Exhibit 99.1
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RENAISSANCE MORTGAGE ACCEPTANCE CORP.
as Purchaser,
RENAISSANCE REIT INVESTMENT CORP.
as Seller,
and
DELTA FUNDING CORPORATION
as Originator
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MORTGAGE LOAN SALE AND CONTRIBUTION AGREEMENT
Series 2005-1
Dated as of March 31, 2005
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TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS...........................................................................2
Section 1.1 Definitions.........................................................................2
ARTICLE II SALE OF MORTGAGE LOANS AND RELATED PROVISIONS.........................................2
Section 2.1 Sale of Mortgage Loans..............................................................2
Section 2.2 Agreement to Purchase...............................................................6
ARTICLE III REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH...................................6
Section 3.1 Representations and Warranties......................................................6
Section 3.2 Substitution of Mortgage Loans.....................................................18
ARTICLE IV SELLER'S COVENANTS...................................................................19
Section 4.1 Covenants of the Seller............................................................19
ARTICLE V INDEMNIFICATION BY THE ORIGINATOR....................................................20
Section 5.1 Indemnification....................................................................20
Section 5.2 Limitation on Liability of the Originator and the Seller...........................21
ARTICLE VI TERMINATION..........................................................................21
Section 6.1 Termination........................................................................21
ARTICLE VII ADMINISTRATIVE DUTIES................................................................21
Section 7.1 Administrative Duties..............................................................21
Section 7.2 Records............................................................................24
Section 7.3 Additional Information to be Furnished.............................................24
ARTICLE VIII MISCELLANEOUS PROVISIONS.............................................................24
Section 8.1 Amendment..........................................................................24
Section 8.2 Governing Law......................................................................24
Section 8.3 Notices............................................................................24
Section 8.4 Severability of Provisions.........................................................25
Section 8.5 Relationship of Parties............................................................25
Section 8.6 Counterparts.......................................................................25
Section 8.7 Further Agreements.................................................................25
Section 8.8 Intention of the Parties...........................................................25
Section 8.9 Successors and Assigns; Assignment of Purchase Agreement...........................25
Section 8.10 Survival...........................................................................25
Section 8.11 Third Party Beneficiary............................................................25
EXHIBIT A
MORTGAGE LOAN SCHEDULE............................................................A-1
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This MORTGAGE LOAN SALE AND CONTRIBUTION AGREEMENT (this
"Agreement"), dated as of March 31, 2005, is made among Renaissance REIT
Investment Corp. (the "Seller"), Renaissance Mortgage Acceptance Corp. (the
"Purchaser") and Delta Funding Corporation (the "Originator").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller owns the Mortgage Loans indicated on the
Mortgage Loan Schedule attached as Exhibit A hereto (the "Mortgage Loans"),
including rights to (a) any property acquired by foreclosure or deed in lieu of
foreclosure or otherwise, (b) the proceeds of any insurance policies covering
the Mortgage Loans and (c) its rights with respect to each of the Group I
Interest Rate Cap Agreement and the NIMs Interest Rate Cap Agreement; and
WHEREAS, the parties hereto desire that the Seller sell the
Mortgage Loans to the Purchaser and transfer its rights under the Group I
Interest Rate Cap Agreement and the NIMs Interest Rate Cap Agreement to the
Purchaser, and that the Originator make certain representations and warranties
on the Closing Date and undertake certain obligations on the Closing Date with
respect to such Mortgage Loans, in each case pursuant to the terms of this
Agreement; and
WHEREAS, pursuant to the terms of an Amended and Restated
Trust Agreement dated as of March 31, 2005 (the "Trust Agreement"), among the
Purchaser, as depositor, Wilmington Trust Company, as owner trustee (the "Owner
Trustee") and ▇▇▇▇▇ Fargo Bank, N.A., as certificate registrar and certificate
paying agent, the Purchaser will convey the Mortgage Loans to the Issuer; and
WHEREAS, pursuant to the terms of a Servicing Agreement dated
as of March 31, 2005 (the "Servicing Agreement"), among ▇▇▇▇▇ Fargo Bank, N.A.,
as master servicer (the "Master Servicer") and securities administrator (the
"Securities Administrator"), Ocwen Federal Bank FSB, servicer (the "Servicer"),
Renaissance Home Equity Loan Trust 2005-1, as issuer (the "Issuer") and HSBC
Bank USA, National Association, as indenture trustee (the "Indenture Trustee"),
the Servicer will service the Mortgage Loans directly or through one or more
Subservicers and the Master Servicer will provide master servicing functions;
and
WHEREAS, pursuant to the terms of an Indenture dated as of
March 31, 2005 (the "Indenture"), between the Issuer, the Indenture Trustee and
the Securities Administrator, the Issuer will pledge the Mortgage Loans to the
Indenture Trustee and issue and transfer to the Purchaser the Asset-Backed
Notes, Series 2005-1 (collectively, the "Notes"), representing debt of the
Issuer; and
WHEREAS, the parties intend these transactions to be treated
for federal, state and local tax purposes as the retention by the Seller of
ownership of the Mortgage Loans and issuance by the Seller of secured
indebtedness evidenced by the Notes, and have mutually covenanted to treat the
transactions consistent with that intent for all federal, state and local tax
purposes;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINITIONS. For all purposes of this Mortgage
Loan Sale and Contribution Agreement, except as otherwise expressly provided
herein or unless the context otherwise requires, capitalized terms not otherwise
defined herein shall have the meanings assigned to such terms in the Definitions
attached to the Indenture as Appendix A, which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
ARTICLE II
SALE OF MORTGAGE LOANS AND RELATED PROVISIONS
Section 2.1 SALE OF MORTGAGE LOANS.
(a) The Seller, concurrently with the execution and
delivery of this Agreement, does hereby sell, transfer, assign, set over and
otherwise convey, to the Purchaser, without recourse, (subject to Sections 2.2
and 3.1) (i) all of its right, title and interest in and to each Mortgage Loan,
including the Cut-Off Date Principal Balance and all collections in respect of
interest and principal received after the Cut-Off Date (other than payments in
respect of accrued interest and principal due on or before March 1, 2005); (ii)
property which secured such Mortgage Loan and which has been acquired by
foreclosure or deed in lieu of foreclosure; (iii) its interest in any insurance
policies in respect of the Mortgage Loans and (v) all proceeds of any of the
foregoing.
(b) In connection with such transfer, assignment and
conveyance the Seller shall deliver to, and deposit with, the Indenture Trustee
or the Custodian on behalf of the Indenture Trustee, on or before the Closing
Date, the following documents or instruments with respect to each Mortgage Loan
(the "Related Documents") and the related Mortgage Loan Schedule in computer
readable format:
(i) The original Mortgage Note, with all prior and
intervening endorsements showing a complete chain of endorsements from
the originator of the Mortgage Loan to the Person so endorsing the
Mortgage Loan to the Indenture Trustee, endorsed by such Person "Pay to
the order of HSBC Bank USA, National Association, as Indenture Trustee
under the applicable agreement, without recourse" and signed, by
facsimile or manual signature, in the name of the Seller by a
Responsible Officer;
(ii) For each Mortgage Loan that is not a MERS Mortgage
Loan, any of: (1) the original Mortgage and related power of attorney,
if any, with evidence of recording thereon, (2) (A) a copy of the
Mortgage, if any, certified as a true copy of the original Mortgage by
a Responsible Officer of the Seller by facsimile or manual signature or
by the closing attorney or by an officer of the title insurer or agent
of the title insurer that issued the related title insurance policy, in
such case, if the original has been transmitted for recording until
such time as the original is returned by the public recording office
and
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(B) a copy of the related power of attorney, if any, or (3) a copy of
the original recorded Mortgage and a copy of the related power of
attorney, if any, certified by the public recording office. For each
Mortgage Loan that is a MERS Mortgage Loan, the original Mortgage,
noting the presence of the MIN of the related Mortgage Loan and either
language indicating that the Mortgage Loan is a MOM Loan if 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;
(iii) For each Mortgage Loan, the original Assignment of
Mortgage in recordable form, from the Seller in blank, or to "HSBC Bank
USA, National Association, as Indenture Trustee under the applicable
agreement";
(iv) The original lender's title insurance policy or a
true copy thereof or, if such original lender's title insurance policy
has been lost, a copy thereof certified by the appropriate title
insurer to be true and complete or, if such lender's title insurance
policy has not been issued as of the Closing Date, a marked up
commitment (binder) to issue such policy;
(v) For each Mortgage Loan that was not a MERS Mortgage
Loan at its origination, all intervening assignments, if any, showing a
complete chain of assignments from the originator to the Seller,
including any recorded warehousing assignments, with evidence of
recording thereon, or a copy thereof certified by a Responsible Officer
of the Seller by facsimile or manual signature, or by the closing
attorney or by an officer of the title insurer or agent of the title
insurer that issued the related title insurance policy, as a true copy
of the original of such intervening assignments if the original has
been transmitted for recording until such time as the original is
returned by the public recording office or a copy of the original
recorded intervening assignments certified by the public recording
office;
(vi) Originals of all assumption, written assurance,
substitution and modification agreements, if any; and
(vii) In the case of a Cooperative Loan, the originals of
the following documents or instruments:
1. The Cooperative Shares, together with a
stock power in blank;
2. The executed Security Agreement;
3. The executed Proprietary Lease;
4. The executed Recognition Agreement;
5. The executed assignment of Recognition
Agreement;
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6. The executed UCC-1 financing statements with
evidence of recording thereon which have
been filed in all places required to perfect
the Seller's interest in the Cooperative
Shares and the Proprietary Lease; and
7. Executed UCC-3 financing statements or other
appropriate UCC financing statements
required by state law, evidencing a complete
and unbroken line from the mortgagee to the
Trustee with evidence of recording thereon
(or in a form suitable for recordation).
In addition, in connection with the assignment of any MERS
Mortgage Loan, the Seller agrees that it will cause, at the Seller's expense,
the MERS(R) System to indicate that such Mortgage Loans have been assigned by
the Seller to the Indenture Trustee in accordance with this Agreement for the
benefit of the Noteholders, by including (or deleting, in the case of Mortgage
Loans which are repurchased in accordance with this Agreement) in such computer
files the information required by the MERS(R) System to identify the series of
Notes issued in connection with such Mortgage Loans. The Seller further agrees
that it will not, and will not permit the Servicer or the Master Servicer to
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.
In instances where, for a Mortgage Loan that is not a MERS
Mortgage Loan, the original recorded Mortgage is not delivered as provided
above, and in instances where intervening assignments called for by clause (v)
above are unavailable, the Seller will deliver or cause to be delivered the
original recorded Mortgage and intervening assignments to the Indenture Trustee
or the Custodian on behalf of the Indenture Trustee promptly upon receipt
thereof but in no event later than one year after the Closing Date.
The Seller hereby confirms to the Purchaser that it has caused
the portions of the Electronic Ledger relating to the Mortgage Loans to be
clearly and unambiguously marked, and has made the appropriate entries in its
general accounting records, to indicate that such Mortgage Loans have been
transferred to the Indenture Trustee, as designee of the Purchaser, and
constitute part of the Trust in accordance with the terms of the trust created
hereunder.
(c) The parties hereto intend that the transactions set
forth herein be a sale by the Seller to the Purchaser of all the Seller's right,
title and interest in and to the Mortgage Loans and other property described
above and the sale by the Purchaser to the Trust of all the Purchaser's right,
title and interest in and to the Mortgage Loans and other property described
above. In the event either transaction set forth herein is deemed not to be a
sale, the Seller hereby grants to the Purchaser, and the Purchaser hereby grants
to the Indenture Trustee, a security interest in all of its respective right,
title and interest in, to and under the Mortgage Loans and other property
described above; and this Agreement shall constitute a security agreement under
applicable law. The Seller and the Purchaser shall, to the extent consistent
with this Agreement, take such actions as may be necessary to ensure that, if
this Agreement were deemed to create a security interest in the Mortgage Loans,
such security interest would be deemed to be a perfected security interest of
first priority under applicable law and will be maintained as such throughout
the term of the Agreement.
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Except as may otherwise expressly be provided herein, neither
the Seller nor the Purchaser shall assign, sell, dispose of or transfer any
interest in the Trust or any portion thereof, or permit the Trust or any portion
thereof to be subject to any lien, claim, mortgage, security interest, pledge or
other encumbrance of, any other Person.
In the event that the parties hereto have failed to transfer
the entire legal ownership in and to each Mortgage Loan to the Trust, the
parties hereto intend that this document operate to transfer the entire
equitable ownership interest in and to each Mortgage Loan to the Trust.
(d) Except with respect to any MERS Mortgage Loan, within
thirty (30) days of the Closing Date, the Seller, at its own expense, shall
prepare and send for recording the Assignments of Mortgage in favor of the
Indenture Trustee, in the appropriate real property or other records. With
respect to any Assignment of Mortgage as to which the related recording
information is unavailable within thirty (30) days following the Closing Date,
such Assignment of Mortgage shall be submitted for recording within thirty (30)
days after receipt of such information but in no event later than one year after
the Closing Date. The Indenture Trustee or the Custodian on behalf of the
Indenture Trustee shall be required to retain a copy of each Assignment of
Mortgage submitted for recording. In the event that any such Assignment of
Mortgage is lost or returned unrecorded because of a defect therein, the Seller
shall promptly prepare a substitute Assignment of Mortgage or cure such defect,
as the case may be, and thereafter the Seller shall be required to submit each
such Assignment of Mortgage for recording. Any failure of the Seller to comply
with this Section 2.1(d) shall result in the obligation of the Seller to
purchase or substitute for the related Mortgage Loans pursuant to the provisions
of Section 2.2.
(e) [Reserved].
(f) If the Seller is given notice that a Mortgage File is
defective or incomplete and if the Seller does not correct or cure such omission
or defect within the 90-day period specified in this Section 2.1(f), the Seller
shall purchase such Mortgage Loan from the Trust on the Determination Date in
the month following the month in which such 90-day period expired at the
Purchase Price of such Mortgage Loan. At any time the Seller exercises its
option to repurchase any Mortgage Loan pursuant to Section 3.1, the Seller shall
notify the Purchaser, the Servicer, the Master Servicer, the Securities
Administrator and the Indenture Trustee of any such repurchase no later than
five Business Days prior to the Determination Date of the month in which it
wishes to repurchase such Mortgage Loans and the Seller shall repurchase such
Mortgage Loan from the Trust on such Determination Date. The Purchase Price for
any purchased or repurchased Mortgage Loan shall be delivered to the Servicer
for deposit in the Collection Account no later than the applicable Determination
Date; and, upon receipt by the Indenture Trustee or the Custodian on behalf of
the Indenture Trustee of written notification of such deposit signed by a
Responsible Officer of the Seller, the Indenture Trustee or the Custodian on
behalf of the Indenture Trustee shall, in accordance with Section 3.07 of the
Servicing Agreement, release to the Seller the related Mortgage File and the
Indenture Trustee or the Custodian shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as shall be necessary to
vest in the Seller or its designee any Mortgage Loan released pursuant hereto.
It is understood and agreed that the obligation of the Seller to purchase
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any Mortgage Loan as to which a material defect in or omission of a constituent
document exists shall constitute the sole remedy against the Seller respecting
such defect or omission available to the Servicer (in its role as such), the
Master Servicer, the Noteholders, the Securities Administrator or the Indenture
Trustee on behalf of Noteholders. If pursuant to the foregoing provisions the
Seller repurchases a Mortgage Loan that is a MERS Mortgage Loan, the Seller
shall cause the Servicer, at the Seller's expense, to either (i) cause MERS to
execute and deliver an Assignment of 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.
The Seller, promptly following the transfer of (i) a Mortgage
Loan from or (ii) an Eligible Substitute Mortgage Loan to the Trust pursuant to
this Section 2.1 or Section 3.1, as the case may be, shall amend the Mortgage
Loan Schedule, appropriately ▇▇▇▇ the Electronic Ledger and make appropriate
entries in its general account records to reflect such transfer and the addition
of any Eligible Substitute Mortgage Loan, if applicable.
Section 2.2 AGREEMENT TO PURCHASE.
The Seller agrees to sell and the Purchaser agrees to
purchase, on or before March 31, 2005 (the "Closing Date"), certain fixed-rate
and adjustable-rate mortgage loans (the "Mortgage Loans"), having an aggregate
principal balance as of the close of business on the Cut-Off Date of
$749,999,268.09 (the "Closing Balance"), after giving effect to all payments due
on the Mortgage Loans on or before the Cut-Off Date, whether or not received,
including the right to any Prepayment Charges payable by the related Mortgagors
in connection with any Principal Prepayments on the Mortgage Loans. The purchase
price payable in connection with such sale shall consist of (i) the cash
proceeds from the sale of the Notes and (ii) delivery of the Trust Certificates
to the Seller.
The Seller and the Purchaser intend that the sale of the
Mortgage Loans to the Purchaser, followed by the Purchaser's sale of the
Mortgage Loans to the Issuer, shall be treated for federal, state and local tax
purposes as a transfer by the Seller directly to the Issuer (followed by the
issuance by the Issuer of Notes that are intended by all parties to such
issuance to be treated for federal, state and local tax purposes as indebtedness
of the Seller secured by the Mortgage Loans).
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.1 REPRESENTATIONS AND WARRANTIES. The Originator (in
the case of (a) and (c) below) and Seller (in the case of (b) below) hereby
represents and warrants to the Purchaser as of the Closing Date (or if otherwise
specified below, as of the date so specified):
(a) AS TO THE ORIGINATOR:
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(1) The Originator is a corporation licensed as
a mortgage banker duly organized, validly existing and in good
standing under the laws of the state of its incorporation and
has, and had at all relevant times, full corporate power to
originate the Mortgage Loans, to own its property, to carry on
its business as presently conducted and to enter into and
perform its obligations under this Agreement. The Originator
has all necessary licenses and is qualified to transact
business in and is in good standing under the laws of each
state where a Mortgaged Property is located or is otherwise
exempt under applicable law from such qualification or is
otherwise not required under applicable law to effect such
qualification and no demand for such qualification has been
made upon the Originator by any state having jurisdiction;
(2) The execution and delivery of this Agreement
by the Originator and the Originator's performance of and
compliance with the terms of this Agreement will not violate
the Originator's articles of incorporation or by-laws or
constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result
in the breach or acceleration of, any material contract,
agreement or other instrument to which the Originator is a
party or which may be applicable to the Originator or any of
its assets;
(3) The Originator has the full power and
authority to enter into and consummate all transactions
contemplated by this Agreement to be consummated by it, has
duly authorized the execution, delivery and performance of
this Agreement, and has duly executed and delivered this
Agreement. This Agreement, assuming due authorization,
execution and delivery by the other parties hereto,
constitutes a valid, legal and binding obligation of the
Originator, enforceable against it in accordance with the
terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(4) The Originator is not in violation of, and
the execution and delivery of this Agreement by the Originator
and the performance by it and compliance with the terms of
this Agreement will not constitute a violation with respect
to, any order or decree of any court or any order or
regulation of any federal, state, municipal or governmental
agency having jurisdiction, which violation would materially
and adversely affect the condition (financial or otherwise) or
operations of the Originator or any of its properties or
materially and adversely affect the performance of any of its
duties hereunder;
(5) Except as disclosed in the Prospectus
Supplement, there are no actions or proceedings against, or
investigations of, the Originator pending or, to the knowledge
of the Originator, threatened, before any court,
administrative agency or other tribunal (A) that, if
determined adversely, would prohibit its entering into this
Agreement, (B) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or (C) that,
if determined
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adversely, would prohibit or materially and adversely affect
the performance by the Originator of any of its obligations
under, or the validity or enforceability of, this Agreement;
(6) No consent, approval, authorization or order
of any court or governmental agency or body is required for
the execution, delivery and performance by the Originator of,
or compliance by the Originator with, this Agreement, or for
the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations
and orders, if any, that have been obtained prior to the
Closing Date;
(7) The Originator 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;
(8) No Officer's Certificate, statement, report
or other document prepared by the Originator and furnished or
to be furnished by it pursuant to this Agreement or in
connection with the transactions contemplated hereby contains
any untrue statement of material fact; and
(9) The transactions contemplated by this
Agreement are in the ordinary course of business of the
Originator.
(b) AS TO THE SELLER:
(1) The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the
state of its incorporation and has, and had at all relevant
times, full corporate power to sell the Mortgage Loans, to own
its property, to carry on its business as presently conducted
and to enter into and perform its obligations under this
Agreement;
(2) The execution and delivery of this Agreement
by the Seller and the Seller's performance of and compliance
with the terms of this Agreement will not violate the Seller's
articles of incorporation or by-laws or constitute a default
(or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the breach or
acceleration of, any material contract, agreement or other
instrument to which the Seller is a party or which may be
applicable to the Seller or any of its assets;
(3) The Seller has the full power and authority
to enter into and consummate all transactions contemplated by
this Agreement to be consummated by it, has duly authorized
the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement. This
Agreement, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a valid, legal and
binding obligation of the Seller, enforceable against it in
accordance with the terms hereof, except as such
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enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws
relating to or affecting the rights of creditors generally,
and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at
law);
(4) The Seller is not in violation of, and the
execution and delivery of this Agreement by the Seller and the
performance by it and compliance with the terms of this
Agreement will not constitute a violation with respect to, any
order or decree of any court or any order or regulation of any
federal, state, municipal or governmental agency having
jurisdiction, which violation would materially and adversely
affect the condition (financial or otherwise) or operations of
the Seller or any of its properties or materially and
adversely affect the performance of any of its duties
hereunder;
(5) There are no actions or proceedings against,
or investigations of, the Seller pending or, to the knowledge
of the Seller, threatened, before any court, administrative
agency or other tribunal (A) that, if determined adversely,
would prohibit its entering into this Agreement, (B) seeking
to prevent the consummation of any of the transactions
contemplated by this Agreement or (C) that, if determined
adversely, would prohibit or materially and adversely affect
the performance by the Seller of any of its obligations under,
or the validity or enforceability of, this Agreement;
(6) 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, or for the
consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations
and orders, if any, that have been obtained prior to the
Closing Date;
(7) The Seller did not sell the Mortgage Loans
to the Purchaser with any intent to hinder, delay or defraud
any of its creditors; and the Seller will not be rendered
insolvent as a result of the sale of the Mortgage Loans to the
Purchaser;
(8) The Seller acquired title to the Mortgage
Loans in good faith, without notice of any adverse claim;
(9) No Officer's Certificate, statement, report
or other document prepared by the Seller and furnished or to
be furnished by it pursuant to this Agreement or in connection
with the transactions contemplated hereby contains any untrue
statement of material fact;
(10) The transfer, assignment and conveyance of
the Mortgage Notes and the Mortgages by the Seller pursuant to
this Agreement are not subject to the bulk transfer laws or
any similar statutory provisions in effect in any applicable
jurisdiction;
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(11) The transactions contemplated by this
Agreement are in the ordinary course of business of the
Seller; and
(12) The Seller has caused or hereby agrees to
cause to be performed any and all acts required to be
performed to preserve the rights and remedies of the Indenture
Trustee in any insurance policies applicable to the Mortgage
Loans, including, without limitation, any necessary
notifications of insurers, assignments of policies or
interests therein, and establishments of co-insured, joint
loss payee and mortgagee rights in favor of the Indenture
Trustee.
(c) AS TO EACH MORTGAGE LOAN:
(1) The information set forth on the Mortgage
Loan Schedule and the Prepayment Charge Schedule is complete,
true and correct as of the dates as of which the information
therein is given;
(2) The Mortgage Notes and the Mortgages have
not been assigned or pledged by the Seller to any Person other
than warehouse lenders, and immediately prior to the
transactions herein contemplated, the Seller had good and
marketable title thereto, and was the sole owner and holder of
the Mortgage Loans free and clear of any and all liens,
claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature
(collectively, a "Lien"), other than any such Lien released
simultaneously with the sale contemplated herein, and had full
right and authority, subject to no interest or participation
of, or agreement with, any other party, to sell and assign the
same pursuant to this Agreement, and immediately upon the
transfer and assignment of each Mortgage Loan as contemplated
by this Agreement, the Trust will be the sole beneficial owner
of, each Mortgage Loan free and clear of any lien, claim,
participation interest, mortgage, security interest, pledge,
charge or other encumbrance or other interest of any nature;
(3) With respect to any Mortgage Loan that is
not a Cooperative Loan, each Mortgage is a valid and existing
lien on the property therein described, and each Mortgaged
Property is free and clear of all encumbrances and liens
having priority over the lien of the Mortgage, except (i)
liens for real estate taxes and special assessments not yet
due and payable, (ii) covenants, conditions and restrictions,
rights of way, easements and other matters of public record as
of the date of recording such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending
institutions generally or specifically reflected in the
appraisal made in connection with the origination of the
related Mortgage Loan, (iii) 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 such Mortgage, (iv) in the case of a Mortgaged
Property that is a condominium or an individual unit in a
planned unit development, liens for common charges permitted
by statute and (v) in the case of a Mortgage Loan secured by a
second lien on the related Mortgaged Property, the related
First Lien. Any security agreement, chattel mortgage or
equivalent document related to the Mortgage and
10
delivered to the Indenture Trustee or the Custodian on behalf
of the Indenture Trustee establishes in the Seller a valid and
subsisting lien on the property described therein, and the
Seller has full right to sell and assign the same to the
Trust;
(4) The terms of each Mortgage Note and Mortgage
have not been impaired, altered or modified in any respect,
except by a written instrument which has been recorded, if
necessary to protect the interests of the Trust, and which has
been delivered to the Indenture Trustee or the Custodian on
behalf of the Indenture Trustee. The substance of any such
alteration or modification is reflected on the Mortgage Loan
Schedule;
(5) No instrument of release or waiver has been
executed in connection with any Mortgage Loan, and no
Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement which has been
approved by the primary mortgage guaranty insurer, if any, and
which has been delivered to the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee;
(6) Except with respect to delinquencies
described in clause (12) hereof, no Mortgagor is in default in
complying with the terms of its Mortgage Note or Mortgage, and
the Seller has not waived any default, breach, violation or
event of acceleration except that the Seller may have accepted
late payments, and all taxes, governmental assessments,
insurance premiums or water, sewer and municipal charges which
previously became due and owing have been paid, or an escrow
of funds has been established in an amount sufficient to pay
for every such item which remains unpaid and which has been
assessed but is not yet due and payable. The Seller has not
advanced funds or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly
or indirectly, for the payment of any amount required by the
Mortgage, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage
proceeds, whichever is more recent, to the day which precedes
by one (1) month the Due Date of the first installment of
principal and interest;
(7) There is no proceeding pending or threatened
for the total or partial condemnation of any Mortgaged
Property, nor is such a proceeding currently occurring, and
such property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or otherwise, 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;
(8) 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 lien) affecting any Mortgaged Property which are, or may
be, liens prior or equal to, or coordinate with, the lien of
the Mortgage except those that are stated in the title
insurance policy and for which related losses are
affirmatively insured against by such policy;
11
(9) All of the improvements that were included
for the purpose of determining the Appraised Value of each
Mortgaged Property lie wholly within the boundaries and
building restriction lines of such property, and no
improvements on adjoining properties encroach upon the
Mortgaged Property except those that are stated in the title
insurance policy and for which related losses are
affirmatively insured against by such policy;
(10) No improvement located on or being part of
any Mortgaged Property is in violation of any applicable
zoning law or regulation. 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 and the Mortgaged Property is lawfully occupied
under applicable law;
(11) All parties that have had any interest in
any Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any
and all licensing requirements of the United States and of the
laws of the state wherein the Mortgaged Property is located
that are applicable to such parties and (2)(A) organized under
the laws of such state or (B) qualified to do business in such
state or exempt from such qualification in a manner so as not
to affect adversely the enforceability of such Mortgage Loan
or (C) federal savings and loan associations or national banks
having principal offices in such state or (D) not doing
business in such state;
(12) With respect to the Mortgage Loans, as of
the Cut-Off Date, (i) all payments required to be made on each
Mortgage Loan under the terms of the related Mortgage Note
have been made and none of the Mortgage Loans (by Cut-Off Date
Pool Balance) are 31 or more days delinquent, and (ii) no
payment required to be made on any Mortgage Loan has been more
than 30 to 59 days delinquent more than once during the twelve
(12) month period immediately preceding the Cut-Off Date;
(13) Each of the documents and instruments
included in a Mortgage File is duly executed and in due and
proper form and each such document or instrument is in a form
generally acceptable to prudent institutional mortgage lenders
that regularly originate or purchase mortgage loans;
(14) The Mortgage Notes and the related Mortgages
are genuine, and each is the legal, valid and binding
obligation of the maker thereof, enforceable in accordance
with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law). All parties
to the Mortgage Note and the Mortgage had legal
12
capacity to execute the Mortgage Note and the Mortgage, and
each Mortgage Note and Mortgage have been duly and properly
executed by such parties. The Mortgagor is a natural person
who is a party to the Mortgage Note and the Mortgage in an
individual capacity, and not in the capacity of a trustee or
otherwise;
(15) 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 origination and servicing of the
Mortgage Loans or otherwise applicable to the Mortgage Loans
have been complied with, and the Originator has and shall
maintain in its possession, available for the Indenture
Trustee's inspection, and shall deliver to the Indenture
Trustee upon demand, evidence of compliance with all such
requirements;
(16) Except for Escrow Repair Loans, the proceeds
of the Mortgage Loans have been fully disbursed, 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, closing or recording the Mortgage Loan
have been paid;
(17) Each Mortgage Loan is covered by an ALTA
mortgage title insurance policy or such other form of policy
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by and
constituting the valid and binding obligation of a title
insurer generally acceptable to prudent mortgage lenders that
regularly originate or purchase mortgage loans comparable to
the Mortgage Loans for sale to prudent investors in the
secondary market that invest in mortgage loans such as the
Mortgage Loans and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring
the Seller, its successors and assigns, as to the first
priority lien of the Mortgage in the case of a Mortgage Loan
secured by a First Lien on the related Mortgaged Property and
the second priority lien of the Mortgage in the case of a
Mortgage Loan secured by a second lien on the related
Mortgaged Property, in the original principal amount of the
Mortgage Loan. The Originator is the sole named insured of
such mortgage title insurance policy, the assignment to the
Indenture Trustee of the Seller's interest in such mortgage
title insurance policy does not require the consent of or
notification to the insurer or the same has been obtained, and
such mortgage title insurance policy is in full force and
effect and will be in full force and effect and inure to the
benefit of the Indenture Trustee upon the consummation of the
transactions contemplated by this Agreement. No claims have
been made under such mortgage title insurance policy and no
prior holder of the related Mortgage, including the Originator
and the Seller, has done, by act or omission, anything that
would impair the coverage of such mortgage title insurance
policy;
(18) All improvements upon the Mortgaged
Properties are insured by a generally acceptable insurer
against loss by fire, hazards of extended coverage and such
other hazards as are customary in the area where the Mortgaged
13
Property is located pursuant to insurance policies conforming
to the requirements of this Agreement. If a Mortgaged Property
was, at the time of origination of the related Mortgage Loan,
in an area identified on a Flood Hazard Boundary Map or Flood
Hazard Rate Map issued by the Federal Emergency Management
Agency as having special flood hazards (and if the flood
insurance policy referenced herein has been made available), a
flood insurance policy is in effect with respect to such
Mortgaged Property with a generally acceptable carrier in an
amount representing coverage described in this Agreement. All
individual insurance policies (collectively, the "hazard
insurance policy") are the valid and binding obligation of the
insurer and contain a standard mortgagee clause naming the
Originator, its successors and assigns, as mortgagee. All
premiums thereon have been paid. 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 obtain and
maintain such insurance at the Mortgagor's cost and expense
and to seek reimbursement therefor from the Mortgagor;
(19) No Mortgage Loan is subject to any right of
rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms
of any Mortgage Note or the related Mortgage, or the exercise
of any right thereunder in accordance with the terms thereof,
render either the Mortgage Note or the Mortgage unenforceable,
in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of
usury, and no such right of rescission, set-off, counterclaim
or defense has been asserted with respect thereto;
(20) Each Mortgage Loan was originated or
purchased and reunderwritten by the Originator;
(21) Except with respect to any interest-only
Mortgage Loan, each Mortgage Loan is payable in Monthly
Payments which would be sufficient, in the absence of late
payments, to fully amortize such loan within the term thereof,
beginning no later than sixty (60) days after disbursement of
the proceeds of the Mortgage Loan. With the exception of no
more than 1% of the Mortgage Loans which have interest rates
that may be reduced if the related Mortgagor makes timely
payments on such Mortgage Loan, each Mortgage Loan bears a
fixed interest rate for the term of the Mortgage Loan or an
adjustable-interest rate based on the related Loan Index;
(22) Each Mortgage contains a customary provision
for the acceleration of the payment of the unpaid principal
balance of the Mortgage Loan in the event the related
Mortgaged Property is sold without the prior consent of the
holder thereunder;
(23) No Mortgage Loan is a construction loan;
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(24) The Mortgage Notes are not and have not been
secured by any collateral, pledged account or other security
except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel
mortgage referred to in clause (3) above;
(25) Each Mortgage contains customary and
enforceable provisions which render the rights and remedies of
the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security, including
(i) in the case of a Mortgage designated as a deed of trust,
by trustee's sale and (ii) otherwise by judicial or
nonjudicial foreclosure. There is no homestead or other
exemption available to the Mortgagor that would interfere with
the right to sell the Mortgaged Property at a trustee's sale
or the right to foreclose the Mortgage;
(26) With respect to each Mortgage constituting a
deed of trust, a trustee, duly qualified under applicable law
to serve as such, has been properly designated and currently
so serves and is named in such Mortgage, and no fees or
expenses are or will become payable by the Indenture Trustee
or the Noteholders to the Indenture Trustee under the deed of
trust, except in connection with a trustee's sale after
default by the Mortgagor, which fees and expenses shall
constitute Servicing Advances;
(27) Each Mortgaged Property is located in the
state identified in the Mortgage Loan Schedule. No residence
or dwelling is a manufactured dwelling that is not treated as
real property under local law. No Mortgaged Properties are
held under a ground lease;
(28) The Mortgage Loans were underwritten in
accordance with the Originator's underwriting guidelines
described in the Prospectus under the heading "The
Seller--Loan Underwriting";
(29) There exist no deficiencies with respect to
escrow deposits and payments, if such are required, for which
customary arrangements for repayment thereof have not been
made, and no escrow deposits or payments of other charges or
payments due the Seller have been capitalized under any
Mortgage or the related Mortgage Note;
(30) No Mortgage Loan was originated under a
buy-down plan;
(31) Other than as provided by this Agreement,
there is no obligation on the part of the Seller or any other
party to make payments in addition to those made by the
Mortgagors;
(32) With respect to each Mortgage Loan, the
Seller is in possession of a complete Mortgage File, except
those documents delivered to the Indenture Trustee or
Custodian on behalf of the Indenture Trustee, and there are no
15
custodial agreements in effect adversely affecting the right
or ability of the Seller to make the document deliveries
required hereby;
(33) No Mortgage Loan was selected for inclusion
under this Agreement on any basis which was intended to have a
material adverse effect on the Noteholders;
(34) No Mortgage Loan has a shared appreciation
or other contingent interest feature;
(35) With respect to each Mortgage Loan secured
by a second lien on the related Mortgaged Property: (a) the
related First Lien does not provide for negative amortization;
and (b) either no consent for the Mortgage Loan secured by a
second lien on the related Mortgaged Property is required by
the holder of the related First Lien or such consent has been
obtained and is contained in the Mortgage File;
(36) Each Mortgage Loan conforms, and all the
Mortgage Loans in the aggregate conform, in all material
respects to the description thereof set forth in the
Prospectus Supplement;
(37) A full appraisal on forms approved by ▇▇▇▇▇▇
Mae or ▇▇▇▇▇▇▇ Mac or on a report of an insured automated
valuation model of the related Mortgaged Property was
performed in connection with the origination of each Mortgage
Loan. Each appraisal or insured automation valuation model
report meets guidelines that would be generally acceptable to
prudent mortgage lenders that regularly originate or purchase
mortgage loans comparable to the Mortgage Loans for sale to
prudent investors in the secondary market that invest in
mortgage loans such as the Mortgage Loans;
(38) To the best of the Seller's knowledge, no
Mortgaged Property was, as of the related Cut-Off Date,
located within a one-mile radius of any site listed in the
National Priorities List as defined under the Comprehensive
Environmental Response, Compensation and Liability Act of
1980, as amended, or on any similar state list of hazardous
waste sites which are known to contain any hazardous substance
or hazardous waste;
(39) None of the Mortgage Loans are subject to a
bankruptcy proceeding;
(40) Each Cooperative Loan is secured by a valid,
subsisting and enforceable perfected first lien and security
interest in the related Mortgaged Property, subject only to
(i) the rights of the Cooperative Corporation to collect
Maintenance and assessments from the Mortgagor, (ii) the lien
of the Blanket Mortgage, if any, on the Cooperative Property
and of real property taxes, water and sewer charges, rents and
assessments on the Cooperative Property not yet due and
payable, and (iii) other matters to which like Cooperative
Units are
16
commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the
Security Agreement or the use, enjoyment, value or
marketability of the Cooperative Unit. Each original UCC
financing statement, continuation statement or other
governmental filing or recordation necessary to create or
preserve the perfection and priority of the first priority
lien and security interest in the Cooperative Shares and
Proprietary Lease has been timely and properly made. Any
security agreement, chattel mortgage or equivalent document
related to the Cooperative Loan and delivered to the Seller or
its designee establishes in the Seller a valid and subsisting
perfected first lien on and security interest in the property
described therein, and the Seller has full right to sell and
assign the same;
(41) Each Cooperative Corporation qualifies as a
"cooperative housing corporation" as defined in Section 216 of
the Code;
(42) Each adjustable-rate Mortgage Loan is
secured by a first lien, and each fixed-rate Mortgage Loan is
secured by a first or second lien;
(43) No Mortgage Loan was subject to (i) the Home
Ownership and Equity Protection Act of 1994, (ii) the
regulations promulgated by the New York State Banking
Department (3 NYCRR Part 41), or (iii) except as set forth in
clause (48) below, any other comparable regulations or
legislation enacted by any other State or regulatory body;
(44) Any Mortgage Loan that is subject to the
regulations promulgated by the Illinois Office of Banks and
Real Estate and the Department of Financial Institutions
(Title 38 Chapter II Section 1050.155) or the regulations
promulgated by the Vermont Commissioner of Banking (Vermont
Stat. ▇▇▇. Title 9, Subsection 104, Reg. B-98-2) is in full
compliance therewith as of the Closing Date;
(45) With respect to each Mortgage Loan that has
a Prepayment Charge feature, each such Prepayment Charge is
enforceable (except to the extent that the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws affecting creditor's
rights generally or the collectability thereof may be limited
due to acceleration in connection with a foreclosure) and each
Prepayment Charge is permitted pursuant to applicable federal,
state and local law, subject to federal preemption where
applicable;
(46) Each Mortgage Loan at the time it was made
complied in all material respects with applicable local, state
and federal laws, including, but not limited to, all
applicable high cost (e.g., predatory and abusive) lending
laws;
(47) Each Mortgage Loan in Loan Group II bears
interest at a fixed rate for the life of the Mortgage Loan;
17
(48) No Mortgage Loan is a High Cost Home Loan
and no Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending
Act; and
(49) No Mortgage Loan is a high cost loan or a
covered loan, as applicable (as such terms are defined in the
then current Standard & Poor's LEVELS Version 5.6(b) Glossary
Revised, Appendix E).
It is understood and agreed that the representations and
warranties set forth in this Section 3.1 shall survive delivery of the
respective Mortgage Files to the Indenture Trustee or the Custodian on behalf of
the Indenture Trustee and the termination of the rights and obligations of the
Servicer pursuant to the Servicing Agreement. Upon discovery by the Seller, the
Depositor, the Servicer, the Master Servicer or a Responsible Officer of the
Indenture Trustee or the Securities Administrator of a breach of any of the
foregoing representations and warranties, which materially and adversely affects
the value of, or the interests of the Trust or the Noteholders in, the related
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties. Within sixty (60) days of its discovery or its
receipt of notice of breach, the Originator shall use all reasonable efforts to
cure such breach in all material respects or shall purchase such Mortgage Loan
from the Trust or substitute an Eligible Substitute Mortgage Loan as provided in
Section 3.2 for such Mortgage Loan. Any such purchase by the Seller shall be at
the Purchase Price, and in each case shall be accomplished in the manner set
forth in Section 2.1(f). It is understood and agreed that the obligation of the
Seller to cure, substitute or purchase any Mortgage Loan as to which such a
breach has occurred and is continuing shall constitute the sole remedy against
the Seller respecting such breach available to the Servicer (in its role as
such), the Master Servicer (in its role as such), the Noteholders, the
Securities Administrator or the Indenture Trustee on behalf of Noteholders. In
addition, on any Payment Date the Seller may, at its option, repurchase Mortgage
Loans from the Trust (which such Mortgage Loans shall not be adversely
selected), provided that such option shall terminate after the Seller has
repurchased Mortgage Loans in the aggregate amount of 1% of the Cut-off Date
Pool Balance. Any such repurchase by the Seller shall be at the Purchase Price,
and in each case shall be accomplished in the manner set forth in Section
2.1(f).
Upon discovery by the Servicer, the Seller, the Depositor, the
Master Servicer or a Responsible Officer of the Indenture Trustee or the
Securities Administrator of a breach of the representation set forth in Section
3.1(c)(45) which materially and adversely affects the Holders of the NIMs Notes,
the party discovering such breach shall give prompt written notice to the
Originator. Within 60 days of the earlier of discovery by the Servicer, the
Depositor, Master Servicer or the Seller, as applicable, or receipt of notice by
the Originator of such breach, the Originator shall cure such breach in all
material respects and pay to the Servicer for deposit into the Collection
Account the amount of the scheduled Prepayment Charge, less any amount
previously collected and paid by the Servicer into the Collection Account.
Section 3.2 SUBSTITUTION OF MORTGAGE LOANS. On or before the
date on which the Seller would otherwise be required to repurchase a Mortgage
Loan under Section 2.1(f) or 3.1, the Seller may deliver to the Indenture
Trustee or the Custodian on behalf of the Indenture Trustee one or more Eligible
Substitute Mortgage Loans in substitution for any one or more of
18
the Defective Mortgage Loans which the Seller would otherwise be required to
repurchase pursuant to Section 2.1(f) or 3.1.
The Seller shall notify the Servicer, the Master Servicer, the
Securities Administrator and the Indenture Trustee in writing not less than five
(5) Business Days before the related Determination Date which is on or before
the date on which the Seller would otherwise be required to repurchase such
Mortgage Loan pursuant to Section 2.1(f) or 3.1 of its intention to effect a
substitution under this Section 3.2. On such Determination Date (the
"Substitution Date"), the Seller shall deliver to the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee (1) the Eligible Substitute
Mortgage Loans to be substituted for the Defective Mortgage Loans, (2) a list of
the Defective Mortgage Loans to be substituted for by such Eligible Substitute
Mortgage Loans, (3) an Officer's Certificate (A) stating that the aggregate
Principal Balance of all Eligible Substitute Mortgage Loans (determined with
respect to each Eligible Substitute Mortgage Loan as of the Determination Date
on which it was substituted) including the principal balance of Eligible
Substitute Mortgage Loans being substituted on such Determination Date does not
exceed an amount equal to 5% of the aggregate Original Class Principal Balance
as of the Closing Date, (B) stating that all conditions precedent to such
substitution specified in the immediately preceding paragraph have been
satisfied and attaching as an exhibit a supplemental Mortgage Loan schedule (the
"Supplemental Mortgage Loan Schedule") setting forth the same type of
information as appears on the Mortgage Loan Schedule and representing as to the
accuracy thereof and (C) confirming that the representations and warranties
contained in Section 3.1 are true and correct in all material respects with
respect to the Eligible Substitute Mortgage Loans on and as of such
Determination Date, PROVIDED that remedies for the inaccuracy of such
representations are limited as set forth in Sections 2.1(f), 3.1 and this
Section 3.2 and (4) a certificate stating that cash in the amount of the related
Substitution Adjustment, if any, has been delivered to the Servicer for deposit
in the Collection Account. Upon receipt of the foregoing, pursuant to Section
3.07 of the Servicing Agreement, the Indenture Trustee or the Custodian on
behalf of the Indenture Trustee shall release such Defective Mortgage Loans to
the Seller.
Concurrently with the satisfaction of the conditions set forth
in the immediately preceding paragraphs and the transfer of such Eligible
Substitute Mortgage Loans to the Indenture Trustee pursuant to Section 2.1, the
Mortgage Loan Schedule shall be deemed to be amended to exclude all Mortgage
Loans being replaced by such Eligible Substitute Mortgage Loans and to include
the information set forth on the Supplemental Mortgage Loan Schedule with
respect to such Eligible Substitute Mortgage Loans, and all references in this
Agreement to Mortgage Loans shall include such Eligible Substitute Mortgage
Loans and be deemed to be made on or after the related Substitution Date, as the
case may be, as to such Eligible Substitute Mortgage Loans.
ARTICLE IV
SELLER'S COVENANTS
Section 4.1 COVENANTS OF THE SELLER. The Seller hereby
covenants that, except for the transfer hereunder with respect to the Mortgage
Loans, the Seller will not sell, pledge, assign or transfer to any other Person,
or grant, create, incur or assume any Lien on, any
19
Mortgage Loan, whether now existing or hereafter created, or any interest
therein; the Seller will notify the Issuer, as assignee of the Purchaser, of the
existence of any Lien (other than as provided above) on any Mortgage Loan
immediately upon discovery thereof; and the Seller will defend the right, title
and interest of each of the Issuer and the Indenture Trustee, as assignee of the
Purchaser and the Issuer, respectively, in, to and under the Mortgage Loans,
whether now existing or hereafter created, against all claims of third parties
claiming through or under the Seller.
ARTICLE V
INDEMNIFICATION BY THE ORIGINATOR
Section 5.1 INDEMNIFICATION. The Originator shall indemnify
and hold harmless each of (i) the Purchaser, (ii) the Underwriters, (iii) the
Person, if any, to which the Purchaser assigns its rights in and to a Mortgage
Loan and each of their respective successors and assigns and (iv) each person,
if any, who controls the Purchaser within the meaning of Section 15 of the
Securities Act of 1933, as amended (the "1933 Act") ((i) through (iv)
collectively, the "Indemnified Party") against any and all losses, claims,
expenses, damages or liabilities to which the Indemnified Party may become
subject, under the 1933 Act or otherwise, insofar as such losses, claims,
expenses, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (a) any untrue statement or alleged untrue statement of any
material fact contained in the Prospectus Supplement or the omission or the
alleged omission to state therein the material fact necessary in order to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with (i)
information furnished in writing to the Purchaser or any of its affiliates by
the Originator or any of its affiliates specifically for use therein, which
shall include, with respect to the Prospectus Supplement, the information set
forth under the captions "Summary--The Mortgage Loans," "Risk Factors" (to the
extent of information concerning the Mortgage Loans contained therein),
"Description of the Mortgage Loans", or (ii) the data files containing
information with respect to the Mortgage Loans as transmitted to the Purchaser
by the Originator or any of its affiliates (as such transmitted information may
have been amended in writing by the Originator or any of its affiliates with the
written consent of the Purchaser subsequent to such transmission), (b) any
representation, warranty or covenant made by the Originator or any affiliate of
the Originator herein or in the Servicing Agreement, on which the Purchaser has
relied, being, or alleged to be, untrue or incorrect or (c) any updated
collateral information provided by any Underwriter to a purchaser of the Notes
or Certificates derived from the data contained in clause (ii) and the
Remittance Report or a current collateral tape obtained from the Originator or
an affiliate of the Originator, including the current principal balances of the
Mortgage Loans; provided, however, that to the extent that any such losses,
claims, expenses, damages or liabilities to which the Indemnified Party may
become subject arise out of or are based upon both (1) statements, omissions,
representations, warranties or covenants of the Seller described in clause (a),
(b) or (c) above and (2) any other factual basis, the Originator shall indemnify
and hold harmless the Indemnified Party only to the extent that the losses,
claims, expenses, damages, or liabilities of the person or persons asserting the
claim are determined to rise from or be based upon matters set forth in clause
(1) above and do not result from the negligence or willful misconduct of such
20
Indemnified Party. This indemnity shall be in addition to any liability that the
Originator may otherwise have.
Section 5.2 LIMITATION ON LIABILITY OF THE ORIGINATOR AND THE
SELLER. The Originator and the Seller shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by the Originator or Seller, as the case may be, herein. Neither the Originator,
the Seller nor any of the directors or officers or employees or agents of the
Originator or the Seller shall be under any liability to the Trust or the
Noteholders for any action taken or for refraining from the taking of any action
by the Seller or the Originator in good faith pursuant to this Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Originator or the Seller or any such Person against any liability which would
otherwise be imposed by reason of its willful misfeasance, bad faith or
negligence in the performance of duties of the Originator or the Seller or by
reason of its reckless disregard of its obligations and duties of the Originator
or the Seller hereunder. The Originator or the Seller and any director or
officer or employee or agent of the Originator or the Seller may rely in good
faith on any document of any kind PRIMA FACIE properly executed and submitted by
any Person respecting any matters arising hereunder. The Originator or the
Seller and any director or officer or employee or agent of any such party shall
be indemnified by the Trust and held harmless against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement
or the Notes, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of its willful misfeasance, bad faith or
negligence in the performance of duties hereunder or by reason of its reckless
disregard of obligations and duties hereunder. The Originator or the Seller
shall be under no obligation to appear in, prosecute or defend any legal action
that is not incidental to its duties hereunder and that in its opinion, may
involve it in any expense or liability; provided, however, that the Seller and
the Originator may undertake any such action which it may deem necessary or
desirable in respect of this Agreement, and the rights and duties of the parties
hereto and the interests of the Noteholders hereunder. In such event, the
reasonable legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust.
ARTICLE VI
TERMINATION
Section 6.1 TERMINATION. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the Originator's indemnity obligations as provided herein, upon the
termination of the Issuer pursuant to the terms of the Trust Agreement.
ARTICLE VII
ADMINISTRATIVE DUTIES
Section 7.1 ADMINISTRATIVE DUTIES.
21
(a) DUTIES WITH RESPECT TO THE INDENTURE. The Originator
(in such capacity, the "Administrator") shall perform all its duties and the
duties of the Issuer under the Indenture. In addition, the Administrator shall
consult with the Owner Trustee as the Administrator deems appropriate regarding
the duties of the Issuer under the Indenture. The Administrator shall monitor
the performance of the Issuer and shall advise the Owner Trustee when action is
necessary to comply with the Issuer's duties under the Indenture. The
Administrator shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Administrator shall take all necessary action that is the
duty of the Issuer to take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Administrator set
forth in this Agreement or any of the Basic Documents, the Administrator shall
perform such calculations and shall prepare for execution by the Issuer or the
Owner Trustee or shall cause the preparation by other appropriate Persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver
pursuant to this Agreement or any of the Basic Documents or under state and
federal tax and securities laws (including, but not limited to, UCC filings in
applicable jurisdictions and annual compliance certificates, if any), and at the
request of the Owner Trustee, the Indenture Trustee or the Securities
Administrator shall take all appropriate action that it is the duty of the
Issuer to take pursuant to this Agreement or any of the Basic Documents. In
accordance with the directions of the Issuer or the Owner Trustee, the
Administrator shall administer, perform or supervise the performance of such
other activities in connection with the Notes (including the Basic Documents) as
are not covered by any of the foregoing provisions and as are expressly
requested by the Issuer, the Indenture Trustee, the Securities Administrator or
the Owner Trustee.
(ii) Notwithstanding anything in this Agreement or any of
the Basic Documents to the contrary, the Administrator shall be responsible for
promptly notifying the Owner Trustee and Certificate Paying Agent in the event
that any withholding tax is imposed on the Issuer's payments (or allocations of
income) to an Owner (as defined in the Trust Agreement) as contemplated in
Section 5.03 of the Trust Agreement. Any such notice shall be in writing and
specify the amount of any withholding tax required to be withheld by the Owner
Trustee or the Certificate Paying Agent pursuant to such provision.
(iii) In carrying out the foregoing duties or any of its
other obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; PROVIDED,
HOWEVER, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer in any material respect
than with terms made available to unrelated third parties.
(c) TAX MATTERS. The Administrator shall prepare, on
behalf of the Owner Trustee, tax returns and information reports as required by
the Code. The Administrator shall
22
also prepare financial statements and such annual or other reports of the Issuer
as are necessary for the Securities Administrator to prepare a Form 1099.
(d) NON-MINISTERIAL MATTERS. With respect to matters that
in the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action pursuant to this Article VIII unless
within a reasonable time before the taking of such action, the Administrator
shall have notified the Owner Trustee, the Indenture Trustee and the Securities
Administrator of the proposed action and the Owner Trustee and, with respect to
items (A), (B), (C) and (D) below, the Indenture Trustee and the Securities
Administrator shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial matters"
shall include:
(1) the amendment of or any supplement to the
Indenture;
(2) the initiation of any claim or lawsuit by
the Issuer and the compromise of any action, claim or lawsuit
brought by or against the Issuer (other than in connection
with the collection of the Mortgage Loans);
(3) the amendment, change or modification of
this Agreement or any of the Basic Documents to which the
Indenture Trustee, the Securities Administrator or the Owner
Trustee, as applicable, is a party;
(4) the appointment of successor Certificate
Paying Agents and successor Indenture Trustees or Securities
Administrator pursuant to the Indenture or the appointment of
a successor Servicer or Master Servicer or the consent to the
assignment by the Certificate Registrar, Paying Agent,
Indenture Trustee or Securities Administrator of its
obligations under the Indenture; and
(5) the removal of the Indenture Trustee or the
Securities Administrator.
(e) ORIGINATOR SHALL ACT AS ADMINISTRATOR. By execution
of this Agreement, the Originator agrees to be bound as Administrator and shall
perform the obligations of the Administrator as described herein.
23
Section 7.2 RECORDS. The Administrator shall maintain
appropriate books of account and records relating to services performed under
this Agreement, which books of account and records shall be accessible for
inspection by the Issuer, the Indenture Trustee, the Securities Administrator
and the Owner Trustee at any time during normal business hours.
Section 7.3 ADDITIONAL INFORMATION TO BE FURNISHED. The
Administrator shall furnish to the Issuer, the Indenture Trustee, the Securities
Administrator and the Owner Trustee from time to time such additional
information regarding the Mortgage Loans and the Notes as the Issuer, the
Indenture Trustee, the Securities Administrator or the Owner Trustee shall
reasonably request.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1 AMENDMENT. This Agreement may be amended from time
to time by the Seller and the Purchaser by written agreement signed by the
Seller and the Purchaser, which consent shall not be unreasonably withheld;
provided, however, that any amendment of Article VII of this Agreement shall
require the consent of the Issuer and the Owner Trustee.
Section 8.2 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 8.3 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered addressed as follows:
(i) if to the Seller:
Renaissance REIT Investment Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
or, such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
(ii) if to the Purchaser:
Renaissance Mortgage Acceptance Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
(iii) if to the Originator:
Delta Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
(iv) if to the Owner Trustee:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
(v) if to the Issuer:
Renaissance Home Equity Loan Trust Series
2005-1
c/o Delta Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(vi) if to the Securities Administrator:
▇▇▇▇▇ Fargo Bank, N.A.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services--
Renaissance HEL Trust 2005-1
(vi) if to the Indenture Trustee:
HSBC Bank USA, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust/Renaissance HEL
Trust 2005-1
25
Section 8.4 SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 8.5 RELATIONSHIP OF PARTIES. Nothing herein contained
shall be deemed or construed to create a 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 the Purchaser.
Section 8.6 COUNTERPARTS. This Agreement may be executed in
two 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
and such counterparts together shall constitute one and the same agreement.
Section 8.7 FURTHER AGREEMENTS. The Purchaser, the Originator
and the Seller each agree to execute and deliver to the other such additional
documents, instruments or agreements as may be necessary or appropriate to
effectuate the purposes of this Agreement.
Section 8.8 INTENTION OF THE PARTIES. The Seller and the
Purchaser agree that it is their intention that the sale of the Mortgage Loans
to the Purchaser, and the Purchaser's sale of the Mortgage Loans to the Issuer
pursuant to the Trust Agreement shall be treated for federal, stated and local
tax purposes as a transfer directly by the Seller to the Issuer (with the
Issuer's issuance of the Notes treated for federal, state and local tax purposes
as the issuance by the Seller of indebtedness secured by the Mortgage Loans) and
mutually covenant to report this and all related transactions for all federal,
stated and local tax reporting purposes in a manner consistent with that intent.
The Purchaser will have the right to review the Mortgage Loans and the Related
Documents to determine the characteristics of the Mortgage Loans which will
affect the federal, stated and local tax consequences of owning the Mortgage
Loans and the Seller will cooperate with all reasonable requests made by the
Purchaser in the course of such review.
Section 8.9 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE
AGREEMENT. This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller, the Originator, the Purchaser and their respective
successors and assigns. The obligations of the Seller and the Originator under
this Agreement cannot be assigned or delegated to a third party without the
consent of the Purchaser, which consent shall be at the Purchaser's sole
discretion. The parties hereto acknowledge that (i) the Purchaser is acquiring
the Mortgage Loans for the purpose of selling them to the Issuer who will in
turn pledge the Mortgage Loans to the Indenture Trustee for the benefit of the
Noteholders and (ii) the Purchaser is acquiring the rights with respect to the
Group I Interest Rate Cap Agreement and the NIMs Interest Rate Cap Agreement for
the purpose of transferring them to the Issuer who will in turn assign these
rights to the Indenture Trustee for the benefit of the Noteholders. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller and the
Originator acknowledge and consent to (i) the assignment by the Purchaser to the
Issuer of all of the Purchaser's rights against the Seller and the Originator
pursuant to this Agreement and to the enforcement or exercise of any right or
remedy against the Seller and the Originator pursuant to this Agreement as
assigned by the Purchaser and (ii) the assignment by the Issuer to the Indenture
Trustee of such rights and to the enforcement or
26
exercise of any right or remedy by the Indenture Trustee, or the Servicer or the
Master Servicer acting pursuant to the Servicing Agreement, against the Seller
and the Originator pursuant to this Agreement as assigned by the Issuer. Such
enforcement of a right or remedy by the Issuer, the Owner Trustee, the Servicer,
the Master Servicer, the Securities Administrator or the Indenture Trustee, as
applicable, shall have the same force and effect as if the right or remedy had
been enforced or exercised by the Purchaser directly.
Section 8.10 SURVIVAL. The representations and warranties made
herein by the Seller and the Originator and the provisions of Article V hereof
shall survive the purchase of the Mortgage Loans hereunder.
Section 8.11 THIRD PARTY BENEFICIARY. Each of the Indenture
Trustee, the Owner Trustee and the Issuer shall be deemed a third-party
beneficiary of this Agreement to the same extent as if it were a party hereto,
and shall have the right to enforce the provisions of this Agreement.
27
IN WITNESS WHEREOF, the Seller, the Originator and the
Purchaser have caused their names to be signed to this Mortgage Loan Sale and
Contribution Agreement by their respective officers thereunto duly authorized as
of the day and year first above written.
RENAISSANCE MORTGAGE ACCEPTANCE CORP.
as Purchaser
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
RENAISSANCE REIT INVESTMENT CORP.
as Seller
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
DELTA FUNDING CORPORATION
as Originator
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(FILED MANUALLY)
A-1
