Document:

exv10w11

Exhibit 10.11

 

BEAR STEARNS ASSET-BACKED SECURITIES I LLC,

as Depositor

NATIONSTAR MORTGAGE LLC,

as Servicer

NEWCASTLE MORTGAGE SECURITIES TRUST 2007-1,

as Issuing Entity

WELLS FARGO BANK, N.A.

as Master Servicer, Securities Administrator and Custodian

and

THE BANKOF NEW YORK,

as Indenture Trustee

 

SALE AND SERVICING AGREEMENT

Dated as of July 12, 2007

 

Mortgage Loans

Newcastle Mortgage Securities Trust 2007-1

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I

	 
	 	 	 	 
	DEFINITIONS

	 
	 	 	 	 
	Section 1.01. Definitions
	 	 	2	 
	Section 1.02. Other Definitional Provisions
	 	 	2	 
	Section 1.03. Interest Calculations
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II

	 
	 	 	 	 
	REPRESENTATIONS AND WARRANTIES

	 
	 	 	 	 
	Section 2.01. Conveyance of Mortgage Loans
	 	 	4	 
	Section 2.02. Acceptance by Indenture Trustee
	 	 	7	 
	Section 2.03. Repurchase or Substitution of Mortgage Loans by the Originator
	 	 	8	 
	Section 2.04. Representations and Warranties Regarding the Master Servicer
	 	 	11	 
	Section 2.05. Representations, Warranties and Covenants of the Servicer
	 	 	12	 
	Section 2.06. Existence
	 	 	14	 
	 
	 	 	 	 
	ARTICLE III

	 
	 	 	 	 
	ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

	 
	 	 	 	 
	Section 3.01. Servicer to Act as Servicer
	 	 	15	 
	Section 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers
	 	 	17	 
	Section 3.03. Successor Sub-Servicers
	 	 	18	 
	Section 3.04. Liability of the Servicer
	 	 	18	 
	Section 3.05. No Contractual Relationship Between Sub-Servicers, the Indenture Trustee or
the Noteholders
	 	 	18	 
	Section 3.06. Assumption or Termination of Sub-Servicing Agreements by the Indenture Trustee
	 	 	19	 
	Section 3.07. Collection of Certain Mortgage Loan Payments
	 	 	19	 
	Section 3.08. Sub-Servicing Accounts
	 	 	20	 
	Section 3.09. Collection of Taxes, Assessments and Similar Items; Servicing Accounts
	 	 	20	 
	Section 3.10. Collection Account and Note Account
	 	 	21	 
	Section 3.11. Withdrawals from the Collection Account and Note Account
	 	 	23	 
	Section 3.12. Investment of Funds in the Collection Account and the Note Account
	 	 	25	 
	Section 3.13. [Reserved]
	 	 	26	 
	Section 3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage
	 	 	26	 
	Section 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements
	 	 	28	 
	Section 3.16. Realization Upon Defaulted Mortgage Loans
	 	 	29	 
	Section 3.17. Custodian and Indenture Trustee to Cooperate; Release of Mortgage Files
	 	 	30	 
	Section 3.18. Servicing Compensation
	 	 	32	 
	Section 3.19. Reports to the Securities Administrator and Others; Collection Account Statements
	 	 	32	 
	Section 3.20. Statement as to Compliance
	 	 	32	 
	Section 3.21. Assessments of Compliance and Attestation Reports
	 	 	33	 
	Section 3.22. Access to Certain Documentation; Filing of Reports by Indenture Trustee
	 	 	36	 
	Section 3.23. Title, Management and Disposition of REO Property
	 	 	36	 
	Section 3.24. Obligations of the Servicer in Respect of Prepayment Interest Shortfalls
	 	 	38	 
	Section 3.25. [Reserved]
	 	 	39	 
	Section 3.26. Obligations of the Servicer in Respect of Mortgage Rates and Monthly Payments
	 	 	39	 
	Section 3.27. [Reserved]
	 	 	39	 
	Section 3.28. [Reserved]
	 	 	39	 
	Section 3.29. Advance Facility
	 	 	39	 
	Section 3.30. Master Servicer
	 	 	41	 
	Section 3.31. Monitoring of Servicer
	 	 	42	 
	Section 3.32. Fidelity Bond
	 	 	43	 
	Section 3.33. Power to Act; Procedures
	 	 	43	 
	Section 3.34. Due-on-Sale Clauses; Assumption Agreements
	 	 	44	 
	Section 3.35. Documents, Records and Funds in Possession of Master Servicer To Be Held for Trustee
	 	 	44	 
	Section 3.36. Possession of Certain Insurance Policies and Documents
	 	 	45	 
	Section 3.37. Compensation for the Master Servicer
	 	 	45	 
	Section 3.38. Obligation of the Master Servicer in Respect of Prepayment Interest Shortfalls
	 	 	45	 
	Section 3.39. Merger or Consolidation
	 	 	45	 
	Section 3.40. Resignation of Master Servicer
	 	 	46	 
	Section 3.41. Assignment or Delegation of Duties by the Master Servicer
	 	 	46	 
	 
	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	REMITTANCE REPORTS; ADVANCES; EXCHANGE ACT REPORTING

	 
	 	 	 	 
	Section 4.01. Remittance Reports and Advances
	 	 	48	 
	Section 4.02. Exchange Act Reporting
	 	 	49	 
	Section 4.03. Swap Account
	 	 	60	 
	Section 4.04. Cap Account
	 	 	60	 
	 
	 	 	 	 
	ARTICLE V

	 
	 	 	 	 
	THE SERVICER AND THE DEPOSITOR

	 
	 	 	 	 
	Section 5.01. Liability of the Servicer, Master Servicer and the Depositor
	 	 	62	 
	Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the Depositor
	 	 	62	 
	Section 5.03. Limitation on Liability of the Servicer, Master Servicer and Others
	 	 	62	 
	Section 5.04. Servicer Not to Resign
	 	 	63	 
	Section 5.05. Delegation of Duties
	 	 	63	 
	Section 5.06. Indemnification
	 	 	64	 
	Section 5.07. Inspection
	 	 	64	 
	 
	 	 	 	 
	ARTICLE VI

	 
	 	 	 	 
	DEFAULT

	 
	 	 	 	 
	Section 6.01. Servicer Events of Termination
	 	 	65	 
	Section 6.02. Master Servicer to Act; Appointment of Successor
	 	 	66	 
	Section 6.03. Waiver of Defaults
	 	 	68	 
	Section 6.04. Notification to Noteholders
	 	 	68	 
	Section 6.05. Survivability of Liabilities
	 	 	69	 
	Section 6.06. Master Servicer Events of Termination
	 	 	69	 
	Section 6.07. Appointment of Successor Master Servicer
	 	 	71	 
	 
	 	 	 	 
	ARTICLE VII

	 
	 	 	 	 
	MISCELLANEOUS PROVISIONS

	 
	 	 	 	 
	Section 7.01. Amendment
	 	 	74	 
	Section 7.02. GOVERNING LAW
	 	 	74	 
	Section 7.03. Notices
	 	 	74	 
	Section 7.04. Severability of Provisions
	 	 	76	 
	Section 7.05. Third-Party Beneficiaries
	 	 	76	 
	Section 7.06. Counterparts
	 	 	77	 
	Section 7.07. Effect of Headings and Table of Contents
	 	 	77	 
	Section 7.08. Termination
	 	 	77	 
	Section 7.09. No Petition
	 	 	77	 
	Section 7.10. No Recourse
	 	 	77	 
	Section 7.11. Indenture Trustee Rights
	 	 	77	 
	Section 7.12. Compliance
	 	 	77	 
	Section 7.13. Intention of the Parties and Interpretation
	 	 	77	 
	 
	 	 	 	 
	ARTICLE VIII

	 
	 	 	 	 
	DUTIES OF THE ADMINISTRATOR

	 
	 	 	 	 
	Section 8.01. Administrative Duties
	 	 	79	 
	Section 8.02. Records
	 	 	80	 
	Section 8.03. Additional Information to be Furnished
	 	 	80	 
	Section 8.04. No Recourse to Owner Trustee
	 	 	81	 

	 	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit A
	 	Form of Assignment Agreement	 	 
	Exhibit B
	 	Mortgage Loan Schedule	 	 
	Exhibit C
	 	Form of Request for Release	 	 
	Exhibit D-1
	 	Form of Custodian’s Initial Certification	 	 
	Exhibit D-2
	 	Form of Custodian’s Final Certification	 	 
	Exhibit E
	 	Form of Lost Note Affidavit	 	 
	Exhibit F
	 	Form of Power of Attorney	 	 
	Exhibit G-1
	 	Form of Certification to Be Provided by the Servicer with Form 10-K	 	 
	Exhibit G-2 
	 	Form of Certification to Be Provided to the Servicer by the Securities Administrator	 	 
	Exhibit H
	 	Servicing Criteria	 	 
	Exhibit I
	 	Form 10-D, Form 8-K and Form 10-K Reporting Responsibility	 	 
	Exhibit J
	 	Standard File Layout-Scheduled/Scheduled	 	 
	Exhibit K 
	 	Standard File Layout- Delinquency Reporting	 	 
	Exhibit L
	 	Calculation of Realized Loss/Form 332	 	 
	Exhibit M
	 	Additional Disclosure Notification	 	 

 

 

          This Sale and Servicing Agreement, dated as of July 12, 2007 (the “Agreement”),
among Bear Stearns Asset Backed Securities I LLC., as depositor (the “Depositor” ),
Nationstar Mortgage LLC, as servicer (the “Servicer”), Newcastle Mortgage Securities
Trust 2007-1 (the “Issuing Entity”), Wells Fargo bank, N.A., as master servicer and
securities administrator (the “Master Servicer” and “Securities Administrator”) and The
Bank of New York, as indenture trustee (the “Indenture Trustee”).

W I T N E S S E T H    T H A T :

          WHEREAS, pursuant to the terms of the Assignment Agreement, the Depositor will
acquire the Mortgage Loans;

          WHEREAS, the Depositor will create Newcastle Mortgage Securities Trust 2007-1, a
Delaware statutory trust;

          WHEREAS, pursuant to the terms of this Sale and Servicing Agreement, the Depositor
will convey the Mortgage Loans and all of its rights under the Assignment Agreement to
the Issuing Entity in exchange for the Notes and the Certificates (as defined below);

          WHEREAS, pursuant to the terms of the Trust Agreement, the Issuing Entity will
issue and transfer to or at the direction of the Depositor, the Certificates;

          WHEREAS, pursuant to the terms of the Indenture the Issuing Entity will pledge the
Mortgage Loans and issue the Notes and the Certificates; and

          WHEREAS, pursuant to the terms of this Sale and Servicing Agreement, the Servicer
will service the Mortgage Loans set forth on the Mortgage Loan Schedule attached hereto
as Exhibit B directly or through one or more Sub-Servicers;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties
hereto agree as follows:

ARTICLE I

DEFINITIONS

          Section 1.01. Definitions.

          For all purposes of this Sale and Servicing Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, capitalized terms
not otherwise defined herein shall have the meanings assigned to such terms in the
Definitions contained in Appendix A to the Indenture which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings specified
herein.

          Section 1.02. Other Definitional Provisions.

          (a) All terms defined in this Sale and Servicing Agreement shall have the defined
meanings when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.

          (b) As used in this Sale and Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not defined in
this Sale and Servicing Agreement or in any such certificate or other document, and
accounting terms partly defined in this Sale and Servicing Agreement or in any such
certificate or other document, to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the extent
that the definitions of accounting terms in this Sale and Servicing Agreement or in any
such certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in this Sale
and Servicing Agreement or in any such certificate or other document shall control.

          (c) The words “hereof,” “herein,” “hereunder” and words of similar import when used
in this Sale and Servicing Agreement shall refer to this Sale and Servicing Agreement as
a whole and not to any particular provision of this Sale and Servicing Agreement;
Section and Exhibit references contained in this Sale and Servicing Agreement are
references to Sections and Exhibits in or to this Sale and Servicing Agreement unless
otherwise specified; and the term “including” shall mean “including without limitation”.

          (d) The definitions contained in this Sale and Servicing Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine as well
as the feminine and neuter genders of such terms.

          (e) Any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented and
includes (in the case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.

          Section 1.03. Interest Calculations.

          All calculations of interest hereunder that are made in respect of the Stated
Principal Balance of a Mortgage Loan shall be made on the basis of a 360-day year
consisting of twelve 30-day months, notwithstanding the terms of the related Mortgage
Note and Mortgage.

 

 

ARTICLE II

REPRESENTATIONS AND WARRANTIES

          Section 2.01. Conveyance of Mortgage Loans.

          The Depositor, concurrently with the execution and delivery hereof, does hereby
sell, transfer, assign, set over and otherwise convey to the Issuing Entity as of the
Closing Date, without recourse, and for the benefit of the Noteholders, all the right,
title and interest of the Depositor, including any security interest therein for the
benefit of the Depositor, in and to (i) each Mortgage Loan identified on the Mortgage
Loan Schedule, including the related Cut-off Date Principal Balance, all interest
accruing thereon on and after the Cut-off Date and all collections in respect of
interest and principal due after the Cut-off Date; (ii) property which secured each such
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure;
(iii) its interest in any insurance policies in respect of the Mortgage Loans; (iv) the
rights of the Depositor under the Purchase Agreement (as assigned to the Depositor
pursuant to the terms of the Assignment Agreement); and (v) all proceeds of any of the
foregoing. Such sale includes all interest and principal due and collected by the
Depositor or the Servicer after the Cut-off Date with respect to the Mortgage Loans. In
consideration of the sale to it of such property, the Issuing Entity shall deliver to or
at the order of the Depositor the Notes and the Certificates.

          In connection with such sale, transfer, and assignment, the Depositor shall
instruct the Seller to deliver to and deposit with the Custodian, on behalf of the
Indenture Trustee, the following documents or instruments with respect to each Original
Mortgage Loan so sold, transferred, and assigned, the following documents or instruments
(with respect to each Mortgage Loan, a “Mortgage File”):

          (i) the original Mortgage Note, endorsed either (A) in blank or (B) in the
following form: “Pay to the order of The Bank of New York, as Indenture Trustee,
without recourse” or with respect to any lost Mortgage Note, an original Lost
Note Affidavit stating that the original mortgage note was lost, misplaced or
destroyed, together with a copy of the related mortgage note; provided, however,
that such substitutions of Lost Note Affidavits for original Mortgage Notes may
occur only with respect to Mortgage Loans, the aggregate Cut-off Date Principal
Balance of which is less than or equal to 1.00% of the Pool Balance as of the
Cut-off Date;

          (ii) the original Mortgage (noting the presence of the MIN of the Mortgage
Loan and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage
Loan is a MOM Loan), with evidence of recording thereon, and the original
recorded power of attorney, if the Mortgage was executed pursuant to a power of
attorney, with evidence of recording thereon or, if such Mortgage or power of
attorney has been submitted for recording but has not been returned from the
applicable public recording office, has been lost or is not otherwise available,
a copy of such Mortgage or power of attorney, as the case may be, certified to be
a true and complete copy of the original submitted for recording;

          (iii) unless the Mortgage Loan is registered on the MERS® System, an
original Assignment, in form and substance acceptable for recording. The Mortgage
shall be assigned either (A) in blank or (B) to “The Bank of New York, as
Indenture Trustee, without recourse”;

          (iv) an original of any intervening assignment of Mortgage showing a
complete chain of assignments (or to MERS if the Mortgage Loan is registered on
the MERS® System and noting the presence of MIN);

          (v) the original or a certified copy of lender’s title insurance policy; and

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

          The Depositor herewith also delivers to the Custodian, on behalf of the Indenture
Trustee, an executed copy of the Assignment Agreement and the Purchase Agreement.

          If any of the documents referred to in Section 2.01(ii), (iii) or (iv) above has as
of the Closing Date been submitted for recording but either (x) has not been returned
from the applicable public recording office or (y) has been lost or such public
recording office has retained the original of such document, the obligations of the
Depositor to instruct the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Custodian, on behalf of the Indenture Trustee, no
later than the Closing Date, of a copy of each such document certified by the Originator
in the case of (x) above or the applicable public recording office in the case of (y)
above to be a true and complete copy of the original that was submitted for recording
and (2) if such copy is certified by the Originator, delivery to the Custodian, on
behalf of the Indenture Trustee, promptly upon receipt thereof of either the original or
a copy of such document certified by the applicable public recording office to be a true
and complete copy of the original. If the original lender’s title insurance policy, or a
certified copy thereof, was not delivered pursuant to Section 2.01(v) above, the
Depositor shall instruct the Seller to deliver or cause to be delivered to the
Custodian, on behalf of the Indenture Trustee, the original or a copy of a written
commitment or interim binder or preliminary report of title issued by the title
insurance or escrow company, with the original or a certified copy thereof to be
delivered to the Custodian, on behalf of the Indenture Trustee, promptly upon receipt
thereof. The Servicer or the Depositor shall deliver or cause to be delivered to the
Custodian, on behalf of the Indenture Trustee, promptly upon receipt thereof any other
documents constituting a part of a Mortgage File received with respect to any Mortgage
Loan, including, but not limited to, any original documents evidencing an assumption or
modification of any Mortgage Loan.

          Upon discovery or receipt of notice of any materially defective document in, or
that a document is missing from, a Mortgage File, the Custodian, on behalf of the
Indenture Trustee, shall promptly notify the Seller and the Originator of such defect or
missing document and request that the Originator deliver such missing document or cure
such defect within 15 days from the date the Originator was notified of such missing
document or defect, and if the Originator does not deliver such missing document or cure
such defect in all material respects during such period, the Custodian, on behalf of the
Indenture Trustee, shall notify the Seller and the Originator of the Originator’s
obligation to repurchase such Mortgage Loan from the Trust on or prior to the
Determination Date following the expiration of such 15 day period (subject to Section
2.03(e)); provided that, in connection with any such breach that could not reasonably
have been cured within such 15 day period, if the Originator has commenced to cure such
breach within such 15 day period, the Originator shall be permitted to proceed
thereafter diligently and expeditiously to cure the same within any additional period
provided under the Assignment Agreement.

          Except with respect to any Mortgage Loan for which MERS is identified on the
Mortgage, the Servicer shall cause the Assignments with respect to any Mortgage Loan
located in Maryland which were delivered in blank to be completed and recorded. In the
event that any such Assignment is lost or returned unrecorded because of a defect
therein, the Servicer or the Custodian via the Exception Report shall notify the
Originator of its obligations under the Assignment Agreement to promptly have a
substitute Assignment prepared or have such defect cured, as the case may be, and
thereafter cause each such Assignment to be duly recorded.

 

 

          For administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be submitted for recording
(except with respect to any Mortgage Loan located in Maryland) unless the Servicer
receives written notice that such failure to record would result in a withdrawal or a
downgrading by any Rating Agency of the rating on any Class of Notes; provided, however,
each Assignment, except with respect to any Mortgage Loan for which MERS is identified
on the Mortgage, shall be submitted for recording by the Originator in the manner
described above, at no expense to the Trust, the Depositor, the Custodian or the
Securities Administrator, upon the earliest to occur of: (i) reasonable direction by the
Holders of 25% of the aggregate Note Balance of the Notes, (ii) the occurrence of a
Servicer Event of Termination, (iii) the occurrence of a bankruptcy, insolvency or
foreclosure relating to the Seller and (iv) the occurrence of a servicing transfer as
described in Section 6.02 hereof. In addition to the foregoing, the Servicer shall cause
each Assignment of Mortgage to be recorded in accordance with customary servicing
practices in order to convey, upon foreclosure, the title of any Mortgaged Property to
the Trust as set forth in Section 3.23 hereof. The cost of recording the Assignments
shall be paid by the Servicer and the Servicer shall be reimbursed for such expenses by
the Trust.

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

          The Servicer shall forward to the Custodian, on behalf of the Indenture Trustee,
original documents evidencing an assumption, modification, consolidation or extension of
any Mortgage Loan entered into in accordance with this Agreement within two weeks of
their execution; provided, however, that the Servicer shall provide the Custodian with a
certified true copy of any such document submitted for recordation within two weeks of
its execution, and shall provide the original of any document submitted for recordation
or a copy of such document certified by the appropriate public recording office to be a
true and complete copy of the original within 365 days of its submission for
recordation. In the event that the Servicer cannot provide a copy of such document
certified by the public recording office within such 365 day period, the Servicer shall
deliver to the Custodian, within such 365 day period, an Officers’ Certificate of the
Servicer which shall (A) identify the recorded document, (B) state that the recorded
document has not been delivered to the Custodian due solely to a delay caused by the
public recording office, (C) state the amount of time generally required by the
applicable recording office to record and return a document submitted for recordation,
if known and (D) specify the date the applicable recorded document is expected to be
delivered to the Custodian, and, upon receipt of a copy of such document certified by
the public recording office, the Servicer shall immediately deliver such document to the
Custodian. In the event the appropriate public recording office will not certify as to
the accuracy of such document, the Servicer shall deliver a copy of such document
certified by an officer of the Servicer to be a true and complete copy of the original
to the Custodian.

          Section 2.02. Acceptance by Custodian on behalf of Indenture Trustee.

          Subject to the provisions of Section 2.01 and subject to the review described below
and any exceptions noted on the Exception Report, the Custodian, on behalf of the
Indenture Trustee, acknowledges receipt of the documents referred to in Section 2.01
above and declares that it holds and will hold such documents and the other documents
delivered to it constituting a Mortgage File, and that it holds or will hold all such
assets and such other assets included in the definition of “Trust Estate” in trust for
the exclusive use and benefit of all present and future Noteholders.

          The Custodian, on behalf of the Indenture Trustee and for the benefit of the
Noteholders, agrees to review each Mortgage File no later than the Closing Date (or,
with respect to any document delivered after the Closing Date, within 45 days of receipt
and with respect to any Qualified Substitute Mortgage Loan, within 45 days after the
assignment thereof). The Custodian, on behalf of the Indenture Trustee and for the
benefit of the Noteholders, further agrees to certify to the Depositor, the Indenture
Trustee and the Servicer in substantially the form attached hereto as Exhibit D-1, on
the Closing Date (or, with respect to any document delivered after the Closing Date,
within 45 days of receipt and with respect to any Qualified Substitute Mortgage Loan,
within 45 days after the assignment thereof) that, as to each Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage
Loan specifically identified in the Exception Report annexed thereto as not being
covered by such certification), (i) all documents required to be delivered to it
pursuant Section 2.01 (other than Section 2.01(vi)) of this Agreement and if actually
delivered to it, the documents required to be delivered to it pursuant to Section
2.01(vi) of this Agreement are in its possession, (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan and (iii) based
on its examination of the foregoing documents, the information set forth in the Mortgage
Loan Schedule that corresponds to items (i), (iii), (x), (xi), (xii), (xviii) and (xxv),
(but only as to Gross Margin and Maximum Mortgage Rate) of the Mortgage Loan Schedule
accurately reflects information set forth in the Mortgage File. It is herein
acknowledged that, in conducting such review, the Custodian is under no duty or
obligation to inspect, review or examine any such documents, instruments, certificates
or other papers to determine that they are recordable or genuine, legally enforceable,
valid or binding or appropriate for the represented purpose or that they have actually
been recorded or that they are other than what they purport to be on their face.

          No later than the first anniversary date of this Agreement, or the following
Business Day if such first anniversary date is not a Business Day, the Custodian shall
deliver to the Depositor, the Indenture Trustee and the Servicer a final certification
in the form annexed hereto as Exhibit D-2, with any applicable exceptions noted on the
Exception Report attached thereto.

          If in the process of reviewing the Mortgage Files and making or preparing, as the
case may be, the certifications referred to above, the Custodian finds any document or
documents constituting a part of a Mortgage File to be missing or defective in any
material respect, at the conclusion of its review the Custodian shall so notify the
Indenture Trustee, the Originator, the Depositor, the Sponsor and the Seller, such
notification to be in the form of the exception report attached to its certification
following a review of the Mortgage Files (an “Exception Report”). In addition, upon the
discovery by the Depositor, the Master Servicer or the Servicer (or upon receipt by a
Responsible Officer of the Indenture Trustee of written notification of such breach) of a
breach of any of the representations and warranties made by the Originator in the
Assignment Agreement in respect of any Mortgage Loan which materially adversely affects
such Mortgage Loan or the interests of the related Noteholders in such Mortgage Loan, the
party discovering such breach shall give prompt written notice to the other parties to
this Agreement.

 

 

          The Depositor and the Issuing Entity intend that the assignment and transfer herein
contemplated constitute a sale of the Mortgage Loans, the related Mortgage Notes and the
related documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Issuing Entity for the benefit of the
Noteholders and that such property not be part of the Depositor’s estate or property of
the Depositor in the event of any insolvency by the Depositor. In the event that such
conveyance is deemed to be, or to be made as security for, a loan, the parties intend
that the Depositor shall be deemed to have granted and the Depositor does hereby grant
to the Issuing Entity a first priority perfected security interest in all of the
Depositor’s right, title and interest in and to the Mortgage Loans, the related Mortgage
Notes and the related documents, and that this Agreement shall constitute a security
agreement under applicable law.

          Section 2.03. Repurchase or Substitution of Mortgage Loans by the Originator.

          (a) Upon discovery or receipt of written notice of any materially defective
document in, or that a document is missing from, a Mortgage File or of the breach by the
Originator of any representation, warranty or covenant under the Purchase Agreement in
respect of any Mortgage Loan which materially adversely affects the value of such
Mortgage Loan or the interest therein of the Noteholders, the Custodian, on behalf of
the Indenture Trustee, shall promptly notify the Originator and the Seller of such
defect, missing document (via the Exception Report with respect to a defect, or missing
document) and the party discovering the breach shall give prompt written notice of the
breach to the other parties to this Agreement and the Originator and the Securities
Administrator shall request that the Originator deliver such missing document or cure
such defect or that the Originator cure such breach within 30 days from the date the
Originator was notified of such missing document, defect or breach, and if the
Originator does not deliver such missing document or cure such defect or if the
Originator does not cure such breach in all material respects during such period, the
Securities Administrator, on behalf of the Indenture Trustee shall notify the Sponsor
and the Originator of the Originator’s obligation to repurchase such Mortgage Loan from
the Trust on or prior to the Determination Date following the expiration of such 30 day
period (subject to Section 2.03(e)); provided that, in connection with any such breach
that could not reasonably have been cured within such 30 day period, if the Originator
has commenced to cure such breach within such 30 day period, the Originator shall be
permitted to proceed thereafter diligently and expeditiously to cure the same within any
additional period provided under the Assignment Agreement. Notwithstanding the
foregoing, to the extent the price required to be paid by the Originator for a
repurchased Mortgage Loan is less than the Purchase Price, the Seller, as required
pursuant to the terms of the Assignment Agreement, shall pay the difference between that
amount and the Purchase Price.

          The Purchase Price for the repurchased Mortgage Loan shall be remitted to the
Servicer for deposit in the Collection Account, and the Custodian, on behalf of the
Indenture Trustee and upon receipt of written certification (in the form of a Request
for Release hereto as Exhibit C) from the Servicer of such deposit, shall release to the
Originator the related Mortgage File and the Indenture Trustee shall execute and deliver
such instruments of transfer or assignment, in each case without recourse,
representation or warranty, as the Originator shall furnish to it and as shall be
necessary to vest in the Originator any Mortgage Loan released pursuant hereto and the
Indenture Trustee and the Custodian shall have no further responsibility with regard to
such Mortgage File (it being understood that neither the Indenture Trustee nor the
Custodian shall have any responsibility for determining the sufficiency of such
assignment for its intended purpose). In lieu of repurchasing any such Mortgage Loan as
provided above, the Originator may cause such Mortgage Loan to be removed from the Trust
(in which case it shall become a Deleted Mortgage Loan) and substitute one or more
Qualified Substitute Mortgage Loans in the manner and subject to the limitations set
forth in Section 2.03(d); provided, however, the Originator may not substitute for any
Mortgage Loan which breaches a representation or warranty regarding abusive or predatory
lending laws. It is understood and agreed that the obligation of the Originator to cure
or to repurchase (or to substitute for) any Mortgage Loan as to which a document is
missing, a material defect in a constituent document exists or as to which such a breach
has occurred and is continuing shall constitute the sole remedy (other than any
indemnification obligation of the Originator pursuant to the Purchase Agreement) against
the Originator respecting such omission, defect or breach available to the Indenture
Trustee on behalf of the Noteholders.

          In the event that the Originator fails to comply with any of the terms of the
Purchase Agreement, the Indenture Trustee, upon notice thereof from the Securities
Administrator or the Master Servicer and on behalf of the Noteholders, shall enforce the
obligations of the Originator to the extent such failure has a materially adverse effect
on the value of such Mortgage Loan or the interest therein of the Noteholders.

          (b) Within 90 days of the earlier of discovery by the Servicer or receipt of notice
by the Servicer of the breach of any representation, warranty or covenant of the
Servicer set forth in Section 2.05 which materially and adversely affects the interests
of the Noteholders in any Mortgage Loan, the Servicer shall cure such breach in all
material respects. Within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.04 which materially and adversely
affects the interests of the Noteholders in any Mortgage Loan, the Master Servicer shall
cure such breach in all material respects.

          (c) As to any Deleted Mortgage Loan for which the Originator substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Originator delivering to the Custodian on behalf of the Indenture Trustee, for such
Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage and the
Assignment to the Indenture Trustee, and such other documents and agreements, with all
necessary endorsements thereon, as are required by Section 2.01, together with an
Officers’ Certificate providing that each such Qualified Substitute Mortgage Loan
satisfies the definition thereof and specifying the Substitution Adjustment (as
described below), if any, in connection with such substitution. The Custodian, on behalf
of the Indenture Trustee, shall acknowledge receipt for such Qualified Substitute
Mortgage Loan or Loans and, within 45 days thereafter, shall review such documents as
specified in Section 2.02 and deliver to the Depositor, the Indenture Trustee, the
Seller and the Servicer, with respect to such Qualified Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit D-1, with
any applicable exceptions noted thereon. Within one year of the date of substitution,
the Custodian, on behalf of the Indenture Trustee, shall deliver to the Depositor, the
Indenture Trustee, the Seller and the Servicer a certification substantially in the form
of Exhibit D-2 hereto with respect to such Qualified Substitute Mortgage Loan or Loans,
with any applicable exceptions noted thereon. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution are not part of the
Trust and will be retained by the Originator. For the month of substitution, payments to
Noteholders will reflect the collections and recoveries in respect of such Deleted
Mortgage Loan in the Due Period preceding the month of substitution and the Originator
shall thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. The Servicer shall give or cause to be given written notice
to the Securities Administrator, who shall forward such notice to the Noteholders, that
such substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan from the terms of this Agreement and the
substitution of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy
of such amended Mortgage Loan Schedule to the Indenture Trustee, the Securities
Administrator, and the Custodian. Upon such substitution by the Originator such
Qualified Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool
and shall be subject in all respects to the terms of this Agreement and the Assignment
Agreement, including all applicable representations and warranties thereof included in
the Assignment Agreement as of the date of substitution.

 

 

          (d) For any month in which the Originator substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will
determine the amount (the “Substitution Adjustment”), if any, by which the aggregate
Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate, as to each such
Qualified Substitute Mortgage Loan, of the Stated Principal Balance thereof as of the
date of substitution, together with one month’s interest on such Stated Principal
Balance at the applicable Mortgage Rate. On the date of such substitution, the
Originator will deliver or cause to be delivered to the Servicer for deposit in the
Collection Account an amount equal to the Substitution Adjustment, if any, and
Custodian, on behalf of the Indenture Trustee, upon receipt of the related Qualified
Substitute Mortgage Loan or Loans and certification by the Servicer of such deposit,
shall release (or shall cause the Custodian to release) to the Originator the related
Mortgage File or Files and the Indenture Trustee shall execute and deliver such
instruments of transfer or assignment, in each case without recourse, representation or
warranty, as the Originator shall deliver to it and as shall be necessary to vest
therein any Deleted Mortgage Loan released pursuant hereto.

          Section 2.04. Representations and Warranties Regarding the Master Servicer.

          The Master Servicer represents and warrants to the Issuing Entity, the Depositor,
the Seller, the Sponsor and the Indenture Trustee for the benefit of the Noteholders, as
follows:

          (i) The Master Servicer is a national banking association duly organized,
validly existing and in good standing under the laws of the United States of
America and has the corporate power to own its assets and to transact the
business in which it is currently engaged. The Master Servicer is duly qualified
to do business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure to so qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Master Servicer or
the validity or enforceability of this Agreement;

          (ii) The Master Servicer has the power and authority to make, execute,
deliver and perform this Agreement and all of the transactions contemplated under
this Agreement, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding obligation
of the Master Servicer enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors’ rights generally and by the
availability of equitable remedies;

          (iii) The Master Servicer is not required to obtain the consent of any other
Person or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be;

          (iv) The execution and delivery of this Agreement and the performance of the
transactions contemplated hereby by the Master Servicer will not violate any
provision of any existing law or regulation or any order or decree of any court
applicable to the Master Servicer or any provision of the charter or bylaws of
the Master Servicer, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Master Servicer is a party or by which
the Master Servicer may be bound; and

          (v) No litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending (other than litigation with
respect to which pleadings or documents have been filed with a court, but not
served on the Master Servicer), or to the knowledge of the Master Servicer
threatened, against the Master Servicer or any of its properties or with respect
to this Agreement or the Notes or the Certificates which, to the knowledge of the
Master Servicer, has a reasonable likelihood of resulting in a material adverse
effect on the transactions contemplated by this Agreement.

     The foregoing representations and warranties shall survive any termination of the
Master Servicer hereunder.

          Section 2.05. Representations, Warranties and Covenants of the Servicer.

          The Servicer hereby represents, warrants and covenants to the Issuing Entity and
for the benefit of the Indenture Trustee, as pledgee of the Mortgage Loans and the
Noteholders, the Master Servicer, the Securities Administrator and to the Depositor,
that as of the Closing Date or as of such date specifically provided herein:

          (i) The Servicer is duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its formation and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in the states where the Mortgaged Property is
located (or is otherwise exempt under applicable law from such qualification) if
the laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Servicer or to ensure the enforceability or
validity of each Mortgage Loan; the Servicer has the power and authority to
execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) and all documents and
instruments contemplated hereby which are executed and delivered by the Servicer
and the consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, assuming due
authorization, execution and delivery by the other parties hereto, evidences the
valid, binding and enforceable obligation of the Servicer, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally; and all requisite
corporate action has been taken by the Servicer to make this Agreement and all
documents and instruments contemplated hereby which are executed and delivered by
the Servicer valid and binding upon the Servicer in accordance with its terms;

          (ii) The consummation of the transactions contemplated by this Agreement are
in the ordinary course of business of the Servicer and will not result in the
material breach of any term or provision of the certificate of formation or
limited liability company agreement of the Servicer or result in the breach of
any term or provision of, or conflict with or constitute a default under or
result in the acceleration of any obligation under, any agreement, indenture or
loan or credit agreement or other instrument to which the Servicer or its
property is subject, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is subject;

 

 

          (iii) The execution and delivery of this Agreement by the Servicer and the
performance and compliance with its obligations and covenants hereunder do not
require the consent or approval of any governmental authority or, if such consent
or approval is required, it has been obtained;

          (iv) [Reserved];

          (v) The Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement;

          (vi) There is no action, suit, proceeding or investigation pending or, to
its knowledge, threatened against the Servicer that, either individually or in
the aggregate, (A) may result in any change in the business, operations,
financial condition, properties or assets of the Servicer that might prohibit or
materially and adversely affect the performance by such Servicer of its
obligations under, or the validity or enforceability of, this Agreement, or (B)
may result in any material impairment of the right or ability of the Servicer to
carry on its business substantially as now conducted, or (C) would draw into
question the validity or enforceability of this Agreement or of any action taken
or to be taken in connection with the obligations of the Servicer contemplated
herein, or (D) would otherwise be likely to impair materially the ability of the
Servicer to perform under the terms of this Agreement;

          (vii) Neither this Agreement nor any information, certificate of an officer,
statement furnished in writing or any report delivered to the Securities
Administrator or Indenture Trustee in connection with the transactions
contemplated hereby contains any untrue statement of a material fact;

          (viii) The Servicer will not waive any Prepayment Charge unless it is waived
in accordance with the standard set forth in Section 3.01; and

          (ix) The Servicer has accurately and fully reported, and will continue to
accurately and fully report on a monthly basis, its borrower credit files for the
Mortgage Loans to each of the three national credit repositories in a timely
manner.

          The foregoing representations and warranties shall survive any termination of the
Servicer hereunder.

          It is understood and agreed that the representations, warranties and covenants set
forth in this Section 2.05 shall survive delivery of the Mortgage Files to the Indenture
Trustee and shall inure to the benefit of the Indenture Trustee, the Depositor, the
Master Servicer, the Securities Administrator, the Noteholders and the Holders of the
Certificates. Upon discovery by any of the Depositor, the Servicer, the Master Servicer
or the Indenture Trustee of a breach of any of the foregoing representations, warranties
and covenants which materially and adversely affects the value of any Mortgage Loan,
Prepayment Charge or the interests therein of the Noteholders, the party discovering
such breach shall give prompt written notice (but in no event later than two Business
Days following such discovery) to the Servicer and the Indenture Trustee.
Notwithstanding the foregoing, within 90 days of the earlier of discovery by the
Servicer or receipt of notice by the Servicer of the breach of the representation or
covenant of the Servicer set forth in Section 2.05(viii) above which materially and
adversely affects the interests of the Holders of the Owner Trust Certificates in any
Prepayment Charge, the Servicer must pay the amount of such waived Prepayment Charge,
for the benefit of the Holders of the Owner Trust Certificates, by depositing such
amount into the Collection Account. The foregoing shall not, however, limit any remedies
available to the Noteholders, the Holders of the Certificates, the Depositor or the
Indenture Trustee on behalf of the Noteholders and, pursuant to the Assignment Agreement
respecting a breach of the representations, warranties and covenants of the Originator.

          Section 2.06. Existence.

          The Issuing Entity will keep in full effect its existence, rights and franchises as
a statutory trust under the laws of the State of Delaware (unless it becomes, or any
successor Issuing Entity hereunder is or becomes, organized under the laws of any other
state or of the United States of America, in which case the Issuing Entity will keep in
full effect its existence, rights and franchises under the laws of such other
jurisdiction) and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement.

ARTICLE III

ADMINISTRATION ANDSERVICING OF MORTGAGE LOANS

          Section 3.01. Servicer to Act as Servicer.

          The Servicer shall service and administer the Mortgage Loans on behalf of the Trust
and in the best interests of and for the benefit of the Noteholders (as determined by
the Servicer in its reasonable judgment) in accordance with the terms of this Agreement
and the Mortgage Loans and, to the extent consistent with such terms, in the same manner
in which it services and administers similar mortgage loans for its own portfolio,
giving due consideration to customary and usual standards of practice of mortgage
lenders and loan servicers administering similar mortgage loans but without regard to:

          (i) any relationship that the Servicer, any Sub-Servicer or any Affiliate of
the Servicer or any Sub-Servicer may have with the related Mortgagor;

          (ii) the ownership or non-ownership of any Note by the Servicer or any
Affiliate of the Servicer;

          (iii) the Servicer’s obligation to make Advances or Servicing Advances; or

          (iv) the Servicer’s or any Sub-Servicer’s right to receive compensation for
its services hereunder or with respect to any particular transaction.

          To the extent consistent with the foregoing, the Servicer (a) shall seek to
maximize the timely and complete recovery of principal and interest on the Mortgage
Notes and (b) shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge only
under the following circumstances: (i) such waiver is standard and customary in
servicing similar Mortgage Loans, (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of the Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment Charge and
the related Mortgage Loan, (iii) the collection of such Prepayment Charge would be in
violation of applicable laws or (iv) such waiver is in accordance with the Servicer’s
internal policies. If a Prepayment Charge is waived as permitted by meeting the standard
described in clause (iii) above, then the Servicer shall make commercially reasonable
efforts to enforce the Indenture Trustee’s rights under the Purchase Agreement including
the obligation of the Originator to pay the amount of such waived Prepayment Charge to
the Servicer for deposit in the Collection Account for the benefit of the Holders of the
Owner Trust Certificates. If the Servicer makes a good faith determination, as evidenced
by an Officer’s Certificate delivered by the Servicer to the Indenture Trustee and the
Master Servicer, that the Servicer’s efforts are not reasonably expected to be
successful in enforcing such rights, it shall notify the Indenture Trustee and the
Master Servicer of such failure, and the Master Servicer shall notify the Originator of
its obligation under the Purchase Agreement to pay to the Servicer the amount of such
waived Prepayment Charge. If a Prepayment Charge is waived as permitted by meeting the
standard described in clause (iv) above, then the Servicer shall deposit the amount of
such waived Prepayment Charge in the Collection Account for the benefit of the Holders
of the Owner Trust Certificates.

 

 

          Subject only to the above-described servicing standards and the terms of this
Agreement and of the Mortgage Loans, the Servicer shall have full power and authority,
acting alone or through Sub-Servicers as provided in Section 3.02, to do or cause to be
done any and all things in connection with such servicing and administration which it
may deem necessary or desirable. Without limiting the generality of the foregoing, the
Servicer, in the name of the Trust, is hereby authorized and empowered by the Indenture
Trustee when the Servicer believes it appropriate in its best judgment in accordance
with the Servicing Standard, to execute and deliver, on behalf of the Trust, the Issuing
Entity, the Noteholders and the Indenture Trustee, 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 the Mortgaged Properties
and to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so as
to convert the ownership of such properties, and to hold or cause to be held title to
such properties, on behalf of the Indenture Trustee and the Noteholders. The Servicer
shall service and administer the Mortgage Loans in accordance with applicable state and
federal law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Servicer shall also comply in the performance of this Agreement with
all reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.17, within five (5) days of the Closing Date, the
Indenture Trustee shall execute and furnish to the Servicer and any Sub-Servicer any
limited powers of attorney in the form of Exhibit F hereto and other documents necessary
or appropriate to enable the Servicer or any Sub-Servicer to carry out their servicing
and administrative duties hereunder; provided, such limited powers of attorney or other
documents shall be prepared by the Servicer and submitted to the Indenture Trustee for
execution. The Indenture Trustee shall not be liable for the actions by the Servicer or
any Sub-Servicers under such powers of attorney and shall be indemnified by the Servicer
(from its own funds without any right of reimbursement from the Collection Account), for
any costs, liabilities or expenses incurred by the Indenture Trustee in connection with
the use or misuse of such powers of attorney.

          The Servicer further is hereby authorized and empowered, on behalf of the
Noteholders and the Indenture Trustee, in its own name or in the name of the
Sub-Servicer, when the Servicer or the Sub-Servicer, as the case may be, believes it is
appropriate in its best judgment to register any Mortgage Loan on the MERS® System, or
cause the removal from the registration of any Mortgage Loan on the MERS® System, to
execute and deliver, on behalf of the Indenture Trustee and the Noteholders or any of
them, any and all instruments of assignment and other comparable instruments with
respect to such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Indenture Trustee and its successors and assigns. Any reasonable
expenses incurred in connection with the actions described in the preceding sentence or
as a result of MERS discontinuing or becoming unable to continue operations in
connection with the MERS® System, shall be reimbursable to the Servicer by withdrawal
from the Collection Account pursuant to Section 3.11.

          Subject to Section 3.09 hereof, in accordance with the standards of the preceding
paragraph, the Servicer, on escrowed accounts, shall advance or cause to be advanced
funds as necessary for the purpose of effecting the payment of taxes and assessments on
the Mortgaged Properties, which advances shall be Servicing Advances reimbursable in the
first instance from related collections from the Mortgagors pursuant to Section 3.09,
and further as provided in Section 3.11. Any cost incurred by the Servicer or by
Sub-Servicers in effecting the payment of taxes and assessments on a Mortgaged Property
shall not, for the purpose of calculating payments to Noteholders, be added to the
unpaid Stated Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit.

          Notwithstanding anything in this Agreement to the contrary, the Servicer may not
make any future advances with respect to a Mortgage Loan (except as provided in Section
4.01) and the Servicer shall not permit any modification with respect to any Mortgage
Loan that would change the Mortgage Rate, reduce or increase the Stated Principal
Balance (except for reductions resulting from actual payments of principal) or change
the final maturity date on such Mortgage Loan, (unless, in any such case, as provided in
Section 3.07, the Mortgagor is in default with respect to the Mortgage Loan or such
default is, in the judgment of the Servicer, reasonably foreseeable). In addition and
notwithstanding anything in this Agreement to the contrary, neither the Servicer nor the
Indenture Trustee shall, under any circumstance, be permitted to sell any Mortgage Loan
(other than with respect to the exercise of an optional redemption pursuant to Section
8.07 of the Indenture or the repurchase of a Mortgage Loan pursuant to Section 2.03).

          Section 3.02. Sub-Servicing Agreements Between Servicer and Sub-Servicers.

          (a) The Servicer may enter into Sub-Servicing Agreements with Sub-Servicers, which
may be Affiliates of the Servicer, for the servicing and administration of the Mortgage
Loans; provided, however, such sub-servicing arrangement and the terms of the related
Sub-Servicing Agreement must provide for the servicing of the Mortgage Loans in a manner
consistent with the servicing arrangement contemplated hereunder and in accordance with
the Servicing Standard. The Master Servicer is hereby authorized to acknowledge, at the
request of the Servicer, any Sub-Servicing Agreement. No such acknowledgment shall be
deemed to imply that the Master Servicer has consented to any such Sub-Servicing
Agreement, has passed upon whether such Sub-Servicing Agreement meets the requirements
applicable to Sub-Servicing Agreements set forth in this Agreement or has passed upon
whether such Sub-Servicing Agreement is otherwise permitted under this Agreement.

          Each Sub-Servicer shall be (i) authorized to transact business in the state or
states where the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the Sub-Servicer to perform its
obligations hereunder and under the Sub-Servicing Agreement and (ii) a Freddie Mac or
Fannie Mae approved mortgage servicer. Each Sub-Servicing Agreement must impose on the
Sub-Servicer requirements conforming to the provisions set forth in Section 3.08 and
provide for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Sub-Servicing Agreement and will be familiar with the
terms thereof. The terms of any Sub-Servicing Agreement will not be inconsistent with
any of the provisions of this Agreement. Any variation in any Sub-Servicing Agreements
from the provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the Sub-Servicing
Accounts or the timing and amount of remittances by the Sub-Servicers to the Servicer,
are conclusively deemed to be inconsistent with this Agreement and therefore prohibited.
The Servicer shall deliver to the Master Servicer copies of all Sub-Servicing
Agreements, and any amendments or modifications thereof, promptly upon the Servicer’s
execution and delivery of such instruments.

 

 

          (b) As part of its servicing activities hereunder, the Servicer, for the benefit of
the Indenture Trustee and the Noteholders, shall enforce the obligations of each
Sub-Servicer under the related Sub-Servicing Agreement, including, without limitation,
any obligation to make advances in respect of delinquent payments as required by a
Sub-Servicing Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Sub-Servicing Agreements, and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent and at
such time as the Servicer, in its good faith business judgment, would require were it
the owner of the related Mortgage Loans. The Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a general
recovery resulting from such enforcement, to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loans, or (ii) from a
specific recovery of costs, expenses or attorneys’ fees against the party against whom
such enforcement is directed.

          Section 3.03. Successor Sub-Servicers.

          The Servicer shall be entitled to terminate any Sub-Servicing Agreement and the
rights and obligations of any Sub-Servicer pursuant to any Sub-Servicing Agreement in
accordance with the terms and conditions of such Sub-Servicing Agreement. In the event
of termination of any Sub-Servicer, all servicing obligations of such Sub-Servicer shall
be assumed simultaneously by the Servicer without any act or deed on the part of such
Sub-Servicer or the Servicer, and the Servicer either shall service directly the related
Mortgage Loans or shall enter into a Sub-Servicing Agreement with a successor
Sub-Servicer which qualifies under Section 3.02.

          Any Sub-Servicing Agreement shall include the provision that such agreement may be
immediately terminated by the Servicer or the Successor Servicer without fee, in
accordance with the terms of this Agreement.

          Section 3.04. Liability of the Servicer.

          Notwithstanding any Sub-Servicing Agreement or the provisions of this Agreement
relating to agreements or arrangements between the Servicer and a Sub-Servicer or
reference to actions taken through a Sub-Servicer or otherwise, the Servicer shall
remain obligated and primarily liable to the Indenture Trustee and the Noteholders for
the servicing and administering of the Mortgage Loans in accordance with the provisions
of Section 3.01 without diminution of such obligation or liability by virtue of such
Sub-Servicing Agreements or arrangements or by virtue of indemnification from the
Sub-Servicer and to the same extent and under the same terms and conditions as if the
Servicer alone were servicing and administering the Mortgage Loans. The Servicer shall
be entitled to enter into any agreement with a Sub-Servicer for indemnification of the
Servicer by such Sub-Servicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification.

          Section 3.05. No Contractual Relationship Between Sub-Servicers, the
Indenture Trustee or the Noteholders.

          Any Sub-Servicing Agreement that may be entered into and any transactions or
services relating to the Mortgage Loans involving a Sub-Servicer in its capacity as such
shall be deemed to be between the Sub-Servicer and the Servicer alone, and the Indenture
Trustee, the Master Servicer, the Securities Administrator or Noteholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section 3.06. The
Servicer shall be solely liable for all fees owed by it to any Sub-Servicer,
irrespective of whether the Servicer’s compensation pursuant to this Agreement is
sufficient to pay such fees.

          Section 3.06. Assumption or Termination of Sub-Servicing Agreements by
the Successor Servicer.

          In the event the Servicer shall for any reason no longer be the servicer (including
by reason of the occurrence of a Servicer Event of Termination), the Successor Servicer
shall thereupon assume all of the rights and obligations of the Servicer under each
Sub-Servicing Agreement that the Servicer may have entered into, unless the Successor
Servicer elects to terminate any Sub-Servicing Agreement in accordance with its terms as
provided in Section 3.03. Upon such assumption, the Successor Servicer shall be deemed,
subject to Section 3.03, to have assumed all of the departing Servicer’s interest
therein and to have replaced the departing Servicer as a party to each Sub-Servicing
Agreement to the same extent as if each Sub-Servicing Agreement had been assigned to the
assuming party, except that (i) the departing Servicer shall not thereby be relieved of
any liability or obligations under any Sub-Servicing Agreement that arose before it
ceased to be the Servicer and (ii) the Successor Servicer shall not be deemed to have
assumed any liability or obligation of the Servicer that arose before it ceased to be
the Servicer.

          The Servicer at its expense shall, upon request of the Successor Servicer, deliver
to the assuming party all documents and records relating to each Sub-Servicing Agreement
and the Mortgage Loans then being serviced and an accounting of amounts collected and
held by or on behalf of it, and otherwise use its best efforts to effect the orderly and
efficient transfer of the Sub-Servicing Agreements to the assuming party. All Servicing
Transfer Costs shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs, and if such predecessor Servicer defaults in its obligation
to pay such costs, such costs shall be paid by Successor Servicer (in which case the
Successor Servicer shall be entitled to reimbursement therefor from the assets of the
Trust).

          Section 3.07. Collection of Certain Mortgage Loan Payments.

          The Servicer shall make reasonable efforts, in accordance with the Servicing
Standard, to collect all payments called for under the terms and provisions of the
Mortgage Loans and the provisions of any applicable insurance policies provided to the
Servicer. Consistent with the foregoing, the Servicer may in its discretion (i) waive
any late payment charge or, if applicable, any penalty interest, or any provisions of
any Mortgage Loan requiring the related Mortgagor to submit to mandatory arbitration
with respect to disputes arising thereunder or (ii) extend the due dates for the Monthly
Payments due on a Mortgage Note for a period of not greater than 180 days; provided,
however, that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation hereunder,
except as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely Advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization schedule of
such Mortgage Loan without modification thereof by reason of such arrangement.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default or, in
the judgment of the Servicer, such default is reasonably foreseeable, the Servicer,
consistent with the standards set forth in Section 3.01, may also waive, modify or vary
any term of such Mortgage Loan (including modifications that would change the Mortgage
Rate, forgive the payment of principal or interest or extend the final maturity date of
such Mortgage Loan), accept payment from the related Mortgagor of an amount less than
the Stated Principal Balance in final satisfaction of such Mortgage Loan, or consent to
the postponement of strict compliance with any such term or otherwise grant indulgence
to any Mortgagor (any and all such waivers, modifications, variances, forgiveness of
principal or interest, postponements, or indulgences collectively referred to herein as
“forbearance”). The Servicer’s analysis supporting any forbearance and the conclusion
that any forbearance meets the standards of Section 3.01 shall be reflected in writing
in the Mortgage File.

 

 

          Section 3.08. Sub-Servicing Accounts.

          In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant to a Sub-
Servicing Agreement, the Sub-Servicer will be required to establish and maintain one or
more accounts (collectively, the “Sub-Servicing Account”). The Sub-Servicing Account
shall be an Eligible Account and shall comply with all requirements of this Agreement
relating to the Collection Account. The Sub-Servicer shall deposit in the clearing
account in which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Sub-Servicer’s receipt thereof, all proceeds of
Mortgage Loans received by the Sub-Servicer less its servicing compensation to the
extent permitted by the Sub-Servicing Agreement, and shall thereafter deposit such
amounts in the Sub-Servicing Account, in no event more than two Business Days after the
receipt of such amounts. The Sub-Servicer shall thereafter deposit such proceeds in the
Collection Account or remit such proceeds to the Servicer for deposit in the Collection
Account not later than two Business Days after the deposit of such amounts in the
Sub-Servicing Account. For purposes of this Agreement, the Servicer shall be deemed to
have received payments on the Mortgage Loans when the Sub-Servicer receives such
payments.

          Section 3.09. Collection of Taxes, Assessments and Similar Items;
Servicing Accounts.

          To the extent required by the related Mortgage Note, the Servicer shall establish
and maintain, or cause to be established and maintained, one or more accounts (the
“Escrow Accounts”), into which all Escrow Payments shall be deposited and retained.
Escrow Accounts shall be Eligible Accounts. The Servicer shall deposit in the clearing
account in which it customarily deposits payments and collections on mortgage loans in
connection with its mortgage loan servicing activities, all Escrow Payments collected on
account of the Mortgage Loans and shall deposit in the Escrow Accounts, in no event more
than two Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the payment of
any such items as required under the terms of this Agreement. Withdrawals of amounts
from an Escrow Account may be made only to (i) effect payment of taxes, assessments,
hazard insurance premiums, and comparable items in a manner and at a time that assures
that the lien priority of the Mortgage is not jeopardized (or, with respect to the
payment of taxes, in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien); (ii) reimburse
the Servicer (or a Sub-Servicer to the extent provided in the related Sub-Servicing
Agreement) out of related collections for any Servicing Advances made pursuant to
Section 3.01 (with respect to taxes and assessments) and Section 3.14 (with respect to
hazard insurance); (iii) refund to Mortgagors any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to Mortgagors on
balances in the Escrow Account; or (v) clear and terminate the Escrow Account at the
termination of the Servicer’s obligations and responsibilities in respect of the
Mortgage Loans under this Agreement in accordance with Section 8.07 of the Indenture. In
the event the Servicer shall deposit in a Escrow Account any amount not required to be
deposited therein, it may at any time withdraw such amount from such Escrow Account, any
provision herein to the contrary notwithstanding. The Servicer will be responsible for
the administration of the Escrow Accounts and will be obligated to make Servicing
Advances to such accounts when and as necessary to avoid the lapse of insurance coverage
on the Mortgaged Property, or which the Servicer knows, or in the exercise of the
required standard of care of the Servicer hereunder should know, is necessary to avoid
the loss of the Mortgaged Property due to a tax sale or the foreclosure as a result of a
tax lien. If any such payment has not been made and the Servicer receives notice of a
tax lien with respect to the Mortgage being imposed, the Servicer will, within 10
Business Days of receipt of such notice, advance or cause to be advanced funds necessary
to discharge such lien on the Mortgaged Property. As part of its servicing duties, the
Servicer or any Sub-Servicers shall pay to the Mortgagors interest on funds in the
Escrow Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Escrow Accounts is insufficient, to pay such interest from its or their
own funds, without any reimbursement therefor. The Servicer may pay to itself any excess
interest on funds in the Escrow Accounts, to the extent such action is in conformity
with the Servicing Standard, is permitted by law and such amounts are not required to be
paid to Mortgagors or used for any of the other purposes set forth above.

          Section 3.10. Collection Account and Note Account.

          (a) On behalf of the Trust, the Servicer shall establish and maintain, or cause to
be established and maintained, one or more accounts (such account or accounts, the
“Collection Account”), held in trust for the benefit of the Trust, the Indenture Trustee
and the Noteholders. On behalf of the Trust, the Servicer shall deposit or cause to be
deposited in the Collection Account, in no event more than two Business Days after the
Servicer’s receipt thereof, as and when received or as otherwise required hereunder, the
following payments and collections received or made by it subsequent to the Cut-off Date
(other than in respect of principal or interest on the Mortgage Loans due on or before
the Cut-off Date) or payments (other than Principal Prepayments) received by it on or
prior to the Cut-off Date but allocable to a Due Period subsequent thereto:

          (i) all payments on account of principal, including Principal Prepayments
(but not Prepayment Charges), on the Mortgage Loans;

          (ii) all payments on account of interest (net of the Servicing Fee) on each
Mortgage Loan;

          (iii) all Insurance Proceeds, Liquidation Proceeds, Subsequent Recoveries
and condemnation proceeds (other than proceeds collected in respect of any
particular REO Property and amounts paid in connection with the redemption of the
Notes pursuant to Section 8.07 of the Indenture) and Subsequent Recoveries;

          (iv) any amounts required to be deposited pursuant to Section 3.12 in
connection with any losses realized on Permitted Investments with respect to
funds held in the Collection Account;

          (v) any amounts required to be deposited by the Servicer pursuant to the
second paragraph of Section 3.14(a) in respect of any blanket policy deductibles;

          (vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 2.03 or Section 8.07 of the Indenture;

          (vii) all amounts required to be deposited in connection with Substitution
Adjustments pursuant to Section 2.03; and

          (viii) all Prepayment Charges collected by the Servicer in connection with
the Principal Prepayment of any of the Mortgage Loans.

 

 

          The foregoing requirements for deposit in the Collection Account shall be
exclusive, it being understood and agreed that, without limiting the generality of the
foregoing, payments in the nature of Servicing Fees, late payment charges, Prepayment
Interest Excess, assumption fees, insufficient funds charges and ancillary income (other
than Prepayment Charges) need not be deposited by the Servicer in the Collection Account
and may be retained by the Servicer as additional compensation. In the event the
Servicer shall deposit in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account, any
provision herein to the contrary notwithstanding.

          (b) On behalf of the Trust, the Servicer shall deliver to the Securities
Administrator in immediately available funds for deposit in the Note Account on or
before 2:00 p.m. New York time on the Servicer Remittance Date, that portion of the
Available Funds (calculated without regard to the references in the definition thereof
to amounts that may be withdrawn from the Note Account) for the related Payment Date
then on deposit in the Collection Account, the amount of all Prepayment Charges
collected during the applicable Prepayment Period by the Servicer in connection with the
Principal Prepayment of any of the Mortgage Loans then on deposit in the Collection
Account, the amount of any funds reimbursable to an Advancing Person pursuant to Section
3.29 (unless such amounts are to be remitted in another manner as specified in the
documentation establishing the related Advance Facility).

          (c) Funds in the Collection Account may be invested in Permitted Investments in
accordance with the provisions set forth in Section 3.12. The Servicer shall give notice
to the Securities Administrator of the location of the Collection Account maintained by
it when established and prior to any change thereof. The Securities Administrator shall
give notice to the Servicer, the Master Servicer and the Sponsor of the location of the
Note Account when established and prior to any change thereof.

          (d) Funds held in the Collection Account at any time may be delivered by the
Servicer to the Securities Administrator for deposit in an account (which may be the
Note Account and must satisfy the standards for the Note Account as set forth in the
definition thereof) and for all purposes of this Agreement shall be deemed to be a part
of the Collection Account; provided, however, that the Securities Administrator shall
have the sole authority to withdraw any funds held pursuant to this subsection (d).

          The Securities Administrator shall establish and maintain an Eligible Account (the
“Note Account”) in which the Securities Administrator shall deposit, on the same day as
it is received from the Servicer, each remittance received by the Securities
Administrator with respect to the Mortgage Loans. In the event the Servicer shall
deliver to the Securities Administrator for deposit in the Note Account any amount not
required to be deposited therein, it may at any time request that the Securities
Administrator withdraw such amount from the Note Account and remit to it any such
amount, any provision herein to the contrary notwithstanding. In addition, the Servicer,
with respect to items (i) through (iv) below, shall deliver to the Securities
Administrator from time to time for deposit, and the Securities Administrator, with
respect to items (i) through (iv) below, shall so deposit, in the Note Account:

          (i) any Advances, as required pursuant to Section 4.01;

          (ii) any amounts required to be deposited pursuant to Section 3.23(d) or (f)
in connection with any REO Property;

          (iii) any Compensating Interest to be deposited pursuant to Section 3.24 in
connection with any Prepayment Interest Shortfall; and

          (iv) any amounts required to be paid to the Securities Administrator
pursuant to the Agreement, including, but not limited to Section 3.06 and Section
6.02.

          Section 3.11. Withdrawals from the Collection Account and Note Account.

          (a) The Servicer shall, from time to time, make withdrawals from the Collection
Account for any of the following purposes or as described in Section 4.01:

          (i) to remit to the Securities Administrator for deposit in the Note Account
the amounts required to be so remitted pursuant to Section 3.10(b) or permitted
to be so remitted pursuant to the first sentence of Section 3.10(d);

          (ii) subject to Section 3.16(d), to reimburse the Servicer for (a) any
unreimbursed Advances to the extent of amounts received which represent Late
Collections (net of the related Servicing Fees), Liquidation Proceeds, Insurance
Proceeds and Subsequent Recoveries on Mortgage Loans or REO Properties with
respect to which such Advances were made in accordance with the provisions of
Section 4.01; or (b) without limiting any right of withdrawal set forth in clause
(vi) below, any unreimbursed Advances that, upon a Final Recovery Determination
with respect to such Mortgage Loan, are Nonrecoverable Advances, but only to the
extent that Late Collections (net of the related Servicing Fees), Liquidation
Proceeds and Insurance Proceeds received with respect to such Mortgage Loan are
insufficient to reimburse the Servicer for such unreimbursed Advances;

          (iii) subject to Section 3.16(d), to pay the Servicer or any Sub-Servicer
(a) any unpaid Servicing Fees, (b) any unreimbursed Servicing Advances with
respect to each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds and Insurance Proceeds received with respect to such
Mortgage Loan or REO Property, and (c) without limiting any right of withdrawal
set forth in clause (vi) below, any Servicing Advances made with respect to a
Mortgage Loan that, upon a Final Recovery Determination with respect to such
Mortgage Loan are Nonrecoverable Advances, but only to the extent that Late
Collections, Liquidation Proceeds and Insurance Proceeds received with respect to
such Mortgage Loan are insufficient to reimburse the Servicer or any Sub-Servicer
for Servicing Advances;

          (iv) to pay to the Servicer as additional servicing compensation (in
addition to the Servicing Fee) on the Servicer Remittance Date any interest or
investment income earned on funds deposited in the Collection Account;

          (v) to pay itself or the Originator with respect to each Mortgage Loan that
has previously been purchased or replaced pursuant to Section 2.03 all amounts
received thereon subsequent to the date of purchase or substitution, as the case
may be;

          (vi) to reimburse the Servicer for any Advance or Servicing Advance
previously made which the Servicer has determined to be a Nonrecoverable Advance
in accordance with the provisions of Section 4.01;

          (vii) to pay, or to reimburse the Servicer for Servicing Advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to Section
3.16(b);

 

 

          (viii) to reimburse the Servicer for expenses incurred by or reimbursable to
the Servicer pursuant to Section 5.03;

          (ix) to pay itself any Prepayment Interest Excess; and

          (x) to clear and terminate the Collection Account.

          The foregoing requirements for withdrawal from the Collection Account shall be
exclusive. In the event the Servicer shall deposit in the Collection Account any amount
not required to be deposited therein, it may at any time withdraw such amount from the
Collection Account, any provision herein to the contrary notwithstanding.

          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, to the extent held by or on behalf of it, pursuant to subclauses (ii), (iii),
(iv), (v), (vi) and (vii) above. The Servicer shall provide written notification to the
Securities Administrator, on or prior to the next succeeding Servicer Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause (vi)
above; provided that an Officers’ Certificate in the form described under Section
4.01(d) shall suffice for such written notification to the Securities Administrator in
respect hereof.

          (b) The Securities Administrator shall, from time to time, make withdrawals from
the Note Account, for any of the following purposes, without priority:

          (i) to make payments in accordance with Section 3.05 of the Indenture;

          (ii) to pay and reimburse itself and the Owner Trustee amounts to which it
or the Owner Trustee is entitled pursuant to Section 6.07 of the Indenture;

          (iii) to clear and terminate the Note Account pursuant to Section 8.07 of
the Indenture;

          (iv) to pay any amounts required to be paid to the Securities Administrator,
Master Servicer, Custodian or the Indenture Trustee pursuant to this Agreement,
including but not limited to funds required to be paid pursuant to Section 2.01,
Section 3.06 and Section 6.02 and Section 3.05 and Section 6.07 of the Indenture;

          (v) to pay to an Advancing Person reimbursements for Advances and/or
Servicing Advances pursuant to Section 3.29; and

          (vi) to pay to the Sponsor on each Payment Date any interest or investment
income earned on funds deposited in the Note Account.

          Section 3.12. Investment of Funds in the Collection Account and the Note Account.

          (a) The Servicer may direct any depository institution maintaining the Collection
Account and any REO Account to invest the funds on deposit in such accounts and the
Sponsor may direct any depository institution maintaining the Note Account to invest the
funds on deposit in such accounts (each such account, for the purposes of this Section
3.12, an “Investment Account”). All investments pursuant to this Section 3.12 shall be
in one or more Permitted Investments bearing interest or sold at a discount, and
maturing, unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if a Person other than the Securities Administrator is the
obligor thereon or if such investment is managed or advised by a Person other than the
Securities Administrator or an Affiliate of the Securities Administrator, and (ii) no
later than the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement, if the Securities Administrator is the obligor thereon or if
such investment is managed or advised by the Securities Administrator or any Affiliate
or if the Securities Administrator or any Affiliate of the Securities Administrator is
the Custodian, sub-custodian or administrator. All such Permitted Investments shall be
held to maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Indenture Trustee (in its capacity as such), or
in the name of a nominee of the Indenture Trustee. The Securities Administrator shall be
entitled to sole possession (except with respect to investment direction of funds held
in the Collection Account, Note Account and any REO Account, and any income and gain
realized thereon) over each such investment, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Securities
Administrator or its agent, together with any document of transfer necessary to transfer
title to such investment to the Indenture Trustee or its nominee. In the event amounts
on deposit in an Investment Account are at any time invested in a Permitted Investment
payable on demand, the Securities Administrator shall:

     (x) consistent with any notice required to be given thereunder, demand that
payment thereon be made on the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such date; and

     (y) demand payment of all amounts due thereunder promptly upon determination
by a Responsible Officer of the Securities Administrator that such Permitted
Investment would not constitute a Permitted Investment in respect of funds
thereafter on deposit in the Investment Account.

          (b) All income and gain realized from the investment of funds deposited in the
Collection Account and any REO Account held by or on behalf of the Servicer shall be for
the benefit of the Servicer and shall be subject to its withdrawal in accordance with
Section 3.11 or Section 3.23, as applicable. The Servicer shall deposit in the
Collection Account or any REO Account, as applicable, the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds in such
Account immediately upon realization of such loss.

          (c) All income and gain realized from the investment of funds deposited in the Note
Account held by or on behalf of the Sponsor shall be for the benefit of the Sponsor and
shall be subject to its withdrawal in accordance with Section 3.11. The Sponsor shall
deposit in the Note Account the amount of any loss of principal incurred in respect of
any such Permitted Investment made with funds in such Account immediately upon
realization of such loss.

          (d) Except as otherwise expressly provided in this Agreement, if any default occurs
in the making of a payment due under any Permitted Investment, or if a default occurs in
any other performance required under any Permitted Investment, the Indenture Trustee may
and, upon the request of the Holders of the 50% of the aggregate Note Balance of the
Notes, shall take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate proceedings.

 

 

          Section 3.13. [Reserved].

          Section 3.14. Maintenance of Hazard Insurance and Errors and Omissions and Fidelity
Coverage.

          (a) The Servicer shall cause to be maintained for each Mortgage Loan hazard
insurance with extended coverage on the Mortgaged Property in an amount which is at
least equal to the lesser of (i) the current Principal Balance of such Mortgage Loan and
(ii) the amount necessary to fully compensate for any damage or loss to the improvements
that are a part of such property on a replacement cost basis, in each case in an amount
not less than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Servicer shall also cause
to be maintained hazard insurance with extended coverage on each REO Property in an
amount which is at least equal to the lesser of (i) the maximum insurable value of the
improvements which are a part of such property and (ii) the outstanding Principal
Balance of the related Mortgage Loan at the time it became an REO Property. The Servicer
will comply in the performance of this Agreement with all reasonable rules and
requirements of each insurer under any such hazard policies. Any amounts to be collected
by the Servicer under any such policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or amounts to be
released to the Mortgagor in accordance with the procedures that the Servicer would
follow in servicing loans held for its own account, subject to the terms and conditions
of the related Mortgage and Mortgage Note) shall be deposited in the Collection Account,
subject to withdrawal pursuant to Section 3.11, if received in respect of a Mortgage
Loan, or in the REO Account, subject to withdrawal pursuant to Section 3.23, if received
in respect of an REO Property. Any cost incurred by the Servicer in maintaining any such
insurance shall not, for the purpose of calculating payments to Noteholders, be added to
the unpaid Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor 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 or REO Property is at any
time in an area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards and flood insurance has been made available, the
Servicer will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid Principal
Balance of the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is participating in
such program).

          In the event that the Servicer shall obtain and maintain a blanket policy insuring
against hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to
have satisfied its obligations as set forth in the first two sentences of this Section
3.14, it being understood and agreed that such policy may contain a deductible clause on
terms substantially equivalent to those commercially available and maintained by
competent servicers, in which case the Servicer shall, in the event that there shall not
have been maintained on the related Mortgaged Property or REO Property a policy
complying with the first two sentences of this Section 3.14, and there shall have been
one or more losses which would have been covered by such policy, deposit to the
Collection Account from its own funds 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 prepare and present, on behalf of itself,
the Indenture Trustee and Noteholders, claims under any such blanket policy in a timely
fashion in accordance with the terms of such policy.

          (b) The Servicer shall keep in force during the term of this Agreement a policy or
policies of insurance covering errors and omissions for failure in the performance of
the Servicer’s obligations under this Agreement, which policy or policies shall be in
such form and amount that would meet the requirements of Fannie Mae or Freddie Mac if it
were the purchaser of the Mortgage Loans, unless the Servicer has obtained a waiver of
such requirements from Fannie Mae or Freddie Mac. The Servicer shall also maintain a
fidelity bond in the form and amount that would meet the requirements of Fannie Mae or
Freddie Mac, unless the Servicer has obtained a waiver of such requirements from Fannie
Mae or Freddie Mac. The Servicer shall be deemed to have complied with this provision if
an Affiliate of the Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage afforded
thereunder extends to the Servicer. Any such errors and omissions policy and fidelity
bond shall by its terms not be cancelable without thirty days’ prior written notice to
the Master Servicer and the Indenture Trustee. The Servicer shall also cause each
Sub-Servicer to maintain a policy of insurance covering errors and omissions and a
fidelity bond which would meet such requirements.

          Section 3.15. Enforcement of Due-On-Sale Clauses; Assumption Agreements.

          The Servicer will, to the extent it has knowledge of any conveyance or prospective
conveyance of any Mortgaged Property by any Mortgagor (whether by absolute conveyance or
by contract of sale, and whether or not the Mortgagor remains or is to remain liable
under the Mortgage Note and/or the Mortgage), exercise its rights to accelerate the
maturity of such Mortgage Loan under the “due-on-sale” clause, if any, applicable
thereto; provided, however, that the Servicer shall not be required to take such action
if in its sole business judgment the Servicer believes it is not in the best interests
of the Trust and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce such
“due-on-sale” clause, or if any of the other conditions set forth in the proviso to the
preceding sentence apply, the Servicer will enter into an assumption and modification
agreement from or with the person to whom such property has been conveyed or is proposed
to be conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains liable
thereon. The Servicer is also authorized, to the extent permitted under the related
Mortgage Note, 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 the Mortgagor and becomes liable under the Mortgage Note, provided that
no such substitution shall be effective unless such person satisfies the current
underwriting criteria of the Servicer for a mortgage loan similar to the related
Mortgage Loan. In connection with any assumption, modification or substitution, the
Servicer shall apply such underwriting standards and follow such practices and
procedures as shall be normal and usual in its general mortgage servicing activities and
as it applies to other mortgage loans owned solely by it. The Servicer shall not take or
enter into any assumption and modification agreement, however, unless (to the extent
practicable in the circumstances) it shall have received confirmation, in writing, of
the continued effectiveness of any applicable hazard insurance policy. Any fee collected
by the Servicer in respect of an assumption, modification or substitution of liability
agreement shall be retained by the Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note (including
but not limited to the related Mortgage Rate and the amount of the Monthly Payment) may
be amended or modified, except as otherwise required pursuant to the terms thereof. The
Servicer shall notify the Master Servicer and the Indenture Trustee that any such
substitution, modification or assumption agreement has been completed by forwarding to
the Custodian, on behalf of the Indenture Trustee, the executed original of such
substitution, modification or assumption agreement, which document 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.

 

 

          Notwithstanding the foregoing paragraph or any other provision of this Agreement,
the Servicer shall not be deemed to be in default, breach or any other violation of its
obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law
or by the terms of the Mortgage Note or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever. For purposes of this
Section 3.15, the term “assumption” is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.

          Section 3.16. Realization Upon Defaulted Mortgage Loans.

          (a) The Servicer shall use its reasonable efforts, consistent with the Servicing
Standard, to foreclose upon or otherwise comparably convert 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 3.07. Title to any such property shall be taken in the name of the Indenture
Trustee or its nominee on behalf of the Noteholders or in the name of the Servicer in
accordance with the Servicer’s customary servicing practices and held for the benefit of
the Trust, subject to applicable law. The Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that such costs
and expenses will be recoverable as Servicing Advances by the Servicer as contemplated
in Section 3.11(a) and Section 3.23. The foregoing is subject to the provision that, in
any case in which a 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 discretion that such restoration will
increase the proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.

          (b) Notwithstanding the foregoing provisions of this Section 3.16 or any other
provision of this Agreement, with respect to any Mortgage Loan as to which the Servicer
has received actual notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the related Mortgaged Property, the Servicer shall not, on behalf
of the Indenture Trustee, either (i) obtain title to such Mortgaged Property as a result
of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire possession of, or
take any other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Indenture Trustee, the Trust or the Noteholders would be considered to
hold title to, to be a “mortgagee-in-possession” of, or to be an “owner” or “operator”
of such Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law, unless the Servicer has also previously determined, based on its
reasonable judgment and a report prepared by a Person who regularly conducts
environmental audits using customary industry standards, that:

          (i) such Mortgaged Property is in compliance with applicable environmental
laws or, if not, that it would be in the best economic interest of the Trust to
take such actions as are necessary to bring the Mortgaged Property into
compliance therewith; and

          (ii) there are no circumstances present at such Mortgaged Property relating
to the use, management or disposal of any hazardous substances, hazardous
materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could be
required under any federal, state or local law or regulation, or that if any such
materials are present for which such action could be required, that it would be
in the best economic interest of the Trust to take such actions with respect to
the affected Mortgaged Property.

          The cost of the environmental audit report contemplated by this Section 3.16 shall
be advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor
from the Collection Account as provided in Section 3.11(a)(vii), such right of
reimbursement being prior to the rights of Noteholders to receive any amount in the
Collection Account received in respect of the affected Mortgage Loan or other Mortgage
Loans.

          If the Servicer determines, as described above, that it is in the best economic
interest of the Trust to take such actions as are necessary to bring any such Mortgaged
Property into compliance with applicable environmental laws, or to take such action with
respect to the containment, clean-up or remediation of hazardous substances, hazardous
materials, hazardous wastes or petroleum-based materials affecting any such Mortgaged
Property, then the Servicer shall take such action as it deems to be in the best
economic interest of the Trust; provided that any amounts disbursed by the Servicer
pursuant to this Section 3.16(b) shall constitute Servicing Advances, subject to Section
4.01(d). The cost of any such compliance, containment, clean-up or remediation shall be
advanced by the Servicer, subject to the Servicer’s right to be reimbursed therefor from
the Collection Account as provided in Section 3.11(a)(vii), such right of reimbursement
being prior to the rights of Noteholders to receive any amount in the Collection Account
received in respect of the affected Mortgage Loan or other Mortgage Loans.

          (c) Reserved.

          (d) Proceeds received in connection with any Final Recovery Determination, as well
as any recovery resulting from a partial collection of Insurance Proceeds, Liquidation
Proceeds or condemnation proceeds, in respect of any Mortgage Loan, will be applied in
the following order of priority: first, to unpaid Servicing Fees; second, to reimburse
the Servicer or any Sub-Servicer for any related unreimbursed Servicing Advances
pursuant to Section 3.11(a)(iii) and Advances pursuant to Section 3.11(a)(ii); third, to
accrued and unpaid interest on the Mortgage Loan, to the date of the Final Recovery
Determination, or to the Due Date prior to the Payment Date on which such amounts are to
be paid if not in connection with a Final Recovery Determination; and fourth, as a
recovery of principal of the Mortgage Loan. The portion of the recovery so allocated to
unpaid Servicing Fees shall be reimbursed to the Servicer or any Sub-Servicer pursuant
to Section 3.11(a)(iii).

          Section 3.17. Custodian and Indenture Trustee to Cooperate; Release of
Mortgage Files.

          (a) Upon the payment in full of any Mortgage Loan, or the receipt by the Servicer
of a notification that payment in full shall be escrowed in a manner customary for such
purposes, the Servicer shall immediately notify or cause to be notified the Custodian,
on behalf of the Indenture Trustee, by a certification and shall deliver to the
Custodian, on behalf of the Indenture Trustee, in written or electronic format, which
format is acceptable to the Custodian, two executed copies of a Request for Release in
the form of Exhibit C hereto (which certification shall include a statement to the
effect that all amounts received or to be received in connection with such payment which
are required to be deposited in the Collection Account pursuant to Section 3.10 have
been or will be so deposited) signed by a Servicing Officer (or in a mutually agreeable
electronic format that will, in lieu of a signature on its face, originate from a
Servicing Officer) and shall request delivery to it of the Mortgage File. Upon receipt
of such certification and request, the Custodian, on behalf of the Indenture Trustee,
shall, within three Business Days, release and send by overnight mail, at the expense
of the Servicer or the related Mortgagor, the related Mortgage File to the Servicer. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Note Account.

 

 

          (b) From time to time and as appropriate for the servicing or foreclosure of any
Mortgage Loan, including, for this purpose, collection under any insurance policy
relating to the Mortgage Loans, the Custodian, on behalf of the Indenture Trustee,
shall, upon any request made by or on behalf of the Servicer and delivery to the
Custodian, on behalf of the Indenture Trustee, of two executed copies of a written
Request for Release in the form of Exhibit C hereto signed by a Servicing Officer (or in
a mutually agreeable electronic format that will, in lieu of a signature on its face,
originate from a Servicing Officer), release the related Mortgage File to the Servicer
within three Business Days, and the Indenture Trustee shall, at the direction of the
Servicer, execute such documents provided to it by the Servicer as shall be necessary to
the prosecution of any such proceedings. Such Request for Release shall obligate the
Servicer to return each and every document previously requested from the Mortgage File
to the Custodian when the need therefor by the Servicer no longer exists, unless the
Mortgage Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Collection Account or the Mortgage File or such document
has been delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Servicer has delivered, or caused to be delivered, to the
Custodian, on behalf of the Indenture Trustee, an additional Request for Release
certifying as to such liquidation or action or proceedings. Upon the request of the
Indenture Trustee or the Custodian, the Servicer shall provide notice to the Indenture
Trustee or the Custodian, as applicable, of the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a Request for Release, in written (with two executed copies)
or electronic format, from a Servicing Officer stating that such Mortgage Loan was
liquidated and that all amounts received or to be received in connection with such
liquidation that are required to be deposited into the Collection Account have been so
deposited, or that such Mortgage Loan has become an REO Property, such Mortgage Loan
shall be released by the Custodian, on behalf of the Indenture Trustee, to the Servicer
or its designee within three Business Days.

          (c) Upon written certification of a Servicing Officer, the Indenture Trustee shall
execute and deliver to the Servicer or the Sub-Servicer, as the case may be, copies of
any court pleadings, requests for Indenture Trustee’s sale or other documents necessary
to the foreclosure or Indenture Trustee’s sale in respect of a Mortgaged Property or to
any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note
or Mortgage or to obtain a deficiency judgment, or to enforce any other remedies or
rights provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Each such certification shall include a request that such pleadings or documents
be executed by the Indenture Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the Indenture
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or Indenture Trustee’s
sale.

          Section 3.18. Servicing Compensation.

          As compensation for its activities hereunder, the Servicer shall be entitled to the
Servicing Fee with respect to each Mortgage Loan payable solely from payments of
interest in respect of such Mortgage Loan, subject to Section 3.24. In addition, the
Servicer shall be entitled to recover unpaid Servicing Fees out of Insurance Proceeds,
Liquidation Proceeds, Subsequent Recoveries or condemnation proceeds to the extent
permitted by Section 3.11(a)(iii) and out of amounts derived from the operation and sale
of an REO Property to the extent permitted by Section 3.23. Except as provided in
Section 3.29, the right to receive the Servicing Fee may not be transferred in whole or
in part except in connection with the transfer of all of the Servicer’s responsibilities
and obligations under this Agreement; provided, however, that the Servicer may pay from
the Servicing Fee any amounts due to a Sub-Servicer pursuant to a Sub-Servicing
Agreement entered into under Section 3.02.

          Additional servicing compensation in the form of assumption fees, late payment
charges, insufficient funds charges or ancillary income (other than Prepayment Charges)
shall be retained by the Servicer only to the extent such fees or charges are received
by the Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account and pursuant to Section 3.23(b) to withdraw from
any REO Account, as additional servicing compensation, interest or other income earned
on deposits therein, subject to Section 3.12 and Section 3.24. The Servicer shall also
be entitled to receive Prepayment Interest Excess pursuant to Section 3.10 and 3.11 as
additional servicing compensation. The Servicer shall be required to pay all expenses
incurred by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.14, to the extent such premiums are not paid by
the related Mortgagors or by a Sub-Servicer, and servicing compensation of each
Sub-Servicer) and shall not be entitled to reimbursement therefor except as specifically
provided herein.

          The Servicer shall be entitled to any Prepayment Interest Excess, which it may
withdraw from the Collection Account pursuant to Section 3.11(a)(ix).

          Section 3.19. Reports to the Securities Administrator and Others;
Collection Account Statements.

          On each Servicer Remittance Date, the Servicer shall forward to the Securities
Administrator, the Master Servicer, the Sponsor and the Depositor an account statement
evidencing the status of the collection account reflecting activity in the previous
month and an Officer’s Certificates shall accompany such account statement certifying
that the information contained in such account statement is true and correct.

          Section 3.20. Statement as to Compliance.

          (a) The Servicer, Master Servicer and Securities Administrator shall deliver to the
Depositor and the Securities Administrator, not later than March 15th of each calendar
year beginning in 2008 an Officers’ Certificate (an “Annual Statement of Compliance”)
stating, as to each signatory thereof, that (i) a review of the activities of each such
party during the preceding calendar year and of performance under this Agreement has
been made under such officers’ supervision and (ii) to the best of such officers’
knowledge, based on such review, the Servicer has fulfilled all of its obligations under
this Agreement in all material respects throughout such year, or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each such
failure known to such officer and the nature and status of cure provisions thereof. Such
Annual Statement of Compliance shall contain no restrictions or limitations on its use.
The Servicer, Master Servicer and Securities Administrator shall deliver a similar
Annual Statement of Compliance by any Sub-Servicer or subcontractor to which the
Servicer, Master Servicer or Securities Administrator has delegated any servicing
responsibilities with respect to the Mortgage Loans, to the Depositor and the Securities
Administrator as described above as and when required with respect to the Servicer.

          Failure of the Servicer or Master Servicer to timely comply with this Section 3.20
shall be deemed a Servicer Event of Termination or Master Servicer Event of Termination,
as applicable, and the Indenture Trustee shall, at the direction of the Depositor, in
addition to whatever rights the Indenture Trustee may have under this Agreement and at
law or equity or to damages, including injunctive relief and specific performance, upon
notice immediately terminate all the rights and obligations of the Servicer or Master
Servicer, as applicable, under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Servicer or Master Servicer, as applicable,
for the same (other than as provided herein with respect to unreimbursed Advances or
Servicing Advances or accrued and unpaid Servicing Fees). This paragraph shall supersede
any other provision in this Agreement or any other agreement to the contrary.

 

 

          The Servicer shall indemnify and hold harmless the Depositor, the Sponsor, the
Master Servicer, the Securities Administrator, the Owner Trustee and the Indenture
Trustee, as applicable and their respective officers, directors and Affiliates from and
against any actual losses, damages, claims, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and expenses that
such Person may sustain based upon a breach of the Servicer’s obligations under this
Section 3.20.

          Section 3.21. Assessments of Compliance and Attestation Reports.

          Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation
AB, the Servicer, Master Servicer, Securities Administrator and Custodian (each an
“Attesting Party”) shall deliver to the Securities Administrator and the Depositor on or
before March 15th of each calendar year beginning in 2008, a report regarding such
Attesting Party’s assessment of compliance (an “Assessment of Compliance”) with the
applicable Servicing Criteria (as set forth in Exhibit H) during the preceding calendar
year. The Assessment of Compliance must contain the following:

          (i) A statement by an authorized officer of such Attesting Party of its
responsibility for assessing compliance with the Servicing Criteria applicable to
such Attesting Party;

          (ii) A statement by an authorized officer of such Attesting Party that such
officer used the Servicing Criteria, and which will also be attached to the
Assessment of Compliance, to assess compliance with the Servicing Criteria
applicable to such Attesting Party;

          (iii) An assessment by an authorized officer of such Attesting Party of such
Attesting Party’s compliance with the applicable Servicing Criteria for the
period consisting of the preceding calendar year, including disclosure of any
material instance of noncompliance with respect thereto during such period, which
assessment shall be based on the activities it performs with respect to
asset-backed securities transactions taken as a whole involving such Attesting
Party, that are backed by the same asset type as the Mortgage Loans;

          (iv) A statement that a registered public accounting firm has issued an
attestation report on such Attesting Party’s Assessment of Compliance for the
period consisting of the preceding calendar year; and

          (v) A statement as to which of the Servicing Criteria, if any, are not
applicable to such Attesting Party, which statement shall be based on the
activities it performs with respect to asset-backed securities transactions taken
as a whole involving such Attesting Party, that are backed by the same asset type
as the Mortgage Loans.

          Such report at a minimum shall address each of the Servicing Criteria specified on
Exhibit H hereto which are indicated as applicable to such Attesting Party.

          On or before March 15th of each calendar year beginning in 2008, each Attesting
Party shall furnish to the Depositor and the Securities Administrator a report (an
“Attestation Report”) by a registered public accounting firm that attests to, and
reports on, the Assessment of Compliance made by such Attesting Party, as required by
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which
Attestation Report must be made in accordance with standards for attestation reports
issued or adopted by the Public Company Accounting Oversight Board.

          The Servicer, Master Servicer, Securities Administrator and Custodian shall cause
any Sub-Servicer engaged by it, and each subcontractor engaged by it and determined by
such party to be “participating in the servicing function” within the meaning of Item
1122 of Regulation AB, to deliver to the Securities Administrator and the Depositor an
Assessment of Compliance and Attestation Report as and when provided above.

          Such Assessment of Compliance, as to any Sub-Servicer, shall address each of the
Servicing Criteria applicable to the Sub-Servicer. Such Assessment of Compliance, as to
any subservicer or subcontractor, shall at a minimum address the applicable Servicing
Criteria specified on Exhibit H hereto which are indicated as applicable to any “primary
servicer” to the extent such subservicer or subcontractor is performing any servicing
function for the party who engages it and to the extent such party is not itself
addressing the Servicing Criteria related to such servicing function in its own
Assessment of Compliance. The Securities Administrator shall confirm that each of the
Assessments of Compliance delivered to it, taken as a whole, address all of the
Servicing Criteria and taken individually address the Servicing Criteria for each party
as set forth in Exhibit H and notify the Depositor of any exceptions. Notwithstanding
the foregoing, as to any subcontractor, an Assessment of Compliance is not required to
be delivered unless it is required as part of a Form 10-K with respect to the Trust
Fund.

          The Custodian shall deliver to the Securities Administrator and the Depositor an
Assessment of Compliance and Attestation Report, as and when provided above, which shall
at a minimum address each of the Servicing Criteria specified on Exhibit H hereto which
are indicated as applicable to a “custodian”. Notwithstanding the foregoing, an
Assessment of Compliance or Attestation Report is not required to be delivered by any
Custodian unless it is required as part of a Form 10-K with respect to the Trust Fund.

          The Custodian has not and shall not engage any Subcontractor which is
“participating in the servicing function” within the meaning of Item 1122 of Regulation
AB, unless such Subcontractor provides, beginning March 1, 2008, a report and a
statement of a registered public accounting firm certifying its compliance with the
applicable servicing criteria in Item 1122(d) of Regulation AB.

          Failure of the Servicer or Master Servicer to timely comply with this Section 3.21
shall be deemed a Servicer Event of Termination or Master Servicer Event of Termination,
as applicable, and the Indenture Trustee shall, at the direction of the Depositor, in
addition to whatever rights the Indenture Trustee may have under this Agreement and at
law or equity or to damages, including injunctive relief and specific performance, upon
notice immediately terminate all the rights and obligations of the Servicer or Master
Servicer, as applicable, under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Servicer or Master Servicer, as applicable,
for the same (other than as provided herein with respect to unreimbursed Advances or
Servicing Advances or accrued and unpaid Servicing Fees). This paragraph shall supercede
any other provision in this Agreement or any other agreement to the contrary. The
Successor Servicer or Successor Master Servicer shall immediately assume the rights and
obligations of the Servicer or Master Servicer, as applicable, under this Agreement.

 

 

          The Servicer shall indemnify and hold harmless the Depositor, the Custodian, the
Master Servicer, the Securities Administrator, the Sponsor, the Owner Trustee and the
Indenture Trustee and their respective officers, directors and Affiliates against and
from any actual losses, damages, claims, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses that such
Person may sustain based upon a breach of the Servicer’s obligations under this Section
3.21.

          The Master Servicer shall indemnify and hold harmless the Depositor, the Sponsor,
the Owner Trustee and the Indenture Trustee and their respective officers, directors and
Affiliates against and from any actual losses, damages, claims, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments and other
costs and expenses that such Person may sustain based upon a breach of the Master
Servicer’s obligations under this Section 3.21.

          The Securities Administrator shall indemnify and hold harmless the Depositor, the
Sponsor, the Owner Trustee and the Indenture Trustee and their respective officers,
directors and Affiliates against and from any actual losses, damages, claims, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and
other costs and expenses that such Person may sustain based upon a breach of the
Securities Administrator’s obligations under this Section 3.21.

          Notwithstanding the foregoing provisions of Section 3.21, in any calendar year in
which an annual report on Form 10-K is not required to be filed, then, in each such
event, the Servicer, Master Servicer and Securities Administrator may, in lieu of
providing an assessment of compliance and attestation thereon in accordance with Item
1122 of Regulation AB, provide (and cause each Subservicer and Subcontractor described
above to provide) to the Depositor, the Sponsor and the Master Servicer, by not later
than March 1 of such calendar year, an Annual Independent Public Accountants’ Servicing
Report. If the Servicer, Master Servicer or Securities Administrator provides an Annual
Independent Public Accountants’ Servicing Report pursuant to this paragraph, then the
certification required to be delivered by the Servicer, Master Servicer and Securities
Administrator, as applicable (and its Subservicers and Subcontractors), shall be in the
form of Exhibit G-1 attached hereto.

          Section 3.22. Access to Certain Documentation.

          The Servicer shall provide to the Office of Thrift Supervision, the FDIC, and any
other federal or state banking or insurance regulatory authority that may exercise
authority over any Noteholder, access to the documentation regarding the Mortgage Loans
required by applicable laws and regulations. Such access shall be afforded without
charge, but only upon reasonable request and during normal business hours at the offices
of the Servicer designated by it. In addition, access to the documentation regarding the
Mortgage Loans will be provided to any Noteholder, the Indenture Trustee, the Owner
Trustee, the Master Servicer and to any Person identified to the Servicer as a
prospective transferee of a Note, upon reasonable request during normal business hours
at the offices of the Servicer designated by it, at the expense of the Person requesting
such access.

          Section 3.23. Title, Management and Disposition of REO Property.

          (a) The deed or certificate of sale of any REO Property shall, subject to
applicable laws, be taken in the name of the Indenture Trustee, or its nominee, in trust
for the benefit of the Noteholders or in the name of the Servicer in accordance with the
Servicer’s customary servicing practices and held for the benefit of the Trust. The
Servicer, on behalf of the Issuing Entity, shall sell any REO Property as soon as
practicable and in any event no later than the end of the third full taxable year after
the taxable year in which such Issuing Entity acquires ownership of such REO Property
for purposes of the Code or request from the Internal Revenue Service, no later than 60
days before the day on which the three-year grace period would otherwise expire, an
extension of such three-year period. The Servicer shall manage, conserve, protect and
operate each REO Property for the Noteholders 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 the Code.

          (b) The Servicer shall separately account for all funds collected and received in
connection with the operation of any REO Property and shall establish and maintain, or
cause to be established and maintained, with respect to REO Properties an account held
in trust for the Indenture Trustee for the benefit of the Noteholders (the “REO
Account”), which shall be an Eligible Account. The Servicer shall be permitted to allow
the Collection Account to serve as the REO Account, subject to separate ledgers for each
REO Property. The Servicer shall be entitled to retain or withdraw any interest income
paid on funds deposited in the REO Account.

          (c) The Servicer shall have full power and authority, subject only to the specific
requirements and prohibitions of this Agreement, to do any and all things in connection
with any REO Property as are consistent with the manner in which the Servicer manages
and operates similar property owned by the Servicer or any of its Affiliates, all on
such terms and for such period (subject to the requirement of prompt disposition set
forth in Section 3.23(a)) as the Servicer deems to be in the best interests of
Noteholders. In connection therewith, the Servicer shall deposit, or cause to be
deposited in the REO Account, in no event more than two Business Days after the
Servicer’s receipt thereof, all revenues received by it with respect to an REO Property
and shall withdraw therefrom funds necessary for the proper operation, management and
maintenance of such REO Property including, without limitation:

          (i) all insurance premiums due and payable in respect of such REO Property;

          (ii) all real estate taxes and assessments in respect of such REO Property
that may result in the imposition of a lien thereon; and

          (iii) all costs and expenses necessary to maintain, operate and dispose of
such REO Property.

          To the extent that amounts on deposit in the REO Account with respect to an REO
Property are insufficient for the purposes set forth in clauses (i) through (iii) above
with respect to such REO Property, the Servicer shall advance from its own funds such
amount as is necessary for such purposes if, but only if, the Servicer would make such
advances if the Servicer owned the REO Property and if in the Servicer’s judgment, the
payment of such amounts will be recoverable from the rental or sale of the REO Property.

          The Servicer may contract with any Independent Contractor for the operation and
management of any REO Property, provided that:

          (i) the terms and conditions of any such contract shall not be inconsistent
herewith;

 

 

          (ii) any such contract shall require, or shall be administered to require,
that the Independent Contractor pay all costs and expenses incurred in connection
with the operation and management of such REO Property, including those listed
above and remit all related revenues (net of such costs and expenses) to the
Servicer as soon as practicable, but in no event later than thirty days following
the receipt thereof by such Independent Contractor;

          (iii) none of the provisions of this Section 3.23(c) relating to any such
contract or to actions taken through any such Independent Contractor shall be
deemed to relieve the Servicer of any of its duties and obligations to the
Indenture Trustee on behalf of the Noteholders with respect to the operation and
management of any such REO Property; and

          (iv) the Servicer shall be obligated with respect thereto to the same extent
as if it alone were performing all duties and obligations in connection with the
operation and management of such REO Property.

          The Servicer shall be entitled to enter into any agreement with any Independent
Contractor performing services for it related to its duties and obligations hereunder
for indemnification of the Servicer by such Independent Contractor, and nothing in this
Agreement shall be deemed to limit or modify such indemnification. The Servicer shall be
solely liable for all fees owed by it to any such Independent Contractor, irrespective
of whether the Servicer’s compensation pursuant to Section 3.18 is sufficient to pay
such fees; provided, however, that to the extent that any payments made by such
Independent Contractor would constitute Servicing Advances if made by the Servicer, such
amounts shall be reimbursable as Servicing Advances made by the Servicer.

          (d) In addition to the withdrawals permitted under Section 3.23(c), the Servicer
may from time to time make withdrawals from the REO Account for any REO Property: (i) to
pay itself or any Sub-Servicer unpaid Servicing Fees in respect of the related Mortgage
Loan; and (ii) to reimburse itself or any Sub-Servicer for unreimbursed Servicing
Advances and Advances made in respect of such REO Property or the related Mortgage Loan.
On the Servicer Remittance Date, the Servicer shall withdraw from each REO Account
maintained by it and deposit into the Note Account in accordance with Section
3.10(d)(ii), for payment on the related Payment Date in accordance with Section 3.05 of
the Indenture, the income from the related REO Property received during the prior
calendar month, net of any withdrawals made pursuant to Section 3.23(c) or this Section
3.23(d).

          (e) Subject to the time constraints set forth in Section 3.23(a), each REO
Disposition shall be carried out by the Servicer in a manner, at such price and upon
such terms and conditions as shall be normal and usual in the Servicing Standard.

          (f) The proceeds from the REO Disposition, net of any amount required by law to be
remitted to the Mortgagor under the related Mortgage Loan and net of any payment or
reimbursement to the Servicer or any Sub-Servicer as provided above, shall be deposited
in the Note Account in accordance with Section 3.10(d)(ii) on the Servicer Remittance
Date in the month following the receipt thereof for payment on the related Payment Date
in accordance with Section 3.05 of the Indenture. Any REO Disposition shall be for cash
only (unless changes in the REMIC Provisions made subsequent to the Closing Date allow a
sale for other consideration).

          (g) The Servicer shall file information returns with respect to the receipt of
mortgage interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and cancellation of indebtedness income with
respect to any Mortgaged Property as required by the Code. Such reports shall be in form
and substance sufficient to meet the reporting requirements of the Code.

          Section 3.24. Obligations of the Servicer in Respect of Prepayment
Interest Shortfalls.

          Not later than 4:00 p.m. New York time on each Servicer Remittance Date, the
Servicer shall remit to the Note Account an amount (“Compensating Interest”) equal to
the lesser of (A) the aggregate of the Prepayment Interest Shortfalls for the related
Payment Date and (B) its aggregate Servicing Fee for the related Payment Date. The
Servicer shall not have the right to reimbursement for any amounts remitted to the
Securities Administrator in respect of Compensating Interest. Such amounts so remitted
shall be included in the Available Funds and paid therewith on the next Payment Date.
The Servicer shall not be obligated to pay Compensating Interest with respect to Relief
Act Interest Shortfalls.

          Section 3.25. [Reserved].

          Section 3.26. Obligations of the Servicer in Respect of Mortgage Rates
and Monthly Payments.

          In the event that a shortfall in any collection on or liability with respect to the
Mortgage Loans in the aggregate results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by the
Servicer in a manner not consistent with the terms of the related Mortgage Note and this
Agreement, the Servicer, upon discovery or receipt of notice thereof, immediately shall
deposit in the Collection Account from its own funds the amount of any such shortfall
and shall indemnify and hold harmless the Trust, the Indenture Trustee, the Depositor,
the Securities Administrator, the Master Servicer and any successor servicer in respect
of any such liability. Such indemnities shall survive the resignation or termination of
the Servicer or the termination or discharge of this Agreement or the Indenture.
Notwithstanding the foregoing, this Section 3.26 shall not limit the ability of the
Servicer to seek recovery of any such amounts from the related Mortgagor under the terms
of the related Mortgage Note, as permitted by law.

          Section 3.27. [Reserved].

          Section 3.28. [Reserved].

          Section 3.29. Advance
Facility.

 

 

          The Servicer is hereby authorized to enter into a financing or other facility (any
such arrangement, an “Advance Facility”) under which (1) the Servicer sells, assigns or
pledges to another Person (together with such Person’s successors and assigns, an
“Advancing Person”) the Servicer’s rights under this Agreement to be reimbursed for any
Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund some or all
Advances and/or Servicing Advances required to be made by the Servicer pursuant to this
Agreement. No consent of the Depositor, the Indenture Trustee,the Master Servicer, the
Securities Administrator the Noteholders or any other party shall be required before the
Servicer may enter into an Advance Facility. The Servicer shall notify each other party
to this Agreement in writing prior to or promptly after entering into or terminating any
Advance Facility stating the identity of the Advancing Person. Notwithstanding the
existence of any Advance Facility under which an Advancing Person agrees to fund
Advances and/or Servicing Advances on the Servicer’s behalf, the Servicer shall remain
obligated pursuant to this Agreement to make Advances and Servicing Advances pursuant to
and as required by this Agreement. If the Servicer enters into an Advance
Facility, and for so long as an Advancing Person remains entitled to receive
reimbursement for any Advances including Nonrecoverable Advances (“Advance Reimbursement
Amounts”) and/or Servicing Advances including Nonrecoverable Advances (“Servicing
Advance Reimbursement Amounts” and together with Advance Reimbursement Amounts,
“Reimbursement Amounts”) (in each case to the extent such type of Reimbursement Amount
is included in the Advance Facility), as applicable, pursuant to this Agreement, then
the Servicer shall identify, in the Officer’s Certificate described in the next two
sentences, such Reimbursement Amounts consistent with the reimbursement rights set forth
in Section 3.11(a)(ii), (iii), (vi) and (vii) and remit such Reimbursement Amounts in
accordance with Section 3.10(b) or otherwise in accordance with the documentation
establishing the Advance Facility to such Advancing Person or to a trustee, agent or
custodian (an “Advance Facility Trustee”) designated by such Advancing Person.
Notwithstanding the foregoing, if so required pursuant to the terms of the Advance
Facility, the Servicer may direct, and if so directed the Securities Administrator is
hereby authorized to and shall pay to the Advance Facility Trustee the Reimbursement
Amounts identified pursuant to the preceding sentence. To the extent that an Advancing
Person funds any Advance and the Servicer provides the Securities Administrator and
Master Servicer with an Officer’s Certificate that such Advancing Person is entitled to
reimbursement, such Advancing Person shall be entitled to receive reimbursement pursuant
to this Agreement for such amount to the extent provided in this section. Such Officer’s
Certificate must specify the amount of the reimbursement, the remittance date, the
Section of this Agreement that permits the applicable Advance to be reimbursed and
either the section(s) of the Advance Facility that entitle the Advancing Person to
request reimbursement from the Securities Administrator, rather than the Servicer, or
proof of an event of default by the Servicer under the Advance Facility entitling the
Advancing Person to reimbursement from the Securities Administrator. Notwithstanding
anything to the contrary herein, in no event shall Advance Reimbursement Amounts or
Servicing Advance Reimbursement Amounts be included in the Available Funds or paid to
Noteholders.

          Reimbursement Amounts shall consist solely of amounts in respect of Advances and/or
Servicing Advances made with respect to the Mortgage Loans for which the Servicer would
be permitted to reimburse itself in accordance with this Agreement, assuming the
Servicer or the Advancing Person had made the related Advance(s) and/or Servicing
Advance(s). Notwithstanding the foregoing, except with respect to reimbursement of
Nonrecoverable Advances as set forth in this Agreement, no Person shall be entitled to
reimbursement from funds held in the Collection Account for future payment to
Noteholders pursuant to this Agreement. None of the Depositor, Master Servicer,
Securities Administrator or the Indenture Trustee shall have any duty or liability with
respect to the calculation of any Reimbursement Amount and shall be entitled to rely,
without independent investigation, on the Officer’s Certificate provided pursuant to
this Section 3.29, nor shall the Depositor, Master Servicer, Securities Administrator or
the Indenture Trustee have any responsibility to track or monitor the administration of
any Advance Facility and the Depositor shall not have any responsibility to track,
monitor or verify the payment of Reimbursement Amounts to the related Advancing Person
or Advance Facility Trustee. The Servicer shall maintain and provide to any successor
servicer and (upon request) the Indenture Trustee, Master Servicer or Securities
Administrator a detailed accounting on a loan by loan basis as to amounts advanced by,
sold, pledged or assigned to, and reimbursed to any Advancing Person. The Successor
Servicer shall be entitled to rely on any such information provided by the predecessor
servicer, and the Successor Servicer shall not be liable for any errors in such
information. Any Successor Servicer shall reimburse the predecessor Servicer and itself
for outstanding Advances and Servicing Advances, respectively, with respect to each
Mortgage Loan on a first in, first out (“FIFO”) basis; provided that the Successor
Servicer has received prior written notice from the predecessor Servicer or the
Advancing Person of reimbursement amounts owed to the predecessor Servicer. Liquidation
Proceeds with respect to a Mortgage Loan shall be applied to reimburse Advances
outstanding with respect to that Mortgage Loan before being applied to reimburse
Servicing Advances outstanding with respect to that Mortgage Loan.

          An Advancing Person who receives an assignment or pledge of the rights to be
reimbursed for Advances and/or Servicing Advances, and/or whose obligations hereunder
are limited to the funding or purchase of Advances and/or Servicing Advances shall not
be required to meet the criteria for qualification of a subservicer set forth in this
Agreement.

          Upon the direction of and at the expense of the Servicer, the Securities
Administrator agrees to execute such acknowledgments, certificates, and other documents
provided by the Servicer recognizing the interests of any Advance Facility Trustee in
such Reimbursement Amounts as the Servicer may cause to be made subject to Advance
Facilities pursuant to this Section 3.29.

          The Servicer shall remain entitled to be reimbursed for all Advances and Servicing
Advances funded by the Servicer to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an Advancing Person.

          The Servicer shall indemnify the Depositor, the Indenture Trustee, the Owner
Trustee, the Master Servicer, the Securities Administrator, any Successor Servicer and
the Trust for any loss, liability or damage resulting from any Advance Facility,
including, without limitation, any claim by the related Advancing Person, except to the
extent that such claim, loss, liability or damage resulted from or arose out of
negligence, recklessness or willful misconduct or breach of its duties hereunder on the
part of the Depositor, the Indenture Trustee or any successor servicer.

          Any amendment to this Section 3.29 or to any other provision of this Agreement that
may be necessary or appropriate to effect the terms of an Advance Facility as described
generally in this Section 3.29, including amendments to add provisions relating to a
successor servicer, may be entered into by the Indenture Trustee, the Depositor and the
Servicer without the consent of any Noteholder but with the consent of the Majority
Certificateholder, provided such amendment complies with Section 7.01 hereof. All
reasonable costs and expenses (including attorneys’ fees) of each party hereto of any
such amendment shall be borne solely by the Servicer. Prior to entering into an Advance
Facility, the Servicer shall notify the Advancing Person in writing that: (a) the
Advances and/or Servicing Advances purchased, financed by and/or pledged to the
Advancing Person are obligations owed to the Servicer on a non-recourse basis payable
only from the cash flows and proceeds received under this Agreement for reimbursement of
Advances and/or Servicing Advances only to the extent provided herein, and none of the
Indenture Trustee, the Securities Administrator nor the Trust are otherwise obligated or
liable to repay any Advances and/or Servicing Advances financed by the Advancing Person
and (b) none of the Indenture Trustee, Master Servicer or Securities Administrator shall
have any responsibility to calculate any Reimbursement Amounts or to track or monitor
the administration of the Advance Facility between the Servicer and the Advancing
Person.

          Section 3.30. Master Servicer.

          The Master Servicer shall supervise, monitor and oversee the obligation of the
Servicer to service and administer the Mortgage Loans in accordance with the terms of
the Agreement and shall have full power and authority to do any and all things which it
may deem necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer shall act
in a manner consistent with Accepted Master Servicing Practices. Furthermore, the Master
Servicer shall oversee and consult with the Servicer as necessary from time-to-time to
carry out the Master Servicer’s obligations hereunder, shall receive, review and
evaluate all reports, information and other data provided to the Master Servicer by the
Servicer and shall enforce the obligations of the Servicer to perform and observe the
covenants, obligations and conditions to be performed or observed by the Servicer under
this Agreement. The Master Servicer shall independently and separately monitor the
Servicer’s servicing activities with respect to each related Mortgage Loan, reconcile
the results of such monitoring with such information provided in the previous sentence
on a monthly basis and coordinate corrective adjustments to the Servicer’s and Master
Servicer’s records. The Master Servicer shall reconcile the results of its Mortgage Loan
monitoring with the actual remittances of the Servicer to the Note Account pursuant to
the terms hereof based on information provided to the Master Servicer by the Securities
Administrator pursuant to the third paragraph of Section 6.01(j) of the Indenture.

 

 

          The Indenture Trustee, Master Servicer, Custodian and Securities Administrator
shall provide access, in each case to the records and documentation in possession of the
Indenture Trustee, the Mater Servicer, the Custodian, or the Securities Administrator,
as the case may be, regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Noteholders, the FDIC, and the supervisory agents and examiners
of the FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at the office of the Indenture Trustee, the Custodian or
the Securities Administrator; provided, however, that, unless otherwise required by law,
none of the Indenture Trustee, the Custodian or the Securities Administrator shall be
required to provide access to such records and documentation if the provision thereof
would violate the legal right to privacy of any Mortgagor. The Indenture Trustee, the
Custodian and the Securities Administrator shall allow representatives of the above
entities, in each case to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Indenture Trustee’s, the
Custodian’s or the Securities Administrator’s, as the case may be, actual costs.

          Section 3.31. Monitoring of Servicer.

          (a) The Master Servicer shall be responsible for monitoring the compliance by the
Servicer with its duties under this Agreement. In the review of the Servicer’s
activities, the Master Servicer may rely upon an Officer’s Certificate of the Servicer
with regard to the Servicer’s compliance with the terms of this Agreement. In the event
that the Master Servicer, in its judgment, determines that the Servicer should be
terminated in accordance with the terms hereof, or that a notice should be sent pursuant
to the terms hereof with respect to the occurrence of an event that, unless cured, would
constitute a Servicer Event of Termination, the Master Servicer shall notify the
Servicer, the Seller and the Indenture Trustee thereof and the Master Servicer shall
issue such notice or take such other action as it deems appropriate.

          (b) The Master Servicer, for the benefit of the Indenture Trustee and the
Noteholders, shall enforce the obligations of the Servicer under this Agreement, and
shall, in the event that the Servicer fails to perform its obligations in accordance
with this Agreement, subject to the preceding paragraph, Article III and Article VI, to
terminate the rights and obligations of the Servicer hereunder in accordance with the
provisions of Article VI. Such enforcement, including, without limitation, the legal
prosecution of claims and the pursuit of other appropriate remedies, shall be in such
form and carried out to such an extent and at such time as the Master Servicer, in its
good faith business judgment, would require were it the owner of the related Mortgage
Loans; provided that the Master Servicer shall not be required to prosecute or defend
any legal action except to the extent that the Master Servicer shall have received
reasonable indemnity for its costs and expenses in pursuing such action.

          (c) The Master Servicer shall be entitled to be reimbursed by the Servicer (or from
amounts on deposit in the Note Account if the Servicer does not timely fulfill its
obligations hereunder) for all Servicing Transfer Costs (or if the predecessor Servicer
is the Master Servicer, from the Servicer immediately preceding the Master Servicer),
including without limitation, any reasonable out-of-pocket or third party costs or
expenses associated with the complete transfer of all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the Master
Servicer to correct any errors or insufficiencies in the servicing data or otherwise to
enable the Master Servicer to service the Mortgage Loans properly and effectively, upon
presentation of reasonable documentation of such costs and expenses.

          (d) The Master Servicer shall require the Servicer to comply with the remittance
requirements and other obligations set forth in this Agreement.

          (e) If the Master Servicer acts as successor Servicer, it will not assume liability
for the representations and warranties of the terminated Servicer.

          (f) The Master Servicer shall not be liable for any acts or omissions of the
Servicer.

          Section 3.32. Fidelity Bond.

          The Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy, affording coverage with respect to
all directors, officers, employees and other Persons acting on such Master Servicer’s
behalf, and covering errors and omissions in the performance of the Master Servicer’s
obligations hereunder. The errors and omissions insurance policy and the fidelity bond
shall be in such form and amount generally acceptable for entities serving as master
servicers or trustees. Upon reasonable request of the Depositor or the Sponsor, the
Master Servicer shall provide to the Depositor or the Sponsor evidence of such insurance
or fidelity bond.

          Section 3.33. Power to Act; Procedures.

          The Master Servicer shall master service the Mortgage Loans and shall have full
power and authority to do any and all things that it may deem necessary or desirable in
connection with the master servicing and administration of the Mortgage Loans, including
but not limited to the power and authority (i) to execute and deliver, on behalf of the
Noteholders and the Indenture 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, (iii) to collect any Insurance
Proceeds and Liquidation Proceeds, and (iv) to effectuate foreclosure or other
conversion of the ownership of the Mortgaged Property. The Indenture Trustee shall
furnish the Master Servicer, upon written request from a Master Servicing Officer, with
any powers of attorney (in form delivered and acceptable to the Indenture Trustee)
empowering the Master Servicer or the Servicer to execute and deliver instruments of
satisfaction or cancellation, or of partial or full release or discharge, and to
foreclose upon or otherwise liquidate Mortgaged Property, and to appeal, prosecute or
defend in any court action relating to the Mortgage Loans or the Mortgaged Property, in
accordance with this Agreement, and the Indenture Trustee shall execute and deliver such
other documents, as the Master Servicer or the Servicer may request, to enable the
Master Servicer to master service and administer the Mortgage Loans and carry out its
duties hereunder, in each case in accordance with Accepted Master Servicing Practices
(and the Indenture Trustee shall have no liability for misuse of any such powers of
attorney by the Master Servicer or the Servicer and shall be indemnified by the Master
Servicer or the Servicer, as applicable, for any cost, liability or expense incurred by
the Indenture Trustee in connection with such Person’s use or misuse of any such power
of attorney). If the Master Servicer or the Indenture Trustee has been advised that it
is likely that the laws of the state in which action is to be taken prohibit such action
if taken in the name of the Indenture Trustee or that the Indenture Trustee would be
adversely affected under the “doing business” or tax laws of such state if such action
is taken in its name, the Master Servicer shall join with the Indenture Trustee in the
appointment of a co-trustee pursuant to Section 6.10 of the Indenture. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in the
name of the Indenture Trustee, be deemed to be the agent of the Indenture Trustee.

 

 

          Section 3.34. Due-on-Sale Clauses; Assumption Agreements.

          To the extent Mortgage Loans contain enforceable due-on-sale clauses, the Master
Servicer shall cause the Servicer to enforce such clauses in accordance with this
Agreement.

          Section 3.35. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Trustee.

          (a) The Master Servicer shall transmit to the Indenture Trustee or Custodian such
documents and instruments coming into the possession of the Master Servicer from time to
time as are required by the terms hereof to be delivered to the Indenture Trustee or
Custodian. Any funds received by the Master Servicer in respect of any Mortgage Loan or
which otherwise are collected by the Master Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be remitted to the Securities
Administrator for deposit in the Note Account. The Master Servicer shall, and, subject
to Section 3.11, shall enforce the obligations of the Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Indenture Trustee, its
agents and accountants at any time upon reasonable request and during normal business
hours, and to Noteholders that are savings and loan associations, banks or insurance
companies, the Office of Thrift Supervision, the FDIC and the supervisory agents and
examiners of such Office and Corporation or examiners of any other federal or state
banking or insurance regulatory authority if so required by applicable regulations of
the Office of Thrift Supervision or other regulatory authority, such access to be
afforded without charge but only upon reasonable request in writing and during normal
business hours at the offices of the Master Servicer designated by it. In fulfilling
such a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.

          (b) All funds collected or held by, or under the control of, the Master Servicer,
in respect of any Mortgage Loans, whether from the collection of principal and interest
payments or from Liquidation Proceeds or Insurance Proceeds, shall be remitted to the
Securities Administrator for deposit in the Note Account.

          Section 3.36. Possession of Certain Insurance Policies and Documents.

          The Custodian, shall retain possession and custody of the originals (to the extent
available) of any primary mortgage insurance policies, or certificate of insurance if
applicable, and any Notes of renewal as to the foregoing as may be issued from time to
time as contemplated by this Agreement. Until all amounts payable in respect of the
Notes has been paid in full and the Master Servicer and the Servicer have otherwise
fulfilled their respective obligations under this Agreement, the Custodian shall also
retain possession and custody of each Mortgage File in accordance with and subject to
the terms and conditions of this Agreement. The Master Servicer shall promptly deliver
or cause to be delivered to the Custodian, upon the execution or receipt thereof the
originals of any primary mortgage insurance policies, any Notes of renewal, and such
other documents or instruments related to the Mortgage Loans that come into the
possession of the Master Servicer from time to time.

          Section 3.37. Compensation for the Master Servicer.

          As compensation for the activities of the Master Servicer hereunder, the Master
Servicer shall be entitled to the Master Servicing Fee, payable to the Master Servicer
on each Payment Date (with respect to the calendar month that immediately preceded the
month of such Payment Date) from funds in the Note Account. The Master Servicing Fee
payable to the Master Servicer in respect of any Payment Date shall be reduced in
accordance with Section 3.38. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.

          Section 3.38. Obligation of the Master Servicer in Respect of Prepayment
Interest Shortfalls.

          In the event that the Servicer fails to perform on any Servicer Remittance Date its
obligations pursuant to Section 3.24, the Master Servicer shall remit to the Securities
Administrator not later than the Payment Date an amount equal to the lesser of (i) the
aggregate amounts required to be paid by the Servicer with respect to Prepayment
Interest Shortfalls attributable to Principal Prepayments on the related Mortgage Loans
for the related Payment Date, and not so paid by the Servicer and (ii) the Master
Servicing Fee for such Payment Date, without reimbursement therefor.

          Section 3.39. Merger or Consolidation.

          Any Person into which the Master Servicer may be merged or consolidated, or any
Person resulting from any merger, conversion, other change in form or consolidation to
which the Master Servicer shall be a party, or any Person succeeding to the business of
the Master Servicer, shall be the successor to the Master Servicer hereunder, without
the execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or resulting Person to the Master Servicer or its Affiliate whose primary
business is the servicing of conventional residential mortgage loans shall be a Person
that is an Approved Servicer.

          Section 3.40. Resignation of Master Servicer.

          Except as otherwise provided in Sections 3.39 and 3.41 hereof, the Master Servicer
shall not resign from the obligations and duties hereby imposed on it unless the Master
Servicer’s duties hereunder are no longer permissible under applicable law or are in
material conflict by reason of applicable law with any other activities carried on by it
and cannot be cured. Any such determination permitting the resignation of the Master
Servicer shall be evidenced by an independent Opinion of Counsel to such effect
delivered to the Issuer, the Depositor, the Seller and the Indenture Trustee. No such
resignation shall become effective until the Indenture Trustee shall have assumed, or a
Successor Master Servicer shall have been appointed by the Sponsor or the Indenture
Trustee and until such successor shall have assumed, the Master Servicer’s
responsibilities and obligations under this Agreement. Notice of such resignation shall
be given promptly by the Master Servicer to the Indenture Trustee.

          If, at any time, the Master Servicer resigns under this Section 3.40, or transfers
or assigns its rights and obligations under Section 4.16, or is removed as Master
Servicer pursuant to Section 6.07, then at such time Wells Fargo Bank, N.A. also shall
resign (and shall be entitled to resign) as Securities Administrator, Custodian, Paying
Agent and Note Registrar. In such event, the obligations of each such party shall be
assumed by the Indenture Trustee or such Successor Master Servicer appointed by the
Indenture Trustee (subject to the provisions of Section 6.07); provided, however, the
Indenture Trustee shall have the same right to appoint, or petition a court to appoint,
a successor Securities Administrator, Paying Agent or Note Registrar as it has pursuant
to Section 6.07 with respect to a successor Master Servicer.

 

 

          Section 3.41. Assignment or Delegation of Duties by the Master Servicer.

          Except as expressly provided herein, the Master Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other Person, or
delegate to or subcontract with, or authorize or appoint any other Person to perform any
of the duties, covenants or obligations to be performed by the Master Servicer
hereunder; provided, however, that the Master Servicer shall have the right with the
prior written consent of the Indenture Trustee and the Seller (which consent shall not
be unreasonably withheld), and upon delivery to the Indenture Trustee and the Seller of
a letter from each Rating Agency to the effect that such action shall not result in a
downgrading of the Notes, to delegate or assign to or subcontract with or authorize or
appoint any qualified Person to perform and carry out any duties, covenants or
obligations to be performed and carried out by the Master Servicer hereunder. Notice of
such permitted assignment shall be given promptly by the Master Servicer to the Seller
and the Indenture Trustee. If, pursuant to any provision hereof, the duties of the
Master Servicer are transferred to a Successor Master Servicer, the entire amount of the
Master Servicing Fees and other compensation payable to the Master Servicer pursuant
hereto shall thereafter be payable to such Successor Master Servicer. Such Successor
Master Servicer shall also pay the fees of the Indenture Trustee and the Securities
Administrator, as provided herein.

ARTICLE IV

REMITTANCE REPORTS; ADVANCES; EXCHANGE ACT REPORTING

          Section 4.01. Remittance Reports and Advances.

          (a) On the 10th calendar day of each month, the Servicer shall deliver to the
Master Servicer and the Sponsor by telecopy or electronic mail (or by such other means
as the Servicer and the Master Servicer may agree from time to time) a Remittance Report
in the format attached as Exhibit J, Exhibit K and Exhibit L with respect to the related
Payment Date. Not later than the second Business Day following each Determination Date,
the Servicer shall deliver or cause to be delivered to the Master Servicer in addition
to the information provided in the Remittance Report, information with respect to the
Principal Prepayments in full from the portion of the Prepayment Period from the 1st to
the 15th of each calendar month and such other information reasonably available to it
with respect to the Mortgage Loans as the Master Servicer may reasonably require to
perform the calculations necessary to make the payments contemplated by Section 3.05 of
the Indenture and to prepare the statements to Noteholders contemplated by Section 3.26
of the Indenture. The Master Servicer shall not be responsible to recompute, recalculate
or verify any information provided to it by the Servicer.

          (b) The amount of Advances to be made by the Servicer for any Payment Date shall
equal, subject to Section 4.01(d), the sum of (i) the aggregate amount of Monthly
Payments (net of the related Servicing Fee), due during the related Due Period in
respect of the Mortgage Loans, which Monthly Payments were delinquent on a contractual
basis as of the Close of Business on the related Determination Date and (ii) with
respect to each REO Property, which REO Property was acquired during or prior to the
related Due Period and as to which REO Property an REO Disposition did not occur during
the related Due Period, an amount equal to the excess, if any, of the REO Imputed
Interest on such REO Property for the most recently ended calendar month, over the net
income from such REO Property transferred to the Note Account pursuant to Section 3.23
for payment on such Payment Date.

          On or before 2:00 p.m. New York time on the Servicer Remittance Date, the Servicer
shall remit in immediately available funds to the Securities Administrator for deposit
in the Note Account an amount equal to the aggregate amount of Advances, if any, to be
made in respect of the Mortgage Loans and REO Properties for the related Payment Date
either (i) from its own funds or (ii) from the Collection Account, to the extent of
funds held therein for future payment (in which case it will cause to be made an
appropriate entry in the records of the Collection Account that amounts held for future
payment have been, as permitted by this Section 4.01, used by the Servicer in discharge
of any such Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of Advances to be made by the Servicer with respect to the Mortgage
Loans and REO Properties. Any amounts held for future payment used by the Servicer to
make an Advance as permitted in the preceding sentence shall be appropriately reflected
in the Servicer’s records and replaced by the Servicer by deposit in the Collection
Account on or before any future Servicer Remittance Date to the extent that the
Available Funds for the related Payment Date (determined without regard to Advances to
be made on the Servicer Remittance Date) shall be less than the total amount that would
be paid to the Classes of Noteholders pursuant to Section 3.05 of the Indenture on such
Payment Date if such amounts held for future payments had not been so used to make
Advances. The Securities Administrator will provide notice to the Servicer by telecopy
by the Close of Business on any Servicer Remittance Date in the event that the amount
remitted by the Servicer to the Securities Administrator on such date is less than the
Advances required to be made by the Servicer for the related Payment Date, as set forth
in the related Remittance Report.

          (c) The obligation of the Servicer to make such Advances is mandatory,
notwithstanding any other provision of this Agreement but subject to (d) below, and,
with respect to any Mortgage Loan, shall continue until the Mortgage Loan is paid in
full or until all Liquidation Proceeds thereon have been recovered, or a Final Recovery
Determination has been made thereon.

          (d) Notwithstanding anything herein to the contrary, no Advance or Servicing
Advance shall be required to be made hereunder by the Servicer if such Advance or
Servicing Advance would, if made, constitute a Nonrecoverable Advance. The determination
by the Servicer that it has made a Nonrecoverable Advance or that any proposed Advance
or Servicing Advance, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officers’ Certificate of the Servicer delivered to the Sponsor and the
Master Servicer. Furthermore, the Servicer shall not be required to advance Relief Act
Interest Shortfalls.

          (e) If the Servicer fails to remit any Monthly Advance required to be made pursuant
to this Section, the Master Servicer shall make, or the Successor Servicer shall make,
such Advance. If the Master Servicer determines that a Monthly Advance is required, it
shall on the Business Day preceding the related Payment Date immediately following such
Determination Date remit to the Securities Administrator from its own funds (or funds
advanced by the applicable Servicer) for deposit in the Note Account immediately
available funds in an amount equal to such Monthly Advance. The Master Servicer shall be
entitled to be reimbursed for all Monthly Advances made by it. Notwithstanding anything
to the contrary herein, in the event the Master Servicer determines in its reasonable
judgment that a Monthly Advance is a Nonrecoverable Advance, the Master Servicer shall
be under no obligation to make such Monthly Advance. If the Master Servicer determines
that a Monthly Advance is a Nonrecoverable Advance, it shall, on or prior to the related
Payment Date, deliver an Officer’s Certificate to the Indenture Trustee and the
Securities Administrator to such effect.

 

 

          Section 4.02. Exchange Act Reporting.

          (a) (i) (A) Within 15 days after each Distribution Date, the Securities
Administrator shall, in accordance with industry standards, prepare and, in accordance
with Section (a)(i)(C) below, file with the Commission via the Electronic Data Gathering
and Retrieval System (“EDGAR”), a Distribution Report on Form 10-D, signed by the Master
Servicer, with a copy of the Monthly Statement to be furnished by the Securities
Administrator to the Certificateholders for such Distribution Date; provided that, the
Securities Administrator shall have received no later than five (5) calendar days after
the related Distribution Date, all information required to be provided to the Securities
Administrator as described in clause (a)(iv) below. Any disclosure that is in addition
to the Monthly Statement and that is required to be included on Form 10-D (“Additional
Form 10-D Disclosure”) shall be, pursuant to the paragraph immediately below, reported
by the parties set forth on Exhibit I to the Securities Administrator and the Depositor
and approved for inclusion by the Depositor, and the Securities Administrator will have
no duty or liability for any failure hereunder to determine or prepare any Additional
Form 10-D Disclosure absent such reporting (other than in the case where the Securities
Administrator is the reporting party as set forth in Exhibit I) and approval.

          (B) Within five (5) calendar days after the related Distribution Date, (i) the
parties set forth in Exhibit I shall be required to provide, pursuant to Section
4.02(a)(iv) below, to the Securities Administrator and the Depositor, to the extent
known by a responsible officer thereof, in EDGAR-compatible format, or in such other
form as otherwise agreed upon by the Securities Administrator and the Depositor and such
party, the form and substance of any Additional Form 10-D Disclosure, if applicable, and
(ii) the Depositor will approve, as to form and substance, or disapprove, as the case
may be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Issuing
Entity shall be responsible for any reasonable fees and expenses assessed or incurred by
the Securities Administrator in connection with including any Additional Form 10-D
Disclosure on Form 10-D pursuant to this Section.

          (C) After preparing the Form 10-D, the Securities Administrator shall forward
electronically a copy of the Form 10-D to the Depositor, the Sponsor and the Master
Servicer for review. Within two Business Days after receipt of such copy, but no later
than the 12th calendar day after the Distribution Date (provided that, the Securities
Administrator forwards a copy of the Form 10-D no later than the 10th calendar after the
Distribution Date), the Depositor shall notify the Securities Administrator in writing
(which may be furnished electronically) of any changes to or approval of such Form 10-D.
In the absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 10-D is in final form and the
Securities Administrator may proceed with the execution and filing of the Form 10-D. No
later than the 13th calendar day after the related Distribution Date, a duly authorized
officer of the Master Servicer shall sign the Form 10-D and, in the case where the
Master Servicer and the Securities Administrator are not affiliated, return an
electronic or fax copy of such signed Form 10-D (with an original executed hard copy to
follow by overnight mail) to the Securities Administrator. If a Form 10-D cannot be
filed on time or if a previously filed Form 10-D needs to be amended, the Securities
Administrator shall follow the procedures set forth in Section 3.17(a)(v)(B). Promptly
(but no later than one (1) Business Day) after filing with the Commission, the
Securities Administrator shall make available on its internet website identified in
Section 7.04 of the Indenture, a final executed copy of each Form 10-D filed by the
Securities Administrator. The signing party at the Master Servicer can be contacted as
set forth in Section 7.04. Form 10-D requires the registrant to indicate (by checking
“yes” or “no”) that it (1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. The Depositor shall notify the Securities
Administrator in writing, no later than the fifth calendar day after the related
Distribution Date with respect to the filing of a report on Form 10-D, if the answer to
the questions should be “no”. The Securities Administrator shall be entitled to rely on
the representations in Section 2.05(ix) and in any such notice in preparing, executing
and/or filing any such report. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of their respective
duties under Sections 4.02(a)(i) and (v) related to the timely preparation, execution
and filing of Form 10-D is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under such Sections. Neither the
Master Servicer nor the Securities Administrator shall have any liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file such Form 10-D, where such failure results from a
party’s failure to deliver, on a timely basis, any information from any such party
needed to prepare, arrange for execution or file such Form 10-D, not resulting from its
own negligence, bad faith or willful misconduct.

          (ii) (A) Within four (4) Business Days after the occurrence of an event requiring
disclosure on Form 8-K (each such event, a “Reportable Event”), the Securities
Administrator shall prepare and, at the direction of the Depositor, file on behalf of
the Trust, any Form 8-K, as required by the Exchange Act; provided that, the Depositor,
upon receipt from the Sponsor of the relevant final Basic Documents within 14 days after
the Closing Date, shall file the initial Form 8-K in connection with the issuance of the
Notes. 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,
pursuant to the paragraph immediately below, reported by the parties set forth on
Exhibit I to the Securities Administrator and the Depositor and approved for inclusion
by the Depositor, and the Securities Administrator will have no duty or liability for
any failure hereunder to determine or prepare any Form 8-K Disclosure Information absent
such reporting (other than in the case where the Securities Administrator is the
reporting party as set forth in Exhibit I) and approval.

          (B) For so long as the Trust is subject to the Exchange Act reporting requirements,
no later than the close of business on the 2nd Business Day after the occurrence of a
Reportable Event (i) the parties set forth in Exhibit I shall be required pursuant to
Section 4.02(a)(iv) below to provide to the Securities Administrator and the Depositor,
to the extent known by a responsible officer thereof, in EDGAR-compatible format, or in
such other form as otherwise agreed upon by the Securities Administrator and the
Depositor and such party, the form and substance of any Form 8-K Disclosure Information,
if applicable, and (ii) the Depositor shall approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure Information on
Form 8-K. The Issuing Entity shall be responsible for any reasonable fees and expenses
assessed or incurred by the Securities Administrator in connection with including any
Form 8-K Disclosure Information on Form 8-K pursuant to this Section.

          (C) After preparing the Form 8-K, the Securities Administrator shall forward
electronically a copy of the Form 8-K to the Depositor and the Master Servicer for
review. No later than the close of business New York City time on the 3rd Business Day
after the Reportable Event, or in the case where the Master Servicer and Securities
Administrator are affiliated, no later than noon New York City time on the 4th Business
Day after the Reportable Event, a duly authorized officer of the Master Servicer shall
sign the Form 8-K and, in the case where the Master Servicer and the Securities
Administrator are not affiliated, 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 Securities
Administrator. Promptly, but no later than the close of business on the 3rd Business Day
after the Reportable Event (provided that, the Securities Administrator forwards a copy
of the Form 8-K no later than noon New York time on the third Business Day after the
Reportable Event), the Depositor shall notify the Securities Administrator in writing
(which may be furnished electronically) of any changes to or approval of such Form 8-K.
In the absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 8-K is in final form and the
Securities Administrator may proceed with the execution and filing of the Form 8-K. If a
Form 8-K cannot be filed on time or if a previously filed Form 8-K needs to be amended,
the Securities Administrator shall follow the procedures set forth in Section
4.02(a)(v)(B). Promptly (but no later than one (1) Business Day) after filing with the
Commission, the Securities Administrator shall, make available on its internet website a
final executed copy of each Form 8-K filed by the Securities Administrator. The signing
party at the Master Servicer can be contacted as set forth in Section 7.03. The parties
to this Agreement acknowledge that the performance by Master Servicer and the Securities
Administrator of their respective duties under this Section 4.02(a)(ii) related to the
timely preparation, execution and filing of Form 8-K is contingent upon such parties
strictly observing all applicable deadlines in the performance of their duties under
this Section 4.02(a)(ii). Neither the Master Servicer nor the Securities Administrator
shall have any liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such Form 8-K,
where such failure results from a party’s failure to deliver, on a timely basis, any
information from such party needed to prepare, arrange for execution or file such Form
8-K, not resulting from its own negligence, bad faith or willful misconduct.

 

 

          (iii) (A) Within 90 days after the end of each fiscal year of the Trust or such
earlier date as may be required by the Exchange Act (the “10-K Filing Deadline”) (it
being understood that the fiscal year for the Trust ends on December 31st of each year),
commencing in March 2008, the Securities Administrator shall prepare and file on behalf
of the Trust a Form 10-K, in form and substance as required by the Exchange Act. Each
such Form 10-K shall include the following items, in each case to the extent they have
been delivered to the Securities Administrator within the applicable time frames set
forth in this Agreement, (I) an annual compliance statement for each Servicer, the
Master Servicer, the Securities Administrator and any subservicer or subcontractor, as
applicable, as described under Section 3.20, (II)(A) the annual reports on assessment of
compliance with Servicing Criteria for each Servicer, the Master Servicer, each
subservicer and subcontractor participating in the servicing function, the Securities
Administrator and the Custodians, as described under Section 3.21, and (B) if any such
report on assessment of compliance with Servicing Criteria described under Section 3.21
identifies any material instance of noncompliance, disclosure identifying such instance
of noncompliance, or if any such report on assessment of compliance with Servicing
Criteria described under Section 3.21 is not included as an exhibit to such Form 10-K,
disclosure that such report is not included and an explanation why such report is not
included, (III)(A) the registered public accounting firm attestation report for each
Servicer, the Master Servicer, the Securities Administrator, each subservicer, each
subcontractor, as applicable, and the Custodians, as described under Section 3.21, and
(B) if any registered public accounting firm attestation report described under Section
3.21 identifies any material instance of noncompliance, disclosure identifying such
instance of noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such report is
not included and an explanation why such report is not included, and (IV) a
Sarbanes-Oxley Certification as described in Section 4.02 (a)(iii)(D) below (provided,
however, that the Securities Administrator, at its discretion, may omit from the Form
10-K any annual compliance statement, assessment of compliance or attestation report
that is not required to be filed with such Form 10-K pursuant to Regulation AB). Any
disclosure or information in addition to (I) through (IV) above that is required to be
included on Form 10-K (“Additional Form 10-K Disclosure”) shall be, pursuant to the
paragraph immediately below, reported by the parties set forth on Exhibit I to the
Securities Administrator and the Depositor and approved for inclusion by the Depositor,
and the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure absent such
reporting (other than in the case where the Securities Administrator is the reporting
party as set forth in Exhibit I) and approval.

          (B) No later than March 15th of each year that the Trust is subject to the Exchange
Act reporting requirements, commencing in 2008, (i) the parties set forth in Exhibit I
shall be required to provide pursuant to Section 4.02(a)(iv) below to the Securities
Administrator and the Depositor, to the extent known by a responsible officer thereof,
in EDGAR-compatible format, or in such other form as otherwise agreed upon by the
Securities Administrator and the Depositor and such party, the form and substance of any
Additional Form 10-K Disclosure, if applicable, and (ii) the Depositor will approve, as
to form and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-K Disclosure on Form 10-K. The Issuing Entity shall be responsible
for any reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure on Form
10-K pursuant to this Section.

          (C) After preparing the Form 10-K, the Securities Administrator shall forward
electronically a copy of the Form 10-K to the Depositor (only in the case where such
Form 10-K includes Additional Form 10-K Disclosure and otherwise if requested by the
Depositor) and the Master Servicer for review. Within three Business Days after receipt
of such copy, but no later than March 25th (provided that, the Securities Administrator
forwards a copy of the Form 10-K no later than the third Business Day prior to March
25th), the Depositor shall notify the Securities Administrator in writing (which may be
furnished electronically) of any changes to or approval of such Form 10-K. In the
absence of receipt of any written changes or approval, the Securities Administrator
shall be entitled to assume that such Form 10-K is in final form and the Securities
Administrator may proceed with the execution and filing of the Form 10-K. No later than
the close of business Eastern Standard time on the 4th Business Day prior to the 10-K
Filing Deadline, an officer of the Master Servicer in charge of the master servicing
function shall sign the Form 10-K and, in the case where the Master Servicer and the
Securities Administrator are unaffiliated, return an electronic or fax copy of such
signed Form 10-K (with an original executed hard copy to follow by overnight mail) to
the Securities Administrator. If a Form 10-K cannot be filed on time or if a previously
filed Form 10-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 4.02(a)(v)(B). Promptly (but no later than one (1)
Business Day) after filing with the Commission, the Securities Administrator shall make
available on its internet website a final executed copy of each Form 10-K filed by the
Securities Administrator. The signing party at the Master Servicer can be contacted as
set forth in Section 7.03. Form 10-K requires the registrant to indicate (by checking
“yes” or “no”) that it (1) has filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. The Depositor shall notify the Securities
Administrator in writing, no later than March 15th of each year in which the Trust is
subject to the requirements of the Exchange Act with respect to the filing of a report
on Form 10-K, if the answer to the question should be “no”. The Securities Administrator
shall be entitled to rely on such response and in any such notice in preparing,
executing and/or filing any such report. The parties to this Agreement acknowledge that
the performance by the Master Servicer and the Securities Administrator of their
respective duties under Sections 4.02(a)(iv) and (v) related to the timely preparation,
execution and filing of Form 10-K is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under such Sections and Sections
3.20 and Section 3.21. Neither the Master Servicer nor the Securities Administrator shall
have any liability for any loss, expense, damage, claim arising out of or with respect
to any failure to properly prepare, execute and/or timely file such Form 10-K, where
such failure results from the Master Servicer’s or the Securities Administrator’s
inability or failure to receive, on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such
 Form 10-K, not resulting
from its own negligence, bad faith or willful misconduct.

          (D) Each Form 10-K shall include a certification (the “Sarbanes-Oxley
Certification”) required to be included therewith pursuant to the Sarbanes-Oxley Act
which shall be signed by the Certifying Person and delivered to the Securities
Administrator no later than March 15th of each year in which the Trust is subject to
the reporting requirements of the Exchange Act. The Master Servicer shall cause the
Servicer, and any subservicer or subcontractor engaged by it to, provide to the Person
who signs the Sarbanes-Oxley Certification (the “Certifying Person”), by March 10th of
each year in which the Trust is subject to the reporting requirements of the Exchange
Act (or such other date specified in the related Servicing Agreement) and otherwise
within a reasonable period of time upon request, a certification (each, a “Back-Up
Certification”), in the form attached hereto as Exhibit _, upon which the Certifying
Person, the entity for which the Certifying Person acts as an officer, and such entity’s
officers, directors and Affiliates (collectively with the Certifying Person,
“Certification Parties”) can reasonably rely. In addition, the Mortgage Loan Seller and,
in the case where the Master Servicer and Securities Administrator are not affiliated,
the Securities Administrator shall sign a Back-Up Certification substantially in the
form of Exhibit _; provided, however, the Mortgage Loan Seller and the Securities
Administrator shall not be required to undertake an analysis of any accountant’s report
attached as an exhibit to the Form 10-K. An officer of the Master Servicer in charge of
the master servicing function shall serve as the Certifying Person on behalf of the
Trust. Such officer of the Certifying Person can be contacted as set forth in Section
7.03.

 

 

          (iv) With respect to any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or any Form 8-K Disclosure Information (collectively, the “Additional
Disclosure”) relating to the Trust Fund, the Securities Administrator’s obligation to
include such Additional Information in the applicable Exchange Act report is subject to
receipt from the entity that is indicated in Exhibit I as the responsible party for
providing that information, if other than the Securities Administrator, as and when
required as described in Section 4.02(a)(i) through (iii) above. Such Additional
Disclosure shall be accompanied by a notice substantially in the form of Exhibit M. Each
of the Servicer, the Master Servicer, the Seller, the Securities Administrator and the
Depositor hereby agrees to notify and provide, to the extent known to the Servicer, the
Master Servicer, the Seller, the Securities Administrator and the Depositor all
Additional Disclosure relating to the Trust Fund, with respect to which such party is
indicated in Exhibit I as the responsible party for providing that information. The
Issuing Entity shall be responsible for any reasonable fees and expenses assessed or
incurred by the Securities Administrator in connection with including any Additional
Disclosure information pursuant to this Section.

          So long as the Depositor is subject to the filing requirements of the Exchange Act
with respect to the Trust Fund, the Indenture Trustee shall notify the Securities
Administrator and the Depositor of any bankruptcy or receivership with respect to the
Indenture Trustee or of any proceedings of the type described under Item 1117 of
Regulation AB that have occurred as of the related Due Period, together with a
description thereof, no later than the date on which such information is required of
other parties hereto as set forth under this Section 4.02. In addition, the Indenture
Trustee shall notify the Securities Administrator and the Depositor of any affiliations
or relationships that develop after the Closing Date between the Indenture Trustee and
the Depositor, the Seller, the Servicer, the Securities Administrator, the Master
Servicer or the Custodian of the type described under Item 1119 of Regulation AB,
together with a description thereof, no later than March 15 of each year that the Trust
is subject to the Exchange Act reporting requirements, commencing in 2008. Should the
identification of any of the Depositor, the Servicer, the Seller, the Securities
Administrator, the Master Servicer or the Custodian change, the Depositor and the
Sponsor, to the extent known by them, shall each promptly notify the Indenture Trustee.

          (v) (A) On or prior to January 30th of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities Administrator shall
prepare and file a Form 15 relating to the automatic suspension of reporting in respect
of the Trust under the Exchange Act.

          (B) In the event that the Securities Administrator is unable to timely file with
the Commission all or any required portion of any Form 8-K, 10-D or 10-K required to be
filed by this Agreement because required disclosure information was either not delivered
to it or delivered to it after the delivery deadlines set forth in this Agreement or for
any other reason, the Securities Administrator shall promptly notify the Depositor and
the Master Servicer. In the case of Form 10-D and 10-K, the Depositor, the Master
Servicer and the Securities Administrator shall cooperate to prepare and file a Form
12b-25 and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange Act.
In the case of Form 8-K, the Securities Administrator will, upon receipt of all required
Form 8-K Disclosure Information and upon the approval of the Depositor, include such
disclosure information on the next Form 10-D. In the event that any previously filed
Form 8-K, 10-D or 10-K needs to be amended, and such amendment relates to any Additional
Disclosure, the Securities Administrator shall notify the Depositor and the parties
affected thereby and such parties will cooperate to prepare any necessary Form 8-K,
10-DA or 10-KA. Any Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K
shall be signed by an appropriate officer of the Master Servicer. The parties hereto
acknowledge that the performance by the Master Servicer and the Securities Administrator
of their respective duties under this Section 3.15(a)(v) related to the timely
preparation, execution and filing of Form 15, a Form 12b-25 or any amendment to Form
8-K, 10-D or 10-K is contingent upon the Master Servicer and the Depositor timely
performing their duties under this Section. Neither the Master Servicer nor the
Securities Administrator shall have any liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare, execute and/or timely
file any such Form 15, Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K, where
such failure results from a party’s failure to deliver, on a timely basis, any
information from such party needed to prepare, arrange for execution or file such Form
15, Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.

          The Depositor and the Sponsor each agrees to promptly furnish to the Securities
Administrator, from time to time upon reasonable request, such further information,
reports and financial statements within its control and related to this Agreement and
the Mortgage Loans as the Securities Administrator that it reasonably deems appropriate
in order to prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those specified
in this Section 4.02; provided, however, the Securities Administrator shall cooperate
with the Depositor in connection with any additional filings with respect to the Trust
Fund as the Depositor deems necessary under the Exchange Act. Fees and expenses incurred
by the Securities Administrator in connection with this Section 4.02 shall not be
reimbursable from the Trust Fund.

          (b) The Securities Administrator shall indemnify and hold harmless the Depositor,
the Indenture Trustee, the Servicer, the Seller and the Sponsor and each of its
officers, directors and affiliates from and against any losses, damages, claims,
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
Securities Administrator’s obligations under Sections 3.20, 3.21 and 4.02 or the
Securities Administrator’s negligence, bad faith or willful misconduct in connection
therewith. In addition, the Securities Administrator shall indemnify and hold harmless
the Depositor, the Indenture Trustee, the Servicer, the Seller and the Sponsor and each
of their respective officers, directors and affiliates from and against any losses,
damages, claims, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based upon (i)
any untrue statement or alleged untrue statement of any material fact contained in any
Back-Up Certification, any Annual Statement of Compliance, any Assessment of Compliance
or any Additional Disclosure provided by the Securities Administrator on its behalf or
on behalf of any subservicer or subcontractor engaged by the Securities Administrator
pursuant to Section 3.20, 3.21 or 4.02 (the “Securities Administrator Information”), or
(ii) any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; provided, by way of
clarification, that this paragraph shall be construed solely by reference to the
Securities Administrator Information and not to any other information communicated in
connection with the Notes, without regard to whether the Securities Administrator
Information or any portion thereof is presented together with or separately from such
other information.

 

 

          The Depositor shall indemnify and hold harmless the Securities Administrator, the Servicer,
the Seller, the Indenture Trustee, the Sponsor, the Custodian and the Master Servicer and each of
its officers, directors and affiliates from and against any losses, damages, claims, 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 obligations of the Depositor to
deliver the information to be provided by it as set forth in Exhibit I or the Depositor’s
negligence, bad faith or willful misconduct in connection therewith. In addition, the Depositor
shall indemnify and hold harmless the Master Servicer, the Servicer, the Indenture Trustee, the
Seller, the Sponsor, the Custodian, the Securities Administrator and each of its respective
officers, directors and affiliates from and against any losses, damages, claims, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any Additional Disclosure provided by the Depositor that is required to
be filed pursuant to this Section 4.02 (the “Depositor Information”), or (ii) any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were made, not misleading;
provided, by way of clarification, that this paragraph shall be construed solely by reference to
the Depositor Information that is required to be filed and not to any other information
communicated in connection with the Notes, without regard to whether the Depositor Information or
any portion thereof is presented together with or separately from such other information.

          The Master Servicer shall indemnify and hold harmless the Indenture Trustee, the Servicer, the
Seller, the Sponsor, and the Depositor and each of its respective officers, directors and
affiliates from and against any losses, damages, claims, 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 obligations of the Master Servicer under Sections 3.20, 3.21 and 4.02
or the Master Servicer’s negligence, bad faith or willful misconduct in connection therewith. In
addition, the Master Servicer shall indemnify and hold harmless the Indenture Trustee, the
Depositor, the Servicer, the Seller, the Sponsor, and each of their officers, directors and
affiliates from and against any losses, damages, claims, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and expenses arising out of
or based upon (i) any untrue statement or alleged untrue statement of any material fact contained
in any Annual Statement of Compliance, any Assessment of Compliance or any Additional Disclosure
provided by the Master Servicer on its behalf or on behalf of any subservicer or subcontractor
engaged by the Master Servicer pursuant to Section 3.20, 3.21 or 4.02 (the “Master Servicer
Information”), or (ii) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading; provided, by way of clarification, that this paragraph shall
be construed solely by reference to the Master Servicer Information and not to any other
information communicated in connection with the Notes, without regard to whether the Master
Servicer Information or any portion thereof is presented together with or separately from such
other information.

          The Servicer shall indemnify and hold harmless the Securities Administrator, the Master
Servicer, the Securities Administrator, the Custodian, the Indenture Trustee, and the Depositor and
each of its respective officers, directors and affiliates from and against any losses, damages,
claims, 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 obligations of the Servicer under Sections 3.20, 3.21 and 4.02 or the Servicer’s
negligence, bad faith or willful misconduct in connection therewith. In addition, the Servicer
shall indemnify and hold harmless Securities Administrator, the Master Servicer, the Securities
Administrator, the Custodian, the Indenture Trustee, and the Depositor, and each of their officers,
directors and affiliates from and against any losses, damages, claims, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any Annual Statement of Compliance, any Assessment of Compliance or any
Additional Disclosure provided by the Servicer on its behalf or on behalf of any subservicer or
subcontractor engaged by the Servicer pursuant to Section 3.20, 3.21 or 4.02 (the “Servicer
Information”), or (ii) any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading; provided, by way of clarification, that this paragraph shall
be construed solely by reference to the Servicer Information and not to any other information
communicated in connection with the Notes, without regard to whether the Servicer Information or
any portion thereof is presented together with or separately from such other information.

          The Custodian shall indemnify and hold harmless the Securities Administrator, the Master
Servicer, the Servicer, the Seller, the Sponsor, the Indenture Trustee, and the Depositor and each
of its respective officers and directors from and against any losses, damages, claims, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other
costs and expenses directly resulting from a material breach of the obligations of the Custodian
under Sections 3.20, 3.21 and 4.02 of this Agreement constituting negligence, bad faith or willful
misconduct on behalf of the Custodian in connection therewith. In addition, the Custodian shall
indemnify and hold harmless Securities Administrator, the Master Servicer, the Securities
Administrator, the Servicer, the Seller, the Sponsor, the Indenture Trustee, and the Depositor, and
each of their officers, directors and affiliates from and against any losses, damages, claims,
penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and
other costs and expenses directly resulting from (i) any untrue statement or alleged untrue
statement of any material fact contained in any Annual Statement of Compliance, any Assessment of
Compliance or any Additional Disclosure provided by the Custodian on its behalf or on behalf of any
subservicer or subcontractor engaged by the Custodian pursuant to Section 3.20, 3.21 or 4.02 of
this Agreement (the “Custodian Information”), or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading; provided, by way of
clarification, that this paragraph shall be construed solely by reference to the Custodian
Information and not to any other information communicated in connection with the Notes, without
regard to whether the Custodian Information or any portion thereof is presented together with or
separately from such other information.

          The Sponsor shall indemnify and hold harmless the Securities Administrator, the Depositor, the
Indenture Trustee, the Custodian, the Securities Administrator and the Master Servicer and each of
its officers, directors and affiliates from and against any losses, damages, claims, 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 obligations of the Sponsor under
Section 4.02 or the Sponsor’s negligence, bad faith or willful misconduct in connection therewith.
In addition, the Sponsor shall indemnify and hold harmless the Depositor, the Indenture Trustee,
the Custodian, the Securities Administrator and the Master Servicer and each of its respective
officers, directors and affiliates from and against any losses, damages, claims, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and
expenses arising
out of or based upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any Additional Disclosure provided by the Sponsor that is required to be filed
pursuant to this Section 4.02 (the “Sponsor Information”), or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not misleading;
provided, by way of clarification, that this paragraph shall be construed solely by reference to
the Sponsor Information that is required to be filed and not to any other information communicated
in connection with the Notes, without regard to whether the Sponsor Information or any portion
thereof is presented together with or separately from such other information.

 

 

          If the indemnification provided for herein is unavailable or insufficient to hold harmless the
Depositor, the Securities Administrator, the Sponsor, the Servicer, the Seller or the Master
Servicer, as applicable, then the defaulting party, in connection with any conduct for which it is
providing indemnification under this Section 4.02(b), agrees that it shall contribute to the amount
paid or payable by the other parties as a result of the losses, claims, damages or liabilities of
the other party in such proportion as is appropriate to reflect the relative fault and the
relative benefit of the respective parties.

          The indemnification provisions set forth in this Section 4.02(b) shall survive the termination of
this Agreement or the termination of any party to this Agreement.

          (c) Failure of the Master Servicer to comply with Section 3.20, 3.21 and this Section 4.02
(including with respect to the timeframes required herein) shall constitute a Master Servicer
Event of Termination, and at the written direction of the Depositor, the Indenture Trustee shall,
in addition to whatever rights the Indenture Trustee may have under this Agreement and at law or
equity or to damages, including injunctive relief and specific performance, upon notice immediately
terminate all of the rights and obligations of the Master Servicer under this Agreement and in and
to the Mortgage Loans and the proceeds thereof without compensating the Master Servicer for the
same (but subject to the Master Servicer rights to payment of any Master Servicing Compensation
and reimbursement of all amounts for which it is entitled to be reimbursed prior to the date of
termination). Failure of the Securities Administrator to comply with this Section 3.17 (including
with respect to the timeframes required in this Section) which failure results in a failure to
timely file the related Form 10-K, shall, at the written direction of the Depositor, constitute a
default and the Indenture Trustee at the direction of the Depositor shall, in addition to whatever
rights the Indenture Trustee may have under this Agreement and at law or equity or to damages,
including injunctive relief and specific performance, upon notice immediately terminate all of the
rights and obligations of the Securities Administrator under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Securities Administrator for the
same (but subject to the Securities Administrator’s right to reimbursement of all amounts for
which it is entitled to be reimbursed prior to the date of termination). This paragraph shall
supersede any other provision in this Agreement or any other agreement to the contrary. In
connection with the termination of the Master Servicer or the Securities Administrator pursuant to
this Section 4.02, the Indenture Trustee shall be entitled to reimbursement of all costs and
expenses associated with such termination to the extent set forth in Section 6.08 of the
Indenture. Notwithstanding anything to the contrary in this Agreement, no Event of Default by the
Master Servicer or default by the Securities Administrator shall have occurred with respect to any
failure to properly prepare, execute and/or timely file any report on Form 8-K, Form 10-D or Form
10-K, any Form 15 or Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K, where such failure
results from a party’s failure to deliver, on a timely basis, any information from such party
needed to prepare, arrange for execution or file any such report, Form or amendment, and does not
result from its own negligence, bad faith or willful misconduct.

          (d) Notwithstanding the provisions of Section 7.01, this Section 4.02 may be amended without the
consent of the Noteholders.

          (e) Any report, notice or notification to be delivered by the Master Servicer or the Securities
Administrator to the Depositor pursuant to this Section 4.02, may be delivered via email to
RegABNotifications@bear.com or, in the case of a notification, telephonically by calling Reg AB
Compliance Manager at 212-272-7525.

          (f) Each of the parties acknowledges and agrees that the purpose of Sections 3.20, 3.21 and 4.02 of
this Agreement is to facilitate compliance by the Sponsor, the Depositor and the Master Servicer
with the provisions of Regulation AB. Therefore, each of the parties agrees that (a) the
obligations of the parties hereunder shall be interpreted in such a manner as to accomplish that
purpose, (b) the parties’ obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance, convention or consensus
among active participants in the asset-backed securities markets, advice of counsel, or otherwise
in respect of the requirements of Regulation AB, (c) the parties shall comply with reasonable
requests made by the Sponsor, the Depositor, the Master Servicer or the Securities Administrator
for delivery of additional or different information as the Sponsor, the Depositor, the Master
Servicer or the Securities Administrator may determine in good faith is necessary to comply with
the provisions of Regulation AB, and (d) no amendment of this Agreement shall be required to
effect any such changes in the obligations of the parties to this transaction as are necessary to
accommodate evolving interpretations of the provisions of Regulation AB.

          Section 4.03. Swap Account.

          (a) On the Closing Date, the Securities Administrator shall establish and maintain a separate,
segregated trust account titled, “Swap Account, The Bank of New York, as Indenture Trustee, in
trust for the registered Noteholders of Newcastle Mortgage Securities Trust 2007-1, Asset-Backed
Notes, Series 2007-1.” Such 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 Securities Administrator held pursuant to this Agreement.
Amounts therein shall be held uninvested.

          (b) On the Business Day prior to Payment Date, prior to any payment to any Note, the Securities
Administrator shall deposit into the Swap Account the amount of any Net Swap Payment or Swap
Termination Payment (other than any Swap Termination Payment resulting from a Swap Provider Trigger
Event) owed to the Swap Provider (after taking into account any upfront payment received from the
counterparty to a replacement interest rate swap agreement) from funds collected and received with
respect to the Mortgage Loans prior to the determination of Available Funds and all amounts
received by it from the Swap Provider.

          (c) The Securities Administrator shall use any payment received from the Owner Trustee pursuant to
Section 2.03 of the Trust Agreement to make any upfront payment required under a replacement swap
agreement and any upfront payment received from the counterparty to a replacement swap agreement
shall be used to pay any Swap Termination Payment owed to the Swap Provider.

          Section 4.04. Cap Account.

          (a) On the Closing Date, the Securities Administrator shall establish and maintain
a separate, segregated trust account titled, “Cap Account, The Bank of New York, as
Indenture Trustee, in trust for the registered Noteholders of Newcastle Mortgage
Securities Trust 2007-1, Asset-Backed Notes, Series 2007-1.” Such 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 Securities Administrator held pursuant to this Agreement. Amounts therein
shall be held uninvested.

 

 

ARTICLE V

THE SERVICER AND THE DEPOSITOR

          Section 5.01. Liability of the Servicer, Master Servicer and the Depositor.

          The Servicer and Master Servicer shall be liable in accordance herewith only to the
extent of the obligations specifically imposed upon and undertaken by Servicer or Master
Servicer, as the case may be, herein. The Depositor shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken by the
Depositor.

          Section 5.02. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer or the Depositor.

          Any entity into which the Servicer or Depositor may be merged or consolidated, or any
entity resulting from any merger, conversion or consolidation to which the Servicer or the
Depositor shall be a party, or any corporation succeeding to the business of the Servicer
or the Depositor, shall be the successor of the Servicer or the Depositor, 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 Servicer shall satisfy all the requirements of Section 6.02
with respect to the qualifications of a successor Servicer.

          Section 5.03. Limitation on Liability of the Servicer, Master Servicer and Others.

          None of the Servicer, the Master Servicer, the Depositor nor any of the directors or
officers or employees or agents of the Servicer, the Master Servicer or the Depositor
shall be under any liability to the Trust or the Noteholders for any action taken or for
refraining from the taking of any action by the Servicer the Master Servicer, or the
Depositor in good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Servicer, the Master Servicer, the
Depositor or any such Person against any liability which would otherwise be imposed by
reason of its willful misfeasance, bad faith or negligence in the performance of duties of
the Servicer, the Master Servicer, or the Depositor, as the case may be, or by reason of
its reckless disregard of its obligations and duties as Servicer, Master Servicer, or
Depositor, as the case may be, hereunder. The Servicer and Master Servicer, and any
director or officer or employee or agent of the Servicer or Master 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 Servicer, the Master Servicer and the
Depositor, and any director or officer or employee or agent of the Servicer, the Master
Servicer or the Depositor, shall be indemnified by the Trust and held harmless against any
loss, liability or expense incurred in connection with (i) any legal action relating to
this Agreement or the Notes, other than any loss, liability or expense incurred by reason
of its willful misfeasance, bad faith or negligence or by reason of its reckless disregard
of its obligations and duties hereunder or by reason of its failure to perform its
obligations or duties hereunder and (ii) any breach of a representation or warranty
regarding the Mortgage Loans. The Servicer, the Master
Servicer or the Depositor may undertake any such action which it may deem necessary
or desirable in respect of this Agreement, and the rights and duties of the parties hereto
and the interests of the Noteholders hereunder. In such event, unless the Depositor, the
Master Servicer or the Servicer acts without the consent of the Holders of 51% of the
aggregate Note Balance of the Notes, the reasonable legal expenses and costs of such
action and any liability resulting therefrom shall be expenses, costs and liabilities of
the Trust and the Servicer shall be entitled to be reimbursed therefor from the Collection
Account as and to the extent provided in Section 3.11, any such right of reimbursement
being prior to the rights of the Noteholders to receive any amount in the Collection
Account. The Master Servicer shall be indemnified by the Issuing Entity pursuant to
Section 6.07 of the Indenture.

          The Servicer’s and the Depositor’s right to indemnity or reimbursement pursuant to
this Section shall survive any resignation or termination of the Servicer pursuant to
Section 5.04 or 6.01 with respect to any losses, expenses, costs or liabilities arising
prior to such resignation or termination (or arising from events that occurred prior to
such resignation or termination). The Master Servicer’s right to indemnity or
reimbursement pursuant to this Section 5.03 shall survive any resignation or termination
of the Master Servicer pursuant to Section 3.40 or 6.06 with respect to any losses,
expenses, costs or liabilities arising prior to such resignation or termination (or
arising from events that occurred prior to such resignation or termination).

          Section 5.04. Servicer Not to Resign.

          The Servicer shall not resign from the obligations and duties hereby imposed on it
except upon determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to the preceding sentence permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such effect
obtained at the expense of the Servicer and delivered to the Master Servicer. No
resignation of the Servicer shall become effective until the Servicer appoints a successor
servicer and the successor servicer shall have assumed the Servicer’s responsibilities,
duties, liabilities (other than those liabilities arising prior to the assumption of
servicing duties by the Successor Servicer) and obligations under this Agreement. Any such
resignation shall not relieve the Servicer of responsibility for any of the obligations
specified in Sections 6.01 and 6.02 as obligations that survive the resignation or receipt
of notice of termination of the Servicer

          Except as expressly provided in this Agreement, the Servicer shall not assign or
transfer any of its rights, benefits or privileges hereunder to any other Person, or
delegate to or subcontract with, or authorize or appoint any other Person to perform any
of the duties, covenants or obligations to be performed by the Servicer hereunder. The
foregoing prohibition on assignment shall not prohibit the Servicer from designating a
Sub-Servicer as payee of any indemnification amount payable to the Servicer hereunder;
provided, however, no Sub-Servicer shall be a third-party beneficiary hereunder and the
parties hereto shall not be required to recognize any Sub-Servicer as an indemnitee under
this Agreement.

          Section 5.05. Delegation of Duties.

          In the ordinary course of business, the Servicer at any time may delegate any of its
duties hereunder to any Person, including any of its Affiliates, who agrees to conduct
such duties in accordance with standards comparable to those set forth in Section 3.01.
Such delegation shall not relieve the Servicer of its liabilities and responsibilities
with respect to such duties and shall not constitute a resignation within the meaning of
Section 5.04. Except as provided in Section 3.02, no such delegation is permitted that
results in the delegee subservicing any Mortgage Loans. The Servicer shall
provide the Indenture Trustee, Master Servicer and Securities Administrator with 60 days
prior written notice prior to the delegation of any of its duties to any Person other than
any of the Servicer’s Affiliates or their respective successors and assigns.

 

 

          Section 5.06. Indemnification.

          (a) The Servicer agrees to indemnify and hold the Indenture Trustee, the Owner
Trustee, the Sponsor, the Master Servicer, the Securities Administrator, the Seller, the
Sponsor and the Depositor harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees and
expenses that the Indenture Trustee, the Owner Trustee, the Sponsor, the Master Servicer,
the Securities Administrator, the Seller, the Sponsor or the Depositor may sustain in any
way related to the failure of the Servicer to perform its duties and service the Mortgage
Loans in compliance with the terms of this Agreement.

          (b) The Master Servicer shall indemnify and hold harmless the Trust, the Securities
Administrator, the Servicer, the Seller, the Sponsor, the Depositor, the Indenture Trustee
and the Owner Trustee from and against any loss, liability, expense, damage or injury
suffered or sustained by reason of the Master Servicer’s willful misfeasance, bad faith or
negligence in the performance of its activities in master servicing or administering the
Mortgage Loans pursuant to this Agreement, including, but not limited to, any judgment,
award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in
connection with the defense of any actual or threatened action, proceeding or claim
related to the Master Servicer’s misfeasance, bad faith or negligence. Any such
indemnification shall not be payable from the assets of the Trust. The provisions of this
Section 5.06(b) shall survive the termination of this Agreement.

          (c) The Custodian shall indemnify and hold harmless the Trust, the Servicer, the
Seller, the Sponsor, the Depositor and the Indenture Trustee from and against any loss,
liability, expense, damage or injury directly resulting from a Custodial Delivery Failure.
The provisions of this Section 5.06(c) shall survive the termination of this Agreement.

          Section 5.07. Inspection

          The Servicer, in its capacity as Servicer, shall afford the Indenture Trustee and the
Master Servicer, upon reasonable notice, during normal business hours, access to all
records maintained by the Servicer in respect of its rights and obligations hereunder and
access to officers of the Servicer responsible for such obligations.

ARTICLE VI

DEFAULT

          Section 6.01. Servicer Events of Termination.

          (a) If any one of the following events (“Servicer Events of Termination”) shall occur
and be continuing:

          (i) (A) The failure by the Servicer to make any Advance; or (B) any other
failure by the Servicer to deposit in the Collection Account or the Note Account any
deposit required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which written notice
of such failure shall have been given to the Servicer by the Master Servicer,
Securities Administrator or Indenture
Trustee or to the Servicer and the Indenture Trustee by any Holders of not less
than 25% of the aggregate Note Balances of the Notes; or

          (ii) The failure by the Servicer to make any required Servicing Advance which
failure continues unremedied for a period of 30 days, or the failure by the Servicer
duly to observe or perform, in any material respect, any other covenants,
obligations or agreements of the Servicer as set forth in this Agreement, which
failure continues unremedied for a period of 30 days (or if such failure or breach
cannot be remedied within 30 days, then such remedy shall have been commenced within
30 days and diligently pursued thereafter; provided, however, that in no event shall
such failure or breach be allowed to exist for a period of greater than 90 days),
after the date (A) on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Master Servicer, Securities
Administrator or Indenture Trustee or to the Indenture Trustee by any Holders of not
less than 25% of the aggregate Note Balance of the Notes or (B) of actual knowledge
of such failure by a Servicing Officer of the Servicer; or

          (iii) The entry against the Servicer of a decree or order by a court or agency
or supervisory authority having jurisdiction in the premises for the appointment of
a trustee, conservator, receiver or liquidator in any insolvency, conservatorship,
receivership, readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of 60
days;

          (iv) Reserved; or

          (v) The Servicer shall voluntarily go into liquidation, consent to the
appointment of a conservator or receiver or liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer or of or relating to all or substantially
all of its property; or a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a conservator,
receiver, liquidator or similar person 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, unbonded or unstayed for
a period of 60 days; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the benefit
of its creditors or voluntarily suspend payment of its obligations;

          (b) then, and in each and every such case, so long as a Servicer Event of Termination
shall not have been remedied within the applicable grace period, (x) with respect solely
to clause (i)(A) above, if such Advance is not made by 11:00 A.M., New York time, on the
Business Day immediately following the Servicer Remittance Date (provided the Master
Servicer shall give the Servicer, and the Servicer shall have received, notice of such
failure to advance by 5:00 P.M. New York time on the Servicer Remittance Date), the Master
Servicer shall terminate all of the rights and obligations of the Servicer under this
Agreement and the Successor Servicer appointed in accordance with Section 6.02, shall
immediately make such Advance and assume, pursuant to Section 6.02, the duties of a
successor Servicer and (y) in the case of (i)(B), (ii), (iii) and (iv) above, the Master
Servicer shall,
at the direction of the Holders of each Class of Notes evidencing Percentage Interests
aggregating not less than 51%, by notice then given in writing to the Servicer and Master
Servicer (and to the Indenture Trustee if given by Holders of Notes), terminate all of the
rights and obligations of the Servicer as servicer under this Agreement. Any such notice
to the Servicer shall also be given to each Rating Agency, the Depositor, the Sponsor and
the Seller. On or after the receipt by the Servicer (and by the Indenture Trustee if such
notice is given by the Holders) of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Notes or the Mortgage Loans or
otherwise, shall pass to and be vested in the Successor Servicer pursuant to and under
this Section; and, without limitation, and the Successor Servicer is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage Loan and
related documents or otherwise. The Servicer agrees to cooperate with the Successor
Servicer (or the applicable successor Servicer) in effecting the termination of the
responsibilities and rights of the Servicer hereunder, including, without limitation, the
delivery to the Successor Servicer of all documents and records requested by it to enable
it to assume the Servicer’s functions under this Agreement within ten Business Days
subsequent to such notice, the transfer within one Business Day subsequent to such notice
to the Successor Servicer for the administration by it of all cash amounts that shall at
the time be held by the Servicer and to be deposited by it in the Collection Account, the
Note Account, any REO Account or any Escrow Account or that have been deposited by the
Servicer in such accounts or thereafter received by the Servicer with respect to the
Mortgage Loans or any REO Property received by the Servicer. All Servicing Transfer Costs
shall be paid by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses and to the extent not paid by the Servicer, by the Trust.

 

 

          Notwithstanding the termination of the Servicer hereunder, the Servicer shall be
entitled to reimbursement of all unpaid Servicing Fees and all unreimbursed Advances and
Servicing Advances in the manner and at the times set forth herein.

          Section 6.02. Master Servicer to Act; Appointment of Successor.

          (a) From the time the Servicer (and the Indenture Trustee, if notice is sent by the
Holders) receives a notice of termination pursuant to Section 6.01, the Master Servicer
(or such other successor Servicer as is approved in accordance with this Agreement) shall
be the successor in all respects to the Servicer in its capacity as servicer under this
Agreement (the “Successor Servicer”) and the transactions set forth or provided for herein
and shall be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof arising on and after its
succession. Notwithstanding the foregoing, the parties hereto agree that the Successor
Servicer, immediately will assume all of the obligations of the Servicer to make Advances
subject to Section 4.01. Notwithstanding the foregoing, the Successor Servicer shall not
be responsible for the lack of information and/or documents that it cannot obtain through
reasonable efforts. It is understood and agreed by the parties hereto that there will be a
period of transition (not to exceed 90 days) before the transition of servicing
obligations is fully effective. As compensation therefor, the Successor Servicer shall be
entitled to such compensation as the Servicer would have been entitled to hereunder if no
such notice of termination or resignation had been given. The appointment of the Successor
Servicer shall not affect any liability of the predecessor Servicer which may have arisen
under this Agreement prior to its termination as Servicer to pay any deductible under an
insurance policy pursuant to Section 3.14 or to reimburse the Successor Servicer pursuant
to Section 3.06, nor shall any Successor Servicer be liable for any acts or omissions of
the predecessor Servicer or for any breach by such Servicer of any of its representations
or warranties contained herein or in any related document or agreement. The Successor
Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. All reasonable
Servicing Transfer Costs shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs, and if such predecessor Servicer defaults in its
obligation to pay such costs, such costs shall be paid by the Successor Servicer (in which
case the Successor Servicer shall be entitled to reimbursement therefor from the assets of
the Trust).

          Notwithstanding the above, (a) if the Master Servicer is to act as successor servicer
and is legally unable so to act, the Indenture Trustee shall act as Successor Servicer and
(b) if the Indenture Trustee is to act as successor servicer and (i) if the Indenture
Trustee is unwilling to act as Successor Servicer or (ii) if the Indenture Trustee is
legally unable so to act, the Indenture Trustee shall appoint (with the consent of the
Majority Certificateholder) or petition a court of competent jurisdiction to appoint, any
established housing and home finance institution, bank or other mortgage loan or home
equity loan servicer having a net worth of not less than $50,000,000 as the successor to
the Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor Servicer will not result in the qualification, reduction or withdrawal of
the ratings assigned to the Notes by the Rating Agencies as evidenced by a letter to such
effect from the Rating Agencies. Pending appointment of a successor to the Servicer
hereunder, unless the Indenture Trustee is prohibited by law from so acting, the Indenture
Trustee shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive compensation out of
payments on Mortgage Loans in an amount equal to the compensation which the Servicer would
otherwise have received pursuant to Section 3.18 (or such other compensation as the
Indenture Trustee and such successor shall agree, not to exceed the Servicing Fee).

          (b) Any Successor Servicer shall during the term of its service as servicer continue
to service and administer the Mortgage Loans for the benefit of Noteholders, and maintain
in force a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Servicer hereunder and a fidelity bond in respect of its
officers, employees and agents to the same extent as the Servicer is so required pursuant
to Section 3.14.

          (c) In connection with the termination or resignation of the Servicer hereunder,
either (i) the Successor Servicer, including the Master Servicer or the Indenture Trustee
if acting as a Successor Servicer, shall represent and warrant that it is a member of MERS
in good standing and shall agree to comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the related Mortgage Loans that are
registered with MERS, in which case the predecessor Servicer shall cooperate with the
Successor Servicer in causing MERS to revise its records to reflect the transfer of
servicing to the Successor Servicer as necessary under MERS’ rules and regulations, or
(ii) the predecessor Servicer shall cooperate with the Successor Servicer in causing MERS
to execute and deliver an Assignment in recordable form to transfer the Mortgage from MERS
to the Indenture Trustee and to execute and deliver such other notices, documents and
other instruments as may be necessary or desirable to effect a transfer of such Mortgage
Loan or servicing of such Mortgage Loan on the MERS® System to the Successor Servicer. The
predecessor Servicer shall file or cause to be filed any such Assignment in the
appropriate recording office. The predecessor Servicer shall bear any and all fees of
MERS, costs of preparing any Assignments, and fees and costs of filing any Assignments
that may be required under this Section 6.02(c).

          Section 6.03. Waiver of Defaults.

          The Majority Noteholders may, on behalf of all Noteholders, waive, in writing, any
events permitting removal of the Servicer as servicer or the Master Servicer as master
servicer pursuant to this Article VI, provided, however, that the Majority Noteholders may
not waive a default in making a required payment on a Note without the written consent of
the Holder of such Note. Upon any waiver of a past default, such default shall cease to
exist and any Servicer Event of Termination or Master Servicer Event of Termination, as
applicable, arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default or impair
any right consequent thereto except to the extent expressly so waived. Notice of any such
waiver shall be given by the Securities Administrator to the Sponsor and the Rating
Agencies.

 

 

          Section 6.04. Notification to Noteholders.

          (a) Upon any termination or appointment of a successor to the Servicer or Master
Servicer pursuant to this Article VI or Section 5.04, the Securities Administrator shall
give prompt written notice thereof to the Owner Trustee, the Sponsor, the Depositor and
the Noteholders at their respective addresses appearing in the Note Register and each
Rating Agency.

          (b) No later than the later of (a) 60 days after the occurrence of any event which
constitutes or which, with notice or lapse of time or both, would constitute a Servicer
Event of Termination or (b) within five Business Days after a Responsible Officer of the
Securities Administrator becomes aware of the occurrence of such an event, the Securities
Administrator shall transmit by mail to all Noteholders notice of such occurrence unless
such default or Servicer Event of Termination shall have been waived or cured.

          Section 6.05. Survivability of Liabilities.

          Notwithstanding anything herein to the contrary, upon termination of the Servicer or
Master Servicer hereunder, any liabilities of the Servicer or Master Servicer, as the case
may be, which accrued prior to such termination shall survive such termination.

          Section 6.06. Master Servicer Events of Termination.

          (a) If any one of the following events (“Master Servicer Events of Default”) shall
occur and be continuing:

          (i) If the Master Servicer is not the Securities Administrator, any failure by
the Master Servicer to furnish the Securities Administrator the Mortgage Loan data
sufficient to prepare the reports described in Section 7.05 of the Indenture which
continues unremedied for a period of one Business Day after the date upon which
written notice of such failure shall have been given to such Master Servicer by the
Indenture Trustee or the Securities Administrator or to such Master Servicer, the
Securities Administrator and the Indenture Trustee by the Holders of not less than
25% of the aggregate Note Balance of the Notes; or

          (ii) Any failure on the part of the Master Servicer duly to observe or perform
in any material respect any other of the covenants or agreements (other than those
referred to in clauses (viii) and (ix) below) on the part of the Master Servicer
contained in this Agreement which continues unremedied for a period of thirty (30)
days after the date on which written notice of such failure, requiring the same to
be remedied, shall have been given to the Master Servicer by the Indenture Trustee
or the Securities Administrator, or to the Master Servicer, the Securities
Administrator and the Indenture Trustee by the Holders of not less than 25% of the
aggregate Note Balance of the Notes; or

          (iii) A decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer, and such decree or order shall have remained in
force undischarged or unstayed for a period of sixty (60) days or any Rating Agency
reduces or withdraws or threatens to reduce or withdraw the rating of the Notes
because
of the financial condition or loan servicing capability of such Master
Servicer; or

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

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

          (vi) The Master Servicer shall be dissolved, or shall dispose of all or
substantially all of its assets, or consolidate with or merge into another entity or
shall permit another entity to consolidate or merge into it, such that the resulting
entity does not meet the criteria for a Successor Master Servicer as specified in
Section 6.04 hereof; or

          (vii) If a representation or warranty set forth in Section 2.01(b) hereof shall
prove to be incorrect as of the time made in any respect that materially and
adversely affects the interests of the Noteholders, and the circumstance or
condition in respect of which such representation or warranty was incorrect shall
not have been eliminated or cured within 30 days after the date on which written
notice of such incorrect representation or warranty shall have been given to the
Master Servicer by the Indenture Trustee or the Securities Administrator, or to the
Master Servicer, the Securities Administrator and the Indenture Trustee by the
Holders of not less than 25% of the aggregate Note Balance of the Notes; or

          (viii) A sale or pledge of any of the rights of the Master Servicer hereunder
or an assignment of this Agreement by the Master Servicer or a delegation of the
rights or duties of the Master Servicer hereunder shall have occurred in any manner
not otherwise permitted hereunder and without the prior written consent of the
Indenture Trustee and the Holders of not less than 50% of the aggregate Note Balance
of the Notes; or

          (ix) Any failure of the Master Servicer to make any Monthly Advances when such
Monthly Advances are due, as required to be made hereunder.

          (b) then, and in each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, (x) with respect solely to clause (ix) above, upon
receipt of written notice or discovery by a Responsible Officer of the Indenture Trustee
or of the Securities Administrator of such failure, the Indenture Trustee shall give
immediate telephonic notice of such failure to a Master Servicing Officer of the Master
Servicer and the Indenture Trustee shall terminate all of the rights and obligations of
the Master Servicer under this Agreement and the Successor Master
Servicer appointed in accordance with Section 6.07 shall immediately make such Monthly
Advance (provided, if the Successor Master Servicer determines in its reasonable judgment
that a Monthly Advance is a Nonrecoverable Advance or if it is prohibited by law from
doing so, the Successor Master Servicer shall be under no obligation to make such Monthly
Advance) prior to the payment of funds on the related Payment Date and assume, pursuant to
Section 6.07, the duties of a Successor Master Servicer and (y) in the case of clauses
(i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above, the Indenture Trustee shall, at
the direction of the Holders of not less than 51% of the aggregate Note Balance of the
Notes by notice then given in writing to the Master Servicer (and to the Indenture Trustee
if given by Holders of Notes), terminate all of the rights and obligations of the Master
Servicer as servicer under this Agreement. Any such notice to the Master Servicer shall
also be given to each Rating Agency and the Seller. On or after receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Notes or the Mortgage Loans or otherwise, shall
pass to and be vested in the Successor Master Servicer pursuant to and under this Section
6.06; and, without limitation, the Successor Master Servicer is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage Loan and
related documents, or otherwise. The Master Servicer agrees to cooperate with the
Successor Master Servicer, the Servicer, the Securities Administrator and the Indenture
Trustee in effecting the termination of the responsibilities and rights of the Master
Servicer hereunder. All Servicing Transfer Costs and other reasonable out-of-pocket costs
and expenses (including attorneys’ fees) incurred in connection with transferring any
Mortgage Files to the Successor Master Servicer and amending this Agreement to reflect
such succession as Master Servicer pursuant to this Section 6.06 shall be paid by the
predecessor Master Servicer within 90 days of written demand, itemized in reasonable
detail, or, to the extent not paid by the predecessor Master Servicer, by the Trust prior
to payments to Noteholders (or, if the predecessor Master Servicer is the Indenture
Trustee, by the initial Master Servicer), upon presentation of reasonable documentation of
such costs and expenses. If the predecessor Master Servicer is required but fails to pay
the amounts specified in the preceding sentence and such amounts are paid by the Trust,
the Securities Administrator shall, at the direction and expense of the
Certificateholders, take appropriate action to enforce such obligation and recover such
amounts on behalf of such Certificateholders.

          Notwithstanding any termination of the activities of the Master Servicer hereunder,
the Master Servicer shall continue to be entitled to receive from the Trust, payment of
all the accrued and unpaid portion of the Master Servicing Fees to which the Master
Servicer would have been entitled and reimbursement for all outstanding Monthly Advances
which amount shall be remitted by the Successor Master Servicer to the terminated Master
Servicer as permitted under Section 3.01 of the Indenture on a first-in, first-out basis.
The Master Servicer shall continue to be entitled to the benefits of Section 5.03,
notwithstanding any termination hereunder, with respect to events occurring prior to such
termination.

 

 

          Section 6.07. Appointment of Successor Master Servicer.

          (a) The Issuer and the Indenture Trustee hereby appoint, and The Bank of New York,
hereby accepts appointment, on behalf of itself or an affiliate, subject to the provisions
of Sections 3.40 and 6.07(d) hereof, upon receipt by the Master Servicer of a notice of
termination pursuant to Section 6.06 or upon resignation of the Master Servicer pursuant
to Section 3.40, to be the successor (the “Successor Master Servicer”) in all respects to
the Master Servicer in its capacity as servicer under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the responsibilities, duties
and liabilities relating thereto placed on the Master Servicer by the terms and
provisions hereof arising on and after its succession; provided, however, that,
without affecting the immediate termination of the rights of the Master Servicer
hereunder, it is understood and acknowledged by the parties hereto that there will be a
period of transition not to exceed 90 days (the “Master Servicer Transition Period”)
before the master servicing transfer is fully effected.

          During the Master Servicer Transition Period, neither the Successor Master Servicer,
the Securities Administrator nor the Indenture Trustee shall be responsible for the lack
of information and documents that it cannot reasonably obtain on a practicable basis under
the circumstances.

          As compensation therefor, the Successor Master Servicer shall be entitled to such
compensation as the Master Servicer would have been entitled to hereunder if no such
notice of termination had been given. Notwithstanding the above, if the Successor Master
Servicer is legally unable to act as successor servicer, the Indenture Trustee may appoint
or petition a court of competent jurisdiction to appoint, any established housing and home
finance institution, bank or other mortgage loan or home equity loan servicer that is an
Approved Servicer (defined for this purpose by (i) striking the words “the Master
Servicer” in clause 1 of the definition thereof and (ii) striking clause 2(a) in the
definition thereof) as the successor to the Master Servicer hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Master Servicer
hereunder; provided that the appointment of any such Successor Master Servicer will not
result in the qualification, reduction or withdrawal of the ratings assigned to the
Offered Notes by the Rating Agencies. Pending appointment of a successor to the Master
Servicer hereunder, unless the Successor Master Servicer is prohibited by law from so
acting, the Successor Master Servicer shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the successor shall be entitled to
receive compensation out of payments on the Mortgage Loans in an amount equal to the
compensation which the Master Servicer would otherwise have received pursuant to Section
3.37 (or such lesser compensation as the Indenture Trustee and such successor shall
agree). The appointment of a Successor Master Servicer shall not affect any liability of
the predecessor Master Servicer which may have arisen under this Agreement prior to its
termination as Master Servicer to indemnify the Indenture Trustee, the Servicer and the
Securities Administrator pursuant to Section 5.06, nor shall any Successor Master Servicer
be liable for any acts or omissions of the predecessor Master Servicer or for any breach
by such Master Servicer of any of its representations or warranties contained herein or in
any related document or agreement. The Indenture Trustee, the Securities Administrator or
a Successor Master Servicer shall have no responsibility or obligation (i) to repurchase
or substitute for any of the Mortgage Loans or (ii) for any acts or omissions of a
predecessor Master Servicer. The Indenture Trustee, the Securities Administrator and such
successor shall take such action, at the expense of the Trust, consistent with this
Agreement, as shall be necessary to effectuate any such succession.

          (b) Any successor, including the Successor Master Servicer, to the Master Servicer as
servicer shall during the term of its service as master servicer (i) continue to master
service and administer the Mortgage Loans for the benefit of Noteholders and (ii) maintain
in force a policy or policies of insurance covering errors and omissions in the
performance of its obligations as Master Servicer hereunder and a fidelity bond in respect
of its officers, employees and agents to the same extent as the Master Servicer is so
required pursuant to Section 3.32.

          (c) In connection with the termination or resignation of the Master Servicer
hereunder, the Successor Master Servicer, including the Indenture Trustee if the Indenture
Trustee is acting as Successor Master Servicer, shall represent and warrant that it is a
member of MERS in good standing and shall agree to comply in all material respects with
the rules and procedures of MERS in connection with the servicing of the Mortgage Loans
that are registered with MERS.

          (d) Notwithstanding the above, the Indenture Trustee may, if it shall be unwilling to
continue to so act, or shall, if it is unable to so act, petition a court of competent
jurisdiction to appoint, or appoint on its own behalf any established housing and home
finance institution servicer, master servicer, servicing or mortgage servicing institution
having a net worth of not less than $25,000,000 and meeting such other standards for a
successor master servicer as are set forth in this Agreement, as the successor to such
Master Servicer in the assumption of all of the responsibilities, duties or liabilities of
a master servicer, like the Master Servicer.

          Neither the Indenture Trustee nor any other Successor Master Servicer shall be deemed
to be in default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any delay in
performing, any duties or responsibilities hereunder, in either case caused by the failure
of the Master Servicer to deliver or provide, or any delay of the Master Servicer in
delivering or providing, any cash, information, documents or records to it.

          Notwithstanding anything herein to the contrary, in no event shall the Indenture
Trustee be liable for any Servicing Fee or Master Servicing Fee or for any differential in
the amount of the Servicing Fee or Master Servicing Fee paid hereunder and the amount
necessary to induce any Successor Servicer or Successor Master Servicer to act as
Successor Servicer or Successor Master Servicer, as applicable, under this Agreement and
the transactions set forth or provided for herein.

 

 

ARTICLE VII

MISCELLANEOUS PROVISIONS

          Section 7.01. Amendment.

          This Agreement may be amended from time to time by the parties hereto (with the
consent of the Majority Certificateholder), provided that any amendment be accompanied by
(i) a letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Notes and (ii) an Officer’s
Certificate of the Sponsor, that such amendment will not cause the Trust to fail to
qualify as a “qualified special purpose entity” under Financial Accounting Standards No.
140.

          Section 7.02. GOVERNING LAW.

          THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS 5-1401 AND
5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          Section 7.03. Notices.

          All demands, notices and communications hereunder shall be in writing and shall be
deemed to have been duly given if when delivered to:

          (a) in the case of the Depositor:

	 	 	 	Bear Stearns Asset Backed Securities I LLC

383 Madison Avenue

New York, New York, 10179

Attention: General Counsel

          (b) in the case of the Originator

	 	 	 	Fremont Investment & Loan

2727 East Imperial Highway

Brea, CA 92821

Attn: Senior Vice President, Capital Markets

Attn: Vice President, Secondary Marketing

          (c) in the case of the Servicer:

	 	 	 	Nationstar Mortgage LLC

350 Highland Drive

Lewisville, Texas 75067

Attn: Jay Bray

          (d) in the case of Rating Agencies:

	 	 	 	Moody’s Investors Service, Inc.

4th Floor

99 Church Street

New York, New York 10007

Attention: Residential Mortgage Monitoring Unit
	 
	 	 	 	Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.

55 Water Street — 41st Floor

New York, New York 10041

Attention: Asset Backed Surveillance Group

          (e) in the case of the Owner Trustee, the Corporate Trust Office:

	 	 	 	Wilmington Trust Company
Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890

Attention: Corporate Trust Administration

          (f) in the case of the Issuing Entity:

	 	 	 	Newcastle Mortgage Securities Trust 2007-1

c/o Newcastle Investment Corp.

750 B Street, Suite 2700

San Diego, CA 92101

Attention: Legal

with a copy to the Sponsor at the address in (g) below.

          (g) in the case of the Indenture Trustee:

	 	 	 	The Bank of New York,

101 Barclay Street, Floor 4W

New York, New York 10286

Attn: Structured Finance — Newcastle Mortgage Securities Trust 2007-1

          (h) in the case of the Sponsor:

	 	 	 	Newcastle Investment Corp.
1245
Avenue of the Americas
New York, New
York 10022
Attention: Debra Hess

          (i) in the case of the Master Servicer:

	 	 	 	Wells Fargo Bank, N.A,
9062 Old
Annapolis Road,
Columbia, Maryland
24105,

Attn: Corporate Trust — Newcastle 2007-1

          (j) in the case of the Securities Administrator:

	 	 	 	Wells Fargo Bank, N.A,

Sixth Street and Marquette Avenue

Minneapolis, Minnesota 55479

          (k) in the case of the Custodian:

	 	 	 	Wells Fargo Bank, N.A,
24 Executive
Park, Suite 200
Irvine, CA 92614

Attn: Corporate Trust — Newcastle 2007-01

 

 

or, as to each party, at such other address as shall be designated by such party in a
written notice to each other party. Any notice required or permitted to be mailed to a
Noteholder shall be given by first class mail, postage prepaid, at the address of such
Noteholder as shown in the Note Register. Any notice so mailed within the time prescribed
in this Agreement shall be conclusively presumed to have been duly given, whether or not
the Noteholder receives such notice. Any notice or other document required to be delivered
or mailed by the Securities Administrator to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation and the
Securities Administrator shall have no liability for failure to deliver such notice or
document to any Rating Agency.

          Section 7.04. 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 Notes or the rights
of the Noteholders thereof.

          Section 7.05. Third-Party Beneficiaries.

          This Agreement will inure to the benefit of and be binding upon the parties hereto,
the Noteholders, the Owner Trustee, the Indenture Trustee and their respective successors
and permitted assigns. Except as otherwise provided in this Agreement, no other Person
will have any right or obligation hereunder. The Indenture Trustee shall have the right to
exercise all rights of the Issuing Entity under this Agreement.

          Section 7.06. Counterparts.

          This instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.

          Section 7.07. Effect of Headings and Table of Contents.

          The Article and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.

          Section 7.08. Termination.

          The respective obligations and responsibilities of the Servicer and the Issuing
Entity created hereby shall terminate upon the satisfaction and discharge of the Indenture
pursuant to Section 4.10 thereof.

          Section 7.09. No Petition.

          The Servicer, by entering into this Agreement, hereby covenants and agrees that it
will not at any time institute against the Depositor or the Issuing Entity, or join in any
institution against the Issuing Entity, any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations of the
Depositor or the Issuing Entity. This section shall survive the termination of this
Agreement by one year.

          Section 7.10. No Recourse.

          The Servicer acknowledges that no recourse may be had against the Depositor or the
Issuing Entity, except as may be expressly set forth in this Agreement.

          Section 7.11. Indenture Trustee Rights.

          The Indenture Trustee shall be entitled to the same rights, protections, indemnities
and immunities afforded to it under the Indenture as if specifically set forth herein.

          Section 7.12. Compliance.

          In order to comply with its duties under the U.S.A. Patriot Act, the Indenture
Trustee may obtain and verify certain information and documentation from the Servicer or
any other party hereto, including but not limited to such such party’s name, address, and
other identifying information.

          Section 7.13. Intention of the Parties and Interpretation.

          Each of the parties acknowledges and agrees that the purpose of Sections 3.20, 3.21
and 4.02 of this Agreement is to facilitate compliance by the Depositor with the
provisions of Regulation AB promulgated by the Securities and Exchange Commission under
the 1934 Act (17 C.F.R. §§ 229.1100 — 229.1123), as such may be amended from time to time
and subject to clarification and interpretive advice as may be issued by the staff of the
Securities and Exchange Commission from time to time. Therefore, each of the parties
agrees that (a) the obligations of the parties hereunder shall be interpreted in such a
manner as to accomplish that purpose, (b) the parties’ obligations hereunder will be
supplemented and modified as necessary to be consistent with any such amendments,
interpretive advice or guidance, convention or consensus among active participants in the
asset-backed securities markets, advice of counsel, or otherwise in respect of the
requirements of Regulation AB, (c) the parties shall comply with reasonable requests made
by the Depositor for delivery of additional or different information as the Depositor may
determine in good faith is necessary to comply with the provisions of Regulation AB, and
(d) no amendment of this Agreement shall be required to effect any such changes in the
parties’ obligations as are necessary to accommodate evolving interpretations of the
provisions of Regulation AB.

 

 

ARTICLE VIII

DUTIES OF THE ADMINISTRATOR

          Section 8.01. Administrative Duties.

          (a) Duties with Respect to the Indenture. The Administrator shall perform all its
duties and the duties of the Issuing Entity under the Indenture. In addition, the
Administrator shall consult with the Owner Trustee as the Administrator deems appropriate
regarding the duties of the Issuing Entity under the Indenture. The Administrator shall
monitor the performance of the Issuing Entity and shall advise the Owner Trustee when
action is necessary to comply with the Issuing Entity’s duties under the Indenture. The
Administrator shall prepare for execution by the Issuing Entity or shall cause the
preparation by other appropriate Persons of all such documents, reports, filings,
instruments, Notes and opinions as it shall be the duty of the Issuing Entity to prepare,
file or deliver pursuant to the Indenture. In furtherance of the foregoing, the
Administrator shall take all necessary action that is the duty of the Issuing Entity to
take pursuant to the Indenture.

          (b) Duties with Respect to the Issuing Entity.

          (i) In addition to the duties of the Administrator set forth in this Agreement
or any of the Basic Documents, the Administrator shall perform such calculations and
shall prepare for execution by the Issuing Entity or the Owner Trustee or shall
cause the preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuing Entity or the Owner Trustee to prepare, file or deliver pursuant to this
Agreement or any of the Basic Documents or under state and federal tax and
securities laws (including, but not limited to, UCC filings in applicable
jurisdictions and annual compliance certificates, if any), and at the request of the
Owner Trustee or the Indenture Trustee shall take all appropriate action that it is
the duty of the Issuing Entity to take pursuant to this Agreement or any of the
Basic Documents. In accordance with the directions of the Issuing Entity or the
Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Notes (including the
Basic Documents) as are not covered by any of the foregoing provisions and as are
expressly requested by the Issuing Entity, the Indenture Trustee or the Owner
Trustee.

          (ii) Notwithstanding anything in this Agreement or any of the Basic Documents
to the contrary, the Administrator shall be responsible for promptly notifying the
Owner Trustee and Certificate Paying Agent in the event that any withholding tax is
imposed on the Issuing Entity’s payments (or allocations of income) to an Owner (as
defined in the Trust Agreement)
as contemplated in Section 5.03 of the Trust Agreement. Any such notice shall
be in writing and specify the amount of any withholding tax required to be withheld
by the Owner Trustee or the Certificate Paying Agent pursuant to such provision.

          (iii) In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Administrator may enter into transactions with or
otherwise deal with any of its Affiliates; provided, however, that the terms of any
such transactions or dealings shall be in accordance with any directions received
from the Issuing Entity and shall be, in the Administrator’s opinion, no less
favorable to the Issuing Entity in any material respect than with terms made
available to unrelated third parties.

          (c) Tax Matters. The Administrator shall prepare, on behalf of the Owner Trustee,
financial statements and such annual or other reports of the Issuing Entity as are
necessary for the preparation by the Securities Administrator of tax returns and
information reports as provided in Section 5.03 of the Trust Agreement, including, without
limitation, Form 1099.

          (d) Non-Ministerial Matters. With respect to matters that in the reasonable judgment
of the Administrator are non-ministerial, the Administrator shall not take any action
pursuant to this Article VIII unless within a reasonable time before the taking of such
action, the Administrator shall have notified the Owner Trustee and the Indenture Trustee
of the proposed action and the Owner Trustee and, with respect to items (A), (B), (C) and
(D) below, the Indenture Trustee shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence, “non-ministerial
matters” shall include:

     (A) the amendment of or any supplement to the Indenture;

     (B) the initiation of any claim or lawsuit by the Issuing Entity and the
compromise of any action, claim or lawsuit brought by or against the Issuing
Entity (other than in connection with the collection of the Mortgage Loans);

     (C) the amendment, change or modification of this Agreement or any of the
Basic Documents to which the Indenture Trustee or the Owner Trustee, as
applicable, is a party;

     (D) the appointment of successor Certificate Paying Agents and successor
Indenture Trustees pursuant to the Indenture or the appointment of successor
Servicers or the consent to the assignment by the Certificate Registrar,
Certificate Paying Agent or Indenture Trustee of its obligations under the
Indenture; and

     (E) the removal of the Indenture Trustee.

          (e) Sponsor shall act as Administrator. By execution of this Agreement, the
Sponsor agrees to be bound as Administrator and shall perform the obligations of the
Administrator as described herein.

          Section 8.02. Records.

          The Administrator shall maintain appropriate books of account and records relating to
services performed under this Agreement, which books of account and records shall be
accessible for inspection by the Issuing Entity, the Indenture Trustee, the Securities
Administrator, the Depositor and the Owner Trustee at any time during normal business
hours.

          Section 8.03. Additional Information to be Furnished.

          The Administrator shall furnish to the Issuing Entity, the Indenture Trustee, the
Securities Administrator and the Owner Trustee from time to time such additional
information regarding the Mortgage Loans and the Notes as the Issuing Entity, the
Indenture Trustee, the Securities Administrator or the Owner Trustee shall reasonably
request.

          Section 8.04. No Recourse to Owner Trustee.

          It is expressly understood and agreed by the parties hereto that (a) this Agreement
is executed and delivered by Wilmington Trust Company, not individually or personally, but
solely as Owner Trustee of Newcastle Mortgage Securities Trust 2007-1, in the exercise of
the powers and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuing Entity is made and
intended not as personal representations, undertakings and agreements by Wilmington Trust
Company but is made and intended for the purpose for binding only the Issuing Entity, (c)
nothing herein contained shall be construed as creating any liability of Wilmington Trust
Company, individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuing Entity or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the Issuing
Entity under this Agreement or any other related documents.

 

 

          IN WITNESS WHEREOF, the parties hereto have caused this Sale and Sale and Servicing
Agreement to be duly executed by their respective officers or representatives all as of
the day and year first above written.

	 	 	 	 	 
	 	BEAR STEARNS ASSET BACKED SECURITIES I LLC

as Depositor

 	 
	 	By:  	/s/ Matthew Perkins	 
	 	 	Name:  	Matthew Perkins	 
	 	 	Title:  	CEO & President	 
	 
	 	NATIONSTAR MORTGAGE LLC,

as Servicer

 	 
	 	By:  	/s/ Gregory A. Oniu	 
	 	 	Name:  	Gregory A. Oniu	 
	 	 	Title:  	Senior Vice President	 
	 
	 	NEWCASTLE MORTGAGE SECURITIES TRUST 2007-1, as Issuing Entity

By: Wilmington Trust Company, not in its individual capacity, but
solely as Owner Trustee

 	 
	 	By:  	/s/ Donald G. MacKelcan	 
	 	 	Name:  	Donald G. MacKelcan	 
	 	 	Title:  	Senior Vice President	 
	 
	 	THE BANK OF NEW YORK,

not in its individual capacity, but solely as as Indenture Trustee

 	 
	 	By:  	/s/ Michael J. Wiblis Hauser	 
	 	 	Name:  	Michael J. Wiblis Hauser	 
	 	 	Title:  	Assistant Vice President	 
	 
	 	WELLS FARGO BANK, N.A.
as Master Servicer, Securities Administrator and Custodian

 	 
	 	By:  	/s/ Darron C. Woodus	 
	 	 	Name:  	Darron C. Woodus	 
	 	 	Title:  	Assistant Vice President	 
	 

	 	 	 	 	 
	For purposes of Article IV and Article VIII:

NEWCASTLE INVESTMENT CORP.,

as Sponsor and Administrator

 	 
	By:  	/s/ Debra Hess	 
	 	Name:  	Debra Hess	 
	 	Title:  	Chief Financial Officer	 
	 

 

 

EXHIBIT A

FORM OF ASSIGNMENT AGREEMENT

 

 

EXHIBIT B

MORTGAGE LOAN SCHEDULE

 

 

EXHIBIT C

FORM OF REQUEST FOR RELEASE

Wells Fargo Bank, N.A.

24 Executive Park, Suite 100

Irvine, California 92614

Attn: Mortgage Document Custody

			
	Re:	 	Sale and Servicing Agreement, dated as of July 12, 2007, among Bear Stearns
Asset Backed Securities I LLC, Newcastle Mortgage Securities Trust 2007-1,
Nationstar Mortgage LLC, Wells Fargo Bank, N.A and The Bank of New York

             In connection with the administration of the Mortgage Loans held by you, as
Custodian, pursuant to the above-captioned Sale and Servicing Agreement, we request the
release, and hereby acknowledge receipt, of the Mortgage File for the Mortgage Loan
described below, for the reason indicated.

Mortgage Loan Number:

Mortgagor Name, Address & Zip Code:

Reason for Requesting Documents (check one):

	 	 	 	 	 	 	 

	____

	 	 	1.	 	 	Mortgage Paid in Full
	 
	____

	 	 	2.	 	 	Foreclosure
	 
	____

	 	 	3.	 	 	Substitution
	 
	____

	 	 	4.	 	 	Other Liquidation
	 
	____

	 	 	5.	 	 	Nonliquidation Reason: ______________________

	 	 	 	 	 	 	 

	 

	 	By:
	 	 
	 	 	 	 	 	 	 
	 	 	(authorized signer)
	 	 	 	 	 	 	 
	 	 	[Servicer] [Master Servicer]:
	 	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Address:  	 	 	 
	 

	 	 	 	 	 	 
	 	 	Date:
	 	 

Custodian

Wells Fargo Bank, N.A.

Please acknowledge the execution of the above request by your signature and date below:

	 	 	 	 	 

	 
	 	 	 	 
	 

	 	 

	 	 
	Signature

	 	Date	 	 
	 
	 	 	 	 
	Documents returned to Custodian:

	 	 
	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	Custodian

	 	Date	 	 

 

 

EXHIBIT D-1

FORM OF CUSTODIAN’S INITIAL CERTIFICATION

[Date]

Newcastle Mortgage Securities Trust 2007-1

c/o Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19990-0001

Attention: Corporate Trust Administration

The Bank of New York,

101 Barclay Street, Floor 4W

New York, New York 10286

Bear Stearns Asset Backed Securities I LLC

383 Madison Avenue

New York, New York, 10179

Attention: General Counsel

Nationstar Mortgage LLC

350 Highland Drive

Lewisville, Texas 75067

			
	Re:	 	Sale and Servicing Agreement,
dated as of July 12, 2007, among Bear Stearns
Asset Backed Securities I LLC,
Newcastle Mortgage Securities Trust 2007-1,
Nationstar Mortgage LLC, Wells Fargo Bank, N.A and The Bank of New York

Ladies and Gentlemen:

      In accordance with Section 2.01(i)-(vi) of the Sale and Servicing Agreement, the
undersigned, as Custodian, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the Exception Report annexed hereto as not being covered by
such certification) (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(vi) of the Sale and Servicing Agreement)
required to be delivered to it pursuant to the Agreement are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and relate to
such Mortgage Loan and (iii) based on its examination and only as to the foregoing, the
information set forth in the Mortgage Loan Schedule that corresponds to items (i),
(iii), (x), (xi), (xii), (xviii) and (xxv) (but only as to Gross Margin and Maximum
Mortgage Rate) of the definition of “Mortgage Loan Schedule” accurately reflects
information set forth in the Mortgage File.

      The Custodian makes no representations as to: (i) the validity, legality,
sufficiency, enforceability, recordability or genuineness of any of the documents
contained in the Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan Schedule, (ii) the collectability, insurability, effectiveness or suitability of
any such Mortgage Loan, or (iii) whether any Mortgage File included any of the documents
specified in clause (vi) of Section 2.01 of the Sale and Servicing Agreement.

      Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the above-captioned Indenture.

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A., as Custodian

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT D-2

FORM OF CUSTODIAN’S FINAL CERTIFICATION

[Date]

Newcastle Mortgage Securities Trust 2007-1

c/o Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19990-0001

Attention: Corporate Trust Administration

The Bank of New York,

101 Barclay Street, Floor 4W

New York, New York 10286

Bear Stearns Asset Backed Securities I LLC

383 Madison Avenue

New York, New York, 10179

Attention: General Counsel

Nationstar Mortgage LLC

350 Highland Drive

Lewisville, Texas 75067

			
	Re:	 	Sale and Servicing Agreement,
dated as of July 12, 2007, among Bear Stearns
Asset Backed Securities I LLC,
Newcastle Mortgage Securities Trust 2007-1,
Nationstar Mortgage LLC, Wells Fargo Bank, N.A and The Bank of New York

Ladies and Gentlemen:

      In accordance with Section 2.01(i)-(vi) of the Sale and Servicing Agreement, the
undersigned, as Custodian, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in the Exception Report annexed hereto as not being covered by
such certification) (i) all documents constituting part of such Mortgage File (other
than such documents described in Section 2.01(vi) of the Sale and Servicing
Agreement) required to be delivered to it pursuant to the Sale and Servicing Agreement
are in its possession.

      The undersigned hereby certifies that as to each Mortgage Loan identified on the
Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule I hereto, it has
reviewed the documents listed above and has determined that each such document appears
to be regular on its face and relates to such Mortgage Loan and, based on an examination
of such documents, the information set forth in (i) of the definition of Mortgage Loan
Schedule accurately reflects information in the Mortgage File.

      We have made no independent examination of any documents contained in each Mortgage
File beyond the review specifically required in the Sale and Servicing Agreement. We
make no representations as to (i) the validity, legality, sufficiency, recordability,
enforceability or genuineness of any of the documents contained in the Mortgage File
pertaining to the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage Loan or
(iii) whether any Mortgage File includes any of the documents specified in clause (vi)
of Section 2.01 of the Sale and Servicing Agreement.

      Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the Agreements. This Certificate is qualified in all respects by the
terms of said Agreements.

	 	 	 	 	 
	 	[CUSTODIAN]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

EXHIBIT E

FORM OF LOST NOTE AFFIDAVIT

     Personally appeared before me the undersigned authority to administer oaths,
_____________________ who first being duly sworn deposes and says: Deponent is
___________________________ of ____________________________, successor by merger to
_________________________ (“Seller”) and who has personal knowledge of the facts set out
in this affidavit.

     On _______________________, ____________________________ did execute and deliver a
promissory note in the principal amount of $___________________.

     That said note has been misplaced or lost through causes unknown and is presently
lost and unavailable after diligent search has been made. Seller’s records show that an
amount of principal and interest on said note is still presently outstanding, due, and
unpaid, and Seller is still owner and holder in due course of said lost note.

     Seller executes this Affidavit for the purpose of inducing The Bank of New York, as
indenture trustee on behalf of Newcastle Mortgage Securities Trust 2007-1, Asset-Backed
Notes, Series 2007-1, to accept the transfer of the above described loan from Seller.

     Seller agrees to indemnify The Bank of New York harmless for any losses incurred by
such parties resulting from the above described promissory note has been lost or
misplaced.

	 	 	 	 
	 	 
	By:  	 	 
	 	  	 	 
	 	 	 
	 

	 	 	 	 	 	 	 	 	 

	STATE OF

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	SS:
	 	 
	COUNTY OF

	 	 	)	 	 	 	 	 

     On this ______ day of ______________, 20_, before me, a Notary Public, in and for
said County and State, appeared , who acknowledged the extension of the foregoing and
who, having been duly sworn, states that any representations therein contained are true.

     Witness my hand and Notarial Seal this _________ day of 20_.

_________________________________

_________________________________

My commission expires __________________________

 

 

EXHIBIT F

FORM OF POWER OF ATTORNEY

     KNOW ALL MEN BY THESE PRESENTS, that The Bank of New York, a national banking
association, having a place of business at ________________, as Indenture Trustee (and
in no personal or other representative capacity), under the Sale and Servicing
Agreement, dated July __, 2007, among Bear Stearns Asset Backed Securities I LLC,
Newcastle Mortgage Securities Trust 2007-1, Nationstar Mortgage LLC, Wells Fargo Bank,
N.A and The Bank of New York, as Indenture Trustee (as amended, restated, supplemented
or otherwise modified from time to time, the “Agreement”; capitalized terms not defined
herein have the definitions assigned to such terms in the Agreement), relating to
Newcastle Mortgage Securities 2007-1, hereby appoints ______________________, in its
capacity as the Servicer under the Agreement as the Indenture Trustee’s true and lawful
Special Attorney-in-Fact, in the Indenture Trustee’s name, place and stead and for the
Indenture Trustee’s benefit, but only in its capacity as Indenture Trustee aforesaid, to
perform all acts and execute all documents as may be customary, necessary and
appropriate to effectuate the following enumerated transactions in respect of any
mortgage, deed of trust, promissory note or real estate owned from time to time owned
(beneficially or in title, whether the Indenture Trustee is named therein as mortgagee
or beneficiary or has become mortgagee or beneficiary by virtue of endorsement,
assignment or other conveyance) or held by or registered to the Indenture Trustee
(directly or through custodians or nominees), or in respect of which the Indenture
Trustee has a security interest or other lien, all as provided under the Agreement and
only to the extent the Indenture Trustee has an interest therein under the Agreement,
and in respect of which the Servicer is acting as servicer pursuant to the Agreement
(collectively the “Mortgage Documents”).

     This appointment shall apply to the following enumerated transactions under the
Agreement only:

     1. The modification or re-recording of any Mortgage Document for the purpose of
correcting it to conform to the original intent of the parties thereto or to correct
title errors discovered after title insurance was issued and where such modification or
re-recording does not adversely affect the lien under the Mortgage Document as insured.

     2. The subordination of the lien under a Mortgage Document to an easement in favor
of a public utility company or a state or federal agency or unit with powers of eminent
domain including, without limitation, the execution of partial
satisfactions/releases, partial reconveyances and the execution of requests to
trustees to accomplish same.

     3. The conveyance of the properties subject to a Mortgage Document to the
applicable mortgage insurer, or the closing of the title to the property to be acquired
as real estate so owned, or conveyance of title to real estate so owned.

     4. The completion of loan assumption and modification agreements in respect of
Mortgage Documents.

     5. The full or partial satisfaction/release of a Mortgage Document or full
conveyance upon payment and discharge of all sums secured thereby, including, without
limitation, cancellation of the related note.

     6. The assignment of any Mortgage Document, in connection with the repurchase of
the mortgage loan secured and evidenced thereby.

     7. The full assignment of a Mortgage Document upon payment and discharge of all
sums secured thereby in conjunction with the refinancing thereof, including, without
limitation, the assignment of the related note.

 

 

     8. With respect to a Mortgage Document, the foreclosure, the taking of a deed in
lieu of foreclosure, or the completion of judicial or non-judicial foreclosure or
termination, cancellation or rescission of any such foreclosure, including, without
limitation, any and all of the following acts:

     a. the substitution of indenture trustee(s) serving under a deed of trust, in
accordance with state law and the deed of trust;

     b. the preparation and issuance of statements of breach or
non-performance;

     c. the preparation and filing of notices of default
and/or notices of sale;

     d. the cancellation/rescission of notices of
default and/or notices of sale; 

     e. the taking of a deed in lieu of
foreclosure; and

     f. the preparation and execution of such other documents and performance of such
other actions as may be necessary under the terms of the Mortgage Document or state law
to expeditiously complete said transactions in paragraphs 8(a) through 8(e), above.

     9. Demand, sue for, recover, collection and receive each and every sum of money,
debt, account and interest (which now is, or hereafter shall become due and payable)
belonging to or claimed by the Indenture Trustee under the Mortgage Documents, and to
use or take any lawful means for recovery thereof by legal process or otherwise.

     10. Endorse on behalf of the Indenture Trustee all checks, drafts and/or negotiable
instruments made payable to the Indenture Trustee in respect of the Mortgage Documents.

     The Indenture Trustee gives the Special Attorney-in-Fact full power and authority
to execute such instruments and to do and perform all and every act and thing necessary
and proper to carry into effect the power or powers granted by this Limited Power of
Attorney, subject to the terms and conditions set forth in the Agreement including the
standard of care applicable to servicers in the Agreement, and hereby does ratify and
confirm to what such Special Attorney-in-Fact shall lawfully do or cause to be done by
authority hereof.

     This Power of Attorney is effective for one (1) year from the date hereof or the
earlier of (i) revocation by the Indenture Trustee, (ii) the Attorney shall no longer be
retained on behalf of the Indenture Trustee or an affiliate of the Indenture Trustee; or
(iii) the expiration of one year from the date of execution.

     The authority granted to the attorney-in-fact by the Power of Attorney is not
transferable to any other party or entity.

     This Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York without regard to its conflicts of law principles.

     IN WITNESS WHEREOF, the Indenture Trustee has caused its corporate name and seal to
be
hereto signed and affixed and these presents to be acknowledged by its duly elected and
authorized officer this ______ day of _________, 200__.

	 	 	 	 	 
	 	THE BANK OF NEW YORK,

as Indenture Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 
	 	WITNESS:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 	 	 
	 	WITNESS:

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

	 	 	 

	STATE OF NEW YORK
	 	 
	 

	 	ss:
	COUNTY OF NEW YORK
	 	 

     On _______________, 2007, before me, the undersigned, a Notary Public in and for
said state, personally appeared _______________________, personally known to me to be
the person whose name is subscribed to the within instrument and to be a duly authorized
and acting Senior Vice President of The Bank of New York and such person acknowledged to
me that such person executed the within instrument in such person’s authorized capacity
as a Senior Vice President of The Bank of New York, and that by such signature on the
within instrument the entity upon behalf of which such person acted executed the
instrument.

     WITNESS my hand and official seal.

                                      

      Notary Public

 

 

EXHIBIT G-1

FORM OF CERTIFICATION TO BE PROVIDED BY THE SERVICER TO THE MASTER SERVICER

Certification

				
	 	Re:	 	Newcastle Mortgage Securities Trust 2007-1 (the “Trust” or the
“Issuing Entity”)
Asset-Backed Notes, Series 2007-1

       I, [identify the certifying individual], certify, that:

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

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

          (iii) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been provided to
the Depositor and the Master Servicer;

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

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

Date: ___________________

	 	 	 	 	 
	 	NATIONSTAR MORTGAGE LLC

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Date:  	 	 

 

 

	 	 	 	 	 

EXHIBIT G-2

FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER

WITH FORM 10-K

Newcastle Mortgage Securities Trust 2007-1 (the “Trust” or the “Issuing Entity”)

Asset-Backed Notes, Series 2007-1

     I, [identify the certifying individual], certify that:

     1. I have reviewed this annual report on Form 10-K, and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form 10-K
[identify issuing entity] (i.e., the name of the specific deal to which this
certification relates rather than just the name of the Depositor)] (the “Exchange Act
periodic reports”);

     2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do
not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, all of the distribution, servicing and other information
required to be provided under Form 10-D for the period covered by this report is
included in the Exchange Act periodic reports;

     4. I am responsible for reviewing the activities performed by the servicer and
based on my knowledge and the compliance review conducted in preparing the servicer
compliance statement required in this report under Item 1123 of Regulation AB, and
except as disclosed in the Exchange Act periodic reports, the servicer has fulfilled its
obligations under the servicing agreement in all material respects; and

     5. All of the reports on assessment of compliance with servicing criteria for
asset-backed securities and their related attestation reports on assessment of
compliance with servicing criteria for asset-backed securities required to be included
in this report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise
disclosed in this report. Any material instances of noncompliance described in such
reports have been disclosed in this report on Form 10-K.

     In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated party: Nationstar Mortgage, LLC.

	 	 	 	 	 
	 	WELLS FARGO BANK, N.A.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Date:  	 	 
	 

 

 

EXHIBIT H

SERVICING CRITERIA TO BE ADDRESSED

IN ASSESSMENT OF COMPLIANCE

Definitions

Primary Servicer — transaction party having borrower contact

Master Servicer — aggregator of pool assets

Securities Administrator — waterfall calculator (may be the Master Servicer, or may be the Servicer)

Custodian — safe keeper of pool assets

Paying Agent — distributor of funds to ultimate investor

Indenture Trustee — fiduciary of the transaction

Note: The definitions above describe the essential function that the party performs,
rather than the party’s title.

Where there are multiple checks for criteria the attesting party will identify in their
management assertion that they are attesting only to the portion of the distribution
chain they are responsible for in the related transaction agreements.

	 	 	 	 	 

	Key:

	 	X -
	 	obligation
	 

	 	XX -
	 	only needs to be provided if transaction documents
Require custodial accounts to be maintained at a federally insured
depository institution
	 

	 	XXX -
	 	will be provided by entity acting as custodian
	 

	 	[X] -
	 	under consideration for obligation

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Master Servicer/	 	 	 	 
	 	 	 	 	 	 	Securities	 	 	 	 
	Reg AB Reference	 	Servicing Criteria	 	Primary Servicer	 	Administrator	 	Indenture Trustee	 	Custodian
	 

	 	General Servicing Considerations	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(1)(i)

	 	Policies and procedures
are instituted to
monitor any performance
or other triggers and
events of default in
accordance with the
transaction agreements.
	 	X
	 	X
	 	 
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(1)(ii)

	 	If any material servicing activities are
outsourced to third parties, policies
and procedures are instituted to monitor
the third party’s performance and
compliance with such servicing
activities.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(1)(iii)

	 	Any requirements in the transaction
agreements to maintain a back-up
servicer for the Pool Assets are
maintained.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(1)(iv)

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

	 	Cash Collection and Administration	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(i)

	 	Payments on pool assets are deposited
into the appropriate custodial bank
accounts and related bank clearing
accounts no more than two business days
following receipt, or such other number
of days specified in the transaction
agreements.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(ii)

	 	Disbursements made via wire transfer on
behalf of an obligor or to an investor
are made only by authorized personnel.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(iii)

	 	Advances of funds or guarantees
regarding collections, cash flows or
paymnets, and any interest or other fees
charged for such advances, are made,
reviewed and approved as specified in
the transaction agreements.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(iv)

	 	The related accounts for the
transaction, such as cash reserve
accounts or accounts established as a
form of over collateralization, are
separately maintained (e.g., with
respect to commingling of cash) as set
forth in the transaction agreements.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(v)

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

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Master Servicer/	 	 	 	 
	 	 	 	 	 	 	Securities	 	 	 	 
	Reg AB Reference	 	Servicing Criteria	 	Primary Servicer	 	Administrator	 	Indenture Trustee	 	Custodian
	1122(d)(2)(vi)

	 	Unissued checks are safeguarded so as to
prevent unauthorized access.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(2)(vii)

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

	 	Investor Remittances and Reporting	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(3)(i)

	 	Reports to investors,
including those to be
filed with the
Commission, are
maintained in accordance
with the transaction
agreements and
applicable Commission
requirements.
Specifically, such
reports (A) are prepared
in accordance with
timeframes and other
terms set forth in the
transaction agreements;
(B) provide information
calculated in accordance
with the terms specified
in the transaction
agreements; (C) are
filed with the
Commission as required
by its rules and
regulations; and (D)
agree with investors’ or
the indenture trustee’s
records as to the total
unpaid principal balance
and number of Pool
Assets serviced by the
Servicer.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(3)(ii)

	 	Amounts due to investors
are allocated and
remitted in accordance
with timeframes,
distribution priority
and other terms set
forth in the transaction
agreements.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(3)(iii)

	 	Disbursements made to an
investor are posted
within two business days
to the Servicer’s
investor records, or
such other number of
days specified in the
transaction agreements.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(3)(iv)

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

	 	Pool Asset Administration	 	 	 	 	 	 	 	 
	 
	1122(d)(4)(i)

	 	Collateral or security
on pool assets is
maintained as required
by the transaction
agreements or related
pool asset documents.
	 	X
	 	 	 	 	 	X
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(ii)

	 	Pool assets and related
documents are
safeguarded as required
by the transaction
agreements
	 	X
	 	 	 	 	 	X
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(iii)

	 	Any additions, removals
or substitutions to the
asset pool are made,
reviewed and approved in
accordance with any
conditions or
requirements in the
transaction agreements.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(iv)

	 	Payments on pool assets,
including any payoffs,
made in accordance with
the related pool asset
documents are posted to
the Servicer’s obligor
records maintained no
more than two business
days after receipt, or
such other number of
days specified in the
transaction agreements,
and allocated to
principal, interest or
other items (e.g.,
escrow) in accordance
with the related pool
asset documents.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(v)

	 	The Servicer’s records
regarding the pool
assets agree with the
Servicer’s records with
respect to an obligor’s
unpaid principal
balance.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(vi)

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

 

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Master Servicer/	 	 	 	 
	 	 	 	 	 	 	Securities	 	 	 	 
	Reg AB Reference	 	Servicing Criteria	 	Primary Servicer	 	Administrator	 	Indenture Trustee	 	Custodian
	1122(d)(4)(vii)

	 	Loss mitigation or
recovery actions (e.g.,
forbearance plans,
modifications and deeds
in lieu of foreclosure,
foreclosures and
repossessions, as
applicable) are
initiated, conducted and
concluded in accordance
with the timeframes or
other requirements
established by the
transaction agreements.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(viii)

	 	Records documenting
collection efforts are
maintained during the
period a pool asset is
delinquent in accordance
with the transaction
agreements. Such
records are maintained
on at least a monthly
basis, or such other
period specified in the
transaction agreements,
and describe the
entity’s activities in
monitoring delinquent
pool assets including,
for example, phone
calls, letters and
payment rescheduling
plans in cases where
delinquency is deemed
temporary (e.g., illness
or unemployment).
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(ix)

	 	Adjustments to interest
rates or rates of return
for pool assets with
variable rates are
computed based on the
related pool asset
documents.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(x)

	 	Regarding any funds held
in trust for an obligor
(such as escrow
accounts): (A) such
funds are analyzed, in
accordance with the
obligor’s pool asset
documents, on at least
an annual basis, or such
other period specified
in the transaction
agreements; (B) interest
on such funds is paid,
or credited, to obligors
in accordance with
applicable pool asset
documents and state
laws; and (C) such funds
are returned to the
obligor within 30
calendar days of full
repayment of the related
pool assets, or such
other number of days
specified in the
transaction agreements.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(xi)

	 	Payments made on behalf
of an obligor (such as
tax or insurance
payments) are made on or
before the related
penalty or expiration
dates, as indicated on
the appropriate bills or
notices for such
payments, provided that
such support has been
received by the servicer
at least 30 calendar
days prior to these
dates, or such other
number of days specified
in the transaction
agreements.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(xii)

	 	Any late payment
penalties in connection
with any payment to be
made on behalf of an
obligor are paid from
the Servicer’s funds and
not charged to the
obligor, unless the late
payment was due to the
obligor’s error or
omission.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(xiii)

	 	Disbursements made on
behalf of an obligor are
posted within two
business days to the
obligor’s records
maintained by the
servicer, or such other
number of days specified
in the transaction
agreements.
	 	X	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(xiv)

	 	Delinquencies,
charge-offs and
uncollectible accounts
are recognized and
recorded in accordance
with the transaction
agreements.
	 	X
	 	X	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	1122(d)(4)(xv)

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

 

 

EXHIBIT
I

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 Securities Administrator
pursuant to Section 4.02(b). If the Securities Administrator is indicated below as to
any item, then the Securities Administrator is primarily responsible for obtaining that
information.

Under Item 1 of Form 10-D: a) items marked “7.05 statement” are satisfied by the
provision of the periodic Payment Date statement under Section 7.05 of the Indenture,
provided by the Securities Administrator 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 7.05 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

	 	Must be filed
within 15 days of
the Payment Date.

	 
	 	 	 	 	 	 	 	 
	 

	 	 	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.
	 	7.05 statement
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(2) Cash flows
received and the
sources thereof for
payments, fees and
expenses.
	 	7.05 statement
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(3) Calculated amounts and
distribution of the flow of funds
for the period itemized by type and
priority of payment, including:

	 	7.05 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.

	 	7.05 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.

	 	7.05 statement
	 
	 	 
	 

	 	 	 	 	 	     (iii) Principal, interest and other
distributions accrued and paid on
the asset-backed securities by type
and by class or series and any
principal or interest shortfalls or
carryovers.

	 	7.05 statement
	 
	 	 
	 

	 	 	 	 	 	     (iv) The amount of excess cash flow
or excess spread and the disposition
of excess cash flow.

	 	7.05 statement
	 
	 	 
	 

	 	 	 	 	 	(4) Beginning and ending principal
balances of the asset-backed
securities.

	 	7.05 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.

	 	7.05 statement
	 
	 	 
	 

	 	 	 	 	 	(6) Beginning and ending balances of
transaction accounts, such as
reserve accounts, and material
account activity during the period.

	 	7.05 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.

	 	7.05 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.

	 	7.05 statement 

Updated Pool composition information
fields to be as specified by
Servicer from time to time

 

 

	 	 	 	 	 	 	 	 	 
	Form	 	Item	 	Description	 	Responsible Entity
	 

	 	 	 	 	 	(9) Delinquency and loss information for the period. 

	 	7.05 statement. 
	 

	 

	 	 	 	 	 	
In addition, describe any material
changes to the information specified in
Item 1100(b)(5) of Regulation AB
regarding the pool assets.

	 	Form 10-D report: 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.

	 	7.05 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-Dreport: Servicer, Master
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.

	 	7.05 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: Sponsor 

Form 10-D report: Seller 

Form 10-D report: Seller
	 
	 	 
	 

	 	 	 	 	 	Item 1121(b) — Pre-Funding or
Revolving Period Information Updated
pool information as required under
Item 1121(b).

	 	N/A

	 	 	 	 	 	 	 	 	 

	 

	 	 	2	 	 	Legal Proceedings	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Item 1117 — Legal proceedings pending against
the following entities, or their respective
property, that is material to Noteholders,
including proceedings known to be
contemplated by governmental authorities:	 	 
	 

	 	 	 	 	 	Seller	 	 
	 

	 	 	 	 	 	Depositor
	 	Seller
	 

	 	 	 	 	 	Indenture Trustee
	 	Depositor
	 

	 	 	 	 	 	Issuing entity
	 	Indenture Trustee
	 

	 	 	 	 	 	Master Servicer
	 	Sponsor
	 

	 	 	 	 	 	Securities Administrator
	 	Master Servicer
	 

	 	 	 	 	 	Servicer
	 	Securities Administrator
	 

	 	 	 	 	 	Originator
	 	Servicer
	 

	 	 	 	 	 	Custodian
	 	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, Sponsor, Issuing

Entity, as applicable
	 
	 	 	 	 	 	 	 	 
	 

	 	 	4	 	 	Defaults Upon Senior Securities	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Information from 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)
	 	Securities Administrator

 

 

	 	 	 	 	 	 	 	 	 
	Form	 	Item	 	Description	 	Responsible Entity

	 

	 	 	5	 	 	Submission of Matters to a Vote of Security
Holders	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Information from Item 4 of Part II of Form
10-Q
	 	Securities Administrator

Indenture Trustee
	 
	 	 	 	 	 	 	 	 
	 

	 	 	6	 	 	Significant Obligors of Pool Assets	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 		 	 	Item 1112(b) — Significant Obligor Financial Information	 	N/A 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	*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
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	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
	 	

Depositor

Securities Administrator

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
	 	Securities Administrator
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Exhibits required
by Item 601 of
Regulation S-K,
such as material
agreements
	 	All parties that are a party to such exhibit and if none, Sponsor
	 
	 	 	 	 	 	 	 	 
	8-K

	 	Must be filed within four business
days of an event reportable on Form 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: Sale and Servicing Agreement, custodial
agreement.

Note: disclosure not required as to definitive
agreements that are fully disclosed in the
prospectus	 	All parties
	 
	 	 	 	 
	

	 	 	1.02 	 	 	Termination of a Material Definitive Agreement	 	All parties
	 
	 	 	 	 
	 

	 	 	 	 	 	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: Sale and Servicing
Agreement, custodial agreement.
	 	All parties
	 
	 	 	 	 
	

	 	 	1.03 	 	 	Bankruptcy or Receivership	 	 
	 
	 	 	 	 
	

	 	 	 	 	 	Disclosure is required
regarding the bankruptcy
or receivership, if known to
the Depositor or
Servicer, with respect to any
of the following:
Sponsor (Seller),
Depositor,
Servicer,
Master
Servicer, Securities
Administrator,
Indenture
Trustee, Swap Provider, Cap
Provider, Custodian
	 	Sponsor (Seller), Depositor,

Servicer, Master Servicer,

Securities Administrator,

Indenture Trustee,
Custodian

 

 

	 	 	 	 	 	 	 	 	 
	Form	 	Item	 	Description	 	Responsible Entity
	 	 	 	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 7.05 statement
	 	Master Servicer
Securities Administrator
	 	 	 	 
	 	 	 	 	 
	 	 	 	3.03

	 	 	Material Modification to
Rights of Security Holders	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	Disclosure is
required of any material modification to documents
defining the rights of Noteholders, including the
Pooling and Sale 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”
	 	Sponsor
	 	 	 	 
	 	 	 	 	 
	 	 	 	5.06

	 	 	Change in Shell Company Status	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	[Not applicable to ABS Issuing
Entitys]
	 	N/A
	 	 	 	 
	 	 	 	 	 
	 	 	 	6.01

	 	 	ABS Informational and
Computational Material	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	[Not included in reports to be
filed under Section 4.07]
	 	N/A
	 	 	 	 
	 	 	 	 	 
	 	 	 	6.02

	 	 	Change of Master Servicer,
Servicer, Securities
Administrator or Indenture
Trustee	 	 
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	Requires disclosure of any
removal, replacement,
substitution or addition of
any master servicer,
affiliated servicer, other
servicer servicing 10% or more
of pool assets at time of
report, other
material servicers or indenture
trustee (in the case of the
Indenture Trustee, only with
respect to itself). Reg AB
disclosure about any new
servicer or indenture trustee
is also required.
	 	Indenture Trustee, Securities Administrator,
Servicer or Master 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/Securities Administrator/Indenture
Trustee
	 	 	 	 
	 	 	 	 	 
	 	 	 	6.04

	 	 	Failure to Make a Required
Payment
	 	Securities Administrator
	 	 	 	 
	 	 	 	 	 
	 	 	 	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.
	 	Sponsor
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	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.
	 	Sponsor

 

 

	 	 	 	 	 	 	 	 	 
	Form	 	Item	 	Description	 	Responsible Entity
	 	 	 	7.01

	 	 	Regulation FD Disclosure
	 	All parties
	 	 	 	 
	 	 	 	 	 
	 	 	 	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, Sponsor
	 	 	 	 
	 	 	 	 	 
	 	 	 	9.01

	 	 	Financial Statements
and Exhibits
	 	The Responsible Entity applicable
to reportable event
	 	 	 	 
	 	 	 	 	 
	10-K	 	 	Must be filed within 90 days of the fiscal year end for the registrant.
	 	 	 	 
	 	 	 	 	 
	 	 	 	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
Financial
Information

Determining current
maximum probable
exposure Determining
current significance
percentage
Obtaining required
financial information
or
effecting incorporation
by reference
	 	
Securities Administrator

Securities Administrator

Depositor
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	Item 1117 — Legal
proceedings
pending against the
following entities, or
their respective
property, that is
material to
Noteholders, including
proceedings known to be
contemplated by
governmental
authorities:	 	 
	 	 	 	 

	 	 	Seller

Depositor
 Indenture
Trustee
 Issuing entity

Master Servicer

Securities
Administrator
 Servicer

Originator

Custodian
	 	Seller
 Depositor
 Indenture Trustee

Sponsor
 Master Servicer
 Securities
Administrator
 Servicer

Originator
 Custodian
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	Item 1119 — Affiliations and
relationships between the following
entities, or their respective
affiliates, that are material to
Noteholders:	 	 
	 	 	 	 

	 	 	Seller
 Depositor
 Indenture
Trustee
 Issuing entity
 Master Servicer

Securities Administrator
 Servicer

Originator
 Custodian
 Credit
Enhancer/Support Provider, if any

Significant Obligor, if any
	 	Seller
 Depositor

Indenture Trustee

Issuing entity

Master Servicer

Securities
Administrator
 Servicer

Originator

Custodian
 Depositor

Sponsor
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	Item 1122 — Assessment
of Compliance with
Servicing Criteria
	 	Each Party participating in the

servicing function
	 	 	 	 
	 	 	 	 	 
	 	 	 	 

	 	 	Item 1123 — Servicer
Compliance Statement
	 	Servicer, Master Servicer

 

 

EXHIBIT J

STANDARD FILE LAYOUT-SCHEDULED/SCHEDULED

Standard Loan Level File Layout — Master Servicing

Exhibit 1: Layout

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Max
	Column Name	 	Description	 	Decimal	 	Format Comment	 	Size
	Each file requires the following fields:	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SER_INVESTOR_NBR

	 	A value assigned by
the Servicer to
define a group of
loans.
	 	 	 	 	 	Text up to 20 digits
	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	LOAN_NBR

	 	A unique identifier
assigned to each
loan by the
investor.
	 	 	 	 	 	Text up to 10 digits
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERVICER_LOAN_NBR

	 	A unique number
assigned to a loan
by the Servicer.
This may be
different than the
LOAN_NBR.
	 	 	 	 	 	Text up to 10 digits
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SCHED_PAY_AMT

	 	Scheduled monthly
principal and
scheduled interest
payment that a
borrower is
expected to pay,
P&I constant.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	NOTE_INT_RATE

	 	The loan interest
rate as reported by
the Servicer.
	 	 	4	 	 	Max length of 6
	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	NET_INT_RATE

	 	The loan gross
interest rate less
the service fee
rate as reported by
the Servicer.
	 	 	4	 	 	Max length of 6
	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERV_FEE_RATE

	 	The servicer’s fee
rate for a loan as
reported by the
Servicer.
	 	 	4	 	 	Max length of 6
	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERV_FEE_AMT

	 	The servicer’s fee
amount for a loan
as reported by the
Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	NEW_PAY_AMT

	 	The new loan
payment amount as
reported by the
Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	NEW_LOAN_RATE

	 	The new loan rate
as reported by the
Servicer.
	 	 	4	 	 	Max length of 6
	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ARM_INDEX_RATE

	 	The index the
Servicer is using to
calculate a
forec asted rate.
	 	 	4	 	 	Max length of 6
	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ACTL_BEG_PRIN_BAL

	 	The borrower’s
actual principal
balance at the
beginning of the
processing cycle.
	 	 	2	 	 	 No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ACTL_END_PRIN_BAL

	 	The borrower’s
actual principal
balance at the end
of the processing
cycle.
	 	 	2	 	 	 No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	BORR_NEXT_
PAY_DUE_DATE

	 	The date at the end
of processing cycle
that the borrower’s
next payment is due
to the Servicer, as
reported by
Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERV_CURT_AMT_1

	 	The first
curtailment amount
to be applied.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERV_CURT_DATE_1

	 	The curtailment
date associated
with the first
curtailment amount.
	 	 	 	 	 	MM/DD/YYYY
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CURT_ADJ_ AMT_1

	 	The curtailment
interest on the
first curtailment
amount, if
applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERV_CURT_AMT_2

	 	The second
curtailment amount
to be applied.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERV_CURT_DATE_2

	 	The curtailment
date associated
with the second
curtailment amount.
	 	 	 	 	 	MM/DD/YYYY
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CURT_ADJ_ AMT_2

	 	The curtailment
interest on the
second curtailment
amount, if
applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 

 

Exhibit 1: Continued          Standard Loan Level File Layout

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Column Name	 	Description	 	Decimal	 	Format Comment	 	Max
 Size
	SERV_CURT_AMT_3

	 	The third curtailment amount to be applied.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SERV_CURT_DATE_3

	 	The curtailment date associated with the
third curtailment amount.
	 	 	 	 	 	MM/DD/YYYY
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	CURT_ADJ_AMT_3

	 	The curtailment interest on the third
curtailment amount, if applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PIF_AMT

	 	The loan “paid in full” amount as reported
by the Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PIF_DATE

	 	The paid in full date as reported by the
Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Action Code Key:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ACTION_CODE

	 	The standard FNMA
numeric code used to
indicate the
default/delinquent
status of a
particular loan.
	 	 	2	 	 	15=Bankruptcy,
 30=Foreclosure,

60=PIF,

63=Substitution,
65=Repurchase,
70=REO	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	INT_ADJ_AMT

	 	The amount of the
interest adjustment
as reported by the
Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SOLDIER_SAILOR_
ADJ_AMT

	 	The Soldier and
Sailor Adjustment
amount, if
applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	NON_ADV_LOAN_AMT

	 	The Non Recoverable
Loan Amount, if
applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	LOAN_LOSS_AMT

	 	The amount the
Servicer is passing
as a loss, if
applicable.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Plus the following applicable fields:	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SCHED_BEG_PRIN_BAL

	 	The scheduled
outstanding principal
amount due at the
beginning of the
cycle date to be
passed through to
investors.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SCHED_END_PRIN_BAL

	 	The scheduled
principal balance due
to investors at the
end of a processing
cycle.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SCHED_PRIN_AMT

	 	The scheduled
principal amount as
reported by the
Servicer for the
current cycle — only
applicable for
Scheduled/Scheduled
Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	SCHED_NET_INT

	 	The scheduled gross
interest amount less
the service fee
amount for the
current cycle as
reported by the
Servicer — only
applicable for
Scheduled/Scheduled
Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ACTL_PRIN_AMT

	 	The actual principal
amount collected by
the Servicer for the
current reporting
cycle — only
applicable for
Actual/Actual Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	ACTL_NET_INT

	 	The actual gross
interest amount less
the service fee
amount for the
current reporting
cycle as reported by
the Servicer — only
applicable for
Actual/Actual Loans.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PREPAY_PENALTY_ AMT

	 	The penalty amount
received when a
borrower prepays on
his loan as reported
by the Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	PREPAY_PENALTY_ WAIVED

	 	The prepayment
penalty amount for
the loan waived by
the servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 

Exhibit 1: Continued          Standard Loan Level File Layout

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Column Name	 	Description	 	Decimal	 	Format Comment	 	Max
 Size
	MOD_DATE

	 	The Effective Payment
Date of the
Modification for the
loan.
	 	 	 	 	 	MM/DD/YYYY
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	MOD_TYPE

	 	The Modification Type.
	 	 	 	 	 	Varchar — value can be alpha or
numeric
	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	DELINQ_P&I_ADVANCE_AMT

	 	The current
outstanding principal
and interest advances
made by Servicer.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	BREACH_FLAG

	 	Flag to indicate if
the repurchase of a
loan is due to a
breach of
Representations and
Warranties
	 	 	 	 	 	Y=Breach
N=NO Breach Let blank if N/A
	 	 	1	 

 

EXHIBIT K

STANDARD FILE LAYOUT—DELINQUENCY REPORTING

	 	 	 	 	 	 	 	 	 
	Column/Header Name	 	Description	 	Decimal	 	Format Comment
	SERVICER_LOAN_NBR

	 	A unique number assigned to a loan by the Servicer. This may be different than the LOAN_NBR	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LOAN_NBR

	 	A unique identifier assigned to each loan by the originator.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	CLIENT_NBR

	 	Servicer Client Number	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SERV_INVESTOR_NBR

	 	Contains a unique number as assigned by an external servicer to identify a group of loans in their system.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BORROWER_FIRST_NAME

	 	First Name of the Borrower.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BORROWER_LAST_NAME

	 	Last name of the borrower.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_ADDRESS

	 	Street Name and Number of Property	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_STATE

	 	The state where the property located.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_ZIP

	 	Zip code where the property is located.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BORR_NEXT_PAY_DUE_DATE

	 	The date that the borrower’s next payment is due to the servicer at the end of processing
cycle, as reported by Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOAN_TYPE

	 	Loan Type (i.e. FHA, VA, Conv)	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_FILED_DATE

	 	The date a particular bankruptcy claim was filed.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_CHAPTER_CODE

	 	The chapter under which the bankruptcy was filed.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_CASE_NBR

	 	The case number assigned by the court to the bankruptcy filing.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	POST_PETITION_DUE_DATE

	 	The payment due date once the bankruptcy has been approved by the courts
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	BANKRUPTCY_DCHRG_DISM_DATE

	 	The Date The Loan Is Removed From Bankruptcy. Either by Dismissal, Discharged and/or a
Motion For Relief Was Granted.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_APPR_DATE

	 	The Date The Loss Mitigation Was Approved By The Servicer
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_TYPE

	 	The Type Of Loss Mitigation Approved For A Loan Such As;	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_EST_COMP_DATE

	 	The Date The Loss Mitigation /Plan Is Scheduled To End/Close
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	LOSS_MIT_ACT_COMP_DATE

	 	The Date The Loss Mitigation Is Actually Completed
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_APPROVED_DATE

	 	The date DA Admin sends a letter to the servicer with instructions to begin foreclosure
proceedings.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	ATTORNEY_REFERRAL_DATE

	 	Date File Was Referred To Attorney to Pursue Foreclosure
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FIRST_LEGAL_DATE

	 	Notice of 1st legal filed by an Attorney in a Foreclosure Action
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_SALE_EXPECTED_DATE

	 	The date by which a foreclosure sale is expected to occur.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_SALE_DATE

	 	The actual date of the foreclosure sale.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FRCLSR_SALE_AMT

	 	The amount a property sold for at the foreclosure sale.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	EVICTION_START_DATE

	 	The date the servicer initiates eviction of the borrower.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	EVICTION_COMPLETED_DATE

	 	The date the court revokes legal possession of the property from the borrower.
	 	 	 	 	 	MM/DD/YYYY

 

 

	 	 	 	 	 	 	 	 	 
	Column/Header Name	 	Description	 	Decimal	 	Format Comment
	LIST_PRICE

	 	The price at which an REO property is marketed.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	LIST_DATE

	 	The date an REO property is listed at a particular price.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	OFFER_AMT

	 	The dollar value of an offer for an REO property.
	 	 	2	 	 	No commas(,) or dollar signs ($)
	 
	 	 	 	 	 	 	 	 
	OFFER_DATE_TIME

	 	The date an offer is received by DA Admin or by the Servicer.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	REO_CLOSING_DATE

	 	The date the REO sale of the property is scheduled to close.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	REO_ACTUAL_CLOSING_DATE

	 	Actual Date Of REO Sale
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	OCCUPANT_CODE

	 	Classification of how the property is occupied.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_CONDITION_CODE

	 	A code that indicates the condition of the property.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROP_INSPECTION_DATE

	 	The date a property inspection is performed.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	APPRAISAL_DATE

	 	The date the appraisal was done.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	CURR_PROP_VAL

	 	The current “as is” value of the property based on brokers price opinion or appraisal.
	 	 	2	 	 	 
	 
	 	 	 	 	 	 	 	 
	REPAIRED_PROP_VAL

	 	The amount the property would be worth if repairs are completed pursuant to a broker’s
price opinion or appraisal.
	 	 	2	 	 	 
	 
	 	 	 	 	 	 	 	 
	If applicable:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DELINQ_STATUS_CODE

	 	FNMA Code Describing Status of Loan	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	DELINQ_REASON_CODE

	 	The circumstances which caused a borrower to stop paying on a loan. Code indicates the
reason why the loan is in default for this cycle.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	MI_CLAIM_FILED_DATE

	 	Date Mortgage Insurance Claim Was Filed With Mortgage Insurance Company.
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	MI_CLAIM_AMT

	 	Amount of Mortgage Insurance Claim Filed
	 	 	 	 	 	No commas(,) or dollar signs ($)

	 	 	 	 	 	 	 	 	 

	MI_CLAIM_PAID_DATE

	 	Date Mortgage Insurance Company Disbursed Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	MI_CLAIM_AMT_PAID

	 	Amount Mortgage Insurance Company Paid On Claim
	 	 	2	 	 	No commas(,) or dollar

signs ($)
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_FILED_DATE

	 	Date Claim Was Filed With Pool Insurance Company
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_AMT

	 	Amount of Claim Filed With Pool Insurance Company
	 	 	2	 	 	No commas(,) or dollar

signs ($)
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_PAID_DATE

	 	Date Claim Was Settled and The Check Was Issued By The Pool Insurer
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	POOL_CLAIM_AMT_PAID

	 	Amount Paid On Claim By Pool Insurance Company
	 	 	2	 	 	No commas(,) or dollar

signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_FILED_DATE

	 	Date FHA Part A Claim Was Filed With HUD
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_AMT

	 	Amount of FHA Part A Claim Filed
	 	 	2	 	 	No commas(,) or dollar

signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_PAID_DATE

	 	Date HUD Disbursed Part A Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_A_CLAIM_PAID_AMT

	 	Amount HUD Paid on Part A Claim
	 	 	2	 	 	No commas(,) or dollar

signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_FILED_DATE

	 	Date FHA Part B Claim Was Filed With HUD
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_AMT

	 	Amount of FHA Part B Claim Filed
	 	 	2	 	 	No commas(,) or dollar

signs ($)
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_PAID_DATE

	 	Date HUD Disbursed Part B Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	FHA_PART_B_CLAIM_PAID_AMT

	 	Amount HUD Paid on Part B Claim
	 	 	2	 	 	No commas(,) or dollar

signs ($)
	 
	 	 	 	 	 	 	 	 
	VA_CLAIM_FILED_DATE

	 	Date VA Claim Was Filed With the Veterans Admin
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	VA_CLAIM_PAID_DATE

	 	Date Veterans Admin. Disbursed VA Claim Payment
	 	 	 	 	 	MM/DD/YYYY
	 
	 	 	 	 	 	 	 	 
	VA_CLAIM_PAID_AMT

	 	Amount Veterans Admin. Paid on VA Claim
	 	 	2	 	 	No commas(,) or dollar

signs ($)

 

 

Exhibit 2: Standard File Codes — Delinquency Reporting

The Loss Mit Type field should show the approved Loss Mitigation Code as follows:

	 	 	 	 	 	 	 

	 

	 	o
	 	ASUM —
	 	Approved Assumption
	 

	 	o
	 	BAP —
	 	Borrower Assistance Program
	 

	 	o
	 	CO —
	 	Charge Off
	 

	 	o
	 	DIL —
	 	Deed-in-Lieu
	 

	 	o
	 	FFA —
	 	Formal Forbearance Agreement
	 

	 	o
	 	MOD —
	 	Loan Modification
	 

	 	o
	 	PRE —
	 	Pre-Sale
	 

	 	o
	 	SS —
	 	Short Sale
	 

	 	o
	 	MISC —
	 	Anything else approved by the PMI or Pool Insurer

NOTE: Wells Fargo Bank will accept alternative Loss Mitigation Types to those above,
provided that they are consistent with industry standards. If Loss Mitigation Types other than
those above are used, the Servicer must supply Wells Fargo Bank with a description of each of the
Loss Mitigation Types prior to sending the file. The Occupant Code field should show the current
status of the property code as follows:

	 	 	 	 	 

	 

	 	o
	 	Mortgagor
	 

	 	o
	 	Tenant
	 

	 	o
	 	Unknown
	 

	 	o
	 	Vacant

The Property Condition field should show the last reported condition of the property
as follows:

	 	 	 	 	 

	 

	 	o
	 	Damaged
	 

	 	o
	 	Excellent
	 

	 	o
	 	Fair
	 

	 	o
	 	Gone
	 

	 	o
	 	Good
	 

	 	o
	 	Poor
	 

	 	o
	 	Special Hazard
	 

	 	o
	 	Unknown

Exhibit 2: Standard File Codes — Delinquency Reporting, Continued The FNMA
Delinquent Reason Code field should show the Reason for Delinquency as follows:

	 	 	 
	Delinquency Code	 	Delinquency Description
	001

	 	FNMA-Death of principal mortgagor
	 
	 	 
	002

	 	FNMA-Illness of principal mortgagor
	 
	 	 
	003

	 	FNMA-Illness of mortgagor’s family member
	 
	 	 
	004

	 	FNMA-Death of mortgagor’s family member
	 
	 	 
	005

	 	FNMA-Marital difficulties
	 
	 	 
	006

	 	FNMA-Curtailment of income
	 
	 	 
	007

	 	FNMA-Excessive Obligation
	 
	 	 
	008

	 	FNMA-Abandonment of property
	 
	 	 
	009

	 	FNMA-Distant employee transfer
	 
	 	 
	011

	 	FNMA-Property problem
	 
	 	 
	012

	 	FNMA-Inability to sell property
	 
	 	 
	013

	 	FNMA-Inability to rent property
	 
	 	 
	014

	 	FNMA-Military Service
	 
	 	 
	015

	 	FNMA-Other
	 
	 	 
	016

	 	FNMA-Unemployment
	 
	 	 
	017

	 	FNMA-Business failure
	 
	 	 
	019

	 	FNMA-Casualty loss
	 
	 	 
	022

	 	FNMA-Energy environment costs
	 
	 	 
	023

	 	FNMA-Servicing problems
	 
	 	 
	026

	 	FNMA-Payment adjustment
	 
	 	 
	027

	 	FNMA-Payment dispute
	 
	 	 
	029

	 	FNMA-Transfer of ownership pending
	 
	 	 
	030

	 	FNMA-Fraud
	 
	 	 
	031

	 	FNMA-Unable to contact borrower
	 
	 	 
	INC

	 	FNMA-Incarceration

 

 

Exhibit 2: Standard File Codes — Delinquency Reporting, Continued

The FNMA Delinquent Status Code field should show the Status of Default as follows:

	 	 	 
	Status Code	 	Status Description
	09

	 	Forbearance
	 
	 	 
	17

	 	Pre-foreclosure Sale Closing Plan Accepted
	 
	 	 
	24

	 	Government Seizure
	 
	 	 
	26

	 	Refinance
	 
	 	 
	27

	 	Assumption
	 
	 	 
	28

	 	Modification
	 
	 	 
	29

	 	Charge-Off
	 
	 	 
	30

	 	Third Party Sale
	 
	 	 
	31

	 	Probate
	 
	 	 
	32

	 	Military Indulgence
	 
	 	 
	43

	 	Foreclosure Started
	 
	 	 
	44

	 	Deed-in-Lieu Started
	 
	 	 
	49

	 	Assignment Completed
	 
	 	 
	61

	 	Second Lien Considerations
	 
	 	 
	62

	 	Veteran’s Affairs-No Bid
	 
	 	 
	63

	 	Veteran’s Affairs-Refund
	 
	 	 
	64

	 	Veteran’s Affairs-Buydown
	 
	 	 
	65

	 	Chapter 7 Bankruptcy
	 
	 	 
	66

	 	Chapter 11 Bankruptcy
	 
	 	 
	67

	 	Chapter 13 Bankruptcy

 

 

EXHIBIT L

CALCULATION OF REALIZED LOSS/GAIN FORM 332

     WELLS FARGO BANK, N.A. — Calculation of Realized Loss/Gain Form 332

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	 	Prepared by: 	 	 	 	 	 	 	 	 	Date: 	 	 	 
	 	 	 	 	 	 	 	 	 	 	   	 
	 	Phone: 	 	 	 	 	 	Email Address: 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 

	 

	 	 
	 	 
	Servicer Loan No.

	 	Servicer Name
	 	Servicer Address
	 
	 
	 	 	 	 
	 

	 	 
	 	 

WELLS FARGO BANK, N.A. Loan No.                                                             

Borrower’s
Name:
                                                                                

Property Address:                                                                                                     

	 	 	 	 	 	 	 	 	 

	Liquidation Type:
	 	REO Sale
	 	3rd Party Sale
	 	Short Sale
	 	Charge Off

	 	 	 	 	 	 	 	 	 

	Was this loan granted a Bankruptcy deficiency or cramdown
	 	Yes	 	No

If “Yes”, provide deficiency or cramdown amount                                                             

	 	 	 	 	 

	Liquidation and Acquisition Expenses:
	 	 	 	 
	(1) Actual Unpaid Principal Balance of Mortgage Loan
	 	$	                                   	(1)
	(2) Interest accrued at Net Rate
	 	 	                                 	(2)
	(3) Accrued Servicing Fees
	 	 	                                 	(3)
	(4) Attorney’s Fees
	 	 	                                 	(4)
	(5) Taxes (see page 2)
	 	 	                                 	(5)
	(6) Property Maintenance
	 	 	                                 	(6)
	(7) MI/Hazard Insurance Premiums (see page 2)
	 	 	                                 	(7)
	(8) Utility Expenses
	 	 	                                 	(8)
	(9) Appraisal/BPO
	 	 	                                 	(9)
	(10) Property Inspections
	 	 	                                                           	(10)
	(11) FC Costs/Other Legal Expenses
	 	 	                                                          	(11)
	(12) Other (itemize)
	 	 	                                                          	(12)
	Cash for Keys                                                             
	 	 	                      	(12)
	HOA/Condo Fees                                                             
	 	 	                                   	(12)
	                                                                                                    
	 	 	                                   	(12)
	 
	 	 	 	 
	Total Expenses
	 	$	                                	(13)
	 
	 	 	 	 
	Credits:
	 	 	 	 
	(14) Escrow Balance
	 	$	                                	(14)
	(15) HIP Refund
	 	 	                                           	(15)
	(16) Rental Receipts
	 	 	                                           	(16)
	(17) Hazard Loss Proceeds
	 	 	                                           	(17)
	(18) Primary Mortgage Insurance / Gov’t Insurance
	 	 	                                           	(18a)
	HUD Part A
	 	 	 	 
	 
	 	 	                                           	(18b)
	HUD Part B
	 	 	 	 
	(19) Pool Insurance Proceeds
	 	 	                                           	(19)
	(20) Proceeds from Sale of Acquired Property
	 	 	                                           	(20)
	(21) Other (itemize)
	 	 	                                           	(21)
	                                                                                                    
	 	 	                                           	(21)
	 
	Total Credits
	 	$	                                	(22)
	 
	 	 	 	 
	Total Realized Loss (or Amount of Gain)
	 	$	                                 	(23)

Escrow Disbursement Detail

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Type	 	 	 	Period of	 	 	 	 	 	 	 	 
	(Tax /Ins.)	 	Date Paid	 	Coverage	 	Total Paid	 	Base Amount	 	Penalties	 	Interest
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

 

 

WELLS FARGO BANK, N.A.

Calculation of Realized Loss/Gain Form 332- Instruction Sheet

NOTE: Do not net or combine items. Show all expenses individually and all credits
as separate line items. Claim packages are due on the remittance report date.
Late submissions may result in claims not being passed until the following month.

(b) The numbers on the 332 form correspond with the numbers listed below.

Liquidation and Acquisition Expenses:

	 	  1.	 	The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced is
required.
	 
	 	  2.	 	The Total Interest Due less the aggregate amount of servicing fee
that would have been earned if all delinquent payments had been made as
agreed. For documentation, an Amortization Schedule from date of default
through liquidation breaking out the net interest and servicing fees
advanced is required.
	 
	 	  3.	 	Accrued Servicing Fees based upon the Scheduled Principal Balance of
the Mortgage Loan as calculated on a monthly basis. For documentation, an
Amortization Schedule from date of default through liquidation breaking out
the net interest and servicing fees advanced is required.
	 
	 	  4-12.	 	 Complete as applicable. Required documentation:

	 	*	 	For interest advances — an amortization schedule (evidencing
calculation of interest advances)
	 
	 	*	 	For taxes and insurance advances — see page 2 of 332 form — breakdown
required showing period of coverage, base tax, interest, penalty.
Advances prior to default require evidence of servicer efforts to recover
advances.
	 
	 	*	 	For escrow advances — complete payment history (to calculate advances from last positive escrow balance forward)
	 
	 	*	 	Other expenses — copies of corporate advance history showing all payments
	 
	 	*	 	REO repairs &gt; $1500 require explanation
	 
	 	*	 	REO repairs &gt;$3000 require evidence of at least 2 bids.
	 
	 	*	 	Short Sale or Charge Off require P&L supporting the decision and WFB’s approved officer cert
	 
	 	*	 	Unusual or extraordinary items may require further documentation.

	 	  13.	 	The total of lines 1 through 12.
	 
	 	  (c)	 	Credits:
	 
	 	  14-21. 	 	 Complete as applicable. Required documentation:

	 	*	 	Copy of the HUD 1 from the REO sale. If a 3rd Party Sale bid instructions, copy of attorney letter of Foreclosure proceeds.
	 
	 	*	 	Copy of EOB for any MI or gov’t guarantee
	 
	 	*	 	All other credits need to be clearly defined on the 332 form

	 	  22.	 	The total of lines 14 through 21.

	 	Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and line (18b) for Part B/Supplemental proceeds.
	 
	 	Total Realized Loss (or Amount of Any Gain)

	 	  23.	 	The total derived from subtracting line 22 from 13. If the amount represents
a realized gain, show the amount in parenthesis (      ).

 

 

EXHIBIT M

ADDITIONAL DISCLOSURE NOTIFICATION

Wells Fargo Bank, N.A. as Securities Administrator

9062 Old Annapolis Road

Columbia, Maryland 21045

Fax: (410) 715-2380

E-mail: cts.sec.notifications@wellsfargo.com

Attn: Corporate Trust Services — Newcastle 2007-1-SEC REPORT PROCESSING

RE: **Additional Form [      ] Disclosure**Required

Ladies and Gentlemen:

          In accordance with Section 4.02 of the Sale and Servicing Agreement, dated as of
July 12, 2007, among Bear Stearns Asset Backed Securities I LLC, Newcastle Mortgage
Securities Trust 2007-1, Nationstar Mortgage LLC, Wells Fargo Bank, N.A and The Bank of
New York, the undersigned hereby notifies you that
certain events have come to our attention that [shall] [may] need to be disclosed on Form [      ].

Description of Additional Form [      ] Disclosure:

List of Any Attachments hereto to be included in the Additional Form [      ] Disclosure:

          Any inquiries related to this notification should be directed to [      ], phone
number: [      ]; email address: [      ].

	 	 	 	 	 
	 	[NAME OF PARTY]

as [role]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:exv10w1

Exhibit
10.1

AMENDMENT NO. 1

TO THE

FIRST INDUSTRIAL REALTY TRUST, INC.

2011 STOCK INCENTIVE PLAN

     AMENDMENT NO. 1 (the “First Amendment”) to the First Industrial Realty Trust, Inc. 2011 Stock
Incentive Plan (the “Plan”), established and maintained by First Industrial Realty Trust, Inc. (the
“Company”).

     WHEREAS, Section 13(a) of the Plan reserves to the Board of Directors of the Company (the
“Board”) the right to amend the Plan at any time; and

     WHEREAS, the Board desires to amend the Plan to clarify that repricing of awards under the
Plan is not permitted without the approval of the stockholders of the Company.

     NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended by the First Amendment as
follows:

	 	1.	 	Amendment to Plan.

          (a) The following Section 4(c) is hereby added to the Plan:

     “(c) Repricing Prohibited. Notwithstanding any provision in the Plan
to the contrary, no adjustment or reduction of the exercise price of any outstanding
Stock Option or SAR in the event of a decline in Stock price is permitted without
approval by the Company’s stockholders or as otherwise specifically provided under
Section 3(d) above. The foregoing prohibition includes (i) reducing the exercise
price of outstanding Stock Options or SARs, (ii) cancelling outstanding Stock
Options or SARs in connection with granting of Stock Options or SARs with a lower
exercise price to the same individual, (iii) cancelling a Stock Option or SAR in
exchange for a cash or other payment, and (iv) take any other action that would be
treated as a repricing of a Stock Option or SAR under the rules of the primary stock
exchange on which the Stock is listed.”

	 	2.	 	Effective Date of Amendment; Ratification and
Confirmation.

     (a) The First Amendment shall become effective upon approval by the Board. In all
other respects, the Plan is hereby ratified and confirmed.

	 	3.	 	Governing Law.

     THE FIRST AMENDMENT SHALL BE GOVERNED BY NEW YORK LAW WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICT OF LAWS THEREOF, EXCEPT TO THE EXTENT SUCH LAW IS PREEMPTED BY FEDERAL LAW.

1

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