Exhibit 99.11c
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EXECUTION COPY
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
Purchaser,
WACHOVIA MORTGAGE CORPORATION
Seller
SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of September 1, 2004
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS 2
Section 1.01. Defined Terms..........................................2
ARTICLE II SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION
OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL
AGREEMENT; DELIVERY OF MORTGAGE LOAN DOCUMENTS..............16
Section 2.01. Agreement to Purchase.................................16
Section 2.02. Purchase Price........................................17
Section 2.03. Servicing of Mortgage Loans...........................17
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files........................18
Section 2.05. Books and Records.....................................18
Section 2.06. Transfer of Mortgage Loans............................19
Section 2.07. Delivery of Mortgage Loan Documents...................19
Section 2.08. Quality Control Procedures............................20
Section 2.09. Closing...............................................20
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER;
REPURCHASE; REVIEW OF MORTGAGE LOANS........................21
Section 3.01. Representations and Warranties of the Seller..........21
Section 3.02. Representations and Warranties as to
Individual Mortgage Loans.............................23
Section 3.03. Repurchase; Substitution..............................36
Section 3.04. Repurchase of Mortgage Loans With First
Payment Defaults......................................38
Section 3.05. Purchase Price Protection.............................38
ARTICLE IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS...............39
Section 4.01. The Seller to Act as Servicer.........................39
Section 4.02. Collection of Mortgage Loan Payments..................40
Section 4.03. Realization Upon Defaulted Mortgage Loans.............41
Section 4.04. Establishment of Custodial Accounts;
Deposits in Custodial Accounts........................42
Section 4.05. Permitted Withdrawals From the Custodial Account......43
Section 4.06. Establishment of Escrow Accounts;
Deposits in Accounts..................................44
Section 4.07. Permitted Withdrawals From the Escrow Account.........45
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Section 4.08. Payment of Taxes, Insurance and Charges;
Maintenance of Primary Mortgage Insurance;
Collections Thereunder................................46
Section 4.09. Transfer of Accounts..................................47
Section 4.10. Maintenance of Hazard Insurance.......................47
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy...48
Section 4.12. Maintenance of Fidelity Bond and Errors
and Omissions Insurance...............................49
Section 4.13. Title, Management and Disposition of REO Property.....49
Section 4.14. Notification of Maturity Date.........................50
ARTICLE V PAYMENTS TO THE PURCHASER.........................................50
Section 5.01. Distributions.........................................50
Section 5.02. Statements to the Purchaser...........................51
Section 5.03. Monthly Advances by the Seller........................52
Section 5.04. Liquidation Reports...................................52
ARTICLE VI GENERAL SERVICING PROCEDURES.....................................53
Section 6.01. Assumption Agreements.................................53
Section 6.02. Satisfaction of Mortgages and
Release of Mortgage Files.............................54
Section 6.03. Servicing Compensation................................55
Section 6.04. Annual Statement as to Compliance.....................55
Section 6.05. Annual Independent Certified Public
Accountants' Servicing Report.........................55
Section 6.06. Purchaser's Right to Examine Seller Records...........56
Section 6.07. Seller Shall Provide Information
as Reasonably Required................................56
ARTICLE VII THE SELLER......................................................57
Section 7.01. Indemnification; Third Party Claims...................57
Section 7.02. Merger or Consolidation of the Seller.................57
Section 7.03. Limitation on Liability of the Seller and Others......58
Section 7.04. Seller Not to Resign..................................58
Section 7.05. No Transfer of Servicing..............................58
ARTICLE VIII DEFAULT........................................................59
Section 8.01. Events of Default.....................................59
Section 8.02. Waiver of Defaults....................................61
ARTICLE IX TERMINATION......................................................61
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Section 9.01. Termination...........................................61
ARTICLE X RECONSTITUTION OF MORTGAGE LOANS..................................61
Section 10.01. Reconstitution of Mortgage Loans......................61
ARTICLE XI MISCELLANEOUS PROVISIONS.........................................64
Section 11.01. Successor to the Seller...............................64
Section 11.02. Amendment.............................................64
Section 11.03. Recordation of Agreement..............................65
Section 11.04. Governing Law.........................................65
Section 11.05. Notices...............................................65
Section 11.06. Severability of Provisions............................66
Section 11.07. Exhibits..............................................67
Section 11.08. General Interpretive Principles.......................67
Section 11.09. Reproduction of Documents.............................67
Section 11.10. Confidentiality of Information........................68
Section 11.11. Recordation of Assignments of Mortgage................68
Section 11.12. Assignment by Purchaser...............................68
Section 11.13. No Partnership........................................69
Section 11.14. Execution; Successors and Assigns.....................69
Section 11.15. Entire Agreement......................................69
Section 11.16. No Solicitation.......................................69
Section 11.17. Costs.................................................70
Section 11.18. Protection of Mortgagor Personal Information..........70
EXHIBITS
A-1 Contents of Mortgage File
A-2 Contents of Servicing File
B Form of Custodial Account Letter Agreement
C Form of Escrow Account Letter Agreement
D Form of Assignment, Assumption and Recognition Agreement
E Form of Assignment and Conveyance
F Request for Release of Documents and Receipt
G Form of S-50Y Report
H Form of P-4DL Report
I Form of Indemnification and Contribution Agreement
J Form of Annual Certification
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This is a Seller's Purchase, Warranties and Servicing
Agreement, dated as of September 1, 2004 and is executed by and between ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Mortgage Capital Inc., as purchaser (the "Purchaser"), and Wachovia
Mortgage Corporation, as seller and servicer (in such capacity, the "Seller").
WITNESSETH:
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WHEREAS, the Purchaser has heretofore agreed to purchase
from the Seller and the Seller has heretofore agreed to sell to the Purchaser
certain Mortgage Loans, servicing rights retained, from time to time, pursuant
to the terms of a letter agreement by and between the Seller and the Purchaser
(the "Purchase Price and Terms Letter");
WHEREAS, each of the Mortgage Loans is secured by a
mortgage, deed of trust or other security instrument creating a first or
second lien on a residential dwelling located in the jurisdiction indicated on
the related Mortgage Loan Schedule, which is annexed to the related Assignment
and Conveyance. The Mortgage Loans as described herein shall be delivered in
groups of whole loans (each, a "Mortgage Loan Package") on various dates as
provided herein (each, a "Closing Date"); and
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself, the
Mortgage Loans and the management, servicing and control of the Mortgage Loans
by the Seller.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Purchaser and the
Seller agree as follows:
ARTICLE I
DEFINITIONS
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Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meaning specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage
Loan, those mortgage servicing practices (including collection procedures) of
prudent mortgage banking institutions which service mortgage loans of the same
type as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located, and which are in accordance with ▇▇▇▇▇▇ Mae servicing
practices and procedures, for MBS pool mortgages, as defined in the ▇▇▇▇▇▇ ▇▇▇
Guides, including future updates.
Adjustable Rate Mortgage Loan: A Mortgage Loan as to which
the related Mortgage Note provides that the Mortgage Interest Rate may be
adjusted periodically.
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Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date set forth in the related Mortgage Note on which the
Mortgage Interest Rate on the Mortgage Loan is adjusted in accordance with the
terms of the Mortgage Note.
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 ▇▇▇▇▇▇ Mae Transfer or a ▇▇▇▇▇▇▇ Mac
Transfer.
Agreement: This Seller's Purchase, Warranties and Servicing
Agreement including all exhibits hereto, amendments hereof and supplements
hereto.
Appraised Value: With respect to any Mortgaged Property, the
lesser of (i) the value thereof as determined by an appraisal made for the
originator of the Mortgage Loan at the time of origination of the Mortgage
Loan by a Qualified Appraiser, and (ii) the purchase price paid for the
related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage
Loan, provided, however, in the case of a Refinanced Mortgage Loan, such value
of the Mortgaged Property is based solely upon the value determined by an
appraisal made for the originator of such Refinanced Mortgage Loan at the time
of origination of such Refinanced Mortgage Loan by a Qualified Appraiser.
Assignment and Conveyance: As defined in Section 2.03.
Assignment of Mortgage: An individual assignment of the
Mortgage, notice of transfer or equivalent instrument in recordable form and
in blank, sufficient under the laws of the jurisdiction wherein the related
Mortgaged Property is located to give record notice of the transfer of the
Mortgage.
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 a Sunday,
or (ii) a legal holiday in the States of New York or North Carolina, or (iii)
a day on which banks in the States of New York or North Carolina are
authorized or obligated by law or executive order to be closed.
Closing Date: The date or dates set forth in the related
Purchase Price and Terms Letter on which the Purchaser from time to time shall
purchase and the Seller from time to time shall sell to the Purchaser, the
Mortgage Loans listed on the related Mortgage Loan Schedule with respect to
the related Mortgage Loan Package.
Code: The Internal Revenue Code of 1986, as the same may be
amended from time to time (or any successor statute thereto).
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Combined Loan-to-Value Ratio or CLTV: As to any Second Lien
Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the original
outstanding principal balance of the Second Lien Loan and (ii) the outstanding
principal balance 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 as of the origination date at such Second Lien Loan to (b)
the Appraised Value of the related Mortgaged Property as of the origination of
the Second Lien Loan.
Compensating Interest: For any Remittance Date, the lesser
of (i) the aggregate Servicing Fee payable to the Seller for such Remittance
Date and (ii) the aggregate Prepayment Interest Shortfall for such Remittance
Date.
Condemnation Proceeds: All awards, compensation and
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 Adjustable Rate Mortgage Loan
purchased pursuant to this Agreement as to which the related Mortgage Note
permits the Mortgagor to convert the Mortgage Interest Rate on such Mortgage
Loan to a fixed Mortgage Interest Rate.
Co-op Lease: With respect to a Co-op Loan, the lease with
respect to a dwelling unit occupied by the Mortgagor and relating to the stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a dwelling unit in a residential cooperative housing corporation
and a collateral assignment of the related Co-op Lease.
Co-op Stock: With respect to a Co-op Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related residential cooperative housing corporation.
Covered Loan: A Mortgage Loan categorized as Covered
pursuant to Appendix E of the Standard & Poor's Glossary.
Credit Score: The credit score for each Mortgage Loan shall
be the minimum of two credit bureau scores obtained at origination or such
other time by the Seller. If two credit bureau scores are obtained, the Credit
Score will be the lower score. If three credit bureau scores are obtained, the
Credit Score will be the middle of the three. When there is more than one
applicant, the lowest of the applicants' Credit Scores will be used. There is
only one (1) score for any loan regardless of the number of borrowers and/or
applicants.
Custodial Account: Each separate demand account or accounts
created and maintained pursuant to Section 4.04 which shall be entitled
"Wachovia Mortgage Corporation, in trust for the Purchaser, as owner of
various whole loan series" and shall be established as an Eligible Account, in
the name of the Person that is the "Purchaser" with respect to the related
Mortgage Loans.
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Cut-off Date: With respect to each Mortgage Loan Package,
the first Business Day of the month of the related Closing Date, or as
otherwise set forth in the related Purchase Price and Terms Letter.
Determination Date: With respect to each Remittance Date,
the 15th day (or if such 15th day is not a Business Day, the Business Day
immediately preceding such 15th day) of the month in which such Remittance
Date occurs.
Due Date: With respect to any Mortgage Loan, the first day
of each month, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of such
Remittance Date and ending on the first day of the month of the Remittance
Date, in both cases, inclusive.
Eligible Account: An account established and maintained: (a)
within FDIC insured accounts (or other accounts with comparable insurance
coverage acceptable to the Rating Agencies) created, maintained and monitored
by the Seller so that all funds deposited therein are fully insured, (b) with
the corporate trust department of a financial institution assigned a long-term
debt rating of not less than "A-1" by Standard & Poor's or "Prime-1" by
▇▇▇▇▇'▇ Investors Services, Inc. and, if ownership of the Mortgage Loans is
evidenced by mortgaged backed securities, the equivalent ratings of the rating
agencies, and held such that the rights of the Purchaser and the owner of the
Mortgage Loans shall be fully protected against the claims of any creditors of
the Seller and of any creditors or depositors of the institution in which such
account is maintained or (c) in a separate non-trust account without FDIC or
other insurance in an Eligible Institution. In the event that a Custodial
Account is established pursuant to clause (b) or (c) of the preceding
sentence, the Seller shall provide the Purchaser with written notice on the
Business Day following the date on which the applicable institution fails to
meet the applicable ratings requirements.
Eligible Institution: An institution having (i) the highest
short-term debt rating, and one of the two highest long-term debt ratings of
the Rating Agency; or (ii) with respect to any Custodial Account, an unsecured
long-term debt rating of at least one of the two highest unsecured long-term
debt ratings of the Rating Agencies.
Eligible Investments: Any one or more of the following
obligations or securities:
(a) direct obligations of, and obligations fully guaranteed
by the United States of America or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America;
(b) (i) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term deposit
rating and/or the long-term unsecured debt obligations or deposits of such
depository institution or trust company at the time of such investment or
contractual commitment providing for such
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investment are rated in one of the two highest rating categories by each
Rating Agency and (ii) any other demand or time deposit or certificate of
deposit that is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed thirty
(30) days and with respect to (i) any security described in clause (a) above
and entered into with a depository institution or trust company (acting as
principal) described in clause (b)(ii) above;
(d) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States of America
or any state thereof that are rated in one of the two highest rating
categories by each Rating Agency at the time of such investment or contractual
commitment providing for such investment; provided, however, that securities
issued by any particular corporation will not be Eligible Investments to the
extent that investments therein will cause the then outstanding principal
amount of securities issued by such corporation and held as Eligible
Investments to exceed 10% of the aggregate outstanding principal balances of
all of the Mortgage Loans and Eligible Investments;
(e) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on
a specified date not more than one year after the date of issuance thereof)
which are rated in one of the two highest rating categories by each Rating
Agency at the time of such investment;
(f) any other demand, money market or time deposit,
obligation, security or investment as may be acceptable to each Rating Agency
as evidenced in writing by each Rating Agency; and
(g) any money market funds the collateral of which consists
of obligations fully guaranteed by the United States of America or any agency
or instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America (which
may include repurchase obligations secured by collateral described in clause
(a)) and other securities and which money market funds are rated in one of the
two highest rating categories by each Rating Agency.
provided, however, that no instrument or security shall be an Eligible
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument
or if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.
Escrow Account: Each separate trust account or accounts
created and maintained pursuant to Section 4.06 which shall be entitled
"Wachovia Mortgage Corporation, in trust for the Purchaser, as owner of
various whole loan series and various Mortgagors" and shall be established as
an Eligible Account, in the name of the Person that is the "Purchaser" with
respect to the related Mortgage Loans.
Escrow Payments: With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer
rents, municipal charges, mortgage insurance premiums, fire and hazard
insurance premiums, condominium charges, and any other payments
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required to be escrowed by the Mortgagor with the mortgagee pursuant to the
Mortgage, applicable law or any other related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 8.01.
▇▇▇▇▇▇ Mae: The entity formerly known as the Federal
National Mortgage Association, or any successor thereto.
▇▇▇▇▇▇ ▇▇▇ Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the
▇▇▇▇▇▇ ▇▇▇ Servicers' Guide and all amendments or additions thereto,
including, but not limited to, future updates thereof.
▇▇▇▇▇▇ Mae Transfer: As defined in Section 10.01.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Fidelity Bond: A fidelity bond to be maintained by the
Seller pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
First Remittance Date: The eighteenth (18th) day of the
month following each respective Closing Date, or if such day is not a Business
Day, the first Business Day immediately thereafter.
Fixed Rate Mortgage Loan: A Mortgage Loan purchased pursuant
to this Agreement which bears a fixed Mortgage Interest Rate during the life
of the loan.
▇▇▇▇▇▇▇ Mac: The entity formerly known as the Federal Home
Loan Mortgage Corporation, or any successor thereto.
▇▇▇▇▇▇▇ Mac Guides: The ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the
▇▇▇▇▇▇▇ Mac Servicers' Guide and all amendments or additions thereto,
including, but not limited to, any future updates thereof.
▇▇▇▇▇▇▇ Mac Transfer: As defined in Section 10.01.
GAAP: Generally accepted accounting principles, consistently
applied.
Gross Margin: With respect to any Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note and
the related Mortgage Loan Schedule that is added to the Index on each
Adjustment Date in accordance with the terms of the related Mortgage Note to
determine the new Mortgage Interest Rate for such Mortgage Loan.
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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
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 a Home Loan
pursuant to Appendix E of the Standard & Poor's Glossary.
HUD: The United States Department of Housing and Urban
Development or any successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan,
the index identified on the Mortgage Loan Schedule and set forth in the
related Mortgage Note for the purpose of calculating the Mortgage Interest
Rate thereon.
Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Only Mortgage Loan: A Mortgage Loan that only
requires payments of interest for a period of time specified in the related
Mortgage Note.
Liquidation Proceeds: Amounts received in connection with
the partial or complete liquidation of a defaulted Mortgage Loan, whether
through the sale or assignment of such Mortgage Loan, trustee's sale,
foreclosure sale or otherwise, or in connection with the sale of the Mortgaged
Property if the Mortgaged Property is acquired in satisfaction of the
Mortgage.
Loan-to-Value Ratio or LTV: With respect to any Mortgage
Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the Mortgage Loan to the Appraised Value of the Mortgaged
Property at origination.
Manufactured Home Mortgage Loan: A single family residential
unit that is constructed in a factory in sections in accordance with the
Federal Manufactured Home Construction and Safety Standards adopted on July
15, 1976, by the Department of Housing and Urban Development ("HUD Code"), as
amended in 2000, which preempts state and local building codes. Each unit is
identified by the presence of a HUD Plate/Compliance Certificate label. The
sections are then transported to the site and joined together and affixed to a
pre-built permanent foundation (which satisfies the manufacturer's
requirements and all state, county, and local building codes and regulations).
The manufactured home is built on a non-removable, permanent frame chassis
that supports the complete unit of walls, floors, and roof. The underneath
part of the home may have running gear (wheels, axles, and brakes) that enable
it to be transported to the permanent site. The wheels and hitch are removed
prior to anchoring the unit to the permanent foundation. The manufactured home
must be classified as real estate and
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taxed accordingly. The permanent foundation may be on land owned by the
mortgager or may be on leased land.
Maximum Mortgage Interest Rate: With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the maximum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be
increased on any Adjustment Date.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS
on the MERS System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS
Mortgage Loan.
Minimum Mortgage Interest Rate: With respect to each
Adjustable Rate Mortgage Loan, a rate that is set forth on the related
Mortgage Loan Schedule and in the related Mortgage Note and is the minimum
interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be
decreased on any Adjustment Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
Monthly Advance: The payment required to be made by the
Seller with respect to any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such
Mortgage Loan pursuant to the terms of the related Mortgage Note.
Mortgage: With respect to any Mortgage Loan that is not a
Co-op Loan, the mortgage, deed of trust or other instrument securing a
Mortgage Note which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note; except that with
respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice,
the mortgage, deed of trust or other instrument securing the Mortgage Note may
secure and create a first or second lien upon a leasehold estate of the
Mortgagor. With respect to a Co-op Loan, the related Security Agreement.
Mortgage File: With respect to each Mortgage Loan, the
documents pertaining thereto specified in Exhibit A-1 and any additional
documents required to be added to the Mortgage File pursuant to this
Agreement.
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Mortgage Interest Rate: As to each Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan in accordance with the
provisions of the related Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable
Rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set
forth in the related Mortgage Note.
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 related Mortgage Loan Schedule, which
Mortgage Loan includes without limitation the Mortgage File, the Monthly
Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds, REO Disposition Proceeds, any escrow accounts related to
the Mortgage Loan, 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 contained in a
Mortgage File.
Mortgage Loan Package: As defined in the Recitals to this
Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage
Loan, the Mortgage Interest Rate less the related Servicing Fee Rate.
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 Mortgagor is self-employed; (5) a code indicating whether the Mortgaged
Property is owner-occupied; (6) the number of units and type of residential
property constituting the Mortgaged Property; (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) with respect to each First Lien Loan, the LTV at origination,
and with respect to each Second Lien Loan, the CLTV at origination; (9) the
Mortgage Interest Rate as of the related Cut-off Date; (10) 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; (11) the
stated maturity date; (12) the first payment date; (13) the amount of the
Monthly Payment as of the related Cut-off Date; (14) the last payment date on
which a payment was actually applied to the outstanding principal balance;
(15) the original principal amount of the Mortgage Loan; (16) the principal
balance of the 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 related Cut-off Date; (17) with respect to each Adjustable Rate
Mortgage Loan, the Adjustment Date; (18) with respect to each Adjustable Rate
Mortgage Loan, the Gross Margin; (19) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate Cap under the terms of the Mortgage
Note; (20) with respect to each Mortgage Loan, a code indicating the type of
Index; (21) the type of Mortgage Loan (i.e., Fixed or Adjustable Rate Mortgage
Loan, First or Second Lien Loan); (20) a code indicating the purpose of the
loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(21) a code indicating the documentation style (i.e., full,
12
alternative or reduced); (22) asset verification (Y/N); (23) the loan credit
classification (as described in the Underwriting Standards); (24) whether such
Mortgage Loan provides for a Prepayment Penalty and, if applicable, the
Prepayment Penalty term; (25) the Mortgage Interest Rate as of origination;
(26) the credit risk score (FICO score); (27) the date of origination; (28)
with respect to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
adjustment period; (29) with respect to each Adjustable Rate Mortgage Loan,
the Mortgage Interest Rate adjustment percentage; (30) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate Cap as of the first
Adjustment Date; (31) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap subsequent to the first Adjustment Date; (32) the Due Date
for the first Monthly Payment; (33) the original Monthly Payment due; (34) a
code indicating the Primary Mortgage Insurance Policy provider and percentage
of coverage, if applicable; (35) Appraised Value; (36) appraisal type; (37)
appraisal date; (40) a code indicating whether the Mortgage Loans is a
"buydown" loan; and (38) with respect to the related Mortgagor, the
debt-to-income ratio. 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; (4) the
weighted average maturity of the Mortgage Loans; (5) the applicable Cut-off
Date; and (6) the applicable Closing Date.
Mortgage Note: The note or other evidence of the
indebtedness of a Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to any Mortgage Loan that
is not a Co-op Loan, the underlying real property securing repayment of the
related Mortgage Note, consisting of a fee simple parcel of real estate or a
leasehold estate, the term of which is equal to or longer than the term of
such Mortgage Note. With respect to a Co-op Loan, the stock allocated to a
dwelling unit in the residential cooperative housing corporation that was
pledged to secure such Co-op Loan and the related Co-op Lease.
Mortgagor: The obligor on a Mortgage Note.
Mortgagor Personal Information: Any information, including,
but not limited to, all personal information about a Mortgagor that is
disclosed to the Seller or the Purchaser by or on behalf of the Mortgagor.
OCC: Office of the Comptroller of the Currency, its
successors and assigns.
Officers' Certificate: A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President, a Senior Vice
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.
Opinion of Counsel: A written opinion of counsel, who may be
an employee of the party on behalf of whom the opinion is being given,
reasonably acceptable to the Purchaser, provided that any Opinion of Counsel
relating to (a) qualification of the Mortgage Loans in a REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
13
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of
the Seller and any servicer of the Mortgage Loans, (ii) does not have any
material direct or indirect financial interest in the Seller or any servicer
or in an Affiliate of either and (iii) is not connected with the Seller or any
servicer as an officer, employee, director or person performing similar
functions.
OTS: Office of Thrift Supervision or any successor thereto.
Periodic Rate Cap: With respect to each Adjustable Rate
Mortgage Loan and any Adjustment Date therefor, a number of percentage points
per annum that is set forth in the related Mortgage Loan Schedule and in the
related Mortgage Note, which is the maximum amount by which the Mortgage
Interest Rate for such Mortgage Loan may increase (without regard to the
Maximum Mortgage Interest Rate) or decrease (without regard to the Minimum
Mortgage Interest Rate) on such Adjustment Date from the Mortgage Interest
Rate in effect immediately prior to such Adjustment Date, which may be a
different amount with respect to the first Adjustment Date.
Person: Any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Premium Percentage: With respect to any Mortgage Loan, a
percentage equal to the excess of the Purchase Price Percentage over 100%.
Prepayment Interest Shortfall: As to any Remittance Date and
Principal Prepayment in full, the difference between (i) one full month's
interest at the applicable Mortgage Interest Rate (after giving effect to any
applicable relief act reduction, debt service reduction and deficient
valuation), as reduced by the Servicing Fee Rate, on the outstanding principal
balance of the related Mortgage Loan immediately prior to such Principal
Prepayment and (ii) the amount of interest actually received with respect to
such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Penalty: With respect to each Mortgage Loan, the
amount of any premium or penalty required to be paid by the Mortgagor if the
Mortgagor prepays such Mortgage Loan as provided in the related Mortgage Note
or Mortgage.
Primary Mortgage Insurance Policy: Each policy of primary
mortgage insurance represented to be in effect pursuant to Section 3.02(bb),
or any replacement policy therefor obtained by the Seller pursuant to Section
4.08.
Prime Rate: The prime rate announced to be in effect from
time to time as published as the average rate in The Wall Street Journal
(Northeast Edition).
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan which is received in advance of its
scheduled Due Date, including any Prepayment Penalty 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.
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Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals
to this Agreement which may also be a form of trade execution notice.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., its
successors in interest and assigns.
Qualified Appraiser: With respect to each Mortgage Loan, an
appraiser, duly appointed by the Seller, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or disapproval
of the Mortgage Loan, and such appraiser and the appraisal made by such
appraiser both satisfy the requirements of ▇▇▇▇▇▇ Mae and Title XI of FIRREA
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
Qualified Insurer: An insurance company duly qualified as
such under the laws of the states in which the Mortgaged Properties are
located, duly authorized and licensed in such states to transact the
applicable insurance business and to write the insurance provided by the
insurance policy issued by it, approved as an insurer by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac.
Rating Agencies: Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇- ▇▇▇▇ Companies, Inc., ▇▇▇▇▇'▇ Investors Service, Inc.
or, in the event that some or all ownership of the Mortgage Loans is evidenced
by mortgage-backed securities, the nationally recognized rating agencies
issuing ratings with respect to such securities, if any.
Reconstitution: As defined in Section 10.01.
Reconstitution Agreement: As defined in Section 10.01.
Reconstitution Date: As defined in Section 10.01.
Refinanced Mortgage Loan: A Mortgage Loan which was made to
a Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy
an existing mortgage.
REMIC: A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
Remittance Date: The 18th day of each month, beginning with
the First Remittance Date, or if such day is not a Business Day, the first
Business Day thereafter.
REO Disposition: The final sale by the Seller of any REO
Property.
REO Disposition Proceeds: Amounts received by the Seller in
connection with an REO Disposition.
15
REO Property: A Mortgaged Property acquired by or on behalf
of the Purchaser in full or partial satisfaction of the related Mortgage as
described in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan for
which a breach of a representation or warranty set forth in this Agreement is
found, a price equal to (i) the then outstanding principal balance of the
Mortgage Loan to be repurchased, plus (ii) 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 (iii) the amount of any outstanding
advances owed to any servicer, plus (iv) all costs and expenses incurred by
the Purchaser or any servicer arising out of or based upon such breach,
including without limitation reasonable costs and expenses incurred in the
enforcement of the Seller's repurchase obligation hereunder, less (v) in the
event the Seller is servicing such Mortgage Loan as of the date of repurchase,
amounts received or advanced in respect of such repurchased Mortgage Loan
which are being held in the Custodial Account for distribution in connection
with such Mortgage Loan, plus (vi) in the event a Mortgage Loan is repurchased
during the period following the related Closing Date and prior to a related
Reconstitution Date (but in no event shall such period extend for more than
the first twelve months following the related Closing Date), an amount equal
to the Premium Percentage multiplied by the outstanding principal balance of
such Mortgage Loan as of the date of such repurchase.
RESPA: Real Estate Settlement Procedures Act, as amended
from time to time.
SAIF: The Savings Association Insurance Fund, or any
successor thereto.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
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-offered
or privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Security Agreement: With respect to a Co-op Loan, the
agreement or mortgage creating a security interest in favor of the originator
of the Co-op Loan in the related Co-op Stock.
Scheduled Principal Balance: As to each Mortgage Loan and
any date of determination, (i) the principal balance of such Mortgage Loan as
of the related Cut-off Date after giving effect to payments of principal due
on or before such date, whether or not received, minus (ii) all amounts
previously distributed to the Purchaser with respect to the Mortgage Loan
representing payments or recoveries of principal (or advances in lieu
thereof).
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Seller of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of a Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not
limited to, foreclosures, bankruptcies, condemnations, drug seizures,
elections, foreclosures by subordinate or superior lienholders, and
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other legal actions incidental to the servicing of the Mortgage Loans
(provided that such expenses are reasonable and that the Seller specifies the
Mortgage Loan(s) to which such expenses relate, and provided further that any
such enforcement, administrative or judicial proceeding does not arise out of
a breach of any representation, warranty or covenant of the Seller hereunder),
(c) the management and liquidation of any REO Property, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may
become a lien upon the Mortgaged Property, and Primary Mortgage Insurance
Policy premiums and fire and hazard insurance coverage, (e) any expenses
reasonably sustained by the Seller with respect to the liquidation of the
Mortgaged Property in accordance with the terms of this Agreement and (f)
compliance with the obligations under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the
amount of the annual fee the Purchaser shall pay to the Seller, which shall,
for each month, be equal to one-twelfth of the product of (i) the Servicing
Fee Rate and (ii) the Scheduled Principal Balance of such Mortgage Loan. Such
fee shall be payable monthly, computed on the basis of the same principal
amount and period respecting which any related interest payment on a Mortgage
Loan is computed, and for any month in which servicing of such Mortgage Loan
is transferred from the Seller, shall be pro rated (based upon the number of
days of the related month the Seller so acted as servicer relative to the
number of days in that month) for each part thereof. The obligation of the
Purchaser to pay the Servicing Fee is limited to, and payable solely from, the
interest portion (including recoveries with respect to interest from
Liquidation Proceeds and other proceeds, to the extent permitted by Section
4.05) of related Monthly Payments collected by the Seller, or as otherwise
provided under Section 4.05.
Servicing Fee Rate: The per annum rate at which the
Servicing Fee accrues, which rate with respect to each Mortgage Loan shall be
as set forth in the related Purchase Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the
documents pertaining thereto specified in Exhibit A-2 and copies of all
documents for such Mortgage Loan specified in Exhibit A-1.
Servicing Officer: Any officer of the Seller involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Seller to the
Purchaser upon request, as such list may from time to time be amended.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and its successors in interest.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Underwriting Standards: As to each Mortgage Loan, the
Seller's underwriting guidelines in effect as of the date of origination of
such Mortgage Loan.
Whole Loan Transfer: As defined in Section 11.01(a)(i).
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ARTICLE II
SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION
--------------------------------------------------------
OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
----------------------------------------------------------
DELIVERY OF MORTGAGE LOAN DOCUMENTS
-----------------------------------
Section 2.01. Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to
purchase on each Closing Date, pursuant to this Agreement and the related
Purchase Price and Terms Letter, the Mortgage Loans being sold by the Seller
and listed on the related Mortgage Loan Schedule, servicing rights retained,
having an aggregate Scheduled Principal Balance in an amount as set forth in
the related Purchase Price and Terms Letter, 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 such Closing Date.
The Seller shall deliver in an electronic format the Mortgage Loan Schedule
for the Mortgage Loans to be purchased on such Closing Date to the Purchaser
at least two (2) Business Days prior to such Closing Date.
Section 2.02. Purchase Price.
The Purchase Price for the Mortgage Loans in a Mortgage Loan
Package shall be equal to the sum of (a) the percentage of par as stated in
the related Purchase Price and Terms Letter (subject to adjustment as provided
therein), multiplied by the aggregate Scheduled Principal Balance of Mortgage
Loans as of the related Cut-off Date listed on the related Mortgage Loan
Schedule plus (b) accrued interest on the aggregate Scheduled Principal
Balance of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Loan Remittance Rate of such Mortgage Loans from and
including the related Cut-off Date to but not including such Closing Date (the
"Purchase Price"). If so provided in the related Purchase Price and Terms
Letter, portions of each Mortgage Loan Package shall be priced separately.
The Purchase Price as set forth in the preceding paragraph
for the Mortgage Loans in a Mortgage Loan Package shall be paid on the related
Closing Date by wire transfer of immediately available funds.
With respect to each Mortgage Loan, the Purchaser shall be
entitled to (1) the principal portion of all Monthly Payments due after the
related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date (provided, however, that the principal portion
of all Monthly Payments due on or before the related Cut-off Date and
collected by the Seller or any successor servicer after the related Cut-off
Date shall belong to the Seller), and (3) all payments of interest on the
Mortgage Loans at the related Mortgage Loan Remittance Rate (minus that
portion of any such payment which is allocable to the period prior to the
related Cut-off Date). The Scheduled 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 whether or not collected,
together with any unscheduled Principal Prepayments collected prior to the
related Cut-off Date; provided, however, that Monthly Payments for a Due Date
beyond the related Cut-off Date shall not be applied to the principal
18
balance as of the related Cut-off Date. Such Monthly Payments shall be the
property of the Purchaser. The Seller shall deposit any such Monthly Payments
into the Custodial Account.
Section 2.03. Servicing of Mortgage Loans.
On each Closing Date, the Mortgage Loans in the related
Mortgage Loan Package will be sold by the Seller to the Purchaser on a
servicing retained basis upon the execution and delivery of an Assignment and
Conveyance in the form attached hereto as Exhibit E (the "Assignment and
Conveyance").
Simultaneously with the execution and delivery of the
related Assignment and Conveyance, for each Mortgage Loan Package, the Seller
hereby agrees to service the Mortgage Loans listed on the Mortgage Loan
Schedule in accordance with Accepted Servicing Practices and this Agreement.
The rights of the Purchaser to receive payments with respect to the related
Mortgage Loans shall be as set forth in this Agreement.
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files.
As of each Closing Date, the Seller will have sold,
transferred, assigned, set over and conveyed to the Purchaser, without
recourse, and the Seller hereby acknowledges that the Purchaser will have, all
the right, title and interest of the Seller in and to the Mortgage Loans. In
accordance with Section 2.07, the Seller shall deliver at its own expense, the
Mortgage Files for the related Mortgage Loans to Purchaser or its designee.
The possession of each Servicing File by the Seller is for the sole purpose of
servicing the related Mortgage Loan. From each Closing Date, the ownership of
each related Mortgage Loan, including the Mortgage Note, the Mortgage, the
contents of the related Mortgage File and all rights, benefits, proceeds and
obligations arising therefrom or in connection therewith, has been vested in
the Purchaser. All rights arising out of the Mortgage Loans including, but not
limited to, all funds received on or in connection with the Mortgage Loans and
all records or documents with respect to the Mortgage Loans prepared by or
which come into the possession of the Seller shall be received and held by the
Seller in trust for the benefit of the Purchaser as the owner of the Mortgage
Loans. Any portion of the Mortgage Files retained by the Seller shall be
appropriately identified in the Seller's computer system to clearly reflect
the ownership of the Mortgage Loans by the Purchaser.
In addition, in connection with the assignment of any MERS
Mortgage Loan, the Seller agrees that it will cause, at its own expense, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Seller to the Purchaser in accordance with this Agreement by including (or
deleting, in the case of Mortgage Loans which are repurchased in accordance
with this Agreement) in such computer files the information required by the
MERS(R) System to identify the Purchaser of such Mortgage Loans. The Seller
further agrees that it will not alter the information referenced in this
paragraph with respect to any Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased in accordance with the
terms of this Agreement.
Section 2.05. Books and Records.
19
The sale of each Mortgage Loan will be reflected on the
Seller's balance sheet and other financial statements as a sale of assets by
the Seller and will be reflected on the Purchaser's balance sheet and other
financial statements as a purchase by the Purchaser. The Seller shall
maintain, a complete set of books and records for the Mortgage Loans sold by
it which shall be appropriately identified in the Seller's computer system to
clearly reflect the ownership of the Mortgage Loans by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, or its designee and shall deliver to the
Purchaser upon demand, evidence of compliance with all federal, state and
local laws, rules and regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇
Mac, as applicable, including but not limited to documentation as to the
method used in determining the applicability of the provisions of the Flood
Disaster Protection Act of 1973, as amended, to the Mortgaged Property,
documentation evidencing insurance coverage and eligibility of any condominium
project for approval by Seller and periodic inspection reports as required by
Section 4.13. To the extent that original documents are not required for
purposes of realization of Liquidation Proceeds or Insurance Proceeds,
documents maintained by the Seller may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Seller
complies with the requirements of the ▇▇▇▇▇▇ Mae Guides.
Section 2.06. Transfer of Mortgage Loans.
The Seller shall keep at its office books and records in
which, subject to such reasonable regulations as it may prescribe, the Seller
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms of Section 11.12.
For the purposes of this Agreement, the Seller shall be under no obligation to
deal with any person with respect to this Agreement or any Mortgage Loan
unless a properly executed Assignment, Assumption and Recognition Agreement in
the form of Exhibit D with respect to such Mortgage Loan has been delivered to
the Seller; provided, that, unless otherwise provided in the related Purchase
Price and Terms Letter, in no event shall there be more than four (4)
"Purchasers" with respect to any Mortgage Loan Package. Upon receipt of notice
of the transfer, the Seller shall ▇▇▇▇ its books and records to reflect the
ownership of the Mortgage Loans by such assignee, and, except as otherwise
provided herein, the previous Purchaser shall be released from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.
Section 2.07. Delivery of Mortgage Loan Documents.
The Seller shall, at least two (2) Business Days prior to
the related Closing Date (or such later date as the Purchaser may reasonably
request), deliver and release to the Purchaser, or its designee, the Mortgage
Loan Documents with respect to each Mortgage Loan pursuant to a bailee letter
agreement. If the Seller cannot deliver the original recorded Mortgage Loan
Documents on the related Closing Date, the Seller shall, promptly upon receipt
thereof and in any case not later than 180 days from the related Closing Date,
deliver such original recorded documents to the Purchaser or its designee
(unless the Seller is delayed in making such delivery by reason of the fact
that such documents shall not have been returned by the appropriate recording
office). If delivery is not completed within 180 days of the related Closing
Date solely because such documents shall not have been returned by the
appropriate recording office, the
20
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 document has been accepted for
recording and shall use its best efforts to deliver such document within
twelve (12) months of the related Closing Date.
To the extent received by it, the Seller shall forward to
the Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two (2) weeks after their execution;
provided, however, that the Seller shall provide the Purchaser, or its
designee, with a copy, certified by the Seller as a true copy, of any such
document submitted for recordation within two (2) weeks after its execution,
and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within two (2)
weeks of its return from the appropriate public recording office.
The Seller shall pay all initial recording fees, if any, for
the Assignments of Mortgage and any other fees or costs 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 or the Purchaser's
designee shall be responsible for recording the Assignments of Mortgage and
shall be reimbursed by the Seller for the costs associated therewith pursuant
to the preceding sentence.
Section 2.08. Quality Control Procedures.
The Seller shall have an internal quality control program
that verifies, on a regular basis, the existence and accuracy of the legal
documents, credit documents, property appraisals, and underwriting decisions.
The program must be capable of evaluating and monitoring the overall quality
of its loan production and servicing activities. The program is to ensure that
the Mortgage Loans are originated and serviced in accordance with prudent
mortgage banking practices and accounting principles; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
Section 2.09. Closing.
The closing for the purchase and sale of the Mortgage Loans
shall take place on the related Closing Date. 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 the
related Closing Date shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the related
Closing Date, the Seller shall deliver to the
Purchaser a magnetic diskette, or transmit by modem
or e-mail, a listing on a loan-level basis of the
information contained in the Mortgage Loan
Schedule;
(b) all of the representations and warranties of the
Seller under this Agreement shall be true and
correct as of the related Closing Date or, with
21
respect to representations and warranties made as
of a date other than the related Closing Date, as
of such date, and no event shall have occurred
which, with notice or the passage of time, would
constitute a default under this Agreement;
(c) the Purchaser shall have received, or the
Purchaser's attorneys shall have received in
escrow, all closing documents, 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 received, or the Seller's
attorneys shall have received in escrow, all
closing documents, in such forms as are agreed upon
and acceptable to the Seller, duly executed by all
signatories other than the Seller as required
pursuant to the terms hereof;
(e) the Seller shall have delivered and released to the
Purchaser (or its designee) on or prior to the
related Closing Date all documents required to be
delivered and released pursuant to the terms of
this Agreement; and
(f) all other terms and conditions of this Agreement,
the related Purchase Price and Terms Letter and the
related Assignment and Conveyance shall have been
materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay
to the Seller on the related Closing Date the Purchase Price pursuant to
Section 2.02 of this Agreement, by wire transfer of immediately available
funds to the account designated by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER;
---------------------------------------------
REPURCHASE; REVIEW OF MORTGAGE LOANS
------------------------------------
Section 3.01. Representations and Warranties of the Seller.
The Seller represents, warrants and covenants to the
Purchaser that as of each Closing Date or as of such date specifically
provided herein:
(a) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all licenses necessary to carry out its business as now
being conducted, and is licensed and qualified to transact business in and is
in good standing under the laws of each state in which any Mortgaged Property
is located or is otherwise exempt under applicable law from such licensing or
qualification or is otherwise not required under applicable law to effect such
licensing or qualification and no demand for such licensing or qualification
has been made upon the Seller by any such state, 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 each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement;
22
(b) The Seller has the full power and authority and legal
right to hold, transfer and convey each Mortgage Loan, to sell each Mortgage
Loan and to execute, deliver and perform, and to enter into and consummate all
transactions contemplated by this Agreement, the related Purchase Price and
Terms Letter and the related Assignment and Conveyance and to conduct its
business as presently conducted; the Seller has duly authorized the execution,
delivery and performance of this Agreement and any agreements contemplated
hereby, has duly executed and delivered this Agreement, the related Purchase
Price and Terms Letter and the related Assignment and Conveyance, and any
agreements contemplated hereby, and this Agreement, the related Purchase Price
and Terms Letter, the related Assignment and Conveyance and each Assignment of
Mortgage to the Purchaser and any agreements contemplated hereby, constitute
the legal, valid and binding obligations of the Seller, enforceable against it
in accordance with their respective terms, except as such enforceability may
be limited by bankruptcy, insolvency, moratorium, reorganization and similar
laws, and by equitable principles affecting the enforceability of the rights
of creditors; and all requisite corporate action has been taken by the Seller
to make this Agreement, the related Purchase Price and Terms Letter, the
related Assignment and Conveyance and all agreements contemplated hereby valid
and binding upon the Seller in accordance with their respective terms;
(c) None of the execution and delivery of this Agreement,
the related Purchase Price and Terms Letter, the related Assignment and
Conveyance, the sale of the Mortgage Loans to the Purchaser, the consummation
of the transactions contemplated hereby, or the fulfillment of or compliance
with the terms and conditions of this Agreement, the related Purchase Price
and Terms Letter or the related Assignment and Conveyance will conflict with
any of the terms, conditions or provisions of the Seller's charter or by-laws
or materially conflict with or result in a material breach of any of the
terms, conditions or provisions of any legal restriction or any material
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 material violation of any law, rule, regulation,
order, judgment or decree to which the Seller or its property is subject;
(d) There is no litigation, suit, proceeding or
investigation pending or, to the Seller's knowledge, threatened, or any order
or decree outstanding, which is reasonably likely to have a material adverse
effect on the sale of the Mortgage Loans, the execution, delivery, performance
or enforceability of this Agreement, the related Purchase Price and Terms
Letter or the related Assignment and Conveyance, or which is reasonably likely
to have a material adverse effect on the financial condition of the Seller;
(e) No consent, approval, authorization or order of 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, the related Purchase Price and Terms Letter and the related
Assignment and Conveyance, except for consents, approvals, authorizations and
orders which have been obtained;
(f) The consummation of the transactions contemplated by
this Agreement, the related Purchase Price and Terms Letter and the related
Assignment and Conveyance 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, the related
23
Purchase Price and Terms Letter and the related Assignment and Conveyance are
not subject to bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(g) The Seller has not used selection procedures that
identified the Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans in the Seller's portfolio at the Cut-off Date;
(h) The Seller will treat the sale of the Mortgage Loans to
the Purchaser as a sale for reporting and accounting purposes and, to the
extent appropriate, for federal income tax purposes;
(i) The Seller is an approved seller/servicer of residential
mortgage loans for ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and HUD, with such facilities,
procedures and personnel necessary for the sound servicing of such mortgage
loans. The Seller is duly qualified, licensed, registered and otherwise
authorized under all applicable federal, state and local laws and regulations,
meets the minimum capital requirements, if applicable, set forth by the OCC,
and is in good standing to sell mortgage loans to and service mortgage loans
for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and no event has occurred which would make the
Seller unable to comply with eligibility requirements or which would require
notification to either ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(j) The Seller does not believe, nor does it have any cause
or reason to believe, that it cannot perform each and every covenant contained
in this Agreement and the related Purchase Price and Terms Letter. 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 the Seller's creditors;
(k) Neither this Agreement nor any information, statement,
tape, diskette, form, report, or other document furnished or to be furnished
pursuant to this Agreement or any Reconstitution Agreement or in connection
with the transactions contemplated hereby (including any Securitization
Transfer or Whole Loan Transfer) contains or will contain 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) The Seller 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 Seller, for accounting and
tax purposes, as compensation for the servicing and administration of the
Mortgage Loans pursuant to this Agreement;
(m) The Seller has delivered to the Purchaser financial
statements as to its last two complete fiscal years for which financial
statements are available. 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 GAAP
consistently applied throughout the periods involved, except as set forth in
the notes thereto. 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 a material adverse effect on its
ability to perform its
24
obligations under this Agreement, the related Purchase Price and Terms Letter
or the related Assignment and Conveyance;
(n) 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; and
(o) The Seller is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the MERS Mortgage Loans for as long as such
Mortgage Loans are registered with MERS.
Section 3.02. Representations and Warranties as to
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser,
as to each Mortgage Loan, as of the related Closing Date as follows:
(a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes delivered to the Purchaser,
is complete, true and correct in all material respects as of the related
Cut-off Date;
(b) With respect to a first lien Mortgage Loan that is not a
Co-op Loan, the Mortgage creates a first lien or a first priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note. With respect to a first lien Mortgage Loan that is a Co-op
Loan, the Mortgage creates a first lien or a first priority ownership interest
in the stock ownership and leasehold rights associated with the cooperative
unit securing the related Mortgage Note;
(c) With respect to a Second Lien Mortgage Loan that is not
a Co-op Loan, the Mortgage creates a second lien or a second priority
ownership interest in an estate in fee simple in real property securing the
related Mortgage Note. With respect to a Second Lien Mortgage Loan that is a
Co-op Loan, the Mortgage creates a second lien or a second priority ownership
interest in the stock ownership and leasehold rights associated with the
cooperative unit securing the related Mortgage Note;
(d) All payments due on or prior to the related Cut-off Date
for such Mortgage Loan have been made as of the related Closing Date, the
Mortgage Loan is not delinquent thirty (30) days or more in payment and has
not been dishonored; there are no material defaults under the terms of the
Mortgage Loan; the Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds from a party other than the owner of
the Mortgaged Property subject to the Mortgage, directly or indirectly, for
the payment of any amount required by the Mortgage Loan; as to each Mortgage
Loan, there has been no more than one thirty (30) day delinquency during the
immediately preceding twelve-month period;
(e) All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;
25
(f) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed in
connection with such Mortgage Loan, and no Mortgagor has been released, in
whole or in part, from the terms thereof except in connection with an
assumption agreement and which assumption agreement is part of the Mortgage
File and the terms of which are reflected in the Mortgage Loan Schedule; the
substance of any such waiver, alteration or modification has been approved by
the issuer of any related Primary Mortgage Insurance Policy and title
insurance policy, to the extent required by the related policies;
(g) The Mortgage Note and the Mortgage are not subject to
any right of rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury, nor will the operation of any of the terms
of the Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render the Mortgage Note or Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(h) All buildings or other customarily insured improvements
upon the Mortgaged Property are insured by an insurer acceptable under the
▇▇▇▇▇▇ Mae Guides, against loss by fire, hazards of extended coverage and such
other hazards as are provided for in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac,
as well as all additional requirements set forth in Section 4.10 of this
Agreement. All such standard hazard policies are in full force and effect and
on the date of origination contained a standard mortgagee clause naming the
Seller and its successors in interest and assigns as loss payee and such
clause is still in effect and all premiums due thereon have been paid. If
required by the Flood Disaster Protection Act of 1973, as amended, the
Mortgage Loan is covered by a flood insurance policy meeting the requirements
of the current guidelines of the Federal Insurance Administration which policy
conforms to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements, as well as all additional
requirements set forth in Section 4.10 of this Agreement. Such policy was
issued by an insurer acceptable under ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac guidelines.
The Mortgage obligates the Mortgagor thereunder to maintain all such insurance
at the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from the
Mortgagor. 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 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 either 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;
26
(i) 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 or
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;
(j) The Mortgage has not been satisfied, canceled or
subordinated, in whole or in part, or rescinded, and the Mortgaged Property
has not been released from the lien of the Mortgage, in whole or in part nor
has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. 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;
(k) With respect to any first lien Mortgage Loan, the
related Mortgage is a valid, subsisting, enforceable and perfected first lien
on the Mortgaged Property and, with respect to any Second Lien Mortgage Loan,
the related Mortgage is a valid, subsisting, enforceable and perfected second
lien on the Mortgaged Property, including for Mortgage Loans that are not
Co-op Loans, all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems affixed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing securing the Mortgage Note's original
principal balance. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Such
lien is free and clear of all adverse claims, liens and encumbrances having
priority over the first or second lien, as applicable, of the Mortgage subject
only to (1) with respect to any Second Lien Mortgage Loan, the related First
Lien, (2) the lien of non-delinquent 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 which are acceptable to mortgage lending
institutions generally and either (A) which are referred to or otherwise
considered in the appraisal made for the originator of the Mortgage Loan, or
(B) which do not adversely affect the appraised value of the Mortgaged
Property as set forth in such appraisal, and (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 (1)
with respect to any first lien Mortgage Loan, a valid, subsisting, enforceable
and perfected first lien and first priority security interest and (2) with
respect to any Second Lien Mortgage Loan, a valid, subsisting, enforceable and
perfected second lien and second priority security interest, in each case, on
the property described therein, and the Seller has the full right to sell and
assign the same to the Purchaser;
(l) The Mortgage Note and the related Mortgage are original
and genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights
27
of creditors generally and the equitable remedy of specific performance and by
general equitable principles. All parties to the Mortgage Note and the related
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the related Mortgage. The Mortgage Note and
the related Mortgage have been duly and properly executed by such parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of Seller, the
Mortgagor or any other party involved in the origination of the Mortgage Loan.
The proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvements and as to disbursements of
any escrow funds therefor have been complied with. 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 related Mortgage;
(m) The Seller or its Affiliate (or with respect to MERS
Mortgage Loans, MERS on behalf of the Seller or its Affiliate) is the sole
owner of record and holder of the Mortgage Loan and the indebtedness evidenced
by the Mortgage Note, and upon recordation the Purchaser or its designee will
be the owner of record of the Mortgage and the indebtedness evidenced by the
Mortgage Note, and upon the sale of the Mortgage Loan to the Purchaser, the
Seller will retain the Servicing File in trust for the Purchaser only for the
purpose of servicing and supervising the servicing of the Mortgage Loan.
Immediately prior to the transfer and assignment to the Purchaser on the
related Closing Date, the Mortgage Loan, including the Mortgage Note and the
Mortgage, were not subject to an assignment or pledge, and the Seller had good
and marketable title to and was the sole owner thereof and had full right to
transfer and sell the Mortgage Loan to the Purchaser free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest and has
the full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign the Mortgage Loan pursuant
to this Agreement and following the sale of the Mortgage Loan, the 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, except for the purposes of servicing the Mortgage Loan as set
forth in this Agreement. 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) Each Mortgage Loan that is not a Co-op Loan is covered
by an ALTA lender's title insurance policy or other generally acceptable form
of policy or insurance acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a
title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located, insuring
(subject to the exceptions contained in (k)(1), (2), (3) and (4) above) the
Seller, its successors and assigns, as to the first or second priority lien,
as applicable, of the Mortgage in the original principal amount of the
Mortgage Loan. Where required by applicable state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. The Seller, its successors and assigns, are the sole
insureds of such lender's title insurance policy, such title insurance policy
has been duly and validly endorsed to the Purchaser or the assignment to the
Purchaser of the Seller's interest therein does not require
28
the consent of or notification to the insurer and such lender's title
insurance policy is in full force and effect and will be in full force and
effect upon the consummation of the transactions contemplated by this
Agreement and the related Purchase Price and Terms Letter. 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;
(o) There is no default, breach, violation or event of
acceleration existing under the Mortgage or the related Mortgage Note and no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event
permitting acceleration; and neither the Seller nor, to the Seller's
knowledge, any prior mortgagee has waived any default, breach, violation or
event permitting acceleration. With respect to each Second Lien Mortgage Loan,
(i) the First Lien 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) 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 Mortgage 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;
(p) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the
related Mortgage, which are not insured against by the title insurance policy
referenced in paragraph (n) above;
(q) All improvements subject to the Mortgage which were
considered in determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of the Mortgaged
Property (and wholly within the project with respect to a condominium unit)
and no improvements on adjoining properties encroach upon the Mortgaged
Property except those which are insured against by the title insurance policy
referred to in clause (n) above and all improvements on the property comply
with all applicable zoning and subdivision laws and ordinances;
(r) The Mortgage Loan was originated by or for the Seller.
The Mortgage Loan complies with the terms, conditions and requirements of the
Underwriting Standards in all material respects. The Mortgage Notes and
Mortgages (exclusive of any riders) are on forms generally acceptable to
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac. The Mortgage Loan bears interest at the Mortgage
Interest Rate set forth in the related Mortgage Loan Schedule, and Monthly
Payments under the Mortgage Note are due and payable on the first day of each
month. The Mortgage contains the usual and enforceable provisions of the
originator at the time of origination for the acceleration of the payment of
the unpaid principal amount of the Mortgage Loan if the related
29
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder;
(s) The Mortgaged Property at origination of the related
Mortgage Loan was and, to the Seller's knowledge, currently is free of
material damage and waste. At origination of the Mortgage Loan there was, and
there currently is, no proceeding pending for the total or partial
condemnation of the Mortgaged Property;
(t) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby. 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 the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption;
(u) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of
trust, except in connection with a trustee's sale or attempted sale after
default by the Mortgagor;
(v) The Mortgage File contains an appraisal (or other
valuation method as indicated on the related Mortgage Loan Schedule and
otherwise acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac for mortgage loans that have
"DU" underwriter or loan prospector approval, respectively) of the related
Mortgaged Property signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser. The appraisal is in a form acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac;
(w) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (A) in
compliance with any and all applicable licensing requirements of the laws of
the state wherein the Mortgaged Property is located, and (B) (1) organized
under the laws of such state, or (2) qualified to do business in such state,
or (3) federal savings and loan associations or national banks or a Federal
Home Loan Bank or savings bank having principal offices in such state, or (4)
not doing business in such state;
(x) The related Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (k) above and such collateral does not serve as security
for any other obligation;
(y) The Mortgage Loan does not contain provisions pursuant
to which Monthly Payments are paid or partially paid with funds deposited in
any separate account
30
established by the Seller 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;
(z) The Mortgagor was not in bankruptcy or insolvent as of
the date of origination of the Mortgage Loan and, to the Seller's knowledge,
is not in bankruptcy or insolvent as of the related Closing Date;
(aa) Each Fixed Rate Mortgage Loan has an original term to
maturity of not more than thirty (30) years, with interest calculated and
payable in arrears on the first day of each month in equal monthly
installments of principal and interest. Except with respect to Interest Only
Mortgage Loans, each Mortgage Note requires a monthly payment which is
sufficient to fully amortize the original principal balance of the Mortgage
Loan fully by the stated maturity date, over an original term of not more than
thirty (30) years and to pay interest at the related Mortgage Interest Rate;
provided, however, in the case of an Interest Only Mortgage Loan, after the
interest-only period, payments will be sufficient to amortize with respect to
the life of the Mortgage Loan. No Mortgage Loan contains terms or provisions
which would result in negative amortization. No Mortgage Loan is a Balloon
Mortgage Loan;
(bb) If a Mortgage Loan has an LTV greater than 80%, the
portion of the principal balance of such Mortgage Loan in excess of the
portion of the Appraisal Value of the Mortgaged Property required by ▇▇▇▇▇▇
Mae, is and will be insured as to payment defaults by a Primary Mortgage
Insurance Policy issued by a Qualified Insurer. All provisions of such Primary
Mortgage Insurance Policy have been and are being complied with, such policy
is in full force and effect, and all premiums due thereunder have been paid.
No action, inaction, or event has occurred and no state of facts exists that
has, or will result in the exclusion from, denial of, or defense to coverage.
Any Mortgage Loan subject to a Primary Mortgage Insurance Policy obligates the
Mortgagor thereunder to maintain the Primary Mortgage Insurance Policy and to
pay all premiums and charges in connection therewith. The mortgage interest
rate for the Mortgage Loan as set forth on the related Mortgage Loan Schedule
is net of any such insurance premium;
(cc) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(dd) As to Mortgage Loans that are not Co-op Loans and that
are not secured by an interest in a leasehold estate, the Mortgaged Property
is located in the state identified in the related Mortgage Loan Schedule and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a townhouse, or a two-to four-family dwelling,
or an individual condominium unit in a condominium project, or an individual
unit in a planned unit development or a de minimis planned unit development,
provided, however, that no residence or dwelling is a mobile home, log home,
geodesic dome or other unique property type. 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, except as permitted under the Underwriting Standards. In
the case of any Mortgaged Properties that are manufactured homes (a
"Manufactured Home Mortgage Loan"),
31
(i) such Manufactured Home Mortgage Loan conforms with the applicable ▇▇▇▇▇▇
▇▇▇ or ▇▇▇▇▇▇▇ Mac requirements regarding mortgage loans related to
manufactured dwellings, (ii) the related manufactured dwelling is permanently
affixed to the land, (iii) the related manufactured dwelling and the related
land are subject to a Mortgage properly filed in the appropriate public
recording office and naming Seller as mortgagee, (iv) the applicable laws of
the jurisdiction in which the related Mortgaged Property is located will deem
the manufactured dwelling located on such Mortgaged Property to be a part of
the real property on which such dwelling is located, and (v) such Manufactured
Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of the
Internal Revenue Code of 1986, as amended and (y) secured by manufactured
housing treated as a single family residence under Section 25(e)(10) of the
Code. 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;
(ee) Except with respect to Interest Only Mortgage Loans,
principal payments on the Mortgage Loan commenced no more than sixty (60) days
after the funds were disbursed in connection with such Mortgage Loan;
(ff) No Mortgage Loan imposes a Prepayment Penalty;
(gg) As of the date of origination of the Mortgage Loan, the
Mortgaged Property was lawfully occupied under applicable law, and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been made
or obtained from the appropriate authorities;
(hh) If the Mortgaged Property is a condominium unit or a
planned unit development (other than a de minimis planned unit development),
or stock in a cooperative housing corporation, such condominium, cooperative
or planned unit development project meets the Seller's eligibility
requirements as set forth in Underwriting Standards;
(ii) There is no pending action or proceeding directly
involving the Mortgaged Property in which compliance with any environmental
law, rule or regulation is an issue; there is no violation of any
environmental law, rule or regulation with respect to the Mortgage Property;
and, to the best of the Seller's knowledge, nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(jj) The related 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 or other similar state
statute;
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(kk) No action has been taken or failed to be taken by the
Seller on or prior to the related Closing Date which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any
Primary Mortgage Insurance Policy (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability
of the timely payment of the full amount of the loss otherwise due thereunder
to the insured) whether arising out of actions, representations, errors,
omissions, negligence, or fraud of the Seller, or for any other reason under
such coverage;
(ll) Each Mortgage Loan has been serviced in all material
respects in compliance with Accepted Servicing Practices;
(mm) With respect to each Co-op Loan, the related Mortgage
is a valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the cooperative for unpaid assessments representing the Mortgagor's
pro rata share of the cooperative's payments for its blanket mortgage, current
and future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security intended to be provided by the Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such cooperative shares;
(nn) With respect to each Co-op Loan, a search for filings
of financing statements has been made by a company competent to make the same,
which company is acceptable to ▇▇▇▇▇▇ ▇▇▇ and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Co-op Loan;
(oo) With respect to each Co-op Loan, the related
cooperative corporation that owns title to the related cooperative apartment
building is a "cooperative housing corporation" within the meaning of Section
216 of the Code, is held by a person as a tenant-stockholder (as defined in
Section 216 of the Code) and is in material compliance with applicable
federal, state and local laws which, if not complied with, could have a
material adverse effect on the Mortgaged Property;
(pp) With respect to each Co-op Loan, there is no
prohibition against pledging the shares of the cooperative corporation or
assigning the Co-op Lease;
(qq) 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, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance
company or similar institution which is supervised and examined by a federal
or state authority;
33
(rr) With respect to any ground lease to which a Mortgaged
Property may be subject: (i) a true, correct and complete copy of the ground
lease and all amendments, modifications and supplements thereto is included in
the Servicing File, and the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease; (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise
except as contained in the Mortgage File; (iii) all rent, additional rent and
other charges reserved therein have been fully paid to the extent payable as
of the related Closing Date; (iv) the Mortgagor enjoys the quiet and peaceful
possession of the leasehold estate, subject to any sublease; (v) the Mortgagor
is not in default under any of the terms of such ground lease, and there are
no circumstances which, with the passage of time or the giving of notice, or
both, would result in a default under such ground lease; (vi) the lessor under
such ground lease is not in default under any of the terms or provisions of
such ground lease on the part of the lessor to be observed or performed; (vii)
the lessor under such ground lease has satisfied any repair or construction
obligations due as of the related Closing Date pursuant to the terms of such
ground lease; (viii) the execution, delivery and performance of the Mortgage
do not require the consent (other than those consents which have been obtained
and are in full force and effect) under, and will not contravene any provision
of or cause a default under, such ground lease; (ix) the ground lease term
extends beyond the maturity date of the related Mortgage Loan; and (x) the
Purchaser has the right to cure defaults on the ground lease;
(ss) With respect to any broker fees collected and paid on
any of the Mortgage Loans, all broker fees have been properly assessed to the
borrower and no claims will arise as to broker fees that are double charged
and for which the borrower would be entitled to reimbursement;
(tt) Each Mortgage Loan constitutes a "qualified mortgage"
under Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
(uu) Except as provided in Section 2.07, the Mortgage Note,
the Mortgage, the Assignment of Mortgage and the other documents set forth in
Exhibit A-1 and required to be delivered on the related Closing Date have been
delivered to the Purchaser or its designee;
(vv) To the Seller's knowledge, all information supplied by,
on behalf of, or concerning the Mortgagor is true, accurate and complete and
does not contain any statement that is or will be inaccurate or misleading in
any material respect;
(ww) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by
applicable law with respect to the making of adjustable rate mortgage loans.
The Seller shall maintain such statement in the Servicing File;
(xx) No Mortgage Loan had a Loan-to-Value Ratio at the time
of origination of more than 100%. No Second Lien Mortgage Loan has an CLTV in
excess of 100%;
(yy) Either (a) no consent for the Second Lien Mortgage 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;
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(zz) With respect to any Second Lien Mortgage Loan, the
Seller has not received notice of: (1) any proceeding for the total or partial
condemnation of any Mortgaged Property, (2) any subsequent, intervening
mortgage, lien, attachment, lis pendens or other encumbrance affecting any
Mortgaged Property or (3) any default under any mortgage, lien or other
encumbrance senior to each Mortgage;
(aaa) No Second Lien Mortgage Loan is a "home equity line of
credit";
(bbb) As of the Closing Date, the Seller has not received a
notice of default of a First Lien which has not been cured;
(ccc) No First Lien provides for negative amortization;
(ddd) No Mortgage Loan is a High Cost Loan or Covered Loan,
as applicable, and no Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act;
(eee) None of the proceeds of the Mortgage Loan were used to
finance single-premium credit insurance policies;
(fff) The origination and servicing practices with respect
to each Mortgage Note and Mortgage have been legal and in accordance with
applicable laws and regulations, and in all material respects proper and
prudent in the mortgage origination and servicing business. With respect to
escrow deposits and payments that the Seller is entitled to collect, all such
payments are in the possession of, or under the control of, the Seller, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All escrow payments
have been collected and are being maintained in full compliance with
applicable state and federal law and the provisions of the related Mortgage
Note and Mortgage. As to any Mortgage Loan that is the subject of an escrow,
escrow of funds is not prohibited by applicable law and has been established
in an amount sufficient to pay for every escrowed item that remains unpaid and
has been assessed but is not yet due and payable. No escrow deposits or other
charges or payments due under the Mortgage Note have been capitalized under
any Mortgage or the related Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage Note. Any interest required to be paid
pursuant to state and local law has been properly paid and credited;
(ggg) No Mortgage Loan is a Convertible Mortgage Loan;
(hhh) With respect to each Adjustable Rate Mortgage Loan,
the Mortgage Loan Documents provide that after the related first Interest Rate
Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(iii) 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
35
expressly insured as having first lien priority by a title insurance policy,
an endorsement to the policy insuring the Mortgagee's consolidated interest or
by other title evidence acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac. The
consolidated principal amount does not exceed the original principal amount of
the Mortgage Loan;
(jjj) 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;
(kkk) No Mortgage Loan was made in connection with the
construction (other than a "construct-to-perm" loan) or rehabilitation of a
Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property (other than a tax deferred exchange under Section 1031 of the Code);
(lll) If applicable, with respect to each Mortgage, the
Seller has within the last twelve months (unless such Mortgage was originated
within such twelve month period) analyzed the required Escrow Payments for
each Mortgage and adjusted the amount of such payments so that, assuming all
required payments are timely made, any deficiency will be eliminated on or
before the first anniversary of such analysis, or any overage will be refunded
to the Mortgagor, in accordance with RESPA and any other applicable law;
(mmm) As to each consumer report (as defined in the Fair
Credit Reporting Act, Public Law 91-508) or other credit information furnished
by the Seller to the Purchaser, the Seller has full right and authority and is
not precluded by law or contract from furnishing such information to the
Purchaser and the Purchaser is not precluded from furnishing the same to any
subsequent or prospective purchaser of such Mortgage. The Seller has and shall
in its capacity as servicer, for each Mortgage Loan, 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 (three of the credit repositories), on a monthly
basis;
(nnn) If the Mortgage Loan is secured by a leasehold estate,
(1) the ground lease is assignable or transferable; (2) the ground lease will
not terminate earlier than five years after the maturity date of the Mortgage
Loan; (3) the ground lease does not provide for termination of the lease in
the event of lessee's default without the Mortgagee being entitled to receive
written notice of, and a reasonable opportunity to cure the default; (4) the
ground lease permits the mortgaging of the related Mortgaged Property; (5) the
ground lease protects the Mortgagee's interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments that
have become due have been paid; and (7) the use of leasehold estates for
residential properties is a widely accepted practice in the jurisdiction in
which the Mortgaged Property is located;
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(ooo) Each Mortgage Loan is covered by a paid in full, life
of loan, tax service contract issued by First American Real Estate Tax
Service, and such contract is transferable;
(ppp) 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;
(qqq) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser and any Mortgage Loan for which the related Mortgage has been
recorded in the name of MERS) have been recorded in the appropriate
jurisdictions wherein such recordation is necessary to perfect the lien
thereof as against creditors of the Seller, or is in the process of being
recorded;
(rrr) On or prior to the related Closing Date, the Mortgagor
has not filed a bankruptcy petition or has not become the subject of
involuntary bankruptcy proceedings or has not consented to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect
of the related Mortgaged Property;
(sss) No Mortgagor with respect to any Mortgage Loan
originated on or after August 1, 2004 is required under the Mortgage or
Mortgage Note to submit to arbitration to resolve any dispute arising out of
or relating in any way to the mortgage loan transaction;
(ttt) The Seller has complied with all applicable anti-money
laundering laws and regulations, including without limitation the USA Patriot
Act of 2001;
(uuu) The Mortgage Note, the Mortgage, the Assignment of
Mortgage and any other documents required to be delivered with respect to each
Mortgage Loan pursuant to Section 2.07 of this Agreement shall be delivered to
the Purchaser or its designee all in compliance with the specific requirements
of Section 2.07. With respect to each Mortgage Loan, the Seller will be in
possession of a complete Mortgage File in compliance with Exhibit A-1 hereto,
except for such documents as will be delivered to the Purchaser or its
designee;
(vvv) With respect to each Adjustable Rate Mortgage Loan,
the Minimum Mortgage Interest Rate is the related Gross Margin; and
(www) The Seller has no knowledge of any circumstances or
conditions with respect to the related Mortgage, Mortgaged Property,
Mortgagor, Mortgage File or the related Mortgagor's credit standing that can
reasonably be expected to cause private institutional investors that invest in
prime mortgage loans similar to the Mortgage Loan to regard the Mortgage Loan
as an unacceptable investment.
Section 3.03. Repurchase; Substitution.
It is understood and agreed that the representations and
warranties set forth in Sections 3.01 and 3.02 shall survive the sale of the
Mortgage Loans and delivery of the Mortgage File to the Purchaser, or its
designee, and shall inure to the benefit of the Purchaser, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment
37
of Mortgage or the examination, or lack of examination, of any Mortgage Loan
Document. Upon discovery by the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser in
any Mortgage Loan, the party discovering such breach shall give prompt written
notice to the others. The Seller shall have a period of ninety (90) days from
the earlier of its discovery or its receipt of notice of any such breach
within which to correct or cure such breach. Notwithstanding the above
sentences, with respect to any Mortgage Loan included in a Securitization
Transfer, within sixty (60) days after the earlier of either discovery by, or
notice to, the Seller of any breach of the representations or warranties set
forth in clause (ff), (tt), (ddd), (eee), (mmm) or (sss) of Section 3.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price. The Seller
hereby covenants and agrees that (except as provided in the previous sentence
with respect to certain breaches for which no substitution is permitted) if
any such breach is not corrected or cured within such ninety (90) day period,
the Seller shall, at the Purchaser's option, either repurchase such Mortgage
Loan at the Repurchase Price or substitute a mortgage loan for the Defective
Mortgage Loan as provided below. In the event that any such breach shall
involve any representation or warranty set forth in Section 3.01, and such
breach is not cured within ninety (90) of the earlier of either discovery by
or notice to the Seller of such breach, all affected Mortgage Loans shall, at
the option of the Purchaser, be repurchased by the Seller at the Repurchase
Price. Any such repurchase shall be accomplished by deposit in the Custodial
Account of the amount of the Repurchase Price.
If pursuant to the foregoing provisions the Seller
repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Seller shall
either (i) cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to the Seller and shall
cause such Mortgage to be removed from registration on the MERS(R) System in
accordance with MERS' rules and regulations or (ii) cause MERS to designate on
the MERS(R) System the Seller as the beneficial holder of such Mortgage Loan.
If the Seller is required to repurchase any Mortgage Loan
pursuant to this Section 3.03 as a result of a breach of any of the
representations and warranties set forth in Section 3.02, the Seller may, with
the Purchaser's prior consent, which consent shall not be unreasonably
withheld, within 180 days from the related Closing Date, remove such defective
Mortgage Loan from the terms of this Agreement and substitute another mortgage
loan for such defective Mortgage Loan, in lieu of repurchasing such defective
Mortgage Loan. Any substitute Mortgage Loan shall (a) have a principal balance
at the time of substitution not in excess of the principal balance of the
defective Mortgage Loan (the amount of any difference, plus one month's
interest thereon at the Mortgage Interest Rate borne by the defective Mortgage
Loan, being paid by the Seller and deemed to be a Principal Prepayment to be
deposited by the Seller in the Custodial Account), (b) have a Mortgage
Interest Rate not less than, and not more than one percentage point greater
than, the Mortgage Interest Rate of the removed Mortgage Loan, (c) have a
remaining term to stated maturity not later than, and not more than one year
less than, the remaining term to stated maturity of the removed Mortgage Loan,
(d) have a Loan-to-Value Ratio at origination no greater than that of the
removed Mortgage Loan, (e) with respect to any Second Lien Mortgage Loan, have
an Combined Loan-to-Value Ratio at origination no greater than that of the
removed Mortgage Loan, (f) have the same lien priority as that of the removed
Mortgage Loan and (g) be, in the reasonable determination of the Purchaser, in
material
38
compliance with the representations and warranties contained in this Agreement
and described in Section 3.02 as of the date of substitution.
The Seller shall amend the related Mortgage Loan Schedule to
reflect the withdrawal of the removed Mortgage Loan from this Agreement and
the substitution of such substitute Mortgage Loan therefor. Upon such
amendment, the Purchaser shall review the Mortgage File delivered to it
relating to the substitute Mortgage Loan. The Monthly Payment on a substitute
Mortgage Loan due on the Due Date in the month of substitution shall be the
property of the Seller and the Monthly Payment on the Defective Mortgage Loan
for which the substitution is made due on the such date shall be the property
of the Purchaser.
It is understood and agreed that the obligation of the
Seller set forth in this Section 3.03 to cure, repurchase or substitute for a
defective Mortgage Loan, and to indemnify Purchaser pursuant to Section 7.01,
constitutes the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties. If the Seller fails to repurchase or
substitute for a defective Mortgage Loan in accordance with this Section 3.03,
or fails to cure a defective Mortgage Loan to Purchaser's reasonable
satisfaction in accordance with this Section 3.03, or to indemnify Purchaser
pursuant to Section 7.01, that failure shall, upon compliance by the Purchaser
with the next to the last paragraph of this Section 3.03, be an Event of
Default and the Purchaser shall be entitled to pursue all available remedies.
No provision of this paragraph shall affect the rights of the Purchaser to
terminate this Agreement for cause, as set forth in Sections 8.01 and 9.01.
Any cause of action against the Seller relating to or
arising out of the breach of any representations and warranties made in
Sections 3.01 and 3.02 shall accrue as to any Mortgage Loan upon (i) the
earlier of discovery of such breach by the Seller or notice thereof by the
Purchaser to the Seller, (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.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may, in connection with any repurchase or substitution of a
Defective Mortgage Loan pursuant to this Section 3.03, require that the Seller
deliver, at the Seller's expense, an Opinion of Counsel to the effect that
such repurchase or substitution will not (i) result in the imposition of taxes
on "prohibited transactions" of such REMIC (as defined in Section 860F of the
Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail
to qualify as a REMIC at any time.
Section 3.04. Repurchase of Mortgage Loans With First
Payment Defaults.
If a Mortgagor is thirty (30) days or more delinquent with
respect to the first Monthly Payment due to the Purchaser on the related
Mortgage Loan immediately following the related Closing Date, the Seller, at
the Purchaser's option, shall promptly repurchase such Mortgage Loan from the
Purchaser within thirty (30) calendar days' of receipt of written notice from
the Purchaser. Any repurchase pursuant to this Section 3.04 shall be effected
in accordance
39
with the procedures set forth in Section 3.03 hereof, however, any such
repurchase shall be made at the Repurchase Price.
Section 3.05. Purchase Price Protection.
With respect to any Mortgage Loan that prepays in full
during the first sixty (60) days following the related Closing Date, the
Seller shall reimburse the Purchaser the amount (if any) by which the Purchase
Price paid by the Purchaser to the Seller exceeded 100% of the outstanding
scheduled principal balance of the Mortgage Loan as of the related Cut-off
Date, within thirty (30) days of such payoff. Upon any assignment of a
Mortgage Loan and/or this Agreement, the Purchaser may at its option retain
its rights under this Section 3.05 notwithstanding such assignment.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
--------------------------------------------------
Section 4.01. The Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service
and administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices, and shall have full power and authority, acting
alone or through subservicers or agents, to do or cause to be done any and all
things in connection with such servicing and administration which the Seller
may deem necessary or desirable and consistent with the terms of this
Agreement and with Accepted Servicing Practices. The Seller shall service and
administer the Mortgage Loans through the exercise of the same care that it
customarily employs for its own account. The Seller may perform its servicing
responsibilities through agents or independent contractors, but shall not
thereby be released from any of its responsibilities hereunder.
Notwithstanding anything to the contrary, the Seller may delegate any of its
duties under this Agreement to one or more of its Affiliates without regard to
any of the requirements of this Section; provided, however, that the Seller
shall not be released from any of its responsibilities hereunder by virtue of
such delegation.
Except as set forth in this Agreement, the Seller shall
service the Mortgage Loans in compliance with the servicing provisions of the
▇▇▇▇▇▇ ▇▇▇ Guides (special servicing option), which include, but are not
limited to, provisions regarding the liquidation of Mortgage Loans, the
collection of Mortgage Loan payments, the payment of taxes, insurance and
other charges, the maintenance of hazard insurance with a Qualified Insurer,
the maintenance of mortgage impairment insurance, the maintenance of fidelity
bond and errors and omissions insurance, inspections, the restoration of
Mortgaged Property, the maintenance of Primary Mortgage Insurance Policies,
insurance claims, the title, management of REO Property, permitted withdrawals
with respect to REO Property, liquidation reports, and reports of foreclosures
and abandonments of Mortgaged Property, the transfer of Mortgaged Property,
the release of Mortgage Files, annual statements, and examination of records
and facilities. In the event of any conflict, inconsistency or discrepancy
between any of the servicing provisions of this Agreement and any of the
servicing provisions of the ▇▇▇▇▇▇ Mae Guides, the provisions of this
Agreement shall control and be binding upon the Purchaser and the Seller.
40
Consistent with the terms of this Agreement, the Seller may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of any such term or in any manner grant indulgence to any
Mortgagor if in the Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser, provided, however, that unless the Mortgagor is in default with
respect to the Mortgage Loan, or such default is, in the judgment of the
Seller, imminent, and the Seller has obtained the prior written consent of the
Purchaser, the Seller shall not permit any modification with respect to any
Mortgage Loan that would which change the Mortgage Interest Rate, forgive the
payment of any principal or interest, reduce or increase the outstanding
principal balance (except for actual payments of principal), make any future
advances or extend the final maturity date, as the case may be, with respect
to such Mortgage Loan. In the event of any such modification that permits the
deferral of interest or principal payments on any Mortgage Loan, the Seller
shall, on the Business Day immediately preceding the Remittance Date in any
month in which any such principal or interest payment has been deferred,
deposit in the Custodial Account from its own funds, in accordance with
Section 4.04, the difference between (a) the otherwise scheduled Monthly
Payment and (b) the amount paid by the Mortgagor. The Seller shall be entitled
to reimbursement for such advances to the same extent as for all other
advances pursuant to Section 4.05. Without limiting the generality of the
foregoing, the Seller shall continue, and is hereby authorized and empowered
by the Purchaser when the Seller believes it appropriate and reasonable in its
best judgment, to prepare, execute and deliver, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties and to institute foreclosure proceedings
or obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on
behalf of the Purchaser pursuant to the provisions of Section 4.13.
Notwithstanding anything herein to the contrary, the Seller may not enter into
a forbearance agreement or similar arrangement with respect to any Mortgage
Loan which runs more than 180 days after the first delinquent Due Date without
the prior consent of the Purchaser. Any such agreement shall be approved by
any applicable holder of a Primary Mortgage Insurance Policy, if required.
The Seller is authorized and empowered by the Purchaser, in
its own name, when the Seller believes it appropriate in its reasonable
judgment to register any Mortgage Loan on the MERS(R) System, or cause the
removal from the registration of any Mortgage Loan on the MERS(R) System, to
execute and deliver, on behalf of the Purchaser, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Purchaser and its successors and assigns.
With respect to requests by the Seller to modify the terms
of any Mortgage Loan or to enter into any forbearance agreement, the Purchaser
shall be deemed to have given consent in connection with a particular matter
if the Purchaser does not affirmatively grant or deny consent within
twenty-one (21) calendar days from the date the Purchaser receives a written
request for consent for such matter from the Seller.
The Seller shall accurately and fully report its borrower
credit files related to the Mortgage Loans to Equifax, Transunion and Experian
in a timely manner.
41
Section 4.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each
Mortgage Loan ceases to be serviced subject to this Agreement, the Seller will
proceed diligently to collect all payments due under each Mortgage Loan when
the same shall become due and payable and shall, to the extent such procedures
shall be consistent with this Agreement, Accepted Servicing Practices, and the
terms and provisions of related Primary Mortgage Insurance Policy, follow such
collection procedures as it follows with respect to mortgage loans comparable
to the Mortgage Loans and held for its own account. Further, the Seller will
take special care in ascertaining and estimating annual escrow payments, and
all other charges that, as provided in the Mortgage, will become due and
payable, so that the installments payable by the Mortgagors will be sufficient
to pay such charges as and when they become due and payable.
Section 4.03. Realization Upon Defaulted Mortgage Loans.
The Seller shall use commercially reasonable efforts,
consistent with the procedures that the Seller would use in servicing loans
for its own account, Accepted Servicing Practices, any Primary Mortgage
Insurance and the best interest of Purchaser, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 4.01. Foreclosure or comparable proceedings shall be initiated
pursuant to ▇▇▇▇▇▇ ▇▇▇ guidelines and applicable state law with respect to
Mortgaged Properties for which no satisfactory arrangements can be made for
collection of delinquent payments. The Seller shall use its best efforts to
realize upon defaulted Mortgage Loans in such manner as will maximize the
receipt of principal and interest by the Purchaser, taking into account, among
other things, the timing of foreclosure proceedings. The foregoing is subject
to the provisions that, in any case in which the Mortgaged Property shall have
suffered damage, the Seller shall not be required to expend its own funds
toward the restoration of such property unless it shall determine in its
discretion (i) that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan to the Purchaser after reimbursement to itself
for such expenses, and (ii) that such expenses will be recoverable by the
Seller through Insurance Proceeds or Liquidation Proceeds from the related
Mortgaged Property, as contemplated in Section 4.05. The Seller shall notify
the Purchaser in writing (which may be by electronic mail) of the commencement
of foreclosure proceedings. The Seller shall be responsible for all costs and
expenses incurred by it in any such proceedings or functions; provided,
however, that it shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 4.05. Notwithstanding anything to the
contrary contained herein, in connection with a foreclosure or acceptance of a
deed in lieu of foreclosure, in the event the Seller has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Purchaser otherwise requests an environmental
inspection or review of such Mortgaged Property, such an inspection or review
is to be conducted by a qualified inspector at the Purchaser's expense. Upon
completion of the inspection, the Seller shall promptly provide the Purchaser
with a written report of the environmental inspection. After reviewing the
environmental inspection report, the Purchaser shall determine how the Seller
shall proceed with respect to the Mortgaged Property.
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In the event that a Mortgage Loan becomes part of a REMIC,
and becomes REO Property, such property shall be disposed of by the Seller,
with the consent of the Purchaser as required pursuant to this Agreement,
within three (3) years after becoming an REO Property, unless the Seller
provides to the trustee under such REMIC an opinion of counsel to the effect
that the holding of such REO Property subsequent to three years after its
becoming REO Property, will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code, or cause the
transaction to fail to qualify as a REMIC at any time that certificates are
outstanding. The Seller shall manage, conserve, protect and operate each such
REO Property for the certificateholders solely for the purpose of its prompt
disposition and sale in a manner which does not cause such property to fail to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code, or any "net income from foreclosure property" which is subject to
taxation under the REMIC provisions of the Code. Pursuant to its efforts to
sell such property, the Seller shall either itself or through an agent
selected by the Seller, protect and conserve such property in the same manner
and to such an extent as is customary in the locality where such property is
located. Additionally, the Seller shall provide the Purchaser or any master
servicer with information sufficient to perform the tax withholding and
reporting related to Sections 1445 and 6050J of the Code.
Section 4.04. Establishment of Custodial Accounts; Deposits
in Custodial Accounts.
The Seller shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan separate and apart from any of its own
funds and general assets and shall establish and maintain one or more
Custodial Accounts with a commercial bank, a savings bank or a savings and
loan association (which may be a depository Affiliate of the Seller) which
meets the guidelines set forth by ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac as an eligible
depository institution for custodial accounts. Each Custodial Account shall be
an Eligible Account. Funds deposited in a Custodial Account may be drawn on in
accordance with Section 4.05. The creation of any Custodial Account shall be
evidenced by a letter agreement in the form shown in Exhibit B hereto. The
original of such letter agreement shall be furnished to the Purchaser on the
initial Closing Date, and upon the request of any subsequent purchaser.
The Seller shall deposit in the Custodial Account on a daily
basis, within one (1) Business Day of receipt thereof, and retain therein the
following payments and collections received or made by it subsequent to the
Cut-off Date, or received by it prior to the Cut-off Date but allocable to a
period subsequent thereto, other than in respect of principal and interest on
the Mortgage Loans due on or before the Cut-off Date:
(i) all payments on account of principal, including
Principal Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the
Mortgage Loans adjusted to the Mortgage Loan Remittance
Rate;
(iii) all Liquidation Proceeds;
43
(iv) any amounts required to be deposited by the
Seller in connection with any REO Property pursuant to
Section 4.13;
(v) all Insurance Proceeds including amounts required
to be deposited pursuant to Sections 4.08, 4.10 and 4.11,
other than proceeds to be held in the Escrow Account and
applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with
Accepted Servicing Practices, the loan documents or
applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged
Property which are not released to the Mortgagor in
accordance with the Seller's normal servicing procedures,
the loan documents or applicable law;
(vii) any Monthly Advances;
(viii) Compensating Interest, if any, for the month of
distribution. Such deposit shall be made from the Seller's
own funds, without reimbursement therefor;
(ix) all proceeds of any Mortgage Loan repurchased in
accordance with Sections 3.03;
(x) any amounts required to be deposited by the Seller
pursuant to Section 4.11 in connection with the deductible
clause in any blanket hazard insurance policy, such deposit
shall be made from the Seller's own funds, without
reimbursement therefor; and
(xi) any amounts required to be deposited in the
Custodial Account pursuant to Section 4.01 or Section 6.02.
The foregoing requirements for deposit in the Custodial
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late
payment charges, assumption fees and other ancillary fees, to the extent
permitted by Section 6.01, need not be deposited by the Seller in the
Custodial Account.
The Seller may invest the funds in the Custodial Account in
Eligible Investments designated in the name of the Seller for the benefit of
the Seller, which shall mature not later than the Business Day next preceding
the Remittance Date next following the date of such investment (except that
(A) any investment in the Eligible Institution with which the Custodial
Account is maintained may mature on such Remittance Date and (B) any other
investment may mature on such Remittance Date if the Seller shall advance
funds on such Remittance Date, pending receipt thereof to the extent necessary
to make distributions to the Purchaser) and shall not be sold or disposed of
prior to maturity. Notwithstanding anything to the contrary herein and above,
all income and gain realized from any such investment shall be for the benefit
of the Seller and shall be subject to withdrawal by the Seller from the
Custodial Account pursuant to Section 4.05(iv). The amount of any losses
incurred in respect of any such investments shall be deposited in the
Custodial Account by the Seller out of its own funds immediately as realized.
44
Section 4.05. Permitted Withdrawals From the Custodial
Account.
The Seller may, from time to time, withdraw from the
Custodial Account for the following purposes:
(i) to make payments to the Purchaser in the amounts
and in the manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the
Seller's right to reimburse itself pursuant to this
subclause (ii) being limited to amounts received on the
related Mortgage Loan which represent late collections (net
of the related Servicing Fee) of principal and/or interest
respecting which any such advance was made, it being
understood that, in the case of such reimbursement, the
Seller's right thereto shall be prior to the rights of the
Purchaser, except that, where the Seller is required to
repurchase a Mortgage Loan, pursuant to Section 3.03, the
Seller's right to such reimbursement shall be subsequent to
the payment to the Purchaser of the Repurchase Price
pursuant to such Section and all other amounts required to
be paid to the Purchaser with respect to such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing
Advances and any unpaid Servicing Fees, the Seller's right
to reimburse itself pursuant to this subclause (iii) with
respect to any Mortgage Loan being limited to related
proceeds from Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and REO Disposition Proceeds;
(iv) to pay to itself as part of its servicing
compensation: (a) any interest earned on funds or any
investment earnings in the Custodial Account net of any
losses on such investments (all such amounts to be withdrawn
monthly not later than each Remittance Date), and (b) to the
extent not otherwise retained, the Servicing Fee from that
portion of any payment or recovery as to interest with
respect to a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage
Loan that has been repurchased pursuant to Section 3.03 all
amounts received thereon and not distributed as of the date
on which the related Repurchase Price is determined;
(vi) to reimburse itself for unreimbursed Monthly
Advances and Servicing Advances to the extent not fully
reimbursed pursuant to Section 4.05(ii) or (iii) above;
(vii) to transfer funds to another Eligible Account in
accordance with Section 4.09 hereof;
(viii) to remove funds inadvertently placed in the
Custodial Account by the Seller or for which amounts
previously deposited are returned unpaid by the related
Mortgagor's banking institution; and
45
(ix) to clear and terminate the Custodial Account upon
the termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in
Accounts.
The Seller shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts. Each Escrow Account shall
be an Eligible Account. Funds deposited in the Escrow Account may be drawn on
by the Seller in accordance with Section 4.07. The creation of any Escrow
Account shall be evidenced by a letter agreement in the form shown in Exhibit
C. The original of such letter agreement shall be furnished to the Purchaser
on the initial Closing Date, and upon request to any subsequent purchaser.
The Seller shall deposit in the Escrow Account or Accounts
on a daily basis, within two (2) Business Days of receipt thereof, and retain
therein:
(i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment
of any such items as required under the terms of this
Agreement;
(ii) all Insurance Proceeds which are to be applied to
the restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose
Escrow Payments are insufficient to cover escrow
disbursements.
The Seller shall make withdrawals from the Escrow Account
only to effect such payments as are required under this Agreement, and for
such other purposes as shall be as set forth or in accordance with Section
4.07. The Seller shall be entitled to retain any interest paid on funds
deposited in an Escrow Account by the depository institution other than
interest on escrowed funds required by law to be paid to the Mortgagor and, to
the extent required by law, the Seller shall pay interest on escrowed funds to
the Mortgagor notwithstanding that such Escrow Account is non-interest bearing
or that interest paid thereon is insufficient for such purposes.
Section 4.07. Permitted Withdrawals From the Escrow Account.
Withdrawals from the Escrow Account may be made by the
Seller only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, Primary Mortgage Insurance Policy
premiums, if applicable, fire and hazard insurance premiums,
condominium assessments and comparable items for the related
Mortgage;
(ii) to reimburse the Seller for any Servicing Advance
made by the Seller with respect to a related Mortgage Loan
but only from amounts received on
46
the related Mortgage Loan which represent late payments or
collections of Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be
determined to be overages;
(iv) for transfer to the Custodial Account in
accordance with the terms of this Agreement;
(v) for application to restoration or repair of the
Mortgaged Property;
(vi) to pay to the Seller, or to the Mortgagor to the
extent required by law, any interest paid on the funds
deposited in the Escrow Account;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement;
(viii) to pay to the Mortgagors or other parties
Insurance Proceeds deposited in accordance with Section
4.06;
(ix) to remove funds inadvertently placed in the
Escrow Account by the Seller or for which amounts previously
deposited are returned unpaid by the related Mortgagor's
banking institution; and
(x) to clear and terminate the Escrow Account upon the
termination of this Agreement.
Section 4.08. Payment of Taxes, Insurance and Charges;
Maintenance of Primary Mortgage Insurance; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments, water rates and other charges which are or may become a lien upon
the Mortgaged Property and the status of primary mortgage insurance premiums
(if any) and fire and hazard insurance coverage and shall obtain, from time to
time, all bills for the payment of such charges, including renewal premiums
and shall effect payment thereof prior to the applicable penalty or
termination date and at a time appropriate for securing maximum discounts
allowable, employing for such purpose deposits of the Mortgagor in the Escrow
Account which shall have been estimated and accumulated by the Seller in
amounts sufficient for such purposes, as allowed under the terms of the
Mortgage or applicable law. To the extent that the Mortgage does not provide
for Escrow Payments, the Seller shall determine that any such payments are
made by the Mortgagor at the time they first become due. The Seller assumes
full responsibility for the timely payment of all ground rents, taxes,
assessments, water rates and other charges and shall effect timely payments of
all such bills irrespective of the Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments and shall make advances
from its own funds to effect such payments subject to its ability to recover
such Servicing Advances pursuant to Sections 4.05(ii), (iii) and (vi).
Notwithstanding the foregoing, if the Seller reasonably determines that any
such Servicing Advance would not be recoverable from amounts collected on the
related Mortgage Loan, the Seller shall have no
47
obligation to make such Servicing Advance. Any such determination shall be
evidenced by an Officer's Certificate delivered to the Purchaser indicating
the reasons therefor.
The Seller will maintain in full force and effect Primary
Mortgage Insurance Policies issued by a Qualified Insurer with respect to each
first lien Mortgage Loan for which such coverage is herein required. Such
coverage will be maintained until the Loan-to-Value ratio of the related
Mortgage Loan is reduced to the amount for which ▇▇▇▇▇▇ ▇▇▇ no longer requires
such insurance to be maintained. The Seller will not cancel or refuse to renew
any Primary Mortgage Insurance Policy in effect on the related Closing Date
that is required to be kept in force under this Agreement unless a replacement
Primary Mortgage Insurance Policy for such canceled or non-renewed policy is
obtained from and maintained with a Qualified Insurer. The Seller shall not
take any action which would result in non-coverage under any applicable
Primary Mortgage Insurance Policy of any loss which, but for the actions of
the Seller would have been covered thereunder. In connection with any
assumption or substitution agreement entered into or to be entered into
pursuant to Section 6.01, the Seller shall promptly notify the insurer under
the related Primary Mortgage Insurance Policy, if any, of such assumption or
substitution of liability in accordance with the terms of such policy and
shall take all actions which may be required by such insurer as a condition to
the continuation of coverage under the Primary Mortgage Insurance Policy. If
such Primary Mortgage Insurance Policy is terminated as a result of such
assumption or substitution of liability, the Seller shall obtain a replacement
Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Seller
agrees to prepare and present, on behalf of itself and the Purchaser, claims
to the insurer under any Primary Mortgage Insurance Policy in a timely fashion
in accordance with the terms of such Primary Mortgage Insurance Policy and, in
this regard, to take such action as shall be necessary to permit recovery
under any Primary Mortgage Insurance Policy respecting a defaulted first lien
Mortgage Loan. Pursuant to Section 4.04, any amounts collected by the Seller
under any Primary Mortgage Insurance Policy shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 4.05.
Section 4.09. Transfer of Accounts.
The Seller may transfer a Custodial Account or an Escrow
Account to a different Eligible Account from time to time. Such transfer shall
be made only upon providing notice of the transfer to the Purchaser.
Section 4.10. Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage
Loan fire and hazard insurance with extended coverage as is acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and customary in the area where the Mortgaged
Property is located in an amount which is equal to the lesser of (i) the
maximum insurable value of the improvements securing such Mortgage Loan and
(ii) the greater of (a) the outstanding principal balance of the Mortgage
Loan, and (b) an amount such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the mortgagee from becoming a co-insurer. If
required by the Flood Disaster Protection Act of 1973, as amended, each
Mortgage Loan shall be covered by a flood insurance policy meeting the
requirements of
48
the current guidelines of the Federal Insurance Administration in effect with
an insurance carrier acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, in an amount
representing coverage not less than the least of (i) the outstanding principal
balance of the Mortgage Loan, (ii) the maximum insurable value of the
improvements securing such Mortgage Loan and (iii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973,
as amended. If at any time during the term of the Mortgage Loan, the Seller
determines in accordance with applicable law and pursuant to the ▇▇▇▇▇▇ Mae
Guides that a Mortgaged Property is located in a special flood hazard area and
is not covered by flood insurance or is covered in an amount less than the
amount required by the Flood Disaster Protection Act of 1973, as amended, the
Seller shall notify the related Mortgagor that the Mortgagor must obtain such
flood insurance coverage, and if the related Mortgagor fails to obtain the
required flood insurance coverage within forty-five (45) days after such
notification, the Seller shall immediately force place the required flood
insurance on the Mortgagor's behalf. To the extent the payment of the related
premiums will not, in the Seller's reasonable determination, constitute
non-recoverable Servicing Advances, the Seller shall also maintain on each REO
Property, fire and hazard insurance with extended coverage in an amount which
is at least equal to the maximum insurable value of the improvements which are
a part of such property, and, to the extent required and available under the
Flood Disaster Protection Act of 1973, as amended, flood insurance in an
amount as provided above. Any amounts collected by the Seller under any such
policies other than amounts to be deposited in the Escrow Account and applied
to the restoration or repair of the Mortgaged Property or REO Property, or
released to the Mortgagor in accordance with Accepted Servicing Practices,
shall be deposited in the Custodial Account, subject to withdrawal pursuant to
Section 4.05. It is understood and agreed that no other additional insurance
need be required by the Seller or maintained on property acquired in respect
of the Mortgage Loan, other than pursuant to this Agreement, the ▇▇▇▇▇▇ ▇▇▇
Guides or such applicable state or federal laws and regulations as shall at
any time be in force and as shall require such additional insurance. All such
policies shall be endorsed with standard mortgagee clauses with loss payable
to the Seller and its successors and/or assigns and shall provide for at least
thirty (30) days prior written notice of any cancellation, reduction in the
amount or material change in coverage to the Seller. The Seller shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent, provided, however, that the Seller shall not
accept any such insurance policies from insurance companies unless such
companies are Qualified Insurers.
Section 4.11. Maintenance of Mortgage Impairment Insurance
Policy.
In the event that the Seller (or an Affiliate of the Seller)
shall obtain and maintain a blanket policy issued by an issuer acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac insuring against hazard losses on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 4.10 and otherwise complies
with all other requirements of Section 4.10, it shall conclusively be deemed
to have satisfied its obligations as set forth in Section 4.10, it being
understood and agreed that such policy may contain a deductible clause, in
which case the Seller shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy
complying with Section 4.10, and there shall have been a loss which would have
been covered by such policy, deposit in the Custodial Account the amount not
otherwise payable under the blanket policy because of such deductible clause.
In connection with its activities as servicer of the Mortgage Loans, the
Seller agrees to prepare and present, on behalf of the Purchaser, claims under
any
49
such blanket policy in a timely fashion in accordance with the terms of such
policy. Upon request of the Purchaser, the Seller shall cause to be delivered
to the Purchaser a certified true copy of such policy and shall use
commercially reasonable efforts to obtain a statement from the insurer
thereunder that such policy shall in no event be terminated or materially
modified without thirty (30) days' prior written notice to the Purchaser.
Section 4.12. Maintenance of Fidelity Bond and Errors and
Omissions Insurance.
The Seller shall maintain, at its own expense, a blanket
Fidelity Bond and an errors and omissions insurance policy, with broad
coverage with responsible companies on all officers, employees or other
persons acting in any capacity with regard to the Mortgage Loans to handle
funds, money, documents and papers relating to the Mortgage Loans. The
Fidelity Bond shall be in the form of a mortgage banker's blanket bond and
shall protect and insure the Seller against losses, including forgery, theft,
embezzlement and fraud of such persons. The errors and omissions insurance
shall protect and insure the Seller against losses arising out of errors and
omissions and negligent acts of such persons. Such errors and omissions
insurance shall also protect and insure the Seller against losses in
connection with the failure to maintain any insurance policies required
pursuant to this Agreement and the release or satisfaction of a Mortgage Loan
without having obtained payment in full of the indebtedness secured thereby.
No provision of this Section 4.12 requiring the Fidelity Bond or errors and
omissions insurance shall diminish or relieve the Seller from its duties and
obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be at least equal to the corresponding
amounts required by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Guides or by ▇▇▇▇▇▇▇ Mac in
the ▇▇▇▇▇▇▇ Mac Guides. The Seller shall deliver to the Purchaser a
certificate from the surety and the insurer as to the existence of the
Fidelity Bond and errors and omissions insurance policy and shall obtain a
statement from the surety and the insurer that such Fidelity Bond or insurance
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser. Upon request by the
Purchaser, the Seller shall provide the Purchaser with an insurance
certificate certifying coverage under this Section 4.12, and will provide an
update to such certificate upon request, or upon renewal or material
modification of coverage.
Section 4.13. Title, Management and Disposition of REO
Property.
In the event that title to the Mortgaged Property is
acquired in foreclosure, by deed in lieu of foreclosure or other method
resulting in full or partial satisfaction of the related Mortgage, the deed or
certificate of sale shall be taken in the name of the Purchaser or its
designee, or in the event the Purchaser or its designee is not authorized or
permitted to hold title to real property in the state where the REO Property
is located, or would be adversely affected under the "doing business" or tax
laws of such state by so holding title, the deed or certificate of sale shall
be taken in the name of such Person or Persons as shall be consistent with an
Opinion of Counsel obtained by the Seller, at the expense of the Purchaser,
from an attorney duly licensed to practice law in the state where the REO
Property is located. Any Person or Persons holding such title other than the
Purchaser shall acknowledge in writing that such title is being held as
nominee for the benefit of the Purchaser.
50
The Seller shall notify the Purchaser in accordance with the
▇▇▇▇▇▇ Mae Guides of each acquisition of REO Property upon such acquisition,
and thereafter assume the responsibility for marketing such REO Property in
accordance with Accepted Servicing Practices. Thereafter, the Seller shall
continue to provide certain administrative services to the Purchaser relating
to such REO Property as set forth in this Section 4.13.
The Seller shall, either itself or through an agent selected
by the Seller, and in accordance with the ▇▇▇▇▇▇ ▇▇▇ Guides manage, conserve,
protect and operate each REO Property in the same manner that it manages,
conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as
the REO Property is managed. The Seller shall cause each REO Property to be
inspected promptly upon the acquisition of title thereto and shall cause each
REO Property to be inspected at least annually thereafter or more frequently
as required by the circumstances. The Seller shall make or cause to be made a
written report of each such inspection. Such reports shall be retained in the
Servicing File.
The Seller shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within three (3) years after title has been taken to such REO Property, unless
the Seller determines, and gives an appropriate notice to the Purchaser to
such effect, that a longer period is necessary for the orderly liquidation of
such REO Property. If a longer period than three (3) years is permitted under
the foregoing sentence and is necessary to sell any REO Property, the Seller
shall report monthly to the Purchaser as to the progress being made in selling
such REO Property. If as of the date title to any REO Property was acquired by
the Seller there were outstanding unreimbursed Servicing Advances with respect
to the REO Property, the Seller shall be entitled to immediate reimbursement
from the Purchaser for any related unreimbursed Servicing Advances. The
disposition of REO Property shall be carried out by the Seller at such price,
and upon such terms and conditions, as the Seller deems to be in the best
interests of the Purchaser. The Seller shall update the Purchaser from
time-to-time as to the status of each REO Property.
Section 4.14. Notification of Maturity Date.
With respect to each Mortgage Loan, the Seller shall execute
and deliver to the Mortgagor any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the maturity date if required under applicable law.
ARTICLE V
PAYMENTS TO THE PURCHASER
-------------------------
Section 5.01. Distributions.
On each Remittance Date, the Seller shall distribute by wire
transfer to the Purchaser (i) all amounts credited to the Custodial Account as
of the close of business on the preceding Determination Date, net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05,
plus (ii) all Monthly Advances, if any, which the Seller is obligated to
distribute pursuant to Section 5.03, plus (iii) all payments in respect of
Compensating Interest for
51
such Remittance Date required to be deposited in the Custodial Account
pursuant to Section 4.04(viii), minus (iv) any amounts attributable to Monthly
Payments collected but due on a Due Date or Dates subsequent to the preceding
Determination Date, which amounts shall be remitted on the Remittance Date
next succeeding the Due Period for such amounts, and any Principal Prepayments
received during the month of such Remittance Date, which amounts shall be
remitted on the next succeeding Remittance Date.
With respect to any remittance received by the Purchaser
after the Business Day following the Business Day on which such payment was
due, the Seller shall pay to the Purchaser interest on any such late payment
at an annual rate equal to the Prime Rate, adjusted as of the date of each
change, plus two percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be deposited in the
Custodial Account by the Seller on the date such late payment is made and
shall cover the period commencing with the day following the second Business
Day on which such payment was due and ending with the Business Day on which
such payment is made, both inclusive. Such interest shall be remitted along
with the distribution payable on the next succeeding Remittance Date. The
payment by the Seller of any such interest shall not be deemed an extension of
time for payment or a waiver of any Event of Default by the Seller.
Section 5.02. Statements to the Purchaser.
The Seller shall furnish to the Purchaser an individual loan
accounting report, as of the last Business Day of each month, in the Seller's
assigned loan number order to document Mortgage Loan payment activity on an
individual Mortgage Loan basis. With respect to each month, the corresponding
individual loan accounting report shall be received by the Purchaser no later
than the fifth (5th) Business Day of the following month in a format mutually
agreed upon by both the Purchaser and the Seller and in hard copy, which
report shall contain the following:
(i) with respect to each Monthly Payment, the amount
of such remittance allocable to principal (including a
separate breakdown of any Principal Prepayment, including
the date of such prepayment, and any Prepayment Penalties or
premiums, along with a detailed report of interest on
principal prepayment amounts remitted in accordance with
Section 4.04);
(ii) with respect to each Monthly Payment, the amount
of such remittance allocable to interest;
(iii) the amount of servicing compensation received by
the Seller during the prior collection period;
(iv) the aggregate Scheduled Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the
Seller during the prior distribution period pursuant to
Section 4.05;
(vi) the number and aggregate outstanding principal
balances of Mortgage Loans (a) delinquent (1) 30 to 59 days,
(2) 60 to 89 days, and (3) 90
52
days or more; (b) as to which foreclosure has commenced;
and (c) as to which REO Property has been acquired; and
(vii) the amount of any Monthly Advances.
The Seller shall also provide a monthly servicing report,
sorted in the Purchaser's assigned loan number order, in the form of reports
S-50Y and P-4DL, attached hereto as Exhibit G and Exhibit H, respectively (or
in such other forms as the Purchaser and the Seller may agree), with each such
report.
The Seller shall prepare and file any and all information
statements or other filings required to be delivered to any governmental
taxing authority or to the Purchaser pursuant to any applicable law with
respect to the Mortgage Loans and the transactions contemplated hereby. In
addition, the Seller shall provide the Purchaser with such information
concerning the Mortgage Loans as is necessary for the Purchaser to prepare its
federal income tax return as the Purchaser may reasonably request from time to
time.
In addition, not more than sixty (60) days after the end of
each calendar year, the Seller shall furnish to each Person who was a
Purchaser at any time during such calendar year an annual statement in
accordance with the requirements of applicable federal income tax law as to
the aggregate of remittances for the applicable portion of such year.
Section 5.03. Monthly Advances by the Seller.
Not later than the close of business on the Business Day
preceding each Remittance Date, the Seller shall deposit in the Custodial
Account an amount equal to all Monthly Payments, whether or not deferred
pursuant to Section 4.01, which were due on a Mortgage Loan on the immediately
preceding Due Date and delinquent at the close of business on the related
Determination Date.
The Seller's obligation to make such Monthly Advances as to
any Mortgage Loan will continue through the earlier of: (i) the date of the
termination or resignation, as applicable, of the Seller pursuant to Section
7.04, 8.01 or 9.01 or (ii) the date of final disposition and liquidation of
the related Mortgage Loan or any Mortgaged Property acquired through
foreclosure or a conveyance in lieu of foreclosure, unless the Seller
reasonably believes such advance to be non-recoverable from proceeds of the
related Mortgage Loan. In such event, the Seller shall deliver to the
Purchaser an Officer's Certificate of the Seller to the effect that an officer
of the Seller has reviewed the related Servicing File and has made the
reasonable determination that any additional advances are non-recoverable from
proceeds of the related Mortgage Loan.
Section 5.04. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Purchaser pursuant to a deed in lieu of
foreclosure, the Seller shall submit to the Purchaser a liquidation report
with respect to such Mortgaged Property. The Seller shall also provide reports
on the status of REO Property containing such information as the Purchaser may
reasonably require.
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ARTICLE VI
GENERAL SERVICING PROCEDURES
----------------------------
Section 6.01. Assumption Agreements.
The Seller shall, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged
Property (whether by absolute conveyance or by contract of sale, and whether
or not the Mortgagor remains or is to remain liable under the Mortgage Note
and/or the Mortgage), exercise its rights to accelerate the maturity of such
Mortgage Loan under any "due-on-sale" clause to the extent permitted by law;
provided, however, that the Seller shall not exercise any such rights if
prohibited by law or the terms of the Mortgage Note from doing so or if the
exercise of such rights would impair or threaten to impair any recovery under
the related Primary Mortgage Insurance Policy, if any. If the Seller
reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause, the Seller will enter into an assumption agreement with
the person to whom the Mortgaged Property has been conveyed or is proposed to
be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, to the extent permitted by applicable state law, the Mortgagor
remains liable thereon. If the Seller is prohibited under applicable law from
(a) entering into an assumption agreement with the Person to whom the
Mortgaged Property has been conveyed or is proposed to be conveyed or (b)
requiring the original Mortgagor to remain liable under the Mortgage Note, the
Seller, with the prior consent of the primary mortgage insurer, if any, is
authorized to enter into a substitution of liability agreement with the person
to whom the Mortgaged Property has been conveyed or is proposed to be conveyed
pursuant to which the original Mortgagor is released from liability and such
Person is substituted as mortgagor and becomes liable under the related
Mortgage Note. Any such substitution of liability agreement shall be in lieu
of an assumption agreement.
In connection with any such assumption or substitution of
liability, the Seller shall follow the underwriting practices and procedures
of the ▇▇▇▇▇▇ Mae Guides. With respect to an assumption or substitution of
liability, the Mortgage Interest Rate borne by the related Mortgage Note and
the amount of the Monthly Payment may not be changed. If the credit of the
proposed transferee does not meet such underwriting criteria, the Seller
diligently shall, to the extent permitted by the Mortgage or the Mortgage Note
and by applicable law, accelerate the maturity of the Mortgage Loan. The
Seller shall notify the Purchaser that any such substitution of liability or
assumption agreement has been completed by forwarding to the Purchaser the
original of any such substitution of liability or assumption agreement, which
document shall be added to the related Mortgage File and shall, for all
purposes, be considered a part of such Mortgage File to the same extent as all
other documents and instruments constituting a part thereof. All fees
collected by the Seller for entering into an assumption or substitution of
liability agreement shall belong to the Seller as additional servicing
compensation.
Notwithstanding the foregoing paragraphs of this Section or
any other provision of this Agreement, the Seller shall not be deemed to be in
default, breach or any other violation of its obligations hereunder by reason
of any assumption of a Mortgage Loan by operation of law or any assumption
which the Seller may be restricted by law from preventing, for any reason
whatsoever. For purposes of this Section 6.01, the term "assumption" is deemed
to also include
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a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the
receipt by the Seller of a notification that payment in full will be escrowed
in a manner customary for such purposes, the Seller will immediately notify
the Purchaser by a certification, which certification shall include a
statement to the effect that all amounts received or to be received in
connection with such payment which are required to be deposited in the
Custodial Account pursuant to Section 4.04 have been or will be so deposited,
of a Servicing Officer and shall request delivery to it of the portion of the
Mortgage File held by the Purchaser. The Purchaser shall no later than five
(5) Business Days after receipt of such certification and request, release or
cause to be released to the Seller, the related Mortgage Loan Documents and,
upon its receipt of such documents, the Seller shall promptly prepare and
deliver to the Purchaser the requisite satisfaction or release. No later than
three (3) Business Days following its receipt of such satisfaction or release,
the Purchaser shall deliver, or cause to be delivered, to the Seller the
release or satisfaction properly executed by the owner of record of the
applicable Mortgage or its duly appointed attorney in fact. If such Mortgage
Loan is a MERS Mortgage Loan, the Seller is authorized to cause the removal
from the registration on the MERS System of such Mortgage and to execute and
deliver, on behalf of the Purchaser, any and all instruments of satisfaction
or cancellation or of partial or full release.
In the event the Seller satisfies or releases a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or should it otherwise prejudice any right the Purchaser may have
under the Mortgage Loan Documents, the Seller, upon written demand, shall
remit within two (2) Business Days to the Purchaser the then outstanding
principal balance of the related Mortgage Loan by deposit thereof in the
Custodial Account.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loans, including for the purpose of collection
under any Primary Mortgage Insurance Policy, the Purchaser shall, upon request
of the Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the portion of the Mortgage File held by the
Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return such Mortgage Loan Documents to the Purchaser when the need therefor by
the Seller no longer exists, unless the Mortgage Loan has been liquidated and
the Liquidation Proceeds relating to the Mortgage Loan have been deposited in
the Custodial Account or the Mortgage File has been delivered to an attorney,
or to a public trustee or other public official as required by law, for
purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Seller has delivered to the Purchaser a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage
File was delivered and the purpose or purposes of such delivery. Upon receipt
of a certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by the Purchaser to the
Seller.
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Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Seller shall
be entitled to the Servicing Fee. Additional servicing compensation in the
form of assumption fees, as provided in Section 6.01, late payment charges,
interest and investment earning on funds on deposit in the Custodial Account
and Escrow Account (to the extent provided for herein) and other ancillary
income shall be retained by the Seller to the extent not required to be
deposited in the Custodial Account. The Seller shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement therefor except as specifically
provided for herein.
Section 6.04. Annual Statement as to Compliance.
On or prior to March 15th of each year for each year in
which the Purchaser or an Affiliate of the Purchaser is required to file an
annual report on Form 10-K in connection with any Securitization Transfer with
the United States Securities and Exchange Commission (the "SEC"), and upon
request of the Purchaser for any other year, the Seller will deliver to the
Purchaser an Officers' Certificate stating, as to each signatory thereof, that
(i) a review of the activities of the Seller during the preceding calendar
year and of performance under this Agreement has been made under such
officers' supervision, and (ii) to the best of such officers' knowledge, based
on such review, the Seller has fulfilled all of its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officers and the nature and status thereof. The first Officer's Certificate
delivered by the Seller to the Purchaser pursuant to this Section shall be
delivered on or before March 15, 2005, or such other date as may be required
pursuant to the first sentence of this Section 6.04. Copies of such statement
shall be provided by the Seller to the Purchaser upon request.
Section 6.05. Annual Independent Certified Public
Accountants' Servicing Report.
On or prior to March 15th of each year for each year in
which the Purchaser or an Affiliate of the Purchaser is required to file an
annual report on Form 10-K in connection with any Securitization Transfer with
the SEC, and upon request of the Purchaser for any other year, the Seller at
its expense shall cause a firm of independent public accountants which is a
member of the American Institute of Certified Public Accountants to furnish a
statement to the Purchaser to the effect that such firm has examined certain
documents and records relating to the Seller's servicing of residential
mortgage loans, and that, on the basis of such an examination, conducted
substantially in compliance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Seller's servicing has
been conducted in compliance with such programs, except for (i) such
exceptions as such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such statement. The first statement
delivered by the Seller to the Purchaser pursuant to this Section shall be
delivered on or before March 15, 2005, or such other date as may be required
pursuant to the first sentence of this Section 6.05. Copies of such statement
shall be provided by the Seller to the Purchaser.
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Section 6.06. Purchaser's Right to Examine Seller Records.
At its expense, the Purchaser shall have the right to
examine and audit upon reasonable notice to the Seller, during business hours
or at such other times as might be reasonable under applicable circumstances,
any and all of the books, records, documentation or other information of the
Seller, or held by another for the Seller or on its behalf or otherwise, which
relates to the performance or observance by the Seller of the terms, covenants
or conditions of this Agreement.
The Seller shall provide to the Purchaser and any
supervisory agents or examiners representing a state or federal governmental
agency having jurisdiction over the Purchaser, including but not limited to,
OCC, OTS, FDIC and other similar entities, access to any documentation
regarding the Mortgage Loans in the possession of the Seller which may be
required by any applicable regulations. Such access shall be afforded without
charge, upon reasonable request, during normal business hours and at the
offices of the Seller, and in accordance with the federal government, OCC,
FDIC, OTS, or any other similar regulations; provided, however, that in
connection with providing such access, the Seller shall not be required to
incur any out-of-pocket costs unless provisions have been made for the
reimbursement thereof.
Section 6.07. Seller Shall Provide Information as Reasonably
Required.
The Seller shall furnish to the Purchaser during the term of
this Agreement such periodic, special or other reports, information or
documentation as the Purchaser may reasonably request, as shall be necessary,
reasonable or appropriate in respect to the Mortgage Loans and the performance
of the Seller under this Agreement, including any reports, information or
documentation reasonably required to comply with any regulations regarding any
supervisory agents or examiners of the Purchaser; provided, that, the Seller
shall not be liable for any out-of-pocket costs with respect to the provision
of such reports, information or documentation. All such reports or information
shall be provided by and in accordance with such applicable instructions and
directions as the Purchaser may reasonably request in relation to this
Agreement or the performance of the Seller under this Agreement. The Seller
agrees to execute and deliver all such instruments and take all such action as
the Purchaser, from time to time, may reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
The Seller, upon reasonable advance notice, shall make
reasonably available to the Purchaser or any prospective purchaser a
knowledgeable financial or accounting officer for the purpose of answering
questions and to permit any prospective purchaser to inspect the Seller's
servicing facilities for the purpose of satisfying such prospective purchaser
that the Seller has the ability to service the Mortgage Loans as provided in
this Agreement.
The Seller shall maintain with respect to each Mortgage Loan
and shall make available for inspection by the Purchaser or its designee the
related Servicing File during the time the Purchaser retains ownership of a
Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
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ARTICLE VII
THE SELLER
----------
Section 7.01. Indemnification; Third Party Claims.
The Seller agrees to indemnify and hold the Purchaser and
its present and former directors, officers, employees and agents harmless from
any and all claims, losses, damages, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that any
of such parties may sustain in any way related to the failure of the Seller to
observe and perform its duties, obligations, covenants, and agreements and to
service the Mortgage Loans in compliance with the terms of this Agreement or
as a result of the breach of a representation or warranty set forth in
Sections 3.01 or 3.02 of this Agreement. The Seller hereunder shall
immediately notify the Purchaser if a claim is made by a third party with
respect to this Agreement or a Mortgage Loan, assume (with the consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Seller shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser shall promptly
reimburse the Seller for all amounts advanced by it pursuant to the two
preceding sentences except when the claim relates to the failure of the Seller
to service and administer the Mortgage Loans in compliance with the terms of
this Agreement, the failure of the Seller to perform its duties and
obligations pursuant to this Agreement, the breach of representation or
warranty set forth in Sections 3.01 or 3.02, or the gross negligence, bad
faith or willful misconduct of the Seller. The provisions of this Section 7.01
shall survive termination of this Agreement and transfer of the related
servicing rights.
Section 7.02. Merger or Consolidation of the Seller.
The Seller shall 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 shall 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 (including by means of sale or disposal of all or substantially
all of the Seller's assets), 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 be an institution whose deposits are insured by FDIC or a company whose
business is the origination and servicing of mortgage loans, unless otherwise
consented to by the Purchaser, which consent shall not be unreasonably
withheld, and shall be qualified and in good standing to service mortgage
loans on behalf of ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac.
58
Section 7.03. Limitation on Liability of the Seller and
Others.
The duties and obligations of the Seller shall be determined
solely by the express provisions of this Agreement, the Seller shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Seller. Neither the
Seller nor any of the officers, employees or agents of the Seller shall be
under any liability to the Purchaser for any action taken or for refraining
from the taking of any action in good faith pursuant to this Agreement, or for
errors in judgment made in good faith; provided, however, that this provision
shall not protect the Seller or any such person against any breach of
warranties or representations made herein, or failure to perform its
obligations in compliance with any standard of care set forth in this
Agreement, or any liability which would otherwise be imposed by reason of
negligence, bad faith or willful misconduct, or any breach of the terms and
conditions of this Agreement. The Seller and any officer, employee or agent of
the Seller may rely in good faith on any document of any kind prima facie
properly executed and submitted by the Purchaser respecting any matters
arising hereunder. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
reasonable opinion may involve it in any expenses or liability.
Section 7.04. Seller Not to Resign.
The Seller shall not resign from the obligations and duties
hereby imposed on it except by mutual consent of the Seller and the Purchaser
or upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Seller. Any
such determination permitting the resignation of the Seller shall be evidenced
by an Opinion of Counsel to such effect delivered to the Purchaser which
Opinion of Counsel shall be in form and substance acceptable to the Purchaser.
No such resignation shall become effective until a successor shall have
assumed the Seller's responsibilities and obligations hereunder in the manner
provided in Section 11.01.
Section 7.05. No Transfer of Servicing.
With respect to the retention of the Seller to service the
Mortgage Loans hereunder, the Seller acknowledges that the Purchaser has acted
in reliance upon the Seller's independent status, the adequacy of its
servicing facilities, plan, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this Section 7.05, the Seller shall not either
assign this Agreement or the servicing hereunder or delegate its rights or
duties hereunder or any portion thereof without the prior written approval of
the Purchaser, which consent may be withheld in the Purchaser's discretion
exercised in good faith. Notwithstanding the foregoing, the Seller may,
without the consent of the Purchaser, retain reasonable and necessary third
party contractors to perform certain servicing and loan administration
functions, including and limited to, hazard insurance administration, tax
payment and administration, flood certification and administration and
foreclosure activities; provided, that such contractors shall perform such
servicing and loan administrative functions in a manner consistent with this
Agreement; provided, further, that the retention of such contractors by Seller
shall not limit the obligation of
59
the Seller to service the Mortgage Loans pursuant to the terms and conditions
of this Agreement or release it from any of its obligations hereunder.
ARTICLE VIII
DEFAULT
-------
Section 8.01. Events of Default.
In case one or more of the following Events of Default by
the Seller shall occur and be continuing, that is to say:
(i) any failure by the Seller to remit to the
Purchaser any payment required to be made under the terms of
this Agreement which continues unremedied for a period of
two (2) Business Days after the date upon which written
notice of such failure, requiring the same to be remedied,
shall have been given to the Seller by the Purchaser; or
(ii) failure on the part of the Seller duly to observe
or perform in any material respect any other of the
covenants or agreements on the part of the Seller set forth
in this Agreement, or which failure continues unremedied for
a period of thirty (30) days after the date on which written
notice of such failure, requiring the same to be remedied,
shall have been given to the Seller by the Purchaser; or
(iii) a decree or order of a court or agency or
supervisory authority having jurisdiction for the
appointment of a conservator or receiver or liquidator in
any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Seller and such
decree or order shall have remained in force undischarged or
unstayed for a period of sixty (60) days; or
(iv) the Seller shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
bankruptcy, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the
Seller or of or relating to all or substantially all of its
property; or
(v) the Seller shall admit in writing its inability to
pay its debts generally as they become due, file a petition
to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit
of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) the Seller ceases to be approved by ▇▇▇▇▇▇ Mae or
▇▇▇▇▇▇▇ Mac as a mortgage loan seller and servicer for more
than thirty (30) days; or
(vii) the Seller attempts to assign its right to
servicing compensation hereunder or the Seller attempts,
without the consent of the Purchaser, to assign this
Agreement or the servicing responsibilities hereunder or to
delegate its duties hereunder or any portion thereof in a
manner not permitted under this Agreement; or
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(viii) the Seller ceases to be (a) licensed to service
first lien residential mortgage loans in each jurisdiction
in which a Mortgaged Property is located and such licensing
is required, and (b) qualified to transact business in any
jurisdiction where it is currently so qualified, but only to
the extent such non-qualification materially and adversely
affects the Seller's ability to perform its obligations
hereunder;
then, and in each and every such case, so long as an Event
of Default shall not have been remedied, the Purchaser, by notice in writing
to the Seller may, in addition to whatever rights the Purchaser may have under
Sections 3.03 and 7.01 and at law or equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Seller under this Agreement and in and to the Mortgage
Loans and the proceeds thereof without compensating the Seller for the same.
On or after the receipt by the Seller of such written notice of termination,
all authority and power of the Seller under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Section 12.01. Upon written request from the
Purchaser, the Seller shall prepare, execute and deliver, any and all
documents and other instruments, place in such successor's possession all
Servicing Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Seller's sole expense. The Seller
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Seller's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Seller to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans or any REO Property.
If any of the Mortgage Loans are MERS Mortgage Loans, in
connection with the termination or resignation (as described in Section 8.04)
of the Seller hereunder, either (i) the successor servicer shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS, or
(ii) the Seller shall cooperate with the successor servicer either (x) in
causing MERS to execute and deliver an assignment of Mortgage in recordable
form to transfer the Mortgage from MERS to the Purchaser and to execute and
deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor servicer or (y)
in causing MERS to designate on the MERS(R) System the successor servicer as
the servicer of such Mortgage Loan.
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Section 8.02. Waiver of Defaults.
The Purchaser may waive only by written notice any default
by the Seller in the performance of its obligations hereunder and its
consequences. Upon any such waiver of a past default, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereon
except to the extent expressly so waived in writing.
ARTICLE IX
TERMINATION
-----------
Section 9.01. Termination.
The respective obligations and responsibilities of the
Seller, as servicer, shall terminate upon (a) the distribution to the
Purchaser of the final payment or liquidation with respect to the last
Mortgage Loan (or advances of same by the Seller); (b) the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure with respect
to the last Mortgage Loan and the remittance of all funds due hereunder or (c)
by mutual consent of the Seller and the Purchaser in writing. Upon written
request from the Purchaser in connection with any such termination, the Seller
shall prepare, execute and deliver, any and all documents and other
instruments, place in the Purchaser's possession all Mortgage Files, and do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise, at the Purchaser's sole expense. The Seller agrees to cooperate
with the Purchaser and such successor in effecting the termination of the
Seller's responsibilities and rights hereunder as servicer, including, without
limitation, the transfer to such successor for administration by it of all
cash amounts which shall at the time be credited by the Seller to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans.
ARTICLE X
RECONSTITUTION OF MORTGAGE LOANS
--------------------------------
Section 10.01. Reconstitution of Mortgage Loans.
The Seller and the Purchaser agree that with respect to some
or all of the Mortgage Loans, 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:
(i) ▇▇▇▇▇▇ Mae under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "▇▇▇▇▇▇ ▇▇▇ Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
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(iii) one or more third party purchasers in one or more Whole
Loan Transfers; or
(iv) one or more trusts or other entities to be formed as part
of one or more Securitization Transfers.
The Purchaser shall use its best efforts to provide notice
to the Seller of each such Reconstitution no later than fifteen (15) calendar
days prior to the related Reconstitution Date, but, in any event, shall
provide such notice to the Seller no later than ten (10) calendar days prior
to the related Reconstitution Date.
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, ▇▇▇▇▇▇ Mae 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 substance reasonably acceptable to the parties or an Assignment
and Recognition Agreement substantially in the form attached hereto as Exhibit
D (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; and (3) to restate the representations and warranties set forth in
Section 3.01 of this Agreement as of the related Reconstitution Date, to
restate the representations and warranties set forth in Section 3.02 of this
Agreement as of the related Closing Date and to represent and warrant that the
Seller has serviced the Mortgage Loans in accordance with this Agreement, in
each case, as of the settlement or closing date in connection with such
Reconstitution. 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 reasonably request; (ii) such additional opinions of
counsel, letters from auditors, and certificates of public officials or
officers of the Seller as are reasonably believed necessary by the Purchaser
or any such other participant; and (iii) to execute, deliver and satisfy all
conditions set forth in any indemnity agreement required by the Purchaser or
any such participant, including, without limitation, an Indemnification and
Contribution Agreement in substantially the form attached hereto as Exhibit I.
Moreover, the Seller agrees to cooperate with all reasonable requests made by
the Purchaser to effect such Reconstitution. The Seller shall indemnify the
Purchaser, each Affiliate of the Purchaser participating in the Reconstitution
and each Person who controls the Purchaser or such Affiliate and their
respective present and former directors, officers, employees and agents, and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that
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each of them may sustain in any way related to any information provided by or
on behalf of the Seller regarding the Seller or any affiliated servicer, the
Seller's or any affiliated servicer's servicing practices or performance or
the Underwriting Standards set forth in any offering document prepared in
connection with any Reconstitution (the "Seller Information"). 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 previously were
"Purchasers" under this Agreement. In connection with any Reconstitution, the
Purchaser shall execute an Indemnification and Contribution Agreement
substantially in the form of Exhibit I attached hereto, which in any case,
shall provide that the Purchaser shall indemnify the Seller and each Person
who controls the Seller and its directors, officers, employees and agents, and
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that each of them may sustain in any way
related to any information, other than (i) the Seller Information or (ii) any
information regarding the Mortgage Loans set forth in any offering document
prepared in connection with any Reconstitution that is derived from loan-level
information provided by the Seller to the Purchaser, the related depositor or
any of their Affiliates, set forth in any offering document prepared in
connection with any Reconstitution.
With respect to any Mortgage Loans sold in a Securitization
Transfer where the Seller is the servicer, the Seller agrees that on or before
March 15th of each year beginning March 15, 2005, the Seller shall deliver to
the depositor, the master servicer (if any) and the trustee for the
securitization trust in the Securitization Transfer, and their officers and
directors, a certification in the form attached as Exhibit J hereto, executed
by the senior officer in charge of servicing at the Seller for use in
connection with any Form 10-K to be filed with the SEC with respect to the
securitization trust. The Seller shall indemnify and hold harmless the
depositor, the master servicer (if any) and the trustee, and their respective
officers and directors, from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments and
other costs and expenses arising out of or based upon any breach of the
Seller's obligations under this paragraph or any material misstatement or
omission, negligence, bad faith or willful misconduct of the Seller in
connection therewith. If the indemnification provided for in the preceding
sentence is unavailable or insufficient to hold harmless any indemnified
party, then the Seller agrees that it shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages
or liabilities of such indemnified party in such proportion as is appropriate
to reflect the relative fault of such indemnified party, on the one hand, and
the Seller, on the other, in connection with a breach of the Seller's
obligations under this paragraph or any material misstatement or omission,
negligence, bad faith or willful misconduct of the Seller in connection
therewith.
The Purchaser shall reimburse the Seller for any and all
out-of-pocket expenses, costs and fees, including reasonable attorney's fees,
incurred by the Seller in response to requests for information or assistance
under this Section, other than such out-of-pocket expenses, costs and fees,
including reasonable attorney's fees, incurred by the Seller in connection
with fulfilling its obligations hereunder with respect to servicing and
administering the related Mortgage Loans. All Mortgage Loans not sold or
transferred pursuant to a Reconstitution shall remain subject to
64
this Agreement and shall continue to be serviced in accordance with the terms
of this Agreement, and with respect thereto this Agreement shall remain in
full force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
------------------------
Section 11.01. Successor to the Seller.
Prior to termination of Seller's responsibilities and duties
under this Agreement pursuant to Section 7.04, 8.01 or 9.01, the Purchaser
shall (i) succeed to and assume all of the Seller's responsibilities, rights,
duties and obligations under this Agreement, or (ii) appoint a successor
having the characteristics set forth in Section 7.02 hereof and which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Seller under this Agreement. In connection with such
appointment and assumption, the Purchaser may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as the
Purchaser and such successor shall agree. In the event that the Seller's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned Sections, the Seller shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Seller pursuant to the aforementioned Sections shall not become
effective until a successor shall be appointed pursuant to this Section and
shall in no event relieve the Seller of the representations and warranties
made pursuant to Sections 3.01 and 3.02, the remedies available under Section
3.03 or the indemnification obligations of the Seller pursuant to Section
7.01.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Seller and to the Purchaser an instrument
accepting such appointment, whereupon such successor shall become fully vested
with all the rights, powers, duties, responsibilities, obligations and
liabilities of the Seller, with like effect as if originally named as a party
to this Agreement. Any termination or resignation of the Seller or this
Agreement pursuant to Section 7.04, 7.05, 8.01 or 9.01 shall not affect any
claims that the Purchaser may have against the Seller arising prior to any
such termination or resignation.
The Seller shall promptly deliver to the successor the funds
in the Custodial Account and the Escrow Account and the Mortgage Files and
related documents and statements held by it hereunder and the Seller shall
account for all funds. The Seller shall execute and deliver such instruments
and do such other things all as may reasonably be required to more fully and
definitely vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Seller. Upon appointment
of successor servicer to the Seller, the Seller shall be reimbursed for
unrecovered Servicing Advances, Monthly Advances and unpaid Servicing Fees
which would otherwise have been recovered by the Seller pursuant to this
Agreement but for the appointment such successor servicer.
Upon a successor's acceptance of appointment as such, the
Seller shall notify by mail the Purchaser of such appointment.
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Section 11.02. Amendment.
This Agreement may be amended or supplemented from time to
time by written agreement executed by the Purchaser and the Seller.
Section 11.03. Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any of
all the Mortgaged Properties subject to the Mortgages are situated, and in any
other appropriate public recording office or elsewhere, such recordation to be
effected by the Seller at the Seller's expense on direction of the Purchaser.
Section 11.04. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflict of law provisions, except to the extent preempted by Federal law. The
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
Section 11.05. Notices.
Any demands, notices or other communications permitted or
required hereunder shall be in writing and shall be deemed conclusively to
have been given if personally delivered at or mailed by registered mail,
postage prepaid, and return receipt requested or certified mail, return
receipt requested, or transmitted by telex, telegraph or telecopier and
confirmed by a similar mailed writing, as follows:
(i) if to the Seller:
Wachovia Mortgage Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 28288-1088
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Wachovia Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Purchaser:
66
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan
Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Servicing Oversight
▇▇▇▇ ▇-▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 11.06. Severability of Provisions.
Any part, provision, representation or warranty of this
Agreement which is prohibited or which is held to be void or unenforceable
shall be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof. 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
67
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 11.07. Exhibits.
The exhibits to this Agreement are hereby incorporated and
made a part hereof and are an integral part of this Agreement.
Section 11.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(i) 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;
(ii) accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP;
(iii) 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;
(iv) a 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;
(v) the words "herein," "hereof," "hereunder," and
other words of similar import refer to this Agreement as a
whole and not to any particular provision;
(vi) the term "include" or "including" shall mean
without limitation by reason of enumeration; and
(vii) headings of the Articles and Sections in this
Agreement are for reference purposes only and shall not be
deemed to have any substantive effect.
Section 11.09. Reproduction of Documents.
This Agreement and all documents relating thereto,
including, without limitation, (i) consents, waivers and modifications which
may hereafter be executed, (ii) documents received by any party at the
closing, and (iii) financial statements, certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
68
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 11.10. Confidentiality of Information.
Each party recognizes that, in connection with this
Agreement, it may become privy to non-public information regarding the
financial condition, operations and prospects of the other party. Each of the
Purchaser and the Seller shall employ proper procedures and standards designed
to maintain the confidential nature of such information and the terms of this
Agreement, except to the extent: (a) disclosure of such information and terms
is reasonably believed by such party to be required in connection with
regulatory requirements or other legal requirements relating to its affairs;
(b) disclosed to any one or more of such party's employees, officers,
directors, agents, attorneys or accountants who would have access to the
contents of this Agreement and such data and information in the normal course
of the performance of such Person's duties for such party, to the extent such
party has procedures in effect to inform such Person of the confidential
nature thereof; (c) disclosed in a prospectus, prospectus supplement or
private placement memorandum relating to a securitization of the Mortgage
Loans by the Purchaser (or an Affiliate assignee thereof) or to any Person in
connection with the resale or proposed resale of all or a portion of the
Mortgage Loans by such party in accordance with the terms of this Agreement;
and (d) that is reasonably believed by such party to be necessary for the
enforcement of such party's rights under this Agreement.
Section 11.11. 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 other 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 (i) with respect to MERS Mortgage Loans, at the
Purchaser's expense and (ii) with respect to Mortgage Loans that are not MERS
Mortgage Loans, at the Seller's expense, in each case, in the event
recordation is either necessary under applicable law or requested by the
Purchaser at its sole option.
Section 11.12. Assignment by Purchaser.
The Purchaser shall have the right, upon notice to the
Seller, to assign, in whole or in part, its interest under this Agreement with
respect to some or all of the Mortgage Loans, and designate any person to
exercise any rights of the Purchaser hereunder, by executing an Assignment,
Assumption and Recognition Agreement substantially in the form of Exhibit D
hereto, and the assignee or designee shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans;
provided, however, that, in no event shall there be any more than three (3)
"Purchasers" with respect to any Mortgage Loan Package. In no event shall the
Purchaser sell a partial interest in any Mortgage Loan without the prior
written
69
consent of the Seller, which consent may be granted or withheld in the
Seller's sole discretion. All references to the Purchaser in this Agreement
shall be deemed to include its assignee or designee.
Section 11.13. No Partnership.
Nothing herein contained shall be deemed or construed to
create a co-partnership or joint venture between the parties hereto and the
services of the Seller shall be rendered as an independent contractor and not
as agent for Purchaser.
Section 11.14. Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same agreement. Subject to Section
7.02, this Agreement shall inure to the benefit of and be binding upon the
Seller and the Purchaser and their respective successors and assigns.
Section 11.15. Entire Agreement.
Each of the parties to this Agreement acknowledges that no
representations, agreements or promises were made to any of the other parties
to this Agreement or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement and the
related Purchase Price and Terms Letter set forth the entire understanding
between the parties hereto and shall be binding upon all successors of all of
the parties. In the event of any inconsistency between a Purchase Price and
Terms Letter and this Agreement, this Agreement shall control.
Section 11.16. No Solicitation.
From and after the related Closing Date, except as provided
below, 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, in any manner to solicit the
borrower or obligor under any Mortgage Loan to refinance the 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 to refinance any Mortgage Loans 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 related Closing Date and
the Seller shall take no action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that the following
promotions or solicitations undertaken by the Seller or any Affiliate of the
Seller shall not be prohibited under this Section 11.16: (i) promotions or
solicitations that are directed to the general public at large or segments
thereof, provided that no segment shall consist primarily of the borrowers or
obligors under the Mortgage Loans, including, without limitation, mass mailing
based on commercially acquired mailing lists, newspaper, radio and television
advertisements; (ii) responding to Mortgagor requests for pay-off information
and regarding other bank or financial products or services; and (iii)
promotions or solicitations to any
70
Mortgagor for any other bank or financial products or services, unless such
promotions or solicitations are for a prepayment of a Mortgage Loan.
Section 11.17. Costs.
The Purchaser shall pay any commissions due its salesmen,
the expenses of its accountants and attorneys and the expenses and fees of any
broker retained by the Purchaser with respect to the transactions covered by
this Agreement. To the extent not otherwise provided herein, all other costs
and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans, including, without limitation, fees for recording intervening
assignments of mortgage and Assignments of Mortgage, the cost of obtaining tax
service contracts and the legal fees and expenses of its attorneys shall be
paid by the Seller. The Seller shall be responsible for causing the
recordation of all Assignments of Mortgage and all intervening assignments of
mortgage, as applicable.
Section 11.18. Protection of Mortgagor Personal Information.
Each of the Purchaser and the Seller agree that it (i) shall
comply with any applicable laws and regulations regarding the privacy and
security of Mortgagor Personal Information, (ii) shall not use Mortgagor
Personal Information in any manner inconsistent with any applicable laws and
regulations regarding the privacy and security of Mortgagor Personal
Information, (iii) shall not disclose Mortgagor Personal Information to third
parties except at the specific written direction of the other; provided,
however, that the Purchaser and the Seller may disclose Mortgagor Personal
Information to third parties in connection with secondary market transactions
to the extent not prohibited by applicable law or to the extent required by a
valid and effective subpoena issued by a court of competent jurisdiction or
other governmental body, (iv) shall maintain adequate physical, technical and
administrative safeguards to protect Mortgagor Personal Information from
unauthorized access and (v) shall immediately notify the other of any actual
or suspected breach of the confidentiality of Mortgagor Personal Information.
[SIGNATURE PAGE TO FOLLOW]
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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 day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
as Purchaser
By: ________________________________________
Name: ______________________________________
Title: ____________________________________
WACHOVIA MORTGAGE CORPORATION,
as Seller
By: ________________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[Signature Page to Seller's Purchase, Warranties and Servicing Agreement,
dated as of September 1, 2004]
72
Exhibit A-1
-----------
Contents of 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 which shall be retained by the Seller in the Servicing
File or delivered to the Purchaser or its designee pursuant to Sections 2.04
and 2.05 of the Seller's Purchase, Warranties and Servicing Agreement.
1. The original Mortgage Note endorsed "Pay to the
order of ___________________ without recourse," and signed in the name of the
Seller by an authorized officer, with all intervening endorsements showing a
complete chain of title from the originator to the Seller. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by
"[Seller], successor by merger to the [name of predecessor]". If the Mortgage
Loan was acquired or originated by the Seller while doing business under
another name, the endorsement must be by "[Seller] formerly known as [previous
name]". If the original note is unavailable, seller will provide an affidavit
of lost note (in form acceptable to the Purchaser) stating that the original
Mortgage Note was lost or destroyed, together with a copy of such Mortgage
Note and indemnifying the Purchaser against any and all claims arising as a
result of any person or entity claiming they are the holder of the note or
that the note has been paid off and returned.
2. A true certified copy, certified by the [title
insurer], of the applicable First Lien.
3. Except as provided below and for each Mortgage Loan
that is not a MERS Mortgage Loan, the original Mortgage with evidence of
recording thereon, or a copy thereof certified by the public recording office
in which such mortgage has been recorded or, if the original Mortgage has not
been returned from the applicable public recording office, a true certified
copy, certified by the [title insurer], of the original Mortgage together with
a certificate of the Seller certifying that the original Mortgage has been
delivered for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located and in the case of
each MERS Mortgage Loan, the original Mortgage, noting the presence of the MIN
of the Mortgage Loans and either language indicating that the Mortgage Loan is
a MOM Loan or if the Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment thereof to MERS, with evidence of
recording indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded.
4. The original or certified to be a true copy or if
in electronic form identified on the Mortgage Loan Schedule, the certificate
number, certified by the Seller, of the related Primary Mortgage Insurance
Policy, if required.
5. In the case of each Mortgage Loan that is not a
MERS Mortgage Loan, the original Assignment, from the Seller in accordance
with Purchaser's instructions, which assignment shall, but for any blanks
requested by the Purchaser, be in form and substance acceptable for recording,
or a copy certified by the Seller as a true and correct copy of the original
Assignment which has been sent for recordation. If the Mortgage Loan was
acquired or
A-1-1
originated by the Seller while doing business under another name, the
Assignment must be by "[Seller] formerly known as [previous name]".
6. With respect to Mortgage Loans that are not Co-op
Loans, the original policy of title insurance, including riders and
endorsements thereto, or if the policy has not yet been issued, a written
commitment or interim binder or preliminary report of title issued by the
title insurance or escrow company.
7. Originals of all recorded intervening Assignments,
or copies thereof, certified by the public recording office in which such
Assignments have been recorded showing a complete chain of title from the
originator to the Seller, with evidence of recording thereon, or a copy
thereof certified by the public recording office in which such Assignment has
been recorded or, if the original Assignment has not been returned from the
applicable public recording office, a true certified copy, certified by the
[title insurer] of the original Assignment together with a certificate of the
[title insurer] certifying that the original Assignment has been delivered for
recording in the appropriate public recording office of the jurisdiction in
which the Mortgaged Property is located.
8. Originals, or copies thereof certified by the
public recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not been
returned from the applicable public recording office, a true certified copy,
certified by the [title insurer], of such original document together with
certificate of Seller certifying the original of such document has been
delivered for recording in the appropriate recording office of the
jurisdiction in which the Mortgaged Property is located.
9. If the Mortgage Note or Mortgage or any other
material document or instrument relating to the Mortgage Loan has been signed
by a person on behalf of the Mortgagor, the original power of attorney or
other instrument that authorized and empowered such person to sign bearing
evidence that such instrument has been recorded, if so required in the
appropriate jurisdiction where the Mortgaged Property is located (or, in lieu
thereof, a duplicate or conformed copy of such instrument, together with a
certificate of receipt from the recording office, certifying that such copy
represents a true and complete copy of the original and that such original has
been or is currently submitted to be recorded in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is located),
or if the original power of attorney or other such instrument has been
delivered for recording in the appropriate public recording office of the
jurisdiction in which the Mortgaged Property is located.
10. With respect to a Co-op Loan: (i) a copy of the
Co-op Lease and the assignment of such Co-op Lease to the originator of the
Mortgage Loan, with all intervening assignments showing a complete chain of
title and an assignment thereof by Seller; (ii) the stock certificate together
with an undated stock power relating to such stock certificate executed in
blank; (iii) the recognition agreement in substantially the same form as
standard a "AZTECH" form; (iv) copies of the financial statement filed by the
originator as secured party and, if applicable, a filed UCC-3 Assignment of
the subject security interest showing a complete chain of title, together with
an executed UCC-3 Assignment of such security interest by the Seller in a form
sufficient for filing.
A-1-2
11. The original of any guarantee executed in
connection with the Mortgage Note.
Notwithstanding anything to the contrary herein, the Seller
may provide one certificate for all of the Mortgage Loans indicating that the
documents were delivered for recording.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
-----------
Contents of Servicing File
With respect to each Mortgage Loan, the Servicing File shall
include each of the following items, which shall be available for inspection
by the Purchaser:
1. Mortgage Loan closing statement (Form HUD-1) and
any other truth-in-lending or real estate settlement procedure forms required
by law.
2. Residential loan application.
3. Uniform underwriter and transmittal summary (▇▇▇▇▇▇
▇▇▇ Form 1008) or reasonable equivalent.
4. Credit report on the mortgagor.
5. Business credit report, if applicable.
6. Residential appraisal report and attachments thereto.
7. Verification of employment and income except for
Mortgage Loans originated under a Limited Documentation Program, all in
accordance with Seller's Underwriting Standards.
8. Verification of acceptable evidence of source and
amount of down payment, in accordance with the Underwriting Standards.
9. Photograph of the Mortgaged Property (may be part
of appraisal).
10. Survey of the Mortgaged Property, if any.
11. Sales contract, if applicable.
12. If available, termite report, structural engineer's
report, water portability and septic certification.
13. Any original security agreement, chattel mortgage
or equivalent executed in connection with the Mortgage.
14. Any ground lease, including all amendments,
modifications and supplements thereto.
15. Any other document required to service the Mortgage
Loans.
A-2-1
Exhibit B
---------
Form of Custodial Account Letter Agreement
__________________ , 200_
To:
As "Seller" under the Seller's Purchase, Warranties and
Servicing Agreement, dated as of September 1, 2004 (the "Agreement"), we
hereby authorize and request you to establish an account, as a Custodial
Account pursuant to Section 4.04 of the Agreement, to be designated as
"Wachovia Mortgage Corporation, in trust for the Purchaser, owner of various
whole loan series - principal and interest". All deposits in the account shall
be subject to withdrawal therefrom by order signed by the Seller. This letter
is submitted to you in duplicate. Please execute and return one original to
us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:_______________________________________
Name:_____________________________________
Title:____________________________________
The undersigned, as "Depository," hereby certifies that the
above described account has been established under Account Number
______________, at the office of the depository indicated above, and agrees to
honor withdrawals on such account as provided above.
__________________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
B-1
Exhibit C
---------
Form of Escrow Account Letter Agreement
_____________________, 200_
To:
As "Seller" under the Seller's Purchase, Warranties and
Servicing Agreement, dated as of September 1, 2004 (the "Agreement"), we
hereby authorize and request you to establish an account, as an Escrow Account
pursuant to Section 4.06 of the Agreement, to be designated as "Wachovia
Mortgage Corporation, in trust for the Purchaser, owner of various whole loan
series, and various Mortgagors." All deposits in the account shall be subject
to withdrawal therefrom by order signed by the Seller. This letter is
submitted to you in duplicate. Please execute and return one original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:_______________________________________
Name:_____________________________________
Title:____________________________________
The undersigned, as "Depository," hereby certifies that the
above described account has been established under Account Number
______________, at the office of the depository indicated above, and agrees to
honor withdrawals on such account as provided above.
__________________________________________
By:_______________________________________
Name:_____________________________________
Title:____________________________________
C-1
Exhibit D
---------
Form of Assignment, Assumption and Recognition Agreement
This Assignment, Assumption and Recognition Agreement (this
"Assignment Agreement"), dated as of _________, between [Purchaser], a
[_____________] corporation (the "Assignor"), ______________________, a
________ corporation (the "Assignee"), and Wachovia Mortgage Corporation, a
North Carolina corporation (the "Seller"):
For good and valuable consideration the receipt and
sufficiency of which hereby are acknowledged, and of the premises and mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns
to Assignee all of the right, title and interest of Assignor, as Purchaser,
in, to and under (a) those certain mortgage loans listed on Exhibit A attached
hereto (the "Mortgage Loans"); and (b) the Seller's Purchase, Warranties and
Servicing Agreement dated as of [_________, 200__], but only to the extent of
the Mortgage Loans (the "Purchase Agreement"). For purposes of this Assignment
Agreement, the term "Purchase Agreement" includes any separate Assignment and
Conveyance pursuant to which Seller and Assignor effectuated the purchase and
sale of any Mortgage Loan following the execution and delivery of the Seller's
Purchase, Warranties and Servicing Agreement dated as of [_________, 200__].
The Assignor specifically reserves and does not assign to
the Assignee hereunder any and all right, title and interest in, to and under
any all obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on
Exhibit A attached hereto and are not the subject of this Assignment
Agreement.
2. Each of the Seller and the Assignor represent and
warrant to the Assignee that (a) the copy of the Purchase Agreement, attached
hereto as Exhibit B, provided to the Assignee, is a true, complete and
accurate copy of the Purchase Agreement, (b) the Purchase Agreement is in full
force and effect as of the date hereof, (c) the provisions thereof have not
been waived, amended or modified in any respect, nor have any notices of
termination been given thereunder, (d) the Purchase Agreement contains all of
the terms and conditions governing the sale of the Mortgage Loans by Seller to
Assignor and the purchase of the Mortgage Loans by Assignor from Seller;
provided, however, that the date of purchase and sale and the amount of
payment for the Mortgage Loans may be set out in a Purchase Price and Terms
Letter, as defined in the Purchase Agreement, and (e) Seller sold, conveyed
and transferred each Mortgage Loan to Assignor pursuant to the Purchase
Agreement.
3. The Assignor warrants and represents to, and
covenants with, the Assignee and the Seller that:
(a) As of the date hereof, the Assignor is not in
default under the Purchase Agreement;
D-1
(b) The Assignor is the lawful owner of the Mortgage
Loans with the full right to transfer the Mortgage Loans and any and all of
its interests, rights and obligations under the Purchase Agreement, free from
any and all claims and encumbrances arising out of the Assignor's ownership
thereof, and the Mortgage Loans, as well as the Purchase Agreement, upon the
transfer thereof to the Assignee as contemplated herein, shall be free and
clear of all such liens, claims and encumbrances or any lien claim or
encumbrance arising out of the ownership of the Mortgage Loans by any person
at any time after Assignor first acquired any Mortgage Loan from the Seller;
(c) The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other defenses available to the
Seller with respect to the Purchase Agreement or the Mortgage Loans;
(d) The Assignor has not waived or agreed to any waiver
under, or agreed to any amendment or other modification of, the Purchase
Agreement or the Mortgage Loans. The Assignor has no knowledge of, and has not
received notice of, any waivers under or amendments or other modifications of,
or assignments of rights or obligations under or defaults under, the Purchase
Agreement, or the Mortgage Loans;
(e) The Assignor is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, and has all requisite corporate power and authority to
sell, transfer and assign the Mortgage Loans;
(f) The Assignor has full corporate power and authority
to execute, deliver and perform under this Assignment Agreement, and to
consummate the transactions set forth herein. The consummation of the
transactions contemplated by this Assignment Agreement is in the ordinary
course of the Assignor's business and will not conflict with, or result in a
breach of, any of the terms, conditions or provisions of the Assignor's
charter or by-laws, or any legal restriction, or any material agreement or
instrument to which the Assignor is now a party or by which it is bound, or
result in the violation of any law, rule, regulation, order, judgment or
decree to which the Assignor or its property is subject. The execution,
delivery and performance by the Assignor of this Assignment Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Assignor. This Assignment
Agreement has been duly executed and delivered by the Assignor and constitutes
the valid and legally binding obligation of the Assignor enforceable against
the Assignor in accordance with its respective terms except as enforceability
thereof may be limited by bankruptcy, insolvency, or reorganization or other
similar laws now or hereinafter in effect relating to creditor's rights
generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or in law;
(g) No material consent, approval, order or
authorization of, or declaration, filing or registration with, any
governmental entity is required to be obtained or made by the Assignor in
connection with the execution, delivery or performance by the Assignor of this
Assignment Agreement, or the consummation by it of the transactions
contemplated hereby; and
(h) The Assignor has paid the purchase price for the
Mortgage Loans and has satisfied any conditions to closing required of it
under the terms of the Purchase Agreement.
D-2
4. The Assignee warrants and represents to, and
covenants with, the Assignor and the Seller that:
(a) The Assignee is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, and has all requisite corporate power and authority to
acquire, own and purchase the Mortgage Loans;
(b) The Assignee has full corporate power and authority
to execute, deliver and perform under this Assignment Agreement, and to
consummate the transactions set forth herein. The consummation of the
transactions contemplated by this Assignment Agreement is in the ordinary
course of the Assignee's business and will not conflict with, or result in a
breach of, any of the terms, conditions or provisions of the Assignee's
charter or by-laws, or any legal restriction, or any material agreement or
instrument to which the Assignee is now a party or by which it is bound, or
result in the violation of any law, rule, regulation, order, judgment or
decree to which the Assignee or its property is subject. The execution,
delivery and performance by the Assignee of this Assignment Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Assignee. This Assignment
Agreement has been duly executed and delivered by the Assignee and constitutes
the valid and legally binding obligation of the Assignee enforceable against
the Assignee in accordance with its respective terms except as enforceability
thereof may be limited by bankruptcy, insolvency, or reorganization or other
similar laws now or hereinafter in effect relating to creditor's rights
generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or in law;
(c) No material consent, approval, order or
authorization of, or declaration, filing or registration with, any
governmental entity is required to be obtained or made by the Assignee in
connection with the execution, delivery or performance by the Assignee of this
Assignment Agreement, or the consummation by it of the transactions
contemplated hereby; and
(d) The Assignee agrees to be bound, as Purchaser, by
all of the terms, covenants and conditions of the Purchase Agreement and the
Mortgage Loans, and from and after the date hereof, the Assignee assumes for
the benefit of each of the Seller and the Assignor all of the Assignor's
obligations as Purchaser thereunder, with respect to the Mortgage Loans.
5. The Seller warrants and represents to, and
covenants with, the Assignor and the Assignee that:
(a) The Seller is not a natural person or a general
partnership and is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, and has all requisite power and
authority to service the Mortgage Loans;
(b) The Seller has full power and authority to execute,
deliver and perform under this Assignment Agreement, and to consummate the
transactions set forth herein. The consummation of the transactions
contemplated by this Assignment Agreement is in the ordinary course of the
Seller's business and will not conflict with, or result in a breach of, any of
the terms, conditions or provisions of the Seller's charter or by-laws, or any
legal restriction, or any material agreement or instrument to which the Seller
is now a party or by which it is bound, or
D-3
result in the violation of any law, rule, regulation, order, judgment or
decree to which the Seller or its property is subject. The execution, delivery
and performance by the Seller of this Assignment Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Seller. This Assignment
Agreement has been duly executed and delivered by the Seller and constitutes
the valid and legally binding obligation of the Seller enforceable against the
Seller in accordance with its respective terms except as enforceability
thereof may be limited by bankruptcy, insolvency, or reorganization or other
similar laws now or hereinafter in effect relating to creditors' rights
generally and by general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or in law;
(d) No material consent, approval, order or
authorization of, or declaration, filing or registration with, any
governmental entity is required to be obtained or made by the Seller in
connection with the execution, delivery or performance by the Seller of this
Assignment Agreement, or the consummation by it of the transactions
contemplated hereby;
(e) As of the date hereof, the Seller is not in default
under the Purchase Agreement; and
(f) No event has occurred or has failed to occur,
during the period commencing on date on which Assignor acquired the Mortgage
Loans and ending on the date hereof, inclusive, which would make the
representations and warranties set forth in Section 3.01 of the Purchase
Agreement untrue if such representations and warranties were made with respect
to the Mortgage Loans effective as of the date hereof.
6. From and after the date hereof, the Seller shall
recognize the Assignee as the owner of the Mortgage Loans, and shall look
solely to the Assignee for performance from and after the date hereof of the
Assignor's obligations with respect to the Mortgage Loans.
7. Notice Addresses.
(a) The Assignee's address for purposes of all notices
and correspondence related to the Mortgage Loans and this Assignment Agreement
is:
______________________
______________________
______________________
Attention: ________________
(b) The Assignor's address for purposes for all notices
and correspondence related to the Mortgage Loans and this Assignment Agreement
is:
[_____________________________]
[_____________________________]
[_____________________________]
[_____________________________]
Attention: _______________
D-4
(c) The Seller's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
Wachovia Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
8. This Assignment Agreement shall be construed in
accordance with the substantive laws of the State of New York (without regard
to conflict of laws principles) and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws, except
to the extent preempted by federal law.
9. This Assignment Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. Any entity into
which the Seller, the Assignor or the Assignee may be merged or consolidated
shall, without the requirement for any further writing, be deemed the Seller,
the Assignor or the Assignee, respectively, hereunder.
10. No term or provision of this Assignment 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.
11. This Assignment Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Purchase Agreement
by the Assignor.
12. Notwithstanding the assignment of the Purchase
Agreement by either the Assignor or Assignee, this Assignment Agreement shall
not be deemed assigned by the Seller or the Assignor unless assigned by
separate written instrument.
13. For the purpose for facilitating the execution of
this Assignment Agreement as herein provided and for other purposes, this
Assignment Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute and be one and the same instrument.
[signatures on following page]
D-5
IN WITNESS WHEREOF, the parties have caused this Assignment
Agreement to be executed by their duly authorized officers as of the date
first above written.
[_____________________________]
Assignor
By:
Name:
Title:
_______________________________
Assignee
By:
Name:
Title:
Wachovia Mortgage Corporation
Seller
By:
Name:
Title:
D-6
Exhibit E
---------
Form of Assignment and Conveyance
On this ____ day of ________, 200_, Wachovia Mortgage Corporation ("Wachovia")
as the Seller under that certain Seller's Purchase, Warranties and Servicing
Agreement, dated as of September 1, 2004 (the "Agreement"), by and between
Wachovia and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the "Purchaser") does
hereby sell, transfer, assign, set over and convey to the Purchaser under the
Agreement, without recourse, but subject to the terms of the Agreement, all
rights, title and interest of Wachovia (excluding the right to service the
Mortgage Loans) in and to the Mortgage Loans listed on the Mortgage Loan
Schedule attached hereto as Exhibit A, together with the Mortgage Files and
all rights and obligations arising under the documents contained therein.
Pursuant to Section 2.07 of the Agreement, Wachovia has delivered to the
Purchaser the documents for each Mortgage Loan to be purchased as set forth
therein. The contents of each Servicing File required to be retained by
Wachovia to service the Mortgage Loans pursuant to the Agreement and thus not
delivered to the Purchaser are and shall be held in trust by Wachovia, for the
benefit of the Purchaser as the owner thereof. Wachovia'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
Agreement, and such retention and possession by Wachovia shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, 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
Wachovia shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by Wachovia at the will of the Purchaser in such
custodial capacity only.
With respect to the Mortgage Loans listed on the Mortgage Loan Schedule
attached hereto as Exhibit A, the term Standard & Poor's Glossary, as used in
the Agreement, shall refer to Version __ of the Standard & Poor's LEVELS(R)
Glossary.
E-1
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
WACHOVIA MORTGAGE CORPORATION
By:______________________________________
Name:____________________________________
Title:___________________________________
E-2
Exhibit F
---------
Request for Release of Documents and Receipt
RE: Mortgage Loan #___________________________________
BORROWER: __________________________________________________
PROPERTY: __________________________________________________
Pursuant to a Seller's Purchase, Warranties and Servicing Agreement (the
"Agreement") between the Seller and the Purchaser, the undersigned hereby
certifies that he or she is an officer of the Seller requesting release of the
documents for the reason specified below. The undersigned further certifies
that:
(Check one of the items below)
_____ On _________________, the above captioned mortgage loan was
paid in full or the Seller has been notified that payment in
full has been or will be escrowed. The Seller hereby
certifies that all amounts with respect to this loan which
are required under the Agreement have been or will be
deposited in the Custodial Account as required.
_____ The above captioned loan is being repurchased pursuant to
the terms of the Agreement. The Seller hereby certifies that
the repurchase price has been credited to the Custodial
Account as required under the Agreement.
_____ The above captioned loan is being placed in foreclosure and
the original documents are required to proceed with the
foreclosure action. The Seller hereby certifies that the
documents will be returned to the Purchaser in the event of
reinstatement.
_____ Other (explain)
____________________________________________________________
____________________________________________________________
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Agreement.
F-1
Based on this certification and the indemnities provided for in the Agreement,
please release to the Seller all original mortgage documents in your
possession relating to this loan.
Dated:_________________ By:___________________________________________
Signature
______________________________________
Title
Send documents to: _______________________________________________________
_______________________________________________________
_______________________________________________________
Acknowledgment:
Purchaser hereby acknowledges that all original documents previously released
on the above captioned mortgage loan have been returned and received by the
Purchaser.
Dated:________________ By:___________________________________________
Signature
Title:________________________________________
F-2
Exhibit G
---------
Form of S-50Y Report
G-1
Exhibit H
---------
Form of P-4DL Report
H-1
Exhibit I
---------
Form of Indemnification and Contribution Agreement
This INDEMNIFICATION AND CONTRIBUTION AGREEMENT
("Agreement"), dated as of [_______], 200_, among [________________] (the
"Depositor"), a [______________] corporation (the "Depositor"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., a New York corporation ("▇▇▇▇▇▇") and Wachovia Mortgage
Corporation, a [_______________] (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor is acting as depositor and registrant
with respect to the Prospectus, dated [________________], and the Prospectus
Supplement to the Prospectus, [________________] (the "Prospectus
Supplement"), relating to [________________] Certificates (the "Certificates")
to be issued pursuant to a Pooling and Servicing Agreement, dated as of
[________________] (the "P&S"), among the Depositor, as depositor,
[________________], as servicer (the "Servicer"), and [________________], as
trustee (the "Trustee");
WHEREAS, as an inducement to the Depositor to enter into the
P&S, and [____________________] (the "Underwriter[s]") to enter into the
Underwriting Agreement, dated [____________________] (the "Underwriting
Agreement"), between the Depositor and the Underwriter[s], and
[_______________] (the "Initial Purchaser[s]") to enter into the Certificate
Purchase Agreement, dated [____________] (the "Certificate Purchase
Agreement"), between the Depositor and the Initial Purchaser[s], Seller has
agreed to provide for indemnification and contribution on the terms and
conditions hereinafter set forth;
WHEREAS, ▇▇▇▇▇▇ purchased from Seller certain of the
Mortgage Loans underlying the Certificates (the "Mortgage Loans") pursuant to
a Seller's Purchase, Warranties and Servicing Agreement, dated as of [DATE]
(the "Sale and Servicing Agreement"), by and between ▇▇▇▇▇▇ and Seller; and
WHEREAS, pursuant to Section 10.01 of the Sale and Servicing
Agreement, the Seller has agreed to indemnify the Depositor, ▇▇▇▇▇▇, the
Underwriter[s], the Initial Purchaser[s] and their respective present and
former directors, officers, employees and agents.
NOW THEREFORE, in consideration of the agreements contained
herein, and other valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the Depositor, ▇▇▇▇▇▇ and the Seller agree as
follows:
1. Indemnification and Contribution.
(a) The Seller agrees to indemnify and hold harmless the
Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] and their
respective Affiliates and their respective
I-1
present and former directors, officers, employees and agents and each person,
if any, who controls the Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial
Purchaser[s] or such Affiliate within the meaning of either Section 15 of the
Securities Act of 1933, as amended (the "1933 Act"), or Section 20 of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the 1933 Act, the 1934 Act or other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based in whole or in part upon any untrue
statement or alleged untrue statement of a material fact contained in the
Prospectus Supplement or the Offering Circular or any omission or alleged
omission to state in the Prospectus Supplement or the Offering Circular a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, or any such untrue statement or omission or alleged untrue
statement or alleged omission made in any amendment of or supplement to the
Prospectus Supplement or the Offering Circular (provided that ▇▇▇▇▇▇ has
provided the Seller with reasonable advanced notice of such amendment or
supplement and Seller if afforded no fewer than five (5) Business Days to
review and, if required, update, the Seller Information stated therein) and
agrees to reimburse the Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial
Purchaser[s] or such Affiliates and each such officer, director, employee,
agent and controlling person promptly upon demand for any legal or other
expenses reasonably incurred by any of them in connection with investigating
or defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
Seller shall be liable in any such case only to the extent that any such loss,
claim, damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission set
forth in or omitted from the Seller Information. The foregoing indemnity
agreement is in addition to any liability which Seller may otherwise have to
the Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] their
Affiliates or any such director, officer, employee, agent or controlling
person of the Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s]
or their respective Affiliates.
(b) ▇▇▇▇▇▇ agrees to indemnify and hold harmless the Seller
and its present and former directors, officers, employees and agents and each
person, if any, who controls the Seller within the meaning of either Section
15 of the 1933 Act, or Section 20 of the 1934 Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based in whole or in part upon any untrue statement or alleged
untrue statement of a material fact contained in the Prospectus Supplement or
the Offering Circular or any omission or alleged omission to state in the
Prospectus Supplement or the Offering Circular a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any such untrue
statement or omission or alleged untrue statement or alleged omission made in
any amendment of or supplement to the Prospectus Supplement or the Offering
Circular and agrees to reimburse the Seller and each such officer, director,
employee, agent and controlling person promptly upon demand for any legal or
other expenses reasonably incurred by any of them in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
I-2
however, that ▇▇▇▇▇▇ shall be liable in any such case only to the extent that
any such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission set forth in or omitted from the information set forth in the
Prospectus Supplement or the Offering Circular or any amendment of or
supplement to either Prospectus Supplement or the Offering Circular other than
(i) the Seller Information or (ii) any information regarding the Mortgage
Loans set forth in the Prospectus Supplement or the Offering Circular or any
amendment of or supplement to either that is derived from loan-level
information provided by the Seller to the Purchaser, the Depositor or any of
their Affiliates. The foregoing indemnity agreement is in addition to any
liability which ▇▇▇▇▇▇ may otherwise have to the Seller or any such director,
officer, employee, agent or controlling person of the Seller.
As used herein:
"Seller Information" means any information relating to
Seller and/or the underwriting guidelines relating to the Mortgage Loans set
forth in the Prospectus Supplement under the headings [______________] and in
the Offering Circular under the headings [______________] and in each case,
provided by the Seller specifically for use therein.
"Offering Circular" means the offering circular, dated
[__________] relating to the private offering of the [_______________]
Certificates.
(c) Promptly after receipt by any indemnified party under
this Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further, however,
that the failure to notify any indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 1.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, except as
provided in the following paragraph, the indemnifying party shall not be
liable to the indemnified party under this Section 1 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
indemnified party unless: (i) the employment thereof has been specifically
authorized by the indemnifying party in writing; (ii) such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it
I-3
which are different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is necessary or
appropriate for such indemnified party to employ separate counsel; or (iii)
the indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in which
case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party, it being understood,
however, the indemnifying party shall not, in connection with any one such
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for all such indemnified
parties.
Each indemnified party, as a condition of the indemnity
agreements contained in this Section 1, shall cooperate with the indemnifying
party in the defense of any such action or claim. No indemnifying party shall
be liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld), but if settled
with its written consent or if there be a final judgment for the plaintiff in
any such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss or liability by reason of such
settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of
such settlement.
(d) If the indemnification provided for in this Section 1 is
unavailable to an indemnified party, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party, respectively, in
connection with the statements or omissions that result in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified party and indemnifying
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and any other
equitable considerations.
(e) The indemnity and contribution agreements contained in
this Section 1 shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by the
Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s], their
respective Affiliates, directors, officers, employees or agents or any person
I-4
controlling the Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial
Purchaser[s] or any such Affiliate, and (iii) acceptance of and payment for
any of the Offered Certificates or Private Certificates.
2. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to Seller, will be mailed,
delivered or faxed or emailed and confirmed by mail to Wachovia Mortgage
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to Wachovia
Mortgage Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇ ▇▇▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇; if sent to ▇▇▇▇▇▇, ▇▇▇▇ be
mailed, delivered or faxed or emailed and confirmed by mail to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loans Operations Manager, Fax: [_______], Email:
▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, with copies to (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ - Legal Counsel, Securities, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, 1221 Avenue of the
Americas, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax [_____], Email:
▇▇▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ -
SPG Finance, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Fax [_____],Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; if to the
Depositor, will be mailed, delivered or telegraphed and confirmed to
[____________________]; or if to the Underwriter[s], will be mailed, delivered
or telegraphed and confirmed to [_____________________]; or if to the Initial
Purchaser[s], will be mailed, delivered or telegraphed and confirmed to
[_____________________].
3. Miscellaneous. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to the conflict of laws provisions thereof. This Agreement shall inure
to the benefit of and be binding upon the parties hereto and their successors
and assigns and the controlling persons referred to herein, and no other
person shall have any right or obligation hereunder. Neither this Agreement
nor any term hereof may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is sought. This
Agreement may be executed in counterparts, each of which when so executed and
delivered shall be considered an original, and all such counterparts shall
constitute one and the same instrument. Capitalized terms used but not defined
herein shall have the meanings provided in the P&S.
[SIGNATURE PAGE FOLLOWS]
I-5
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, this __th day of [_____________].
[DEPOSITOR]
By: ___________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: ____________________________________
Name:
Title:
WACHOVIA MORTGAGE CORPORATION
By: ____________________________________
Name:
Title:
I-6
Exhibit J
---------
Form of Annual Certification
Re: [_______________] (the "Trust"), Mortgage Pass-Through
Certificates, Series [_____], issued pursuant to the Pooling
and Servicing Agreement, dated as of [_____], 200[_] (the
"Pooling and Servicing Agreement"), among [_____], as
depositor (the "Depositor"), [_____], as trustee (the
"Trustee"), [_____], as servicer (the "Servicer"), and
[_____], as responsible party
I, [identify the certifying individual], certify to the
Depositor and the Trustee, and their officers, directors and Affiliates, and
with the knowledge and intent that they will rely upon this certification,
that:
1. The servicing information required to be provided
to the Trustee by the Servicer under the Pooling and
Servicing Agreement has been so provided;
2. I am responsible for reviewing the activities
performed by the Servicer under the Pooling and Servicing
Agreement and based upon my knowledge and the annual
compliance review required under the Pooling and Servicing
Agreement, and except as disclosed in the annual compliance
statement required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing
Agreement (which has been so delivered to the Trustee), the
Servicer has fulfilled its obligations under the Pooling and
Servicing Agreement; and
3. All significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards
for purposes of the report provided by an independent public
accountant, after conducting a review conducted in
compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the
Pooling and Servicing Agreement, have been disclosed to such
accountant and are included in such report.
Date: _______________________________
______________________________________
[Signature]
[Title]