on such Distribution
Date).

     PASS-THRU ENTITY: A “Pass-Thru Entity” as defined in Section 860E(e)(6) of the Code.

     PAYING AGENT: The Person appointed by the Trustee as Paying Agent pursuant to Section
4.05.

     PERCENTAGE INTEREST: As to any Certificate, the percentage interest evidenced thereby
in distributions required to be made hereunder, such percentage interest being equal, with respect
to any Class, to the percentage obtained by dividing the Outstanding Certificate Principal Balance
of such Certificate by the aggregate of the Outstanding Certificate Principal Balances of all the
Certificates of such Class and with respect to all Certificates, the percentage obtained by
dividing the Outstanding Certificate Principal Balance of such Certificate by the aggregate of the
Outstanding Certificate Principal Balances of all the Certificates.

     PERMITTED ACTIVITIES: The primary activities of the Trust created pursuant to this
Agreement which shall be: (i) holding Mortgage Loans transferred from the Depositor and other
assets of the Trust Fund, including any credit enhancement and passive derivative financial
instruments that pertain to beneficial interests issued or sold to parties other than the
Depositor, its Affiliates, or its agents; (ii) issuing certificates and other interests in the
assets of the Trust Fund; (iii) receiving collections on the Mortgage Loans and making payments on
such certificates and interests in accordance with the terms of this Agreement; and (iv) engaging
in other activities that are necessary or incidental to accomplish these limited purposes, which
activities cannot be contrary to the status of the Trust Fund as a qualified special purpose entity
under existing accounting literature.

     PERSON: Any individual, corporation, partnership, limited liability company, limited
liability partnership, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

     PLAN: As defined in Section 4.02(d)(i).

     PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty insurance or any
replacement policy therefor referred to in Section 5.15 hereof.

19

 

     PRINCIPAL BALANCE: At the time of any determination, the principal balance of a
Mortgage Loan remaining to be paid at the close of business on the Cut-off Date (after deduction of
all principal payments due on or before the Cut-off Date whether or not paid) (or, in the case of a
substitute Mortgage Loan included in the Trust Fund pursuant to Section 3.03, the close of business
as of the date of substitution) reduced by all amounts previously distributed to Certificateholders
that are allocable to payments of principal on such Mortgage Loan (including the principal portion
of Advances of the Servicer made pursuant to Section 6.03).

     PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Distribution Date, the
sum of (i) the Basic Principal Distribution Amount for such Distribution Date and (ii) the
Overcollateralization Increase Amount for such Distribution Date.

     PRINCIPAL PREPAYMENT: Any payment or other recovery of principal on a Mortgage Loan
(other than Late Collections) which is received other than as part of a monthly payment; provided,
however, that the term Principal Prepayment does not include Insurance Proceeds, Liquidation
Proceeds, Subsequent Recoveries, condemnation awards or other cash proceeds from a source other
than the applicable Mortgagor.

     PRINCIPAL PREPAYMENT PERIOD: With respect to any Distribution Date, the period
beginning on the first day of the month preceding the month in which such Distribution Date occurs
and ending on the last day of such month.

     PRINCIPAL REMITTANCE AMOUNT: With respect to any Distribution Date, the portion of
the Available Distribution Amount equal to the sum of (i) all scheduled payments of principal
collected or advanced on the Mortgage Loans by the Servicer that were due during the related Due
Period, (ii) the principal portion of each full and partial principal prepayment made by a borrower
on a Mortgage Loan during the related Principal Prepayment Period, (iii) each other unscheduled
collection, including insurance proceeds and net liquidation proceeds representing or allocable to
recoveries of principal of the Mortgage Loans received during the related Prepayment Period,
including any Subsequent Recoveries on the Mortgage Loans, (iv) the principal portion of the
purchase price of each Mortgage Loan repurchased by the Seller due to a defect in documentation or
a material breach of a representation and warranty with respect to such Mortgage Loan or, in the
case of a permitted substitution of a defective Mortgage Loan, the amount representing any
principal adjustment in connection with any such replaced Mortgage Loan with respect to the related
Principal Prepayment Period and (v) in connection with any optional purchase of the Mortgage Loans,
the principal portion of the Purchase Price, up to the principal portion of such Purchase Price.

     PTCE: As defined in Section 4.02(d)(i).

     PURCHASE PRICE: With respect to any Mortgage Loan required to be purchased on any
date pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01, an amount equal to the sum of (a) 100% of
the Principal Balance thereof, (b) unpaid accrued interest at the Mortgage Rate thereon from the
Due Date on which interest was last paid by the Mortgagor or Advanced by the Servicer to the Due
Date next following the date of repurchase, (c) the aggregate of any unreimbursed Advances and any
unreimbursed Servicing Advances and (d) any unreimbursed costs, penalties and/or damages incurred
by the Trust Fund and/or the Trustee in connection with any violation relating to such Mortgage
Loan of any predatory or abusive lending law.

     QUALIFIED INSURER: An insurance company duly qualified as such under the laws of the
states in which the Mortgaged Properties are located, duly authorized and licensed in such states
to transact the applicable insurance business and to write the insurance provided, approved as an
insurer by FNMA and FHLMC and whose claims-paying ability is rated in the two highest rating
categories by S&P

20

 

and Moody’s with respect to primary mortgage insurance and in the two highest rating
categories for general policyholder rating and financial performance index rating by A.M. Best
Company or its successor in interest with respect to hazard and flood insurance.

     RATE ADJUSTMENT DATE: The second LIBOR Business Day prior to the first day of each
Accrual Period after the initial Accrual Period.

     RATE CAP CEILING: With respect to the Yield Maintenance Agreement and the applicable
Distribution Date, the rate specified in Exhibit V under the heading “Rate Cap Ceiling” for that
Distribution Date.

     RATING AGENCY: Any nationally recognized statistical rating organization, or its
successor, that rated one or more Classes of Certificates at the request of the Depositor at the
time of the initial issuance of the Certificates. If such organization or a successor is no longer
in existence, “Rating Agency” shall be such nationally recognized statistical rating organization,
or other comparable Person, designated by the Depositor, notice of which designation shall be given
to the Trustee and the Servicer. References herein to the two highest long-term debt rating
categories of a Rating Agency shall mean AA or better in the case of S&P and Fitch Ratings and Aa
or better in the case of Moody’s.

     REALIZED LOSS: With respect to (i) a Liquidated Mortgage Loan, the amount, if any, by
which the unpaid Principal Balance and accrued interest thereon at a rate equal to the Net Mortgage
Rate exceeds the amount actually recovered by the Servicer with respect thereto (net of
reimbursement of Advances and Servicing Advances) at the time such Mortgage Loan became a
Liquidated Mortgage Loan or (ii) with respect to a Mortgage Loan which is not a Liquidated Mortgage
Loan, any amount of principal that the Mortgagor is no longer legally required to pay (except for
the extinguishment of debt that results from the exercise of remedies due to default by the
Mortgagor).

     REALIZED LOSS INTEREST SHORTFALL: The meaning specified in Section 6.05(c).

     RECORD DATE: With respect to the Class A, Class M and Class B Certificates, the close
of business on the Business Day immediately preceding the Distribution Date. With respect to the
Class A-R and Class CE Certificates, the close of business on the last Business Day of the calendar
month preceding the month of the related Distribution Date.

     REFERENCE BANK RATE: The rate determined on the basis of the rates at which deposits
in U.S. dollars are offered by the reference banks (which shall be three major banks that are
engaged in transactions in the London interbank market, selected by the Servicer or its designee)
as of 11:00 A.M., London time, on the day that is two LIBOR Business Days prior to the first date
of the related Accrual Period to prime banks in the London interbank market for a period of one
month in amounts approximately equal to the aggregate of the outstanding principal balance of the
Certificates (other than the Class A-R and Class CE Certificates). The Servicer or its designee
will request the principal London office of each of the reference banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate will be the arithmetic mean of the
quotations. If on such date fewer than two quotations are provided as requested, the rate will be
the arithmetic mean of the rates quoted by one or more major banks in New York City, selected by
the Servicer or its designee, as of 11:00 A.M., New York City time, on such date for loans in U.S.
dollars to leading European banks for a period of one month in amounts approximately equal to the
aggregate of the outstanding principal balance of the Certificates (other than the Class A-R and
Class CE Certificates). If no such quotations can be obtained, the rate will be LIBOR for the prior
Distribution Date, or in the case of the first Rate Adjustment Date, 5.320%.

     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

21

 

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.

     RELEVANT MORTGAGE LOAN: The meaning specified in Section 5.01.

     RELATED CERTIFICATES: With respect to each Class of REMIC Regular Interests, the
related Certificates set forth in the table under “Upper-Tier REMIC” in Section 2.04(a).

     RELIEF ACT: The Servicemembers Civil Relief Act or the California Military and
Veterans Code, as amended, or any other similar state or local law.

     RELIEF ACT REDUCTIONS: With respect to any Distribution Date and any Mortgage Loan as
to which there has been a reduction in the amount of interest collectible thereon for the most
recently ended calendar month as a result of the application of the Relief Act, the amount, if any,
by which (i) interest collectible on such Mortgage Loan for the most recently ended calendar month
is less than (ii) interest accrued thereon for such month pursuant to the Mortgage Note.

     REMIC: A “real estate mortgage investment conduit,” as such term is defined in
Section 860D of the Code. References herein to “a REMIC” or “the REMICs” shall mean one or all, as
the context requires, of the REMICs created hereunder.

     REMIC NET WAC: As of any Distribution Date, the weighted average of the Net Mortgage
Rates of the Mortgage Loans as of the first day of the calendar month immediately preceding the
calendar month of such Distribution Date, weighted on the basis of their Stated Principal Balances
as of that date.

     REMIC PASS-THROUGH RATE: In the case of a Class of the Class A, Class M and Class B
Certificates, the Upper-Tier REMIC Net WAC Cap for the Corresponding REMIC Regular Interest.

     REMIC POOL: Each of the SWAP REMIC, the Lower-Tier REMIC and the Upper-Tier REMIC.

     REMIC PROVISIONS: Provisions of the federal income tax law relating to REMICs which
appear at Sections 860A through 860G of Part IV of Subchapter M of Chapter 1 of Subtitle A of the
Code, and related provisions, and U.S. Department of the Treasury temporary, proposed or final
regulations and rulings promulgated thereunder, as the foregoing are in effect (or with respect to
proposed regulations, are proposed to be in effect) from time to time.

     REMIC REGULAR INTEREST: Each of the interests in the Upper-Tier REMIC as set forth in
Section 2.04 other than the Residual Interest.

     REMIC SWAP RATE: For each Distribution Date (and the related Accrual Period), a per
annum rate equal to the Fixed Rate under the Swap Agreement for such Distribution Date, as set
forth in the Swap Agreement.

     REMIC REPORTING AGENT: As defined in Section 7.02(b).

     REPURCHASE PROCEEDS: All proceeds of any Mortgage Loan or property acquired in
respect thereof repurchased pursuant to Section 2.02, 3.01, 5.01, 5.21 or 11.01.

     RESIDUAL INTEREST: The interest represented by (i) amounts, if any, remaining in the
Collection Account following termination of the Trust Fund after payments to the Class A

22

 

Certificateholders (other than the Class A-R Certificateholders), the Class M
Certificateholders, the Class B Certificateholders and the Class CE Certificateholders and (ii)
amounts, if any, paid in respect of principal and accrued interest on the Class A-R Certificates
from collections or advances with respect to the Mortgage Loans, other than, in the case of both
(i) and (ii), amounts attributable to the Class SW-R Interest or Class LT-R Interest.

     RESPONSIBLE OFFICER: When used with respect to the Trustee, any senior vice
president, any vice president, any assistant vice president, any senior trust officer, any trust
officer or any other officer of the Trustee in its Agency & Trust Office customarily performing
functions similar to those performed by any of the above designated officers.

     REUTERS PAGE LIBOR01: The display currently so designated on the Reuters Xtra 3000
Service (or such other page as may replace that page on that service or any successor service for
displaying comparable rates or prices).

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

     SALE AGREEMENT: The Mortgage Loan Sale Agreement dated as of April 1, 2007 between
the Depositor and CHF.

     SARBANES-OXLEY CERTIFICATION: The meaning specified in Section 5.24(f).

     SECTION 302 REQUIREMENTS: Any rules or regulations promulgated pursuant to the
Sarbanes-Oxley Act of 2002 (as such may be amended from time to time).

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

     SELLER: CHF.

     SENIOR ENHANCEMENT PERCENTAGE: For any Distribution Date, the percentage obtained by
dividing (x) the sum of (i) the aggregate Outstanding Certificate Principal Balance of the Class M
and Class B Certificates (after giving effect to the distribution of the Principal Distribution
Amount on such Distribution Date) and (ii) the Overcollateralized Amount (after giving effect to
the distribution of the Principal Distribution Amount on such Distribution Date) by (y) the
aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due
Period.

     SENIOR PRINCIPAL DISTRIBUTION AMOUNT: For any Distribution Date, an amount equal to
the excess of (x) the aggregate Outstanding Certificate Principal Balance of the Class A
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(1) 89.20% and (2) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period and (B) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period minus the Overcollateralization Floor.

     SERVICER: Chase or any successor under this Agreement 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 and which are
“unanticipated expenses” (within the meaning of Treasury regulations section 1.860G-1(b)(3)(ii))
including, but not limited to, the cost of (i) the preservation, restoration and protection of the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation
of the Mortgaged

23

 

Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) if the Mortgaged
Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) is acquired in
satisfaction of the Mortgage, (iv) taxes and assessments on the Mortgaged Properties subject to the
Mortgage Loans and (v) compliance with the obligations under Section 5.21.

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

     SERVICING FEE: The amount of the monthly fee paid for the servicing of the Mortgage
Loans, equal to, as of any Distribution Date, with respect to each Mortgage Loan, one-twelfth of
the Servicing Fee Rate of the Principal Balance thereof as of the Determination Date in the
preceding month, subject to adjustment as provided in Section 6.05. The Servicing Fee shall be
payable only at the time of and with respect to those Mortgage Loans for which payment is in fact
made of the entire amount of the Monthly Payments that shall have come due and only at the time
such Monthly Payment shall be made. The right to receive the Servicing Fee is limited to, and the
Servicing Fee is payable solely from, the interest portion of such Monthly Payments (or the
interest portion of any Principal Prepayment in full) collected by the Servicer, or as otherwise
provided under Section 5.09 or 5.23.

     SERVICING FEE RATE: 0.2560% per annum.

     SERVICING OFFICER: Any officer of the Servicer or any Sub-Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose name appears on a
written certificate listing servicing officers furnished to the Trustee by the Servicer on or prior
to the Closing Date, and signed on behalf of the Servicer or any Sub-Servicer by its President, any
Vice President or its Treasurer, as such certificate may from time to time be amended.

     SFAS 140: Statement of Financial Accounting Standard No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities dated September 2000,
published by the Financial Accounting Standards Board of the Financial Accounting Foundation.

     SIMILAR LAW: The meaning specified in Section 4.02(d).

     SINGLE CERTIFICATE: A Certificate of any Class that evidences the smallest
permissible original denomination for such Class of Certificates as specified in Section 4.01(d).

     STANDARD HAZARD POLICY: Each standard hazard insurance policy or replacement therefor
referred to in Section 5.16.

     STARTUP DAY: The meaning specified in Section 2.04(a).

     STATED PRINCIPAL BALANCE: For any Mortgage Loan at any Due Date, the unpaid principal
balance of such Mortgage Loan as of such Due Date as specified in the amortization schedule at the
time relating thereto (before any adjustment to such amortization schedule by reason of any
moratorium or similar waiver or grace period) after giving effect to any previous principal
prepayments and liquidation proceeds allocable to principal and to the payment of principal due on
such Due Date and irrespective of any delinquency in payment by the related mortgagor.

     STEP-DOWN DATE: The earlier to occur of (1) the Distribution Date on which the
aggregate Outstanding Certificate Principal Balance of the Class A Certificates has been reduced to
zero and (2) the later to occur of (x) the Distribution Date occurring in May 2010 and (y) the
first Distribution Date on which the Senior Enhancement Percentage is greater than or equal to
10.80% (for the purpose of this

24

 

definition only, the Senior Enhancement Percentage shall be calculated prior to the
distribution of the Principal Distribution Amount to the Class M and Class B Certificates).

     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 as determined by and under the direction or
authority of the Servicer or a Sub-Servicer.

     SUB-SERVICER: Any Person that services Mortgage Loans on behalf of the Servicer or
any Sub-Servicer 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 this Agreement that are identified in Item 1122(d) of Regulation
AB. Any Sub-Servicer shall meet the qualifications set forth in Section 5.02.

     SUB-SERVICING AGREEMENT: Any agreement between the Servicer and any Sub-Servicer,
relating to servicing or administration of certain Mortgage Loans as provided in Section 5.02, in
such form as has been approved by the Servicer and the Depositor.

     SUBSEQUENT RECOVERY: The amount, if any, recovered by the Servicer with respect to a
Liquidated Mortgage Loan with respect to which a Realized Loss has been incurred after liquidation
and disposition of such Mortgage Loan.

     SUBSTITUTE EXCESS INTEREST: As defined in Section 3.03.

     SUPPLEMENTAL INTEREST TRUST: The separate trust, established pursuant to Section 5.30
of this Agreement.

     SUPPLEMENTAL INTEREST TRUST ACCOUNT: The separate Eligible Account created and
maintained by the Supplemental Interest Trust Trustee pursuant to Section 5.30 in the name of the
Supplemental Interest Trust Trustee for the benefit of the Supplemental Interest Trust and
designated “The Bank of New York Trust Company, N.A., as supplemental interest trust trustee, in
trust for registered holders of ChaseFlex Trust, Multi-Class Mortgage Pass-Through Certificates,
Series 2007-2.” Funds in the Supplemental Interest Trust Account shall be held in trust for the
Supplemental Interest Trust for the uses and purposes set forth in this Agreement.

     SUPPLEMENTAL INTEREST TRUST TRUSTEE: The Bank of New York Trust Company, N.A., a
national banking association, not in its individual capacity, but solely in its capacity as trustee
of the Supplemental Interest Trust for the benefit of the Certificateholders under this Agreement,
and any successor thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a party and any
successor supplemental interest trust trustee as may from time to time be serving as successor
supplemental interest trustee hereunder.

     SWAP AGREEMENT: The schedule to the master agreement (attached as Exhibit W hereto),
including the confirmation thereto (attached as Exhibit W-1 hereto) and the related credit support
annex (attached as Exhibit W-2 hereto), between the Swap Counterparty and the Supplemental Interest
Trust Trustee for the benefit of the Certificateholders or any other swap agreement (including any
related schedules) held by the Supplemental Interest Trust pursuant to Section 5.30 hereof.

     SWAP COUNTERPARTY: JPMorgan Chase Bank N.A., or any successor counterparty who meets
the requirements set forth in the Swap Agreement.

25

 

     SWAP LIBOR: With respect to any Distribution Date (and the related Accrual Period)
the product of (i) the Floating Rate Option (as defined in the Swap Agreement for the related Swap
Payment Date), (ii) two and (iii) the quotient of (a) the actual number of days in the Accrual
Period for the Lower-Tier REMIC Interests divided by (b) 30.

     SWAP PAYMENT DATE: For so long as the Swap Agreement is in effect or amounts remain
unpaid thereunder, the 2nd Business Day (as defined in the Swap Agreement) immediately
preceding each Distribution Date.

     SWAP POSTED COLLATERAL ACCOUNT: The segregated Eligible Account created and
maintained by the Supplemental Interest Trust Trustee pursuant to Section 5.30 in the name of the
Supplemental Interest Trust Trustee for the benefit of the Supplemental Interest Trust and
designated “The Bank of New York Trust Company, N.A., as supplemental interest trust trustee, in
trust for registered holders of ChaseFlex Trust, Multi-Class Mortgage Pass-Through Certificates,
Series 2007-2.” Funds in the Swap Posted Collateral Account shall be held in trust for the
Supplemental Interest Trust for the uses and purposes set forth in the Swap Agreement

     SWAP REMIC: The SWAP REMIC as described in Section 2.04.

     SWAP REMIC INTERESTS: Each of the interests in the SWAP REMIC as set forth in Section
2.04.

     SWAP REMIC REGULAR INTEREST: Each of the SWAP REMIC Interests other than the Class
SW-R Interest.

     SWAP TERMINATION PAYMENT: Any payment payable by the Supplemental Interest Trust or
the Swap Counterparty upon termination of the Swap Agreement pursuant to the Swap Agreement.

     TRIGGER EVENT: A Trigger Event is in effect with respect to any
Distribution Date on or after the Step-Down Date if either (i) the percentage obtained by dividing
(x) the aggregate Stated Principal Balance of the Mortgage Loans that are 60 days or more
delinquent (including, for this purpose, Mortgage Loans in REO, foreclosure or bankruptcy status)
as of the last day of the prior calendar month by (y) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the prior calendar month exceeds 50.00% of the Senior
Enhancement Percentage for such Distribution Date or (ii) the cumulative Realized Losses on the
Mortgage Loans (after reduction for all Subsequent Recoveries received from the Cut-off Date
through the last day of the related Due Period) as a percentage of the original aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date is greater than the percentage set
forth in the following table:

	 	 	 	 	 
	Range of Distribution Dates	 	Percentage
	May 2009 – April 2010
	 	 	0.20	%*
	May 2010 – April 2011
	 	 	0.45	%*
	May 2011 – April 2012
	 	 	0.75	%*
	May 2012 – April 2013
	 	 	1.10	%*
	May 2013 and thereafter
	 	 	1.25	%

 

			
	*	 	The percentages indicated are the percentages applicable for the first Distribution Date
in the corresponding range of Distribution Dates. The percentage for each succeeding
Distribution Date in the range shall increase incrementally by 1/12th of the positive
difference between the percentage applicable to the first Distribution Date in that range and
the percentage applicable to the first Distribution Date in the succeeding range.

     TRUST: The Trust created pursuant to this Agreement.

26

 

     TRUST FUND: The corpus
 of the Trust consisting of (i) the Mortgage Loans, (ii) such
assets as shall from time to time be identified as deposited in the Collection Account, the
Certificate Account and the Supplemental Interest Trust, (iii) the Trust’s rights under the Yield Maintenance
Agreement and the Swap Agreement, (iv) property which secured a Mortgage Loan and which has been acquired by foreclosure
or deed in lieu of foreclosure, (v) Standard Hazard Policies and any other insurance policies, and
the proceeds thereof and (vi) any proceeds of any of the foregoing.

     TRUSTEE: The Bank of New York Trust Company, N.A., a national banking association and
its successors and any corporation resulting from or surviving any consolidation or merger to which
it or its successors may be a party, and any successor trustee at the time serving as successor
trustee hereunder, appointed as herein provided.

     UNCERTIFICATED CLASS CE INTEREST: An uncertificated REMIC Regular Interest having the
characteristics described in Section 2.04.

     UNPAID REALIZED LOSS AMOUNT: For any Class of Class A, Class M, Class B or Class CE
Certificates and any Distribution Date, the unpaid portion of the aggregate Allocated Realized Loss
Amount allocated to that Class, as reduced by an amount equal to any increase in the related
Outstanding Certificate Principal Balance due to (i) the receipt of Subsequent Recoveries or (ii)
distributions of proceeds of the Swap Agreement or Yield Maintenance Agreement.

     UPPER-TIER REMIC: The Upper-Tier REMIC as described in Section 2.04.

     UPPER-TIER REMIC NET WAC CAP: For any Distribution Date, the Net Rate.

     U.S. PERSON: A “United States Person” as defined in Section 7701(a)(30) of the Code.

     YIELD MAINTENANCE AGREEMENT: The yield maintenance agreement described in Section
5.29 and set forth in Exhibit U.

     YIELD MAINTENANCE AGREEMENT AMOUNT: The amount described in Section 5.29(e).

     YIELD MAINTENANCE AGREEMENT COUNTERPARTY: JPMorgan Chase Bank, N.A., in its capacity
as cap counterparty under the Yield Maintenance Agreement, and its successors in interest.

[END OF ARTICLE I]

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS; TRUST FUND

     Section 2.01 Conveyance of Mortgage Loans. The Depositor, concurrently with the
execution and delivery hereof, does hereby sell, transfer, assign, set over and convey to the
Trustee without recourse all the right, title and interest of the Depositor in and to the Mortgage
Loans, including all interest and principal received on or with
respect to the Mortgage Loans on or after the Cut-off Date (other than Monthly Payments due on
the Mortgage Loans on or before the Cut-off Date).

27

 

     In connection with such assignment, the Depositor does hereby deliver to, and deposit with,
the Custodian on behalf of the Trustee the following documents or instruments with respect to each
Mortgage Loan so assigned:

	(i)	 	With respect to each Mortgage Loan which is not a Co-op Loan:

     (A) Original Mortgage Note bearing all intervening endorsements, endorsed “Pay to the order of
___, without recourse” and signed in the name of the last endorsee by an authorized officer.

     (B) The original Mortgage (including all riders thereto) with evidence of recording thereon,
or a copy thereof certified by the public recording office in which such Mortgage has been
recorded or, if the original Mortgage has not been returned from the applicable public recording
office, a true certified copy of the original that was sent for recording, certified by the Seller.

     (C) The original policy of title insurance, or in the event such original title policy is
unavailable a copy of the related policy (provided that use of a copy is acceptable to the related
title insurance or escrow company), including riders and endorsements thereto, or if the policy has
not yet been issued, a written commitment or interim binder or preliminary report of title issued
by the title insurance or escrow company.

     (D) Certified true copy of power of attorney sent for recording.

	(ii)	 	With respect to each Non-MERS Mortgage Loan which is not a Co-op Loan:

     (A) The original Assignment of Mortgage to “The Bank of New York Trust Company, N.A., as
trustee (Chase Mortgage Finance Corporation),” which assignment shall be in form and substance
acceptable for recording, or a copy certified by the Seller as a true and correct copy of the
original Assignment of Mortgage which has been sent for recordation. Subject to the foregoing,
such assignments may, if permitted by law, be by blanket assignments for Mortgage Loans covering
Mortgaged Properties situated within the same county. If the Assignment of Mortgage is in blanket
form, a copy of the Assignment of Mortgage shall be included in the related individual Mortgage
File.

     (B) The original policy of title insurance, or in the event such original title policy is
unavailable a copy of the related policy (provided that use of a copy is acceptable to the related
title insurance or escrow company), including riders and endorsements thereto, or if the policy has
not yet been issued, a written commitment or interim binder or preliminary report of title issued
by the title insurance or escrow company.

     (C) Originals of all recorded intervening Assignments of Mortgage, or copies thereof,
certified by the public recording office in which such Assignments or Mortgage have been recorded
showing a complete chain of title from the originator to the Depositor, with evidence of recording,
thereon, or a copy thereof certified by the public recording office in which such Assignment of
Mortgage has been recorded or, if the original Assignment of Mortgage has not been returned from
the applicable public recording office, a true certified copy, certified by the Seller of the
original Assignment of Mortgage together with a certificate of the Seller certifying that the
original Assignment of Mortgage has been delivered for recording in the appropriate public
recording office of the jurisdiction in which the Mortgaged Property is located.

     (D) Originals, or copies thereof certified by the public recording office in which such
documents have been recorded, of each assumption, extension, modification, written assurance or
substitution agreements, if applicable, or if the original of such document has not been returned
from the applicable public recording office, a true certified copy, certified by the Seller, of
such original document

28

 

together with certificate of Seller certifying the original of such document
has been delivered for recording in the appropriate recording office of the jurisdiction in which
the Mortgaged Property is located.

     (E) If the Mortgage Note or Mortgage or any other material document or instrument relating to
the Mortgage Loan has been signed by a Person on behalf of the Mortgagor, the original power of
attorney or other instrument that authorized and empowered such Person to sign bearing evidence
that such instrument has been recorded, if so required in the appropriate jurisdiction where the
Mortgaged Property is located (or, in lieu thereof, a duplicate or conformed copy of such
instrument, together with a certificate of receipt from the recording office, certifying that such
copy represents a true and complete copy of the original and that such original has been or is
currently submitted to be recorded in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located), or if the original power of attorney or
other such instrument has been delivered for recording in the appropriate public recording office
of the jurisdiction in which the Mortgaged Property is located, a copy of any applicable power of
attorney.

	(iii)	 	With respect to each Co-op Loan:

	 	(A)	 	(I) The original Mortgage Note bearing all intervening endorsements,
endorsed “Pay to the order of ___, without recourse” and signed in the name
of the last endorsee by an authorized officer.
	 
	 	(B)	 	The original loan security agreement entered into by the Mortgagor with
respect to such Co-Op Loan.
	 
	 	(C)	 	Original Form UCC-1 and any continuation statements with evidence of
filing thereon entered into by the Mortgagor with respect to such Co-Op Loan or
if the original of such document has not been returned from the applicable
public recording office, a true certified copy of the document sent for
recording.
	 
	 	(D)	 	Form UCC-3 (or copy thereof) by the applicable Mortgage Loan Seller or
its agent assigning the security interest covered by such Form UCC-1 to “The
Bank of New York Trust Company, N.A. as trustee” or to blank, together with all
Forms UCC-3 (or copies thereof) showing a complete chain of assignment from the
originator of the related Co-op Loan to the Seller, with evidence of recording
thereon.
	 
	 	(E)	 	Stock certificate representing the stock allocated to the related
dwelling unit in the related residential cooperative housing corporation and
pledged by the related Mortgagor to the originator of such Co-op Loan with a
stock power in blank attached.
	 
	 	(F)	 	Original proprietary lease.
	 
	 	(G)	 	Original assignment of proprietary lease, to the Trustee or to blank,
and all intervening assignments thereof.
	 
	 	(H)	 	Original recognition agreement of the interests of the mortgagee with
respect to the Co-op Loan by the residential cooperative housing corporation,
the stock of which was pledged by the related Mortgagor to the originator of
such Co-op Loan.
	 
	 	(I)	 	Originals of any assumption, consolidation or modification agreements
relating to any of the items specified in (A) through (D) above with respect to
such Co-op Loan.

29

 

	 	(J)	 	Certified true copy of power of attorney sent for recording.

     If in connection with any Mortgage Loan which is not a Co-op Loan the Depositor cannot deliver
the Mortgage, Assignments of Mortgage, or assumption, consolidation or modification agreement, as
the case may be, with evidence of recording thereon concurrently with the execution and delivery of
this Agreement solely because of a delay caused by the public recording office where such Mortgage,
Assignments of Mortgage, or assumption, consolidation or modification agreement, as the case may
be, has been delivered for recordation, the Depositor shall deliver or cause to be delivered to the
Trustee written notice stating that such Mortgage, Assignments of Mortgage, or assumption,
consolidation or modification agreement, as the case may be, has been delivered to the appropriate
public recording office for recordation. Thereafter, the Depositor shall deliver or cause to be
delivered to the Trustee such Mortgage, Assignments of Mortgage, or assumption, consolidation or
modification agreement, as the case may be, with evidence of recording indicated thereon upon
receipt thereof from the public recording office.

     With respect to any Non-MERS Mortgage Loans which are not Co-op Loans, and as to which the
related Mortgaged Property is located in Florida, the Servicer shall cause to be recorded in the
appropriate public recording office for real property records each Assignment of Mortgage referred
to in this Section 2.01 as soon as practicable. With respect to any Non-MERS Mortgage Loans which
are not Co-op Loans as to which the related Mortgaged Property is located outside of Florida, the
Servicer shall not be obligated to cause to be recorded the Assignment of Mortgage referred to in
this Section 2.01. With respect to Co-op Loans as to which the related dwelling unit is located in
Florida, the Servicer shall cause to be filed in the appropriate filing office the Form UCC-3
referred to in this Section 2.01 as soon as practicable. With respect to any Co-op Loans as to
which the related dwelling unit is located outside Florida, the Servicer shall not be obligated to
cause to be filed the Form UCC-3 referred to in this Section 2.01. While each such Assignment of
Mortgage or Form UCC-3 is being recorded or filed, as applicable, the Servicer shall deliver to the
Trustee a photocopy of such document. If any such Assignment of Mortgage or Form UCC-3 is returned
unrecorded or unfiled to the Servicer because of any defect therein, the Servicer shall cause such
defect to be cured and such document to be recorded or filed in accordance with this paragraph.
The Depositor shall deliver or cause to be delivered each such original recorded or filed
Assignment of Mortgage and intermediate assignment or Form UCC-3 to the Trustee within 270 days of
the Closing Date or shall deliver to the Trustee on or before such date an Officer’s Certificate
stating that such document has been delivered to the appropriate public recording or filing office
for recording or filing, but has not been returned solely because of a delay caused by such
recording or filing office. In any event, the Depositor shall use all reasonable efforts to cause
each such document with evidence of recording or filing thereon to be delivered to the Trustee
within 300 days of the Closing Date.

     With respect to each MERS Mortgage Loan, the Trustee, at the expense of the Depositor and at
the direction and with the cooperation of the Servicer, shall cause to be taken such actions as are
necessary to cause the Trustee to be clearly identified as the trustee of each such Mortgage Loan
on the records of MERS for purposes of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.

     The ownership of each Mortgage Note, the Mortgage and the contents of the related Mortgage
File is vested in the Trustee. Neither the Depositor nor the Servicer shall take any action
inconsistent with such ownership and shall not claim any ownership interest therein. The Depositor
and the Servicer shall respond to any third party inquiries with respect to ownership of the
Mortgage Loans by stating that such ownership is held by the Trustee on behalf of the
Certificateholders. Mortgage documents relating
to the Mortgage Loans not delivered to the Trustee are and shall be held in trust by the
Servicer or any Sub-Servicer, for the benefit of the Trustee as the owner thereof, and the
Servicer’s or such Sub-Servicer’s possession of the contents of each Mortgage File so retained is
for the sole purpose of servicing the related Mortgage Loan, and such retention and possession by
the Servicer or such Sub-Servicer is in a

30

 

custodial capacity only. The Depositor agrees to take no
action inconsistent with the Trustee’s ownership of the Mortgage Loans, to promptly indicate to all
inquiring parties that the Mortgage Loans have been sold and to claim no ownership interest in the
Mortgage Loans. Each Mortgage File and the mortgage documents relating to the Mortgage Loans
contain proprietary business information of the Servicer and its customers. The Trustee and the
Depositor agree that they will not use such information for business purposes without the express
written consent of the Servicer and that all such information shall be kept strictly confidential.

     It is the intention of this Agreement that the conveyance of the Depositor’s right, title and
interest in and to the Trust Fund pursuant to this Agreement shall constitute a purchase and sale
and not a loan. If a conveyance of Mortgage Loans from the Seller to the Depositor is
characterized as a pledge and not a sale, then the Depositor shall be deemed to have transferred to
the Trustee all of the Depositor’s right, title and interest in, to and under the obligations of
the Seller deemed to be secured by said pledge; and it is the intention of this Agreement that the
Depositor shall also be deemed to have granted to the Trustee a first priority security interest in
all of the Depositor’s right, title, and interest in, to and under the obligations of the Seller to
the Depositor deemed to be secured by said pledge and that the Trustee shall be deemed to be an
independent custodian for purposes of perfection of the security interest granted to the Depositor.
If the conveyance of the Mortgage Loans from the Depositor to the Trustee is characterized as a
pledge, it is the intention of this Agreement that this Agreement shall constitute a security
agreement under applicable law, and that the Depositor shall be deemed to have granted to the
Trustee a first priority security interest in all of the Depositor’s right, title and interest in,
to and under the Mortgage Loans, all payments of principal of or interest on such Mortgage Loans,
all other rights relating to and payments made in respect of the Trust Fund, and all proceeds of
any thereof. If the trust created by this Agreement terminates prior to the satisfaction of the
claims of any Person in any Certificates, the security interest created hereby shall continue in
full force and effect and the Trustee shall be deemed to be the collateral agent for the benefit of
such Person.

     In addition to the conveyance made in the first paragraph of this Section 2.01, the Depositor
does hereby convey, assign and set over to the Trustee all of its right, title and interest in that
portion of the Trust Fund described in items (ii), (iii), (iv) and (v) of the definition thereof
and further assigns to the Trustee for the benefit of the Certificateholders those representations
and warranties of the Seller contained in the Sale Agreement and described in Section 3.01 hereof
and the benefit of the repurchase obligations of the Seller described in Sections 2.02 and 3.01
hereof and the obligations of the Seller contained in the Sale Agreement to take, at the request of
the Depositor or the Trustee, all action on its part which is reasonably necessary to ensure the
enforceability of a Mortgage Loan.

     The parties hereto agree and understand that it is not intended that any mortgage loan be
included in the Trust that is any of (i) a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act effective November 27, 2003, (ii) a “High-Cost Home Loan” as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004, (iii) a “High-Cost Home Mortgage Loan”
as defined in the Massachusetts Predatory Home Loan Practices Act effective November 7, 2004 or
(iv) a “High-Cost Home Loan” as defined by the Indiana High Cost Home Loan Law effective January 1,
2005.

     Section 2.02 Acceptance by Trustee. Except as set forth in the Exception Report
delivered contemporaneously herewith (the “Exception Report”), the Trustee acknowledges receipt by
the Custodian on the Trustee’s behalf of the Mortgage
Note for each Mortgage Loan and delivery of a Mortgage File (but does not acknowledge receipt
of all documents required to be included in such Mortgage File) with respect to each Mortgage Loan
and declares that the Custodian holds and will hold on the Trustee’s behalf such documents and any
other documents constituting a part of the Mortgage Files delivered to it in trust for the use and
benefit of all present and future Certificateholders. The Depositor

31

 

will cause the Seller to
repurchase any Mortgage Loans to which an exception was taken in the Exception Report unless such
exception is cured to the satisfaction of the Trustee within 45 Business Days of the Closing Date.
The Trustee may accept delivery of such Mortgage Files by the Custodian on its behalf. The
Custodian will deliver a copy of the Exception Report to the Depositor and the Trustee.

     The Custodian, on the Trustee’s behalf, agrees, for the benefit of Certificateholders, to
review each Mortgage File delivered to it within 270 days after the Closing Date to ascertain that
all documents required by Section 2.01 have been executed and received, and that such documents
relate to the Mortgage Loans identified in Exhibit A that have been conveyed to it. If the
Custodian on the Trustee’s behalf finds any document or documents constituting a part of a Mortgage
File to be missing or defective (that is, mutilated, damaged, defaced or unexecuted) in any
material respect, the Custodian on the Trustee’s behalf shall promptly (and in any event within no
more than five Business Days) after such finding so notify the Servicer, the Seller, the Trustee
and the Depositor. In addition, the Custodian on the Trustee’s behalf shall also notify the
Servicer, the Seller, the Trustee and the Depositor, if (a) in examining the Mortgage Files, the
documentation shows on its face (i) any adverse claim, lien or encumbrance, (ii) that any Mortgage
Note was overdue or had been dishonored, (iii) any evidence on the face of any Mortgage Note or
Mortgage of any security interest or other right or interest therein, or (iv) any defense against
or claim to the Mortgage Note by any party or (b) the original Mortgage with evidence of recording
thereon with respect to a Mortgage Loan is not received within 270 days of the Closing Date;
provided, however, that if the Depositor cannot deliver the original Mortgage with evidence of
recording thereon because of a delay caused by the public recording office where such Mortgage has
been delivered for recordation, the Depositor shall deliver or cause to be delivered to the
Custodian and the Trustee written notice stating that such Mortgage has been delivered to the
appropriate public recording officer for recordation and thereafter the Depositor shall deliver or
cause to be delivered such Mortgage with evidence of recording thereon upon receipt thereof from
the public recording office. The Depositor shall request that the Seller correct or cure such
omission, defect or other irregularity, or substitute a Mortgage Loan pursuant to the provisions of
Section 3.03, within 60 days from the date the Seller was notified of such omission or defect and,
if the Seller does not correct or cure such omission or defect within such period, that the Seller
purchase such Mortgage Loan from the Trustee within 90 days from the date the Depositor notified
the Seller and the Trustee of such omission, defect or other irregularity at the Purchase Price of
such Mortgage Loan. The Purchase Price for any Mortgage Loan purchased pursuant to this Section
2.02 shall be paid to the Servicer and deposited by the Servicer in the Collection Account promptly
upon receipt, and, upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall promptly release to the Seller the related Mortgage File and
the Trustee shall execute and deliver such instruments of transfer or assignment, without recourse,
as shall be necessary to vest in the Seller or its designee, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility with regard to such
Mortgage Loan. It is understood and agreed that the obligation of the Seller to purchase, cure or
substitute any Mortgage Loan as to which a material defect in or omission of a constituent document
exists shall constitute the sole remedy respecting such defect or omission available to the Trustee
on behalf of Certificateholders. The Trustee shall be under no duty or obligation to inspect,
review and examine such documents, instruments, certificates or other papers to determine that they
are genuine, enforceable or appropriate to the represented purpose, or that they have actually been
recorded, or that they are other than what they purport to be on their face. The Trustee shall
keep confidential the name of each Mortgagor and shall not solicit any such Mortgagor for the
purpose of refinancing the related Mortgage Loan.

     Within 280 days of the Closing Date, the Trustee based solely on information provided to it
by the Custodian shall deliver to the Depositor and the Servicer the Trustee’s Certification,
substantially in the form of Exhibit G attached hereto, setting forth the status of the Mortgage
Files as of such date.

32

 

     Section 2.03 Trust Fund; Authentication of Certificates. The Trustee acknowledges and
accepts the assignment to it of the Trust Fund created pursuant to this Agreement in trust for the
use and benefit of all present and future Certificateholders. The Trustee acknowledges the
assignment to it for the benefit of the Trust Fund of the Mortgage Loans and has caused to be
authenticated and delivered to or upon the order of the Depositor, in exchange for the Mortgage
Loans, Certificates duly authenticated by the Trustee or, if an Authenticating Agent has been
appointed pursuant to Section 4.06, the Authenticating Agent in authorized denominations evidencing
ownership of the entire Trust Fund.

     Section 2.04 REMIC Elections.

     (a) The Depositor hereby instructs and authorizes the Paying Agent to make appropriate
elections to treat the Trust Fund as including three REMICs (the SWAP REMIC, the Lower-Tier REMIC
and the Upper-Tier REMIC). This Agreement shall be construed so as to carry out the intention of
the parties that each REMIC created hereunder be treated as a REMIC at all times prior to the date
on which the Trust Fund is terminated. The Closing Date is hereby designated as the “startup day”
of each REMIC created hereunder within the meaning of Section 860G(a)(9) of the Code. The Trust
Fund, for federal income tax purposes will consist of (i) the REMIC Pools, (ii) the grantor trust
described in Section 2.04(c), (iii) the Supplemental Interest Trust, the Swap Agreement and the
Yield Maintenance Agreement and (iv) the Class A-R Reserve Fund. The SWAP REMIC shall hold as
assets all property of the Trust Fund, other than the SWAP REMIC Interests, the Lower-Tier REMIC
Interests and the assets described in clauses (ii), (iii) and (iv) above. Each of the SWAP REMIC
Regular Interests is hereby designated a “regular interest” (within the meaning of Section
860G(a)(1) of the Code) in the SWAP REMIC. The Lower-Tier REMIC shall hold as assets the several
classes of uncertificated SWAP REMIC Regular Interests. Each of the Lower-Tier REMIC Regular
Interests is hereby designated a “regular interest” (within the meaning of Section 860G(a)(1) of
the Code) in the Lower-Tier REMIC. The Upper-Tier REMIC shall hold as assets the several classes
of uncertificated Lower-Tier REMIC Regular Interests. Each of the REMIC Regular Interests is
hereby designated as a “regular interest” (within the meaning of Section 860G(a)(1) of the Code) in
the Upper-Tier REMIC. The Class SW-R Interest is hereby designated as the sole residual interest
(within the meaning of Section 860G(a)(2) of the Code) in the SWAP REMIC. The Class LT-R Interest
is hereby designated as the sole residual interest (within the meaning of Section 860G(a)(2) of the
Code) in the Lower-Tier REMIC. The Residual Interest is hereby designated as the sole residual
interest (within the meaning of Section 860G(a)(2) of the Code) in the Upper-Tier REMIC. The Class
A-R Certificate evidences ownership of the Class SW-R Interest, the Class LT-R Interest, the
Residual Interest and the right to receive payments from the Class A-R Reserve Fund. All interests
described in this Section 2.04(a) shall be designated as such on the Startup Day.

33

 

The SWAP REMIC

     The following table sets forth the designations, initial principal balances and interest rates for
each interest in the SWAP REMIC:

	 	 	 	 	 	 	 	 	 
	Class Initial	 	Principal Balance	 	Interest Rate
	SW-Z
	 	$	302,406,458.170	 	 	 	(1	)
	SW-1A
	 	$	1,385,698.520	 	 	 	(2	)
	SW-1B
	 	$	1,385,698.520	 	 	 	(3	)
	SW-2A
	 	$	1,522,643.480	 	 	 	(2	)
	SW-2B
	 	$	1,522,643.480	 	 	 	(3	)
	SW-3A
	 	$	1,656,603.830	 	 	 	(2	)
	SW-3B
	 	$	1,656,603.830	 	 	 	(3	)
	SW-4A
	 	$	1,787,436.605	 	 	 	(2	)
	SW-4B
	 	$	1,787,436.605	 	 	 	(3	)
	SW-5A
	 	$	1,914,686.720	 	 	 	(2	)
	SW-5B
	 	$	1,914,686.720	 	 	 	(3	)
	SW-6A
	 	$	2,037,776.010	 	 	 	(2	)
	SW-6B
	 	$	2,037,776.010	 	 	 	(3	)
	SW-7A
	 	$	2,155,700.130	 	 	 	(2	)
	SW-7B
	 	$	2,155,700.130	 	 	 	(3	)
	SW-8A
	 	$	2,267,001.645	 	 	 	(2	)
	SW-8B
	 	$	2,267,001.645	 	 	 	(3	)
	SW-9A
	 	$	2,366,675.615	 	 	 	(2	)
	SW-9B
	 	$	2,366,675.615	 	 	 	(3	)
	SW-10A
	 	$	2,425,777.350	 	 	 	(2	)
	SW-10B
	 	$	2,425,777.350	 	 	 	(3	)
	SW-11A
	 	$	2,434,717.015	 	 	 	(2	)
	SW-11B
	 	$	2,434,717.015	 	 	 	(3	)
	SW-12A
	 	$	2,404,979.275	 	 	 	(2	)
	SW-12B
	 	$	2,404,979.275	 	 	 	(3	)
	SW-13A
	 	$	2,360,080.680	 	 	 	(2	)
	SW-13B
	 	$	2,360,080.680	 	 	 	(3	)
	SW-14A
	 	$	2,316,016.875	 	 	 	(2	)
	SW-14B
	 	$	2,316,016.875	 	 	 	(3	)
	SW-15A
	 	$	2,272,772.385	 	 	 	(2	)
	SW-15B
	 	$	2,272,772.385	 	 	 	(3	)
	SW-16A
	 	$	2,230,332.015	 	 	 	(2	)
	SW-16B
	 	$	2,230,332.015	 	 	 	(3	)
	SW-17A
	 	$	2,188,680.865	 	 	 	(2	)
	SW-17B
	 	$	2,188,680.865	 	 	 	(3	)
	SW-18A
	 	$	2,147,804.290	 	 	 	(2	)
	SW-18B
	 	$	2,147,804.290	 	 	 	(3	)
	SW-19A
	 	$	2,107,687.925	 	 	 	(2	)
	SW-19B
	 	$	2,107,687.925	 	 	 	(3	)
	SW-20A
	 	$	2,068,317.680	 	 	 	(2	)
	SW-20B
	 	$	2,068,317.680	 	 	 	(3	)
	SW-21A
	 	$	2,029,679.715	 	 	 	(2	)
	SW-21B
	 	$	2,029,679.715	 	 	 	(3	)

34

 

	 	 	 	 	 	 	 	 	 
	Class Initial	 	Principal Balance	 	Interest Rate
	SW-22A
	 	$	1,991,760.455	 	 	 	(2	)
	SW-22B
	 	$	1,991,760.455	 	 	 	(3	)
	SW-23A
	 	$	1,954,546.560	 	 	 	(2	)
	SW-23B
	 	$	1,954,546.560	 	 	 	(3	)
	SW-24A
	 	$	1,918,024.950	 	 	 	(2	)
	SW-24B
	 	$	1,918,024.950	 	 	 	(3	)
	SW-25A
	 	$	1,882,182.800	 	 	 	(2	)
	SW-25B
	 	$	1,882,182.800	 	 	 	(3	)
	SW-26A
	 	$	1,847,007.480	 	 	 	(2	)
	SW-26B
	 	$	1,847,007.480	 	 	 	(3	)
	SW-27A
	 	$	1,812,486.645	 	 	 	(2	)
	SW-27B
	 	$	1,812,486.645	 	 	 	(3	)
	SW-28A
	 	$	1,778,608.145	 	 	 	(2	)
	SW-28B
	 	$	1,778,608.145	 	 	 	(3	)
	SW-29A
	 	$	1,745,360.060	 	 	 	(2	)
	SW-29B
	 	$	1,745,360.060	 	 	 	(3	)
	SW-30A
	 	$	1,712,730.700	 	 	 	(2	)
	SW-30B
	 	$	1,712,730.700	 	 	 	(3	)
	SW-31A
	 	$	1,680,708.585	 	 	 	(2	)
	SW-31B
	 	$	1,680,708.585	 	 	 	(3	)
	SW-32A
	 	$	1,649,282.450	 	 	 	(2	)
	SW-32B
	 	$	1,649,282.450	 	 	 	(3	)
	SW-33A
	 	$	1,618,441.240	 	 	 	(2	)
	SW-33B
	 	$	1,618,441.240	 	 	 	(3	)
	SW-34A
	 	$	1,588,174.095	 	 	 	(2	)
	SW-34B
	 	$	1,588,174.095	 	 	 	(3	)
	SW-35A
	 	$	1,558,470.370	 	 	 	(2	)
	SW-35B
	 	$	1,558,470.370	 	 	 	(3	)
	SW-36A
	 	$	1,529,319.600	 	 	 	(2	)
	SW-36B
	 	$	1,529,319.600	 	 	 	(3	)
	SW-37A
	 	$	1,500,711.545	 	 	 	(2	)
	SW-37B
	 	$	1,500,711.545	 	 	 	(3	)
	SW-38A
	 	$	1,472,636.105	 	 	 	(2	)
	SW-38B
	 	$	1,472,636.105	 	 	 	(3	)
	SW-39A
	 	$	1,445,083.420	 	 	 	(2	)
	SW-39B
	 	$	1,445,083.420	 	 	 	(3	)
	SW-40A
	 	$	1,399,106.860	 	 	 	(2	)
	SW-40B
	 	$	1,399,106.860	 	 	 	(3	)
	SW-41A
	 	$	1,369,243.530	 	 	 	(2	)
	SW-41B
	 	$	1,369,243.530	 	 	 	(3	)
	SW-42A
	 	$	1,343,618.255	 	 	 	(2	)
	SW-42B
	 	$	1,343,618.255	 	 	 	(3	)
	SW-43A
	 	$	1,318,470.220	 	 	 	(2	)
	SW-43B
	 	$	1,318,470.220	 	 	 	(3	)
	SW-44A
	 	$	1,293,790.575	 	 	 	(2	)
	SW-44B
	 	$	1,293,790.575	 	 	 	(3	)
	SW-45A
	 	$	1,269,570.615	 	 	 	(2	)
	SW-45B
	 	$	1,269,570.615	 	 	 	(3	)
	SW-46A
	 	$	1,245,801.820	 	 	 	(2	)

35

 

	 	 	 	 	 	 	 	 	 
	Class Initial	 	Principal Balance	 	Interest Rate
	SW-46B
	 	$	1,245,801.820	 	 	 	(3	)
	SW-47A
	 	$	1,222,475.800	 	 	 	(2	)
	SW-47B
	 	$	1,222,475.800	 	 	 	(3	)
	SW-48A
	 	$	1,199,584.340	 	 	 	(2	)
	SW-48B
	 	$	1,199,584.340	 	 	 	(3	)
	SW-49A
	 	$	1,177,119.375	 	 	 	(2	)
	SW-49B
	 	$	1,177,119.375	 	 	 	(3	)
	SW-50A
	 	$	1,155,072.980	 	 	 	(2	)
	SW-50B
	 	$	1,155,072.980	 	 	 	(3	)
	SW-51A
	 	$	1,133,437.395	 	 	 	(2	)
	SW-51B
	 	$	1,133,437.395	 	 	 	(3	)
	SW-52A
	 	$	1,112,204.980	 	 	 	(2	)
	SW-52B
	 	$	1,112,204.980	 	 	 	(3	)
	SW-53A
	 	$	1,091,368.250	 	 	 	(2	)
	SW-53B
	 	$	1,091,368.250	 	 	 	(3	)
	SW-54A
	 	$	1,070,919.860	 	 	 	(2	)
	SW-54B
	 	$	1,070,919.860	 	 	 	(3	)
	SW-55A
	 	$	1,050,852.595	 	 	 	(2	)
	SW-55B
	 	$	1,050,852.595	 	 	 	(3	)
	SW-56A
	 	$	1,031,159.385	 	 	 	(2	)
	SW-56B
	 	$	1,031,159.385	 	 	 	(3	)
	SW-57A
	 	$	1,011,833.275	 	 	 	(2	)
	SW-57B
	 	$	1,011,833.275	 	 	 	(3	)
	SW-58A
	 	$	992,867.440	 	 	 	(2	)
	SW-58B
	 	$	992,867.440	 	 	 	(3	)
	SW-59A
	 	$	974,255.210	 	 	 	(2	)
	SW-59B
	 	$	974,255.210	 	 	 	(3	)
	SW-60A
	 	$	955,989.990	 	 	 	(2	)
	SW-60B
	 	$	955,989.990	 	 	 	(3	)
	SW-61A
	 	$	938,065.355	 	 	 	(2	)
	SW-61B
	 	$	938,065.355	 	 	 	(3	)
	SW-62A
	 	$	920,474.965	 	 	 	(2	)
	SW-62B
	 	$	920,474.965	 	 	 	(3	)
	SW-63A
	 	$	903,212.615	 	 	 	(2	)
	SW-63B
	 	$	903,212.615	 	 	 	(3	)
	SW-64A
	 	$	888,821.035	 	 	 	(2	)
	SW-64B
	 	$	888,821.035	 	 	 	(3	)
	SW-65A
	 	$	883,788.385	 	 	 	(2	)
	SW-65B
	 	$	883,788.385	 	 	 	(3	)
	SW-66A
	 	$	867,208.760	 	 	 	(2	)
	SW-66B
	 	$	867,208.760	 	 	 	(3	)
	SW-67A
	 	$	850,938.420	 	 	 	(2	)
	SW-67B
	 	$	850,938.420	 	 	 	(3	)
	SW-68A
	 	$	834,971.610	 	 	 	(2	)
	SW-68B
	 	$	834,971.610	 	 	 	(3	)
	SW-69A
	 	$	819,302.690	 	 	 	(2	)
	SW-69B
	 	$	819,302.690	 	 	 	(3	)
	SW-70A
	 	$	803,926.120	 	 	 	(2	)
	SW-70B
	 	$	803,926.120	 	 	 	(3	)

36

 

	 	 	 	 	 	 	 	 	 
	Class Initial	 	Principal Balance	 	Interest Rate
	SW-71A
	 	$	788,836.475	 	 	 	(2	)
	SW-71B
	 	$	788,836.475	 	 	 	(3	)
	SW-72A
	 	$	774,028.420	 	 	 	(2	)
	SW-72B
	 	$	774,028.420	 	 	 	(3	)
	SW-73A
	 	$	759,496.715	 	 	 	(2	)
	SW-73B
	 	$	759,496.715	 	 	 	(3	)
	SW-74A
	 	$	745,236.235	 	 	 	(2	)
	SW-74B
	 	$	745,236.235	 	 	 	(3	)
	SW-75A
	 	$	731,241.920	 	 	 	(2	)
	SW-75B
	 	$	731,241.920	 	 	 	(3	)
	SW-76A
	 	$	717,508.840	 	 	 	(2	)
	SW-76B
	 	$	717,508.840	 	 	 	(3	)
	SW-77A
	 	$	704,032.125	 	 	 	(2	)
	SW-77B
	 	$	704,032.125	 	 	 	(3	)
	SW-78A
	 	$	690,807.020	 	 	 	(2	)
	SW-78B
	 	$	690,807.020	 	 	 	(3	)
	SW-79A
	 	$	677,828.835	 	 	 	(2	)
	SW-79B
	 	$	677,828.835	 	 	 	(3	)
	SW-80A
	 	$	665,092.995	 	 	 	(2	)
	SW-80B
	 	$	665,092.995	 	 	 	(3	)
	SW-81A
	 	$	652,594.970	 	 	 	(2	)
	SW-81B
	 	$	652,594.970	 	 	 	(3	)
	SW-82A
	 	$	640,330.360	 	 	 	(2	)
	SW-82B
	 	$	640,330.360	 	 	 	(3	)
	SW-83A
	 	$	628,294.810	 	 	 	(2	)
	SW-83B
	 	$	628,294.810	 	 	 	(3	)
	SW-84A
	 	$	616,484.070	 	 	 	(2	)
	SW-84B
	 	$	616,484.070	 	 	 	(3	)
	SW-85A
	 	$	604,893.950	 	 	 	(2	)
	SW-85B
	 	$	604,893.950	 	 	 	(3	)
	SW-86A
	 	$	593,520.350	 	 	 	(2	)
	SW-86B
	 	$	593,520.350	 	 	 	(3	)
	SW-87A
	 	$	582,359.240	 	 	 	(2	)
	SW-87B
	 	$	582,359.240	 	 	 	(3	)
	SW-88A
	 	$	571,406.675	 	 	 	(2	)
	SW-88B
	 	$	571,406.675	 	 	 	(3	)
	SW-89A
	 	$	560,658.770	 	 	 	(2	)
	SW-89B
	 	$	560,658.770	 	 	 	(3	)
	SW-90A
	 	$	550,111.715	 	 	 	(2	)
	SW-90B
	 	$	550,111.715	 	 	 	(3	)
	SW-91A
	 	$	539,761.770	 	 	 	(2	)
	SW-91B
	 	$	539,761.770	 	 	 	(3	)
	SW-92A
	 	$	529,605.285	 	 	 	(2	)
	SW-92B
	 	$	529,605.285	 	 	 	(3	)
	SW-93A
	 	$	519,638.640	 	 	 	(2	)
	SW-93B
	 	$	519,638.640	 	 	 	(3	)
	SW-94A
	 	$	509,858.310	 	 	 	(2	)
	SW-94B
	 	$	509,858.310	 	 	 	(3	)
	SW-95A
	 	$	500,260.835	 	 	 	(2	)

37

 

	 	 	 	 	 	 	 	 	 
	Class Initial	 	Principal Balance	 	Interest Rate
	SW-95B
	 	$	500,260.835	 	 	 	(3	)
	SW-96A
	 	$	490,842.795	 	 	 	(2	)
	SW-96B
	 	$	490,842.795	 	 	 	(3	)
	SW-97A
	 	$	481,600.870	 	 	 	(2	)
	SW-97B
	 	$	481,600.870	 	 	 	(3	)
	SW-98A
	 	$	472,531.770	 	 	 	(2	)
	SW-98B
	 	$	472,531.770	 	 	 	(3	)
	SW-99A
	 	$	463,632.275	 	 	 	(2	)
	SW-99B
	 	$	463,632.275	 	 	 	(3	)
	SW-100A
	 	$	454,899.240	 	 	 	(2	)
	SW-100B
	 	$	454,899.240	 	 	 	(3	)
	SW-101A
	 	$	446,329.555	 	 	 	(2	)
	SW-101B
	 	$	446,329.555	 	 	 	(3	)
	SW-102A
	 	$	437,920.185	 	 	 	(2	)
	SW-102B
	 	$	437,920.185	 	 	 	(3	)
	SW-103A
	 	$	429,668.145	 	 	 	(2	)
	SW-103B
	 	$	429,668.145	 	 	 	(3	)
	SW-104A
	 	$	421,570.500	 	 	 	(2	)
	SW-104B
	 	$	421,570.500	 	 	 	(3	)
	SW-105A
	 	$	413,624.385	 	 	 	(2	)
	SW-105B
	 	$	413,624.385	 	 	 	(3	)
	SW-106A
	 	$	405,826.965	 	 	 	(2	)
	SW-106B
	 	$	405,826.965	 	 	 	(3	)
	SW-107A
	 	$	398,175.485	 	 	 	(2	)
	SW-107B
	 	$	398,175.485	 	 	 	(3	)
	SW-108A
	 	$	390,667.215	 	 	 	(2	)
	SW-108B
	 	$	390,667.215	 	 	 	(3	)
	SW-109A
	 	$	383,319.335	 	 	 	(2	)
	SW-109B
	 	$	383,319.335	 	 	 	(3	)
	SW-110A
	 	$	376,088.905	 	 	 	(2	)
	SW-110B
	 	$	376,088.905	 	 	 	(3	)
	SW-111A
	 	$	368,993.850	 	 	 	(2	)
	SW-111B
	 	$	368,993.850	 	 	 	(3	)
	SW-112A
	 	$	362,031.650	 	 	 	(2	)
	SW-112B
	 	$	362,031.650	 	 	 	(3	)
	SW-113A
	 	$	355,199.830	 	 	 	(2	)
	SW-113B
	 	$	355,199.830	 	 	 	(3	)
	SW-114A
	 	$	348,516.955	 	 	 	(2	)
	SW-114B
	 	$	348,516.955	 	 	 	(3	)
	SW-115A
	 	$	341,984.475	 	 	 	(2	)
	SW-115B
	 	$	341,984.475	 	 	 	(3	)
	SW-116A
	 	$	335,817.445	 	 	 	(2	)
	SW-116B
	 	$	335,817.445	 	 	 	(3	)
	SW-117A
	 	$	330,044.690	 	 	 	(2	)
	SW-117B
	 	$	330,044.690	 	 	 	(3	)
	SW-118A
	 	$	327,938.815	 	 	 	(2	)
	SW-118B
	 	$	327,938.815	 	 	 	(3	)
	SW-119A
	 	$	328,140.235	 	 	 	(2	)
	SW-119B
	 	$	328,140.235	 	 	 	(3	)

38

 

	 	 	 	 	 	 	 	 	 
	Class Initial	 	Principal Balance	 	Interest Rate
	SW-120A
	 	$	327,936.675	 	 	 	(2	)
	SW-120B
	 	$	327,936.675	 	 	 	(3	)
	SW-121A
	 	$	324,171.705	 	 	 	(2	)
	SW-121B
	 	$	324,171.705	 	 	 	(3	)
	SW-122A
	 	$	317,800.280	 	 	 	(2	)
	SW-122B
	 	$	317,800.280	 	 	 	(3	)
	SW-123A
	 	$	14,517,279.905	 	 	 	(2	)
	SW-123B
	 	$	14,517,279.905	 	 	 	(3	)
	SW-R
	 	 	(4	)	 	 	(4	)

 

			
	(1)	 	The interest rate on the Class SW-Z Interest shall be a per annum rate equal to the REMIC Net WAC.
	 
	(2)	 	For any Distribution Date, the interest rate on each SWAP REMIC Regular Interest ending with
the designation “A” shall be a per annum rate equal to 2 times the REMIC Net WAC, subject to a
maximum rate of 2 times the REMIC Swap Rate for such Distribution Date.
	 
	(3)	 	For any Distribution Date, the interest rate on each SWAP REMIC Regular Interest ending with
the designation “B” shall be a per annum rate equal to the greater of (x) the excess, if any, of
(i) 2 times the REMIC Net WAC over (ii) 2 times the REMIC Swap Rate for such Distribution Date and
(y) 0.00%.
	 
	(4)	 	The Class SW-R Interest shall have no principal amount and shall bear no interest. The Class
SW-R Interest is the sole class of residual interest of the SWAP REMIC and is represented by the
Class A-R Certificate.

All payments of principal and interest at the Net Mortgage Rate on each of the Mortgage Loans
received by the SWAP REMIC with respect to the Mortgage Loans shall be paid to the SWAP REMIC
Regular Interests until the principal balance of all such interests have been reduced to zero and
any losses allocated to such interests have been reimbursed. Any available funds remaining in the
SWAP REMIC on a Distribution Date after distributions to the SWAP REMIC Regular Interests shall be
distributed to the Class A-R Certificates on account of the Class SW-R Interest. On each
Distribution Date, the aggregate Interest Remittance Amount (net of expenses (other than any Net
Swap Payment or Swap Termination Payment paid to the Swap Counterparty)) shall be distributed with
respect to each of the SWAP REMIC Regular Interests based on the interest rates for each such SWAP
REMIC Regular Interest. On each Distribution Date, the aggregate Principal Remittance Amount shall
be distributed first to the Class SW-Z Interest until its principal balance is reduced to zero and
then sequentially to each of the other SWAP REMIC Regular Interests in ascending order of their
numerical class designation, in equal amounts to each such class in such numerical designation,
until the principal balance of each such class is reduced to zero. All losses shall be allocated
among the SWAP REMIC Regular Interests in the same manner that principal distributions are
allocated. Subsequent Recoveries and loss reimbursements shall be allocated among the SWAP REMIC
Regular Interests in the reverse fashion from the manner in which losses are allocated.

Lower-Tier REMIC

     The Lower-Tier REMIC shall issue the Lower-Tier REMIC Interests as designated below. The
following table specifies the class designation, pass-through rate, initial principal amount and
Corresponding Certificates (as applicable) for each class of Lower-Tier REMIC Interest.

39

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Lower-Tier REMIC	 	 	 	 	 	 	 	 	 	Corresponding
	Interest	 	Initial Principal Amount	 	Pass-Through Rate	 	Certificates
	LTA-1
	 	 	(1	)	 	 	(3	)	 	 	A-1	 
	LTA-2
	 	 	(1	)	 	 	(3	)	 	 	A-2	 
	LTM-1
	 	 	(1	)	 	 	(3	)	 	 	M-1	 
	LTM-2
	 	 	(1	)	 	 	(3	)	 	 	M-2	 
	LTM-3
	 	 	(1	)	 	 	(3	)	 	 	M-3	 
	LTM-4
	 	 	(1	)	 	 	(3	)	 	 	M-4	 
	LTM-5
	 	 	(1	)	 	 	(3	)	 	 	M-5	 
	LTM-6
	 	 	(1	)	 	 	(3	)	 	 	M-6	 
	LTB-1
	 	 	(1	)	 	 	(3	)	 	 	B-1	 
	LTB-2
	 	 	(1	)	 	 	(3	)	 	 	B-2	 
	LTB-3
	 	 	(1	)	 	 	(3	)	 	 	B-3	 
	LTX
	 	 	(2	)	 	 	(3	)	 	 	N/A	 
	LT-IO
	 	 	(4	)	 	 	(4	)	 	 	N/A	 
	LT-R
	 	 	(5	)	 	 	(5	)	 	 	N/A	 

 

			
	(1)	 	The initial principal amount of each of these Lower-Tier REMIC Interests is equal to 50%
of the initial principal amount of the Corresponding Certificates.
	 
	(2)	 	The initial principal amount of the Class LTX Interest is equal to the excess of the (i) the
aggregate Principal Balance of the Mortgage Loans as of the Cut-off Date over (ii) the aggregate
initial principal balance of the Lower-Tier REMIC Marker Classes.
	 
	(3)	 	For each Distribution Date, the interest rate for each of the Lower-Tier REMIC Regular
Interests (other than the Class LT-IO Interest) shall be a per annum rate (but not less than zero)
equal to the product of (i) the weighted average of the interest rates on the SWAP REMIC Regular
Interests for such Distribution Date and (ii) a fraction the numerator of which is 30 and the
denominator of which is the actual number of days in the Accrual Period for the LIBOR Certificates,
provided however, that for any Distribution Date on which the Class LT-IO Interest is entitled to a
portion of interest accruals on a SWAP REMIC Regular Interest ending with a designation “A” as
described in footnote 4 below, such weighted average shall be computed by first subjecting the rate
on such SWAP REMIC Regular Interest to a cap equal to Swap LIBOR for such Distribution Date.
	 
	(4)	 	The Class LT-IO Interest is an interest-only class that does not have a principal balance. For
only those Distribution Dates listed in the first column of the table below, the Class LT-IO
Interest shall be entitled to interest accrued on the SWAP REMIC Regular Interest listed in the
second column below at a per annum rate equal to the excess, if any, of (i) the interest rate for
such SWAP REMIC Regular Interest for such Distribution Date over (ii) Swap LIBOR for such
Distribution Date.

	 	 	 
	Distribution Date	 	SWAP REMIC Regular Interest
	1
	 	Class SW-1A
	1-2
	 	Class SW-2A
	1-3
	 	Class SW-3A
	1-4
	 	Class SW-4A
	1-5
	 	Class SW-5A
	1-6
	 	Class SW-6A
	1-7
	 	Class SW-7A
	1-8
	 	Class SW-8A
	1-9
	 	Class SW-9A
	1-10
	 	Class SW-10A

40

 

	 	 	 
	Distribution Date	 	SWAP REMIC Regular Interest
	1-11
	 	Class SW-11A
	1-12
	 	Class SW-12A
	1-13
	 	Class SW-13A
	1-14
	 	Class SW-14A
	1-15
	 	Class SW-15A
	1-16
	 	Class SW-16A
	1-17
	 	Class SW-17A
	1-18
	 	Class SW-18A
	1-19
	 	Class SW-19A
	1-20
	 	Class SW-20A
	1-21
	 	Class SW-21A
	1-22
	 	Class SW-22A
	1-23
	 	Class SW-23A
	1-24
	 	Class SW-24A
	1-25
	 	Class SW-25A
	1-26
	 	Class SW-26A
	1-27
	 	Class SW-27A
	1-28
	 	Class SW-28A
	1-29
	 	Class SW-29A
	1-30
	 	Class SW-30A
	1-31
	 	Class SW-31A
	1-32
	 	Class SW-32A
	1-33
	 	Class SW-33A
	1-34
	 	Class SW-34A
	1-35
	 	Class SW-35A
	1-36
	 	Class SW-36A
	1-37
	 	Class SW-37A
	1-38
	 	Class SW-38A
	1-39
	 	Class SW-39A
	1-40
	 	Class SW-40A
	1-41
	 	Class SW-41A
	1-42
	 	Class SW-42A
	1-43
	 	Class SW-43A
	1-44
	 	Class SW-44A
	1-45
	 	Class SW-45A
	1-46
	 	Class SW-46A
	1-47
	 	Class SW-47A
	1-48
	 	Class SW-48A
	1-49
	 	Class SW-49A
	1-50
	 	Class SW-50A
	1-51
	 	Class SW-51A
	1-52
	 	Class SW-52A
	1-53
	 	Class SW-53A
	1-54
	 	Class SW-54A
	1-55
	 	Class SW-55A
	1-56
	 	Class SW-56A
	1-57
	 	Class SW-57A
	1-58
	 	Class SW-58A
	1-59
	 	Class SW-59A
	1-60
	 	Class SW-60A
	1-61
	 	Class SW-61A
	1-62
	 	Class SW-62A
	1-63
	 	Class SW-63A

41

 

	 	 	 
	Distribution Date	 	SWAP REMIC Regular Interest
	1-64
	 	Class SW-64A
	1-65
	 	Class SW-65A
	1-66
	 	Class SW-66A
	1-67
	 	Class SW-67A
	1-68
	 	Class SW-68A
	1-69
	 	Class SW-69A
	1-70
	 	Class SW-70A
	1-71
	 	Class SW-71A
	1-72
	 	Class SW-72A
	1-73
	 	Class SW-73A
	1-74
	 	Class SW-74A
	1-75
	 	Class SW-75A
	1-76
	 	Class SW-76A
	1-77
	 	Class SW-77A
	1-78
	 	Class SW-78A
	1-79
	 	Class SW-79A
	1-80
	 	Class SW-80A
	1-81
	 	Class SW-81A
	1-82
	 	Class SW-82A
	1-83
	 	Class SW-83A
	1-84
	 	Class SW-84A
	1-85
	 	Class SW-85A
	1-86
	 	Class SW-86A
	1-87
	 	Class SW-87A
	1-88
	 	Class SW-88A
	1-89
	 	Class SW-89A
	1-90
	 	Class SW-90A
	1-91
	 	Class SW-91A
	1-92
	 	Class SW-92A
	1-93
	 	Class SW-93A
	1-94
	 	Class SW-94A
	1-95
	 	Class SW-95A
	1-96
	 	Class SW-96A
	1-97
	 	Class SW-97A
	1-98
	 	Class SW-98A
	1-99
	 	Class SW-99A
	1-100
	 	Class SW-100A
	1-101
	 	Class SW-101A
	1-102
	 	Class SW-102A
	1-103
	 	Class SW-103A
	1-104
	 	Class SW-104A
	1-105
	 	Class SW-105A
	1-106
	 	Class SW-106A
	1-107
	 	Class SW-107A
	1-108
	 	Class SW-108A
	1-109
	 	Class SW-109A
	1-110
	 	Class SW-110A
	1-111
	 	Class SW-111A
	1-112
	 	Class SW-112A
	1-113
	 	Class SW-113A
	1-114
	 	Class SW-114A
	1-115
	 	Class SW-115A
	1-116
	 	Class SW-116A

42

 

	 	 	 
	Distribution Date	 	SWAP REMIC Regular Interest
	1-117
	 	Class SW-117A
	1-118
	 	Class SW-118A
	1-119
	 	Class SW-119A
	1-120
	 	Class SW-120A
	1-121
	 	Class SW-121A
	1-122
	 	Class SW-122A
	1-123
	 	Class SW-123A

	(5)	 	The Class LT-R Interest has no principal amount and bears no interest. The Class LT-R Interest
is the sole class of residual interest of the Lower-Tier REMIC and is represented by the Class A-R
Certificate.

All payments received by the Lower-Tier REMIC with respect to the SWAP REMIC Regular Interests
shall be paid to the Lower-Tier REMIC Regular Interests until the principal balance of all such
interests have been reduced to zero and any losses allocated to such interests have been
reimbursed. Any excess amounts shall be distributed to the Class LT-R Interest. On each
Distribution Date, an amount equal to 50% of the increase in the Overcollateralized Amount shall be
payable as a reduction of the principal amounts of the Lower-Tier REMIC Marker Classes (with such
amount allocated among the Lower-Tier REMIC Marker Classes so that each Lower-Tier REMIC Marker
Class will have its principal reduced by an amount equal to 50% of any increase in the
Overcollateralized Amount that results in a reduction in the principal balance of its Corresponding
Certificates) and will be accrued and added to the principal balance of the Class LTX Interest.
All payments of scheduled principal and prepayments of principal on the Mortgage Loans shall be
allocated 50% to the Class LTX Interest and 50% to the Lower-Tier REMIC Marker Classes (with
principal payments allocated to each of the Lower-Tier REMIC Marker Classes in an amount equal to
50% of the principal amounts distributed to the Corresponding Certificates in reduction of their
principal amounts). Notwithstanding the preceding sentence, an amount equal to the principal
payments that result in a reduction in the Overcollateralized Amount shall be treated as payable
entirely to the Class LTX Interest. Realized Losses that are allocated to the Certificates shall
be applied to the Lower-Tier REMIC Marker Classes and the Class LTX Interest so that after all
distributions have been made on each Distribution Date (i) the principal balance of each of the
Lower-Tier REMIC Marker Classes is equal to 50% of the principal balance of the Corresponding
Certificates and (ii) the principal balance of the Class LTX Interest is equal to the sum of (x)
50% of the aggregate Stated Principal Balance of the Mortgage Loans and (y) 50% of the
Overcollateralized Amount. Each Lower-Tier REMIC Marker Class shall be entitled to receive an
amount equal to 50% of all amounts distributed to the Corresponding Certificates in respect of
unreimbursed amounts of Realized Losses. The Class LTX Interest shall be entitled to receive all
other amounts distributed to the Certificates in respect of unreimbursed amounts of Realized
Losses.

If on any Distribution Date the Outstanding Certificate Principal Balance of any Class of
Certificates is increased due to Subsequent Recoveries pursuant to the definition of “Outstanding
Certificate Principal Balance”, then there shall be an equivalent increase in the principal amounts
of the Lower-Tier REMIC Regular Interests, with such increase allocated (before the making of
distributions and the allocation of losses on the Lower-Tier REMIC Regular Interests on such
Distribution Date) among the Lower-Tier REMIC Regular Interests so that (i) each of the Lower-Tier
Marker Classes has a principal balance equal to 50% of the principal balance of the Corresponding
Certificates, (ii) the Class LTX Interest has a principal balance equal to the sum of (x) 50% of
the aggregate Stated Principal Balance of the Mortgage Loans and (y) 50% of the Overcollateralized
Amount.

Upper-Tier REMIC

     The assets of the Upper-Tier REMIC shall be the Lower-Tier REMIC Regular Interests. The REMIC
Regular Interests shall be designated as the regular interests in the Upper-Tier REMIC and the

43

 

Residual Interest shall be designated as the sole class of residual interest in the Upper-Tier
REMIC.

The following table sets forth the designation, the initial principal balances, the interest rates
and Classes of Related Certificates for each of the interests in the Upper-Tier REMIC.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Class of Related
	Class	 	Initial Principal Balance	 	Rate	 	Certificates
	UTA-1
	 	 	(1	)	 	 	(2	)	 	 	A-1	 
	UTA-2
	 	 	(1	)	 	 	(2	)	 	 	A-2	 
	UTM-1
	 	 	(1	)	 	 	(2	)	 	 	M-1	 
	UTM-2
	 	 	(1	)	 	 	(2	)	 	 	M-2	 
	UTM-3
	 	 	(1	)	 	 	(2	)	 	 	M-3	 
	UTM-4
	 	 	(1	)	 	 	(2	)	 	 	M-4	 
	UTM-5
	 	 	(1	)	 	 	(2	)	 	 	M-5	 
	UTM-6
	 	 	(1	)	 	 	(2	)	 	 	M-6	 
	UTB-1
	 	 	(1	)	 	 	(2	)	 	 	B-1	 
	UTB-2
	 	 	(1	)	 	 	(2	)	 	 	B-2	 
	UTB-3
	 	 	(1	)	 	 	(2	)	 	 	B-3	 
	Uncertificated Class CE Interest
	 	 	(3	)	 	 	(3	)	 	 	N/A	 
	UT-IO
	 	 	(4	)	 	 	(4	)	 	 	N/A	 
	Residual Interest
	 	 	(5	)	 	 	(5	)	 	 	N/A	 

 

			
	(1)	 	The initial principal balance of each of these REMIC Regular Interests shall equal the
initial principal balance of its Class of Related Certificates.
	 
	(2)	 	The interest rates on each of these REMIC Regular Interests shall be an annual rate equal to
the Certificate Rate for the Class of Related Certificates, provided that in lieu of the applicable
Net WAC set forth in the definition of Certificate Rate, the applicable Upper-Tier REMIC Net WAC
Cap shall be used.
	 
	(3)	 	The Uncertificated Class CE Interest shall have an initial principal balance equal to the
initial Overcollateralized Amount. The Uncertificated Class CE Interest shall accrue interest on a
notional balance set forth in the definition of Class CE Interest Distribution Amount at a rate
equal to the Class CE Distributable Interest Rate. The Uncertificated Class CE Interest shall be
represented by the Class CE Certificates.
	 
	(4)	 	The Class UT-IO Interest shall have no principal amount and will not have an interest rate, but
will be entitled to 100% of the interest accrued with respect to the Class LT-IO Interest. The
Class UT-IO Interest shall be represented by the Class CE Certificates.
	 
	(5)	 	The Residual Interest has no principal amount and bears no interest. The Residual Interest is
the sole class of residual interest of the Upper-Tier REMIC and is represented by the Class A-R
Certificate.

     The beneficial ownership of the Class SW-R Interest, the Class LT-R Interest, the
Residual Interest and the right to receive payments from the Class A-R Reserve Fund shall be
represented by the Class A-R Certificate.

     (b) (i) It is intended that the rights of each Class of the Class A, Class M and Class B
Certificates to receive payments in respect of Excess Interest shall be treated as a right in
interest rate cap contracts written by the Class CE Certificateholders in favor of the Holders of
each Class of the Class A, Class M and Class B Certificates and such shall be accounted for as
property held separate and apart from the regular interests in the Upper-Tier REMIC held by the
Holders of the Class A, Class M and Class B Certificates. For information reporting requirements,
the rights of the Class A, Class M and Class B

44

 

Certificates to receive payments in respect of
Excess Interest shall be assumed to have zero value or a de minimis value. This provision is
intended to satisfy the requirements of Treasury Regulations Section 1.860G-2(i) for the treatment
of property rights coupled with REMIC interests to be separately respected and shall be interpreted
consistently with such regulation. On each Distribution Date, to the extent that any of the Class
A, Class M and Class B Certificates receive payments in respect of Excess Interest, such amounts,
to the extent not derived from payments on the Swap Agreement or Yield Maintenance Agreement, will
be treated as distributed by the Upper-Tier REMIC to the Class CE Certificates pro rata
in payment of the amounts specified in Section 6.01(c)(18) and then paid to the relevant Class of
Certificates pursuant to the related interest rate cap agreement.

          (ii) It is intended that the beneficial owners of the Certificates (other than the Class A-R
and Class CE Certificates) shall be treated as having entered into a notional principal contract
with respect to the beneficial owners of the Class CE Certificates. Pursuant to each such notional
principal contract, all beneficial owners of each Class of Certificates (other than the Class A-R
and Class CE Certificates) shall be treated as having agreed to pay, on each Distribution Date, to
the beneficial owners of the Class CE Certificates an aggregate amount equal to the excess, if any,
of (i) the amount payable on such Distribution Date on the Corresponding REMIC Regular Interest of
such Class of Certificates over (ii) the amount payable on such Class of Certificates on such
Distribution Date (such excess, a “Class Payment Shortfall”). A Class Payment Shortfall shall be
allocated to each Class of Certificates to the extent that interest accrued on such Class for the
related Accrual Period at the Certificate Rate for a Class, computed by substituting “Upper-Tier
REMIC Net WAC Cap” for the Net WAC set forth in the definition thereof, exceeds the amount of
interest accrued on such Certificate at the Certificate Rate (without such substitution) for the
related Accrual Period, and a Class Payment Shortfall payable from principal collections shall be
allocated to the most subordinate Class of Certificates with an outstanding principal balance to
the extent of such balance.

     (c) The parties intend that the portion of the Trust Fund consisting of the Uncertificated
Class CE Interest, the uncertificated Class UT-IO Interest, the rights to receive payments deemed
made by the Class A, Class M and Class B Certificates in respect of notional principal contracts
described in Section 2.04(b)(ii), the Supplemental Interest Trust, the Swap Agreement, the Yield
Maintenance Agreements and the obligation of the Holders of the Class CE Certificates to pay
amounts in respect of Excess Interest to the Holders of the Class A, Class M and Class B
Certificates shall be treated as a “grantor trust” under the Code, for the benefit of the Holders
of the Class CE Certificates, and the provisions hereof shall be interpreted consistently with this
intention. In furtherance of such intention, the Trustee shall (i) furnish or cause to be
furnished to the Holders of the Class CE Certificates information regarding their allocable share,
if any, of the income with respect to such grantor trust, (ii) file or cause to be filed with the
Internal Revenue Service Form 1041 (together with any necessary attachments) and such other forms
as may be applicable and (iii) comply with such information reporting obligations with respect to
payments from such grantor trust to the Holders of the Class A, Class M, Class B and Class CE
Certificates as may be applicable under the Code.

          The parties intend that amounts paid to the Swap Counterparty under the Swap Agreement shall
be deemed for federal income tax purposes to be paid by the Class CE Certificates first, out of
funds deemed received in respect of the Class UT-IO Interest, second, out of funds deemed received
in respect of the Uncertificated Class CE Interest and third, out of funds deemed received in
respect of notional principal contracts described in Section 2.04(b)(ii), and the provisions hereof
shall be interpreted consistently with this intention. On each Distribution Date, to the extent
that amounts paid to the Swap Counterparty are deemed paid out of funds received in respect of the
Uncertificated Class CE Interest, such amounts will be treated as distributed by the Upper-Tier
REMIC to the Class CE Certificates pro rata in payment of the amounts specified in Section
6.01(c)(18) and then paid to the Swap Counterparty pursuant to the Swap Agreement.

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          The Supplemental Interest Trust shall be an “outside reserve fund” for federal income tax
purposes and not an asset of any REMIC. Furthermore, the Holders of the Class CE Certificates
shall be the beneficial owners of the Supplemental Interest Trust for all federal income tax
purposes, and shall be taxable on all income earned thereon.

     (d) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the
“latest possible maturity date” of each “regular interest” in each REMIC created hereunder is the
Distribution Date immediately following the latest scheduled maturity of any Mortgage Loan.

     (e) The “tax matters person” with respect to each REMIC created hereunder for purposes of the
REMIC Provisions shall be the beneficial owner of the Class A-R Certificate having the largest
Percentage Interest of such Class; provided, however, that such largest beneficial owner and, to
the extent relevant, each other Holder of a Class A-R Certificate, by its acceptance thereof,
irrevocably appoints the Servicer as its agent and attorney-in-fact to act as “tax matters person”
with respect to each REMIC created hereunder for purposes of the REMIC provisions.

     (f) It is intended that each REMIC created hereunder shall constitute, and that the affairs of
the Trust Fund shall be conducted so as to qualify each REMIC created hereunder as, a “real estate
mortgage investment conduit” as defined in and in accordance with the REMIC Provisions. In
furtherance of such intention, the Servicer covenants and agrees that it shall act as agent (and
the Servicer is hereby appointed to act as agent) on behalf of the Trust Fund, each REMIC created
hereunder and the Holder of the Class A-R Certificate and that in such capacity it shall:

     (i) prepare and file, or cause to be prepared and filed, in a timely manner, a U.S.
Real Estate Mortgage Investment Conduit Income Tax Return (Form 1066) for each REMIC created
hereunder and prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information returns for
each taxable year with respect to each REMIC created hereunder, using the calendar year as
the taxable year and the accrual method of accounting, containing such information and at
the times and in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and shall furnish or cause to be furnished to Certificateholders the
schedules, statements or information at such times and in such manner as may be required
thereby;

     (ii) within thirty days of the Closing Date, shall furnish or cause to be furnished to
the Internal Revenue Service, on Form 8811 or as otherwise may be required by the Code, the
name, title, address, and telephone number of the person that the Holders of the
Certificates may contact for tax information relating thereto (and the Servicer shall act as
the representative of the Trust Fund for this purpose), together with such additional
information as may be required by such Form, and shall update such information at the time
or times in the manner required by the Code;

     (iii) make or cause to be made an election, on behalf of each REMIC created hereunder,
to be treated as a REMIC, and make the appropriate designations, if applicable, in
accordance with this Section 2.04 on the federal tax return of each REMIC hereunder for its
first taxable year (and, if necessary, under applicable state law);

     (iv) prepare and forward, or cause to be prepared and forwarded, to the
Certificateholders and to the Internal Revenue Service and, if necessary, state tax
authorities, all information returns or reports, or furnish or cause to be furnished by
telephone, mail, publication or other appropriate method such information, as and when
required to be provided to them in

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accordance with the REMIC Provisions, including without
limitation, the calculation of any original issue discount;

     (v) provide information necessary for the computation of tax imposed on the transfer of
the Class A-R Certificate to a Disqualified Organization, or an agent (including a broker,
nominee or other middleman) of a Disqualified Organization, or a pass-through entity in
which a
Disqualified Organization is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable for such tax);

     (vi) ensure that federal, state or local income tax or information returns shall be
signed by the Trustee or such other Person as may be required to sign such returns by the
Code or state or local laws, regulations or rules; and

     (vii) maintain such records relating to each REMIC created hereunder as may be required
by the Code and as may be necessary to prepare the foregoing returns, schedules, statements
or information.

     (g) Pursuant to Section 6.02(b), the Servicer, with the consent of the Trustee, hereby
appoints the Global Corporate Trust MBS Group of The Bank of New York Trust Company, N.A. to
perform the duties enumerated in (f) above.

     Section 2.05 Permitted Activities of Trust. The Trust is created for the object and
purpose of engaging in the Permitted Activities.

     Section 2.06 Qualifying Special Purpose Entity. For purposes of SFAS 140, the parties
hereto intend that the Trust shall be treated as a “qualifying special purpose entity” as such term
is used in SFAS 140 and any successor rule thereto and its power and authority as stated in Section
2.05 of this Agreement shall be limited in accordance with paragraph 35 thereof.

[END OF ARTICLE II]

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND

THE SERVICER; REPURCHASE OF MORTGAGE LOANS

     Section 3.01 Representations and Warranties of the Depositor with respect to the Mortgage
Loans.

     The Depositor hereby represents and warrants to the Trustee for the benefit of the
Certificateholders that on or before the Closing Date it has entered into the Sale Agreement with
the Seller, that the Seller has made the following representations and warranties with respect to
each Mortgage Loan in the Sale Agreement as of the Closing Date, which representations and
warranties run to and are for the benefit of the Depositor and the Trustee for the benefit of the
Certificateholders, and as to which the Depositor has assigned to the Trustee for the benefit of
the Certificateholders, pursuant to Section 2.01 hereof, the right to cause the Seller to
repurchase a Mortgage Loan as to which there has occurred an uncured breach of representations and
warranties in accordance with the provisions of the Sale Agreement.

     (a) The information set forth in the Mortgage Loan Schedule is complete, true and correct in
all material respects;

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     (b) With respect to a Mortgage Loan which is not a Co-op Loan, the Mortgage creates a first
lien or a first priority ownership interest in an estate in fee simple in real property securing
the related Mortgage Note. With respect to a Co-op Loan, the related Mortgage is a valid,
enforceable and subsisting first security interest on the related cooperative shares securing the
related Mortgage Note, subject only to (a) liens of the related residential cooperative housing
corporation for unpaid assessments representing the Mortgagor’s pro rata share of the related
residential cooperative housing corporation’s payments for its blanket mortgage, current and future
real property taxes, insurance premiums, maintenance fees and other assessments to which like
collateral is commonly subject and (b) other matters to which like collateral is commonly subject
which do not materially interfere with the benefits of the security intended to be provided by the
related security agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts
owed to the related cooperative which individually or in the aggregate will not have a material
adverse effect on such Co-op Loan), which have priority over the Trustee’s security interest in
such cooperative shares;

     (c) All payments due prior to the Cut-off Date for such Mortgage Loan have been made as of the
Closing Date, the Mortgage Loan is not delinquent in payment more than 30 days and has not been
dishonored; to the best of the Seller’s knowledge, there are no material defaults under the terms
of the Mortgage Loan; the Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the Mortgaged Property subject
to the Mortgage (or, with respect to a Co-op Loan, the related Mortgagor), directly or indirectly,
for the payment of any amount required by the Mortgage Loan; there has been no more than one
delinquency in excess of 30 days during the preceding twelve-month period;

     (d) To the best of the Seller’s knowledge, all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or escrow funds have been established in an amount sufficient
to pay for every such escrowed item which remains unpaid and which has been assessed but is not yet
due and payable;

     (e) The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or
modified in any respect, except by written instruments. No Mortgagor has been released, in whole
or in part, from the terms thereof except in connection with an assumption agreement and which
assumption agreement is part of the Mortgage File and the terms of which are reflected in the
Mortgage Loan Schedule;

     (f) The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off,
counterclaim or defense, including, without limitation, the defense of usury, nor will the
operation of any of the terms of the Mortgage Note or Mortgage, or the exercise of any right
thereunder, render the Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no
such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto,
and the Mortgagor was not a debtor in any state or federal bankruptcy or insolvency proceeding at
the time the Mortgage Loan was originated;

     (g) With respect to a Mortgage Loan which is not a Co-op Loan, all buildings or other
customarily insured improvements upon the Mortgaged Property are insured by an insurer acceptable
under the FNMA Guides against loss by fire, hazards of extended coverage and such other hazards as
are provided for in the FNMA Guides or by FHLMC. All such standard hazard policies are in full
force and effect and on the date of origination contained a standard mortgagee clause naming the
Seller and its successors in interest and assigns as loss payee and such clause is still in effect
and all premiums due thereon have been paid. If required by the Flood Disaster Protection Act of
1973, as amended, the

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Mortgaged Property is covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration which policy conforms to FNMA and FHLMC
requirements. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at
the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do so, authorizes the holder of
the Mortgage to maintain such insurance at the Mortgagor’s cost and expense and to seek
reimbursement therefor from the Mortgagor;

     (h) Any and all requirements of any federal, state or local laws and all applicable predatory
and abusive lending laws, including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws
applicable to the Mortgage Loan have been complied with in all material respects;

     (i) The Mortgage has not been satisfied, canceled or subordinated, in whole or in part, or
rescinded, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part nor has any instrument been executed that would effect any such release, cancellation,
subordination or rescission;

     (j) With respect to a Mortgage Loan which is not a Co-op Loan, the Mortgage is a valid,
subsisting, enforceable and perfected first lien on the Mortgaged Property, including, all
buildings on the Mortgaged Property. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Such lien is free and clear
of all adverse claims, liens and encumbrances having priority over the first lien of the Mortgage
subject only to (1) the lien of non-delinquent current real property taxes and assessments not yet
due and payable, (2) covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording which are acceptable to mortgage lending
institutions generally and either (A) which are referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan, or (B) which do not adversely affect the
Appraised Value of the Mortgaged Property as set forth in such appraisal, and (3) other matters to
which like properties are commonly subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability
of the related Mortgaged Property. Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security interest on the
property described therein, and the Depositor has the full right to sell and assign the same to the
Trustee for the benefit of the Certificateholders;

     (k) The Mortgage Note and the related Mortgage are original and genuine and each is the legal,
valid and binding obligation of the maker thereof, enforceable in all respects in accordance with
its terms subject to bankruptcy, insolvency and other laws of general application affecting the
rights of creditors and the Depositor has taken all action necessary to transfer such rights of
enforceability to the Trustee for the benefit of the Certificateholders. All parties to the
Mortgage Note and the Mortgage had the legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have
been duly and property executed by such parties. The proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder, and any and all requirements
as to completion of any on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with;

     (l) The Seller is the sole owner and holder of the Mortgage Loan and the indebtedness
evidenced by the Mortgage Note, except for the Assignments of Mortgage which have been sent for
recording, and upon recordation the Seller will be the owner of record of the Mortgage and the
indebtedness evidenced by the Mortgage Note, and upon the sale of the Mortgage Loan to the Trust
for the benefit of the Certificateholders, the Seller will retain the Mortgage File or any part
thereof with

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respect thereto not delivered to the Trust for the benefit of the Certificateholders or its
designee in trust only for the purpose of servicing and supervising the servicing of the Mortgage
Loan. Immediately prior to the transfer and assignment to the Trust for the benefit of the
Certificateholders, the Mortgage Loan, including the Mortgage Note and the Mortgage, were not
subject to an assignment or pledge, and the Depositor had good and marketable title to and was the
sole owner thereof and had full right to transfer and sell the Mortgage Loan to the Trustee for the
benefit of the Certificateholders free and clear of any encumbrance, equity, lien, pledge, charge,
claim or security interest and has the full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign the Mortgage Loan pursuant
to this Agreement and following the sale of the Mortgage Loan, the Trustee for the benefit of the
Certificateholders will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest;

     (m) With respect to a Mortgage Loan which is not a Co-op Loan, the Mortgage Loan is covered by
an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance
acceptable to FNMA or FHLMC, issued by a title insurer acceptable to FNMA or FHLMC and qualified to
do business in the jurisdiction where the Mortgaged Property is located, insuring (subject to the
exceptions contained in (j) (1), (2) and (3) above) the Seller, its successors and assigns, as to
the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan.
Such lender’s title insurance policy insures ingress and egress by or upon the Mortgaged Property
or any interest therein. Where required by state law or regulation, the Mortgagor has been given
the opportunity to choose the carrier of the required mortgage title insurance. The Seller, its
successors and assigns, are the sole insureds of such lender’s title insurance policy, and such
lender’s title insurance policy is in full force and effect and will be in full force and effect
upon the consummation of the transactions contemplated by this Agreement. No claims have been made
under such lender’s title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything which would impair the coverage of such lender’s
title insurance policy;

     (n) There is no default, breach, violation or event of acceleration existent, under the
Mortgage or the related Mortgage Note and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a default, breach, violation or
event permitting acceleration; and neither the Seller nor any prior mortgagee has waived any
default, breach, violation or event permitting acceleration;

     (o) There are no mechanics’, or similar liens or claims which have been filed for work, labor
or material (and no rights are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property (or the related residential dwelling unit in the Underlying Mortgage
Property, in the case of a Co-op Loan) which are or may be liens prior to or equal to the lien of
the related Mortgage;

     (p) With respect to a Mortgage Loan which is not a Co-op Loan, all improvements subject to the
Mortgage which were considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged Property (and wholly
within the project with respect to a condominium unit) and no improvements on adjoining properties
encroach upon the Mortgaged Property except those which are insured against by the title insurance
policy referred to in clause (m) above and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances; the Mortgaged Property is lawfully occupied
under applicable law;

     (q) The Mortgage Loan complies in all material respects with all the terms, conditions and
requirements of the Seller’s underwriting standards in effect at the time of origination of such
Mortgage Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on forms generally
acceptable to FNMA or FHLMC. Monthly Payments under the Mortgage Note are due and payable on the
first day of each month. The Mortgage contains the usual and enforceable provisions of the
originator at the time of

50

 

origination for the acceleration of the payment of the unpaid principal amount of the Mortgage
Loan if the related Mortgaged Property is sold without the prior consent of the mortgagee
thereunder;

     (r) The Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), is
not subject to any material damage by waste, fire, earthquake, windstorm, flood or other casualty.
To the best of the Seller’s knowledge, at origination of the Mortgage Loan there was, and there
currently is, no proceeding pending for the total or partial condemnation of the Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan);

     (s) The related Mortgage contains customary and enforceable provisions such as to render the
rights and remedies of the holder thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby, including, (l) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (2) otherwise by judicial foreclosure. There
is no homestead or other exemption available to the Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage subject
to applicable federal and state laws and judicial precedent with respect to bankruptcy and right of
redemption or similar law;

     (t) If the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified if
required under applicable law to act as such, has been properly designated and currently so serves
and is named in the Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee’s sale or attempted sale after default by the Mortgagor;

     (u) The Mortgage File contains an appraisal or a recertification document (in the case of a
Mortgage Loan originated under the Seller’s Streamlined Refinance Program) of the related Mortgaged
Property (or the related residential dwelling unit in the Underlying Mortgaged Property, in the
case of a Co-op Loan), signed prior to the final approval of the mortgage loan application by an
appraiser approved by the Seller who had no interest, direct or indirect, in the Mortgaged Property
(or Underlying Mortgaged Property, in the case of a Co-op Loan), or in any loan made on the
security thereof, and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan. The appraisal is in a form acceptable to FNMA or FHLMC;

     (v) All parties which have had any interest in the Mortgage, whether as mortgagee, assignee,
pledgee or otherwise, are (or, during the period in which they held and disposed of such interest,
were) (A) in substantial compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property (or Underlying Mortgaged Property, in the case of a
Co-op Loan), is located, and (B) (1) organized under the laws of such state, or (2) qualified to do
business in such state, or (3) federal savings and loan associations or national banks or a Federal
Home Loan Bank or savings bank having principal offices in such state, or (4) not doing business in
such state;

     (w) The related Mortgage Note is not and has not been secured by any collateral except the
lien of the corresponding Mortgage and the security interest of any applicable security interest of
any applicable agreement or chattel mortgage referred to above and such collateral does not serve
as security for any other obligation;

     (x) The Mortgagor has received all disclosure materials required by applicable law with
respect to the making of such mortgage loans;

     (y) The Mortgage Loan does not contain “graduated payment” features;

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     (z) The Mortgagor is not in bankruptcy and, to the best of the Seller’s knowledge, the
Mortgagor is not insolvent;

     (aa) The Mortgage Loans are fixed rate mortgage loans. Each Mortgage Loan has an original term
to maturity of not more than thirty (30) years with interest payable in arrears on the first day of
each month. No Mortgage Loan contains terms or provisions which would result in negative
amortization;

     (bb) Each Mortgage Note, each Mortgage, each Assignment of Mortgage and any other documents
required pursuant to this Agreement to be delivered to the Trustee on behalf of the
Certificateholders or its designee, or its assignee for each Mortgage Loan, have been, on or before
the Closing Date, delivered to the Trustee on behalf of the Certificateholders or its designee, or
its assignee;

     (cc) All escrow payments have been collected in full compliance with state and federal law and
the provisions of the related Mortgage Note and Mortgage. As to any Mortgage Loan that is the
subject of an escrow, escrow of funds is not prohibited by applicable law and has been established
in an amount sufficient to pay for every escrowed item that remains unpaid and has been assessed
but is not yet due and payable. No escrow deposits or other charges or payments due under the
Mortgage Note have been capitalized under any Mortgage or the related Mortgage Note. Any interest
required to be paid pursuant to state, federal and local law has been properly paid and credited;

     (dd) [Reserved];

     (ee) In the event that at origination the Mortgage Loan has a Loan-to-Value Ratio greater than
80%, the excess of the principal balance of the Mortgage Loan over 75% of the Appraised Value of
the Mortgaged Property, with respect to a refinanced Mortgage Loan, or the lesser of the Appraised
Value or the purchase price of the Mortgaged Property (or Underlying Mortgaged Property, in the
case of a Co-op Loan), with respect to a purchase money Mortgage Loan, is and will be insured as to
payment defaults by a Primary Insurance Policy issued by a Qualified Insurer, except where the
primary mortgage insurance was (i) impermissible at origination at applicable law, in which case
such Mortgage Loan was originated in accordance with applicable law, (ii) cancelled at the request
of the Mortgagor pursuant to the cancellation requirements of FNMA, FHLMC, state law or, as
applicable the Home Owner and Equity Protection Act of 1994, as amended, or (iii) automatically
terminated in accordance with the termination requirements of FNMA, FHLMC, state law or, as
applicable the Home Owner and Equity Protection Act of 1994, as amended. All provisions of such
Primary Insurance Policy have been and are being complied with, such policy is in full force and
effect, and all premiums due thereunder have been paid. No action, inaction, or event has occurred
and no state of facts exists that has, or will result in the exclusion from, denial of, or defense
to coverage. Any Mortgage Loan subject to a Primary Insurance Policy obligates the Mortgagor
thereunder to maintain the Primary Insurance Policy and to pay all premiums and charges in
connection therewith. The Mortgage Rate for the Mortgage Loan as set forth on the Mortgage Loan
Schedule is net of any such insurance premium;

     (ff) The Assignment of Mortgage is in recordable form and is acceptable for recording (or, in
the case of a Co-op Loan, is in a form acceptable for filing) under the laws of the jurisdiction in
which the Mortgaged Property (or underlying Mortgaged Property, in the case of a Co-op Loan) is
located;

     (gg) As to Mortgage Loans that are not secured by an interest in a leasehold estate, the
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), is located in
the state identified in the Mortgage Loan Schedule and consists of a single parcel of real property
with a detached single family residence erected thereon, or a two-to four-family dwelling, or an
individual condominium unit in a condominium project, or a dwelling unit in a residential
cooperative housing corporation or an individual unit in an attached planned unit

52

 

development or a
detached planned unit development, provided, however, that no residence or dwelling is a single
parcel of real property with a mobile home thereon. As of the date of origination, no portion of
the Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), was used
for commercial purposes, and since the date of origination, to the best of the Seller’s knowledge,
no portion of the Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan), is used for commercial purposes;

     (hh) If the Mortgaged Property is a condominium unit or a planned unit development (other than
a de minimis planned unit development), as of the date of origination of the related Mortgage Loan,
such condominium or planned unit development project met the Seller’s eligibility requirements, as
set forth in the Seller’s underwriting guidelines as of such date; in the case of each Co-op Loan,
the related residential cooperative housing corporation complied in all material respects with the
Seller’s requirements as set forth in the Seller’s underwriting guidelines as of such date;

     (ii) To the best of the Seller’s knowledge, there is no pending action or proceeding directly
involving the Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan),
in which compliance with any environmental law, rule or regulation is an issue;

     (jj) As of the Cut-off Date, the Seller has not granted any interest rate relief to the
Mortgagor under the Relief Act;

     (kk) No Mortgage Loan was made in connection with the construction or rehabilitation of a
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), or facilitating
the trade-in or exchange of a Mortgaged Property (or Underlying Mortgaged Property, in the case of
a Co-op Loan);

     (ll) No action has been taken or failed to be taken by Depositor, on or prior to the Closing
Date, which has resulted or will result in an exclusion from, denial of, or defense to coverage
under any Primary Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of the full amount of
the loss otherwise due thereunder to the insured) whether arising out of actions, representations,
errors, omissions, negligence, or fraud of the Depositor, or for any other reason under such
coverage;

     (mm) The Mortgage Loan was originated by a mortgagee approved by the Secretary of Housing and
Urban Development pursuant to Sections 203 and 211 of the National Housing Act, as amended, a
savings and loan association, a savings bank, a commercial bank, credit union, insurance company or
similar institution which is supervised and examined by a federal or state authority;

     (nn) Principal payments on the Mortgage Loan commenced no more than sixty (60) days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage Note is payable on the
first day of each month in equal monthly installments of principal and interest, with interest
calculated and

     payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from commencement of amortization;

     (oo) As of the Closing Date, the Mortgage Loan is a “qualified mortgage” within the meaning of
Section 860G(a)(3) of the Code (without regard to Treasury Regulations §1.860G-2(f) or any similar
rule that provides that a defective obligation is a qualified mortgage for a temporary period);

     (pp) With respect to a Mortgage Loan that is a Co-op Loan, the stock that is pledged as
security for the Mortgage Loan is held by a Person as a tenant-stockholder (as defined in Section
216 of the Code) in a cooperative housing corporation (as defined in Section 216 of the Code);

53

 

     (qq) As of the Closing Date, the Mortgage Loan is not the subject of pending or final
foreclosure proceedings and the Seller would not, based on the delinquency status of the Mortgage
Loan, institute foreclosure proceedings with respect to the Mortgage Loan prior to the next
scheduled payment for the Mortgage Loan;

     (rr) As of the Closing Date, the Mortgage Loan does not provide for interest other than at
either (i) a single fixed rate in effect throughout the term of the Mortgage Loan or (ii) a
“variable rate” (within the meaning of Treasury Regulation Section 1.860G-1(a)(3)) in effect
throughout the term of the Mortgage Loan;

     (ss) No Mortgage Loan is a “covered loan” within the meaning of the Georgia Fair Lending Act
of 2002, as amended;

     (tt) None of the Mortgage Loans are (a) covered by the Home Ownership and Equity Protection
Act of 1994 or (b) classified as a “high cost” loan or similarly classified using different
terminology under any federal, state or local law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest rates, points and/or
fees such as predatory lending laws; None of the Mortgage Loans are “high cost” loans as defined by
the applicable federal, state or local predatory and abusive lending laws nor is any Mortgage Loan
a “High Cost Loan” or “Covered Loan,” as applicable (as such terms are defined in the current
Standard & Poor’s LEVELS® Glossary which is now version 5.6 revised, appendix E) and no Mortgage
Loan originated on or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act of 2002, as amended; and

     (uu) As to each Mortgage Loan that is secured by an interest in a leasehold estate, (i) the
use of a leasehold estate for residential properties is an accepted practice in the area where the
related Mortgaged Property is located, (ii) residential property consisting of leasehold estates is
marketable in the area where the related Mortgaged Property is located, (iii) the related lease has
been recorded in the applicable land records, (iv) the lease is valid and in good standing and is
not subject to any prior lien by which the lease could be terminated or subject to any charge or
penalty, and (v) the remaining term of the lease does not terminate less than five years after the
maturity date of such Mortgage Loan.

     Upon discovery by any of the Depositor, the Servicer or the Trustee of a breach of any of the
foregoing representations and warranties which materially and adversely affects the value of a
Mortgage Loan or the interest of the Certificateholders (or which materially and adversely affects
the interests of the Certificateholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other parties and to the Seller, which notice shall
specify the date of discovery. Pursuant to the Sale Agreement, the Seller shall within 90 days
from the earlier of (i) the date of receipt of notice of such breach or (ii) the date the Seller
otherwise discovers such breach, cure such breach, substitute a Mortgage
Loan pursuant to the provisions of Section 3.03 or, if the breach relates to a particular
Mortgage Loan, purchase such Mortgage Loan from the Trustee at the Purchase Price. The Purchase
Price for the purchased Mortgage Loan shall be paid to the Servicer and shall be deposited by the
Servicer in the Collection Account promptly upon receipt, and, upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer, the Trustee shall promptly
release to the Seller the related Mortgage File, and the Trustee shall execute and deliver such
instruments of transfer or assignment as may be provided to it by the Servicer, without recourse,
as shall be necessary to vest in the Seller or its designee, as the case may be, any Mortgage Loan
released pursuant hereto, and the Trustee shall have no further responsibility with regard to such
Mortgage Loan. It is understood and agreed that the obligation of the Seller to cure, substitute
or purchase any Mortgage Loan as to which such a breach has occurred

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shall constitute the sole
remedy respecting such breach available to Certificateholders or the Trustee on behalf of
Certificateholder.

     Section 3.02 Representations and Warranties of the Servicer. The Servicer represents
and warrants to, and covenants with, the Trustee for the benefit of the Certificateholders that as
of the Closing Date:

     (a) The Servicer is a limited liability company duly chartered and validly existing in good
standing under the laws of the State of Delaware, and the Servicer is duly qualified or registered
as a foreign corporation in good standing in each jurisdiction in which the ownership or lease or
its properties or the conduct of its business requires such qualification;

     (b) The execution and delivery of this Agreement by the Servicer and its performance and
compliance with the terms of this Agreement will not violate the Servicer’s certificate of
formation or by-laws or constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any material contract,
agreement or other instrument to which the Servicer is a party or which may be applicable to the
Servicer or any of its assets;

     (c) This Agreement, assuming due authorization, execution and delivery by the Trustee and the
Depositor, constitutes a valid, legal and binding obligation of the Servicer, enforceable against
it in accordance with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally
and to general principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;

     (d) The Servicer is not in default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental agency, which default
might have consequences that would materially and adversely affect the condition (financial or
other) or operations of the Servicer or its properties or might have consequences that would affect
its performance hereunder; and

     (e) No litigation is pending or, to the best of the Servicer’s knowledge, threatened against
the Servicer which would prohibit its entering into this Agreement or performing its obligations
under this Agreement. It is understood and agreed that the representations and warranties set
forth in this Section 3.02 shall survive the issuance and delivery of the Certificates and shall be
continuing as long as any Certificate shall be outstanding or this Agreement has been terminated.

     Section 3.03 Option to Substitute. If the Seller is required to repurchase any
Mortgage Loan pursuant to Section 2.02 or 3.01, the Seller may, at its option, within two years
from the Closing Date, remove such defective Mortgage Loan from the terms of this Agreement and
substitute another mortgage loan for such defective Mortgage Loan, in lieu of
repurchasing such defective Mortgage Loan. Any substitute Mortgage Loan shall (a) have a
Principal Balance at the time of substitution not in excess of the Principal Balance of the removed
Mortgage Loan (the amount of any difference, plus one month’s interest thereon at the Mortgage Rate
borne by the removed Mortgage Loan, being paid by the Seller and deemed to be a Principal
Prepayment to be deposited by the Servicer in the Collection Account), (b) have a Mortgage Rate not
less than, and not more than one percentage point greater than, the Mortgage Rate of the removed
Mortgage Loan (provided, however, that if the Mortgage Rate on the substitute Mortgage Loan exceeds
the Mortgage Rate on the removed Mortgage Loan, the amount of that excess interest (the “Substitute
Excess Interest”) shall be payable to the Class A-R Certificate), (c) have a remaining term to
stated maturity not later than, and not more than one year less than, the remaining term to stated
maturity of the removed Mortgage Loan, (d) be, in the reasonable determination of the Servicer, of
the same type,

55

 

quality and character (including location of the Mortgaged Property (or underlying
Mortgaged Property, in the case of a Co-op Loan)) as the removed Mortgage Loan as if the breach had
not occurred, (e) have a Loan-to-Value Ratio at origination no greater than that of the removed
Mortgage Loan and (f) be, in the reasonable determination of the Seller, in material compliance
with the representations and warranties contained in the Sale Agreement and described in Section
3.01, as of the date of substitution.

     The Seller shall amend the Mortgage Loan Schedule to reflect the withdrawal of the removed
Mortgage Loan from this Agreement and the substitution of such substitute Mortgage Loan therefor
and shall send a copy of such amended Mortgage Loan Schedule to the Servicer and the Trustee. The
Sale Agreement provides that upon such amendment the Seller shall be deemed to have made as to such
substitute Mortgage Loan the representations and warranties set forth in Section 3.01 as of the
date of such substitution, which shall be continuing as long as any Certificate shall be
outstanding or this Agreement has not been terminated, and the remedies for breach of any such
representation or warranty shall be as set forth in Section 3.01. Upon such amendment, the
Custodian on behalf of the Trustee shall review the Mortgage File delivered to it relating to the
substitute Mortgage Loan, within the time and in the manner and with the remedies specified in
Section 2.02, except that for purposes of this Section 3.03 (other than the two-year period
specified in the first sentence of this Section), such time shall be measured from the date of the
applicable substitution. In the event of such a substitution, accrued interest on the substitute
Mortgage Loan for the month in which the substitution occurs and any Principal Prepayments made
thereon during such month shall be the property of the Trust Fund, and accrued interest for such
month on the Mortgage Loan for which the substitution is made and any Principal Prepayments made
thereon during such month shall be the property of the Seller. The principal payment on a
substitute Mortgage Loan due on the Due Date in the month of substitution shall be the property of
the Seller, and the principal payment on the Mortgage Loan for which the substitution is made due
on such date shall be the property of the Trust Fund.

[END OF ARTICLE III]

ARTICLE IV

THE CERTIFICATES

     Section 4.01 The Certificates.

     (a) The Class A, Class M, Class B and Class CE Certificates shall be substantially in the
forms thereof included within Exhibits C, D, E, E-1 and F and shall, on original issue, be executed
by the Depositor and authenticated by the Trustee (or, if an Authenticating Agent has been
appointed pursuant to Section 4.06, the Authenticating Agent) upon receipt by the Trustee of the
documents specified in Section 2.01, delivered to or upon the order of the Depositor.

     (b) The Depository and the Trustee have entered into a Depository Agreement dated as of April
26, 2007 (the “Depository Agreement”). Except as provided in paragraph (c) below, the Book-Entry
Certificates shall at all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Book-Entry Certificates may not be transferred as provided
in Section 4.02 except to a successor to the Depository; (ii) ownership and transfers of
registration of the Book-Entry Certificates on the books of the Depository shall be governed by
applicable rules established by the Depository; (iii) the Depository may collect its usual and
customary fees, charges and expenses from its Depository Participants; (iv) the Paying Agent and
the Trustee shall deal with the Depository, Depository Participants and Indirect Participants as
representatives of the Certificate Owners of the Book-Entry Certificates for purposes of exercising
the rights of such Holders under this Agreement, and

56

 

requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with respect to different
Certificate Owners; and (v) the Paying Agent and the Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its Depository Participants
and furnished by the Depository Participants with respect to Indirect Participants and persons
shown on the books of such Indirect Participants as direct or indirect Certificate Owners. The
Depository Agreement provides that the Depository shall maintain book-entry records with respect to
the Certificate Owners and with respect to ownership and transfers of such Certificates.

     All transfers by Certificate Owners of Book-Entry Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm representing such
Certificate Owners. Each Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as agent in accordance
with the Depository’s normal procedures.

     (c) If (i)(A) the Depository advises the Depositor, the Paying Agent or the Trustee in writing
that the Depository is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Trustee, the Paying Agent or the Depositor are unable after exercise of
their reasonable best efforts to locate a qualified successor or (ii) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system through the
Depository, the Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent, shall notify all Certificate Owners, through the Depository, of the occurrence of any such
event and of the availability of definitive, fully registered Certificates (the “Definitive
Certificates”) to Certificate Owners requesting the same. Upon surrender to the Trustee or, if a
Paying Agent has been appointed under Section 4.05, the Paying Agent, of the Book-Entry
Certificates by the Depository for registration and receipt by the Trustee or, if a Paying Agent
has been appointed under Section 4.05, the Paying Agent, of an adequate supply of certificates from
the Depositor, the Trustee or if the Paying Agent is appointed under Section 4.05, the Paying Agent
shall issue the Definitive Certificates based on information received from the Depository. Neither
the Depositor, the Servicer, the Paying Agent nor the Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.

     (d) The Certificates (other than the Class A-R Certificate and the Class CE Certificate) shall
be issuable in the minimum original dollar denominations (and integral multiples of $1,000.00 in
excess of such amount) and aggregate original dollar denominations per Class as set forth in the
following table (except that, if necessary, in order to aggregate the Original Certificate
Principal Balance of a Class, one Certificate of such Class will be issued in a different
denomination). A single Class A-R Certificate and a single Class CE Certificate will be issued in
definitive form.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate Original Certificate	 	 
	 	 	Minimum	 	Principal Balance of all	 	 
	 	 	Original	 	Certificates of the	 	CUSIP
	Class	 	Denomination	 	Indicated Class	 	Number
	Class A-1
	 	$	100,000.00	 	 	$	510,849,000	 	 	16165WA A4
	Class A-2
	 	$	100,000.00	 	 	$	56,761,000	 	 	16165WA B2
	Class M-1
	 	$	100,000.00	 	 	$	8,700,000	 	 	16165WA C0
	Class M-2
	 	$	100,000.00	 	 	$	3,300,000	 	 	16165WA D8
	Class M-3
	 	$	100,000.00	 	 	$	2,100,000	 	 	16165WA E6
	Class M-4
	 	$	100,000.00	 	 	$	2,100,000	 	 	16165WA F3
	Class M-5
	 	$	100,000.00	 	 	$	2,100,000	 	 	16165WA G1
	Class M-6
	 	$	100,000.00	 	 	$	2,100,000	 	 	16165WA H9
	Class A-R(1)
	 	$	100.00	 	 	$	100.00	 	 	16165WA M8

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	 	 	 	 	 	 	Aggregate Original Certificate	 	 
	 	 	Minimum	 	Principal Balance of all	 	 
	 	 	Original	 	Certificates of the	 	CUSIP
	Class	 	Denomination	 	Indicated Class	 	Number
	Class B-1
	 	$	100,000.00	 	 	$	2,100,000	 	 	16165WA J5
	Class B-2
	 	$	100,000.00	 	 	$	2,100,000	 	 	16165WA K2
	Class B-3
	 	$	100,000.00	 	 	$	3,000,000	 	 	16165WA L0
	Class CE
	 	 	N/A	 	 	 	(2	)	 	16165WA N6

 

			
	(1)	 	The Class A-R Certificate represents the residual interest in each of the REMIC Pools.
	 
	(2)	 	The Class CE Certificates will have an aggregate original
notional amount of $600,011,458.17.

     The Certificates shall be signed by manual or facsimile signature on behalf of the Depositor
by an officer of the Depositor. Certificates bearing the manual or facsimile signatures of
individuals who were at the time of signature officers of the Depositor shall bind the Depositor,
notwithstanding that such individuals or any of them have ceased to be an officer prior to the
authentication and delivery of such Certificate or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a manual authentication by an officer of
the Trustee (or if an Authenticating Agent has been appointed pursuant to Section 4.06, the
Authenticating Agent) and such authentication upon any Certificate shall be conclusive evidence,
and the only evidence, that such Certificate has been duly authenticated and delivered hereunder.
All Certificates shall be dated the date of their authentication.

     Section 4.02 Registration of Transfer and Exchange of Certificates.

     (a) The Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying Agent,
shall cause to be kept a certificate register (the “Certificate Register”) in which, subject to
such reasonable regulations as it may prescribe, the Trustee or, if a Paying Agent has been
appointed under Section 4.05, the Paying Agent, shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided.

     (b) Upon surrender for registration of transfer of any Certificate at any office or agency of
the Trustee, or if a Paying Agent has been appointed hereunder pursuant to Section 4.05, the Paying
Agent maintained for such purpose, the Depositor shall execute and the Trustee or if an
Authenticating Agent is appointed under Section 4.06, the Authenticating Agent shall authenticate
and deliver, in the name of the designated transferee or transferees, a Certificate of a like Class
and aggregate Percentage Interest and dated the date of authentication by the Authenticating Agent.

     (c) No transfer of a Class CE Certificate shall be made unless such transfer is made pursuant
to an effective registration statement or otherwise in accordance with the requirements under the
Securities Act. If such a transfer is to be made in reliance upon an exemption from said Act, (i)
the Depositor may require (except with respect to the initial transfer of a Class CE Certificate
from J.P. Morgan Securities Inc. and except if the transferee executes a certificate substantially
in the form of Exhibit H hereto) a written opinion of independent counsel acceptable to and in form
and substance reasonably satisfactory to the Depositor and the Trustee that such transfer may be
made pursuant to an exemption, describing the applicable exemption and the basis therefor, from
said Act and laws or is being made pursuant to said Act and laws, which opinion of counsel shall
not be an expense of the Trust Fund,

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the Trustee, the Depositor or the Servicer, and (ii) the
Depositor shall require the transferee to execute a certification substantially in the form of
Exhibit H or Exhibit I.

     (d) (i) No transfer of an ERISA Restricted Certificate or a Class A-R Certificate shall be
made unless the prospective transferee provides the Depositor and the Trustee with (I) a
representation as set forth in Exhibit K for Class A-R Certificates or in Exhibit M for ERISA
Restricted Certificates to the effect that such transferee is not an employee benefit plan subject
to Title I of ERISA, a plan subject to Section 4975 of the Code or a plan or arrangement subject to
any provisions under any federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the foregoing provisions of ERISA or the Code (“Similar Law”)
(collectively, a “Plan”), and is not directly or indirectly acquiring the Certificate for, on
behalf of or with any assets of any such Plan, or (II) solely in the case of an ERISA Restricted
Certificate, (A) if the Certificate has been the subject of an ERISA-Qualifying Underwriting, a
representation as set forth in Exhibit M that such transferee is an insurance company that is
acquiring the ERISA-Restricted Certificate with assets contained in an “insurance company general
account,” as defined in Section V(E) of Prohibited Transaction Class Exemption (“PTCE”) 95-60, and
the acquisition and holding of the Certificate are covered and exempt under Sections I and III of
PTCE 95-60, or (B) solely in the case of a Definitive Certificate, an Opinion of Counsel reasonably
satisfactory to the Depositor and the Trustee to the effect that the acquisition and holding of
such Certificate will not constitute or result in a nonexempt prohibited transaction under ERISA or
the Code, or a violation of Similar Law, and will not subject the Depositor, the Servicer or the
Trustee to any obligation in addition to those expressly undertaken in this Agreement, which
Opinion of Counsel shall not be an expense of the Depositor, the Servicer or the Trustee.

     (ii) No transfer of a Certificate that is neither an ERISA Restricted Certificate nor a Class
A-R Certificate shall be registered unless the transferee provides the Depositor and the Trustee
with a representation as set forth in Exhibit M that either (i) such transferee is not, and is not
acting for, on behalf of or with any assets of, an employee benefit plan or other arrangement
subject to Title I of ERISA or plan subject to Section 4975 of the Code, or (ii) until the
termination of the Swap Agreement, the acquisition and holding of the Certificate will not
constitute or result in a non-exempt prohibited transaction under Title I of ERISA or Section 4975
of the Code.

     (iii) Except in the case of a Definitive Certificate, the representations set forth in
paragraph (i) of this Subsection 4.02(d), other than subparagraph (i)(II)(B), shall be deemed to
have been made to the Depositor and the Trustee by the transferee’s acceptance of a Certificate (or
the acceptance by a Certificate Owner of the beneficial interest in any Class of Certificates).
Notwithstanding any other provision herein to the contrary, any purported transfer of a Certificate
or a Class A-R Certificate to or on behalf of a Plan without the delivery to the Depositor of a
representation or an Opinion of Counsel reasonably satisfactory to the Depositor and the Trustee as
described above shall be void and of no effect. None of the Depositor, the Servicer or the Trustee
shall be under any liability to any Person for any registration or transfer of any Certificate that
is in fact not permitted by this Section 4.02(d) nor shall the Paying Agent be under any liability
for making any payments due on such Certificate to the Holder thereof or taking any other action
with respect to such Holder under the provisions of this Agreement so long as the transfer was
registered in accordance with the foregoing requirements. The Depositor, Servicer, Paying Agent
and/or Trustee shall be entitled, but not obligated, to recover from any Holder of any Certificate
that was in fact a Plan and that held such Certificate in violation of this Section 4.02(d) all

     payments made on such Certificate at and after the time it commenced such holding. Any such
payments so recovered shall be paid and delivered to the last preceding Holder of such Certificate
that is not a Plan.

     (e) At the option of a Certificateholder, a Certificate may be exchanged for another
Certificate or Certificates of authorized denominations of a like Class, upon surrender of the
Certificate to be exchanged at any office or agency of the Trustee, or if a Paying Agent has been
appointed under

59

 

Section 4.05, the Paying Agent, maintained for such purpose. Whenever the
Certificate is so surrendered for exchange, the Depositor shall execute and the Authenticating
Agent shall authenticate and deliver, the Certificate which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for transfer or
exchange shall (if so required by the Authenticating Agent) be duly endorsed by, or be accompanied
by a written instrument of transfer in the form satisfactory to the Authenticating Agent duly
executed by, the Holder thereof or his attorney duly authorized in writing.

     (f) No service charge shall be made to the Holder for any transfer or exchange of a
Certificate, but the Servicer may require payment by the Certificateholders of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any transfer or
exchange of such Certificate.

     (g) All Certificates surrendered for transfer or exchange shall be destroyed by the Trustee or
if a Paying Agent has been appointed under Section 4.05, the Paying Agent, in accordance with the
Trustee’s or, if a Paying Agent has been appointed under Section 4.05, the Paying Agent’s, standard
procedures.

     (h) [Reserved].

     (i) A Disqualified Organization is prohibited from acquiring beneficial ownership of a Class
A-R Certificate. Notwithstanding anything to the contrary contained herein, (i) unless and until
the Servicer and the Trustee shall have received an Opinion of Counsel, satisfactory to it in form
and substance, to the effect that the absence of the conditions contained in this Section 4.02(i)
would not result in the imposition of federal tax upon any REMIC created hereunder or cause any
REMIC created hereunder to fail to qualify as a REMIC, no transfer, sale or other disposition of
the Class A-R Certificate (including for purposes of this section any beneficial interest therein)
may be made without the express written consent of the Certificate Registrar or, if no Certificate
Registrar is appointed, the Trustee, which consent is to be granted by the Certificate Registrar
or, if no Certificate Registrar is appointed, the Trustee only upon compliance with the
requirements of this Section and (ii) no transfer, sale or other disposition of the Class A-R
Certificate (or any beneficial interest therein) may be made to a Person who is not a U.S. Person
unless such Person furnishes the transferor, the Certificate Registrar and the Trustee, with a duly
completed and effective Form W-8ECI (or any successor thereto) or an Opinion of Counsel to the
effect that such transfer is in accordance with the requirements of the Code and that the transfer
will not be disregarded for federal income tax purposes. As a condition to granting its consent to
a transfer of a Class A-R Certificate, the Certificate Registrar or, if no Certificate Registrar is
appointed, the Trustee, shall require the proposed transferee of such Certificate (including, in
the case of the initial issuance of the Class A-R Certificate, the initial Holder thereof) to
execute a letter and affidavit substantially in the form attached hereto as Exhibit K and shall
require the proposed transferor (other than in the case of the transfer to the initial Holder) of
such Certificate to execute a letter substantially in the form attached hereto as Exhibit K-1. In
the absence of a contrary instruction from the transferor of such Certificate, declaration (11) in
the affidavit in Exhibit K may be left blank. If the transferor requests by written notice to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee, prior to the date
of the proposed transfer that one of the two other forms of declaration (11) of such affidavit be
used, then the Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee,
shall require that such form of declaration (11) be included in such affidavit.

     As a condition to the granting of the consent referred to in this Section 4.02(i), prior to
the transfer, sale, pledge, hypothecation or other disposition of the Class A-R Certificate or any
interest therein, the Certificate Registrar or, if no Certificate Registrar is appointed, the
Trustee shall require that (1) the proposed transferee deliver to the Trustee or Certificate
Registrar, as applicable, its taxpayer identification number and state, under penalties of perjury
that such number is the social security or

60

 

employer identification number, as the case may be, of
the transferee or provide an affidavit under penalties of perjury stating that as of the date of
such transfer such transferee is not and has no intention of becoming a Disqualified Organization;
(2) the proposed transferee deliver to the Trustee or Certificate Registrar, as applicable, an
affidavit stating (i) that such transferee is not acquiring such Class A-R Certificate as an agent,
broker, nominee, or middleman for a Disqualified Organization, (ii) if the Class A-R Certificate is
a “non-economic residual interest” within the meaning of Treas. Reg. §1.860E-1(c)(2), (X) that no
purpose of the acquisition of the Class A-R Certificate is to avoid or impede the assessment or
collection of tax, (Y) that such transferee has historically paid its debts as they came due and
will continue to pay its debts as they come due, and (Z) that such transferee represents that it
understands that, as the holder of the non-economic residual interest, the transferee may incur tax
liabilities in excess of any cash flows generated by the interest and that the transferee intends
to pay taxes associated with holding the residual interest, and (iii) unless the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee consents to the transfer of the
Class A-R Certificate to a Person who is not a U.S. Person and who has furnished either a duly
completed and effective Form W-8ECI (or any successor thereto) or an Opinion of Counsel to the
effect that the transfer will not be disregarded for federal income tax purposes, that it is a U.S.
Person; (3) if so requested by the transferor in written notice provided to the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee, prior to the date of the
proposed transfer, the proposed transferee deliver to the Trustee or Certificate Registrar, as
applicable, an affidavit that includes a declaration made in the form of declaration (11) in the
affidavit set forth in Exhibit K requested by the transferor; and (4) the transferor deliver to the
Certificate Registrar or, if no Certificate Registrar is appointed, the Trustee a written
certification that as of the date of such transfer it has no knowledge and no reason to know that
the affirmations described in clauses (1), (2) and (3) were false. The Certificate Registrar or,
if no Certificate Registrar is appointed, the Trustee shall not grant the consent referred to in
this Section 4.02(i) if it has actual knowledge that any statement made in the affidavit issued
pursuant to the preceding sentence is not true. Notwithstanding any purported transfer, sale or
other disposition of the Class A-R Certificate to a Disqualified Organization or in violation of
the provisions of this Section 4.02(i), such transfer, sale or other disposition shall be deemed to
be of no legal force or effect whatsoever and such Disqualified Organization shall not be deemed to
be a Class A-R Certificateholder for any purpose hereunder, including, but not limited to, the
receipt of distributions on such Class A-R Certificate. If any purported transfer shall be in
violation of the provisions of this Section 4.02(i) then the prior Holder of the Class A-R
Certificate shall, upon discovery that the transfer of such Class A-R Certificate was not in fact
permitted by this Section 4.02(i), be restored to all rights and obligations as a Holder thereof
retroactive to the date of the purported transfer of such Class A-R Certificate. The Trustee, the
Servicer and the Certificate Registrar shall be under no liability to any Person for any
registration or transfer of a Class A-R Certificate that is not permitted by this Section 4.02(i)
or for making payments due on such Class A-R Certificate to the purported Holder thereof or taking
any other action with respect to such purported Holder under the provisions of this Agreement so
long as the transfer was not registered under the written certification of the Certificate
Registrar or, if no Certificate Registrar is appointed, the Trustee as described in this Section
4.02(i). The prior Holder shall be entitled to recover from any purported Holder of a Class A-R
Certificate that was in fact not a permitted purported transferee under this Section 4.02(i) at the
time it became a purported Holder all payments made to such purported Holder on such Class A-R
Certificate; provided that the Servicer shall not be responsible for such recovery. Each Class A-R
Certificateholder, by the acceptance of the Class A-R Certificate, shall be deemed for all purposes
to have consented to the provisions of this Section 4.02(i) and to any amendment to this Agreement
deemed necessary by counsel of the Trustee or the Servicer to ensure that the Class A-R Certificate
is not transferred to a Disqualified Organization and that any transfer of such Class A-R
Certificate will not cause the imposition of a tax upon any REMIC created hereunder or cause
any REMIC created hereunder to fail to qualify as a REMIC. The restrictions on transfer of the
Class A-R Certificate will cease to apply and be void upon receipt by the Certificate Registrar or,
if no Certificate Registrar is appointed, the Trustee of an Opinion of Counsel to the effect that
such restrictions on transfer

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are no longer necessary to avoid the risk of material federal
taxation to any REMIC created hereunder or prevent any REMIC created hereunder from qualifying as a
REMIC.

     (j) The Servicer shall make available upon written request to each Holder and each proposed
transferee of a Class B-3, Class B-4 or Class B-5 Certificate such information as may be required
to permit the proposed transfer to be effected pursuant to Rule 144A under the Securities Act.

     Section 4.03 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any mutilated
Certificate is surrendered to the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, or the Trustee or, if a Paying Agent has been appointed under Section 4.05,
the Paying Agent, receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate, and (b) there is delivered to the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, such security or indemnity as may be required by it to save
it harmless, then, in the absence of notice to the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, that such Certificate has been acquired by a bona fide
purchaser, the Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent, shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Certificate, a new Certificate of like tenor and Class. Upon the issuance of any
new Certificate under this Section, the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, may require of the Certificateholder the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. Any replacement Certificate of any Class issued
pursuant to this Section shall constitute complete and indefeasible evidence of ownership of the
Percentage Interest in the distributions to which the Certificateholders of such Class are
entitled, as if originally issued, whether or not the mutilated, destroyed, lost or stolen
Certificate shall be found at any time, and such mutilated, destroyed, lost or stolen Certificate
shall be of no force or effect under this Agreement, to the extent permitted by law.

     Section 4.04 Persons Deemed Owners. Prior to due presentation of a Certificate of any
Class for registration of transfer, the Depositor, the Servicer, the Paying Agent and the Trustee
may treat the Person in whose name any Certificate is registered on the Record Date as the owner of
such Certificate and the Percentage Interest in the distributions to which the Certificateholders
of such Class are entitled on the relevant date as the Holder of such Certificate and the
Percentage Interest represented by such Certificate for the purpose of receiving remittances
pursuant to Section 6.01 and for all other purposes whatsoever, and neither the Depositor, the
Servicer, the Paying Agent nor the Trustee shall be affected by notice to the contrary.

     Section 4.05 Appointment of Paying Agent and Certificate Registrar; Certificate
Account. The Trustee shall appoint a Paying Agent and a Certificate Registrar (the
“Certificate Registrar”) hereunder, provided such Paying Agent and such Certificate Registrar shall
not be the Depositor, the Seller, or an Affiliate of the Depositor or the Seller. No later than
two Business Days prior to each Distribution Date, the Servicer shall deposit or cause to be
deposited with the Paying Agent from funds on deposit in the Collection Account a sum up to the
Available Distribution Amount, such sum to be held in trust for the benefit of Certificateholders
in a segregated account (the “Certificate Account”) which shall be an Eligible Account in the name
of “The Bank of New York Trust Company, N.A., as Trustee, in trust for and for the benefit of the
Certificateholders of Multi-Class Mortgage Pass-Through Certificates, ChaseFlex Trust, Series
2007-2 — Certificate Account”. The Paying Agent shall establish such Certificate
Account with a commercial bank, a savings bank or a savings and loan association. The Paying
Agent may invest moneys in the Certificate Account in Eligible Investments, which shall mature not
later than a date sufficient to make payment on the Distribution Date next following the date of
such investment and shall not be sold or disposed of prior to maturity. All income and gain
realized from any such investment shall be for the benefit of the Paying Agent as additional
compensation and shall be subject to its

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withdrawal or order from time to time. The amount of any
losses incurred in respect of any such investments (to the extent not offset by income from other
such investments) shall be deposited in the Certificate Account by the Paying Agent out of its own
funds immediately as realized. The Servicer shall cause the Paying Agent to perform each of the
obligations of the Paying Agent set forth herein and shall be liable to the Trustee and the
Certificateholders for failure of the Paying Agent to perform such obligations. So long as the
Paying Agent is a party other than the Trustee, the Trustee shall have no liability in connection
with the performance or failure of performance of the Paying Agent. The Trustee designates The
Bank of New York Trust Company, N.A. as the initial Paying Agent and initial Certificate Registrar.
Only the Trustee may remove the Paying Agent and Certificate Registrar and may do so at will,
provided that the Trustee gives 20 days’ prior written notice of such removal to the Paying Agent
and Certificate Registrar and the Rating Agencies.

     The Paying Agent will hold all sums held by it for the payment to Certificateholders in trust
for the benefit of the Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders.

     Section 4.06 Authenticating Agents.

     (a) The Trustee may appoint one or more Authenticating Agents (each, an “Authenticating
Agent”) which shall be authorized to act on behalf of the Trustee in authenticating the
Certificates. Wherever reference is made in this Agreement to the authentication of Certificates
by the Trustee or the Trustee’s certificate of authentication, such reference shall be deemed to
include authentication on behalf of the Trustee by an Authenticating Agent and a certificate of
authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent must be an entity organized and doing business under the laws of the United States of America
or of any state, having a combined capital and surplus of at least $15,000,000, authorized under
such laws to do a trust business and subject to supervision or examination by federal or state
authorities. So long as the Authenticating Agent is a party other than the Trustee, the Trustee
shall have no liability in connection with the performance or failure of performance of the
Authenticating Agent. The Trustee hereby appoints the Paying Agent as the initial Authenticating
Agent.

     (b) Any Person into which any Authenticating Agent may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or consolidation to which
any Authenticating Agent shall be a party, or any Person succeeding to the corporate agency
business of any Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee or the
Authenticating Agent.

     (c) Any Authenticating Agent may at any time resign by giving at least 30 days’ advance
written notice of resignation to the Trustee and the Depositor. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be eligible in
accordance within the provisions of this Section 4.06, the Trustee may appoint a successor
Authenticating Agent, shall give written notice of such appointment to the Depositor and shall mail
notice of such appointment to all Holders of Certificates. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights, powers, duties and
responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 4.06. No Authenticating Agent shall
have responsibility or liability for any action taken by it as such at the direction of the
Trustee. Each of the Authenticating Agent, Certificate Registrar and Paying Agent shall be
afforded the same rights, protections and indemnities as the Trustee as set forth under Article
VIII hereunder.

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[END OF ARTICLE IV]

ARTICLE V

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

     Section 5.01 Servicer to Service Mortgage Loans. The Servicer shall service and
administer the Mortgage Loans and shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 5.02, to do any and all things which it may deem necessary or
desirable in connection with such servicing and administration, all in accordance with Accepted
Servicing Practices. Without limiting the generality of the foregoing, the Servicer in its own
name or in the name of a Sub-Servicer shall, pursuant to a power of attorney granted hereby by the
Trustee for such purposes, when the Servicer or the Sub-Servicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the Certificateholders and
the Trustee or any of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the related Mortgaged Properties; provided, however, that subject to the
provisions of this paragraph, the Servicer may allow a modification with respect to a Mortgage Loan
if the Servicer would take such action in the ordinary course of its business if it were the owner
of the Mortgage Loan. The Servicer will indemnify the Trustee for any misuse of such power of
attorney provided hereunder. The Servicer may agree to a modification of any Mortgage Loan (the
“Relevant Mortgage Loan”) upon the request of the related Mortgagor, provided that (i) the
modification is in lieu of a refinancing and the Mortgage Rate on the Relevant Mortgage Loan, as
modified, is approximately a prevailing market rate of newly-originated mortgage loans having
similar terms, (ii) the aggregate of the adjusted bases of all Modified Mortgage Loans (including
the Relevant Mortgage Loans) plus the aggregate adjusted bases of any assets that are not qualified
mortgages or permitted investments under Section 860G(a) of the Code that are assets of the Trust
Fund established hereunder at all times on any day is less than one percent of the aggregate of the
adjusted bases of all assets of the Trust Fund (including such Modified Mortgage Loans) on such
day, and (iii) the Servicer purchases the Relevant Mortgage Loan from the Trust Fund as described
below. Effective immediately after such modification, and, in any event, on the same Business Day
on which the modification occurs, all right, title and interest of the Trustee in and to the
Modified Mortgage Loan shall automatically be deemed transferred and assigned to the Servicer and
all benefits and burdens of ownership thereof, including without limitation the right to accrued
interest thereon from and including the date of modification and the risk of default thereon, shall
pass to the Servicer. To confirm such transfer and assignment, the Servicer, as servicer
hereunder, as soon as practicable shall execute an instrument of assignment of the Modified
Mortgage Loan without recourse in customary form to the Servicer in its individual capacity. The
Servicer shall deposit the Purchase Price for any Modified Mortgage Loan in the Collection Account
pursuant to Section 5.08. Upon receipt by the Trustee of written notification of any such deposit
signed by a Servicing Officer, the Trustee shall release to the Servicer the related Mortgage File
and shall execute and deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary more fully to vest in the Servicer any Modified Mortgage Loan
previously transferred and assigned pursuant thereto. Notwithstanding anything herein to the
contrary, the Servicer shall not make or permit
any modification of a Mortgage Loan that would cause any REMIC Pool to fail to qualify as a
REMIC for federal income tax purposes or that would result in the imposition of any material tax
under Section 860F(a) or Section 860G(d) of the Code.

     The Servicer shall furnish to the Trustee for execution and redelivery to the Servicer or, at
the request of the Servicer, a Sub-Servicer, such documents necessary or appropriate to enable the
Servicer to service and administer the Mortgage Loans and the Trustee shall not be responsible for
the Servicer’s

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application thereof. The Servicer agrees to remain eligible as either a FNMA or
FHLMC seller/servicer, or both, for so long as it is Servicer.

     All Servicing Advances made by the Servicer in effecting the timely payment of taxes,
insurance and assessments on the properties subject to the Mortgage Loans shall not, for the
purpose of calculating monthly distributions to Certificateholders, be added to the amount owing
under the related Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so permit,
and such Servicing Advances shall be recoverable by the Servicer to the extent permitted by
Sections 5.09 and 5.23.

     Section 5.02 Sub-Servicing Agreements Between Servicer and Sub-Servicers; Enforcement of
Sub-Servicer’s Obligations.

     (a) The Servicer may enter into Sub-Servicing Agreements with Sub-Servicers for the servicing
and administration of all or part of the Mortgage Loans. References in this Agreement to actions
taken or to be taken by the Servicer in servicing the Mortgage Loans serviced by it include
actions taken or to be taken by a Sub-Servicer on behalf of the Servicer. Each Sub-Servicing
Agreement will be upon such terms and conditions as are not inconsistent with this Agreement and as
the Servicer and the Sub-Servicer have agreed. The Servicer hereby agrees to notify the Trustee in
writing promptly upon the appointment of any Sub-Servicer. For purposes of this Agreement, the
receipt by the Sub-Servicer of any amount with respect to a Mortgage Loan (other than amounts
representing servicing compensation or reimbursement for an advance) shall be treated as the
receipt by the Servicer of such amount. The Sub-Servicer shall deposit all such funds in an
Eligible Account.

     (b) As part of its servicing activities hereunder, the Servicer, for the benefit of the
Trustee and the Certificateholders, shall enforce the obligations of each Sub-Servicer under the
related Sub-Servicing Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements as appropriate, and the pursuit of
other remedies, shall be in such form and carried out to such an extent and at such time as the
Servicer, in its good faith business judgment, would require were it the owner of the related
Mortgage Loans. The Servicer shall pay the costs of such enforcement at its own expense but shall
be reimbursed therefor only (i) from a general recovery resulting from such enforcement only to the
extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loans
or (ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against
whom such enforcement is directed.

     (c) The Servicer shall not permit a Sub-Servicer to perform any servicing responsibilities
hereunder with respect to the Mortgage Loans unless that Sub-Servicer first agrees in writing with
the Servicer to deliver an Assessment of Compliance and an Accountant’s Attestation in such manner
and at such times that permits the Servicer to comply with Section 5.25 of this Agreement.

     Section 5.03 Successor Sub-Servicers. The Servicer shall be entitled to terminate any
Sub-Servicing Agreement that may exist in accordance with the terms and conditions of such
Sub-Servicing Agreement and without any limitation by virtue of this Agreement.

     Section 5.04 Liability of the Servicer. Notwithstanding any Sub-Servicing Agreement,
any of the provisions of this Agreement relating to agreements or arrangements between the Servicer
and a Sub-Servicer or reference to actions taken through a Sub-Servicer or otherwise, the Servicer
shall remain obligated and liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans in accordance with the provisions of this Agreement without
diminution of such obligation or liability by virtue of such Sub-Servicing Agreements or
arrangements or by virtue of indemnification from the Sub-Servicer and to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and administering the
Mortgage Loans. The Servicer shall be entitled

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to enter into any agreement with a Sub-Servicer for
indemnification of the Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.

     Section 5.05 No Contractual Relationship Between Sub-Servicer and Trustee or
Certificateholders. Any Sub-Servicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Sub-Servicer in its capacity as
such and not as an originator shall be deemed to be between the Sub-Servicer and the Servicer
alone, and the Trustee and Certificateholders shall not be deemed parties thereto and shall have no
claims, rights, obligations, duties or liabilities with respect to the Sub-Servicer.

     Section 5.06 Termination of Sub-Servicing Agreement. If the Servicer shall for any
reason no longer be the Servicer hereunder (including by reason of any Event of Default), the
Servicer shall thereupon terminate each Sub-Servicing Agreement that may have been entered into,
and the Trustee, its designee or the successor servicer and the Trustee shall not be deemed to have
assumed any of the Servicer’s interest therein or to have replaced the Servicer as a party to any
such Sub-Servicing Agreement.

     Section 5.07 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 proceed
diligently to collect all payments due under each of the Mortgage Loans when the same shall become
due and payable; provided, however, that the Servicer may elect, to the extent consistent with
Accepted Servicing Practices, to waive any late payment charge and shall, to the extent such
procedures shall be consistent with this Agreement, follow such collection procedures as it follows
with respect to conventional mortgage loans held in its own portfolio. Any such arrangements shall
not diminish or otherwise affect the Servicer’s obligation to make Advances pursuant to Section
6.03.

     Section 5.08 Establishment of Collection Account; Deposit in Collection Account. With
respect to all of the Mortgage Loans, the Servicer shall segregate and hold all funds collected and
received pursuant to a Mortgage Loan separate and apart from any of its own funds and general
assets and shall establish and maintain one or more Collection Accounts for the benefit of the
Certificateholders (collectively, the “Collection Account”) which are Eligible Accounts, in the
form of a trust account, in the name of “The Bank of New York Trust Company, N.A., as Trustee, in
trust for and for the benefit of the Certificateholders of Multi-Class Mortgage Pass-Through
Certificates, Chase Home Finance LLC as subservicer for JPMorgan Chase Bank, N.A. as Servicer,
ChaseFlex Trust, Series 2007-2 — Collection Account.” Such Collection Account shall be established
with a commercial bank, a savings bank or a savings and loan association. The Servicer may invest,
or cause the institution maintaining the Collection Account to invest, moneys in the Collection
Account in Eligible Investments, which shall mature not later than two Business Days preceding the
Distribution Date next following the date of such investment and shall not be sold or disposed of
prior to its maturity. All income and gain realized from any such
investment shall be for the benefit of the Servicer as additional compensation and shall be
subject to its withdrawal or order from time to time. The amount of any losses incurred in respect
of any such investments (to the extent not offset by income from other such investments) shall be
deposited in the Collection Account by the Servicer out of its own funds immediately as realized;
provided, however, that if the Trustee becomes the Servicer, the Trustee shall not be required to
deposit the amount of any loss incurred prior to it becoming the Servicer.

     The Servicer shall deposit or cause to be deposited in the Collection Account on a daily basis
(and not later than the second Business Day following receipt), and retain therein:

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     (i) All payments which were received after the Cut-off Date on account of principal of
the Mortgage Loans (other than the principal portion of Monthly Payments due on or before
the Cut-off Date), and all Principal Prepayments collected on or after the Cut-off Date;

     (ii) All payments which were received after the Cut-off Date on account of interest on
the Mortgage Loans (net of the Servicing Fee)(other than the interest portion of Monthly
Payments due on or before the Cut-off Date);

     (iii) Any Subsequent Recovery or Net Liquidation Proceeds;

     (iv) All Insurance Proceeds received by the Servicer under any title, hazard or other
insurance policy, including amounts required to be deposited pursuant to Sections 5.16 and
5.20, other than proceeds to be held in the Escrow Account or applied to the restoration or
repair of the Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op
Loan) or released to the Mortgagor in accordance with the Servicer’s normal servicing
procedures or otherwise applied or held as required by applicable law;

     (v) All awards or settlements in respect of condemnation proceedings affecting any
Mortgaged Property (or Underlying Mortgaged Property, in the case of a Co-op Loan), which
are not released to the Mortgagor in accordance with the Servicer’s normal servicing
procedures;

     (vi) All Repurchase Proceeds;

     (vii) All Advances made by the Servicer pursuant to Section 6.03;

     (viii) All amounts representing revenues under the insurance provided pursuant to
Section 5.19 to the extent of any losses borne by any Certificateholder;

     (ix) All revenues from any Mortgaged Property (or Underlying Mortgaged Property in the
case of a Co-op Loan) acquired by the Servicer by foreclosure or deed in lieu of foreclosure
net of any Servicing Advances with respect to such Mortgaged Property (or Underlying
Mortgaged Property in the case of a Co-op Loan); and

     (x) Any other amounts required to be deposited therein pursuant to this Agreement.

     The Servicer shall maintain accounting records on a Mortgage Loan by Mortgage Loan basis with
respect to the Collection Account. The Servicer shall give notice to the Trustee, any Paying
Agent, the Depositor and each Rating Agency of any change in the location of the Collection
Account, prior to the use thereof. Notwithstanding anything to the contrary herein, no Monthly
Payment or any portion thereof shall be permitted to remain in the Collection Account for more than
12 months. Any Monthly Payment or any portion thereof that has remained in the Collection Account
for 12 months shall be deemed a
Principal Prepayment and distributed to Certificateholders pursuant to the provisions of this
Agreement on the Distribution Date immediately following the end of such 12 month period.

     Section 5.09 Permitted Withdrawals from the Collection Account. The Servicer may,
from time to time, withdraw funds from the Collection Account for the following purposes:

     (a) to reimburse itself for Advances made pursuant to Section 6.03 (including amounts to
reimburse the related Sub-Servicer for advances made pursuant to the applicable Sub-Servicing
Agreement), the Servicer’s and the related Sub-Servicer’s right to receive reimbursement pursuant
to this

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subclause (i) being limited to amounts received on particular Mortgage Loans which
represent Late Collections (net of the Servicing Fees) with respect to those particular Mortgage
Loans;

     (b) to pay itself the Servicing Fee;

     (c) to reimburse itself for unreimbursed Servicing Advances, or to pay the related
Sub-Servicer any unreimbursed Servicing Advances, the Servicer’s right to receive reimbursement or
make payments to the Sub-Servicer pursuant to this subclause (c) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Insurance Proceeds, Subsequent Recoveries and
condemnation awards;

     (d) to reimburse itself (or the related Sub-Servicer) or the Depositor for expenses incurred
by and recoverable by or reimbursable to it pursuant to Section 5.01 or 5.16;

     (e) to reimburse itself (or the related Sub-Servicer) for any Nonrecoverable Advances;

     (f) to pay to itself (or the related Sub-Servicer) income earned on the investment of funds
deposited in the Collection Account;

     (g) to make deposits into the Certificate Account in the amounts and in the manner provided
for herein;

     (h) to make payments to itself or others pursuant to any provision of this Agreement, and to
clear and terminate the Collection Account upon the termination of this Agreement; and

     (i) to withdraw amounts deposited in error.

     Section 5.10 Establishment of Escrow Account; Deposits in Escrow Account. With
respect to those Mortgage Loans on which the Servicer or any Sub-Servicer collects Escrow Payments,
if any, the Servicer shall, and shall cause any Sub-Servicer to, segregate and hold all funds
collected and received pursuant to each such 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, in the form of trust accounts. Such Escrow Accounts shall be
established with a commercial bank, a mutual savings bank or a savings and loan association the
deposits of which are insured by the FDIC in a manner which shall provide maximum available
insurance thereunder, and which may be drawn on by the Servicer. The Servicer shall, if requested
by the Trustee, give notice to the Trustee of the location of any Escrow Account. Nothing in this
paragraph shall be deemed to require the Servicer to collect Escrow Payments in the absence of a
provision in the related Mortgage requiring such collection.

     The Servicer shall deposit, or cause to be deposited, in any Escrow Account or Accounts on a
daily basis, and retain therein, (i) all Escrow Payments collected on account of any Mortgage Loans
serviced by the Servicer, for the purpose of effecting timely payment of any such items as required
under the terms of this Agreement and (ii) all amounts representing proceeds of any hazard
insurance policy which are to be applied to the restoration or repair of any Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan). The Servicer shall make withdrawals
therefrom only to effect such payments as are required under this Agreement, and for such other
purposes as are set forth in Section 5.11. The Servicer shall be entitled to retain any interest
paid on funds deposited in the Escrow Account by the depository institution other than interest on
escrowed funds required by law to be paid to the related Mortgagor and, to the extent required by
law, the Servicer shall pay interest on escrowed funds to the related Mortgagor notwithstanding
that the Escrow Account is non-interest-bearing or that interest paid thereon is insufficient for
such purposes.

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     Section 5.11 Permitted Withdrawals from Escrow Account. Withdrawals from any Escrow
Account or Accounts may be made by a Servicer only (i) to effect timely payments of ground rents,
taxes, assessments, water rates, Standard Hazard Policy premiums, or other items constituting
Escrow Payments for the related Mortgage, (ii) to reimburse the Servicer for any Servicing Advance
made by the Servicer, 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,
(iii) to refund to any Mortgagor any funds found to be in excess of the amounts required under the
terms of the related Mortgage Loan or under applicable law, (iv) for application to restoration or
repair of the property subject to the related Mortgage, (v) to pay to the Servicer, or to the
Mortgagor to the extent required by law, any interest paid on the funds deposited in the Escrow
Account, (vi) to clear and terminate the Escrow Account on the termination of this Agreement or
(vii) to withdraw amounts deposited in error.

     Section 5.12 Payment of Taxes, Insurance and Other Charges. With respect to each
Mortgage Loan, the Servicer shall maintain, or cause to be maintained, accurate records reflecting
any delinquencies or nonpayments with regard to taxes, assessments and Standard Hazard Policy
premiums. The Servicer assumes full responsibility for ensuring the payment of all such bills and
shall effect 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 advances from its own funds
to effect such payments.

     Section 5.13 Transfer of Accounts. The Servicer may transfer the Collection Account
or Escrow Account to an Eligible Account maintained with a different depository institution from
time to time and shall notify the Trustee and the Paying Agent of any such transfer.

     Section 5.14 [Reserved].

     Section 5.15 Maintenance of the Primary Insurance Policies. The Servicer shall not
take, or permit any related Sub-Servicer to take, any action which would result in non-coverage
under any applicable Primary Insurance Policy of any loss which, but for the actions of the
Servicer or Sub-Servicer, would have been covered thereunder. Except as otherwise required by
applicable law, to the extent coverage is available and until the Loan-to-Value Ratio of the
related Mortgage Loan is reduced to 80%, the Servicer shall keep or cause to be kept in full force
and effect each such Primary Insurance Policy in an amount equal to the amount by which the unpaid
principal balance of the related Mortgage Loan exceeds 75% of the value (as described in the
definition of Loan-to-Value Ratio) of the related Mortgaged Property (or Underlying Mortgaged
Property, in the case of a Co-op Loan). The Servicer shall not cancel or refuse to renew any
such Primary Insurance Policy or consent to any related Sub-Servicer canceling or refusing to
renew any such Primary Insurance Policy applicable to a Mortgage Loan subserviced by it, that is in
effect at the date of the initial issuance of the Certificates and is required to be kept in force
hereunder unless the replacement Primary Insurance Policy for such canceled or non-renewed policy
is maintained with an insurer whose claims-paying ability is rated at least as high as the original
insurer or is acceptable to each Rating Agency as confirmed in writing by each such Rating Agency,
unless otherwise required by law.

     Section 5.16 Maintenance of Standard Hazard Policies.

     (a) The Servicer shall cause to be maintained for each Mortgage Loan (other than a Co-op Loan)
a Standard Hazard Policy with extended coverage as is prudent in the area where the Mortgaged
Property is located in an amount which is equal to the greater of (i) the lesser of (A) 100% of the
maximum insurable value of the improvements securing such Mortgage Loan or (B) the principal
balance owing on such Mortgage Loan, or (ii) such amount required to prevent the Mortgagor or
mortgagee from becoming a co-insurer. If the Mortgaged Property is in an area identified at the
time of origination in the Federal Register by the Federal Emergency Management Agency as having
special flood hazards (and

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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 or (iii) the maximum amount of insurance which is
available under the Flood Disaster Protection Act of 1973, as amended. The Servicer shall also
maintain on property acquired upon foreclosure, or by deed in lieu of foreclosure, of any Mortgage
Loan, fire and hazard insurance with extended coverage in an amount which is not less than the
lesser of (i) the outstanding Principal Balance of the Mortgage Loan or (ii) the maximum insurable
value of the improvements which are a part of such property, liability insurance, and, to the
extent available, flood insurance in an amount as provided above. Any amounts collected by the
Servicer under any such policies (other than amounts to be applied to the restoration or repair of
the property subject to the related Mortgage or property acquired in liquidation of the Mortgage
Loan, or released to the Mortgagor in accordance with the Servicer’s normal servicing procedures)
shall be deposited, subject to applicable law, in the Collection Account. 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 such Standard Hazard Policies and other policies shall be endorsed with
standard mortgagee clauses with loss payable to the Servicer or its designee. Any such Standard
Hazard Policies or other policies may be in the form of blanket policies; provided, however, that
in the event of any claim arising in connection with a hazard loss the Servicer shall be obligated,
in the case of blanket insurance policies, to deposit in the Collection Account any amount not
payable under such blanket policy because of a deductible clause in such policy and not otherwise
payable under an individual policy. The Servicer shall not interfere with the Mortgagor’s freedom
of choice in selecting either his insurance carrier or agent; provided, however, that the Servicer
shall not accept any such insurance policies from insurance companies unless such companies are
acceptable insurers in the discretion of the Servicer.

     (b) Any cost incurred by the Servicer in maintaining any of the foregoing insurance shall not,
for the purpose of calculating monthly distributions to Certificateholders, be added to the amount
owing under the Mortgage Loan, notwithstanding that the terms of the Mortgage Loan so permit. Such
costs (other than the costs of maintaining a blanket hazard insurance policy not attributable to a
specific Mortgaged Property) shall be recoverable by the Servicer from the Mortgagor or out of
Insurance Proceeds, Subsequent Recoveries or Liquidation Proceeds or to the extent permitted by
Section 5.09.

     Section 5.17 [Reserved].

     Section 5.18 [Reserved].

     Section 5.19 Fidelity Bond and Errors and Omissions Insurance. The Servicer shall
maintain, at its own expense, a blanket fidelity bond and an errors and omissions insurance policy,
with broad coverage with responsible companies on all officers, employees or other persons acting
on behalf of the Servicer in any capacity with regard to the Mortgage Loans to handle funds, money,
documents and papers relating to the Mortgage Loans. Any such fidelity bond and errors and
omissions insurance shall protect and insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such persons and shall be
maintained at a level acceptable to FNMA. No provision of this Section 5.19 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. Upon request of the Trustee, the Servicer
shall cause to be delivered to the Trustee a certification evidencing coverage under such fidelity
bond and insurance policy. Promptly upon receipt of any notice from the surety or the insurer that
such fidelity bond or insurance policy has been terminated or modified in a

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materially adverse
manner, the Servicer shall notify the Trustee and each Rating Agency of any such termination or
modification.

     Section 5.20 Collections under Insurance Policies; Enforcement of Due-On-Sale Clauses;
Assumption Agreements.

     (a) In connection with its activities as administrator and servicer of the Mortgage Loans, the
Servicer agrees to present, on behalf of itself, the Trustee and the Certificateholders, claims to
the insurer under any Standard Hazard Policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any insurance policies. Pursuant to Section 5.08,
the Servicer shall deposit Insurance Proceeds in the Collection Account.

     (b) When any Mortgaged Property (or stock allocated to a dwelling unit, in the case of a Co-op
Loan) is conveyed by the Mortgagor, the Servicer shall enforce any due-on-sale clause contained in
any Mortgage Note or Mortgage, to the extent permitted by such Mortgage Note or Mortgage,
applicable law and governmental regulations. Subject to the foregoing, the Servicer is authorized
to take or enter into an assumption or substitution agreement from or with the Person to whom such
property has been or is about to be conveyed. In connection with such assumption or substitution,
the Servicer shall apply such underwriting standards and follow such practices and procedures as
shall be normal and usual and as it applies to mortgage loans owned solely by it.

     Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Servicer
shall not be deemed to be in default, breach or any other violation of its obligations hereunder by
reason of any conveyance by the Mortgagor of the Mortgaged Property (or stock allocated to a
dwelling unit, in the case of a Co-op Loan) or any assumption of a Mortgage Loan by operation of
law which the Servicer in good faith determines it may be restricted by law from preventing, for
any reason whatsoever.

     (c) Subject to the Servicer’s duty to enforce any due-on-sale clause to the effect set forth
in Section 5.20(b), in any case in which a Mortgaged Property (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) is to be conveyed to a Person by a Mortgagor, and such Person is
to enter into an assumption agreement or modification agreement or supplement to the Mortgage Note
or Mortgage, the Servicer shall so notify the Trustee by forwarding to the Trustee the original
copy of such assumption or substitution agreement, which copy shall be added by the Trustee to the
related Mortgage File and shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and
instruments constituting a part thereof. In connection with any such assumption, modification
agreement or substitution agreement, the interest rate of the related Mortgage Note shall not be
changed, the principal amount of the Mortgage Note shall not be increased or decreased and the
maturity of the Mortgage Note shall not be extended, nor shall it be shortened by more than one
year. Any fee collected by the Servicer for entering into an assumption or substitution of
liability agreement with respect to such Mortgage Loan shall be retained by the Servicer as
additional servicing compensation.

     Section 5.21 Income and Realization from Defaulted Mortgage Loans. The Servicer, on
behalf of the Trustee, shall foreclose upon or otherwise comparably convert the ownership of
Mortgaged Properties (or stock allocated to a dwelling unit, in the case of a Co-op Loan) securing
such of the Mortgage Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to Section 5.07, shall
manage, conserve, protect and operate such Mortgaged Properties (or stock allocated to a dwelling
unit, in the case of a Co-op Loan) for the purposes of their prompt disposition and sale, and shall
dispose of such Mortgaged Properties (or stock allocated to a dwelling unit, in the case of a Co-op
Loan) on such terms and conditions as it deems in the best interests of the Certificateholders. The
Servicer shall sell such property prior to the close of the third calendar year beginning after the
year in which such foreclosure or conversion occurs or such longer

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period as would not prevent such
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) from
constituting “foreclosure property” within the meaning of Section 860G(a)(8) of the Code. The
Servicer will ensure that no Mortgaged Property shall be held, rented or otherwise used in such a
manner or pursuant to any terms that would (i) cause such Mortgaged Property to fail to qualify as
“foreclosure property” within the meaning of Section 860G(a)(8) of the Code or (ii) subject any
REMIC Pool to the imposition of any federal income taxes on the income earned on such Mortgaged
Property, including any taxes imposed by reason of Section 860F or 860G(c) of the Code. In
connection with such activities, the Servicer shall follow such practices and procedures as it
shall deem necessary or advisable, as shall be normal and usual in its general mortgage servicing
activities, including its management of foreclosed properties for a temporary period as
contemplated herein. The foregoing is subject to the provisions of Section 5.28 of this Agreement
and to the proviso that the Servicer shall not be required to expend its own funds in connection
with any management, foreclosure or towards the restoration of any property unless it shall
determine that such management, restoration or foreclosure will increase any Subsequent Recoveries
or Liquidation Proceeds of the Mortgage Loan to Certificateholders after reimbursement to itself
for such expenses (respecting which it shall have priority for purposes of withdrawals from the
Collection Account pursuant to Section 5.09). The Servicer shall be permitted to earn income with
respect to any Mortgaged Properties (or stock allocated to a dwelling unit, in the case of a Co-op
Loan), provided such income does not constitute “net income from foreclosure property” within the
meaning of Section 860G(c) of the Code. The income earned from the management of such Mortgaged
Properties (or stock allocated to a dwelling unit, in the case of a Co-op Loan), net of
reimbursement to the Servicer for expenses (including any taxes) incurred in connection with such
management, shall be applied to the payment of principal of and interest on the related defaulted
Mortgage Loans (with interest accruing and principal amortizing as though such Mortgage Loans were
still current) and all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and shall be deposited
into the Collection Account. To the extent the income received is in excess of the amount
attributable to amortizing principal and accrued interest at the Net Mortgage Rate on the related
Mortgage Loan, such excess shall be deposited in the Collection Account.

     The Servicer shall take into account the existence of any hazardous substances, hazardous
wastes or solid wastes, as such terms are defined in the Comprehensive Environmental Response
Compensation and Liability Act, as amended, the Resources Conservation and Recovery Act of 1976, as
amended, or other federal, state or local environmental legislation, on a Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan) in determining whether to foreclose
upon or otherwise comparably
convert the ownership of such property. To the extent that the Servicer has actual knowledge
of any such substance or waste, it shall consult with the Trustee regarding the appropriate course
of action. The Servicer shall not institute foreclosure actions with respect to a property
containing substance or waste as described above if it reasonably believes that such action would
not be consistent with its servicing standards, and in no event shall the Servicer manage, operate
or take any other action with respect thereto which the Servicer in good faith believes will result
in “clean-up” or other liability under applicable law. The net income from the rental or sale of a
REO Property shall be deposited in the Collection Account within two (2) Business Days after
receipt thereof by the Servicer.

     The Servicer may enter into a special servicing agreement with an unaffiliated holder of 100%
Percentage Interest of the Class of Class B Certificates then outstanding having the highest
numerical class designation or a holder of a class of securities representing interests in such
Class B Certificate and/or other subordinate mortgage pass-through certificates, such agreement to
be (i) substantially in the form of Exhibit J hereto or (ii) subject to each Rating Agency’s
acknowledgment that the ratings of the Certificates in effect immediately prior to the entering
into of such agreement would not be qualified, downgraded or withdrawn and the Certificates would
not be placed on credit review status (except for possible upgrading) as a result of such
agreement. Any such agreement may contain provisions whereby

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such holder may instruct the Servicer
to commence or delay foreclosure proceedings with respect to delinquent Mortgage Loans and will
contain provisions for the deposit of cash by the holder that would be available for distribution
to Certificateholders if Liquidation Proceeds are less than they otherwise may have been had the
Servicer acted in accordance with its normal procedures.

     Section 5.22 Trustee to Cooperate; Release of Mortgage Files.

     (a) Upon becoming aware of the payment in full of any Mortgage Loan, or upon the receipt by
the Servicer of a notification that payment in full will be made in a manner customary for such
purposes, the Servicer shall immediately notify the Custodian with a copy to the Trustee by a
certification (which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to be deposited in
the Collection Account pursuant to Section 5.08 have been or will be so deposited) of a Servicing
Officer and shall request delivery to it of the Mortgage File. Upon receipt of such certification
and request, within five Business Days the Custodian on behalf of the Trustee shall release the
related Mortgage File to the Servicer and the Trustee will execute and deliver to the Servicer the
request for reconveyance, deed of reconveyance or release or satisfaction of mortgage or such other
instruments releasing the lien of the Mortgage as have been provided by the Servicer to the
Trustee, together with the Mortgage Note with written evidence of cancellation thereon, and the
Trustee shall have no further responsibility with respect to said Mortgage File. Upon any such
payment in full, or the receipt of such notification, the Servicer is authorized to procure from
the Trustee under the deed of trust which secured the Mortgage Note, if any, a deed of full
reconveyance covering the property encumbered by such deed of trust, which assignment of deed of
trust, except as otherwise provided by any applicable law, shall be recorded by the Servicer in the
appropriate land records in the jurisdiction in which the assignment of deed of trust is recorded,
or, as the case may be, to procure from the Trustee an instrument of satisfaction or, if the
Mortgagor so requests, an assignment without recourse, which deed of reconveyance, instrument of
satisfaction or assignment shall be delivered by the Servicer to the Person or Persons entitled
thereto. No expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or to the Trustee.

     (b) From time to time as is appropriate for the servicing or foreclosure of any Mortgage Loan,
the Servicer shall deliver to the Custodian a certificate of a Servicing Officer requesting that
possession of the Mortgage File be released to the Servicer and certifying as to the reason for
such release

     and that such release will not invalidate any insurance coverage provided in respect of the
Mortgage Loan under any of the insurance policies required by this Agreement. With such
certificate, the Servicer shall require that the Custodian on behalf of the Trustee release the
Mortgage File, and, within five Business Days, the Custodian shall deliver the Mortgage File or any
document therein to the Servicer. The Servicer shall cause each Mortgage File so released to be
returned to the Custodian on behalf of the Trustee when the need therefor by the Servicer no longer
exists, unless (i) the Mortgage Loan has been liquidated and the Net Liquidation Proceeds relating
to the Mortgage Loan have been deposited in the Collection Account or (ii) the Mortgage File has
been delivered to an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property (or stock allocated to a dwelling unit, in the case of a Co-op Loan) either
judicially or non-judicially, and the Servicer has delivered to the Custodian on behalf of the
Trustee a certificate of a Servicing Officer in the form of Exhibit L hereto certifying as to the
name and address of the Person to which such Mortgage File was delivered and the purpose or
purposes of such delivery.

     (c) Upon written request of the Servicer, the Trustee shall execute and deliver to the
Servicer any court pleadings, requests for trustee’s sale or other documents prepared by and
delivered by the Servicer to the Trustee necessary to the foreclosure or trustee’s sale in respect
of a Mortgaged Property

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(or stock allocated to a dwelling unit, in the case of a Co-op Loan) or to
any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage
or to obtain a deficiency judgment, or to enforce any other remedies or rights provided by the
Mortgage Note or Mortgage or otherwise available at law or in equity. Together with such documents
or pleadings, the Servicer shall deliver to the Trustee a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and certifying as to the
reason such documents or pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate any insurance coverage under the insurance policies required under this
Agreement or invalidate or otherwise affect the lien of the Mortgage, except for the termination of
such a lien upon completion of the foreclosure or trustee’s sale. The Trustee may rely on such
certificate without further inquiry.

     (d) The Servicer may provide an electronic transmission for release of documents under this
Section 5.22 in a form agreed to in advance of initial transmission by both the Servicer and the
Custodian, which form shall contain information readable without intervention by Custodian’s data
processing operations computer hardware and software staff, and arranged in a record layout to be
specified by Custodian (a “Paperless Release Request”). The Servicer agrees to maintain and
control access to electronic signature information and assumes liability for any unauthorized use
thereof, except for any unauthorized use thereof by the Custodian and, provided that, the Servicer
shall have no liability arising from the form of transmission if the Servicer complies with the
Custodian’s standards set forth in the next paragraph of this Section 5.22(d). The Servicer also
agrees to maintain accurate records of electronic transactions related to the custodial files. The
Servicer hereby authorizes the Custodian to automatically append the electronic signature of an
authorized representative to the applicable request for release of documents and agrees and
acknowledges that by appending such authorized representative’s electronic signature, the Custodian
shall be entitled to rely thereon. For purposes of this Agreement the term “electronic signature”
means an electronic identifier intended by the person using it to have the same force and effect as
the use of a manual signature.

          The Servicer agrees in advance to comply with all Custodian data encryption, security and
record layout standards in connection with any Paperless Release Request as may be amended from
time to time upon notice from Custodian to the Servicer. The Custodian reserves the right to
restrict or suspend the Servicer’s access to the Custodian’s computer systems for maintenance or
repairs or for any other reason in the Custodian’s sole discretion, provided however that the
Custodian shall promptly provide the Servicer with notice of such restriction or suspension.
Notwithstanding the foregoing, the
Servicer is authorized to transmit and the Custodian is authorized to accept signed facsimile
copies of the requests for document release described in this Section 5.22.

     Section 5.23 Servicing and Other Compensation. The Servicer, as compensation for its
activities hereunder, shall be entitled to receive, on or prior to each Distribution Date, the
amounts provided for as the Servicing Fee and as reimbursement for Nonrecoverable Advances,
Servicing Advances and reimbursement for Advances, all as specified by Section 5.09. The amount of
compensation or reimbursement provided for shall be accounted for on a Mortgage Loan-by-Mortgage
Loan basis.

     Additional servicing compensation in the form of assumption fees, prepayment fees and late
payment charges shall be retained by the Servicer, to the extent permitted by applicable law. The
Servicer shall be required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including the fees, expenses and indemnities of the Trustee and any
Sub-Servicer) and shall not be entitled to reimbursement therefor except as specifically provided
in Sections 5.09 and 5.21.

     Section 5.24 1934 Act Reports.

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     (a) As set forth on Schedule X hereto, for so long as the Trust is subject to the Exchange Act
reporting requirements, no later than the end of business on the 2nd Business Day after the
occurrence of an event requiring disclosure on Form 8-K (a “reportable event”) (i) the Depositor,
the Seller, the Trustee and the Paying Agent shall notify the Servicer of any item reportable on a
Form 8-K of which each such party has knowledge (unless such item is specific to the Servicer, in
which case the Servicer will be deemed to have notice) and (ii) shall deliver to the Servicer at
least two Business Days prior to the filing deadline for such Form 8-K, all information, data, and
exhibits (unless such information, data, and exhibits are specific to the Servicer) required to be
provided or filed with such Form 8-K. After preparing the Form 8-K on behalf of the Depositor, the
Servicer shall execute and promptly file such Form 8-K.

     (b) For so long as the Trust is subject to the Exchange Act, within 15 days after each
Distribution Date, the Servicer shall, on behalf of the Trust and in accordance with industry
standards, file with the Commission via the Electronic Data Gathering and Retrieval System (EDGAR),
a Form 10-D with (1) a copy of the report to the Certificateholders for such Distribution Date as
an exhibit thereto and (2) any other information known to the Servicer or provided to the Servicer
to be included at its discretion in Form 10-D (“Additional Form 10-D Disclosure”) as set forth in
the next paragraph.

     (c) For so long as the Trust is subject to the Exchange Act, as set forth in Schedule Y
hereto, within 5 calendar days after the related Distribution Date (i) the parties hereto, as
applicable, will be required to provide to the Servicer, to the extent known to such party, any
Additional Form 10-D Disclosure (including any breaches of pool asset representations and
warranties or transaction covenants of which the party has written notice and which has not been
included on the monthly distribution report for the period), if applicable, and (ii) the Servicer,
to the extent it deems necessary, shall incorporate such Additional Form 10-D Disclosure into the
Form 10-D and shall file such Form 10-D by the 8th calendar day after the Distribution
Date.

     (d) For so long as the Trust is subject to the Exchange Act, prior to the 90th calendar day
after the end of the fiscal year for the trust, the Servicer shall, on behalf of the Trust and in
accordance with industry standards, prepare and file with the Commission via EDGAR a Form 10-K with
respect to the Trust Fund. Such Form 10-K shall include the following items: (i) an annual
compliance statement for the Servicer and each Subservicer, as described in Section 5.25 of the
Agreement, (ii)(A) the annual reports on assessment of compliance with servicing criteria for the
Paying Agent, each Servicer, Subservicer and Subcontractor (unless the Servicer has determined that
such compliance statement is not
required by Regulation AB), as described in Section 5.25 of the Agreement, and (B) if any
Reporting Servicer’s report on assessment of compliance with servicing criteria described in
Section 5.25 identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any report on assessment of compliance with servicing criteria
described in Section 5.25 of the Agreement is not included as an exhibit to such Form 10-K,
disclosure that such report is not included and an explanation why such report is not included,
(iii)(A) the registered public accounting firm attestation report for the Paying Agent, the
Servicer and each Subservicer, as described in Section 5.26 of the Agreement, and (B) if any
registered public accounting firm attestation report described in the Section 5.26 of the Agreement
identifies any material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation report is not included
as an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why
such report is not included, and (iv) a Sarbanes-Oxley Certification in the form attached hereto as
Exhibit S, executed by the senior officer in charge of securitizations of the Servicer. Any
disclosure or information in addition to (i) through (iv) above that is required to be included on
Form 10-K (“Additional Form 10-K Disclosure”) shall be determined and prepared by and at the
direction of the Servicer pursuant to the following paragraph.

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     (e) As set forth in Schedule Z hereto, no later than March 12 of each year that the Trust is
subject to the Exchange Act reporting requirements, commencing in 2007, (i) the parties identified
on Schedule Z shall be required to provide to the Depositor and the Servicer, to the extent known,
any Additional Form 10-K Disclosure, if applicable, and (ii) the Servicer, to the extent it deems
necessary, shall incorporate such Additional Form 10-K Disclosure into the Form 10-K and shall file
such Form 10-K by the 85th calendar day after the end of the fiscal year for the Trust.

     (f) Each Form 10-K shall include a certification (the “Sarbanes-Oxley Certification”) which
shall be in the form attached hereto as Exhibit S. The Depositor will cause its senior officer in
charge of securitization to execute the Sarbanes-Oxley Certification required pursuant to Rule
13a-14 under the Securities Exchange Act of 1934, as amended, by March 15 of each year in which the
Trust is subject to the reporting requirements of the Exchange Act. In connection therewith, the
Paying Agent shall sign a certification (in the form attached hereto as Exhibit O) for the benefit
of the Servicer and its officers, directors and affiliates regarding certain aspects of the Form
10-K Certification.

     (g) Following the first date legally permissible under applicable regulations and
interpretations of the Commission, the Servicer shall, on behalf of the Trust and in accordance
with industry standards, file with the Commission via EDGAR a Form 15 Suspension Notification with
respect to the Trust Fund, if applicable.

     (h) The Servicer shall have no responsibility to file any items with the Commission other than
those specified in this section and the Servicer shall execute any and all form 8-Ks and 10-Ds
required hereunder. The Depositor shall execute each form 10-K.

     (i) If the Commission issues additional interpretative guidance or promulgates additional
rules or regulations with respect to Regulation AB or otherwise, or if other changes in applicable
law occur, that would require the reporting arrangements, or the allocation of responsibilities
with respect thereto, described in this Section 5.24, to be conducted differently than as
described, the Depositor, the Servicer, the Paying Agent and the Trustee shall comply with
reasonable requests made by CHF, the Servicer or the Depositor to amend the provisions of this
Section 5.24 in order to comply with such amended reporting requirements and to deliver additional
or different information as CHF or the Depositor may determine in good faith is necessary to comply
with the provisions of Regulation AB, provided that such information is available to such party
without unreasonable effort or expense or is reimbursed by the requesting party and within such
timeframe as may be reasonably requested. Any such
supplementation or modification shall be made without the consent of the Certificateholders,
and may result in a change in the reports filed by the Servicer on behalf of the Trust under the
Exchange Act.

     (j) The Depositor, the Servicer, the Trustee and the Paying Agent agree to use their good
faith efforts to cooperate in complying with the requirements of this Sections 5.24.

     Section 5.25 Annual Statement as to Compliance. Not later than (a) March 15 of each
calendar year (other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which an annual report on Form 10-K is not required to be filed
pursuant to Section 5.24 on behalf of the Trust, by April 15 of each calendar year (or if such day
is not a Business Day, the immediately succeeding Business Day), the Servicer shall deliver to the
Depositor, an Officers’ Certificate in the form attached hereto as Exhibit T stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer during the preceding
calendar year and of the performance of the Servicer 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 its obligations under this Agreement in all material respects throughout
such year or a portion thereof, or, if there has been a failure to fulfill any such obligation in
any material respect, specifying each such failure known to such officer and the nature

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and status
thereof. With respect to any Subservicer that meets the criteria of Item 1108(a)(2)(i) through
(iii) of Regulation AB in the sole determination of the Servicer, the Servicer shall request from
such Subservicer, the Officer’s Certificate set forth in this Section 5.25 as and when required
with respect to such Subservicer.

     Section 5.26 Assessment of Compliance and Independent Public Accountants’ Attestation;
Financial Statements.

     (a) Not later than (i) March 15 of each calendar year (other than the calendar year during
which the Closing Date occurs) or (ii) with respect to any calendar year during which an annual
report on Form 10-K is not required to be filed pursuant to Section 5.24 on behalf of the Trust, by
April 15 of each calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer, at its own expense, shall deliver to the Trustee and the Depositor an
officer’s assessment of its compliance with the Servicing Criteria during the preceding calendar
year as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB (the
“Assessment of Compliance”), which addresses the items set forth in Exhibit R hereto.

     (b) Not later than (i) March 15 of each calendar year (other than the calendar year during
which the Closing Date occurs) or (ii) with respect to any calendar year during which an annual
report on Form 10-K is not required to be filed pursuant to Section 5.24 on behalf of the Trust,
April 15 of each calendar year (or if such day is not a Business Day, the immediately succeeding
Business Day), the Servicer, at its own expense, shall cause a nationally or regionally recognized
firm of independent registered public accountants (who may also render other services to any
Servicer, the Seller or any affiliate thereof) which is a member of the American Institute of
Certified Public Accountants to furnish a statement to the Trustee, the Paying Agent and the
Depositor that attests to and reports on the assessment of compliance provided by such Servicer
pursuant to Section 5.26(a) (the “Accountant’s Attestation”). Such Accountant’s 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.

     (c) The Servicer shall request that any Subservicer and each Subcontractor (to the extent
determined by the Servicer to be required under Regulation AB) not later than March 15 of each
calendar year (other than the calendar year during which the Closing Date occurs) with respect to
any calendar year during which the Trust’s annual report on Form 10-K is required to be filed in
accordance with the
Exchange Act and the rules and regulations of the Commission, provide an Assessment of
Compliance, which addresses the items set forth in Exhibit R hereto. The Servicer shall request
that any Subservicer (other than the calendar year during which the Closing Date occurs) with
respect to any calendar year during which the Trust’s annual report on Form 10-K is not required to
be filed in accordance with the Exchange Act and the rules and regulations of the Commission, by
April 15 of each calendar year (or, in each case, if such day is not a Business Day, the
immediately succeeding Business Day) provide an Assessment of Compliance, which addresses the items
set forth in Exhibit R hereto.

     (d) Not later than March 15 of each calendar year (other than the calendar year during which
the Closing Date occurs) with respect to any calendar year during which the Trust’s annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the Servicer shall request that each Subservicer and each
Subcontractor (to the extent determined by the Servicer to be required by Regulation AB) provide an
Accountant’s Attestation by a registered public accounting firm that attests to, and reports on,
the Assessment of Compliance pursuant to Section 5.26(c) above. Other than the calendar year
during which the Closing Date occurs, with respect to any calendar year during which the Trust’s
annual report on Form 10-K is not required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, not later than April 15 of each calendar year (or, in each
case, if such day is not a Business Day, the immediately

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succeeding Business Day), the Servicer
shall request that each Subservicer provide an Accountant’s Attestation by a registered public
accounting firm that attests to, and reports on, the Assessment of Compliance pursuant to Section
5.26(c) above.

     (e) Not later than, with respect to any calendar year during which the Trust’s annual report
on Form 10K is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, March 15 (or, in each case, if such day is not a Business
Day, the immediately preceding Business Day), the Paying Agent shall deliver to the Depositor and
the Servicer an Assessment of Compliance with regard to the Servicing Criteria applicable to the
Paying Agent during the preceding calendar year, which addresses the items set forth in Exhibit R
hereto.

     (f) Not later than, with respect to any calendar year during which the Trust’s annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, March 15 (or, in each case, if such day is not a Business Day, the
immediately preceding Business Day), the Paying Agent shall deliver to the Depositor and the
Servicer an Accountant’s Attestation by a registered public accounting firm that attests to, and
reports on, the Assessment of Compliance pursuant to Section 5.26(e) above.

     (g) Not later than, with respect to any calendar year during which the Trust’s annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 calendar days before the date on which the Trust’s annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission (or, in each case, if such day is not a Business Day, the immediately
preceding Business Day), the Servicer shall request that each custodian, including the Custodian,
deliver to the Servicer an Assessment of Compliance with regard to the Servicing Criteria
applicable to such custodian during the preceding calendar year, which addresses the items set
forth in Exhibit R hereto; provided, however, that where the Custodian and the Servicer are both
Chase, the provisions of this Section 5.26(g) may be satisfied by the delivery of a single report
containing the Assessment of Compliance of Chase.

     (h) Not later than March 12 (or, in each case, if such day is not a Business Day, the
immediately succeeding Business Day), of any calendar year (other than the calendar year during
which the Closing Date occurs) during which the Trust’s annual report on Form 10-K is required to
be filed in accordance with the Exchange Act and the rules and regulations of the Commission, the
Servicer shall
request that each Custodian deliver to the Servicer an Accountant’s Attestation by a
registered public accounting firm that attests to, and reports on, the Assessment of Compliance
pursuant to Section 5.26(g) above; provided, however, that where the Custodian and the Servicer are
both Chase, the provisions of this Section 5.26(h) may be satisfied by the delivery of a single
report containing the Accountant’s Attestation of Chase.

     (i) Each of the parties hereto acknowledges and agrees that the purpose of this Section 5.26
is to facilitate compliance by the Seller, the Servicer and the Depositor with the provisions of
Regulation AB, as such may be amended or clarified from time to time. Therefore, each of the
parties agrees that the parties’ obligations hereunder will be supplemented and modified as
necessary to be consistent with any such amendments, interpretive advice or guidance, convention or
consensus among active participants in the asset-backed securities markets, advice of counsel, or
otherwise in respect of the requirements of Regulation AB and the parties shall comply with
reasonable requests made by the Seller, the Servicer or the Depositor for delivery of additional or
different information as CHF or the Depositor may determine in good faith is necessary to comply
with the provisions of Regulation AB, provided that such information is available to such party
without unreasonable effort or expense or is reimbursed by the requesting party and within such
timeframe as may be reasonably requested. Any such supplementation

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or modification shall be made
without the consent of the Certificateholders, and may result in a change in the reports filed by
the Servicer on behalf of the Trust under the Exchange Act.

     Section 5.27 Access to Certain Documentation; Rights of the Depositor in Respect of the
Servicer. The Servicer shall provide access to the Trustee and Certificateholders which are
savings and loan associations, banks or insurance companies or examiners of any federal or state
banking or insurance regulatory authority to the documentation regarding the Mortgage Loans if so
required by applicable regulations of any regulatory authority, such access to be afforded subject
to reimbursement for expenses without charge but only upon reasonable request and during normal
business hours at the offices of the Servicer designated by it. The Depositor may, but is not
obligated to, enforce the obligations of the Servicer under this Agreement. The Depositor shall
not assume any responsibility or liability for any action or failure to take action by the Servicer
and is not obligated to supervise the performance of the Servicer under this Agreement or
otherwise.

     Section 5.28 REMIC-Related Covenants. For as long as the Trust Fund shall exist, the
Servicer, the Paying Agent and the Trustee shall act in accordance herewith to assure continuing
treatment of each REMIC created hereunder as a REMIC. In particular:

     (a) The Servicer shall not create, or permit the creation of, any “interests” in any REMIC
created hereunder within the meaning of Section 860G(a) of the Code other than the “regular
interests” in each such REMIC designated as such in Section 2.04(a) and the “residual interest” in
each such REMIC designated as such in Section 2.04(a);

     (b) As of all times as may be required by the Code, the Servicer will ensure that
substantially all of the assets of each REMIC created hereunder will consist of “qualified
mortgages” as defined in Section 860G(a)(3) of the Code and “permitted investments” as defined in
Section 860G(a)(5) of the Code. The Paying Agent will maintain records that are sufficient to
indicate the compliance of each REMIC created hereunder with applicable requirements of the Code
(and applicable Proposed, Temporary or final Treasury Regulations) relating to the assets held by
such REMIC. Further, the Servicer shall not permit and the Trustee shall not accept the transfer
or substitution of any Mortgage Loan other than pursuant to Section 3.03, 5.01 or 5.21 of this
Agreement, and the Servicer shall, in any case, not permit substitution unless the Servicer and the
Trustee have received an Opinion of Counsel,

     which will not be an expense of any REMIC created hereunder, that such transfer or
substitution would not adversely affect the REMIC status of any REMIC created hereunder or would
not otherwise be prohibited by this Agreement;

     (c) The Servicer shall ensure that no REMIC created hereunder receives a fee or other
compensation for services and that no REMIC created hereunder receives any income from assets other
than “qualified mortgages” within the meaning of Section 860G(a)(3) of the Code or “permitted
investments” within the meaning of Section 860G(a)(5) of the Code, and shall take whatever action
it deems necessary to avoid any material tax imposed by the Code on any REMIC created hereunder;

     (d) None of the Depositor, the Servicer, the Paying Agent or the Trustee shall sell or permit
the sale of all or any portion of the Mortgage Loans or of any Eligible Investment unless such sale
is as a result of a repurchase of the Mortgage Loans pursuant to this Agreement or the Trustee has
received an Opinion of Counsel, which will not be an expense of any REMIC created hereunder or the
Trustee, to the effect that such sale (i) is pursuant to a “qualified liquidation” as defined in
Section 860F(a)(4) of the Code and as described in Section 11.01 hereof, or (ii) would not be
treated as a “prohibited transaction” within the meaning of Section 860F(a)(2) of the Code that
results in the realization of a material amount of gain or loss for federal income tax purposes;

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     (e) The Trustee shall not accept any contribution to any REMIC created hereunder after the
Startup Day without an Opinion of Counsel (which shall not be an expense of the Trustee) that such
contribution is included within the exceptions provided in Section 860G(d)(2) of the Code and,
therefore, will not be subject to the tax imposed by Section 860G(d)(1) of the Code; and

     (f) Notwithstanding anything to the contrary in this Agreement, the Servicer and the Trustee,
at the direction of the Servicer, shall take any other action or refuse to take any action
otherwise required (including adjusting the Purchase Price for any Mortgage Loan) where the
Servicer deems such action or inaction reasonably necessary to ensure the REMIC status of each
REMIC created hereunder under the Code and applicable regulations or to avoid the imposition of any
material tax liability on any REMIC created hereunder that will affect amounts distributable to the
Certificateholders.

     (g) In the event that any applicable federal, state or local tax, including interest,
penalties or assessments, additional amounts or additions to tax, is imposed on any REMIC created
hereunder, such tax shall be treated in the same manner as a Realized Loss and shall be charged
against amounts otherwise distributable to the Holders of the Certificates, except as provided in
the last sentence of this Section 5.28 (g). The Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent shall withdraw from the Collection Account sufficient funds to
pay or provide for the payment of, and to actually pay, such tax as is estimated to be legally owed
by (but such authorization shall not prevent the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent from contesting, at the expense of the Trust Fund (other than
as a consequence of a breach of its obligations under this Agreement), any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such
proceedings). The Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying
Agent is hereby authorized to and shall segregate, into a separate non-interest bearing account,
the net income from any “prohibited transaction” under Code Section 860F(a), the amount of any
taxable contribution to any REMIC created hereunder after the Startup Day that is subject to tax
under Code Section 860G(d), and 35% of any estimated “net income from foreclosure property” under
Section 860G(c) and use such income or amount, to the extent necessary, to pay such tax. To the
extent that any such tax is paid to the Internal Revenue Service or applicable state or local tax
authorities, the Trustee or a Paying Agent has been appointed under Section 4.05, the Paying Agent
shall retain an equal amount from future amounts otherwise distributable to the Holder of the Class
A-R Certificate and shall distribute such retained amounts to the Holders of the other Classes of
Certificates, to
the extent they remain outstanding, until they are fully reimbursed for any amount of such
taxes previously charged to the then Holder of the Class A-R Certificate. Neither the Trustee nor
the Servicer shall be responsible for any taxes imposed on any REMIC created hereunder except to
the extent such taxes arise as a consequence of a breach of their respective obligations under this
Agreement. The Trustee shall not be liable hereunder for any taxes imposed on any REMIC hereunder
as the result of any direction taken hereunder from the Servicer or any action of the Servicer or
Paying Agent hereunder.

     Section 5.29 Yield Maintenance Agreement.

     (a) [Reserved.]

     (b) The Depositor hereby directs the Supplemental Interest Trust Trustee to execute and
deliver on behalf of the Supplemental Interest Trust the Yield Maintenance Agreement and authorizes
the Supplemental Interest Trust Trustee to perform its obligations thereunder on behalf of the
Supplemental Interest Trust in accordance with the terms of the Yield Maintenance Agreement. On or
before the Closing Date, the Supplemental Interest Trust Trustee shall enter into the Yield
Maintenance Agreement on behalf of the Supplemental Interest Trust, with the Yield Maintenance
Agreement Counterparty. The Yield Maintenance Agreement shall be held in the Supplemental Interest
Trust and be part of the Trust Fund but not part of any REMIC. The Supplemental Interest Trust
Trustee shall deposit all amounts

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received from the Yield Maintenance Agreement Counterparty into
the Supplemental Interest Trust Account and distribute such amounts in accordance with Section 5.30
below.

     (c) [Reserved.]

     (d) The Seller, the Depositor and the Certificateholders by acceptance of their Certificates
acknowledge and agree that the Supplemental Interest Trust Trustee shall execute, deliver and
perform its obligations under the Yield Maintenance Agreement and shall do so solely in its
capacity as Supplemental Interest Trust Trustee of the Supplemental Interest Trust and not in its
individual capacity. The Supplemental Interest Trust Trustee is hereby directed to represent and
warrant to the Yield Maintenance Agreement Counterparty under the Yield Maintenance Agreement that
the beneficial owner for United States federal income tax purposes of payments made under the Yield
Maintenance Agreement is a “U.S. person” (as that term is used in section 1.1441-4(a)(3)(ii) of
United States Treasury Regulations (the “Regulations”)) for United States federal income tax
purposes. Every provision of this Agreement relating to the conduct of affecting the liability of
or affording protection to the Paying Agent shall apply to the Supplemental Interest Trust
Trustee’s execution of the Yield Maintenance Agreement and the performance of its duties and
satisfaction of its obligations thereunder.

     (e) [Reserved.]

     Section 5.30 The Swap Agreement; Supplemental Interest Trust.

     (a) On the Closing Date, the Depositor shall establish the Supplemental Interest Trust,
pursuant to the provisions of the Agreement and the laws of the State of New York, which shall be
maintained pursuant to the Agreement, as a separate trust, to be known, for convenience, as
“ChaseFlex 2007-2 Supplemental Interest Trust.” The corpus of the Supplemental Interest Trust shall
be held by the Supplemental Interest Trust Trustee for the benefit of the holders of the
Certificates as a segregated subtrust of the Trust Fund, which shall hold the Yield Maintenance
Agreement, the Swap Agreement and the Supplemental Interest Trust Account. Funds deposited within
the Supplemental Interest Trust shall be held separate and apart from, and shall not be commingled
with, any other moneys, including, without

     limitation, other moneys of the Supplemental Interest Trust Trustee held pursuant to this
Agreement. In no event shall any funds deposited in the Supplemental Interest Trust be credited to
or made available to any other account of the Trust Fund. The records of the Paying Agent shall at
all times reflect that the Supplemental Interest Trust is a subtrust of the Trust Fund, the assets
of which are segregated from other assets of the Trust Fund.

     On the Closing Date, the Supplemental Interest Trust Trustee shall establish an account (the
“Supplemental Interest Trust Account”), which shall be an Eligible Account within the Supplemental
Interest Trust. Any Swap Termination Payments or Net Swap Payments received from the Swap
Counterparty and any payments received from the Yield Maintenance Agreement Counterparty pursuant
to Section 5.29 above will be deposited into the Supplemental Interest Trust Account. Certain
distributions to the Certificateholders and any Swap Termination Payments or Net Swap Payments owed
to the Swap Counterparty will be paid out of the Supplemental Interest Trust Account. The
Supplemental Interest Trust Trustee is hereby directed by the Depositor to execute the Swap
Agreement on behalf of the Supplemental Interest Trust in the form presented to it by the Depositor
and shall have no responsibility for the contents of such Swap Agreement, including, without
limitation, the representations and warranties contained therein. The Supplemental Interest Trust
Trustee shall have all of the rights and protections of the Trustee hereunder.

     The Supplemental Interest Trust Trustee shall use reasonable efforts to enforce all of the
rights of the Supplemental Interest Trust and exercise any remedies under the Swap Agreement and,
in the event the Swap Agreement is terminated as a result of the designation by either party
thereto of an Early

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Termination Date (as defined in the Swap Agreement), find a replacement
counterparty to enter into a replacement swap agreement utilizing the amounts of the net Swap
Termination Payments received.

     For each Distribution Date, through and including the Distribution Date in July 2017, the
Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust Trustee shall,
based on the “significance estimate” (as defined in Regulation AB and which shall be provided to
the Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust by the
Depositor within five (5) Business Days prior to the Distribution Date), calculate the
“significance percentage” (as defined in Regulation AB) of the Swap Agreement and the Yield
Maintenance Agreement. If on any such Distribution Date, the Significance Percentage relating to
either of the Swap Agreement or the Yield Maintenance Agreement is equal to or greater than 9%, the
Supplemental Interest Trust Trustee shall promptly notify the Depositor and the Depositor, on
behalf of the Supplemental Interest Trust Trustee, shall obtain the financial information required
to be delivered by the Swap Counterparty or the Yield Maintenance Agreement Counterparty, as
applicable, pursuant to the terms of the Swap Agreement or Yield Maintenance Agreement, as
applicable. If, on any succeeding Distribution Date through and including the Distribution Date in
July 2017, the “significance percentage” relating to the Swap Agreement or the Yield Maintenance
Agreement is equal to or greater than 10%, the Supplemental Interest Trust Trustee shall promptly
notify the Depositor and the Depositor shall, within five (5) Business Days of such Distribution
Date, deliver to the Paying Agent the financial information provided to it by the Swap Counterparty
or Yield Maintenance Agreement Counterparty, as applicable, in Edgar-compatible format for
inclusion in the Form 10-D relating to such Distribution Date.

     Any Swap Termination Payment received by the Supplemental Interest Trust Trustee from the Swap
Counterparty shall be deposited in the Supplemental Interest Trust and shall be used to make any
upfront payment required under a replacement swap agreement and any upfront payment received from
the counterparty to a replacement swap agreement shall be used to pay any Swap Termination Payment
owed to the Swap Counterparty.

     Notwithstanding anything contained herein, in the event that a replacement swap agreement
cannot be obtained within thirty (30) days after receipt by the Supplemental Interest Trust Trustee
of the Swap Termination Payment paid by the terminated Swap Counterparty, the Supplemental Interest
Trust
Trustee shall deposit such Swap Termination Payment into a separate, segregated non-interest
bearing subtrust established by the Supplemental Interest Trust Trustee and the Supplemental
Interest Trust Trustee shall, on each Distribution Date following receipt of such Swap Termination
Payment, withdraw from such subtrust, an amount equal to the Net Swap Payment, if any, that would
have been paid to the Supplemental Interest Trust by the original Swap Counterparty (computed in
accordance with the original Swap Agreement) and distribute such amount in accordance with Section
4.04(l)(i)-(viii) of this Agreement. Any such subtrust shall not be an asset of any REMIC.

     On any Distribution Date (or in the case of any Net Swap Payments, on the related Swap Payment
Date), any Swap Termination Payments or Net Swap Payments owed to the Swap Counterparty will be
paid out of and any Net Swap Payments or Swap Termination Payments received from the Swap
Counterparty will be deposited into the Supplemental Interest Trust Account. Neither the
Supplemental Interest Trust nor the Supplemental Interest Trust Account will be an asset of any
REMIC. After giving effect to any distributions pursuant to Section 6.01(c), funds on deposit in
the Supplemental Interest Trust Account shall be distributed in the following order of priority by
the Supplemental Interest Trust Trustee:

     (i) To
cover any Net Swap Payments and any Swap Termination Payments (other than a Defaulted
Swap Termination Payment) owed to the Swap Counterparty, not previously paid with Interest
Remittance Amounts;

     (ii) To the Class A Certificates, the related Basis Risk Shortfall Carryover Amount for each
such Class for such Distribution Date, on a pro rata basis based on the entitlement of each such
Class pursuant to this clause (ii);

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     (iii) Sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
Class B-1, Class B-2 and Class B-3 Certificates, in that order, any remaining Basis Risk Shortfall
Carryover Amounts;

     (iv) Up to a total amount necessary to restore the applicable Overcollateralization Target
Amount, first, to the Class A Certificates, in accordance with the priority described under Section
6.01(b) and, second, to the Class M and Class B Certificates, sequentially, in accordance with the
priority described under Section 6.01(b) in an amount necessary to restore the applicable
Overcollateralization Target Amount.

     (v) to the Class A Certificates, pro rata based on amounts due, in an amount equal to the
unpaid Interest Shortfall allocable to each such Class;

     (vi) to the Class A Certificates, pro rata based on amounts due, in an amount equal to the
Unpaid Realized Loss Amount allocable to each such Class;

     (vii) to the Class M-1 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (viii) to the Class M-1 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (ix) to the Class M-2 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (x) to the Class M-2 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xi) to the Class M-3 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (xii) to the Class M-3 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xiii) to the Class M-4 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (xiv) to the Class M-4 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xv) to the Class M-5 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (xvi) to the Class M-5 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xvii) to the Class M-6 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (xviii) to the Class M-6 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xix) to the Class B-1 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (xx) to the Class B-1 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xxi) to the Class B-2 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

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     (xxii) to the Class B-2 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xxiii) to the Class B-3 Certificates, in an amount equal to the unpaid Interest Shortfall
allocable to such Class;

     (xxiv) to the Class B-3 Certificates, in an amount equal to the Unpaid Realized Loss Amount
allocable to such Class;

     (xxv) to the holders of the Class A Certificates, pro rata, in an amount equal to each such
Class’ previously allocated and not reimbursed share of Net Interest Shortfalls, if any;

     (xxvi) to
the Class M-1 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxvii) to
the Class M-2 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxviii) to
the Class M-3 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxix) to
the Class M-4 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxx) to
the Class M-5 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxxi) to
the Class M-6 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxxii) to
the Class B-1 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxxiii) to
the Class B-2 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any;

     (xxxiv) to
the Class B-3 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of Net Interest Shortfalls, if any; and

     (xxxv) to the Class CE Certificates any remaining amounts.

     Notwithstanding the foregoing, however, the sum of all cumulative amounts distributed
pursuant to clauses (iv), (vi), (viii), (x), (xii), (xiv), (xvi), (xviii), (xx), (xxii) and (xxiv)
above will not exceed the cumulative amount of all Realized Losses incurred.

     Upon termination of the Trust Fund, any amounts remaining in the Supplemental Interest
Trust shall be distributed pursuant to the priorities set forth in this Section 5.30(a).

     With respect to the failure of the Swap Counterparty to perform any of its obligations under
the Swap Agreement, the breach by the Swap Counterparty of any of its representations and
warranties made pursuant to the Swap Agreement, or the termination of the Swap Agreement, the
Supplemental Interest Trust Trustee shall send any notices and make any demands required hereunder
(to the extent that a Responsible Officer of the Supplemental Interest Trust Trustee has actual
knowledge or written notice of any such failure, breach or termination).

     On the Closing Date, the Swap Counterparty and the Supplemental Interest Trust Trustee (which
is hereby authorized and directed to enter into such credit support annex) will enter into a credit
support annex in relation to the Swap Agreement, which annex is intended to protect the
Supplemental Interest Trust from certain ratings downgrades that might hinder the ability of the
Swap Counterparty to continue

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its obligations under the Swap Agreement.

     Pursuant to and in accordance with the terms and provisions of the Swap Agreement, the Swap
Counterparty may be required to post additional collateral in connection with its obligations under
the Swap Agreement. In connection with the foregoing, on the Closing Date, the Supplemental
Interest Trust Trustee shall establish and maintain a Swap Posted Collateral Account.

     To the extent that the Swap Counterparty remits any Posted Collateral to the Supplemental
Interest Trust Trustee under the Swap Agreement, the Supplemental Interest Trust Trustee shall,
upon receipt of the Posted Collateral, deposit the Posted Collateral into the Swap Posted
Collateral Account and shall hold, release and disburse such collateral in accordance with the
terms and provisions of the Swap Agreement. Where a termination event occurs with respect to the
Swap Counterparty under the Swap Agreement, or where the Swap Counterparty fulfills certain
obligations to the Supplemental Interest Trust such as finding a replacement swap counterparty or a
guarantor that meets established criteria of the Rating Agencies, the Supplemental Interest Trust
Trustee shall make payments from the Swap Posted Collateral Account in accordance with the
provisions of the Swap Agreement. Amounts held in the Swap Posted Collateral Account will not be
part of the Trust Fund and will not be available for distribution to any Certificateholders, except
to the extent distributed to the Supplemental Interest Trust pursuant to the Swap Agreement. Any
funds held in the Swap Posted Collateral Account shall be invested by the Supplemental Interest
Trust Trustee in Permitted Investments in accordance with the written instructions of the Swap
Counterparty. Absent receipt by the Supplemental Interest Trust Trustee of written instructions
from the Swap Counterparty, such funds shall remain uninvested. Any earnings shall be remitted to
the Swap Counterparty in accordance with the Swap Agreement.

[END OF ARTICLE V]

ARTICLE VI

PAYMENTS TO THE CERTIFICATEHOLDERS

     Section 6.01 Distributions.

(a) On each Distribution Date, the Paying Agent shall make the following disbursements and
transfers in the following order of priority in each case, to the extent of the Interest Remittance
Amount remaining for such Distribution Date:

(i) for
deposit into the Supplemental Interest Trust Account, to cover any Net Swap Payments and any Swap
Termination Payments (other than any Defaulted Swap Termination Payment) owed by the
Supplemental Interest Trust to the Swap Counterparty;

(ii) to each Class of Class A Certificates, the related Interest Distribution Amount, on a
pro rata basis based on the entitlement of each such Class pursuant
to this clause (ii);

(iii) to each Class of Class A Certificates, the related unpaid Interest Shortfall, if any,
for each such Class for such Distribution Date on a pro rata basis
based on the entitlement of each such Class pursuant to this
clause (iii);

(iv) to the Class M-1 Certificates, the related Interest Distribution Amount
for such Class of Certificates;

(v) to the Class M-2 Certificates, the related Interest Distribution Amount
for such Class of Certificates;

(vi) to the Class M-3 Certificates, the related Interest Distribution Amount
for such Class of Certificates;

(vii) to the Class M-4 Certificates, the related Interest Distribution Amount for such Class of Certificates;

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(viii) to the Class M-5 Certificates, the related Interest Distribution
Amount for such Class of Certificates;

(ix) to the Class M-6 Certificates, the related Interest Distribution Amount
for such Class of Certificates;

(x) to the Class B-1 Certificates, the related Interest Distribution Amount
for such Class of Certificates; and

(xi) to the Class B-2 Certificates, the related Interest Distribution Amount
for such Class of Certificates; and

(xii) to the Class B-3 Certificates, the related Interest Distribution Amount
for such Class of Certificates.

Any Interest Remittance Amount remaining undistributed after giving effect to subclause (i) through
(xii) above shall be used in determining the amount of Net Monthly Excess Cashflow, if any, for
such Distribution Date.

(b) On each Distribution Date, the Paying Agent shall make the following disbursements and
transfers in the following order of priority in each case, to the extent of the Principal
Distribution Amount:

(i) On each Distribution Date (a) prior to the Step-Down Date or (b) on which a Trigger
Event is in effect, the Paying Agent will withdraw from the Certificate Account that portion
of the Available Distribution Amount equal to the Principal Distribution Amount for such
Distribution Date, and make the following disbursements and transfers in the order of
priority
described below, in each case to the extent of the Principal Distribution Amount remaining
for such Distribution Date:

(1) For
deposit into the Supplemental Interest Trust Account, to cover any
Net Swap Payments and any Swap Termination Payments (other than any
Defaulted Swap Termination Payment) owed by the Supplemental Interest Trust to the
Swap Counterparty, in each case, to the
extent not paid pursuant to Section 6.01(a)(i);

(2) To the Class A Certificates, pro rata based upon their Outstanding Certificate
Principal Balances, until the Outstanding Certificate Principal Balance of each such Class
has been reduced to zero;

(3) to the Class M-1 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero;

(4) to the Class M-2 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero;

(5) to the Class M-3 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero;

(6) to the Class M-4 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero;

(7) to the Class M-5 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero;

(8) to the Class M-6 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero;

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(9) to the Class B-1 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero;

(10) to the Class B-2 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero; and

(11) to the Class B-3 Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero.

(ii) On each Distribution Date (a) on or after the Step-Down Date and (b) on which a Trigger
Event is not in effect, the Paying Agent will withdraw from the Distribution Account that
portion of the Available Distribution Amount equal to the Principal Distribution Amount for
such Distribution Date, and make the following disbursements and transfers in the order of
priority described below:

(1) For
deposit into the Supplemental Interest Trust Account, to cover any
Net Swap Payments and any Swap Termination Payments (other than any Defaulted Swap Termination Payment) owed by the Supplemental Interest
Trust to the Swap Counterparty, in each
case, to the extent not paid pursuant to Section 6.01(a)(i);

(2) To the Class A Certificates, the Senior Principal Distribution Amount for such
Distribution Date, pro rata based upon their Outstanding Certificate Principal Balances,
until the Outstanding Certificate Principal Balance of each such Class has been reduced to
zero;

(3) to the Class M-1 Certificates, the Class M-1 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero;

(4) to the Class M-2 Certificates, the Class M-2 Principal Distribution Amount for such

Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero;

(5) to the Class M-3 Certificates, the Class M-3 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero;

(6) to the Class M-4 Certificates, the Class M-4 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero;

(7) to the Class M-5 Certificates, the Class M-5 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero;

(8) to the Class M-6 Certificates, the Class M-6 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero;

(9) to the Class B-1 Certificates, the Class B-1 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero;

(10) to the Class B-2 Certificates, the Class B-2 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been reduced to zero; and

(11) to the Class B-3 Certificates, the Class B-3 Principal Distribution Amount for such
Distribution Date, until the Outstanding Certificate Principal Balance of such Class has
been

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reduced to zero.

Any Principal Distribution Amount remaining undistributed after giving effect to clauses (i)
(1)-(11) and (ii) (1)-(11) above shall be used in determining the amount of Net Monthly Excess
Cashflow, if any, for such Distribution Date.

(c) On each Distribution Date, the Net Monthly Excess Cashflow shall be distributed as follows:

(1) to the Class or Classes of Certificates then entitled to receive distributions in
respect of principal, in an amount equal to any Overcollateralization Increase Amount,
payable to such Holders under clause (b) above as part of the Principal Distribution Amount,
and applied in the same order of priority as payments of principal would otherwise be
applied on such Distribution Date to reduce the Outstanding Certificate Principal Balance of
such Certificates until the aggregate Outstanding Certificate Principal Balance of such
Classes of Certificates is reduced to zero;

(2) to the Class A Certificates, pro rata based on amounts due, in an amount equal to each
such Class’ previously allocated and not reimbursed share of any Net Interest Shortfalls
allocated to each such Certificates;

(3) to the Class A Certificates, pro rata based on amounts due, in an amount equal to the
Unpaid Realized Loss Amount allocable to each such Class;

(4) to the Class M-1 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(5) to the Class M-1 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(6) to the Class M-2 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(7) to the Class M-2 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(8) to the Class M-3 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(9) to the Class M-3 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(10) to the Class M-4 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(11) to the Class M-4 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(12) to the Class M-5 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(13) to the Class M-5 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(14) to the Class M-6 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(15) to the Class M-6 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(16) to the Class B-1 Certificates, any unpaid Interest Shortfall allocable to such Class of

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Certificates;

(17) to the Class B-1 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(18) to the Class B-2 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(19) to the Class B-2 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(20) to the Class B-3 Certificates, any unpaid Interest Shortfall allocable to such Class of
Certificates;

(21) to the Class B-3 Certificates, any Unpaid Realized Loss Amount allocable to such Class
of Certificates;

(22) concurrently, to each Class of Class A Certificates, pro rata, in an amount equal to
each such Class’ previously allocated and not reimbursed share of any Net Interest
Shortfalls allocated to each such Certificates, if any;

(23) to the Class M-1 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(24) to the Class M-2 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(25) to the Class M-3 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(26) to the Class M-4 Certificates, in an amount equal to such Class’ previously allocated
and
not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(27) to the Class M-5 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(28) to the Class M-6 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(29) to the Class B-1 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(30) to the Class B-2 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(31) to the Class B-3 Certificates, in an amount equal to such Class’ previously allocated
and not reimbursed share of any Net Interest Shortfalls allocated to such Certificates;

(32) to the Class A Certificates, an amount equal to any Basis Risk Shortfall Carryover
Amounts for such Certificates for such Distribution Date pro rata based upon the outstanding
Basis Risk Shortfall Carryover Amounts for each such Class (after giving effect to any
amounts paid from amounts on deposit in the Supplemental Interest Trust Account for such
Distribution Date pursuant to Section 5.30);

(33) to the Class M and Class B Certificates, an amount equal to any Basis Risk Shortfall
Carryover Amounts for such Certificates for such Distribution date (after giving effect to
any amounts paid from amounts on deposit in the Supplemental Interest Trust Account for such
Distribution Date pursuant to Section 5.30), in the order of priority described in Section
6.01(b);

(34) to the Paying Agent, the Custodian or the Trustee in respect of any unreimbursed

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expenses and indemnifications owing thereto permitted pursuant to this Agreement;

(35) to the Supplemental Interest Trust, for payment to the Swap Counterparty, any unpaid
Swap Termination Payment (including any Defaulted Swap Termination Payments) payable to the
Swap Counterparty;

(36) to the Class CE Certificates in the following order of priority, (A) the Class CE
Interest Distribution Amount, (B) any unpaid Class CE Interest Shortfall, (C) as principal
on the Class CE Certificate until the Outstanding Certificate Principal Balance of the Class
CE Certificates has been reduced to zero and (D) any Unpaid Realized Loss Amount allocable
to the Class CE Certificates; and

(37) to the Class A-R Certificates, any remaining amounts.

(d) Amounts distributed to the Class A-R Certificates pursuant to Section 6.01(c)(37) on any
Distribution Date shall be allocated among the related REMIC residual interests represented thereby
such that each such interest is allocated the excess of funds available to the related REMIC over
required distributions to the regular interests in such REMIC on such Distribution Date.

(e) The Paying Agent shall establish an account (the “Class A-R Reserve Fund”),
which shall be an Eligible Account. The Class A-R Reserve Fund shall be entitled
“Class A-R Reserve Fund, The Bank of New York Trust Company, N.A., as
Trustee for the benefit of the holders of the ChaseFlex Trust Series 2007-2 Class A-R
Certificates.” The Depositor will deposit $100 into the Class A-R Reserve Fund. On the
first Distribution Date, the Paying Agent shall distribute the amount on deposit in the Class A-R
Reserve Fund to the Class A-R Certificates, until the Outstanding Certificate Principal Balance of
such Class has been reduced to zero.

     Section 6.02 Statements to the Certificateholders.

     (a) Not later than the earlier of (i) three Business Days after the Determination Date and
(ii) the second Business Day prior to each Distribution Date, the Servicer shall send to the Paying
Agent and the Trustee (in such format as may be mutually agreed) the relevant information for
purposes of this
Section 6.02. Not later than each Distribution Date, the Paying Agent shall make available on
its website located at www.jpmorgan.com/sfr or upon request shall send to any Certificateholder,
the Depositor, the Trustee, the Servicer, any co-trustee, and each Rating Agency a statement
setting forth the following information, after giving effect to the distributions to be made by the
Paying Agent pursuant to Section 6.01 on or as of such Distribution Date:

     (i) with respect to each Class of Certificates the amount of such distribution to
Holders of such Class allocable to principal;

     (ii) with respect to each Class of Certificates the amount of such distribution to
Holders of such Class allocable to interest;

     (iii) the aggregate amount of any Principal Prepayments, Repurchase Proceeds or other
unscheduled recoveries included in the distributions to Certificateholders;

     (iv) the aggregate amount of any Advances by the Servicer pursuant to Section 6.03;

     (v) the number of Outstanding Mortgage Loans and the Mortgage Pool Principal Balance as
of the close of business as of the end of the related Principal Prepayment Period;

     (vi) the related amount of the Servicing Fees (as adjusted pursuant to Section 6.05)
retained or withdrawn from the Collection Account by the Servicer;

     (vii) the number and aggregate principal amounts of Mortgage Loans (A) delinquent
(calculated using the Mortgage Bankers Association (MBA) method) (1) one Monthly Payment,
(2) two Monthly Payments and (3) three or more Monthly Payments, (B) in foreclosure and (C)
in

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bankruptcy, in each case, as of the end of the close of business on the first day of the
calendar month of such Distribution Date;

     (viii) the number and the principal balance of Mortgage Loans with respect to any real
estate acquired through foreclosure or grant of a deed in lieu of foreclosure;

     (ix) the aggregate amount of all Advances recovered during the related Due Period;

     (x) with respect to the following Distribution Date, the Outstanding Certificate
Principal Balance of each Class of Certificates;

     (xi) the aggregate amount of Realized Losses during the related Due Period and the
aggregate amount of Realized Losses since the Cut-off Date;

     (xii) the allocation to each Class of Certificates of any Realized Losses during the
related Due Period;

     (xiii) the Outstanding Certificate Principal Balance of each Class of Certificates
immediately prior to and after giving effect to the distributions to each Class on such
Distribution Date;

     (xiv) with respect to each Class of Certificates, any amounts of Net Interest
Shortfalls, Compensating Interest Shortfalls and reductions relating to the Relief Act on
such Distribution Date;

     (xv) the number of Mortgage Loans with respect to which a reduction in the Mortgage
Rate has occurred pursuant to the Relief Act, as well as the amount of interest not required
to be paid with respect to any such Mortgage Loans during the related Due Period as a result
of such reductions; both in the aggregate and for each Class of Certificates;

     (xvi) updated pool composition information such as weighted average coupon, weighted
average life, weighted average remaining term, pool factors and prepayment amounts;

     (xvii) if applicable, any material changes to methodology regarding calculations of
delinquencies and charge-offs;

     (xviii) any material modifications, extensions or waivers to pool asset terms, fees,
penalties or payments during the distribution period or that have cumulatively become
material over time;

     (xix) material breaches of pool asset representations or warranties or transaction
covenants;

     (xx) information on ratio, coverage or other test used for determining any early
amortization, liquidation or other performance trigger and whether the trigger was met;

     (xxi) excess interest payments for each Class of Certificates;

     (xxii) whether a Trigger Event has occurred and is in effect;

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     (xxiii) as of each Distribution Date, the amount, if any, paid or received by the
Supplemental Interest Trust pursuant to the Swap Agreement and the amount thereof to be paid
to each Class of Certificates or the Swap Counterparty, as applicable;

     (xxiv) as of each Distribution Date, the Overcollateralized Amount and the
Overcollateralization Target Amount;

     (xxv) as of each Distribution Date, the amount on deposit in the Supplemental Interest
Trust Account;

     (xxvi) as of each Distribution Date, the amount, if any, received by the Supplemental
Interest Trust pursuant to the Yield Maintenance Agreement and the amount thereof to be paid
to each class of Certificates;

     (xxvii) if applicable, information regarding any new issuance of asset-backed
securities backed by the same asset pool, any pool asset changes (other than in connection
with a pool asset converting into cash in accordance with its terms), such as additions or
removals in connection with a prefunding period and pool asset substitutions and repurchases
(and purchase rates, if applicable), and cash flows available for future purchases, such as
the balances of any prefunding or revolving accounts, if applicable; and

     (xxviii) if applicable, any material changes in the solicitation, credit-granting,
underwriting, origination, acquisition or pool selection criteria or procedures, as
applicable, used to originate, acquire or select the new pool assets.

     The Paying Agent’s responsibility for sending the above information to the Certificateholders
is limited to the availability, timeliness and accuracy of the information derived from the
Servicer which shall be provided as required in this Section 6.02(a).

     Upon reasonable advance notice in writing if required by federal regulation, the Servicer will
provide to each Certificateholder which is a savings and loan association, bank or insurance
company certain reports and access during business hours to information and documentation regarding
the Mortgage Loans sufficient to permit such Certificateholder to comply with applicable
regulations of regulatory authorities with respect to investment in the Certificates; provided,
that the Servicer shall be entitled to be reimbursed by each such Certificateholder for the
Servicer’s actual expenses incurred in providing such reports and access.

     (b) The Servicer shall cause to be prepared, and the Servicer or the Trustee, as required by
applicable law, shall file, any and all tax returns, information statements or other filings
required to be delivered to Certificateholders and any governmental taxing authority pursuant to
any applicable law with respect to the Trust Fund and the transactions contemplated hereby (the
Servicer or the Trustee may, at its option but with the consent of the other, which consent shall
not be unreasonably withheld, appoint an organization which regularly engages in the preparation
and filing of such documents on a continuous basis for profit and which represents itself to be
expert in such matters) and the Servicer shall maintain a record of the information necessary for
the application of Section 860E(e) of the Code and shall make such information available as
required by Section 860D(a)(6) of the Code; provided, however, that the Servicer shall notify the
Trustee of the Trustee’s obligation to make any such filings and that any fees of the organization
appointed as provided above shall be paid by the Servicer; and provided further that if an
organization is employed, as described above, to prepare and file any such filings, neither the
Trustee nor the Servicer shall be liable for any errors by such organization.

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     Section 6.03 Advances by the Servicer. If, on any Determination Date, the Servicer
determines that any Monthly Payments due on the immediately preceding Due Date have not been
received, the Servicer shall, unless it determines in its sole discretion that such amounts will
not be recoverable from Late Collections, Liquidation Proceeds or otherwise, make an Advance on or
before two Business Days prior to the related Distribution Date in an amount equal to the amount of
such delinquent Monthly Payments, after adjustment of any delinquent interest payment for the
Servicing Fee. For purposes of this Section 6.03, the delinquent Monthly Payments referred to in
the preceding sentence shall be deemed to include an amount equal to the Monthly Payments that
would have been due on Mortgage Loans which have been foreclosed or otherwise terminated and in
connection with which the Servicer acquired and continues to own the Mortgaged Properties on behalf
of the Certificateholders. If the Servicer makes an Advance, it shall on or prior to two Business
Days prior to such Distribution Date either (i) deposit in the Collection Account an amount equal
to such Advance, (ii) cause to be made an appropriate entry in the records of the Collection
Account that funds in such account being held for future distribution or withdrawal have been, as
permitted by this Section 6.03, used by the Servicer to make such Advance or (iii) make Advances in
the form of any combination of clauses (i) and (ii) aggregating the amount of such Advance. Any
funds being held in the Collection Account for future distribution to Certificateholders and so
used pursuant to clause (ii) or (iii) above shall be replaced by the Servicer from its own funds by
deposit into the Collection Account on or before any subsequent Distribution Date to the extent
that funds in the Collection Account on such Distribution Date shall be less than the amount of
payments required to be made to Certificateholders on such Distribution Date. Any such Advance
shall be included with the distribution to the Certificateholders on the related Distribution Date.
If the Servicer determines not to make a Nonrecoverable Advance, it shall on the related
Determination Date furnish to the Trustee, any co-trustee, the Paying Agent and each Rating Agency
notice of such determination. The Servicer shall be
entitled to be reimbursed from the Collection Account for all Advances and Nonrecoverable
Advances as provided in Section 5.09.

     Section 6.04 Allocation of Realized Losses.

     (a) Prior to each Determination Date, the Servicer shall determine (i) the total amount of
Realized Losses, if any, incurred during the related Principal Prepayment Period.

     (b) Realized Losses shall be allocated by the Paying Agent to the Classes of Certificates as
follows:

     first, to the Class CE Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     second, to the Class B-3 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     third, to the Class B-2 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     fourth, to the Class B-1 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     fifth, to the Class M-6 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     sixth, to the Class M-5 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

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     seventh, to the Class M-4 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     eighth, to the Class M-3 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     ninth, to the Class M-2 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero;

     tenth, to the Class M-1 Certificates, until the Outstanding Certificate Principal Balance of
such Class is reduced to zero; and

     eleventh, to the Class A Certificates, pro rata based upon their respective Outstanding
Certificate Principal Balances, until the Outstanding Certificate Principal Balance of each such
Class is reduced to zero; provided, however, that Realized Losses that would otherwise be allocated
to the Class A-1 Certificates will instead be allocated to the Class A-2 Certificates, until the
Outstanding Certificate Principal Balance of the Class A-2 Certificates has been reduced to zero.

     (c) In the event that a Subsequent Recovery is made with respect to any Realized Loss, the
amount of such Subsequent Recovery shall be treated as a Principal Prepayment and deposited in the
Collection Account and distributed on the applicable Distribution Date.

     Section 6.05 Compensating Interest; Allocation of Certain Interest Shortfalls.

     (a) Upon a Principal Prepayment of a Mortgage Loan, the Servicer shall deposit into the
Collection Account from its own funds, as a reduction of its servicing compensation hereunder, an
amount, if any, by which the amount of the interest that would otherwise accrue with respect to
such Mortgage Loan from the date of prepayment to the Due Date in the related Due Period at the Net
Mortgage Rate exceeds the amount of the interest (adjusted to the Net Mortgage Rate) collected from
the Mortgagor with respect to such period (such amount, “Compensating Interest”); provided,
however, that with respect to any Distribution Date, the Servicer’s obligation to deposit any such
amount is limited to an amount equal to the product of (i) one-twelfth of 0.125% and (ii) the
aggregate Stated Principal Balance of the Mortgage Loans with respect to the Due Date in the month
immediately preceding the month of such Distribution Date.

     (b) On any Distribution Date, the excess, if any, of (X) Compensating Interest with respect to
such Distribution Date over (Y) the amount deposited in the Collection Account pursuant to (a)
above for such Distribution Date shall equal the “Compensating Interest Shortfall” with respect to
such Distribution Date. On any Distribution Date, the Compensating Interest Shortfall shall be
allocated pro rata among the outstanding Classes of Class A, Class M and Class B Certificates based
on the amount of interest to which each such Class would otherwise be paid on such Distribution
Date had there been no such Compensating Interest Shortfall.

     (c) On any Distribution Date, the interest portion of any Realized Losses (“Realized Loss
Interest Shortfall”) (other than the interest portion of Excess Losses) shall be allocated to
the Class of Subordinated Certificates then outstanding having the highest numerical Class
designation (for this purpose, the Class M Certificates shall be deemed to have a lower numerical
Class designation than each Class of Class B Certificates) or, if no Class of Subordinated
Certificates is then outstanding, to the Class A Certificates pro rata among the outstanding
Classes of Class A Certificates based on the amount of interest to which each such Class would
otherwise be paid on such Distribution Date had there been no such Realized Loss Interest
Shortfall. On any Distribution Date, the interest portion of any Excess Losses

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shall be allocated
pro rata among the outstanding Classes of Certificates based upon the amount of interest to which
each such Class would otherwise be paid on such Distribution Date had there been no such Excess
Losses allocable to interest; provided, however, that so long as the Outstanding Certificate
Principal Balance of the Class A-2 Certificates is greater than zero, the interest portion of any
Excess Losses that would otherwise be allocated to the Class A-1 Certificates in accordance with
this Section 6.05(c) will instead be allocated to the Class A-2 Certificates.

     (d) Any interest shortfall resulting from the Relief Act shall be allocated pro rata among the
outstanding Classes of Certificates based upon the amount of interest to which each such Class
would otherwise be paid on such Distribution Date.

     Section 6.06 Subordination. The rights of any Holder of the Class CE Certificates to
receive distributions in respect of the Class CE Certificates on any Distribution Date shall be
subordinated to the rights of the Class A, Class M and Class B Certificateholders to receive
distributions in respect of the Class A, Class M and Class B Certificates, respectively. The
rights of the Class B Certificateholders to receive distributions in respect of the Class B
Certificates on any Distribution Date shall be subordinated to the rights of the Class A and Class
M Certificateholders to receive distributions in respect of the Class A and Class M Certificates.
The rights of the Class M Certificateholders to receive distributions in respect of the Class M
Certificates on any Distribution Date shall be subordinated to the rights of the Class A
Certificateholders to receive distributions in respect of the Class A Certificates. The rights of
the Class B-1 Certificateholders to

     receive distributions in respect of the Class B-1 Certificates on any Distribution Date shall
be subordinate to the rights of the Class A and Class M Certificateholders to receive distributions
in respect of such Class A and Class M Certificates. Each Class of Class B Certificates (other
than the Class B-1 Certificates) is subordinated to the Class A Certificates, the Class M
Certificates and each Class of Class B Certificates having a lower numerical Class designation than
such Class of Class B Certificates. The rights of the Class M-1 Certificateholders to receive
distributions in respect of the Class M-1 Certificates on any Distribution Date shall be
subordinate to the rights of the Class A Certificateholders to receive distributions in respect of
such Class A Certificates. Each Class of Class M Certificates (other than the Class M-1
Certificates) is subordinated to the Class A Certificates and each Class of Class M Certificates
having a lower numerical Class designation than such Class of Class M Certificates. The rights of
the Servicer, as servicer, to receive funds from the Collection Account, pursuant to Section 5.09,
on account of the Servicing Fee (except as provided in Section 6.05) in respect of each Mortgage
Loan, assumption fees, late payment charges and other mortgagor charges, reimbursement of Advances
and expenses or otherwise, shall not be subordinated to the rights of the Class A, Class M or Class
B Certificateholders. Amounts held by the Servicer or the Paying Agent for future distribution to
the Class M or Class B Certificateholders, including, without limitation, in the Collection
Account, shall not be distributed in respect of the Class M or Class B Certificates except in
accordance with the terms of this Agreement. The Class B Certificateholders are deemed to have
granted a security interest in such amounts to the Class A and Class M Certificateholders to secure
the rights of the Class A and Class M Certificateholders to receive distributions in priority over
the Class B Certificateholders. The Class M Certificateholders are deemed to have granted a
security interest in such amounts to the Class A Certificateholders to secure the rights of the
Class A Certificateholders to receive distributions in priority over the Class A
Certificateholders.

     Section 6.07 Determination of LIBOR. The meaning of LIBOR applicable to the
calculation of the Certificate Rates on the Certificates for any Accrual Period (other than the
initial Accrual Period) will be determined by the Servicer or its designee on each Rate Adjustment
Date as follows:

     For any Accrual Period other than the first Accrual Period, “LIBOR” means, with respect to a
Distribution Date, the rate determined by the Swap Counterparty to be (i) the per annum rate for
deposits in U.S. dollars for a period of one month which appears on the Reuters Page LIBOR01 as of

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11:00 a.m., London time, on the day that is two London Business Days prior to the first day of the
Interest Accrual Period relating to such Distribution Date (rounded upwards, if necessary, to the
nearest 1/100,000 of 1%); (ii) if such rate does not appear on the Reuters Page LIBOR01, LIBOR
shall be the arithmetic mean (rounded as aforesaid) of the offered quotations obtained by the Swap
Counterparty from the Reference Banks for deposits in U.S. dollars to leading banks in the London
interbank market as of approximately 11:00 a.m., London time, on the day that is two London
Business Days prior to the first day of the Interest Accrual Period relating to such Distribution
Date; or (iii) if fewer than two Reference Banks provide the Swap Counterparty with such
quotations, LIBOR shall be the rate per annum which the Swap Counterparty determines to be the
arithmetic mean (rounded as aforesaid) of the offered quotations which leading banks in New York
City selected by the Swap Counterparty are quoting in the New York interbank market on the first
day of the Interest Accrual Period relating to such Distribution Date for deposits in U.S. dollars
to the Reference Banks or, if fewer than two such quotations are available, to leading European and
Canadian banks.

     The establishment of LIBOR on any Rate Adjustment Date and the Servicer’s subsequent
calculation of the Certificate Rates applicable to the Certificates for the relevant Accrual
Period, in the absence of manifest error, will be final and binding.

[END OF ARTICLE VI]

ARTICLE VII

REPORTS TO BE PREPARED BY THE SERVICER

     Section 7.01 Servicer Shall Provide Information as Reasonably Required. The Servicer
shall furnish to the Trustee or, if a Paying Agent has been appointed pursuant to Section 4.05, the
Paying Agent, 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
in respect to the Trustee or, if a Paying Agent has been appointed pursuant to Section 4.05, the
Paying Agent, or otherwise in respect to the purposes of this Agreement, all such reports or
information to be as provided by and in accordance with such applicable instructions and directions
as the Trustee or, if a Paying Agent has been appointed pursuant to Section 4.05, the Paying Agent
may reasonably require.

     Section 7.02 Federal Information Returns and Reports to Certificateholders.

     (a) For federal income tax purposes, the taxable year of each REMIC Pool shall be a calendar
year and the Servicer shall maintain or cause the maintenance of the books of each REMIC Pool on
the accrual method of accounting.

     (b) The Servicer or anyone acting on its behalf pursuant to Section 2.04(g) shall prepare and
file or cause to be filed with the Internal Revenue Service federal tax or information returns with
respect to the Trust Fund, each REMIC Pool and the Certificates containing such information and at
the times and in the manner as may be required by the Code or applicable Treasury regulations, and
shall furnish to each Certificateholder at any time during the calendar year for which such returns
or reports are made such statements or information at the times and in the manner as may be
required thereby. Without limitation on any other requirement of this Section 7.02, the Servicer
shall make available the information necessary for the application of Section 860E(e) of the Code
within 60 days of such request. With respect to the Class A-R Certificate, the Servicer shall
provide such information or cause such information to be provided to (i) the Internal Revenue
Service, (ii) the transferor of a Class A-R Certificate to a Disqualified

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Organization and (iii) a
Pass-Thru Entity that holds a Class A-R Certificate with one or more record holders that are
Disqualified Organizations. The Servicer also shall provide or cause to be provided promptly the
above described computation and information relating to the tax on transfers to Disqualified
Organizations or holdings by Pass-Thru Entities within sixty (60) days after becoming aware of the
transfer to a Disqualified Organization or Pass-Thru Entity with one or more Disqualified
Organization owners, as the case may be. In addition, except as may be provided in Treasury
Regulations, any Person holding an interest in a Pass-Thru Entity as a nominee for another will,
with respect to such interest, be treated as a Pass-Thru Entity. In connection with the foregoing,
the Servicer shall provide the name, address and telephone number of the person who can be
contacted to obtain information required to be reported to the holders of regular interests in any
REMIC created hereunder (the “REMIC Reporting Agent”) as required by IRS Form 8811. The Trustee
hereby designates the Servicer to serve as the REMIC Reporting Agent. The Servicer shall indicate
the elections to treat each of the REMIC Pools as a REMIC (which elections shall apply to the
taxable period ending December 31, 2007 and each calendar year thereafter) in such manner as the
Code or applicable Treasury regulations may prescribe. The Trustee shall sign all tax and
information returns filed pursuant to this Section 7.02 and any other returns as may be required by
the Code, and in doing so shall rely entirely upon, and shall have no liability for
information provided by, or calculations provided by, the Servicer. The Servicer is hereby
designated as the agent of the Holder of the Class A-R Certificate who shall be the “tax matters
person” (within the meaning of Treas. Reg. §1.860F-4(d)) for each REMIC Pool. Any Holder of a
Class A-R Certificate will by acceptance thereof so appoint the Servicer as agent and
attorney-in-fact for the purpose of acting as tax matters person. In the event that the Code or
applicable Treasury regulations prohibit the Trustee from signing tax or information returns or
other statements, or the Servicer from acting as tax matters person (as an agent or otherwise), the
Trustee or the Servicer, as the case may be, shall take whatever action that in its sole good faith
judgment is necessary for the proper filing of such information returns or for the provision of a
tax matters person, including designation of the Holder of a Class A-R Certificate to sign such
returns or act as tax matters person. Each Holder of a Class A-R Certificate shall be bound by
this Section 7.02 by virtue of its acceptance of a Class A-R Certificate.

[END OF ARTICLE VII]

ARTICLE VIII

THE DEPOSITOR AND THE SERVICER 

     Section 8.01 Indemnification; Third Party Claims. The Servicer agrees to indemnify
the Depositor and the Trustee and hold the Depositor and the Trustee, their officers, directors,
employees and agents harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses that the Depositor
or the Trustee, or their officers, directors, employees or agents may sustain in any way related to
failure of the Servicer to perform its duties and service the Mortgage Loans in compliance with the
terms of this Agreement; provided that no such indemnification shall be required with respect to
acts of a prior Servicer. The Servicer shall immediately notify the Depositor and the Trustee if a
claim is made by a third party with respect to this Agreement or the Mortgage Loans, assume (with
the consent of the Depositor and the Trustee) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and satisfy any judgment
or decree which may be entered against it, the Depositor or the Trustee, their officers, directors,
employees or agents in respect of such claim. This right to indemnification shall survive the
termination of this Agreement.

     Section 8.02 Merger or Consolidation of the Depositor or the Servicer. The Depositor
and the Servicer will each keep in full effect its existence, rights and franchises as a corporation, and will obtain

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and 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, the Certificates or any of the Mortgage Loans and to perform
its duties under this Agreement. The Servicer will not sell all or substantially all of its assets
without the prior written consent of the Depositor and the Trustee which shall not be unreasonably
withheld or delayed.

     Any Person into which the Depositor or the Servicer may be merged or consolidated, or to whom
the Depositor or the Servicer has sold substantially all of its assets, or any corporation
resulting from any merger, conversion or consolidation to which the Depositor or the Servicer shall
be a party, or any Person succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or
surviving Person to the Servicer shall satisfy the requirements of Section 8.05 with respect
to the qualifications of a successor to the Servicer.

     Notwithstanding anything else in this Section 8.02 and Section 8.04 to the contrary, the
Servicer may assign its rights and delegate its duties and obligations under this Agreement;
provided that the Person accepting such assignment or delegation shall be a Person which is
qualified to service mortgage loans on behalf of FNMA or FHLMC, is approved in advance in writing
by the Trustee and the Depositor, is willing to service the Mortgage Loans and executes and
delivers to the Depositor and the Trustee an agreement, in form and substance reasonably
satisfactory to the Depositor and the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be performed or
observed by the Servicer under this Agreement; provided further that each Rating Agency’s rating of
any of the Classes of Certificates that have been rated in effect immediately prior to such
assignment and delegation will not be qualified or reduced or withdrawn as a result of such
assignment and delegation. In the case of any such assignment and delegation, the Servicer shall
be released from its obligations as Servicer under this Agreement, except that the Servicer shall
remain liable for all liabilities and obligations incurred by it as Servicer hereunder prior to the
satisfaction of the conditions to such assignment and delegation set forth in the next preceding
sentence.

     Section 8.03 Limitation on Liability of the Depositor, the Servicer, the Trustee and
Others. Neither the Depositor, the Servicer nor any of the directors, officers, employees or
agents of the Depositor or the Servicer shall be under any liability to the Trustee or the
Certificateholders for any action taken, or for refraining from the taking of any action, in good
faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or the Servicer against any breach of warranties or representations
made herein, or failure to perform its obligations in strict compliance with this Agreement, or any
liability which would otherwise be imposed by reason of any breach of the terms and conditions of
this Agreement. The Depositor, the Servicer, the Trustee, and any director, officer, employee or
agent of the Depositor, the Servicer or the Trustee may rely in good faith on any document of any
kind prima facie properly executed and submitted by any Person respecting any matters arising
hereunder. Neither the Depositor, the Servicer nor the Trustee shall be under any obligation to
appear in, prosecute or defend any legal action which is not incidental to its respective duties to
service the Mortgage Loans in accordance with this Agreement and which in its opinion may cause it
to incur any expenses or liability; provided, however, that the Depositor, the Servicer or the
Trustee may in its discretion (and, in the case of the Depositor or the Servicer, with the consent
of the Trustee, which consent shall not be unreasonably withheld) undertake any such action which
it may deem necessary or desirable with respect to this Agreement and the rights and duties of the
parties hereto. In such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities payable from the Collection Account
and the Depositor, the Servicer or the Trustee shall be entitled to be reimbursed therefor out of
the Collection Account as provided by Section 5.09; provided that no such right of reimbursement
shall exist with respect to the Servicer when such claim relates to the

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failure of the Servicer to
service the Mortgage Loans in strict compliance with the terms of this Agreement or to a breach of
a representation or warranty made by the Servicer hereunder.

     Section 8.04 Depositor and Servicer Not to Resign. Except as described in Section
8.02, neither the Depositor nor the Servicer shall assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the Depositor, the Servicer
and all of the Certificateholders unless the determination is made that its duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by the Depositor or the
Servicer. Any such determination permitting the resignation of the Depositor or the Servicer shall
be evidenced by an opinion of independent counsel to such effect delivered to the Trustee which
opinion of counsel shall be in form and substance acceptable to the
Trustee. Upon any such assignment or resignation, the Depositor or the Servicer, as
appropriate, shall send notice to all Certificateholders of the effect of such assignment or
resignation upon the then current rating of the Class of Certificates by each Rating Agency whose
rating on such Class is then in effect. No such resignation shall become effective until a
successor shall have assumed the Depositor’s or the Servicer’s responsibilities and obligations
hereunder in the manner provided in Section 8.05. Any purported assignment or resignation which
does not comply with the requirements of this Section shall be of no effect.

     Section 8.05 Successor to the Servicer. In connection with the termination of the
Servicer’s responsibilities and duties under this Agreement pursuant to Section 8.04 or 9.01, the
Trustee shall succeed to and assume all of the Servicer’s responsibilities, rights, duties and
obligations as Servicer (but not in any other capacity) under this Agreement (except that the
Trustee shall not be obligated to make Advances if prohibited by applicable law nor to effectuate
repurchases or substitutions of Mortgage Loans pursuant to Section 2.02 and except that the Trustee
makes no representations and warranties pursuant to Sections 3.01 and 3.02). Prior to the
termination of the Servicer’s responsibilities, duties and liabilities under this Agreement, the
Trustee may appoint a successor having a net worth of not less than $15,000,000 and which is a FNMA
or FHLMC approved seller/servicer in good standing and which shall succeed to all rights and assume
all of the responsibilities, duties and liabilities of the Servicer under this Agreement, except as
aforesaid, if the Trustee receives a letter from each Rating Agency that such appointment would not
result in a reduction or withdrawal of the current rating of any Class of Certificates that is
rated by a Rating Agency. Any co-trustee appointed pursuant to Section 10.10 for purposes of this
Section 8.05 shall have an obligation to make Advances pursuant to Section 6.03 during such time as
the Trustee is the Servicer, which obligation shall be joint and several with that of the Trustee
as Servicer. If the Trustee has become the successor to the Servicer in accordance with this
Section or Section 9.03, then notwithstanding the above, the Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established housing and home finance institution having a net worth of
not less than $15,000,000 and which is a FNMA or FHLMC approved seller/servicer in good standing as
the successor to the Servicer hereunder in the assumption of all of the responsibilities, duties or
liabilities of the Servicer hereunder. In connection with any such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of payments on
Mortgage Loans as it and such successor shall agree or such court shall determine; provided,
however, that no such compensation shall be in excess of that permitted under this Agreement
without the consent of all of the Certificateholders. If the Trustee is acting as Servicer, the
Trustee shall be entitled to all compensation of the Servicer hereunder, and all such compensation
due to the Trustee as Servicer shall be in addition to all compensation it is entitled to as
Trustee under this Agreement. If the Servicer’s duties, responsibilities and liabilities under
this Agreement should be terminated pursuant

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to Section 8.02, 8.04 or 9.01, the Servicer shall
discharge such duties and responsibilities during the period from the date it acquires knowledge of
such termination until the effective date thereof with the same degree of diligence and prudence
which it is obligated to exercise under this Agreement, and shall take no action whatsoever that
might impair or prejudice the rights or financial condition of its successor or the Trust Fund.
The resignation or removal of the Servicer pursuant to Section 8.02, 8.04 or 9.01 shall not become
effective until a successor shall be appointed pursuant to this Section and shall in no event
relieve the Servicer of liability for breach of the representations and warranties made pursuant to
Section 3.02.

     Any successor appointed as provided herein shall execute, acknowledge and deliver to the
Servicer and to the Trustee 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
and the Certificates. Any termination or resignation of the Servicer or this Agreement pursuant to
Section 8.02, 8.04, 9.01 or 11.01

     shall not affect any claims that the Trustee may have against the Servicer for events or
actions taken or not taken by the Servicer arising prior to any such termination or resignation.

     The Servicer shall timely deliver to the successor the funds that were, or were required to
be, in the Collection Account and the Escrow Account, if any, and all Mortgage Files and related
documents, statements and recordkeeping held by it hereunder and the Servicer shall account for all
funds and shall execute and deliver such instruments and do such other things 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.

     Upon a successor’s acceptance of appointment as such, the Servicer shall notify, in writing,
the Trustee, the Certificateholders and each Rating Agency of such appointment.

     Section 8.06 Maintenance of Ratings. The Servicer shall cooperate with the Depositor
and take any action that may be reasonably necessary to maintain the current rating or ratings on
the Certificates.

[END OF ARTICLE VIII]

ARTICLE IX

DEFAULT

     Section 9.01 Events of Default. If one or more of the following Events of Default
shall occur and be continuing, that is to say:

     (a) any failure by the Servicer to remit any payment required to be made or distributed under
the terms of this Agreement which continues unremedied for a period of three (3) Business Days
after the date upon which written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Trustee, the Paying Agent or the Depositor or to the
Servicer, the Trustee, the Paying Agent and the Depositor by the Holders of Certificates of any
Class evidencing, as to such Class, Percentage Interests aggregating not less than 25%; or

     (b) a breach by the Servicer in a material respect of any representation or warranty set forth
in Section 3.02, or failure on the part of the Servicer duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Servicer set forth in this
Agreement, which continues unremedied for a period of 60 days after the date on which written
notice of such breach or failure, requiring the same to be remedied, shall have been given to the
Servicer by the Trustee or the Depositor or to the Servicer, the Trustee and the Depositor by the
Holders of Certificates of any Class evidencing, as to such Class, Percentage Interests aggregating
not less than 25%; or

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     (c) the Servicer shall notify the Trustee and any Paying Agent appointed pursuant to Section
4.05 in writing that it is unable to make an Advance required to be made in accordance with Section
6.03; or;

     (d) a decree or order of a court or agency or supervisory authority having jurisdiction for
the appointment of a conservator or receiver or liquidator in any 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 the Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or

     (e) the Servicer shall consent to the appointment of a conservator or receiver or liquidator
in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or substantially all of the
Servicer’s property; or

     (f) the Servicer shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its
obligations;

then, and in each and every such case, so long as an Event of Default shall not have been remedied,
upon receiving notice or knowledge of such event, the Trustee shall notify the Certificateholders
and each Rating Agency of such Event of Default. The Trustee may, upon receipt of such notice or
knowledge, and at the written direction of the Holders of Certificates evidencing Percentage
Interests aggregating more than 50%, shall, by notice in writing to the Servicer, terminate all the
rights and obligations of the Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof. On or after the receipt by the Servicer of such written notice, 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
8.05. Upon written request from the Trustee, 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 Servicer’s sole expense. The Servicer
agrees to cooperate with the Trustee and any co-trustee 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 which shall at the time be credited or
should have been credited by the Servicer to the Collection Account or Escrow Account or thereafter
received with respect to the Mortgage Loans. The Trustee will have no obligation to take any
action or institute, conduct or defend any litigation under this Agreement at the request, order or
direction of any of the Holders of Certificates unless such Certificateholders have offered to the
Trustee reasonable security or indemnity against the costs, expenses and liabilities which the
Trustee may incur. The Paying Agent shall provide information regarding the Certificateholders
available to the Paying Agent in order to allow the Trustee to comply with the provisions above.

     Section 9.02 Waiver of Defaults. The Trustee may waive any default by the Servicer in
the performance of its obligations hereunder and its consequences, except that a default in the
making of any required distribution on any of the Certificates may only be waived by the Holders of
a majority of the Percentage Interests of the affected Certificateholders. Upon any such waiver of
a past default, such default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon except to the extent
expressly so waived.

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     Section 9.03 Trustee to Act; Appointment of Successor. On and after the time the
Servicer receives a notice of termination pursuant to Section 9.01, the Trustee or a successor
servicer appointed by it shall be the successor in all respects to the Servicer to the extent
provided in Section 8.05.

     Section 9.04 Notification to Certificateholders and the Rating Agencies.

     (a) Upon any such termination pursuant to Section 9.01, the Trustee shall give prompt written
notice thereof to Certificateholders at their respective addresses appearing in the Certificate
Register and to each Rating Agency.

     (b) Within sixty (60) days of a Responsible Officer of the Trustee having received written
notice of the occurrence of any Event of Default, the Trustee shall transmit by mail to all Holders
of Certificates notice of each such Event of Default hereunder known to the Trustee, unless such
Event of Default shall have been cured or waived.

     (c) The Paying Agent shall provide information regarding the Certificateholders available to
the Paying Agent in order to allow the Trustee to comply with the provisions above.

[END OF ARTICLE IX]

ARTICLE X

CONCERNING THE TRUSTEE

     Section 10.01 Duties of Trustee. The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default which may have occurred, undertakes to, and
is empowered to, perform such duties and only such duties as are specifically set forth in this
Agreement. Any permissive right of the Trustee as enumerated in this Agreement shall not be
construed as a duty; provided that in case an Event of Default has occurred (which has not been
cured), the Trustee shall exercise such of the rights and powers vested in it by this Agreement,
and use the same degree of care and skill in their exercise as a prudent man would exercise or use
under the circumstances in the conduct of such man’s own affairs.

     No provision of this Agreement shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act or its own willful misconduct; provided,
however, that:

     (i) Prior to the occurrence of an Event of Default, and after the curing of all such
Events of Default which may have occurred, the duties and obligations of the Trustee shall
be determined solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement;

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     (ii) The Trustee shall not be liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and

     (iii) The Trustee shall not be liable with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with the direction of
Certificateholders of any Class holding Certificates which evidence, as to such Class,
Percentage Interests aggregating not less than 25% as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Agreement.

     (iv) The Trustee shall execute the Letter of Representations, a form of which is
attached hereto as Exhibit P, on behalf of the Depositor.

     Section 10.02 Certain Matters Affecting the Trustee. Except as otherwise provided in
Section 10.01:

     (a) The Trustee may rely upon and shall be protected in acting or refraining from acting upon
any resolution, Officers’ Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party or
parties;

     (b) The Trustee may consult with counsel, and any advice or Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or suffered or omitted by
it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

     (c) The Trustee shall be under no obligation to exercise any of the trusts or powers vested in
it by this Agreement or to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;

     (d) Neither the Trustee nor any of its directors, officers, employees or agents shall be
personally liable for any action taken, suffered or omitted by it in good faith and believed by it
or any of them to be authorized or within the discretion or rights or powers conferred upon the
Trustee by this Agreement;

     (e) Prior to the occurrence of an Event of Default hereunder and after the curing of all
Events of Default which may have occurred, the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates of any Class evidencing, as to such Class,
Percentage Interests aggregating not less than 25% (in the case of conflicting requests by two or
more 25% or greater Percentage Interests, the Trustee shall act in accordance with the first such
request); provided, however, that if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it
by the terms of this Agreement, the Trustee may require reasonable indemnity against such expense
or liability as a condition to such proceeding. The reasonable expense of every such examination
shall be paid by the Servicer, if an Event of Default shall have occurred and is continuing, and
otherwise by the Certificateholder requesting the investigation;

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     (f) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, subcontractors or attorneys; and

     (g) Nothing in this Agreement shall be construed to require the Trustee (except as might
otherwise be required in its capacity as successor Servicer) to expend its own funds.

     Section 10.03 Trustee Not Liable for Certificates or Mortgage Loans. The recitals
contained herein shall be taken as the statements of the Depositor or the Servicer, as the case may
be, and the Trustee assumes no responsibility for their correctness. The Trustee makes no
representations or warranties as to the validity or sufficiency of this Agreement or of the
Certificates, of any Mortgage Loan or related document or the Trust Estate. The Trustee shall not
be accountable for the use or application by the Depositor or the Servicer of any of the
Certificates or of the proceeds of such Certificates, or for the use or application of any funds
paid to the Depositor or the Servicer in respect of the Mortgage Loans or deposited in or withdrawn
from the Collection Account by the Depositor or the Servicer or the Certificate Account by the
Paying Agent. The Trustee shall have no responsibility for the timeliness or the amount of
payments made by the Paying Agent to the Certificateholders.

     Section 10.04 Trustee May Own Certificates. The Trustee in its individual or any
other capacity may become the owner or pledgee of Certificates with the same rights it would have
if it were not Trustee.

     Section 10.05 Fees and Expenses. The Paying Agent, from moneys received from the
Servicer, covenants and agrees to pay to the Trustee and its agents a monthly fee (which shall not
be limited by any provision of law in regard to the compensation of a trustee of an express trust)
equal to the product of (a) the aggregate Principal Balance of the Mortgage Loans as of the
Determination Date in the preceding month and (b) one-twelfth of 0.000010, and the Servicer will
pay or reimburse the Trustee, or its agents upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or its agents in accordance with any of
the provisions of this Agreement (including the reasonable compensation and the expenses and
disbursements of its counsel and of all persons not regularly in its employ, and the expenses
incurred by the Trustee in connection with the appointment of an office or agency pursuant to
Section 10.11) and the Servicer shall indemnify and hold harmless the Trustee its officers,
directors, employees and agents from and against any and all claims, liabilities, losses or
expenses (including but not limited to reasonable attorneys fees) incurred in connection with the
administration of this Trust and the performance of its duties hereunder provided that the Servicer
shall not be required to reimburse any such expense or indemnify against any such loss or liability
incurred by the Trustee through the Trustee’s own negligence or bad faith. Notwithstanding
anything to the contrary in this Agreement, this Section shall survive the termination of this
Agreement.

     Section 10.06 Eligibility Requirements for Trustee. The Trustee hereunder shall at
all times be an entity having its principal office in a state and city acceptable to the Depositor
and organized and doing business under the laws of such state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by federal or state
authority. The Trustee shall not be an Affiliate of either Seller or the Depositor. If such
entity publishes reports of condition at least annually, pursuant to law or to the requirements of
the aforesaid supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee
shall resign immediately in the manner and with the effect specified in Section 10.07.

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     Section 10.07 Resignation and Removal of the Trustee. The Trustee, and any co-trustee
may at any time resign and be discharged from the trusts hereby created by giving written notice
thereof to the Depositor, the Servicer and each Rating Agency. Upon receiving such notice of
resignation, the Depositor shall promptly appoint a successor trustee or co-trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee
and one copy to the successor trustee; provided that such appointment does not result in a
reduction or withdrawal of the rating of any of the Classes of Certificates that have been rated.
If no successor trustee shall have been so appointed and have accepted appointment within thirty
(30) days after the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.

     If at any time, the Trustee shall cease to be eligible in accordance with the provisions of
Section 10.06 and shall fail to resign after written request therefor by the Depositor, or if at
any time the Trustee shall become incapable of acting, or shall be adjudged bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor may remove the Trustee and appoint
a successor trustee by written instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee.

     The Holders of Certificates evidencing in the aggregate more than 50% of Percentage Interest
may at any time remove the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact duly authorized, one
complete set of which instruments shall be delivered to the Depositor, one complete set to the
Trustee so removed and one complete set to the successor so appointed.

     Any resignation or removal of the Trustee or any resignation of any co-trustee and appointment
of a successor trustee or co-trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in Section 10.08, or
upon acceptance of appointment by a co-trustee, as applicable, unless with respect to a co-trustee,
the Trustee receives written notice from each Rating Agency that the failure to appoint a successor
co-trustee would not result in a withdrawal or reduction of the rating of any of the Classes of
Certificates that have been rated, in which case the resignation of any co-trustee shall be
effective upon receipt of such written notice. Any co-trustee may not be removed unless the
Depositor and the Trustee each receive written notice from each Rating Agency that such removal
would not result in a withdrawal or reduction of the rating of any of the Classes of Certificates
that have been rated, in which case the removal of any co-trustee shall be effective upon receipt
of such written notice.

     Section 10.08 Successor Trustee. Any successor trustee appointed as provided in
Section 10.07 shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the resignation or
removal of the predecessor trustee shall become effective, and such successor trustee shall become
effective and such successor trustee, without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor trustee shall deliver to
the successor trustee all Mortgage Files and related documents and statements held by it hereunder,
and the Depositor, the Servicer and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers, duties and obligations.

105

 

     No successor trustee shall accept appointment as provided in this Section unless at the time
of such acceptance such successor trustee shall be eligible under the provisions of Section 10.06.
Prior to the appointment of any successor trustee becoming effective, the Depositor shall have
received from each Rating Agency written confirmation that such appointment would not result in a
reduction of the rating of the Class A or Class M Certificates.

     Upon acceptance of appointment by a successor trustee as provided in this Section, the
Servicer shall mail notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register, to the Servicer, any
Sub-Servicer and to each Rating Agency. If the Depositor fails to mail such notice within ten (10)
days after acceptance of appointment by the successor trustee, the successor trustee shall cause
such notice to be mailed at the expense of the Depositor.

     Section 10.09 Merger or Consolidation of Trustee. Any entity into which the Trustee
may be merged or converted or with which it may be consolidated or any entity resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or any entity succeeding
to the business of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible under the provisions of Section 10.06, without the execution or
filing of any paper or any further act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding.

     Section 10.10 Appointment of Co-Trustee or Separate Trustee. At any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Fund
or property securing the same may at the time be located, the Depositor and the Trustee acting
jointly shall have the power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, of
any part of the Trust Fund, and to vest in such Person or Persons, in such capacity, such title to
the Trust Fund, or any part thereof, and, subject to the other provisions of this Section 10.10,
such powers, duties, obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable. If the Depositor shall not have joined in such appointment within fifteen
(15) days after the receipt by it of a request so to do, or in case an Event of Default shall have
occurred and be continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 10.06, hereunder, and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under Section 10.08 hereof.

     In the case of any appointment of a co-trustee or separate trustee pursuant to this Section
10.10, all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be
conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly and severally, except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed (whether as Trustee hereunder or as successor
to the Servicer hereunder), the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the holding of title to
the Trust Fund or any portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.

     Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article X. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting
the liability of, or affording protection to, the Trustee. Every such instrument shall be
filed with the Trustee.

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     Any separate trustee or co-trustee may, at any time, constitute the Trustee, its agent or
attorney-in-fact, with full power and authority, to the extent not prohibited by law, to do any
lawful act under or in respect of this Agreement on its behalf and in its name.

     Section 10.11 Appointment of Office or Agency. The Trustee may appoint an office or
agency in The City of New York where Certificates may be surrendered for registration of transfer
or exchange. The Trustee will maintain an office at the address stated in Section 12.07 hereof
where notices and demands to or upon the Trustee in respect of the Certificates may be served.

     Section 10.12 Indemnification.

     (a) The Paying Agent shall indemnify and hold harmless the Trustee, the Depositor, the
Servicer and their respective officers, directors, agents and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a failure of the Paying Agent to deliver
when required any Assessment of Compliance required of it pursuant to Section 5.26 or any material
misstatement or omission contained in any Assessment of Compliance provided on its behalf pursuant
to Section 5.26. If the indemnification provided for herein is unavailable or insufficient to hold
harmless the indemnified parties, then the Paying Agent agrees that it shall contribute to the
amount paid or payable by the indemnified parties as a result of the losses, claims, damages or
liabilities of the indemnified parties in such proportion as is appropriate to reflect the relative
fault of the Paying Agent on the one hand and of the indemnified parties on the other.

     (b) The Servicer shall indemnify and hold harmless the Trustee, the Paying Agent and the
Depositor and their respective officers, directors, agents and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach by the Servicer or any of its
officers, directors, agents or Affiliates of its obligations under Sections 5.24, 5.25, and 5.26,
any material misstatement or omission in any documents prepared thereunder (to the extent the
Servicer is responsible for providing information or calculating amounts included in such
information), the failure of the Servicer to deliver when required any Assessment of Compliance or
Accountant’s Attestation required of it pursuant to Section 5.26 or Annual Statement of Compliance
required pursuant to Section 5.25, as applicable, or any material misstatement or omission
contained in any Assessment of Compliance, Accountant’s Attestation or Annual Statement of
Compliance provided on its behalf pursuant to Section 5.25 or 5.26, as applicable, or the
negligence, bad faith or willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold harmless the indemnified
parties, then the Servicer agrees that it shall contribute to the amount paid or payable by the
indemnified parties as a result of the losses, claims, damages or liabilities of the indemnified
parties in such proportion as is appropriate to reflect the relative fault of the Servicer on the
one hand and of the indemnified parties on the other.

[END OF ARTICLE X]

ARTICLE XI

TERMINATION

     Section 11.01 Termination. The respective obligations and responsibilities of the
Depositor, the Servicer (except the duty to pay the Trustee’s fees and expenses and indemnification
hereunder) and the Trustee shall terminate upon (i) the later of the final payment or other
liquidation (or any Advance with

107

 

respect thereto) of the last Mortgage Loan or the disposition of
all property acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan and the
remittance of all funds due hereunder; or (ii) at the option of the Servicer, on any Distribution
Date which occurs in the month next following a Due Date on which the aggregate unpaid Principal
Balance of all Outstanding Mortgage Loans is less than 10% of the aggregate unpaid Principal
Balance of the Mortgage Loans on the Cut-off Date, so long as the Servicer deposits or causes to be
deposited in the Collection Account during the Principal Prepayment Period related to such
Distribution Date (and provides notice to the Trustee with a copy to the Paying Agent appointed
pursuant to Section 4.05 of its intention to so deposit on or before 20th day of such Principal
Prepayment Period) an amount equal to the Purchase Price for each Outstanding Mortgage Loan plus
any unpaid Net Swap Payments and any Swap Termination Payment owed to the Swap Counterparty, less
any unreimbursed Advances made with respect to any Mortgage Loan (which amount shall offset
completely any unreimbursed Advances for which the Servicer is otherwise entitled to
reimbursement), and, with respect to all property acquired in respect of any Mortgage Loan
remaining in the Trust Fund, an amount equal to the fair market value of such property, as
determined by an appraisal to be conducted by an appraiser selected by the Trustee, less
unreimbursed Advances made with respect to any Mortgage Loan with respect to which property has
been acquired; provided, however, that in no event shall the trust created hereby continue beyond
the expiration of 21 years from the death of the last survivor of the descendants of Joseph P.
Kennedy, the late ambassador of the United States to the Court of St. James’s, living on the date
hereof. Notwithstanding the foregoing, amounts paid by the Servicer
pursuant to this paragraph in respect of unpaid Net Swap Payments and
Swap Termination Payments owed to the Swap Counterparty shall not be
a part of any REMIC. Notwithstanding the foregoing, a termination may be effected by the making of such
optional repurchases only if the termination of the Trust Fund satisfies the requirement for a
“qualified liquidation” of the Trust Fund within the meaning of Section 860F(a)(4) of the Code and
the purchases of the Outstanding Mortgage Loans pursuant to this Section 11.01 will not constitute
“prohibited transactions” within the meaning of Section 860F(a)(2) of the Code.

     Notice of any termination, specifying the Distribution Date upon which all Certificateholders
may surrender their Certificates to the Trustee or, if a Paying Agent has been appointed pursuant
to Section 4.05, the Paying Agent for payment and cancellation, shall be given promptly by the
Trustee or, if a Paying Agent has been appointed under Section 4.05, the Paying Agent, (upon
direction by the Depositor ten (10) days prior to the date such notice is to be mailed) by signed
letter to Certificateholders and each Rating Agency mailed no later than the 25th day of the month
preceding the month of such final distribution specifying (i) the Distribution Date upon which
final payment on the Certificates will be made upon presentation and surrender of Certificates at
the office or agency of the Trustee or, if a Paying Agent has been appointed under Section 4.05,
the Paying Agent, therein designated and (ii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation and surrender of
the Certificates at the office or agency of the Trustee or, if a Paying Agent has been appointed
under Section 4.05, the Paying Agent, therein specified. The Servicer shall indicate the date of
adoption of the plan of qualified liquidation in a statement attached to the final federal income
tax return of each REMIC Pool. After giving such notice, the Trustee or if a Paying Agent has been
appointed under Section 4.05, the Paying Agent shall not register the transfer or exchange of any
Certificates. If such notice is given in connection with the Servicer’s election to purchase the
Outstanding Mortgage Loans, the Servicer shall deposit in the Collection Account after adoption of
the plan during the applicable Principal Prepayment Period an amount equal to the purchase price as
determined as provided in clause (ii) of the preceding paragraph and on the Distribution Date on
which such termination is to occur, Certificateholders will be entitled to the amount of such
purchase price but not amounts in excess thereof, all as provided herein. Upon presentation and
surrender of the Certificates, the Trustee, or if a Paying Agent has been appointed under Section
4.05, the Paying Agent shall notify the Servicer and the Servicer shall cause to be distributed to
Certificateholders an amount equal to (a) the amount otherwise
distributable on such Distribution Date, if not in connection with a purchase; or (b) if the
Servicer elected to so purchase, the purchase price determined as provided in clause (ii) of the
preceding paragraph. Following such final deposit the Trustee shall promptly release to the
Servicer the Mortgage Files for the remaining Mortgage Loans, and the Trustee shall execute all
assignments, endorsements and other

108

 

instruments necessary to effectuate such transfer and shall
have no further responsibility with regard to said Mortgage Files.

     If all of the Certificateholders shall not surrender their Certificates for cancellation
within three (3) months after the time specified in the above-mentioned written notice, at the
close of the 90 day period beginning after the written notice is given, each remaining
Certificateholder will be credited with an amount that would have been otherwise distributed to
such Certificateholder, and the Trustee or, if a Paying Agent has been appointed under Section
4.05, the Paying Agent, shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final distribution with respect
thereto. If within three (3) months after the second notice all the Certificates shall not have
been surrendered for cancellation, the Trustee or, if a Paying Agent has been appointed under
Section 4.05, the Paying Agent, shall appoint an agent to take appropriate and reasonable steps to
contact the remaining Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain in the Trust Fund hereunder.

[END OF ARTICLE XI]

ARTICLE XII

MISCELLANEOUS PROVISIONS

     Section 12.01 Severability of Provisions. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid,
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.

     Section 12.02 Limitation on Rights of Certificateholders. The death or incapacity of
any Certificateholder shall not operate to terminate this Agreement or the Trust Fund, nor entitle
such Certificateholder’s legal representatives or heirs to claim an accounting or to take any
action or proceeding in any court for a partition or winding-up of the Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of them.

     No Certificateholder shall have any right to vote (except as expressly provided herein) or in
any manner otherwise control the operation and management of the Trust Fund, or the obligations of
the parties hereto, nor shall anything herein set forth, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time to time as partners
or members of an association; nor shall any Certificateholder be under any liability to any third
Person by reason of any action taken by the parties to this Agreement pursuant to any provision
hereof.

     No Certificateholder shall have any right by virtue of any provision of this Agreement to
institute any suit, action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and the Holders of Certificates
of any Class evidencing in the aggregate
not less than 25% of the Percentage Interests of such Class shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder
(in the case of conflicting requests by two or more 25% or greater Percentage Interests, the
Trustee shall act in accordance with the first such request) and shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for sixty
(60) days after its receipt of such notice, request and offer of indemnity, shall have neglected or

109

 

refused to institute any such action, suit
or proceeding; it being understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates of any Class shall have any right in any manner whatever by virtue of any provision
of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of such
Certificates of such Class or any other Class, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the common benefit of Certificateholders of such Class or all
Classes, as the case may be. For the protection and enforcement of the provisions of this Section,
each and every Certificateholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.

     Section 12.03 Amendment. This Agreement may be amended from time to time by the
Depositor, the Servicer and the Trustee, without the consent of any of the Certificateholders (but
with the consent of the Swap Counterparty to the extent any such amendment would have a materially
adverse effect on the Swap Counterparty, in such capacity), to cure any ambiguity, to correct or
supplement any provisions herein which may be inconsistent with any other provisions herein, to
ensure continuing treatment of each REMIC created hereunder as a REMIC to avoid or minimize the
risk of imposition of any tax on any REMIC created hereunder pursuant to the Code, or to make any
other provisions with respect to matters or questions arising under this Agreement which shall not
be materially inconsistent with the provisions of this Agreement, provided that such actions shall
not, as evidenced by an Opinion of Counsel, adversely affect in any material respect the interests
of any Certificateholder of a Class having an Outstanding Certificate Principal Balance of greater
than zero or cause any REMIC created hereunder to fail to qualify as a REMIC.

     This Agreement may also be amended from time to time by the Depositor, the Servicer and the
Trustee with the consent of the Holders of Certificates evidencing in the aggregate not less than
66-2/3% of the Percentage Interest of each Class of Certificates having an Outstanding Certificate
Principal Balance greater than zero and affected thereby, and with the consent of the Swap
Counterparty to the extent any such amendment would have a materially adverse effect on the Swap
Counterparty, in such capacity, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in any manner the
rights of the Holders of Certificates of such Class; provided, however, that no such amendment
shall (i) reduce in any manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed on any Certificate without the consent of the Holder of
such Certificate, (ii) reduce the aforesaid percentage of Certificates of any Class the Holders of
which are required to consent to any such amendment or (iii) change the percentage specified in
clause (ii) of the first paragraph of Section 11.01, without the consent of the Holders of all
Certificates of such Class then outstanding.

     Notwithstanding anything to the contrary in this Agreement, this Agreement may be amended from
time to time by the Depositor, the Servicer and the Trustee with the consent of Certificateholders
evidencing not less than 66-2/3% of the interests held by parties other than the Depositor, its
Affiliates or its agents, and with the consent of the Swap Counterparty to the extent any such
amendment would have a materially adverse effect on the Swap Counterparty, in such capacity, for
the purposes of significantly changing the Permitted Activities of the Trust.

     Promptly after the execution of any such amendment the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and each Rating Agency.

     It shall not be necessary for the consent of Certificateholders under this Section 12.03 to
approve the particular form of any proposed amendment but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may

110

 

prescribe. In connection with any amendment pursuant to this
Section 12.03 the Trustee, Paying Agent and Depositor shall be entitled to receive an Opinion of
Counsel to the effect that such amendment is authorized or permitted by this Agreement and that all
conditions precedent to the execution of such amendment in accordance with this Section 12.03 have
been met.

     Section 12.04 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be an original, and such
counterparts shall constitute but one and the same instrument.

     Section 12.05 Duration of Agreement. This Agreement shall continue in existence and
effect until terminated as herein provided.

     Section 12.06 Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.

     Section 12.07 Notices. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at or mailed by first
class or registered mail, postage prepaid, to (i) in the case of the Depositor, Chase Mortgage
Finance Corporation, 300 Tice Boulevard, 3rd Floor North, Woodcliff Lake, New Jersey 07675,
Attention: Structured Finance, (ii) in the case of the Servicer, JPMorgan Chase Bank, N.A., 1111
Polaris Parkway, Columbus, Ohio 43240, (iii) in the case of the Custodian, JPMorgan Chase Bank,
N.A., 1080 Oliver Road, Monroe, Louisiana, 71201, (iv) in the case of the Trustee, The Bank of New
York Trust Company, N.A., 601 Travis, 16th Floor, Houston, Texas 77002, (v) in the case
of the Paying Agent, The Bank of New York Trust Company, N.A., 601 Travis, 16th Floor,
Houston, Texas 77002, (vi) in the case of Moody’s, Moody’s Investors Service, Inc., 99 Church
Street, 4th Floor, New York, New York 10007 (vii) [Reserved] (viii) in the case of S&P,
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., 55 Water Street,
New York, New York 10041 and (ix) in the case of any of the foregoing persons, such other addresses
as may hereafter be furnished by any such persons to the other parties to this Agreement.

     Section 12.08 Further Assurances. The Seller and the Servicer agree to do and
perform, from time to time, any and all acts and to execute any and all further instruments
required or reasonably requested by the Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing statements and the
preparation for execution by the Trustee of any continuation statements relating to the Co-op Loans
for filing under the provisions of the Uniform Commercial Code as in effect in the jurisdiction in
which the Underlying Mortgaged Property related to the affected Co-op Loan is located. The Trustee
agrees that it shall promptly execute and redeliver to the Seller or the Servicer for filing any
such continuation statement so prepared by the Seller relating to the Co-op Loans.

     The Swap Counterparty shall be deemed a third-party beneficiary of this Agreement to the same
extent as if it were a party hereto and shall have the right to enforce its rights under this
Agreement, which rights include but are not limited to, the obligation of the Paying Agent (A) to
pay any Net Swap
Payment and any Swap Termination Payment to the Swap Counterparty and (B) to establish and
maintain the Supplemental Interest Trust, to make such deposits thereto, investments therein and
distributions therefrom as are required pursuant to Article VI. For the protection and enforcement
of the provisions of this Section, the Swap Counterparty shall be entitled to relief as can be
given either at law or in equity.

111

 

[END OF ARTICLE XII]

112

 

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

	 	 	 	 	 	 	 
	 	 	CHASE MORTGAGE FINANCE CORPORATION,	 	 
	 	 	as Depositor	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,	 	 
	 	 	as Servicer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.	 	 
	 	 	as Trustee and Paying Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.,	 	 
	 	 	as Custodian	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 

 

EXHIBIT A

MORTGAGE LOAN SCHEDULE

[INTENTIONALLY OMITTED]

A-1

 

EXHIBIT B

CONTENTS OF MORTGAGE FILE

     (i) With respect to each Mortgage Loan which is not a Co-op Loan:

     (A) (I) Original Mortgage Note bearing all intervening endorsements, endorsed, “Pay to the
order of _______________, without recourse” and signed in the name of the last endorsee by an
authorized officer.

     (B) The original Mortgage (including all riders thereto) with evidence of recording thereon,
or a copy thereof certified by the public recording office in which such Mortgage has been
recorded or, if the original Mortgage has not been returned from the applicable public recording
office, a true certified copy of the original that was sent for recording, certified by the Seller.

     (C) With respect to each Non-MERS Mortgage Loan which is not a Co-op Loan, the original
Assignment of Mortgage to “The Bank of New York Trust Company, N.A., as trustee (Chase Mortgage
Finance Corporation),” which assignment shall be in form and substance acceptable for recording, or
a copy certified by the Seller as a true and correct copy of the original Assignment of Mortgage
which has been sent for recordation. Subject to the foregoing, such assignments may, if permitted
by law, be by blanket assignments for Mortgage Loans covering Mortgaged Properties situated within
the same county. If the Assignment of Mortgage is in blanket form, a copy of the Assignment of
Mortgage shall be included in the related individual Mortgage File.

     (D) The original policy of title insurance, or in the event such original title policy is
unavailable a copy of the related policy (provided that use of a copy is acceptable to the related
title insurance or escrow company), including riders and endorsements thereto, or if the policy has
not yet been issued, a written commitment or interim binder or preliminary report of title issued
by the title insurance or escrow company.

     (E) Originals of all recorded intervening Assignments of Mortgage, or copies thereof,
certified by the public recording office in which such Assignments or Mortgage have been recorded
showing a complete chain of title from the originator to the Depositor, with evidence of recording,
thereon, or a copy thereof certified by the public recording office in which such Assignment of
Mortgage has been recorded or, if the original Assignment of Mortgage has not been returned from
the applicable public recording office, a true certified copy, certified by the Seller of the
original Assignment of Mortgage together with a certificate of the Seller certifying that the
original Assignment of Mortgage has been delivered for recording in the appropriate public
recording office of the jurisdiction in which the Mortgaged Property is located.

     (F) Originals, or copies thereof certified by the public recording office in which such
documents have been recorded, of each assumption, extension, modification, written assurance or
substitution agreements, if applicable, or if the original of such document has not been returned
from the applicable public recording office, a true certified copy, certified by the Seller, of
such original document together with certificate of such Seller certifying the original of such
document has been delivered for recording in the appropriate recording office of the jurisdiction
in which the Mortgaged Property is located.

     (G) Certified, true copy of original power of attorney sent for recording.

B-1

 

     (ii) With respect to each Co-op Loan:

     (A)(I) The original Mortgage Note endorsed “Pay to the order of
_______________, without
recourse” and signed in the name of the last endorsee by an authorized officer.

     (B) The original loan security agreement entered into by the Mortgagor with respect to
such Co-op Loan.

     (C) Original Form UCC-1 and any continuation statements with evidence of filing thereon
entered into by the Mortgagor with respect to such Co-op Loan or if the original of such
document has not been returned from the applicable public recording office, a true certified
copy of the document sent for recording.

     (D) Form UCC-3 (or copy thereof) by the applicable Mortgage Loan Seller or its agent
assigning the security interest covered by such Form UCC-1 to “The Bank of New York as
trustee” or to blank, together with all Forms UCC-3 (or copies thereof) showing a complete
chain of assignment from the originator of the related Co-op Loan to the Seller, with
evidence of recording thereon.

     (E) Stock certificate representing the stock allocated to the related dwelling unit in
the related residential cooperative housing corporation and pledged by the related Mortgagor
to the originator of such Co-op Loan with a stock power in blank attached.

     (F) Original proprietary lease.

     (G) Original assignment of proprietary lease, to the Trustee or to blank, and all
intervening assignments thereof.

     (H) Original recognition agreement of the interests of the mortgagee with respect to
the Co-op Loan by the residential cooperative housing corporation, the stock of which was
pledged by the related Mortgagor to the originator of such Co-op Loan.

     (I) Originals of any assumption, consolidation or modification agreements relating to
any of the items specified in (A) through (F) above with respect to such Co-op Loan.

     (J) Certified true copy of power of attorney sent for recording.

B-2

 

EXHIBIT C

FORM OF CLASS A CERTIFICATE

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE PAYING AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A “REGULAR INTEREST” IN A “REAL
ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE SHALL BE
DEEMED TO REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL REPRESENT) TO THE DEPOSITOR
AND THE TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY
ASSETS OF, ANY EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR ANY PLAN SUBJECT TO SECTION 4975
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR (B) THE TRANSFEREE’S ACQUISITION
AND HOLDING OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER TITLE I OF ERISA OR SECTION 4975 OF THE CODE.

THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES NOT REPRESENT
AN OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION (THE “DEPOSITOR”), JPMORGAN
CHASE BANK, N.A. (THE “SERVICER”) OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES.
NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE
LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE SERVICER, THE TRUSTEE OR BY ANY OF THEIR
AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OR NOTIONAL AMOUNT OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW. ANYONE ACQUIRING
THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE OR NOTIONAL AMOUNT, AS APPLICABLE, BY
INQUIRY OF THE PAYING AGENT.

C-1

 

THIS CERTIFICATE DOES NOT PURPORT TO SUMMARIZE THE POOLING AND SERVICING AGREEMENT (THE
“AGREEMENT”) AND REFERENCE IS MADE TO THE AGREEMENT FOR THE INTERESTS, RIGHTS AND LIMITATIONS OF
RIGHTS, BENEFITS, OBLIGATIONS AND DUTIES EVIDENCED THEREBY, AND THE RIGHTS, DUTIES AND IMMUNITIES
OF THE TRUSTEE AND THE PAYING AGENT.

TO THE EXTENT NOT DEFINED HEREIN, THE CAPITALIZED TERMS USED HEREIN HAVE THE MEANINGS ASSIGNED IN
THE AGREEMENT.

C-2

 

CLASS A-[ ] CERTIFICATE

	 	 	 
	Number: 07-2-A-[ ]-1

	 	Original Denomination:
	 

	 	$ 
	 
	 	 
	Cut-off Date: April 1, 2007

	 	Final Scheduled
	 

	 	Distribution Date: May 25, 2037
	 
	 	 
	Initial Distribution Date:

	 	Aggregate Original Principal Balance or Notional Amount of all Class A-[ ] Certificates:
	May 25, 2007

	 	$ 
	 
	 	 
	Certificate Rate: Variable

	 	CUSIP:
	 
	 	 
	Registered Owner:
	 	 

CHASEFLEX TRUST SERIES 2007-2

MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE

     This certifies that the Registered Owner identified above is the registered owner of the
ownership interest (the “Ownership Interest”) evidenced by this Certificate in certain
distributions with respect to a pool of Mortgage Loans formed and sold by Chase Mortgage Finance
Corporation (the “Depositor”), and certain other property held in trust for the benefit of
Certificateholders (collectively, the “Trust Fund”), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the “Servicer”) and are secured by liens on the
Mortgaged Properties. The Trust Fund was created pursuant to a Pooling and Servicing Agreement
(the “Agreement”), dated as of the Cut-off Date among the Depositor, the Servicer, the Custodian
and The Bank of New York Trust Company, N.A., as Paying Agent and Trustee.

     This Certificate is one of a duly authorized issue of Certificates, as designated above, and
is issued under and is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which
Agreement such Holder is bound. Anyone acquiring this Certificate may ascertain its current
Principal Balance or Notional Amount, as applicable, by inquiry of the Paying Agent.

     Pursuant to the terms of the Agreement, the Paying Agent will distribute from funds in the
Certificate Account the amount specified in the Agreement on the 25th day of each month or, if such
25th day is not a Business Day, the Business Day immediately following (the “Distribution Date”),
commencing on the Initial Distribution Date.

     Distributions on this Certificate will be made in the manner specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution, and only upon presentation and

C-3

 

surrender of this Certificate at the office of the Paying Agent specified in such notice of
final distribution.

     The Paying Agent will cause to be kept at its Agency & Trust Office in New York, New York, or
at the office of its designated agent, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such purpose, the Paying
Agent will, subject to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class and dated the date
of authentication by the Authenticating Agent.

     The Holder, by its acceptance of this Certificate, agrees that it will look solely to the
Trust Fund for payment hereunder and that neither the Trustee nor the Paying Agent is liable to the
Holders for any amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     No service charge will be made to the Holder for any transfer or exchange of the Certificate,
but the Paying Agent may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of the Certificate. Prior
to due presentation of a Certificate for registration of transfer, the Depositor, the Servicer, the
Paying Agent and the Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the Servicer and the Trustee
in the manner specified in the Agreement.

     The Agreement provides that the Trust Fund will elect to be treated as one or more “real
estate mortgage investment conduits” for federal income tax purposes (each, a “REMIC”).

     The respective obligations and responsibilities of the Depositor, the Servicer (except the
duty to pay the Trustee’s fees and expenses and indemnification hereunder) and the Trustee shall
terminate in the manner specified in the Agreement; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James’s, living on the date hereof.

     Unless the certificate of authentication has been executed by the Authenticating Agent, by
manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.

C-4

 

     IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly executed.

	 	 	 	 	 
	Dated: April 26, 2007	 	CHASE MORTGAGE FINANCE
CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer

C-5

 

	 	 	 	 	 
	Dated: April 26, 2007	 	CERTIFICATE OF AUTHENTICATION
	 
	 	 	 	 
	 	 	This is one of the
Certificates referred to
in the within-mentioned
Agreement.
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Authenticating Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

C-6

 

[FORM OF ASSIGNMENT]

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)

 

 

(Please Print or Type Name and Address of Assignee)

 

the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint

                                                                    
            Attorney to transfer the within Certificate on the books
kept for the registration thereof, with full power of substitution in the
premises.

Dated:

	 	 	 
	(Signature guaranty)
	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.

(*This information, which is voluntary, is being requested to ensure that the assignee will not be
subject to backup withholding under Section 3406 of the Code.)

C-7

 

EXHIBIT D

FORM OF CLASS M CERTIFICATE

THIS CLASS M CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES AS
DESCRIBED IN THE POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE PAYING AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A “REGULAR INTEREST” IN A “REAL
ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO
REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL REPRESENT) TO THE DEPOSITOR AND THE
TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF,
ANY EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR (B) THE TRANSFEREE’S ACQUISITION AND HOLDING OF
THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I
OF ERISA OR SECTION 4975 OF THE CODE.

THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES NOT REPRESENT AN
OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION (THE “DEPOSITOR”), JPMORGAN CHASE
BANK, N.A. (THE “SERVICER”) OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE SERVICER, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES
OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

 

 

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OR NOTIONAL AMOUNT OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW. ANYONE ACQUIRING
THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE OR NOTIONAL AMOUNT, AS APPLICABLE, BY
INQUIRY OF THE PAYING AGENT.

THIS CERTIFICATE DOES NOT PURPORT TO SUMMARIZE THE POOLING AND SERVICING AGREEMENT (THE
“AGREEMENT”) AND REFERENCE IS MADE TO THE AGREEMENT FOR THE INTERESTS, RIGHTS AND LIMITATIONS OF
RIGHTS, BENEFITS, OBLIGATIONS AND DUTIES EVIDENCED THEREBY, AND THE RIGHTS, DUTIES AND IMMUNITIES
OF THE TRUSTEE AND THE PAYING AGENT.

TO THE EXTENT NOT DEFINED HEREIN, THE CAPITALIZED TERMS USED HEREIN HAVE THE MEANINGS ASSIGNED IN
THE AGREEMENT.

CLASS M-[ ] CERTIFICATE

	 	 	 
	Number: 07-2-M-[ ]-1

	 	Original Denomination:
	 

	 	$ 
	 
	 	 
	Cut-off Date: April 1, 2007

	 	Final Scheduled
	 

	 	Distribution Date: May 25, 2037
	 
	 	 
	Initial Distribution Date: 

May 26, 2007

	 	Aggregate Original Principal
Balance or Notional Amount
of all Class M-[ ] Certificates:

$ 
	 
	 	 
	Certificate Rate: Variable

	 	CUSIP:
	 
	 	 
	Registered Owner:
	 	 

CHASEFLEX TRUST SERIES 2007-2

MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE

     This certifies that the Registered Owner identified above is the registered owner of the
ownership interest (the “Ownership Interest”) evidenced by this Certificate in certain
distributions with respect to a pool of Mortgage Loans formed and sold by Chase Mortgage Finance
Corporation (the “Depositor”), and certain other property held in trust for the benefit of
Certificateholders (collectively, the “Trust Fund”), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the “Servicer”) and are secured by liens on the
Mortgaged Properties. The Trust Fund was created pursuant to a Pooling and Servicing Agreement
(the “Agreement”), dated as of the Cut-off Date among the Depositor, the Servicer, the Custodian
and The Bank of New York Trust Company, N.A., as Paying Agent and Trustee.

D-2

 

     This Certificate is one of a duly authorized issue of Certificates, as designated above, and
is issued under and is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which
Agreement such Holder is bound. Anyone acquiring this Certificate may ascertain its current
Principal Balance or Notional Amount, as applicable, by inquiry of the Paying Agent.

     Pursuant to the terms of the Agreement, the Paying Agent will distribute from funds in the
Certificate Account the amount specified in the Agreement on the 25th day of each month or, if such
25th day is not a Business Day, the Business Day immediately following (the “Distribution Date”),
commencing on the Initial Distribution Date.

     Distributions on this Certificate will be made in the manner specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution, and only upon presentation and surrender
of this Certificate at the office of the Paying Agent specified in such notice of final
distribution.

     The Paying Agent will cause to be kept at its Agency & Trust Office in New York, New York, or
at the office of its designated agent, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such purpose, the Paying
Agent will, subject to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class and dated the date
of authentication by the Authenticating Agent.

     The Holder, by its acceptance of this Certificate, agrees that it will look solely to the
Trust Fund for payment hereunder and that neither the Trustee nor the Paying Agent is liable to the
Holders for any amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     No service charge will be made to the Holder for any transfer or exchange of the Certificate,
but the Paying Agent may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of the Certificate. Prior
to due presentation of a Certificate for registration of transfer, the Depositor, the Servicer, the
Paying Agent and the Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the Servicer and the Trustee
in the manner specified in the Agreement.

     The Agreement provides that the Trust Fund will elect to be treated as one or more “real
estate mortgage investment conduits” for federal income tax purposes (each, a “REMIC”).

D-3

 

     The respective obligations and responsibilities of the Depositor, the Servicer (except the
duty to pay the Trustee’s fees and expenses and indemnification hereunder) and the Trustee shall
terminate in the manner specified in the Agreement; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James’s, living on the date hereof.

     Unless the certificate of authentication has been executed by the Authenticating Agent, by
manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.

D-4

 

     IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly executed.

	 	 	 	 	 
	Dated: April 26, 2007	 	CHASE MORTGAGE FINANCE
CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer

D-5

 

	 	 	 	 	 
	Dated: April 26, 2007	 	CERTIFICATE OF AUTHENTICATION
	 
	 	 	 	 
	 	 	This is one of the
Certificates referred to
in the within-mentioned
Agreement.
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Authenticating Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

D-6

 

[FORM OF ASSIGNMENT]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)

 

 

(Please Print or Type Name and Address of Assignee)

 

the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint

                                                                    
             Attorney to transfer the within Certificate on the books
kept for the registration thereof, with full power of substitution in the
premises.

Dated:

	 	 	 
	(Signature guaranty)
	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.

(*This information, which is voluntary, is being requested to ensure that the assignee will not be
subject to backup withholding under Section 3406 of the Code.)

D-7

 

EXHIBIT E

FORM OF CLASS B CERTIFICATE

THIS CLASS B CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES AND THE
CLASS M CERTIFICATES, AS DESCRIBED IN THE AGREEMENT.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE PAYING AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A “REGULAR INTEREST” IN A “REAL
ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

UNTIL THE TERMINATION OF THE SWAP AGREEMENT, EACH TRANSFEREE OF THIS CERTIFICATE SHALL BE DEEMED TO
REPRESENT (OR IN THE CASE OF A DEFINITIVE CERTIFICATE, SHALL REPRESENT) TO THE DEPOSITOR AND THE
TRUSTEE THAT (A) SUCH TRANSFEREE IS NOT, AND IS NOT ACTING FOR, ON BEHALF OF OR WITH ANY ASSETS OF,
ANY EMPLOYEE BENEFIT PLAN OR OTHER ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OR ANY PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR (B) THE TRANSFEREE’S ACQUISITION AND HOLDING OF
THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER TITLE I
OF ERISA OR SECTION 4975 OF THE CODE.

THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES NOT REPRESENT AN
OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION (THE “DEPOSITOR”), JPMORGAN CHASE
BANK, N.A. (THE “SERVICER”) OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC REGULAR INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE SERVICER, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES
OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

E-1

 

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OR NOTIONAL AMOUNT OF
THIS CERTIFICATE WILL BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW. ANYONE ACQUIRING
THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT PRINCIPAL BALANCE OR NOTIONAL AMOUNT, AS APPLICABLE, BY
INQUIRY OF THE PAYING AGENT.

THIS CERTIFICATE DOES NOT PURPORT TO SUMMARIZE THE POOLING AND SERVICING AGREEMENT (THE
“AGREEMENT”) AND REFERENCE IS MADE TO THE AGREEMENT FOR THE INTERESTS, RIGHTS AND LIMITATIONS OF
RIGHTS, BENEFITS, OBLIGATIONS AND DUTIES EVIDENCED THEREBY, AND THE RIGHTS, DUTIES AND IMMUNITIES
OF THE TRUSTEE AND THE PAYING AGENT.

TO THE EXTENT NOT DEFINED HEREIN, THE CAPITALIZED TERMS USED HEREIN HAVE THE MEANINGS ASSIGNED IN
THE AGREEMENT.

CLASS B-[ ] CERTIFICATE

	 	 	 
	Number: 07-2-B-[ ]-1

	 	Original Denomination:
	 

	 	$ 
	 
	 	 
	Cut-off Date: April 1, 2007

	 	Final Scheduled
	 

	 	Distribution Date: May 25, 2037
	 
	 	 
	Initial Distribution Date: 

May 25, 2007

	 	Aggregate Original Principal
Balance or Notional Amount
of all Class B-[ ] Certificates:

$
	 
	 	 
	Certificate Rate: Variable

	 	CUSIP:
	 
	 	 
	Registered Owner:
	 	 

E-2

 

CHASEFLEX TRUST SERIES 2007-2

MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE

     This certifies that the Registered Owner identified above is the registered owner of the
ownership interest (the “Ownership Interest”) evidenced by this Certificate in certain
distributions with respect to a pool of Mortgage Loans formed and sold by Chase Mortgage Finance
Corporation (the “Depositor”), and certain other property held in trust for the benefit of
Certificateholders (collectively, the “Trust Fund”), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the “Servicer”) and are secured by liens on the
Mortgaged Properties. The Trust Fund was created pursuant to a Pooling and Servicing Agreement
(the “Agreement”), dated as of the Cut-off Date among the Depositor, the Servicer, the Custodian
and The Bank of New York Trust Company, N.A., as Paying Agent and Trustee.

     This Certificate is one of a duly authorized issue of Certificates, as designated above, and
is issued under and is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which
Agreement such Holder is bound. Anyone acquiring this Certificate may ascertain its current
Principal Balance or Notional Amount, as applicable, by inquiry of the Paying Agent.

     Pursuant to the terms of the Agreement, the Paying Agent will distribute from funds in the
Certificate Account the amount specified in the Agreement on the 25th day of each month or, if such
25th day is not a Business Day, the Business Day immediately following (the “Distribution Date”),
commencing on the Initial Distribution Date.

     Distributions on this Certificate will be made in the manner specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution, and only upon presentation and surrender
of this Certificate at the office of the Paying Agent specified in such notice of final
distribution.

     The Paying Agent will cause to be kept at its Agency & Trust Office in New York, New York, or
at the office of its designated agent, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such purpose, the Paying
Agent will, subject to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class and dated the date
of authentication by the Authenticating Agent.

     The Holder, by its acceptance of this Certificate, agrees that it will look solely to the
Trust Fund for payment hereunder and that neither the Trustee nor the Paying Agent is liable to the
Holders for any amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

E-3

 

     No service charge will be made to the Holder for any transfer or exchange of the Certificate,
but the Paying Agent may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or exchange of the
Certificate. Prior to due presentation of a Certificate for registration of transfer, the
Depositor, the Servicer, the Paying Agent and the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate and the Percentage Interest in the Trust
Fund evidenced thereby for the purpose of receiving distributions pursuant to the Agreement and for
all other purposes whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the
Trustee will be affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the Servicer and the Trustee
in the manner specified in the Agreement.

     The Agreement provides that the Trust Fund will elect to be treated as one or more “real
estate mortgage investment conduits” for federal income tax purposes (each, a “REMIC”).

     The respective obligations and responsibilities of the Depositor, the Servicer (except the
duty to pay the Trustee’s fees and expenses and indemnification hereunder) and the Trustee shall
terminate in the manner specified in the Agreement; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James’s, living on the date hereof.

     Unless the certificate of authentication has been executed by the Authenticating Agent, by
manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.

E-4

 

     IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly executed.

	 	 	 	 	 
	Dated: April 26, 2007	 	CHASE MORTGAGE FINANCE
CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer

E-5

 

	 	 	 	 	 
	Dated: April 26, 2007	 	CERTIFICATE OF AUTHENTICATION
	 
	 	 	 	 
	 	 	This is one of the
Certificates referred to
in the within-mentioned
Agreement.
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Authenticating Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

E-6

 

[FORM OF ASSIGNMENT]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)

 

 

(Please Print or Type Name and Address of Assignee)

 

the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint

                                                                    
             Attorney to transfer the within Certificate on the books
kept for the registration thereof, with full power of substitution in the
premises.

Dated:

	 	 	 
	(Signature guaranty)
	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.

(*This information, which is voluntary, is being requested to ensure that the assignee will not be
subject to backup withholding under Section 3406 of the Code.)

E-7

 

EXHIBIT E-1

FORM OF CLASS CE CERTIFICATE

THIS CLASS CE CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES AND THE
CLASS M CERTIFICATES AND THE CLASS B CERTIFICATES AS DESCRIBED IN THE AGREEMENT.

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A “REGULAR INTEREST” IN A “REAL
ESTATE MORTGAGE INVESTMENT CONDUIT,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND
860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE
CORPORATION (THE “DEPOSITOR”), JPMORGAN CHASE BANK, N.A. (THE “SERVICER”) OR THE TRUSTEE REFERRED
TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER THIS CERTIFICATE, THE REMIC REGULAR INTEREST
REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS ARE GUARANTEED OR INSURED BY THE DEPOSITOR,
THE SERVICER, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES OR BY ANY GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.

THIS CLASS CE CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS SOLD
OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER SUCH ACT OR UNDER
APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR AND THE TRUSTEE SHALL HAVE
RECEIVED (A) A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE “CODE”), OR A PLAN SUBJECT TO ANY PROVISIONS UNDER ANY
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”) (COLLECTIVELY, A “PLAN”), AND IS NOT
DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH
PLAN, (B) IF THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY THAT IS ACQUIRING
THE CERTIFICATE WITH ASSETS OF AN “INSURANCE COMPANY GENERAL ACCOUNT” AS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION

E-1-1

 

(“PTCE”) 95-60 AND THE ACQUISITION AND HOLDING OF THE
CERTIFICATE ARE COVERED AND EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A DEFINITIVE
CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE DEPOSITOR AND THE TRUSTEE, AND UPON WHICH
THE DEPOSITOR AND THE TRUSTEE SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE ACQUISITION AND
HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT CONSTITUTE OR RESULT IN A
NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE OR A VIOLATION OF SIMILAR LAW AND WILL NOT
SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN BY SUCH ENTITIES IN THE POOLING AND SERVICING AGREEMENT, WHICH OPINION OF COUNSEL SHALL
NOT BE AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE SERVICER.

THIS CERTIFICATE DOES NOT PURPORT TO SUMMARIZE THE POOLING AND SERVICING AGREEMENT (THE
“AGREEMENT”) AND REFERENCE IS MADE TO THE AGREEMENT FOR THE INTERESTS, RIGHTS AND LIMITATIONS OF
RIGHTS, BENEFITS, OBLIGATIONS AND DUTIES EVIDENCED THEREBY, AND THE RIGHTS, DUTIES AND IMMUNITIES
OF THE TRUSTEE AND THE PAYING AGENT.

TO THE EXTENT NOT DEFINED HEREIN, THE CAPITALIZED TERMS USED HEREIN HAVE THE MEANINGS ASSIGNED IN
THE AGREEMENT.

CLASS CE CERTIFICATE

	 	 	 
	Number: 07-2-CE-1

	 	Original Denomination:
	 

	 	$ 
	 
	 	 
	Cut-off Date: April 1, 2007

	 	Final Scheduled
	 

	 	Distribution Date: May 25, 2037
	 
	 	 
	First Distribution Date: 

May 25, 2007

	 	Aggregate Original Notional
Amount of all Class CE
Certificates:
	 
	 	 
	 

	 	CUSIP:
	 
	 	 
	Registered Owner: J.P. Morgan Securities
Inc.
	 	 

E-1-2

 

CHASEFLEX TRUST SERIES 2007-2

MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE

     This certifies that the Registered Owner identified above is the registered owner of the
ownership interest (the “Ownership Interest”) evidenced by this Certificate in certain
distributions with respect to a pool of Mortgage Loans formed and sold by Chase Mortgage Finance
Corporation (the “Depositor”), and certain other property held in trust for the benefit of
Certificateholders (collectively, the “Trust Fund”), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the “Servicer”) and are secured by liens on the
Mortgaged Properties. The Trust Fund was created pursuant to a Pooling and Servicing Agreement
(the “Agreement”), dated as of the Cut-off Date among the Depositor, the Servicer, the Custodian
and The Bank of New York Trust Company, N.A., as Paying Agent and Trustee.

     This Certificate is one of a duly authorized issue of Certificates, as designated above, and
is issued under and is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which
Agreement such Holder is bound. Anyone acquiring this Certificate may ascertain its current
Principal Balance or Notional Amount, as applicable, by inquiry of the Paying Agent.

     Pursuant to the terms of the Agreement, the Paying Agent will distribute from funds in the
Certificate Account the amount specified in the Agreement on the 25th day of each month or, if such
25th day is not a Business Day, the Business Day immediately following (the “Distribution Date”),
commencing on the Initial Distribution Date.

     Distributions on this Certificate will be made in the manner specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution, and only upon presentation and surrender
of this Certificate at the office of the Paying Agent specified in such notice of final
distribution.

     The Paying Agent will cause to be kept at its Agency & Trust Office in New York, New York, or
at the office of its designated agent, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such purpose, the Paying
Agent will, subject to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class and dated the date
of authentication by the Authenticating Agent.

     The Holder, by its acceptance of this Certificate, agrees that it will look solely to the
Trust Fund for payment hereunder and that neither the Trustee nor the Paying Agent is liable to the
Holders for any amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     No service charge will be made to the Holder for any transfer or exchange of the Certificate,
but the Paying Agent may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of

E-1-3

 

the Certificate. Prior
to due presentation of a Certificate for registration of transfer, the Depositor,
the Servicer, the Paying Agent and the Trustee may treat the Person
in whose name any Certificate is registered as the owner of such Certificate and the Percentage Interest in the Trust
Fund evidenced thereby for the purpose of receiving distributions pursuant to the Agreement and for
all other purposes whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the
Trustee will be affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the Servicer and the Trustee
in the manner specified in the Agreement.

     The Agreement provides that the Trust Fund will elect to be treated as one or more “real
estate mortgage investment conduits” for federal income tax purposes (each, a “REMIC”).

     The respective obligations and responsibilities of the Depositor, the Servicer (except the
duty to pay the Trustee’s fees and expenses and indemnification hereunder) and the Trustee shall
terminate in the manner specified in the Agreement; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James’s, living on the date hereof.

     Unless the certificate of authentication has been executed by the Authenticating Agent, by
manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.

E-1-4

 

     IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly executed.

	 	 	 	 	 
	Dated: April 26, 2007	 	CHASE MORTGAGE FINANCE
CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer

E-1-5

 

	 	 	 	 	 
	Dated: April 26, 2007	 	CERTIFICATE OF AUTHENTICATION
	 
	 	 	 	 
	 	 	This is one of the
Certificates referred to
in the within-mentioned
Agreement.
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Authenticating Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

E-1-6

 

[FORM OF ASSIGNMENT]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)

 

 

(Please Print or Type Name and Address of Assignee)

 

the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint

                                                                   
              Attorney to transfer the within Certificate on the books
kept for the registration thereof, with full power of substitution in the
premises.

Dated:

	 	 	 
	(Signature guaranty)
	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.

(*This information, which is voluntary, is being requested to ensure that the assignee will not be
subject to backup withholding under Section 3406 of the Code.)

E-1-7

 

EXHIBIT F

FORM OF CLASS A-R CERTIFICATE

SOLELY FOR FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A “RESIDUAL INTEREST” IN
MULTIPLE “REAL ESTATE MORTGAGE INVESTMENT CONDUITS,” AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”).

THIS CERTIFICATE IS PAYABLE SOLELY FROM THE ASSETS OF THE TRUST FUND, AND DOES NOT REPRESENT AN
OBLIGATION OF OR INTEREST IN CHASE MORTGAGE FINANCE CORPORATION (THE “DEPOSITOR”), JPMORGAN CHASE
BANK, N.A. (THE “SERVICER”) OR THE TRUSTEE REFERRED TO BELOW OR ANY OF THEIR AFFILIATES. NEITHER
THIS CERTIFICATE, THE REMIC RESIDUAL INTEREST REPRESENTED HEREBY NOR THE UNDERLYING MORTGAGE LOANS
ARE GUARANTEED OR INSURED BY THE DEPOSITOR, THE SERVICER, THE TRUSTEE OR BY ANY OF THEIR AFFILIATES
OR BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY.

NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE DEPOSITOR AND THE TRUSTEE SHALL HAVE
RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH
TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED (“ERISA”), A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO ANY PROVISIONS UNDER ANY FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS
THAT ARE SUBSTANTIVELY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (COLLECTIVELY, A
“PLAN”), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS CERTIFICATE FOR, ON BEHALF OF, OR WITH
ANY ASSETS OF ANY SUCH PLAN.

TRANSFERABILITY OF THIS CERTIFICATE IS RESTRICTED UNDER THE PROVISIONS OF THE AGREEMENT.

FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL
BE DIFFERENT FROM THE ORIGINAL DENOMINATION SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY
ASCERTAIN ITS CURRENT PRINCIPAL BALANCE BY INQUIRY OF THE PAYING AGENT.

F-1

 

CLASS A-R CERTIFICATE

	 	 	 
	Number: 07-2-A-R-1

	 	Original Denomination:
	 

	 	$100.00 
	 
	 	 
	Cut-off Date: April 1, 2007

	 	Final Scheduled
	 

	 	Distribution Date: May 25, 2037
	 
	 	 
	Initial Distribution Date:

May 25, 2007

	 	Aggregate Original Principal
Balance of Class A-R
Certificate: $100.00 
	 
	 	 
	Certificate Rate: N/A

	 	CUSIP:
	 
	 	 
	Registered Owner:
	 	 

CHASEFLEX TRUST SERIES 2007-2

MULTI-CLASS MORTGAGE PASS-THROUGH CERTIFICATE

     This certifies that the Registered Owner identified above is the registered owner of the
ownership interest (the “Ownership Interest”) evidenced by this Certificate in certain
distributions with respect to a pool of Mortgage Loans formed and sold by Chase Mortgage Finance
Corporation (the “Depositor”), and certain other property held in trust for the benefit of
Certificateholders (collectively, the “Trust Fund”), as described in the Agreement. The Mortgage
Loans are serviced by JPMorgan Chase Bank, N.A. (the “Servicer”) and are secured by liens on the
Mortgaged Properties. The Trust Fund was created pursuant to a Pooling and Servicing Agreement
(the “Agreement”), dated as of the Cut-off Date among the Depositor, the Servicer, the Custodian
and The Bank of New York Trust Company, N.A., as Paying Agent and Trustee.

     This Certificate is one of a duly authorized issue of Certificates, as designated above, and
is issued under and is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof assents and by which
Agreement such Holder is bound. Anyone acquiring this Certificate may ascertain its current
Principal Balance or Notional Amount, as applicable, by inquiry of the Paying Agent.

     Pursuant to the terms of the Agreement, the Paying Agent will distribute from funds in the
Certificate Account the amount specified in the Agreement on the 25th day of each month or, if such
25th day is not a Business Day, the Business Day immediately following (the “Distribution Date”),
commencing on the Initial Distribution Date.

     Distributions on this Certificate will be made in the manner specified in the Agreement.
Notwithstanding the above, the final distribution on this Certificate will be made after due notice
by the Paying Agent of the pendency of such distribution, and only upon presentation and

F-2

 

surrender of this Certificate at the office of the Paying Agent specified in such notice of
final distribution.

     The Paying Agent will cause to be kept at its Agency & Trust Office in New York, New York, or
at the office of its designated agent, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Paying Agent will provide for the registration of Certificates
and of transfers and exchanges of Certificates. Upon surrender for registration of transfer of any
Certificate at any office or agency of the Paying Agent, maintained for such purpose, the Paying
Agent will, subject to the limitations set forth in the Agreement, authenticate and deliver, in the
name of the designated transferee or transferees, a Certificate of a like class and dated the date
of authentication by the Authenticating Agent.

     The Holder, by its acceptance of this Certificate, agrees that it will look solely to the
Trust Fund for payment hereunder and that neither the Trustee nor the Paying Agent is liable to the
Holders for any amount payable under this Certificate or the Agreement or, except as expressly
provided in the Agreement, subject to any liability under the Agreement.

     No service charge will be made to the Holder for any transfer or exchange of the Certificate,
but the Paying Agent may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of the Certificate. Prior
to due presentation of a Certificate for registration of transfer, the Depositor, the Servicer, the
Paying Agent and the Trustee may treat the Person in whose name any Certificate is registered as
the owner of such Certificate and the Percentage Interest in the Trust Fund evidenced thereby for
the purpose of receiving distributions pursuant to the Agreement and for all other purposes
whatsoever, and neither the Depositor, the Servicer, the Paying Agent nor the Trustee will be
affected by notice to the contrary.

     The Agreement may be amended from time to time by the Depositor, the Servicer and the Trustee
in the manner specified in the Agreement.

     The Agreement provides that the Trust Fund will elect to be treated as one or more “real
estate mortgage investment conduits” for federal income tax purposes (each, a “REMIC”).

     The respective obligations and responsibilities of the Depositor, the Servicer (except the
duty to pay the Trustee’s fees and expenses and indemnification hereunder) and the Trustee shall
terminate in the manner specified in the Agreement; provided, however, that in no event shall the
trust created by the Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James’s, living on the date hereof.

     Unless the certificate of authentication has been executed by the Authenticating Agent, by
manual signature, this Certificate shall not be entitled to any benefit under the Agreement or be
valid for any purpose.

F-3

 

     IN WITNESS WHEREOF, the Depositor has caused this Certificate to be duly executed.

	 	 	 	 	 
	Dated: April 26, 2007	 	CHASE MORTGAGE FINANCE
CORPORATION
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Officer

F-4

 

	 	 	 	 	 
	Dated: April 26, 2007	 	CERTIFICATE OF AUTHENTICATION
	 
	 	 	 	 
	 	 	This is one of the
Certificates referred to
in the within-mentioned
Agreement.
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.
as Authenticating Agent
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

F-5

 

[FORM OF ASSIGNMENT]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

(PLEASE INSERT SOCIAL SECURITY* OR TAXPAYER IDENTIFICATION NUMBER OF ASSIGNEE)

 

 

(Please Print or Type Name and Address of Assignee)

 

the within Certificate, and all rights thereunder, and hereby does irrevocably
constitute and appoint

                                                                    
             Attorney to transfer the within Certificate on the books
kept for the registration thereof, with full power of substitution in the
premises.

Dated:

	 	 	 
	(Signature guaranty)
	 	 
	 

	 	 
	 

	 	NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Certificate in every
particular, without alteration or enlargement
or any change whatever.

(*This information, which is voluntary, is being requested to ensure that the assignee will not be
subject to backup withholding under Section 3406 of the Code.)

F-6

 

EXHIBIT G

FORM OF TRUSTEE CERTIFICATION

[DATE]

     The Bank of New York Trust Company, N.A., as trustee (the “Trustee”) under the Pooling and
Servicing Agreement dated as of April 1, 2007 (the “Agreement”) among Chase Mortgage Finance
Corporation (the “Company”), the Trustee, the Paying Agent and JPMorgan Chase Bank, N.A., regarding
ChaseFlex Trust, Series 2007-2, hereby certifies that, except as noted in the Exception Report:

     1. The Trustee or the Custodian on behalf of the Trustee took the Mortgage Notes and other
property in the Trust Fund in good faith for value and without notice or knowledge (i) of any
adverse claims, liens or encumbrances, (ii) that any Mortgage Note was overdue or had been
dishonored or subject to any security interest or other right or interest therein, or (iii) of any
defense against or claim to the Mortgage Notes or other property in the Trust Fund on the part of
any entity;

     2. The Trustee or the Custodian on behalf of the Trustee received actual possession of the
Mortgage Notes; and

     3. The Trustee or the Custodian on behalf of the Trustee took possession of the Mortgage Notes
in the ordinary course of its business.

     Capitalized words used herein shall have the respective meanings assigned to them in the
Agreement.

[SIGNATURE PAGE IMMEDIATELY FOLLOWS]

G-1

 

     IN WITNESS WHEREOF, the undersigned executed this Trustee’s Certificate as of the 26th day of
April, 2007.

	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.,
	 	 	as Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

G-2

 

EXHIBIT H

FORM OF INVESTMENT LETTER

(Accredited Investor)

[DATE]

JPMorgan Chase Bank, N.A.

1111 Polaris Parkway

Columbus, Ohio 43240

JPMorgan Chase Bank, N.A.

Global Trust Services

Four New York Plaza

6th Floor

New York, New York 10004

J.P. Morgan Securities Inc.

270 Park Avenue, 7th Floor

New York, New York 10017

The Bank of New York Trust Company, N.A., as trustee

601 Travis, 16th Floor

Houston, TX 77002

Attn: Corporate Trust Services/CFLX 2007-2

			
		 	Re: ChaseFlex Trust Series 2007-2, Multi-Class Mortgage
Pass-Through Certificates, Series 2007-2, [Class CE- ]

Ladies and Gentlemen:

     _______________(the “Purchaser”) intends to purchase from
_______________(the
“Transferor”) $_______________by original principal balance (the “Transferred Certificates”) of ChaseFlex
Trust Series 2007-2, Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, [Class CE- ]
(the “Certificates”), issued pursuant to a pooling and servicing agreement, dated as of April 1,
2007 (the “Pooling and Servicing Agreement”), among Chase Mortgage Finance Corporation (the
“Depositor”), JPMorgan Chase Bank, N.A. (“Chase”), as servicer and custodian, The Bank of New York
Trust Company, N.A., as paying agent and The Bank of New York Trust Company, N.A., as trustee (the
“Trustee”). [The Purchaser intends to register the Transferred Certificate in the name of
_______________, as nominee for _______________.] All terms used and not otherwise defined
herein shall have the meanings set forth in the Pooling and Servicing Agreement.

     For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Purchaser certifies, represents and warrants to, and covenants with, the
Depositor and the Trustee that:

H-1

 

     1. The Purchaser understands that (a) the Certificates have not been registered or qualified
under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any
state, (b) neither the Depositor nor the Trustee is required, and neither of them intends, to so
register or qualify the Certificates, (c) the Certificates cannot be resold unless (i) they are
registered and qualified under the Securities Act and the applicable state securities laws or (ii)
an exemption from registration and qualification is available and (d) the Pooling and Servicing
Agreement contains restrictions regarding the transfer of the Certificates.

     2. The Certificates will bear a legend to the following effect:

	 	 	THIS CLASS CE CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD
OR TRANSFERRED UNLESS IT IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT
FROM REGISTRATION UNDER SUCH ACT OR UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE POOLING AND SERVICING
AGREEMENT REFERRED TO HEREIN.
	 
	 	 	[THIS LEGEND WILL APPEAR ON THE CERTIFICATE ONLY IF SUCH CERTIFICATE IS AN ERISA
RESTRICTED CERTIFICATE.] NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
DEPOSITOR SHALL HAVE RECEIVED (A) A REPRESENTATION LETTER FROM THE TRANSFEREE OF
THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED (“ERISA”), A PLAN SUBJECT TO SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”), OR A PLAN SUBJECT TO ANY PROVISIONS UNDER ANY
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SUBSTANTIVELY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAW”)
(COLLECTIVELY, A “PLAN”), AND IS NOT DIRECTLY OR INDIRECTLY ACQUIRING THIS
CERTIFICATE FOR, ON BEHALF OF OR WITH ANY ASSETS OF ANY SUCH PLAN, (B) IF THE
CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING UNDERWRITING, A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS AN INSURANCE COMPANY
THAT IS ACQUIRING THE CERTIFICATE WITH ASSETS OF AN “INSURANCE COMPANY GENERAL
ACCOUNT” AS DEFINED IN SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION
(“PTCE”) 95-60 AND THE ACQUISITION AND HOLDING OF THE CERTIFICATE ARE COVERED AND
EXEMPT UNDER SECTIONS I AND III OF PTCE 95-60 OR (C) SOLELY IN THE CASE OF A
DEFINITIVE CERTIFICATE, AN OPINION OF COUNSEL SATISFACTORY TO THE DEPOSITOR, AND
UPON WHICH THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT THAT THE
ACQUISITION AND HOLDING OF THIS CERTIFICATE BY THE PROSPECTIVE TRANSFEREE WILL NOT
CONSTITUTE OR RESULT IN A NONEXEMPT PROHIBITED TRANSACTION UNDER ERISA OR THE CODE
OR A VIOLATION OF SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE
SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN BY SUCH ENTITIES IN THE
POOLING AND SERVICING AGREEMENT, WHICH

H-2

 

	 	 	OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE
SERVICER.

     3. The Purchaser is acquiring the Transferred Certificates for its own account [for investment
only]*/ and not with a view to or for sale or other transfer in connection with any distribution of
the Transferred Certificates in any manner that would violate the Securities Act or any applicable
state securities laws, subject, nevertheless, to the understanding that disposition of the
Purchaser’s property shall at all times be and remain within its control.

     4. The Purchaser (a) is a substantial, sophisticated institutional investor having such
knowledge and experience in financial and business matters, and in particular in such matters
related to securities similar to the Certificates, such that it is capable of evaluating the merits
and risks of investment in the Certificates, (b) is able to bear the economic risks of such an
investment and (c) is an “accredited investor” within the meaning of Rule 501(a) promulgated
pursuant to the Securities Act.

     5. The Purchaser will not nor has it authorized nor will it authorize any Person to (a) offer,
pledge, sell, dispose of or otherwise transfer any Certificate, any interest in any Certificate or
any other similar security to any Person in any manner, (b) solicit any offer to buy or to accept a
pledge, disposition or other transfer of any Certificate, any interest in any Certificate or any
other similar security from any person in any manner, (c) otherwise approach or negotiate with
respect to any Certificate, any interest in any Certificate or any other similar security with any
person in any manner, (d) make any general solicitation by means of general advertising or in any
other manner, or (e) take any other action, that would constitute a distribution of any Certificate
under the Securities Act or the Investment Company Act of 1940, as amended (the “1940 Act”), that
would render the disposition of any Certificate a violation of Section 5 of the Securities Act or
any state securities law, or that would require registration or qualification pursuant thereto.
Neither the Purchaser nor anyone acting on its behalf has offered the Certificates for sale or made
any general solicitation by means of general advertising or in any other manner with respect to the
Certificates. The Purchaser will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Pooling and Servicing Agreement.

     6. If the Purchaser is acquiring ERISA Restricted Certificates, the Purchaser is not a Plan
and is not acquiring the ERISA Restricted Certificates for, on behalf of or with any assets of any
such Plan, except as may be permitted in accordance with Section 4.02(d) of the Pooling and
Servicing Agreement.

     7. Prior to the sale or transfer by the Purchaser of any of the Certificates, the Purchaser
will obtain from any subsequent purchaser substantially the same certifications, representations,
warranties and covenants contained in the foregoing paragraphs and in this letter or a letter
substantially in the form of Exhibit I to the Pooling and Servicing Agreement.

     8. The Purchaser agrees to indemnify the Trustee, the Servicer and the Depositor against any
liability that may result from any misrepresentation made herein.

     9. The Purchaser has received such information as Purchaser deems necessary in order to make
its investment decision.

 

			
	*/	 	Not required of a broker/dealer purchaser.

H-3

 

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	[PURCHASER]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

H-4

 

EXHIBIT I

FORM OF RULE 144A INVESTMENT LETTER

(Qualified Institutional Buyer)

[DATE]

JPMorgan Chase Bank, N.A.

1111 Polaris Parkway

Columbus, Ohio 43240

JPMorgan Chase Bank, N.A.

Global Trust Services

Four New York Plaza

6th Floor

New York, New York 10004

J.P. Morgan Securities Inc.

270 Park Avenue, 7th Floor

New York, New York 10017

The Bank of New York Trust Company, N.A., as trustee

601 Travis, 16th Floor

Houston, TX 77002

Attn: Corporate Trust Services/CFLX 2007-2

			
	Re:	 	ChaseFlex Trust Series 2007-2, Multi-Class Mortgage
Pass-Through Certificates, Series 2007-2, [Class CE- ]

Ladies and Gentlemen:

     _______________(the “Purchaser”) intends to purchase from
_______________(the
“Transferor”) $_______________by original principal balance (the “Transferred Certificates”) of ChaseFlex
Trust Series 2007-2, Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, [Class CE-]
(the “Certificates”), issued pursuant to a pooling and servicing agreement, dated as of April 1,
2007 (the “Pooling and Servicing Agreement”), among Chase Mortgage Finance Corporation (the
“Depositor”), JPMorgan Chase Bank, N.A. (“Chase”), as servicer (the “Servicer”) and custodian, The
Bank of New York Trust Company, N.A., as paying agent and The Bank of New York Trust Company, N.A.,
as trustee (the “Trustee”). [The Purchaser intends to register the Transferred Certificate in the
name of _______________, as nominee for _______________.] All terms used and not otherwise
defined herein shall have the meanings set forth in the Pooling and Servicing Agreement.

     For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Purchaser certifies, represents and warrants to, and covenants with, the
Depositor and the Trustee that:

I-1

 

In connection with our acquisition of the above Transferred Certificates we certify that (a) we
understand that the Certificates are not being registered under the Securities Act of 1933, as
amended (the “Act”), or any state securities laws and are being transferred to us in a transaction
that is exempt from the registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable of evaluating the
merits and risks of investments in the Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase of the Transferred
Certificates and all matters relating thereto or any additional information deemed necessary to our
decision to purchase the Transferred Certificates, (d) solely with respect to an ERISA Restricted
Certificate, we (A) are not an employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), a plan subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the “Code”) or a plan subject to any provisions under
any federal, state, local, non-U.S. or other laws or regulations that are substantively similar to
the foregoing provisions of ERISA or the Code (“Similar Law”) (collectively, a “Plan”), and is not
directly or indirectly acquiring the Certificate for, on behalf of or with any assets of any such
Plan, (B) if the Certificate has been the subject of an ERISA-Qualifying Underwriting, are an
insurance company that is acquiring the Certificate with assets of an “insurance company general
account” as defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”),
and the acquisition and holding of the Certificate are covered and exempt under Sections I and III
of PTCE 95-60, or (C) solely in the case of a Definitive Certificate, will deliver herewith an
Opinion of Counsel satisfactory to the Depositor and the Trustee, and upon which the Depositor and
the Trustee shall be entitled to rely, to the effect that the acquisition and holding of this
Certificate by the prospective transferee will not constitute or result in a nonexempt prohibited
transaction under ERISA or the Code or a violation of Similar Law and will not subject the Trustee,
the Depositor or the Servicer to any obligation in addition to those undertaken by such entities in
the Pooling and Servicing Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the Depositor or the Servicer,(e) we have not, nor has anyone acting on our behalf
offered, transferred, pledged, sold or otherwise disposed of the Certificates, any interest in the
Certificates or any other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Certificates, any interest in the Certificates or any other
similar security from, or otherwise approached or negotiated with respect to the Certificates, any
interest in the Certificates or any other similar security with, any person in any manner, or made
any general solicitation by means of general advertising or in any other manner, or taken any other
action, that would constitute a distribution of the Certificates under the Securities Act or that
would render the disposition of the Certificates a violation of Section 5 of the Securities Act or
require registration pursuant thereto, nor will act, nor has authorized or will authorize any
person to act, in such manner with respect to the Certificates, (f) we are a “qualified
institutional buyer” as that term is defined in Rule 144A under the Securities Act and have
completed one of the forms of certification to that effect attached hereto as Annex 1 or Annex 2.
We are aware that the sale of the Transferred Certificates to us is being made in reliance on Rule
144A. We are acquiring the Transferred Certif
icates for our own account or for resale pursuant to
Rule 144A and further understand that such Certificates may be resold, pledged or transferred only
(i) to a person reasonably believed by us, based upon certifications of such purchaser or
information we have in our possession, to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act. We have received such information as we deem
necessary in order to make our investment decision.

I-2

 

     We agree to indemnify the Trustee, the Servicer and the Depositor against any liability that
may result from any misrepresentation made herein.

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	[PURCHASER]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

I-3

 

ANNEX 1

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees Other Than Registered Investment Companies]

     The undersigned (the “Buyer”) hereby certifies as follows to the parties listed in the Rule
144A Transferee Certificate to which this certification relates with respect to the Certificates
described therein:

     1. As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice
President or other executive officer of the Buyer.

     2. In connection with the purchases by the Buyer, the Buyer is a “qualified institutional
buyer” as that term is defined in Rule 144A under the Securities Act of 1933, as amended (“Rule
144A”) because (i) the Buyer owned and/or invested on a discretionary basis $_______________*/ in
securities (except for the excluded securities referred to below) as of the end of the Buyer’s most
recent fiscal year (such amount being calculated in accordance with Rule 144A) and (ii) the Buyer
satisfies the criteria in the category marked below.

	 	—	 	Corporation, etc. The Buyer is a corporation (other
than a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended.
	 
	 	—	 	Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking and is
supervised by Federal, State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
	 
	 	—	 	Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by a State
or Federal authority having supervision over such institution or is a foreign
savings and loan association or equivalent institution and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
	 
	 	—	 	Broker-dealer. The Buyer is a dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.

 

			
	*	 	Buyer must own and/or invest on a discretionary basis at least $100,000,000 in securities unless Buyer is a
dealer, and, in that case, Buyer must own and/or invest on a discretionary basis at least $10,000,000 in securities.

I-4

 

	 	—	 	Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar official or
agency of the State, territory or the District of Columbia.
	 
	 	—	 	State or Local Plan. The Buyer is a plan established
and maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees.
	 
	 	—	 	ERISA Plan. The Buyer is an employee benefit plan
within the meaning of Title I of the Employee Retirement Income Security Act of
1974, as amended.
	 
	 	—	 	Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940, as amended.
	 
	 	—	 	Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958, as
amended.
	 
	 	—	 	Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the Investment Advisors
Act of 1940, as amended.

     3. The term “securities” as used for purposes of the calculation of the dollar amount
in paragraph 2 excludes: (i) securities of issuers that are affiliated with the Buyer, (ii)
securities that are part of an unsold allotment to or subscription by the Buyer, if the Buyer is a
dealer, (iii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank
deposit notes and certificates of deposit, (v) loan participations, (vi) repurchase agreements,
(vii) securities owned but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.

     4. For purposes of determining the aggregate amount of securities owned and/or invested on a
discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did
not include any of the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those securities has been
published. If clause (ii) in the preceding sentence applies, the securities may be valued at
market. Further, in determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are consolidated with the Buyer
in its financial statements prepared in accordance with generally accepted accounting principles
and if the investments of such subsidiaries are managed under the Buyer’s direction. However, such
securities were not included if the Buyer is a majority-owned, consolidated subsidiary of another
enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.

     5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller
to it and other parties related to the Certificates are relying and will continue to rely on the
statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A.

     6. Until the date of purchase of the Rule 144A Securities, the Buyer will notify each of the
parties to which this certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer’s purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In addition, if the Buyer is
a bank or savings and loan as

I-5

 

provided above, the Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

I-6

 

ANNEX 2

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

[For Transferees That are Registered Investment Companies]

     The undersigned (the “Buyer”) hereby certifies as follows to the parties listed in the Rule
144A Transferee Certificate to which this certification relates with respect to the Certificates
described therein:

     1. As indicated below, the undersigned is the President, Chief Financial Officer or Senior
Vice President of the Buyer or, if the Buyer is a “qualified institutional buyer” as that term is
defined in Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”), because Buyer is
part of a Family of Investment Companies (as defined below), is such an officer of the Adviser.

     2. In connection with purchases by Buyer, the Buyer is a “qualified institutional buyer” as
defined in Rule 144A because (i) the Buyer is an investment company registered under the Investment
Company Act of 1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer’s Family of
Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer’s most recent fiscal year. For purposes of
determining the amount of securities owned by the Buyer or the Buyer’s Family of Investment
Companies, the cost of such securities was used, except (i) where the Buyer or the Buyer’s Family
of Investment Companies reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost of those securities
has been published. If clause (ii) in the preceding sentence applies, the securities may be valued
at market.

	 	—	 	The Buyer owned $_______________in securities (other than the
excluded securities referred to below) as of the end of the Buyer’s most recent
fiscal year (such amount being calculated in accordance with Rule 144A).
	 
	 	—	 	The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_______________in securities (other than the excluded
securities referred to below) as of the end of the Buyer’s most recent fiscal
year (such amount being calculated in accordance with Rule 144A).

     3. The term “Family of Investment Companies” as used herein means two or more registered
investment companies (or series thereof) that have the same investment adviser or investment
advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or
because one investment adviser is a majority owned subsidiary of the other).

     4. The term “securities” as used herein does not include (i) securities of issuers that are
affiliated with the Buyer or are part of the Buyer’s Family of Investment Companies, (ii)
securities issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit
notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi)
securities owned but subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.

     5. The Buyer is familiar with Rule 144A and understands that the parties listed in the Rule
144A Transferee Certificate to which this certification relates are relying and will continue to
rely on the

I-7

 

statements made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer’s own account.

     6. Until the date of purchase of the Certificates, the undersigned will notify the parties
listed in the Rule 144A Transferee Certificate to which this certification relates of any changes
in the information and conclusions herein. Until such notice is given, the Buyer’s purchase of the
Certificates will constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	IF AN ADVISER:
	 
	 	 	 	 
	 	 	 
	 	 	Print Name of Buyer
	 
	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 

I-8

 

EXHIBIT J

FORM OF SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT

     This SPECIAL SERVICING AND COLLATERAL FUND AGREEMENT (the “Agreement”) is made and entered
into as of [DATE], between JPMorgan Chase Bank, N.A., (the “Company”) and _______________
(the “Purchaser”).

PRELIMINARY STATEMENT

     _______________(the “Owner”) is the holder of the entire interest in ChaseFlex Trust
Series 2007-2, Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, Class [ ] (the
“Class [ ] Certificates”). The Class [ ] Certificates were issued pursuant to a Pooling and
Servicing Agreement dated as of April 1, 2007 (the “Pooling and Servicing Agreement”) among Chase
Mortgage Finance Corporation, (the “Company”), JPMorgan Chase Bank, N.A., as servicer (the
“Servicer”), JPMorgan Chase Bank, N.A., as custodian, (the “Custodian”), The Bank of New York Trust
Company, N.A., as paying agent (the “Paying Agent”) and The Bank of New York Trust Company, N.A.,
as trustee (the “Trustee”).

     The Owner intends to resell all of the Class [ ] Certificates directly to the Purchaser on
or promptly after the date hereof.

     In connection with such sale, the parties hereto have agreed that the Company, as Servicer,
will engage in certain special servicing procedures relating to foreclosures for benefit of the
Purchaser, and that the Purchaser will deposit funds in a collateral fund to cover any losses
attributable to such procedures as well as all advances and costs in connection therewith, as set
forth herein.

     In consideration of the mutual agreements herein contained, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Purchaser agree to the following:

ARTICLE I

DEFINITIONS

     Section 1.01 Defined Terms.

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

     Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day on which
banking institutions in the State of New York are required or authorized by law or executive order
to be closed.

     Collateral Fund: The fund established and maintained pursuant to Section 3.01 hereof.

     Collateral Fund Permitted Investments: Either: (i) obligations of, or obligations
fully guaranteed as to principal and interest by, the United States, or any agency or
instrumentality thereof, provided such obligations are backed by the full faith and credit of the
United States, (ii) a money market fund rated in the highest rating category by a nationally
recognized rating agency selected by the Company, (iii) cash, (iv) mortgage pass-through
certificates issued or guaranteed by GNMA, FNMA or FHLMC, (v) commercial paper (including both
non-interest bearing discount obligations and interest bearing

J-1

 

obligations payable on demand or on a specified date), the issuer of which may be an affiliate
of the Company, having at the time of such investment a rating of at least Prime-1 by Moody’s
Investors Service, Inc. (“Moody’s”) or at least D-1 by Fitch Ratings and (vi) demand and time
deposits in, certificates of deposit of, any depository institution or trust company (which may be
an affiliate of the Company) incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal and/or state banking
authorities, so long as at the time of such investment either (x) the long-term debt obligations of
such depository institution or trust company have a rating of at least Aa by Moody’s or at least AA
by Fitch Ratings or (y) the certificate of deposit or other unsecured short-term debt obligations
of such depository institution or trust company have a rating of at least A-1 by Fitch Ratings or
Prime-1 by Moody’s and, for each of the preceding clauses (i), (iv), (v) and (vi), the maturity
thereof shall be not later than the earlier to occur of (A) 30 days from the date of the related
investment and (B) the next succeeding Distribution Date.

     Commencement of Foreclosure: The first official action required under local law in
order to commence foreclosure proceedings or to schedule a trustee’s sale under a deed of trust,
including (i) in the case of a mortgage, any filing or service of process necessary to commence an
action to foreclose, or (ii) in the case of a deed of trust, the posting, publishing, filing or
delivery of a notice of sale, but not including in either case (x) any notice of default, notice of
intent to foreclose or sell or any other action prerequisite to the actions specified in (i) or
(ii) above and upon the consent of the Purchaser which will be deemed given unless expressly
withheld within two Business Days of notification, (y) the acceptance of a deed-in-lieu of
foreclosure (whether in connection with a sale of the related property or otherwise) or (z)
initiation and completion of a short pay-off.

     Current Appraisal: With respect to any Mortgage Loan as to which the Purchaser has
made an Election to Delay Foreclosure, an appraisal of the related Mortgaged Property (or
Underlying Mortgaged Property, in the case of a Co-op Loan), obtained by the Purchaser at its
expense from an appraiser (which shall not be an affiliate of the Purchaser) acceptable to the
Company as nearly contemporaneously as practicable to the time of the Purchaser’s election,
prepared based on the Company’s customary requirements for such appraisals.

     Election to Delay Foreclosure: Any election by the Purchaser to delay the
Commencement of Foreclosure, made in accordance with Section 2.02(b).

     Election to Foreclose: Any election by the Purchaser to proceed with the Commencement
of Foreclosure, made in accordance with Section 2.03(a).

     Required Collateral Fund Balance: As of any date of determination, an amount equal to
the aggregate of all amounts previously required to be deposited in the Collateral Fund pursuant to
Section 2.02(d) (after adjustment for all withdrawals and deposits pursuant to Section 2.02(e)) and
Section 2.03(b) (after adjustment for all withdrawals and deposits pursuant to Section 2.03(c)) and
Section 3.03 to be reduced by all withdrawals therefrom pursuant to Section 2.02(g) and Section
2.03(d).

     Section 1.02. Definitions Incorporated by Reference.

     All capitalized terms not otherwise defined in this Agreement shall have the meanings assigned
in the Pooling and Servicing Agreement.

J-2

 

ARTICLE II

SPECIAL SERVICING PROCEDURES

     Section 2.01 Reports and Notices.

     1. In connection with the performance of its duties under the Pooling and Servicing Agreement
relating to the realization upon defaulted Mortgage Loans, the Company, as Servicer, shall provide
to the Purchaser the following notices and reports:

	 	(a)	 	Within five Business Days after each Distribution Date (or
included in or with the monthly statement to Certificateholders pursuant to the
Pooling and Servicing Agreement), the Company shall provide to the Purchaser a
report indicating for the Trust the number of Mortgage Loans that are (A)
thirty days, (B) sixty days, (C) ninety days or more delinquent or (D) in
foreclosure, and indicating for each such Mortgage Loan the outstanding
principal balance.
	 
	 	(b)	 	Prior to the Commencement of Foreclosure in connection with any
Mortgage Loan, the Company shall provide the Purchaser with a notice (sent by
telecopier) of such proposed and imminent foreclosure, stating the loan number
and the aggregate amount owing under the Mortgage Loan.

     2. If requested by the Purchaser, the Company shall make its servicing personnel available
(during their normal business hours) to respond to reasonable inquiries by the Purchaser in
connection with any Mortgage Loan identified in a report under subsection (a)(i)(B), (a)(i)(C),
(a)(i)(D) or (a)(ii) which has been given to the Purchaser; provided, that (1) the Company shall
only be required to provide information that is readily accessible to its servicing personnel and
is non-confidential and (2) the Company shall not be required to provide any written information
under this subsection.

     3. In addition to the foregoing, the Company shall provide to the Purchaser such information
as the Purchaser may reasonably request concerning each Mortgage Loan that is at least sixty days
delinquent and each Mortgage Loan which has become real estate owned, through the final liquidation
thereof; provided that the Company shall only be required to provide information that is readily
accessible to its servicing personnel and is non-confidential.

	 	(a)	 	With respect to all Mortgage Loans which are serviced at any
time by the Company through a Subservicer, the Company shall be entitled to
rely for all purposes hereunder, including for purposes of fulfilling its
reporting obligations under this Section 2.01 on the accuracy and completeness
of any information provided to it by the applicable Subservicer.

     Section 2.02 Purchaser’s Election to Delay Foreclosure Proceedings.

     1. The Purchaser directs the Company that in the event that the Company does not receive
written notice of the Purchaser’s election pursuant to subsection (b) below within 24 hours
(exclusive of any intervening non-Business Days) of transmission of the notice provided by
the Company under Section 2.01(a)(ii), subject to extension as set forth in Section 2.02(b), the
Company shall proceed with the Commencement of Foreclosure in respect of such Mortgage Loan in
accordance with its normal foreclosure policies without further notice to the Purchaser. Any
foreclosure that has been initiated may be discontinued (i) without notice to the Purchaser, if the
Mortgage Loan has been brought current or if a refinancing or prepayment occurs with respect to the
Mortgage Loan (including by means of a short payoff approved by the Company) (ii) with notice to
the Purchaser if the Company has reached the terms of a forbearance agreement with the borrower.
In such latter case the Company may complete such

J-3

 

forbearance agreement unless instructed otherwise by the Purchaser within one Business Day of
notification.

     2. In connection with any Mortgage Loan with respect to which a notice under Section
2.01(a)(ii) has been given to the Purchaser, the Purchaser may elect, for reasonable cause as
determined by the Purchaser, to instruct the Company to delay the Commencement of Foreclosure until
such term as the Purchaser determines that the Company may proceed with the Commencement of
Foreclosure. Such election must be evidenced by written notice received within 24 hours (exclusive
of any intervening non-Business Days) of transmission of the notice provided by the Company under
Section 2.01(a)(ii). Such 24 hour period shall be extended for no longer than an additional four
Business Days after the receipt of the information if the Purchaser requests additional information
related to such foreclosure; provided, however that the Purchaser will have at least one Business
Day to respond to any requested additional information. Any such additional information shall (i)
not be confidential in nature and (ii) be obtainable by the Company from existing reports,
certificates or statements or otherwise be readily accessible to its servicing personnel. The
Purchaser agrees that it has no right to deal with the Mortgagor. If the Company’s normal
foreclosure policy includes acceptance of a deed-in-lieu of foreclosure or short payoff, the
Purchaser will be notified and given one Business Day to respond.

     3. With respect to any Mortgage Loan as to which the Purchaser has made an Election to Delay
Foreclosure, the Purchaser shall obtain a Current Appraisal as soon as practicable, and shall
provide the Company with a copy of such Current Appraisal.

     4. Within two Business Days of making any Election to Delay Foreclosure, the Purchaser shall
remit by wire transfer to the Company, for deposit in the Collateral Fund, an amount, as calculated
by the Company, equal to the sum of (i) 125% of the greater of the outstanding Principal Balance of
the Mortgage Loan and the value shown in the Current Appraisal referred to in subsection (c) above
(or, if such Current Appraisal has not yet been obtained, the Company’s estimate thereof, in which
case the required deposit under this subsection shall be adjusted upon obtaining of such Current
Appraisal), and (ii) three months’ interest on the Mortgage Loan at the applicable Mortgage Rate.
If any Election to Delay Foreclosure extends for a period in excess of three months (such excess
period being referred to herein as the “Excess Period”), the Purchaser shall remit by wire transfer
in advance to the Company for deposit in the Collateral Fund the amount, as calculated by the
Company, equal to interest on the Mortgage Loan at the applicable Mortgage Rate for the Excess
Period. The terms of this Agreement shall no longer apply to the servicing of any Mortgage Loan
upon the failure of the Purchaser to deposit the above amounts relating to the Mortgage Loan within
two Business Days of the Election to Delay Foreclosure.

     5. With respect to any Mortgage Loan as to which the Purchaser has made an Election to Delay
Foreclosure, the Company may withdraw from the Collateral Fund from time to time amounts necessary
to reimburse the Company for all Advances and Liquidation Expenses thereafter made by the Company
as Servicer in accordance with the Pooling and Servicing Agreement. To the extent that the amount
of any such Liquidation Expense is determined by the Company based on estimated costs, and the
actual costs are subsequently determined to be higher, the Company may withdraw the additional
amount from the Collateral Fund. In the event that the Mortgage Loan is brought current by the
Mortgagor and the foreclosure action is discontinued, the amounts so withdrawn from the Collateral
Fund shall be redeposited therein as and to the extent that reimbursement therefor from amounts
paid by the Mortgagor is not prohibited pursuant to the Pooling and Servicing Agreement. Except as
provided in the preceding sentence, amounts withdrawn from the Collateral Fund to cover Advances
and Liquidation Expenses shall not be redeposited therein or otherwise reimbursed to the Purchaser.
If and when any such Mortgage Loan is brought current by the Mortgagor, all amounts remaining in
the Collateral Fund in respect of such

J-4

 

Mortgage Loan (after adjustment for all withdrawals and deposits pursuant to this subsection)
shall be released to the Purchaser.

     6. With respect to any Mortgage Loan as to which the Purchaser has made an Election to Delay
Foreclosure, the Company shall continue to service the Mortgage Loan in accordance with its
customary procedures (other than the delay in Commencement of Foreclosure as provided herein). If
and when the Purchaser shall notify the Company that it believes that it is appropriate to do so,
the Company shall proceed with the Commencement of Foreclosure. In any event, if the Mortgage Loan
is not brought current by the Mortgagor by the time the loan becomes 6 months delinquent, the
Purchaser’s election shall no longer be effective and at the Purchaser’s option, either (i) the
Purchaser shall purchase the Mortgage Loan from the Trust Fund at a purchase price equal to the
fair market value as shown on the Current Appraisal, to be paid by (x) applying any balance in the
Collateral Fund to such purchase price, and (y) to the extent of any deficiency, by wire transfer
of immediately available funds to the Company or Trustee; or (ii) the Company shall proceed with
the Commencement of Foreclosure.

     7. Upon the occurrence of a liquidation with respect to any Mortgage Loan as to which the
Purchaser made an Election to Delay Foreclosure and as to which the Company proceeded with the
Commencement of Foreclosure in accordance with subsection (f) above, the Company shall calculate
the amount, if any, by which the value shown on the Current Appraisal obtained under subsection (c)
exceeds the actual sales price obtained for the related Mortgaged Property (or stock allocated to a
dwelling unit in the case of a Co-op Loan) (net of Liquidation Expenses and accrued interest
related to the extended foreclosure period), and the Company shall withdraw the amount of such
excess from the Collateral Fund, shall remit the same to the Trust Fund and in its capacity as
Servicer shall apply such amount as additional Liquidation Proceeds pursuant to the Pooling and
Servicing Agreement. After making such withdrawal, all amounts remaining in the Collateral Fund in
respect of such Mortgage Loan (after adjustment for all withdrawals and deposits pursuant to
subsection (e)) shall be released to the Purchaser.

     Section 2.03 Purchaser’s Election to Commence Foreclosure Proceedings.

     1. In connection with any Mortgage Loan identified in a report under Section 2.01(a)(i)(B),
the Purchaser may elect, for reasonable cause as determined by the Purchaser, to instruct the
Company to proceed with the Commencement of Foreclosure as soon as practicable. Such election must
be evidenced by written notice received by the Company by 5:00 p.m., New York City time, on the
third Business Day following the delivery of such report under Section 2.01(a)(i).

     2. Within two Business Days of making any Election to Foreclose, the Purchaser shall remit to
the Company, for deposit in the Collateral Fund, an amount, as calculated by the Company, equal to
125% of the current Principal Balance of the Mortgage Loan and three months’ interest on the
Mortgage Loan at the applicable Mortgage Rate. If and when any such Mortgage Loan is brought
current by the Mortgagor, all amounts in the Collateral Fund in respect of such Mortgage Loan shall
be released to the Purchaser. The terms of this Agreement shall no longer apply to the servicing
of any Mortgage Loan upon the failure of the Purchaser to deposit the above amounts relating to the
Mortgage Loans within two Business Days at the Election to Foreclose.

     3. With respect to any Mortgage Loan as to which the Purchaser has made an Election to
Foreclose, the Company shall continue to service the Mortgage Loan in accordance with its customary
procedures (other than to proceed with the Commencement of Foreclosure as provided herein). In
connection therewith, the Company shall have the same rights to make withdrawals for Advances and
Liquidation Expenses from the Collateral Fund as are provided under Section 2.02(e), and the
Company shall make reimbursements thereto to the limited extent provided under such subsection.
The Company shall not be required to proceed with the Commencement of Foreclosure if (i) the same
is stayed as a result of the Mortgagor’s bankruptcy or is otherwise barred by applicable law, or to
the extent that all

J-5

 

legal conditions precedent thereto have not yet been complied with or (ii) the Company believes
there is a breach of representation or warranties by the Company, which may result in a repurchase
or substitution of such Mortgage Loan, or (iii) the Company reasonably believes the Mortgaged
Property (or Underlying Mortgaged Property, in the case of a Co-op Loan) may be contaminated with
or affected by hazardous wastes or hazardous substances (and the Company supplies the Purchaser
with information supporting such belief). The Company will repurchase or substitute a Mortgage
Loan pursuant to the preceding clause (ii) within the time period specified in the Pooling and
Servicing Agreement. Any foreclosure that has been initiated may be discontinued (i) without
notice to the Purchaser if the Mortgage Loan has been brought current or if a refinancing or
prepayment occurs with respect to the Mortgage Loan (including by means of a short payoff approved
by the Company), or (ii) with notice to the Purchaser if the Company has reached the terms of a
forbearance agreement unless instructed otherwise by the Purchaser within two Business Days of
notification.

     4. Upon the occurrence of a liquidation with respect to any Mortgage Loan as to which the
Purchaser made an Election to Foreclose and as to which the Company proceeded with the Commencement
of Foreclosure in accordance with subsection (c) above, the Company shall calculate the amount, if
any, by which the Principal Balance of the Mortgage Loan at the time of liquidation (plus all
unreimbursed Advances and Liquidation Expenses in connection therewith other than those paid from
the Collateral Fund) exceeds the actual sales price obtained for the related Mortgaged Property (or
stock allocated to a dwelling unit in the case of a Co-op Loan), and the Company shall withdraw the
amount of such excess from the Collateral Fund, shall remit the same to the Trust Fund and in its
capacity as Servicer shall apply such amount as additional Liquidation Proceeds pursuant to the
Pooling and Servicing Agreement. After making such withdrawal, all amounts remaining in the
Collateral Fund (after adjustment for all withdrawals and deposits pursuant to subsection (c)) in
respect of such Mortgage Loan shall be released to the Purchaser.

     Section 2.04 Termination.

     1. With respect to all Mortgage Loans included in the Trust Fund, the Purchaser’s rights to
make any Election to Delay Foreclosure or any Election to Foreclose and the Company’s obligations
under Section 2.01 shall terminate (i) at such time as the Outstanding Certificate Principal
Balance of the Class B-5 Certificates has been reduced to zero, (ii) if the greater of (x) _______________% (or
such lower or higher percentages that represents the Company’s actual historical loss experience
with respect to the Mortgage Loans in the related pool) of the aggregate principal balance of all
Mortgage Loans that are in foreclosure or are more than 90 days delinquent on a contractual basis
and REO properties or if the aggregate amount that the Company estimates will be required to be
withdrawn from the Collateral Fund with respect to Mortgage Loans as to which the Purchaser has
made an Election to Delay Foreclosure or an Election to Foreclose exceeds (z) the Outstanding
Certificate Principal Balance of the Class [ ] Certificates, or (iii) upon any transfer by the
Purchaser of any interest (other than the minority interest therein, but only if the transferee
provides written acknowledgment to the Company of the Purchaser’s right hereunder and that such
transferee will have no rights hereunder) in the Class [ ] Certificates (whether or not such
transfer is registered under the Pooling and Servicing Agreement), including any such transfer in
connection with a termination of the Trust Fund. Except as set forth above, this Agreement and the
respective rights, obligations and responsibilities of the Purchaser and the Company hereunder
shall terminate upon the later to occur of (i) the final liquidation of the last Mortgage Loan as
to which the Purchaser made any Election to Delay Foreclosure or any Election to Foreclose and the
withdrawal of all remaining amounts in the Collateral Fund as provided herein and (ii) ten (10)
Business Day’s notice.

     2. Purchaser’s rights pursuant to Section 2.02 or 2.03 of this Agreement shall terminate with
respect to a Mortgage loan as to which the Purchaser has exercised its rights under Section 2.02 or
2.03 hereof, upon Purchaser’s failure to deposit any amounts required pursuant to Section 2.02(d)
or 2.03(b).

J-6

 

     3. Neither the Servicer nor any of its directors, officers, employees or agents shall be under
any liability for any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall
not protect the Servicer or any such Person against any liability which would otherwise be imposed
by reason of willful misfeasance, bad faith or gross negligence in the performance of duties or by
reason of reckless disregard of obligations and duties hereunder. The Servicer and any director,
officer, employee or agent thereof may rely in good faith on any document of any kind prima facie
properly executed and submitted by an Person respecting any matters arising hereunder.

ARTICLE III

COLLATERAL FUND; SECURITY INTEREST

     Section 3.01 Collateral Fund.

     1. Upon receipt from the Purchaser of the initial amount required to be deposited in the
Collateral Fund pursuant to Article 11, the Company shall establish and maintain with itself as a
segregated account on its books and records an account (the “Collateral Fund”), entitled “JPMorgan
Chase Bank, N.A., as Servicer, for the benefit of registered holders of ChaseFlex Trust Series
2007-1, Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, Class B-5.” Amounts in the
Collateral Fund shall continue to be the property of the Purchaser, subject to the first priority
security interest granted hereunder for the benefit of the Certificate holders, until withdrawn
from the Collateral Fund pursuant to Section 2.02 or 2.03 hereof.

     2. Upon the termination of this Agreement and the liquidation of all Mortgage Loans as to
which the Purchaser has made any Election to Delay Foreclosure or any Election to Foreclose
pursuant to Section 2.04 hereof, the Company shall distribute to the Purchaser all amounts
remaining in the Collateral Fund together with any investment earnings thereon.

     3. The Collateral Fund shall be an “outside reserve fund” within the meaning of the REMIC
Provisions, beneficially owned by the Purchaser, who shall report all income, gain or loss with
respect thereto. Any amounts transferred from the Trust Fund to the Collateral Fund shall be
deemed to be transferred to the Purchaser, as beneficial owner of the Collateral Fund. In no event
shall the Purchaser (i) take or cause the Trustee or the Company to take any action that could
cause any REMIC established under the Trust Agreement to fail to qualify as a REMIC or cause the
imposition on any such REMIC of any “prohibited transaction” or “prohibited contribution” taxes or
(ii) cause the Trustee or the Company to fail to take any action necessary to maintain the status
of any such REMIC as a REMIC.

     Section 3.02. Collateral Fund Permitted Investments.

     1. The Company shall, at the written direction of the Purchaser invest the funds in the
Collateral Fund in Collateral Fund Permitted Investments. Such direction shall not be changed more
frequently than quarterly. In the absence of any direction, the Company shall select such
investments in accordance with the definition of Collateral Fund Permitted Investments in its
discretion.

     2. All income and gain realized from any investment as well as any interest earned on deposits
in the Collateral Fund (net of any losses on such investments) and any payments of principal made
in respect of any Collateral Fund Permitted Investment shall be deposited in the Collateral Fund
upon receipt. All costs and realized losses associated with the purchase and sale of Collateral
Fund Permitted Investments shall be borne by the Purchaser and the amount of net realized losses
shall be deposited by the Purchaser in the Collateral Fund. The Company shall periodically (but
not more frequently than monthly) distribute to the Purchaser upon request an amount of cash, to
the extent cash is

J-7

 

available therefor in the Collateral Fund, equal to the amount by which the balance of the
Collateral Fund, after giving effect to all other distributions to be made from the Collateral Fund
on such date, exceeds the Required Collateral Fund Balance. Any amounts so distributed shall be
released from the lien and security interest of this Agreement.

     Section 3.03 Grant of Security Interest.

     1. The Purchaser grants to the Company and the Trustee for the benefit of the
Certificateholders a security interest in and lien on all of the Purchaser’s right, title and
interest, whether now owned or hereafter acquired, in and to: (1) the Collateral Fund, (2) all
amounts deposited in the Collateral Fund and Collateral Fund Permitted Investments in which such
amounts are invested (and the distributions and proceeds of such investments) and (3) all cash and
non-cash proceeds of any of the foregoing, including proceeds of the voluntary or involuntary
conversion thereof (all of the foregoing collectively, the “Collateral”).

     2. The Purchaser acknowledges the lien on and security interest in the Collateral for the
benefit of the Certificateholders. The Purchaser shall take all actions requested by the Company
or the Trustee as may be reasonably necessary to perfect the security interest created under this
Agreement in the Collateral and cause it to be prior to all other security interests and liens,
including the execution and delivery to the Company for filing of appropriate financing statements
in accordance with applicable law. The Company shall file appropriate continuation statements, or
appoint an agent on its behalf to file such statements, in accordance with applicable law.

     Section 3.04 Collateral Shortfalls.

     In the event that amounts on deposit in the Collateral Fund at any time are insufficient to
cover any withdrawals therefrom that the Company or the Trustee is then entitled to make hereunder,
the Purchaser shall be obligated to pay such amounts to the Company or the Trustee immediately upon
demand. Such obligation shall constitute a general corporate obligation of the Purchaser.

ARTICLE IV

MISCELLANEOUS PROVISIONS

     Section 4.01 Amendment.

     This Agreement may be amended from time to time by the Company and the Purchaser by written
agreement signed by the Company and the Purchaser.

     Section 4.02 Counterparts.

     This Agreement may be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

     Section 4.03 Governing Law.

     This Agreement shall be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in accordance with
such laws.

     Section 4.04 Notices.

J-8

 

     All demands, notices and direction hereunder shall be in writing or by telecopy and shall be
deemed effective upon receipt to:

in the case of the Company,

JPMorgan Chase Bank, N.A.

1111 Polaris Parkway

Columbus, Ohio 43240

such other address as may hereafter be furnished in writing by the Company, or

in the case of the Purchaser, with respect to notices pursuant to Section 2.01,

	 	 	 	 	 
	 	 	[PURCHASER]
	 
	 	 	 	 
	 	 	 
	 	 	[ADDRESS]
	 

	 	Attn:	 	 
	 

	 	 	 	 
	 

	 	Phone:	 	 
	 

	 	 	 	 
	 

	 	Fax:	 	 
	 

	 	 	 	 

with respect to all other notices pursuant to this Agreement,

	 	 	 	 	 
	 	 	 
	 	 	[ADDRESS]
	 

	 	Attn:	 	 
	 

	 	 	 	 
	 

	 	Phone:	 	 
	 

	 	 	 	 
	 

	 	Fax:	 	 
	 

	 	 	 	 

or such other address as may hereafter be furnished in writing by the Purchaser.

     Section 4.05 Severability of Provisions.

     If any one or more of the covenants, agreements, provisions or terms of this Agreement shall
be for any reason whatsoever, including regulatory, held invalid, 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.

     Section 4.06 Successors and Assigns.

     The provisions of this Agreement shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties hereto, and all such provisions shall inure to the
benefit of the Certificateholders; provided, however, that the rights under this Agreement cannot
be assigned by the Purchaser without the consent of the Company.

     Section 4.07 Article and Section Headings.

     The article and section headings herein are for convenience of reference only, and shall not
limit or otherwise affect the meaning hereof.

J-9

 

     Section 4.08 Confidentiality.

     The Purchaser agrees that all information supplied by or on behalf of the Company pursuant to
Sections 2.01 or 2.02, including individual account information, is the property of the Company and
the Purchaser agrees to hold such information confidential and not to disclose such information.

J-10

 

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

	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A.
	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

J-11

 

EXHIBIT K

FORM OF CLASS A-R TRANSFEREE’S LETTER

CHASEFLEX TRUST SERIES 2007-2

[DATE]

Chase Mortgage Finance Corporation

300 Tice Boulevard, Third Floor

Woodcliff Lake, New Jersey 07675

JPMorgan Chase Bank, N.A.

Global Trust Services

Four New York Plaza

6th Floor

New York, New York 10004

The Bank of New York Trust Company, N.A., as trustee

601 Travis, 16th Floor

Houston, TX 77002

Attn: Corporate Trust Services/CFLX 2007-2

Ladies and Gentlemen:

     We propose to purchase Chase Mortgage Finance Corporation’s ChaseFlex Trust Series 2007-2,
Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, Class A-R, described in the
Prospectus Supplement, dated April 25, 2007 and Prospectus, dated April 17, 2007.

     1. We certify that (a) we are not a disqualified organization, (b) we are not purchasing such
Class A-R Certificate on behalf of a disqualified organization and (c) we are not an entity that
holds such Class A-R Certificate as nominee to facilitate the clearance and settlement of such
securities through electronic book-entry changes in accounts of participating organizations; for
this purpose the term “disqualified organization” means the United States, any state or political
subdivision thereof, any foreign government, any international organization, any agency or
instrumentality of any of the foregoing (except any entity treated as other than an instrumentality
of the foregoing for purposes of Section 168(h)(2)(D) of the Internal Revenue Code of 1986, as
amended (the “Code”)), any organization (other than a cooperative described in Section 521 of the
Code) that is exempt from taxation under the Code (unless such organization is subject to tax on
excess inclusions) and any organization that is described in Section 1381(a)(2)(C) of the Code. We
understand that any breach by us of this certification may cause us to be liable for an excise tax
imposed upon transfers to disqualified organizations.

     2. We certify that we are not an employee benefit plan subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), a plan subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the “Code”) or a plan or arrangement subject to any
provisions under any federal, state, local, non-U.S. or other laws or regulations that are
substantively similar to the

K-1

 

foregoing provisions of ERISA or the Code (collectively, a “Plan”), and are not directly or
indirectly acquiring the Class A-R Certificate for, on behalf of or with any assets of any such
Plan.

     3. We certify that (a) we have historically paid our debts as they became due, (b) we intend,
and believe that we will be able, to continue to pay our debts as they become due in the future,
(c) we understand that, as beneficial owner of the Class A-R Certificate, we may incur tax
liabilities in excess of any cash flows generated by the Class A-R Certificate, (d) we intend to
pay any taxes associated with holding the Class A-R Certificate as they become due and (e) we will
not cause income from the Class A-R Certificate to be attributable to a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax treaty) of ours or
another U.S. taxpayer.

     4. We acknowledge that we will be the beneficial owner of the Class A-R Certificate and:*/

	 	—	 	The Class A-R Certificate will be registered in our name.
	 
	 	—	 	The Class A-R Certificate will be held in the name of our nominee,
_______________, which is not a disqualified organization.

     5. Unless Chase Mortgage Finance Corporation (“CMFC”) has consented to the transfer to us by
executing the form of Consent affixed hereto as Appendix B, we certify that we are a U.S. person;
for this purpose the term “U.S. Person” means a citizen or resident of the United States, a
corporation or partnership (unless, in the case of a partnership, Treasury regulations are adopted
that provide otherwise) created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, including an entity treated as a corporation or partnership
for federal income tax purposes, an estate whose income is subject to Unites States federal income
tax regardless of its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of such trust, and one or more such U.S. Persons have
the authority to control all substantial decisions of such trust, (or, to the extent provided in
applicable Treasury regulations, certain trusts in existence on August 20, 1996 which are eligible
to elect to be treated as U.S. Persons). We agree that any breach by us of this certification
shall render the transfer of any interest in the Class A-R Certificate to us absolutely null and
void and shall cause no rights in the Class A-R Certificate to vest in us.

     6. We agree that in the event that at some future time we wish to transfer any interest in the
Class A-R Certificate, we will transfer such interest in the Class A-R Certificate only (a) to a
transferee that (i) is not a disqualified organization and is not purchasing such interest in the
Class A-R Certificate on behalf of a disqualified organization, (ii) is a U.S. person and (iii) has
delivered to CMFC a letter in the form of this letter (including the affidavit appended hereto)
and, if requested by CMFC, an opinion of counsel (in a form acceptable to CMFC) that the proposed
transfer will not cause the interest in the Class A-R Certificate to be held by a disqualified
organization or a person who is not a U.S. person or (b) with the written consent of CMFC.

     7. We hereby designate JPMorgan Chase Bank, N.A. as our fiduciary to act as the tax matters
person for the Series 2007-2 REMICs.

	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	[PURCHASER]

 

			
	*/	 	Check appropriate box and if necessary fill in
the name of the Transferee’s nominee.

K-2

 

	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Accepted as of , 200_	 	 	 	 
	 
	 	 	 	 	 	 
	CHASE MORTGAGE FINANCE CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

K-3

 

APPENDIX A

Affidavit pursuant to (i) Section 860E(e)(4) of the Internal Revenue Code of 1986, as amended, and
(ii) certain provisions of the Pooling and Servicing Agreement

     Under penalties of perjury, the undersigned declares that the following is true:

	 	(1)	 	He or she is an officer of _______________(the
“Transferee”),
	 
	 	(2)	 	the Transferee’s Employee Identification number is _______________,
	 
	 	(3)	 	the Transferee is not a “disqualified organization” (as defined below),
has no plan or intention of becoming a disqualified organization, and is not
acquiring any of its interest in the Chase Mortgage Finance Corporation,
Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, Class A-R on
behalf of a disqualified organization or any other entity,
	 
	 	(4)	 	unless Chase Mortgage Finance Corporation (“CMFC”) has consented to the
transfer to the Transferee by executing the form of Consent affixed as Appendix
B to the Transferee’s Letter to which this Certificate is affixed as Appendix
A, the Transferee is a “U.S. Person” (as defined below),
	 
	 	(5)	 	that no purpose of the transfer is to avoid or impede the assessment or
collection of tax,
	 
	 	(6)	 	the Transferee has historically paid its debts as they became due,
	 
	 	(7)	 	the Transferee intends, and believes that it will be able, to continue
to pay its debts as they become due in the future,
	 
	 	(8)	 	the Transferee understands that, as beneficial owner of the Class A-R
Certificate, it may incur tax liabilities in excess of any cash flows generated
by the Class A-R Certificate,
	 
	 	(9)	 	the Transferee intends to pay any taxes associated with holding the
Class A-R Certificate as they become due,
	 
	 	(10)	 	the Transferee consents to any amendment of the Pooling and Servicing
Agreement that shall be deemed necessary by CMFC (upon advice of counsel) to
constitute a reasonable arrangement to ensure that the Class A-R Certificate
will not be owned directly or indirectly by a disqualified organization, and
	 
	 	(11)	 	IF BRACKETED, THE FOLLOWING CERTIFICATIONS ARE INAPPLICABLE [the
transfer is not a direct or indirect transfer of the Class A-R Certificate to a
foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Transferee, and as to each of the residual
interests represented by the Class A-R Certificate, the present value of the
anticipated tax liabilities associated with holding such residual interest does
not exceed the sum of:

     the present value of any consideration given to the Transferee to acquire such residual
interest;

     the present value of the expected future distributions on such residual interest; and

     the present value of the anticipated tax savings associated with holding such residual
interest as the related REMIC generates losses.

K-4

 

For purposes of this declaration, (i) the Transferee is assumed to pay tax at a rate
equal to the highest rate of tax specified in Section 11(b)(1) of the Code, but the
tax rate specified in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b)(1) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the preceding
two years and will compute its taxable income in the current taxable year using the
alternative minimum tax rate, and (ii) present values are computed using a discount
rate equal to the Federal short-term rate prescribed by Section 1274(d) of the Code
for the month of the transfer and the compounding period used by the Transferee;]

[Alternative (11) (A) at the time of the transfer, and at the close of each of the
Transferee’s two fiscal years preceding the year of transfer, the Transferee’s gross assets
for financial reporting purposes exceed $100 million and its net assets for financial
reporting purposes exceed $10 million; and

	 	(B)	 	the Transferee is an eligible corporation as defined in Treasury regulation Section
1.860E-1(c)(6)(i) and has agreed in writing that any subsequent transfer of the
Class A-R Certificate will be to another eligible corporation in a transaction that
satisfies Treasury regulation Sections 1.860E-1(c)(4)(i), 1.860E-1(c)(4)(ii),
1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) and such transfer will not be a direct or
indirect transfer to a foreign permanent establishment (within the meaning of an
applicable income tax treaty) of a domestic corporation.
	 
	 	 	 	For purposes of this declaration, (i) the gross assets and net assets of the
Transferee do not include any obligation of any related person (as defined in
Treasury regulation section 1.860E-1(c)(6)(ii)) or any other asset if a principal
purpose for holding or acquiring the other asset is to permit the Transferee to make
this declaration or to satisfy the requirements of Treasury regulation section
1.860E-1(c)(5)(i);]

[Alternative (11) Intentionally left blank;]

     (12) the Transferee represents that it will not cause income from the Class A-R Certificate to
be attributable to a foreign permanent establishment or fixed base (within the meaning of an
applicable income tax treaty) of the Transferee or another U.S. taxpayer;

For purpose of this affidavit, the term “disqualified organization” means the United
States, any state or political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of the foregoing
(except any entity treated as other than an instrumentality of the foregoing for
purposes of Section 168(h)(2)(D) of the Internal Revenue Code of 1986, as amended
(the “Code”)), any organization (other than a cooperative described in Section 521
of the Code) that is exempt from taxation under the Code (unless such organization
is subject to tax on excess inclusions) and any organization that is described in
Section 1381(a)(2)(C) of the Code and the term “U.S. Person” means a citizen or
resident of the United States, a corporation or partnership (unless, in the case of
a partnership, Treasury regulations are adopted that provide otherwise) created or
organized in or under the laws of the United States, any state thereof or the
District of Columbia, including an entity treated as a corporation or partnership
for federal income tax purposes, an estate whose income is subject to Unites States
federal income tax regardless of its source, or a trust if a court within the United
States is able to exercise primary supervision over the administration of such
trust, and one or more such U.S. Persons have the authority to control all
substantial decisions of

K-5

 

such trust, (or, to the extent provided in applicable Treasury regulations, certain
trusts in existence on August 20, 1996 which are eligible to elect to be treated as
U.S. Persons).

K-6

 

	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 	 	 
	 
	 	 	 	 
	Address of Investor for receipt of distribution:	 	 
	 
	 	 	 	 
	Address of Investor for receipt of tax information:	 	 
	 
	 	 	 	 
	(Corporate Seal)	 	 
	 
	 	 	 	 
	Attest:	 	 

	 	 	 
	 

	 	 
	 

	 	, Secretary

Personally appeared before me the above-named _______________, known or proved to me to be the same
person who executed the foregoing instrument and to be the _______________of the Investor, and
acknowledged to me that he executed the same as his free act and deed and the free act and deed of
the Investor.

Subscribed and sworn before me this            day of
                                        
, 200  .

	 	 	 	 
	Notary Public
	County of
	 	 
	 

	 	 	 
	State of
	 	 	 
	 

	 	 	 
	My commission expires the                      day of
                    

	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

K-7

 

APPENDIX B

CONSENT

	 	 	 
	 

	 	(Transferee)
	 	 
	 
	 
	 	 
	 	 
	 
	 
	 	 
	 	 
	 

Ladies and Gentlemen:

     Chase Mortgage Finance Corporation (“CMFC”) hereby consents to the transfer to, and
registration in the name of, the Transferee (or, if applicable, registration in the name of such
Transferee’s nominee of the Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, Class
A-R described in the Transferee’s Letter to which this Consent is appended, notwithstanding CMFC’s
knowledge that the Transferee is not a U.S. Person (as defined in such Transferee’s Letter).

	 	 	 	 	 	 	 
	 	 	 	 	CHASE MORTGAGE FINANCE CORPORATION
	 
	 	 	 	 	 	 
	 

	 	 	 	By:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

K-8

 

EXHIBIT K-1

FORM OF CLASS A-R TRANSFEROR’S LETTER

CHASEFLEX TRUST SERIES 2007-2

[DATE]

JPMorgan Chase Bank, N.A.

Global Trust Services

Four New York Plaza

6th Floor

New York, New York 10004

The Bank of New York Trust Company, N.A., as trustee

601 Travis, 16th Floor

Houston, TX 77002

Attn: Corporate Trust Services/CMFT 2007-2

          We propose to transfer to _______________(the “Transferee”)
Chase Mortgage Finance
Corporation’s ChaseFlex Trust Series 2007-2, Multi-Class Mortgage Pass-Through Certificates, Series
2007-2, Class A-R, described in the Prospectus Supplement, dated April 25, 2007 and Prospectus,
dated April 17, 2007. We have reviewed the attached affidavit of the Transferee, and have no actual
knowledge that such affidavit is not true, and have no reason to believe that the Transferee has
the intention to impede the assessment or collection of any federal, state or local taxes legally
required to be paid with respect to the Class A-R Certificate referred to in the attached
affidavit. In addition, we have conducted a reasonable investigation at the time of the transfer
and found that the Transferee has historically paid its debts as they came due and we found no
significant evidence to indicate that the Transferee will not continue to pay its debts as they
become due.

	 	 	 
	 

	 	Very truly yours,
	 
	 	 
	 

	 	 
	 

	 	Name:
	 

	 	Title:

K-1-1

 

EXHIBIT L

REQUEST FOR RELEASE OF DOCUMENTS

			
	To:	 	JPMorgan Chase Bank, N.A.

1040 Oliver Road

Monroe, LA 71201

	 	 	 
	Re:

	 	Pooling and Servicing Agreement, dated as of April 1, 2007, by and
among Chase Mortgage Finance Corporation, JPMorgan Chase Bank, N.A. and
The Bank of New York Trust Company, N.A. relating to the issuance
of the ChaseFlex Trust Series 2007-2, Multi-Class Mortgage Pass-Through
Certificates, Series 2007-2

     In connection with the administration of the Mortgage Loans held by you, as Custodian on
behalf of the Trustee, pursuant to the above-captioned Pooling and Servicing Agreement, we request
the release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage Loan described
below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

	 	 	 	 	 	 	 
	                    

	 	 	1.	 	 	Mortgage Paid in Full
	                    

	 	 	2.	 	 	Foreclosure
	                    

	 	 	3.	 	 	Substitution
	                    

	 	 	4.	 	 	Other Liquidation
	                    

	 	 	5.	 	 	Nonliquidation Reason:

	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	(authorized signatory)	 	 
	 
	 	 	 	 	 	 
	 

	 	Issuer:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

L-1

 

Custodian

JPMorgan Chase Bank, N.A.

Please acknowledge the execution of the above request by your signature and date below:

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	Date
	 	 
	 
	 	 	 	 
	Documents returned to Custodian:
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Custodian

	 	Date	 	 

L-2

 

EXHIBIT M

FORM OF TRANSFEREE ERISA REPRESENTATION LETTER

[DATE]

The Bank of New York Trust Company, N.A.

601 Travis, 16th Floor

Houston, TX 77002

Attn: Corporate Trust Services/CMFT 2007-2

Chase Mortgage Finance Corporation

300 Tice Boulevard, Third Floor

Woodcliff Lake, New Jersey 07675

			
	Re:	 	ChaseFlex Trust Series 2007-2, Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, [Class — ]

Ladies and Gentlemen:

                          (the “Purchaser”)
intends to purchase from                                    
      (the
“Transferor”) $                     by original principal balance (the “Transferred Certificate”) of ChaseFlex
Trust Series 2007-2, Multi-Class Mortgage Pass-Through Certificates, Series 2007-2, [Class -___]
(the “Certificates”), issued pursuant to a pooling and servicing agreement, dated as of April 1,
2007 (the “Pooling and Servicing Agreement”), among Chase Mortgage Finance Corporation (the
“Depositor”), JPMorgan Chase Bank, N.A. (“Chase”), as servicer (the “Servicer”) and Custodian, and
The Bank of New York Trust Company, N.A., as trustee (the “Trustee”) and paying agent. [The
Purchaser intends to register the Transferred Certificate in the name of
                                        , as
nominee for                     .] All terms used and not otherwise defined herein shall have the
meanings set forth in the Pooling and Servicing Agreement.

     For good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, we hereby certify, represent and warrant to, and covenant with, the Depositor that
we:

     I. Solely in the case of ERISA Restricted Certificates, (A) are not an employee benefit plan
within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
“Code”) or a plan subject to any provisions under any federal, state, local, non-U.S. or other laws
or regulations that are substantively similar to the foregoing provisions of ERISA or the Code
(“Similar Law”) (collectively, a “Plan”), and is not directly or indirectly acquiring the
Certificate for, on behalf of or with any assets of any such Plan, (B) if the Certificate has been
the subject of an ERISA-Qualifying Underwriting, are an insurance company that is acquiring the
Certificate with assets of an “insurance company general account” as defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 (“PTCE 95-60”), and the acquisition and holding of the
Certificate are covered and exempt under Sections I and III of PTCE 95-60, or (C) solely in the
case of a Definitive Certificate, will deliver herewith an Opinion of Counsel satisfactory to the
Depositor, and upon which the Depositor shall be entitled to rely, to the effect that the
acquisition and holding of this Certificate by the prospective transferee will not constitute or

M-1

 

result in a nonexempt prohibited transaction under ERISA or the Code or a violation of Similar Law
and will not subject the Trustee, the Depositor or the Servicer to any obligation in addition to
those undertaken by such entities in the Pooling and Servicing Agreement, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Servicer.

     II. Solely in the case of Certificates other than ERISA Restricted Certificates and the Class
A-R Certificate, either (i) are not, and are not acting for, on behalf of or with any assets of, an
employee benefit plan or other arrangement subject to Title I of ERISA or plan subject to Section
4975 of the Code, or (ii) until the termination of the Swap Agreement, our acquisition and holding
of the Certificate will not constitute or result in a non-exempt prohibited transaction under Title
I of ERISA or Section 4975 of the Code.

     We agree to indemnify the Trustee, the Servicer and the Depositor against any liability that
may result from any misrepresentation made herein.

M-2

 

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	[PURCHASER]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

M-3

 

EXHIBIT N

[RESERVED]

N-1

 

EXHIBIT O

FORM OF OFFICER’S CERTIFICATE (PAYING AGENT)

[DATE]

Chase Mortgage Finance Corporation

300 Tice Boulevard, Third Floor

Woodcliff Lake, New Jersey 07675

     Reference is made to each pooling and servicing agreement listed on Exhibit A hereto (each, an
“Agreement”) in which The Bank of New York Trust Company, N.A. has been appointed the paying agent
(the “Paying Agent”). I, [     ], an [          ] of the Paying Agent, hereby certify to Chase
Mortgage Finance Corporation (the “Depositor”), and its officers, directors and affiliates, and
with the knowledge and intent that they will rely upon this certification that:

1. The Bank of New York Trust Company, N.A. has served as Paying agent for the Depositor
during the period of time from [     ] through [     ] and the following certifications and
statements of the Paying Agent set forth below relate solely to that period of time and for
no other periods.

2. I have reviewed (i) the annual report on Form 10-K (including the exhibits provided by
the Depositor to the Paying Agent for attachment thereto) for the fiscal year [     ] (the
“Annual Report”), (ii) all reports on Form 10-D containing distribution reports filed in
respect of periods included in the year covered by that annual report, relating to each of
the trusts created pursuant to each Agreement and (iii) all reports on Form 8-K (if any)
containing information provided by the Paying Agent, required to be filed in respect of the
period covered by the Annual Report (collectively with the related reports on Form 10-D and
Form 8-K (if any), the “Reports”);

3. Based on my knowledge, the information included in the Reports, taken as a whole, does
not contain any untrue statement of a material fact or omit to state a material fact
required by the respective pooling and servicing agreement to be included therein and
necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading as of the last day of the period covered by the
Reports; and

4. In compiling the distribution information, the Paying Agent has relied upon information
furnished to it by the Servicer under each pooling and servicing agreement. The Paying
Agent shall have no responsibility or liability for any inaccuracy in such reports resulting
from information so provided by the Servicer.

	 	 	 	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 

O-1

 

EXHIBIT P

LETTER OF REPRESENTATIONS

[INTENTIONALLY OMITTED]

P-1

 

EXHIBIT Q

[RESERVED]

Q-1

 

EXHIBIT R

SERVICING CRITERIA TO BE ADDRESSED

IN ASSESSMENT OF COMPLIANCE

(RMBS unless otherwise noted)

[TO BE UPDATED]

	 	 	 
	Definitions

	 	Key:
	Primary Servicer – transaction party having borrower contact

	 	          X - obligation

Custodian – safe keeper of certain pool assets

Trustee – fiduciary of the transaction

Paying Agent – agent of the Trustee

Where there are multiple checks for criteria the attesting party will identify in their
management assertion that they are attesting only to the portion of the distribution chain they are
responsible for in the related transaction agreements.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Bank of	 	The Bank of	 	 
	 	 	 	 	 	 	New York	 	New York	 	 
	 	 	 	 	JPMorgan*	 	Trust	 	Trust	 	JPMorgan
	 	 	 	 	Chase Bank,	 	Company,	 	Company,	 	Chase Bank,
	Reg AB	 	 	 	N.A.	 	N.A. (Paying	 	N.A.	 	N.A.
	Reference	 	Servicing Criteria	 	(Servicer)	 	Agent)	 	(Trustee)	 	(Custodian)
	 

	 	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.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X
	 	If applicable

for a transaction

participant
	 	 	 	If applicable

for a

transaction

participant
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(1)(iii)

	 	Any requirements in the
transaction agreements to
maintain a back-up servicer for
the Pool Assets are maintained.
	 	X
	 	N/A
	 	N/A	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X	 	 	 	 	 	 

R-1

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Bank of	 	The Bank of	 	 
	 	 	 	 	 	 	New York	 	New York	 	 
	 	 	 	 	JPMorgan*	 	Trust	 	Trust	 	JPMorgan
	 	 	 	 	Chase Bank,	 	Company,	 	Company,	 	Chase Bank,
	Reg AB	 	 	 	N.A.	 	N.A. (Paying	 	N.A.	 	N.A.
	Reference	 	Servicing Criteria	 	(Servicer)	 	Agent)	 	(Trustee)	 	(Custodian)
	 

	 	Cash Collection and
Administration	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(i)

	 	Payments on pool assets 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.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(ii)

	 	Disbursements made via wire
transfer on behalf of an obligor
or to an investor are made only
by authorized personnel.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(iv)

	 	The related accounts for the
transaction, such as cash
reserve accounts or accounts
established as a form of over
collateralization, are
separately maintained (e.g.,
with respect to commingling of
cash) as set forth in the
transaction agreements.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(vi)

	 	Unissued checks are safeguarded
so as to prevent unauthorized
access.
	 	X
	 	If applicable	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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
	 	X
	 	X	 	 	 	 

R-2

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Bank of	 	The Bank of	 	 
	 	 	 	 	 	 	New York	 	New York	 	 
	 	 	 	 	JPMorgan*	 	Trust	 	Trust	 	JPMorgan
	 	 	 	 	Chase Bank,	 	Company,	 	Company,	 	Chase Bank,
	Reg AB	 	 	 	N.A.	 	N.A. (Paying	 	N.A.	 	N.A.
	Reference	 	Servicing Criteria	 	(Servicer)	 	Agent)	 	(Trustee)	 	(Custodian)
	 

	 	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.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	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 Pool Assets
serviced by the Servicer.
	 	X
	 	X

(not

including (c))	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Pool Asset Administration	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(i)

	 	Collateral or security on pool
assets is maintained as required
by the transaction agreements or
related pool asset documents.
	 	X
	 	 	 	 	 	X
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(ii)

	 	Pool assets and related
documents are safeguarded as
required by the transaction
agreements
	 	X
	 	 	 	 	 	X
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(iii)

	 	Any additions, removals or
substitutions to the asset pool
are
	 	X	 	 	 	 	 	 

R-3

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Bank of	 	The Bank of	 	 
	 	 	 	 	 	 	New York	 	New York	 	 
	 	 	 	 	JPMorgan*	 	Trust	 	Trust	 	JPMorgan
	 	 	 	 	Chase Bank,	 	Company,	 	Company,	 	Chase Bank,
	Reg AB	 	 	 	N.A.	 	N.A. (Paying	 	N.A.	 	N.A.
	Reference	 	Servicing Criteria	 	(Servicer)	 	Agent)	 	(Trustee)	 	(Custodian)
	 

	 	made, reviewed and approved
in accordance with any
conditions or requirements in
the transaction agreements.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(iv)

	 	Payments on pool assets,
including any payoffs, made in
accordance with the related pool
asset 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 pool
asset documents.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(v)

	 	The Servicer’s records regarding
the pool assets agree with the
Servicer’s records with respect
to an obligor’s unpaid principal
balance.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(vi)

	 	Changes with respect to the
terms or status of an obligor’s
pool assets (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.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(viii)

	 	Records documenting collection
efforts are maintained during
the period a pool asset 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 pool
assets including, for example,
phone calls, letters and payment
rescheduling plans in cases
where delinquency is deemed
temporary (e.g., illness or
unemployment).
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(ix)

	 	Adjustments to interest rates or
	 	X	 	 	 	 	 	 

R-4

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	The Bank of	 	The Bank of	 	 
	 	 	 	 	 	 	New York	 	New York	 	 
	 	 	 	 	JPMorgan*	 	Trust	 	Trust	 	JPMorgan
	 	 	 	 	Chase Bank,	 	Company,	 	Company,	 	Chase Bank,
	Reg AB	 	 	 	N.A.	 	N.A. (Paying	 	N.A.	 	N.A.
	Reference	 	Servicing Criteria	 	(Servicer)	 	Agent)	 	(Trustee)	 	(Custodian)
	 

	 	rates of return for pool assets
with variable rates are computed
based on the related pool asset
documents.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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 pool asset
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 pool asset documents
and state laws; and (C) such
funds are returned to the
obligor within 30 calendar days
of full repayment of the related
pool assets, or such other
number of days specified in the
transaction agreements.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	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.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(xiv)

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

R-5

 

 

			
	*	 	Certain obligations will be satisfied by Chase Home Finance LLC as subservicer.
	 
	**	 	Subject to further interpretation by the SEC.

R-6

 

EXHIBIT S

FORM OF SARBANES-OXLEY CERTIFICATION

[DATE]

Chase Mortgage Finance Corporation

300 Tice Boulevard, Third Floor

Woodcliff Lake, New Jersey 07675

			
	          Re:   	 	ChaseFlex Trust Series 2007-2, Multi-Class Mortgage
Pass-Through Certificates, Series 2007-2

I, [identify the certifying individual], certify that:

     I have reviewed the report on Form 10-K and all reports on Form 10-D required to be filed in
respect of the period covered by this report on Form 10-K of [identify the issuing entity] (the
“Exchange Act periodic reports”);

     1. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

     2. Based on my knowledge, all of the distribution, servicing and other information required to
be provided under Form 10-D for the period covered by this report is included in the Exchange Act
periodic reports;

     3. [I am responsible for reviewing the activities performed by the servicer(s) and based on my
knowledge and the compliance review(s) conducted in preparing the servicer compliance statement(s)
required in this report under Item 1123 of Regulation AB, and except as disclosed in the Exchange
Act periodic reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s); and]

     4. All of the reports on assessment of compliance with servicing criteria for ABS and their
related attestation reports on assessment of compliance with servicing criteria for asset-backed
securities required to be included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of noncompliance described in such
reports have been disclosed in this report on Form 10-K.

[In giving the certifications above, I have reasonably relied on information provided to me by the
following unaffiliated parties [name of servicer, sub-servicer, co-servicer, depositor or
trustee].]

     Date:                                   

	 	 	 	 	 
	 

	 	 

[Signature]
	 	 
	 

	 	[Title]	 	 

S-1

 

EXHIBIT T

FORM OF ITEM 1123 CERTIFICATION OF SERVICER

[DATE]

Chase Mortgage Finance Corporation

300 Tice Boulevard, Third Floor

Woodcliff Lake, New Jersey 07675

			
	          Re:   	 	ChaseFlex Trust Series 2007-2, Multi-Class Mortgage
Pass-Through Certificates, Series 2007-2

I, [identify name of certifying individual], [title of certifying individual] of JPMorgan Chase
Bank, N.A. (the “Servicer”), hereby certify that:

(1) A review of the activities of the Servicer during the preceding calendar year and of the
performance of the Servicer under the Agreement has been made under my supervision; and

(2) To the best of my knowledge, based on such review, the Servicer has fulfilled all its
obligations under the Agreement in all material respects throughout such year or a portion
thereof[, or, if there has been a failure to fulfill any such obligation in any material respect, I
have specified below each such failure known to me and the nature and status thereof].

Date:

	 	 	 	 	 	 	 
	 	 	JPMorgan Chase Bank, N.A.,

as Servicer	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

T-1

 

EXHIBIT U

FORM OF YIELD MAINTENANCE AGREEMENT

April 26, 2007

Rate Collar Transaction

ChaseFlex Trust 2007-2
Attn:

Re: Interest Rate Transaction No: [    ]

Ladies and Gentlemen:

The purpose of this letter agreement is to set forth the terms and conditions of the rate collar
transaction (the “Interest Rate Transaction”) entered into between JPMorgan Chase Bank, N.A. (the
“Derivative Provider”) and The Bank of New York Trust Company, N.A., not in its individual
capacity, but solely as Paying Agent on behalf of ChaseFlex Trust 2007-2 (the “Counterparty”) on
April 26, 2007. This agreement constitutes a “Confirmation” as referred to in and supplements,
forms part of, and is subject to, the ISDA Master Agreement between the parties hereto.

The particular Interest Rate Transaction to which this Confirmation relates is a Rate Collar
Transaction, the terms of which are set forth below.

The definitions and provisions contained in the [    ] ISDA Definitions, as published by the
International Swaps and Derivatives Association, Inc. are incorporated into this Confirmation. In
the event of any inconsistency between those definitions and provisions and this Confirmation, this
Confirmation will govern. The Interest Rate Transaction relates to the Class A-1, Class A-2, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class B-1 Class B-2 and Class B-3
Certificates issued pursuant to the Pooling and Servicing Agreement dated as of April 1, 2007 among
Chase Mortgage Finance Corporation, as Depositor, The Bank of New York Trust Company, N.A, as
Trustee and Paying Agent and JPMorgan Chase Bank, N.A., as Servicer (the “Pooling and Servicing
Agreement”).

In consideration of the payment of the sum of USD $ [    ] (the “Premium”) by J.P. Morgan
Securities, Inc. on behalf of Chase Home Finance, LLC to the Derivative Provider on or about April
26, 2007 and in consideration of the promise by the Derivative Provider to make payments to the
Counterparty in accordance with Section 2 hereof, the parties hereto agree as follows

	1.	 	Definitions

	 	a.	 	“Ceiling Rate” means, with respect to any Calculation Period, the rate set forth as the
“Ceiling Rate” on the attached Schedule I.
	 
	 	b.	 	“Floor Rate” means, with respect to any Calculation Period, the rate set forth as the
“Strike Rate” on the attached Schedule I.

U-1

 

	 	c.	 	“Business Day” means any day which is both a New York Business Day and a London
Business Day.
	 
	 	d.	 	“Calculation Period” means, with respect to a Payment Date, the period, as set forth on
the attached Schedule I, from the Calculation Period Start Date to but excluding the
Calculation Period End Date, and including such Payment Date.
	 
	 	e.	 	“Designated Maturity” means 1 month(s).
	 
	 	f.	 	“Effective Date” means the first Calculation Period Start Date.
	 
	 	g.	 	“Floating Rate” means, with respect to a Payment Date, the rate determined by the
Derivative Provider to be (i) the per annum rate for deposits in U.S. dollars for a period
of the Designated Maturity which appears on the Telerate Page 3750 Screen as of 11:00 a.m.,
London time, on the day that is two London Business Days prior to the Reset Date of the
Calculation Period of such Payment Date (rounded upwards, if necessary, to the nearest
1/100,000 of 1%); (ii) if such rate does not appear on the Telerate Page 3750 Screen, the
Floating Rate shall be the arithmetic mean (rounded as aforesaid) of the offered quotations
obtained by the Derivative Provider from the Reference Banks for deposits in U.S. dollars
to leading banks in the London interbank market as of approximately 11:00 a.m., London
time, on the day that is two London Business Days prior to the Reset Date of the
Calculation Period of such Payment Date; or (iii) if fewer than two Reference Banks provide
the Derivative Provider with such quotations, the Floating Rate shall be the rate per annum
which the Derivative Provider determines to be the arithmetic mean (rounded as aforesaid)
of the offered quotations which leading banks in New York City selected by the Derivative
Provider are quoting in the New York interbank market on the Reset Date of the Calculation
Period of such Payment Date for deposits in U.S. dollars to the Reference Banks or, if
fewer than two such quotations are available, to leading European and Canadian Banks.
	 
	 	h.	 	“London Business Day” means any day on which banks are open for business in London and
on which dealings in deposits in U.S. dollars are transacted in the London interbank
market.
	 
	 	i.	 	“New York Business Day” means any day on which banks are not required or authorized by
law to close in New York City.
	 
	 	j.	 	“Notional Principal Amount” means, with respect to any Calculation Period, the notional
amount set forth in the attached Schedule I.
	 
	 	k.	 	“Payment Date” means the day that is two New York business days prior to each
Calculation Period End Date, provided that if such Payment Date is not a Business Day, such
Payment Date shall be the next preceding Business Day.
	 
	 	l.	 	“Reference Banks” means four major banks in the London interbank market selected by the
Derivative Provider.
	 
	 	m.	 	“Reset Date” means the first day of each Calculation Period.
	 
	 	n.	 	“Telerate Page 3750 Screen” means the display designated as “Page 3750” on the Dow
Jones Telerate Service (or such other page as may replace Page 3750 on that service or such
other

U-2

 

	 	 	 	service as may be nominated by the British Bankers’ Association as the information vendor
for the purpose of displaying British Bankers’ Association Interest Settlement Rates for
U.S. Dollar deposits).
	 
	 	o.	 	“Termination Date” means the last Calculation Period End Date.

	2.	 	Payments

	 	a.	 	The Derivative Provider agrees, subject to the payment to the Derivative Provider of
the Premium, to pay to the Counterparty, on each Payment Date on which the related Floating
Rate is determined to be greater than the Floor Rate and less than the Ceiling Rate, an
amount equal to the product of (x) the amount by which the Floating Rate exceeds the Floor
Rate with respect to the Calculation Period ending on or nearest such Payment Date, (y) the
Notional Principal Amount and (z) the actual number of days in that Calculation Period
divided by 360.
	 
	 	b.	 	All payments to the Derivative Provider shall be made as follows.
	 
	 	 	 	Payments in USD

JPMORGAN CHASE BANK NA

JPMORGAN CHASE BANK NA
	 
	 	c.	 	All payments to the Counterparty shall be made as follows:

  Wire Transfer:

The Bank of New York

ABA:

REF: CFLX 2007-2 Cap

Attn:

	3.	 	Notices. Any notices hereunder 1) shall be in writing and hand-delivered or sent by
first-class mail, postage prepaid, return receipt requested, and shall be addressed to the
intended recipient at its address set forth on the signature page hereof or at such other
address as such party shall have last specified by notice to the other party and 2) shall be
effective (a) if delivered by hand or sent by overnight courier, on the day it is delivered,
unless delivery is made after the close of business or on a day that is not a Business Day, in
which case such notice will be effective on the next Business Day, or (b) if sent by certified
or registered mail or the equivalent (return receipt requested), three Business Days after
dispatch.
	 
	 	 	All notices and queries to the Derivative Provider should be sent to:

     JPMorgan Chase Bank, N.A. Client Service Group

U-3

 

Telephone:

Facsimile:

Please quote the JPMorgan deal number(s):

	 	 	All notices and queries to the Counterparty should be sent to:

Bank of New York Trust Company, N.A.
	 
	 	 	 601 Travis 16th Floor

Houston, Texas 77002
	 
	4.	 	 Governing Law. This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York.
	 
	5.	 	Assignments. Neither party shall have the right to assign its rights or obligations
under this letter agreement without the prior written consent of the other party.
	 
	6.	 	Set-off; Counterclaim. All payments under this letter agreement will be made without
set-off or counterclaim, except that each party will have the right to set-off, counterclaim
or withhold payment in respect of any default by the other party under this letter agreement
or under any other agreement between the parties.
	 
	7.	 	Each Party’s Reliance on its Own Judgment. Each party has entered into this Rate
Collar Transaction solely in reliance on its own judgment. Neither party has any fiduciary
obligation to the other party relating to this Rate Collar Transaction. In addition, neither
party has held itself out as advising, or has held out any of its employees or agents as
having the authority to advise, the other party as to whether or not the other party should
enter into this Rate Collar Transaction, any subsequent actions relating to this Rate Collar
Transaction or any other matters relating to this Rate Collar Transaction. Neither party
shall have any responsibility or liability whatsoever in respect of any advice of this nature
given, or views expressed, by it or any of such persons to the other party relating to this
Rate Collar Transaction, whether or not such advice is given or such views are expressed at
the request of the other party.
	 
	8.	 	Waiver of Right to Trial by Jury. Each party hereby irrevocably waives any and all
rights to trial by jury with respect to any legal proceeding arising out of or relating to
this letter agreement or the Rate Collar Transaction.
	 
	9.	 	Limitation of Liability. It is expressly understood and agreed by the parties hereto
that (a) this Rate Collar Transaction is executed and delivered by the Counterparty, not
individually or personally but solely as Paying Agent of the Trust, in the exercise of the
powers and authority conferred and vested in it under the Pooling and Servicing Agreement, (b)
each of the representations, undertakings and agreements herein made on the part of the Trust
is made and intended for the purpose of binding only the Trust (c) nothing herein shall be
construed as creating any liability on the Counterparty, individually or personally, to
perform any covenant either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties who are signatories to this letter agreement and by any
person claiming by, through or under such parties, and (d) under no circumstances shall the
Counterparty be personally liable for the payment of any indebtedness or expenses of the Trust
or be liable for the breach or failure of any obligation, representation, warranty or covenant
made or undertaken by the Trust under this Rate Collar Transaction.

U-4

 

	10.	 	Reporting. Counterparty agrees to deliver, promptly upon request by the Derivative
Provider, or with respect to any particular type of report or other document as to which the
Derivative Provider has previously made request to receive all reports or documents of that
type, promptly upon delivery or receipt of such report or document by the Counterparty, any
report or other document required to be delivered by or to the Counterparty under the terms of
the Pooling and Servicing Agreement, other than those required to be delivered directly by the
Counterparty to the Derivative Provider thereunder.
	 
	11.	 	Written confirmation. No later than each Reset Date, the Derivative Provider agrees
to deliver to the Counterparty a written confirmation containing the results of the
Calculations performed on each Reset Date and the amount which is to be paid to the
Counterparty on the next Payment Date.
	 
	12.	 	Compliance with Regulation AB.

	 	(i)	 	If at any time after the date hereof for so long as the Counterparty is required to
file periodic reports under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) with respect to the Certificates, in the reasonable determination made in good faith
of Chase Mortgage Finance Corporation the aggregate “significance percentage” (as defined
in Regulation AB (“Regulation AB”) under the Securities Act of 1933, as amended, and the
Exchange Act) of all derivative instruments (contemplated by Item 1115 of Regulation AB)
provided by the Derivative Provider and any of its affiliates to the Counterparty is at
least 10% but less than 20%, the Derivative Provider shall, subject to subparagraph (iii)
below, within five (5) Business Days following request therefor provide the financial
information required under Item 1115(b)(1) of Regulation AB for the Derivative Provider
(and for the group of affiliated entities, if applicable) (the “Item 1115(b)(1)
Information”). Any such Item 1115(b)(1) Information shall be in a form suitable for
conversion to the format required for filing by the Depositor with the Securities and
Exchange Commission via the Electronic Data Gathering and Retrieval System (EDGAR).
	 
	 	(ii)	 	If at any time after the date hereof for so long as the Counterparty is required to
file periodic reports under the Exchange Act with respect to the Certificates, in the
reasonable determination made in good faith of Chase Mortgage Finance Corporation, the
aggregate “significance percentage” of all derivative instruments (contemplated by Item
1115 of Regulation AB) provided by the Derivative Provider and any of its affiliates to the
Counterparty is at least 20%, the Derivative Provider shall, subject to subparagraph (iii)
below, within five (5) Business Days following request therefor provide the financial
information required under Item 1115(b)(2) of Regulation AB for the Derivative Provider
(and for the group of affiliated entities, if applicable) (the “Item 1115(b)(2)
Information”, and together with the Item 1115(b)(1) Information, the “Additional
Information”). Any such Item 1115(b)(2) Information shall be in a form suitable for
conversion to the format required for filing by the Depositor with the Securities and
Exchange Commission via the Electronic Data Gathering and Retrieval System (EDGAR). In
addition, any such Item 1115(b)(2) Information shall be accompanied by any necessary
auditor’s consents.
	 
	 	(iii)	 	If the Derivative Provider is unable to provide any such Additional Information if, as
and when required, the Derivative Provider shall, at its option, within ten (10) Business
Days following request therefor, (1) promptly post collateral satisfactory to Chase
Mortgage Finance Corporation in an amount which is reasonably determined in good faith to
be sufficient to reduce the aggregate “significance percentage” to (x) in the case of
subparagraph (A) above, below 10%, and (y) in the case of subparagraph (B) above, provided
the Derivative Provider is able to meet the requirements of subparagraph (A) above, below
20%, in each case pursuant to a credit support

U-5

 

	 	 	 	annex or similar agreement reasonably satisfactory to the Chase Mortgage Finance
Corporation, or (2) at the sole expense of the Derivative Provider, without any expense or
liability to the Counterparty, transfer or assign its obligations under this Agreement to a
substitute counterparty reasonably acceptable to the Counterparty that (x) is able to
provide such Additional Information if, as and when required, and (y) enters into an
agreement similar in form to this Agreement pursuant to which such substitute counterparty
agrees to provide the Additional Information if, as and when required.
	 
	 	(iv)	 	The Derivative Provider’s obligation to provide any such Additional Information shall
terminate beginning in any such year in which the Counterparty’s obligation to file
periodic reports under the Exchange Act has terminated.

	 	 	 	 	 
	JPMorgan Chase Bank, N.A.	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Name:
	 	 	 	 
	Title:

	 	 

	 	 
	 

	 	 

	 	 

ChaseFlex Trust 2007-2

By: Bank of New York Trust Company, N.A, not in its individual capacity, but solely as Paying Agent
on behalf of ChaseFlex Trust 2007-2

Name:

Title:

U-6

 

EXHIBIT V

SCHEDULE I TO YIELD MAINTENANCE AGREEMENT

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Calculation Period Start	 	Calculation Period End	 	Scheduled Notional	 	Cap Strike Rate	 	Rate Cap
	Date	 	Date	 	Amount ($)	 	(%)	 	Ceiling (%)
	May 25, 2007

	 	June 25, 2007
	 	 	294,833,602.96	 	 	 	6.058	 	 	 	11.50	 
	June 25, 2007

	 	July 25, 2007
	 	 	291,788,316.00	 	 	 	6.270	 	 	 	11.50	 
	July 25, 2007

	 	August 25, 2007
	 	 	288,475,108.34	 	 	 	6.058	 	 	 	11.50	 
	August 25, 2007

	 	September 25, 2007
	 	 	284,900,235.13	 	 	 	6.058	 	 	 	11.50	 
	September 25, 2007

	 	October 25, 2007
	 	 	281,070,861.69	 	 	 	6.269	 	 	 	11.50	 
	October 25, 2007

	 	November 25, 2007
	 	 	276,995,309.67	 	 	 	6.057	 	 	 	11.50	 
	November 25, 2007

	 	December 25, 2007
	 	 	272,683,909.41	 	 	 	6.268	 	 	 	11.50	 
	December 25, 2007

	 	January 25, 2008
	 	 	268,149,906.12	 	 	 	6.056	 	 	 	11.50	 
	January 25, 2008

	 	February 25, 2008
	 	 	263,416,554.89	 	 	 	6.056	 	 	 	11.50	 
	February 25, 2008

	 	March 25, 2008
	 	 	258,565,000.19	 	 	 	6.494	 	 	 	11.50	 
	March 25, 2008

	 	April 25, 2008
	 	 	253,695,566.16	 	 	 	6.054	 	 	 	11.50	 
	April 25, 2008

	 	May 25, 2008
	 	 	248,885,607.61	 	 	 	6.267	 	 	 	11.50	 
	May 25, 2008

	 	June 25, 2008
	 	 	244,165,446.25	 	 	 	6.053	 	 	 	11.50	 
	June 25, 2008

	 	July 25, 2008
	 	 	239,533,412.50	 	 	 	6.266	 	 	 	11.50	 
	July 25, 2008

	 	August 25, 2008
	 	 	234,987,867.73	 	 	 	6.052	 	 	 	11.50	 
	August 25, 2008

	 	September 25, 2008
	 	 	230,527,203.70	 	 	 	6.052	 	 	 	11.50	 
	September 25, 2008

	 	October 25, 2008
	 	 	226,149,841.97	 	 	 	6.264	 	 	 	11.50	 
	October 25, 2008

	 	November 25, 2008
	 	 	221,854,233.39	 	 	 	6.051	 	 	 	11.50	 
	November 25, 2008

	 	December 25, 2008
	 	 	217,638,857.54	 	 	 	6.263	 	 	 	11.50	 
	December 25, 2008

	 	January 25, 2009
	 	 	213,502,222.18	 	 	 	6.049	 	 	 	11.50	 
	January 25, 2009

	 	February 25, 2009
	 	 	209,442,862.75	 	 	 	6.049	 	 	 	11.50	 
	February 25, 2009

	 	March 25, 2009
	 	 	205,459,341.84	 	 	 	6.731	 	 	 	11.50	 
	March 25, 2009

	 	April 25, 2009
	 	 	201,550,248.72	 	 	 	6.047	 	 	 	11.50	 
	April 25, 2009

	 	May 25, 2009
	 	 	197,714,198.82	 	 	 	6.260	 	 	 	11.50	 
	May 25, 2009

	 	June 25, 2009
	 	 	193,949,833.22	 	 	 	6.046	 	 	 	11.50	 
	June 25, 2009

	 	July 25, 2009
	 	 	190,255,818.26	 	 	 	6.258	 	 	 	11.50	 
	July 25, 2009

	 	August 25, 2009
	 	 	186,630,844.97	 	 	 	6.046	 	 	 	11.50	 
	August 25, 2009

	 	September 25, 2009
	 	 	183,073,628.68	 	 	 	6.045	 	 	 	11.50	 
	September 25, 2009

	 	October 25, 2009
	 	 	179,582,908.56	 	 	 	6.256	 	 	 	11.50	 
	October 25, 2009

	 	November 25, 2009
	 	 	176,157,447.16	 	 	 	6.043	 	 	 	11.50	 
	November 25, 2009

	 	December 25, 2009
	 	 	172,796,029.99	 	 	 	6.255	 	 	 	11.50	 
	December 25, 2009

	 	January 25, 2010
	 	 	169,497,465.09	 	 	 	6.042	 	 	 	11.50	 
	January 25, 2010

	 	February 25, 2010
	 	 	166,260,582.61	 	 	 	6.041	 	 	 	11.50	 
	February 25, 2010

	 	March 25, 2010
	 	 	163,084,234.42	 	 	 	6.722	 	 	 	11.50	 
	March 25, 2010

	 	April 25, 2010
	 	 	159,967,293.68	 	 	 	6.039	 	 	 	11.50	 
	April 25, 2010

	 	May 25, 2010
	 	 	156,908,654.48	 	 	 	6.251	 	 	 	11.50	 
	May 25, 2010

	 	June 25, 2010
	 	 	153,907,231.39	 	 	 	6.038	 	 	 	11.50	 
	June 25, 2010

	 	July 25, 2010
	 	 	150,961,959.18	 	 	 	6.249	 	 	 	11.50	 
	July 25, 2010

	 	August 25, 2010
	 	 	148,071,792.34	 	 	 	6.036	 	 	 	11.50	 
	August 25, 2010

	 	September 25, 2010
	 	 	145,273,578.62	 	 	 	6.036	 	 	 	11.50	 
	September 25, 2010

	 	October 25, 2010
	 	 	142,535,091.56	 	 	 	6.248	 	 	 	11.50	 
	October 25, 2010

	 	November 25, 2010
	 	 	139,847,855.05	 	 	 	6.036	 	 	 	11.50	 
	November 25, 2010

	 	December 25, 2010
	 	 	137,210,914.61	 	 	 	6.248	 	 	 	11.50	 
	December 25, 2010

	 	January 25, 2011
	 	 	134,623,333.46	 	 	 	6.036	 	 	 	11.50	 
	January 25, 2011

	 	February 25, 2011
	 	 	132,084,192.23	 	 	 	6.036	 	 	 	11.50	 
	February 25, 2011

	 	March 25, 2011
	 	 	129,592,588.59	 	 	 	6.718	 	 	 	11.50	 
	March 25, 2011

	 	April 25, 2011
	 	 	127,147,636.99	 	 	 	6.036	 	 	 	11.50	 

V-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Calculation Period Start	 	Calculation Period End	 	Scheduled Notional	 	Cap Strike Rate	 	Rate Cap
	Date 	 	Date	 	Amount ($)	 	(%)	 	Ceiling (%)
	April 25, 2011

	 	May 25, 2011
	 	 	124,748,468.31	 	 	 	6.248	 	 	 	11.50	 
	May 25, 2011

	 	June 25, 2011
	 	 	122,394,229.56	 	 	 	6.036	 	 	 	11.50	 
	June 25, 2011

	 	July 25, 2011
	 	 	120,084,083.60	 	 	 	6.248	 	 	 	11.50	 
	July 25, 2011

	 	August 25, 2011
	 	 	117,817,208.81	 	 	 	6.036	 	 	 	11.50	 
	August 25, 2011

	 	September 25, 2011
	 	 	115,592,798.85	 	 	 	6.036	 	 	 	11.50	 
	September 25, 2011

	 	October 25, 2011
	 	 	113,410,062.35	 	 	 	6.248	 	 	 	11.50	 
	October 25, 2011

	 	November 25, 2011
	 	 	111,268,222.63	 	 	 	6.036	 	 	 	11.50	 
	November 25, 2011

	 	December 25, 2011
	 	 	109,166,517.44	 	 	 	6.248	 	 	 	11.50	 
	December 25, 2011

	 	January 25, 2012
	 	 	107,104,198.67	 	 	 	6.036	 	 	 	11.50	 
	January 25, 2012

	 	February 25, 2012
	 	 	105,080,532.12	 	 	 	6.036	 	 	 	11.50	 
	February 25, 2012

	 	March 25, 2012
	 	 	103,094,797.24	 	 	 	6.475	 	 	 	11.50	 
	March 25, 2012

	 	April 25, 2012
	 	 	101,146,286.82	 	 	 	6.036	 	 	 	11.50	 
	April 25, 2012

	 	May 25, 2012
	 	 	99,234,306.84	 	 	 	6.248	 	 	 	11.50	 
	May 25, 2012

	 	June 25, 2012
	 	 	97,358,176.13	 	 	 	6.036	 	 	 	11.50	 
	June 25, 2012

	 	July 25, 2012
	 	 	95,517,226.20	 	 	 	6.248	 	 	 	11.50	 
	July 25, 2012

	 	August 25, 2012
	 	 	93,710,800.97	 	 	 	6.036	 	 	 	11.50	 
	August 25, 2012

	 	September 25, 2012
	 	 	91,933,158.90	 	 	 	6.036	 	 	 	11.50	 
	September 25, 2012

	 	October 25, 2012
	 	 	90,165,582.13	 	 	 	6.248	 	 	 	11.50	 
	October 25, 2012

	 	November 25, 2012
	 	 	88,431,164.61	 	 	 	6.036	 	 	 	11.50	 
	November 25, 2012

	 	December 25, 2012
	 	 	86,729,287.77	 	 	 	6.250	 	 	 	11.50	 
	December 25, 2012

	 	January 25, 2013
	 	 	85,059,344.55	 	 	 	6.037	 	 	 	11.50	 
	January 25, 2013

	 	February 25, 2013
	 	 	83,420,739.17	 	 	 	6.037	 	 	 	11.50	 
	February 25, 2013

	 	March 25, 2013
	 	 	81,812,886.93	 	 	 	6.721	 	 	 	11.50	 
	March 25, 2013

	 	April 25, 2013
	 	 	80,235,213.98	 	 	 	6.038	 	 	 	11.50	 
	April 25, 2013

	 	May 25, 2013
	 	 	78,687,157.14	 	 	 	6.251	 	 	 	11.50	 
	May 25, 2013

	 	June 25, 2013
	 	 	77,168,163.71	 	 	 	6.039	 	 	 	11.50	 
	June 25, 2013

	 	July 25, 2013
	 	 	75,677,691.24	 	 	 	6.252	 	 	 	11.50	 
	July 25, 2013

	 	August 25, 2013
	 	 	74,215,207.40	 	 	 	6.039	 	 	 	11.50	 
	August 25, 2013

	 	September 25, 2013
	 	 	72,780,189.72	 	 	 	6.040	 	 	 	11.50	 
	September 25, 2013

	 	October 25, 2013
	 	 	71,372,125.47	 	 	 	6.253	 	 	 	11.50	 
	October 25, 2013

	 	November 25, 2013
	 	 	69,990,511.43	 	 	 	6.040	 	 	 	11.50	 
	November 25, 2013

	 	December 25, 2013
	 	 	68,634,853.76	 	 	 	6.254	 	 	 	11.50	 
	December 25, 2013

	 	January 25, 2014
	 	 	67,304,667.77	 	 	 	6.041	 	 	 	11.50	 
	January 25, 2014

	 	February 25, 2014
	 	 	65,999,477.83	 	 	 	6.042	 	 	 	11.50	 
	February 25, 2014

	 	March 25, 2014
	 	 	64,718,817.11	 	 	 	6.725	 	 	 	11.50	 
	March 25, 2014

	 	April 25, 2014
	 	 	63,462,227.49	 	 	 	6.043	 	 	 	11.50	 
	April 25, 2014

	 	May 25, 2014
	 	 	62,229,259.35	 	 	 	6.256	 	 	 	11.50	 
	May 25, 2014

	 	June 25, 2014
	 	 	61,019,471.45	 	 	 	6.044	 	 	 	11.50	 
	June 25, 2014

	 	July 25, 2014
	 	 	59,832,430.75	 	 	 	6.257	 	 	 	11.50	 
	July 25, 2014

	 	August 25, 2014
	 	 	58,667,712.27	 	 	 	6.045	 	 	 	11.50	 
	August 25, 2014

	 	September 25, 2014
	 	 	57,524,898.92	 	 	 	6.046	 	 	 	11.50	 
	September 25, 2014

	 	October 25, 2014
	 	 	56,403,581.38	 	 	 	6.258	 	 	 	11.50	 
	October 25, 2014

	 	November 25, 2014
	 	 	55,303,357.95	 	 	 	6.047	 	 	 	11.50	 
	November 25, 2014

	 	December 25, 2014
	 	 	54,223,834.41	 	 	 	6.259	 	 	 	11.50	 
	December 25, 2014

	 	January 25, 2015
	 	 	53,164,623.84	 	 	 	6.048	 	 	 	11.50	 
	January 25, 2015

	 	February 25, 2015
	 	 	52,125,346.56	 	 	 	6.048	 	 	 	11.50	 
	February 25, 2015

	 	March 25, 2015
	 	 	51,105,629.94	 	 	 	6.731	 	 	 	11.50	 
	March 25, 2015

	 	April 25, 2015
	 	 	50,105,108.27	 	 	 	6.049	 	 	 	11.50	 

V-2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Calculation Period Start	 	Calculation Period End	 	Scheduled Notional	 	Cap Strike Rate	 	Rate Cap
	Date	 	Date	 	Amount ($)	 	(%)	 	Ceiling (%)
	April 25, 2015

	 	May 25, 2015
	 	 	49,123,422.68	 	 	 	6.262	 	 	 	11.50	 
	May 25, 2015

	 	June 25, 2015
	 	 	48,160,220.94	 	 	 	6.05	 	 	 	11.50	 
	June 25, 2015

	 	July 25, 2015
	 	 	47,215,157.40	 	 	 	6.263	 	 	 	11.50	 
	July 25, 2015

	 	August 25, 2015
	 	 	46,287,892.85	 	 	 	6.051	 	 	 	11.50	 
	August 25, 2015

	 	September 25, 2015
	 	 	45,378,094.37	 	 	 	6.052	 	 	 	11.50	 
	September 25, 2015

	 	October 25, 2015
	 	 	44,485,435.26	 	 	 	6.264	 	 	 	11.50	 
	October 25, 2015

	 	November 25, 2015
	 	 	43,609,594.89	 	 	 	6.053	 	 	 	11.50	 
	November 25, 2015

	 	December 25, 2015
	 	 	42,750,258.60	 	 	 	6.266	 	 	 	11.50	 
	December 25, 2015

	 	January 25, 2016
	 	 	41,907,117.60	 	 	 	6.054	 	 	 	11.50	 
	January 25, 2016

	 	February 25, 2016
	 	 	41,079,868.83	 	 	 	6.055	 	 	 	11.50	 
	February 25, 2016

	 	March 25, 2016
	 	 	40,268,214.90	 	 	 	6.495	 	 	 	11.50	 
	March 25, 2016

	 	April 25, 2016
	 	 	39,471,863.93	 	 	 	6.056	 	 	 	11.50	 
	April 25, 2016

	 	May 25, 2016
	 	 	38,690,529.50	 	 	 	6.269	 	 	 	11.50	 
	May 25, 2016

	 	June 25, 2016
	 	 	37,923,890.83	 	 	 	6.058	 	 	 	11.50	 
	June 25, 2016

	 	July 25, 2016
	 	 	37,171,713.02	 	 	 	6.27	 	 	 	11.50	 
	July 25, 2016

	 	August 25, 2016
	 	 	36,433,725.32	 	 	 	6.059	 	 	 	11.50	 
	August 25, 2016

	 	September 25, 2016
	 	 	35,709,662.02	 	 	 	6.06	 	 	 	11.50	 
	September 25, 2016

	 	October 25, 2016
	 	 	34,999,262.36	 	 	 	6.273	 	 	 	11.50	 
	October 25, 2016

	 	November 25, 2016
	 	 	34,302,228.45	 	 	 	6.062	 	 	 	11.50	 
	November 25, 2016

	 	December 25, 2016
	 	 	33,618,259.50	 	 	 	6.274	 	 	 	11.50	 
	December 25, 2016

	 	January 25, 2017
	 	 	32,946,624.61	 	 	 	6.063	 	 	 	11.50	 
	January 25, 2017

	 	February 25, 2017
	 	 	32,286,535.23	 	 	 	6.064	 	 	 	11.50	 
	February 25, 2017

	 	March 25, 2017
	 	 	31,630,657.60	 	 	 	6.748	 	 	 	11.50	 
	March 25, 2017

	 	April 25, 2017
	 	 	30,974,377.13	 	 	 	6.066	 	 	 	11.50	 
	April 25, 2017

	 	May 25, 2017
	 	 	30,318,503.78	 	 	 	6.28	 	 	 	11.50	 
	May 25, 2017

	 	June 25, 2017
	 	 	29,670,160.37	 	 	 	6.067	 	 	 	11.50	 
	June 25, 2017

	 	July 25, 2017
	 	 	29,034,559.81	 	 	 	6.281	 	 	 	11.50	 
	July 25, 2017

	 	August 25, 2017
	 	 	0	 	 	 	0	 	 	 	11.50	 

V-3

 

EXHIBIT W

FORM OF SWAP SCHEDULE TO THE MASTER AGREEMENT

SCHEDULE

to the

Master Agreement

dated as of April 26, 2007

between

	 	 	 	 	 
	JPMorgan Chase Bank, N.A.
(“Morgan”)

	 	and
	 	The Bank of New York Trust Company,
N.A., not in its individual capacity
but solely as Supplemental Interest
Trust Trustee on behalf of the
Supplemental Interest Trust with
respect to ChaseFlex Trust Series
2007-2
(“Counterparty”)

(1)

Termination Provisions

In this Agreement:

	(a)	 	“Specified Entity” shall not apply.

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

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

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

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

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

	 	(i)	 	“Specified Indebtedness” will have the meaning specified in Section 14, except
that such term shall not include obligations in respect of deposits received in the
ordinary course of such party’s banking business.
	 
	 	(b)	 	“Threshold Amount” means, with respect to Morgan, an amount equal to three
percent of the shareholders’ equity of the applicable Relevant Entity (as defined below
in Part 6).

W-1

 

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

	 	(i)	 	Section 5(a)(vii)(2), (7) and (9) will not apply to the Counterparty;
	 
	 	(ii)	 	Section 5(a)(vii)(4) will not apply to the Counterparty to the extent that it
refers to proceedings or petitions instituted or presented by Morgan or any of Morgan’s
Affiliates;
	 
	 	(iii)	 	Section 5(a)(vii)(6) will not apply to the Counterparty to the extent that it
refers to (i) any appointment that is contemplated or effected by any document to which
the Counterparty is, as of the date of this Agreement, a party in connection with the
transactions contemplated by the Pooling Agreement or (ii) any such appointment to which
the Counterparty has not yet become subject to; and
	 
	 	(iv)	 	Section 5(a)(vii)(8) will apply to the Counterparty but only to the extent that
it applies to Sections 5(a)(vii)(2), (4), (6) and (7) as they apply with respect to the
Counterparty).

	(h)	 	The “Merger Without Assumption” provisions of Section 5(a)(viii) will apply to Morgan and
will not apply to the Counterparty.
	 
	(i)	 	The “Tax Event” provisions of Section 5(b)(ii) will apply to Morgan and to the Counterparty,
provided that the words “(x) any action taking by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party to this
Agreement) or (y)” shall be deleted.
	 
	(j)	 	The “Tax Event Upon Merger” provisions of Section 5(b)(iii) will apply, provided that Morgan
shall not be entitled to designate an Early termination Date by reason of a Tax event Upon
Merger in respect of which it is the Affected Party.
	 
	(k)	 	The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to Morgan and
will not apply to the Counterparty.
	 
	(l)	 	The “Automatic Early Termination” provisions of Section 6(a) will not apply to Morgan and
will not apply to the Counterparty.
	 
	(m)	 	The “Transfer to Avoid Termination Event” provisions of 6(b)(ii) will apply to Morgan and the
Counterparty, provided that the words “or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party” shall be deleted.
	 
	(n)	 	“Termination Currency” means United States Dollars.
	 
	(o)	 	For purposes of computing amounts payable on early termination:

	 	(i)	 	Market Quotation will apply to this Agreement; and
	 
	 	(ii)	 	The Second Method will apply to this Agreement.

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

(a) a notice of optional termination of the Issuing Entity pursuant to Section 11.01
of the

W-2

 

Pooling Agreement is issued and is no longer capable of being rescinded. If this
Additional Termination Event occurs, the Counterparty shall be the sole Affected
Party and this Transaction shall be the sole Affected Transaction; provided,
however, that notwithstanding Section 6(b)(iv), either party may designate an Early
Termination Date in respect of this Additional Termination Event; provided, further,
that such Early Termination Date shall not be prior to ten Business Days prior to
the final Distribution Date;

(b) any provision of the Pooling Agreement is amended unless Morgan has consented in
writing to such amendment where such consent is required under the Pooling
Agreement. If this Additional Termination Event occurs, the Counterparty shall be
the sole Affected Party and all Transactions then outstanding between the parties
shall be Affected Transactions.

(c) If (i) any supplemental trust instrument is given effect and (ii) Morgan has not
consented in writing to such supplemental trust instrument prior to the date on
which such supplemental trust instrument takes effect where such consent is required
under the Pooling Agreement. If this Additional Termination Event occurs, then the
Counterparty shall be the sole Affected Party and all Transactions then outstanding
between the parties shall be Affected Transactions; or

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

(2)

Tax Representations

	(a)	 	Payer Tax Representation:

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

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

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

       provided that it shall not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of this
Agreement by reason of

W-3

 

material prejudice to its legal or commercial position.

(b) Payee Tax Representation:

For the purpose of Section 3(f), Morgan and Counterparty each represent that it is a United
States Person.

(3)

Agreement to Deliver Documents

For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver the following documents,
as applicable:

	(a)	 	For the purpose of Sections 4(a)(i) and (ii) of this Agreement, Counterparty agrees to
deliver complete and accurate United States Internal Revenue Service Forms W-9 (or any
applicable successor form), in the name of the ChaseFlex Trust Series 2007-2 supplemental
interest trust, in a manner reasonably satisfactory to Morgan, (I) upon execution of this
Agreement; (II) promptly upon reasonable demand of Morgan, and (III) promptly upon learning
that any such form previously filed by Counterparty has become obsolete or incorrect.

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

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

	(d)	 	The Counterparty will, upon execution of this Agreement, deliver a conformed copy of the
Pooling Agreement.

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

	(f)	 	The Counterparty shall supply Morgan with copies of all accountings and reports required to
be supplied to a party that is a Certificateholder (as defined in the Pooling Agreement).
Copies of such accountings and/or reports shall be delivered to Morgan at the following
address:

JPMorgan Chase Bank, National Association

c/o John Coffey

270 Park Avenue

New York, New York 10017

e-mail address: john.j.coffey@jpmorgan.com

Each of the foregoing documents (other than the legal opinions described in (6) above) is covered
by the representation contained in Section 3(d) of this Agreement.

(4)

Miscellaneous

W-4

 

	(a)	 	Governing Law. This Agreement will be governed by and construed in accordance with the laws
of the State of New York without reference to choice of law doctrine.
	 
	(b)	 	Notices.

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

Attention: Legal Department-Derivatives Practice Group

270 Park Avenue, 41st Floor

New York, New York 10017-2070

Telex No.: 232337; Answerback: CBC UR

Facsimile No.: (212) 270-3620
	 
	 	(ii)	 	In connection with Section 12(a), all notices to the Counterparty shall, with
respect to any particular Transaction, be sent to the address, telex number or
facsimile number specified in the relevant Confirmation and any notice for purposes of
Sections 5 or 6 of the Agreement shall be sent to the address or telex number specified
below:

	 	 	The Bank of New York Trust Company, N.A.

	 	601	 	Travis, 16th Floor

Houston, Texas 77002

Telephone: (512) 479-2635

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

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

	 	(i)	 	Section 10(a) will apply; and
	 
	 	(ii)	 	For the purpose of Section 10(c):

	 	(I)	 	Morgan is a Multibranch Party and may act through its London
and New York Offices.
	 
	 	(II)	 	The Counterparty is not a Multibranch Party.

	(e)	 	Credit Support Documents.

     With respect to Morgan, if applicable, any Eligible Guarantee delivered by Morgan shall
constitute a Credit Support Document.

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

W-5

 

	(f)	 	Credit Support Provider.

     With respect to Morgan, the party guaranteeing Morgan’s obligations pursuant to an Eligible
Guarantee, if any, shall be a Credit Support Provider.

	(g)	 	Process Agents. The Counterparty appoints as its Process Agent for the purpose of Section
13(c): [Not Applicable]

(5)

Other Provisions

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

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

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

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

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

	(f)	 	No Petition; Limited Recourse. Morgan hereby agrees that it shall not until a period of one
year and one day (or if longer, the applicable preference period) after all rated liabilities
of the Trust have been indefeasibly paid in full institute against, or join any other person
in instituting against the Counterparty any bankruptcy, reorganization, arrangement,
insolvency, moratorium or liquidation proceedings or other proceedings under U.S. federal or
state or other bankruptcy or

W-6

 

	 	 	similar laws. Notwithstanding the foregoing, nothing herein shall prevent Morgan from
participating in any such proceeding once commenced. This provision shall survive
termination of this Agreement.

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

	(g)	 	Additional Representations.

(a) Section 3 is hereby amended by adding at the end thereof the following paragraphs:

     “(g) It is an “eligible contract participant” under, and as defined in, Section 1a(12) of the
Commodity Exchange Act, as amended.

     (h) Each party will be deemed to represent to the other party on the date on which it enters
into a Transaction that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):

(i) Non-Reliance. It is acting for its own account, and it has made its own independent
decisions to enter into that Transaction and as to whether that Transaction is appropriate or
proper for it based upon its own judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral) of the other party as
investment advice or as a recommendation to enter into that Transaction; it being understood
that information and explanations related to the terms and conditions of a Transaction shall not
be considered investment advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party shall be deemed to be an assurance
or guarantee as to the expected results of that Transaction.

(ii) Assessment and Understanding. It is capable of assessing the merits of and understanding
(on its own behalf or through independent professional advice), and understands and accepts, the
terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes,
the risks of that Transaction.

(iii) Status of Parties. The other party is not acting as a fiduciary for or an adviser to it
in respect of that Transaction.”

(b) The additional representation shall be given by Morgan only:

“(i) Pari Passu. Its obligations under this Agreement rank equal and ratably with all of its
other unsecured, unsubordinated obligations except those obligations preferred by operation
of law.”

	(h)	 	Amendment to Section 9(b) of the Agreement. Section 9(b) of the Agreement is amended by
adding the following sentence immediately following the end of the first sentence thereof:

“In addition, no amendment modification or waiver in respect of this

W-7

 

Agreement will be effective unless the Rating Agency Condition is
satisfied.”

	(i)	 	Set-off. Notwithstanding any provision of this Agreement or any other existing or future
agreement, but subject to Section 2(c), Section 6 and Part 6(3)(viii) of this Schedule a, each
party irrevocably waives any and all rights it may have to set off, net, recoup or otherwise
withhold or suspend or condition payment or performance of any obligation between it and the
other party hereunder against any obligation between it and the other party under any other
agreements. The provisions for Set-off set forth in Section 6(e) of the Agreement shall not
apply to this Agreement.

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

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

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

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

	(15)	 	Supplemental Interest Trust Trustee Capacity. It is expressly understood and agreed by the
parties hereto that (i) this Agreement is executed and delivered by The Bank of New York Trust
Company, N.A. not individually or personally but solely as Supplemental Interest Trust Trustee
of the supplemental interest trust created under the Pooling Agreement (the “Supplemental
Interest Trust”) in the exercise of the powers and authority conferred and vested in it under
the terms of the Pooling Agreement, (ii) each of the representations, undertakings and
agreements herein made on the part of the Counterparty is made and intended not as personal
representations, undertakings and agreements by The Bank of New York Trust Company, N.A. but
is made and intended for the purpose of binding only the Supplemental Interest Trust, (iii)
nothing herein contained shall be construed as creating any liability on the part of The Bank
of New York Trust Company, N.A., individually or personally, to perform any covenant, either
expressed or implied, contained herein, all such liability, if any, being expressly waived by
the parties hereto and by any Person claiming by, through or under the parties hereto, and
(iv) under no circumstances shall The Bank of New York Trust Company, N.A. be personally
liable for the payment of any indebtedness or expenses of the Counterparty or be liable for
the breach or failure of any

W-8

 

	 	 	obligation, representation, warranty or covenant made or undertaken by the Counterparty
under this Agreement or any other related documents, as to all of which recourse shall be
had solely to the assets of the Supplemental Interest Trust in accordance with the terms of
the Pooling Agreement. The parties hereto acknowledge that The Bank of New York Trust
Company, N.A. as Supplemental Interest Trust Trustee has been directed to enter into this
Agreement pursuant to the Pooling Agreement.

Part 6

Downgrade Provisions; Transfer; Payments on Early Termination;

	(1)	 	Ratings Downgrade Provisions.

Following the occurrence of a Ratings Event I and/or a Ratings Event II, for as long as such
Ratings Event I or Ratings Event II is continuing, the parties shall comply with the following
provisions, as applicable.

     I. Ratings Event I:

     A. Actions upon Ratings Event 1: Not later than 30 calendar days after a Ratings Event I has
occurred and is continuing, Morgan shall, at its own expense:

(A) provide, or cause to be provided, an Eligible Guarantee to Counterparty in respect of all
Morgan’s present and future obligations under this Agreement;

or

(B) transfer Morgan’s rights and obligations under the Agreement and all Confirmations pursuant
to a Qualifying Novation;

or

(C) deliver Eligible Collateral to Counterparty in accordance with the terms of the Approved
Credit Support Document and, following such delivery, maintain Eligible Collateral as required
under the Approved Credit Support Document;

Morgan’s obligations under this Part 6(1)(I) shall cease, solely with respect to such
occurrence, if (A) there is no Ratings Event I or (B) Morgan has either provided an Eligible
Guarantee in respect of all Morgan’s present and future obligations under this Agreement or
transferred its rights and obligations pursuant to a Qualifying Novation in accordance with
the terms of this Schedule.

     B. Eligible Guarantee or Eligible Replacement below Ratings Event I Levels

     If a Qualifying Novation is made to an Eligible Replacement or an Eligible Guarantee is
provided and, immediately after the execution of such Qualifying Novation or Eligible Guarantee (as
applicable), there is a Ratings Event I, then (so long as such Ratings Event I is continuing) Part
6(1)(I.A.) above shall apply without regard to the 30 calendar day time period referred to therein.

     II. Ratings Event II

     A. Actions upon Ratings Event II

     If a Ratings Event II has occurred and is continuing, the following shall occur.

     Morgan shall, at its own expense, use commercially reasonable efforts to, as soon as
reasonably practicable:

W-9

 

(A) provide, or cause to be provided, an Eligible Guarantee to Counterparty in respect of all
Morgan’s present and future obligations under this Agreement;

or

(B) transfer Morgan’s rights and obligations under the Agreement and all Confirmations pursuant
to a Qualifying Novation.

     If, immediately prior to such Ratings Event II, Morgan is required to deliver and maintain
Eligible Collateral following a Ratings Event I, Morgan shall continue to maintain Eligible
Collateral under the Approved Credit Support Document.

If, immediately prior to such Ratings Event II, Morgan is not required to deliver and maintain
Eligible Collateral following a Ratings Event I, then Morgan shall post Eligible Collateral in
accordance with the terms of the Approved Credit Support Document until Morgan has provided an
Eligible Guarantee in respect of all Morgan’s present and future obligations under this
Agreement or transferred its rights and obligations pursuant to a Qualifying Novation in
accordance with terms of this Schedule. In addition, Morgan shall continue to use commercially
reasonable efforts to either transfer its rights and obligations pursuant to a Qualifying
Novation or to provide an Eligible Guarantee in accordance with terms of this Schedule.

     Morgan’s obligations under this Part 6(1) shall cease, solely with respect to such occurrence,
if (A) there is no Rating Events II or (B) Morgan has either provided an Eligible Guarantee in
respect of all Morgan’s present and future obligations under this Agreement or transferred its
rights and obligations pursuant to a Qualifying Novation, in either case in accordance with the
terms of this Schedule.

     B. Ratings Event II Event of Default/Additional Termination Event

     Failure by Morgan to comply with the requirement of this Part 6(1)II to use commercially
reasonable efforts to obtain an Eligible Guarantee in respect of all Morgan’s present and future
obligations under this Agreement or Qualifying Novation shall constitute an Event of Default with
respect to Morgan.

     If Morgan has not, within 10 Business Days of the occurrence of a Ratings Event II, obtained
an Eligible Guarantee in respect of all Morgan’s present and future obligations under this
Agreement or effected a Qualifying Novation, it shall constitute an Additional Termination Event in
respect of which Morgan is the sole Affected Party and all Transactions are Affected Transactions,
but only if:

     1. (a) one or more Eligible Replacements has made a Firm Offer (in response to
solicitation either by Morgan or the Counterparty) to be the transferee of a
transfer pursuant to a Qualifying Novation and/or (b) at least one entity has made
a Firm Offer to provide an Eligible Guarantee in respect of all Morgan’s present
and future obligations under this Agreement;

and

2. such Ratings Event II is continuing.

     Failure by Morgan to post or maintain Eligible Collateral in accordance with the Approved
Credit Support Document shall be an Event of Default under Section 5(a)(iii).

     III. Definitions

     As used herein:

     “Approved Credit Support Document” means the 1994 ISDA Credit Support Annex (ISDA Agreements
Subject to New York Law Only), as modified by the Paragraph 13 thereto, in the form annexed hereto.
An Approved Credit Support Document will be executed and delivered contemporaneously with this
Agreement.

W-10

 

     “Business Day” shall have the meaning given to this term in the Confirmation.

     “Eligible Guarantee” means an unconditional and irrevocable guarantee that is provided by a
guarantor as principal debtor rather than as surety and directly enforceable by the Counterparty
and that meets the following conditions:

	 	1.	 	either (A) a law firm has given a legal opinion confirming that none of
the guarantor’s payments to the Counterparty will be subject to withholding tax or
(B) such guarantee provides that, in the event that any of such guarantor’s
payments to the Counterparty are subject to withholding for tax, such guarantor is
required to pay such additional amount as is necessary to ensure that the net
amount actually received by the Counterparty will equal the full amount the
Counterparty would have received had no such withholding been required; and
	 
	 	2.	 	the guarantor must meet the Ratings Event I Required Ratings and/or
Ratings Event II Required Ratings in each case certified by such guarantor to
Counterparty, provided that if such guarantor does not meet the Ratings Event I
Required Ratings, such guarantee shall not be an Eligible Guarantee unless either
the guarantor or Morgan delivers Eligible Collateral in accordance with the
Approved Credit Support Document at the time such Eligible Guarantee is provided;
and
	 
	 	3.	 	the Rating Agency Condition has been met with respect to S&P.

     “Eligible Replacement” means (i) an entity that satisfies the Ratings Event I Required Ratings
and/or the Ratings Event II Required Ratings in each case certified by Party to Counterparty or
(ii) an entity whose present and future obligations owing to the Counterparty are guaranteed
pursuant to an Eligible Guarantee by a guarantor that satisfies the Ratings Event I Required
Ratings and/or Ratings Event II Required Ratings in each case certified by such guarantor to
Counterparty.

     “Firm Offer” means an offer which, when made, was capable of becoming legally binding upon
acceptance.

     “Fitch” means Fitch Ratings or any successor thereto.

     “Moody’s” means Moody’s Investors Service, Inc. or any successor thereto.

“Pooling Agreement” means the Pooling and Servicing Agreement, dated as of April 1, 2007,
among Chase Mortgage Finance Corporation, as Depositor, JPMorgan Chase Bank, N.A., as
Servicer, JPMorgan Chase Bank, N.A., as Custodian and The Bank of New York Trust Company,
N.A., as Paying Agent and Trustee;

     “Qualifying Novation” means a transfer of all rights and obligations of Morgan under all
Transactions that are the subject of this Agreement (which may include a transfer of this
Agreement) to an Eligible Replacement that is party to a Replacement Agreement with the
Counterparty that meets the following conditions:

	 	1.	 	if the Eligible Replacement does not meet the Ratings
Event I Required Ratings, such Eligible Replacement delivers Eligible
Collateral in accordance with the Approved Credit Support Document at the
time of such Qualifying Novation; and
	 
	 	2.	 	if the Replacement Agreement is this Agreement, prior
notice is given to S&P; and
	 
	 	3.	 	if the Replacement Agreement is not this Agreement, the
Rating Agency Condition is met with respect to S&P.

     “Rating Agencies” means S&P, Moody’s and Fitch.

W-11

 

     “Rating Agency Condition” means, with respect to any particular proposed act or omission to
act hereunder that the party acting or failing to act must consult with each of the Rating Agencies
(unless otherwise specified) then providing a rating of the Certificates and receive from each
Rating Agency a prior written confirmation that the proposed action or inaction would not cause a
downgrade or withdrawal of the then-current rating of the Certificates.

     “Ratings Event I” shall occur with respect to S&P, Moody’s or Fitch if no Relevant Entity has
the Ratings Event I Required Ratings as specified under paragraph (a) or (b) thereof, as
applicable.

     An entity will have “Ratings Event I Required Ratings” (a) with respect to Moody’s, (i) if
such entity is the subject of Moody’s Short-term Rating, such rating is “Prime-1” and its
long-term, unsecured and unsubordinated debt obligations are rated A2 or above by Moody’s and (ii)
if such entity is not the subject of a Moody’s Short-term Rating, its long-term, unsecured and
unsubordinated debt obligations are rated “A1” or above by Moody’s, (b) with respect to S&P, (i)
the S&P short-term senior unsecured debt rating of such entity is A-1 or above or (ii) if such
entity is not the subject of an S&P short-term rating, if its long-term senior unsecured debt
rating is A+ or above and (c) with respect to Fitch, if such entity has a short-term senior
unsecured rating of “F-1” or above or a long-term senior unsecured rating of “A” or above.

“Ratings Event II” shall occur with respect to S&P, Moody’s or Fitch if no Relevant Entity
has the Ratings Event II Required Ratings under paragraph (a) or (b) thereof, as applicable.

An entity will have “Ratings Event II Required Ratings” (a) with respect to Moody’s, (i) if
such entity is the subject of a Moody’s Short-term Rating, if such rating is “Prime-2” or
above and its long-term, unsecured and unsubordinated debt obligations are rated “A3” or
above by Moody’s and (ii) if such entity is not the subject a Moody’s Short-term Rating, if
its long-term, unsecured and unsubordinated debt obligations are rated “A3” by Moody’s, (b)
with respect to S&P, such entity’s long-term senior unsecured S&P debt rating is BBB- or
above and (c) with respect to Fitch, if such entity has a short-term senior unsecured rating
of “F-2” or above or a long-term senior unsecured rating of “BBB+” or above.

     “Relevant Entity” means Morgan or any guarantor under an Eligible Guarantee in respect of all
Morgan’s present and future obligations under this Agreement.

     “Replacement Agreement” means either (i) this Agreement, if this Agreement is transferred to
an Eligible Replacement in the course of a Qualifying Novation or (ii) an agreement on
substantially the same terms as this Agreement, including ratings triggers, credit support
documentation and other provisions of this Agreement.

     “S&P” means by Standard & Poor’s Ratings Service or any successor thereto.

     “Supplemental Interest Trust” shall have the meaning set forth in the Pooling Agreement.

(2) Amendment to Section 7 of the Agreement.

The following provisions shall be added to the end of Section 7:

A. Qualifying Novations

I. The Counterparty shall determine whether or not a transfer is a Qualifying
Novation which shall be deemed upon receipt of evidence that the Rating Agency
Condition has been met.

II. If an entity has made a Firm Offer (which remains capable of becoming legally
binding upon acceptance) to be the transferee of a Qualifying Novation, the
Counterparty shall at Morgan’s written request and cost execute any documentation
Morgan deems

W-12

 

necessary to effect such transfer and take such action as required pursuant to this
Agreement.

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

B. Other Transfers

Transfers other than Qualifying Novations or transfers under Section 7(a) of this Agreement
shall be effective only if Rating Agency Condition has been met.

	(3)	 	Termination Amounts
	 
	 	 	Notwithstanding Section 6 of this Agreement, so long as Morgan is (A) the Affected Party in
respect of a Termination Event or (B) the Defaulting Party in respect of any Event of
Default, paragraphs (i) to (viii) below shall apply:

(i) The Counterparty shall not designate as an Early Termination Date a date earlier than 10
Business Days after the notice designating such Early Termination Date becomes effective.

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

(iii) The definition of “Settlement Amount” shall be deleted in its entirety and replaced
with the following:

	 	 	 	“Settlement Amount” means, with respect to any Early Termination Date, an amount (as
determined by the Counterparty) equal to the Termination Currency Equivalent of the
amount (whether positive or negative) of any Market Quotation for the relevant
Terminated Transaction or group of Terminated Transactions that is accepted by the
Counterparty so as to become legally binding, provided that:

W-13

 

	 	(a)	 	If, on or before the day falling ten Local Business
Days after the day on which the Early Termination Date is designated or
such later day as Counterparty may specify in writing to Morgan, (but in
either case no later than the Early Termination Date) (such day, the
“Latest Settlement Amount Determination Date”), no Market Quotation for the
relevant Terminated Transaction or group of Terminated Transactions has
been accepted by Counterparty so as to become legally binding and one or
more Market Quotations have been made and remain capable of becoming
legally binding upon acceptance, the Settlement Amount shall equal the
Termination Currency Equivalent of the amount (whether positive or
negative) of the lowest of such Market Quotation; or
	 
	 	(b)	 	If on the Latest Settlement Amount Determination Date
no Market Quotation for the relevant Terminated Transaction or group of
Terminated Transactions is accepted by the Counterparty so as to become
legally binding and no Market Quotations have been made and remain capable
of becoming legally binding upon acceptance, the Settlement Amount shall
equal the Counterparty’s Loss (whether positive or negative and without
reference to any Unpaid Amounts) for the relevant Terminated Transaction or
group of Terminated Transactions.”

(iv) For the purpose of paragraph (4) of the definition of Market Quotation, the
Counterparty shall determine whether a Firm Offer is made in respect of a Replacement
Transaction with commercial terms substantially the same as those of this Agreement which
shall be deemed upon receipt of evidence that the Rating Agency Condition has been met (save
for the exclusion of provisions relating to Transactions that are not Terminated
Transactions).

(v) At any time on or before the Latest Settlement Amount Determination Day at which two or
more Market Quotations remain capable of becoming legally binding upon acceptance, the
Counterparty shall be entitled to accept only the lowest of such Market Quotations.

(vi) If the Counterparty requests Morgan in writing to obtain Market Quotations, Morgan
shall use its reasonable efforts to do so on or before the Latest Settlement Amount
Determination Day.

(vii) Morgan may also elect to obtain Market Quotations without a request from the
Counterparty.

(viii) If the Settlement Amount is a negative number, Section 6(e)(i)(3) of this Agreement
shall be deleted in its entirety and replaced with the following:

“Second Method and Market Quotation. If Second Method and Market Quotation apply,
(1) the Counterparty shall pay to Morgan an amount equal to the absolute value of
the Settlement Amount in respect of the Terminated Transactions, (2) the
Counterparty shall pay to Morgan the Termination Currency Equivalent of the Unpaid
Amounts owing to Morgan and (3) Morgan shall pay to the Counterparty the Termination
Currency Equivalent of the Unpaid Amounts owing to the Counterparty, provided that,
(i) the amounts payable under (2) and (3) shall be subject to netting in accordance
with Section 2(c) of this Agreement and (ii) notwithstanding any other provision of
this Agreement, any amount payable by Morgan under (3) shall not be netted-off
against any amount payable by the Counterparty under (1).”

W-14

 

Please confirm your agreement to the terms of the foregoing Schedule by signing below.

	 	 	 	 	 
	 	

JPMORGAN CHASE BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	The Bank of New York Trust Company, N.A., not in its individual capacity but solely as Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust with respect to ChaseFlex Trust
Series 2007-2

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

W-15

 

EXHIBIT W-1

FORM OF SWAP CONFIRMATION

Interest Rate Swap Transaction

The purpose of this letter agreement is to confirm the terms and conditions of the
Transaction entered into between:

JPMORGAN CHASE BANK, N.A.

(“JPMorgan”)

and

The Bank of New York, not in its individual capacity but solely as Supplemental Interest Trust
Trustee on behalf of the Supplemental Interest Trust with respect to ChaseFlex Trust Series 2007-2
(the “Counterparty”)

on the Trade Date and identified by the JPMorgan Deal Number specified below (the “Transaction”).
This letter agreement constitutes a “Confirmation” as referred to in the Master Agreement specified
below, and supersedes any previous confirmation or other writing with respect to the transaction
described below.

The definitions and provisions contained in the [ ] ISDA Definitions (the “Definitions”), as
published by the International Swaps and Derivatives Association, Inc. are incorporated into this
Confirmation. In the event of any inconsistency between those definitions and provisions and this
Confirmation, this Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated as
of April 30, 2007, as amended and supplemented from time to time (the “Agreement”), between
JPMORGAN CHASE BANK, N.A. (“JPMorgan”) and The Bank of New York, not in its individual capacity but
solely as Supplemental Interest Trust Trustee on behalf of the Supplemental Interest Trust with
respect to ChaseFlex Trust Series 2007-2 (the “Counterparty”). All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.

W-1-1

 

The terms of the particular Interest Rate Swap Transaction to which this
Confirmation relates are as follows:

	 	 	 
	A. TRANSACTION DETAILS
	 	 
	 
	 	 
	JPMorgan Deal Number(s):

	 	[ ]
	 
	 	 
	Notional Amount:

	 	Per attached schedule in Exhibit A
	 
	 	 
	Trade Date:

	 	April 17, 2007
	 
	 	 
	Effective Date:

	 	April 30, 2007
	 
	 	 
	Termination Date:

	 	July 25, 2017 subject to adjustment in accordance with
the Following Business Day Convention
	 
	 	 
	Fixed Amounts:
	 	 
	 
	 	 
	Fixed Rate Payer:

	 	Counterparty
	 
	 	 
	Fixed Rate Payer Period End Dates:

	 	The 25th of each month in
each year commencing with May 25, 2007
to and including the Termination Date,
subject to no adjustment
	 
	 	 
	Fixed Rate Payer Payment Dates:

	 	The Fixed Rate Payer Period End Date,
subject to adjustment in accordance
with the Following Business Day
Convention
	 
	 	 
	Fixed Rate:

	 	[ ] percent
	 
	 	 
	Fixed Rate Day Count Fraction:

	 	30/360
	 
	 	 
	Business Days:

	 	New York
	 
	 	 
	Floating Amounts:
	 	 
	 
	 	 
	Floating Rate Payer:

	 	JPMorgan

W-1-2

 

	 	 	 
	Floating Rate Payer Period End Dates:

	 	The 25th of each month in each year commencing
with May 25, 2007 to and including the Termination Date, subject to no adjustment
	 
	 	 
	Floating Rate for initial Calculation Period:

	 	[ ] percent
	 
	 	 
	Floating Rate Payer Payment Dates:

	 	[ ] Business days preceding each Floating Rate Payer Period End Date.
	 
	 	 
	Floating Rate Option:

	 	USD-LIBOR-BBA
	 
	 	 
	Designated Maturity:

	 	1 Month
	 
	 	 
	Spread:

	 	None
	 
	 	 
	Floating Rate Day Count Fraction:

	 	Actual/360
	 
	 	 
	Reset Dates:

	 	The first day of each Calculation Period.
	 
	 	 
	Compounding:

	 	Inapplicable
	 
	 	 
	Business Days:

	 	New York
	 
	 	 
	Calculation Agent:

	 	JPMorgan, unless otherwise stated in the Agreement.
	 
	 	 
	B. ACCOUNT DETAILS
	 	 
	Payments to JPMorgan in USD:

	 	JPMORGAN CHASE BANK NA
	 

	 	JPMORGAN CHASE BANK NA
	 

	 	BIC:
	 

	 	ABA:
	 

	 	AC No:
	 

	 	Ref: # ChaseFlex 2007-2
	 
	 	 
	Payments to Counterparty in USD:

	 	The Bank of New York
	 

	 	ABA:
	 

	 	Ref: CFLX 2007-2 swap
	 

	 	Attn:
	 
	 	 
	C. OFFICES
	 	 
	 
	 	 
	JPMorgan:

	 	NEW YORK
	 
	 	 
	Counterparty:

	 	NEW YORK
	 
	 	 
	D. RELATIONSHIP BETWEEN PARTIES
	 	 

W-1-3

 

Each party will be deemed to represent to the other party on the date on which it enters into a
Transaction that (absent a written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that Transaction):

(a) Non-Reliance. It is acting for its own account, and it has made its own independent decisions
to enter into that Transaction and as to whether that Transaction is appropriate or proper for it
based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is
not relying on any communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that Transaction. No communication (written or
oral) received from the other party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction. U.S. Bank National Association is acting not in its
individual capacity but solely as Swap Trustee and has been directed to enter into the transaction.

(b) Assessment and Understanding. It is capable of assessing the merits of and understanding (on
its own behalf or through independent professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is capable of assuming, and assumes the risks of that
Transaction.

(c) Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in
respect of that Transaction.

E. SUPPLEMENTAL INTEREST TRUST TRUSTEE CAPACITY

It is expressly understood and agreed by the parties hereto that insofar as this Confirmation is
executed by the Supplemental Interest Trust Trustee (i) this Confirmation is executed and delivered
by The Bank of New York Trust Company, N.A., not in its individual capacity but solely as
Supplemental Interest Trust Trustee under the Pooling and Servicing Agreement, dated as of April 1,
2007 (the “Pooling and Servicing Agreement”), among Chase Mortgage Finance Corporation, as
depositor, Chase Home Finance LLC, as seller, The Bank of New York Trust Company, N.A., as trustee,
JPMorgan Chase Bank National Association as servicer in the exercise of the powers and authority
conferred and vested in it thereunder, (ii) under no circumstances shall The Bank of New York Trust
Company, N.A. in its individual capacity be personally liable for the payment of any indebtedness
or expenses or be personally liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken under this Confirmation, and (iii) each of the
representations, undertakings and agreements herein made on behalf of the Counterparty is made and
intended not as personal representations, undertakings and agreements of the Counterparty.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a
copy of this Confirmation and returning it to us or by sending to us a letter, telex or facsimile
substantially similar to this letter, which letter, telex or facsimile sets forth the material
terms of the Transaction to which this Confirmation relates and indicates agreement to those terms.
When referring to this Confirmation, please indicate: JPMorgan Deal Number(s): [ ]

W-1-4

 

	 	 	 	 	 
	JPMorgan Chase Bank, N.A.	 	 
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

Accepted and confirmed as of the date first written:

The Bank of New York, not in its individual

capacity but solely as Supplemental Interest Trust

Trustee on behalf of the Supplemental Interest Trust

with respect to ChaseFlex Trust Series 2007-2

	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

	 	 	 	 	 
	Your reference number:
	 	 	 	 
	 

	 	 

	 	 

W-1-5

 

Exhibit A

SWAP NOTIONAL BALANCE SCHEDULE

	 	 	 	 	 	 	 
	Calculation 	 	Calculation Period	 	Scheduled Notional
	Period Start Date	 	End Date	 	Amount ($)
	April 30, 2007

	 	May 25, 2007
	 	 	297,605,000.00	 
	May 25, 2007

	 	June 25, 2007
	 	 	294,833,602.96	 
	June 25, 2007

	 	July 25, 2007
	 	 	291,788,316.00	 
	July 25, 2007

	 	August 25, 2007
	 	 	288,475,108.34	 
	August 25, 2007

	 	September 25, 2007
	 	 	284,900,235.13	 
	September 25, 2007

	 	October 25, 2007
	 	 	281,070,861.69	 
	October 25, 2007

	 	November 25, 2007
	 	 	276,995,309.67	 
	November 25, 2007

	 	December 25, 2007
	 	 	272,683,909.41	 
	December 25, 2007

	 	January 25, 2008
	 	 	268,149,906.12	 
	January 25, 2008

	 	February 25, 2008
	 	 	263,416,554.89	 
	February 25, 2008

	 	March 25, 2008
	 	 	258,565,000.19	 
	March 25, 2008

	 	April 25, 2008
	 	 	253,695,566.16	 
	April 25, 2008

	 	May 25, 2008
	 	 	248,885,607.61	 
	May 25, 2008

	 	June 25, 2008
	 	 	244,165,446.25	 
	June 25, 2008

	 	July 25, 2008
	 	 	239,533,412.50	 
	July 25, 2008

	 	August 25, 2008
	 	 	234,987,867.73	 
	August 25, 2008

	 	September 25, 2008
	 	 	230,527,203.70	 
	September 25, 2008

	 	October 25, 2008
	 	 	226,149,841.97	 
	October 25, 2008

	 	November 25, 2008
	 	 	221,854,233.39	 
	November 25, 2008

	 	December 25, 2008
	 	 	217,638,857.54	 
	December 25, 2008

	 	January 25, 2009
	 	 	213,502,222.18	 
	January 25, 2009

	 	February 25, 2009
	 	 	209,442,862.75	 
	February 25, 2009

	 	March 25, 2009
	 	 	205,459,341.84	 
	March 25, 2009

	 	April 25, 2009
	 	 	201,550,248.72	 
	April 25, 2009

	 	May 25, 2009
	 	 	197,714,198.82	 
	May 25, 2009

	 	June 25, 2009
	 	 	193,949,833.22	 
	June 25, 2009

	 	July 25, 2009
	 	 	190,255,818.26	 
	July 25, 2009

	 	August 25, 2009
	 	 	186,630,844.97	 
	August 25, 2009

	 	September 25, 2009
	 	 	183,073,628.68	 
	September 25, 2009

	 	October 25, 2009
	 	 	179,582,908.56	 
	October 25, 2009

	 	November 25, 2009
	 	 	176,157,447.16	 
	November 25, 2009

	 	December 25, 2009
	 	 	172,796,029.99	 
	December 25, 2009

	 	January 25, 2010
	 	 	169,497,465.09	 
	January 25, 2010

	 	February 25, 2010
	 	 	166,260,582.61	 
	February 25, 2010

	 	March 25, 2010
	 	 	163,084,234.42	 
	March 25, 2010

	 	April 25, 2010
	 	 	159,967,293.68	 
	April 25, 2010

	 	May 25, 2010
	 	 	156,908,654.48	 
	May 25, 2010

	 	June 25, 2010
	 	 	153,907,231.39	 
	June 25, 2010

	 	July 25, 2010
	 	 	150,961,959.18	 
	July 25, 2010

	 	August 25, 2010
	 	 	148,071,792.34	 
	August 25, 2010

	 	September 25, 2010
	 	 	145,273,578.62	 
	September 25, 2010

	 	October 25, 2010
	 	 	142,535,091.56	 
	October 25, 2010

	 	November 25, 2010
	 	 	139,847,855.05	 
	November 25, 2010

	 	December 25, 2010
	 	 	137,210,914.61	 
	December 25, 2010

	 	January 25, 2011
	 	 	134,623,333.46	 
	January 25, 2011

	 	February 25, 2011
	 	 	132,084,192.23	 
	February 25, 2011

	 	March 25, 2011
	 	 	129,592,588.59	 
	March 25, 2011

	 	April 25, 2011
	 	 	127,147,636.99	 

W-1-6

 

	 	 	 	 	 	 	 
	Calculation Period	 	Calculation Period	 	Scheduled Notional
	Start Date	 	End Date	 	Amount ($)
	April 25, 2011

	 	May 25, 2011
	 	 	124,748,468.31	 
	May 25, 2011

	 	June 25, 2011
	 	 	122,394,229.56	 
	June 25, 2011

	 	July 25, 2011
	 	 	120,084,083.60	 
	July 25, 2011

	 	August 25, 2011
	 	 	117,817,208.81	 
	August 25, 2011

	 	September 25, 2011
	 	 	115,592,798.85	 
	September 25, 2011

	 	October 25, 2011
	 	 	113,410,062.35	 
	October 25, 2011

	 	November 25, 2011
	 	 	111,268,222.63	 
	November 25, 2011

	 	December 25, 2011
	 	 	109,166,517.44	 
	December 25, 2011

	 	January 25, 2012
	 	 	107,104,198.67	 
	January 25, 2012

	 	February 25, 2012
	 	 	105,080,532.12	 
	February 25, 2012

	 	March 25, 2012
	 	 	103,094,797.24	 
	March 25, 2012

	 	April 25, 2012
	 	 	101,146,286.82	 
	April 25, 2012

	 	May 25, 2012
	 	 	99,234,306.84	 
	May 25, 2012

	 	June 25, 2012
	 	 	97,358,176.13	 
	June 25, 2012

	 	July 25, 2012
	 	 	95,517,226.20	 
	July 25, 2012

	 	August 25, 2012
	 	 	93,710,800.97	 
	August 25, 2012

	 	September 25, 2012
	 	 	91,933,158.90	 
	September 25, 2012

	 	October 25, 2012
	 	 	90,165,582.13	 
	October 25, 2012

	 	November 25, 2012
	 	 	88,431,164.61	 
	November 25, 2012

	 	December 25, 2012
	 	 	86,729,287.77	 
	December 25, 2012

	 	January 25, 2013
	 	 	85,059,344.55	 
	January 25, 2013

	 	February 25, 2013
	 	 	83,420,739.17	 
	February 25, 2013

	 	March 25, 2013
	 	 	81,812,886.93	 
	March 25, 2013

	 	April 25, 2013
	 	 	80,235,213.98	 
	April 25, 2013

	 	May 25, 2013
	 	 	78,687,157.14	 
	May 25, 2013

	 	June 25, 2013
	 	 	77,168,163.71	 
	June 25, 2013

	 	July 25, 2013
	 	 	75,677,691.24	 
	July 25, 2013

	 	August 25, 2013
	 	 	74,215,207.40	 
	August 25, 2013

	 	September 25, 2013
	 	 	72,780,189.72	 
	September 25, 2013

	 	October 25, 2013
	 	 	71,372,125.47	 
	October 25, 2013

	 	November 25, 2013
	 	 	69,990,511.43	 
	November 25, 2013

	 	December 25, 2013
	 	 	68,634,853.76	 
	December 25, 2013

	 	January 25, 2014
	 	 	67,304,667.77	 
	January 25, 2014

	 	February 25, 2014
	 	 	65,999,477.83	 
	February 25, 2014

	 	March 25, 2014
	 	 	64,718,817.11	 
	March 25, 2014

	 	April 25, 2014
	 	 	63,462,227.49	 
	April 25, 2014

	 	May 25, 2014
	 	 	62,229,259.35	 
	May 25, 2014

	 	June 25, 2014
	 	 	61,019,471.45	 
	June 25, 2014

	 	July 25, 2014
	 	 	59,832,430.75	 
	July 25, 2014

	 	August 25, 2014
	 	 	58,667,712.27	 
	August 25, 2014

	 	September 25, 2014
	 	 	57,524,898.92	 
	September 25, 2014

	 	October 25, 2014
	 	 	56,403,581.38	 
	October 25, 2014

	 	November 25, 2014
	 	 	55,303,357.95	 
	November 25, 2014

	 	December 25, 2014
	 	 	54,223,834.41	 
	December 25, 2014

	 	January 25, 2015
	 	 	53,164,623.84	 
	January 25, 2015

	 	February 25, 2015
	 	 	52,125,346.56	 
	February 25, 2015

	 	March 25, 2015
	 	 	51,105,629.94	 
	March 25, 2015

	 	April 25, 2015
	 	 	50,105,108.27	 

W-1-7

 

	 	 	 	 	 	 	 
	Calculation Period	 	Calculation Period	 	Scheduled Notional
	Start Date	 	End Date	 	Amount ($)
	April 25, 2015

	 	May 25, 2015
	 	 	49,123,422.68	 
	May 25, 2015

	 	June 25, 2015
	 	 	48,160,220.94	 
	June 25, 2015

	 	July 25, 2015
	 	 	47,215,157.40	 
	July 25, 2015

	 	August 25, 2015
	 	 	46,287,892.85	 
	August 25, 2015

	 	September 25, 2015
	 	 	45,378,094.37	 
	September 25, 2015

	 	October 25, 2015
	 	 	44,485,435.26	 
	October 25, 2015

	 	November 25, 2015
	 	 	43,609,594.89	 
	November 25, 2015

	 	December 25, 2015
	 	 	42,750,258.60	 
	December 25, 2015

	 	January 25, 2016
	 	 	41,907,117.60	 
	January 25, 2016

	 	February 25, 2016
	 	 	41,079,868.83	 
	February 25, 2016

	 	March 25, 2016
	 	 	40,268,214.90	 
	March 25, 2016

	 	April 25, 2016
	 	 	39,471,863.93	 
	April 25, 2016

	 	May 25, 2016
	 	 	38,690,529.50	 
	May 25, 2016

	 	June 25, 2016
	 	 	37,923,890.83	 
	June 25, 2016

	 	July 25, 2016
	 	 	37,171,713.02	 
	July 25, 2016

	 	August 25, 2016
	 	 	36,433,725.32	 
	August 25, 2016

	 	September 25, 2016
	 	 	35,709,662.02	 
	September 25, 2016

	 	October 25, 2016
	 	 	34,999,262.36	 
	October 25, 2016

	 	November 25, 2016
	 	 	34,302,228.45	 
	November 25, 2016

	 	December 25, 2016
	 	 	33,618,259.50	 
	December 25, 2016

	 	January 25, 2017
	 	 	32,946,624.61	 
	January 25, 2017

	 	February 25, 2017
	 	 	32,286,535.23	 
	February 25, 2017

	 	March 25, 2017
	 	 	31,630,657.60	 
	March 25, 2017

	 	April 25, 2017
	 	 	30,974,377.13	 
	April 25, 2017

	 	May 25, 2017
	 	 	30,318,503.78	 
	May 25, 2017

	 	June 25, 2017
	 	 	29,670,160.37	 
	June 25, 2017

	 	July 25, 2017
	 	 	29,034,559.81	 
	July 25, 2017

	 	August 25, 2017
	 	 	0.00	 

W-1-8

 

EXHIBIT W-2

FORM OF SWAP CREDIT SUPPORT ANNEX

ANNEX A

PARAGRAPH 13 TO

CREDIT SUPPORT ANNEX

to the Schedule to the

Master Agreement

dated as of April 26, 2007

between

	 	 	 	 	 
	JPMorgan Chase Bank, N.A.
	 	and
	 	The Bank of New York Trust Company,
	(“Morgan”)
	 	 	 	N.A., not in its individual capacity but
	 
	 	 	 	solely as Supplemental Interest Trust
	 
	 	 	 	Trustee on behalf of the Supplemental
	 
	 	 	 	Interest Trust with respect to ChaseFlex
	 
	 	 	 	Trust Series 2007-2
	 
	 	 	 	(“Counterparty”)

Paragraph 13. Elections and Variables

(a) Security Interest for “Obligations”. The term “Obligations” as used in this Annex includes no
additional obligations with respect to either party.

(b) Credit Support Obligations.

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

     (A) “Delivery Amount” has the meaning specified in Paragraph 3(a), except that the words
“upon a demand made by the Transferee on or promptly following a Valuation Date” shall be
deleted and replaced by the words “on each Valuation Date”.

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

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

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

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

(iv) Thresholds.

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

W-2-1

 

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

     “Threshold” means with respect to Counterparty: infinity.

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

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

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

(c) Valuation and Timing.

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

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

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

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

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

	(d)	 	Conditions Precedent. Not applicable.

	(e)	 	Substitution.

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

W-2-2

 

     (ii) Consent. Inapplicable.

	(f)	 	Dispute Resolution.

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

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

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

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

	(g)	 	Holding and Using Posted Collateral.

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

     (1) Counterparty is not a Defaulting Party; and

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

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

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

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

          Initially, the Custodian for Counterparty is: None

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

	(h)	 	Distributions and Interest Amount.

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

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

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

W-2-3

 

	(i)	 	Additional Representation(s). Not Applicable.

	(j)	 	Other Eligible Support and Other Posted Support.

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

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

	(k)	 	Demands and Notices.

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

          Counterparty:

The Bank of New York Trust Company, N.A.

601 Travis, 16th Floor

Houston, Texas 77002

Telephone: (512) 479-2635

Facsimile: [       ]

Morgan:

JPMorgan Chase Bank, N.A.

Attention: Legal Department-Derivatives Practice Group

270 Park Avenue, 41st Floor

New York, New York 10017-2070

Telex No.: 232337; Answerback: CBC UR

	(l)	 	Addresses for Transfers.

Counterparty: as set forth in notices to Morgan from time to time

Morgan:

JPMorgan Chase Bank, N.A.

Attention: Legal Department-Derivatives Practice Group

270 Park Avenue, 41st Floor

New York, New York 10017-2070

Telex No.: 232337; Answerback: CBC UR

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

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

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

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

W-2-4

 

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

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

Paragraph 9. Representations. The Pledgor represents to the Secured Party (which
representations will be deemed to be repeated as of each date on which it Transfers Eligible
Collateral) that:

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

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

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

“Pledgor” means Morgan

“Secured Party” means Counterparty

	(n)	 	Independent Amounts

(i) Addition to Paragraph 12: The “S&P Independent Amount” means, for any Valuation
Date, (i) if a Ratings Event I with respect to S&P has not occurred, zero, or (ii) otherwise,
the sum of (x) the Exposure and (y) the sum of the Volatility Buffers determined by the
Valuation Agent with respect to each Transaction subject to the Agreement.

“Volatility Buffer” means, with respect to a Transaction, an amount
equal to the product of (a) the Factor applicable to the Transaction
and (b) the Notional Amount of the Transaction.

“Factor” means, with respect to a Transaction, a percentage
dependent on Morgan’s Counterparty Rating by S&P, and the original
maturity of the Transaction and determined by the Valuation Agent by
reference to the following table:

	 	 	 	 	 	 	 
	S&P Counterparty	 	Maturities up to 5	 	Maturities up to 10	 	Maturities up to 30
	Rating	 	years (%)	 	years (%)	 	years (%)
	A-2
	 	3.25	 	4.00	 	4.75
	A-3
	 	4.00	 	5.00	 	6.25
	BB+ or lower
	 	4.50	 	6.75	 	7.50

(ii) Addition to Paragraph 12: The “Moody’s Independent Amount” means,

W-2-5

 

(i) for so long as the no Ratings Event I has occurred and is continuing,
zero;

(ii) If a Ratings Event I with respect to Moody’s has been continuing for at
least 30 Business Days and either:

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

(b) a Ratings Downgrade Event II with respect to Moody’s has been
continuing for less than 30 Business Days, the Ratings Event I
Collateral Amount specified in Appendix B hereto; and

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

     (o) Other Provisions

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

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

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

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

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

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

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

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

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

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

W-2-6

 

Accepted and Agreed:

JPMORGAN CHASE BANK, N. A.

By:                                                            

Name:

Title:

The Bank of New York Trust Company, N.A., not in its individual capacity but solely as Supplemental
Interest Trust Trustee on behalf of the Supplemental Interest Trust with respect to ChaseFlex Trust
Series 2007-2

By:                                                            

Name:

Title:

W-2-7

 

Appendix A

Valuation Percentages

Applicable if the rated Certificates issued by the Counterparty are U.S.$ Denominated

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	MOODY’S	 	 
	 	 	MOODY'S RATINGS	 	RATINGS EVENT	 	 
	INSTRUMENT	 	EVENT I	 	II	 	S&P
	U.S. Dollar Cash

	 	 	100	%	 	 	100	%	 	 	100	 
	EURO Cash

	 	 	97	%	 	 	93	%	 	 	89.8	 
	Sterling Cash

	 	 	97	%	 	 	94	%	 	 	91.9	 
	Fixed Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department with Remaining Maturity

	<1 year

	 	 	100	%	 	 	100	%	 	 	98.6	 
	1 to 2 years

	 	 	100	%	 	 	99	%	 	 	97.3	 
	2 to 3 years

	 	 	100	%	 	 	98	%	 	 	95.8	 
	3 to 5 years

	 	 	100	%	 	 	97	%	 	 	93.8	 
	5 to 7 years

	 	 	100	%	 	 	95	%	 	 	91.4	 
	7 to 10 years

	 	 	100	%	 	 	94	%	 	 	90.3	 
	10 to 20 years

	 	 	100	%	 	 	89	%	 	 	87.9	 
	>20 years

	 	 	100	%	 	 	87	%	 	 	84.6	 
	Floating Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department

	All Maturities

	 	 	100	%	 	 	99	%	 	 	N/A	 
	Fixed Rate U.S. Agency Debentures with Remaining Maturity

	<1 year

	 	 	100	%	 	 	99	%	 	 	98	 
	1 to 2 years

	 	 	100	%	 	 	98	%	 	 	96.8	 
	2 to 3 years

	 	 	100	%	 	 	97	%	 	 	96.3	 
	3 to 5 years

	 	 	100	%	 	 	96	%	 	 	94.5	 
	5 to 7 years

	 	 	100	%	 	 	94	%	 	 	90.3	 
	7 to 10 years

	 	 	100	%	 	 	93	%	 	 	86.9	 
	10 to 20 years

	 	 	100	%	 	 	88	%	 	 	82.6	 
	>20 years

	 	 	100	%	 	 	86	%	 	 	77.9	 
	Floating Rate U.S. Agency Debentures –

	All Maturities

	 	 	100	%	 	 	98	%	 	 	N/A	 
	Floating Rate Euro Zone Government Bonds Rated Aa3 or Above and AAA by S&P with Remaining Maturity

	<1 year

	 	 	97	%	 	 	93	%	 	 	98	 
	1 to 2 years

	 	 	97	%	 	 	92	%	 	 	96.3	 
	2 to 3 years

	 	 	97	%	 	 	91	%	 	 	95.8	 
	3 to 5 years

	 	 	97	%	 	 	89	%	 	 	89.3	 
	5 to 7 years

	 	 	97	%	 	 	87	%	 	 	85.7	 
	7 to 10 years

	 	 	97	%	 	 	86	%	 	 	80.7	 
	10 to 20 years

	 	 	97	%	 	 	82	%	 	 	72.5	 
	>20 years

	 	 	97	%	 	 	80	%	 	 	 	 
	Floating Rate Euro Zone Government Bonds Rated Aa3 or Above

	All Maturities

	 	 	97	%	 	 	92	%	 	 	 	 
	Fixed Rate United Kingdom Gilts with Remaining Maturity

	<1 year

	 	 	97	%	 	 	93	%	 	 	 	 
	1 to 2 years

	 	 	97	%	 	 	92	%	 	 	 	 
	2 to 3 years

	 	 	97	%	 	 	91	%	 	 	 	 

W-2-8

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	MOODY’S	 	 
	 	 	MOODY'S RATINGS	 	RATINGS EVENT	 	 
	INSTRUMENT	 	EVENT I	 	II	 	S&P
	3 to 5 years

	 	 	97	%	 	 	90	%	 	 	 	 
	5 to 7 years

	 	 	97	%	 	 	89	%	 	 	 	 
	7 to 10 years

	 	 	97	%	 	 	88	%	 	 	 	 
	10 to 20 years

	 	 	97	%	 	 	84	%	 	 	 	 
	>20 years

	 	 	97	%	 	 	82	%	 	 	 	 
	Floating Rate United Kingdom Gilts

	All Maturities

	 	 	97	%	 	 	93	%	 	 	 	 

For purposes of Appendix A:

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

W-2-9

 

Appendix B

Ratings Event I Collateral Amounts

The Ratings Event I Collateral Amount will be equal to the greater of (A) zero and (B) the sum
of (x) the Exposure and (y) the aggregate of the Additional Ratings Event I Collateral Amounts for
all Transactions.

“Additional Ratings Event I Collateral Amount” means, for each Transaction, the Notional Amount for
such Transaction multiplied by the applicable percentage as specified below.

Potential Increase of Mid-Market Valuation of Swaps, Caps, Floors &

Transaction Specific Hedges

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

W-2-10

 

Appendix C

Ratings Event II Collateral Amount

The Ratings Event II Collateral Amount will be equal to the greater of (A) zero, (B) the sum, for
all Transaction, of the next payment owed by Morgan under each Transaction or (C) the sum of (x)
the Exposure and (y) the aggregate of the Additional Ratings Event II Collateral Amounts for all
Transactions.

“Additional Ratings Event II Collateral Amount” means, for each Transaction, the Notional Amount
for such Transaction multiplied by the applicable percentage as specified below.

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

W-2-11

 

SCHEDULE X

	 	 	 
	Item on Form 8-K 	 	Party Responsible
	*Item 1.01- Entry into a Material Definitive
Agreement

	 	All parties
	*Item 1.02- Termination of a Material Definitive
Agreement

	 	All parties
	Item 1.03- Bankruptcy or Receivership

	 	Depositor
	Item 2.04- Triggering Events that Accelerate or
Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet
Arrangement

	 	Depositor
	*Item 3.03- Material Modification to Rights of
Security Holders

	 	Depositor, Servicer
	Item 5.03- Amendments of Articles of
Incorporation or Bylaws; Change of Fiscal Year

	 	Depositor
	Item 6.01- ABS Informational and Computational
Material

	 	Depositor
	*Item 6.02- Change of Servicer or Trustee

	 	Servicer, Trustee (as
to change of Trustee
only), Paying Agent (as
to change of Paying
Agent only)
	 
	 	 
	*Item 6.03- Change in Credit Enhancement or
External Support

	 	Depositor
	*Item 6.04- Failure to Make a Required
Distribution

	 	Paying Agent
	Item 6.05- Securities Act Updating Disclosure

	 	Depositor
	Item 7.01- Reg FD Disclosure

	 	Depositor
	Item 8.01

	 	Depositor
	Item 9.01

	 	Depositor

  X-1

 

 

SCHEDULE Y

	 	 	 
	Item on Form 10-D	 	Party Responsible
	Item 1: Distribution and Pool Performance
Information

	 	Paying Agent through the
Item 602 statement based on information provided to it by the Servicer
	Plus any information required by Item 1121 which
is NOT included on the monthly statement to
Certificateholders

	 	Servicer
	Item 2: Legal Proceedings per Item 1117 of Reg AB

	 	All parties to the PSA
(as to themselves), the
depositor/trustee/paying
agent/servicer (to the
extent known) as to the
issuing entity, the
depositor/servicer as to
the sponsor, 1106(b)
originator and any
1100(d)(1) party
	 
	 	 
	Item 3: Sale of Securities and Use of Proceeds

	 	Depositor
	Item 4: Defaults Upon Senior Securities

	 	Servicer, Paying Agent
(except as to 9.01(b) or
(d)) and Trustee (to the
extent of knowledge
thereof)
	 
	 	 
	Item 5: Submission of Matters to a Vote of
Security Holders

	 	Depositor, Paying Agent
(to the extent it is
submitting a matter to
vote) and the Trustee
(to the extent it is
submitting a matter to
vote)
	 
	 	 
	Item 6: Significant Obligors of Pool Assets

	 	Depositor/Sponsor/Mortgag

e Loan Seller/ Servicer
	 
	 	 
	Item 7: Significant Enhancement Provider
Information

	 	Depositor/Sponsor
	Item 8: Other Information

	 	Servicer, Paying Agent
and any other party
responsible for
disclosure items on Form
10-D
	 
	 	 
	Item 9: Exhibits

	 	Servicer

  Y-1

 

 

SCHEDULE Z

	 	 	 
	Item on Form 10-K 	 	Party Responsible
	Item 1B: Unresolved Staff Comments

	 	Depositor
	 
	 	 
	*Item 9B: Other Information

	 	Servicer, Paying Agent and any
other party responsible for
disclosure items on Form 8-K
	 
	 	 
	*Item 15: Exhibits, Financial
Statement Schedules

	 	Servicer/subservicers/Depositor
	*Additional Item:
Disclosure per Item 1117 of Reg AB

	 	All parties to the PSA (as to
themselves), the
Depositor/Trustee/Paying
Agent/Servicer (to the extent
known) as to the issuing entity,
the depositor/servicer as to the
sponsor, 1106(b) originator, any
1100(d)(1) party
	 
	 	 
	*Additional Item:
Disclosure per Item 1119 of Reg AB

	 	All parties to the PSA, the
sponsor, originator, significant
obligor, enhancement or support
provider
	 
	 	 
	Additional Item:
Disclosure per Item 1112(b) of Reg AB

	 	Depositor/Sponsor/Mortgage Loan

Seller/Servicer
	Additional Item:
	 	 
	Disclosure per Items 1114(b) and
1115(b) of Reg AB

	 	Depositor/Sponsor

  Z-1

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