Exhibit 99.3
EXECUTION COPY
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AMENDED AND RESTATED FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
Purchaser
AMERIQUEST MORTGAGE COMPANY,
Seller
________________________
Dated as of June 1, 2005
Conventional,
Fixed and Adjustable Rate Residential Mortgage Loans
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AMENDED AND RESTATED FLOW MORTGAGE LOAN PURCHASE AND
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WARRANTIES AGREEMENT
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This FLOW AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT (the "Agreement"), dated as of June 1, 2005, by and
between ▇▇▇▇▇▇▇ Sachs Mortgage Company, a New York limited partnership, having
an office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "Purchaser"), and
Ameriquest Mortgage Company, a Delaware corporation, having an office at ▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller").
W I T N E S S E T H:
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WHEREAS, the Purchaser and the Seller are parties to that certain
Flow Mortgage Loan Purchase and Warranties Agreement, dated as of April 26,
2004, as amended by (the "Original Purchase Agreement"), pursuant to which the
Seller desires to sell to the Purchaser, and, from time to time, the Purchaser
desires to purchase from the Seller, certain conventional adjustable and fixed
rate residential first and second lien mortgage loans (the "Mortgage Loans")
on a servicing released basis as described herein, and which shall be
delivered as a pool of whole loans;
WHEREAS, the parties wish to amend the Original Purchase Agreement
as set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Purchaser
and the Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms
shall have the respective meanings set forth below.
Accepted Origination Practices: With respect to any Mortgage Loan
those reasonable and customary nonprime origination practices in the industry
for the same type of mortgage loans as the Mortgage Loan in the jurisdiction
where the related Mortgaged Property is located.
Accepted Servicing Practices: With respect to any Mortgage Loan
those reasonable and customary nonprime servicing practices in the industry
for the same type of mortgage loans as the Mortgage Loan in the jurisdiction
where the related Mortgaged Property is located which comply with all
applicable laws, and incorporating the Delinquency Collection Policies and
Procedures.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ ▇▇▇ Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Flow Amended and Restated Mortgage Loan Purchase
and Warranties Agreement and all amendments hereof and supplements hereto.
Appraised Value: (i) With respect to any First Lien Loan, the
value of the related Mortgaged Property based upon either the appraisal made
or Insured AVM, if any, for the originator at the time of origination of the
Mortgage Loan or the sales price of the Mortgaged Property at such time of
origination, whichever is less; provided, however, that in the case of a
refinanced Mortgage Loan, such value is based solely upon the appraisal made
or the Insured AVM supplied, if any, at the time of origination of such
refinanced Mortgage Loan, and (ii) with respect to any Second Lien Loan, the
value, determined pursuant to the Seller's Underwriting Guidelines, of the
related Mortgaged Property as of the origination of the Second Lien Loan.
Assignment and Conveyance Agreement: As defined in Subsection
6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (excepting therefrom
mortgage recordation information where such has not been returned by the
applicable county recorder's office and the name of the assignee), sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect the sale of the Mortgage to the Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan which by its original
terms or any modifications thereof provides for amortization beyond its
scheduled maturity date.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii)
a day on which banking and savings and loan institutions, in the State of New
York, the state in which the Custodian's operations are located or the state
in which the Interim Servicer's servicing operations are located, are
authorized or obligated by law or executive order to be closed.
Closing Date: The date or dates set forth on the related Purchase
Price and Terms Agreement on which the Purchaser from time to time shall
purchase and the Seller from time to time shall sell, the Mortgage Loans
listed on the related Mortgage Loan Schedule
CLTV: As of any date and as to (1) any Second Lien Loan, the
ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of its origination date and (ii)
the outstanding principal balance as of the origination date of any mortgage
loan or mortgage loans that are senior or equal in priority to the Second Lien
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value and (2) any First Lien Loan, the ratio, expressed as a percentage, of
the (a) sum of (i) the outstanding principal balance of the First Lien Loan as
of its origination date and (ii) the outstanding
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principal balance as of the origination date of any mortgage loan or mortgage
loans that are junior or equal in priority to the First Lien Loan and which
are secured by the same Mortgaged Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby
the Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a
Fixed Rate Mortgage Loan in accordance with the terms of the related Mortgage
Note.
Cost of Carry: As defined in the related Purchase Price and Terms
Agreement.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Credit Files: As defined in Section 5 herein.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.04 of the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, to be executed between the Purchaser and the
Custodian and to be dated as of the original Cut-Off Date.
Custodian: The custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement, as therein provided. If at any time there is no Custodial
Agreement in effect with respect to a Mortgage Loan, all references to the
Custodian herein and in the Interim Servicing Agreement shall be deemed to
refer to the Purchaser (or its designee) with respect to such Mortgage Loan.
Cut-off Date: With respect to each Mortgage Loan in a Mortgage
Loan Package, the date set forth on the related Purchase Price and Terms
Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a by the Seller in accordance with the terms
of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Interim Servicer, a copy of which is
attached to the Interim Servicing Agreement.
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Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06 of the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting taxes and/or fire and hazard insurance premiums required to be
escrowed by the Mortgagor with the mortgagee pursuant to a voluntary escrow
agreement between the Mortgagor and the Seller or the Mortgage or any other
document.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association and its
successors in interest.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇
Mae Servicers' Guide and all amendments or additions thereto.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 13 hereof.
FICO: A FICO credit score or other similar recognized credit score
created by one of the credit rating agencies which may employ a statistical
model other than the FICO model.
First Lien Loan: Any Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc. and its successors in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation and its
successors in interest.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which
amount is added to the Index in accordance with the terms of the related
Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under
any other applicable state, federal or local law (or a similarly classified
loan using different terminology under a law imposing heightened
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regulatory scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees) or (c) categorized as
High Cost pursuant to Appendix E of Standard & Poor's Glossary. For avoidance
of doubt, the parties agree that this definition shall apply to any law
regardless of whether such law is presently, or in the future becomes, the
subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
Index: With respect to each Adjustable Rate Mortgage Loan, the
index set forth on the related Mortgage Loan Schedule.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Insured AVM: An appraisal valuation model which has been insured
by St. ▇▇▇▇ Fire and Marine Insurance Company.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate Mortgage Loan, the date specified in the related Mortgage Note and the
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Servicer: Ameriquest Mortgage Company, a Delaware
corporation, and its successors in interest, and any successor interim
servicer under the Interim Servicing Agreement.
Interim Servicing Agreement: The agreement, attached as Exhibit B
hereto, to be entered into by the Purchaser and the Interim Servicer,
providing for the Interim Servicer to service the Mortgage Loans for an
interim period as specified by the Interim Servicing Agreement.
Lifetime Rate Cap: The provision of each Mortgage Note related to
an Adjustable Rate Mortgage Loan which provides for an absolute maximum
Mortgage Interest Rate thereunder. The Mortgage Interest Rate during the terms
of each Adjustable Rate Mortgage Loan shall not at any time exceed the
Mortgage Interest Rate at the time of origination of such Adjustable Rate
Mortgage Loan by more than the amount per annum set forth on the related
Mortgage Loan Schedule.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of its origination date (unless otherwise indicated), to the
Appraised Value of the Mortgaged Property.
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Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing
a Mortgage Note, which creates a first lien, in the case of a First Lien Loan,
or a second lien, in the case of a Second Lien Loan, on the Mortgaged
Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being identified on the applicable Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, Servicing Rights, and all other rights, benefits, proceeds
and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage
Loan.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting
forth the following information with respect to each Mortgage Loan in the
related Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying
number; (2) the Mortgagor's name; (3) the street address of the Mortgaged
Property including the city, state and zip code; (4) a code indicating whether
the Mortgaged Property is owner-occupied, a second home or investment property
(as indicated by the Mortgagor at the time of origination of the Mortgage
Loan); (5) the number and type of residential units constituting the Mortgaged
Property (i.e., a single family residence, a 2-4 family residence, a unit in a
condominium project or a unit in a planned unit development, manufactured
housing); (6) the Mortgage Loan origination date; (7) the original months to
maturity or the remaining months to maturity from the related Cut-off Date, in
any case based on the original amortization schedule and, if different, the
maturity expressed in the same manner but based on the actual amortization
schedule; (8) the Loan-to-Value Ratio at origination; (9) with respect to
First Lien Loans, the LTV and with respect to Second Lien Loans, the CLTV;
(10) the Mortgage Interest Rate as of the related Cut-off Date; (11) the date
on which the Monthly Payment was due on the Mortgage Loan and, if such date is
not consistent with the Due Date currently in effect, such Due Date; (12) the
stated maturity date; (13) the amount of the Monthly Payment as of the related
Cut-off Date; (14) the last payment date as of which a payment was actually
applied to the outstanding principal balance (i.e. the paid through date);
(15) the original principal amount of the Mortgage Loan; (16) the principal
balance of the
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Mortgage Loan as of the close of business on the related Cut-off Date, after
deduction of payments of principal due and collected on or before the Cut-off
Date; (17) the Interest Rate Adjustment Date; (18) the Gross Margin; (19) the
Lifetime Rate Cap under the terms of the Mortgage Note; (20) a code indicating
the type of Index; (21) the Mortgage Interest Rate as of origination; (22) the
type of Mortgage Loan (i.e., fixed-rate, adjustable-rate); (23) the lien
status of the Mortgage Loan (i.e., First Lien, Second Lien); (24) a code
indicating the purpose of the loan (i.e., purchase, refinance, cash-out
refinance); (25) a code indicating the documentation style (i.e., full,
limited, or stated income); (26) the credit risk classification (as described
in the Underwriting Guidelines); (27) the applicable Cut-off Date; (28) the
applicable Closing Date; (29) a code indicating whether the Mortgage Loan is a
High Cost Loan or Home Loan as such terms are defined in the then current
Standard & Poor's Glossary; (30) the FICO score; (31) with respect to the
related Mortgagor, the debt-to-income ratio; (32) with respect to Second Lien
Loans, the outstanding principal balance of the superior lien; (33) the
Appraised Value of the Mortgaged Property; (34) the sale price of the
Mortgaged Property if the Mortgage Loan was originated in connection with the
purchase of the Mortgaged Property; (35) the Periodic Rate Cap under the terms
of the Mortgage Note; (36) the Periodic Rate Floor under the terms of the
Mortgage Note; (37) whether such Mortgage Loan provides for a prepayment
charge; (38) the prepayment charge period of such Mortgage Loan, if
applicable; (39) a description of the type of prepayment charge, if
applicable; (40) a code indicating if the Mortgage Loan is a Balloon Mortgage
Loan; (41) the initial and periodic mortgage interest rate adjustment period;
(42) mortgage interest rate adjustment percentage; (43) a code indicating
whether Mortgage Loan is assumable; (44) a code indicating whether Mortgage
Loan has been modified; (45) one year payment history; (46) due date for first
monthly payment; (47) original monthly payment due; (48) S&P doc type code;
(49) S&P appraisal type code; (50) escrow holdbacks, if any; and (51) total
points and fees paid by the Mortgagor. With respect to the Mortgage Loans in
the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4)
the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness
(including a Lost Note Affidavit) of a Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of a related Mortgage Note,
consisting of an unsubordinated estate in fee simple or, with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, a leasehold estate, in a
single parcel or multiple parcels of real property improved by a residential
dwelling as further described in this Agreement.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as
required by this Agreement.
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Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Seller, reasonably acceptable to the Purchaser.
Origination Representations and Warranties: The representations
and warranties set forth in section 9.02 (b), (c), (d), (q), (aa), (o), (s),
(w), (hh), (qq).
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase on an
Interest Rate Adjustment Date above the Mortgage Interest Rate previously in
effect.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate previously in
effect.
Person: Any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Premium Percentage: With respect to any Mortgage Loan, a
percentage equal to the excess of the Purchase Price Percentage over 100%.
Principal Prepayment: Any payment or other recovery of principal
on a Mortgage Loan which is received in advance of its scheduled Due Date,
including any prepayment charge or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on
any date or dates in any month or months subsequent to the month of
prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: With respect to each purchase
of a Mortgage Loan Package hereunder, that certain letter agreement setting
forth the general terms and conditions of such transaction and identifying the
Mortgage Loans to be purchased hereunder, by and between the Seller and the
Purchaser.
Purchase Price Percentage: With respect to any Mortgage Loan, an
amount equal to the percentage of par as stated in the Purchase Price and
Terms Agreement (subject to adjustment as provided therein) related to such
Mortgage Loan.
Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, or any successor to
the Purchaser under this Agreement as herein provided.
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Qualifying FICO Score: A FICO credit score of the "primary wage
earner" (i.e. the mortgagor or co-mortgagor with the highest earnings)
measured under the following standard: (a) if a FICO score is obtained from
only one credit rating agency, that score; (b) if FICO scores are obtained
from two credit rating agencies, the lower score or (c) if FICO scores are
obtained from three credit rating agencies, the middle score.
Rating Agency: Any of Fitch Inc., ▇▇▇▇▇'▇ Investors Service, Inc.,
or Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies
Inc., or their respective successors in interest.
Reconstitution: A Whole Loan Transfer or a Securitization
Transfer.
Reconstitution Agreements: The agreement or agreements entered
into by the Seller and/or the Interim Servicer and the Purchaser and/or
certain third parties on the Reconstitution Date or Dates with respect to any
or all of the Mortgage Loans sold hereunder, in connection with a Whole Loan
Transfer, Agency Transfer or a Securitization Transfer pursuant to Section 13.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to a REMIC, which appear at Section 860A through 860G of Subchapter M
of Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement or the Interim
Servicing Agreement is found, a price equal to the then outstanding principal
balance of the Mortgage Loan to be repurchased, plus accrued interest thereon
at the Mortgage Interest Rate from the date to which interest had last been
paid through the date of such repurchase, plus the amount of any outstanding
advances owed to any servicer, plus all third party costs and expenses
incurred by the Purchaser or any servicer arising out of or based upon such
breach, including without limitation out-of-pocket costs and expenses incurred
in the enforcement of the Seller's repurchase obligation hereunder plus any
costs and damages incurred by the related trust with respect to any
securitization of the Mortgage Loan in connection with any violation by such
Mortgage Loan of any predatory- or abusive-lending law.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
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Securitization Transfer: The sale or transfer of some or all of
the Mortgage Loans to a trust or other entity as part of a publicly issued or
privately placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Ameriquest Mortgage Company, a Delaware corporation, and
its successors in interest.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, an amount equal to one-twelfth of 0.50% of the
actual outstanding principal balance of the Mortgage Loans for the related
collection period and as set forth in the Interim Servicing Agreement. Such
fee shall be payable monthly and shall be pro rated for any portion of a month
during which the Mortgage Loan is serviced by the Interim Servicer under the
Interim Servicing Agreement. Except with respect to payments by the Purchaser
or the Successor Servicer to the Seller of all accrued and unpaid Servicing
Fees owing to the Seller with respect to the Mortgage Loans being transferred
on a Transfer Date, the obligation of the Purchaser to pay the Servicing Fee
is limited to, and the Servicing Fee is payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, to the extent permitted by this Agreement) of such Monthly Payment
collected by the Interim Servicer, or as otherwise provided under this
Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the Custodian
and copies of the Mortgage Loan Documents.
Servicing Representations and Warranties: The representations and
warranties set forth in Section 9.02(a), (f), (h), (ff), (nn), and (pp).
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received
by the Interim Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans; (d) all
agreements or documents creating, defining or evidencing any such servicing
rights to the extent they relate to such servicing rights and all rights of
the Interim Servicer thereunder; (e) Escrow Payments or other similar payments
with respect to the Mortgage Loans and any amounts actually collected by the
Interim Servicer with respect thereto; (f) all accounts and other rights to
payment related to any of the property described in this paragraph; and (g)
any and all documents, files, records, servicing files, servicing documents,
servicing records, data tapes, computer records, or other information
pertaining to the Mortgage Loans or pertaining to the past, present or
prospective servicing of the Mortgage Loans.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before
such date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Standard & Poor's: Standard & Poor's Rating Services, a division
of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and its successors in interest.
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Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Sections 9.03 and 14.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Interim Servicer shall cease all servicing responsibilities.
Such date shall occur on the day indicated by the Purchaser to the Interim
Servicer in the related Purchase Price and Terms Agreement.
Underwriting Guidelines: The underwriting guidelines of the
Seller, a copy of which is attached hereto as Exhibit I and a then-current
copy of which shall be attached as an exhibit to the related Assignment and
Conveyance.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to
a Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller, on each related Closing Date agrees to sell from time
to time, and the Purchaser agrees to purchase from time to time without
recourse but subject to the terms of this Agreement. Mortgage Loans having an
aggregate principal balance on the related Cut-off Date in an amount as set
forth in the related Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the related Closing Date.
SECTION 3. Mortgage Schedules.
The Seller from time to time shall provide the Purchaser with
certain information constituting a preliminary listing of the Mortgage Loans
to be purchased on each Closing Date in accordance with the related Purchase
Price and Terms Agreement and this Agreement (each, a "Preliminary Mortgage
Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for
the Mortgage Loans to be purchased on the related Closing Date to the
Purchaser at least two (2) Business Days prior to the related Closing Date.
The related Mortgage Loan Schedule shall be the Preliminary Mortgage Schedule
with those Mortgage Loans which have not been funded prior to the related
Closing Date deleted.
SECTION 4. Purchase Price.
The Purchase Price for the Mortgage Loans shall be equal to (a)
the Purchase Price Percentage multiplied by the Cut-off Date Balance for each
Mortgage Loan, plus (b) accrued and unpaid interest on such principal balance
at the related Mortgage Interest Rate (net of the Servicing Fee) for each such
Mortgage Loan from the related date interest was last paid
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for such Mortgage Loan through the day prior to the related Closing Date,
inclusive. For purposes hereof, "Cut-off Date Balance" means the aggregate
principal balance, as of the related Cut-off Date, of the Mortgage Loans
listed on the related Mortgage Loan Schedule, after application of scheduled
payments of principal due on or before the related Cut-off Date, to the extent
such payments were actually received, together with any unscheduled principal
payments collected prior to the related Cut-off Date. If so provided in the
related Purchase Price and Terms Agreement, portions of the Mortgage Loans
shall be priced separately. The Purchase Price as so determined shall be paid
to the Seller on the related Closing Date by wire transfer of immediately
available funds to an account designated by the Seller in writing.
The Purchase Price plus accrued interest as set forth in the
preceding paragraph shall be paid to the Seller on the related Closing Date by
wire transfer of immediately available funds to an account designated by the
Seller in writing; provided that the Seller has satisfied all conditions to
closing set forth in Section 11 of this Agreement. If Seller has satisfied the
conditions to closing set forth in Section 11 of this Agreement on or prior to
10:00 p.m. (Eastern Time) on the Business Day immediately prior to the related
Closing Date, the Purchaser shall initiate the wire transfer of the Purchase
Price and accrued interest on or prior to 12:00 noon (Eastern Time).
The Purchaser shall be entitled to (l) all principal collected on
or after the related Cut-off Date, (2) all other recoveries of principal
collected on or after the related Cut-off Date, and (3) all payments of
interest on the Mortgage Loans (net of applicable Servicing Fees accrued since
the paid through date prior to each Closing Date). The outstanding principal
balance of each Mortgage Loan as of the related Cut-off Date is determined
after application of payments of principal due on or before the related
Cut-off Date, to the extent actually collected, together with any unscheduled
principal prepayments collected prior to the Cut-off Date.
SECTION 5. Examination of Mortgage Files.
At least fourteen (14) days prior to the related Closing Date,
unless otherwise agreed by the Seller and the Purchaser, the Seller shall (i)
either (a) deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased in the related Mortgage
Loan Package, the related Mortgage File, including a copy of the Assignment of
Mortgage, pertaining to each Mortgage Loan, or (b) make the related Mortgage
File available to the Purchaser for examination at such other location as
shall otherwise be acceptable to the Purchaser and (ii) deliver to the
Purchaser copies of the credit and servicing files (collectively, the "Credit
Files"). The Purchaser shall have the right to conduct BPO's and AVM's on up
to 100% of the Mortgage Loans. Such examination of the Mortgage Files may be
made by the Purchaser or its designee at any reasonable time before or after
the related Closing Date. Notwithstanding any limitation on the review of
Mortgage Loans which may be agreed upon by the Purchase and the Seller, in the
event that the Purchaser has significant adverse findings or suspects systemic
issues in its initial review the Purchaser shall have the right to conduct
additional due diligence reviews in order to satisfy the requirements of
ratings agencies, servicers and the Purchaser's internal compliance
procedures..
With respect to any Mortgage Loan that is purchased by Purchaser
prior to the completed of due diligence and is subsequently rejected by
Purchaser, any due diligence drops (a
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"Declined Mortgage Loan") will be delivered back to Seller and Seller will
rebate to the Purchaser its Purchase Price with respect to such Declined
Mortgage Loans (plus interest at a rate equal to the Cost of Carry from the
related Closing Date through the day prior to the date of repurchase) within 2
days of finalizing due diligence results (the "Declined Mortgage Loan Payment
Date"). The parties will true up on any resulting WAC buy ups or buy down on
the Declined Mortgage Loan Payment Date.
In the event that due diligence drops exceed 10% of a pool, Seller
may (1) at its sole discretion, terminate this agreement upon reimbursement to
Purchaser of its hedge related losses with respect to the unpurchased Mortgage
Loans, and Purchaser will remit to Seller all hedge related gains, in each
case arising out of the hedging contracts identified on Exhibit D tot the
Purchase Price and Terms Letter or (2) substitute loans for the loans dropped
as a result of such post-purchase due diligence (Purchaser will have a right
to conduct 100% due diligence on substitutions). In the event Seller
terminates this agreement pursuant to this section, all Mortgage Loans
previously purchased by Purchaser (and not declined in the due diligence
process) shall remain subject to this Agreement and Seller shall be relieved
of any further obligation to Purchaser as to Mortgage Loans not previously
purchased by Purchaser, excluding the hedge reimbursement obligation set forth
in the preceding sentence.
The Purchaser may, at its option and without notice to the Seller,
purchase some or all of the Mortgage Loans without conducting any partial or
complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files or the Credit Files shall not impair in any way the Purchaser's
(or any of its successor's) rights to demand repurchase or other remedy as
provided in this Agreement. In the event that the Seller fails to deliver the
Credit Files with respect to any Mortgage Loan, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in
the manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing Files.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained
pursuant to this Agreement to be appropriately identified in the Seller's
computer system and/or books and records, as appropriate, to clearly reflect
the sale of the related Mortgage Loan to the Purchaser. The Seller shall
release from its custody the contents of any Servicing File retained by it
only in accordance with this Agreement or the Interim Servicing Agreement,
except when such release is required in connection with a repurchase of any
such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02. Books and Records.
Record title to each Mortgage as of the related Closing Date shall
be in the name of the Seller, the Purchaser or one or more designees of the
Purchaser, as the Purchaser shall
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select. Notwithstanding the foregoing, each Mortgage and related Mortgage Note
shall be possessed solely by the Purchaser or the appropriate designee of the
Purchaser, as the case may be. All rights arising out of the Mortgage Loans
including, but not limited to, all funds received by the Seller or the Interim
Servicer after the related Cut-off Date on or in connection with a Mortgage
Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with
a Mortgage Loan shall be received and held by the Seller or the Interim
Servicer in trust for the benefit of the Purchaser or the appropriate designee
of the Purchaser, as the case may be, as the owner of the Mortgage Loans
pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the
Seller.
The Seller shall be responsible for maintaining, and shall
maintain a complete set of books and records for each Mortgage Loan which
shall be marked clearly to reflect the ownership of each Mortgage Loan by the
Purchaser. In particular, the Seller shall maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and all applicable requirements of ▇▇▇▇▇▇ ▇▇▇ or
▇▇▇▇▇▇▇ Mac, including but not limited to documentation as to the method used
in determining the applicability of the provisions of the National Flood
Insurance Act of 1968, as amended, to the Mortgaged Property, documentation
evidencing insurance coverage and periodic inspection reports, as required by
the ▇▇▇▇▇▇ Mae Guides. To the extent that original documents are not required
for purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Seller or the Interim Servicer may be in the form
of microfilm or microfiche so long as the Seller or the Interim Servicer
complies with the requirements of the ▇▇▇▇▇▇ ▇▇▇ Guides.
Subsection 6.03. Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later
than five (5) days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A hereto with respect to each Mortgage Loan set
forth on the related Mortgage Loan Schedule.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Certification and Trust Receipt of
the Custodian in the form annexed to the Custodial Agreement. The Purchaser
shall pay all fees and expenses of the Custodian from and after the Closing
Date.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, 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 Seller shall provide the Custodian, or
to such other Person as the Purchaser shall designate in writing, with a
certified true copy of any such document submitted for recordation within two
weeks of its execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such
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document certified by the appropriate public recording office to be a true and
complete copy of the original within 90 days of its submission for
recordation.
In the event any document listed on Exhibit A as constituting a
part of the Mortgage Files and required to be delivered to the Custodian
pursuant to this Section 6.03, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not
so delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to
the Custodian in blank on or prior to the related Closing Date and recorded
subsequently by the Purchaser or its designee), and in the event that the
Seller does not cure such failure within 30 days of discovery or receipt of
written notification of such failure from the Purchaser, the related Mortgage
Loan shall, upon the request of the Purchaser, be repurchased by the Seller at
the price and in the manner specified in Subsection 9.03. The foregoing
repurchase obligation shall not apply in the event that the Seller cannot
deliver such original of any document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction, provided that
(i) the Seller shall deliver a recording receipt of such recording office or,
if such recording receipt is not available, an officer's certificate of a
servicing officer of the Seller, confirming that such documents have been
accepted for recording (upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the related Mortgage Loans, the
Seller shall reissue and deliver to the Purchaser or its designee said
officer's certificate relating to the related Mortgage Loans), and (ii) such
document is delivered within twelve (12) months of the related Closing Date.
On the related Closing Date, the Seller shall pay the Purchaser an
assignment of mortgage recording fee of $15.00 per Mortgage Loan purchased on
such Closing Date, which fee shall be netted from the Purchase Price paid by
the Purchaser. The Seller shall pay for any other fees or costs (incurred
prior to the related Closing Date) in transferring all original documents to
the Custodian or, upon written request of the Purchaser, to the Purchaser or
the Purchaser's designee. The Purchaser shall be responsible for all fees and
costs of the Custodian incurred on or after the related Closing Date. The
Purchaser or the Purchaser's designee shall be responsible for recording the
Assignments of Mortgage.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser
on a servicing released basis. Subject to, and upon the terms and conditions
of this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract
servicer of the Mortgage Loans for an interim period pursuant to and in
accordance with the terms and conditions contained in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein). Except as set forth in the Interim Servicing
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Agreement, the Interim Servicer shall service the Mortgage Loans on an
"actual/actual" basis and otherwise in compliance with Accepted Servicing
Practices; provided, that in the event that the Reconstitution Date occurs
prior to the related Transfer Date, Seller shall interim service the Mortgage
Loans on a scheduled/scheduled basis, and remit and report to the related
securitization trust pursuant to the terms of the related Reconstitution
Agreements until the related Transfer Date.
Pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Interim
Servicer shall begin servicing the Mortgage Loans on behalf of the Purchaser
and shall be entitled to a Servicing Fee with respect to such Mortgage Loans
until the applicable Transfer Date. The Interim Servicer shall conduct such
servicing in accordance with the Interim Servicing Agreement.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to, the related Mortgage Loans
subject to such Transfer Date. On the Transfer Date, the Purchaser or
Successor Servicer shall reimburse the Interim Servicer for any earned but
uncollected Servicing Fees, ancillary fees and unreimbursed Servicing Advances
related to the Mortgage Loans. The Transfer Date shall be the date determined
in accordance with Section 6.02 of the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
On or prior to the applicable Transfer Date, the Seller shall, at its
sole cost and expense, take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the related Mortgage
Loans to the Purchaser, or its designee, including but not limited to the
following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor
of each related Mortgage Loan a letter advising such Mortgagor of the transfer
of the servicing of the related Mortgage Loan to the Purchaser, or its
designee, in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing
Act of 1990; provided, however, the content and format of the letter shall
have the prior approval of the Purchaser. The Seller shall provide the
Purchaser with copies of all such related notices no later than the Transfer
Date.
(b) Notice to Taxing Authorities and Insurance Companies. The
Seller shall transmit to the applicable taxing authorities and insurance
companies (including primary mortgage insurance policy insurers, if
applicable) and/or agents, notification of the transfer of the servicing to
the Purchaser, or its designee, and instructions to deliver all notices, tax
bills and insurance statements, as the case may be, to the Purchaser from and
after the Transfer Date. The Seller shall provide the Purchaser with copies of
all such notices no later than the Transfer Date.
(c) Delivery of Servicing Records. Within five (5) Business Days
of the related Transfer Date, the Seller shall forward to the Purchaser, or
its designee, all servicing records and the Servicing File in the Interim
Servicer's possession relating to each related
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Mortgage Loan including the information enumerated in the Interim Servicing
Agreement (with respect to each such Mortgage Loan, for an interim period, as
specified therein).
(d) Escrow Payments. Within five (5) Business Days of the related
Transfer Date, the Seller shall provide the Purchaser, or its designee, with
immediately available funds by wire transfer in the amount of the net Escrow
Payments and suspense balances and all loss draft balances associated with the
related Mortgage Loans. The Seller shall provide the Purchaser with an
accounting statement, in electronic format acceptable to the Purchaser in its
reasonable discretion, of Escrow Payments and suspense balances and loss draft
balances sufficient to enable the Purchaser to reconcile the amount of such
payment with the accounts of the Mortgage Loans. Additionally, the Seller
shall wire transfer to the Purchaser the amount of any agency, trustee or
prepaid Mortgage Loan payments and all other similar amounts held by the
Interim Servicer.
(e) Payoffs and Assumptions. Within five (5) Business Days of the
related Transfer Date, the Seller shall provide to the Purchaser, or its
designee, copies of all assumption and payoff statements generated by the
Interim Servicer on the related Mortgage Loans from the related Cut-off Date
to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to
the Transfer Date all payments received by the Interim Servicer or the Seller
on each related Mortgage Loan shall be properly applied by the Seller to the
account of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the Transfer Date
shall be forwarded to the Purchaser by overnight mail on the date of receipt.
The Seller shall notify the Purchaser of the particulars of the payment, which
notification requirement shall be satisfied if the Seller forwards with its
payment all information received by the Seller from the related Mortgagor and
otherwise in the Seller's possession to permit processing of the payment by
the Purchaser or its designee. The Seller shall assume full responsibility for
the necessary and appropriate legal application of such Monthly Payments
received by the Seller after the Transfer Date with respect to related
Mortgage Loans in foreclosure or bankruptcy as of the Transfer Date; provided,
for purposes of this Agreement, necessary and appropriate legal application of
such Monthly Payments shall include, but not be limited to, endorsement of a
Monthly Payment to the Purchaser with the particulars of the payment such as
the account number, dollar amount, date received and any special Mortgagor
application instructions and the Seller shall comply with the foregoing
requirements with respect to all Monthly Payments received by the Interim
Servicer after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment occurring
prior to the applicable Transfer Date and discovered after the Transfer
Date shall immediately notify the other party;
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(iii) If a misapplied payment which occurred prior to the Transfer
Date cannot be identified and said misapplied payment has resulted in a
shortage in a Custodial Account or Escrow Account, the Seller shall be
liable for the amount of such shortage. The Seller shall reimburse the
Purchaser for the amount of such shortage within thirty (30) days after
receipt of written demand therefor from the Purchaser;
(iv) If a misapplied payment or NSF check from a Mortgagor has
created an improper Purchase Price as the result of an inaccurate
outstanding principal balance on a Mortgage Loan as of the Cut-off Date
or an excessive distribution to the Purchaser at any time following the
Cut-off Date, a check shall be issued to the party shorted by the
improper payment application within five (5) Business Days after notice
thereof by the other party; and
(v) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding Seller
and/or the Purchaser Mortgage Loan identification number and an
explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records
and accounts of the Seller with respect to the related Mortgage Loans shall be
in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer
Date, reconcile principal balances and make any monetary adjustments required
by the Purchaser. Any such monetary adjustments will be transferred between
the Seller and the Purchaser as appropriate.
(k) Servicing Transfer Procedures. The Seller shall comply with
the servicing transfer procedures set forth on Exhibit L hereto.
(l) IRS Forms. The Seller shall file all IRS forms 1099, 1099A,
1098 or 1041 and K-1 in a timely manner for the period from January 1, 2004 to
but not including the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall provide copies of such forms
to the Purchaser upon request and shall reimburse the Purchaser for any costs
or penalties incurred by the Purchaser due to the Seller's failure to comply
with this paragraph.
SECTION 9. Representations, Warranties and Covenants;
Remedies for Breach.
Subsection 9.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser
that as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
state of Delaware and has all licenses necessary to carry on its business as
now being conducted and is licensed, qualified
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and in good standing in each state wherein it owns or leases any material
properties or where a Mortgaged Property is located, if the laws of such state
require licensing or qualification in order to conduct business of the type
conducted by the Seller, and in any event the Seller is in compliance with the
laws of any such state to the extent necessary to ensure the enforceability of
the related Mortgage Loan and the servicing of such Mortgage Loan in
accordance with the terms of this Agreement and the Interim Servicing
Agreement; the Seller has the full corporate power, authority and legal right
to hold, transfer and convey the Mortgage Loans and to execute and deliver
this Agreement and the Interim Servicing Agreement and to perform its
obligations hereunder and thereunder; the execution, delivery and performance
of this Agreement and the Interim Servicing Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized; this Agreement and the Interim
Servicing Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and
enforceable obligations of the Seller, regardless of whether such enforcement
is sought in a proceeding in equity or at law; and all requisite corporate or
other action has been taken by the Seller to make this Agreement and the
Interim Servicing Agreement and all agreements contemplated hereby valid and
binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement and the Interim Servicing
Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions in effect in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement and the Interim Servicing Agreement, the acquisition or origination
of the Mortgage Loans by the Seller, the sale of the Mortgage Loans to the
Purchaser, the consummation of the transactions contemplated hereby and
thereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement, will conflict with or result in a breach of any of the terms,
conditions or provisions of the Seller's charter, by-laws or other
organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Seller or its property is subject, or result in the
creation or imposition of any lien, charge or encumbrance that would have an
adverse effect upon any of its properties pursuant to the terms of any
mortgage, contract, deed of trust or other instrument, or impair the ability
of the Purchaser to realize on the Mortgage Loans, impair the value of the
Mortgage Loans, or impair the ability of the Purchaser to realize the full
amount of any insurance benefits accruing pursuant to this Agreement;
(d) Ability to Service. The Interim Servicer has the facilities,
procedures, and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans. The Interim Servicer is
duly qualified, licensed, registered and otherwise authorized under all
applicable federal, state and local laws, and regulations, and is in good
standing to enforce, originate, sell mortgage loans to, and service mortgage
loans in each jurisdiction wherein the Mortgaged Properties are located;
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(e) Reasonable Servicing Fee. The Seller, on behalf of the Interim
Servicer, acknowledges and agrees that the Servicing Fee, represents
reasonable compensation for performing such services and that the entire
Servicing Fee shall be treated by the Interim Servicer, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement and the Interim Servicing Agreement;
(f) Ability to Perform; Solvency. The Seller 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. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale
of the Mortgage Loans is not undertaken with the intent to hinder, delay or
defraud any of Seller's creditors;
(g) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, is reasonably likely to result in an adverse judgment and such
judgment would result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair the ability of the Seller to perform under the terms
of this Agreement. There is no action, suit, proceeding or investigation
pending against the Seller with respect to the Mortgage Loans relating to
fraud, predatory lending, servicing or closing practices;
(h) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement
or the Mortgage Loans, the delivery of a portion of the Mortgage Files to the
Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the related Closing Date;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio
at the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(j) Sale Treatment. The Seller has been advised by its independent
certified public accountants that under generally accepted accounting
principles the transfer of the Mortgage Loans may be treated as a sale on the
books and records of the Seller and the Seller has determined that the
disposition of the Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for tax and accounting purposes;
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(k) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished by or on behalf of the Seller or to be furnished by or on behalf of
the Seller pursuant to this Agreement contains any untrue statement of fact or
omits or will omit to state a fact necessary to make the statements contained
herein or therein not misleading;
(l) Financial Statements. The Seller has delivered to the
Purchaser financial statements as to its last three complete fiscal years and
any later quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent results
of operations and changes in financial position for each of such periods and
the financial position at the end of each such period of the Seller and its
subsidiaries and have been prepared in accordance with generally accepted
accounting principles of the United States consistently applied throughout the
periods involved, except as set forth in the notes thereto. In addition, the
Seller has delivered information as to its loan gain and loss experience in
respect of foreclosures and its loan delinquency experience for the
immediately preceding three-year period, in each case with respect to mortgage
loans owned by it and mortgage loans serviced for others during such period,
and all such information so delivered shall be true and correct in all
material respects. There has been no change in the business, operations,
financial condition, properties or assets of the Seller since the date of the
Seller's financial statements that would have an adverse effect on its ability
to perform its obligations under this Agreement. The Seller has completed any
forms requested by the Purchaser in a timely manner and in accordance with the
provided instructions; and
(m) No Brokers. The Seller has not dealt with any broker,
investment banker, agent or other person that may be entitled to any
commission or compensation in connection with the sale of the Mortgage Loans.
(n) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as
a result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(o) Lost Note Affidavit. No more than 1% of the Mortgage Loans in
a Mortgage Loan Package shall have a lost note affidavit in lieu of an
original Mortgage Note.
Subsection 9.02. Representations and Warranties Regarding
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that,
as to each Mortgage Loan, as of the related Closing Date (or such other date
as set forth therein) for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct as of the date
set forth therein;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note, other than payments
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for which the related due date was not thirty or more days prior to the
related Closing Date, have been made and credited. No Mortgage Loan has been
delinquent for thirty or more days at any time since the origination of the
Mortgage Loan;
(c) No Outstanding Charges. All real estate taxes, insurance
premiums, which previously became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay for every such
item which remains unpaid and which has been assessed but is not yet due and
payable. All governmental assessments, water, sewer and municipal charges,
leasehold payments or ground rents which previously became due and owing have
been paid on or prior to the date on which such charges would constitute a
lien on the related Mortgaged Property. Except for (A) payments in the nature
of escrow payments and (B) interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage Loan proceeds, whichever is
earlier to the day which precedes by one month the Due Date of the first
installment of principal and interest, including, without limitation, taxes
and insurance payments, the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required
under the Mortgage Loan;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the
related Mortgage Loan Schedule. The substance of any such waiver, alteration
or modification has been approved by the title insurer, if any, to the extent
required by the policy, and its terms are reflected on the Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the title
insurer, to the extent required by the policy, and which assumption agreement
is part of the Mortgage Loan File delivered to the Custodian or to such other
Person as the Purchaser shall designate in writing and the terms of which are
reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage meeting Accepted Origination Practices, as well as all additional
requirements set forth in Section 2.10 of the Servicing Agreement. If required
by the National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration in effect. All individual
insurance policies contain a standard
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mortgagee clause naming the Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid and such policies may not
be reduced, terminated or cancelled without 30 days' prior written notice to
the mortgagee. The Mortgage obligates the Mortgagor thereunder to maintain the
hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier
of the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and effect and
inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in,
and has no knowledge of the Mortgagor's or any servicer's having engaged in,
any act or omission which would impair the coverage of any such policy, the
benefits of the endorsement provided for herein, or the validity and binding
effect of such policy, including, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of
any federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, predatory and abusive lending and
disclosure laws applicable to the Mortgage Loan have been complied with, the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations, and the Seller shall maintain in
its possession, available for the Purchaser's inspection, and shall deliver to
the Purchaser upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission. Except for the
acceptance of a payment on a day other than a Due Date, the Seller has not
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged
Property is a fee simple property located in the state identified in the
Mortgage Loan Schedule (except that with respect to real property located in
jurisdictions in which the use of leasehold estates for residential properties
is a generally-accepted practice, the Mortgaged Property may be a leasehold
estate provided such leasehold meets the standards set forth in the ▇▇▇▇▇▇ ▇▇▇
Seller's Guide). The Mortgage Property consists of a single parcel of real
property with a detached single family residence erected thereon, or a two- to
four-family dwelling, or an individual residential condominium unit in a
condominium project, an individual unit in a planned unit development or a
manufactured home; provided, however, no Mortgaged Property is a cooperative
home and that
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any condominium unit or planned unit development shall not fall within any of
the "Ineligible Projects" of part XII, Section 102 of the ▇▇▇▇▇▇ Mae Selling
Guide and shall conform with the Underwriting Guidelines. With respect to any
Mortgage Loan secured by a Mortgaged Property improved by manufactured
housing, (i) such manufactured dwelling shall conform with the applicable
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements regarding such dwellings, (ii) the
related manufactured housing unit is permanently affixed to the land, (iii)
the related manufactured housing unit and the related land are subject to a
Mortgage properly filed in the appropriate public recording office and naming
the Seller as mortgagee and (iv) the related Mortgaged Property is not located
in the state of New Jersey. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office
shall not be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes;
(j) Valid First and Second Lien. Each Mortgage is a valid,
subsisting, enforceable and perfected first lien, with respect to First Lien
Loans, or second lien, with respect to Second Lien Loans, of record on a
single parcel of real estate constituting the Mortgaged Property, including
all buildings and improvements on the Mortgaged Property and all additions,
alterations and replacements made at any time. In no event shall any Mortgage
Loan be in a lien position more junior than a second lien. The lien of the
Mortgage is subject only to:
(1) with respect to Second Lien Loans, the lien of the
first mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and
assessments not yet due and payable;
(3) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator
of the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the
originator of the Mortgage Loan or (b) which do not
adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are
commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the
Mortgage or the use, enjoyment, value or marketability of
the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected (A) first lien and first priority
security interest with respect to each First Lien Loan, or (B) second lien and
second priority security interest with respect to each Second Lien Loan, in
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either case, on the property described therein and Seller has full right to
sell and assign the same to Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor or
guarantor, if applicable, in connection with a Mortgage Loan are genuine, and
each is the legal, valid and binding obligation of the maker thereof
enforceable in accordance with its terms (including, without limitation, any
provisions therein relating to Prepayment Charges). All parties to the
Mortgage Note, the Mortgage and any other such related agreement had legal
capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note, the Mortgage and any other related agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. Excluding any pledge obligation pursuant to the
Seller's warehouse lending agreements (which obligation shall be released on
or before the Closing Date), the Seller is the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and
upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files or any part thereof with respect thereto not delivered to
the Custodian, the Purchaser or the Purchaser's designee, in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan.
The Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1)
in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2) either (i)
organized under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a savings bank or
a national bank having a principal office in such state, or (3) not doing
business in such state;
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(o) CLTV, LTV; FICO Score. No Mortgage Loan that is a Second Lien
Loan has a CLTV in excess of 100%. No Mortgage Loan has an LTV greater than
100%. At origination of the Mortgage Loan, the Qualifying FICO Score was not
less than 500;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA lender's
title insurance policy, or other generally acceptable to ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac that was issued by a title insurer licensed and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
the Seller, its successors and assigns, as to the first priority lien (with
respect to First Lien Loans) or second priority lien (with respect to Second
Lien Loans) of the Mortgage in the original principal amount of the Mortgage
Loan, subject only to the exceptions contained in clauses (1), (2), (3) and
(4) of paragraph (j) of this Subsection 9.02, and in the case of Adjustable
Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures
ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The title policy does not contain any
special exceptions (other than the standard exclusions) for zoning and uses
and has been marked to delete the standard survey exception or to replace the
standard survey exception with a specific survey reading. The Seller, its
successor and assigns, are the sole insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and remains in full
force and effect and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. There is no default, breach, violation or event
which would permit acceleration existing under the Mortgage or the Mortgage
Note and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event which would permit acceleration, and neither the Seller nor
any of its affiliates nor any of their respective predecessors, have waived
any default, breach, violation or event which would permit acceleration. With
respect to each Second Lien Loan, (i) the prior mortgage is in full force and
effect, (ii) there is no default, breach, violation or event of acceleration
existing under such prior mortgage or the related mortgage note, (iii) as of
the related Closing Date, no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, and either (A)
the prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Loan to receive notice of, and
affords such mortgagee an opportunity to cure any default by payment in full
or otherwise under the prior mortgage;
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(r) No Mechanics' Liens. There are no mechanics' or similar liens
or claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties encroach
upon the Mortgaged Property. The Mortgaged Property and all improvements
located on or being part of the Mortgaged Property are in compliance with all
applicable zoning and building laws, ordinances and regulations;
(t) Origination; Payment Terms. The Mortgage Loan was originated
by a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act (as amended from
time to time) a savings and loan association, a savings bank, a commercial
bank, credit union, insurance company or other similar institution which is
supervised and examined by a federal or state authority. No Mortgage Loan
contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan commenced no more than sixty days
after funds were disbursed in connection with the Mortgage Loan. The Mortgage
Note is payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in
arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity
date (unless the Mortgage Loan is identified on the Mortgage Loan Schedule as
a Balloon Mortgage Loan), over an original term of not more than thirty years
from commencement of amortization. Unless otherwise specified on the related
Mortgage Loan Schedule, the Mortgage Loan is payable on the first day of each
month. There are no Convertible Mortgage Loans;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise
by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver
good and merchantable title to the Mortgaged Property. There is no homestead
or other exemption available to a Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or
similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
(a copy of which is attached to the related Assignment and Conveyance
Agreement as Exhibit C). The Mortgage Note and Mortgage are on forms generally
acceptable in the secondary market and no representations have been made to a
Mortgagor that are inconsistent with the mortgage instruments used;
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(w) Occupancy of the Mortgaged Property. As of the Closing Date
the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property have been made or
obtained from the appropriate authorities. The Seller has not received
notification from any Governmental Authority that the Mortgaged Property is in
material non-compliance with such laws or regulations, is being used, operated
or occupied unlawfully or has failed to have or obtain such inspection,
licenses or certificates, as the case may be. The Seller has not received
notice of any violation or failure to conform with any such law, ordinance,
regulation, standard, license or certificate. Except as indicated on the
Mortgage Loan Schedule, the Mortgagor represented at the time of origination
of the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as
the Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed
of trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage (or in the case of a substitution of trustee, is named
in a properly recorded substitution of trustee), and no fees or expenses are
or will become payable by the Purchaser, the Custodian or the Interim Servicer
to the trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor;
(z) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property
is located (excepting therefrom mortgage recordation information where such
has not been returned by the applicable county recorder's office and the name
of the assignee). The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller are not subject to the bulk transfer or
similar statutory provisions in effect in any applicable jurisdiction;
(aa) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(bb) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which may constitute a "buydown"
provision. The Mortgage Loan is not a graduated payment mortgage loan, and the
Mortgage Loan does not have a shared appreciation or other contingent interest
feature. The indebtedness
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evidenced by the Mortgage Note is not convertible to an ownership interest in
the Mortgaged Property or the Mortgagor and the Seller has not financed nor
does it own directly or indirectly, any equity of any form in the Mortgaged
Property or the Mortgagor;
(cc) No Balloon Mortgage Loans. The Mortgage Loan is not a Balloon
Mortgage Loan unless specifically listed on the Mortgage Loan Schedule;
(dd) Qualified Mortgage. The Mortgage Loan is a qualified mortgage
under Section 860G(a)(3) of the Code;
(ee) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first or second, as applicable, lien
priority by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence in accordance
with Accepted Originating Practices. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;
(ff) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices utilized with
respect to the Mortgage Loan have been in all respects in compliance with
Accepted Servicing Practices, applicable laws and regulations, and have been
in all respects legal and proper. With respect to escrow deposits and Escrow
Payments (other than with respect to Second Lien Loans for which the mortgagee
under the prior mortgage lien is collecting Escrow Payments), all such
payments are in the possession of Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof
have not been made. Each Mortgage Loan is covered by a paid in full, life of
loan, tax service contract and each of these contracts is assignable to the
Purchaser. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related voluntary escrow
agreement. An escrow of funds is not prohibited by applicable law, and, where
requested by the Mortgagor, and has been established in an amount sufficient
to pay for every applicable item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect
to each Mortgage Note which required a new index to be selected, and such
selection did not conflict with the terms of the related Mortgage Note. Any
and all notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the
Monthly Payment adjustments have been delivered. Any interest required to be
paid pursuant to state, federal and local law has been properly paid and
credited;
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(gg) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with ▇▇▇▇▇▇ ▇▇▇
guidelines for such trusts;
(hh) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested
or allowed to the Mortgagor under the Servicemembers' Civil Relief Act of
2003, as amended, or any similar state statute;
(ii) Appraisal. Except with respect to Mortgage Loan's which have
Insured AVM's, the Seller has delivered to the Purchaser an appraisal of the
Mortgaged Property signed prior to the approval of the Mortgage application by
an appraiser qualified under applicable law who (i) is licensed in the state
where the Mortgaged Property is located, (ii) has no interest, direct or
indirect, in the Mortgaged Property or in any Loan or the security therefor,
and (iii) does not receive compensation that is affected by the approval or
disapproval of the Mortgage Loan. Each appraisal and appraiser both satisfy
the requirements of Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 and the regulations promulgated thereunder, all as
in effect on the date the Mortgage Loan was originated. The appraisal shall
have been made within one hundred and eighty (180) days of the origination of
the Mortgage Loan and shall be completed in compliance with the Uniform
Standards of Professional Appraisal Practice, and all applicable Federal and
state laws and regulations. If an appraisal was made more than one hundred and
twenty (120) days before the origination of the Mortgage Loan, the Seller
shall have received and delivered to the Purchaser a recertification of the
appraisal;
(jj) Prepayment Charge. The Mortgage Loan is subject to a
prepayment charge as provided in the related Mortgage Note except as set forth
on the related Mortgage Loan Schedule. With respect to each Mortgage Loan that
has a prepayment fee charge, each such prepayment fee is enforceable and will
be enforced by Seller for the benefit of Purchaser upon the full and voluntary
principal prepayment, and each prepayment charge is permitted pursuant to
federal, state and local law and is only payable, during the first 3 years of
the term of the Mortgage Loan. Each such prepayment penalty is in an amount
equal to the maximum amount permitted under applicable law;
(kk) Single-premium credit life insurance policy. No Mortgagor was
required to purchase any single premium credit insurance policy (e.g., life,
disability, accident, unemployment, or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of credit. No
Mortgagor obtained a prepaid single premium credit insurance policy (e.g.,
life, disability, accident, unemployment, mortgage, or health insurance) in
connection with the origination of the Mortgage Loan; no proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies
or debt cancellation agreements as part of the origination of, or as a
condition to closing, such Mortgage Loan;
(ll) Predatory Lending Regulations. The Mortgage Loans are not
subject to the requirement of the Home Ownership and Equity Protection Act of
1994 ("HOEPA") and no Mortgage Loan is subject to, or in violation of, any
applicable federal, state or local law, ordinance or regulation similar to
HOEPA and (2) (i) no Mortgage Loan is a "high cost" loan as defined by HOEPA
or any other applicable predatory or abusive lending laws and (ii) no Mortgage
Loan is a "high cost home", "covered" (excluding home loans defined as
"covered
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home loans" pursuant to clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002), "high risk home", "threshold",
"predatory" or similarly classified loan under any other applicable state,
federal or local law (or similarly classified loan using different terminology
under a law imposing heightened regulatory scrutiny or additional legal
liability for resident mortgage loans having high interest rates, points
and/or fees). No Mortgage Loan is a "High Cost Loan" or "Covered Loan", as
applicable (as such terms are defined in the then current Standard & Poor's
LEVELS Glossary Revised, Appendix E). No Mortgage Loan is a "covered home
loan" pursuant to the New Jersey Home Ownership Security Act of 2002. There is
no Mortgage Loan that was originated on or after October 1, 2002 and before
March 7, 2003 which is secured by property located in the State of Georgia;
(mm) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of
these contracts is assignable to the Purchaser;
(nn) Consent. Either (a) no consent for the Second Lien Loan is
required by the holder of the related first lien or (b) such consent has been
obtained and is contained in the Mortgage File;
(oo) Credit Reporting. The Seller has, in its capacity as
servicer, for each Mortgage Loan prior to the Closing Date, has fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable
and unfavorable) on its borrower credit files to Equifax, Experian and Trans
Union Credit Information Company or their successors on a monthly basis;
(pp) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances, other than those commonly
used for homeowner repair maintenance and/or household purposes, and there
exists no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue;
(qq) Fraud. No fraud was committed in connection with the
origination of any Mortgage Loan. The Company does not represent or warrant
the accuracy of the qualifying income stated by the borrower(s) in connection
with a Mortgage Loan that does not require income verification as defined in
the Company's underwriting guidelines attached hereto as Exhibit I;
(rr) HELOC. No Mortgage Loan is an open-ended loan;
(ss) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents constituting the
Mortgage File for each Mortgage Loan have been delivered to the Custodian. The
Seller is in possession of a complete, true and accurate Mortgage File in
compliance with Exhibit A hereto, except for such documents the originals of
which have been delivered to the Custodian;
(tt) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan,
the Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or
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transferred without the prior written consent of the mortgagee thereunder, and
such provision is enforceable. None of the Mortgage Loans are, by their terms,
assumable;
(uu) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation
of a Mortgaged Property or facilitating the trade-in or exchange of a
Mortgaged Property, except for any Mortgage Loans identified in the related
Mortgage Loan Schedule as being subject to a escrow holdback;
(vv) Prior Servicing. Each Mortgage Loan has been serviced in
strict compliance with Accepted Servicing Practices;
(ww) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest
in the land; (2) the terms of such lease expressly permit the mortgaging of
the leasehold estate, the assignment of the lease without the lessor's consent
and the acquisition by the holder of the Mortgage of the rights of the lessee
upon foreclosure or assignment in lieu of foreclosure or provide the holder of
the Mortgage with substantially similar protections; (3) the terms of such
lease do not (a) allow the termination thereof upon the lessee's default
without the holder of the Mortgage being entitled to receive written notice
of, and opportunity to cure, such default, (b) allow the termination of the
lease in the event of damage or destruction as long as the Mortgage is in
existence, (c) prohibit the holder of the Mortgage from being insured (or
receiving proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent other
than pre-established increases set forth in the lease; (4) the original term
of such lease is not less than 15 years; (5) the term of such lease does not
terminate earlier than five years after the maturity date of the Mortgage
Note; and (6) the Mortgaged Property is located in a jurisdiction in which the
use of leasehold estates in transferring ownership in residential properties
is a widely accepted practice;
(xx) Recordation. Each original Mortgage was recorded, or has been
delivered to the appropriate public recording office for recordation, and,
except for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been delivered to the Purchaser in recordable form, other
than the insertion of any necessary Mortgage recording information;
(yy) Litigation. The Mortgage Loan is not subject to any
outstanding litigation for fraud, origination, predatory lending, servicing or
closing practices;
(zz) Compliance with Anti-Money Laundering Laws. The Seller has
materially complied with all applicable anti-money laundering laws and
regulations, including without limitation the USA Patriot Act of 2001;
(aaa) Origination Practices. No borrower was encouraged or
required to select a Mortgage Loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan's origination, such
borrower did not qualify taking into account credit history and debt-to-income
ratios for a lower-cost credit product then offered by the Mortgage Loan's
originator or any affiliate of the Mortgage Loan's originator;
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(bbb) Fees Disclosed. All fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be collected
in connection with the origination and servicing of each Mortgage Loan has
been disclosed in writing to the Mortgagor in accordance with applicable state
and federal law and regulation;
(ccc) Arbitration. With respect to any Mortgage Loan originated on
or after August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage Loan transaction; and
(ddd) Insured AVM Premiums. All Insured AVM premiums have been
paid and the insurance benefits are transferable.
Subsection 9.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and
warranties set forth in Subsections 9.01 and 9.02 shall survive the sale of
the Mortgage Loans to the Purchaser and shall inure to the benefit of the
Purchaser, notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment of Mortgage or the examination or failure to
examine any Mortgage File. Upon discovery by either the Seller or the
Purchaser of a breach of any of the foregoing representations and warranties,
the party discovering such breach shall give prompt written notice to the
other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty set forth in
Subsection 9.01 or 9.02 which materially and adversely affects the value of
the Mortgage Loans or the interest of the Purchaser therein (or which
materially and adversely affects the value of the applicable Mortgage Loan or
the interest of the Purchaser therein in the case of a representation and
warranty relating to a particular Mortgage Loan), the Seller shall use its
best efforts promptly to cure such breach in all material respects and, if
such breach cannot be cured, the Seller shall, at the Purchaser's option,
repurchase such Mortgage Loan at the Repurchase Price, together with all
expenses incurred by the Purchaser as a result of such repurchase; provided,
that in the event of a breach of the representation and warranty set forth in
Subsection 9.01(o), Seller shall, at the Purchaser's option, repurchase
Mortgage Loans such that the aggregate principal balance of Mortgage Loans
with lost note affidavits in lieu of 1.0% of the aggregate principal balance
of the Mortgage Loans; and provided further, if Seller requests an extension
of the cure period, the related breach is curable and Seller is diligently
acting to cure such breach, Seller shall have an additional 30 days to cure
such breach. Notwithstanding the above sentence, within 60 days (or 90 days if
an extension has been requested pursuant to the preceding sentence) of the
earlier of either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (dd), (jj), (kk), (ll)
(oo), and (ccc) of Subsection 9.02, the Seller shall repurchase such Mortgage
Loan at the Repurchase Price, together with all expenses incurred by the
Purchaser as a result of such repurchase. Any repurchase of a Mortgage Loan or
Loans pursuant to the foregoing provisions of this Subsection 9.03 shall be
accomplished by either (a) if the Interim Servicing Agreement has been entered
into and is in effect, deposit in the Custodial Account of the amount of the
Repurchase Price for distribution to the Purchaser on the next scheduled
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Remittance Date, after deducting therefrom any amount received in respect of
such repurchased Mortgage Loan or Loans and being held in the Custodial
Account for future distribution or (b) if the Interim Servicing Agreement has
not been entered into or is no longer in effect, by direct remittance of the
Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions. For purposes of this paragraph, if the Seller is not
acting as the servicer of the related Mortgage Loan, the Purchaser shall or
shall cause a copy of the related Servicing File (and all relevant servicing
documents) to be sent along with such notice of a breach of a representation
or warranty to the Seller. The cure period for a breach shall commence upon
Seller's receipt of documents referred to in the preceding sentence.
At the time of repurchase the Purchaser and the Seller shall
arrange for the reassignment of the Deleted Mortgage Loan to the Seller and
the delivery to the Seller of any documents held by the Custodian relating to
the Deleted Mortgage Loan. In the event of a repurchase, the Seller shall,
simultaneously with such reassignment, give written notice to the Purchaser
that such repurchase has taken place and amend the Mortgage Loan Schedule to
reflect the withdrawal of the Deleted Mortgage Loan from this Agreement .
It is understood and agreed that the obligations of the Seller set
forth in this Subsection 9.03 to cure or repurchase a defective Mortgage Loan,
and the obligations of the Seller set forth in Subsection 14.01 to indemnify
the Purchaser constitute the sole remedies of the Purchaser respecting a
breach of the foregoing representations and warranties. Any cause of action
against the Seller relating to or arising out of the breach of any
representations and warranties made in Subsections 9.01 and 9.02 shall accrue
as to any Mortgage Loan upon (i) discovery of such breach by the Purchaser or
notice thereof by the Seller to the Purchaser, (ii) failure by the Seller to
cure such breach or repurchase such Mortgage Loan as specified above, and
(iii) demand upon the Seller by the Purchaser for compliance with this
Agreement.
Subsection 9.04. Repurchase of Mortgage Loans That Prepay in Full.
If any Mortgage Loan which does not provide for the payment of a
Prepayment Charge, is prepaid in full within ninety (90) days from and after
the related Closing Date, the Seller shall pay to the Purchaser, within ten
(10) business days of such prepayment in full (provided that the Seller has
been notified of such prepayment by the Purchaser), an amount equal to the
Premium Percentage multiplied by the outstanding principal balance of such
Mortgage Loan as of the date of such prepayment in full. The Seller shall have
no obligation to make any payments to the Purchaser under this Subsection 9.04
if the Purchaser has not notified the Seller within 60 days of the Mortgage
Loan pay-off.
Subsection 9.05. Repurchase of Mortgage Loans with First Payment
Defaults.
If the related Mortgagor fails to make the first Monthly Payment
due after the related Closing Date (or such date as is otherwise set forth in
the Purchase Price and Terms Agreement) with respect to any Mortgage Loan to
be made by the Mortgagor before the date which is one month after the related
due date (the "First Payment Default Date"), the Seller shall repurchase such
Mortgage Loan within five business days of the Purchaser's request at a price
equal to the Purchase Price Percentage (as adjusted) multiplied by the then
outstanding principal
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balance of the Mortgage Loan to be repurchased plus accrued and unpaid
interest thereon from the date to which interest was last paid through the day
prior to the repurchase date at the mortgage interest rate.
Subsection 9.06. Representations and Warranties Regarding the
Purchaser.
The Purchaser represents, warrants and covenants to the Seller
that as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Purchaser is a New York
limited partnership duly organized, validly existing and in good standing
under the laws of the state of New York. The Purchaser has the full power,
authority and legal right to execute and deliver this Agreement and the
Interim Servicing Agreement and to perform its obligations hereunder and
thereunder; the execution, delivery and performance of this Agreement and the
Interim Servicing Agreement by the Purchaser and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized; this Agreement and the Interim Servicing Agreement and all
agreements contemplated hereby and thereby have been duly executed and
delivered and constitute the valid, legal, binding and enforceable obligations
of the Purchaser (subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium, receivership or other laws relating to
or affecting creditors' rights generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity)); and all requisite corporate or other action has been taken by the
Purchaser to make this Agreement and the Interim Servicing Agreement and all
agreements contemplated hereby and thereby valid and binding upon the
Purchaser in accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this
Agreement, the Interim Servicing Agreement, the acquisition of the Mortgage
Loans by the Purchaser, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement or the Interim Servicing Agreement, will conflict with or
result in a breach of any of the terms, conditions or provisions of the
Purchaser's charter, by-laws or other organizational documents or any legal
restriction or any agreement or instrument to which the Purchaser is now a
party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Purchaser or its
property is subject, unless such conflict, breach, default or violation is
immaterial to this transaction;
(c) Ability to Perform; Solvency The Purchaser 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 and the Interim Servicing
Agreement. The Purchaser is solvent and the acquisition on the Mortgage Loans
will not cause the Purchaser to become insolvent;
(d) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to Purchaser's knowledge threatened against the
Purchaser, before any court, administrative agency or other tribunal asserting
the invalidity of this Agreement, seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or which would draw into
question the validity of this Agreement or of any action taken or to be taken
in connection with the obligations of the Purchaser contemplated herein or in
the Interim Servicing
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Agreement, or which would be likely to impair the ability of the Purchaser to
perform under the terms of this Agreement or the Interim Servicing Agreement;
(e) No Consent Required. Unless it is immaterial to this
transaction, no consent, approval, authorization or order of, or registration
or filing with, or notice to any court or governmental agency or body is
required for the execution, delivery and performance by the Purchaser of or
compliance by the Purchaser with this Agreement or the Interim Servicing
Agreement or the acquisition of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or the Interim Servicing
Agreement, or if required, such approval has been obtained prior to the
related Closing Date.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans in
each Mortgage Loan Package shall take place on the related Closing Date. At
the Purchaser's option, the Closing shall be either: by telephone, confirmed
by letter or wire as the parties shall agree, or conducted in person, at such
place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(a) at least two Business Days prior to the related Closing
Date, the Seller shall deliver to the Purchaser, in
electronic format acceptable to the Purchaser in its
reasonable discretion, a listing on a loan-level basis of
the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(b) all of the representations and warranties of the Seller
under this Agreement and of the Interim Servicer under the
Interim Servicing Agreement (with respect to each Mortgage
Loan for an interim period, as specified therein) shall be
true and correct as of the related Closing Date and no event
shall have occurred which, with notice or the passage of
time, would constitute a default under this Agreement or an
Event of Default under the Interim Servicing Agreement;
(c) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing
documents as specified in Section 11 of this Agreement, in
such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the terms hereof;
(d) the Seller shall have delivered and released to the
Custodian all documents required pursuant to this Agreement;
and
(e) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
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Subject to the foregoing conditions, the Purchaser shall pay to
the Seller on the related Closing Date the Purchase Price, plus accrued
interest pursuant to Section 4 of this Agreement, by wire transfer of
immediately available funds to the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on
each Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement (to be executed and delivered only for the
initial Closing Date);
2. the Interim Servicing Agreement, dated as of the initial
Cut-off Date, in the form of Exhibit B hereto (to be
executed and delivered only for the initial Closing Date);
3. with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
4. the related Mortgage Loan Schedule, segregated by Mortgage
Loan Package, one copy to be attached hereto, one copy to be
attached to the Custodian's counterpart of the Custodial
Agreement, and one copy to be attached to the related
Assignment and Conveyance as the Mortgage Loan Schedule
thereto;
5. a Custodian's Certification, as required under the Custodial
Agreement;
6. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments hereto;
7. with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit D hereto ("Opinion of
Counsel of the Seller");
8. with respect to the initial Closing Date, an Opinion of
Counsel of the Custodian (who may be an employee of the
Custodian), in the form of an exhibit to the Custodial
Agreement;
9. a Security Release Certification, in the form of Exhibit E
or F, as applicable, hereto executed by any person, as
requested by the Purchaser, if any of the Mortgage Loans
have at any time been subject to any security interest,
pledge or hypothecation for the benefit of such person;
10. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance as Exhibit C; and
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11. Assignment and Conveyance Agreement in the form of Exhibit H
hereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees, all fees incurred
after the Closing Date related to preparing assignments/endorsements, all
initial recording fees, if any, for the assignments of mortgage for all
Mortgage Loans not recorded in the name of MERS, all fees, if any, for
transferring record ownership on the MERS system of Mortgage Loans recorded in
the name of MERS, custodial fees, including the costs associated with clearing
exceptions, (including costs to record intervening assignments and any
existing assumption and modification agreements) and the fees and expenses of
its counsel. The Purchaser shall deduct an amount equal to fifteen dollars per
Mortgage Loans from the Purchase Price proceeds to be paid on any Closing Date
to cover the costs of preparing and recording assignments of mortgage. All
servicing fees incurred prior to the related Closing Date, and all costs and
expenses incurred in connection with the transfer of the Mortgage Loans, fees
to transfer files and fees and expenses of Seller's counsel, shall be payable
by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or
all of the Mortgage Loans, within 180 days after the related Closing Date, on
one or more dates (each, a "Reconstitution Date") at the Purchaser's sole
option, the Purchaser may effect a sale (each, a "Reconstitution") of some or
all of the Mortgage Loans then subject to this Agreement, without recourse,
to:
a) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS
Program (Special Servicing Option) (each, a "▇▇▇▇▇▇
Mae Transfer"); or
b) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
c) one or more third party purchasers in one or more
Whole Loan Transfers; or
d) one or more trusts or other entities to be formed as
part of one or more Securitization Transfers;
provided however, the Purchaser shall be limited to three Reconstitutions for
each pool of Mortgage Loans sold.
The Seller agrees to execute in connection with any Agency
Transfer, any and all reasonably acceptable pool purchase contracts, and/or
agreements among the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the parties, and in
connection with a Securitization Transfer, a pooling and servicing agreement
in form and
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substance reasonably acceptable to the parties or an Assignment and
Recognition Agreement in form and substance reasonable acceptable to the
parties (collectively, the agreements referred to herein are designated, the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; (3) to
restate the Origination Representations and Warranties set forth in Section
9.02 of this Agreement as of the applicable Closing Date, restate the
Servicing Representations and warranties set forth in Section 9.02 of this
Agreement as of the applicable Transfer Date provided, that with respect to
the representation and warranty set forth in Section 9.02(aa), the Seller's
restatement of such representation and warranty as of the Reconstitution Date
shall be qualified "to the best of the Seller's knowledge", and restate the
remaining representations and warranties set forth in Section 9.02 of this
Agreement and the representations and warranties set forth in Section 9.01 of
this Agreement and in the Interim Servicing Agreement as of the settlement or
closing date in connection with such Reconstitution (each, a "Reconstitution
Date"). The Seller shall provide to such servicer or issuer, as the case may
be, and any other participants or purchasers in such Reconstitution: (i) any
and all information and appropriate verification of information which may be
reasonably available to the Seller or its affiliates, whether through letters
of its auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request; and (ii) such additional representations,
warranties which are consistent with the representations and warranties
contained in this Agreement, but modified, if necessary, to reflect changes
since the related Closing Date; provided however, nothing contained herein
shall be construed to obligate the Seller to make any representation or
warranty that results in an increase in Seller's liability beyond that
originally agreed to in this Agreement unless (a) such representations and
warranty can be made by the Seller without resulting in a breach of such
representations and warranty being deemed to exist at the time it is made and
(b) such representation or warranty has become standard in the industry or is
required by a bond insurer, Rating Agency or, with respect to Mortgage Loans
which the Seller has indicated on the Mortgage Loan Schedule conform to ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac requirements, ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, in a
securitization. All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related
Mortgage Loan Package, shall continue to be serviced in accordance with the
terms of this Agreement and the Interim Servicing Agreement and with respect
thereto this Agreement shall remain in full force and effect.
The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser, each Person who controls the Purchaser or such
Affiliate and the Successor Servicer and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that each of them may sustain in any way related to any
information provided by or on behalf of the Seller regarding the Seller, the
Seller's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who
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previously were "Purchasers" under this Agreement and "Successor Servicer"
shall mean the Person then acting as the Successor Servicer under this
Agreement and any and all Persons who previously were "Successor Servicers"
under this Agreement.
The Purchaser shall indemnify the Seller and hold it harmless
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that the Seller may sustain in any way related information
provided by the Purchaser which is included in the offering documents relating
to the Transaction. The Agreement will set forth the foregoing reconstitution
provisions.
SECTION 14. Indemnification.
Subsection 14.01. Indemnification; Third Party Claims.
(a) The Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and hold such parties
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees and expenses that such parties may sustain in any way related to the
failure of the Seller to originate the Mortgage Loans in accordance with
Accepted Origination Practices, service the Mortgage Loans in accordance with
Accepted Servicing Practices perform its obligations (as Seller and Interim
Servicer) in strict compliance with the terms of this Agreement or any
Reconstitution Agreement or any breach of any of Seller's representations,
warranties and covenants set forth in this Agreement (provided that such costs
shall not include any lost profits).
(b) The Purchaser shall indemnify the Seller and its present and
former directors, officers, employees and agents and hold such parties
harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
fees and expenses that such parties may sustain in any way related to the
failure of the Purchaser (or its Successor Servicer) to perform its
obligations under this Agreement, to service the Mortgage Loans from and after
the Transfer Date, or any breach of any of Purchaser's representations,
warranties and covenants set forth in this Agreement (provided that such costs
shall not include any lost profits).
(c) Promptly after receipt by an indemnified party under this
Subsection 14.01 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Subsection 14.01, notify the indemnifying party
in writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve the indemnifying party from any liability
which it may have to any indemnified party under this Subsection 14.01, except
to the extent that it has been prejudiced in any material respect, or from any
liability which it may have, otherwise than under this Subsection 14.01. In
case any such action is brought against any indemnified party and it notifies
the indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may elect
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that
-40-
there may be legal defenses available to it or them and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party
or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to assume the defense of such action and
approval by the indemnified party of counsel, the indemnifying party will not
be liable to such indemnified party for expenses incurred by the indemnified
party in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (together with one local
counsel, if applicable)), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
Subsection 14.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to
which the Seller shall be a party, or any Person succeeding to the business of
the Seller, shall be the successor of the Seller hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided,
however, that the successor or surviving Person shall have a net worth of at
least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at
the end of the last two fiscal years covered by such Consolidated Statement of
Operations. Purchaser shall require any prospective purchaser to keep such
financial statement of the Seller confidential. The Seller shall also make
available any comparable interim statements to the extent any such statements
have been prepared by the Seller (and are available upon request to members or
stockholders of the Seller or the public at large). The Seller, if it has not
already done so, agrees to furnish promptly to the Purchaser copies of the
statements specified above. The Seller shall also make available information
on its servicing performance with respect to loans serviced for others,
including delinquency ratios.
-41-
The Seller also agrees to allow reasonable access to a
knowledgeable financial or accounting officer for the purpose of answering
questions asked by any prospective purchaser regarding recent developments
affecting the Seller or the financial statements of the Seller.
SECTION 16. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto waive any provision of law
which prohibits or renders void or unenforceable any provision hereof. If the
invalidity of any part, provision, representation or warranty of this
Agreement shall deprive any party of the economic benefit intended to be
conferred by this Agreement, the parties shall negotiate, in good-faith, to
develop a structure the economic effect of which is nearly as possible the
same as the economic effect of this Agreement without regard to such
invalidity.
SECTION 17. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 18. Governing Law Jurisdiction; Consent to
Service of Process.
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER
AND THE SELLER IRREVOCABLY (I) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR
PROCEEDING IN ANY SUCH COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION
OR PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW; AND (IV) CONSENTS TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF
BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
-42-
SECTION 19. Intention of the Parties.
It is the intention of the parties that the Purchaser is
purchasing, and the Seller is selling the Mortgage Loans and not a debt
instrument of the Seller or another security. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
Moreover, the arrangement under which the Mortgage Loans are held shall be
consistent with classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the Mortgage Loans. As
part of its due diligence review, the Purchaser shall have the right to review
the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income
tax consequences of owning the Mortgage Loans and the Seller shall cooperate
with all reasonable requests made by the Purchaser in the course of such
review.
SECTION 20. Successors and Assigns; Assignment of
Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. The Purchaser shall not assign its obligation to purchase the
Mortgage Loans under any executed Purchase Price and Terms Agreement without
the prior written consent of the Seller. This Agreement shall not be assigned,
pledged or hypothecated by Seller without the prior written consent of the
Purchaser. The Purchase shall not assign the Agreement in connection with a
whole loan sale of Mortgage Loans to third parties more than twice with
respect to any Mortgage Loan Package.
SECTION 21. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
SECTION 22. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 23. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
-43-
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without
limitation by reason of enumeration.
SECTION 24. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
SECTION 25. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
SECTION 26. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for
real property records in all the counties or their comparable jurisdictions in
which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere such recordation to be
effected at the Purchaser's expense in the event recordation is either
necessary under applicable law or desired by the Purchaser. The Seller has no
obligation to record any Assignment of Mortgage related to a Mortgage Loan
hereunder.
SECTION 27. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of
its agents or affiliates, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail (via electronic
-44-
means or otherwise), solicit the borrower or obligor under any Mortgage Loan
for any purpose whatsoever, including to refinance a Mortgage Loan, in whole
or in part, without the prior written consent of the Purchaser. It is
understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the Closing Date and the Seller shall take no action to
undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that (1) offers to refinance a Mortgage Loan made within
30 days following Seller's receipt of a request for verification of mortgage
or payoff demand related to a Mortgagor (other than those initiated in
response to a solicitation initiated by the Seller or any of its agents or
Affiliates), (2) promotions undertaken by the Seller or any affiliate of the
Seller which are directed to the general public at large, or designated
segments thereof including, without limitation, mass mailing based on
commercially acquired mailing lists, calling campaigns, newspaper, billboard,
radio, web site, internet and television advertisements and/or (3) statements
on or "stuffers" in a Mortgagor's monthly billing statement referencing the
Servicer's mortgage lending business, including its refinance lending
business, shall not constitute solicitation under this Section 27.
SECTION 28. Notices
All demands, notices and communications hereunder shall be in
writing and shall be given via email or facsimile transmission (with a copy
sent by first class mail) or registered or certified mail to the person at the
address set forth below:
(i) if to the Seller:
Ameriquest Mortgage Company
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
with a copy to:
Ameriquest Mortgage Company
▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Director of Capital Markets
If notice is required with respect to the service of
any summons and complaint or any other process,
pursuant to Section 30 herein,
with a copy to:
National Registered Agents, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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(ii) if to the Purchaser:
▇▇▇▇▇▇▇ Sachs Mortgage Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax:
Email:
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 29. Confidential Information
The Seller and Purchaser understand and agree that this Agreement,
any other agreements executed in connection with the sale contemplated
hereunder, any agreements executed in connection with any Reconstitution, and
any offering circulars or other disclosure documents produced in connection
with any Reconstitution are confidential and proprietary to the Purchaser or
Seller, and the Seller and Purchaser agree to hold such documents confidential
and not to divulge such documents to anyone except (a) to the extent required
by law or judicial order or to enforce its rights or remedies under this
Agreement, (b) to the extent such information enters into the public domain
other than through the wrongful act of the Seller or the Purchaser, as the
case may be, (c) as is necessary in working with legal counsel, rating
agencies, auditors, agents, taxing authorities or other governmental agencies
or (d) the federal income tax treatment of the transactions hereunder, any
fact relevant to understanding the federal tax treatment of the transactions
hereunder, and all materials of any kind (including opinions or other tax
analyses) relating to such federal income tax treatment; provided that the
Seller may not disclose the name of or identifying information with respect to
Purchaser or any pricing terms or other nonpublic business or financial
information that is unrelated to the purported or claimed federal income tax
treatment of the transactions hereunder and is not relevant to understanding
the purported or claimed federal income tax treatment of the transactions
hereunder.
[Signatures Commence on Following Page]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly
authorized as of the date first above written.
▇▇▇▇▇▇▇ SACHS MORTGAGE
COMPANY, a New York limited
partnership
(Purchaser)
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ REAL
ESTATE FUNDING CORP., a New
York corporation, as General Partner
By:_______________________________________
Name:
Title:
AMERIQUEST MORTGAGE COMPANY
(Seller)
By:_______________________________________
Name:
Title:
-47-
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall
include each of the following items, which shall be available for inspection
by the Purchaser and any prospective Purchaser, and which shall be delivered
to the Custodian, or to such other Person as the Purchaser shall designate in
writing, pursuant to Section 6 of the Flow Amended and Restated Mortgage Loan
Purchase and Warranties Agreement to which this Exhibit is attached (the
"Agreement"):
(a) either (i) the original Mortgage Note bearing all intervening
endorsements, evidencing a complete chain of assignments from the originator
to the last endorsee (the "Last Endorsee") endorsed "Pay to the order of
_________, without recourse" and signed in the name of the Last Endorsee by an
authorized officer. To the extent that there is no room on the face of the
Mortgage Notes for endorsements, the endorsement may be contained on an
allonge, if state law so allows and the Custodian is so advised by the Seller
that state law so allows. If the Mortgage Loan was acquired by the Last
Endorsee in a merger, the endorsement must be by "[Last Endorsee], successor
by merger to [name of predecessor]". If the Mortgage Loan was acquired or
originated by the Last Endorsee while doing business under another name, the
endorsement must be by "[Last Endorsee], formerly known as [previous name]" or
(ii) with respect to not more than 1% of the Mortgage Loans, a lost note
affidavit acceptable in form and substance to the Purchaser;
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If
in connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the related Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or cause to be delivered
to the Custodian, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's Certificate of
the Seller stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such Mortgage certified by
such public recording office to be a true and complete copy of the original
recorded Mortgage;
(d) the originals of all assumption, modification, consolidation
or extension agreements, if any, with evidence of recording thereon;
A-1
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must
be duly recorded only if recordation is either necessary under applicable law
or commonly required by private institutional mortgage investors in the area
where the Mortgaged Property is located or on direction of the Purchaser as
provided in this Agreement. If the Assignment of Mortgage is to be recorded,
the Mortgage shall be assigned to the Purchaser. If the Assignment of Mortgage
is not to be recorded, the Assignment of Mortgage shall be delivered in blank.
If the Mortgage Loan was acquired by the Last Endorsee in a merger, the
Assignment of Mortgage must be made by "[Last Endorsee], successor by merger
to [name of predecessor]". If the Mortgage Loan was acquired or originated by
the Last Endorsee while doing business under another name, the Assignment of
Mortgage must be by "[Last Endorsee], formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage,
evidencing a complete chain of assignment from the originator to the Last
Endorsee, either unrecorded or with evidence of recording thereon, or if any
such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office retains
the original recorded assignments of mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Seller stating that such
intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office,
a copy of such intervening assignment certified by such public recording
office to be a true and complete copy of the original recorded intervening
assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and
complete by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
A-2
EXHIBIT B
FORM OF INTERIM SERVICING AGREEMENT
-----------------------------------
B-1
EXHIBIT C
FORM OF SELLER'S OFFICER'S CERTIFICATE
--------------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company"), and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete
copy of the charter of the Company which is in full force and effect on
the date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete
copy of the bylaws of the Company which are in effect on the date hereof
and which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and
no event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete
copy of the corporate resolutions of the Board of Directors of the
Company authorizing the Company to execute and deliver each of the Flow
Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of June 1, 2005, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company
(the "Purchaser") and the Company (the "Purchase Agreement"), the
Amended and Restated Interim Servicing Agreement, dated as of June 1,
2005 by and between the Company and the Purchaser (the "Interim
Servicing Agreement") and to endorse the Mortgage Notes and execute the
Assignments of Mortgages by original [or facsimile] signature,] and such
resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Interim Servicing Agreement the sale of
the mortgage loans or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval, authorization
or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of the Purchase Agreement and the
Interim Servicing Agreement conflicts or will conflict with or results
or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a
party or by which it is bound or to which it is subject, or any statute
or order, rule, regulations, writ,
C-1
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the aggregate,
is reasonably likely to result in an adverse judgment and such judgment
would result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on
its business substantially as now conducted or in any material liability
on the part of the Company or which would draw into question the
validity of the Purchase Agreement and the Interim Servicing Agreement,
or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Purchase Agreement and the Interim Servicing Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Interim Servicing Agreement and (c) any other
document delivered or on the date hereof in connection with any purchase
described in the agreements set forth above was, at the respective times
of such signing and delivery, and is now, a duly elected or appointed,
qualified and acting officer or representative of the Company, who holds
the office set forth opposite his or her name on Exhibit 5, and the
signatures of such persons appearing on such documents are their genuine
signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Interim
Servicing Agreement.
C-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By: ___________________________________
Name: ________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By: ___________________________________
Name: ________________________
Title: [Assistant] Secretary
C-3
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
------------------------ ------------------------ ------------------------
------------------------ ------------------------ ------------------------
------------------------ ------------------------ ------------------------
------------------------ ------------------------ ------------------------
------------------------ ------------------------ ------------------------
------------------------ ------------------------ ------------------------
C-4
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER AND INTERIM SERVICER
-------------------------------------------------------------
[INSERT PURCHASER NAME]
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain
matters in connection with the sale by the Company of the Mortgage Loans
pursuant to that certain Flow Amended and Restated Mortgage Loan Purchase and
Warranties Agreement by and between the Company and ▇▇▇▇▇▇▇ Sachs Mortgage
Company (the "Purchaser"), dated as of June 1, 2005 (the "Purchase Agreement")
which sale is in the form of whole loans, serviced pursuant to an Interim
Servicing Agreement, dated as of June 1, 2005 by and between the Interim
Servicer and the Purchaser (the "Interim Servicing Agreement" and,
collectively with the Purchase Agreement, the "Agreements"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Purchase
Agreement and the Interim Servicing Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Interim Servicing Agreement; and
3. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company and the
Interim Servicer contained in the Purchase Agreement and in the Interim
Servicing Agreement, as applicable. [We] [I] have assumed the authenticity of
all documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company and the Interim Servicer is [type of entity] duly
organized, validly existing and in good standing under the laws of
the [United States] and are qualified to transact business in, and
is in good standing under, the laws of [the state of
incorporation].
D-1
2. Each of the Company and the Interim Servicer has the power to
engage in the transactions contemplated by the Agreements to which
it is a party and all requisite power, authority and legal right
to execute and deliver such Agreements and to perform and observe
the terms and conditions of such Agreements.
3. Each of the Agreements to which it is a party has been duly
authorized, executed and delivered by the Company and the Interim
Servicer, as applicable, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company and the Interim Servicer, as applicable,
subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the
application of the rules of equity, including those respecting the
availability of specific performance, none of which will
materially interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the Mortgage
Loans.
4. The Company has been duly authorized to allow any of its officers
to execute any and all documents by original signature in order to
complete the transactions contemplated by the Agreements.
5. Each of the Company and the Interim Servicer has been duly
authorized to allow any of its officers to execute any and all
documents by original signature in order to complete the
transactions contemplated by the Agreements to which it is a party
by original [or facsimile] signature in order to execute the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the Mortgage
Notes and the Assignments of Mortgages represents the legal and
valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company or the Interim
Servicer of or compliance by the Company or the Interim Servicer
with the Agreements to which it is a party and the sale of the
Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements to which each is a
party or (ii) any required consent, approval, authorization or
order has been obtained by the Company or the Interim Servicer.
7. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of, the Agreements to which it is a
party conflicts or will conflict with or results or will result in
a breach of or constitutes or will constitute a default under the
charter, by-laws or other organizational documents of the Company
or the Interim Servicer, as applicable, the terms of any indenture
or other agreement or instrument to which the Company or the
Interim Servicer is a party or by which it is bound or to which it
is subject, or violates any statute or order, rule, regulations,
writ, injunction or decree of any court, governmental authority or
regulatory body to which the Company or the Interim Servicer is
subject or by which it is bound.
D-2
8. There is no action, suit, proceeding or investigation pending or,
to the best of my knowledge, threatened against the Company or the
Interim Servicer which, in [our] [my] judgment, either in any one
instance or in the aggregate, is reasonably likely to result in an
adverse judgment and such judgment would result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Company or the Interim Servicer or in
any material impairment of the right or ability of the Company or
the Interim Servicer to carry on its business substantially as now
conducted or in any material liability on the part of the Company
or the Interim Servicer or which would draw into question the
validity of the Agreements to which it is a party or the Mortgage
Loans or of any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to
materially impair the ability of the Company or the Interim
Servicer to perform under the terms of the Agreements to which it
is a party.
9. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Agreements is sufficient to fully transfer to
the Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes have
been duly endorsed as provided in Exhibit A to the Purchase
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon the
name of the assignee being inserted, are acceptable for recording
under the laws of the state where each related Mortgaged Property
is located. The endorsement of the Mortgage Notes, the delivery to
the Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to the
Purchaser, or its designee, are sufficient to permit the Purchaser
to avail itself of all protection available under applicable law
against the claims of any present or future creditors of the
Company, and are sufficient to prevent any other sale, transfer,
assignment, pledge or hypothecation of the Mortgages and the
Mortgage Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
_________________________________________
[Name]
Senior Counsel
D-3
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, _____
________________________
________________________
________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________
[COMPANY] a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Company under a Flow Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2005, certain mortgage loans
originated by the Company. The Company warrants that the mortgage loans to be
sold to ▇▇▇▇▇▇▇ Sachs Mortgage are in addition to and beyond any collateral
required to secure advances made by you to the Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company shall not be used as additional or substitute
collateral for advances made by [____________]. ▇▇▇▇▇▇▇ Sachs Mortgage Company
understands that the balance of the Company's mortgage loan portfolio may be
used as collateral or additional collateral for advances made by
[___________], and confirms that it has no interest therein.
E-1
Execution of this letter by [___________] shall constitute a full
and complete release of any security interest, claim, or lien which
[___________] may have against the mortgage loans to be sold to ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mortgage Company.
Very truly yours,
__________________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Date:_____________________________________
Acknowledged and approved:
__________________________
By:___________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
E-2
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be
purchased by ▇▇▇▇▇▇▇ Sachs Mortgage Company from the Company named below
pursuant to that certain Flow Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2005, and certifies that all notes,
mortgages, assignments and other documents in its possession relating to such
Mortgage Loans have been delivered and released to the Company named below or
its designees, as of the date and time of the sale of such Mortgage Loans to
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company.
Name and Address of Financial Institution
________________________________
(Name)
________________________________
(Address)
By:_____________________________
F-1
II. Certification of Release
------------------------
The Company named below hereby certifies to ▇▇▇▇▇▇▇ Sachs Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Company, the security interests in
the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage
Loans. The Company warrants that, as of such time, there are and will be no
other security interests affecting any or all of such Mortgage Loans.
______________________________
By:___________________________
Title:________________________
Date:_________________________
F-2
EXHIBIT G
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
G-5
EXHIBIT H
ASSIGNMENT AND CONVEYANCE
-------------------------
On this ___ day of __________, ____, ___________________
("Seller"), as (i) the Seller under that certain Purchase Price and Terms
Agreement, dated as of ___________, _____ (the "PPTA"), (ii) the Seller under
that certain Flow Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of June 1, 2005 (the "Purchase Agreement") and (iii) the
Seller/Interim Servicer under that certain Amended and Restated Flow Interim
Servicing Agreement, dated as of June 1, 2005 (the "Interim Servicing
Agreement" and, together with the PPTA and the Purchase Agreement, the
"Agreements") does hereby sell, transfer, assign, set over and convey to
▇▇▇▇▇▇▇ Sachs Mortgage Company ("Purchaser") as the Purchaser under the
Agreements, without recourse, but subject to the terms of the Agreements, all
right, title and interest of, in and to the Mortgage Loans listed on the
Mortgage Loan Schedule attached hereto as Exhibit A (the "Mortgage Loans"),
together with the Mortgage Files and all rights and obligations arising under
the documents contained therein. Each Mortgage Loan subject to the Agreements
was underwritten in accordance with, and conforms to, the Underwriting
Guidelines attached hereto as Exhibit B. Pursuant to Section 6 of the Purchase
Agreement, the Seller has delivered to the Custodian the documents for each
Mortgage Loan to be purchased as set forth in the Custodial Agreement. The
contents of each Servicing File required to be retained by
__________________________ ("Interim Servicer") to service the Mortgage Loans
pursuant to the Interim Servicing Agreement and thus not delivered to the
Purchaser are and shall be held in trust by the Seller in its capacity as
Interim Servicer for the benefit of the Purchaser as the owner thereof. The
Interim Servicer's possession of any portion of the Servicing File is at the
will of the Purchaser for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to the Interim Servicing Agreement, and such
retention and possession by the Interim Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage, the Servicing
Rights and the contents of the Mortgage File and Servicing File is vested in
the Purchaser and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or which come into the possession of the
Seller or the Interim Servicer shall immediately vest in the Purchaser and
shall be retained and maintained, in trust, by the Seller at the will of the
Purchaser in such custodial capacity only.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
H-1
[SELLER]
By:__________________________________
Name:________________________________
Title:_______________________________
Accepted and Agreed:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE COMPANY
By:____________________________
Name:_______________________
Title:______________________
By:____________________________
Name:_______________________
Title:______________________
H-2
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
H-3
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
H-4
EXHIBIT I
SELLER'S UNDERWRITING GUIDELINES
I-1
EXHIBIT J
J-1
EXHIBIT K
Servicing Transfer Procedures
Below please find a description of the processes and reporting requirements
that must be undertaken by the identified parties in connection with the
servicing transfer of loans from Interim Servicer to Final Servicer.
In each month prior and up to the servicing transfer:
o If a securitization occurs the month of or the next succeeding month
after transfer, the Interim Servicer will prepare the scheduled
remittance files and applicable trust reports for delivery to the Final
Servicer and Trustee
o Interim Servicer will provide the trustee with a file containing
scheduled balances in addition to the fields enumerated below, with a
copy provided to ▇▇▇▇▇▇▇ Sachs
In each month in which a servicing transfer occurs, with respect to the loans
that are being transferred, Interim Servicer must undertake the following:
o Provide a servicing transfer file to Final Servicer with all
information required to know how to apply payments outlined below
within 3 business days of servicing transfer
o Remit to Final Servicer by wire transfer all unscheduled, prepaid,
payoffs and other collections as labeled below within 3 business days
of servicing transfer date
o Provide to Final Servicer the following MSP (Alltel) tapes:
o T309 History Tape
o 10P Tax/Hazard Insurance Listing
o 19M Insurance Notification
o 1LF Flood Insurance Listing
o 4CV Force Place Insurance
o 10N Service Released by Old Inv
o 2FW Foreclosure Workstation
o 309 Master Ledger Record
o 2FT Foreclosure Trial Balance
o 4TB Transfer Trial Balance
o 54F Escrow Analysis Report
o 10S Mortgage Insurance List
o 1AT Escrow Open Items
o 4TN Pending Payoff Report
o 1BW Bankruptcy Workstation
o 45C Customer Account Activity
o 54E Collection Activity
o 5SB Bankruptcy Trial Balance
o 54D Letter Log
o 2EH Escrow Header
o 4BS Buydown
o 4BC ARM
o P1TW ARM Calcs
Purchase shall pay any additional costs charges by MSP relating to the
provision of the Letter Log, Escrow Header, Buydown, ARM, and AMR Calcs tapes.
In addition to the list described above, Interim Servicer must provide
reporting details to both Final Servicer and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co and related
"net" cash to either Final Servicer (1) or Goldman (2) as indicated below:
o Transaction Date, Payment Due date and Description for each item below:
o Unscheduled partial payments for last month of servicing
(Principal, curtailment interest) (1)
o Payoffs for last month of servicing (Principal, Net Interest -
inclusive of 30 days of net interest) (1)
o Payment Reversals for last month of servicing (Principal, Net
Interest, and identify all payment dates reversed) (1) due "from"
Final Servicer
o All Paid Aheads as of cutoff date (Principal, Net Interest) (1)
o Sch Payments for last month of servicing (Principal, Net Interest)
(2)
o Prior month unscheduled collections plus related payoff and
curtailment interest shortfall (2)
o Loan Repurchases during last month serviced (Principal, Net
Interest,) (1) if loan sold into security, (2) if not
o Premium Recapture (2)
o Delinquency Advances (Principal, Net Interest) (1) due "from" Final
Servicer
o 1= funds due to or "from" new servicer
o 2= funds due to Goldman
o Test of Expected P&I schedule - send to both Goldman and Final
Servicer with Servicing transfer reports
In each month in which a servicing transfer occurs, with respect to the loans
that are being transferred, Final Servicer must undertake the following:
o Load the loans into a scheduled/schedule investor number as of the 1st
of the transfer month
o Remit scheduled/scheduled funds to the trustee in respect of the 1st of
the transfer month
o Provide all reporting to the trustee on a scheduled/scheduled basis
K-4