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ASSIGNMENT, ASSUMPTION AND
RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (this "
Assignment "), dated as of November 1, 2006, is entered into
among J.P. Morgan Acceptance Corporation I, a Delaware corporation
(the " Depositor "), HSBC Bank USA, National Association, as
trustee (the " Trustee ") of J.P. Morgan Alternative Loan
Trust 2006-A7 (the " Trust "), J.P. Morgan Mortgage
Acquisition Corp. (" JPMorgan Acquisition "), Countrywide
Home Loans, Inc. (" Countrywide "), Countrywide Home Loans
Servicing LP ("Servicer") and U.S. Bank National Association (the "
Master Servicer ").
RECITALS
WHEREAS JPMorgan Acquisition and Countrywide have entered into a
certain Amended and Restated Master Mortgage Loan Purchase and
Servicing Agreement, dated as of December 1, 2005 (the "
Agreement "), pursuant to which JPMorgan Acquisition has
acquired certain Mortgage Loans pursuant to the terms of the
Agreement and Countrywide has agreed to service such Mortgage
Loans;
WHEREAS Countrywide has assigned the right to service such
Mortgage Loans to the Servicer and the Servicer has agreed to
service such Mortgage Loans;
WHEREAS the Depositor has agreed, on the terms and conditions
contained herein, to purchase from JPMorgan Acquisition certain of
the Mortgage Loans (the " Specified Mortgage Loans ") which
are subject to the provisions of the Agreement and are listed on
the mortgage loan schedule attached as Exhibit I hereto (the "
Specified Mortgage Loan Schedule "); and
WHEREAS the Trustee, on behalf of the Trust, has agreed, on the
terms and conditions contained herein, to purchase from the
Depositor the Specified Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual promises
contained herein and other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the
parties agree as follows:
1.
Assignment and Assumption
(a)
On and as of the date hereof, JPMorgan Acquisition hereby sells,
assigns and transfers to the Depositor all of its right, title and
interest in the Specified Mortgage Loans and all rights and
obligations related thereto as provided under the Agreement to the
extent relating to the Specified Mortgage Loans, the Depositor
hereby accepts such assignment from JPMorgan Acquisition (the
" First Assignment and Assumption "), and Countrywide and
the Servicer hereby acknowledge the First Assignment and
Assumption.
JPMorgan Acquisition specifically reserves and does not assign
to the Depositor hereunder any and all right, title and interest
in, to and under and all obligations of JPMorgan Acquisition with
respect to any Mortgage Loans subject to the Agreement which are
not the Specified Mortgage Loans.
(b)
On and as of the date hereof, immediately after giving effect to
the First Assignment and Assumption, the Depositor hereby sells,
assigns and transfers to the Trustee, on behalf of the Trust, all
of its right, title and interest in the Specified Mortgage Loans
and all rights and obligations related thereto as provided under
the Agreement to the extent relating to the Specified Mortgage
Loans, and the Trustee, on behalf of the Trust, hereby accepts such
assignment from the Depositor (the " Second Assignment and
Assumption "), and Countrywide and the Servicer hereby
acknowledge the Second Assignment and Assumption.
(c)
On and as of the date hereof, JPMorgan Acquisition represents
and warrants to the Depositor and the Trustee that JPMorgan
Acquisition has not taken any action that would serve to impair or
encumber the respective ownership interests of the Depositor and
the Trustee in the Specified Mortgage Loans since the date of
JPMorgan Acquisition’s acquisition of the Specified Mortgage
Loans.
2.
Recognition of Trustee
(a)
From and after the date hereof, both JPMorgan Acquisition and
Countrywide shall note the transfer of the Specified Mortgage Loans
to the Trustee, in their respective books and records and shall
recognize the Trustee, on behalf of the Trust, as of the date
hereof, as the owner of the Specified Mortgage Loans, and the
Servicer shall service the Specified Mortgage Loans for the benefit
of the Trust pursuant to the Agreement, the terms of which are
incorporated herein by reference. It is the intention of
Countrywide, the Servicer the Depositor, the Trustee and JPMorgan
Acquisition that this Assignment shall be binding upon and inure to
the benefit of the Depositor, the Trustee and JPMorgan Acquisition
and their respective successors and assigns.
(b)
Without in any way limiting the foregoing, the parties confirm
that this Assignment includes the rights relating to amendments and
waivers under the Agreement. Accordingly, the right of
JPMorgan Acquisition to consent to any amendment of the Agreement
and its rights concerning waivers as set forth in Sections 8.14 and
8.17, respectively, of the Agreement shall be exercisable, to the
extent any such amendment or waiver affects the Specified Mortgage
Loans or any of the rights or obligations under the Agreement with
respect thereto (including, without limitation, the servicing of
the Specified Mortgage Loans), by the Trustee as assignee of
JPMorgan Acquisition.
3.
Representations and Warranties
(a)
The Depositor represents and warrants that it is a sophisticated
investor able to evaluate the risks and merits of the transactions
contemplated hereby, and that it has not relied in connection
therewith upon any statements or representations of Countrywide or
JPMorgan Acquisition other than those contained in the Agreement or
this Assignment.
(b)
Each of the parties hereto represents and warrants that it is
duly and legally authorized to enter into this Assignment.
(c)
Each of the parties hereto represents and warrants that this
Assignment has been duly authorized, executed and delivered by it
and (assuming due authorization, execution and delivery thereof by
each of the other parties hereto) constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its
terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors’ rights generally and by general
equitable principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(d)
Countrywide hereby restates, as of the Closing Date (as defined
in the Pooling and Servicing Agreement referred to below), the
representations and warranties contained in Section 3.01 of the
Agreement (except with respect to Section 3.01 (k)), to and for the
benefit of the Depositor, the Trustee and the Trust, and by this
reference incorporates such representations and warranties herein,
as of such Closing Date.
4.
The Servicer hereby acknowledges that U.S. Bank National
Association has been appointed as the Master Servicer of the
Specified Mortgage Loans pursuant to the pooling and servicing
agreement dated as of the date hereof among the Depositor, the
Master Servicer, the Securities Administrator and the Trustee (the
"Pooling and Servicing Agreement") for Mortgage Pass-Through
Certificates, Series 2006-A7 and, therefore, has the right to
enforce all obligations of the Servicer under the Agreement. Such
rights will include, without limitation, the right to terminate the
Servicer under the Agreement upon the occurrence of an event of
default thereunder, the right to receive all remittances required
to be made by the Servicer under the Agreement and the Assignment,
the right to receive all monthly reports and other data required to
be delivered by the Servicer under the Agreement and the
Assignment, the right to examine the books and records of the
Servicer, indemnification rights and the right to exercise certain
rights of consent and approval relating to actions taken by
JPMorgan Acquisition. Notwithstanding the foregoing, it is
understood that the Servicer shall not be obligated to defend and
indemnify and hold harmless the Master Servicer, the Trust, the
Trustee, the Depositor, and JP Morgan Acquisition from and against
any losses, damages, penalties, fines, forfeitures, judgments and
any related costs including, without limitation, reasonable and
necessary legal fees, resulting from actions or inactions of the
Servicer which were taken or omitted upon the instruction or
direction of the Master Servicer. The Servicer shall make all
distributions under the Agreement and the Assignment to the Master
Servicer by wire transfer of immediately available funds to:
U.S. Bank National Association
ABA Number:
091000022
Account Name: U.S. Bank Corporate Trust
Account number: 173103322058
For further credit to:
J.P. Morgan Alternative Loan Trust 2006-A7,
Distribution Account Number: 107164000
The Servicer shall deliver all reports required to be delivered
under the Agreement and the Assignment to the Master Servicer at
the following address:
U.S. Bank National Association
2121 Cliff Drive, #205
Eagan, MN 55122
Attention: J.P. Morgan Alternative Loan Trust 2006-A7
Telecopier: (651) 365-6384
5.
Establishment of Custodial Account
The Servicer shall establish and maintain a separate Collection
Account in the name of the Trustee, in trust for J.P. Morgan
Alternative Loan Trust 2006-A7, for all funds collected and
received on the Specified Mortgage Loans.
6.
Amendment to the Agreement
The parties to the Agreement hereby agree to amend the Agreement
as follows:
(a)
The definition of "Qualified Substitute Mortgage Loan" under the
Agreement, solely with respect to the Specified Mortgage Loans, is
hereby amended by deleting such definition in its entirety and
replacing it with the following:
"A mortgage loan that must, on the date of such substitution,
(i) have an unpaid principal balance, after deduction of all
scheduled payments due in the month of substitution (or if more
than one (1) mortgage loan is being substituted, an aggregate
principal balance), not in excess of the unpaid principal balance
of the repurchased Mortgage Loan and not less than ninety percent
(90%) of the unpaid principal balance of the repurchased Mortgage
Loan (the amount of any shortfall will be deposited in the
Custodial Account by the Servicer in the month of substitution);
(ii) have a minimum Mortgage Interest Rate not less than that of
the repurchased Mortgage Loan; (iii) have a maximum Mortgage
Interest Rate not less than that of the repurchased Mortgage Loan
and not more than two (2) percentage points above that of the
repurchased Mortgage Loan; (iv) have a remaining term to maturity
not greater than, and not more than one year less than, the
maturity date of the repurchased Mortgage Loan; (v) have a Gross
Margin not less than that of the repurchased Mortgage Loan; (vi)
have a Periodic Rate Cap equal to that of the repurchased Mortgage
Loan; (vii) have an LTV at the time of substitution equal to or
less than the LTV of the repurchased Mortgage Loan at the time of
substitution; (viii) have the same Interest Adjustment Date as that
of the repurchased Mortgage Loan; (ix) have the same Index as that
of the repurchased Mortgage Loan; (x) not permit conversion of the
related Mortgage Interest Rate to a permanent fixed Mortgage
Interest Rate; (xi) be the same type of Mortgage Loan (i.e., an
Adjustable Rate Mortgage Loan); and (xii) comply with each
representation and warranty (respecting individual Mortgage Loans)
set forth in Section 3.02 hereof."
(b)
Notwithstanding any provision in the Agreement to the contrary,
the parties to the Agreement hereby agree that, in connection with
any prepayments in full of the Specified Mortgage Loans in a
Mortgage Pool (as defined in the Pooling and Servicing Agreement),
Countrywide or the Servicer shall contribute from its own funds,
without reimbursement therefor up to a maximum amount per month
equal to the lesser of one half of (a) one-twelfth of the product
of (i) the Servicing Fee Rate (as defined in the Agreement) and
(ii) the stated principal balance of such Specified Mortgage Loans,
or (b) the aggregate Servicing Fee actually received for such month
for the Specified Mortgage Loans in such Mortgage Pool, for any
shortfall in the interest component of such Specified Mortgage
Loans such that one month’s interest shall be deposited to
the Custodial Account, as defined in the Agreement.
7.
Indemnification and Contribution
(a)
Countrywide shall indemnify and hold harmless the Depositor, its
officers and directors and each person, if any, who controls the
Depositor within the meaning of either Section 15 of the Securities
Act of 1933, as amended (the " 1933 Act ") or Section 20 of
the Securities Exchange Act of 1934, as amended (the " 1934
Act ") against any and all losses, claims, damages or
liabilities, joint or several, to which the Depositor or any of
them may become subject under the 1933 Act, the 1934 Act or other
federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based in whole
or in part upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Free-Writing
Prospectus and Prospectus Supplement (as hereafter defined) or any
omission or alleged omission to state in the Free-Writing
Prospectus and Prospectus Supplement 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,
but in each case to the extent, and only to the extent that such
untrue statement or alleged untrue statement or omission or alleged
omission was made in or omitted from the Countrywide Information
(as defined herein) and (ii) agree to reimburse the Depositor and
each such officer, director and controlling person promptly upon
demand for any legal or other expenses reasonably incurred by any
of them in connection with investigating or defending or preparing
to defend against any such loss, claim, damage, liability or action
as such expenses are incurred. The foregoing indemnity
agreement is in addition to any liability which Countrywide may
otherwise have.
As used herein "Countrywide Information" means the information
furnished in writing by Countrywide or the Servicer as set forth on
Exhibit II attached hereto, specifically for use in the
Free-Writing Prospectus of the Depositor (the "Free-Writing
Prospectus") dated on or about November 1, 2006, relating to the
J.P. Morgan Alternative Loan Trust 2006-A7, Mortgage Pass-Through
Certificates (the "Certificates"), and the Prospectus Supplement of
the Depositor (the "Prospectus Supplement" and together with the
Free-Writing Prospectuses, the "Offering Documents") dated on or
about November 28, 2006, relating to the J.P. Morgan Alternative
Loan Trust 2006-A7, Mortgage Pass-Through Certificates (the
"Certificates").
(b)
The Depositor and JPMorgan Acquisition shall indemnify and hold
harmless Countrywide and the Servicer, their respective officers
and directors and each person, if any, who controls Countrywide and
the Servicer within the meaning of either Section 15 of the 1933
Act or Section 20 of the 1934 Act, against any and all losses,
claims, damages or liabilities, joint or several, to which
Countrywide and the Servicer or any of them may become subject
under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based in whole or in part upon any
untrue statement or alleged untrue statement of a material fact
contained in the Offering Documents or any omission or alleged
omission to state in the Offering Documents 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, but in each case to the extent, and only to the extent
that such untrue statement or alleged untrue statement or omission
or alleged omission was made in or omitted from the Depositor
Information (as defined herein), and agrees to reimburse
Countrywide, the Servicer and each such officer, director and
controlling person promptly upon demand for any legal or other
expenses reasonably incurred by any of them in connection with
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to
any liability which the Depositor and JPMorgan Acquisition may
otherwise have.
As used herein " Depositor Information " means all
information other than the Countrywide Information contained in the
Free-Writing Prospectus dated on or about November 1, 2006,
Prospectus Supplement dated on or about November 28, 2006, the
accompanying Prospectus dated on or about September 21, 2006, any
private placement memorandum relating to the privately offered
Certificates and any amendment or supplement to any of the
foregoing and any other materials used by the Depositor to offer
any of the Certificates.
(c)
Promptly after receipt by any indemnified party under this
Section 7 of notice of any claim or the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under this Section 6, notify
the indemnifying party in writing of the claim or the commencement
of that action; provided, however, that the failure to notify the
indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been
materially prejudiced by such failure; and provided further,
however, that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to any
indemnified party otherwise than under this Section 7.
If any such claim or action shall be brought against an
indemnified party, and it shall promptly notify the indemnifying
party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with
any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of
such claim or action, except as provided in the following
paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other
expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless: (i) the employment
thereof has been specifically authorized by the indemnifying party
in writing; (ii) such indemnified party shall have been advised by
such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to
the indemnifying party and in the reasonable judgment of such
counsel it is advisable for such indemnified party to employ
separate counsel; or (iii) the indemnifying party has failed to
assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that
it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified
party, it being understood, however, the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for all such
indemnified parties.
The indemnifying party shall not be liable for any settlement of
any such action effected without its written consent (which consent
shall not be unreasonably withheld or delayed), but if settled with
its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against
any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested the indemnifying party to
reimburse the indemnified party for fees and expenses of counsel,
the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent
if such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request or such lesser
amount if time is required by the settlement (as set forth in
written notice).
(d)
If the indemnification provided for in this Section 7 is
unavailable to an indemnified party or insufficient in respect of
any losses, claims, damages or liabilities referred to therein,
then the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims,
damages or liabilities, in such proportion as is appropriate to
reflect the relative fault of the indemnifying party in connection
with the statements or omissions that result in such losses,
claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the indemnifying
party shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact is contained in the
Countrywide Information, on the one hand, or Depositor Information
on the other.
The amount paid or payable by an indemnified party as a result
of the losses, claims, damages and liabilities referred to in this
Section 7(d) shall be deemed to include, subject to the limitations
set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or
defending any such action or claim, except where the indemnified
party is required to bear such expenses pursuant to this Section 7,
which expenses the indemnifying party shall pay as and when
incurred, at the request of the indemnified party, to the extent
that the indemnifying party will be ultimately obligated to pay
such expenses. In the event that any expenses so paid by the
indemnifying party are subsequently determined to not be required
to be borne by the indemnifying party hereunder, the party which
received such payment shall promptly refund the amount so paid to
the party which made such payment. No person guilty of
fraudulent misrepresentations (within the meaning of Section 11(f)
of the 1933 Act), shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e)
The indemnity and contribution agreements contained in this
Section 7 shall remain operative and in full force and effect
regardless of (i) any termination of the Agreement, (ii) any
investigation made by any of the Depositor or Countrywide, their
directors or officers or any person controlling any of them, by or
on behalf of any them, and (iii) acceptance of and payment for any
of the Certificates.
8.
Indemnification by Master Servicer
The Master Servicer shall indemnify and hold harmless
Countrywide and its affiliates, and in each case, its officers,
directors and agents from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related
costs, judgments and other costs and expenses arising out of or
based upon a breach by the Master Servicer or any of its officers,
directors, agents or affiliates of its obligations in connection
with the preparation, filing and certification of any Form 10-K,
Form 10-D or Form 8-K pursuant to the Pooling and Servicing
Agreement or the gross negligence of the Master Servicer in
connection therewith. In addition, the Master Servicer shall
indemnify and hold harmless Countrywide and its affiliates, and in
each case, its officers, directors and agents from and against any
losses, damages, penalties, fines, forfeitures, reasonable legal
fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach by any Servicer (as defined
in the Pooling and Servicing Agreement), other than Countrywide, of
its obligations in connection with any back-up certification (or
any other back-up documents) to any certification of any Form 10-K,
Form 10-D or Form 8-K required to be provided by the Master
Servicer, but solely to the extent the Master Servicer receives
amounts from such Servicer in connection with any indemnification
provided by such Servicer (in each case as defined in the Pooling
and Servicing Agreement) to the Master Servicer.
9.
Continuing Effect
Except as contemplated hereby, the Agreement shall remain in
full force and effect in accordance with its terms.
10.
Governing Law
This Assignment and the rights and obligations hereunder shall
be governed by and construed in accordance with the internal laws
of the State of New York.
11.
Notices
Any notices or other communications permitted or required under
the Agreement to be made to the Depositor and the Trustee shall be
made in accordance with the terms of the Agreement and shall be
sent to the Depositor and Trustee as follows:
In the case of JPMorgan Acquisition:
J.P. Morgan Mortgage Acquisition Corp.
270 Park Avenue, 10th Floor
New York, New York 10017
Attention: Seth Fenton
Telephone: (212) 834 5463
Facsimile: (917) 464-8161
With a copy to:
JPMorgan Chase & Co.
270 Park Avenue
New York, New York 10017
Attention: General Counsel’s Office
In the case of the Depositor:
J.P. Morgan Acceptance Corporation I
270 Park Avenue
New York,
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