Document:

Unassociated Document

    

    Execution
      Version

    

    

    

    

    

    
      

    

    
      

    

    

     

    Stock
      Purchase Agreement

    
 

     

    between

     

    

     

    Hanover
      Capital Mortgage Holdings, Inc.

     

    

     

    and

     

    

     

    RCG
      PB, Ltd.

     

    

     

    August
      10, 2007

     

    

     

    

     

    
      

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Stock
      Purchase Agreement

     

    This
      Stock Purchase Agreement
      (“Agreement”)
      is
      dated August 10, 2007 by and between Hanover Capital Mortgage Holdings, Inc.,
      a
      corporation incorporated under the laws of the State of Maryland (the
“Company”),
      and
      RCG PB, Ltd, a Cayman exempt company (the “Investor”).

     

    Background

     

    On
      the
      date hereof, the parties hereto entered into a repurchase agreement regarding
      mortgage-backed securities of the Company (the “Repurchase
      Agreement”).
      In
      consideration of Investor’s execution and performance of its respective
      obligations under the Repurchase Agreement and as a material inducement to
      the
      Investor entering into the Repurchase Agreement, the Company agrees, pursuant
      to
      the terms and conditions herein, to issue to Investor 600,000 shares of common
      stock, par value $0.01 per share, of the Company (“Common
      Stock”),
      and
      to register such shares for resale under the Securities Act (as defined
      below).

     

    Terms

     

    Now,
      Therefore,
      in
      consideration of the mutual covenants and promises set forth herein, the parties
      hereto, intending to be legally bound, agree as follows:

     

    1. Definitions.
      Unless
      the context otherwise requires, the following terms shall have the following
      meanings for purposes of this Agreement:

     

    (a) “Additional
      Share Listing Application”
shall
      mean any Additional Listing Application or similar document required by the
      American Stock Exchange relating to the Shares or the transactions contemplated
      by this Agreement.

     

    (b) “Affiliate”
of
      any
      specified person means any other person that, directly or indirectly, is in
      control of, is controlled by, or is under common control with, such specified
      person. For purposes of this definition, control of a person means the power,
      direct or indirect, to direct or cause the direction of the management and
      policies of such person whether by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the
      foregoing.

     

    (c) “Commission”
means
      the Securities and Exchange Commission.

     

    (d) “Entity”
shall
      mean a corporation, limited liability company, partnership, joint venture,
      association, trust, or any other entity or organization.

     

    (e) “Equity”
shall
      mean shares of capital stock of the Company and any option, warrant, convertible
      security/debt or other right to acquire shares of capital stock of the
      Company.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (f) “Exchange
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended, or any similar federal
      statute enacted hereafter, and the rules and regulations of the Commission
      thereunder, all as the same shall be in effect from time to time.

     

    (g) “Managing
      Underwriter”
means
      the investment banker or investment bankers and manager or managers that
      administer an underwritten offering, if any, conducted pursuant to Section
      5(f)
      hereof.

     

    (h) “Material
      Adverse Effect”
shall
      mean any event or effect which has or reasonably is expected to have,
      individually or in the aggregate, a material adverse effect on
      the
      business, assets, liabilities, properties, affairs, results of operations or
      condition (financial or otherwise) of the Company.

     

    (i) “NASD”
means
      The National Association of Securities Dealers, Inc.

     

    (j) “Person”
and
      “person”
shall
      include any natural person, Entity or any governmental or regulatory authority
      whatsoever.

     

    (k) “Prospectus”
means
      the prospectus included in a Shelf Registration Statement, as amended or
      supplemented by any prospectus supplement and by all other amendments thereto,
      including post-effective amendments, and all material incorporated by reference
      into such prospectus.

     

    (l) “Securities
      Act”
shall
      mean the Securities Act of 1933, as amended, or any similar federal statute
      enacted hereafter, and the rules and regulations of the Commission thereunder
      all as the same shall be in effect from time to time.

     

    (m) “Shares”
shall
      have the meaning given thereto in Section 2.

     

    (n) “Transfer”
shall
      mean to sell, or in any other way directly or indirectly, to transfer, assign,
      distribute, encumber, pledge, hypothecate or otherwise dispose of, either
      voluntarily or involuntarily (or a sale, or any other direct or indirect
      transfer, assignment, distribution, encumbrance or other voluntary or
      involuntary disposition), as the case may be.

     

    (o) “Transfer
      Restricted Securities”
means
      each Share of Common Stock issued to Investor pursuant to this Agreement until
      the earliest of:

     

    (i) the
      date
      on which such Share of Common Stock has been effectively registered under the
      Securities Act and disposed of in accordance with the Shelf Registration
      Statement;

     

    (ii) the
      date
      on which such Share of Common Stock is transferred in compliance with Rule
      144
      under the Securities Act or may be sold or transferred by the Investor pursuant
      to Rule 144 under the Securities Act (or any other similar provision then in
      force) without any volume or manner of sale restrictions thereunder;
      or

     

    (iii) the
      date
      on which such Share of Common Stock ceases to be outstanding (whether as a
      result of redemption, repurchase and cancellation, conversion or
      otherwise).

     

    
      
        
        

      

      
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    2. Sale
      and Purchase of Stock.
      Pursuant
      to the terms and conditions set forth herein, and in consideration for entering
      into, and performing its obligations under, the Repurchase Agreement, and upon
      the earlier of (i) the approval of the American Stock Exchange of the Additional
      Share Listing Application relating thereto and (ii) such time as the Common
      Stock of the Company is no longer listed on the American Stock Exchange, the
      Company shall sell to the Investor and the Investor shall purchase from the
      Company
      Six
      Hundred Thousand (600,000) shares of the Company’s common stock, par value $.01
      per share (collectively, the “Shares”).
      The
      Company shall deliver to the Investor one stock certificate, registered in
      its
      name, for the Shares purchased pursuant to the instructions and direction of
      the
      Investor. The Company hereby agrees to utilize its reasonable best efforts
      to
      have the Additional Share Listing Application approved by the American Stock
      Exchange. The issuance and delivery of the Shares shall
      be
      made on the earliest practicable date after the Company has received
      unconditional approval of the Additional Share Listing Application
      or upon
      such delisting; provided, however, if the Additional Share Listing Application
      has not been approved prior to the thirtieth (30th)
      day
      after the date hereof (with an automatic extension of thirty (30) days if the
      Company is in good faith pursuing an appeal with the American Stock Exchange
      to
      approve the Additional Listing Application) or the Company has not otherwise
      provided the Shares to the Investor, the Company acknowledges that it shall
      be
      in default of this Agreement, which such default shall
      also constitute an Event of Default under the Repurchase Agreement (as defined
      therein).

     

    3. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to the Investor as follows: 

     

    (a) Organization.
      The
      Company is a corporation duly incorporated, existing and in good standing under
      the laws of the State of Maryland and has all requisite corporate power and
      authority to own and lease its properties, to carry on its business as presently
      conducted and to carry out the transactions contemplated hereby. The Company
      is
      qualified as a foreign corporation in good standing all such jurisdictions,
      if
      any, in which the conduct of its business as presently conducted or its present
      ownership, leasing or operation of property requires such qualification, except
      where the failure to qualify so would not, individually or in the aggregate,
      have a Material Adverse Effect. The Company is not currently in breach of any
      provision of its Articles of Incorporation and By-laws.
      

     

    (b) Authorization
      of the Company.
      The
      execution, delivery and performance by the Company of this Agreement has been
      duly authorized by all requisite corporate action by the Company; and this
      Agreement has been duly executed and delivered by the Company and constitutes
      its valid and binding obligation, enforceable in accordance with its terms,
      except as may be limited by bankruptcy, insolvency, moratorium or similar laws
      affecting the enforcement of creditors’ rights generally. The execution,
      delivery and performance by the Company of this Agreement, the issuance, sale
      and delivery of the Shares and the consummation of the transactions contemplated
      by this Agreement by the Company will not (i) violate any provision of law,
      statute, rule or regulation, or any ruling, writ, injunction, order, judgment
      or
      decree of any court, administrative agency or other governmental body applicable
      to the Company or its properties or assets, except for such violations which
      are
      not reasonably likely to have a Material Adverse Effect, (ii) conflict with
      or
      result in any breach (with or without the giving of notice or passage of time)
      of any of the terms, conditions or provisions of, or constitute a default,
      or
      result in the creation of any material lien, security interest, charge or
      encumbrance upon any of the properties or assets of the Company under any note,
      indenture, mortgage, lease agreement or other material contract, agreement
      or
      instrument to which the Company is a party or by which it or any of its property
      is bound or affected (except for such conflicts or breaches as to which
      requisite waivers and consents have been obtained and except for such conflicts
      or breaches which are not reasonably likely, individually or in the aggregate,
      to have a Material Adverse Effect), or (iii) conflict with the Articles of
      Incorporation or By-laws of the Company (in each case as amended to the date
      hereof). No authorization, approval, consent or order of any court or
      governmental authority or agency is necessary in connection with the issuance
      of
      the Shares hereunder, except as may be required under Blue Sky laws or except
      for such as have been obtained. The Shares have duly authorized and upon the
      issuance, sale and delivery of the Shares, the Shares will be validly issued
      and
      outstanding, fully paid and nonassessable, not subject to preemptive or any
      other rights of the stockholders of the Company, or others and free and clear
      of
      any and all liens and encumbrances. 

     

    
      
        
        

      

      
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    (c) Capitalization.
      The
      authorized capital stock of the Company immediately prior to the consummation
      of
      the purchase of the Shares at the Closing consists of 90,000,000 shares
of
      common
      stock, of which 8,063,962 shares are validly issued and outstanding and are
      fully paid and nonassessable,
      and
      10,000,000 shares of preferred stock, none of which are issued or outstanding.
      In addition, 193,600 shares of Common Stock have been reserved for issuance
      upon
      exercise of all options and any other securities convertible into shares of
      Common Stock and pursuant to any other contractual obligation, and such Shares
      constitute approximately 7.27% of the total shares of Common Stock of the
      Company on a fully diluted basis after the issuance of the Shares hereunder.
      Except as set forth in the SEC Reports, (i) there is no existing option,
      warrant, call, commitment or other agreement to which the Company is a party
      requiring, and there are no convertible securities of the Company outstanding
      which upon conversion would require, the issuance of any additional Equity
      of
      the Company, and (ii) there are no agreements to which the Company is a party
      with any of the holders of Equity of the Company with respect to the
      registration rights, voting or Transfer of the Equity of the Company, or to
      the
      Company’s knowledge, among or between any Person other than the Company, other
      than as provided herein. Except as set forth in the SEC Reports (as defined
      below) and as may have been provided to the Investor herein, there are no
      preemptive or similar rights to purchase or otherwise acquire Equity of the
      Company pursuant to any provision of law, the Articles of Incorporation or
      By-laws of the Company, in each case as amended to the date hereof, or any
      agreement to which the Company is a party or otherwise. 

     

    (d) SEC
      Reports.
      The
      Company has filed all reports, schedules, forms, statements and other documents
      required to be filed by the Company under the Securities Act and the Exchange
      Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years
      preceding the date hereof (or such shorter period as the Company was required
      by
      law or regulation to file such material) (the foregoing materials, including
      the
      exhibits thereto and documents incorporated by reference therein, being
      collectively referred to herein as the “SEC
      Reports”)
      on a
      timely basis or has received a valid extension of such time of filing and has
      filed any such SEC Reports prior to the expiration of any such extension. As
      of
      their respective dates, the SEC Reports complied in all material respects with
      the requirements of the Securities Act and the Exchange Act, as applicable,
      and
      none of the SEC Reports, when filed, contained any untrue statement of a
      material fact or omitted to state a material fact required to be stated therein
      or necessary in order to make the statements therein, in the light of the
      circumstances under which they were made, not misleading.

     

     

    
      
        
        

      

      
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      (e) Financial
        Statements.
        Except
        as noted therein, the consolidated financial statements (including the related
        notes thereto) for the year ended December 31, 2006 and the three month period
        ended March 31, 2007 contained in the SEC Reports present fairly, in all
        material respects, the consolidated financial condition of the Company and
        its
        consolidated subsidiaries as of the dates indicated and the results of their
        operations and changes in their consolidated cash flows for the periods
        specified; such financial statements have been prepared in conformity with
        accounting principles generally accepted in the United States applied on
        a
        consistent basis.

    

     

    (f) 1940
      Act.
      The
      Company is not (A) an “investment company,” or a company “controlled by an
      investment company,” within the meaning of the Investment Company Act of 1940,
      as amended, or (B) a “holding company,” or a “subsidiary company of a holding
      company,” or an “affiliate” of either a “holding company” or a “subsidiary
      company of a holding company,” as such terms are defined in the Public Utility
      Holding Company Act of 1935, as amended.

     

    (g) REIT.
      The
      Company is organized and operates in conformity with the requirements for
      qualification as a real estate investment trust under the Internal Revenue
      Code
      of 1986, as amended (the “Code”), and the Company’s current and proposed method
      of operation, as described in the SEC Reports, will enable the Company to meet
      the requirements for taxation as a real estate investment trust under the
      Code.

     

    (h) Proceedings.
      Other
      than as set forth in the SEC Reports, there are no legal or governmental
      proceedings pending to which the Company or any of its consolidated subsidiaries
      is a party or to which any property of the Company or any of its consolidated
      subsidiaries is subject, which could reasonably be expected, individually or
      in
      the aggregate, to have a Material Adverse Effect, and, to the knowledge of
      the
      Company, no such proceedings are threatened or contemplated by governmental
      authorities or threatened by others.

     

    (i) Offering
      Exemption.
      Subject
      in part to and in reliance in part upon the accuracy of the representations
      and
      warranties of the Investor set forth in Section 4 hereof, the offering and
      sale
      of the Shares are exempt from registration under the Securities Act; and the
      aforesaid offering and sale is and will be exempt from registration under
      applicable state securities and “Blue Sky” laws. The Company has made or will
      make all requisite filings and has taken or will take all action necessary
      to be
      taken to comply with such state securities or blue sky laws. 

     

    (j) Registration
      Rights.
      Except
      as set forth in Section 5 below, the Investor has no right to cause the Company
      to effect the registration under the Securities Act of any shares of common
      stock or any other securities (including debt securities) of the
      Company. 

    
      
        
        

      

      
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      4. Representations,
        Warranties and Covenants of the Investor.
        The
        Investor represents and warrants or covenants (as the case may be) to the
        Company as follows:

       

      (a) The
        execution, delivery and performance of this Agreement will not violate any
        provision of law, any order of any court or other agency of government, or
        any
        provision of any material indenture, agreement or other instrument to which
        the
        Investor or any of its properties or assets is bound.

       

      (b) This
        Agreement has been duly executed and delivered by the Investor and constitutes
        the legal, valid and binding obligation of the Investor, enforceable in
        accordance with its terms, except as may be limited by bankruptcy, insolvency,
        moratorium or similar laws affecting the enforcement of creditors’ rights
        generally.

       

    

    (c) The
      Investor represents and warrants to the Company that the Investor is acquiring
      the Shares for its own account, for investment and not with a view to the
      distribution thereof within the meaning of the Securities Act.

     

    (d) The
      Investor understands that the Shares are being issued and sold in transactions
      exempt from the registration or qualification requirements of the Securities
      Act
      and applicable state securities laws and have not been registered or qualified
      under the Securities Act or any state securities laws. The Investor acknowledges
      that reliance on said exemptions is predicated in part on the accuracy of its
      Investor’s representations and warranties herein. The Investor acknowledges and
      agrees that the Shares being
      acquired by it hereunder, must be held by the Investor purchasing the same
      indefinitely unless a subsequent disposition thereof is registered or qualified
      under the Securities Act and applicable state securities laws or is exempt
      from
      registration; and that the Company is not required so to register or qualify
      any
      such Shares, or to take any action to make such an exemption available except
      to
      the extent provided herein.

     

    (e) The
      Investor further understands that the exemption from registration afforded
      by
      Rule 144 (the provisions of which are known to the Investor) promulgated under
      the Securities Act depends on the satisfaction of various conditions relating
      to
      the Investor and the Company and that, if applicable, Rule 144 affords the
      basis
      for sales under certain circumstances only in limited amounts.

     

    (f) The
      Investor is an “accredited investor” (as that term is defined in Rule 501(a)
      under the Securities Act) and by reason of its business and financial
      experience, it has such knowledge, sophistication and experience in business
      and
      financial matters as to be capable of evaluating the merits and risks of the
      prospective investment, is able to bear the economic risk of such investment
      and, at the present time, is able to afford a complete loss of such
      investment.

     

    (g) The
      Investor has received and reviewed all of the information that it considers
      necessary or appropriate for deciding whether to purchase the Shares, including
      the SEC Reports. The Investor has had an opportunity to ask questions and to
      receive answers from the Company regarding the terms and conditions of the
      issuance of the Shares and the business properties and financial condition
      of
      the Company.

     

    (h) The
      Investor acknowledges that investment in the Company is speculative and involves
      a high degree of risk.

     

    
      
        
        

      

      
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      (i) The
        Investor acknowledges that neither the Commission nor any state securities
        commission has approved the Shares or confirmed the accuracy or determined
        the
        adequacy of the information concerning the Company provided to the
        Investor.

       

      (j) The
        Investor is unaware of, is in no way relying on, and did not become aware
        of the
        offering of the Shares through or as a result of, any form of general
        solicitation or general advertising including, without limitation, any article,
        notice, advertisement or other communication published in any newspaper,
        magazine or similar media or broadcast over television or radio, in connection
        with the offering and sale of the Shares and did not become aware of the
        offering of the Shares and is not purchasing the Shares through or as a result
        of any seminar or meeting to which the Investor was invited by, or any
        solicitation of a subscription by, a person not previously known to the Investor
        in connection with investments in securities generally.

       

    

    (k) The
      Investor is not relying on the Company or any of its respective employees or
      agents with respect to the legal, tax, economic and related considerations
      of an
      investment in the Shares, and the Investor has relied on the advice of, or
      has
      consulted with, only its own attorney, accountant, representative and/or tax
      advisor.

     

    (l) Any
      certificates representing the Shares will bear a legend substantially similar
      to
      the following:

     

    THIS
      SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
      OR
      THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY.

     

    5. Registration
      Rights.
      

     

    (a) Demand
      Registration.
      

     

    (i) The
      Company shall: 

     

    
      
        
        

      

      
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      (A) as
        promptly as practicable (but in no event more than 120 days after the date
        hereof) (the “Shelf
        Filing Deadline”),
        cause
        to be filed a registration statement pursuant to Rule 415 under the Securities
        Act or any similar rule that may be adopted by the Commission (the “Shelf
        Registration Statement”),
        which
        Shelf Registration Statement shall provide for the registration and resale,
        on a
        continuous or delayed basis, of all of the Transfer Restricted Shares;

       

      (B) use
        its
        reasonable best efforts to cause the Shelf Registration Statement to be declared
        effective under the Securities Act by the Commission as promptly as practicable
        (but in no event later than 180 days after the date hereof) (the “Effectiveness
        Target Date”);
        and

       

      (C) use
        its
        reasonable best efforts to keep the Shelf Registration Statement continuously
        effective, supplemented and amended as required by the Securities Act and
        by the
        provisions of Section 5(b)(ii) hereof to the extent necessary to ensure that
        it
        conforms with the requirements of this Agreement and the Securities Act and
        the
        rules and regulations of the Commission promulgated thereunder as announced
        from
        time to time, for a period (the “Effectiveness
        Period”)
        from
        the date the Shelf Registration Statement is declared effective by the
        Commission until the earlier of:

    

    (x)
      the
      date when Investor is able to sell all such Transfer Restricted Securities
      immediately without restriction pursuant to Rule 144(k) under the Securities
      Act; or

     

    (y)
      the
      date when (i) all of such Transfer Restricted Securities of Investor are
      registered under the Shelf Registration Statement and disposed of in accordance
      with the Shelf Registration Statement or pursuant to Rule 144(k) under the
      Securities Act or any similar rule that may be adopted by the Commission or
      (ii)
      the Transfer Restricted Securities cease to be outstanding.

     

    The
      Company shall be deemed not to have used its reasonable best efforts to keep
      the
      Shelf Registration Statement effective during the Effectiveness Period if it
      voluntarily takes any action that would result in Investor not being able to
      offer and sell such Transfer Restricted Securities at any time during the
      Effectiveness Period, unless such action is (x) required by applicable law,
      and
      (y) permitted by Section 5(b)(ii)(B) hereof.

     

    (ii) If
      the
      Shelf Registration Statement or any Subsequent Shelf Registration Statement
      (as
      defined below) ceases to be effective for any reason at any time during the
      Effectiveness Period (other than because all Transfer Restricted Securities
      registered thereunder shall have been resold pursuant thereto or shall have
      otherwise ceased to be Transfer Restricted Securities), the Company shall use
      its best efforts to obtain the prompt withdrawal of any order suspending the
      effectiveness thereof or file an additional Shelf Registration Statement
      covering all of the securities that as of the date of such filing are Transfer
      Restricted Securities (a “Subsequent
      Shelf Registration Statement”).
      If a
      Subsequent Shelf Registration Statement is filed, the Company shall use its
      best
      efforts to cause the Subsequent Shelf Registration Statement to become effective
      as promptly as is practicable after such filing and to keep such Shelf
      Registration Statement (or Subsequent Shelf Registration Statement) continuously
      effective until the end of the Effectiveness Period.

     

     

    
      
        
        

      

      
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      (iii) The
        Company shall supplement and amend the Shelf Registration Statement if required
        by the rules, regulations or instructions applicable to the registration
        form
        used by the Company for such Shelf Registration Statement, if required by
        the
        Securities Act.

       

      (iv) The
        Company shall cause the Shelf Registration Statement and the related Prospectus
        and any amendment or supplement thereto, as of the effective date of the
        Shelf
        Registration Statement or such amendment or supplement, (i) to comply in
        all
        material respects with the applicable requirements of the Securities Act,
        and
        (ii) not to contain any untrue statement of a material fact or omit to state
        a
        material fact required to be stated therein or necessary in order to make
        the
        statements therein (in the case of the Prospectus, in light of the circumstances
        under which they were made) not misleading.

    

     

    (v) Investor
      agrees it will only sell Transfer Restricted Securities pursuant to a Shelf
      Registration Statement or pursuant to an exemption from registration under
      the
      Securities Act. 

     

    (b) Registration
      Procedures.

     

    (i) In
      connection with the Shelf Registration Statement, the Company shall comply
      with
      all the provisions of Section 5(b)(ii) hereof and shall use its reasonable
      best
      efforts to effect such registration to permit the sale of the Transfer
      Restricted Securities, and pursuant thereto, shall as promptly as practicable
      prepare and file with the Commission a Shelf Registration Statement relating
      to
      the registration on any appropriate form under the Securities Act.

     

    (ii) In
      connection with the Shelf Registration Statement and any Prospectus required
      by
      this Agreement to permit the sale or resale of Transfer Restricted Securities,
      the Company shall:

     

    (A) subject
      to any notice by the Company in accordance with this Section 5(b)(ii) of the
      existence of any fact or event of the kind described in Section 5(b)(ii)(D)(4),
      use its reasonable best efforts to keep the Shelf Registration Statement
      continuously effective during the Effectiveness Period; upon the occurrence
      of
      any event that would cause the Shelf Registration Statement or the Prospectus
      contained therein (i) to contain a material misstatement or omission, or (ii)
      not to be effective and usable for resale of Transfer Restricted Securities
      during the Effectiveness Period, the Company shall file promptly an appropriate
      amendment to the Shelf Registration Statement, a supplement to the Prospectus
      or
      a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or
      15(d)
      of the Exchange Act, in the case of clause (i), correcting any such misstatement
      or omission, and, in the case of either clause (i) or (ii), if such amendment
      does not become automatically effective upon filing with the Commission, use
      its
      reasonable best efforts to cause such amendment to be declared effective and
      the
      Shelf Registration Statement and the related Prospectus to become usable for
      their intended purposes as soon as practicable thereafter;

     

    (B) notwithstanding
      Section 5(b)(ii)(A) hereof, the Company may suspend the effectiveness of the
      Shelf Registration Statement not more than two (2) times in any twelve (12)
      month period and in each case for as short a period as possible (but in no
      event
      shall any such period exceed 60 days) (each such period, a “Suspension
      Period”):

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    
       

      (1)
        if an
        event occurs and is continuing as a result of which the Shelf Registration
        Statement, the Prospectus, any amendment or supplement thereto, or any document
        incorporated by reference therein would, in the Company’s judgment, contain an
        untrue statement of a material fact or omit to state a material fact required
        to
        be stated therein or necessary to make the statements therein not misleading;
        and

       

      (2)
        if
        the Company determines in good faith that the disclosure of a material event
        at
        such time would be seriously detrimental to the Company and its subsidiaries
        and
        the Company delivers a certificate to the Investor signed by the Chief Executive
        Officer of the Company stating that the Company’s board of directors in its good
        faith judgment has determined that effecting the sale at such time would
        require
        the Company to make public disclosure of information the public disclosure
        of
        which would have a material adverse effect upon the Company.

       

    

    Upon
      the
      occurrence of any event described in clauses (1) and (2) of this Section
      5(b)(ii)(B), the Company shall give notice to Investor that the availability
      of
      the Shelf Registration Statement is suspended and, upon actual receipt of any
      such notice, Investor agrees not to sell any Transfer Restricted Securities
      pursuant to the Shelf Registration Statement until Investor’s receipt of copies
      of the supplemented or amended Prospectus provided for in Section 5(b)(ii)
      hereof. The Company shall not be required to specify in the written notice
      to
      Investor the nature of the event giving rise to the Suspension
      Period;

     

    (C) prepare
      and file with the Commission such amendments and post-effective amendments
      to
      the Shelf Registration Statement as may be necessary to keep the Shelf
      Registration Statement effective during the Effectiveness Period; cause the
      Prospectus to be supplemented by any required Prospectus supplement, and as
      so
      supplemented to be filed pursuant to Rule 424 under the Securities Act, and
      to
      comply fully with the applicable provisions of Rules 424 under the Securities
      Act in a timely manner; and comply with the provisions of the Securities Act
      with respect to the disposition of all Transfer Restricted Securities covered
      by
      the Shelf Registration Statement during the applicable period in accordance
      with
      the intended method or methods of distribution by the sellers thereof set forth
      in the Shelf Registration Statement or supplement to the
      Prospectus;

     

    (D) promptly
      advise Investor (which notice pursuant to clauses (1) through (4) below shall
      be
      accompanied by an instruction to suspend the use of the Prospectus until the
      Company shall have remedied the basis for such suspension):

     

    (1)
      when
      the Prospectus or any Prospectus supplement or post-effective amendment has
      been
      filed, and, with respect to the Shelf Registration Statement or any
      post-effective amendment thereto, when the same has become
      effective,

     

    (2)
      of
      any request by the Commission for amendments to the Shelf Registration Statement
      or amendments or supplements to the Prospectus or for additional information
      relating thereto,

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

     

    (3)
      of
      the issuance by the Commission of any stop order suspending the effectiveness
      of
      the Shelf Registration Statement under the Securities Act or of the suspension
      by any state securities commission of the qualification of the Transfer
      Restricted Securities for offering or sale in any jurisdiction, or the
      threatening or initiation of any proceeding for any of the preceding purposes,
      or

     

    (4)
      of
      the happening of any event or the failure of any event to occur or the discovery
      of any facts, during the Effectiveness Period, which makes any statement made
      in
      a Shelf Registration Statement, the related Prospectus, any amendment or
      supplement thereto or any document incorporated by reference therein untrue
      in
      any material respect or which causes such document(s) to omit to state a
      material fact necessary in order to make the statements therein (in the case
      of
      the Prospectus, in the light of the circumstances under which they were made)
      not misleading;

     

    (E) if
      at any
      time the Commission shall issue any stop order suspending the effectiveness
      of
      the Shelf Registration Statement, or any state securities commission or other
      regulatory authority shall issue an order suspending the qualification or
      exemption from qualification of the Transfer Restricted Securities under state
      securities or Blue Sky laws, use its reasonable best efforts to obtain the
      withdrawal or lifting of such order at the earliest possible time and shall
      provide to Investor prompt notice of the withdrawal of any such
      order;

     

    (F) make
      available at reasonable times for inspection by Investor, and any attorney
      or
      accountant retained by Investor, all financial and other records, pertinent
      corporate documents and properties of the Company as shall be reasonably
      necessary to enable them to conduct a reasonable investigation within the
      meaning of Section 11 of the Securities Act, and cause the Company’s officers,
      directors, managers and employees to supply all information reasonably requested
      by any such representative or representatives of Investor or such attorney
      or
      accountant in connection therewith; provided that, subject to Section
      5(b)(ii)(A),
      (x)
      appropriate safeguards are in place to protect the confidentiality of such
      information, and (y) in no event shall the Company be required to disclose
      any
      proprietary information to any competitor or agent thereof;

     

    (G) if
      requested by Investor, promptly incorporate into the Shelf Registration
      Statement or Prospectus, pursuant to a supplement or post-effective amendment
      if
      necessary, such information as Investor may reasonably request to have included
      therein, including, without limitation, information relating to the “Plan of
      Distribution” of the Transfer Restricted Securities;

     

    (H) deliver
      to Investor, without charge, as many copies of the Prospectus (including each
      preliminary Prospectus) and any amendment or supplement thereto as it reasonably
      may request; subject to any notice by the Company in accordance with this
      Section 5(b)(ii) of the existence of any fact or event of the kind described
      in
      Section 5(b)(iv)(D)(4), the Company hereby consents to the use of the Prospectus
      and any amendment or supplement thereto by Investor in connection with the
      offering and the sale of the Transfer Restricted Securities covered by the
      Prospectus or any amendment or supplement thereto;

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    
       

      (I) before
        any public offering of Transfer Restricted Securities, cooperate with Investor
        and its counsel in connection with the registration and qualification of
        the
        Transfer Restricted Securities under the securities or Blue Sky laws of such
        jurisdictions in the United States as Investor may reasonably request and
        do any
        and all other acts or things necessary or advisable to enable the disposition
        in
        such jurisdictions of the Transfer Restricted Securities covered by the Shelf
        Registration Statement; provided,
        however,
        that
        the Company shall not be required (i) to register or qualify as a foreign
        corporation or a dealer of securities in any jurisdiction where it would
        not
        otherwise be required to qualify but for this Section 5(b)(ii)(I) or to take
        any
        action that would subject it to the service of process in any jurisdiction
        where
        it would not otherwise be subject to such service of process, or (ii) to
        subject
        itself to general or unlimited service of process or to taxation in any such
        jurisdiction if it is not then so subject;

       

      (J) unless
        any Transfer Restricted Securities shall be in book-entry form only, cooperate
        with Investor to facilitate the timely preparation and delivery of certificates
        representing Transfer Restricted Securities to be sold and not bearing any
        restrictive legends (unless required by applicable securities laws); and
        enable
        such Transfer Restricted Securities to be in such denominations and registered
        in such names as Investor may request at least two business days before any
        sale
        of Transfer Restricted Securities;

       

    

    (K) use
      its
      reasonable best efforts to cause the Transfer Restricted Securities covered
      by
      the Shelf Registration Statement to be registered with or approved by such
      other
      U.S. governmental agencies or authorities as may be necessary to enable the
      seller or sellers thereof to consummate the disposition of such Transfer
      Restricted Securities;

     

    (L) subject
      to Section 5(b)(ii)(B) hereof, if any fact or event contemplated by Section
      5(b)(ii)(D)(1) through (4) hereof shall exist or have occurred, use its
      reasonable best efforts to prepare a supplement or post-effective amendment
      to
      the Shelf Registration Statement or related Prospectus or any document
      incorporated therein by reference or file any other required document so that,
      as thereafter delivered to the purchasers of Transfer Restricted Securities,
      the
      Prospectus will not contain an untrue statement of a material fact or omit
      to
      state any material fact required to be stated therein or necessary to make
      the
      statements therein, in light of the circumstances in which they are made, not
      misleading;

     

    (M) cooperate
      and assist in any filings required to be made with the NASD and in the
      performance of any due diligence investigation by any underwriter that is
      required to be undertaken in accordance with the rules and regulations of the
      NASD;

     

    (N) otherwise
      use its reasonable best efforts to comply with all applicable rules and
      regulations of the Commission and all reporting requirements under the rules
      and
      regulations of the Exchange Act;

     

    (O) make
      generally available to its security holders an earning statement satisfying
      the
      provisions of Section 11(a) of the Securities Act and Rule 158 of the Securities
      Act as soon as practicable after the effective date of the Shelf Registration
      Statement and in any event no later than 45 days after the end of a 12-month
      period (or 90 days, if such period is a fiscal year) beginning with the first
      month of the Company’s first fiscal quarter commencing after the effective date
      of the Shelf Registration Statement;

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    
      (P) cause
        all
        Shares covered by the Shelf Registration Statement to be listed or quoted,
        as
        the case may be, on each securities exchange or automated quotation system
        on
        which Common Stock is then listed or quoted;

       

      (Q) provide
        to Investor upon written request each document filed with the Commission
        pursuant to the requirements of Section 13 and Section 15 of the Exchange
        Act
        after the effective date of the Shelf Registration Statement, unless such
        document is available through the Commission’s EDGAR system;

       

      (R) in
        connection with any underwritten offering conducted pursuant to Section 5(f)
        hereof, make such representations and warranties to Investor and the
        underwriters, in form, substance and scope as are customarily made by issuers
        to
        underwriters in primary underwritten offerings and covering matters including,
        but not limited to, those set forth in this Agreement;

    

    (S) in
      connection with any underwritten offering conducted pursuant to Section 5(f)
      hereof, obtain opinions of counsel to the Company and updates thereof (which
      counsel and opinions (in form, scope and substance) shall be reasonably
      satisfactory to the Managing Underwriters) addressed to Investor and the
      underwriters, if any, covering such matters as are customarily covered in
      opinions requested in underwritten offerings and such other matters as may
      be
      reasonably requested by Investor and underwriters;

     

    (T) in
      connection with any underwritten offering conducted pursuant to Section 5(f),
      hereof, obtain “comfort” letters and updates thereof from the independent
      certified public accountants of the Company (and, if necessary, any other
      independent certified public accountants of any subsidiary of the Company or
      of
      any business acquired by the Company for which financial statements and
      financial data are, or are required to be, included in the Shelf Registration
      Statement), addressed to Investor and the underwriters, in customary form and
      covering matters of the type customarily covered in “comfort” letters in
      connection with primary underwritten offerings;

     

    (U) in
      connection with any underwritten offering conducted pursuant to Section 5(f)
      hereof, deliver such documents and certificates as may be reasonably requested
      by Investor and the Managing Underwriters, including those to evidence
      compliance with Section 5(b)(ii)(B) and 5(b)(ii)(L) hereof and with any
      customary conditions contained in this Agreement or other agreement entered
      into
      by the Company;

     

    (V) in
      connection with underwritten offering conducted pursuant to Section 5(f) hereof,
      the Company shall, if requested, promptly include or incorporate in a Prospectus
      supplement or post-effective amendment to the Shelf Registration Statement
      such
      information as the Managing Underwriters reasonably agree should be included
      therein and to which the Company does not reasonably object and shall make
      all
      required filings of such Prospectus supplement or post-effective amendment
      as
      soon as practicable after it is notified of the matters to be included or
      incorporated in such Prospectus supplement or post-effective amendment;

     

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    
      (W) use
        its
        reasonable best efforts to take all other steps necessary to effect the
        registration of the Shares covered by the Shelf Registration
        Statement;

       

      (X) enter
        into customary agreements (including, if requested, an underwriting agreement
        in
        customary form) and take all other appropriate actions in order to expedite
        or
        facilitate the registration or the disposition of the Shares, and in connection
        therewith, if an underwriting agreement is entered into, cause the same to
        contain indemnification provisions and procedures no less favorable than
        those
        set forth in Section 6 hereof; and

       

      (Y) The
        actions set forth in clauses (U), (V), (W) and (X) of this Section 5(b)(ii)
        shall be performed at (i) the effectiveness of the Shelf Registration Statement
        and each post-effective amendment thereto, and (ii) each closing under any
        underwriting or similar agreement as and to the extent required
        thereunder.

       

      (iii) Investor
        agrees that, upon receipt of any notice (a “Suspension
        Notice”)
        from
        the Company under Section 5(b)(ii)(B) or the existence of any fact of the
        kind
        described in Section 5(b)(ii)(D)(4) hereof, it will forthwith discontinue
        disposition of Transfer Restricted Securities pursuant to the Shelf Registration
        Statement until:

    

     

    (A) it
      has
      received copies of the supplemented or amended Prospectus contemplated by
      Section 5(b)(ii)(L) hereof; or

     

    (B) the
      end
      of the Suspension Period provided under Section 5(b)(ii)(B) or, if earlier,
      when
      it is advised in writing by the Company that the use of the Prospectus may
      be
      resumed, and has received copies of any additional or supplemental filings
      that
      are incorporated by reference in the Prospectus; provided,
      however,
      that
      any such document filed and publicly available through the Commission’s EDGAR
      system shall be deemed to have been received by it.

     

    If
      so
      directed by the Company, each Holder will deliver to the Company (at the
      Company’s expense) all copies, other than permanent file copies then in such
      Holder’s possession, of the Prospectus covering such Transfer Restricted
      Securities that was current at the time of receipt of such notice of
      suspension.

     

    (iv) Notwithstanding
      anything herein to the contrary, Investor agrees that it shall not be entitled
      to sell any of its Transfer Restricted Securities pursuant to a Shelf
      Registration Statement, or to receive a Prospectus relating thereto, unless
      Investor has furnished the Company with such information regarding Investor
      and
      the distribution of such Transfer Restricted Securities as the Company may
      from
      time to time reasonably require for inclusion in such Shelf Registration
      Statement. Investor agrees promptly to furnish to the Company all information
      required to be disclosed in order to make the information previously furnished
      to the Company by Investor not misleading and any other information regarding
      Investor and the distribution of such Transfer Restricted Securities as the
      Company may from time to time reasonably request in writing. Any sale of any
      Transfer Restricted Securities by Investor shall constitute a representation
      and
      warranty by Investor that the information relating to Investor and its plan
      of
      distribution is as set forth in the Prospectus delivered by Investor in
      connection with such disposition, that such Prospectus does not as of the time
      of such sale contain any untrue statement of a material fact relating to or
      provided by Investor or its plan of distribution and that such Prospectus does
      not as of the time of such sale omit to state any material fact relating to
      or
      provided by Investor or its plan of distribution necessary to make the
      statements in such Prospectus, in the light of the circumstances under which
      they were made not misleading.

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    
      (c) Registration
        Expenses.
        All
        expenses incident to the Company’s performance of or compliance with this
        Section 5 shall be borne by the Company regardless of whether a Shelf
        Registration Statement becomes effective, including, without limitation:
        

       

      (1)
        all
        registration and filing fees and expenses (including filings made with the
        NASD);

       

      (2)
        all
        fees and expenses of compliance with federal securities and state Blue Sky
        or
        securities laws; 

       

      (3)
        all
        expenses of printing (including printing of Prospectuses) and the Company’s
        expenses for messenger and delivery services and telephone; 

    

     

    (4)
      all
      fees and disbursements of counsel to the Company;

     

    (5)
      all
      application and filing fees in connection with listing (or authorizing for
      quotation) the Common Stock on a national securities exchange or automated
      quotation system pursuant to the requirements hereof; and 

     

    (6)
      all
      fees and disbursements of independent certified public accountants of the
      Company.

     

    The
      Company shall bear its internal expenses (including, without limitation, all
      salaries and expenses of its officers and employees performing legal, accounting
      or other duties), the expenses of any annual audit and the fees and expenses
      of
      any Person, including special experts, retained by the Company. The Company
      shall pay all expenses customarily borne by issuers in an underwritten offering
      to the extent set forth in Section 5(f) hereof.

     

    (d) Indemnification
      and Contribution.

     

    (i) The
      Company agrees to indemnify and hold harmless Investor and its directors,
      officers, and employees, Affiliates and agents and each Person, if any, who
      controls Investor within the meaning of the Securities Act or the Exchange
      Act
      (each, an “Indemnified
      Person”),
      against any loss, claim, damage, liability or expense, joint or several, or
      any
      action in respect thereof (including, but not limited to, any loss, claim,
      damage, liability or action relating to resales of the Transfer Restricted
      Securities), to which such Indemnified Person may become subject, insofar as
      any
      such loss, claim, damage, liability or action arises out of, or is based
      upon:

     

    (A) any
      untrue statement or alleged untrue statement of a material fact contained in
      (i)
      the Shelf Registration Statement at the time that it becomes or is declared
      effective or in any amendment thereof, in any Prospectus, or in any amendment
      or
      supplement thereto or any issuer free writing prospectus in respect thereof,
      or
      (ii) any Blue Sky application or other document or any amendment or supplement
      thereto prepared or executed by the Company (or based upon written information
      furnished by or on behalf of the Company expressly for use in such Blue Sky
      application or other document or amendment or supplement) filed in any
      jurisdiction specifically for the purpose of qualifying any or all of the
      Transfer Restricted Securities under the securities law of any state or other
      jurisdiction (such application or document being hereinafter called a
“Blue
      Sky Application”);
      or

    
    

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    
       

      (B) the
        omission or alleged omission to state therein any material fact required
        to be
        stated therein or necessary to make the statements therein, in the light
        of the
        circumstances under which they were made, not misleading, and agrees to
        reimburse each Indemnified Person promptly upon demand for any legal or other
        expenses reasonably incurred by such Indemnified Person in connection with
        investigating, defending, settling, compromising or paying any such loss,
        claim,
        damage, liability, expense or action; provided,
        however,
        that
        the Company shall not be liable in any such case to the extent that any such
        loss, claim, damage, liability or expense arises out of, or is based upon,
        any
        untrue statement or alleged untrue statement or omission or alleged omission
        made in reliance upon and in conformity with written information furnished
        to
        the Company by or on behalf of Investor (or its related Indemnified Person)
        specifically for use therein. The foregoing indemnity agreement is in addition
        to any liability which the Company may otherwise have. 

    

     

    The
      Company also agrees to indemnify as provided in this Section 5(d)(i) or
      contribute as provided in Section 5(d)(v) hereof to Losses (as defined below)
      of
      each underwriter, if any, of Shares registered under a Shelf Registration
      Statement, their directors, officers, employees, Affiliates or agents and each
      Person who controls such underwriter on substantially the same basis as that
      of
      the indemnification of Investor provided in this Section 5(d)(i) and shall,
      if
      requested by Investor, enter into an underwriting agreement reflecting such
      agreement, as provided in Section 5(b)(ii)(Z) hereof.

     

    (ii) Investor
      agrees to indemnify and hold harmless the Company, its directors, officers,
      employees and agents and each Person, if any, who controls the Company within
      the meaning of the Securities Act or the Exchange Act to the same extent as
      the
      foregoing indemnity from the Company to Investor, but only with reference to
      written information relating to Investor furnished to the Company by or on
      behalf of Investor specifically for inclusion in the documents referred to
      in
      the foregoing indemnity; provided,
      however,
      that
      Investor shall not be liable for any indemnity claims hereunder in excess of
      the
      amount of net proceeds received by Investor from the sale of Transfer Restricted
      Securities pursuant to such document(s). This indemnity agreement set forth
      in
      this Section shall be in addition to any liabilities which any such Holder
      may
      otherwise have.

     

    (iii) Promptly
      after receipt by an indemnified party under this Section 6 of notice of any
      claim or the commencement of any action, the indemnified party shall, if a
      claim
      in respect thereof is to be made against the indemnifying party under this
      Section 5(d), notify the indemnifying party in writing of the claim or the
      commencement of that action; provided,
      however,
      that
      the failure to notify the indemnifying party (x) shall not relieve it from
      any
      liability which it may have under paragraphs (i) or (ii) of this Section unless
      and to the extent it did not otherwise learn of such action and has been
      materially prejudiced (through the forfeiture of substantive rights and
      defenses) by such failure and (y) shall not, in any event, relieve it from
      any
      liability which it may have to an indemnified party otherwise than under
      paragraphs (i) or (ii) of this Section 5(d). If any such claim or action shall
      be brought against an indemnified party, and it shall notify the indemnifying
      party thereof, the indemnifying party shall be entitled to participate therein
      and, to the extent that it wishes, jointly with any other similarly notified
      indemnifying party, to assume the defense thereof with counsel reasonably
      satisfactory to the indemnified party. After notice from the indemnifying party
      to the indemnified party of its election to assume the defense of such claim
      or
      action, the indemnifying party shall not be liable to the indemnified party
      under this Section 5(d) for any legal or other expenses subsequently incurred
      by
      the indemnified party in connection with the defense thereof other than
      reasonable costs of investigation. 

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    
       

      (iv) The
        indemnifying party under this Section 5(d) shall not be liable for any
        settlement of any proceeding effected without its written consent, which
        shall
        not be withheld unreasonably, but if settled with such consent or if there
        is a
        final judgment for the plaintiff, the indemnifying party agrees to indemnify
        the
        indemnified party against any loss, claim, damage, liability or expense by
        reason of such settlement or judgment. Notwithstanding the foregoing sentence,
        if at any time an indemnified party shall have requested an indemnifying
        party
        to reimburse the indemnified party for fees and expenses of counsel as
        contemplated by Section 5(d)(iii) hereof, the indemnifying party agrees that
        it
        shall be liable for any settlement of any proceeding effected without its
        written consent if (A) such settlement is entered into more than 30 days
        after
        receipt by such indemnifying party of the aforesaid request, (B) such
        indemnifying party shall have received notice of the terms of such settlement
        at
        least 30 days prior to such settlement being entered into, and (C) such
        indemnifying party shall not have reimbursed the indemnified party in accordance
        with such request prior to the date of such settlement. Notwithstanding the
        immediately preceding sentence, if at any time an indemnified party shall
        have
        requested an indemnifying party to reimburse the indemnified party for fees
        and
        expenses of counsel, an indemnifying party shall not be liable for any
        settlement effected without its consent if such indemnifying party (W)
        reimburses such indemnified party in accordance with such request to the
        extent
        it considers such request to be reasonable and (X) provides written notice
        to
        the indemnified party substantiating the unpaid balance as unreasonable,
        in each
        case prior to the date of such settlement. No indemnifying party shall, without
        the prior written consent of the indemnified party, effect any settlement,
        compromise or consent to the entry of judgment in any pending or threatened
        action, suit or proceeding in respect of which any indemnified party is or
        could
        have been a party and indemnity was or could have been sought hereunder by
        such
        indemnified party, unless such settlement, compromise or consent (Y) includes
        an
        unconditional release of such indemnified party from all liability on claims
        that are the subject matter of such action, suit or proceeding and (Z) does
        not
        include a statement as to or an admission of fault, culpability or a failure
        to
        act by or on behalf of any indemnified party.

    

    (v) If
      the
      indemnification provided for in this Section 5(d) shall for any reason be
      unavailable or insufficient to hold harmless an indemnified party under Section
      5(d)(i) or 5(d)(ii) in respect of any loss, claim, damage or liability (or
      action in respect thereof) referred to therein, each indemnifying party shall,
      in lieu of indemnifying such indemnified party, contribute to the aggregate
      amount paid or payable by such indemnified party as a result of such loss,
      claim, damage or liability (including legal or other expenses reasonably
      incurred in connection with investigating or defending any loss, claim,
      liability, damage or action) (collectively “Losses”)
      (or
      action in respect thereof):

     

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    

    
      (A) in
        such
        proportion as is appropriate to reflect the relative benefits received by
        the
        Company from the offering and sale of the Transfer Restricted Securities
        on the
        one hand and Investor with respect to the sale by Investor of the Transfer
        Restricted Securities on the other, or

       

      (B) if
        the
        allocation provided by Section 5(d)(v)(A) is not permitted by applicable
        law, in
        such proportion as is appropriate to reflect not only the relative benefits
        referred to in Section 5(d)(v)(A) but also the relative fault of the Company
        on
        the one hand and Investor on the other in connection with the statements
        or
        omissions or alleged statements or alleged omissions that resulted in such
        loss,
        claim, damage or liability (or action in respect thereof), as well as any
        other
        relevant equitable considerations.

       

      The
        relative benefits received by the Company on the one hand and Investor on
        the
        other with respect to such offering and such sale shall be deemed to be in
        the
        same proportion as the total net proceeds from the offering of the Shares
        purchased under this Agreement (before deducting expenses) received by the
        Company, on the one hand, bear to the total proceeds received by Investor
        with
        respect to its sale of Transfer Restricted Securities on the other. The relative
        fault of the parties shall be determined by reference to whether the untrue
        or
        alleged untrue statement of a material fact or the omission or alleged omission
        to state a material fact relates to information supplied by the Company on
        the
        one hand or Investor on the other, the intent of the parties and their relative
        knowledge, access to information and opportunity to correct or prevent such
        statement or omission. The Company and Investor agree that it would not be
        just
        and equitable if the amount of contribution pursuant to this Section 5(d)(v)
        were determined by pro rata
        allocation or by any other method of allocation that does not take into account
        the equitable considerations referred to in the first sentence of this paragraph
        (v).

       

    

    The
      amount paid or payable by an indemnified party as a result of the loss, claim,
      damage or liability, or action in respect thereof, referred to above in this
      Section 5(d) shall be deemed to include, for purposes of this Section 5(d),
      any
      legal or other expenses reasonably incurred by such indemnified party in
      connection with investigating or defending or preparing to defend any such
      action or claim.

     

    No
      Person
      guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
      of
      the Securities Act) shall be entitled to contribution from any Person who was
      not guilty of such fraudulent misrepresentation.

     

    (vi) The
      provisions of this Section 5(d) shall remain in full force and effect,
      regardless of any investigation made by or on behalf of Investor or the Company
      or any of the officers, directors or controlling Persons referred to in Section
      5(d) hereof, and will survive the sale by Investor of Transfer Restricted
      Securities.

     

    (e) Rule
      144.
      The
      Company agrees that, for so long as any Transfer Restricted Securities remain
      outstanding and during any period in which the Company is subject to Section
      13
      or 15 (d) of the Exchange Act, to make all filings required thereby in a timely
      manner in order to permit resales of such Transfer Restricted Securities
      pursuant to Rule 144.

     

    (f) Underwritten
      Registrations.

     

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    

    
      (i) Investor
        may sell Transfer Restricted Securities (in whole or in part) in an underwritten
        offering; provided,
        that the
        Company shall not be obligated to participate in more than one underwritten
        offering during the Effectiveness Period. If any of the Transfer Restricted
        Securities covered by the Shelf Registration Statement are to be sold in
        an
        underwritten offering, the Managing Underwriters shall be selected by
        Investor.

       

      (ii) Investor
        may not participate in any underwritten offering pursuant to the Shelf
        Registration Statement unless Investor (i) agrees to sell its Transfer
        Restricted Shares on the basis reasonably provided in any underwriting
        arrangements approved by the Company; (ii) completes and executes all
        questionnaires, powers of attorney, indemnities, underwriting agreements
        and
        other documents reasonably required under the terms of such underwriting
        arrangements; and (iii) provides such information required under Section
        4(b)(iv) within a reasonable amount of time before such underwritten
        offering.

       

      (iii) Investor
        shall be responsible for any underwriting discounts and commissions and fees
        and, subject to Section 5(c) hereof, expenses of its own counsel. The Company
        shall pay all expenses customarily borne by issuers in an underwritten offering,
        including but not limited to filing fees, the fees and disbursements of its
        counsel and independent public accountants and any printing expenses incurred
        in
        connection with such underwritten offering.

       

    

    (g) Additional
      Holders; Assignment of Registration Rights.
      For
      purposes of this Section 5, the term “Investor” shall mean the Investor and any
      holder of Transfer Restricted Shares that received Shares in a Transfer
      permitted hereunder (each a “Permitted Holder”), and to the extent that an
      affirmative action is to be taken by the “Investor” in this Section 5, such
      action shall be taken by the Investor and the Permitted Holders holding a
      majority of the Transfer Restricted Shares collectively held by the Investor
      and
      all such Permitted Holders. The rights set forth in this Section 5 may only
      be
      assigned by the Investor or a Permitted Holder to a third party in connection
      with, and as part of, the Transfer of at least 100,000 Transfer Restricted
      Shares.

     

    6. Survival
      of Representations, Warranties and Agreements; Fees and Expenses.

     

    (a) All
      representations and warranties contained herein shall survive the Closing until
      the end of the applicable statute of limitations period; provided, however,
      that
      notwithstanding the foregoing, the representations of the Company set forth
      in
      Section 3(d) above shall survive only until the first anniversary of the date
      hereof. Any claim relating to the representations and warranties contained
      herein that has been made prior to the applicable survival date shall survive
      until such claim is resolved finally. All covenants contained herein shall
      survive indefinitely until, by their respective terms, they are no longer
      operative.

     

    (b) The
      parties hereby agree to bear each of their own costs and expenses, including
      accounting fees, counsel fees and costs and filing fees, incurred by each party
      in connection with the development, preparation and execution of this Agreement
      and all other documents and instruments relating thereto. 

     

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    

    
      7. Remedies.
        In case
        any one or more of the covenants and/or agreements set forth in this Agreement
        shall have been breached by the parties, the non-breaching party may proceed
        to
        protect and enforce its rights either by suit in equity and/or by action
        at law,
        including, but not limited to, an action for damages as a result of any such
        breach and/or an action for specific performance or injunctive relief with
        respect to any such covenant or agreement contained in this Agreement if
        applicable. 

       

      8. Notices.
        All
        notices or requests provided for or permitted to be given pursuant to this
        Agreement must be in writing and may be given or served by (i) depositing
        the same in the United States mail, addressed to the party to be notified,
        postage paid, and registered or certified with return receipt requested,
        (ii) delivering such notice in person to such party, (iii) delivering such
        notice by courier service, or (iv) delivering such notice by PDF or facsimile
        transmission. Notices so deposited in the mail shall be deemed to have been
        given or served on the date on which the party actually received or refused
        such
        written notice or request, as shown by the date or postmark of any return
        receipt indicating the date of delivery or attempted delivery to such receiving
        party. Notices so delivered in person, by courier or by PDF or facsimile
        transmission shall be deemed to have been given or served on the date on
        which
        the party actually received or refused such written notice or request, as
        shown
        by the date of any written receipt or facsimile confirmation indicating the
        date
        of delivery or attempted delivery to such receiving party. The addresses
        and
        facsimile numbers of the parties hereto for all purposes of this Agreement
        are:

       

      Company   -                                 
        Hanover
        Capital Mortgage Holdings, Inc.

      200
        Metroplex Drive, Suite 100

      Edison,
        NJ 08817

      Attention:
        Suzette Berrios, General Counsel

      Facsimile:
        (732) 548-0286

    

    with
      a
      copy to:

    

    Pepper
      Hamilton LLP

    3000
      Two
      Logan Square

    Eighteenth
      and Arch Streets

    Philadelphia,
      PA 19103-2799

    Attention:
      Brian M. Katz, Esq.

    Facsimile:
      (215) 981-4750

    

    Investor   -                                  
       RCG
      PB,
      Ltd.

    c/o
      Ramius Capital Group, LLC

    666
      Third
      Avenue, 26th Floor

    New
      York,
      New York 10017

    Attention:
      Owen S. Littman

    Facsimile:
      (212) 845-7995

    

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

     

     

    with
      a
      copy to

    

    Mayer,
      Brown, Rowe & Maw LLP

    71
      South
      Wacker Drive

    Chicago,
      IL 60606

    Attention:
      Edward J. Schneidman

    Facsimile:
      (312) 701-7348

    

    By
      giving
      the other parties at least five (5) days written notice thereof, any party
      hereto shall have the right from time to time and at any time during the term
      of
      this Agreement to change its respective address or facsimile number and each
      party shall have the right to specify as its address any other address within
      the United States of America or as its facsimile number any other facsimile
      number within the United States of America. 

     

    9. Binding
      Agreement; Assignment.
      This
      Agreement and each provision herein shall be binding upon and applicable to,
      and
      shall inure to the benefit of the parties, their permitted assigns and legal
      representatives. Except as set forth in Section 5(g) hereof with respect to
      the
      assignment of rights under Section 5 (which such assignment shall not require
      the consent, written or otherwise, of the Company), this Agreement and the
      rights and obligations herein may not be assigned by any party hereto (or its
      permitted assigns) without the written consent of the other party
      hereto.
      

     

    10. Consents,
      Waivers and Amendments.
      No
      consent or waiver, express or implied, by any party hereto of the breach,
      default or violation by any other party hereto of its obligations hereunder
      shall be deemed or construed to be a consent or waiver to or of any other
      breach, default or violation of the same or any other obligations of such party
      hereunder. Failure on the part of any party hereto to complain of any act of
      any
      of the other parties or to declare any of the other parties hereto in default,
      irrespective or how long such failure continues, shall not constitute a waiver
      by such party of its rights hereunder. No amendment to this Agreement shall
      be
      valid or binding upon the parties hereto unless the parties consent in writing
      to such amendment. 

     

    11. Applicable
      Law.
      This
      Agreement and all questions relating to its validity, interpretation and
      performance shall be governed by and construed in accordance with the laws
      of
      the State of New York.

     

    12. Entire
      Agreement.
      This
      Agreement and the Repurchase Agreement supersede any prior or contemporaneous
      understanding or agreement between parties with regard to the subject matter
      hereof and thereof. There are no arrangements, understandings or agreements,
      oral or written, among the parties hereto relating to the subject matter of
      this
      Agreement or the Repurchase Agreement, except those fully expressed herein
      or
      therein or in documents executed contemporaneously herewith or
      therewith. 

     

    13. Captions.
      The
      captions used in this Agreement are for convenience only and shall not be
      construed in interpreting this Agreement. Whenever the context so required,
      the
      neuter shall include the feminine and masculine, and the singular shall include
      the plural, and conversely. 

     

    14. Headings.
      All
      section headings herein have been inserted for convenience of reference only
      and
      shall in no way modify or restrict any of the terms or provisions
      hereof. 

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    15. Counterparts.
      This
      Agreement may be signed in any number of counterparts, each of which shall
      be an
      original for all purposes, but all of which taken together shall constitute
      only
      one agreement. This Agreement shall become binding when one or more counterparts
      hereof, individually or taken together, shall bear the signatures of all of
      the
      parties reflected hereon as the signatories. 

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    The
      parties hereto have executed this Stock Purchase Agreement as of the day and
      year first above written.

     

     

    
      	 	
              Company:

            
	 	 	 
	 	
              HANOVER
                CAPITAL MORTGAGE HOLDINGS, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                John A. Burchett

            
	 	 	
              Name:
                John A. Burchett

            
	 	 	
              Title:
                Chairman, President and Chief Executive
                Officer

            

    

    

    

    
      	 	
              Investor:

            
	 	 	 
	 	
              RCG
                PB, LTD

            
	 	 	 
	 	 	 
	 	 	 
	 	
              By:

            	
              /s/
                Jeffrey M. Solomon

            
	 	 	
              Name:
                Jeffrey M. Solomon

            
	 	 	
              Title:
                Authorized SignatoryEXECUTION

    

    

    

    SAXON
      ASSET SECURITIES COMPANY,

    Depositor 

     

    SAXON
      MORTGAGE SERVICES, INC.,

    Servicer

     

    and

     

    DEUTSCHE
      BANK NATIONAL TRUST COMPANY

    Trustee

     

    _____________________________________________________

     

    POOLING
      AND SERVICING AGREEMENT

     

    Dated
      as
      of July 1, 2007

     

    _____________________________________________________

     

    SAXON
      ASSET SECURITIES TRUST 2007-3

     

    MORTGAGE
      LOAN ASSET BACKED CERTIFICATES, SERIES 2007-3

     

    
       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    TABLE
      OF CONTENTS

    
       

      Page

       

      
        	
                ARTICLE
                  1 DEFINITIONS

              	
                 

              	
                6

              
	 	 	 
	
                Section
                  1.1

              	
                Defined
                  Terms

              	
                6

              
	 	 	 
	
                ARTICLE
                  2 CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
                  WARRANTIES

              	
                41

              
	 	 
	
                Section
                  2.1

              	
                Conveyance
                  of Mortgage Loans.

              	
                41

              
	
                Section
                  2.2

              	
                Acceptance
                  by Trustee of the Mortgage Loans.

              	
                44

              
	
                Section
                  2.3

              	
                Representations,
                  Warranties and Covenants of the Depositor and the
                  Servicer.

              	
                46

              
	
                Section
                  2.4

              	
                Delivery
                  of Opinion of Counsel in Connection with Substitutions.

              	
                51

              
	
                Section
                  2.5

              	
                Execution
                  and Delivery of Certificates.

              	
                51

              
	 	 	 
	
                ARTICLE
                  3 ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

              	
                51

              
	 	 	 
	
                Section
                  3.1

              	
                Servicer
                  to Service Mortgage Loans.

              	
                51

              
	
                Section
                  3.2

              	
                Subservicing;
                  Enforcement of the Obligations of Servicers.

              	
                52

              
	
                Section
                  3.3

              	
                Rights
                  of the Trustee in Respect of the Servicer.

              	
                53

              
	
                Section
                  3.4

              	
                Trustee
                  to Act as Servicer.

              	
                53

              
	
                Section
                  3.5

              	
                Collection
                  of Mortgage Loan Payments; Collection Account; Distribution
                  Account.

              	
                54

              
	
                Section
                  3.6

              	
                Collection
                  of Taxes, Assessments and Similar Items; Escrow Accounts.

              	
                56

              
	
                Section
                  3.7

              	
                Access
                  to Certain Documentation and Information Regarding the Mortgage
                  Loans.

              	
                57

              
	
                Section
                  3.8

              	
                Permitted
                  Withdrawals from the Collection Account and Distribution
                  Account.

              	
                57

              
	
                Section
                  3.9

              	
                Maintenance
                  of Hazard Insurance; Maintenance of Primary Insurance
                  Policies.

              	
                59

              
	
                Section
                  3.10

              	
                Enforcement
                  of Due-on-Sale Clauses; Assumption Agreements.

              	
                60

              
	
                Section
                  3.11

              	
                Realization
                  Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
                  Loans.

              	
                61

              
	
                Section
                  3.12

              	
                Trustee
                  to Cooperate; Release of Mortgage Files.

              	
                65

              
	
                Section
                  3.13

              	
                Documents
                  Records and Funds in Possession of Servicer to be Held for the
                  Trustee.

              	
                66

              
	
                Section
                  3.14

              	
                Servicing
                  Compensation.

              	
                66

              
	
                Section
                  3.15

              	
                Access
                  to Certain Documentation.

              	
                67

              
	
                Section
                  3.16

              	
                Annual
                  Statement as to Compliance.

              	
                67

              
	
                Section
                  3.17

              	
                Annual
                  Independent Public Accountants’ Servicing Statement.

              	
                68

              
	
                Section
                  3.18

              	
                Errors
                  and Omissions Insurance; Fidelity Bonds.

              	
                68

              
	
                Section
                  3.19

              	
                Advances.

              	
                68

              
	
                Section
                  3.20

              	
                Advance
                  Facility.

              	
                68

              
	
                Section
                  3.21

              	
                Prepayment
                  Penalties.

              	
                69

              

      

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  4 DISTRIBUTIONS

              	
                70

              
	 	 
	
                Section
                  4.1

              	
                Priorities
                  of Distribution.

              	
                70

              
	
                Section
                  4.2

              	
                Method
                  of Distribution.

              	
                78

              
	
                Section
                  4.3

              	
                Allocation
                  of Losses.

              	
                79

              
	
                Section
                  4.4

              	
                Reports
                  to the Depositor and the Trustee.

              	
                80

              
	
                Section
                  4.5

              	
                Reports
                  by or on Behalf of the Servicer.

              	
                80

              
	
                Section
                  4.6

              	
                The
                  Calculation Agent.

              	
                83

              
	
                Section
                  4.7

              	
                The
                  Excess Reserve Fund Account.

              	
                83

              
	
                Section
                  4.8

              	
                The
                  Supplemental Interest Trust.

              	
                83

              
	 	 	 
	
                ARTICLE
                  5 THE CERTIFICATES

              	
                87

              
	 	 
	
                Section
                  5.1

              	
                The
                  Certificates.

              	
                87

              
	
                Section
                  5.2

              	
                Certificate
                  Register; Registration of Transfer and Exchange of
                  Certificates.

              	
                88

              
	
                Section
                  5.3

              	
                Mutilated,
                  Destroyed, Lost or Stolen Certificates.

              	
                93

              
	
                Section
                  5.4

              	
                Persons
                  Deemed Owners.

              	
                93

              
	
                Section
                  5.5

              	
                Access
                  to List of Certificateholders’ Names and Addresses.

              	
                93

              
	
                Section
                  5.6

              	
                Maintenance
                  of Office or Agency.

              	
                93

              
	 	 	 
	
                ARTICLE
                  6 THE DEPOSITOR AND THE SERVICER

              	94
	 	 
	
                Section
                  6.1

              	
                Respective
                  Liabilities of the Depositor and the Servicer.

              	
                94

              
	
                Section
                  6.2

              	
                Merger
                  or Consolidation of the Depositor and Servicer.

              	
                94

              
	
                Section
                  6.3

              	
                Limitation
                  on Liability of the Depositor, the Servicer and Others.

              	
                94

              
	
                Section
                  6.4

              	
                Limitation
                  on Resignation of Servicer.

              	
                95

              
	
                Section
                  6.5

              	
                Annual
                  Statement as to Compliance.

              	
                95

              
	
                Section
                  6.6

              	
                Annual
                  Independent Public Accountants’ Servicing Statement.

              	
                96

              
	 	 	 
	
                ARTICLE
                  7 SERVICER DEFAULT

              	
                96

              
	 	 
	
                Section
                  7.1

              	
                Events
                  of Default.

              	
                96

              
	
                Section
                  7.2

              	
                Notification
                  to Certificateholders.

              	
                98

              
	 	 	 
	
                ARTICLE
                  8 CONCERNING THE TRUSTEE

              	
                98

              
	 	 
	
                Section
                  8.1

              	
                Duties
                  of Trustee.

              	
                98

              
	
                Section
                  8.2

              	
                Certain
                  Matters Affecting the Trustee.

              	
                100

              
	
                Section
                  8.3

              	
                Trustee
                  Not Liable for Certificates or Mortgage Loans.

              	
                101

              
	
                Section
                  8.4

              	
                Trustee
                  May Own Certificates.

              	
                102

              
	
                Section
                  8.5

              	
                Trustee’s
                  Fees and Expenses.

              	
                102

              
	
                Section
                  8.6

              	
                Eligibility
                  Requirements for Trustee.

              	
                102

              
	
                Section
                  8.7

              	
                Resignation
                  and Removal of Trustee.

              	
                103

              
	
                Section
                  8.8

              	
                Successor
                  Trustee.

              	
                103

              
	
                Section
                  8.9

              	
                Merger
                  or Consolidation of Trustee.

              	
                104

              
	
                Section
                  8.10

              	
                Appointment
                  of Co-Trustee or Separate Trustee.

              	
                104

              
	
                Section
                  8.11

              	
                Tax
                  Matters.

              	
                105

              
	
                Section
                  8.12

              	
                Trustee
                  Exchange Act Reporting Requirements.

              	
                107

              
	
                Section
                  8.13

              	
                Reports
                  filed with the Securities and Exchange Commission.

              	
                108

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                ARTICLE
                  9 TERMINATION

              	
                111

              
	 	 
	
                Section
                  9.1

              	
                Termination
                  upon Liquidation or Purchase of all Mortgage Loans.

              	
                111

              
	
                Section
                  9.2

              	
                Final
                  Distribution on the Certificates.

              	
                112

              
	
                Section
                  9.3

              	
                Additional
                  Termination Requirements.

              	
                113

              
	 	 	 
	
                ARTICLE
                  10 [RESERVED]

              	
                114

              
	 	 
	
                ARTICLE
                  11 MISCELLANEOUS PROVISIONS

              	
                114

              
	 	 
	
                Section
                  11.1

              	
                Amendment.

              	
                114

              
	
                Section
                  11.2

              	
                Recordation
                  of Agreement; Counterparts.

              	
                115

              
	
                Section
                  11.3

              	
                Governing
                  Law.

              	
                116

              
	
                Section
                  11.4

              	
                Intention
                  of Parties.

              	
                116

              
	
                Section
                  11.5

              	
                Notices.

              	
                117

              
	
                Section
                  11.6

              	
                Severability
                  of Provisions.

              	
                117

              
	
                Section
                  11.7

              	
                Assignment.

              	
                118

              
	
                Section
                  11.8

              	
                Limitation
                  on Rights of Certificateholders.

              	
                118

              
	
                Section
                  11.9

              	
                Inspection
                  and Audit Rights.

              	
                119

              
	
                Section
                  11.10

              	
                Certificates
                  Nonassessable and Fully Paid.

              	
                119

              
	
                Section
                  11.11

              	
                Limitations
                  on Actions; No Proceedings.

              	
                119

              
	
                Section
                  11.12

              	
                Mortgage
                  Data.

              	
                120

              
	
                Section
                  11.13

              	
                Third
                  Party Beneficiary

              	
                120

              
	
                Section
                  11.14

              	
                Replacement
                  of Swap Counterparty

              	
                120

              

      

      

      
        
          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      SCHEDULES

       

      
        	
                Schedule
                  I:

              	
                Mortgage
                  Loan Schedule (By Group)

              	
                S-I-1

              
	
                Schedule
                  IA:

              	
                [Reserved]

              	
                S-I1-A

              
	
                Schedule
                  IB:

              	
                [Reserved]

              	
                S-IB-1

              
	
                Schedule
                  II:

              	
                Pass-Through
                  Rate Schedule

              	
                S-II-1

              
	
                Schedule
                  III:

              	
                REMIC
                  Structure

              	
                S-III-1

              

      

       

      EXHIBITS

       

      
        	
                Exhibit
                  A:

              	
                Form
                  of Senior Certificates

              	
                1-A

              
	
                Exhibit
                  B:

              	
                Form
                  of Subordinate Certificates

              	
                B-1

              
	
                Exhibit
                  C:

              	
                Form
                  of Initial Certification of Trustee

              	
                C-1

              
	
                Exhibit
                  D:

              	
                Form
                  of Final Certification of Trustee

              	
                D-1

              
	
                Exhibit
                  E:

              	
                U.S.
                  Person Affidavit

              	
                E-1

              
	
                Exhibit
                  F:

              	
                Form
                  of Transferor Certificate

              	
                F-1

              
	
                Exhibit
                  G-1:

              	
                Form
                  of Investment Letter (Non-Rule 144A)

              	
                G-1-1

              
	
                Exhibit
                  G-2:

              	
                Benefit
                  Plan Affidavit

              	
                G-2-1

              
	
                Exhibit
                  H:

              	
                Form
                  of Rule 144A Letter - QIB Certification

              	
                H-1

              
	
                Exhibit
                  I:

              	
                Request
                  for Release of Documents and Receipt

              	
                I-1

              
	
                Exhibit
                  J:

              	
                [Reserved]

              	
                J-1

              
	
                Exhibit
                  K:

              	
                Form
                  of Remittance Agency Agreement

              	
                K-1

              
	
                Exhibit
                  L:

              	
                Form
                  of Security Release Certification

              	
                L-1

              
	
                Exhibit
                  M-1:

              	
                [Reserved]

              	
                M-1-1

              
	
                Exhibit
                  M-2:

              	
                [Reserved]

              	
                M-2-1

              
	
                Exhibit
                  N:

              	
                [Reserved]

              	
                N-1

              
	
                Exhibit
                  O:

              	
                Form
                  of Certification to be Provided to the Depositor by the
                  Trustee

              	
                O-1

              
	
                Exhibit
                  P:

              	
                Form
                  of Certification to be Provided to the Depositor by the
                  Servicer

              	
                P-1

              
	
                Exhibit
                  Q:

              	
                Interest
                  Rate Swap Agreement

              	
                Q-1

              
	
                Exhibit
                  R:

              	
                [Reserved]

              	
                R-1

              
	
                Exhibit
                  S:

              	
                Form
                  10-D, Form 8-K and Form 10-K Reporting Responsibility

              	
                S-1

              
	
                Exhibit
                  T:

              	
                Servicing
                  Criteria to be Addressed in Trustee Assessment of Compliance
                  

              	
                T-1

              

      

       

    

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    

     

    THIS
      POOLING AND SERVICING AGREEMENT, dated as of July 1, 2007 (this “Agreement”)
      among SAXON ASSET SECURITIES COMPANY, a Virginia corporation, as depositor
      (the
“Depositor”), SAXON MORTGAGE SERVICES, INC., a Texas corporation, as servicer
      (the “Servicer”), and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking
      association, as trustee (the “Trustee”),

     

    WITNESSETH
      THAT

     

    In
      consideration of the mutual agreements herein contained, the parties hereto
      agree as follows:

     

    PRELIMINARY
      STATEMENT

     

    The
      Depositor is the owner of the assets that are hereby conveyed to the Trustee
      in
      return for the Certificates. For federal income tax purposes, the Trust Fund
      shall comprise multiple REMICs organized in a tiered REMIC structure in the
      manner set forth in Schedule III hereto. The Certificates will represent the
      entire beneficial ownership interest in the Trust Fund. 

     

    This
      Preliminary Statement includes definitions of principal terms of the
      Certificates. In addition, the following table sets forth the initial Class
      Principal Balances of the Certificates and the minimum denominations (or
      Percentage Interests) and integral multiples in excess thereof in which such
      Classes shall be issuable (except that one Certificate of each Class of
      Certificates may be issued in a different amount):

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              Class
                Designation

            	
              Initial
                Class Principal/Notional Balance

            	
              Minimum
                Percentage Interest/Denomination

            	
              Integral
                Multiples in Excess
                Minimum

            
	
              Class
                1-A

            	
              $569,917,000

            	
              $ 
                 25,000

            	
              $ 
                1,000

            
	
              Class
                2-A1

            	
              $241,270,000

            	
                  
                25,000

            	
               
                  1,000

            
	
              Class
                2-A2

            	
              $
                64,750,000

            	
                  
                25,000

            	
                 
                1,000

            
	
              Class
                2-A3

            	
              $
                84,130,000

            	
                  
                25,000

            	
                 
                1,000

            
	
              Class
                2-A4

            	
              $
                27,578,000

            	
                  
                25,000

            	
                 
                1,000

            
	
              Class
                1-M1

            	
              $
                36,690,000

            	
                 
                100,000

            	
                 
                1,000

            
	
              Class
                2-M1

            	
              $
                26,892,000

            	
                 
                100,000

            	
                  1,000

            
	
              Class
                1-M2

            	
              $
                33,021,000

            	
                 
                100,000

            	
                  1,000

            
	
              Class
                2-M2

            	
              $
                24,203,000

            	
                 
                100,000

            	
                  1,000

            
	
              Class
                1-M3

            	
              $
                21,198,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                2-M3

            	
              $
                15,538,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                1-M4

            	
              $
                17,937,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                2-M4

            	
              $
                13,148,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                1-M5

            	
              $
                17,937,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                2-M5

            	
              $
                13,148,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                1-M6

            	
              $
                16,307,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                2-M6

            	
              $
                11,952,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                B-1

            	
              $
                28,259,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                B-2

            	
              $
                24,020,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                B-3

            	
              $
                23,313,000

            	
                
                100,000

            	
                  1,000

            
	
              Class
                OC

            	
              $101,732,627

            	
              100%   
                

            	
                
                    N/A

            
	
              Class
                P

            	
              $        
                 1,000

            	
              100%  
                

            	
                     N/A

            
	
              Class
                R

            	
                           
                N/A

            	
              100%  
                

            	
                     N/A

            
	
              Class
                L-IO

            	
                 
                Notional

            	
              100%  
                

            	
                     N/A

            

    

     

    For
      purposes of this Agreement (and construction of the applicable terms and
      provisions hereof), the Class 1-A, Class 1-M1, Class 1-M2, Class 1-M3, Class
      1-M4, Class 1-M5 and Class 1-M6 Certificates “relate” to Group 1; the Class
      2-A1, Class 2-A2, Class 2-A3, Class 2-A4, Class 2-M1, Class 2-M2, Class 2-M3,
      Class 2-M4, Class 2-M5 and Class 2-M6 Certificates “relate” to Group 2; and the
      Class B Certificates “relate” to Group 1 and Group 2.

     

    ARTICLE
      1

     

    DEFINITIONS

     

    
       Section
        1.1  Defined
        Terms

    

     

    Whenever
      used in this Agreement, in addition to any capitalized terms defined in the
      Preliminary Statement, 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 set forth
      in
      Section 3.1 of this Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    Account
      Designation:
      Saxon
      Asset Securities Trust 2007-3 Mortgage Loan Asset Backed Certificates, Series
      2007-3.

     

    Advance:
      Each
      P&I Advance and Servicing Advance.

     

    Adverse
      REMIC Event:
      Either
      (i) loss of status as a REMIC, within the meaning of Section 860D of the Code,
      for any group of assets identified as a REMIC in Schedule III of this Agreement,
      or (ii) imposition of any tax, including the tax imposed under Section
      860F(a)(1) on prohibited transactions, and the tax imposed under Section 860G(d)
      on certain contributions to a REMIC, on any REMIC created
      hereunder.

     

    Aggregate
      Net WAC Cap
      With
      respect to the Offered Certificates and any Distribution Date, a per annum
      rate
      equal to the product of (i) the excess, if any, of (a) the weighted average
      of
      the Net Mortgage Rates of the Mortgage Loans, weighted based on their relative
      Stated Principal Balances as of the first day of the related Due Period,
      adjusted to reflect prepayments received after the first Day of the related
      Due
      Period that were distributed on the immediately preceding Distribution Date,
      over (b) the Swap Payment Rate for such Distribution Date, multiplied by (ii)
      the quotient of 30 divided by the actual number of days in the Interest Accrual
      Period.

     

    Agreement:
      This
      Pooling and Servicing Agreement and all amendments or supplements
      hereto.

     

    Available
      Distribution Amount:
      With
      respect to any Distribution Date, the sum of the following amounts:

     

    (1) the
      total
      amount of all cash received by or on behalf of the Servicer with respect to
      the
      Mortgage Loans serviced by it and received by the Trustee by the related
      Servicer Remittance Date and not previously distributed (including Liquidation
      Proceeds, condemnation proceeds and Insurance Proceeds), except:

     

    (a) all
      scheduled payments of principal and related interest collected on the Mortgage
      Loans but due on a date after the related Due Date;

     

    (b) all
      partial Principal Prepayments received with respect to the Mortgage Loans after
      the related Prepayment Period, together with all related interest accrued on
      such Mortgage Loans;

     

    (c) all
      Prepayment Penalties received in connection with the Mortgage
      Loans;

     

    (d) all
      Principal Prepayments in full received with respect to the Mortgage Loans after
      the related Prepayment Period, together with all related interest accrued on
      such Mortgage Loans;

     

    (e) Liquidation
      Proceeds, condemnation proceeds, Insurance Proceeds and Subsequent Recoveries
      received on such Mortgage Loans after the previous calendar month;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (d) all
      amounts reimbursable to the Servicer pursuant to the terms of this Agreement
      or
      to the Trustee and/or the Custodian pursuant to the terms of this Agreement
      or
      the Custodial Agreement, in each case with respect to the Mortgage Loans or
      otherwise allocable to the Certificates;

     

    (e) reinvestment
      income on the balance of funds, if any, in the Collection Account or the
      Distribution Account; and

     

    (f) amounts
      as to which the Servicer is entitled to reimbursement from the Collection
      Account pursuant to this Agreement (including Servicing Fees), and as to which
      the Trustee and/or the Custodian, as applicable, are entitled with respect
      to
      the Mortgage Loans or otherwise allocable to the Certificates to be reimbursed
      from the Distribution Account or otherwise pursuant to this Agreement or the
      Custodial Agreement, as applicable (including the Trustee Fee);

     

    (2) all
      Advances on the Mortgage Loans made by the Servicer (or any successor servicer)
      for that Distribution Date;

     

    (3) any
      amounts paid as Compensating Interest with respect to the Mortgage Loans by
      the
      Servicer for that Distribution Date; 

     

    (4)
       the
      total
      amount of any cash deposited in the Distribution Account in connection with
      the
      repurchase of any Mortgage Loans by the Depositor pursuant to this Agreement
      and
      the Seller pursuant to the Sales Agreement; and

     

    (5) all
      Subsequent Recoveries received with respect to the Mortgage Loans during the
      related Prepayment Period.

     

    Basic
      Principal Distribution Amount:
      With
      respect to the Offered Certificates and any Distribution Date, the
      excess, if any, of
      the
      Principal Remittance Amount over
      the
      Excess Subordinate Amount.

     

    Basis
      Risk Carry Forward Amount:
      With
      respect to the Group 1 Certificates, the Group 1 Basis Risk Carry Forward
      Amount, with respect to the Group 2 Certificates, the Group 2 Basis Risk Carry
      Forward Amount, and with respect to the Class B Certificates, the Class B Basis
      Risk Carry Forward Amount.

     

    Basis
      Risk Payment:
      For any
      Distribution Date, the aggregate of the Basis Risk Carry Forward Amounts, for
      that date. With respect to any Distribution Date, the Basis Risk Payment cannot
      exceed the sum of (i) the amount otherwise distributable on the Class OC
      Certificates (other than amounts received by the holder of the Class OC
      Certificates in respect of and Net Swap Receipts) and (ii) amounts payable
      from
      Net Swap Receipts.

     

    Bankruptcy
      Code:
      The
      United States Bankruptcy Reform Act of 1978, as amended.

     

    Blanket
      Mortgage:
      The
      mortgage or mortgages encumbering a Cooperative Property.

     

    Book-Entry
      Certificates:
      All
      Classes of Certificates other than the Physical Certificates.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    Business
      Day:
      Any day
      other than (i) a Saturday or a Sunday, or (ii) a day on which banking
      institutions in New York City or the city in which any of the Custodian, the
      Servicer, or the Corporate Trust Office of the Trustee is located are authorized
      or obligated by law or executive order to be closed.

     

    Calculation
      Agent:
      Deutsche Bank National Trust Company, a national banking association, and its
      successors and assigns in such capacity under this Pooling and Servicing
      Agreement.

     

    Certificate:
      Any one
      of the Certificates executed by the Trustee in substantially the forms attached
      hereto as exhibits.

     

    Certificate
      Owner:
      With
      respect to a Book-Entry Certificate, the Person who is the beneficial owner
      of
      such Book-Entry Certificate.

     

    Certificate
      Principal Balance:
      With
      respect to any Certificate (other than the Class P and Class L-IO Certificates)
      and as of any Distribution Date, the Certificate Principal Balance on the date
      of the initial issuance of such Certificate as set forth on the face thereof,
      as
      reduced by:

     

    
      	 	
              (i)

            	
              all
                amounts distributed on previous Distribution Dates on such Certificate
                in
                reduction of the Certificate Principal Balance thereof;
                and

            

    

     

    
      	 	
              (ii)

            	
              with
                respect to the Class M and Class B Certificates only, the amount
                of
                Realized Losses on the Mortgage Loans allocated to such
                Certificate;

            

    

     

    provided,
      however,
      that
      the Certificate Principal Balance of each Class M and Class B Certificate to
      which Realized Losses have been allocated will be increased, sequentially in
      the
      order of payment priority, by the amount of Subsequent Recoveries on the
      Mortgage Loans distributed as principal to any Certificate, but not by more
      than
      the amount of Realized Losses previously allocated to reduce the Certificate
      Principal Balance of such Certificate.

     

    Any
      amounts distributed to a Class of Class M and Class B Certificate in respect
      of
      any Unpaid Realized Loss Amount will not further reduce the Certificate
      Principal Balance of that Class.

     

    Certificate
      Register:
      The
      register maintained pursuant to Section 5.2 hereof.

     

    Certificateholder
      or Holder:
      The
      person in whose name a Certificate is registered in the Certificate Register,
      except that, solely for the purpose of giving any consent pursuant to this
      Agreement, any Certificate registered in the name of the Depositor or any
      affiliate of the Depositor shall be deemed not to be Outstanding and the
      Percentage Interest evidenced thereby shall not be taken into account in
      determining whether the requisite amount of Percentage Interests necessary
      to
      effect such consent has been obtained; provided,
      however,
      that if
      any such Person (including the Depositor) owns 100% of the Percentage Interests
      evidenced by a Class of Certificates, such Certificates shall be deemed to
      be
      Outstanding for purposes of any provision hereof that requires the consent
      of
      the Holders of Certificates of a particular Class as a condition to the taking
      of any action hereunder. The Trustee is entitled to rely conclusively on a
      certification of the Depositor or any affiliate of the Depositor in determining
      which Certificates are registered in the name of an affiliate of the
      Depositor.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    Class:
      All
      Certificates bearing the same class designation as set forth in the Preliminary
      Statement.

     

    Class
      A Certificates:
      All
      Certificates which include an “A” in their class designation.

     

    Class
      A Principal Allocation Percentage:
      With
      respect to each of the Group 1 Senior Certificates and the Group 2 Senior
      Certificates and any Distribution Date, the percentage equivalent of a fraction,
      determined as follows: (i) in the case of the Group 1 Senior Certificates the
      numerator of which is (x) the portion of the Principal Remittance Amount for
      such Distribution Date that is attributable to principal received or advanced
      on
      the Group 1 Mortgage Loans, and the denominator of which is (y) the Principal
      Remittance Amount for such Distribution Date and (ii) in the case of the Group
      2
      Senior Certificates the numerator of which is (x) the portion of the Principal
      Remittance Amount for such Distribution Date that is attributable to principal
      received or advanced on the Group 2 Mortgage Loans, and the denominator of
      which
      is (y) the Principal Remittance Amount for such Distribution Date.

     

    Class
      B Basis Risk Carry Forward Amount:
      With
      respect to any Class of Class B Certificates and any Distribution Date, an
      amount equal to the sum of (i) the excess, if any, of (x) the amount of interest
      such Class of Class B Certificates would have been entitled to receive on such
      Distribution Date if the Aggregate Net WAC Cap had not been applicable to such
      Class on such Distribution Date over (y) the amount of interest accrued on
      such
      Distribution Date at the Aggregate Net WAC Cap and (ii) the related Basis Risk
      Carry Forward Amount for previous Distribution Dates remaining unpaid together
      with interest thereon at a rate equal to the related Pass-Through Rate for
      such
      Class of Class B Certificates for the most recently ended Interest Accrual
      Period.

     

    Class
      B Certificates:
      All
      Certificates which include a “B” in their class designation.

     

    Class
      B-1 Principal Distribution Amount:
      with
      respect to the Class B-1 Certificates and any Distribution Date (i) prior to
      the
      Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
      for the Offered Certificates for that Distribution Date, the Principal
      Distribution Amount for that Distribution Date remaining after distribution
      of
      the Senior Principal Distribution Amount, the Class M1 Principal Distribution
      Amount, the Class M2 Principal Distribution Amount, the Class M3 Principal
      Distribution Amount, the Class M4 Principal Distribution Amount, the Class
      M5
      Principal Distribution Amount and the Class M6 Principal Distribution Amount
      or
      (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
      the
      Offered Certificates for that Distribution Date, the lesser of:

     

    
      	 	
              (i)
                

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount, the Class
                M1
                Principal Distribution Amount, the Class M2 Principal Distribution
                Amount,
                the Class M3 Principal Distribution Amount, the Class M4 Principal
                Distribution Amount, the Class M5 Principal Distribution Amount and
                the
                Class M6 Principal Distribution Amount; and

            

    

     

    
      	 	
              (ii)
                

            	
              the
                excess (if any) of (A) the sum of (1) the Class Principal Balance
                of the
                Class B-1 Certificates immediately prior to that Distribution Date
                and (2)
                the aggregate Class Principal Balance of the Senior Certificates
                and the
                Class M Certificates (after taking into account the payment of the
                Senior,
                Class M1, Class M2, Class M3, Class M4, Class M5 and Class M6 Principal
                Distribution Amounts for such Distribution Date) over (B) the lesser
                of
                (i) the aggregate Stated Principal Balance of the Mortgage Loans
                as of the
                last day of the related Due Period multiplied by approximately 78.90%
                and
                (ii) 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 Overcollateralization
                Floor.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    Class
      B-2 Principal Distribution Amount:
      With
      respect to the Class B-2 Certificates and any Distribution Date (i) prior to
      the
      Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
      for the Offered Certificates for that Distribution Date, the Principal
      Distribution Amount for that Distribution Date remaining after distribution
      of
      the Senior Principal Distribution Amount, the Class M1 Principal Distribution
      Amount, the Class M2 Principal Distribution Amount, the Class M3 Principal
      Distribution Amount, the Class M4 Principal Distribution Amount, the Class
      M5
      Principal Distribution Amount, the Class M6 Principal Distribution Amount and
      the Class B-1 Principal Distribution Amount or (ii) on or after the Stepdown
      Date if a Trigger Event is not in effect for the Offered Certificates for that
      Distribution Date, the lesser of:

     

    
      	 	
              (i)

            	
              the
                sum of the Principal Distribution Amount for that Distribution Date
                remaining after distribution of the Senior Principal Distribution
                Amount,
                the Class M1 Principal Distribution Amount, the Class M2 Principal
                Distribution Amount, the Class M3 Principal Distribution Amount,
                the Class
                M4 Principal Distribution Amount, the Class M5 Principal Distribution
                Amount, the Class M6 Principal Distribution Amount and the Class
                B-1
                Principal Distribution Amount; and 

            

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the Class Principal Balance
                of the
                Class B-2 Certificates immediately prior to that Distribution Date
                and (2)
                the aggregate Class Principal Balance of the Senior Certificates,
                the
                Class M Certificates and the Class B-1 Certificates (after taking
                into
                account the payment of the Senior, Class M1, Class M2, Class M3,
                Class M4,
                Class M5, Class M6 and Class B-1 Principal Distribution Amounts for
                such
                Distribution Date) over (B) the lesser of (i) the aggregate Stated
                Principal Balance of the Mortgage Loans as of the last day of the
                related
                Due Period multiplied by approximately 82.30% and (ii) 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
                Overcollateralization Floor.

            

    

     

    Class
      B-3 Principal Distribution Amount:
      With
      respect to the Class B-3 Certificates and any Distribution Date (i) prior to
      the
      Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect
      for the Offered Certificates for that Distribution Date, the Principal
      Distribution Amount for that Distribution Date remaining after distribution
      of
      the Senior Principal Distribution Amount, the Class M1 Principal Distribution
      Amount, the Class M2 Principal Distribution Amount, the Class M3 Principal
      Distribution Amount, the Class M4 Principal Distribution Amount, the Class
      M5
      Principal Distribution Amount, the Class M6 Principal Distribution Amount,
      the
      Class B-1 Principal Distribution Amount and the Class B-2 Principal Distribution
      Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect
      for the Offered Certificates for that Distribution Date, the lesser
      of:

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount, the Class
                M1
                Principal Distribution Amount, the Class M2 Principal Distribution
                Amount,
                the Class M3 Principal Distribution Amount, the Class M4 Principal
                Distribution Amount, the Class M5 Principal Distribution Amount,
                the Class
                M6 Principal Distribution Amount, the Class B-1 Principal Distribution
                Amount and the Class B-2 Principal Distribution Amount; and
                

            

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the Class Principal Balance
                of the
                Class B-3 Certificates immediately prior to that Distribution Date
                and (2)
                the aggregate Class Principal Balance of the Senior Certificates,
                the
                Class M Certificates and the Class B-1 and Class B-2 Certificates
                (after
                taking into account the payment of the Senior, Class M1, Class M2,
                Class
                M3, Class M4, Class M5, Class M6, Class B-1 and Class B-2 Principal
                Distribution Amounts for such Distribution Date) over (B) the lesser
                of
                (i) the aggregate Stated Principal Balance of the Mortgage Loans
                as of the
                last day of the related Due Period multiplied by approximately 85.60%
                and
                (ii) 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 Overcollateralization
                Floor.

            

    

     

    Class
      L-IO Notional Amount:
      With
      respect to the Class L-IO Certificates and any Distribution Date, a notional
      amount equal to the product of (i) $10,000 multiplied by (ii) the aggregate
      Stated Principal Balance of the Mortgage Loans as of the end of the Due Period
      that ended during the month in which such Distribution Date occurs divided
      by
      the
      aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
      Date

     

    Class
      L-IO Rate:
      A per
      annum rate equal to 0.00000007077438%.

     

    Class
      M Certificates:
      All
      Certificates which include an “M” in their class designation.

     

    Class
      M1 Principal Distribution Amount:
      With
      respect to the Class 1-M1 and Class 2-M1 Certificates and any Distribution
      Date
      (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger
      Event is in effect for the Offered Certificates for that Distribution Date,
      the
      Principal Distribution Amount for that Distribution Date remaining after
      distribution of the Senior Principal Distribution Amount or (ii) on or after
      the
      Stepdown Date if a Trigger Event is not in effect for the Offered Certificates
      for that Distribution Date, the lesser of:

     

    
      	 	
              (i)

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount;
                and

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the aggregate Class Principal
                Balance of the Class 1-M1 and Class 2-M1 Certificates immediately
                prior to
                that Distribution Date and (2) the aggregate Class Principal Balance
                of
                the Senior Certificates (after taking into account the payment of
                the
                Senior Principal Distribution Amount for such Distribution Date)
                over (B)
                the lesser of (i) the aggregate Stated Principal Balance of the Mortgage
                Loans as of the last day of the related Due Period multiplied by
                approximately 48.80% and (ii) 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 Overcollateralization
                Floor.

            

    

     

    Class
      M2 Principal Distribution Amount:
      With
      respect to the Class 1-M2 and Class 2-M2 Certificates and any Distribution
      Date
      (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger
      Event is in effect for the Offered Certificates for that Distribution Date,
      the
      Principal Distribution Amount for that Distribution Date remaining after
      distribution of the Senior Principal Distribution Amount and the Class M1
      Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger
      Event is not in effect for the Offered Certificates for that Distribution Date,
      the lesser of: 

     

    
      	 	
              (i)

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount and the
                Class M1
                Principal Distribution Amount; and

            

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the aggregate Class Principal
                Balance of the Class 1-M2 and Class 2-M2 Certificates immediately
                prior to
                that Distribution Date and (2) the aggregate Class Principal Balance
                of
                the Senior Certificates, the Class 1-M1 and Class 2-M1 Certificates
                (after
                taking into account the payment of the Senior and Class M1 Principal
                Distribution Amounts for such Distribution Date) over (B) the lesser
                of
                (i) the aggregate Stated Principal Balance of the Mortgage Loans
                as of the
                last day of the related Due Period multiplied by approximately 56.90%
                and
                (ii) 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 Overcollateralization
                Floor.

            

    

     

    Class
      M3 Principal Distribution Amount:
      With
      respect to the Class 1-M3 and Class 2-M3 Certificates and any Distribution
      Date
      (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger
      Event is in effect for the Offered Certificates for that Distribution Date,
      the
      Principal Distribution Amount for that Distribution Date remaining after
      distribution of the Senior Principal Distribution Amount, the Class M1 Principal
      Distribution Amount and the Class M2 Principal Distribution Amount or (ii)
      on or
      after the Stepdown Date if a Trigger Event is not in effect for the Offered
      Certificates for that Distribution Date, the lesser of:

     

    
      	 	
              (i)

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount, the Class
                M1
                Principal Distribution Amount and the Class M2 Principal Distribution
                Amount; and 

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the aggregate Class Principal
                Balance of the Class 1-M3 and Class 2-M3 Certificates immediately
                prior to
                that Distribution Date and (2) the aggregate Class Principal Balance
                of the Senior Certificates, the Class 1-M1, Class 2-M1, Class 1-M2
                and
                Class 2-M2 Certificates (after taking into account the payment of
                the
                Senior, Class M1 and Class M2 Principal Distribution Amounts for
                such
                Distribution Date) over (B) the lesser of (i) the aggregate Stated
                Principal Balance of the Mortgage Loans as of the last day of the
                related
                Due Period multiplied by approximately 62.10% and (ii) 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
                Overcollateralization Floor.

            

    

     

    Class
      M4 Principal Distribution Amount:
      With
      respect to the Class 1-M4 and Class 2-M4 Certificates and any Distribution
      Date
      (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger
      Event is in effect for the Offered Certificates for that Distribution Date,
      the
      Principal Distribution Amount for that Distribution Date remaining after
      distribution of the Senior Principal Distribution Amount, the Class M1 Principal
      Distribution Amount, the Class M2 Principal Distribution Amount and the Class
      M3
      Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger
      Event is not in effect for the Offered Certificates for that Distribution Date,
      the lesser of:

     

    
      	 	
              (i)

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount, the Class
                M1
                Principal Distribution Amount, the Class M2 Principal Distribution
                Amount
                and the Class M3 Principal Distribution Amount; and
                

            

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the aggregate Class Principal
                Balance of the Class 1-M4 and Class 2-M4 Certificates immediately
                prior to
                that Distribution Date and (2) the aggregate Class Principal Balance
                of
                the Senior Certificates, the Class 1-M1, Class 2-M1, Class 1-M2,
                Class
                2-M2, Class 1-M3 and Class 2-M3 Certificates (after taking into account
                the payment of the Senior, Class M1, Class M2 and Class M3 Principal
                Distribution Amounts for such Distribution Date) over (B) the lesser
                of
                (i) the aggregate Stated Principal Balance of the Mortgage Loans
                as of the
                last day of the related Due Period multiplied by approximately 66.50%
                and
                (ii) 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 Overcollateralization
                Floor.

            

    

     

    Class
      M5 Principal Distribution Amount:
      With
      respect to the Class 1-M5 and Class 2-M5 Certificates and any Distribution
      Date
      (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger
      Event is in effect for the Offered Certificates for that Distribution Date,
      the
      Principal Distribution Amount for that Distribution Date remaining after
      distribution of the Senior Principal Distribution Amount, the Class M1 Principal
      Distribution Amount, the Class M2 Principal Distribution Amount, the Class
      M3
      Principal Distribution Amount and the Class M4 Principal Distribution Amount
      or
      (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
      the
      Offered Certificates for that Distribution Date, the lesser of:

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (i)

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount, the Class
                M1
                Principal Distribution Amount, the Class M2 Principal Distribution
                Amount,
                the Class M3 Principal Distribution Amount and the Class M4 Principal
                Distribution Amount; and 

            

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the aggregate Class Principal
                Balance of the Class 1-M5 and Class 2-M5 Certificates immediately
                prior to
                that Distribution Date and (2) the aggregate Class Principal Balance
                of
                the Senior Certificates, the Class 1-M1, Class 2-M1, Class 1-M2,
                Class
                2-M2, Class 1-M3, Class 2-M3, Class 1-M4 and Class 2-M4 Certificates
                (after taking into account the payment of the Senior, Class M1, Class
                M2,
                Class M3 and Class M4 Principal Distribution Amounts for such Distribution
                Date) over (B) the lesser of (i) the aggregate Stated Principal Balance
                of
                the Mortgage Loans as of the last day of the related Due Period multiplied
                by approximately 70.90% and (ii) 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 Overcollateralization
                Floor.

            

    

     

    Class
      M6 Principal Distribution Amount:
      With
      respect to the Class 1-M6 and Class 2-M6 Certificates and any Distribution
      Date
      (i) prior to the Stepdown Date or on or after the Stepdown Date if a Trigger
      Event is in effect for the Offered Certificates for that Distribution Date,
      the
      Principal Distribution Amount for that Distribution Date remaining after
      distribution of the Senior Principal Distribution Amount, the Class M1 Principal
      Distribution Amount, the Class M2 Principal Distribution Amount, the Class
      M3
      Principal Distribution Amount, the Class M4 Principal Distribution Amount and
      the Class M5 Principal Distribution Amount or (ii) on or after the Stepdown
      Date
      if a Trigger Event is not in effect for the Offered Certificates for that
      Distribution Date, the lesser
      of:

     

    
      	 	
              (i)

            	
              the
                Principal Distribution Amount for that Distribution Date remaining
                after
                distribution of the Senior Principal Distribution Amount, the Class
                M1
                Principal Distribution Amount, the Class M2 Principal Distribution
                Amount,
                the Class M3 Principal Distribution Amount, the Class M4 Principal
                Distribution Amount and the Class M5 Principal Distribution Amount;
                and
                

            

    

     

    
      	 	
              (ii)

            	
              the
                excess (if any) of (A) the sum of (1) the aggregate Class Principal
                Balance of the Class 1-M6 and Class 2-M6 Certificates immediately
                prior to
                that Distribution Date and (2) the aggregate Class Principal Balance
                of
                the Senior Certificates, the Class 1-M1, Class 2-M1, Class 1-M2,
                Class
                2-M2, Class 1-M3, Class 2-M3, Class 1-M4, Class 2-M4, Class 1-M5
                and Class
                2-M5 Certificates (after taking into account the payment of the Senior,
                Class M1, Class M2, Class M3, Class M4 and Class M5 Principal Distribution
                Amounts for such Distribution Date) over (B) the lesser of (i) the
                aggregate Stated Principal Balance of the Mortgage Loans as of the
                last
                day of the related Due Period multiplied by approximately 74.90%
                and (ii)
                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 Overcollateralization
                Floor.

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Class
      OC Distributable Amount:
      With
      respect to any Distribution Date and the Class OC Certificates, the excess,
      if
      any, of (x) the sum of (i) the amount of interest accrued during the related
      Interest Accrual Period at the related Pass-Through Rate on the Class Principal
      Balance for such Distribution Date and not included in the Extra Principal
      Distribution Amount on that Distribution Date and (ii) the Overcollateralization
      Release Amount, if any, for such Distribution Date, over (y) the
      Overcollateralization Increase Amount and the amount of any Swap Termination
      Payment, if any, for such Distribution Date.

     

    
      Class
        P Deposit:
        An
        amount equal to $1,000 deposited by the Depositor on the Closing
        Date.

       

    

    Class
      P Distribution Amount:
      With
      respect to each Distribution Date, an amount equal to the total of all
      Prepayment Penalties received on the Mortgage Loans in the prior Due Period.
      

     

    Class
      Principal Balance:
      With
      respect to any Class of Certificates and as of any Distribution Date, the
      aggregate of the Certificate Principal Balances of all Certificates of such
      Class as of such date.

     

    Closing
      Date:
      August
      3, 2007.

     

    Code:
      The
      Internal Revenue Code of 1986, including any successor or amendatory
      provisions.

     

    Collection
      Account:
      The
      separate Eligible Account or Accounts created and maintained by the Servicer
      pursuant to Section 3.5 hereof with a depository institution for the benefit
      of
      the Trustee on behalf of Certificateholders and designated with the applicable
      Account Designation.

     

    Commission:
      As
      defined in Section 8.12 hereof.

     

    Compensating
      Interest:
      As to
      any Distribution Date and any Principal Prepayment in Full in respect of a
      Mortgage Loan that is received during the period from the eighteenth day of
      the
      month prior to the month of such Distribution Date through the last day of
      such
      month, an additional payment made by the Servicer to the extent funds are
      available from the total Servicing Fee payable for such Distribution Date,
      equal
      to the amount of interest at the Mortgage Rate (less the applicable Servicing
      Fee Rate) for that Mortgage Loan from the date of the prepayment through the
      last day of the month of such Distribution Date. For the avoidance of doubt,
      no
      Compensating Interest payment shall be required in connection with any
      shortfalls resulting from Principal Prepayments in part or the application
      of
      the Relief Act.

     

    Cooperative
      Corporation:
      The
      entity that holds title (fee or an acceptable leasehold estate) to the real
      property and improvements constituting the Cooperative Property and which
      governs the Cooperative Property, which Cooperative Corporation must qualify
      as
      a Cooperative Housing Corporation under Section 216 of the Code.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    Coop
      Shares:
      Shares
      issued by a Cooperative Corporation.

     

    Cooperative
      Loan:
      Any
      Mortgage Loan secured by Coop Shares and a Proprietary Lease.

     

    Cooperative
      Property:
      The
      real property and improvements owned by the Cooperative Corporation, including
      the allocation of individual dwelling units to the holders of the Coop Shares
      of
      the Cooperative Corporation.

     

    Cooperative
      Unit:
      A
      single-family dwelling located in a Cooperative Property.

     

    Corporate
      Trust Office:
      The
      designated office of the Trustee at which at any particular time its corporate
      trust business with respect to this Agreement shall be
      administered.

     

    Cumulative
      Loss Trigger Event:
      With
      respect to any Distribution Date, the circumstances in which the aggregate
      amount of Realized Losses on the Mortgage Loans incurred since the Cut-off
      Date
      through the last day of the related Due Period divided by the aggregate
      outstanding principal balance of the Mortgage Loans as of the Cut-off Date
      exceeds the applicable percentages set forth below with respect to such
      Distribution Date: 

     

    
      	
              Distribution
                Date

            	
              Percentage

            
	 	 
	
              August
                2009 — July 2010

            	
              1.90%
                for the first month, plus an additional 1/12th of 2.40% for each
                month
                thereafter

            
	
              August
                2010 — July 2011

            	
              4.30%
                for the first month, plus an additional 1/12th of 2.60% for each
                month
                thereafter

            
	
              August
                2011 — July 2012

            	
              6.90%
                for the first month, plus an additional 1/12th of 2.10% for each
                month
                thereafter

            
	
              August
                2012 — July 2013

            	
              9.00%
                for the first month, plus an additional 1/12th of 0.75% for each
                month
                thereafter

            
	
              August
                2013 and thereafter

            	
              9.75%

            

    

     

    Custodial
      Agreement:
      The
      Custodial Agreement between the Custodian and Trustee dated as of July 1,
      2007.

     

    Custodian:
      Deutsche Bank National Trust Company, and its successors and assigns in such
      capacity.

     

    Cut-off
      Date:
      With
      respect to each Mortgage Loan, the later of the close of business on July 1,
      2007 and the date of origination of such Mortgage Loan.

     

    Debt
      Service Reduction:
      With
      respect to any Mortgage Loan, a reduction by a court of competent jurisdiction
      in a proceeding under the Bankruptcy Code in the Scheduled Payment for such
      Mortgage Loan which became final and non-appealable, except such a reduction
      resulting from a Deficient Valuation or any reduction that results in a
      permanent forgiveness of principal.

     

    Defaulted
      Swap Termination Payment:
      Any
      termination 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 of the Swap Counterparty) with respect to which the
      Swap Counterparty is the sole affected party.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Defective
      Mortgage Loan:
      Any
      Mortgage Loan which is required to be repurchased pursuant to Section 2.2 or
      2.3.

     

    Deficient
      Valuation:
      With
      respect to any Mortgage Loan, a valuation by a court of competent jurisdiction
      of the Mortgaged Property in an amount less than the then-outstanding
      indebtedness under the Mortgage Loan, or any reduction in the amount of
      principal to be paid in connection with any Scheduled Payment that results
      in a
      permanent forgiveness of principal, which valuation or reduction results from
      an
      order of such court which is final and non-appealable in a proceeding under
      the
      Bankruptcy Code.

     

    Definitive
      Certificates:
      Any
      Certificate evidenced by a Physical Certificate and any Certificate issued
      in
      lieu of a Book-Entry Certificate pursuant to Section 5.2(e).

     

    Delay
      Certificates:
      All
      interest-bearing Classes of Certificates other than the Non-Delay
      Certificates.

     

    Deleted
      Mortgage Loan:
      As
      defined in Section 2.3(d) hereof.

     

    Delinquency
      Loss Trigger Event:
      (1) with respect to any Distribution Date until the aggregate Class
      Principal Balance of the Senior Certificates has been reduced to zero, the
      circumstances in which the quotient (expressed as a percentage) of (x) the
      Three Month Rolling Average and (y) the aggregate unpaid principal balance
      of the Mortgage Loans, as of the last day of the related Due Period, equals
      or
      exceeds (z) 26.58% of the prior period’s Senior Enhancement Percentage and
      (2) with respect to any Distribution Date on or after the Distribution Date
      on which the aggregate Class Principal Balance of the Senior Certificates has
      been reduced to zero, the circumstances in which the quotient (expressed as
      a
      percentage) of (x) the Three Month Rolling Average and (y) the
      aggregate unpaid principal balance of the Mortgage Loans, as of the last day
      of
      the related Due Period, equals or exceeds (z) 31.25% of the prior period’s
      M-1 Enhancement Percentage.

     

    Delinquent:
      A
      Mortgage Loan is “Delinquent” if any payment due thereon is not made by the
      close of business on the Determination Date immediately following the day such
      payment is scheduled to be due. A Mortgage Loan is “30 days Delinquent” if such
      payment has not been received by the close of business on the Determination
      Date
      immediately succeeding the Determination Date on which such payment was
      categorized as “Delinquent.” Similarly for “60 days Delinquent,” “90 days
      Delinquent” and so on.

     

    Denomination:
      With
      respect to each Certificate, the amount set forth on the face thereof as the
      “Initial Principal Balance of this Certificate” or the Percentage Interest
      appearing on the face thereof.

     

    Depositor:
      Saxon
      Asset Securities Company, a Virginia corporation, or its successor in
      interest.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    Depository:
      The
      initial Depository shall be The Depository Trust Company, the nominee of which
      is Cede & Co., as the registered Holder of the Book-Entry Certificates. The
      Depository shall at all times be a “clearing corporation” as defined in Section
      8-102(a)(5) of the Uniform Commercial Code of the State of New
      York.

     

    Depository
      Institution:
      The
      Trustee or any depository institution or trust company that (a) is
      incorporated under the laws of the United States of America or any State
      thereof, (b) is subject to supervision and examination by federal or state
      banking authorities and (c) has outstanding unsecured commercial paper or
      other short-term unsecured debt obligations that are rated “P-1” by Moody’s,
“F1+” by Fitch and “1-A” by Standard & Poor’s (to the extent they are Rating
      Agencies hereunder).

     

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

     

    Determination
      Date:
      As to
      any Distribution Date, the earlier of (i) the 17th
      day of
      the month in which such Distribution Date occurs, or (ii) if such day is not
      a
      Business Day, the immediately preceding Business Day.

     

    Distribution
      Account:
      The
      separate Eligible Account created and maintained by the Trustee pursuant to
      Section 3.5(c) in the name of the Trustee for the benefit of the
      Certificateholders and designated with the applicable Account Designation.
      

     

    Distribution
      Account Deposit Date:
      As to
      any Distribution Date, the Business Day immediately preceding such Distribution
      Date.

     

    Distribution
      Date:
      The
      25th day of each calendar month after the initial issuance of the Certificates,
      or if such 25th day is not a Business Day, the next succeeding Business Day,
      commencing on the Initial Distribution Date.

     

    Due
      Date:
      With
      respect to any Distribution Date and each Mortgage Loan, the day of the month
      in
      which each Distribution Date occurs on which the related mortgage payment is
      due
      (or, in the case of an Odd Due Date Mortgage Loan, such day in the preceding
      month).

     

    Due
      Period:
      With
      respect to any Distribution Date, the period from and including the second
      day
      of each month through and including the first day of the following
      month.

     

    Eligible
      Account:
      Any of
      (i) an account or accounts maintained with a federal or state chartered
      depository institution or trust company the short-term unsecured debt
      obligations of which (or, in the case of a depository institution or trust
      company that is the principal subsidiary of a holding company, the short-term
      unsecured debt obligations of such holding company) are rated at the time any
      amounts are held on deposit therein (a) “P-1” by Moody's (or at least “A2” if
      such institution has no short-term rating from Moody’s), (b) at least “A-1” by
      S&P (or at least “A+” if such institution has no short-term rating from
      S&P) and (c) “F1” by Fitch (with respect to the preceding clauses (a), (b)
      and (c), in each case if such rating agency is a Rating Agency, and such
      applicable ratings from S&P, Fitch and Moody’s, the “Required Ratings”);
provided,
      in each
      case, that following a downgrade, withdrawal or suspension of any such
      institution’s rating below any applicable Required Rating, each such account
      shall promptly (and in any case within not more than 30 calendar days) be moved
      to another institution which has the Required Ratings, or to one or more
      segregated trust accounts as provided in clause (ii), (ii) a segregated
      trust account or accounts maintained with the trust department of a federal
      or
      state chartered depository institution or trust company, which institution
      or
      company has capital and surplus of not less than $50 million, acting in its
      fiduciary capacity or (iii) any other account acceptable to each Rating
      Agency. Eligible Accounts may bear interest, and may include, if otherwise
      qualified under this definition, accounts maintained with the
      Trustee.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

    

    Equivalent
      Priority:
      With
      respect to any Class of Class M Certificates relating to a Group, the Class
      of
      Class M Certificates with the equivalent Class designation relating to the
      other
      Group (e.g., the Class 1-M1 and Class 2-M1 Certificates are of Equivalent
      Priority).

     

    ERISA:
      The
      Employee Retirement Income Security Act of 1974, as amended.

     

    ERISA-Restricted
      Certificates:
      On the
      Closing Date, each of the Class P, Class OC and Class R Certificates;
      thereafter, the Class L-IO, Class P, Class OC and Class R Certificates and
      any
      Class of Certificates that no longer satisfies the applicable ratings
      requirement under the Underwriter’s Exemption.

     

    ERISA-Restricted
      Swap Certificates:
      Any of
      the Offered Certificates.

     

    ERISA
      Qualifying Underwriting:
      A best
      efforts or firm commitment underwriting that meets the requirements of the
      Underwriter’s Exemption.

     

    Escrow
      Account:
      The
      Eligible Account or Accounts established and maintained pursuant to Section
      3.6(a) hereof.

     

    Event
      of Default:
      As
      defined in Section 7.1 hereof.

     

    Excess
      Reserve Fund Account:
      The
      separate Eligible Account created and maintained by the Trustee pursuant to
      Section 4.7 in the name of the Trustee for the benefit of the
      Certificateholders and designated “Deutsche Bank National Trust Company, in
      trust for registered Holders of Saxon Asset Securities Trust 2007-3, Mortgage
      Pass-Through Certificates, Series 2007-3.” Funds in the Excess Reserve Fund
      Account shall be held in trust for the Certificateholders for the uses and
      purposes set forth in this Agreement. All investments made in respect of funds
      on deposit in the Excess Reserve Fund Account shall only be made in Permitted
      Investments.

     

    Excess
      Proceeds:
      With
      respect to any Liquidated Mortgage Loan, the amount, if any, by which the sum
      of
      any Liquidation Proceeds of such Mortgage Loan received during the Prepayment
      Period in which such Mortgage Loan became a Liquidated Mortgage Loan, net of
      any
      amounts previously reimbursed to the Servicer as Nonrecoverable Advance(s)
      with
      respect to such Mortgage Loan pursuant to Section 3.8(a)(iii), exceeds (i)
      the
      unpaid principal balance of such Liquidated Mortgage Loan as of the Due Date
      in
      the month in which such Mortgage Loan became a Liquidated Mortgage Loan plus
      (ii) accrued interest at the Mortgage Rate from the Due Date as to which
      interest was last paid or advanced (and not reimbursed) to Certificateholders
      up
      to the Due Date applicable to the Distribution Date immediately following the
      Prepayment Period during which such liquidation occurred. Notwithstanding the
      foregoing, Excess Proceeds with respect to any Nonrecoverable Mortgage Loan
      shall be equal to the amount, if any, by which Subsequent Recoveries with
      respect to such Nonrecoverable Mortgage Loan exceed the Realized Loss with
      respect thereto.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

    

    Excess
      Subordinate Amount:
      With
      respect to any Distribution Date and the Offered Certificates, the excess,
      if any,
      of (i) the Overcollateralized Amount on that Distribution Date (calculated
      for
      this purpose only after assuming that 100% of the Principal Remittance Amount
      on
      that Distribution Date has been distributed) over
      (ii) the
      Overcollateralization Target Amount for such Distribution Date.

     

    Exchange
      Act:
      As
      defined in Section 8.12 hereof.

     

    Extra
      Principal Distribution Amount:
      With
      respect to the Offered Certificates and any Distribution Date will be the lesser
      of (i) the excess of (x) the Interest Remittance Amount, over (y) the sum of
      (a)
      the Senior Interest Distribution Amount, (b) the Subordinate Interest
      Distribution Amount and (c) any Net Swap Payments and any Swap Termination
      Payment owed to the Swap Counterparty, but not including any Defaulted Swap
      Termination Payment owed to the Swap Counterparty, if any, in each case, on
      such
      Distribution Date and (ii) the Overcollateralization Increase Amount for such
      Distribution Date.

     

    Fannie
      Mae:
      The
      entity formally known as the Federal National Mortgage Association, a federally
      chartered and privately owned corporation organized and existing under the
      Federal National Mortgage Association Charter Act, or any successor
      thereto.

     

    FDIC:
      The
      Federal Deposit Insurance Corporation, or any successor thereto.

     

    FIRREA:
      The
      Financial Institutions Reform, Recovery, and Enforcement Act of
      1989.

     

    Fiscal
      Quarter:
      December 1 to February 29 (or the last day in such month), March 1 to May 31,
      June 1 to August 31, or September 1 to November 30, as applicable.

     

    Fitch:
      Fitch,
      Inc., or any successor thereto. If Fitch is designated as a Rating Agency in
      the
      Preliminary Statement, the address for notices to Fitch shall be Fitch, Inc.,
      One State Street Plaza, New York, New York 10004, Attention: Residential
      Mortgage Surveillance Group, or such other address as Fitch may hereafter
      furnish to the Depositor and the Servicer.

     

    Freddie
      Mac:
      The
      entity formally known as the Federal Home Loan Mortgage Corporation, a corporate
      instrumentality of the United States created and existing under Title III of
      the
      Emergency Home Finance Act of 1970, as amended, or any successor
      thereto.

     

    Group:
      The
      Group 1 Mortgage Loans or the Group 2 Mortgage Loans, as the context
      requires.

     

    Group
      1 Basis Risk Carry Forward Amount:
      With
      respect to any Class of Group 1 Certificates and any Distribution Date, an
      amount equal to the sum of (i) the excess, if any, of (x) the amount of interest
      such Class of Group 1 Certificates would have been entitled to receive on such
      Distribution Date if neither the Aggregate Net WAC Cap nor the Group 1 WAC
      Cap
      had been applicable to such Class on such Distribution Date over (y) the amount
      of interest accrued on such Distribution Date at the lesser of: (a) the
      Aggregate Net WAC Cap and (b) the Group 1 WAC Cap and (ii) the related Basis
      Risk Carry Forward Amount for previous Distribution Dates remaining unpaid
      together with interest thereon at a rate equal to the related Pass-Through
      Rate
      (without regard to the Net WAC Cap) for such Class of Group 1 Certificates
      for
      the most recently ended Interest Accrual Period.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

       

    

    Group
      1 Certificates:
      The
      Group 1 Senior Certificates and the Class 1-M1, Class 1-M2, Class 1-M3, Class
      1-M4, Class 1-M5 and Class 1-M6 Certificates.

     

    Group
      1 Mortgage Loans:
      The
      pool of Mortgage Loans identified in the Mortgage Loan Schedule as having been
      assigned to Group 1 and any Substitute Mortgage Loans delivered in replacement
      of any Mortgage Loan.

     

    Group
      1 Principal Allocation Percentage:
      For any
      Distribution Date, the percentage equivalent of a fraction, the numerator of
      which is (x) the portion of the Principal Remittance Amount for such
      Distribution Date that is attributable to principal received or advanced on
      the
      Group 1 Mortgage Loans and the denominator of which is (y) the aggregate
      Principal Remittance Amount for such Distribution Date.

     

    Group
      1 Senior Certificates:
      The
      Class 1-A Certificates.

     

    Group
      1 Senior Principal Allocation Amount:
      With
      respect to the Group 1 Senior Certificates and any Distribution Date, the
      product of the Class A Principal Allocation Percentage for the Group 1 Senior
      Certificates for that Distribution Date and the Senior Principal Distribution
      Amount for that Distribution Date.

     

    Group
      1 WAC Cap:
      With
      respect to the Group 1 Certificates and any Distribution Date, a per annum
      rate
      equal to the product of (i) the excess, if any, of (a) the weighted average
      of
      the Net Mortgage Rates of the Group 1 Mortgage Loans weighted based on their
      relative Stated Principal Balances as of the first day of the related Due
      Period, adjusted to reflect prepayments received after the first Day of the
      related Due Period that were distributed on the immediately preceding
      Distribution Date, over (b) the Swap Payment Rate for such Distribution Date,
      multiplied by (ii) the quotient of 30 divided by the actual number of days
      in
      the Interest Accrual Period.

     

    Group
      2 Basis Risk Carry Forward Amount:
      With
      respect to any Class of Group 2 Certificates and any Distribution Date, an
      amount equal to the sum of (i) the excess, if any, of (x) the amount of interest
      such Class of Group 2 Certificates would have been entitled to receive on such
      Distribution Date if neither the Aggregate Net WAC Cap nor the Group 2 WAC
      Cap
      had been applicable to such Class on such Distribution Date over (y) the amount
      of interest accrued on such Distribution Date at the lesser of: (a) the
      Aggregate Net WAC Cap and (b) the Group 2 WAC Cap and (ii) the related Basis
      Risk Carry Forward Amount for previous Distribution Dates remaining unpaid
      together with interest thereon at a rate equal to the related Pass-Through
      Rate
      (without regard to the Net WAC Cap) for such Class of Group 2 Certificates
      for
      the most recently ended Interest Accrual Period.

     

    
      
        
        

      

      
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    Group
      2 Certificates:
      The
      Group 2 Senior Certificates and the Class 2-M1, Class 2-M2, Class 2-M3, Class
      2-M4, Class 2-M5 and Class 2-M6 Certificates.

     

    Group
      2 Mortgage Loans:
      The
      pool of Mortgage Loans identified in the Mortgage Loan Schedule as having been
      assigned to Group 2 and any Substitute Mortgage Loans delivered in replacement
      of any Mortgage Loan.

     

    Group
      2 Principal Allocation Percentage:
      For any
      Distribution Date, the percentage equivalent of a fraction, the numerator of
      which is (x) the portion of the Principal Remittance Amount for such
      Distribution Date that is attributable to principal received or advanced on
      the
      Group 2 Mortgage Loans and the denominator of which is (y) the aggregate
      Principal Remittance Amount for such Distribution Date.

     

    Group
      2 Senior Certificates:
      The
      Class 2-A1, Class 2-A2, Class 2-A3 and Class 2-A4 Certificates.

     

    Group
      2 Senior Principal Allocation Amount:
      With
      respect to the Group 2 Senior Certificates and any Distribution Date, the
      product of the Class A Principal Allocation Percentage for the Group 2 Senior
      Certificates for that Distribution Date and the Senior Principal Distribution
      Amount for that Distribution Date.

     

    Group
      2 WAC Cap:
      With
      respect to the Group 2 Certificates and any Distribution Date, a per annum
      rate
      equal to the product of (i) the excess, if any, of (a) the weighted average
      of
      the Net Mortgage Rates of the Group 2 Mortgage Loans weighted based on their
      relative Stated Principal Balances as of the first day of the related Due
      Period, adjusted to reflect prepayments received after the first Day of the
      related Due Period that were distributed on the immediately preceding
      Distribution Date, over (b) the Swap Payment Rate for such Distribution Date,
      multiplied by (ii) the quotient of 30 divided by the actual number of days
      in
      the Interest Accrual Period.

     

    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.

     

    Initial
      Distribution Date:
      August
      27, 2007.

     

    Initial
      Optional Termination Date:
      The
      first Distribution Date on or after which the aggregate Stated Principal Balance
      of the Mortgage Loans is less than 10% of the aggregate Stated Principal Balance
      thereof as of the Cut-off Date.

     

    Insurance
      Policy:
      With
      respect to any Mortgage Loan included in the Trust Fund, any insurance policy,
      including all riders and endorsements thereto in effect, including any
      replacement policy or policies for any Insurance Policies.

     

    Insurance
      Proceeds:
      Proceeds paid by an insurer pursuant to any Insurance Policy, in each case
      other
      than any amount included in such Insurance Proceeds in respect of Insured
      Expenses.

     

    
      
        
        

      

      
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    Insured
      Expenses:
      Expenses covered by an Insurance Policy or any other insurance policy with
      respect to the Mortgage Loans.

     

    Interest
      Accrual Period:
      For any
      Class of Offered Certificates and the Class L-IO Certificates and the August
      2007 Distribution Date will be the 24-day period commencing on the Closing
      Date
      and ending on the day immediately preceding that Distribution Date. The Interest
      Accrual Period for any Distribution Date thereafter and any Class of Offered
      Certificates and the Class L-IO Certificates shall be the one-month period
      commencing on the Distribution Date in the month prior to the month in which
      that Distribution Date occurs and ending on the day immediately preceding that
      Distribution Date. With respect to each Class of Offered Certificates, interest
      will be calculated on the basis of a 360-day year and the actual number of
      days
      that elapsed in the related Interest Accrual Period. With respect to the Class
      L-IO Certificates, interest will be calculated on the basis of a 360-day year
      consisting of twelve 30-day months.

     

    Interest
      Carry Forward Amount:
      With
      respect to any Class of Offered Certificates and any Distribution Date, the
      amount, if any, by which the Interest Distribution Amount for that Class of
      Offered Certificates for the immediately preceding Distribution Date exceeded
      the actual amount distributed on such Class in respect of interest on the
      immediately preceding Distribution Date, together with any Interest Carry
      Forward Amount with respect to such Class remaining unpaid from previous
      Distribution Dates, plus interest accrued thereon at the related Pass-Through
      Rate for the most recently ended Interest Accrual Period.

     

    Interest
      Distribution Amount:
      For the
      Offered Certificates and any Distribution Date will be the aggregate of the
      Senior and Subordinate Interest Distribution Amounts for that Distribution
      Date.

     

    Interest
      Determination Date:
      With
      respect to the first Interest Accrual Period, August 27, 2007, and with respect
      to any subsequent Interest Accrual Period, the second London Business Day
      preceding such Interest Accrual Period.

     

    Interest
      Remittance Amount:
      For the
      Offered Certificates and any Distribution Date will be that portion of the
      Available Distribution Amount for such Distribution Date that represents
      interest received or advanced on the Mortgage Loans.

     

    Last
      Endorsee:
      As
      defined in Section 2.1(b).

     

    Latest
      Possible Maturity Date:
      The
      Distribution Date following the third anniversary of the scheduled maturity
      date
      of the Mortgage Loan having the latest scheduled maturity date as of the Cut-off
      Date.

     

    Liquidated
      Mortgage Loan:
      With
      respect to any Distribution Date, a defaulted Mortgage Loan (including any
      REO
      Property) which was liquidated by the Servicer in any manner, including but
      not
      limited to a disposition pursuant to Section 3.11(i), in the Prepayment Period
      for such Distribution Date and as to which the Servicer has determined (in
      accordance with this Agreement) that it has received all amounts it expects
      to
      receive in connection with the liquidation of such Mortgage Loan, including
      the
      final disposition of an REO Property.

     

    
      
        
        

      

      
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    Liquidation
      Proceeds:
      Amounts, including Insurance Proceeds, received by the Servicer in connection
      with the partial or complete liquidation of defaulted Mortgage Loans, whether
      through trustee’s sale, foreclosure sale, disposition pursuant to Section
      3.11(i), or otherwise or amounts received in connection with any condemnation
      or
      partial release of a Mortgaged Property and any other proceeds received in
      connection with an REO Property, less the sum of related unreimbursed Servicing
      Fees, Servicing Advances and P&I Advances.

     

    Loan-to-Value
      Ratio:
      With
      respect to any Mortgage Loan and as to any date of determination, the fraction
      (expressed as a percentage) the numerator of which is the principal balance
      of
      the related Mortgage Loan at such date of determination and the denominator
      of
      which is the lesser of the purchase price of the related Mortgaged Property
      and
      the appraised value of the related Mortgaged Property.

     

    Loan
      Modification Reduction:
      With
      respect to any Mortgage Loan, the amount of any reduction of the principal
      amount thereof resulting from a modification of such Mortgage Loan by the
      Servicer permitted pursuant to the terms of this Agreement.

     

    London
      Business Day:
      A day
      on which banks are open for dealing in foreign currency and exchange in London
      and New York City.

     

    Lost
      Mortgage Note:
      Any
      Mortgage Note the original of which was permanently lost or destroyed and has
      not been replaced.

     

    Lower-Tier
      Interest:
      Any
      interest created in REMIC 1 or REMIC 2.

     

    M-1
      Enhancement Percentage:
      For any
      Distribution Date, the percentage obtained by dividing (x) the aggregate Class
      Principal Balance of the Class 1-M2, Class 2-M2, Class 1-M3, Class 2-M3, Class
      1-M4, Class 2-M4, Class 1-M5, Class 2-M5, Class 1-M6, Class 2-M6, Class B-1,
      Class B-2 and Class B-3 Certificates (together with the Overcollateralized
      Amount and taking into account the distributions of the Principal Distribution
      Amount and all payments of principal from the Swap Account, if any, for such
      Distribution Date) by (y) the aggregate principal balance of the Mortgage Loans
      as of the last day of the related Due Period.

     

    Maintenance:
      With
      respect to any Cooperative Unit, the rent paid by the Mortgagor to the
      Cooperative Corporation pursuant to the Proprietary Lease.

     

    Majority
      in Interest:
      As to
      any Class of Regular Certificates, the Holders of Certificates of such Class
      evidencing, in the aggregate, at least 51% of the Percentage Interests evidenced
      by all Certificates of such Class.

     

    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, as nominee for the holder
      from
      time to time of the Mortgage Note.

     

    
      
        
        

      

      
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    Monthly
      Statement:
      The
      statement delivered to the Certificateholders pursuant to
      Section 4.5.

     

    Moody’s:
      Moody’s
      Investors Service, Inc., or any successor thereto. If Moody’s is designated as a
      Rating Agency in the Preliminary Statement, the address for notices to Moody’s
      shall be Moody’s Investors Service, Inc., 99 Church Street, New York, New York
      10007, Attention: Residential Pass-Through Monitoring, or such other address
      as
      Moody’s may hereafter furnish to the Depositor or the Servicer.

     

    Mortgage:
      The
      mortgage, deed of trust or other instrument creating a first or second lien
      on
      an estate in fee simple or leasehold interest in real property securing a
      Mortgage Note.

     

    Mortgage
      Loan Document Requirements:
      As
      defined in Section 2.2 hereof.

     

    Mortgage
      File:
      The
      mortgage documents listed in Section 2.1 hereof pertaining to a particular
      Mortgage Loan and any additional documents delivered to the Trustee to be added
      to the Mortgage File pursuant to this Agreement.

     

    Mortgage
      Loan Documents:
      As
      defined in Section 2.1 hereof.

     

    Mortgage
      Loans:
      Such of
      the mortgage loans transferred and assigned pursuant to the provisions hereof
      as
      from time to time are held as a part of the Trust Fund (including any REO
      Property), the mortgage loans so held being identified in the Mortgage Loan
      Schedule, notwithstanding foreclosure or other acquisition of title of the
      related Mortgaged Property.

     

    Mortgage
      Loan Schedule:
      The
      list of Mortgage Loans (as from time to time amended by the Servicer to reflect
      the addition of Substitute Mortgage Loans and the deletion of Deleted Mortgage
      Loans pursuant to the provisions of this Agreement) transferred to the Trustee
      as part of the Trust Fund and from time to time subject to this Agreement,
      attached hereto as Schedule I, setting forth the following information with
      respect to each Mortgage Loan:

     

    (i)  the
      loan
      number;

     

    (ii)  the
      Mortgagor’s name;

     

    (iii)  the
      original principal balance; 

     

    (iv)  the
      Stated Principal Balance as of the Cut-off Date; 

     

    (v)  the
      Mortgage Rate;

     

    (vi)  Servicing
      Fee; and

     

    (vii)  the
      related Group. 

     

    Mortgage
      Note:
      The
      original executed mortgage note or other evidence of indebtedness evidencing
      the
      indebtedness of a Mortgagor under a Mortgage Loan.

     

    Mortgage
      Rate:
      The
      annual rate of interest borne by a Mortgage Note from time to time.

     

    
      
        
        

      

      
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    Mortgaged
      Property:
      The
      underlying property securing a Mortgage Loan, which, in the case of a
      Cooperative Loan, is the related Coop Shares and Proprietary Lease.

     

    Mortgagor:
      Any
      obligor on a Mortgage Note.

     

    Net
      Monthly Excess Cashflow:
      For the
      Certificates and any Distribution Date, the excess, if any, of (x) the Available
      Distribution Amount for the Distribution Date over (y) the sum of (1) the
      aggregate of the Senior Interest Distribution Amounts payable to the holders
      of
      the Senior Certificates, the Subordinate Interest Distribution Amounts payable
      to the holders of the Subordinate Certificates, the Principal Distribution
      Amount and (2) the aggregate of all Net Swap Payments and any Swap Termination
      Payment owed to the Swap Counterparty, including, without limitation, any Senior
      Defaulted Swap Termination Payment, but not including any other Defaulted Swap
      Termination Payment owed to the Swap Counterparty, if any.

     

    Net
      Mortgage Rate:
      For
      each Mortgage Loan, the mortgage interest rate thereon less the Servicing Fee
      Rate, the Trustee Fee Rate and the Class L-IO Rate.

     

    Net
      Prepayment Interest Shortfall:
      As to
      any Distribution Date and Group, the amount by which the aggregate of Prepayment
      Interest Shortfalls during the related Prepayment Period exceeds an amount
      equal
      to the Compensating Interest, if any, for such Distribution Date.

     

    Net
      Swap Payment:
      With
      respect to any Distribution Date, any net payment (other than a Swap Termination
      Payment) payable by the Trust to the Swap Provider on the related Fixed Rate
      Payer Payment Date (as defined in the Swap Agreement).

     

    Net
      Swap Receipt:
      With
      respect to any Distribution Date, any net payment (other than a Swap Termination
      Payment) made by the Swap Provider to the Trust on the related Floating Rate
      Payer Payment Date (as defined in the Swap Agreement).

     

    Net
      WAC Cap:
      The
      Aggregate Net WAC Cap, the Group 1 WAC Cap or the Group 2 WAC Cap, as the
      context requires.

     

    Non-MERS
      Mortgage Loan:
      Any
      Mortgage Loan other than a MERS Mortgage Loan.

     

    Nonrecoverable
      Advance:
      Any
      portion of any P&I Advance or Servicing Advance previously made or proposed
      to be made by the Servicer that, in the good faith judgment of the advancing
      party, will not be ultimately recoverable by such advancing party from the
      related Mortgagor, related Liquidation Proceeds or otherwise.

     

    Nonrecoverable
      Mortgage Loan:
      Any
      Mortgage Loan that has been determined to be a Nonrecoverable Mortgage Loan
      pursuant to Section 3.11(f) hereof and is identified in an Officer’s Certificate
      signed by a Servicing Officer delivered to the Servicer pursuant to Section
      3.11(f) hereof. For the avoidance of doubt, Mortgage Loans represented by REO
      Property shall not constitute Nonrecoverable Mortgage Loans.

     

    Nonrecoverable
      Mortgage Loan Purchase Price:
      As to
      any Nonrecoverable Mortgage Loan, an amount equal to the sum of (i) the
      Projected Net Liquidation Value thereof on the date of purchase of such loan
      pursuant to this Agreement; and (ii) any accrued interest at the applicable
      Mortgage Rate from the date through which interest was last paid by the
      Mortgagor to the Due Date occurring in the Due Period immediately preceding
      the
      Distribution Date on which the Nonrecoverable Mortgage Loan Purchase Price
      is to
      be distributed to Certificateholders.

     

    
      
        
        

      

      
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    Notice
      Address:
      For
      purposes hereof, the addresses of the Depositor, the Servicer and the Trustee,
      are as follows:

     

    (i) If
      to the
      Depositor:

     

    Saxon
      Asset Securities Company

    4860
      Cox
      Road

    Glen
      Allen, Virginia 23060

     

    (ii) If
      to the
      Trustee:

     

    Deutsche
      Bank National Trust Company

    1761
      East
      St. Andrew Place

    Santa
      Ana, California 92705

    Attention:
      SX 0703

     

    (iii) If
      to
the
      Servicer:

     

    Saxon
      Mortgage Services, Inc.

    4708
      Mercantile Drive

    Fort
      Worth, TX 76137

    Attn:
      David Dill, Chief Executive Officer and President

    

    Notice
      of Final Distribution:
      The
      notice to be provided pursuant to Section 9.2 to the effect that final
      distribution on any of the Certificates shall be made only upon presentation
      and
      surrender thereof.

     

    Odd
      Due Date Mortgage Loan:
      Any
      Mortgage Loan whose monthly payments are due on a day other than the first
      day
      of the month.

     

    Offered
      Certificates:
      The
Class
      1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class 2-A4, Class
      1-M1, Class 2-M1, Class 1-M2, Class 2-M2, Class 1-M3, Class 2-M3, Class 1-M4,
      Class 2-M4, Class 1-M5, Class 2-M5, Class 1-M6, Class 2-M6
      Certificates,
      Class
      B-1, Class B-2 and Class B-3 Certificates.

     

    Officer’s
      Certificate:
      A
      certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
      the President, a Managing Director, a Vice President (however denominated),
      an
      Assistant Vice President, the Treasurer, the Secretary, or one of the Assistant
      Treasurers or Assistant Secretaries of the entity required by the terms of
      this
      Agreement to deliver such certificate, or by such officer of such entity as
      may
      be required to sign such certificate by the terms of this Agreement relating
      to
      such particular certificate.

     

    One-Month
      LIBOR:
      As of
      any Interest Determination Date, the rate for one-month U.S. dollar deposits
      which appears in the Reuters Screen LIBOR01, as of 11:00 a.m., London time,
      on
      such Interest Determination Date. If such rate does not appear on Reuters Screen
      LIBOR01, the rate for that day will be determined on the basis of the rates
      at
      which deposits in United States dollars are offered by the Reference Banks
      at
      approximately 11:00 a.m., London time, on that day to prime banks in the London
      interbank market for a period equal to the relevant Interest Accrual Period
      (commencing on the first day of such Interest Accrual Period). The Calculation
      Agent, as agent for the Servicer, 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 for that day will be the arithmetic-
      mean
      of the quotations. If fewer than two quotations are provided as requested,
      the
      rate for that day will be the arithmetic-mean of the rates quoted by major
      banks
      in New York City, selected by the Servicer, at approximately 11:00 a.m., New
      York City time, on that day for loans in United States dollars to leading
      European banks for a period equal to the relevant Interest Accrual Period
      (commencing on the first day of such Interest Accrual Period). The Calculation
      Agent, as agent for the Servicer, shall review Reuters Screen LIBOR01 as of
      the
      required time, make the required requests to the principal offices of the
      Reference Banks and selections of major banks in New York City and shall
      determine the rate which constitutes One-Month LIBOR for each Interest
      Determination Date.

     

    
      
        
        

      

      
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    Opinion
      of Counsel:
      A
      written opinion of counsel, who may be counsel for the Depositor or the
      Servicer, including in-house counsel, reasonably acceptable to the Trustee.
      

     

    Optional
      Termination:
      The
      termination of the trust created hereunder in connection with the purchase
      of
      the Mortgage Loans pursuant to Section 9.1 hereof.

     

    OTS:
      The
      Office of Thrift Supervision.

     

    Outstanding:
      With
      respect to the Certificates as of any date of determination, all Certificates
      theretofore executed and authenticated under this Agreement except:

     

    (i) Certificates
      theretofore canceled by the Trustee or delivered to the Trustee for
      cancellation; and

     

    (ii) Certificates
      in exchange for which or in lieu of which other Certificates have been executed
      and delivered by the Trustee pursuant to this Agreement.

     

    Outstanding
      Mortgage Loan:
      As of
      any Determination Date, a Mortgage Loan with a Stated Principal Balance greater
      than zero which was not the subject of a Principal Prepayment in Full prior
      to
      such Determination Date and which did not become a Liquidated Mortgage Loan
      prior to such Determination Date.

     

    Overcollateralized
      Amount:
      With
      respect to the Offered Certificates as of the Closing Date will be an amount
      equal to approximately $101,732,627. With respect to any Distribution Date
      following the Closing Date, the Overcollateralized Amount is the amount by
      which
      the aggregate Stated Principal Balance of the Mortgage Loans as of the last
      day
      of the related Due Period exceeds the aggregate Class Principal Balance of
      the
      Offered Certificates after taking into account all payments of principal on
      such
      Distribution Date.

     

    Overcollateralization
      Floor:
      Prior
      to the Distribution Date in August 2027, 0.50% of the aggregate principal
      balance of the Mortgage Loans as of the Cut-off Date. On that date and
      thereafter, the Overcollateralization Floor will be equal to the greater of
      (i)
      0.50% of the aggregate principal balance of the Mortgage Loans as of the Cut-off
      Date, and (ii) the sum of (a) 0.10% of the aggregate principal balance of the
      Mortgage Loans as of the Cut-off Date and (b) the aggregate principal balance,
      as of the last day of the related Due Period, of all outstanding Mortgage Loans
      having original terms to maturity of 40 years.

     

    
      
        
        

      

      
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    Overcollateralization
      Increase Amount:
      With
      respect to the Offered Certificates and any Distribution Date, the amount,
      if
      any, by which the Overcollateralization Target Amount exceeds the
      Overcollateralized Amount for such Distribution Date (calculated for this
      purpose only after assuming that 100% of the Principal Remittance Amount on
      such
      Distribution Date has been distributed).

     

    Overcollateralization
      Target Amount:
      For the
      Offered Certificates and any Distribution Date (i) prior to the Stepdown Date,
      the product of (x) 7.20% and (y) the aggregate Stated Principal Balance of
      the
      Mortgage Loans as of the Cut-off Date, (ii) on and after the Stepdown Date,
      provided,
      that a
      Trigger Event is not in effect, the lesser of (a) the product of (x) 14.40%
      and
      (y) the aggregate Stated Principal Balance of the Mortgage Loans as of the
      last
      day of the related Due Period and (b) the product of (x) 7.20% and (y) the
      aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
      Date
      and (iii) on and after the Stepdown Date, if a Trigger Event is in effect,
      the
      Overcollateralization Target Amount for the immediately preceding Distribution
      Date; provided,
      however,
      that on
      each Distribution Date the Overcollateralization Target Amount shall not be
      lower than the applicable Overcollateralization Floor.

     

    Ownership
      Interest:
      As to
      any Residual Certificate, any ownership interest in such Certificate including
      any interest in such Certificate as the Holder thereof and any other interest
      therein, whether direct or indirect, legal or beneficial.

     

    P&I
      Advance:
      The
      payment required to be made by the Servicer with respect to any Distribution
      Date pursuant to Section 3.19, the amount of any such payment being equal to
      the
      aggregate of payments of principal and interest (net of the related Servicing
      Fee and any net income in the case of any REO Property) on the Mortgage Loans
      that were due during the related Due Period and not received as of the close
      of
      business on the related Determination Date, less the aggregate amount of any
      such delinquent payments that the Servicer has determined would constitute
      a
      Nonrecoverable Advance if advanced.

     

    Pass-Through
      Rate:
      For any
      Class of Offered Certificates and any Distribution Date, the rate described
      in
      the Pass-Through Rate Schedule.

     

    Pass-Through
      Rate Schedule:
      The
      Schedule setting forth the Pass-Through Rates of the Certificates, attached
      as
      Schedule II hereto.

     

    Paying
      Agent:
      Deutsche Bank National Trust Company, a New York banking corporation, and its
      successors and assigns in such capacity.

     

    Percentage
      Interest:
      As to
      any Certificate, the percentage interest evidenced thereby in distributions
      required to be made on the related Class, such percentage interest being set
      forth on the face thereof or equal to the percentage obtained by dividing the
      Denomination of such Certificate by the aggregate of the Denominations of all
      Certificates of the same Class.

     

    
      
        
        

      

      
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      Permitted
      Investments:
      Any one
      or more of the following obligations or securities acquired at a purchase price
      of not greater than par, regardless of whether issued by the Servicer, the
      Trustee or any of their respective Affiliates:

     

    (i)  direct
      obligations of, or obligations fully guaranteed as to timely payment of
      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)  demand
      and time deposits in, certificates of deposit of, or bankers” acceptances (which
      shall each have an original maturity of not more than 90 days and, in the
      case of bankers” acceptances, shall in no event have an original maturity of
      more than 365 days or a remaining maturity of more than 30 days) denominated
      in
      United States dollars and issued by, any Depository Institution and rated “P-1”
by Moody’s, “F1+” by Fitch and “A-1+” by Standard & Poor’s (to the extent
      they are Rating Agencies hereunder and are so rated by such Rating
      Agency);

     

    (iii)  repurchase
      obligations with respect to any security described in clause (i) above
      entered into with a Depository Institution (acting as principal);

     

    (iv)  securities
      bearing interest or sold at a discount that are issued by any corporation
      incorporated under the laws of the United States of America or any State thereof
      and that are rated by each Rating Agency that rates such securities in its
      highest long-term unsecured rating categories at the time of such investment
      or
      contractual commitment providing for such investment;

     

    (v)  commercial
      paper (including both non-interest-bearing discount obligations and
      interest-bearing obligations payable on demand or on a specified date not more
      than 30 days after the date of acquisition thereof) that is rated by each Rating
      Agency that rates such securities in its highest short-term unsecured debt
      rating available at the time of such investment;

     

    (vi)  units
      of
      money market funds, including money market funds advised by the Depositor,
      the
      Trustee or an Affiliate thereof, that have been rated “Aaa” by Moody’s, “AAA” by
      Standard & Poor’s and at least “AA” by Fitch (to the extent they are Rating
      Agencies hereunder and such funds are so rated by such Rating Agency);
      and

     

    (vii)  if
      previously confirmed in writing to the Trustee, any other demand, money market
      or time deposit, or any other obligation, security or investment, as may be
      acceptable to the Rating Agencies as a permitted investment of funds backing
      “Aaa” and “AAA” rated securities;

     

    provided,
      however,
      that no
      instrument described hereunder shall evidence either the right to receive
      (a) only interest with respect to the obligations underlying such
      instrument or (b) both principal and interest payments derived from
      obligations underlying such instrument and the interest and principal payments
      with respect to such instrument provide a yield to maturity at par greater
      than
      120% of the yield to maturity at par of the underlying obligations.

     

    
      
        
        

      

      
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    Permitted
      Transferee:
      Any
      person other than a “disqualified organization” as defined in section
      860E(e)(5).

     

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

     

    Physical
      Certificates:
      The
      Private Certificates.

     

    Prepayment
      Interest Excess:
      As to
      any Principal Prepayment in Full received by the Servicer from the first day
      through the seventeenth day of any calendar month (other than the calendar
      month
      in which the Cut-off Date occurs), all amounts paid by the related Mortgagor
      in
      respect of interest on such Principal Prepayment. All Prepayment Interest Excess
      shall be paid to the Servicer as additional servicing compensation.

     

    Prepayment
      Interest Shortfall:
      As to
      any Distribution Date, Mortgage Loan and Principal Prepayment received (a)
      during the period from the eighteenth day of the month preceding the month
      of
      such Distribution Date through the last day of such month, in the case of a
      Principal Prepayment in Full, or (b) during the month preceding the month of
      such Distribution Date, in the case of a partial Principal Prepayment, the
      amount, if any, by which one month’s interest at the related Mortgage Rate (less
      the related Servicing Fee) on such Principal Prepayment exceeds the amount
      of
      interest actually paid by the Mortgagor in connection with such Principal
      Prepayment.

     

    Prepayment
      Penalty:
      With
      respect to any Prepayment Period, any prepayment premium, penalty or charge
      collected by the Servicer from a Mortgagor pursuant to the terms of the related
      Mortgage Note.

     

    Prepayment
      Period:
      As to
      each Distribution Date, the period from but excluding the Cut-off Date to and
      including the 17th
      day of
      the month in which the first Determination Date occurs and each period
      thereafter from and including the 18th
      day of a
      month to and including the Determination Date occurring in the following
      month.

     

    Primary
      Mortgage Insurance Policy:
      Any
      mortgage guaranty insurance, if any, on an individual Mortgage Loan, as
      evidenced by a policy or certificate, whether such policy is obtained by the
      originator, the lender, the borrower or the Seller on behalf of the Trust
      Fund.

     

    Principal
      Distribution Amount:
      For the
      Offered Certificates and any Distribution Date will be the
      sum of
      the
      Basic Principal Distribution Amount and the Extra Principal Distribution Amount,
      in each case for that Distribution Date.

     

    
      
        
        

      

      
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    Principal
      Remittance Amount:
      For the
      Offered Certificates and any Distribution Date, the
      sum of 

     

    (i)
      the
      principal portion of all Scheduled Payments on the Mortgage Loans due during
      the
      related Due Period, whether or not received on or prior to the related
      Determination Date; 

     

    (ii)
      the
      principal portion of all proceeds received in respect of the repurchase of
      a
      Mortgage Loan (or, in the case of a substitution, certain amounts representing
      a
      principal adjustment as required by this Agreement) during the related
      Prepayment Period; and 

     

    (iii)
      the
      principal portion of all other unscheduled collections, including Insurance
      Proceeds, condemnation proceeds, Liquidation Proceeds, to the extent applied
      as
      recoveries of principal on the Mortgage Loans, and all full and partial
      Principal Prepayments, received during the related Prepayment Period.

     

    In
      no
      event will the Principal Remittance Amount with respect to any Distribution
      Date
      be (x) less than zero or (y) greater than the then outstanding aggregate Class
      Principal Balance of the Offered Certificates.

     

    Principal
      Prepayment:
      Any
      payment of principal by a Mortgagor on a Mortgage Loan that is received in
      advance of its scheduled Due Date and is not accompanied by an amount
      representing scheduled interest due on any date or dates in any month or months
      subsequent to the month of prepayment. Partial Principal Prepayments shall
      be
      applied by the Servicer in accordance with the terms of the related Mortgage
      Note.

     

    Principal
      Prepayment in Full:
      Any
      Principal Prepayment made by a Mortgagor of the entire principal balance of
      a
      Mortgage Loan.

     

    Private
      Certificates:
      Any
      Class L-IO, Class OC, Class P or Class R Certificate.

     

    Projected
      Net Liquidation Value:
      With
      respect to any Nonrecoverable Mortgage Loan, the amount, set forth in an
      Officer’s Certificate signed by a Servicing Officer in a form acceptable to the
      Trustee, equal to (i) the fair market value of the related Mortgaged Property
      as
      determined by a real estate broker meeting the qualifications, and applying
      broker’s price opinion methodology generally acceptable to, residential mortgage
      servicers, or other property valuation opinion methodology customarily used
      by
      residential mortgage servicers with respect to defaulted loans, less (ii) the
      Servicer’s good faith estimate of the total of all related costs of liquidation,
      Servicing Fees, and Advances reasonably expected to be incurred in the event
      the
      Mortgaged Property were the subject of foreclosure or otherwise converted to,
      and sold as, REO Property.

     

    Proprietary
      Lease:
      With
      respect to any Cooperative Unit, a lease or occupancy agreement between a
      Cooperative Corporation and a holder of related Coop Shares.

     

    PUD:
      Planned
      Unit Development.

     

    Purchase
      Price:
      With
      respect to any Mortgage Loan, an amount equal to the sum of (i) 100% of the
      unpaid principal balance of such Mortgage Loan on the date of such purchase,
      (ii) accrued interest thereon at the applicable Mortgage Rate from the date
      through which interest was last paid by the Mortgagor to the Due Date occurring
      in the Due Period immediately preceding the Distribution Date on which the
      Purchase Price is to be distributed to Certificateholders and (iii) any costs
      and damages incurred by the Trust in connection with any violation by such
      Mortgage Loan of any predatory- or abusive-lending law.

     

    
      
        
        

      

      
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    Rating
      Agency:
      Each of
      S&P, Fitch and Moody’s. If any such organization or a successor is no longer
      in existence, “Rating Agency” shall be such nationally recognized statistical
      rating organization, or other comparable Person, as is designated by the
      Depositor, notice of which designation shall be given to the Trustee. References
      herein to a given rating category of a Rating Agency shall mean such rating
      category without giving effect to any modifiers.

     

    Realized
      Loss:
      With
      respect to any Distribution Date and any Mortgage Loan (other than a
      Nonrecoverable Mortgage Loan) that became a Liquidated Mortgage Loan during
      the
      related Prepayment Period will be the sum of (i) the principal balance of such
      Mortgage Loan remaining outstanding (after all recoveries of principal have
      been
      applied thereto) and the principal portion of P&I Advances made by the
      Servicer with respect to such Mortgage Loan which have been reimbursed from
      Liquidation Proceeds, and (ii) the accrued interest on such Mortgage Loan
      remaining unpaid and the interest portion of P&I Advances made by the
      Servicer with respect to such Mortgage Loan which have been reimbursed from
      Liquidation Proceeds. The amounts set forth in clause (i) are the principal
      portion of Realized Losses and the amounts set forth in clause (ii) are the
      interest portion of Realized Losses. With respect to any Mortgage Loan that
      is
      not a Liquidated Mortgage Loan, the amount of any Debt Service Reduction, Loan
      Modification Reduction or Deficient Valuation incurred with respect to such
      Mortgage Loan as of the related Due Date will be treated as a Realized Loss.
      With respect to any Nonrecoverable Mortgage Loan, the sum of (i) the amount
      by
      which the unpaid principal balance thereof exceeds the Projected Net Liquidation
      Value thereof and (ii) the amount, if any, by which the Projected Net
      Liquidation Value thereof exceeds Liquidation Proceeds received in respect
      thereof. The Realized Loss in respect of any Nonrecoverable Mortgage Loan
      calculated pursuant to clause (i) of the preceding sentence shall be given
      effect as of the Prepayment Period during which the Servicer classifies such
      loan as a Nonrecoverable Mortgage Loan.

     

    Recognition
      Agreement:
      With
      respect to any Cooperative Loan, an agreement between the Cooperative
      Corporation and the originator of such Mortgage Loan which establishes the
      rights of such originator in the Cooperative Property.

     

    Record
      Date:
      The
      close of business on the Business Day immediately preceding such Distribution
      Date.

     

    Reference
      Bank:
      Leading
      banks selected by the Servicer and engaged in transactions in U.S. dollar
      deposits in the London interbank market.

     

    Refinancing
      Mortgage Loan:
      Any
      Mortgage Loan originated in connection with the refinancing of an existing
      Mortgage Loan.

     

    Regular
      Certificates:
      Any
      of
      the Offered Certificates and the Class OC Certificates.

     

    
      
        
        

      

      
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    Regulation
      AB:
      Regulation AB promulgated under the Securities Act and the Exchange Act, as
      the
      same may be amended from time to time; and all references to any rule, item,
      section or subsection of, or definition or term contained in, Regulation AB
      mean
      such rule, item, section, subsection, definition or term, as the case may be,
      or
      any successor thereto, in each case as the same may be amended from time to
      time.

     

    Relief
      Act:
      The
      Servicemembers’ Civil Relief Act, as amended.

     

    Relief
      Act Interest Shortfall:
      For any
      Distribution Date and a Mortgage Loan will be the reduction in the amount of
      interest collectible on such Mortgage Loan for the most recently ended calendar
      month immediately preceding the related Distribution Date as a result of the
      application of the Relief Act or similar state laws.

     

    REMIC:
      A “real
      estate mortgage investment conduit” within the meaning of section 860D of the
      Code.

     

    REMIC
      Change of Law:
      Any
      proposed, temporary or final regulation, revenue ruling, revenue procedure
      or
      other official announcement or interpretation relating to REMICs and the REMIC
      Provisions issued after the Closing Date.

     

    REMIC
      Provisions:
      Provisions of the federal income tax law relating to real estate mortgage
      investment conduits, which appear at sections 860A through 860G of subchapter
      M
      of chapter 1 of the Code, and related provisions, and regulations promulgated
      thereunder, as the foregoing may be in effect from time to time.

     

    Remittance
      Agency Agreement:
      As
      defined in Section 2.2 hereof.

     

    REO
      Disposition:
      The
      final sale by the applicable Servicer of any REO Property.

     

    REO
      Property:
      A
      Mortgaged Property acquired by the Trust Fund through foreclosure or
      deed-in-lieu of foreclosure in connection with a defaulted Mortgage
      Loan.

     

    Replacement
      Swap Provider Payment:
      Any
      payments that have been received by the Trust as a result of entering into
      a
      replacement interest rate swap agreement.

     

    Request
      for Release:
      The
      Request for Release submitted by the Servicer to the Trustee, substantially
      in
      the form of Exhibit I.

     

    Required
      Recordation States:
      The
      states of Florida and Mississippi.

     

    Residual
      Certificates:
      The
      Class R Certificates.

     

    Responsible
      Officer:
      When
      used with respect to the Trustee, any Vice President, any Assistant Vice
      President, the Secretary, any Assistant Secretary, Managing Director, Director,
      Associate or any other officer of the Trustee customarily performing functions
      similar to those performed by any of the above designated officers and having
      direct responsibility for the administration of this Agreement and also to
      whom,
      with respect to a particular matter, such matter is referred because of such
      officer’s knowledge of and familiarity with the particular subject.

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

       

    

    Reuters
      Screen LIBOR01:
      The
      display page designated as the "LIBOR01" page on Reuters (or such other page
      as
      may replace that page on that service for the purpose of displaying London
      inter-bank offered rates or prices of major banks).

     

    Sales
      Agreement:
      The
      Sales Agreement between the Depositor and Saxon Funding Management LLC regarding
      the sale of the Mortgage Loans, dated as of the Closing Date.

     

    S&P:
      Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
      Inc. If S&P is designated as a Rating Agency in the Preliminary Statement,
      the address for notices to S&P shall be Standard & Poor’s Ratings
      Services, 26 Broadway, 15th Floor, New York, New York 10004, Attention: Mortgage
      Surveillance Monitoring, or such other address as S&P may hereafter furnish
      to the Depositor and the Servicer.

     

    Scheduled
      Notional Amount:
      For any
      Distribution Date and the Swap Agreement, the notional amount with respect
      to
      which payments under the Swap Agreement will be calculated. 

     

    Scheduled
      Payment:
      The
      scheduled monthly payment on a Mortgage Loan due on any Due Date allocable
      to
      principal and/or interest on such Mortgage Loan which, unless otherwise
      specified herein, shall give effect to any related Debt Service Reduction and
      any Deficient Valuation that affects the amount of the monthly payment due
      on
      such Mortgage Loan.

     

    SEC
      Rules:
      Any
      rules promulgated by the Commission, and any interpretations thereof by the
      staff of the Commission.

     

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

     

    Security
      Release Certification:
      As
      defined in Section 2.2 hereof.

     

    Seller:
      SFM.

     

    Senior
      Certificates:
      The
      Group 1 Senior Certificates and the Group 2 Senior Certificates.

     

    Senior
      Enhancement Percentage:
      For any
      Distribution Date, the percentage obtained by dividing (x) the aggregate Class
      Principal Balance of the Subordinate Certificates (together with the
      Overcollateralized Amount and taking into account the distributions of the
      Principal Distribution Amount and all payments of principal from the Swap
      Account, if any, for such Distribution Date) by (y) the aggregate principal
      balance of the Mortgage Loans as of the last day of the related Due
      Period.

     

    Senior
      Interest Distribution Amount:
      With
      respect to any Class of Senior Certificates and any Distribution Date, interest
      accrued during the related Interest Accrual Period on the related Class
      Principal Balance of that Class immediately prior to the Distribution Date
      at
      the Pass-Through Rate for that Class reduced (to an amount not less than zero),
      in the case of such Class, by the allocable share, if any, for that Class of
      Prepayment Interest Shortfalls to the extent not covered by Compensating
      Interest paid by the Servicer and Relief Act Interest Shortfalls, together
      with
      the Interest Carry Forward Amount, if any, for such Distribution Date for such
      Class of Senior Certificates.

     

    
      
        
        

      

      
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    Senior
      Principal Distribution Amount:
      With
      respect to the Senior Certificates and any Distribution Date (i) prior to the
      Stepdown Date or on or after the Stepdown Date if a Trigger Event is in effect,
      the Principal Distribution Amount or (ii) on or after the Stepdown Date if
      a
      Trigger Event is not in effect for the Offered Certificates for that
      Distribution Date, the lesser of: 

     

     

    (i)
      the
      Principal Distribution Amount for that Distribution Date; and 

     

     

    (ii)
      the
      excess (if any) of (A) the aggregate Class Principal Balance of the Senior
      Certificates immediately prior to that Distribution Date over (B) the lesser
      of
      (i) the aggregate Stated Principal Balance of the Mortgage Loans as of the
      last
      day of the related Due Period multiplied by approximately 39.80%
      and (ii)
      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
      Overcollateralization Floor.

     

    Servicer:
      Saxon
      Mortgage Services, Inc. and its permitted successors and assigns.

     

    Servicing
      Advances:
      All
      customary, reasonable and necessary “out of pocket” costs and expenses incurred
      in the performance by the Servicer of its servicing obligations hereunder,
      including, but not limited to, the cost of (i) the preservation, restoration
      and
      protection of a Mortgaged Property, (ii) any expenses reimbursable to the
      Servicer pursuant to Section 3.11 and any enforcement or judicial proceedings,
      including foreclosures, (iii) the management and liquidation of any REO Property
      (including reasonable fees paid to any independent contractor in connection
      therewith) and (iv) compliance with the obligations under Section 3.1 and
      Section 3.9.

     

    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:
      As to
      each Mortgage Loan and any Distribution Date, an amount payable out of each
      full
      payment of interest received on such Mortgage Loan and equal to one-twelfth
      of
      the Servicing Fee Rate multiplied by the Stated Principal Balance of such
      Mortgage Loan as of the Due Date in the month prior to the month of such
      Distribution Date (or, in the case of an Odd Due Date Mortgage Loan, the Due
      Date occurring in the second month preceding the month of such Distribution
      Date).

     

    Servicing
      Fee Rate:
      0.50%
      per annum.

     

    Servicing
      Officer:
      Any of
      the President, any Vice President (however denominated), or Assistant Vice
      President of the Servicer involved in, or responsible for, the administration
      and servicing of one or more Mortgage Loans at the time of performance of the
      relevant activity of the Servicer.

     

    SFM:
      Saxon
      Funding Management LLC, a Delaware limited liability company, and its successors
      and assigns.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

       

    

    SMS:
      Saxon
      Mortgage Services, Inc., a Texas corporation.

     

    Startup
      Day:
      The
      Closing Date.

     

    Stated
      Principal Balance:
      For any
      Mortgage Loan and Due Date, the unpaid principal balance of the Mortgage Loan
      as
      of that Due Date, as specified in its amortization schedule at that time (before
      any adjustment to the amortization schedule for any moratorium or similar waiver
      or grace period), after giving effect to (i) the payment of principal due on
      that Due Date, irrespective of any delinquency in payment by the related
      mortgagor, and (ii) prepayments of principal and the principal portion of
      Liquidation Proceeds received with respect to that Mortgage Loan through the
      last day of the related Prepayment Period.

     

    Stepdown
      Date:
      With
      respect to the Certificates, the later
      to occur
      of:

     

    (1) the
      earlier
      to occur
      of 

     

    (x) the
      Distribution Date in August 2010, and 

     

    (y) the
      Distribution Date immediately following the Distribution Date on which the
      aggregate Class Principal Balance of the Senior Certificates is reduced to
      zero;
      and

     

    (2) the
      first
      Distribution Date on which the Senior Enhancement Percentage (calculated for
      this purpose only after taking into account distributions of principal on the
      Mortgage Loans, but prior to any distribution of the Principal Distribution
      Amount to the holders of the Offered Certificates then entitled to distributions
      of principal on the Distribution Date) is greater than or equal to approximately
      60.20%.

     

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

     

    Subordinate
      Certificates:
      The
      Class B Certificates.

     

    Subordinate
      Interest Distribution Amount:
      With
      respect to any Class of Subordinate Certificates and any Distribution Date,
      interest accrued during the related Interest Accrual Period on the related
      Class
      Principal Balance of that Class immediately prior to the Distribution Date
      at
      the Pass-Through Rate for that Class reduced (to an amount not less than zero),
      in the case of such Class, by the allocable share, if any, for that Class of
      Prepayment Interest Shortfalls to the extent not covered by Compensating
      Interest paid by the Servicer and Relief Act Interest Shortfalls.

     

    Subservicer:
      Any
      Person that services Mortgage Loans on behalf of the Servicer or any
      Subservicer, performing the substantial majority of the material functions
      required to be performed by the Servicer under this Agreement that are
      identified in Item 1122(d) of Regulation AB.

     

    
      
        
        

      

      
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    Subservicing
      Agreement:
      Any
      written contract for the subservicing of the Mortgage Loans between the Servicer
      and a Subservicer.

     

    Subsequent
      Recoveries:
      With
      respect to any Mortgage Loan other than a Nonrecoverable Mortgage Loan,
      unexpected recoveries, net of reimbursable expenses, received by the Servicer
      and remitted by it to the Trustee, with respect to a Liquidated Mortgage Loan
      that resulted in a Realized Loss in a month prior to the month of receipt of
      such recoveries. As to any Nonrecoverable Mortgage Loan, the excess of (i)
      any
      net Liquidation Proceeds received in respect of such loan; over (ii) the
      Projected Net Liquidation Value thereof.

     

    Substitute
      Mortgage Loan:
      A
      Mortgage Loan substituted by the Depositor or Servicer for a Deleted Mortgage
      Loan which must, on the date of such substitution, as confirmed in a Request
      for
      Release, substantially in the form of Exhibit I, (i) have a Stated Principal
      Balance, after deduction of the principal portion of the Scheduled Payment
      due
      in the month of substitution, not in excess of, and not more than 10% less
      than
      the Stated Principal Balance of the Deleted Mortgage Loan; (ii) accrue interest
      on the same basis as the Deleted Mortgage Loan and be accruing interest at
      a
      rate no lower than and not more than 1% per annum higher than, that of the
      Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no higher than that
      of
      the Deleted Mortgage Loan; (iv) not be a Cooperative Loan unless the Deleted
      Mortgage Loan was a Cooperative Loan; (v) be covered by a Primary Mortgage
      Insurance Policy if the Deleted Mortgage Loan was so covered; and (vi) comply
      with each representation and warranty set forth in Section 2.3 hereof. Any
      of
      the characteristics described above may be satisfied in the aggregate by one
      or
      more Substitute Mortgage Loans.

     

    Substitution
      Adjustment Amount:
      The
      meaning ascribed to such term pursuant to Section 2.3 hereof.

     

    Supplemental
      Interest Trust:
      The
      corpus of a trust created pursuant to Section 4.8 of this Agreement and
      designated as the “Supplemental Interest Trust” or the “Saxon Asset Securities
      2007-3 Supplemental Interest Trust,” consisting of the Swap Agreement, the Swap
      Account and the Excess Reserve Fund Account.

     

    Swap
      Account:
      The
      meaning ascribed to such term pursuant to Section 4.8 hereof.

     

    Swap
      Agreement:
      The
      interest rate swap agreement documented pursuant to the 1992 ISDA Master
      Agreement, together with a schedule, credit support annex and confirmation,
      between the Trustee, on behalf of the Supplemental Interest Trust, and the
      Swap
      Counterparty attached hereto as Exhibit Q.

     

    Swap
      Counterparty:
      Morgan
      Stanley Capital Services Inc.,
      and any
      permitted successor thereto.

     

    Swap
      Payment Allocation:
      For any
      Class of Certificates and any Distribution Date, that Class’s pro
      rata
      share of
      the Net Swap Receipts, if any, for that Distribution Date, based on the Class
      Principal Balances at the beginning of the related Due Period of the Classes
      of
      Certificates.

     

    Swap
      Payment Rate:
      With
      respect to any Distribution Date, a per annum rate equal to the quotient of
      (i)
      the product of (a) Net Swap Payment or Swap Termination Payment (other than
      a
      Defaulted Swap Termination Payment) owed to the Swap Counterparty for such
      Distribution Date multiplied by (b) 12, divided by (ii) the aggregate of the
      Stated Principal Balances of the Mortgage Loans as of the first day of the
      related Due Period, adjusted to reflect prepayments received after the first
      Day
      of the related Due Period that were distributed on the immediately preceding
      Distribution Date.

     

    
      
        
        

      

      
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    Swap
      Termination Payment:
      Any
      payment payable by the Trust or the Swap Counterparty upon termination of the
      Swap Agreement as a result of an Event of Default (as defined in the Swap
      Agreement) or a Termination Event (as defined in the Swap Agreement);
provided,
      that a
      Swap Termination Payment shall not include any such amount to the extent already
      received by the Swap Counterparty as a Replacement Swap Provider
      Payment.

     

    Transfer:
      Any
      direct or indirect transfer or sale of any Ownership Interest in a Residual
      Certificate.

     

    Three
      Month Rolling Average:
      With
      respect to the Mortgage Loans and the end of the Due Period related to any
      Distribution Date, the rolling 3 month average percentage of the aggregate
      Stated Principal Balance of the Mortgage Loans that are 60 or more days
      delinquent (including Mortgage Loans in foreclosure, REO Properties and Mortgage
      Loans discharged in bankruptcy). For purposes of calculating the Three Month
      Rolling Average, any Mortgage Loan that is modified or repurchased by the
      Servicer shall be treated as “60 or more days delinquent” for a period of 12
      months from the date of such repurchase or most recent
      modification.

     

    Trigger
      Event:
      either
      a Cumulative Loss Trigger Event or a Delinquency Loss Trigger
      Event.

     

    Trustee:
      Deutsche Bank National Trust Company and its successors and, if a successor
      trustee is appointed hereunder, such successor.

     

    Trustee
      Fee:
      As to
      any Distribution Date, an amount equal to one-twelfth of the Trustee Fee Rate
      multiplied by the Stated Principal Balance with respect to such Distribution
      Date.

     

    Trustee
      Fee Rate:
      0.0025%
      per annum.

     

    Trust
      Fund:
      As
      described in Section 2.1 hereof.

     

    Underwriter:
      Morgan
      Stanley & Co. Incorporated.

     

    Underwriter’s
      Exemption:
      Prohibited Transaction Exemption 2007-5, 72 Fed. Reg. 13130 (2007), as amended
      (or any successor thereto), or any substantially similar administrative
      exemption granted by the U.S. Department of Labor.

     

    Underwritten
      Certificates:
      The
      Certificates purchased by the Underwriter pursuant to the Underwriting Agreement
      by and among SFM, Saxon Asset Securities Company and the
      Underwriter.

     

    Unpaid
      Interest Shortfall Amount
      For any
      Class of Offered Certificates, the sum of Relief Act Interest Shortfalls and
      net
      prepayment interest shortfalls on the Mortgage Loans allocated to such Class
      of
      Offered Certificates on that Distribution Date and such amounts from any prior
      Distribution Date remaining unpaid.

     

    
      
        
        

      

      
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    Unpaid
      Realized Loss Amount
      For any
      Class of Certificates, the portion of any Realized Losses previously allocated
      to that Class remaining unpaid from prior Distribution Dates.

     

    Upper-Tier
      REMIC:
      REMIC
      3.

     

    Voting
      Rights:
      The
      voting rights of the trust will be allocated as follows: 

     

    (i) 1%
      to
      each of the Class L-IO, Class OC, Class P and Class R Certificates;
      and

     

    (ii) the
      remainder to the Classes of Offered Certificates in proportion to their
      respective outstanding Class Principal Balances.

     

    ARTICLE
      2

     

    CONVEYANCE
      OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES

     

    
      	   
              Section 2.1  	
              Conveyance
                of Mortgage Loans.

            

    

     

    
      	(a)  	
              To
                provide for the distribution of the principal of and interest on
                the
                Certificates in accordance with their terms, the distribution of
                all other
                sums distributable hereunder with respect to the Certificates and
                the
                performance of the covenants contained herein, the Depositor hereby
                bargains, sells, conveys, assigns and transfers to the Trustee, in
                trust,
                without recourse and for the exclusive benefit of the Certificateholders
                as their interests may appear, all the Depositor’s right, title and
                interest in and to any and all benefits accruing to the Depositor
                from:
                (i) the Mortgage Loans, which the Depositor is causing to be
                delivered to the Trustee (or the Custodian) herewith (and all Substitute
                Mortgage Loans substituted therefor), together in each case with
                the
                related Mortgage Files and the Depositor’s interest in any collateral that
                secured a Mortgage Loan but that is acquired by foreclosure or
                deed-in-lieu of foreclosure after the Closing Date, and all Scheduled
                Payments due after the Cut-off Date and all principal prepayments
                received
                with respect to the Mortgage Loans paid by the borrower after the
                Cut-off
                Date and proceeds of the conversion, voluntary or involuntary, of
                the
                foregoing; (ii) the Sales Agreement; (iii)  the Swap
                Agreement and (iv) all proceeds of any of the foregoing (including,
                but not limited to, all proceeds of any mortgage insurance, hazard
                insurance, or title insurance policy relating to the Mortgage Loans,
                cash
                proceeds, accounts, accounts receivable, notes, drafts, acceptances,
                chattel paper, checks, deposit accounts, rights to payment of any
                and
                every kind, and other forms of obligations and receivables, which
                at any
                time constitute all or part or are included in the proceeds of any
                of the
                foregoing) to pay the Certificates as specified herein (items (i)
                through
                (v) above collectively, the “Trust Fund”). The Trustee is hereby
                authorized to enter into the Swap Agreement on behalf of the Supplemental
                Interest Trust.

            

    

     

    
      
        
        

      

      
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      	(b)  	
              In
                connection with the transfer set forth in clause (a) above, the Depositor
                has delivered or caused to be delivered to the Trustee or the Custodian
                on
                its behalf for the benefit of the Certificateholders the following
                documents or instruments (collectively, the “Mortgage Loan Documents”)
                with respect to each Mortgage Loan so
                transferred:

            

    

     

    (i)  (A)
      the
      original Mortgage Note endorsed by manual or facsimile signature to the Trustee
      or the Custodian or in blank, without recourse, with all intervening
      endorsements showing a complete chain of endorsement from the originator to
      the
      Person endorsing the Mortgage Note (the “Last Endorsee”) (each such endorsement
      being sufficient to transfer all right, title and interest of the party so
      endorsing, as noteholder or assignee thereof, in and to that Mortgage Note);
      or

     

    (B)
      with
      respect to any Lost Mortgage Note, a lost note affidavit from the Depositor
      stating that the original Mortgage Note was lost or destroyed, together with
      a
      copy of such Mortgage Note;

     

    (ii)  except
      with respect to any Cooperative Loan, the original recorded Mortgage or a copy
      of such Mortgage certified by the Depositor, the originating lender, settlement
      agent, or escrow company as being a true and complete copy of the
      Mortgage;

     

    (iii)  except
      with respect to any Mortgage Loan for which the related Mortgage names the
      Custodian as nominee for the originating lender (or similar designation
      satisfactory to the Custodian), as beneficiary or mortgagee, either (A) a duly
      executed assignment of the Mortgage in blank, or (B) an original recorded
      assignment of the Mortgage from the Last Endorsee to the Custodian or a copy
      of
      such assignment of Mortgage certified by the Depositor, the originating lender,
      settlement agent, or escrow company as being a true and complete copy thereof
      which in either case may be included in a blanket assignment or assignments;
      

     

    (iv)  each
      interim recorded assignment of such Mortgage, or a copy of each such interim
      recorded assignment of Mortgage certified by the Depositor, the originating
      lender, settlement agent, or escrow company as being a true and complete copy
      thereof; 

     

    (v)  the
      original or copies of each assumption, modification, written assurance or
      substitution agreement, if any;

     

    (vi)  except
      as
      to any second lien Mortgage Loan in the original principal amount of $50,000.00
      or less, either the original or duplicate original title policy (including
      all
      riders thereto) with respect to the related Mortgaged Property, if available,
      provided that the title policy (including all riders thereto) will be delivered
      as soon as it becomes available, and if the title policy is not available,
      and
      to the extent required pursuant to the second paragraph below or otherwise
      in
      connection with the rating of the Certificates, a written commitment or interim
      binder or preliminary report of the title issued by the title insurance or
      escrow company with respect to the Mortgaged Property; and

     

    
      
        
        

      

      
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    (vii)  in
      the
      case of a Cooperative Loan, the originals of the following documents or
      instruments:

     

    
      	 	
              (a)

            	
              The
                Coop Shares, together with a stock power in
                blank;

            

    

    
      	 	
              (b)

            	
              The
                executed Security Agreement;

            

    

    
      	 	
              (c)

            	
              The
                executed Proprietary Lease;

            

    

    
      	 	
              (d)

            	
              The
                executed Recognition Agreement;

            

    

    
      	 	
              (e)

            	
              The
                executed UCC1 financing statement with evidence of recording thereon
                which
                have been filed in all places required to perfect the Depositor’s interest
                in the Coop Shares and the Proprietary Lease;
                and

            

    

    
      	 	
              (f)

            	
              Executed
                UCC3 financing statements or other appropriate UCC financing statements
                required by state law, evidencing a complete and unbroken line from
                the
                mortgagee to the Trustee with evidence of recording thereon (or in
                a form
                suitable for recordation).

            

    

     

    (viii) the
      original Primary Mortgage Insurance Policy or certificate or, an electronic
      certification evidencing the existence of the Primary Mortgage Insurance Policy
      or certificate, if private mortgage guaranty insurance is required;

     

    In
      the
      event that in connection with any Mortgage Loan the Depositor cannot deliver
      (a)
      the original recorded Mortgage or (b) any recorded assignments or interim
      assignments satisfying the requirements of clause (iii) or (iv) above,
      respectively, concurrently with the execution and delivery hereof because such
      document or documents have not been returned from the applicable public
      recording office, the Depositor shall deliver such documents to the Trustee
      or
      the Custodian on its behalf as promptly as possible upon receipt thereof and,
      in
      any event, within 720 days following the Closing Date. The Depositor or Servicer
      shall forward or cause to be forwarded to the Trustee or the Custodian on its
      behalf (a) from time to time additional original documents evidencing an
      assumption or modification of a Mortgage Loan and (b) any other documents
      required to be delivered by the Depositor or the Servicer to the Trustee. In
      the
      case where a public recording office retains the original recorded Mortgage
      or
      in the case where a Mortgage is lost after recordation in a public recording
      office, the Depositor shall deliver to the Trustee a copy of such Mortgage
      certified (to the extent such certification is reasonably obtainable) by such
      public recording office to be a true and complete copy of the original recorded
      Mortgage.

     

    In
      addition, in the event that in connection with any Mortgage Loan the Depositor
      cannot deliver the original or duplicate original lender’s title policy
      (together with all riders thereto), satisfying the requirements of clause (vi)
      above, concurrently with the execution and delivery hereof because the related
      Mortgage or a related assignment has not been returned from the applicable
      public recording office, the Depositor shall promptly deliver to the Trustee
      or
      the Custodian on its behalf such original or duplicate original lender’s title
      policy (together with all riders thereto) upon receipt thereof from the
      applicable title insurer, and in any event, within 720 days following the
      Closing Date. 

     

    
      
        
        

      

      
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    Subject
      to the immediately following sentence, as promptly as practicable subsequent
      to
      the transfer set forth in clause (a) of this Section 2.1, and in any event,
      within thirty (30) days thereafter, the Servicer shall as to any Mortgage Loan
      with respect to which the Depositor delivers an assignment of the Mortgage
      in
      blank pursuant to clause (b)(iii)(A) of this Section 2.1, (i) complete each
      such
      assignment of Mortgage to conform to clause (b)(iii)(B) of this Section 2.1,
      (ii) cause such assignment to be in proper form for recording in the appropriate
      public office for real property records, and (iii) cause to be delivered for
      recording in the appropriate public office for real property records each such
      assignment of the Mortgages, except that, with respect to any assignments of
      Mortgage as to which the Servicer has not received the information required
      to
      prepare such assignments in recordable form, the Servicer’s obligation to do so
      and to deliver the same for such recording shall be as soon as practicable
      after
      receipt of such information and in any event within thirty (30) days after
      receipt thereof. Notwithstanding the foregoing, the Servicer need not cause
      to
      be recorded any assignment which relates to a Mortgage Loan in any state other
      than the Required Recordation States; however
      with
      respect to each MERS Mortgage Loan, the Servicer, at the expense of the
      Depositor, shall take such actions as are necessary to cause the Trustee to
      be
      clearly identified as the owner of each such Mortgage Loan on the record of
      MERS
      for purposes of the system of recording transfers of beneficial ownership of
      mortgages maintained by MERS.

     

    In
      the
      case of Mortgage Loans that have been prepaid in full as of the Closing Date,
      the Depositor, in lieu of delivering the above documents to the Trustee or
      the
      Custodian on its behalf, will deposit in the Collection Account the portion
      of
      such payment that is required to be deposited in the Collection Account pursuant
      to Section 3.8 hereof.

     

    
      	 	
              (c)

            	
              It
                is agreed and understood by the Depositor (and the Depositor so represents
                and recognizes) that it is not intended that any Mortgage Loan to
                be
                included in the Trust Fund be (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 in the Indiana Home Loan Practices Act effective
                January 1, 2005.
                

            

    

    

    Section
      2.2  Acceptance
      by Trustee of the Mortgage Loans.

     

    The
      Trustee or the Custodian, on behalf of the Trustee acknowledges receipt of
      the
      documents identified in the initial certification in the form annexed hereto
      as
      Exhibit C (the “Initial Certification”) and declares that it or the Custodian
      holds and will hold such documents and the other documents delivered to it
      constituting the Mortgage Files, and that it or the Custodian holds or will
      hold
      such other assets as are included in the Trust Fund, in trust for the exclusive
      use and benefit of all present and future Certificateholders. 

     

    The
      Trustee agrees to execute and deliver or to cause the Custodian to execute
      and
      deliver on the Closing Date to the Depositor and the Servicer an Initial
      Certification in the form annexed hereto as Exhibit C. Based on its or the
      Custodian’s review and examination, and only as to the documents identified in
      such Initial Certification, the Custodian, on behalf of the Trustee acknowledges
      that such documents appear regular on their face and relate to such Mortgage
      Loan. Neither the Trustee nor the Custodian shall be under any duty or
      obligation to inspect, review or examine said documents, instruments,
      certificates or other papers to determine that the same are genuine, enforceable
      or appropriate for the represented purpose or that they have actually been
      recorded in the real estate records or that they are other than what they
      purport to be on their face.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

       

    

    Not
      later
      than 360 days after the Closing Date, the Trustee shall deliver or shall cause
      the Custodian to deliver to the Depositor and the Servicer a Final Certification
      in the form annexed hereto as Exhibit D, with any applicable exceptions noted
      thereon. Notwithstanding anything to the contrary contained herein, in the
      event
      there are exceptions to the Final Certification, the Trustee may transmit such
      exceptions electronically (via email) to the Depositor and the Servicer, subject
      to the prior approval of the Depositor and the Servicer.

     

    If,
      in
      the course of such review, the Trustee or the Custodian, on behalf of the
      Trustee finds any document constituting a part of a Mortgage File which does
      not
      meet the requirements of Section 2.1 hereof (the “Mortgage Loan Document
      Requirements”), the Trustee shall list or shall cause the Custodian to list such
      as an exception in the Final Certification; provided,
      however,
      that
      neither the Trustee nor the Custodian shall make any determination as to whether
      (i) any endorsement is sufficient to transfer all right, title and interest
      of
      the party so endorsing, as noteholder or assignee thereof, in and to that
      Mortgage Note or (ii) any assignment is in recordable form or is sufficient
      to
      effect the assignment of and transfer to the assignee thereof under the mortgage
      to which the assignment relates. SFM shall promptly correct or cure such defect
      within 90 days from the date it was so notified of such defect and, if SFM
      does
      not correct or cure such defect within such period, SFM shall either (a)
      substitute for the related Mortgage Loan a Substitute Mortgage Loan, which
      substitution shall be accomplished in the manner and subject to the conditions
      set forth in Section 2.3 hereof, or (b) purchase such Mortgage Loan from the
      Trustee within 90 days from the date SFM was notified of such defect in writing
      at the Purchase Price of such Mortgage Loan; provided,
      however,
      that in
      no event shall such substitution or purchase occur more than 540 days from
      the
      Closing Date, except that if the substitution or purchase of a Mortgage Loan
      pursuant to this provision is required by reason of a delay in delivery of
      any
      documents by the appropriate recording office, and there is a dispute between
      either the Servicer or SFM and the Trustee over the location or status of the
      recorded document, then such substitution or purchase shall occur within 720
      days from the Closing Date. Any such substitution pursuant to (a) above shall
      not be effected prior to the delivery to the Trustee of the Opinion of Counsel
      required by Section 2.4 hereof, if any, and any substitution pursuant to (a)
      above shall not be effected prior to the additional delivery to the Trustee
      of a
      Request for Release substantially in the form of Exhibit I. No substitution
      is
      permitted to be made in any calendar month after the Determination Date for
      such
      month. The Purchase Price for any such Mortgage Loan shall be deposited by
      SFM
      in the Collection Account on or prior to the Distribution Account Deposit Date
      for the Distribution Date in the month following the month of repurchase and,
      upon receipt of such deposit and certification with respect thereto in the
      form
      of Exhibit I hereto, the Trustee shall cause the Custodian to release the
      related Mortgage File to SFM and shall execute and deliver at SFM’s request such
      instruments of transfer or assignment prepared by SFM, in each case without
      recourse, as shall be necessary to vest in SFM, or a designee, the Trustee’s
      interest in any Mortgage Loan released pursuant hereto. 

     

    
      
        
        

      

      
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      As
        soon
        as practicable after the delivery of a Substitute Mortgage Loan under Section
        2.3 hereof, the Servicer, at the expense of the Depositor, shall (i) with
        respect to a Substitute Mortgage Loan that is a Non-MERS Mortgage Loan, cause
        the assignment of mortgage to be recorded by the Servicer if required pursuant
        to Section 2.1 hereof or (ii) with respect to a Substitute Mortgage Loan
        that is
        a MERS Mortgage Loan, cause to be taken such actions as are necessary to
        cause
        the Trustee to be clearly identified as the owner of each such Mortgage Loan
        on
        the records of MERS if required pursuant to Section 2.1
        hereof.

    

     

    The
      Trustee shall retain or shall cause the Custodian to retain possession and
      custody of each Mortgage File in accordance with and subject to the terms and
      conditions set forth herein. The Servicer shall promptly deliver to the Trustee
      or the Custodian on its behalf, upon the execution or receipt thereof, the
      originals of such other documents or instruments constituting the Mortgage
      File
      as come into the possession of the Servicer from time to time.

     

    It
      is
      understood and agreed that the obligation of SFM to substitute for or to
      purchase any Mortgage Loan which does not meet the requirements of Section
      2.1
      hereof shall constitute the sole remedy respecting such defect available to
      the
      Trustee and any Certificateholder against the Depositor or SFM.

     

    In
      order
      to facilitate sales and deliveries of Mortgage Loans to the Trust Fund, the
      Trustee may execute and deliver one or more remittance agency agreements in
      substantially the form of Exhibit K hereto (each, a "Remittance Agency
      Agreement"), and in such event the Trustee: (i) shall perform the duties of
      Remittance Agent (as that term is defined in the related Remittance Agency
      Agreement); and (ii) may accept as conclusive evidence of the release of the
      related security interests one or more security release certifications in
      substantially the form attached as Exhibit L hereto (each, a "Security Release
      Certification").

     

    Section
      2.3  Representations,
      Warranties and Covenants of the Depositor and the Servicer.

     

    (a)  The
      Servicer represents and warrants to the Trustee and the Swap Counterparty that,
      as of the Closing Date:

     

    (i)  the
      Servicer is a corporation licensed as a mortgage servicer duly organized,
      validly existing and in good standing under the laws of the state of its
      incorporation and has, and had at all relevant times, full corporate power
      to
      service the Mortgage Loans, to own its property, to carry on its business as
      presently conducted and to enter into and perform its obligations under this
      Agreement. The Servicer has all necessary licenses and is qualified to transact
      business in and is in good standing under the laws of each state where any
      Mortgaged Property is located or is otherwise exempt under applicable law from
      such qualification or is otherwise not required under applicable law to effect
      such qualification and no demand for such qualification has been made upon
      the
      Servicer by any state having jurisdiction;

     

    (ii)  the
      execution and delivery of this Agreement by the Servicer and the performance
      by
      it of and compliance with the terms of this Agreement will not (A) violate
      the
      Servicer's articles of incorporation 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 or acceleration 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 or (B) result in the creation
      or
      imposition of any lien, charge or encumbrance upon any of its properties
      pursuant to the terms of any such contract, agreement or other
      instrument;

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

       

    

    (iii)  the
      Servicer has the full power and authority to enter into and consummate all
      transactions contemplated by this Agreement to be consummated by it, has duly
      authorized the execution, delivery and performance of this Agreement, and has
      duly executed and delivered this Agreement. This Agreement, assuming due
      authorization, execution and delivery by the other parties hereto, constitutes
      a
      valid, legal and binding obligation of the Servicer, enforceable against it
      in
      accordance with the terms hereof, except as such enforcement may be limited
      by
      bankruptcy, insolvency, reorganization, receivership, moratorium or other
      similar laws relating to or affecting the rights of creditors generally, and
      by
      general equity principles (regardless of whether such enforcement is considered
      in a proceeding in equity or at law);

     

    (iv)  the
      Servicer is not in violation of, and the execution and delivery of this
      Agreement by the Servicer and the performance by it and compliance with the
      terms of this Agreement will not constitute a violation with respect to, any
      order or decree of any court or any order or regulation of any federal, state,
      municipal or governmental agency having jurisdiction, which violation would
      materially and adversely affect the condition (financial or otherwise) or
      operations of the Servicer or any of its properties or materially and adversely
      affect the performance of any of its duties hereunder; and

     

    (v)  there
      are
      no actions or proceedings against, or investigations of, the Servicer pending
      or, to the knowledge of the Servicer, threatened, before any court,
      administrative agency or other tribunal (A) that, if determined adversely,
      would
      prohibit its entering into this Agreement, (B) seeking to prevent the
      consummation of any of the transactions contemplated by this Agreement or (C)
      that, if determined adversely, would prohibit or materially and adversely affect
      the performance by the Servicer of any of its obligations under, or the validity
      or enforceability of, this Agreement.

     

    (b)  The
      Depositor represents and warrants to the Trustee and the Swap Counterparty
      that,
      as of the Closing Date:

     

    (i)  the
      Depositor is a corporation, duly organized, validly existing and in good
      standing under the laws of the state of its incorporation and has, and had
      at
      all relevant times, full corporate power to own its property, to carry on its
      business as presently conducted and to enter into and perform its obligations
      under this Agreement;

     

    (ii)  the
      execution and delivery of this Agreement by the Depositor and the performance
      by
      it of and compliance with the terms of this Agreement will not (A) violate
      the
      Depositor's articles of incorporation 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 or acceleration of, any material contract,
      agreement or other instrument to which the Depositor is a party or which may
      be
      applicable to the Depositor or any of its assets or (B) result in the creation
      or imposition of any lien, charge or encumbrance upon any of its properties
      pursuant to the terms of any such contract, agreement or other
      instrument;

     

    
      
        
        

      

      
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    (iii)  the
      Depositor has the full power and authority to enter into and consummate all
      transactions contemplated by this Agreement to be consummated by it, has duly
      authorized the execution, delivery and performance of this Agreement, and has
      duly executed and delivered this Agreement. This Agreement, assuming due
      authorization, execution and delivery by the other parties hereto, constitutes
      a
      valid, legal and binding obligation of the Depositor, enforceable against it
      in
      accordance with the terms hereof, except as such enforcement may be limited
      by
      bankruptcy, insolvency, reorganization, receivership, moratorium or other
      similar laws relating to or affecting the rights of creditors generally, and
      by
      general equity principles (regardless of whether such enforcement is considered
      in a proceeding in equity or at law);

     

    (iv)  the
      Depositor is not in violation of, and the execution and delivery of this
      Agreement by the Depositor and the performance by it and compliance with the
      terms of this Agreement will not constitute a violation with respect to, any
      order or decree of any court or any order or regulation of any federal, state,
      municipal or governmental agency having jurisdiction, which violation would
      materially and adversely affect the condition (financial or otherwise) or
      operations of the Depositor or any of its properties or materially and adversely
      affect the performance of any of its duties hereunder; and

     

    (v)  there
      are
      no actions or proceedings against, or investigations of, the Depositor pending
      or, to the knowledge of the Depositor, threatened, before any court,
      administrative agency or other tribunal (A) that, if determined adversely,
      would
      prohibit its entering into this Agreement, (B) seeking to prevent the
      consummation of any of the transactions contemplated by this Agreement or (C)
      that, if determined adversely, would prohibit or materially and adversely affect
      the performance by the Depositor of any of its obligations under, or the
      validity or enforceability of, this Agreement.

     

    (c)  Pursuant
      to Section 2.1(a)(iii) hereof, the Depositor has assigned to the Trustee, for
      the benefit of Certificateholders, its rights under each Sales Agreement,
      including each representation and warranty applicable to the Mortgage Loans
      (and
      the applicable remedies) set forth in such Sales Agreement in respect of the
      Mortgage Loans. Each Sales Agreement provides remedies against SFM directly
      to
      the Depositor.

     

    Upon
      discovery by any of the parties hereto of a breach of a representation or
      warranty made by the Seller in respect of the Mortgage Loans that (i) materially
      and adversely affects the interests of the Certificateholders in any such
      Mortgage Loan or (ii) is set forth in subsections (B) or (C) of Exhibit B to
      the
      Sales Agreement between the Depositor and SFM, the party discovering such breach
      shall give prompt notice thereof to the other parties. SFM hereby covenants
      that
      within 90 days of the earlier of its discovery or its receipt of written notice
      from any party of a breach such of any representation or warranty which (x)
      materially and adversely affects the interests of the Certificateholders in
      any
      Mortgage Loan (it being understood that any such breach shall be deemed to
      materially and adversely affect the value of such Mortgage Loan or the interest
      of the Trust Fund therein, if the Trust Fund incurs a loss as the result of
      such
      breach) or (y) is set forth in subsections (B) or (C) of Exhibit B to the Sales
      Agreement between the Depositor and SFM, it shall cure such breach in all
      material respects, and if such breach is not so cured, shall, (i) if such 90-day
      period expires prior to the second anniversary of the Closing Date, remove
      such
      Mortgage Loan (a “Deleted Mortgage Loan”) from the Trust Fund and substitute in
      its place a Substitute Mortgage Loan, in the manner and subject to the
      conditions set forth in this Section; or (ii) repurchase the affected Mortgage
      Loan or Mortgage Loans from the Trustee at the Purchase Price in the manner
      set
      forth below; provided,
      however,
      that
      any such substitution pursuant to (i) above shall not be effected prior to
      the
      delivery to the Trustee of the Opinion of Counsel required by Section 2.4(a)
      hereof, if any, and any such substitution pursuant to (i) above shall not be
      effected prior to the additional delivery to the Trustee or the Custodian on
      its
      behalf of a Request for Release substantially in the form of Exhibit I and
      the
      Mortgage File for any such Substitute Mortgage Loan. SFM shall promptly
      reimburse the Servicer and the Trustee for any expenses reasonably incurred
      by
      the Servicer or the Trustee in respect of enforcing the remedies against the
      Seller. With respect to the representations and warranties described in this
      Section which are made to the best of SFM’s knowledge, if it is discovered by
      either the Servicer or the Trustee that the substance of such representation
      and
      warranty is inaccurate (if required to impose the obligations described above
      on
      SFM) and such inaccuracy materially and adversely affects the value of the
      related Mortgage Loan or the interests of the Certificateholders therein,
      notwithstanding SFM’s lack of knowledge with respect to the substance of such
      representation or warranty, such inaccuracy shall be deemed a breach of the
      applicable representation or warranty.

     

    
      
        
        

      

      
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    With
      respect to any Substitute Mortgage Loan, SFM shall deliver to the Trustee or
      the
      Custodian on its behalf for the benefit of the Certificateholders the Mortgage
      Note, the Mortgage, the related assignment of the Mortgage, and such other
      documents and agreements as are required by Section 2.1, with the Mortgage
      Note
      endorsed and the Mortgage assigned as required by Section 2.1. No substitution
      is permitted to be made in any calendar month after the Determination Date
      for
      such month. Scheduled Payments due with respect to Substitute Mortgage Loans
      in
      the month of substitution shall not be part of the Trust Fund and will be
      retained by SFM on the next succeeding Distribution Date. For the month of
      substitution, distributions to Certificateholders will include the monthly
      payment due on any Deleted Mortgage Loan for such month and thereafter SFM
      shall
      be entitled to retain all amounts received in respect of such Deleted Mortgage
      Loan. The Servicer shall amend the Mortgage Loan Schedule for the benefit of
      the
      Certificateholders to reflect the removal of such Deleted Mortgage Loan and
      the
      substitution of the Substitute Mortgage Loan or Loans and the Servicer shall
      deliver the amended Mortgage Loan Schedule to the Trustee. Upon such
      substitution, the Substitute Mortgage Loan or Loans shall be subject to the
      terms of this Agreement in all respects, and SFM shall be deemed to have made
      with respect to such Substitute Mortgage Loan or Loans, as of the date of
      substitution, the representations and warranties made by SFM pursuant to the
      Sales Agreement with respect to such Mortgage Loan. Upon any such substitution
      and the deposit to the Collection Account of the amount required to be deposited
      therein in connection with such substitution as described in the following
      paragraph, the Trustee shall release or shall cause the Custodian to release
      the
      Mortgage File held for the benefit of the Certificateholders relating to such
      Deleted Mortgage Loan to SFM and shall execute and deliver at SFM’s direction
      such instruments of transfer or assignment prepared by SFM , in each case
      without recourse, as shall be necessary to vest title in SFM, or its designee,
      the Trustee’s interest in any Deleted Mortgage Loan substituted for pursuant to
      this Section 2.3.

     

    
      
        
        

      

      
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    For
      any
      month in which SFM substitutes one or more Substitute Mortgage Loans for one
      or
      more Deleted Mortgage Loans, the Servicer will determine the amount (if any)
      by
      which the aggregate principal balance of all such Substitute Mortgage Loans
      as
      of the date of substitution is less than the aggregate Stated Principal Balance
      of all such Deleted Mortgage Loans (after application of the scheduled principal
      portion of the monthly payments due in the month of substitution). The amount
      of
      such shortage (the “Substitution Adjustment Amount”) plus an amount equal to the
      sum of (i) the aggregate of any unreimbursed Advances with respect to such
      Deleted Mortgage Loans and (ii) any costs and damages actually incurred and
      paid
      by or on behalf of the Trust in connection with any breach of the representation
      and warranty resulting from a violation of a predatory or abusive lending law
      applicable to such Mortgage Loan shall be deposited in the Collection Account
      by
      SFM on or before the Distribution Account Deposit Date for the Distribution
      Date
      in the month succeeding the calendar month during which the related Mortgage
      Loan became required to be purchased or replaced hereunder.

     

    In
      the
      event that SFM shall have repurchased a Mortgage Loan, the Purchase Price
      therefor shall be deposited in the Collection Account on or prior to the
      Distribution Account Deposit Date for the Distribution Date in the month
      following the month during which SFM became obligated hereunder to repurchase
      or
      replace such Mortgage Loan and upon such deposit of the Purchase Price, the
      delivery of the Opinion of Counsel required by Section 2.4 hereof and receipt
      of
      a Request for Release in the form of Exhibit I hereto, the Trustee shall release
      or shall cause the Custodian to release the related Mortgage File held for
      the
      benefit of the Certificateholders to SFM, and the Trustee shall execute and
      deliver or shall cause the Custodian to execute and deliver at SFM’s direction
      such instruments of transfer or assignment prepared by such Person, in each
      case
      without recourse, as shall be necessary to transfer title from the Trustee.
      It
      is understood and agreed that the obligation under this Agreement of each Seller
      to cure, repurchase or replace any Mortgage Loan as to which a breach has
      occurred and is continuing shall constitute the sole remedy respecting such
      breach available to Certificateholders or the Trustee on their
      behalf.

     

    The
      representations and warranties made pursuant to this Section 2.3 (and the
      representations and warranties with respect to the Mortgage Loans made in each
      Sales Agreement) shall survive delivery of the respective Mortgage Files to
      the
      Trustee or the Custodian for the benefit of the Certificateholders.

     

    (d)  Upon
      discovery by the Depositor, the Servicer or the Trustee that any Mortgage Loan
      does not constitute a “qualified mortgage” within the meaning of Section
      860G(a)(3) of the Code, the party discovering such fact shall promptly (and
      in
      any event within five (5) Business Days of discovery) give written notice
      thereof to the other parties. In connection therewith, the Trustee shall require
      SFM, at SFM’s option, to either (i) substitute, if the conditions in Section
      2.3(d) with respect to substitutions are satisfied, a Substitute Mortgage Loan
      for the affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan
      within 90 days of such discovery in the same manner as it would a Mortgage
      Loan
      for a breach of representation or warranty made pursuant to this Section 2.3.
      The Trustee shall reconvey or shall cause the Custodian to reconvey to SFM
      the
      Mortgage Loan to be released pursuant hereto in the same manner, and on the
      same
      terms and conditions, as it would a Mortgage Loan repurchased for breach of
      a
      representation or warranty contained in this Section 2.3.

     

    
      
        
        

      

      
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          Section
        2.4  Delivery
        of Opinion of Counsel in Connection with Substitutions.

    

     

    Notwithstanding
      any contrary provision of this Agreement, no substitution pursuant to Section
      2.2 or Section 2.3 shall be made more than 90 days after the Closing Date unless
      the Depositor or SFM delivers to the Trustee an Opinion of Counsel, which
      Opinion of Counsel shall not be at the expense of either the Trustee or the
      Trust Fund, addressed to the Trustee, to the effect that such substitution
      will
      not result in an Adverse REMIC Event.

        

        Section
      2.5  Execution
      and Delivery of Certificates.

     

    The
      Trustee acknowledges the transfer and assignment to it of the Trust Fund and,
      concurrently with such transfer and assignment, has executed and delivered
      to or
      upon the order of the Depositor, the Certificates in authorized denominations
      evidencing directly or indirectly the entire ownership of the Trust Fund. The
      Trustee agrees to hold the Trust Fund and exercise the rights referred to above
      for the benefit of all present and future Holders of the Certificates and to
      perform the duties set forth in this Agreement to the best of its ability,
      to
      the end that the interests of the Holders of the Certificates may be adequately
      and effectively protected.

     

    ARTICLE
      3

     

    ADMINISTRATION
      AND SERVICING OF MORTGAGE LOANS

     

        Section
      3.1  Servicer
      to Service Mortgage Loans.

     

    For
      and
      on behalf of the Certificateholders, the Servicer shall service and administer
      the Mortgage Loans in accordance with the terms of this Agreement and customary
      and usual standards of practice of prudent mortgage loan servicers. In
      connection with such servicing and administration, the Servicer shall have
      full
      power and authority, acting alone and/or through Subservicers as provided in
      Section 3.2 hereof, to do or cause to be done any and all things that it may
      deem necessary or desirable in connection with such servicing and
      administration, including but not limited to, the power and authority, subject
      to the terms hereof (i) to execute and deliver, on behalf of the
      Certificateholders and the Trustee, customary consents or waivers and other
      instruments and documents, (ii) to consent to transfers of any Mortgaged
      Property and assumptions of the Mortgage Notes and related Mortgages (but only
      in the manner provided in this Agreement), (iii) to collect any Insurance
      Proceeds and other Liquidation Proceeds, and (iv) to effectuate foreclosure
      or
      other conversion of the ownership of the Mortgaged Property securing any
      Mortgage Loan; provided,
      that
      the Servicer shall not take any action that is inconsistent with or prejudices
      the interests of the Trust Fund or the Certificateholders in any Mortgage Loan
      or the rights and interests of the Depositor, the Trustee and the
      Certificateholders under this Agreement. The Servicer shall represent and
      protect the interests of the Trust Fund in the same manner as it protects its
      own interests in mortgage loans in its own portfolio in any claim, proceeding
      or
      litigation regarding a Mortgage Loan; provided,
      however,
      that
      unless (x) the Mortgagor is in default with respect to the Mortgage Loan, or
      such default is, in the judgment of the Servicer, imminent or (y) in the absence
      of default or imminent default, any such waiver, modification, postponement
      or
      indulgence would not cause an Adverse REMIC Event, the Servicer may not permit
      any modification with respect to any Mortgage Loan. Without limiting the
      generality of the foregoing, the Servicer, in its own name or in the name of
      the
      Depositor and the Trustee, is hereby authorized and empowered by the Depositor
      and the Trustee, when the Servicer believes it appropriate in its reasonable
      judgment, to execute and deliver, on behalf of the Trustee, the Depositor,
      the
      Certificateholders 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 Mortgaged Properties held for the benefit of the Certificateholders. The
      Servicer shall prepare and deliver to the Depositor and/or the Trustee such
      documents requiring execution and delivery by either or both of them as are
      necessary or appropriate to enable the Servicer to service and administer the
      Mortgage Loans to the extent that the Servicer is not permitted to execute
      and
      deliver such documents pursuant to the preceding sentence. Upon receipt of
      such
      documents, the Depositor and/or the Trustee shall promptly execute such
      documents and deliver them to the Servicer.

     

    
      
        
        

      

      
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    In
      accordance with the standards of the preceding paragraph, the Servicer shall
      make Servicing Advances as necessary for the purpose of effecting the payment
      of
      taxes and assessments on the Mortgaged Properties, which advances shall be
      reimbursable in the first instance from related collections from the Mortgagors
      pursuant to Section 3.6 hereof, and further as provided in Section 3.8 hereof.
      The costs incurred by the Servicer, if any, in effecting the timely payments
      of
      taxes and assessments on the Mortgaged Properties and related insurance premiums
      shall not, for the purpose of calculating monthly distributions to the
      Certificateholders, be added to the Stated Principal Balances of the related
      Mortgage Loans, notwithstanding that the terms of such Mortgage Loans so
      permit.

     

    Upon
      request of the Servicer, the Trustee and the Custodian shall furnish the
      Servicer with any powers of attorney necessary or appropriate to enable the
      Servicer to execute in the name of the Trustee or the Custodian, as applicable,
      all documents reasonably required to perform the servicing functions described
      in this Article 3.

     

        Section
      3.2  Subservicing;
      Enforcement of the Obligations of Servicers.

     

    (a)  The
      Servicer may arrange for the subservicing of any Mortgage Loan by a Subservicer
      pursuant to a Subservicing Agreement; provided,
      however,
      that
      such subservicing arrangement and the terms of the related Subservicing
      Agreement must provide for the servicing of such Mortgage Loans in a manner
      consistent with the servicing arrangements contemplated hereunder. Unless the
      context otherwise requires, references in this Agreement to actions taken or
      to
      be taken by the Servicer in servicing the Mortgage Loans include actions taken
      or to be taken by a Subservicer on behalf of the Servicer. Notwithstanding
      the
      provisions of any Subservicing Agreement, any of the provisions of this
      Agreement relating to agreements or arrangements between the Servicer and a
      Subservicer or reference to actions taken through a Subservicer or otherwise,
      the Servicer shall remain obligated and liable to the Depositor, the Trustee
      and
      the Certificateholders for the servicing and administration of the Mortgage
      Loans in accordance with the provisions of this Agreement without diminution
      of
      such obligation or liability by virtue of such subservicing agreements or
      arrangements or by virtue of indemnification from the Subservicer and to the
      same extent and under the same terms and conditions as if the Servicer alone
      were servicing and administering the Mortgage Loans. All actions of each
      Subservicer performed pursuant to the related Subservicing Agreement shall
      be
      performed as an agent of the Servicer with the same force and effect as if
      performed directly by the Servicer.

     

    
      
        
        

      

      
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    (b)  For
      purposes of this Agreement, the Servicer shall be deemed to have received any
      collections, recoveries or payments with respect to the Mortgage Loans that
      are
      received by a Subservicer regardless of whether such payments are remitted
      by
      the Subservicer to the Servicer.

     

    Notwithstanding
      anything to the contrary set forth herein, as a condition to the utilization
      of
      any Subservicer or Subcontractor determined to be “participating in the
      servicing function” within the meaning of Item 1122 with respect to more than 5
      percent of the pool assets, the Servicer shall obtain from any such Subservicer
      or Subcontractor used by the Servicer for the benefit of the Depositor a written
      agreement from such Subservicer or Subcontractor (in form and substance
      satisfactory to the Depositor) to comply with the provisions of Sections 3.16
      and 3.17 of this Agreement to the same extent as if such Subservicer or
      Subcontractor were the Servicer.

     

        Section
      3.3  Rights
      of the Trustee in Respect of the Servicer.

     

    The
      Trustee shall not have any responsibility or liability for any action or failure
      to act by the Servicer nor shall the Trustee be obligated to supervise the
      performance of the Servicer hereunder or otherwise.

     

        Section
      3.4  Trustee
      to Act as Servicer.

     

    In
      the
      event that the Servicer shall for any reason no longer be the Servicer hereunder
      (including by reason of an Event of Default), the Successor Servicer shall
      thereupon assume all of the rights and obligations of the Servicer hereunder
      arising thereafter (except that the Trustee shall not be (i) liable for losses
      of the Servicer pursuant to Section 3.9 hereof or any acts or omissions of
      the
      predecessor Servicer hereunder, (ii) obligated to make Advances if it is
      prohibited from doing so by applicable law, (iii) obligated to effectuate
      repurchases or substitutions of Mortgage Loans hereunder including, but not
      limited to, repurchases or substitutions of Mortgage Loans pursuant to Section
      2.2 or 2.3 hereof, (iv) responsible for expenses of the Servicer pursuant to
      Section 2.3 hereof or (v) deemed to have made any representations and warranties
      of the Servicer hereunder). If the Servicer shall for any reason no longer
      be
      the Servicer (including by reason of any Event of Default), the Successor
      Servicer shall succeed to any rights and obligations of the Servicer under
      this
      Pooling and Servicing Agreement.

     

    The
      Servicer shall, upon request of the Trustee, but at the expense of the Servicer,
      deliver to the assuming party all documents and records relating to the
      Servicing Agreement or substitute servicing agreement and the Mortgage Loans
      then being serviced thereunder and an accounting of amounts collected or held
      by
      it and otherwise use its best efforts to effect the orderly and efficient
      transfer of the substitute Servicing Agreement to the assuming
      party.

     

    
      
        
        

      

      
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          Section
        3.5  Collection
        of Mortgage Loan Payments; Collection Account; Distribution
        Account.

    

     

    (a)  The
      Servicer shall make reasonable efforts in accordance with the customary and
      usual standards of practice of prudent mortgage servicers to collect all
      payments called for under the terms and provisions of the Mortgage Loans to
      the
      extent such procedures shall be consistent with this Agreement. Consistent
      with
      the foregoing, and subject to the provisions of Section 3.1 hereof, the Servicer
      may in its discretion (i) waive any late payment charge or penalty interest
      and
      (ii) extend the due dates for payments due on a Mortgage Note for a period
      not
      greater than 180 days; provided,
      however,
      that
      the Servicer cannot extend the maturity of any such Mortgage Loan past the
      date
      on which the final payment is due on the latest maturing Mortgage Loan as of
      the
      Cut-off Date. In the event of any such arrangement, any P&I Advance required
      to be made by the Servicer on the related Mortgage Loan in accordance with
      the
      provisions hereof (i) with respect to the Prepayment Period in which such
      arrangement became effective shall be made in accordance with the amortization
      schedule of such Mortgage Loan without giving effect to the modification thereof
      by reason of such arrangements and (ii) with respect to any Prepayment Period
      thereafter shall be made in accordance with the amortization schedule of such
      Mortgage Loan as so modified. The Servicer shall not be required to institute
      or
      join in litigation with respect to collection of any payment (whether under
      a
      Mortgage, Mortgage Note or otherwise or against any public or governmental
      authority with respect to a taking or condemnation) if it reasonably believes
      that enforcing the provision of the Mortgage or other instrument pursuant to
      which such payment is required is prohibited by applicable law.

     

    The
      Servicer shall comply with the provisions of Section 3.21 hereof with respect
      to
      each Prepayment Penalty related to the Mortgage Loans.

     

    (b)  The
      Servicer shall establish and maintain a Collection Account into which the
      Servicer shall deposit or cause to be deposited as soon as practicable following
      receipt but in no event no later than two Business Days after receipt, except
      as
      otherwise specifically provided herein, the following payments and collections
      remitted by Subservicers or received by it in respect of Mortgage Loans
      subsequent to the Cut-off Date (other than in respect of principal and interest
      due on the Mortgage Loans on or before the Cut-off Date) and the following
      amounts required to be deposited hereunder:

     

    (i)  all
      payments on account of principal on the Mortgage Loans, including Principal
      Prepayments;

     

    (ii)  all
      payments on account of interest on the Mortgage Loans, net of the related
      Servicing Fee and any Prepayment Interest Excess;

     

    (iii)  each
      Prepayment Penalty required to be deposited by the Servicer
      hereunder;

     

    (iv)  all
      Insurance Proceeds and Liquidation Proceeds, other than proceeds to be applied
      to the restoration or repair of the Mortgaged Property or released to the
      Mortgagor in accordance with the Servicer’s normal servicing
      procedures;

     

    
      
        
        

      

      
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    (v)  any
      amount required to be deposited by the Servicer pursuant to Section 3.5(d)
      in
      connection with any losses on Permitted Investments;

     

    (vi)  any
      amounts required to be deposited by the Servicer pursuant to Section 3.9(b)
      and
      (d) hereof, and in respect of net monthly rental income from REO Property
      pursuant to Section 3.11 hereof;

     

    (vii)  any
      amounts required to be deposited pursuant to this Agreement in connection with
      the repurchase of a Mortgage Loan by SFM;

     

    (viii)  all
      Substitution Adjustment Amounts; 

     

    (ix)  all
      P&I Advances made by the Servicer pursuant to Section 3.19 hereof;
      and

     

    (x) the
      amount of any Subsequent Recoveries.

    

    In
      addition, with respect to any Mortgage Loan that is subject to a buydown
      agreement, on each Due Date for such Mortgage Loan, in addition to the monthly
      payment remitted by the Mortgagor, the Servicer shall cause funds to be
      deposited into the Collection Account in an amount required to cause an amount
      of interest to be paid with respect to such Mortgage Loan equal to the amount
      of
      interest that has accrued on such Mortgage Loan from the preceding Due Date
      at
      the related Mortgage Rate (net of the Servicing Fee Rate) on such
      date.

     

    The
      foregoing requirements for remittance by the Servicer shall be exclusive, it
      being understood and agreed that, without limiting the generality of the
      foregoing, payments in the nature of late payment charges, assumption fees
      or
      amounts attributable to reimbursements of Advances, if collected, need not
      be
      remitted by the Servicer. In the event that the Servicer shall remit any amount
      not required to be remitted, it may at any time withdraw or direct the
      institution maintaining the Collection Account to withdraw such amount from
      the
      Collection Account, any provision herein to the contrary notwithstanding. Such
      withdrawal or direction may be accomplished by delivering written notice thereof
      to the Trustee or such other institution maintaining the Collection Account
      which describes the amounts deposited in error in the Collection Account. The
      Servicer shall maintain adequate records with respect to all withdrawals made
      pursuant to this Section. All funds deposited in the Collection Account shall
      be
      held in trust for the Certificateholders until withdrawn in accordance with
      Section 3.8.

     

    (c)  The
      Trustee shall establish and maintain, on behalf of Certificateholders, the
      Distribution Account. On each Distribution Account Deposit Date, the Servicer
      shall remit to the Trustee for deposit in the Distribution Account the Available
      Distribution Amount for such date. In addition, the Trustee shall deposit any
      amounts received from the Servicer pursuant to Section 3.5(d) in connection
      with
      losses on Permitted Investments in the Distribution Account. On
      the
      Closing Date, the Trustee shall desposit the Class P Deposit into the
      Collection Account.
       

    

    In
      the
      event that the Servicer shall remit any amount not required to be remitted,
      it
      may at any time direct the Trustee to withdraw such amount from the Distribution
      Account, any provision herein to the contrary notwithstanding. Such direction
      may be accomplished by delivering an Officer’s Certificate to the Trustee which
      describes the amounts deposited in error in the Distribution Account. All funds
      deposited in the Distribution Account shall be held by the Trustee in trust
      for
      the Certificateholders until disbursed in accordance with this Agreement or
      withdrawn in accordance with Section 3.8. In no event shall the Trustee incur
      liability for withdrawals from the Distribution Account at the direction of
      the
      Servicer.

     

    
      
        
        

      

      
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    (d)  The
      institutions at which the Collection Account and Distribution Account are
      maintained shall invest funds as directed by the Servicer in Permitted
      Investments which in each case shall mature not later than (i) in the case
      of
      the Collection Account, the second Business Day immediately preceding the
      related Distribution Account Deposit Date (except that if such Permitted
      Investment is an obligation of the institution that maintains such account,
      then
      such Permitted Investment shall mature not later than the Business Day next
      preceding such Distribution Account Deposit Date) and (ii) in the case of the
      Distribution Account, the Business Day next preceding the related Distribution
      Date (except that if such Permitted Investment is an obligation of the
      institution that maintains such fund or account, then such Permitted Investment
      shall mature not later than such Distribution Date) and, in each case, shall
      not
      be sold or disposed of prior to its maturity. All such Permitted Investments
      shall be made in the name of the Trustee, for the benefit of the
      Certificateholders. All income and gain net of any losses realized from any
      such
      investment of funds on deposit in the Collection Account shall be for the
      benefit of the Servicer as servicing compensation and all income and gain net
      of
      any losses realized from any such investment of funds on deposit in the
      Distribution Account shall be for the benefit of the Servicer. The amount of
      any
      realized losses in the Collection Account or the Distribution Account in respect
      of any such investments shall promptly be deposited by the Servicer in the
      Collection Account or the Distribution Account, respectively. The Trustee in
      its
      fiduciary capacity shall not be liable for the amount of any loss incurred
      in
      respect of any investment or lack of investment of funds held in the Collection
      Account and made in accordance with this Section 3.5.

     

    (e)  In
      order
      to comply with laws, rules, regulations and executive orders in effect from
      time
      to time applicable to banking institutions, including those relating to the
      funding of terrorist activities and money laundering (“Applicable Law”), the
      Trustee is required to obtain, verify and record certain information relating
      to
      individuals and entities which maintain a business relationship with the
      Trustee. Accordingly, each of the parties agrees to provide to the Trustee
      upon
      its request from time to time such identifying information and documentation
      as
      may be available for such party in order to enable the Trustee to comply with
      Applicable Law. 

     

        Section
      3.6  Collection
      of Taxes, Assessments and Similar Items; Escrow Accounts.

     

    (a)  To
      the
      extent required by the related Mortgage Note and not violative of current law,
      the Servicer shall establish and maintain one or more accounts (each, an “Escrow
      Account”) and deposit and retain therein all collections from the Mortgagors (or
      advances by the Servicer) for the payment of taxes, assessments, hazard
      insurance premiums or comparable items for the account of the Mortgagors.
      Nothing herein shall require the Servicer to compel a Mortgagor to establish
      an
      Escrow Account in violation of applicable law.

     

    (b)  Withdrawals
      of amounts so collected from the Escrow Accounts may be made only to effect
      timely payment of taxes, assessments, hazard insurance premiums, condominium
      or
      PUD association dues, or comparable items, to reimburse the Servicer out of
      related collections for any payments made pursuant to Sections 3.1 hereof (with
      respect to taxes and assessments and insurance premiums) and 3.9 hereof (with
      respect to hazard insurance), to refund to any Mortgagors any sums determined
      to
      be overages, to pay interest, if required by law or the terms of the related
      Mortgage or Mortgage Note, to Mortgagors on balances in the Escrow Account
      or to
      clear and terminate the Escrow Account at the termination of this Agreement
      in
      accordance with Section 9.1 hereof. The Escrow Accounts shall not be a part
      of
      the Trust Fund.

     

    
      
        
        

      

      
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    (c)  The
      Servicer shall advance, as Servicing Advances, any payments referred to in
      Section 3.6(a) that are not timely paid by the Mortgagors on the date when
      the
      tax, premium or other cost for which such payment is intended is due;
provided,
      however
      that the
      Servicer shall not be required to make any such advance if such advance, in
      the
      good faith judgment of the Servicer, would constitute a Nonrecoverable
      Advance.

     

        Section
      3.7  Access
      to Certain Documentation and Information Regarding the Mortgage
      Loans.

     

    The
      Servicer shall afford the Depositor and the Trustee reasonable access to all
      records and documentation regarding the Mortgage Loans and all accounts,
      insurance information and other matters relating to this Agreement, such access
      being afforded without charge, but only upon reasonable request and during
      normal business hours at the office designated by the Servicer.

     

    Upon
      reasonable advance notice in writing, the Servicer will provide to each
      Certificateholder which is a savings and loan association, bank or insurance
      company certain reports and reasonable access to information and documentation
      regarding the Mortgage Loans sufficient to permit such Certificateholder to
      comply with applicable regulations of the OTS or other regulatory authorities
      with respect to investment in the Certificates; provided,
      that
      the Servicer shall be entitled to be reimbursed by each such Certificateholder
      for actual expenses incurred by the Servicer in providing such reports and
      access.

     

        Section
      3.8  Permitted
      Withdrawals from the Collection Account and Distribution Account.

     

    (a)  The
      Servicer may from time to time make withdrawals from the Collection Account
      for
      the following purposes:

     

    (i)  to
      the
      extent not previously retained by the Servicer, to pay to the Servicer the
      servicing compensation to which it is entitled pursuant to Section 3.14, and
      earnings on or investment income with respect to funds in or credited to the
      Collection Account as additional servicing compensation;

     

    (ii)  to
      the
      extent not previously retained by the Servicer, to reimburse the Servicer for
      unreimbursed Advances made by it, such right of reimbursement pursuant to this
      subclause (ii) being limited to amounts received on the Mortgage Loan(s) in
      respect of which any such Advance was made;

     

    (iii)  to
      reimburse the Servicer for any Nonrecoverable Advance previously
      made;

     

    
      
        
        

      

      
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    (iv)  to
      reimburse the Servicer for Insured Expenses from the related Insurance
      Proceeds;

     

    (v)  to
      reimburse the Servicer for unpaid Servicing Fees as provided in Section 3.11
      hereof;

     

    (vi)  to
      pay to
      the purchaser, with respect to each Mortgage Loan or property acquired in
      respect thereof that has been purchased pursuant to Section 2.2, 2.3 or 3.11,
      all amounts received thereon after the date of such purchase;

     

    (vii)  to
      reimburse the Servicer or the Depositor for expenses incurred by any of them
      and
      reimbursable pursuant to Section 6.3 hereof;

     

    (viii)  to
      withdraw any amount deposited in the Collection Account and not required to
      be
      deposited therein;

     

    (ix)  on
      or
      prior to the Distribution Account Deposit Date, to withdraw an amount equal
      to
      the Available Distribution Amount and remit such amount to the Trustee for
      deposit in the Distribution Account; and

     

    (x)  to
      clear
      and terminate the Collection Account upon termination of this Agreement pursuant
      to Section 9.1 hereof.

     

    The
      Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
      Mortgage Loan basis, for the purpose of justifying any withdrawal from the
      Collection Account pursuant to such subclauses (i), (ii), (iv), (v) and (vi).
      Prior to making any withdrawal from the Collection Account pursuant to subclause
      (iii), the Servicer shall deliver to the Trustee an Officer’s Certificate of a
      Servicing Officer indicating the amount of any previous Advance determined
      by
      the Servicer to be a Nonrecoverable Advance and identifying the related Mortgage
      Loan(s), and their respective portions of such Nonrecoverable
      Advance.

     

    (b)  The
      Trustee shall withdraw funds from the Distribution Account for distributions
      to
      Certificateholders in the manner specified in this Agreement. In addition,
      the
      Trustee may prior to making the distribution pursuant to Section 4.1 from time
      to time make withdrawals from the Distribution Account for the following
      purposes:

     

    (i)  to
      pay to
      itself the Trustee Fee and reimburse itself for reasonable expenses for the
      related Distribution Date (allocated pro
      rata
      by
      Group, if applicable);

     

    (ii)  to
      the
      extent not previously retained by the Servicer, to pay to the Servicer the
      servicing compensation to which it is entitled pursuant to Section
      3.14;

     

    (iii)  to
      pay to
      the Servicer earnings on or investment income with respect to funds in the
      Distribution Account;

     

    (iv)  to
      withdraw and return to the Servicer any amount deposited in the Distribution
      Account and not required to be deposited therein, including any amounts owed
      to
      the Servicer as part of the Servicing Fee in accordance with the terms
      hereunder; 

     

    
      
        
        

      

      
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    (v)  on
      each
      Distribution Date to pay to the Class L-IO Certificate any interest accrued
      thereon for the related Interest Accrual Period at the Class L-IO Rate;
      and

     

    (vi)  to
      clear
      and terminate the Distribution Account upon termination of the Agreement
      pursuant to Section 9.1 hereof.

     

        Section
      3.9  Maintenance
      of Hazard Insurance; Maintenance of Primary Insurance Policies.

     

    (a)  The
      Servicer shall cause to be maintained, for each Mortgage Loan, hazard insurance
      with extended coverage in an amount that is at least equal to the lesser of
      (i)
      the maximum insurable value of the improvements securing such Mortgage Loan;
      (ii) the outstanding principal balance of the Mortgage Loan and (iii) the
      maximum amount available in the locality of the related Mortgaged Property
      from
      insurers generally acceptable to institutional residential mortgage lenders
      without payment of extraordinary premium. Each such policy of standard hazard
      insurance shall contain, or have an accompanying endorsement that contains,
      a
      standard mortgagee clause. Any amounts collected by the Servicer under any
      such
      policies (other than the amounts to be applied to the restoration or repair
      of
      the related Mortgaged Property or amounts released to the Mortgagor in
      accordance with the Servicer’s normal servicing procedures) shall be deposited
      in the Collection Account. Any cost incurred by the Servicer in maintaining
      any
      such insurance shall not, for the purpose of calculating monthly distributions
      to the Certificateholders or remittances to the Trustee for their benefit,
      be
      added to the principal balance of the Mortgage Loan, notwithstanding that the
      terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
      Servicer as Servicing Advances or, if applicable, as Nonrecoverable Advances.
      It
      is understood and agreed that no earthquake or other additional insurance is
      to
      be required of any Mortgagor or maintained on property acquired in respect
      of a
      Mortgage other than pursuant to such applicable laws and regulations as shall
      at
      any time be in force and as shall require such additional insurance. If the
      Mortgaged Property is located at the time of origination of the Mortgage Loan
      in
      a federally designated special flood hazard area and such area is participating
      in the national flood insurance program, the Servicer shall cause flood
      insurance to be maintained with respect to such Mortgage Loan. Such flood
      insurance shall be in an amount equal to the least of (i) the original principal
      balance of the related Mortgage Loan, (ii) the replacement value of the
      improvements which are part of such Mortgaged Property, and (iii) the maximum
      amount of such insurance available for the related Mortgaged Property under
      the
      national flood insurance program.

     

    (b)  In
      the
      event that the Servicer shall obtain and maintain a blanket policy insuring
      against hazard losses on any or all of the Mortgage Loans, it shall conclusively
      be deemed to have satisfied its obligations as set forth in the first sentence
      of this Section with respect to all of the Mortgage Loans so covered, it being
      understood and agreed that such policy may contain a deductible clause on terms
      substantially equivalent to those commercially available and maintained by
      comparable servicers. If such policy contains a deductible clause, the Servicer
      shall, in the event that there shall not have been maintained on the related
      Mortgaged Property a policy complying with the first sentence of this Section,
      and there shall have been a loss that would have been covered by such policy,
      deposit in the Collection Account the amount not otherwise payable under the
      blanket policy because of such deductible clause. In connection with its
      activities as Servicer of the Mortgage Loans, the Servicer agrees to present,
      on
      behalf of itself, the Depositor, and the Trustee for the benefit of the
      Certificateholders, claims under any such blanket policy.

     

    
      
        
        

      

      
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    (c)  The
      Servicer shall not 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, would have been covered thereunder. The Servicer shall not cancel
      or refuse to renew any such Primary Insurance Policy 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 a Qualified
      Insurer.

     

    The
      Servicer shall not be required to maintain any Primary Insurance Policy (i)
      with
      respect to any Mortgage Loan with a Loan-to-Value Ratio less than or equal
      to
      80% (or such lower Loan-to-Value Ratio as may be provided by applicable law)
      as
      of any date of determination or, based on a new appraisal, the principal balance
      of such Mortgage Loan represents 80% or less of the new appraised value (or
      other method of determination as may be provided by applicable law) or (ii)
      if
      maintaining such Primary Insurance Policy is otherwise prohibited by applicable
      law.

     

    The
      Servicer agrees to effect the timely payment of the premiums on each Primary
      Insurance Policy, and such costs not otherwise recoverable shall be recoverable
      by the Servicer as Servicing Advances or, if applicable, as Nonrecoverable
      Advances.

     

    (d)  In
      connection with its activities as Servicer of the Mortgage Loans, the Servicer
      agrees to present on behalf of itself, the Trustee and Certificateholders,
      claims to the insurer under any Primary Insurance Policies and, in this regard,
      to take such reasonable action as shall be necessary to permit recovery under
      any Primary Insurance Policies respecting defaulted Mortgage Loans. Any amounts
      collected by the Servicer under any Primary Insurance Policies shall be
      deposited in the Collection Account.

     

        Section
      3.10  Enforcement
      of Due-on-Sale Clauses; Assumption Agreements.

     

    (a)  Except
      as
      otherwise provided in this Section, when any property subject to a Mortgage
      has
      been conveyed by the Mortgagor, the Servicer shall to the extent that it has
      knowledge of such conveyance enforce any due-on-sale clause contained in any
      Mortgage Note or Mortgage, to the extent, in the Servicer’s reasonable judgment,
      enforcement is permitted under applicable law and governmental regulations.
      Notwithstanding the foregoing, the Servicer is not required to exercise such
      rights with respect to a Mortgage Loan if the Person to whom the related
      Mortgaged Property has been conveyed or is proposed to be conveyed satisfies
      the
      terms and conditions contained in the Mortgage Note and Mortgage related thereto
      and the consent of the mortgagee under such Mortgage Note or Mortgage is not
      otherwise so required under such Mortgage Note or Mortgage as a condition to
      such transfer. In the event that the Servicer is prohibited by law from
      enforcing any such due-on-sale clause, or if nonenforcement is otherwise
      permitted hereunder, the Servicer is authorized, subject to Section 3.10(b),
      to
      take or enter into an assumption and modification agreement from or with the
      person to whom such property has been or is about to be conveyed, pursuant
      to
      which such person becomes liable under the Mortgage Note and, unless prohibited
      by applicable state law, the Mortgagor remains liable thereon, provided that
      the
      Mortgage Loan shall continue to be covered (if so covered before the Servicer
      enters such agreement) by the applicable Required Insurance Policies. The
      Servicer, subject to Section 3.10(b), is also authorized with the prior approval
      of the insurers under any Required Insurance Policies to enter into a
      substitution of liability agreement with such Person, pursuant to which the
      original Mortgagor is released from liability and such Person is substituted
      as
      Mortgagor and becomes liable under the Mortgage Note. Notwithstanding the
      foregoing, the Servicer shall not be deemed to be in default under this Section
      by reason of any transfer or assumption which the Servicer reasonably believes
      it is restricted by law from preventing, for any reason whatsoever.

     

    
      
        
        

      

      
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    (b)  Subject
      to the Servicer’s duty to enforce any due-on-sale clause to the extent set forth
      in Section 3.10(a) hereof, in any case in which a Mortgaged Property has been
      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 that requires the signature of the Trustee, or if an instrument
      of release signed by the Trustee is required releasing the Mortgagor from
      liability on the Mortgage Loan, the Servicer shall prepare and deliver or cause
      to be prepared and delivered to the Trustee for signature and shall direct,
      in
      writing, the Trustee to execute the assumption agreement with the Person to
      whom
      the Mortgaged Property is to be conveyed and such modification agreement or
      supplement to the Mortgage Note or Mortgage or other instruments as are
      reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
      or otherwise to comply with any applicable laws regarding assumptions or the
      transfer of the Mortgaged Property to such Person. In connection with any such
      assumption, no material term of the Mortgage Note may be changed. In addition,
      the substitute Mortgagor and the Mortgaged Property must be acceptable to the
      Servicer in accordance with its underwriting standards as then in effect.
      Together with each such substitution, assumption or other agreement or
      instrument delivered to the Trustee for execution by it, the Servicer shall
      deliver an Officer’s Certificate signed by a Servicing Officer stating that the
      requirements of this subsection have been met in connection therewith. The
      Servicer shall notify the Trustee that any such substitution or assumption
      agreement has been completed by forwarding to the Trustee the original of such
      substitution or assumption agreement, which in the case of the original shall
      be
      added 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. Any fee collected by the Servicer
      for
      entering into an assumption or substitution of liability agreement will be
      retained by the Servicer as additional servicing compensation.

     

        Section
      3.11  Realization
      Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
      Loans.

     

    (a)  The
      Servicer shall use its best efforts, consistent with Accepted Servicing
      Practices, to foreclose upon or otherwise comparably convert (which may include
      an acquisition of REO Property) the ownership of properties 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 3.5, and which are not released from this Agreement pursuant
      to any other provision hereof. The Servicer shall use reasonable efforts to
      realize upon such defaulted Mortgage Loans in such manner as will maximize
      the
      receipt of principal and interest by the Trustee, taking into account, among
      other things, the timing of foreclosure proceedings. The foregoing is subject
      to
      the provisions that, in any case in which Mortgaged Property shall have suffered
      damage from an uninsured cause, the Servicer shall not be required to expend
      its
      own funds toward the restoration of such property unless it shall determine
      in
      its sole discretion (i) that such restoration will increase the net proceeds
      of
      liquidation of the related Mortgage Loan to the Trustee, after reimbursement
      to
      itself for such expenses, and (ii) that such expenses will be recoverable by
      such Servicer as contemplated in Section 3.8. The Servicer shall be responsible
      for all other costs and expenses incurred by it in any such proceedings;
provided,
      however,
      that it
      shall be entitled to reimbursement thereof from the related Mortgage Loan,
      as
      contemplated in Section 3.8.

     

    
      
        
        

      

      
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    (b)  If
      the
      Servicer has actual knowledge that a Mortgaged Property which the Servicer
      is
      contemplating acquiring in foreclosure or by deed in lieu of foreclosure is
      located within a one mile radius of any site with material environmental or
      hazardous waste risks known to the Servicer, the Servicer will, prior to
      acquiring the Mortgaged Property, consider such risks and shall proceed with
      such in foreclosure or by deed in lieu of foreclosure only if the Servicer
      reasonably determines that doing so shall more like than not be in the best
      interests of the Trust Fund, considering all relevant factors including such
      environmental matters. For the purpose of this Section, actual knowledge of
      the
      Servicer means actual knowledge of a Servicing Officer involved in the servicing
      of the relevant Mortgage Loan at the time such knowledge was acquired. Actual
      knowledge of the Servicer does not include knowledge imputable by virtue of
      the
      availability of or accessibility to information relating to environmental or
      hazardous waste sites or the locations thereof.

     

    (c)  With
      respect to any REO Property, the deed or certificate of sale shall be taken
      in
      the name of the Trustee for the benefit of the Certificateholders, or its
      nominee, on behalf of the Certificateholders; provided,
      that
      the Servicer may cause title to be placed in the name of the Custodian or the
      Servicer if the Servicer reasonably determines that such manner of holding
      title
      is required or advisable in order to facilitate the foreclosure process as
      to
      any one or more particular Mortgage Loans. The Trustee’s name shall be placed on
      the title to such REO Property solely as the Trustee hereunder and not in its
      individual capacity. The Servicer shall ensure that the title to such REO
      Property references this Agreement and the Trustee’s capacity thereunder. The
      Servicer shall use its reasonable best efforts, to sell, or cause its
      Subservicer to sell, in accordance with Accepted Servicing Practices, any REO
      Property serviced by the Servicer or Subservicer as soon as possible, but in
      no
      event later than the conclusion of the third calendar year beginning after
      the
      year of its acquisition by REMIC 1 unless (i) the Servicer applies for and
      receives an extension of such period from the Internal Revenue Service pursuant
      to the REMIC Provisions and Code Section 856(e)(3), in which event such REO
      Property shall be sold within the applicable extension period, or (ii) the
      Servicer obtains an Opinion of Counsel, addressed to the Depositor, the Trustee
      and the Servicer, to the effect that the holding by REMIC 1 of such REO Property
      subsequent to such period will not result in the imposition of taxes on
“prohibited transactions” as defined in Section 860F of the Code or cause any
      REMIC to fail to qualify as a REMIC under the REMIC Provisions or comparable
      provisions of relevant state laws at any time. The Servicer shall manage,
      conserve, protect and operate each REO Property serviced by the Servicer for
      the
      Trustee solely for the purpose of its prompt disposition and sale in a manner
      which does not cause such REO Property to fail to qualify as “foreclosure
      property” within the meaning of Section 860G(a)(8) or result in the receipt by
      REMIC 1 of any “income from non permitted assets” within the meaning of Section
      860F(a)(2)(B) of the Code or any “net income from foreclosure property” which is
      subject to taxation under Section 860G(a)(1) of the Code. Pursuant to its
      efforts to sell such REO Property, the Servicer shall either itself or through
      an agent selected by the Servicer protect and conserve such REO Property in
      the
      same manner and to such extent as is customary in the locality where such REO
      Property is located and may, incident to its conservation and protection of
      the
      interests of the Trustee on behalf of the Certificateholders, rent the same,
      or
      any part thereof, as the Servicer deems to be in the best interest of the
      Trustee on behalf of the Certificateholders for the period prior to the sale
      of
      such REO Property; provided,
      however,
      that
      any rent received or accrued with respect to such REO Property qualifies as
      “rents from real property” as defined in Section 856(d) of the Code. An
      independent contractor, as the agent of the Servicer, may be retained by the
      Servicer to perform functions relating to the title, management and disposition
      of REO Property. The Servicer shall be responsible for such independent
      contractor’s fees and expenses relating to an REO Property and shall be entitled
      to reimbursement thereof from the Liquidation Proceeds with respect to the
      related Mortgaged Property, as Servicing Advances or, if applicable, as
      Nonrecoverable Advances. The Servicer shall prepare for and deliver to the
      Trustee a statement with respect to any REO Property that has been rented
      showing the aggregate rental income received and all expenses incurred in
      connection with the management and maintenance of such REO Property at such
      times as is necessary to enable the Trustee to comply with the reporting
      requirements of the REMIC Provisions. The net monthly rental income, if any,
      from such REO Property shall be deposited in the Collection Account no later
      than the close of business on each Determination Date. The Servicer shall
      perform the tax reporting and withholding required by Sections 1445 and 6050J
      of
      the Code with respect to foreclosures and abandonments, the tax reporting
      required by Section 6050H of the Code with respect to the receipt of mortgage
      interest from individuals and any tax reporting required by Section 6050P of
      the
      Code with respect to the cancellation of indebtedness by certain financial
      entities, by preparing such tax and information returns as may be required,
      in
      the form required, and delivering the same to the Trustee for
      filing.

     

    
      
        
        

      

      
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    (d)  Reserved.

     

    (e)  In
      the
      event of a default on a Mortgage Loan one or more of whose obligors is not
      a
“United States person,” as that term is defined in Section 7701(a)(30) of the
      Code, in connection with any foreclosure or acquisition of a deed in lieu of
      foreclosure (together, “foreclosure”) in respect of such Mortgage Loan, the
      Servicer will cause compliance with the provisions of Treasury Regulation
      Section 1.1445-2(d)(3) (or any successor thereto) necessary to assure that
      no
      withholding tax obligation arises with respect to the proceeds of such
      foreclosure except to the extent, if any, that proceeds of such foreclosure
      are
      required to be remitted to the obligor on such Mortgage Loan.

     

    (f)  Promptly
      upon making any determination not to foreclose, or to discontinue the
      foreclosure process, as to any Mortgage Loan, the Servicer shall deliver to
      the
      Trustee an Officer’s Certificate signed by a Servicing Officer identifying the
      Mortgage Loans as to which such determination has been made (each such Mortgage
      Loan, a “Nonrecoverable Mortgage Loan”) setting forth the basis for such
      determination.

     

    
      
        
        

      

      
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    (g)  The
      income earned from the management of any REO Properties, net of reimbursement
      to
      the Servicer for expenses incurred (including any property or other taxes)
      in
      connection with such management, Advances and Servicing Advances, shall be
      applied to the payment of principal of and interest on the related defaulted
      Mortgage Loans (with interest accruing 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 net income received during any calendar month is in excess of the amount
      attributable to amortizing principal and accrued interest at the related
      Mortgage Rate on the related Mortgage Loan for such calendar month, such excess
      shall be considered to be a partial prepayment of principal of the related
      Mortgage Loan.

     

    (h)  The
      proceeds from any liquidation of a Mortgage Loan, as well as any income from
      an
      REO Property, will be applied in the following order of priority: first, to
      reimburse the Servicer for any related unreimbursed Servicing Advances and
      Servicing Fees; second, to reimburse the Servicer for any unreimbursed Advances;
      third, to reimburse the Collection Account for any Nonrecoverable Advances
      (or
      portions thereof) that were previously withdrawn by the Servicer pursuant to
      Section 3.8(a)(iii) that related to such Mortgage Loan; fourth, to accrued
      and
      unpaid interest (to the extent no Advance has been made for such amount or
      any
      such Advance has been reimbursed) on the Mortgage Loan or related REO Property,
      at the Mortgage Rate (net of the Servicing Fee Rate) to the Due Date occurring
      in the month in which such amounts are required to be distributed; and fifth,
      as
      a recovery of principal of the Mortgage Loan. Excess Proceeds, if any, from
      the
      liquidation of a Liquidated Mortgage Loan will be retained by the Servicer
      as
      additional servicing compensation pursuant to Section 3.14.

     

    (i)  The
      Servicer shall manage, conserve, protect and operate each related REO Property
      for the Trustee solely for the purpose of its prompt disposition and sale.
      The
      Servicer, either itself or through an agent selected by the Servicer, shall
      manage, conserve, protect and operate the REO Property in the same manner that
      it manages, conserves, protects and operates other foreclosed property for
      its
      own account, and in the same manner that similar property in the same locality
      as the REO Property is managed. The Servicer shall attempt to sell the same
      (and
      may temporarily rent the same for a period not greater than one year, except
      as
      otherwise provided below) on such terms and conditions as such Servicer deems
      to
      be in the best interest of the Trustee. The Trustee shall have no obligations
      with respect to any REO Dispositions.

     

    (j)  The
      Servicer shall have the right to purchase any Mortgage Loan which as of the
      first day of a Fiscal Quarter is 90 days or more Delinquent from the Trust
      at a
      price equal to the Purchase Price; provided,
      however,
      that
      (i) such Mortgage Loan is still 90 days or more Delinquent as of the date of
      such purchase and (ii) this purchase option, if not theretofore exercised,
      shall
      terminate on the day prior to the last day of the related Fiscal Quarter. This
      purchase option, if not exercised, shall not be thereafter reinstated unless
      the
      delinquency is cured and the Mortgage Loan thereafter becomes 90 days or more
      Delinquent again, in which case the option shall again become exercisable as
      of
      the first day of the related Fiscal Quarter. For any such Mortgage Loan that
      is
      a Nonrecoverable Mortgage Loan, such purchase shall be at a price equal to
      the
      Nonrecoverable Mortgage Loan Purchase Price; and provided,
      further,
      that
      any REO Property may be disposed of pursuant to the preceding Section 3.11(i).
      The total price calculated pursuant to the preceding sentence for any Mortgage
      Loan purchased hereunder shall be deposited in the Collection Account and the
      Trustee, upon receipt of the Request for Release from the Servicer in the form
      of Exhibit I hereto, shall release or cause to be released to the purchaser
      of
      such Mortgage Loan the related Mortgage File and shall execute and deliver
      such
      instruments of transfer or assignment prepared by the purchaser of such Mortgage
      Loan, in each case without recourse, as shall be necessary to vest in the
      purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto
      and
      the purchaser of such Mortgage Loan shall succeed to all the Trustee’s right,
      title and interest in and to such Mortgage Loan and all security and documents
      related thereto. Such assignment shall be an assignment outright and not for
      security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage
      Loan, and all security and documents, free of any further obligation to the
      Trustee or the Certificateholders with respect thereto.

     

    
      
        
        

      

      
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        Section
      3.12  Trustee
      to Cooperate; Release of Mortgage Files.

     

    Upon
      the
      payment in full of any Mortgage Loan, or the receipt by the Servicer of a
      notification that payment in full will be escrowed in a manner customary for
      such purposes, the Servicer will immediately notify the Trustee by delivering,
      or causing to be delivered a Request for Release substantially in the form
      of
      Exhibit I. Upon receipt of such request, the Trustee shall or shall cause the
      Custodian to promptly release the related Mortgage File to the Servicer, and
      the
      Trustee shall at the Servicer’s direction execute and deliver to the Servicer
      the request for reconveyance, deed of reconveyance or release or satisfaction
      of
      mortgage or such instrument releasing the lien of the Mortgage, in each case
      as
      provided by the Servicer, together with the Mortgage Note with written evidence
      of cancellation thereon. In lieu of the document execution process described
      in
      the preceding two sentences, the Servicer shall be authorized to execute each
      such Request for Release, request for reconveyance, deed of reconveyance, and
      release, satisfaction of mortgage, or such instrument releasing the lien of
      the
      Mortgage as attorney in fact for the Trustee (or the Custodian, if applicable)
      pursuant to the powers of attorney described in Section 3.1. Expenses incurred
      in connection with any instrument of satisfaction or deed of reconveyance shall
      be chargeable to the related Mortgagor.

     

    From
      time
      to time and as shall be appropriate for the servicing or foreclosure of any
      Mortgage Loan, including for such purpose, collection under any policy of flood
      insurance, any fidelity bond or errors or omissions policy, or for the purposes
      of effecting a partial release of any Mortgaged Property from the lien of the
      Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
      or any of the other documents included in the Mortgage File, the Trustee shall,
      upon delivery to the Trustee of a Request for Release in the form of Exhibit
      I
      signed by a Servicing Officer, release the Mortgage File to the Servicer.
      Subject to the further limitations set forth below, the Servicer shall cause
      the
      Mortgage File or documents so released to be returned to the Trustee or its
      Custodian when the need therefor by the Servicer no longer exists.

     

    If
      the
      Servicer at any time seeks to initiate a foreclosure proceeding in respect
      of
      any Mortgaged Property as authorized by this Agreement, the Servicer shall
      deliver or cause to be delivered to the Trustee, for signature, as appropriate,
      any court pleadings, requests for trustee’s sale or other documents necessary to
      effectuate such foreclosure or any legal action brought to obtain judgment
      against the Mortgagor on the Mortgage Note or the Mortgage or to obtain a
      deficiency judgment or to enforce any other remedies or rights provided by
      the
      Mortgage Note or the Mortgage or otherwise available at law or in
      equity.

     

    
      
        
        

      

      
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        Section
      3.13  Documents
      Records and Funds in Possession of Servicer to be Held for the
      Trustee.

     

    Notwithstanding
      any other provisions of this Agreement, the Servicer shall transmit to the
      Trustee, or the Custodian on its behalf, all documents and instruments described
      in Section 2.1(b), and shall hold as Servicer and agent of the Trustee all
      other
      documents, in respect of a Mortgage Loan coming into the possession of the
      Servicer from time to time and shall account fully to the Trustee for any funds
      received by the Servicer or which otherwise are collected by the Servicer as
      Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan.
      All
      Mortgage Files and funds collected or held by, or under the control of, the
      Servicer in respect of any Mortgage Loans, whether from the collection of
      principal and interest payments or from Liquidation Proceeds, including but
      not
      limited to, any funds on deposit in the Collection Account, shall be held by
      the
      Servicer for and on behalf of the Trustee and shall be and remain the sole
      and
      exclusive property of the Trustee, subject to the applicable provisions of
      this
      Agreement. The Servicer also agrees that it shall not create, incur or subject
      any Mortgage File or any funds that are deposited in the Collection Account,
      Distribution Account or any Escrow Account, or any funds that otherwise are
      or
      may become due or payable to the Trustee for the benefit of the
      Certificateholders, to any claim, lien, security interest, judgment, levy,
      writ
      of attachment or other encumbrance, or assert by legal action or otherwise
      any
      claim or right of setoff against any Mortgage File or any funds collected on,
      or
      in connection with, a Mortgage Loan, except, however, that the Servicer shall
      be
      entitled to set off against and deduct from any such funds any amounts that
      are
      properly due and payable to the Servicer under this Agreement.

     

        Section
      3.14  Servicing
      Compensation.

     

    As
      compensation for its activities hereunder, the Servicer shall be entitled to
      retain or withdraw from the Collection Account an amount equal to the Servicing
      Fee for each Mortgage Loan; provided,
      that
      the aggregate Servicing Fee with respect to any Distribution Date shall be
      reduced (i) by the amount of any Compensating Interest paid by the Servicer
      with
      respect to such Distribution Date, and (ii) with respect to the first
      Distribution Date, an amount equal to any amount to be deposited into the
      Distribution Account by the Depositor pursuant to Section 2.1(a) and not so
      deposited.

     

    Additional
      servicing compensation in the form of (i) Prepayment Interest Excess and all
      income and gain net of any losses realized from Permitted Investments and (ii)
      assumption fees, late payment charges, and other receipts not required to be
      deposited to the Collection Account pursuant to Section 3.5 hereof, including
      any Excess Proceeds, shall be retained by the Servicer as additional servicing
      compensation. The Servicer shall be required to pay all expenses incurred by
      them respectively in connection with their respective activities hereunder
      to
      the extent such expenses do not constitute Advances or Nonrecoverable Advances
      as defined in this Agreement and shall not be entitled to reimbursement therefor
      except as specifically provided in this Agreement.

     

    
      
        
        

      

      
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        Section
      3.15  Access
      to Certain Documentation.

     

    The
      Servicer shall provide to the OTS and the FDIC and to comparable regulatory
      authorities supervising Holders of Subordinate Certificates and the examiners
      and supervisory agents of the OTS, the FDIC and such other authorities, access
      to the documentation regarding the Mortgage Loans required by applicable
      regulations of the OTS and the FDIC. Such access shall be afforded without
      charge, but only upon reasonable and prior written request and during normal
      business hours at the offices designated by the Servicer. Nothing in this
      Section shall limit the obligation of the Servicer to observe any applicable
      law
      prohibiting disclosure of information regarding the Mortgagors and the failure
      of the Servicer to provide access as provided in this Section as a result of
      such obligation shall not constitute a breach of this Section.

     

        Section
      3.16  Annual
      Statement as to Compliance.

     

    Commencing
      in 2008, the Servicer shall deliver to the Depositor and the Trustee on or
      before March 15 of each applicable calendar year (or March 24 if there is no
      requirement to file a Form 10-K in that calendar year) an Officer’s Certificate
      stating, as to the signer thereof, that (i) a review of the activities of the
      Servicer during the preceding fiscal 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 of its material obligations under this Agreement throughout such
      year, or, if there has been a material default in the fulfillment of any such
      obligation, specifying each such default known to such officer and the nature
      and status thereof. Upon request, the Trustee shall forward a copy of each
      such
      statement to each Rating Agency and each Underwriter.

     

    Commencing
      in 2008, on or before March 15 of each calendar year (or March 24 if there
      is no
      requirement to file a Form 10-K in that calendar year), the Servicer shall
      deliver to the Depositor, the Servicer and the Trustee a report regarding its
      assessment of compliance with the servicing criteria specified in paragraph
      (d)
      of Item 1122 of Regulation AB (§ 229.1122(d)), as of and for the period ending
      the end of each fiscal year, with respect to asset-backed security transactions
      taken as a whole involving the Servicer, and that are backed by the same asset
      type as the Mortgage Loans. Each such report shall include all of the statements
      required under paragraph (a) of Item 1122 of Regulation AB (§ 229.1122(a)) as
      set forth in Exhibit T hereto.

     

    Copies
      of
      such statements shall be provided to any Securityholder upon request, by the
      Servicer or by the Trustee at the Servicer’s expense if the Servicer failed to
      provide such copies (unless (i) the Servicer shall have failed to provide the
      Trustee with such statement or (ii) the Trustee shall be unaware of the
      Servicer’s failure to provide such statement).

     

    The
      Servicer shall promptly notify the Depositor and the Trustee (i) of any legal
      proceedings pending against the Servicer of the type described in Item 1117
      (§
229.1117) of Regulation AB and (ii) if the Servicer shall become (but only
      to
      the extent not previously disclosed to the Trustee and the Depositor) at any
      time an affiliate of any of the Seller, the Trustee or any Servicer,
      Subservicer, Subcontractor or “Originator” contemplated by Item 1110 (§
229.1110) of Regulation AB, any significant obligor contemplated by Item 1112
      (§
229.1112) of Regulation AB, any enhancement or support provider contemplated
      by
      Items 1114 or 1115 (§§ 229.1114-1115) of Regulation AB or any other material
      party to the Trust Fund contemplated by Item 1100(d)(1) (§ 229.1100(d)(1)) of
      Regulation AB.

     

    
      
        
        

      

      
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          Section
        3.17  Annual
        Independent Public Accountants’ Servicing Statement.

    

     

    Commencing
      in 2008, on or before March 15 of each calendar year (or March 24 if there
      is no
      requirement to file a Form 10-K in that calendar year), the Servicer shall
      deliver to the Trustee and the Depositor a report by a registered public
      accounting firm that attests to, and reports on, the assessment made by the
      Servicer pursuant to the second paragraph of Section 3.16. Such report shall
      be
      made in accordance with standards for attestation engagements issued or adopted
      by the Public Company Accounting Oversight Board.

     

        Section
      3.18  Errors
      and Omissions Insurance; Fidelity Bonds.

     

    The
      Servicer shall for so long as it acts as Servicer under this Agreement, obtain
      and maintain in force (a) a policy or policies of insurance covering errors
      and
      omissions in the performance of its obligations as Servicer hereunder and (b)
      a
      fidelity bond in respect of its officers, employees and agents. Each such policy
      or policies and bond shall, together, comply with the requirements from time
      to
      time of Fannie Mae or Freddie Mac for persons performing servicing for mortgage
      loans purchased by Fannie Mae or Freddie Mac. In the event that any such policy
      or bond ceases to be in effect, the Servicer shall obtain a comparable
      replacement policy or bond from an insurer or issuer, meeting the requirements
      set forth above as of the date of such replacement.

     

        Section
      3.19  Advances.

     

    The
      Servicer shall determine on or before each Determination Date whether it is
      required to make a P&I Advance pursuant to the definition thereof. If the
      Servicer determines it is required to make a P&I Advance, it shall, before
      the Distribution Account Deposit Date, deposit into the Distribution Account
      an
      amount equal to the P&I Advance. The Servicer shall be entitled to be
      reimbursed for all P&I Advances of its own funds made pursuant to this
      Section as provided in Section 3.8 hereof. The obligation to make P&I
      Advances with respect to any Mortgage Loan shall continue if such Mortgage
      Loan
      has been foreclosed or otherwise terminated and the related Mortgaged Property
      has not been liquidated; provided,
      that in
      no event shall the Servicer be required to make any proposed Advance that,
      if
      made, would in the good faith judgment of the Servicer to be a Nonrecoverable
      Advance.

     

    The
      Servicer shall deliver to the Trustee on the related Distribution Account
      Deposit Date an Officer’s Certificate of a Servicing Officer indicating the
      amount of any proposed Advance that, if made, would in the good faith judgment
      of the Servicer be a Nonrecoverable Advance.

     

        Section
      3.20  Advance
      Facility.

     

    The
      Servicer is hereby authorized to enter into any facility with any Person (any
      such Person, an “Advance Facility Counterparty”) which provides that the
      Servicer may pledge or sell its rights to receive reimbursement of Advances
      pursuant to this Agreement (“Advance Reimbursement Rights”) pursuant to credit
      facilities, repurchase facilities, or similar facilities providing liquidity
      for
      the funding of Advances, including facilities providing that such Advance
      Facility Counterparty may make all or a portion of the Advances (any such
      facility, an “Advance Facility”), although no Advance Facility shall reduce or
      otherwise affect the Servicer’s obligations to fund such Advances. If so
      required pursuant to the terms of an Advance Facility, to the extent that an
      Advance Facility Counterparty makes all or a portion of any Advance and the
      Advance Facility Counterparty and the Servicer provide the Trustee with notice
      acknowledged by the Servicer that such Advance Facility Counterparty is entitled
      to reimbursement, such Advance Facility Counterparty shall be entitled to
      receive reimbursement pursuant to this Agreement for such amount to the extent
      provided. Such notice from the Advance Facility Counterparty and the Servicer
      must specify the amount of the reimbursement and must specify which Section
      of
      this Agreement permits the Advance to be reimbursed. The Trustee shall be
      entitled to conclusively rely without independent investigation on the Advance
      Facility Counterparty’s statement with respect to the amount of any
      reimbursement pursuant to this Section 3.20 and with respect to the Advance
      Facility Counterparty’s statement with respect to the Section of this Agreement
      permits the Advance to be reimbursed. An Advance Facility Counterparty whose
      obligations are limited to the making of Advances will not be deemed to be
      a
      Subservicer under this Agreement.

     

    
      
        
        

      

      
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    (b) If
      so
      required pursuant to the terms of an Advance Facility, the Servicer may direct,
      and if so directed in writing the Trustee is hereby authorized to and shall
      pay
      to the Advance Facility Counterparty (i) reimbursements for Advances; and (ii)
      all or such portion of the Servicing Fee as may be so specified in the Advance
      Facility, that would otherwise be payable to the Servicer pursuant to this
      Agreement or the Servicing Agreement. 

     

    (c) Upon
      request of the Servicer, the Trustee agrees to execute such acknowledgments
      recognizing the interests of any Advance Facility Counterparty in such Advance
      Reimbursement Rights and Servicing Fees as the Servicer may cause to be made
      subject to Advance Facilities pursuant to this Section 3.20, and such other
      documents in connection with such Advance Facilities as may be reasonably
      requested from time to time by any Advance Facility Counterparty. The
      implementation of the arrangement described in this Section shall not require
      the consent of Certificateholders or the Trustee.

     

        Section
      3.21  Prepayment
      Penalties.

     

    The
      Servicer will not waive any Prepayment Penalty or part of a Prepayment Penalty
      unless (i) such waiver relates to a default or a reasonably foreseeable default
      and would, in the reasonable judgment of the Servicer, maximize recovery of
      total net proceeds taking into account the value of such Prepayment Penalty
      and
      related Mortgage Loan and, if such waiver is made in connection with a
      refinancing of the related Mortgage Loan, such refinancing is related to a
      default or a reasonably foreseeable default; (ii) the related Mortgage Loan
      indebtedness has been accelerated; or (iii) the Servicer obtains an Opinion
      of
      Counsel, which may be in-house counsel for the Servicer, opining that the
      Prepayment Penalty is not legally enforceable in the circumstances under which
      the related prepayment occurs. In no event will the Servicer waive a Prepayment
      Penalty in connection with a refinancing of a Mortgage Loan that is not related
      to a default or a reasonably foreseen default.

     

    
      
        
        

      

      
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    ARTICLE
      4

     

    DISTRIBUTIONS

     

        Section
      4.1  Priorities
      of Distribution. 

     

    (a)  On
      each
      Distribution Date, the Trustee shall make the following distributions from
      the
      Distribution Account, net of the Trustee Fee and Trustee’s expenses, of an
      amount equal to the Interest Remittance Amount in the following order of
      priority:

     

    (i)  in
      the
      following order, first,
      (1) to
      the Swap Account, the sum of (x) all Net Swap Payments and (y) any Swap
      Termination Payment owed to the Swap Counterparty, but not including any
      Defaulted Swap Termination Payment owed to the Swap Counterparty, if any, and
      then
      (2) to
      the Class L-IO Certificates, interest accrued during the related Interest
      Accrual Period on the Class L-IO Notional Amount at the Class L-IO
      Rate;

     

    (ii)  concurrently,
      (1) from the remaining portion of the Interest Remittance Amount related to
      the
      Group 1 Mortgage Loans, to the Class 1-A Certificates, their Senior Interest
      Distribution Amount for such Distribution Date, and (2) from the remaining
      portion of the Interest Remittance Amount related to the Group 2 Mortgage Loans,
      concurrently, to the Group 2 Senior Certificates, their respective Senior
      Interest Distribution Amounts for such Distribution Date, pro
      rata
      based on
      their respective Senior Interest Distribution Amounts for such Distribution
      Date; 

     

    (iii)  concurrently,
      (1) from the remaining portion of the Interest Remittance Amount related to
      the
      Group 1 Mortgage Loans, concurrently, to the Group 2 Senior Certificates, their
      respective Senior Interest Distribution Amounts for such Distribution Date
      remaining unpaid after clause second above, pro
      rata
      based on
      their respective Senior Interest Distribution Amounts for such Distribution
      Date, and (2) from the remaining portion of the Interest Remittance Amount
      related to the Group 2 Mortgage Loans, to the Class 1-A Certificates, their
      Senior Interest Distribution Amount for such Distribution Date remaining unpaid
      after clause second above;

     

    (iv)  to
      the
      Class 1-M1 and Class 2-M1 Certificates, the Subordinate Interest Distribution
      Amounts (to the extent of the Interest Remittance Amount remaining after
      distributions of interest to the Classes of Certificates with a higher payment
      priority) with respect to each such Class; provided,
      however,
      that if
      the remaining Interest Remittance Amount is insufficient to make a full
      distribution of the Subordinate Interest Distribution Amounts to the Class
      1-M1
      and Class 2-M1 Certificates, the remaining Interest Remittance Amount will
      be
      distributed pro
      rata
      among
      the Class 1-M1 and Class 2-M1 Certificates based on the ratio of
      (i) Subordinate Interest Distribution Amounts for each such Class to
      (ii) the total amount of Subordinate Interest Distribution Amounts for the
      Class 1-M1 and Class 2-M1 Certificates in the aggregate;

     

    
      
        
        

      

      
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    (v)  to
      the
      Class 1-M2 and Class 2-M2 Certificates, the Subordinate Interest Distribution
      Amounts (to the extent of the Interest Remittance Amount remaining after
      distributions of interest to the Classes of Certificates with a higher payment
      priority) with respect to each such Class; provided,
      however,
      that if
      the remaining Interest Remittance Amount is insufficient to make a full
      distribution of the Subordinate Interest Distribution Amounts to the Class
      1-M2
      and Class 2-M2 Certificates, the remaining Interest Remittance Amount will
      be
      distributed pro
      rata
      among
      the Class 1-M2 and Class 2-M2 Certificates based on the ratio of
      (i) Subordinate Interest Distribution Amounts for each such Class to
      (ii) the total amount of Subordinate Interest Distribution Amounts for the
      Class 1-M2 and Class 2-M2 Certificates in the aggregate;

     

    (vi)  to
      the
      Class 1-M3 and Class 2-M3 Certificates, the Subordinate Interest Distribution
      Amounts (to the extent of the Interest Remittance Amount remaining after
      distributions of interest to the Classes of Certificates with a higher payment
      priority) with respect to each such Class; provided,
      however,
      that if
      the remaining Interest Remittance Amount is insufficient to make a full
      distribution of the Subordinate Interest Distribution Amounts to the Class
      1-M3
      and Class 2-M3 Certificates, the remaining Interest Remittance Amount will
      be
      distributed pro
      rata
      among
      the Class 1-M3 and Class 2-M3 Certificates based on the ratio of
      (i) Subordinate Interest Distribution Amounts for each such Class to
      (ii) the total amount of Subordinate Interest Distribution Amounts for the
      Class 1-M3 and Class 2-M3 Certificates in the aggregate;

     

    (vii)  to
      the
      Class 1-M4 and Class 2-M4 Certificates, the Subordinate Interest Distribution
      Amounts (to the extent of the Interest Remittance Amount remaining after
      distributions of interest to the Classes of Certificates with a higher payment
      priority) with respect to each such Class; provided,
      however,
      that if
      the remaining Interest Remittance Amount is insufficient to make a full
      distribution of the Subordinate Interest Distribution Amounts to the Class
      1-M4
      and Class 2-M4 Certificates, the remaining Interest Remittance Amount will
      be
      distributed pro
      rata
      among
      the Class 1-M4 and Class 2-M4 Certificates based on the ratio of
      (i) Subordinate Interest Distribution Amounts for each such Class to
      (ii) the total amount of Subordinate Interest Distribution Amounts for the
      Class 1-M4 and Class 2-M4 Certificates in the aggregate;

     

    (viii)  to
      the
      Class 1-M5 and Class 2-M5 Certificates, the Subordinate Interest Distribution
      Amounts (to the extent of the Interest Remittance Amount remaining after
      distributions of interest to the Classes of Certificates with a higher payment
      priority) with respect to each such Class; provided,
      however,
      that if
      the remaining Interest Remittance Amount is insufficient to make a full
      distribution of the Subordinate Interest Distribution Amounts to the Class
      1-M5
      and Class 2-M5 Certificates, the remaining Interest Remittance Amount will
      be
      distributed pro
      rata
      among
      the Class 1-M5 and Class 2-M5 Certificates based on the ratio of
      (i) Subordinate Interest Distribution Amounts for each such Class to
      (ii) the total amount of Subordinate Interest Distribution Amounts for the
      Class 1-M5 and Class 2-M5 Certificates in the aggregate;

     

    
      
        
        

      

      
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    (ix)  to
      the
      Class 1-M6 and Class 2-M6 Certificates, the Subordinate Interest Distribution
      Amounts (to the extent of the Interest Remittance Amount remaining after
      distributions of interest to the Classes of Certificates with a higher payment
      priority) with respect to each such Class; provided,
      however,
      that if
      the remaining Interest Remittance Amount is insufficient to make a full
      distribution of the Subordinate Interest Distribution Amounts to the Class
      1-M6
      and Class 2-M6 Certificates, the remaining Interest Remittance Amount will
      be
      distributed pro
      rata
      among
      the Class 1-M6 and Class 2-M6 Certificates based on the ratio of
      (i) Subordinate Interest Distribution Amounts for each such Class to
      (ii) the total amount of Subordinate Interest Distribution Amounts for the
      Class 1-M6 and Class 2-M6 Certificates in the aggregate;

     

    (x)  sequentially,
      to the Class B-1, Class B-2 and Class B-3 Certificates, in that order, their
      respective Subordinate Interest Distribution Amounts, in each case, to the
      extent of the Interest Remittance Amount remaining after distributions of
      interest to the Classes of Certificates with a higher payment priority;
      and

     

    (xi)  any
      remaining Interest Remittance Amount on any Distribution Date will be
      distributed as part of Net Monthly Excess Cashflow pursuant to Section 4.1(d)
      below;

     

    (b)  On
      each
      Distribution Date (a) prior to the Stepdown Date or (b) on which a Trigger
      Event
      is in effect, the holders of each Class of Certificates shall be entitled to
      receive distributions in respect of principal from the Principal Distribution
      Amount and the Swap Counterparty shall be entitled to the payments described
      below, in each case to the extent of the Available Distribution Amount available
      therefor after payment of the Interest Distribution Amount, in the following
      order of priority:

     

    (i)  to
      the
      Swap Account, the sum of (x) all Net Swap Payments and (y) any Swap Termination
      Payment owed to the Swap Counterparty, but not including any Defaulted Swap
      Termination Payment owed to the Swap Counterparty, if any, remaining unpaid
      on
      that Distribution Date after distributions from the Interest Remittance Amount
      for that Distribution Date;

     

    (ii)  to
      the
      Senior Certificates in accordance with Section 4.1(e);

     

    (iii)  to
      the
      Class 1-M1 and Class 2-M1 Certificates in accordance with Section 4.1(f), until
      the Class Principal Balance of each of the Class 1-M1 and Class 2-M1
      Certificates has been reduced to zero;

     

    (iv)  to
      the
      Class 1-M2 and Class 2-M2 Certificates, in accordance with Section 4.1(f),
      until
      the Class Principal Balance of each of the Class 1-M2 and Class 2-M2
      Certificates has been reduced to zero;

     

    (v)  to
      the
      Class 1-M3 and Class 2-M3 Certificates, in accordance with Section 4.1(f),
      until
      the Class Principal Balance of each of the Class 1-M3 and Class 2-M3
      Certificates has been reduced to zero;

     

    
      
        
        

      

      
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    (vi)  to
      the
      Class 1-M4 and Class 2-M4 Certificates, in accordance with Section 4.1(f),
      until
      the Class Principal Balance of each of the Class 1-M4 and Class 2-M4
      Certificates has been reduced to zero;

     

    (vii)  to
      the
      Class 1-M5 and Class 2-M5 Certificates, in accordance with Section 4.1(f),
      until
      the Class Principal Balance of each of the Class 1-M5 and Class 2-M5
      Certificates has been reduced to zero;

     

    (viii)  to
      the
      Class 1-M6 and Class 2-M6 Certificates, in accordance with Section 4.1(f),
      until
      the Class Principal Balance of each of the Class 1-M6 and Class 2-M6
      Certificates has been reduced to zero;

     

    (ix)  to
      the
      Class B-1 Certificates, until the Class Principal Balance of such Class has
      been
      reduced to zero;

     

    (x)  to
      the
      Class B-2 Certificates, until the Class Principal Balance of such Class has
      been
      reduced to zero;

     

    (xi)  to
      the
      Class B-3 Certificates, until the Class Principal Balance of such Class has
      been
      reduced to zero; and

     

    (xii)  any
      remaining Principal Distribution Amount on any Distribution Date will be
      distributed as part of Net Monthly Excess Cashflow pursuant to Section 4.1(d)
      below;

     

    (c)  On
      each
      Distribution Date (a) on or after the Stepdown Date and (b) on which a Trigger
      Event is not in effect, the holders of each Class of Certificates and the Swap
      Counterparty shall be entitled to receive distributions from the Principal
      Distribution Amount, in each case to the extent of the Available Distribution
      Amount available therefore after payment of the Interest Remittance Amount,
      in
      the following order of priority: 

     

    (i)  to
      the
      Swap Account, the sum of (x) all Net Swap Payments and (y) any Swap Termination
      Payment owed to the Swap Counterparty, but not including any Defaulted Swap
      Termination Payment owed to the Swap Counterparty, if any, remaining unpaid
      on
      that Distribution Date after distributions from the Interest Remittance Amount
      for that Distribution Date;

     

    (ii)  to
      the
      holders of the Senior Certificates, in an amount up to the Senior Principal
      Distribution Amount, in accordance with Section 4.1(e), until their respective
      Class Principal Balances are reduced to zero;

     

    (iii)  to
      the
      Class 1-M1 and Class 2-M1 Certificates, in an amount up to the Class M1
      Principal Distribution Amount, in accordance with Section 4.1(f), until their
      respective Class Principal Balances are reduced to zero;

     

    (iv)  to
      the
      Class 1-M2 and Class 2-M2 Certificates, in an amount up to the Class M2
      Principal Distribution Amount, in accordance with Section 4.1(f), until their
      respective Class Principal Balances are reduced to zero;

     

    
      
        
        

      

      
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    (v)  to
      the
      Class 1-M3 and Class 2-M3 Certificates, in an amount up to the Class M3
      Principal Distribution Amount, in accordance with Section 4.1(f), until their
      respective Class Principal Balances are reduced to zero; 

     

    (vi)  to
      the
      Class 1-M4 and Class 2-M4 Certificates, in an amount up to the Class M4
      Principal Distribution Amount, in accordance with Section 4.1(f), until their
      respective Class Principal Balances are reduced to zero;

     

    (vii)  to
      the
      Class 1-M5 and Class 2-M5 Certificates, in an amount up to the Class M5
      Principal Distribution Amount, in accordance with Section 4.1(f), until their
      respective Class Principal Balances are reduced to zero;

     

    (viii)  to
      the
      Class 1-M6 and Class 2-M6 Certificates, in an amount up to the Class M6
      Principal Distribution Amount, in accordance with Section 4.1(f), until their
      respective Class Principal Balances are reduced to zero;

     

    (ix)  to
      the
      Class B-1 Certificates, in an amount up to the Class B-1 Principal Distribution
      Amount, until the Class Principal Balance of such Class has been reduced to
      zero;

     

    (x)  to
      the
      Class B-2 Certificates, in an amount up to the Class B-2 Principal Distribution
      Amount, until the Class Principal Balance of such Class has been reduced to
      zero;

     

    (xi)  to
      the
      Class B-3 Certificates, in an amount up to the Class B-3 Principal Distribution
      Amount, until the Class Principal Balance of such Class has been reduced to
      zero; and

     

    (xii)  any
      remaining Principal Distribution Amount on any Distribution Date will be
      distributed as part of Net Monthly Excess Cashflow pursuant to Section 4.1(d)
      below;

     

    (d)  On
      each
      Distribution Date, the Net Monthly Excess Cashflow and, for purposes of making
      distributions at priorities (xx) through (xxiii) below, funds on deposit in
      the
      Excess Reserve Fund, will be distributed to the Certificates and the Swap
      Counterparty in the following order of priority:

     

    (i)  to
      the
      Class 1-M1 and Class 2-M1 Certificates, on a pro
      rata
      basis
      based on (i) the Interest Carry Forward Amount of each such Class over
      (ii) the aggregate Interest Carry Forward Amount of the Class 1-M1 and
      Class 2-M1 Certificates, any Interest Carry Forward Amount for each such
      Class;

     

    (ii)  to
      the
      Class 1-M1 and Class 2-M1 Certificates, on a pro
      rata
      basis
      based on (i) the Unpaid Realized Loss Amount of each such Class over
      (ii) the aggregate Unpaid Realized Loss Amount of the Class 1-M1 and Class
      2-M1 Certificates, any Unpaid Realized Loss Amount for each such
      Class;

     

    
      
        
        

      

      
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    (iii)  to
      the
      Class 1-M2 and Class 2-M2 Certificates, on a pro
      rata
      basis
      based on (i) the Interest Carry Forward Amount of each such Class over
      (ii) the aggregate Interest Carry Forward Amount of the Class 1-M2 and
      Class 2-M2 Certificates, any Interest Carry Forward Amount for each such
      Class;

     

    (iv)  to
      the
      Class 1-M2 and Class 2-M2 Certificates, on a pro
      rata
      basis
      based on (i) the Unpaid Realized Loss Amount of each such Class over
      (ii) the aggregate Unpaid Realized Loss Amount of the Class 1-M2 and Class
      2-M2 Certificates, any Unpaid Realized Loss Amount for each such
      Class;

     

    (v)  to
      the
      Class 1-M3 and Class 2-M3 Certificates, on a pro
      rata
      basis
      based on (i) the Interest Carry Forward Amount of each such Class over
      (ii) the aggregate Interest Carry Forward Amount of the Class 1-M3 and
      Class 2-M3 Certificates, any Interest Carry Forward Amount for each such
      Class;

     

    (vi)  to
      the
      Class 1-M3 and Class 2-M3 Certificates, on a pro
      rata
      basis
      based on (i) the Unpaid Realized Loss Amount of each such Class over
      (ii) the aggregate Unpaid Realized Loss Amount of the Class 1-M3 and Class
      2-M3 Certificates, any Unpaid Realized Loss Amount for each such
      Class;

     

    (vii)  to
      the
      Class 1-M4 and Class 2-M4 Certificates, on a pro
      rata
      basis
      based on (i) the Interest Carry Forward Amount of each such Class over
      (ii) the aggregate Interest Carry Forward Amount of the Class 1-M4 and
      Class 2-M4 Certificates, any Interest Carry Forward Amount for each such
      Class;

     

    (viii)  to
      the
      Class 1-M4 and Class 2-M4 Certificates, on a pro
      rata
      basis
      based on (i) the Unpaid Realized Loss Amount of each such Class over
      (ii) the aggregate Unpaid Realized Loss Amount of the Class 1-M4 and Class
      2-M4 Certificates, any Unpaid Realized Loss Amount for each such
      Class;

     

    (ix)  to
      the
      Class 1-M5 and Class 2-M5 Certificates, on a pro
      rata
      basis
      based on (i) the Interest Carry Forward Amount of each such Class over
      (ii) the aggregate Interest Carry Forward Amount of the Class 1-M5 and
      Class 2-M5 Certificates, any Interest Carry Forward Amount for each such
      Class;

     

    (x)  to
      the
      Class 1-M5 and Class 2-M5 Certificates, on a pro
      rata
      basis
      based on (i) the Unpaid Realized Loss Amount of each such Class over
      (ii) the aggregate Unpaid Realized Loss Amount of the Class 1-M5 and Class
      2-M5 Certificates, any Unpaid Realized Loss Amount for each such
      Class;

     

    (xi)  to
      the
      Class 1-M6 and Class 2-M6 Certificates, on a pro
      rata
      basis
      based on (i) the Interest Carry Forward Amount of each such Class over
      (ii) the aggregate Interest Carry Forward Amount of the Class 1-M6 and
      Class 2-M6 Certificates, any Interest Carry Forward Amount for each such
      Class;

     

    (xii)  to
      the
      Class 1-M6 and Class 2-M6 Certificates, on a pro
      rata
      basis
      based on (i) the Unpaid Realized Loss Amount of each such Class over
      (ii) the aggregate Unpaid Realized Loss Amount of the Class 1-M6 and Class
      2-M6 Certificates, any Unpaid Realized Loss Amount for each such
      Class;

     

    
      
        
        

      

      
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    (xiii)  to
      the
      Class B-1 Certificates, the Interest Carry Forward Amount;

     

    (xiv)  to
      the
      Class B-1 Certificates, the Unpaid Realized Loss Amount;

     

    (xv)  to
      the
      Class B-2 Certificates, the Interest Carry Forward Amount;

     

    (xvi)  to
      the
      Class B-2 Certificates, the Unpaid Realized Loss Amount;

     

    (xvii)  to
      the
      Class B-3 Certificates, the Interest Carry Forward Amount;

     

    (xviii)  to
      the
      Class B-3 Certificates, the Unpaid Realized Loss Amount;

     

    (xix)  to
      the
      Excess Reserve Fund Account, the amount of any Basis Risk Payment for that
      Distribution Date;

     

    (xx)  from
      funds on deposit in the Excess Reserve Fund Account, sequentially, first
      (i)
      concurrently, to the Classes of Senior Certificates currently outstanding,
      first pro
      rata,
      based
      on their respective Class Principal Balances, to the extent needed to pay any
      Basis Risk Carry Forward Amount for each such Class and then,
      pro
      rata,
      based
      on any Basis Risk Carry Forward Amount remaining unpaid for each such Class,
      in
      an amount up to the amount of any Basis Risk Carry Forward Amount remaining
      unpaid for such Classes of Certificates and then
      (ii)
      sequentially, to the Class M Certificates, in order of priority, in each case
      first pro
      rata,
      based
      on the related Class Principal Balance between Classes of Certificates of
      Equivalent Priority to the extent needed to pay any Basis Risk Carry Forward
      Amount for each such Class, then,
      pro
      rata,
      based
      on the related Basis Risk Carry Forward Amounts remaining unpaid, between
      Classes of Certificates of Equivalent Priority, in an amount up to the amount
      of
      any Basis Risk Carry Forward Amount remaining unpaid for such Classes of
      Certificates, and then
      (iii) sequentially, to the Class B-1, Class B-2 and Class B-3 Certificates,
      in that order, in an amount up to the amount of any Basis Risk Carry Forward
      Amount for such Classes of Certificates;

     

    (xxi)  from
      all
      remaining amounts (including remaining funds on deposit in the Excess Reserve
      Fund Account), sequentially, first
      (i)
      concurrently, to the Senior Certificates, first pro
      rata,
      based
      on their respective Class Principal Balances to the extent needed to pay any
      Unpaid Interest Shortfall Amount for each such Class and then,
      pro
      rata,
      based
      on any Unpaid Interest Shortfall Amount remaining unpaid for each such Class,
      in
      an amount up to the amount of any Unpaid Interest Shortfall Amount remaining
      unpaid for such Classes of Certificates and then (ii) sequentially, to the
      Class
      M Certificates, in order of priority, in each case pro
      rata
      between
      Classes of Certificates of Equivalent Priority, first
      based on
      their respective Class Principal Balances to the extent needed to pay any Unpaid
      Interest Shortfall Amount for each such Class and then,
      based
      on any Unpaid Interest Shortfall Amount remaining unpaid for each such Class,
      in
      an amount up to the amount of any Unpaid Interest Shortfall Amount remaining
      unpaid for such Classes of Certificates, and then
      (iii) sequentially, to the Class B-1, Class B-2 and Class B-3 Certificates,
      in that order, in an amount up to the amount of any Unpaid Interest Shortfall
      Amount for such Classes of Certificates;

     

    
      
        
        

      

      
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    (xxii)  from
      all
      remaining amounts (including remaining funds on deposit in the Excess Reserve
      Fund Account), to the Swap Account, the amount of any Defaulted Swap Termination
      Payment owed to the Swap Counterparty;

     

    (xxiii)  from
      all
      remaining amounts (including remaining funds on deposit in the Excess Reserve
      Fund Account), to the holders of the Class OC Certificates; provided,
      that if
      such Distribution Date is the Distribution Date immediately following the
      expiration of the latest prepayment charge term with respect to the Mortgage
      Loans or any Distribution Date thereafter, then any such remaining amounts
(including
      the Class P Deposit), together with the Class P Distribution Amount, will
      be distributed first, to the holders of the Class P Certificates, until the
      Class Principal Balance thereof has been reduced to zero; and second, to the
      holders of the Class OC Certificates; and

     

    (xxiv)  to
      the
      holders of the Class R Certificates, any remaining amounts.

     

    (e)  All
      principal distributions to the holders of the Senior Certificates on any
      Distribution Date will be allocated concurrently between the Group 1 Senior
      Certificates and the Group 2 Senior Certificates, based on their respective
      Class A Principal Allocation Percentages for that Distribution Date. Any
      payments of principal to the Group 1 Senior Certificates will first be made
      from
      payments relating to the Group 1 Mortgage Loans and any payments of principal
      to
      the Group 2 Senior Certificates will first be made from payments relating to
      the
      Group 2 Mortgage Loans.

     

    However,
      commencing with the Distribution Date on which the aggregate Class Principal
      Balance of either the Group 1 Senior Certificates or the Group 2 Senior
      Certificates has been reduced to zero, the remaining principal distributions
      distributable to the Senior Certificates on that Distribution Date and all
      of
      the principal distributions distributable to the Senior Certificates on all
      subsequent Distribution Dates will be distributed to the holders of the
      remaining Senior Certificates in accordance with the principal distribution
      allocations described below, until their Class Principal Balances have been
      reduced to zero (without regard to the Group 1 Senior Principal Allocation
      Amount or Group 2 Senior Principal Allocation Amount).

    

    Distributions
      to the Group 1 Senior Certificates.
      On each
      Distribution Date, the Group 1 Senior Principal Allocation Amount will be
      distributed to the Class 1-A Certificates, until its Class Principal Balance
      is
      reduced to zero;

    

    Distributions
      to the Group 2 Senior Certificates.
      On each
      Distribution Date, the Group 2 Senior Principal Allocation Amount will be
      distributed, sequentially, to the Class 2-A1, Class 2-A2, Class 2-A3 and Class
      2-A4 Certificates, in that order, until their respective Class Principal
      Balances have been reduced to zero.

    

    However,
      from and after the Distribution Date on which the aggregate Class Principal
      Balances of the Class 1-M1, Class 2-M1, Class 1-M2, Class 2-M2, Class 1-M3,
      Class 2-M3, Class 1-M4, Class 2-M4, Class 1-M5, Class 2-M5, Class 1-M6, Class
      2-M6, Class B-1, Class B-2 and Class B-3 Certificates and the Class Principal
      Balance of the Class OC Certificates have been reduced to zero, any principal
      distributions allocable to the Class 2-A1, Class 2-A2, Class 2-A3 and Class
      2-A4
      Certificates are required to be distributed pro
      rata
      among
      those Classes, based on their Class Principal Balances, until their Class
      Principal Balances have been reduced to zero.

    

    
      
        
        

      

      
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    (f)  Principal
      amounts to be distributed to the Class 1-M1, Class 2-M1, Class 1-M2, Class
      2-M2,
      Class 1-M3, Class 2-M3, Class 1-M4, Class 2-M4, Class 1-M5, Class 2-M5, Class
      1-M6 and Class 2-M6 Certificates will be paid as follows:

     

    (i) The
      Group
      1 Principal Allocation Percentage of amounts distributable to the respective
      Class M Certificates will be paid to the Class 1-M1, Class 1-M2, Class 1-M3,
      Class 1-M4, Class 1-M5, and Class 1-M6 Certificates.

     

    (ii) The
      Group
      2 Principal Allocation Percentage of amounts distributable to the respective
      Class M Certificates will be paid to the Class 2-M1, Class 2-M2, Class 2-M3,
      Class 2-M4, Class 2-M5, and Class 2-M6 Certificates.

     

    Notwithstanding
      the foregoing, in the event that the Class Principal Balance of any Class of
      the
      Class M Certificates is reduced to zero while the other Class of Class M
      Certificates of Equivalent Priority remains outstanding, the amounts referred
      to
      in (i) and (ii) immediately above will be distributed to whichever Class of
      Class M Certificates of Equivalent Priority remains outstanding until the Class
      Principal Balance of such Class has been reduced to zero.

     

    (g)  On
      each
      Distribution Date, the Class P Distribution Amount received during the related
      Prepayment Period will be distributed to the holders of the Class P
      Certificates.

     

        Section
      4.2  Method
      of Distribution.

     

    (a)  All
      distributions with respect to each Class of Certificates on each Distribution
      Date shall be made pro
      rata
      among
      the outstanding Certificates of such Class, based on the Percentage Interest
      in
      such Class represented by each Certificate. Payments to the Certificateholders
      on each Distribution Date shall be made by the Trustee to the Certificateholders
      of record on the related Record Date by check or money order mailed to a
      Certificateholder at the address appearing in the Certificate Register, or
      upon
      written request by such Certificateholder to the Trustee made not later than
      the
      applicable Record Date, by wire transfer to a U.S. depository institution
      acceptable to the Trustee, or by such other means of payment as such
      Certificateholder and the Trustee shall agree.

     

    (b)  Each
      distribution with respect to a Book-Entry Certificate shall be paid to the
      Depository, which shall credit the amount of such distribution to the accounts
      of its Depository Participants in accordance with its normal procedures. Each
      Depository Participant shall be responsible for disbursing such distribution
      to
      the Certificate Owners that it represents and to each financial intermediary
      for
      which it acts as agent. Each such financial intermediary shall be responsible
      for disbursing funds to the Certificate Owners that it represents. All such
      credits and disbursements with respect to a Book-Entry Certificate are to be
      made by the Depository and the Depository Participants in accordance with the
      provisions of the applicable Certificates. Neither the Trustee nor the Servicer
      shall have any responsibility therefor except as otherwise provided by
      applicable law.

     

    
      
        
        

      

      
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    (c)  The
      Trustee shall withhold or cause to be withheld such amounts as it reasonably
      determines are required by the Code (giving full effect to any exemptions from
      withholding and related certifications required to be furnished by
      Certificateholders or Certificate Owners and any reductions to withholding
      by
      virtue of any bilateral tax treaties and any applicable certification required
      to be furnished by Certificateholders or Certificate Owners with respect
      thereto) from distributions to be made to a “Foreign Person” as defined in
      Section 1445(f)(3) of the Code. 

     

        Section
      4.3  Allocation
      of Losses.

     

    (a)  On
      each
      Distribution Date, the Trustee shall allocate any excess of the aggregate Class
      Principal Balance of the Certificates over the aggregate Stated Principal
      Balance of the Mortgage Loans to reduce the Class Principal Balances of the
      Subordinate Certificates in the following order of priority:

     

    (i)  to
      the
      Class B-3 Certificates, until the Class Principal Balance thereof is reduced
      to
      zero;

     

    (ii)  to
      the
      Class B-2 Certificates, until the Class Principal Balance thereof is reduced
      to
      zero;

     

    (iii)  to
      the
      Class B-1 Certificates, until the Class Principal Balance thereof is reduced
      to
      zero;

     

    (iv)  to
      the
      Class 1-M6 and Class 2-M6 Certificates, pro
      rata
      based on
      the respective outstanding Class Principal Balances of such Classes, until
      the
      Class Principal Balance of each such Class is reduced to zero;

     

    (v)  to
      the
      Class 1-M5 and Class 2-M5 Certificates, pro
      rata
      based on
      the respective outstanding Class Principal Balances of such Classes, until
      the
      Class Principal Balance of each such Class is reduced to zero;

     

    (vi)  to
      the
      Class 1-M4 and Class 2-M4 Certificates,
      pro
      rata
      based on
      the respective outstanding Class Principal Balances of such Classes, until
      the
      Class Principal Balance of each such Class is reduced to zero;

     

    (vii)  to
      the
      Class 1-M3 and Class 2-M3 Certificates, pro
      rata,
      until
      the Class Principal Balance thereof has been reduced to zero; 

     

    (viii)  to
      the
      Class 1-M2 and Class 2-M2 Certificates, pro
      rata
      based on
      the respective outstanding Class Principal Balances of such Classes, until
      the
      Class Principal Balance of each such Class is reduced to zero; and

     

    (ix)  to
      the
      Class 1-M1 and Class 2-M1 Certificates, pro
      rata
      based on
      the respective outstanding Class Principal Balances of such Classes, until
      the
      Class Principal Balance of each such Class is reduced to zero.

     

    
      
        
        

      

      
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    (b)  Realized
      Losses shall not be allocated to the Senior Certificates or the Class P
      Certificates.

     

    (c)  Notwithstanding
      the foregoing, the Class Principal Balance of a Class of Subordinate
      Certificates that has been reduced because of allocations of Realized Losses
      may
      also be increased as a result of Subsequent Recoveries. If a final liquidation
      of a Mortgage Loan resulted in a Realized Loss and thereafter the Servicer
      receives a recovery specifically related to that Mortgage Loan, such recovery
      (net of any reimbursable expenses) shall be distributed to the
      Certificateholders on any Distribution Date in the same manner as prepayments
      received in
      the
      related Prepayment Period. In addition, the Class Principal Balance of each
      Class of Subordinate Certificates to which Realized Losses have been allocated,
      shall be increased, sequentially in the order of payment priority, to the extent
      that such Subsequent Recoveries are distributed as principal to any Class of
      Subordinate Certificates to the extent that (i) the related Realized Loss was
      allocated to any Class of Subordinate Certificates and (ii) the aggregate Stated
      Principal Balance of the Mortgage Loans as of immediately preceding Due Date
      (after giving effect to unscheduled receipts of principal in the Prepayment
      Period related to that prior Due Date) exceeds the aggregate Class Principal
      Balance of the Senior Certificates immediately prior to that Distribution Date.
      However, the Class Principal Balance of each such Class of Subordinate
      Certificates will not be increased by more than the amount of Realized Losses
      previously applied to reduce the Class Principal Balance of each such Class
      of
      Subordinate Certificates. Holders of Certificates whose Class Principal Balance
      is increased in this manner shall not be entitled to interest on the increased
      balance for any Interest Accrual Period preceding the Distribution Date on
      which
      the increase occurs. The foregoing provisions shall apply even if the Class
      Principal Balance of a Class of Subordinate Certificates was previously reduced
      to zero. Accordingly, each Class of Subordinate Certificates will be considered
      to remain outstanding until the termination of the Trust Fund.

     

        Section
      4.4  Reports
      to the Depositor
      and
      the Trustee.

     

    On
      or
      before the Business Day preceding each Distribution Date, the Servicer shall
      notify, or cause to be notified, the Depositor and the Trustee of the following
      information with respect to the next Distribution Date (which notification
      may
      be given by facsimile, electronic transmission or by telephone promptly
      confirmed in writing):

     

    
      	(a)  	
              the
                aggregate amount then on deposit in the Distribution Account and
                the
                source thereof (identified as interest, scheduled principal or unscheduled
                principal);

            

    

     

    
      	(b)  	
              the
                amount of any Realized Losses and Unpaid Realized Loss
                Amounts;

            

    

     

    
      	(c)  	
              the
                application of the amounts distributed on such Distribution Date
                pursuant
                to Section 4.1 hereof (including the distribution of any Subsequent
                Recoveries); 

            

    

     

    
      	(d)  	
              whether
                a Trigger Event has occurred; and

            

    

     

        Section
      4.5  Reports
      by or on Behalf of the Servicer.

     

    (a)  On
      or as
      soon as practicable following each Distribution Date, the Servicer shall report
      or cause to be published on the Trustee’s website located at ,
      or such
      other website designated by the Trustee as may be set forth in a notice provided
      to the Holder of each of the Certificates and each Rating Agency, the following
      information: 

     

    
      
        
        

      

      
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    (i)  with
      respect to each Class of Certificates (other than Class OC and Class R
      Certificates) (based on a Certificate in the original principal amount of
      $1,000):

     

    
      	(A)  	
              the
                amount of the aggregate distributions on such Distribution
                Date;

            

    

    
       

      
        	(B)  	
                the
                  amount of such distribution allocable to
                  interest;

              

      

        

    

    
      	(C)  	
              the
                amount of such distributions allocable to principal, separately
                identifying the aggregate amount of any prepayments, Substitution
                Adjustment Amounts, repurchase amounts pursuant to Article 2 or other
                recoveries of principal included therein, any Extra Principal Distribution
                Amount for such Distribution Date;

            

    

     

    
      	(D)  	
              the
                Class Principal Balance after giving effect to any distribution allocable
                to principal; and

            

    

     

    
      	(E)  	
              any
                Interest Carry Forward Amount and any Basis Risk Carry Forward
                Amount;

            

    

     

    (ii)  the
      Net
      WAC Cap applicable to each Class of Certificates;

     

    (iii)  any
      Subsequent Recoveries and Realized Losses for the period and since the Cut-off
      Date;

     

    (iv)  the
      largest Mortgage Loan balance outstanding in each Group;

     

    (v)  Prepayment
      Penalties collected and owed;

     

    (vi)  the
      Servicing Fees allocable to each Group, and any fees paid to the Trustee or
      the
      Custodian;

     

    (vii)  One-Month
      LIBOR on the most recent Interest Determination Date; 

     

    (viii)  the
      Pass-Through Rates for the Certificates for the current Interest Accrual Period
      and whether such rates have been capped; 

     

    
      (ix) the
        number and aggregate principal balances of Mortgage Loans in each Group (a)
        30-59 days Delinquent, (b) 60-89 days Delinquent and (c) 90 or more days
        Delinquent, as of the close of business on the last Business Day of the
        immediately preceding calendar month;

    

     

    (x)  the
      percentage that each of the Stated Principal Balances set forth pursuant to
      clauses (a), (b) and (c) of paragraph (ix) above represent with respect to
      all
      Mortgage Loans in each Group;

     

    
      
        
        

      

      
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      (xi) the
        number and Stated Principal Balance of all Mortgage Loans in each Group in
        foreclosure proceedings as of the close of business as of the close of business
        on the last Business Day of the immediately preceding calendar
        month;

      

        (xii) the
          number of Mortgagors and the Stated Principal Balances of Mortgage Loans
          in each
          Group involved in bankruptcy proceedings as of the close of business on
          the last
          Business Day of the immediately preceding calendar month;

         

        (xiii) the
          aggregate number and aggregate book value of any REO Property in each Group
          as
          of the close of business on the last Business Day of the immediately preceding
          calendar month; 

         

        (xiv) the
          number and amount by principal balance of 60+ Day Delinquent Loans in each
          Group
          as of the close of business on the last Business Day of the immediately
          preceding calendar month; 

         

      

    

    (xv)  the
      aggregate Stated Principal Balance of the Mortgage Loans, the Mortgage Rates
      (in
      incremental ranges), the Weighted Average Net Rate, the weighted average life
      and the weighted average remaining term of the Mortgage Loans, at the beginning
      and at the end of the related Prepayment Period;

     

    (xvi)  the
      Stated Principal Balance of the Mortgage Loans whose Mortgage Rates adjust
      on
      the basis of six-month LIBOR at the end of the related Prepayment
      Period;

     

    (xvii)  the
      amount of cash flow received for such Distribution Date, and the sources
      thereof;

     

    (xviii)  the
      Realized Losses, if any, allocated to each Class of Certificates on that
      Distribution Date; 

     

    (xix)  the
      applicable Record Date, Interest Accrual Period and calculation date for each
      Class of Certificates and such Distribution Date; 

     

    (xx)  the
      amount on deposit in the Distribution Account as of such Distribution Date
      (after giving effect to distributions on such date) and as of the prior
      Distribution Date; 

     

    (xxi)  the
      amount of any payments under the Swap Agreement; and

     

    (xxii)  for
      each
      Distribution Date, the separate product of (x) a fraction, the numerator of
      which is 10,000, and the denominator of which is the aggregate Stated Principal
      Balance of the Mortgage Loans, and (y) each of the following: (1) the total
      amount of principal received in respect of the Mortgage Loans during the related
      Due Period, separately identifying the amount received in respect of (a)
      scheduled and (b) unscheduled payments on the Mortgage Loans during that Due
      Period, (2) all Liquidation Proceeds and Subsequent Recoveries received on
      the
      Mortgage Loans during that Due Period and (3) the Realized Losses on the
      Mortgage Loans, both as of the related Due Period and since the Closing
      Date.

     

    
      
        
        

      

      
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    (b)  All
      allocations made by the Trustee shall be based on information the Trustee
      receives from the Servicer which the Trustee shall be protected in relying
      on.

     

    In
      addition to the information listed above, such report shall also include such
      other information as is required by Form 10-D, including, but not limited to,
      the information required by Item 1121 (§ 229.1121) of Regulation AB, to the
      extent such information is provided to the Trustee on a timely basis by the
      responsible party as set forth in Exhibit S.

     

        Section
      4.6  The
      Calculation Agent.

     

    (a)  The
      Calculation Agent, as agent for the Servicer, shall timely and accurately (i)
      perform and provide to the Trustee calculations of all amounts of principal
      and
      interest required to be distributed on each Distribution Date pursuant to this
      Article 4; and (ii) in connection with such calculations, determine the
      appropriate One Month LIBOR with respect to each Interest Determination Date
      in
      accordance with the definition of “One Month LIBOR” set forth in Section 1.1.
      The Calculation Agent shall not resign from its capacity as the Calculation
      Agent on fewer than sixty (60) prior written days notice to the
      Servicer.

     

    (b)  The
      compensation of the Calculation Agent shall be the responsibility of the
      Servicer, payable from the Servicing Fee.

     

    (c)  The
      Servicer may terminate the Calculation Agent, in its capacity as the Calculation
      Agent, at any time, with or without cause, upon thirty (30) days notice in
      writing to the Calculation Agent. No fee shall be payable to the Calculation
      Agent in connection with any such termination. 

     

        Section
      4.7  The
      Excess Reserve Fund Account.

     

    (a)  The
      Trustee shall establish and maintain an Excess Reserve Fund Account to be held
      in trust for the benefit of Holders of the Certificates. The Excess Reserve
      Fund
      Account shall at all times be an Eligible Account. Amounts on deposit in the
      Excess Reserve Fund Account shall be invested at the direction of the Depositor
      on behalf of the Holders of the Class OC Certificate. Investments
      in the Excess Reserve Fund Account shall be limited to Permitted
      Investments.

     

    (b)  The
      Excess Reserve Fund Account shall not be an asset of any REMIC created pursuant
      to this Agreement. For state and federal tax purposes, the Holder of the Class
      OC Certificate shall be the beneficial owner of the Excess Reserve Fund
      Account.

     

        Section
      4.8  The
      Supplemental Interest Trust.

     

    (a)  A
      separate trust is hereby established (the “Supplemental Interest Trust” or the
“Saxon Asset Securities Trust 2007-3 Supplemental Interest Trust”), the corpus
      of which shall be held by the Trustee in trust for the benefit of the
      Certificateholders. The Trustee shall be the trustee of the Supplemental
      Interest Trust. The Trustee, as trustee of the Supplemental Interest Trust,
      shall establish an account (the “Swap Account”). The Swap Account shall be an
      Eligible Account, and funds on deposit therein shall be held separate and apart
      from, and shall not be commingled with, any other moneys, including, without
      limitation, other moneys of the Trustee held pursuant to this Agreement. The
      Supplemental Interest Trust will not be an asset of any REMIC
      hereunder.

     

    
      
        
        

      

      
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    (b)  On
      each
      Distribution Date, Swap Termination Payments, Net Swap Payments owed to the
      Swap
      Counterparty and Net Swap Receipts will be deposited into the Swap Account.
      Funds in the Swap Account will be distributed in the following order of
      priority:

     

    (i)  to
      the
      Swap Counterparty, all Net Swap Payments, if any, owed to the Swap Counterparty
      for that Distribution Date;

     

    (ii)  to
      the
      Swap Counterparty, any Swap Termination Payment, but not including any Defaulted
      Swap Termination Payment, for that Distribution Date;

     

    (iii)  concurrently,
      to the Senior Certificates, pro
      rata,
      based
      on the amount of the related Interest Distribution Amount remaining unpaid,
      any
      unpaid Senior Interest Distribution Amount remaining unpaid after distribution
      of the Interest Remittance Amount;

     

    (iv)  first,
      sequentially, to the Class M Certificates in each case pro
      rata,
      based
      on the amount of the related Interest Distribution Amount remaining unpaid,
      between Classes of Certificates of Equivalent Priority, and then,
      sequentially, to the Class B-1, Class B-2 and Class B-3 Certificates, in that
      order, any unpaid Subordinate Interest Distribution Amount remaining unpaid
      after distribution of the Interest Remittance Amount and any unpaid Interest
      Carry Forward Amounts remaining unpaid after distribution of Net Monthly Excess
      Cashflow;

     

    (v)  to
      the
      Offered Certificates in accordance with the principal distribution rules in
      effect for such Distribution Date, in an amount equal to the amount necessary
      to
      meet the Overcollateralization Target for that Distribution Date (to the extent
      remaining unpaid from the Available Distribution Amount);

     

    (vi)  concurrently,
      to the Senior Certificates, pro
      rata,
      in an
      amount up to their respective Swap Payment Allocations for that Distribution
      Date, any remaining Basis Risk Carry Forward Amounts, to the extent unpaid
      from
      funds on deposit in the Excess Reserve Fund Account;

     

    (vii)  first,
      sequentially, to the Class M Certificates, in order of priority, in each case
      pro
      rata,
      based
      on their respective Class Principal Balances, between Classes of Certificates
      of
      Equivalent Priority, and then,
      sequentially, to the Class B-1, Class B-2 and Class B-3 Certificates, in that
      order, in an amount up to their respective Swap Payment Allocations for that
      Distribution Date, any remaining Basis Risk Carry Forward Amounts, to the extent
      unpaid from funds on deposit in the Excess Reserve Fund Account;

     

    (viii)  concurrently,
      to the Offered Certificates, pro
      rata
      by need,
      any remaining Basis Risk Carry Forward Amounts, to the extent
      unpaid;

     

    
      
        
        

      

      
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    (ix)  first,
      sequentially, to each Class of Class M Certificates, in order of priority,
      in
      each case pro
      rata,
      based
      on (i) the Unpaid Realized Loss Amount of each such Class over
      (ii) the aggregate Unpaid Realized Loss Amount of such Class and the Class
      of Class M Certificates of Equivalent Priority, and then,
      sequentially, to the Class B-1, Class B-2 and Class B-3 Certificates, in that
      order, any remaining Unpaid Realized Loss Amounts;

     

    (x)  sequentially,
      first
      (i)
      concurrently, to the Senior Certificates, first pro
      rata,
      based
      on their respective Class Principal Balances to the extent needed to pay any
      Unpaid Interest Shortfall Amount for each such Class and then,
      pro
      rata,
      based
      on any Unpaid Interest Shortfall Amount remaining unpaid for each such Class,
      in
      an amount up to the amount of any Unpaid Interest Shortfall Amount remaining
      unpaid for such Classes of Certificates and then
      (ii) sequentially, to the Class M Certificates, in order of priority, in
      each case pro
      rata,
      first,
      based
      on their respective Class Principal Balances, between Classes of Certificates
      of
      Equivalent Priority in an amount up to the amount of any Unpaid Interest
      Shortfall Amount remaining unpaid for such Classes of Certificates, and
then,
      pro
      rata,
      based
      on any Unpaid Interest Shortfall Amounts remaining unpaid for each such Class,
      in an amount up to the amount of any Unpaid Interest Shortfall Amount remaining
      unpaid for such Classes of Certificates, and then
      (iii) sequentially, to the Class B-1, Class B-2 and Class B-3 Certificates,
      in that order, in an amount up to the amount of any Unpaid Interest Shortfall
      Amount for such Classes of Certificates;

     

    (xi)  to
      the
      Swap Counterparty, any Defaulted Swap Termination Payment owed to the Swap
      Counterparty for that Distribution Date; and

     

    (xii)  all
      remaining amounts to the holder of the Class OC Certificates.

     

    If
      the
      Swap Counterparty should fail to perform any of its obligations under the Swap
      Agreement, or breach any of its representations and warranties made pursuant
      to
      the Swap Agreement, the Trustee shall send any notices and make any
      demands, on behalf of the Trust as are required under the Swap Agreement. To
      the
      extent that the Swap Counterparty fails to make any payment required under
      the
      terms of the Swap Agreement, the Trustee shall immediately demand that
      Morgan Stanley, the guarantor of the Swap Counterparty’s obligations under the
      guarantee of Morgan Stanley relating to the Swap Agreement, make any and all
      payments then required to be made by Morgan Stanley pursuant to such guarantee.
      In addition, in the event a “Delivery Amount” (as defined in the credit support
      annex to the Swap Agreement) payable but not delivered by the Swap Counterparty
      as required by the Swap Agreement, the Trustee shall deliver a notice of
      failure to transfer collateral on the next Business Day following such failure,
      in accordance with the terms of the credit support annex to the Swap
      Agreement.

     

    Notwithstanding
      the foregoing, in the event that the Trust receives a Swap Termination Payment,
      the Trustee shall use the Swap Termination Payment to enter into a replacement
      interest rate swap agreement as directed by the Depositor with a successor
      swap
      counterparty (or its guarantor) meeting the ratings requirements set forth
      in
      the Swap Agreement being terminated on the same remaining terms as those in
      the
      Swap Agreement being terminated, so long as the Swap Termination Payment is
      sufficient to obtain such replacement interest rate swap agreement. In the
      event
      that the Trust receives a Swap Termination Payment, and a successor swap
      counterparty (or its guarantor) cannot be obtained, then the Trustee shall
      be
      required to deposit any Swap Termination Payment into the reserve account that
      is a sub-account of the Swap Account. On each subsequent Distribution Date
      (so
      long as funds are available in such reserve account), the Trustee will be
      required to withdraw from the reserve account and deposit into the Swap Account
      an amount equal to the amount of any Net Swap Receipt due the trust (calculated
      in accordance with the terms of the original Swap Agreement) and treat such
      amount as a Net Swap Receipt for purposes of determining the distributions
      from
      the Swap Account. The remaining amount in the reserve account shall remain
      in
      that account and not treated as a Swap Termination Payment for purposes of
      determining the distributions from the Swap Account until the final Distribution
      Date.

     

    
      
        
        

      

      
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    In
      the
      event that, upon the Supplemental Interest Trust entering into a replacement
      interest rate swap, the Trust is entitled to receive a Replacement Swap
      Counterparty Payment from a replacement swap provider, such replacement interest
      rate swap shall provide that the replacement swap counterparty shall make such
      Replacement Swap Counterparty Payment to the Swap Account, which obligation
      shall be enforced by the Trustee pursuant to the terms of such replacement
      interest rate swap. Notwithstanding the foregoing, any Replacement Swap
      Counterparty Payment shall be made from the Swap Account to the Swap
      Counterparty immediately upon receipt of such payment, regardless of whether
      the
      date of receipt thereof is a Distribution Date. To the extent that any
      Replacement Swap Counterparty Payment is made to an account other than the
      Swap
      Account, then, notwithstanding anything to the contrary contained in this
      Agreement, any Replacement Swap Counterparty Payment shall be paid to the Swap
      Counterparty immediately upon receipt of such Replacement Swap Counterparty
      Payment by the Trust, regardless of whether the date of receipt thereof is
      a
      Distribution Date and without regard to anything to the contrary contained
      in
      this Agreement. For the avoidance of doubt, the parties agree that the Swap
      Counterparty shall have first priority to any Replacement Swap Counterparty
      Payment over the payment by the Trust to Certificateholders, any Servicer,
      the
      Custodian, the Trustee or any other Person. However, to the extent any
      Replacement Swap Counterparty Payment received from a replacement swap
      counterparty and paid to the Swap Counterparty being replaced is less than
      the
      full amount of a Swap Termination Payment owed to the Swap Counterparty , any
      remaining amount of the Swap Termination Payment shall be paid to the Swap
      Counterparty on subsequent Distribution Dates in accordance with this Section
      4.8 and Section 4.1 (unless the Replacement Swap Counterparty Payment is paid
      to
      the Swap Counterparty on a Distribution Date, in which case such remaining
      amounts will be paid on such Distribution Date).

    

    (c)  Funds
      in
      the Swap Account shall be invested in Permitted Investments. Any earnings on
      such amounts shall be added to the amounts distributed on each Distribution
      Date
      pursuant to Section 4.10(b). The Class OC Certificates shall evidence ownership
      of the Swap Account for federal income tax purposes and the Depositor on behalf
      of the Holder thereof shall direct the Trustee, in writing, as to investment
      of
      amounts on deposit therein. The Depositor shall be liable for any losses
      incurred on such investments.

     

    (d)  Upon
      termination of the Trust, any amounts remaining in the Swap Account shall be
      distributed to the Class OC Certificates.

     

    
      
        
        

      

      
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    (e)  It
      is the
      intention of the parties hereto that, for federal and state income and state
      and
      local franchise tax purposes, the Supplemental Interest Trust be disregarded
      as
      an entity separate from the holder of the Class OC Certificates unless and
      until
      the date when either (a) there is more than one Class OC Certificateholder
      or (b) any Class of Certificates in addition to the Class OC Certificates
      is recharacterized as an equity interest in the Supplemental Interest Trust
      for
      federal income tax purposes. The Trustee shall not be responsible for any entity
      level tax reporting for the Supplemental Interest Trust.

     

    To
      the
      extent that the Supplemental Interest Trust is determined to be a separate
      legal
      entity from the Trustee, any obligation of the Trustee under the Swap Agreement
      shall be deemed to be an obligation of the Supplemental Interest
      Trust.

    

    ARTICLE
      5

     

    THE
      CERTIFICATES

     

        Section
      5.1  The
      Certificates.

     

    The
      Certificates shall be substantially in the forms attached as exhibits hereto.
      The Certificates shall be issuable in registered form, in the minimum
      denominations, integral multiples in excess thereof (except that one Certificate
      in each Class may be issued in a different amount which must be in excess of
      the
      applicable minimum denomination) and aggregate denominations per Class set
      forth
      in the Preliminary Statement.

     

    Subject
      to Section 9.2 hereof respecting the final distribution on the Certificates,
      on
      each Distribution Date the Trustee shall make distributions to each
      Certificateholder of record on the preceding Record Date either (x) by wire
      transfer in immediately available funds to the account of such Holder at a
      bank
      or other entity having appropriate facilities therefor, if (i) such Holder
      has
      so notified the Trustee at least five Business Days prior to the related Record
      Date and (ii) such Holder shall hold (A) 100% of the Class Principal Balance
      of
      any Class of Certificates or (B) Certificates of any Class with aggregate
      principal Denominations of not less than $1,000,000 or (y) by check mailed
      by
      first class mail to such Certificateholder at the address of such Holder
      appearing in the Certificate Register.

     

    The
      Certificates shall be executed by manual or facsimile signature on behalf of
      the
      Trustee by an authorized officer. Certificates bearing the manual or facsimile
      signatures of individuals who were, at the time when such signatures were
      affixed, authorized to sign on behalf of the Trustee shall bind the Trustee,
      notwithstanding that such individuals or any of them have ceased to be so
      authorized prior to the countersignature and delivery of such Certificates
      or
      did not hold such offices at the date of such Certificate. No Certificate shall
      be entitled to any benefit under this Agreement, or be valid for any purpose,
      unless countersigned by the Trustee by manual signature, and such
      countersignature upon any Certificate shall be conclusive evidence, and the
      only
      evidence, that such Certificate has been duly executed and delivered hereunder.
      All Certificates shall be dated the date of their countersignature. On the
      Closing Date, the Trustee shall countersign the Certificates to be issued at
      the
      direction of the Depositor, or any affiliate thereof.

     

    
      
        
        

      

      
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    The
      Depositor shall provide, or cause to be provided, to the Trustee on a continuous
      basis, an adequate inventory of Certificates to facilitate
      transfers.

     

        Section
      5.2  Certificate
      Register; Registration of Transfer and Exchange of Certificates.

     

    (a)  The
      Trustee shall maintain, or cause to be maintained in accordance with the
      provisions of Section 5.6 hereof, a Certificate Register for the Trust Fund
      in
      which, subject to the provisions of subsections (b) and (c) below and to such
      reasonable regulations as it may prescribe, the Trustee shall provide for the
      registration of Certificates and of transfers and exchanges of Certificates
      as
      herein provided. Upon surrender for registration of transfer of any Certificate,
      the Trustee shall execute and deliver, in the name of the designated transferee
      or transferees, one or more new Certificates of the same Class and aggregate
      Percentage Interest.

     

    At
      the
      option of a Certificateholder, Certificates may be exchanged for other
      Certificates of the same Class in authorized denominations and evidencing the
      same aggregate Percentage Interest upon surrender of the Certificates to be
      exchanged at the office or agency of the Trustee. Whenever any Certificates
      are
      so surrendered for exchange, the Trustee shall execute, authenticate, and
      deliver the Certificates which the Certificateholder making the exchange is
      entitled to receive. Every Certificate presented or surrendered for registration
      of transfer or exchange shall be accompanied by a written instrument of transfer
      in form satisfactory to the Trustee duly executed by the Holder thereof or
      his
      attorney duly authorized in writing.

     

    No
      service charge to the Certificateholders shall be made for any registration
      of
      transfer or exchange of Certificates, but payment of a sum sufficient to cover
      any tax or governmental charge that may be imposed in connection with any
      transfer or exchange of Certificates may be required.

     

    All
      Certificates surrendered for registration of transfer or exchange shall be
      cancelled and subsequently destroyed by the Trustee in accordance with the
      Trustee’s customary procedures.

     

    (b)  No
      Person
      shall transfer a Private Certificate unless such transfer (i) is made pursuant
      to an effective registration statement under the Securities Act and any
      applicable state securities laws, or (ii) is exempt from the registration
      requirements under said Act and such state securities laws. In the event that
      a
      transfer is to be made in reliance upon an exemption from the Securities Act
      and
      such laws, in order to assure compliance with the Securities Act and such laws,
      the Certificateholder desiring to effect such transfer and such
      Certificateholder’s prospective transferee shall each certify to the Trustee in
      writing the facts surrounding the transfer in substantially the forms set forth
      in Exhibit F (the “Transferor Certificate”) and (i) deliver a letter in
      substantially the form of either Exhibit G-1 (the “Investment Letter”) or
      Exhibit H (the “Rule 144A Letter”) or (ii) there shall be delivered to the
      Trustee at the expense of the transferor an Opinion of Counsel that such
      transfer may be made pursuant to an exemption from the Securities Act. The
      Depositor shall provide to any Holder of a Private Certificate and any
      prospective transferee designated by any such Holder, information regarding
      the
      related Certificates and the Mortgage Loans and such other information as shall
      be necessary to satisfy the condition to eligibility set forth in Rule
      144A(d)(4) for transfer of any such Certificate without registration thereof
      under the Securities Act pursuant to the registration exemption provided by
      Rule
      144A. The Trustee and the Servicer shall cooperate with the Depositor in
      providing the Rule 144A information referenced in the preceding sentence,
      including providing to the Depositor such information regarding the
      Certificates, the Mortgage Loans and other matters regarding the Trust Fund
      as
      the Depositor shall reasonably request to meet its obligation under the
      preceding sentence. Each Holder of a Private Certificate desiring to effect
      such
      transfer shall, and does hereby agree to, indemnify the Trustee and the
      Depositor, the Depositor and the Servicer against any liability that may result
      if the transfer is not so exempt or is not made in accordance with such federal
      and state laws.

     

    
      
        
        

      

      
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    No
      transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
      shall have received either (i) a representation from the transferee of such
      Certificate acceptable to and in form and substance satisfactory to the Trustee
      (in the event such Certificate is a Private Certificate, such requirement is
      satisfied only by the Trustee’s receipt of a representation letter from the
      transferee substantially in the form of Exhibit G-2), to the effect that such
      transferee is not an employee benefit plan or arrangement subject to Section
      406
      of ERISA, as amended, or a plan or arrangement subject to Section 4975 of the
      Code, or a person acting on behalf of any such plan or arrangement, or using
      the
      assets of any such plan or arrangement to effect such transfer (collectively
      a
“Benefit Plan Investor”), (ii) if the purchaser is an insurance company, a
      representation in the form of Exhibit G-2 that (a) the purchaser is an insurance
      company which is purchasing such Certificates pursuant to an ERISA-Qualifying
      Underwriting with funds contained in an “insurance company general account” (as
      such term is defined in Section V(e) of Prohibited Transaction Class Exemption
      (“PTCE”) 95-60) and (b) all of the requirements of PTCE 95-60 are met, or (iii)
      in the case of any such ERISA-Restricted Certificate presented for registration
      in the name of a Benefit Plan Investor, an Opinion of Counsel satisfactory
      to
      the Trustee, which Opinion of Counsel shall not be an expense of either the
      Trustee or the Trust Fund, addressed to the Trustee to the effect that the
      purchase or holding of such ERISA-Restricted Certificate will not result in
      prohibited transactions under Title I of ERISA and/or Section 4975 of the Code
      and will not subject the Servicer, the Trustee or the Underwriter to any
      obligation in addition to those expressly undertaken in this Agreement.
      Notwithstanding anything else to the contrary herein, any purported transfer
      of
      an ERISA-Restricted Certificate to a Benefit Plan Investor without the above
      representations or the delivery to the Trustee of an Opinion of Counsel
      satisfactory to the Trustee as described above shall be void and of no effect.
      Any representations required to be made in subsection (i) and (ii) above in
      the
      case of ERISA-Restricted Certificates which are the Book-Entry-Certificates
      shall be deemed to have been made by the acquisition of such
      Certificates.

     

    No
      transfer of an ERISA-Restricted Swap Certificate prior to the termination of
      the
      Swap Agreement shall be made unless the Trustee shall have received a
      representation letter from the transferee of such Certificate, substantially
      in
      the form set forth in Exhibit G-2, to the effect that either (i) such transferee
      is not a Benefit Plan Investor or (ii) the acquisition and holding of the
      ERISA-Restricted Swap Certificate are eligible for exemptive relief under the
      statutory exemption for non-fiduciary service providers under Section 408(b)(17)
      of ERISA and Section 4975(d)(20) of the Code, Prohibited Transaction Class
      Exemption (“PTCE”) 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or PTCE 96-23 or
      another applicable exemption. Notwithstanding anything else to the contrary
      herein, any purported transfer of an ERISA-Restricted Swap Certificate prior
      to
      the termination of the Swap Agreement to or on behalf of a Benefit Plan Investor
      without the delivery to the Trustee of a representation letter as described
      above shall be void and of no effect. If the ERISA-Restricted Swap Certificate
      is a Book-Entry Certificate, the transferee will be deemed to have made a
      representation as provided in clause (i) or (ii) of this paragraph, as
      applicable.

     

    
      
        
        

      

      
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    If
      any
      ERISA-Restricted Swap Certificate, or any interest therein, is acquired or
      held
      in violation of the provisions of the preceding paragraph, the next preceding
      permitted beneficial owner will be treated as the beneficial owner of that
      Certificate, retroactive to the date of transfer to the purported beneficial
      owner. Any purported beneficial owner whose acquisition or holding of an
      ERISA-Restricted Swap Certificate, or interest therein, was effected in
      violation of the provisions of the preceding paragraph shall indemnify to the
      extent permitted by law and hold harmless the Depositor, the Trustee and the
      Servicer from and against any and all liabilities, claims, costs or expenses
      incurred by such parties as a result of such acquisition or
      holding.

     

    To
      the
      extent permitted under applicable law (including, but not limited to, ERISA),
      the Trustee shall be under no liability to any Person for any registration
      of
      transfer of any ERISA-Restricted Certificate or ERISA-Restricted Swap
      Certificate that is in fact not permitted by this Section 5.2(b) or 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 by the Trustee in accordance with the
      foregoing requirements.

     

    No
      transfer of any Private Certificate presented or surrendered for registration
      of
      transfer or exchange shall be made unless the transfer or exchange is
      accompanied by a written instrument of transfer and accompanied by IRS Form
      W-8ECI, W-8BEN, W-8IMY (and all appropriate attachments) or W-9 duly executed
      by
      the Certificateholder or its representative or nominee duly authorized in
      writing. The Trustee shall promptly forward any such IRS Form (other than with
      respect to the Residual Certificates) received to the Swap Counterparty located
      at 1585 Broadway New York, New York 10036, Attention: NY ISD SPV Team, Fax:
      (212) 507-7754. Each Holder of a Private Certificate and each transferee thereof
      shall be deemed to have consented to the Trustee forwarding to the Swap
      Counterparty any such tax certification form such Certificateholder or
      transferee has provided and updated in accordance with these transfer
      restrictions by its purchase of such Private Certificate. The Trustee shall
      not
      be liable for the completeness, accuracy, content or truthfulness of any such
      tax certification provided to it.

     

    (c)  Each
      Person who has or who acquires any Ownership Interest in a Residual Certificate
      shall be deemed by the acceptance or acquisition of such Ownership Interest
      to
      have agreed to be bound by the following provisions, and the rights of each
      Person acquiring any Ownership Interest in a Residual Certificate are expressly
      subject to the following provisions:

     

    (i)  Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall be a Permitted Transferee.

     

    (ii)  No
      Ownership Interest in a Residual Certificate may be registered on the Closing
      Date or thereafter transferred, and the Trustee shall not register the Transfer
      of any Residual Certificate unless, in addition to the Certificates required
      to
      be delivered to the Trustee under subparagraph (b) above, the Trustee shall
      have
      been furnished with an affidavit (a “Transfer Affidavit”) of the initial owner
      or the proposed transferee in the form attached hereto as Exhibit
      E.

     

    
      
        
        

      

      
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    (iii)  Each
      Person holding or acquiring any Ownership Interest in a Residual Certificate
      shall agree (A) to obtain a Transfer Affidavit from any other Person to whom
      such Person attempts to Transfer its Ownership Interest in a Residual
      Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such
      Person is acting as nominee, trustee or agent in connection with any Transfer
      of
      a Residual Certificate and (C) not to Transfer its Ownership Interest in a
      Residual Certificate or to cause the Transfer of an Ownership Interest in a
      Residual Certificate to any other Person if it has actual knowledge that such
      Person is not a Permitted Transferee.

     

    (iv)  Any
      attempted or purported Transfer of any Ownership Interest in a Residual
      Certificate in violation of the provisions of this Section 5.2(c) shall be
      absolutely null and void and shall vest no rights in the purported Transferee.
      If any purported transferee shall become a Holder of a Residual Certificate
      in
      violation of the provisions of this Section 5.2(c), then the last preceding
      Permitted Transferee shall be restored to all rights as Holder thereof
      retroactive to the date of registration of Transfer of such Residual
      Certificate. The Trustee shall be under no liability to any Person for any
      registration of Transfer of a Residual Certificate that is in fact not permitted
      by Section 5.2(b) and this Section 5.2(c) or 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 after receipt of the related Transfer Affidavit, Transferor
      Certificate and either the Rule 144A Letter or the Investment Letter. The
      Trustee shall be entitled but not obligated to recover from any Holder of a
      Residual Certificate that was in fact not a Permitted Transferee at the time
      it
      became a Holder or, at such subsequent time as it became other than a Permitted
      Transferee, all payments made on such Residual Certificate at and after either
      such time. Any such payments so recovered by the Trustee shall be paid and
      delivered by the Trustee to the last preceding Permitted Transferee of such
      Certificate.

     

    (v)  The
      Depositor shall make available, upon receipt of written request from the
      Trustee, all information necessary to compute any tax imposed under Section
      860E(e) of the Code as a result of a Transfer of an Ownership Interest in a
      Residual Certificate to any Holder who is not a Permitted
      Transferee.

     

    The
      restrictions on Transfers of a Residual Certificate set forth in this Section
      5.2(c) shall cease to apply (and the applicable portions of the legend on a
      Residual Certificate may be deleted) with respect to Transfers occurring after
      delivery to the Trustee of an Opinion of Counsel, which Opinion of Counsel
      shall
      not be an expense of the Trust Fund, the Trustee, the Depositor or the Servicer,
      to the effect that the elimination of such restrictions will not cause an
      Adverse REMIC Event. Each Person holding or acquiring any Ownership Interest
      in
      a Residual Certificate hereby consents to any amendment of this Agreement which,
      based on an Opinion of Counsel furnished to the Trustee, is reasonably necessary
      (a) to ensure that the record ownership of, or any beneficial interest in,
      a
      Residual Certificate is not transferred, directly or indirectly, to a Person
      that is not a Permitted Transferee and (b) to provide for a means to compel
      the
      Transfer of a Residual Certificate which is held by a Person that is not a
      Permitted Transferee to a Holder that is a Permitted Transferee.

     

    
      
        
        

      

      
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    (d)  The
      preparation and delivery of all certificates and opinions referred to above
      in
      this Section 5.2 in connection with transfer shall be at the expense of the
      parties to such transfers.

     

    (e)  Except
      as
      provided 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 Certificates may not be transferred by the Trustee except to another
      Depository; (ii) the Depository shall maintain book-entry records with respect
      to the Certificate Owners and with respect to ownership and transfers of such
      Book-Entry Certificates; (iii) 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; (iv) the Depository may collect
      its usual and customary fees, charges and expenses from its Depository
      Participants; (v) the Trustee shall deal with the Depository, Depository
      Participants and indirect participating firms as representatives of the
      Certificate Owners of the Book-Entry Certificates for purposes of exercising
      the
      rights of holders under this Agreement, and 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 (vi) 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 participating firms and persons
      shown on the books of such indirect participating firms as direct or indirect
      Certificate Owners.

     

    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 Owner. 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.

     

    If
      (x)
      (i) the Depository or the Depositor advises the Trustee in writing that the
      Depository is no longer willing or able to properly discharge its
      responsibilities as Depository, and (ii) the Trustee or the Depositor is unable
      to locate a qualified successor or (y) after the occurrence of an Event of
      Default, Certificate Owners representing at least 51% of the Class Principal
      Balance of the Book-Entry Certificates together advise the Trustee and the
      Depository through the Depository Participants in writing that the continuation
      of a book-entry system through the Depository is no longer in the best interests
      of the Certificate Owners, the Trustee 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 of the related Class of Certificates by the Depository, accompanied
      by
      the instructions from the Depository for registration, the Trustee shall issue
      the Definitive Certificates. Neither the Servicer, the Depositor nor the Trustee
      shall be liable for any delay in delivery of such instruction and each may
      conclusively rely on, and shall be protected in relying on, such instructions.
      The Servicer shall provide the Trustee with an adequate inventory of
      certificates to facilitate the issuance and transfer of Definitive Certificates.
      Upon the issuance of Definitive Certificates all references herein to
      obligations imposed upon or to be performed by the Depository shall be deemed
      to
      be imposed upon and performed by the Trustee, to the extent applicable with
      respect to such Definitive Certificates and the Trustee shall recognize the
      Holders of the Definitive Certificates as Certificateholders hereunder;
provided,
      that
      the Trustee shall not by virtue of its assumption of such obligations become
      liable to any party for any act or failure to act of the
      Depository.

     

    
      
        
        

      

      
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          Section
        5.3  Mutilated,
        Destroyed, Lost or Stolen Certificates.

    

     

    If
      (a)
      any mutilated Certificate is surrendered to the Trustee, or the Trustee receives
      evidence to its satisfaction of the destruction, loss or theft of any
      Certificate and (b) there is delivered to the Servicer and the Trustee such
      security or indemnity as may be required by them to save each of them harmless,
      then, in the absence of notice to the Trustee that such Certificate has been
      acquired by a bona fide purchaser, the Trustee shall execute, countersign and
      deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
      or
      stolen Certificate, a new Certificate of like Class, tenor and Percentage
      Interest. In connection with the issuance of any new Certificate under this
      Section 5.3, the Trustee may require 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 (including the fees and expenses of the Trustee) connected
      therewith. Any replacement Certificate issued pursuant to this Section 5.3
      shall
      constitute complete and indefeasible evidence of ownership, as if originally
      issued, whether or not the lost, stolen or destroyed Certificate shall be found
      at any time.

     

        Section
      5.4  Persons
      Deemed Owners.

     

    The
      Trustee and any agent of the Trustee may treat the Person in whose name any
      Certificate is registered as the owner of such Certificate for the purpose
      of
      receiving distributions as provided in this Agreement and for all other purposes
      whatsoever, and neither the Trustee nor any agent of the Trustee shall be
      affected by any notice to the contrary.

     

        Section
      5.5  Access
      to List of Certificateholders’ Names and Addresses.

     

    If
      three
      or more Certificateholders (a) request such information in writing from the
      Trustee, (b) state that such Certificateholders desire to communicate with
      other
      Certificateholders with respect to their rights under this Agreement or under
      the Certificates, and (c) provide a copy of the communication which such
      Certificateholders propose to transmit, or if the Depositor or Servicer shall
      request such information in writing from the Trustee, then the Trustee shall,
      within ten Business Days after the receipt of such request, provide the
      Depositor, the Servicer or such Certificateholders at such recipients’ expense
      the most recent list of the Certificateholders of such Trust Fund held by the
      Trustee, if any. The Depositor and every Certificateholder, by receiving and
      holding a Certificate, agree that the Trustee shall not be held accountable
      by
      reason of the disclosure of any such information as to the list of the
      Certificateholders hereunder, regardless of the source from which such
      information was derived.

     

    
          Section
        5.6       Maintenance
        of Office or Agency.

    

     

    The
      Trustee will maintain or cause to be maintained at its expense an office or
      offices or agency or agencies where Certificates may be surrendered for
      registration of transfer or exchange. The Trustee initially designates its
      office DB Services Tennessee, 648 Grassmere Park Road, Nashville, Tennessee
      37211-3658; Attention: Transfer Unit, for such purposes. The Trustee will give
      prompt written notice to the Certificateholders of any change in such location
      of any such office or agency.

     

    
      
        
        

      

      
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    ARTICLE
      6

     

    THE
      DEPOSITOR AND THE SERVICER

     

        Section
      6.1  Respective
      Liabilities of the Depositor and the Servicer.

     

    The
      Depositor and Servicer shall each be liable in accordance herewith only to
      the
      extent of the obligations specifically and respectively imposed upon and
      undertaken by them herein.

     

        Section
      6.2  Merger
      or Consolidation of the Depositor and Servicer.

     

    The
      Depositor and Servicer will each keep in full effect its existence, rights
      and
      franchises as a corporation (or, in the case of the Servicer, a limited
      partnership) under the laws of the United States or under the laws of one of
      the
      states thereof and will each obtain 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, or any of the Mortgage Loans and to perform
      its respective duties under this Agreement.

     

    Any
      Person into which the Depositor or the Servicer may be merged or consolidated,
      or any Person resulting from any merger 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, as the case may be, 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 be qualified to sell
      mortgage loans to, and to service mortgage loans on behalf of, Fannie Mae or
      Freddie Mac.

     

        Section
      6.3  Limitation
      on Liability of the Depositor, the Servicer and Others.

     

    None
      of
      the Depositor, the Servicer or any of the directors, officers, employees or
      agents of the Depositor or the Servicer shall be under any liability to 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, the Servicer or any such Person
      against any breach of representations or warranties made by it herein or protect
      the Depositor, the Servicer or any such Person from any liability which would
      otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
      in the performance of duties or by reason of reckless disregard of obligations
      and duties hereunder. The Depositor, the Servicer and any director, officer,
      employee or agent of the Depositor or the Servicer 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. The Depositor, the Servicer and any
      director, officer, employee or agent of the Depositor or the Servicer shall
      be
      indemnified by the Trust Fund and held harmless against any loss, liability
      or
      expense incurred in connection with any audit, controversy or judicial
      proceeding relating to a governmental taxing authority or any legal action
      relating to this Agreement or the performance thereof, or the Certificates,
      other than any loss, liability or expense related to any specific Mortgage
      Loan
      or Mortgage Loans (except as any such loss, liability or expense shall be
      otherwise reimbursable pursuant to this Agreement) and any loss, liability
      or
      expense incurred by reason of willful misfeasance, bad faith or negligence
      in
      the performance of duties hereunder or by reason of reckless disregard of
      obligations and duties hereunder. None of the Depositor or the Servicer shall
      be
      under any obligation to appear in, prosecute or defend any legal action that
      is
      not incidental to its respective duties hereunder and which in its opinion
      may
      involve it in any expense or liability; provided,
      however,
      that
      any of the Depositor or the Servicer may in its discretion undertake any such
      action that it may deem necessary or desirable in respect of this Agreement
      and
      the rights and duties of the parties hereto and interests of the Trustee and the
      Certificateholders hereunder. In such event, the legal expenses and costs of
      such action and any liability resulting therefrom shall be expenses, costs
      and
      liabilities of the Trust Fund, and the Depositor and the Servicer shall be
      entitled to be reimbursed therefor out of the Collection Account.

     

    
      
        
        

      

      
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          Section
        6.4  Limitation
        on Resignation of Servicer.

    

     

    The
      Servicer shall not resign from the obligations and duties hereby imposed on
      it
      except (a) upon appointment of a successor servicer who is a member in good
      standing of MERS and receipt by the Trustee of a letter from each Rating Agency
      that such a resignation and appointment will not result in a downgrading of
      the
      rating of any of the Certificates, or (b) upon determination that its duties
      hereunder are no longer permissible under applicable law. Any such determination
      under clause (b) permitting the resignation of the Servicer shall be evidenced
      by an Opinion of Counsel to such effect delivered to the Trustee. No such
      resignation shall become effective until the Trustee or a successor servicer
      shall have assumed the Servicer’s responsibilities, duties, liabilities and
      obligations hereunder.

     

        Section
      6.5  Annual
      Statement as to Compliance.

     

    Commencing
      in 2008, the Servicer shall deliver to the Depositor and the Trustee on or
      before March 15 of each applicable calendar year, (or March 24 if there is
      no
      requirement to file a Form 10-K in that calendar year), an Officer’s Certificate
      stating, as to the signer thereof, that (i) a review of the activities of the
      Servicer during the preceding fiscal 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 of its material obligations under this Agreement throughout such
      year, or, if there has been a material default in the fulfillment of any such
      obligation, specifying each such default known to such officer and the nature
      and status thereof. Upon request, the Trustee shall forward a copy of each
      such
      statement to each Rating Agency and each Underwriter.

     

    Commencing
      in 2008, on or before March 15 of each calendar year (or March 24 if there
      is no
      requirement to file a Form 10-K in that calendar year), the Servicer shall
      deliver to the Depositor and the Trustee a report regarding its assessment
      of
      compliance with the servicing criteria specified in paragraph (d) of Item 1122
      of Regulation AB (§ 229.1122(d)), as of and for the period ending the end of
      each fiscal year, with respect to asset-backed security transactions taken
      as a
      whole involving the Servicer, and that are backed by the same asset type as
      the
      Mortgage Loans. Each such report shall include all of the statements required
      under paragraph (a) of Item 1122 of Regulation AB (§ 229.1122(a)) as set forth
      in Exhibit T hereto.

     

    
      
        
        

      

      
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    Copies
      of
      such statements shall be provided to any Securityholder upon request, by the
      Servicer or by the Trustee at the Servicer’s expense if the Servicer failed to
      provide such copies (unless (i) the Servicer shall have failed to provide the
      Trustee with such statement or (ii) the Trustee shall be unaware of the
      Servicer’s failure to provide such statement.

     

    The
      Servicer shall promptly notify the Depositor and the Trustee (i) of any legal
      proceedings pending against the Servicer of the type described in Item 1117
      (§
229.1117) of Regulation AB and (ii) if the Servicer shall become (but only
      to
      the extent not previously disclosed to the Trustee and the Depositor) at any
      time an affiliate of any of the Seller, the Trustee or any Servicer,
      Subservicer, Subcontractor or “Originator” contemplated by Item 1110 (§
229.1110) of Regulation AB, any significant obligor contemplated by Item 1112
      (§
229.1112) of Regulation AB, any enhancement or support provider contemplated
      by
      Items 1114 or 1115 (§§ 229.1114-1115) of Regulation AB or any other material
      party to the Trust contemplated by Item 1100(d)(1) (§ 229.1100(d)(1)) of
      Regulation AB.

     

        Section
      6.6  Annual
      Independent Public Accountants’ Servicing Statement.

     

    Commencing
      in 2008, on or before March 15 of each calendar year (or March 24 if there
      is no
      requirement to file a Form 10-K in that calendar year), the Servicer shall
      deliver to the Trustee and the Depositor a report by a registered public
      accounting firm that attests to, and reports on, the assessment made by the
      Servicer pursuant to the second paragraph of Section 8.5. Such report shall
      be
      made in accordance with standards for attestation engagements issued or adopted
      by the Public Company Accounting Oversight Board.

     

    ARTICLE
      7

     

    SERVICER
      DEFAULT

     

        Section
      7.1  Events
      of Default.

     

    “Event
      of
      Default,” wherever used herein, means any one of the following
      events:

     

    (i)  any
      failure by the Servicer to deposit in the Collection Account or remit to the
      Trustee any payment required to be made under the terms of this Agreement,
      which
      failure shall continue unremedied for five days after the date upon which
      written notice of such failure shall have been given to the Servicer by the
      Trustee or the Depositor and the Trustee by the Holders of Certificates having
      not less than 51% of the Voting Rights evidenced by the Certificates;
      or

     

    (ii)  any
      failure by the Servicer to observe or perform in any material respect any other
      of the covenants or agreements on the part of the Servicer contained in this
      Agreement, which failure materially affects the rights of Certificateholders,
      which failure continues unremedied for a period of 60 days after the date on
      which written notice of such failure shall have been given to the Servicer
      by
      the Trustee or the Depositor, or to the Servicer and the Trustee by the Holders
      of Certificates evidencing not less than 51% of the Voting Rights evidenced
      by
      the Certificates; provided,
      however,
      that
      the 60-day cure period shall not apply to the initial delivery of the Mortgage
      File for Delay Delivery Mortgage Loans nor the failure to substitute or
      repurchase in lieu thereof; or

     

    
      
        
        

      

      
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    (iii)  a
      decree
      or order of a court or agency or supervisory authority having jurisdiction
      in
      the premises for the appointment of a 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 consecutive days;
      or

     

    (iv)  the
      Servicer shall consent to the appointment of a receiver or liquidator in any
      insolvency, readjustment of debt, marshalling of assets and liabilities or
      similar proceedings of or relating to the Servicer or all or substantially
      all
      of the property of the Servicer; or

     

    (v)  the
      Servicer shall admit in writing its inability to pay its debts generally as
      they
      become due, file a petition to take advantage of, or commence a voluntary case
      under, any applicable insolvency or reorganization statute, make an assignment
      for the benefit of its creditors, or voluntarily suspend payment of its
      obligations.

     

    Upon
      its
      obtaining actual knowledge of the occurrence of an Event of Default, the Trustee
      shall promptly deliver to the Depositor, an Officer’s Certificate that an event
      has occurred that may justify termination of the Servicer hereunder and
      describing the circumstances surrounding such event. Upon the occurrence of
      an
      Event of Default, the Trustee may terminate the Servicer hereunder, if in its
      judgment such termination is in the best interests of the Trust Fund. The
      Trustee shall so terminate the Servicer if directed to do so by the Holders
      of
      Certificates evidencing not less than 51% of the Voting Rights evidenced by
      the
      Certificates exercised in writing following delivery to such Holders by the
      Trustee of notice of the occurrence of such Event of Default pursuant to Section
      7.2(b).

     

    Upon
      any
      such termination, the Trustee shall enter into a substitute servicing
      arrangement with another mortgage loan servicing company acceptable to the
      Trustee and Rating Agency under which such mortgage loan servicing company
      shall
      assume, satisfy, perform and carry out all liabilities, duties, responsibilities
      and obligations that are to be, or otherwise were to have been, satisfied,
      performed and carried out by the terminated Servicer hereunder. Until such
      time
      as the Trustee enters into a substitute servicing agreement with respect to
      the
      Mortgage Loans, the Trustee shall assume, satisfy, perform and carry out all
      obligations which otherwise were to have been satisfied, performed and carried
      out by the terminated Servicer. As compensation to the Trustee for any servicing
      obligations fulfilled or assumed by the Trustee, the Trustee shall be entitled
      to any servicing compensation to which the terminated Servicer would have been
      entitled if such Servicer had not been terminated.

     

    Notwithstanding
      any termination of the activities of the Servicer hereunder, the Servicer shall
      be entitled to receive, out of any late collection of a Scheduled Payment on
      a
      Mortgage Loan which was due prior to the notice terminating such Servicer’s
      rights and obligations as Servicer hereunder and received after such notice,
      that portion thereof to which such Servicer would have been entitled pursuant
      to
      Sections 3.8(a)(i) through (vii), and any other amounts payable to such Servicer
      hereunder the entitlement to which arose prior to the termination of its
      activities hereunder.

     

    
      
        
        

      

      
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    In
      no
      event shall the termination of the Servicer under this Agreement result in
      any
      diminution of the Servicer’s right to reimbursement for any outstanding Advances
      due such Servicer at the time of termination. The successor Servicer shall
      be
      obligated to promptly reimburse the terminated Servicer for outstanding
      Advances; provided,
      however,
      that if
      the Trustee becomes the successor Servicer, such reimbursement obligation shall
      be limited to the funds available in the Collection Account for such purposes
      pursuant to Sections 3.8(a)(ii) and 3.8(iii) of the Pooling and Servicing
      Agreement. In addition, any such reimbursement for outstanding Advances shall
      be
      made on a first in, first out (“FIFO”) basis no later than the 18th
      day
      of
      each month provided that the successor Servicer has received prior written
      notice from the appropriate party, under the Pooling and Servicing Agreement,
      of
      such reimbursement amount.

     

        Section
      7.2  Notification
      to Certificateholders.

     

    (a)  Upon
      any
      termination of or appointment of a successor to the Servicer, the Trustee shall
      give prompt written notice thereof to Certificateholders and to each Rating
      Agency.

     

    (b)  Within
      60
      days after the occurrence of any Event of Default, the Trustee shall transmit
      by
      mail to all Certificateholders notice of each such Event of Default hereunder
      known to the Trustee, unless such Event of Default shall have been cured or
      waived.

     

    ARTICLE
      8

     

    CONCERNING
      THE TRUSTEE

     

        Section
      8.1  Duties
      of Trustee.

     

    The
      Trustee, prior to the occurrence of an Event of Default of which a Responsible
      Officer of the Trustee has actual knowledge and after the curing of all Events
      of Default that may have occurred, shall undertake to perform such duties and
      only such duties as are specifically set forth in this Agreement. In case an
      Event of Default of which a Responsible Officer of the Trustee has actual
      knowledge has occurred and remains uncured, 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 person would exercise or use
      under
      the circumstances in the conduct of such person’s own affairs.

     

    The
      Trustee, upon receipt of all resolutions, certificates, statements, opinions,
      reports, documents, orders or other instruments furnished to the Trustee that
      are specifically required to be furnished pursuant to any provision of this
      Agreement shall examine them to determine whether they are in the form required
      by this Agreement; provided,
      however,
      that
      the Trustee shall not be responsible for the accuracy or content of any such
      resolution, certificate, statement, opinion, report, document, order or other
      instrument. If any such instrument is found not to conform in any material
      respect to the requirements of this Agreement, the Trustee shall notify the
      Certificateholders of such instrument in the event that the Trustee, after
      so
      requesting, does not receive a satisfactorily corrected instrument.

     

    
      
        
        

      

      
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    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)  unless
      an
      Event of Default of which a Responsible Officer of the Trustee has actual
      knowledge shall have occurred and be continuing, 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 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 which it believed in good faith to be genuine and to have been duly
      executed by the proper authorities respecting any matters arising
      hereunder;

     

    (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
      finally proven that the Trustee was negligent in ascertaining the pertinent
      facts;

     

    (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
      Holders of Certificates evidencing not less than 25% of the Voting Rights of
      Certificates relating 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 not be required to expend or risk its own funds or otherwise
      incur
      financial liability in the performance of any of its duties hereunder or the
      exercise of any of its rights or powers if there is reasonable ground for
      believing that the repayment of such funds or adequate indemnity against such
      risk or liability is not assured to it, and none of the provisions contained
      in
      this Agreement shall in any event require the Trustee to perform, or be
      responsible for the manner of performance of, any of the obligations of the
      Servicer under this Agreement except during such time, if any, as the Trustee
      shall be the successor to, and be vested with the rights, duties, powers and
      privileges of, the Servicer; and

     

    
      
        
        

      

      
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    (v)  without
      limiting the generality of this Section 8.1, the Trustee shall have no duty
      (A)
      to see to any recording, filing, or depositing of this Agreement or any
      agreement referred to herein or any financing statement or continuation
      statement evidencing a security interest, or to see to the maintenance of any
      such recording or filing or deposit or to any rerecording, refiling or
      redepositing of any thereof, (B) to see to any insurance, (C) to see to the
      payment or discharge of any tax, assessment, or other governmental charge or
      any
      lien or encumbrance of any kind owing with respect to, assessed or levied
      against, any part of the Trust Fund other than from funds available in the
      Distribution Account (D) to confirm or verify the contents of any reports or
      certificates of the Servicer delivered to the Trustee pursuant to this Agreement
      believed by the Trustee to be genuine and to have been signed or presented
      by
      the proper party or parties.

     

    (vi)  The
      Trustee shall (A) on the Closing Date, deliver or cause to be delivered a
      correct, complete and duly executed IRS Form W-9 of the Supplemental Interest
      Trust to the Swap Counterparty and (B) from time to time if requested by
      the Swap Counterparty, deliver or cause to be delivered to the Swap Counterparty
      an applicable IRS Form W-8IMY.

     

        Section
      8.2  Certain
      Matters Affecting the Trustee.

     

    Except
      as
      otherwise provided in Section 8.1:

     

    (i)  the
      Trustee may request and 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 and the Trustee shall have no responsibility to ascertain or confirm
      the
      genuineness of any signature of any such party or parties;

     

    (ii)  the
      Trustee may consult with counsel, financial advisers or accountants and the
      advice of any such counsel, financial advisers or accountants and any 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 Opinion of Counsel;

     

    (iii)  the
      Trustee shall not be liable for any action taken, suffered or omitted by it
      in
      good faith and believed by it to be authorized or within the discretion or
      rights or powers conferred upon it by this Agreement;

     

    (iv)  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 so to do by Holders of Certificates evidencing
      not
      less than 25% of the Voting Rights allocated to each Class of Certificates;
      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 assured to the Trustee by the security
      afforded to it by the terms of this Agreement, the Trustee may require indemnity
      satisfactory to the Trustee against such cost, expense or liability as a
      condition to taking any such action. 

     

    (v)  the
      Trustee may execute any of the trusts or powers hereunder or perform any duties
      hereunder either directly or by or through agents, accountants or attorneys
      and
      the Trustee shall not be responsible for any misconduct or negligence on the
      part of such agent, accountant or attorney appointed by the Trustee with due
      care;

     

    
      
        
        

      

      
        100

        
          

        

      

      
        
        

      

       

    

    (vi)  the
      Trustee shall not be required to risk or expend its own funds or otherwise
      incur
      any financial liability in the performance of any of its duties or in the
      exercise of any of its rights or powers hereunder if it shall have reasonable
      grounds for believing that repayment of such funds or adequate indemnity against
      such risk or liability is not assured to it;

     

    (vii)  the
      Trustee shall not be liable for any loss on any investment of funds pursuant
      to
      this Agreement (other than as issuer of the investment security);

     

    (viii)  the
      Trustee or its Affiliates shall be permitted to receive additional compensation
      that could be deemed to be in the Trustee’s economic self-interest for (i)
      serving as investment adviser, administrator, shareholder servicing agent,
      custodian or sub-custodian with respect to certain of the Eligible Investments,
      (ii) using Affiliates to effect transactions in certain Eligible Investments
      and
      (iii) effecting transactions in certain Eligible Investments.

     

    (ix)  the
      Trustee shall not be deemed to have knowledge of an Event of Default until
      a
      Responsible Officer of the Trustee shall have received written notice thereof
      and in the absence of such notice, the Trustee may conclusively assume that
      there is no Event of Default;

     

    (x)  the
      Trustee shall be under no obligation to exercise any of the trusts, rights
      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 satisfactory to the Trustee against the costs, expenses
      and liabilities which may be incurred therein or thereby;

     

    (xi)  the
      right
      of the Trustee to perform any discretionary act enumerated in this Agreement
      shall not be construed as a duty, and the Trustee shall not be answerable for
      other than its negligence or willful misconduct in the performance of such
      act;
      and

     

    (xii)  the
      Trustee shall not be required to give any bond or surety in respect of the
      execution of the Trust Fund created hereby or the powers granted
      hereunder.

     

        Section
      8.3  Trustee
      Not Liable for Certificates or Mortgage Loans.

     

    The
      recitals contained herein and in the Certificates shall be taken as the
      statements of the Depositor, the Depositor or Servicer, as the case may be,
      and
      the Trustee assumes no responsibility for their correctness. The Trustee makes
      no representations as to the validity or sufficiency of this Agreement, the
      Swap
      Agreement or of the Certificates or of any Mortgage Loan or related document
      other than with respect to the Trustee’s execution and counter-signature of the
      Certificates. The Trustee shall not be accountable for the use or application
      by
      the Depositor or the Servicer 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.

     

    
      
        
        

      

      
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        Section
      8.4  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 as it would have if it were not the
      Trustee.

     

        Section
      8.5  Trustee’s
      Fees and Expenses.

     

    The
      Trustee, as compensation for its activities prior to making the distributions
      pursuant to Section 4.1 hereunder, shall be entitled to deduct from the
      Distribution Account on each Distribution Date an amount equal to the Trustee
      Fee and reasonable expenses for such Distribution Date. SMS shall indemnify
      and
      hold harmless the Trustee, the Paying Agent or the Custodian and any director,
      officer, employee or agent thereof against any loss, liability or expense,
      including reasonable attorney’s fees, incurred in connection with or arising out
      of or in connection with this Agreement, the Swap Agreement, any custodial
      agreement or the Certificates, including, but not limited to, any such loss,
      liability or expense incurred in connection with any legal action against the
      Trust or the Trustee, the Paying Agent or the Custodian or any director,
      officer, employee or agent thereof, or the performance of any of the duties
      of
      the Trustee or the Paying Agent under this Agreement or the Swap Agreement,
      or
      the duties of the Custodian under any custodial agreement (including, but not
      limited to, the execution and delivery of documents in connection with a
      foreclosure sale, trustee’s sale, or deed in lieu of foreclosure of a Mortgage
      Loan, including, but not, limited to, any deed of reconveyance, any substitution
      of trustee documents or any other documents to release, satisfy, cancel or
      discharge any Mortgage Loan) other than any loss, liability or expense incurred
      by reason of the willful misfeasance, bad faith or negligence in the performance
      of the duties under this Agreement or the Swap Agreement or by reason of the
      willful misfeasance, bad faith or gross negligence of the Custodian under any
      custodial agreement (including specifically any loss, liability or expense
      incurred by the Custodian by reason of simple negligence under any custodial
      agreement). The provisions of this Section 8.5 shall survive the resignation
      or
      removal of the Trustee or the Paying Agent and the termination of this Agreement
      and the resignation or removal of the Custodian under any custodial agreement.
      The Trustee may receive an additional indemnity from a party acceptable to
      the
      Trustee.

     

        Section
      8.6  Eligibility
      Requirements for Trustee.

     

    The
      Trustee hereunder shall at all times be a corporation or association organized
      and doing business under the laws of a 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, subject to super-vision or
      examination by federal or state authority and with a credit rating which would
      not cause either of the Rating Agencies to reduce their respective then current
      ratings of the Certificates (or having provided such security from time to
      time
      as is sufficient to avoid such reduction). If such corporation or association
      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 8.6 the combined capital and surplus of such
      corporation or association 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 8.6, the Trustee shall resign immediately in the
      manner and with the effect specified in Section 8.7 hereof. The entity serving
      as Trustee may have normal banking and trust relationships with the Depositor
      and its affiliates or the Servicer and its affiliates; provided,
      however,
      that
      such entity cannot be an affiliate of the Servicer other than the Trustee in
      its
      role as successor to the Servicer.

     

    
      
        
        

      

      
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          Section
        8.7  Resignation
        and Removal of Trustee.

    

     

    The
      Trustee may at any time resign and be discharged from the trusts hereby created
      by giving written notice of resignation to the Depositor, the Swap Counterparty
      and the Servicer and each Rating Agency not less than 60 days before the date
      specified in such notice when, subject to Section 8.8, such resignation is
      to
      take effect, and acceptance by a successor trustee in accordance with Section
      8.8 meeting the qualifications set forth in Section 8.6. If no successor trustee
      meeting such qualifications shall have been so appointed and have accepted
      appointment within 30 days after the giving of such notice or 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 8.6 hereof and shall fail to resign after written request thereto by
      the
      Depositor, or if at any time the Trustee shall become incapable of acting,
      or
      shall be adjudged as 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, or a tax is imposed with respect
      to
      the Trust Fund by any state in which the Trustee or the Trust Fund is located
      and the imposition of such tax would be avoided by the appointment of a
      different trustee, then the Depositor or the Servicer may remove the Trustee
      and
      appoint a successor trustee by written instrument, in triplicate, one copy
      of
      which instrument shall be delivered to the Trustee, one copy of which shall
      be
      delivered to the Servicer and one copy to the successor trustee.

     

    The
      Holders of Certificates entitled to at least 51% of the Voting Rights 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 by
      the
      successor Trustee to the Servicer, one complete set to the Trustee so removed
      and one complete set to the successor so appointed. Notice of any removal of
      the
      Trustee shall be given to each Rating Agency by the Successor
      Trustee.

     

    Any
      resignation or removal of the Trustee and appointment of a successor trustee
      pursuant to any of the provisions of this Section 8.7 shall become effective
      upon acceptance of appointment by the successor trustee as provided in Section
      8.8 hereof.

     

        Section
      8.8  Successor
      Trustee.

     

    Any
      successor trustee appointed as provided in Section 8.7 hereof shall execute,
      acknowledge and deliver to the Depositor and to its predecessor trustee and
      the
      Servicer an instrument accepting such appointment hereunder and thereupon the
      resignation or removal of the predecessor 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 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.

     

    
      
        
        

      

      
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    No
      successor trustee shall accept appointment as provided in this Section 8.8
      unless at the time of such acceptance such successor trustee shall be eligible
      under the provisions of Section 8.6 hereof and its appointment shall not
      adversely affect the then current rating of the Certificates.

     

    Upon
      acceptance of appointment by a successor trustee as provided in this Section
      8.8, the Depositor shall mail notice of the succession of such trustee hereunder
      to all Holders of Certificates and the Swap Counterparty. If the Depositor
      fails
      to mail such notice within 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
      8.9  Merger
      or Consolidation of Trustee.

     

    Any
      corporation into which the Trustee may be merged or converted or with which
      it
      may be consolidated or any corporation resulting from any merger, conversion
      or
      consolidation to which the Trustee shall be a party, or any corporation
      succeeding to the business of the Trustee, shall be the successor of the Trustee
      hereunder; provided,
      that
      such corporation shall be eligible under the provisions of Section 8.6 hereof
      without the execution or filing of any paper or further act on the part of
      any
      of the parties hereto, anything herein to the contrary
      notwithstanding.

     

        Section
      8.10  Appointment
      of Co-Trustee or Separate Trustee.

     

    Notwithstanding
      any other provisions of this Agreement, 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 any Mortgage Note may at the time be located, the Servicer
      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, or separate
      trustee or separate trustees, of all or any part of the Trust Fund, and to
      vest
      in such Person or Persons, in such capacity and for the benefit of the
      Certificateholders, such title to the Trust Fund or any part thereof, whichever
      is applicable, and, subject to the other provisions of this Section 8.10, such
      powers, duties, obligations, rights and trusts as the Servicer and the Trustee
      may consider necessary or desirable. If the Servicer shall not have joined
      in
      such appointment within 15 days after the receipt by it of a request to do
      so,
      or in the 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 8.6 and no notice to Certificateholders of
      the
      appointment of any co-trustee or separate trustee shall be required under
      Section 8.8.

     

    Every
      separate trustee and co-trustee shall, to the extent permitted by law, be
      appointed and act subject to the following provisions and
      conditions:

     

    (i)  To
      the
      extent necessary to effectuate the purposes of this Section 8.10, 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 (it being understood that such separate
      trustee or co-trustee is not authorized to act separately without the Trustee
      joining in such act), 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
      applicable Trust Fund or any portion thereof in any such jurisdiction) shall
      be
      exercised and performed singly by such separate trustee or co-trustee, but
      solely at the direction of the Trustee;

     

    
      
        
        

      

      
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    (ii)  No
      trustee hereunder shall be held personally liable by reason of any act or
      omission of any other trustee hereunder and such appointment shall not, and
      shall not be deemed to, constitute any such separate trustee or co-trustee
      as
      agent of the Trustee;

     

    (iii)  The
      Trustee may at any time accept the resignation of or remove any separate trustee
      or co-trustee; and

     

    (iv)  The
      Servicer, and not the Trustee, shall be liable for the payment of reasonable
      compensation, reimbursement and indemnification to any such separate trustee
      or
      co-trustee.

     

    Any
      notice, request or other writing given to the Trustee shall be deemed to have
      been given to each of the separate trustees and co-trustees, when and as
      effectively as if given to each of them. Every instrument appointing any
      separate trustee or co-trustee shall refer to this Agreement and the conditions
      of this Article VIII. 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 and a copy thereof given to
      the
      Servicer and the Depositor.

     

    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. If any separate trustee or co-trustee shall die,
      become incapable of acting, resign or be removed, all of its estates,
      properties, rights, remedies and trusts shall vest in and be exercised by the
      Trustee, to the extent permitted by law, without the appointment of a new or
      successor trustee.

     

        Section
      8.11  Tax
      Matters.

     

    It
      is
      intended that the assets with respect to which the REMIC elections are to be
      made, as set forth in Schedule III, shall constitute, and that the conduct
      of
      matters relating to such assets shall be such as to qualify such assets as
      REMICs 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 each such
      REMIC and that in such capacity it shall: (a) prepare and file, or cause to
      be
      prepared and filed, 

     

    
      
        
        

      

      
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    in
      a
      timely manner, a U.S. Real Estate Mortgage Investment Conduit Income Tax Return
      (Form 1066 or any successor form adopted by the Internal Revenue Service) 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 such REMIC, 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 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; (b) within thirty days
      of
      the Closing Date, furnish or cause to be furnished to the Internal Revenue
      Service, on Forms 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, together with
      such additional information as may be required by such Form, and update such
      information at the time or times in the manner required by the Code; (c) make
      or
      cause to be made REMIC elections as directed in Schedule III on the federal
      tax
      returns for each such REMIC’s first taxable year (and, if necessary, under
      applicable state law); (d) 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 and reports as and
      when required to be provided to them in accordance with the REMIC Provisions,
      including without limitation, the calculation of any original issue discount
      using the prepayment assumption and any information returns due to payments
      from
      the Excess Reserve Fund Account and the Supplemental Interest Trust; (e) provide
      information necessary for the computation of tax imposed on the transfer of
      a
      Residual Certificate to a Person that is not a Permitted Transferee, or an
      agent
      (including a broker, nominee or other middleman) of a Non-Permitted Transferee,
      or a pass-through entity in which a Non-Permitted Transferee 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); (f) to the
      extent that they are under its control conduct matters relating to such assets
      at all times that any Certificates are outstanding so as to maintain the status
      of each REMIC created hereunder under the REMIC Provisions; (g) not knowingly
      or
      intentionally take any action or omit to take any action that would cause an
      Adverse REMIC Event; (h) pay the amount of any federal, state or local tax,
      including prohibited transaction taxes as described below, imposed on any such
      REMIC prior to its termination when and as the same shall be due and payable
      (but such obligation shall not prevent the Servicer or any other appropriate
      Person from contesting any such tax in appropriate proceedings and shall not
      prevent the Servicer from withholding payment of such tax, if permitted by
      law,
      pending the outcome of such proceedings); (i) 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; (j) maintain records relating to any such
      REMIC, including but not limited to the income, expenses, assets and liabilities
      thereof and the fair market value and adjusted basis of the assets determined
      at
      such intervals as may be required by the Code, as may be necessary to prepare
      the foregoing returns, schedules, statements or information; and (k) as and
      when
      necessary and appropriate, represent any such REMIC in any administrative or
      judicial proceedings relating to an examination or audit by any governmental
      taxing authority, request an administrative adjustment as to any taxable year
      of
      any such REMIC, enter into settlement agreements with any governmental taxing
      agency, extend any statute of limitations relating to any tax item of any such
      REMIC, and otherwise act on behalf of any such REMIC in relation to any tax
      matter or controversy involving it.

     

    
      
        
        

      

      
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    To
      enable
      the Servicer to perform its duties as set forth herein, the Depositor shall
      provide, or cause to be provided, to the Servicer within ten (10) days after
      the
      Closing Date all information or data that the Servicer requests in writing
      and
      determines to be relevant for tax purposes to the valuations and offering prices
      of the Certificates, including, without limitation, the price, yield, prepayment
      assumption and projected cash flows of the Certificates and the Mortgage Loans.
      Thereafter, the Depositor shall provide to the Servicer promptly upon written
      request therefor, any such additional information or data that the Servicer
      may,
      from time to time, reasonably request in order to enable the Servicer to perform
      its duties as set forth herein. The Depositor hereby indemnifies the Servicer
      for any losses, liabilities, damages, claims or expenses of the Servicer arising
      from any errors or miscalculations of the Servicer that result from any failure
      of the Depositor to provide, or to cause to be provided, accurate information
      or
      data to the Servicer on a timely basis.

     

    The
      Depositor, the Servicer and the Trustee covenant and agree that (i) they shall,
      to the extent that they are under their control, conduct matters relating to
      the
      assets of the Trust Fund at all times that any Certificates are outstanding
      so
      as to maintain the status of each REMIC created hereunder under the REMIC
      Provisions (and, with respect to matters that are under its control and which
      are otherwise required to be performed by the Trustee pursuant to this
      Agreement, the Trustee shall maintain the treatment of the Excess Reserve Fund
      Account and the rights with respect to payments from the Excess Reserve Fund
      Account as provided in paragraph (b) below), and (ii) they shall not knowingly
      or intentionally take any action or omit to take any action that would cause
      an
      Adverse REMIC Event.

     

        Section
      8.12  Trustee
      Exchange Act Reporting Requirements.

     

    (a)  On
      or
      before March 15 of each calendar year (or March 24 if there is no requirement
      to
      file a Form 10-K in that calendar year), the Trustee shall deliver to the
      Servicer and the Depositor a report regarding its assessment of compliance
      with
      the servicing criteria specified in paragraph (d) of Item 1122 of Regulation
      AB
      (§ 229.1122(d)), as of and for the period ending the end of each fiscal year,
      with respect to asset-backed security transactions taken as a whole involving
      the Trustee and that are backed by the same asset type as the Mortgage Loans.
      Each such report shall include all of the statements required to be provided
      under paragraph (a) of Item 1122 of Regulation AB (§ 229.1122(a)) as set forth
      in Exhibit T hereto.

     

    (b)  On
      or
      before March 15 of each calendar year (or March 24 if there is no requirement
      to
      file a Form 10-K in that calendar year), the Trustee shall each deliver to
      the
      Servicer and the Depositor a report by a registered public accounting firm
      that
      attests to, and reports on, the assessment made by the Trustee pursuant to
      subsection (a) above. Each such report shall be made in accordance with
      standards for attestation engagements issued or adopted by the Public Company
      Accounting Oversight Board.

     

    (c)  The
      Trustee shall promptly notify the Servicer and the Depositor of any legal
      proceedings pending against the Trustee of the type described in Item 1117
      (§
229.1117) of Regulation AB.

     

    (d)  In
      order
      to comply with laws, rules, regulations and executive orders in effect from
      time
      to time applicable to banking institutions, including those relating to the
      funding of terrorist activities and money laundering (“Applicable Law”), the
      Trustee is required to obtain, verify and record certain information relating
      to
      individuals and entities which maintain a business relationship with the
      Trustee. Accordingly, each of the parties agrees to provide to Trustee upon
      its
      request from time to time such identifying information and documentation as
      may
      be available for such party in order to enable the Trustee to comply with
      Applicable Law.

     

    
      
        
        

      

      
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          Section
        8.13  Reports
        filed with the Securities and Exchange Commission.

    

     

    (a)  The
      Trustee and the Servicer shall reasonably cooperate with the Depositor in
      connection with the satisfaction of the reporting requirements under the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Trustee
      shall prepare on behalf of the Trust Fund any Forms 8-K, 10-D and 10-K as
      provided in Section 8.13(b).

     

    (b)  The
      Depositor shall prepare or cause to be prepared the initial current report
      on
      Form 8-K. Thereafter, within 15 days after each Distribution Date, the Trustee
      shall, in accordance with industry standards, file with the Commission via
      the
      Electronic Data Gathering and Retrieval System (EDGAR) filing requirements,
      a
      Form 10-D executed by the Depositor with (i) a copy of the Monthly Statement
      for
      such Distribution Date and (ii) such other information as is required by Form
      10-D, including, but not limited to, the information required by Item 1121
      (§229.1121) of Regulation AB (so long as such information is made available to
      the Trustee in a format compatible with EDGAR filing requirements).

     

    Any
      disclosure in addition to the monthly statement required to be included on
      the
      Form 10-D (“Additional Form 10-Disclosure”) shall be determined and prepared by
      the entity that is indicated in Exhibit S as the responsible entity for
      providing that information. Any Additional Form 10-D Disclosure shall be
      provided to the Trustee by email to DBSec.Notifications@db.com
      within 5
      calendar days after the related Determination Date. Any Additional Form 10-D
      Disclosure shall clearly identify which item of Form 10-D the information
      relates to. The Depositor shall also be copied on any Additional Form 10-D
      Disclosure.

     

    The
      Trustee shall compile the information provided to it, prepare the Form 10-D
      and
      forward the Form 10-D to the Depositor for review and verification. No later
      than three Business Days prior to the 15th calendar day after the related
      Distribution Date, an officer of the Depositor shall sign the Form 10-D and
      return such executed Form 10-D to the Trustee by email (with an original
      executed hard copy to follow by overnight mail).

     

    Prior
      to
      January 30 of the first year in which the Trustee is able to do so under
      applicable law, the Trustee shall file a Form 15 Suspension Notice with respect
      to the Trust Fund, if applicable. Prior to (x) March 31, 2008 and (y) unless
      and
      until a Form 15 Suspension Notice shall have been filed, prior to March 31
      of
      each year thereafter, the Trustee shall prepare a Form 10-K with respect to
      the
      Trust Fund. The Trustee shall file each such Form 10-K by March 31 of the
      applicable year. Such Form 10-K shall be signed by an appropriate officer of
      the
      Depositor by March 25, 2008 and shall include the certification required
      pursuant to the Sarbanes-Oxley Act of 2002, as amended from time to time, and
      any rules promulgated thereunder by the Commission (the “Form 10-K
      Certification”), which certification shall be signed by an appropriate officer
      of the Depositor. Such Form 10-K shall also include as exhibits (i) the annual
      statement as to compliance and the assessments of compliance with servicing
      criteria described in Section 3.16 and Section 6.5 of this Agreement, (ii)
      the
      public accounting firm attestation reports described in Section 3.17 and Section
      6.6 of this Agreement, relating to the assessments of compliance with servicing
      criteria described therein and (iii) the items described in (i) and (ii) above
      with respect to any Subservicer or Subcontractor. If any party’s report on
      assessment of compliance with servicing criteria required by clause (i) in
      the
      immediately preceding sentence, or the related public accounting firm
      attestation report required by clause (ii) in the immediately preceding
      sentence, identifies any material instance of noncompliance with the servicing
      criteria specified in paragraph (d) of Item 1122 of Regulation AB
      (§229.1122(d)), the Form 10-K shall identify the material instance of
      noncompliance. If these items have not been delivered to the Trustee within
      a
      reasonable period of time before the Trustee files any Form 10-K, the Trustee
      shall cooperate with the Depositor to file an amended Form 10-K including such
      missing documents as exhibits reasonably promptly after receipt of such items
      by
      the Trustee. 

     

    
      
        
        

      

      
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    Prior
      to
      (x) March 1, 2008 and (y) unless an until a Form 15 Suspension Notice shall
      have
      been filed, prior to March 1 of each year thereafter, each entity that is
      indicated in Exhibit S as a responsible entity for providing any disclosure
      or
      information in addition that described in the preceding paragraph that is
      required to be included on Form 10-K (“Additional Form 10-K Disclosure”) shall
      be required to provide to the Trustee by email to DBSec.Notifications@db.com.
      Any Additional Form 10-K Disclosure shall clearly identify which item of Form
      10-K the information relates to. The Depositor shall also be copied on any
      Additional Form 10-K Disclosure.

     

    (c)  The
      Trustee shall sign a certification (in the form attached hereto as Exhibit
      O)
      for the benefit of the Depositor and its officers, directors and affiliates
      (provided,
      however,
      that
      the Trustee shall not undertake an analysis of the accountant’s report referred
      to in Section 3.17 and Section 6.5 of this Agreement), and the Servicer shall
      sign a certification in the form attached hereto as Exhibit P for the benefit
      of
      the Depositor, the Trust Fund, the Trustee and their officers, directors and
      affiliates.

     

    In
      addition, (i) the Trustee shall indemnify and hold harmless the Depositor and
      its officers, and directors from and against losses, damages (except for
      special, indirect or consequential loss or damage) penalties, fines,
      forfeitures, reasonable and necessary legal fees and related costs, judgments
      and other costs and expenses arising out of or based upon an intentional breach
      by the Trustee of its obligations under this Section or the Trustee’s
      negligence, bad faith or willful misconduct in connection therewith, (ii) the
      Servicer shall indemnify and hold harmless the Depositor, the Trustee and each
      of their respective officers, directors and affiliates from and against any
      losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
      fees and related costs, judgments and other costs and expenses arising out
      of or
      based upon a breach of the Servicer’s obligations under this Section or the
      Servicer’s negligence, bad faith or willful misconduct in connection therewith
      and (iii) the Depositor shall indemnify and hold harmless the Trustee and its
      officers, directors and affiliates from and against any losses, damages,
      penalties, fines, forfeitures, reasonable and necessary legal fees and related
      costs, judgments and other costs and expenses arising out of or based upon
      a
      breach of the Depositor’s obligations under this Section or the Depositor’s
      negligence, bad faith or willful misconduct in connection
      therewith.

     

    
      
        
        

      

      
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    (d)  Within
      four (4) Business Days after the occurrence of an event requiring disclosure
      on
      Form 8-K (each such event, a “Reportable Event”), the Trustee shall prepare and
      file on behalf of the Trust Fund any Form 8-K, as required by the Exchange
      Act;
provided,
      that
      the Depositor shall file the initial Form 8-K in connection with the issuance
      of
      the Certificates. Any disclosure or information related to a Reportable Event
      or
      that is otherwise required to be included on Form 8-K (“Form 8-K Disclosure
      Information”) shall be prepared by the party responsible for preparing such
      disclosure as set forth on Exhibit S hereto and compiled by the Trustee pursuant
      to the following paragraph. Any Form 8-K Disclosure shall be forwarded to the
      Trustee by email to DBSec.Notifications@db.com. The Depositor shall be copied
      on
      any Form 8-K Disclosure. The Trustee will have no duty or liability for any
      failure hereunder to determine or prepare any Form 8-K Disclosure Information
      or
      any Form 8-K, except as set forth in the next paragraph.

     

    As
      set
      forth on Exhibit S hereto, for so long as the Issuing Entity is subject to
      the
      Exchange Act reporting requirements, no later than noon (Eastern Standard Time)
      on the 2nd Business Day after the occurrence of a Reportable Event, certain
      parties to this Agreement shall be required to provide to the Depositor and
      the
      Trustee, to the extent known by such applicable parties, any Form 8-K Disclosure
      Information, if applicable. The Trustee shall compile all such information
      provided to it in a Form 8-K prepared by it.

     

    After
      preparing the Form 8-K, the Trustee shall forward electronically a draft copy
      of
      the Form 8-K to the Depositor for review, verification and execution by the
      Depositor. No later than the end of the 3rd Business Day after the Reportable
      Event, an officer of the Depositor shall sign the Form 8-K and return an
      electronic or fax copy of such signed Form 8-K (with an original executed hard
      copy to follow by overnight mail) to the Trustee. If a Form 8-K cannot be filed
      on time or if a previously filed Form 8-K needs to be amended, the Trustee
      will
      cooperate with the Depositor to file an amendment.

     

    (e)  Upon
      any
      filing with the Commission, the Trustee shall promptly deliver to the Depositor
      a copy of any executed report, statement or information.

     

    (f)  The
      Trustee will have no duty to verify the accuracy or sufficiency of any
      information not prepared by it included in any Form 10-D, Form 10-K or Form
      8-K.
      The Trustee shall have no liability with respect to any failure to properly
      prepare or file any Form 10-D or Form 10-K resulting from or relating to the
      Trustee’s inability or failure to obtain any information or signature in a
      timely manner from the party responsible for delivery of such information or
      signature, so long as any such failure does not result from the negligence
      or
      willful misconduct of the Trustee. The Trustee shall have no liability with
      respect to any failure to properly file any Form 10-D, Form 10-K or Form 8-K
      resulting from or relating to the Depositor’s failure to timely comply with the
      provisions of this section. Nothing herein shall be construed to require the
      Trustee or any officer, director or Affiliate thereof to sign any Form 10-D,
      Form 10-K or Form 8-K.

     

    
      
        
        

      

      
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    ARTICLE
      9

    TERMINATION

     

        Section
      9.1  Termination
      upon Liquidation or Purchase of all Mortgage Loans.

     

    (a)  Subject
      to Section 9.3, the obligations and responsibilities of the Depositor, the
      Servicer and the Trustee created hereby with respect to the Trust Fund shall
      terminate upon the earlier of: 

     

    (i)  the
      purchase by the Servicer or its designee of all Mortgage Loans (including REO
      Properties not otherwise disposed of pursuant to Section 3.11(i)) remaining
      in
      the Trust Fund at a price equal to the sum of (A) 100% of the Stated Principal
      Balance of each Mortgage Loan that is not a Nonrecoverable Mortgage Loan; (B)
      the Projected Net Liquidation Value of each Nonrecoverable Mortgage Loan (not
      including any REO), (C) the lesser of (x) the appraised value of any REO
      Property as determined by a real estate broker meeting the qualifications,
      and
      applying broker’s price opinion methodology, generally acceptable to residential
      mortgage servicers, or other property valuation opinion methodology customarily
      used by residential mortgage servicers with respect to defaulted loans and
      (y)
      the Stated Principal Balance of each Mortgage Loan related to any REO Property
      and (D) any Swap Termination Payments payable to the Swap Counterparty. In
      addition, such purchase price shall include with respect to the Mortgage Loans
      (including REO Properties) accrued and unpaid interest thereon at the applicable
      Net Rate, except to the extent the Servicer was not or would not be required
      to
      make a P&I Advance hereunder; and 

     

    (ii)  the
      later
      of (A) the maturity or other liquidation (or any Advance with respect thereto)
      of the last Mortgage Loan remaining in the Trust Fund and the disposition of
      all
      REO Property and (B) the distribution to Certificateholders of all amounts
      required to be distributed to them pursuant to this Agreement. In no event
      shall
      the trusts created hereby continue beyond the earlier of (i) the expiration
      of
      21 years from the death of the 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, and (ii) the Latest Possible Maturity Date. 

     

    The
      right
      to purchase all Mortgage Loans and REO Properties pursuant to clause (i) above
      shall be conditioned upon the aggregate Stated Principal Balance of the Mortgage
      Loans, at the time of any such repurchase, aggregating less than ten percent
      as
      of the end of the related Due Period of the Stated Principal Balance of the
      Mortgage Loans as of the Cut-Off Date. 

     

    (b)  With
      respect to any purchase pursuant to subsection (a), upon deposit of the price
      determined pursuant to subsection (a)(i) in the Distribution Account, the
      Trustee shall release or cause to be released to the purchaser of each such
      Mortgage Loan the related Mortgage File and shall execute and deliver such
      instruments of transfer or assignment prepared by the purchaser of such Mortgage
      Loan (including appropriate instruments with respect to any REO Property),
      in
      each case without recourse, as shall be necessary to vest in the purchaser
      of
      such Mortgage Loan any Mortgage Loan sold pursuant hereto, and the purchaser
      of
      such Mortgage Loan shall succeed to all the Trustee’s right, title and interest
      in and to such Mortgage Loan and all security and documents related thereto.
      Such assignment shall be an assignment outright and not for security. The
      purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan, and
      all
      security and documents, free of any further obligation to the Trustee or the
      Certificateholders with respect thereto.

     

    
      
        
        

      

      
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    (c)  Notwithstanding
      anything to the contrary contained herein, the Servicer hereby agrees that
      it
      shall not exercise its right to purchase the Mortgage Loans in accordance with
      paragraph (a) of this Section 9.1 for so long as any NIM securities are
      outstanding. For purposes of this paragraph (c), “NIM securities” shall mean any
      securities issued by a trust into which the Class C Certificates are
      transferred.

     

        Section
      9.2  Final
      Distribution on the Certificates.

     

    If
      on any
      Determination Date, the Servicer determines that there are no Outstanding
      Mortgage Loans and no other funds or assets in the Trust Fund other than the
      funds in the Collection Account, the Servicer shall direct the Trustee promptly
      to send a final distribution notice to each Certificateholder. If the Servicer
      elects to terminate the Trust Fund pursuant to clause (a) of Section 9.1, at
      least 20 days prior to the date notice is to be mailed to the affected
      Certificateholders, the Servicer shall notify the Depositor, the Swap
      Counterparty and the Trustee of the date the Servicer intends to terminate
      the
      Trust Fund and of the applicable repurchase price of the Mortgage Loans and
      REO
      Properties.

     

    Notice
      of
      any termination of the Trust Fund, specifying the Distribution Date on which
      Certificateholders may surrender their Certificates for payment of the final
      distribution and cancellation, shall be given promptly by the Trustee by letter
      to Certificateholders mailed not earlier than the 10th day and no later than
      the
      15th day of the month next preceding the month of such final distribution.
      Any
      such notice shall specify (a) the Distribution Date upon which final
      distribution on the Certificates will be made upon presentation and surrender
      of
      Certificates at the office therein designated, (b) the amount of such final
      distribution, (c) the location of the office or agency at which such
      presentation and surrender must be made, and (d) that the Record Date otherwise
      applicable to such Distribution Date is not applicable, distributions being
      made
      only upon presentation and surrender of the Certificates at the office therein
      specified. The Servicer will give such notice to each Rating Agency at the
      time
      such notice is given to Certificateholders.

     

    In
      the
      event such notice is given, the Servicer shall cause all funds in the Collection
      Account to be remitted to the Trustee for deposit in the Distribution Account
      on
      the Business Day prior to the applicable Distribution Date in an amount equal
      to
      the final distribution in respect of the Certificates. Upon such final deposit
      with respect to the Trust Fund and the receipt by the Trustee of a Request
      for
      Release therefor, the Trustee shall promptly release to the Servicer the
      Mortgage Files for the Mortgage Loans.

     

    Upon
      presentation and surrender of the Certificates, the Trustee shall cause to
      be
      distributed to the Certificateholders of each Class, in the order set forth
      in
      Section 4.2 hereof, on the final Distribution Date, in the case of the
      Certificateholders, in proportion to their respective Percentage Interests,
      with
      respect to Certificateholders of the same Class, an amount equal to (i) as
      to
      each Class of Regular Certificates, the Class Principal Balance thereof plus
      accrued interest thereon (or on their Notional Principal Balance, if applicable)
      in the case of an interest bearing Certificate, and (ii) as to the Residual
      Certificates, the amount, if any, which remains on deposit in the Distribution
      Account (other than the amounts retained to meet claims) after application
      pursuant to clause (i) above.

     

    
      
        
        

      

      
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    In
      the
      event that any affected Certificateholders shall not surrender Certificates
      for
      cancellation within six months after the date specified in the above mentioned
      written notice, the Trustee 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 six months after the
      second notice all the applicable Certificates shall not have been surrendered
      for cancellation, the Trustee may take appropriate steps, or may appoint an
      agent to take appropriate 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 a part of the Trust Fund. If
      within one year after the second notice all Certificates shall not have been
      surrendered for cancellation, the holder of each of the Class R Certificates
      shall be entitled to all unclaimed funds and other assets of the REMICs held
      for
      distribution to such Certificateholders, which remain subject
      hereto.

     

        Section
      9.3  Additional
      Termination Requirements.

     

    (a)  In
      the
      event the Servicer exercises its purchase option as provided in Section 9.1,
      the
      Trust Fund shall be terminated in accordance with the following additional
      requirements, unless the Trustee has been supplied with an Opinion of Counsel,
      at the expense of the Servicer, to the effect that the failure to comply with
      the requirements of this Section 9.3 will not result in an Adverse REMIC
      Event:

     

    (i)  The
      Trustee shall sell all of the assets that constitute the Trust Fund for cash
      as
      provided in Section 9.01(a)(i), and, within 90 days of such sale, shall
      distribute to (or credit to the account of) the Holders of the Certificates
      the
      proceeds of such sale together with other cash on hand (less amounts retained
      to
      meet claims) in complete liquidation of the Trust Fund and each REMIC created
      hereunder; 

     

    (ii)  The
      Trustee shall attach a statement to the final federal income tax return for
      each
      REMIC created hereunder stating that pursuant to Treasury Regulation § 1.860F-1,
      the first day of the 90-day liquidation period for each such REMIC was the
      date
      on which the Trustee sold the assets of the Trust Fund pursuant to Section
      9.01(a)(i); and

     

    (iii)  If
      the
      Swap Agreement is still outstanding at the time of termination of the Trust
      Fund, the Trustee shall notify the Swap Counterparty of such
      termination.

     

    (b)  By
      their
      acceptance of the Certificates, the Holders thereof hereby authorize the Trustee
      to undertake the above-described actions.

     

    
      
        
        

      

      
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    ARTICLE
      10

     

    

     

    [RESERVED]

     

     

    ARTICLE
      11

     

    MISCELLANEOUS
      PROVISIONS

     

        Section
      11.1  Amendment.

     

    This
      Agreement may be amended from time to time by the Depositor, Servicer and the
      Trustee without the consent of any of the Certificateholders (i) to cure any
      ambiguity or mistake, (ii) to cause the provisions herein to conform to or
      be
      consistent with or in furtherance of the statements made with respect to the
      Certificates, the Trust Fund or this Agreement in any disclosure document
      pursuant to which any Certificates were offered; to correct any defective
      provision herein or to supplement any provision herein which may be inconsistent
      with any other provision herein, (iii) to add to the duties of the Depositor
      or
      the Servicer, (iv) to add any other provisions with respect to matters or
      questions arising hereunder or (v) to modify, alter, amend, add to or rescind
      any of the terms or provisions contained in this Agreement; provided,
      that
      any action pursuant to clauses (iv) or (v) above shall not, as evidenced by
      an
      Opinion of Counsel delivered to the Trustee (which Opinion of Counsel shall
      not
      be an expense of the Trustee or the Trust Fund), adversely affect in any
      material respect the interests of any Certificateholder; provided,
      however,
      that
      the amendment shall not be deemed to adversely affect in any material respect
      the interests of the Certificateholders if the Person requesting the amendment
      obtains a letter from each Rating Agency stating that the amendment would not
      result in the downgrading or withdrawal of the respective ratings then assigned
      to the Certificates; it being understood and agreed that any such letter in
      and
      of itself will not represent a determination as to the materiality of any such
      amendment and will represent a determination only as to the credit issues
      affecting any such rating. The Trustee, the Depositor and the Servicer also
      may
      at any time and from time to time amend this Agreement without the consent
      of
      the Certificateholders to modify, eliminate or add to any of its provisions
      to
      such extent as shall be necessary or helpful to (i) maintain the qualification
      of each REMIC created hereunder as a REMIC under the Code, (ii) avoid or
      minimize the risk of the imposition of any tax on any such REMIC pursuant to
      the
      Code that would be a claim at any time prior to the final redemption of the
      Certificates or (iii) comply with any other requirements of the Code;
provided,
      that
      the Trustee have been provided an Opinion of Counsel, which opinion shall be
      an
      expense of the party requesting such opinion but in any case shall not be an
      expense of the Trustee or the Trust Fund, to the effect that such action is
      necessary or helpful to, as applicable, (i) maintain such qualification, (ii)
      avoid or minimize the risk of the imposition of such a tax or (iii) comply
      with
      any such requirements of the Code.

     

    This
      Agreement may also be amended from time to time by the Depositor, Servicer
      and
      the Trustee with the consent of the Holders of a Majority in Interest of each
      Class of Certificates affected thereby 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; provided,
      however,
      that no
      such amendment shall (i) reduce in any manner the amount of, or delay the timing
      of, payments required to be distributed on any Certificate without the consent
      of the Holder of such Certificate, (ii) adversely affect in any material respect
      the interests of the Holders of any Class of Certificates in a manner other
      than
      as described in (i), without the consent of the Holders of Certificates of
      such
      Class evidencing, as to such Class, Percentage Interests aggregating 66%, or
      (iii) reduce the aforesaid percentages of Certificates the Holders of which
      are
      required to consent to any such amendment, without the consent of the Holders
      of
      all such Certificates then outstanding.

     

    
      
        
        

      

      
        114

        
          

        

      

      
        
        

      

       

    

    Notwithstanding
      any contrary provision of this Agreement, the Trustee shall not consent to
      any
      amendment to this Agreement unless it shall have first received an Opinion
      of
      Counsel, which opinion shall not be an expense of the Trustee or the Trust
      Fund,
      to the effect that such amendment will not cause an Adverse REMIC Event. Any
      amendment to this Agreement will require the prior written consent of the Swap
      Counterparty if such amendment will materially and adversely affect the rights
      or interests of the Swap Counterparty.

     

    The
      Trustee shall provide the Swap Counterparty with at least ten (10) days prior
      written notice of any proposed amendment of this Agreement. Notwithstanding
      any
      contrary provision of this Agreement, the Trustee shall not, without the prior
      written consent of the Swap Counterparty, consent to any amendment to this
      Agreement that would (i) adversely affect its ability to perform, timely and
      fully, its obligations under the Swap Agreement, (ii) adversely affect or change
      the rights of the Swap Counterparty or the benefits accorded to it under this
      Agreement or the Swap Agreement, (iii) adversely affect or change the
      obligations of the Swap Counterparty under the Swap Agreement or (iv) modify
      the
      meaning of any term used in the Swap Agreement and defined in this Agreement,
      or
      any component thereof.

     

    Promptly
      after the execution of any amendment to this Agreement requiring the consent
      of
      Certificateholders, the Trustee shall furnish written notification of the
      substance or a copy of such amendment to each Certificateholder, Swap
      Counterparty and each Rating Agency.

     

    It
      shall
      not be necessary for the consent of Certificateholders under this Section 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 prescribe.

     

    Nothing
      in this Agreement shall require the Trustee to enter into an amendment without
      receiving an Opinion of Counsel (which Opinion shall not be an expense of the
      Trustee or the Trust Fund), satisfactory to the Trustee that (i) such amendment
      is permitted and is not prohibited by this Agreement and that all requirements
      for amending this Agreement have been complied with; and (ii) either (A) the
      amendment does not adversely affect in any material respect the interests of
      any
      Certificateholder or the Swap Counterparty or (B) the conclusion set forth
      in
      the immediately preceding clause (A) is not required to be reached pursuant
      to
      this Section 11.1.

     

        Section
      11.2  Recordation
      of Agreement; Counterparts.

     

    This
      Agreement is subject to recordation in all appropriate public offices for real
      property records in all the counties or other comparable jurisdictions in which
      any or all of the properties subject to the Mortgages are situated, and in
      any
      other appropriate public recording office or elsewhere, such recordation to
      be
      effected by the Servicer at its expense, but only upon direction a majority
      of
      the Certificateholders to the effect that such recordation materially and
      beneficially affects the interests of the Certificateholders. However, the
      foregoing sentence notwithstanding, the Servicer may provide copies hereof
      to
      counsel, judicial officers, and government agencies, or may cause this Agreement
      to be recorded, in any jurisdiction in which, in the Servicer’s judgment, such
      disclosure or recording may facilitate foreclosure or other recovery with
      respect to any one or more of the Mortgage Loans. 

     

    
      
        
        

      

      
        115

        
          

        

      

      
        
        

      

       

    

    For
      the
      purpose of facilitating the recordation of this Agreement as herein provided
      and
      for other purposes, this Agreement may be executed (by facsimile or otherwise)
      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
      11.3  Governing
      Law.

     

    THIS
      AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE
      LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
      IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
      HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
      LAWS.

     

        Section
      11.4  Intention
      of Parties.

     

    It
      is the
      express intent of the parties hereto that the conveyance of the Trust Fund
      by
      the Depositor to the Trustee be, and be construed as, absolute sales thereof
      to
      the Trustee. It is, further, not the intention of the parties that such
      conveyances be deemed a pledge thereof by the Depositor to the Trustee. However,
      in the event that, notwithstanding the intent of the parties, such assets are
      held to be the property of the Depositor, or if for any other reason this
      Agreement is held or deemed to create a security interest in such assets, then
      (i) this Agreement shall be deemed to be a security agreement within the meaning
      of the Uniform Commercial Code of the State of New York and (ii) the conveyance
      provided for in this Agreement shall be deemed to be an assignment and a grant
      by the Depositor to the Trustee, for the benefit of the Certificateholders,
      of a
      security interest in all of the assets that constitute the Trust Fund, whether
      now owned or hereafter acquired.

     

    The
      Depositor, for the benefit of the Certificateholders, shall, to the extent
      consistent with this Agreement, take such actions as may be necessary to ensure
      that, if this Agreement were deemed to create a security interest in the Trust
      Fund, such security interest would be deemed to be a perfected security interest
      of first priority under applicable law and will be maintained as such throughout
      the term of the Agreement. The Depositor shall arrange for filing any Uniform
      Commercial Code continuation statements in connection with any security interest
      granted or assigned to the Trustee for the benefit of the
      Certificateholders.

     

    
      
        
        

      

      
        116

        
          

        

      

      
        
        

      

       

          Section
        11.5  Notices.

    

     

    (a)  The
      Trustee shall use its best efforts to promptly provide notice to each Rating
      Agency and Swap Counterparty with respect to each of the following of which
      it
      has actual knowledge:

     

    
      
        	 	
                1.

              	
                any
                  material change or amendment to this
                  Agreement;

              

      

      
        
           

          
            	 	
                    2.

                  	
                    the
                      occurrence of any Event of Default that has not been
                      cured;

                  

          

           

        

      

    

    
      	 	
              3.

            	
              the
                resignation or termination of the Servicer or the Trustee and the
                appointment of any successor;

            

    

     

    
      	 	
              4.

            	
              the
                repurchase or substitution of Mortgage Loans pursuant to Section
                2.3
                hereof;

            

    

    
       

      
        
          	 	
                  5.

                	
                  the
                    final payment to Certificateholders;
                    and

                

        

        
          
             

            
              	 	
                      6.

                    	
                      any
                        rating action involving the long-term credit rating of the
                        Servicer, which
                        notice shall be made by first-class mail within two Business
                        Days after
                        the Trustee gains actual knowledge
                        thereof.

                    

            

          

        

      

    

     

    In
      addition, the Trustee shall promptly furnish to each Rating Agency copies of
      the
      following:

     

    
      
        
          
            	 	
                    1.

                  	
                    Each
                      report to Certificateholders described in Section 4.5
                      hereof;

                  

          

          
            
               

              
                	 	
                        2.

                      	
                        Each
                          annual statement as to compliance described in Section
                          3.16
                          hereof;

                      

              

            

          

        

      

       

    

    
      	 	
              3.
                

            	
              Each
                annual independent public accountants’ servicing report described in
                Section 3.17 hereof; and

            

    

     

    
      	 	
              4.

            	
              Any
                notice of a purchase of a Mortgage Loan pursuant to Section 2.2,
                2.3 or
                3.11 hereof.

            

    

     

    
      	(b)  	
              All
                directions, demands, authorizations, consents, waivers, communications
                and
                notices hereunder shall be in writing and shall be deemed to have
                been
                duly given when delivered by first class mail, facsimile or courier
                to the
                applicable Notice Address, or in the case of the Rating Agencies,
                the
                address specified therefor in the definition corresponding to the
                name of
                such Rating Agency. Notices to Certificateholders shall be deemed
                given
                when mailed, first class postage prepaid, to their respective addresses
                appearing in the Certificate
                Register.

            

    

     

        Section
      11.6  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
      or of the Certificates or the rights of the Holders thereof.

     

    
      
        
        

      

      
        117

        
          

        

      

      
        
        

      

       

          Section
        11.7  Assignment.

    

     

    Notwithstanding
      anything to the contrary contained herein, except as provided in Section 6.02,
      this Agreement may not be assigned by the Servicer without the prior written
      consent of the Trustee and Depositor. As a condition to the utilization of
      any
      Subservicer or Subcontractor determined to be “participating in the servicing
      function” within the meaning of Item 1122, the Servicer shall obtain from any
      such Subservicer or Subcontractor used by the Servicer for the benefit of the
      Depositor a written agreement from such Subservicer or Subcontractor (in form
      and substance satisfactory to the Depositor) to comply with the provisions
      of
      Sections 6.5 and 6.6 of this Agreement to the same extent as if such Subservicer
      or Subcontractor were the Servicer.

        

        Section
      11.8  Limitation
      on Rights of Certificateholders.

     

    The
      death
      or incapacity of any Certificateholder shall not operate to terminate this
      Agreement or the trust created hereby, nor entitle such Certificateholder’s
      legal representative or heirs to claim an accounting or to take any action
      or
      commence any proceeding in any court for a petition or winding up of the trust
      created hereby, or 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 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 party 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 or by availing itself of any
      provisions 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 an Event
      of Default and of the continuance thereof, as herein provided, and unless the
      Holders of Certificates evidencing not less than 25% of the Voting Rights
      evidenced by the Certificates shall also have made written request to the
      Trustee to institute such action, suit or proceeding in its own name as Trustee
      hereunder 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 60 days after its receipt of such notice,
      request and offer of indemnity shall have neglected or 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
      shall have any right in any manner whatever by virtue or by availing itself
      or
      themselves of any provisions of this Agreement to affect, disturb or prejudice
      the rights of the Holders of any other of the Certificates, 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 all Certificateholders. For the protection and enforcement
      of
      the provisions of this Section 11.8, each and every Certificateholder and the
      Trustee shall be entitled to such relief as can be given either at law or in
      equity.

     

    
      
        
        

      

      
        118

        
          

        

      

      
        
        

      

       

          Section
        11.9  Inspection
        and Audit Rights.

    

     

    The
      Servicer agrees that, on reasonable prior notice, it will permit and will cause
      each Subservicer to permit any representative of the Depositor or the Trustee
      during the Servicer’s normal business hours, to examine all the books of
      account, records, reports and other papers of the Servicer relating to the
      Mortgage Loans, to make copies and extracts therefrom, to cause such books
      to be
      audited by independent certified public accountants selected by the Depositor
      or
      the Trustee and to discuss its affairs, finances and accounts relating to the
      Mortgage Loans with its officers, employees and independent public accountants
      (and by this provision the Servicer hereby authorizes said accountants to
      discuss with such representative such affairs, finances and accounts), all
      at
      such reasonable times and as often as may be reasonably requested. Any
      out-of-pocket expense incident to the exercise by the Depositor or the Trustee
      of any right under this Section 11.9 shall be borne by the party requesting
      such
      inspection; all other such expenses shall be borne by the Servicer or the
      related Subservicer.

     

        Section
      11.10  Certificates
      Nonassessable and Fully Paid.

     

    It
      is the
      intention of the Depositor that Certificateholders shall not be personally
      liable for obligations of the Trust Fund, that the interests in the Trust Fund
      represented by the Certificates shall be nonassessable for any reason
      whatsoever, and that the Certificates, upon due authentication thereof by the
      Trustee pursuant to this Agreement, are and shall be deemed fully
      paid.

     

        Section
      11.11  Limitations
      on Actions; No Proceedings.

     

    (a)  Other
      than pursuant to this Agreement, or in connection with or incidental to the
      provisions or purposes of this Agreement, the trust created hereunder shall
      not
      (i) issue debt or otherwise borrow money, (ii) merge or consolidate with any
      other entity reorganize, liquidate or transfer all or substantially all of
      its
      assets to any other entity, or (iii) otherwise engage in any activity or
      exercise any power not provided for in this Agreement.

     

    (b)  Notwithstanding
      any prior termination of this Agreement, the Trustee, the Servicer, the
      Depositor and the Swap Counterparty as a third-party beneficiary shall not,
      prior to the date which is one year and one day after the termination of this
      Agreement, acquiesce, petition or otherwise invoke or cause any Person to invoke
      the process of any court or government authority for the purpose of commencing
      or sustaining a case against the Depositor or the Trust Fund under any federal
      or state bankruptcy, insolvency or other similar law or appointing a receiver,
      liquidator, assignee, trustee, custodian, sequestrator or other similar official
      of the Depositor or the Trust Fund or any substantial part of their respective
      property, or ordering the winding up or liquidation of the affairs of the
      Depositor or the Trust Fund.

     

    
      
        
        

      

      
        119

        
          

        

      

      
        
        

      

       

          Section
        11.12  Mortgage
        Data.

    

     

    The
      Depositor hereby represents to S&P that, to the Depositor’s knowledge, the
      information provided to such Rating Agency, including any loan level detail,
      is
      true and correct according to such Rating Agency’s requirements.

     

        Section
      11.13  Third
      Party Beneficiary

     

    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
      the
      obligations of the Trustee regarding the Supplemental Interest Trust, the Swap
      Agreement or otherwise relating to the Swap Counterparty. 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 subject to the
      restrictions set forth in this Agreement.

     

        Section
      11.14  Replacement
      of Swap Counterparty

     

    Notwithstanding
      anything to the contrary contained herein, in the event that a replacement
      swap
      agreement is not obtained within 30 days after receipt by the Trustee of the
      Swap Termination Payment paid by the terminated Swap Counterparty, the Trustee
      shall deposit such Swap Termination Payment into the Supplemental Interest
      Account and the Trustee shall, on each Distribution Date, withdraw from such
      Supplemental Interest Account, 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 terms of the
      original Swap Agreement) and distribute such amount in accordance with Section
      4.10(b) of this Agreement. 

    

    *
      *
      *

    

     

    

    
      
        
        

      

      
        120

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the Depositor, Servicer 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.

     

    SAXON
      ASSET SECURITIES COMPANY

    

    

    By:
        /s/
      Ernest G.
      Bretana                            

    Name:
      Ernest G. Bretana

    Title:
      Executive Vice President

     

     

    SAXON
      MORTGAGE SERVICES, INC.

    

    

    By:
        /s/
      David L.
      Dill                                   

    Name:
      David L. Dill

    Title:
      Chief Executive Officer and President

    

    

    DEUTSCHE
      BANK
      NATIONAL TRUST 

    COMPANY

    

    

    By:
        /s/
      Karlene
      Benvenuto                           

    Name:
      Karlene Benvenuto

    Title:
      Authorized Signer

     

    

     

    By:
        /s/
      Mei
      Nghia                                         

    Name:
      Mei
      Nghia

    Title:
      Authorized Signer

     

    

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Schedule
      I

     

    MORTGAGE
      LOAN SCHEDULE (BY GROUP)

    

    [On
      file at the offices of Saxon
      Asset Securities Company]

    

     

    
      
        
        

      

      
        S-I-1

        
          

        

      

      
        
        

      

    

     

    Schedule
      II

     

    PASS-THROUGH
      RATE SCHEDULE 

     

    Set
      forth
      below are the Pass-Through Rates for each interest bearing Class of
      Certificates:

     

    Class
      1-A Pass-Through Rate:
      The
      Pass-Through Rate for the Class 1-A Certificates for the Interest Accrual Period
      related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.310%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      1
      WAC Cap. Beginning with the Interest Accrual period related to the Distribution
      Date immediately following the first related Initial Optional Termination Date,
      the Pass-Through Rate for the Class 1-A Certificates will be a per annum rate
      equal to the least of (i) one-month LIBOR + 0.620%, (ii) the Aggregate Net
      WAC
      Cap and (iii) the Group 1 WAC Cap.

    

    Class
      2A-1 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2A-1 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.220%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual period related to the Distribution
      Date immediately following the first related Initial Optional Termination Date,
      the Pass-Through Rate for the Class 2A-1 Certificates will be a per annum rate
      equal to the least of (i) one-month LIBOR + 0.440%, (ii) the Aggregate Net
      WAC
      Cap and (iii) the Group 2 WAC Cap.

     

    Class
      2A-2 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2A-2 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.320%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual period related to the Distribution
      Date immediately following the first related Initial Optional Termination Date,
      the Pass-Through Rate for the Class 2A-2 Certificates will be a per annum rate
      equal to the least of (i) one-month LIBOR + 0.640%, (ii) the Aggregate Net
      WAC
      Cap and (iii) the Group 2 WAC Cap.

     

    Class
      2A-3 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2A-3 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.400%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual period related to the Distribution
      Date immediately following the first related Initial Optional Termination Date,
      the Pass-Through Rate for the Class 2A-3 Certificates will be a per annum rate
      equal to the least of (i) one-month LIBOR + 0.800%, (ii) the Aggregate Net
      WAC
      Cap and (iii) the Group 2 WAC Cap.

     

    
      
        
        

      

      
        S-II-1

        
          

        

      

      
        
        

      

    

     

    Class
      2A-4 Pass-Through Rate: The
      Pass-Through Rate for the Class 2A-4 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.490%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual period related to the Distribution
      Date immediately following the first related Initial Optional Termination Date,
      the Pass-Through Rate for the Class 2A-4 Certificates will be a per annum rate
      equal to the least of (i) one-month LIBOR + 0.980%, (ii) the Aggregate Net
      WAC
      Cap and (iii) the Group 2 WAC Cap.

     

    Class
      B-1 Pass-Through Rate:
      The
      Pass-Through Rate for the Class B-1 Certificates for the Interest Accrual Period
      related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the lesser of (i)
      one-month LIBOR + 2.250% and (ii) the Aggregate Net WAC Cap. Beginning with
      the
      Interest Accrual Period related to the Distribution Date immediately following
      the first Initial Optional Termination Date, the Pass-Through Rate for the
      Class
      B-1 Certificates will be a per annum rate equal to the lesser of (i) one-month
      LIBOR + 3.375% and (ii) the Aggregate Net WAC Cap.

    

    Class
      B-2 Pass-Through Rate:
      The
      Pass-Through Rate for the Class B-2 Certificates for the Interest Accrual Period
      related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the lesser of (i)
      one-month LIBOR + 2.250% and (ii) the Aggregate Net WAC Cap. Beginning with
      the
      Interest Accrual Period related to the Distribution Date immediately following
      the first Initial Optional Termination Date, the Pass-Through Rate for the
      Class
      B-2 Certificates will be a per annum rate equal to the lesser of (i) one-month
      LIBOR + 3.375% and (ii) the Aggregate Net WAC Cap.

    

    Class
      B-3 Pass-Through Rate:
      The
      Pass-Through Rate for the Class B-3 Certificates for the Interest Accrual Period
      related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the lesser of (i)
      one-month LIBOR + 2.250% and (ii) the Aggregate Net WAC Cap. Beginning with
      the
      Interest Accrual Period related to the Distribution Date immediately following
      the first Initial Optional Termination Date, the Pass-Through Rate for the
      Class
      B-3 Certificates will be a per annum rate equal to the lesser of (i) one-month
      LIBOR + 3.375% and (ii) the Aggregate Net WAC Cap.

    

    Class
      1-M1 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 1-M1 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.800%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      1
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 1-M1 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 1.200%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 1 WAC Cap.

     

    Class
      2-M1 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2-M1 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.800%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 2-M1 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 1.200%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 2 WAC Cap.

    

    
      
        
        

      

      
        S-II-2

        
          

        

      

      
        
        

      

       

    

    Class
      1-M2 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 1-M2 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.900%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      1
      WAC Cap.. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 1-M2 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 1.350%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 1 WAC Cap.

    

    Class
      2-M2 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2-M2 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 0.900%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 2-M2 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 1.350%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 2 WAC Cap.

    

    Class
      1-M3 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 1-M3 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 1.050%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      1
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 1-M3 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 1.575%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 1 WAC Cap.

    

    Class
      2-M3 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2-M3 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 1.100%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 2-M3 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 1.650%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 2 WAC Cap.

    

    Class
      1-M4 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 1-M4 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 1.750%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      1
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 1-M4 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 2.625%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 1 WAC Cap.

     

    
      
        
        

      

      
        S-II-3

        
          

        

      

      
        
        

      

       

    

    Class
      2-M4 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2-M4 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 1.750%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 2-M4 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 2.625%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 2 WAC Cap.

     

    Class
      1-M5 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 1-M5 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 2.000%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      1
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 1-M5 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 3.000%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 1 WAC Cap.

     

    Class
      2-M5 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2-M5 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 2.050%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 2-M5 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 3.075%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 2 WAC Cap.

     

    Class
      1-M6 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 1-M6 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 2.250%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      1
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 1-M6 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 3.375%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 1 WAC Cap.

     

    Class
      2-M6 Pass-Through Rate:
      The
      Pass-Through Rate for the Class 2-M6 Certificates for the Interest Accrual
      Period related to any Distribution Date on or prior to the first related Initial
      Optional Termination Date will be a per annum rate equal to the least of (i)
      one-month LIBOR + 2.250%, (ii) the Aggregate Net WAC Cap and (iii) the Group
      2
      WAC Cap. Beginning with the Interest Accrual Period related to the Distribution
      Date immediately following the first Initial Optional Termination Date, the
      Pass-Through Rate for the Class 2-M6 Certificates will be a per annum rate
      equal
      to the least of (i) one-month LIBOR + 3.375%, (ii) the Aggregate Net WAC Cap
      and
      (iii) the Group 2 WAC Cap.

     

    
      
        
        

      

      
        S-II-4

        
          

        

      

      
        
        

      

    

     

    Schedule
      III

     

    The
      Trustee shall make elections to treat each of the segregated groups of assets
      described below as a real estate mortgage investment conduit (each a “REMIC” or,
      in the alternative, “REMIC 1”, “REMIC 2”, and “REMIC 3,” REMIC 3 also being
      referred to as the Upper-Tier REMIC). The Certificates, other than the Class
      R
      Certificate, represent ownership of the regular interests in the Upper-Tier
      REMIC for purposes of the REMIC Provisions. In addition, the Offered
      Certificates represent the right to receive payments in respect of Basis Risk
      Carryforward Amounts, which right is not treated as an interest in any REMIC
      created under this agreement. The Class R Certificate represents ownership
      of
      the sole class of residual interest in each of REMIC 1, REMIC 2, and the
      Upper-Tier REMIC for purposes of the REMIC Provisions.

     

    The
      Upper-Tier REMIC shall hold as its assets the several classes of uncertificated
      Lower-Tier Interests in REMIC 2, other than the Class LT2-R Interest, and each
      such Lower-Tier Interest is hereby designated as a regular interest in REMIC
      2.
      REMIC 2 shall hold as its assets the several classes of uncertificated
      Lower-Tier Interests in REMIC 1, other than the Class LT1-R Interest, and each
      such Lower-Tier Interest is hereby designated as a regular interest in REMIC
      1.
      REMIC 1 shall hold as its assets the property of the Trust Fund other than
      the
      (i) Lower Tier Interests in REMIC 1 and REMIC 2, (ii) the Excess Reserve Fund
      Account, (iii) the Swap Agreement, and (iv) the Supplemental Interest
      Trust.

     

    The
      startup day for each REMIC created hereby for purposes of the REMIC Provisions
      is the Closing Date. In addition, for purposes of the REMIC Provisions, the
      latest possible maturity date for each regular interest in each REMIC created
      hereby is the Latest Possible Maturity Date.

     

    Definitions
      

     

    Capitalized
      terms used in this Schedule III but not otherwise defined herein or in the
      Agreement shall have the meaning set forth below:

     

    Adjusted
      Net Rate:
      For any
      Distribution Date (and the related Accrual Period), a per annum rate equal
      to
      the product of (i) two and (ii) the REMIC 2 Net WAC, computed for this purpose
      by subjecting the interest rate on the Class LT2-Q Interest to a cap equal
      to 0%
      and subjecting the interest rate on each of the other REMIC 2 Regular Interest
      to a cap equal to the Pass-Through Rate for such Distribution Date on the
      Corresponding Class of Certificates (each such Pass-Through Rate computed for
      this purpose by substituting “REMIC 2 Net WAC for the applicable Net
      WAC).

     

    Class
      SIO Shortfall:
      For any
      Distribution Date, the excess, if any, of (i) the Net Swap Payment or Swap
      Termination Payment owed to the Swap Counterparty on the Fixed Rate Payer
      Payment Date (as defined in the Swap Agreement) related to such Distribution
      Date over (ii) the amount distributable with respect to the UT-SIO Interest
      in
      REMIC 3 of such Distribution Date.

     

    
      
        
        

      

      
        S-III-1

        
          

        

      

      
        
        

      

       

    

    Corresponding
      Class:
      With
      respect to any REMIC 2 Regular Interest or REMIC 3 Regular Interest, the Class
      of Certificates having the same alphanumeric designation as described in the
      tables set out in this Schedule III for REMIC 2 and REMIC 3,
      respectively.

     

    REMIC
      1 Net WAC:
      For any
      Distribution Date, a
      per
      annum rate equal to the weighted average of the Net Mortgage Rates of the
      Mortgage Loans, weighted based on their relative Stated Principal Balances
      as of
      the first day of the related Due Period, adjusted to reflect prepayments
      received after the first Day of the related Due Period that were distributed
      on
      the immediately preceding Distribution Date.

     

    REMIC
      2 Net WAC:
      For any
      Distribution Date, the weighted average of the interest rates on the REMIC
      1
      Regular Interests (other than the LT1-P Interest) for such Distribution Date.
      

     

    REMIC
      Swap Rate:
      A per
      annum rate of 10.70%. 

     

    Swap
      LIBOR:
      A per
      annum rate equal to the product of (i) the Floating Rate Option (as defined
      in
      the Swap Agreement) for the Distribution Date, multiplied by (ii) two multiplied
      by (iii) the quotient of the actual number of days in the Accrual Period divided
      by 30. 

     

    REMIC
      1 

     

    The
      following table sets forth the designations, initial principal amounts, and
      interest rates for each interest in REMIC 2, each of which (other than the
      Class
      LT2-R Interest is hereby designated as a regular interest in REMIC 1 (the “REMIC
      1 Regular Interests”):

     

    
      	
              REMIC
                1 Lower-Tier Designation

            	 	
              Initial
                Principal Amount

            	 	
              REMIC
                1 Lower-Tier

              Interest
                Rate

            
	
              LT1-A

            	 	
              $           
                 101,732,627.00

            	 	
              (1)

            
	
              LT1-F1

            	 	
              $              
                22,398,087.79 

            	 	
              (2)

            
	
              LT1-V1

            	 	
              $              
                22,398,087.79 

            	 	
              (3)

            
	
              LT1-F2

            	 	
              $              
                21,798,654.90 

            	 	
              (2)

            
	
              LT1-V2

            	 	
              $              
                21,798,654.90 

            	 	
              (3)

            
	
              LT1-F3

            	 	
              $              
                21,236,146.14 

            	 	
              (2)

            
	
              LT1-V3

            	 	
              $              
                21,236,146.14 

            	 	
              (3)

            
	
              LT1-F4

            	 	
              $              
                20,707,574.89 

            	 	
              (2)

            
	
              LT1-V4

            	 	
              $              
                20,707,574.89 

            	 	
              (3)

            
	
              LT1-F5

            	 	
              $              
                20,209,573.24 

            	 	
              (2)

            
	
              LT1-V5

            	 	
              $              
                20,209,573.24 

            	 	
              (3)

            
	
              LT1-F6

            	 	
              $              
                19,738,851.70 

            	 	
              (2)

            
	
              LT1-V6

            	 	
              $              
                19,738,851.70 

            	 	
              (3)

            
	
              LT1-F7

            	 	
              $              
                19,292,208.74 

            	 	
              (2)

            
	
              LT1-V7

            	 	
              $              
                19,292,208.74 

            	 	
              (3)

            
	
              LT1-F8

            	 	
              $              
                18,866,519.16 

            	 	
              (2)

            
	
              LT1-V8

            	 	
              $              
                18,866,519.16 

            	 	
              (3)

            
	
              LT1-F9

            	 	
              $              
                18,458,316.84 

            	 	
              (2)

            
	
              LT1-V9

            	 	
              $              
                18,458,316.84 

            	 	
              (3)

            

    

     

    
      
        
        

      

      
        S-III-2

        
          

        

      

      
        
        

      

    

    
       

      
        	
                REMIC
                  1 Lower-Tier Designation

              	 	
                Initial
                  Principal Amount

              	 	
                REMIC
                  1 Lower-Tier

                Interest
                  Rate

              

      

    

    
      	
              LT1-F10

            	 	
              $              
                18,058,894.32 

            	 	
              (2)

            
	
              LT1-V10

            	 	
              $              
                18,058,894.32 

            	 	
              (3)

            
	
              LT1-F11

            	 	
              $              
                17,671,843.03 

            	 	
              (2)

            
	
              LT1-V11

            	 	
              $              
                17,671,843.03 

            	 	
              (3)

            
	
              LT1-F12

            	 	
              $              
                17,292,318.74 

            	 	
              (2)

            
	
              LT1-V12

            	 	
              $              
                17,292,318.74 

            	 	
              (3)

            
	
              LT1-F13

            	 	
              $              
                16,912,192.63 

            	 	
              (2)

            
	
              LT1-V13

            	 	
              $              
                16,912,192.63 

            	 	
              (3)

            
	
              LT1-F14

            	 	
              $              
                16,516,602.40 

            	 	
              (2)

            
	
              LT1-V14

            	 	
              $              
                16,516,602.40 

            	 	
              (3)

            
	
              LT1-F15

            	 	
              $              
                15,905,197.75 

            	 	
              (2)

            
	
              LT1-V15

            	 	
              $              
                15,905,197.75 

            	 	
              (3)

            
	
              LT1-F16

            	 	
              $              
                15,252,225.28 

            	 	
              (2)

            
	
              LT1-V16

            	 	
              $              
                15,252,225.28 

            	 	
              (3)

            
	
              LT1-F17

            	 	
              $              
                14,689,340.36 

            	 	
              (2)

            
	
              LT1-V17

            	 	
              $              
                14,689,340.36 

            	 	
              (3)

            
	
              LT1-F18

            	 	
              $              
                14,078,445.56 

            	 	
              (2)

            
	
              LT1-V18

            	 	
              $              
                14,078,445.56 

            	 	
              (3)

            
	
              LT1-F19

            	 	
              $              
                13,421,387.16 

            	 	
              (2)

            
	
              LT1-V19

            	 	
              $              
                13,421,387.16 

            	 	
              (3)

            
	
              LT1-F20

            	 	
              $              
                12,954,394.02 

            	 	
              (2)

            
	
              LT1-V20

            	 	
              $              
                12,954,394.02 

            	 	
              (3)

            
	
              LT1-F21

            	 	
              $              
                12,325,616.65 

            	 	
              (2)

            
	
              LT1-V21

            	 	
              $              
                12,325,616.65 

            	 	
              (3)

            
	
              LT1-F22

            	 	
              $              
                12,755,595.61 

            	 	
              (2)

            
	
              LT1-V22

            	 	
              $              
                12,755,595.61 

            	 	
              (3)

            
	
              LT1-F23

            	 	
              $              
                54,449,684.43 

            	 	
              (2)

            
	
              LT1-V23

            	 	
              $              
                54,449,684.43 

            	 	
              (3)

            
	
              LT1-F24

            	 	
              $              
                10,271,590.16 

            	 	
              (2)

            
	
              LT1-V24

            	 	
              $              
                10,271,590.16 

            	 	
              (3)

            
	
              LT1-F25

            	 	
              $                
                8,456,009.78 

            	 	
              (2)

            
	
              LT1-V25

            	 	
              $                
                8,456,009.78 

            	 	
              (3)

            
	
              LT1-F26

            	 	
              $                
                8,160,331.62 

            	 	
              (2)

            
	
              LT1-V26

            	 	
              $                
                8,160,331.62 

            	 	
              (3)

            
	
              LT1-F27

            	 	
              $                
                7,780,246.26 

            	 	
              (2)

            
	
              LT1-V27

            	 	
              $                
                7,780,246.26 

            	 	
              (3)

            
	
              LT1-F28

            	 	
              $                
                8,029,555.43 

            	 	
              (2)

            
	
              LT1-V28

            	 	
              $                
                8,029,555.43 

            	 	
              (3)

            
	
              LT1-F29

            	 	
              $                31,552,432.90
                

            	 	
              (2)

            
	
              LT1-V29

            	 	
              $                31,552,432.90
                

            	 	
              (3)

            
	
              LT1-F30

            	 	
              $                
                6,769,065.99 

            	 	
              (2)

            
	
              LT1-V30

            	 	
              $                
                6,769,065.99 

            	 	
              (3)

            
	
              LT1-F31

            	 	
              $                
                5,483,341.04 

            	 	
              (2)

            

    

     

    
      
        
        

      

      
        S-III-3

        
          

        

      

      
        
        

      

    

    
      
         

        
          	
                  REMIC
                    1 Lower-Tier Designation

                	 	
                  Initial
                    Principal Amount

                	 	
                  REMIC
                    1 Lower-Tier

                  Interest
                    Rate

                

        

      

    

    
      	
              LT1-V31

            	 	
              $                
                5,483,341.04 

            	 	
              (3)

            
	
              LT1-F32

            	 	
              $                
                5,851,154.62 

            	 	
              (2)

            
	
              LT1-V32

            	 	
              $                
                5,851,154.62 

            	 	
              (3)

            
	
              LT1-F33

            	 	
              $                
                5,094,903.63 

            	 	
              (2)

            
	
              LT1-V33

            	 	
              $                
                5,094,903.63 

            	 	
              (3)

            
	
              LT1-F34

            	 	
              $                
                6,344,934.74 

            	 	
              (2)

            
	
              LT1-V34

            	 	
              $                
                6,344,934.74 

            	 	
              (3)

            
	
              LT1-F35

            	 	
              $                28,926,784.90
                

            	 	
              (2)

            
	
              LT1-V35

            	 	
              $                28,926,784.90
                

            	 	
              (3)

            
	
              LT1-F36

            	 	
              $                
                6,396,047.96 

            	 	
              (2)

            
	
              LT1-V36

            	 	
              $                
                6,396,047.96 

            	 	
              (3)

            
	
              LT1-F37

            	 	
              $                
                3,034,272.04 

            	 	
              (2)

            
	
              LT1-V37

            	 	
              $                
                3,034,272.04 

            	 	
              (3)

            
	
              LT1-F38

            	 	
              $                
                3,223,643.66 

            	 	
              (2)

            
	
              LT1-V38

            	 	
              $                
                3,223,643.66 

            	 	
              (3)

            
	
              LT1-F39

            	 	
              $                
                2,832,126.08 

            	 	
              (2)

            
	
              LT1-V39

            	 	
              $                
                2,832,126.08 

            	 	
              (3)

            
	
              LT1-F40

            	 	
              $                
                3,405,422.71 

            	 	
              (2)

            
	
              LT1-V40

            	 	
              $                
                3,405,422.71 

            	 	
              (3)

            
	
              LT1-F41

            	 	
              $                11,382,540.41
                

            	 	
              (2)

            
	
              LT1-V41

            	 	
              $                11,382,540.41
                

            	 	
              (3)

            
	
              LT1-F42

            	 	
              $                
                3,565,345.91 

            	 	
              (2)

            
	
              LT1-V42

            	 	
              $                
                3,565,345.91 

            	 	
              (3)

            
	
              LT1-F43

            	 	
              $                
                1,928,832.04 

            	 	
              (2)

            
	
              LT1-V43

            	 	
              $                
                1,928,832.04 

            	 	
              (3)

            
	
              LT1-F44

            	 	
              $                
                1,958,819.29 

            	 	
              (2)

            
	
              LT1-V44

            	 	
              $                
                1,958,819.29 

            	 	
              (3)

            
	
              LT1-F45

            	 	
              $                
                1,800,735.08 

            	 	
              (2)

            
	
              LT1-V45

            	 	
              $                
                1,800,735.08 

            	 	
              (3)

            
	
              LT1-F46

            	 	
              $                
                1,954,460.99 

            	 	
              (2)

            
	
              LT1-V46

            	 	
              $                
                1,954,460.99 

            	 	
              (3)

            
	
              LT1-F47

            	 	
              $                
                4,448,180.96 

            	 	
              (2)

            
	
              LT1-V47

            	 	
              $                
                4,448,180.96 

            	 	
              (3)

            
	
              LT1-F48

            	 	
              $                
                1,942,443.06 

            	 	
              (2)

            
	
              LT1-V48

            	 	
              $                
                1,942,443.06 

            	 	
              (3)

            
	
              LT1-F49

            	 	
              $                
                1,398,016.05 

            	 	
              (2)

            
	
              LT1-V49

            	 	
              $                
                1,398,016.05 

            	 	
              (3)

            
	
              LT1-F50

            	 	
              $                
                1,349,580.65 

            	 	
              (2)

            
	
              LT1-V50

            	 	
              $                
                1,349,580.65 

            	 	
              (3)

            
	
              LT1-F51

            	 	
              $                
                1,302,809.10 

            	 	
              (2)

            
	
              LT1-V51

            	 	
              $                
                1,302,809.10 

            	 	
              (3)

            
	
              LT1-F52

            	 	
              $                
                1,257,644.80 

            	 	
              (2)

            
	
              LT1-V52

            	 	
              $                
                1,257,644.80 

            	 	
              (3)

            

    

     

    
      
        
        

      

      
        S-III-4

        
          

        

      

      
        
        

      

    

    
      
         

        
          	
                  REMIC
                    1 Lower-Tier Designation

                	 	
                  Initial
                    Principal Amount

                	 	
                  REMIC
                    1 Lower-Tier

                  Interest
                    Rate

                

        

      

    

    
      	
              LT1-F53

            	 	
              $                
                1,214,033.01 

            	 	
              (2)

            
	
              LT1-V53

            	 	
              $                
                1,214,033.01 

            	 	
              (3)

            
	
              LT1-F54

            	 	
              $                
                1,171,920.36 

            	 	
              (2)

            
	
              LT1-V54

            	 	
              $                
                1,171,920.36 

            	 	
              (3)

            
	
              LT1-F55

            	 	
              $                
                1,131,256.85 

            	 	
              (2)

            
	
              LT1-V55

            	 	
              $                
                1,131,256.85 

            	 	
              (3)

            
	
              LT1-F56

            	 	
              $                
                1,091,992.53 

            	 	
              (2)

            
	
              LT1-V56

            	 	
              $                
                1,091,992.53 

            	 	
              (3)

            
	
              LT1-F57

            	 	
              $              
                30,103,854.16 

            	 	
              (2)

            
	
              LT1-V57

            	 	
              $               30,103,854.16
                

            	 	
              (3)

            
	
              LT1-P

            	 	
              $                       
                1,000.00

            	 	
              0.00%

            
	
              LT1-R

            	 	
              (4)

            	 	
              (4)

            

    

    
      
        

      

    

    
      	(1)  	
              For
                any Distribution Date (and the related Accrual Period) the interest
                rate
                for the LT1-A Interest shall equal the REMIC 1 Net
                WAC.

            

    

     

    
      	(2)  	
              For
                any Distribution Date (and the related Accrual Period) the interest
                rate
                for each of these REMIC 1 Regular Interests shall be the lesser of
                (i) the
                REMIC Swap Rate and (ii) the product of (a) two multiplied by (b)
                the
                REMIC 1 Net WAC.

            

    

     

    
      	(3)  	
              For
                any Distribution Date (and the related Accrual Period) the interest
                rate
                for each of these REMIC 1 Regular Interests shall be the excess,
                if any,
                of (i) the product of (a) two multiplied by (b) the REMIC 1 Net WAC
                over
                (ii) the REMIC Swap Rate. 

            

    

     

    
      	(4)  	
              The
                LT1-R Interest is the sole residual interest in REMIC 1. It does
                not have
                a principal amount or an interest
                rate.

            

    

     

    On
      each
      Distribution Date, the Trustee shall distribute interest with respect to each
      of
      the REMIC 1 Regular Interests based on the above-described interest
      rates.

     

    On
      each
      Distribution Date, the Trustee shall distribute the principal with respect
      to
      the REMIC 1 Regular Interests in the following order of priority:

     

    (i)
      to
      the Class LT1-A Interest until its principal balance is reduced to zero;
      and

     

    (ii)
      then
      sequentially, to the other REMIC 1 Regular Interests (other than the LT1-P
      Interest) in ascending order of their numerical designation, and, with respect
      to each pair of REMIC 1 Regular Interests having the same numerical designation,
      in equal amounts to each such REMIC 1 Regular Interest, until the principal
      balance of each such REMIC 1 Regular Interest is reduced to zero. 

     

    Realized
      losses shall be allocated among the REMIC 1 Regular Interests in the same manner
      that principal distributions are allocated.

     

    On
      each
      Distribution Date, the Prepayment Penalties collected during the preceding
      calendar month, shall be allocated to the LT1-P Interest, and, on the
      Distribution Date immediately following the expiration of the latest
      Distribution Date upon which a Mortgage Loan would be subject to a Prepayment
      Penalty upon prepayment, principal shall be distributed in respect of the LT1-P
      Interest until its principal balance is reduced to zero.

     

    
      
        
        

      

      
        S-III-5

        
          

        

      

      
        
        

      

       

    

    REMIC
      2

     

    The
      following table sets forth the designations, initial principal amounts, and
      interest rates for each interest in REMIC 2, each of which (other than the
      Class
      LT2-R Interest) is hereby designated as a regular interest in REMIC 2 (the
      “REMIC 2 Regular Interests”):

     

    
      	
              REMIC
                2

              Lower
                Tier 

              Designation

            	 	
              REMIC
                2

              Lower
                Tier

              Interest
                Rate

            	 	
              Initial
                

              Principal
                Amount

            	 	
              Corresponding
                Class of Certificate(s)

            
	
              LT2-1-A

            	 	
              (1)

            	 	
              $    
                284,958,500.00 

            	 	
              Class
                1-A

            
	
              LT2-2-A1

            	 	
              (1)

            	 	
              $    
                120,635,000.00 

            	 	
              Class
                2-A1

            
	
              LT2-2-A2

            	 	
              (1)

            	 	
              $      
                32,375,000.00 

            	 	
              Class
                2-A2

            
	
              LT2-2-A3

            	 	
              (1)

            	 	
              $      
                42,065,000.00 

            	 	
              Class
                2-A3

            
	
              LT2-2-A4

            	 	
              (1)

            	 	
              $      
                13,789,000.00 

            	 	
              Class
                2-A4

            
	
              LT2-1-M1

            	 	
              (1)

            	 	
              $      
                18,345,000.00 

            	 	
              Class
                1-M1

            
	
              LT2-2-M1

            	 	
              (1)

            	 	
              $      
                13,446,000.00 

            	 	
              Class
                2-M1

            
	
              LT2-1-M2

            	 	
              (1)

            	 	
              $      
                16,510,500.00 

            	 	
              Class
                1-M2

            
	
              LT2-2-M2

            	 	
              (1)

            	 	
              $      
                12,101,500.00 

            	 	
              Class
                2-M2

            
	
              LT2-1-M3

            	 	
              (1)

            	 	
              $      
                10,599,000.00 

            	 	
              Class
                1-M3

            
	
              LT2-2-M3

            	 	
              (1)

            	 	
              $        
                7,769,000.00 

            	 	
              Class
                2-M3

            
	
              LT2-1-M4

            	 	
              (1)

            	 	
              $        
                8,968,500.00 

            	 	
              Class
                1-M4

            
	
              LT2-2-M4

            	 	
              (1)

            	 	
              $        
                6,574,000.00 

            	 	
              Class
                2-M4

            
	
              LT2-1-M5

            	 	
              (1)

            	 	
              $        
                8,968,500.00 

            	 	
              Class
                1-M5

            
	
              LT2-2-M5

            	 	
              (1)

            	 	
              $        
                6,574,000.00 

            	 	
              Class
                2-M5

            
	
              LT2-1-M6

            	 	
              (1)

            	 	
              $        
                8,153,500.00 

            	 	
              Class
                1-M6

            
	
              LT2-2-M6

            	 	
              (1)

            	 	
              $        
                5,976,000.00 

            	 	
              Class
                2-M6

            
	
              LT2-B-1

            	 	
              (1)

            	 	
              $       14,129,500.00
                

            	 	
              Class
                B-1

            
	
              LT2-B-2

            	 	
              (1)

            	 	
              $       12,010,000.00
                

            	 	
              Class
                B-2

            
	
              LT2-B-3

            	 	
              (1)

            	 	
              $       11,656,500.00
                

            	 	
              Class
                B-3

            
	
              LT2-
                P

            	 	
              (1)

            	 	
              $               
                1,000.00 

            	 	
              Class
                P

            
	
              LT2-Q
                

            	 	
              (1)

            	 	
              $   
                 757,336,627.00 

            	 	
              N/A

            
	
              LT2-SIO

            	 	
              (2)

            	 	
              (2)

            	 	
              N/A

            
	
              LT2-R

            	 	
              (3)

            	 	
              (3)

            	 	
              R

            

    

    
      
        

      

    

    
      	 	
              (1)

            	
              For
                any Distribution Date (and the related Accrual Period) the interest
                rate
                for each of these REMIC 2 Regular Interests is a per annum rate equal
                to
                the weighted average of the interest rates on the REMIC 1 Regular
                Interests for such Distribution Date, provided,
                however, that
                for any Distribution Date on which the Class LT2-SIO Interest is
                entitled
                to a portion of the interest accruals on a REMIC 1 Regular Interest
                having
                an “F” in its designation, as described in footnote (2) below, such
                weighted average shall be computed by first subjecting the rate on
                such
                REMIC 1 Regular Interest to a cap equal to Swap LIBOR for such
                Distribution Date. 

            

      	 	 	 

    

    
      
        	 	
                (2)

              	
                The
                  Class LT2-SIO Interest is an interest only REMIC 2 Regular Interest
                  that
                  does not have a principal balance. For only those Distribution
                  Dates
                  listed in the first column in the table below, the Class LT2-SIO
                  Interest
                  shall be entitled to interest accrued on the REMIC 1 Regular Interests
                  listed in the second column in the table below at a per annum rate
                  equal
                  to the excess, if any, of (i) the interest rate for such REMIC
                  1 Regular
                  Interest for such Distribution Date over (ii) Swap LIBOR for such
                  Distribution Date.

              

      

       

      
        
          
          

        

        
          S-III-6

          
            

          

        

        
          
          

        

      

    

     

    
      	
              Distribution
                Dates

            	
              REMIC
                1 Class Designation

            
	
              1

            	
              LT1-F1

            
	
              1-2

            	
              LT1-F2

            
	
              1-3

            	
              LT1-F3

            
	
              1-4

            	
              LT1-F4

            
	
              1-5

            	
              LT1-F5

            
	
              1-6

            	
              LT1-F6

            
	
              1-7

            	
              LT1-F7

            
	
              1-8

            	
              LT1-F8

            
	
              1-9

            	
              LT1-F9

            
	
              1-10

            	
              LT1-F10

            
	
              1-11

            	
              LT1-F11

            
	
              1-12

            	
              LT1-F12

            
	
              1-13

            	
              LT1-F13

            
	
              1-14

            	
              LT1-F14

            
	
              1-15

            	
              LT1-F15

            
	
              1-16

            	
              LT1-F16

            
	
              1-17

            	
              LT1-F17

            
	
              1-18

            	
              LT1-F18

            
	
              1-19

            	
              LT1-F19

            
	
              1-20

            	
              LT1-F20

            
	
              1-21

            	
              LT1-F21

            
	
              1-22

            	
              LT1-F22

            
	
              1-23

            	
              LT1-F23

            
	
              1-24

            	
              LT1-F24

            
	
              1-25

            	
              LT1-F25

            
	
              1-26

            	
              LT1-F26

            
	
              1-27

            	
              LT1-F27

            
	
              1-18

            	
              LT1-F28

            
	
              1-29

            	
              LT1-F29

            
	
              1-30

            	
              LT1-F30

            
	
              1-31

            	
              LT1-F31

            
	
              1-32

            	
              LT1-F32

            
	
              1-33

            	
              LT1-F33

            
	
              1-34

            	
              LT1-F34

            
	
              1-35

            	
              LT1-F35

            
	
              1-36

            	
              LT1-F36

            
	
              1-37

            	
              LT1-F37

            
	
              1-38

            	
              LT1-F38

            
	
              1-39

            	
              LT1-F39

            
	
              1-40

            	
              LT1-F40

            
	
              1-41

            	
              LT1-F41

            
	
              1-42

            	
              LT1-F42

            
	
              1-43

            	
              LT1-F43

            

    

     

    
      
        
        

      

      
        S-III-7

        
          

        

      

      
        
        

      

    

     

    
      	
              1-44

            	
              LT1-F44

            
	
              1-45

            	
              LT1-F45

            
	
              1-46

            	
              LT1-F46

            
	
              1-47

            	
              LT1-F47

            
	
              1-48

            	
              LT1-F48

            
	
              1-49

            	
              LT1-F49

            
	
              1-50

            	
              LT1-F50

            
	
              1-51

            	
              LT1-F51

            
	
              1-52

            	
              LT1-F52

            
	
              1-53

            	
              LT1-F53

            
	
              1-54

            	
              LT1-F54

            
	
              1-55

            	
              LT1-F55

            
	
              1-56

            	
              LT1-F56

            
	
              1-57

            	
              LT1-F57

            

    

    

     

    
      	 	
              (3)

            	
              The
                Class LT2-R interest is the sole residual interests in REMIC 2. It
                does
                not have an interest rate or a principal
                balance.

            

    

     

    On
      each
      Distribution Date, interest shall be distributed on the REMIC 2 Regular
      Interests based on the above-described interest rates,
      provided, however,
      that
      interest that accrues on the LT2-Q Interest shall be deferred in an amount
      equal
      to one-half of the increase, if any, in the Overcollateralization Amount for
      such Distribution Date. Any interest so deferred shall itself bear interest
      at
      the interest rate for the LT2-Q Interest. An amount equal to the interest so
      deferred shall be distributed as additional principal on the other REMIC 2
      Regular Interests that have a principal balance in the manner described under
      priority first
      below.

     

    On
      each
      Distribution Date principal shall be distributed, and Realized Losses shall
      be
      allocated, among the REMIC 2 Regular Interests in the following order of
      priority:

     

    First,
      to each
      REMIC 2 Regular Interest for which there is a Corresponding Class of
      Certificates until the principal balance of each such REMIC 2 Regular Interest
      equals one-half of the Class Certificate Balance of the Corresponding Class
      of
      Certificates immediately after such Distribution Date; and

     

    Second,
      to the
      Class LT2-Q Interests, any remaining amounts.

     

    On
      each
      Distribution Date, all amounts distributable with respect to the LT1-P Interest
      in REMIC 1 shall be passed through on the LT2-P Interest in REMIC
      2.

     

    REMIC
      3

    

    The
      following table sets forth the designations, initial principal amounts, and
      interest rates for each interest in REMIC 3, each of which (other than the
      Class
      UT-R Interest) is hereby designated as a regular interest in REMIC 3(the “REMIC
      3 Regular Interests”): 

     

    
      
        
        

      

      
        S-III-8

        
          

        

      

      
        
        

      

       

    

    
      	
              REMIC
                3

              Designation

            	 	
              REMIC
                3

              Interest
                Rate

            	 	
              Initial
                Principal Amount

            	 	
              Corresponding
                Class of Certificates

            
	
              UT-1-A

            	 	
              (1)

            	 	
              $         
                569,917,000.00 

            	 	
              Class
                1-A

            
	
              UT-A1

            	 	
              (1)

            	 	
              $         
                241,270,000.00 

            	 	
              Class
                2-A1

            
	
              UT-2-A2

            	 	
              (1)

            	 	
              $           
                64,750,000.00 

            	 	
              Class
                2-A2

            
	
              UT-2-A3

            	 	
              (1)

            	 	
              $           
                84,130,000.00 

            	 	
              Class
                2-A3

            
	
              UT-2-A4

            	 	
              (1)

            	 	
              $           
                27,578,000.00 

            	 	
              Class
                2-A4

            
	
              UT-1-M1

            	 	
              (1)

            	 	
              $           
                36,690,000.00 

            	 	
              Class
                1-M1

            
	
              UT-2-M1

            	 	
              (1)

            	 	
              $           
                26,892,000.00 

            	 	
              Class
                2-M1

            
	
              UT-1-M2

            	 	
              (1)

            	 	
              $           
                33,021,000.00 

            	 	
              Class
                1-M2

            
	
              UT-2-M2

            	 	
              (1)

            	 	
              $           
                24,203,000.00 

            	 	
              Class
                2-M2

            
	
              UT-1-M3

            	 	
              (1)

            	 	
              $           
                21,198,000.00 

            	 	
              Class
                1-M3

            
	
              UT-2-M3

            	 	
              (1)

            	 	
              $           
                15,538,000.00 

            	 	
              Class
                2-M3

            
	
              UT-1-M4

            	 	
              (1)

            	 	
              $           
                17,937,000.00 

            	 	
              Class
                1-M4

            
	
              UT-2-M4

            	 	
              (1)

            	 	
              $           
                13,148,000.00 

            	 	
              Class
                2-M4

            
	
              UT-1-M5

            	 	
              (1)

            	 	
              $           
                17,937,000.00 

            	 	
              Class
                1-M5

            
	
              UT-2-M5

            	 	
              (1)

            	 	
              $           
                13,148,000.00 

            	 	
              Class
                2-M5

            
	
              UT-1-M6

            	 	
              (1)

            	 	
              $           
                16,307,000.00 

            	 	
              Class
                1-M6

            
	
              UT-2-M6

            	 	
              (1)

            	 	
              $           
                11,952,000.00 

            	 	
              Class
                2-M6

            
	
              UT-B-1

            	 	
              (1)

            	 	
              $           
                28,259,000.00 

            	 	
              Class
                B-1

            
	
              UT-B-2

            	 	
              (1)

            	 	
              $           
                24,020,000.00 

            	 	
              Class
                B-2

            
	
              UT-B-3

            	 	
              (1)

            	 	
              $           
                23,313,000.00 

            	 	
              Class
                B-3

            
	
              UT-P

            	 	
              0.00%

            	 	
              $                    
                1,000.00 

            	 	
              Class
                P

            
	
              UT-SIO

            	 	
              (2)

            	 	
              (2)

            	 	
              Class
                O/C

            
	
              UT-O/C

            	 	
              N/A

            	 	
              $          101,732,627.00
                

            	 	
              Class
                O/C

            
	
              UT-R

            	 	
              (4)

            	 	
              (4)

            	 	
              R

            

    

     

    
      	(1)  	
              For
                any Distribution Date, the interest rate for each of these REMIC
                3 Regular
                Interests shall equal the Pass-Through Rate for the Corresponding
                Class of
                Certificates, provided, however, that references in the definition
                of
                Pass-Through Rate to the applicable Net WAC Cap shall be deemed,
                for
                purposes of the REMIC Provisions, to be references to a per annum
                rate
                equal to the product of (i) the REMIC 2 Net WAC multiplied by (ii)
                the
                quotient of 30 divided by the actual number of days in the related
                Accrual
                Period. If, on any Distribution Date, the interest rate on any of
                these
                REMIC 3 Regular Interests exceeds the Pass-Through Rate on the
                Corresponding Class of Certificates, then the excess interest so
                accrued
                shall be treated as having been paid to the beneficial owner of the
                affected Class of Certificates and then paid by such beneficial owner
                to
                the Supplemental Interest Trust to the extent of any Class SIO Shortfalls.
                \

            

    

     

    
      	(2)  	
              The
                UT-SIO Interest is any interest only interest; it does not have a
                principal amount. For each Distribution Date, the UT-SIO Interest
                shall be
                entitled to all amounts distributed on such Distribution Date with
                respect
                to the LT2-SIO Interest. Ownership of the UT-SIO shall be evidenced
                by the
                Class OC Certificate. 

            

    

     

    
      	(3)  	
              For
                purposes of the REMIC Provisions, the UT-OC Interest comprises two
                components, a principal only component and an interest only component.
                The
                principal amount of the principal only component equals the
                Overcollateralization Amount on the Closing Date. The interest only
                component has a notional amount equal at al times to the sum of the
                principal amounts of the REMIC 2 Regular Interests (other than the
                LT2-P
                and LT2-SIO Interests). For each Distribution Date (and the related
                Accrual Period), the UT-OC Interest shall accrue interest at a per
                annum
                rate equal to the excess, if any, of (i) the REMIC 2 Net WAC over
                (ii) the
                Adjusted Net Rate. Interest accrued on the UT-OC Interest during
                each
                Accrual Period shall be deferred to the extent it is applied to increase
                the Overcollateralization Amount for the related Distribution Date.
                Any
                interest so deferred shall not itself bear interest. Ownership of
                the
                UT-OC Interest shall be evidenced by the Class OC Certificate.
                

            

    

     

    
      
        
        

      

      
        S-III-9

        
          

        

      

      
        
        

      

    

     

    
      	(4)  	
              The
                UT-R Interest is the sole residual interest in the Upper-Tier REMIC.
                It
                does not have an interest rate or a principal balance. The Class
                R
                Certificate evidences ownership of the LT1-R, LT2-R, and UT-R
                Interests.

            

    

     

    For
      any Distribution Date, distributions shall be made and Realized Losses shall
      be
      allocated among the REMIC 3 Regular Interests in the same manner in which such
      amounts are allocated among the Corresponding Classes of Certificates as
      provided in this Agreement.

     

     

    
      
        
        

      

      
        S-III-10

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

    FORM
      OF SENIOR CERTIFICATES

     

    

    
      
        
        

      

      
        1-A

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    FORM
      OF SUBORDINATE CERTIFICATES

     

    

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      C

     

    FORM
      OF INITIAL CERTIFICATION OF TRUSTEE

     

    August
      __, 2007

     

    Deutsche
      Bank National Trust Company, as Trustee

    1761
      East
      St. Andrew Place

    Santa
      Ana, California 92705

    

    Saxon
      Asset Securities Company

    4860
      Cox
      Road

    Glen
      Allen, Virginia 23060

    Attention:
      President

     

    SAXON
      ASSET SECURITIES COMPANY

    MORTGAGE
      LOAN ASSET BACKED

    SECURITIES,
      SERIES 2007-3

     

    Ladies
      and Gentlemen:

     

    In
      accordance with Section 2.3(a) of the Standard Terms of Custody Agreement (June
      2000 Edition) (the “Standard Terms”) incorporated into the Custody Agreement,
      dated as of July 1, 2007 (together with the Standard Terms, the “Custody
      Agreement”), between Deutsche Bank National Trust Company, as trustee (the
“Trustee”), and Deutsche Bank National Trust Company, as custodian (the
“Custodian”), the Custodian hereby certifies that it has received and is holding
      a Mortgage File with respect to each Mortgage Loan (other than any Mortgage
      Loan
      listed on the schedule of exceptions attached hereto) listed on Schedule I
      (a
      copy of which is attached hereto) to the Custody Agreement.

     

    In
      connection therewith, the Custodian has examined each Mortgage File to confirm
      that:

     

    (i)  no
      Note,
      on the face or the reverse side(s) thereof, contains evidence, except for the
      endorsement to the Custodian, of any unsatisfied claims, liens, security
      interests, encumbrances or restrictions on transfer;

     

    (ii)  the
      Note
      bears an endorsement that appears to be an original either in blank or to the
      Custodian, as set forth substantially as follows “Without Recourse, pay to the
      order of Bankers Trust Company or Deutsche Bank National Trust Company, as
      Custodian or Trustee”;

     

    (iii)  all
      documents required to be contained in the Mortgage File are in its
      possession;

     

    (iv)  such
      documents have been reviewed by it and appear to relate to such Mortgage Loan
      and are not torn or mutilated; and

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

       

    

    (v)  based
      on
      its examination and only as to the foregoing documents, the mortgage information
      set forth on the Mortgage Loan Schedule, with respect to the loan number,
      mortgagor name, property address (including city, state and zip code),
      origination date and maturity date, accurately reflects information set forth
      in
      the Mortgage File and each balance listed as the “Original Balance” on Schedule
      I to the Custody Agreement is identical to the original principal amount of
      the
      corresponding Note (or, if applicable, the amount set forth in a lost note
      affidavit).

     

    The
      Custodian further certifies that the Custodian’s review of each Mortgage File
      included each of the procedures set forth in Section 2.3(a) of the Standard
      Terms.

     

    The
      Custodian has not (1) inspected, reviewed or examined any such documents,
      instruments, securities or other papers to determine that they or the signatures
      thereon are genuine, enforceable, or appropriate for the represented purpose,
      any such documents, instruments, securities or other papers have actually been
      recorded or that any document that appears to be an original is in fact an
      original, or (2) determined whether any Mortgage File should include any surety
      or guaranty, Note Assumption Rider, buydown agreement, assumption agreement,
      modification agreement, written assurance or substitution
      agreement.

     

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the Custody Agreement.

     

    DEUTSCHE
      BANK NATIONAL TRUST COMPANY, as Custodian

     

    By:_________________________________________________

    Name:_______________________________________________

    Title: _______________________________________________

    

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      D

     

    FORM
      OF FINAL CERTIFICATION OF TRUSTEE

     

    ____
      __,
      ____

     

     

    Deutsche
      Bank National Trust Company, as Trustee

     

    1761
      East
      St. Andrew Place

    Santa
      Ana, California 92705

     

    Saxon
      Asset Securities Company

    4860
      Cox
      Road

    Glen
      Allen, Virginia 23060

    Attention:
      President

     

    Saxon
      Mortgage Services, Inc.

    4708
      Mercantile Drive

    Fort
      Worth, Texas 76137 

    Attention:
      President

    

     

    SAXON
      ASSET SECURITIES COMPANY

    MORTGAGE
      LOAN ASSET BACKED

    SECURITIES,
      SERIES 2007-3

     

    Ladies
      and Gentlemen:

     

    In
      accordance with (i) Section 2.02 of the Pooling and Servicing Agreement among
      Saxon Asset Securities Company, as depositor, Saxon Mortgage Services, Inc.,
      as
      servicer and Deutsche Bank National Trust Company, as trustee (the “Trustee”)
      and (ii) Section 2.3(a) of the Standard Terms of Custody Agreement (June 2000
      Edition) (the “Standard Terms”) incorporated into the Custody Agreement, dated
      as of July 1, 2007 (together with the Standard Terms, the “Custody Agreement”),
      between the Trustee, and Deutsche Bank National Trust Company, as custodian
      (the
“Custodian”), the Custodian hereby certifies that it has received and is holding
      a Mortgage File with respect to each Mortgage Loan (other than any Mortgage
      Loan
      listed on the schedule of exceptions attached hereto) listed on Schedule I
      (a
      copy of which is attached hereto) to the Custody Agreement.

     

    In
      connection therewith, the Custodian has examined each Mortgage File to confirm
      that:

     

    (vi)  no
      Note,
      on the face or the reverse side(s) thereof, contains evidence, except for the
      endorsement to the Custodian, of any unsatisfied claims, liens, security
      interests, encumbrances or restrictions on transfer;

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

       

    

    (vii)  the
      Note
      bears an endorsement that appears to be an original either in blank or to the
      Custodian, as set forth substantially as follows “Without Recourse, pay to the
      order of Bankers Trust Company or Deutsche Bank National Trust Company, as
      Custodian or Trustee”;

     

    (viii)  all
      documents required to be contained in the Mortgage File are in its
      possession;

     

    (ix)  such
      documents have been reviewed by it and appear to relate to such Mortgage Loan
      and are not torn or mutilated; and

     

    (x)  based
      on
      its examination and only as to the foregoing documents, the mortgage information
      set forth on the Mortgage Loan Schedule, with respect to the loan number,
      mortgagor name, property address (including city, state and zip code),
      origination date and maturity date, accurately reflects information set forth
      in
      the Mortgage File and each balance listed as the “Original Balance” on Schedule
      I to the Custody Agreement is identical to the original principal amount of
      the
      corresponding Note (or, if applicable, the amount set forth in a lost note
      affidavit).

     

    The
      Custodian further certifies that the Custodian’s review of each Mortgage File
      included each of the procedures set forth in Section 2.3(a) of the Standard
      Terms.

     

    The
      Custodian has not (1) inspected, reviewed or examined any such documents,
      instruments, securities or other papers to determine that they or the signatures
      thereon are genuine, enforceable, or appropriate for the represented purpose,
      any such documents, instruments, securities or other papers have actually been
      recorded or that any document that appears to be an original is in fact an
      original, or (2) determined whether any Mortgage File should include any surety
      or guaranty, Note Assumption Rider, buydown agreement, assumption agreement,
      modification agreement, written assurance or substitution
      agreement.

     

    Capitalized
      words and phrases used herein shall have the respective meanings assigned to
      them in the Custody Agreement.

     

    DEUTSCHE
      BANK NATIONAL TRUST COMPANY, as Custodian

     

    
      By:_________________________________________________

      Name:_______________________________________________

      Title: _______________________________________________

    

     

     

    

     

    

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      E

     

    U.S.
      PERSON AFFIDAVIT

    PURSUANT
      TO SECTIONS 860D(a)(6)(A) and 860E(e)(4)

    OF
      THE INTERNAL REVENUE CODE OF 1986, AS AMENDED

    

    Re:
      Saxon
      Asset Securities Company 

    Series
      2007-3 Trust (the “Trust”) 

    Mortgage
      Loan Asset Backed Certificates, Class R 

    

    STATE
      OF
      [                                     
 ]

    ss:

    CITY
      OF
      [                                      
]

    

    Under
      penalties of perjury, I, the undersigned, declare that to the best of my
      knowledge and belief, the following representations are true, correct and
      complete: 

     

    1.  I
      am a
      duly authorized officer of
      [                          
], a
      [                        
 ] (the “Transferee”) and on behalf of which I have the authority to make
      this affidavit.

     

    2.  The
      Transferee is acquiring all or a portion of the Class R Certificates (the
“Residual Certificates”), which represent a residual interest in one or more
      real estate mortgage investment conduits (each, a “REMIC”) for which elections
      are to be made under Section 860D of the Internal Revenue Code of 1986, as
      amended (the “Code”). 

     

    3.  The
      Transferee either is (i) a citizen or resident of the United States, (ii) a
      domestic partnership or corporation, (iii) an estate or trust that is subject
      to
      United States federal income tax regardless of the source of its income, or
      (iv)
      a foreign person who would be subject to United States income taxation on a
      net
      basis on income derived from the Residual Certificates (a “U.S.
      Person”).

     

    4.  The
      Transferee is not a “Disqualified Organization” (as defined below), and the
      Transferee is not acquiring a Residual Certificate for the account of, or as
      agent or nominee of, or with a view to the transfer of direct or indirect record
      or beneficial ownership to, a Disqualified Organization. For the purposes
      hereof, a Disqualified Organization is any of the following: (i) the United
      States, any state or political subdivision thereof, any foreign government,
      any
      international organization, or any agency or instrumentality of any of the
      foregoing; (ii) any organization (other than a farmer’s cooperative as defined
      in section 521 of the Code) that is exempt from federal income taxation
      (including taxation under the unrelated business taxable income provisions
      of
      the Code); (iii) any rural telephone or electrical service cooperative described
      in section 1381(a)(2)(C) of the Code; or (iv) any other entity so designated
      by
      Treasury rulings or regulations promulgated or otherwise in effect as of the
      date hereof. In addition, a corporation will not be treated as an
      instrumentality of the United States or of any state or political subdivision
      thereof if all its activities are subject to tax and, with the exception of
      the
      Federal Home Loan Mortgage Corporation, a majority of its board of directors
      is
      not selected by such governmental unit.

     

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

       

    

    5.  The
      Transferee agrees to consent to any amendment of the Pooling and Servicing
      Agreement that shall be deemed necessary by Saxon (upon the advice of counsel
      to
      Saxon) to constitute a reasonable arrangement to ensure that no interest in
      a
      Residual Certificate will be owned directly or indirectly by a Disqualified
      Organization. 

     

    6.  The
      Transferee acknowledges that Section 860E(e) of the Code would impose a
      substantial tax on the transferor or, in certain circumstances, on an agent
      for
      the Transferee, with respect to any transfer of any interest in any Residual
      Certificate to a Disqualified Organization. 

     

    Capitalized
      terms used and not otherwise defined herein shall have the meanings assigned
      to
      them in the Pooling and Servicing Agreement, dated as of July 1, 2007, by and
      among Saxon Asset Securities Company, the Servicer and the Trustee.

     

    IN
      WITNESS WHEREOF, the undersigned has caused this instrument to be executed
      by
      its duly authorized representative as of the [__] day of
      [           ] 200[  
]. 

     

    [NAME
      OF
      TRANSFEROR/TRANSFEREE]

    

    By:
      ______________________

    

    Name:
      ____________________

    

    Title:
      _____________________

    

    Personally
      appeared before me [_____________________], known or proved to me to be the
      same
      person who executed the foregoing instrument and to be a [____________________]
      of the Transferee, and acknowledged to me that he or she executed the same
      as
      his or her free act and deed and as the free act and deed of the Transferee.
      

     

    Subscribed
      and sworn before me this [__] day of
      [                 
] 200[   ]. 

     

    Notary
      Public

    

    My
      commission expires the [____] day of [________] 200[__].

     

    
 

    
      
        
        

      

      
        E-2

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      F

     

    FORM
      OF TRANSFEROR CERTIFICATE

     

    [date]

     

    Saxon
      Asset Securities Company

    4860
      Cox
      Road

     

    Glen
      Allen, Virginia 23060

     

    Deutsche
      Bank National Trust Company 

    1761
      E. St. Andrews Place

    Santa
      Ana, California 92705

    

     

    
      	 	
              Re:
                

            	
              Saxon
                Asset Securities Trust 2007-3, 

            

    

    Mortgage
      Loan Pass-Through Certificates, Series 2007-3  

     

     

    Ladies
      and Gentlemen:

     

    In
      connection with our disposition of the above Certificates we certify that (a)
      we
      have not offered or sold any Certificates to, or solicited offers to buy any
      Certificates from, any person, or otherwise approached or negotiated with any
      person with respect thereto, in a manner that would be deemed, or taken any
      other action which would result in, a violation of Section 5 of the Act, (b)
      to
      the extent we are disposing of a Class ___ Certificate, we have no knowledge
      the
      Transferee is not a Permitted Transferee and (c) no purpose of the proposed
      disposition of a Class ___ Certificate is to impede the assessment or collection
      of tax.

     

    Very
      truly yours,

     

    [NAME
      OF
      TRANSFEROR]

     

    By:
      ______________________________

     

     

     

    

    
      
        
        

      

      
        F-1

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
      G-1

     

    FORM
      OF INVESTMENT LETTER [NON-RULE 144A]

     

    [date]

     

    

    Saxon
      Asset Securities Company

    4860
      Cox
      Road

     

    Glen
      Allen, Virginia 23060

     

    Deutsche
      Bank National Trust Company 

    1761
      E. St. Andrew Place

     

    Santa
      Ana, California 92705

     

    

     

    
      	 	
              Re:
                

            	
              Saxon
                Asset Securities Trust 2007-3, 

            

    

    Mortgage
      Loan Pass-Through Certificates, Series 2007-3 

     

     

    Ladies
      and Gentlemen:

     

    In
      connection with our acquisition of the above-captioned 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 are an
“accredited investor”, as defined in Regulation D under the Act, and 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 Certificates and all matters relating
      thereto or any additional information deemed necessary to our decision to
      purchase the Certificates, (d) we are not an employee benefit plan that is
      subject to the Employee Retirement Income Security Act of 1974, as amended,
      or a
      plan that is subject to Section 4975 of the Internal Revenue Code of 1986,
      as
      amended, nor are we acting on behalf of any such plan or using the assets of
      any
      such plan or arrangement, (e) we are acquiring the Certificates for investment
      for our own account and not with a view to any distribution of such Certificates
      (but without prejudice to our right at all times to sell or otherwise dispose
      of
      the Certificates in accordance with clause (g) below), (f) we have not offered
      or sold any Certificates to, or solicited offers to buy any Certificates from,
      any person, or otherwise approached or negotiated with any person with respect
      thereto, or taken any other action which would result in a violation of Section
      5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
      Certificates unless (1) such sale, transfer or other disposition is made
      pursuant to an effective registration statement under the Act or is exempt
      from
      such registration requirements, and if requested, we will at our expense provide
      an opinion of counsel satisfactory to the addressees of this Certificate that
      such sale, transfer or other disposition may be made 

     

     

    
      
        
        

      

      
        G-1-1

        
          

        

      

      
        
        

      

    

    

    pursuant
      to an exemption from the Act, (2) the purchaser or transferee of such
      Certificate has executed and delivered to you a certificate to substantially
      the
      same effect as this certificate, and (3) the purchaser or transferee has
      otherwise complied with any conditions for transfer set forth in the Pooling
      and
      Servicing Agreement.

     

    Very
      truly yours,

     

    [NAME
      OF TRANSFEREE]

     

    By:                                                    
       

    Authorized
      Officer

     

    

     

     

    
      
        
        

      

      
        G-1-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      G-2

     

    BENEFIT
      PLAN AFFIDAVIT

    

    
      	 	
              Re:

            	
              [Trust
                Information] ERISA-Restricted Certificates and ERISA-Restricted Swap
                Certificates 

            

    

    

    STATE
      OF
      [_________]   )
      

                    )ss:

    COUNTY/CITY
      OF [_______]         
)

     

    Under
      penalties of perjury, I, the undersigned, declare that, to the best of my
      knowledge and belief, the following representations are true, correct, and
      complete.

     

    1. That
      I am
      a duly authorized officer of [Organization], a [State] corporation (the
“Purchaser”), whose taxpayer identification number is [____________], and on
      behalf of which I have the authority to make this affidavit.

    

    2. In
      the
      case of an ERISA-Restricted Certificate, the Purchaser either (x) is not, and
      on
      __________________ [date of transfer] will not be, an employee benefit plan
      or
      other retirement arrangement subject to Section 406 of the Employee Retirement
      Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the
      Internal Revenue Code of 1986, as amended (the “Code”), (collectively, a “Plan”)
      or a person acting on behalf of any such Plan or investing the assets of any
      such Plan to acquire a Certificate; (y) if the Certificate has been the subject
      of an ERISA-Qualifying Underwriting, is an insurance company that is purchasing
      the Certificate with funds contained in an “insurance company general account”
as defined in Section V(e) of Prohibited Transaction Class Exemption (“PTCE”)
      95-60 and the purchase and holding of the Certificate are covered under Sections
      I and III of PTCE 95-60; or (z) herewith delivers to the Trustee an opinion
      of
      counsel (a “Benefit Plan Opinion”) satisfactory to the Trustee, and upon which
      the Trustee, the Servicer and the Depositor shall be entitled to rely, to the
      effect that the purchase or holding of such Certificate by the Investor will
      not
      result in any non-exempt prohibited transactions under Title I of ERISA or
      Section 4975 of the Code and will not subject the Trustee, the Depositor, the
      Servicer or any NIMS Insurer 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 Trust Fund or any of the above
      parties.

     

    3.
       In
      the
      case of an ERISA-Restricted Swap Certificate prior to the termination of the
      Swap Agreement, either (i) the Purchaser is neither a Plan nor a person acting
      on behalf of any such Plan or using the assets of any such Plan to effect such
      transfer or (ii) the acquisition and holding of the ERISA-Restricted Swap
      Certificate are eligible for exemptive relief under Section 408(b)(17) of ERISA
      and Section 4975(d)(20) of the Code, PTCE 84-14, PTCE 90-1, PTCE 91-38, PTCE
      95-60 or PTCE 96-23 or another applicable exemption.

     

    
      
        
        

      

      
        G-2-1

        
          

        

      

      
        
        

      

       

    

    Capitalized
      terms used but not otherwise defined herein shall have the meanings assigned
      to
      such terms in the Pooling and Servicing Agreement, dated as of [__________],
      among
      [__________________].

     

    [NAME
      OF
      PURCHASER]

     

    

     

    By:________________________________

    [TITLE]

     

    

    
      
        
        

      

      
        G-2-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      H

     

    FORM
      OF RULE 144A AGREEMENT-QIB
      CERTIFICATION

     

    SAXON
      ASSET SECURITIES COMPANY

     

    MORTGAGE
      LOAN ASSET BACKED CERTIFICATES, SERIES 2007-3

     

     

    [date]

     

    Deutsche
      Bank National Trust Company, as Trustee

    1761
      East
      St. Andrew Place

    Santa
      Ana, California 92705

    Attention:
      Alice D. Tatusian

     

    Deutsche
      Bank National Trust Company, as Certificate Registrar

    1761
      East
      St. Andrew Place

    Santa
      Ana, California 92705

    Attention:
      Alice D. Tatusian 

    

    Saxon
      Mortgage Services, Inc.

    4708
      Mercantile Drive

    Fort
      Worth, Texas 76137 

    Attention:
      President

    

    Saxon
      Asset Securities Company, as Depositor

    4860
      Cox
      Road

    Glen
      Allen, Virginia 23060

    Attention:
      Ernie Bretana

     

    Ladies
      and Gentlemen:

     

    In
      connection with the purchase on the date hereof of the captioned Certificates
      (the “Purchased Certificates”), the undersigned (the “Transferee”) hereby
      certifies and covenants to the transferor, Saxon, the Servicer, the Certificate
      Registrar, the Trustee and the Trust as follows:

     

    
      	1.  	
              The
                Transferee is a “qualified institutional buyer” as that term is defined in
                Rule 144A (“Rule 144A”) promulgated under the Securities Act of 1933, as
                amended (the “Securities Act”) and has completed the form of certification
                to that effect attached hereto as Annex A. The Transferee is aware
                that
                the sale to it is being made in reliance on Rule
                144A.

            

    

     

    
      	2.  	
              The
                Transferee understands that the Purchased Certificates have not been
                registered under the Securities Act or registered or qualified under
                any
                state securities laws and that no transfer may be made unless the
                Purchased Certificates are registered under the Securities Act and
                under
                applicable state law or unless an exemption from such registration
                is
                available. The Transferee further understands that neither Saxon,
                the
                Servicer, the Certificate Registrar, the Paying Agent, the Calculation
                Agent, the Trustee nor the Trust is under any obligation to register
                the
                Purchased Certificates or make an exemption from such registration
                available.

            

    

     

    
      
        
        

      

      
        H-1

        
          

        

      

      
        
        

      

    

     

    
      	3.  	
              The
                Transferee is acquiring the Purchased Certificates for its own account
                or
                for the account of a “qualified institutional buyer,” and understands that
                such Purchased Certificates may be resold, pledged or transferred
                only (a)
                to a person reasonably believed to be such 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 (b) pursuant
                to
                another exemption from registration under the Securities Act and
                under
                applicable state securities laws. In addition, such transfer may
                be
                subject to additional restrictions, as set forth in Section 5.2 of
                the
                Pooling and Servicing Agreement.

            

    

     

    
      	4.  	
              The
                Transferee has been furnished with all information that it requested
                regarding (a) the Purchased Certificates and distributions thereon
                and (b)
                the Pooling and Servicing Agreement referred to
                below.

            

    

     

    
      	5.  	
              If
                applicable, the Transferee has complied or will comply in all material
                respects with applicable regulatory guidelines relating to the ownership
                of mortgage derivative products.

            

    

     

    All
      capitalized terms used but not otherwise defined herein have the respective
      meanings assigned thereto in the Pooling and Servicing Agreement, dated as
      of
      July 1, 2007, by and among Saxon Asset Securities Company, the Servicer, the
      Certificate Registrar and the Trustee, pursuant to which the Purchased
      Certificates were issued.

     

    IN
      WITNESS WHEREOF, the undersigned has caused this Rule 144A Agreement—QIB
      Certification to be executed by a duly authorized representative this [__]
      day
      of [ ] 200[ ].

     

    [NAME
      OF TRANSFEREE]

    

     

    By:______________________________

    Title:____________________________

     

    

     

     

    
      
        
        

      

      
        H-2

        
          

        

      

      
        
        

      

      
         

      

    

    EXHIBIT
      I

     

    REQUEST
      FOR RELEASE OF DOCUMENTS AND RECEIPT

     

    
      
        

      

    

    Date         
      

     

    [Addressed
      to Trustee

    or,
      if
      applicable, custodian]

     

    In
      connection with the administration of the mortgages held by you as Trustee
      under
      a certain Pooling and Servicing Agreement, dated as of July 1, 2007, among
      Saxon
      Asset Securities Company, as Depositor, Saxon Mortgage Services, Inc., as
      Servicer, and you, as Trustee (the “Pooling and Servicing Agreement”), the
      undersigned Servicer hereby requests a release of the Mortgage File held by
      you
      as Trustee with respect to the following described Mortgage Loan for the reason
      indicated below.

     

    Mortgagor’s
      Name:

     

    Address:

     

    Loan
      No.:

     

    Reason
      for requesting file:

     

    1.  Mortgage
      Loan paid in full. (The Servicer hereby certifies that all amounts received
      in
      connection with the loan have been or will be credited to the Collection Account
      pursuant to the Pooling and Servicing Agreement.)

     

    2.  The
      Mortgage Loan is being foreclosed.

     

    3.  Mortgage
      Loan substituted. (The Servicer hereby certifies that a Qualifying Substitute
      Mortgage Loan has been assigned and delivered to you along with the related
      Mortgage File pursuant to the Pooling and Servicing Agreement.)

     

    4.  Mortgage
      Loan repurchased. (The Servicer hereby certifies that the Purchase Price has
      been credited to the Collection Account pursuant to the Pooling and Servicing
      Agreement.)

     

    5.  Other.
      (Describe)

     

    6.  California
      Mortgage Loan expected to be paid in full.

     

    The
      undersigned acknowledges that the above Mortgage File will be held by the
      undersigned in accordance with the provisions of the Pooling and Servicing
      Agreement and will be returned to you within 10 days of our receipt of the
      Mortgage File, except if the Mortgage Loan has been paid in full, or repurchased
      or substituted for a Qualifying Substitute Mortgage Loan (in which case the
      Mortgage File will be retained by us permanently) and except if the Mortgage
      Loan is being foreclosed or is a California Mortgage Loan specified in #6 above
      (in which case the Mortgage File will be returned when no longer required by
      us
      for such purpose).

     

    
      
        
        

      

      
        I-1

        
          

        

      

      
        
        

      

       

    

    Capitalized
      terms used herein shall have the meanings ascribed to them in the Pooling and
      Servicing Agreement.

     

    _____________________________________

    [Name
      of
      Servicer]

     

    By:__________________________________

    Name:

    Title:
      Servicing Officer

     

     

    
      
        
        

      

      
        I-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      J

     

    [RESERVED]

     

     

    
      
        
        

      

      
        J-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      K

     

    FORM
      OF REMITTANCE AGENCY AGREEMENT

     

    This
      Remittance Agency Agreement, dated as of _____________,
      20__,
      is made by and among, Saxon Asset Securities Company, as buyer (the
“Counterparty”), Saxon Asset Securities Company (“SAXON”) and Deutsche Bank
      National Trust Company (the “Remittance Agent”).

     

    The
      Counterparty hereby appoints the Remittance Agent, and the Remittance Agent
      hereby accepts its appointment as agent of the Counterparty in connection with
      the receipt of $[  ]
      (the
“Remitted Amount”) in connection with the sale of mortgage-backed securities by
      Saxon Asset Securities Trust, Series 2007-3 in immediately available funds
      on
      the date hereof. The Counterparty delivers herewith to the Remittance Agent,
      in
      escrow pending wire transfer of the Remitted Amount as provided herein, a
      security release certification (the “Security Release Certification”)
      referencing the above-mentioned Saxon Asset Securities Trust, Series 2007-3.
      Upon receipt by the Remittance Agent of the Remitted Amount on the
      Counterparty’s behalf, the Counterparty hereby authorizes the Remittance Agent
      to release the Counterparty’s right, title, interest or claim of any kind with
      respect to the Mortgage Loans and the related collateral and assets identified
      in the Security Release Certification by delivering the Security Release
      Certification to SAXON and such other parties as SAXON may
      designate.

     

    The
      Remittance Agent shall wire the Remitted Amounts promptly as reasonably possible
      pursuant to the Counterparty’s wiring instructions set forth below:

     

    [                                                    
      ]

     

    Bank:
      [                                  
]

    ABA:
      [                                  
]

    Acct:
      [                            
       ] 

    Re:
      Saxon
      Mortgage Services, Inc.

    Attn:
      [                                   
]

     

    In
      no
      event shall the Remitted Amount be remitted to SAXON, Saxon Mortgage Services,
      Inc. or any party other than the Counterparty.

     

    The
      parties agree that if for reasons not arising from the Remittance Agent’s
      negligence or willful misconduct, the Remittance Agent is unable to wire the
      Remitted Amount, then the Remittance Agent shall incur no liability for any
      reasonable delay; provided,
      that
      the Remittance Agent shall make commercially reasonable efforts to invest such
      funds on the Counterparty’s behalf, and shall remit the Remitted Amount together
      with any investment earnings thereof as soon as possible thereafter, and in
      any
      event, within 1 Business Day.

     

    In
      consideration of the execution and delivery of this Remittance Agency Agreement
      by the Counterparty, SAXON hereby represents and warrants to the Counterparty
      that the Remitted Amount includes the total amount to which the Counterparty
      is
      entitled to receive pursuant to the terms of any and all existing agreements
      between the Counterparty and SAXON prior to delivering the release set forth
      in
      the Security Release Certification (such total amount, the “Required Amount”).
      In the event that upon final audit by the Counterparty the Remitted Amount
      is
      determined to be less than the Required Amount, SAXON shall pay the difference
      between the Remitted Amount and the Required Amount to the Counterparty in
      immediately available funds within two Business Days following notice
      thereof.

     

    
      
        
        

      

      
        K-1

        
          

        

      

      
        
        

      

       

    

    IN
      WITNESS WHEREOF, the Remittance Agent, the Counterparty and SAXON have caused
      this Remittance Agency Agreement to be executed and delivered by its duly
      authorized officer as of the date first set forth above.

     

    DEUTSCHE
      BANK NATIONAL TRUST COMPANY, as Remittance Agent

     

    By____________________________

    Name:_________________________

    Title:__________________________

    Telephone:
      _____________________

     

    By____________________________

    Name:_________________________

    Title:__________________________

    Telephone:
      _____________________

     

    

     

    [      ]

    as
      Counterparty

     

    By____________________________

    Name:_________________________

    Title:__________________________

    Telephone:
      _____________________

     

    

     

    SAXON
      ASSET SECURITIES COMPANY

     

    By____________________________

    Name:
      _________________________

    Title:
      __________________________

    Telephone:
      _____________________

     

     

     

     

    
      
        
        

      

      
        K-2

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      L

     

    FORM
      OF SECURITY RELEASE CERTIFICATION

     

    Definitions.
      As used
      in this Security Release Certification, the term “Remittance Agency Agreement”
shall mean the Remittance Agency Agreement, dated as of _____________,
      20__,
      among the undersigned financial institution (the “Counterparty”),
      Saxon
      Asset
      Securities Company (“SAXON”), and Deutsche Bank National Trust Company (the
“Remittance Agent”) relating to Saxon Asset Securities Trust 2007-3. The term
“Pooling and Servicing Agreement” shall mean the Pooling and Servicing Agreement
      among Saxon Asset Securities Company (“Saxon”), Saxon Mortgage Services, Inc.
      (“Saxon”), as Servicer, and the Trustee named therein relating to the said Saxon
      Asset Securities Trust.

     

    Release.
      Simultaneously with receipt by wire transfer of the Remitted Amount as defined
      in the Remittance Agency Agreement, the Counterparty hereby, without further
      act, releases any and all right, title, interest, or security interest in the
      Mortgage Loans identified in the Pooling and Servicing Agreement, together
      with
      all of the Counterparty’s rights and interests in and to the related loan files,
      rights, assets of any kind, and proceeds thereof, related to the Mortgage Loans.
      Until payment for such Mortgage Loans is received by the Remittance Agent,
      the
      Counterparty’s aforesaid ownership interest therein will remain in full force
      and effect.

     

    The
      Counterparty agrees that upon receipt by the Remittance Agent of the Remitted
      Amount it shall execute and deliver to SFM and such other parties as SFM may
      designate such further release documents, and file with the appropriate filing
      officials, as required, any and all documents appropriate to further evidence
      such release and to reflect such release in appropriate public records.

     

    IN
      WITNESS WHEREOF, the Counterparty has caused this Security Release Certification
      to be executed and delivered by its duly authorized officer as of the date
      first
      set forth above.

     

    [                                                               
       ]

     

    
      By____________________________

      Name:
        _________________________

      Title:
        __________________________

      Telephone:
        _____________________
    

    

     

     

    
      
        
        

      

      
        L-1

        
          

        

      

      
        
        

      

    

     

    

    EXHIBIT
      M-1

    RESERVED

     

    

     

     

     

    
      
        
        

      

      
        M-1-1

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      M-2

    RESERVED

    

     

     

     

    
      
        
        

      

      
        M-2-1

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      N

    [RESERVED]

    

    

     

    

     

     

     

    
      
        
        

      

      
        N-1

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      O

     

    FORM
      CERTIFICATION TO BE PROVIDED 

    TO
      THE DEPOSITOR BY THE TRUSTEE

    

    

    Re:
      Saxon
      Asset Securities Trust 2007-3

    

    I,
      [identify the certifying individual], a [title] of Deutsche Bank National Trust
      Company, as Trustee, hereby certify to Saxon Asset Securities Company (the
      “Depositor”), and its officers, directors and affiliates, and with the knowledge
      and intent that they will reply upon this certification that:

    

    1.  [I
      have
      reviewed the annual report on Form 10-K (including the exhibits provided by
      the
      Depositor to the Trustee for attachment thereto) for the fiscal year [____],
      and
      all reports on Form 10-D containing distribution reports filed in respect of
      periods included in the year covered by that annual report, of the Depositor,
      relating to the above-referenced trust;]

     

    2.  [Based
      on
      my actual knowledge, without independent investigation or inquiry, the
      information provided by the Servicer in these distribution reports prepared
      by
      the Trustee, taken as a whole, does not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the statements
      made, in light of the circumstances under which such statements were made not
      misleading as of the last day of the period covered by that annual report;
      and]

     

    3.  [Based
      on
      my knowledge, the distribution information required to be provided by the
      trustee under the pooling and servicing agreement is included in these
      distribution reports.]

     

    

    Date: _________________________________

    Deutsche
      Bank National Trust Company,

    as
      Trustee

    

    

    By:
      ____________________________________

    [Signature]

    [Title]

    

    

     

     

    
      
        
        

      

      
        O-1

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      P

    

    FORM
      CERTIFICATION TO BE 

    PROVIDED
      TO THE DEPOSITOR BY THE SERVICER

    

    

    Re:
      Saxon
      Asset Securities Trust 2007-3

    

    I,
      [identify the certifying individual], certify to Saxon Asset Securities Company
      (the “Depositor”), and its officers, directors and affiliates, and with the
      knowledge and intent that they will rely upon this certification,
      that:

    

    1.  [I
      have
      reviewed the servicing reports contained in the annual report on Form 10-K
      for
      the fiscal year [___], and the servicing reports contained in all reports on
      Form 10-D containing such reports filed in respect of periods included in the
      year covered by that annual report, of the Depositor relating to the
      above-referenced trust;]

     

    2.  [Based
      on
      my knowledge, the information in these reports, taken as a whole, does not
      contain any untrue statement of a material fact or omit to state a material
      fact
      necessary to make the statements made in light of the circumstances under which
      such statements were made, not misleading as of the last day of the period
      covered by that annual report;]

     

    3.  [Based
      on
      my knowledge, the servicing information required to be provided to the trustee
      by the servicer under the pooling and servicing agreement is included in these
      reports;]

     

    4.  [I
      am
      responsible for reviewing the activities performed by the servicer under the
      pooling and servicing agreement and based upon the review required under the
      pooling and servicing agreement, and except as disclosed in the report, the
      servicer has fulfilled its obligations under the pooling and servicing
      agreement; and]

     

    5.  [I
      have
      disclosed to the Depositor’s certified public accountants all significant
      deficiencies relating to the servicer’s compliance with the minimum servicing
      standards in accordance with a review conducted in compliance with the Uniform
      Single Attestation Program for Mortgage Bankers or similar standard as set
      forth
      in the pooling and servicing agreement.]

     

    

    _____________________________

    _____________________________

    [Signature]

    [Title]

    Date:

     

    

    

    

     

     

    
      
        
        

      

      
        P-1

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      Q

    

    INTEREST
      RATE SWAP AGREEMENT

    

    

     

    
      
        
        

      

      
        Q-1

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
      R

     

    [RESERVED]

    

    

     

     

    
      
        
        

      

      
        R-1

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      S

    

    FORM
      10-D, FORM 8-K AND FORM 10-K

    REPORTING
      RESPONSIBILITY

    

    As
      to
      each item described below, the entity indicated as the Responsible Entity shall
      be primarily responsible for reporting the information to the Trustee pursuant
      to Section 8.13(b). If the Trustee is indicated below as the Responsible Entity
      as to any item, then the Trustee is primarily responsible for obtaining that
      information.

    

    Under
      Item 1 of Form 10-D: a) items marked “4.5 statement” are required to be included
      in the periodic Distribution Date statement under Section 4.5 of the Pooling
      and
      Servicing Agreement, provided by the Trustee based on information received
      from
      the Servicer; and b) items marked “Form 10-D report” are required to be in the
      Form 10-D report but not the 4.5 statement, provided by the party indicated.
      Information under all other Items of Form 10-D is to be included in the Form
      10-D report.

    

    
      	
              Form

            	 	
              Item

            	 	
              Description

            	 	
              Responsible
                Entity

            
	
              10-D

            	 	
              1

            	 	
              Distribution
                and Pool Performance Information

            	 	 
	 	 	 	 	
              Item
                1121(a) - Distribution and Pool Performance
                Information

            	 	 
	 	 	 	 	
              (1) Any
                applicable record dates, accrual dates, determination dates for
                calculating payments and actual payment dates for the payment
                period.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (2) Cash
                flows received and the sources thereof for payments, fees and
                expenses.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (3) Calculated
                amounts and distribution of the flow of funds for the period itemized
                by
                type and priority of payment, including:

            	 	
              4.5
                statement

            
	 	 	 	 	
              (i) Fees
                or expenses accrued and paid, with an identification of the general
                purpose of such fees and the party receiving such fees or
                expenses.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (ii) Payments
                accrued or paid with respect to enhancement or other support identified
                in
                Item 1114 of Regulation AB (such as insurance premiums or other
                enhancement maintenance fees), with an identification of the general
                purpose of such payments and the party receiving such
                payments.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (iii) Principal,
                interest and other payments accrued and paid on the asset-backed
                securities by type and by class or series and any principal or interest
                shortfalls or carryovers.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (iv) The
                amount of excess cash flow or excess spread and the disposition of
                excess
                cash flow.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (4) Beginning
                and ending principal balances of the asset-backed
                securities.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (5) Interest
                rates applicable to the pool assets and the asset-backed securities,
                as
                applicable. Consider providing interest rate information for pool
                assets
                in appropriate distributional groups or incremental
                ranges.

            	 	
              4.5
                statement

            

    

     

    
      
        
        

      

      
        S-1

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 	 	
              (6) Beginning
                and ending balances of transaction accounts, such as reserve accounts,
                and
                material account activity during the period.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (7) Any
                amounts drawn on any credit enhancement or other support identified
                in
                Item 1114 of Regulation AB, as applicable, and the amount of coverage
                remaining under any such enhancement, if known and
                applicable.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (8) Number
                and amount of pool assets at the beginning and ending of each period,
                and
                updated pool composition information, such as weighted average coupon,
                weighted average life, weighted average remaining term, pool factors
                and
                prepayment amounts.

            	 	
              4.5
                statement

               

              Updated
                pool composition information filed to be as specified by Depositor
                or
                Servicer from time to time.

            
	 	 	 	 	
              (9) Delinquency
                and loss information for the period.

               

              In
                addition, describe any material changes to the information specified
                in
                Item 1100(b)(5) of Regulation AB regarding the pool
                assets.

            	 	
              4.5
                statement

               

              Form
                10-D report; Depositor or Servicer

            
	 	 	 	 	
              (10) Information
                on the amount, terms and general purpose of any advances made or
                reimbursed during the period, including the general use of funds
                advanced
                and the general source of funds for
                reimbursements.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (11) 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.

            	 	
              Form
                10-D report; Servicer

            
	 	 	 	 	
              (12) Material
                breaches of pool asset representations or warranties or transaction
                covenants.

            	 	
              Form
                10-D report; Servicer

            
	 	 	 	 	
              (13) Information
                on ratio, coverage or other tests used for determining any early
                amortization, liquidation or other performance trigger and whether
                the
                trigger was met.

            	 	
              4.5
                statement

            
	 	 	 	 	
              (14) Information
                regarding any new issuance of asset-backed securities backed by the
                same
                asset pool, [information regarding] 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
                or
                revolving 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. Disclose 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.

            	 	
              Form
                10-D report: Depositor,
                Servicer

            

    

     

    
      
        
        

      

      
        S-2

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              2

            	 	
              Legal
                Proceedings

            	 	 
	 	 	 	 	
              Item
                1117 - Legal proceedings pending against the following entities,
                or their
                respective property, that is material to Certificateholders, including
                proceedings known to be contemplated by governmental
                authorities:

              Seller

              Depositor

              Trustee

              Issuing
                entity

              Servicer

              Originator

              Custodian

            	 	
               

               

               

               

              Seller

              Depositor

              Trustee

              Issuing
                Entity

              Servicer

              Originator

              Custodian

            
	 	 	
              3

            	 	
              Sales
                of Securities and Use of Proceeds

            	 	 
	 	 	 	 	
              Information
                from Item 2(a) of Part II of Form 10-Q:

               

              With
                respect to any sale of securities by the sponsor, depositor or issuing
                entity, that are backed by the same asset pool or are otherwise issued
                by
                the issuing entity, whether or not registered, provide the sales
                and use
                of proceeds information in Item 701 of Regulation S-K. Pricing information
                can be omitted if securities were not registered.

            	 	
               

               

              Depositor
                or Servicer

            
	 	 	
              4

            	 	
              Defaults
                Upon Senior Securities

            	 	 
	 	 	 	 	
              Information
                form Item 3 of Part II of Form 10-Q:

               

              Report
                the occurrence of any Event of Default (after expiration of any grace
                period and provision of any required notice)

            	 	
               

               

              N/A

            
	 	 	
              5

            	 	
              Submission
                of Matters to a Vote of Security Holders

            	 	 
	 	 	 	 	
              Information
                from Item 4 of Part II of Form 10-Q

            	 	
              Trustee

            
	 	 	
              6

            	 	
              Significant
                Obligors of Pool Assets

            	 	 
	 	 	 	 	
              Item
                1112(b) - Significant Obligor Financial
                Information*

               

              *This
                information need only be reported on the Form 10-D for the distribution
                period in which updated information is required pursuant to the
                Item

            	 	 
	 	 	
              7

            	 	
              Significant
                Enhancement Provider Information

            	 	 
	 	 	 	 	
              Item
                1114(b)(2) - Credit Enhancement Provider Financial
                Information*

               

              Determining
                applicable disclosure threshold

               

              Obtaining
                required financial information or effecting incorporation by
                reference

            	 	
               

               

               

              N/A

               

              N/A

            

    

     

    
      
        
        

      

      
        S-3

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 	 	
              Item
                1115(b) - Derivative Counterparty Financial
                Information*

               

              Determining
                current maximum probable exposure

               

              Determining
                current significance percentage

               

              Obtaining
                required financial information or effecting incorporation by
                reference

            	 	
               

               

               

              [TBD]

               

              [TBD]

               

              Depositor
                

            
	 	 	 	 	
              *This
                information need only be reported on the Form 10-D for the distribution
                period in which updated information is required pursuant to the
                Items.

            	 	 
	 	 	
              8

            	 	
              Other
                Information

            	 	 
	 	 	 	 	
              Disclose
                any information required to be reported on Form 8-K during the period
                covered by the Form 10-D but not reported

            	 	
              The
                Responsible Entity for the applicable Form 8-K item as indicated
                below

            
	 	 	
              9

            	 	
              Exhibits

            	 	 
	 	 	 	 	
              Distribution
                report

            	 	
              Trustee

            
	 	 	 	 	
              Exhibits
                required by Item 601 of Regulation S-K, such as material
                agreements

            	 	
              Depositor

            
	
              8-K

            	 	 	 	 	 	 
	 	 	
              1.01

            	 	
              Entry
                into a Material Definitive Agreement

            	 	 
	 	 	 	 	
              Disclosure
                is required regarding entry into or amendment of any definitive agreement
                that is material to the securitization, even if depositor is not
                a
                party.

               

              Examples:
                servicing agreement, custodial agreement

               

              Note:
                disclosure not required as to definitive agreements that are fully
                disclosed in the prospectus

            	 	
              Depositor

            
	 	 	
              1.02

            	 	
              Termination
                of a Material Definitive Agreement

            	 	 
	 	 	 	 	
              Disclosure
                is required regarding termination of any definitive agreement that
                is
                material to the securitization (other than expiration in accordance
                with
                its terms), even if depositor is not a party. Examples: servicing
                agreement, custodial agreement.

            	 	
              Depositor

            
	 	 	
              1.03

            	 	
              Bankruptcy
                or Receivership

            	 	 
	 	 	 	 	
              Disclosure
                is required regarding the bankruptcy or receivership, if known to
                the
                Depositor or Servicer or Trustee, with respect to any of the
                following:

               

              Sponsor
                (Seller), Depositor, Trustee, Swap Counterparty,
                Custodian

            	 	
              Depositor/Trustee

            

    

     

    
      
        
        

      

      
        S-4

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              2.04

            	 	
              Triggering
                Events that Accelerate or Increase a Direct Financial Obligation
                or an
                Obligation under an Off-Balance Sheet Arrangement

            	 	 
	 	 	 	 	
              Includes
                an early amortization, performance trigger or other event, including
                event
                of default, that would materially alter the payment priority/distribution
                of cash flows/amortization schedule.

               

              Disclosure
                will be made of events other than waterfall triggers which are disclosed
                in the 4.05 statement

            	 	
              N/A

            
	 	 	
              3.03

            	 	
              Material
                Modification to Rights of Security Holders

            	 	 
	 	 	 	 	
              Disclosure
                is required of any material modification to documents defining the
                rights
                of Certificateholders, including the Pooling and Servicing
                Agreement

            	 	
              Party
                requesting material modification

            
	 	 	
              5.03

            	 	
              Amendments
                to Articles of Incorporation or Bylaws; Change in Fiscal
                Year

            	 	 
	 	 	 	 	
              Disclosure
                is required of any amendment “to the governing documents of the issuing
                entity”

            	 	
              Depositor

            
	 	 	
              6.02

            	 	
              Change
                of Servicer or Trustee

            	 	 
	 	 	 	 	
              Requires
                disclosure of any removal, replacement, substitution or addition
                of any
                servicer, affiliated servicer, other servicer servicing 10% or more
                of
                pool assets at time of report, other material servicers, certificate
                administrator or trustee. Reg AB disclosure about any new servicer
                or
                trustee is also required.

            	 	
              Trustee
                or Servicer

            
	 	 	
              6.03

            	 	
              Change
                in Credit Enhancement or Other External Support

            	 	 
	 	 	 	 	
              Covers
                termination of any enhancement in manner other than by its terms,
                the
                addition of an enhancement, or a material change in the enhancement
                provided. Applies to external credit enhancements as well as derivatives.
                Reg AB disclosure about any new enhancement provider is also
                required.

            	 	
              Depositor
                or Servicer

            
	 	 	
              6.04

            	 	
              Failure
                to Make a Required Payment

            	 	
              Trustee

            
	 	 	
              6.05

            	 	
              Securities
                Act Updating Disclosure

            	 	 
	 	 	 	 	
              If
                any material pool characteristic differs by 5% or more at the time
                of
                issuance of the securities from the description in the final prospectus,
                provide updated Reg AB disclosure about the actual asset
                pool.

            	 	
              Depositor
                or Servicer

            
	 	 	 	 	
              If
                there are any new servicers or originators required to be disclosed
                under
                Regulation AB as a result of the foregoing, provide the information
                called
                for in Items 1108 and 1110 respectively.

            	 	
              Depositor
                or Servicer

            
	 	 	
              7.01

            	 	
              Regulation
                FD Disclosure

            	 	
              Depositor
                or Servicer

            
	 	 	
              8.01

            	 	
              Other
                Events

            	 	 
	 	 	 	 	
              Any
                event, with respect to which information is not otherwise called
                for in
                Form 8-K, that the registrant deems of importance to security
                holders.

            	 	
              Depositor
                or Servicer

            

    

     

    
      
        
        

      

      
        S-5

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              9.01

            	 	
              Financial
                Statements and Exhibits

            	 	
              The
                Responsible Entity applicable to reportable
                event

            
	
              10-K

            	 	 	 	 	 	 
	 	 	
              9B

            	 	
              Other
                Information

            	 	 
	 	 	 	 	
              Disclose
                any information required to be reported on Form 8-K during the fourth
                quarter covered by the Form 10-K but not reported

            	 	
              The
                Responsible Entity for the applicable Form 8-K item as indicated
                above

            
	 	 	
              15

            	 	
              Exhibits
                and Financial Statement Schedules

            	 	 
	 	 	 	 	
              Item
                1112(b) - Significant Obligor Financial
                Information

            	 	
              N/A

            
	 	 	 	 	
              Item
                1114(b)(2) - Credit Enhancement Provider Financial
                Information

               

              Determining
                applicable disclosure threshold

               

              Obtaining
                required financial information or effecting incorporation by
                reference

            	 	
               

               

               

              N/A

               

              N/A

            
	 	 	 	 	
              Item
                1115(b) - Derivative Counterparty

            	 	 

    

    

    

    

     

     

    
      
        
        

      

      
        S-6

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      T

     

    SERVICING
      CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

     

     

    The
      assessment of compliance to be delivered by the [Trustee] [Servicer] shall
      address, at a minimum, the applicable servicing criteria identified
      below:

     

    
      	
               

              Reference

            	 	
               

              Servicing
                Criteria

            	 	
              Applicable
                

              Servicing
                Criteria

            
	
              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.

            	 	
              Trustee

            
	
              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.

            	 	
              Trustee

            
	
              1122(d)(1)(iii)

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

            	 	
              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.

            	 	
              Servicer

            
	
              1122(d)(2)(i)

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

            	 	
              Servicer

            
	
              1122(d)(2)(ii)

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

            	 	
              Trustee/Servicer

            
	
              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.

            	 	
              Servicer

            

    

     

    
      
        
        

      

      
        T-1

        
          

        

      

      
        
        

      

    

     

    
      	
              1122(d)(2)(iv)

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

            	 	
              Trustee/Servicer

            
	
              1122(d)(2)(v)

            	 	
              Each
                custodial account is maintained by a federally insured depository
                institution as set forth in the transaction
                documents.

            	 	
              Trustee/Servicer

            
	
              1122(d)(2)(vi)

            	 	
              Unissued
                checks are safeguarded so as to prevent unauthorized
                access.

            	 	
              Trustee/Servicer

            
	
              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 documents;
                (C)
                reviewed and approved by someone other than the person who prepared
                the
                reconciliation; and (D) contain explanations for reconciling items.
                These
                reconciling items are resolved within 90 calendar days of their original
                identification, or such other number of day specified in the transaction
                agreements.

            	 	
              Trustee/Servicer

            
	
              1122(d)(3)(i)

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

            	 	
              Trustee/Servicer

            
	
              1122(d)(3)(ii)

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

            	 	
              Trustee/Servicer

            

    

     

    
      
        
        

      

      
        T-2

        
          

        

      

      
        
        

      

    

     

    
      	
              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 documents.

            	 	
              Trustee/Servicer

            
	
              1122(d)(3)(iv)

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

            	 	
              Trustee

            
	
              1122(d)(4)(i)

            	 	
              Collateral
                or security on Mortgage Loans is maintained as required by the transaction
                agreements or related Mortgage Loan documents.

            	 	
              Trustee/Servicer

            
	
              1122(d)(4)(ii)

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

            	 	
              Trustee/Servicer

            
	
              1122(d)(4)(iii)

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

            	 	
              Trustee/Servicer

            
	
              1122(d)(4)(iv)

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

            	 	
              Servicer

            
	
              1122(d)(4)(v)

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

            	 	
              Servicer

            
	
              1122(d)(4)(vi)

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

            	 	
              Servicer

            
	
              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.

            	 	
              Servicer

            

    

     

    
      
        
        

      

      
        T-3

        
          

        

      

      
        
        

      

    

     

    
      	
              1122(d)(4)(viii)

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

            	 	
              Servicer

            
	
              1122(d)(4)(ix)

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

            	 	
              Servicer

            
	
              1122(d)(4)(x)

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

            	 	
              Servicer

            
	
              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.

            	 	
              Servicer

            
	
              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.

            	 	
              Servicer

            

    

     

    
      
        
        

      

      
        T-4

        
          

        

      

      
        
        

      

    

     

    
      	
              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.

            	 	
              Servicer

            
	
              1122(d)(4)(xiv)

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

            	 	
              Servicer

            
	
              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.

            	 	
              Trustee

            

    

     

    

    
      
        
        

      

      
        T-5

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