EXHIBIT 4
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GS MORTGAGE SECURITIES CORP.,
Depositor,
XXXXXX LOAN SERVICING LP,
Servicer,
NC CAPITAL CORPORATION,
Responsible Party,
and
JPMORGAN CHASE BANK,
Trustee
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POOLING AND SERVICING AGREEMENT
Dated as of August 1, 2003
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GSAMP TRUST 2003-SEA
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2003-SEA
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.............
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer.........................
Section 2.04 Delivery of Opinion of Counsel in Connection with
Substitution; Non-Qualified Mortgages......................
Section 2.05 Execution and Delivery of Certificates......................
Section 2.06 REMIC Matters...............................................
Section 2.07 Representations and Warranties of the Depositor.............
Section 2.08 Original Mortgage Loan Seller and Purchaser Mortgage Loan
Obligations................................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans..........................
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers...............................................
Section 3.03 Successor Subservicers......................................
Section 3.04 Liability of the Servicer...................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee....................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee....................................................
Section 3.07 Collection of Certain Mortgage Loan Payments................
Section 3.08 Subservicing Accounts.......................................
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts............................................
Section 3.10 Collection Account..........................................
Section 3.11 Withdrawals from the Collection Account.....................
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account.......................................
Section 3.13 Maintenance of Hazard Insurance, Errors and Omissions and
Fidelity Coverage..........................................
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements...
Section 3.15 Realization upon Defaulted Mortgage Loans...................
Section 3.16 Release of Mortgage Files...................................
Section 3.17 Title, Conservation and Disposition of REO Property.........
Section 3.18 Notification of Adjustments.................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans.........................................
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee........................
Section 3.21 Servicing Compensation......................................
Section 3.22 Annual Statement as to Compliance...........................
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements............................
Section 3.24 Trustee to Act as Servicer..................................
Section 3.25 Compensating Interest.......................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act....................
Section 3.27 Excess Reserve Fund Account; Distribution Account...........
Section 3.28 Optional Purchase of Delinquent Mortgage Loans..............
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances....................................................
Section 4.02 Priorities of Distribution..................................
Section 4.03 Monthly Statements to Certificateholders....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR......
Section 4.05 Allocation of Applied Realized Loss Amounts.................
Section 4.06 The Class A-1 Certificate Insurance Policy..................
Section 4.07 Effect of Payments by the Class A-1 Certificate Insurer;
Subrogation................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates............................................
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates...................................
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........
Section 5.04 Persons Deemed Owners.......................................
Section 5.05 Access to List of Certificateholders' Names and Addresses...
Section 5.06 Maintenance of Office or Agency.............................
Section 5.07 Rights of the Class A-1 Certificate Insurer to Exercise
Rights of Class A-1 Certificateholders.....................
Section 5.08 Class A-1 Certificate Insurer Default.......................
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer.....
Section 6.02 Merger or Consolidation of the Depositor or the Servicer.....
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others.................................................
Section 6.04 Limitation on Resignation of the Servicer...................
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims.....................................................
Section 6.06 Servicing Rights Pledge.....................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default...........................................
Section 7.02 Trustee to Act; Appointment of Successor....................
Section 7.03 Notification to Certificateholders..........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee.......................................
Section 8.02 Certain Matters Affecting the Trustee.......................
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.......
Section 8.04 Trustee May Own Certificates................................
Section 8.05 Trustee's Fees and Expenses.................................
Section 8.06 Eligibility Requirements for the Trustee....................
Section 8.07 Resignation and Removal of the Trustee......................
Section 8.08 Successor Trustee...........................................
Section 8.09 Merger or Consolidation of the Trustee......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee...............
Section 8.11 Tax Matters.................................................
Section 8.12 Periodic Filings............................................
Section 8.13 Tax Classification of the Excess Reserve Fund Account.......
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans......................................................
Section 9.02 Final Distribution on the Certificates......................
Section 9.03 Additional Termination Requirements.........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment...................................................
Section 10.02 Recordation of Agreement; Counterparts......................
Section 10.03 Governing Law...............................................
Section 10.04 Intention of Parties........................................
Section 10.05 Notices.....................................................
Section 10.06 Severability of Provisions..................................
Section 10.07 Assignment; Sales; Advance Facilities.......................
Section 10.08 Limitation on Rights of Certificateholders..................
Section 10.09 Inspection and Audit Rights.................................
Section 10.10 Certificates Nonassessable and Fully Paid...................
Section 10.11 Waiver of Jury Trial........................................
Section 10.12 The Class A-1 Certificate Insurer Default...................
Section 10.13 Third Party Beneficiary.....................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of the Servicer
Schedule III Representations and Warranties as the Responsible Party as to
the Responsible Party Mortgage Loans
Schedule IV Representations and Warranties of the Responsible Party
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class N Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F Form of Document Certification and Exception Report of Trustee
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Trustee Certification to be provided to Depositor
Exhibit N Form of Servicer Certification to be provided to Depositor
Exhibit O Original Mortgage Loan Seller Agreements
Exhibit P Responsible Party Purchase Agreements
THIS POOLING AND SERVICING AGREEMENT, dated as of August 1, 2003,
among GS MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), XXXXXX LOAN SERVICING LP, a Delaware limited partnership, as
servicer (the "Servicer"), NC CAPITAL CORPORATION, a California corporation, as
responsible party (the "Responsible Party"), and JPMORGAN CHASE BANK, a New York
banking corporation, as trustee (the "Trustee"),
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that seven segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising seven REMICs
(each, a "Trust REMIC" or, in the alternative, the Lower Tier REMIC, the Upper
Tier REMIC, the Class M-1 REMIC, the Class B-1 REMIC, the Class B-2 REMIC, Class
B-3 REMIC and the Class X REMIC, respectively). As further described herein, the
Class X/N Regular Interest and each Class of LIBOR Certificates (other than the
right of each Class of LIBOR Certificates to receive Basis Risk Carry Forward
Amounts) represents ownership of a regular interest in a REMIC for purposes of
the REMIC Provisions. The Class R-1 Certificate represents ownership of the sole
class of residual interest in each of the Lower Tier REMIC and the Upper Tier
REMIC, and the Class R-2 Certificate represents ownership of the sole class of
residual interest in each of the Class M-1 REMIC, the Class B-1 REMIC, the Class
B-2 REMIC, Class B-3 REMIC and the Class X REMIC for purposes of the REMIC
Provisions. The Startup Day for each REMIC described herein is the Closing Date.
The latest possible maturity date for each Certificate is the latest date
referenced in Section 2.06. The Upper Tier REMIC shall hold as assets the
several classes of uncertificated Lower Tier Regular Interests, set out below.
The Lower Tier REMIC shall hold as assets the assets described in the definition
of "Trust Fund" herein (other than the Excess Reserve Fund Account). Each such
Lower Tier Regular Interest is hereby designated as a regular interest in the
Lower Tier REMIC. The Class LT-A-1, Class LT-M-1, Class LT-B-1, Class LT-B-2 and
Class LT-B-3 Interests are hereby designated the LT-Accretion Directed Classes
(the "LT-Accretion Directed Classes").
The Class M-1 REMIC shall hold as an asset the Class M-1 Interest
issued by the Upper Tier REMIC, the Class M-1 Certificates shall represent
ownership of the regular interest issued by the Class M-1 REMIC and the Class
M1-R Interest shall represent the sole class residual interest in the Class M-1
REMIC.
The Class B-1 REMIC shall hold as an asset the Class B-1 Interest
issued by the Upper Tier REMIC, the Class B-1 Certificates shall represent
ownership of the regular interest issued by the Class B-1 REMIC and the Class
B1-R Interest shall represent the sole class residual interest in the Class B-1
REMIC.
The Class B-2 REMIC shall hold as an asset the Class B-2 Interest
issued by the Upper Tier REMIC, the Class B-2 Certificates shall represent
ownership of the regular interest issued by the Class B-2 REMIC and the Class
B2-R Interest shall represent the sole class residual interest in the Class B-2
REMIC.
The Class B-3 REMIC shall hold as an asset the Class B-3 Interest
issued by the Upper Tier REMIC, the Class B-3 Certificates shall represent
ownership of the regular interest issued by the Class B-3 REMIC and the Class
B3-R Interest shall represent the sole class residual interest in the Class B-3
REMIC.
The Class X REMIC shall hold as an asset the Class X Interest issued
by the Upper Tier REMIC, the Class X/N Regular Interest shall represent
ownership of the regular interest issued by the Class X REMIC and the Class X-R
Interest shall represent the sole class residual interest in the Class X REMIC.
The Class N and Class X Certificates represent beneficial ownership of the Class
X/N Regular Interest and the Excess Reserve Fund Account. If the Class N and
Class X Certificates are beneficially owned by more than one person, and such
Persons do not hold both the Class N and Class X Certificates proportionately,
then each such Person will be treated as owning an interest in a partnership
that holds the Class X/N Regular Interest and the Excess Reserve Fund Account
for federal income tax purposes as described in Section 8.11.
Each LIBOR Certificate represents a beneficial ownership of a
regular interest in a Trust REMIC and the right to receive Basis Risk Carry
Forward Amounts, which portion of the Trust Fund shall be treated as a grantor
trust.
Corresponding
Lower Tier Lower Tier Initial Lower Tier Upper Tier
Class Designation Interest Rate Principal Amount REMIC Class
----------------- ------------- ---------------- -----------
Class LT-A-1 (1) 1/2 initial Corresponding A-1
Upper Tier REMIC initial
principal balance
Class LT-M-1 (1) 1/2 initial Corresponding M-1
Upper Tier REMIC initial
principal balance
Class LT-B-1 (1) 1/2 initial Corresponding B-1
Upper Tier REMIC initial
principal balance
Class LT-B-2 (1) 1/2 initial Corresponding B-2
Upper Tier REMIC initial
principal balance
Class LT-B-3 (1) 1/2 initial Corresponding B-3
Upper Tier REMIC initial
principal balance
Class LT-Accrual (1) 1/2 Pool Stated Principal
Balance plus 1/2
Overcollateralized Amount
Class LT-R (2) (2)
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap (without
reduction for the Premium Rate).
(2) The Class LT-R Interest is the sole Class of residual interest in the
Lower Tier REMIC and it does not have a principal amount or an interest
rate.
The Lower Tier REMIC shall hold as assets all of the assets included
in the Trust Fund other than the Excess Reserve Fund Account and the Lower Tier
Regular Interests, the Upper Tier Regular Interest and the Class X/N Regular
Interest.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the principal
balances of the LT-Accretion Directed Classes (each such Class will be reduced
by an amount equal to 50% of any increase in the Overcollateralized Amount that
is attributable to a reduction in the principal balance of its Corresponding
Class) and will be accrued and added to the principal balance of the Class
LT-Accrual Interest. On each Distribution Date, the increase in the principal
balance of the Class LT-Accrual Interest may not exceed interest accruals for
such Distribution Date for the Class LT-Accrual Interest. In the event that: (i)
50% of the increase in the Overcollateralized Amount exceeds (ii) interest
accruals on the Class LT-Accrual Interest for such Distribution Date, the excess
for such Distribution Date (accumulated with all such excesses for all prior
Distribution Dates) will be added to any increase in the Overcollateralized
Amount for purposes of determining the amount of interest accrual on the Class
LT-Accrual Interest payable as principal on the LT-Accretion Directed Classes on
the next Distribution Date pursuant to the first sentence of this paragraph. All
payments of scheduled principal and prepayments of principal generated by the
Mortgage Loans or paid under the Policy shall be allocated (i) 50% to the Class
LT-Accrual Interest, and (ii) 50% to the LT-Accretion Directed Classes
(principal payments shall be allocated among such LT-Accretion Directed Classes
in an amount equal to 50% of the principal amounts allocated to their respective
Corresponding Classes), until paid in full. Notwithstanding the above, principal
payments allocated to the Class X Interest that result in the reduction in the
Overcollateralized Amount shall be allocated to the Class LT-Accrual Interest
(until paid in full). Realized Losses shall be applied so that after all
distributions have been made on each Distribution Date (i) the principal balance
of each of the LT-Accretion Directed Classes is equal to 50% of the principal
balance of their Corresponding Class, and (ii) the Class LT-Accrual Interest is
equal to 50% of the aggregate Stated Principal Balance of the Mortgage Loans
plus 50% of the Overcollateralized Amount.
The Upper Tier REMIC shall issue the following classes of Upper Tier
Regular Interests, and each such interest, other than the Class UT-R Interest,
is hereby designated as a regular interest in the Upper Tier REMIC.
Upper Tier
Interest Rate Initial Upper Tier
and Principal Amount
Corresponding and Corresponding Corresponding
Upper Tier Class Pass-Through Class Certificate Class of
Class Designation Rate Balance Certificates
----------------- ------------------ ----------------- -------------
Class A-1 (1) $99,087,000 Class A-1(4)
Class M-1 (1) $2,923,000 Class M-1(4)
Class B-1 (1) $1,062,000 Class B-1(4)
Class B-2 (1) $1,063,000 Class B-2(4)
Class B-3 (1) $1,060,000 Class B-3(7)
Class X (2) 0(2) Class X(2)
Class UT-R (3) 0 Class R
(1) The Class A-1, Class M-1, Class B-1, Class B-2 and Class B-3 Interests
will bear interest during each Interest Accrual Period at a per annum rate
equal to (a) on or prior to the Optional Termination Date, the least of
(i) LIBOR plus 0.400%, 2.250%, 4.250%, 4.500%, 4.500%, respectively, and
(ii) the WAC Cap or (b) after the Optional Termination Date, the lesser of
(i) LIBOR plus 0.800%, 3.375%, 6.375%, 6.750%, and 6.750%, respectively,
and (ii) the WAC Cap.
(2) The Class X Interest has an initial principal balance of $1,062,606, but
it will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance equal to the aggregate of
the principal balances of the Lower Tier Regular Interests as of the first
day of the related Interest Accrual Period. With respect to any Interest
Accrual Period, the Class X Interest shall bear interest at a rate equal
to the excess, if any, of the WAC Cap over the product of (i) 2 and (ii)
the weighted average Pass-Through Rate of the Lower Tier Regular
Interests, where the interest rate on the Class LT-Accrual Interest is
subject to a cap equal to zero and each LT-Accretion Directed Class is
subject to a cap equal to the Pass-Through Rate on its Corresponding
Class; provided, however, if the Pass-Through Rate of the Class A-1
Interest is calculated by reference to clause (i) of its Pass-Through
Rate, the cap with respect to the Class LT-A-1 Interest shall be increased
by the lesser of the Premium Rate and the amount by which the amount in
clause (ii) of such Class's Pass-Through Rate exceeds the amount in clause
(i) thereof for purposes of the calculation. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class X Interest shall be deferred in an amount equal to
any increase in the Overcollateralized Amount on such Distribution Date.
Such deferred interest shall not itself bear interest.
(3) The Class UT-R Interest is the sole Class of residual interest in the
Upper Tier REMIC. The Class UT-R Interest does not have an interest rate.
(4) The Class A-1 Certificates will represent not only the ownership of the
Corresponding Class of Upper Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk Carry Forward Amounts. Each of the Class M-1 Interest, Class
B-1 Interest, Class B-2 Interest, Class B-3 Interest and Class X Interest
will be contributed to the Class M-1 REMIC, Class B-1 REMIC, the Class B-2
REMIC, Class B-3 REMIC and the Class X REMIC, respectively.
The Class M-1 REMIC shall issue the following classes of interests.
The Class M-1 Certificates shall represent the regular interest in the Class M-1
REMIC and the Class M1-R Interest shall represent the sole class of residual
interest in the Class M-1 REMIC.
Class M-1 REMIC Class M-1 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class M-1 REMIC (1) (1)
Regular Interest
Class M1-R (2) (2)
(1) The Class M-1 REMIC shall issue one regular interest which shall be
represented by the Class M-1 Certificates and shall be entitled to 100% of
all amounts payable on the Class M-1 Interest issued by the Upper-Tier
REMIC.
(2) The Class M1-R Interest is the sole class of residual interest in the
Class M-1 REMIC and shall be represented by the Class R-2 Certificate. The
Class M1-R Interest does not have an interest rate or a principal balance.
The Class B-1 REMIC shall issue the following classes of interests.
The Class B-1 Certificates shall represent the regular interest in the Class B-1
REMIC and the Class B1-R Interest shall represent the sole class of residual
interest in the Class B-1 REMIC.
Class B-1 REMIC Class B-1 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class B-1 REMIC (1) (1)
Regular Interest
Class B1-R (2) (2)
(1) The Class B-1 REMIC shall issue one regular interest which shall be
represented by the Class B-1 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-1 Interest issued by the Upper-Tier
REMIC.
(2) The Class B1-R Interest is the sole class of residual interest in the
Class B-1 REMIC and shall be represented by the Class R-2 Certificate. The
Class B1-R Interest does not have an interest rate or a principal balance.
The Class B-2 REMIC shall issue the following classes of interests.
The Class B-2 Certificates shall represent the regular interest in the Class B-2
REMIC and the Class B2-R Interest shall represent the sole class of residual
interest in the Class B-2 REMIC.
Class B-2 REMIC Class B-2 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class B-2 REMIC (1) (1)
Regular Interest
Class B2-R (2) (2)
(1) The Class B-2 REMIC shall issue one regular interest which shall be
represented by the Class B-2 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-2 Interest issued by the Upper-Tier
REMIC.
(2) The Class B2-R Interest is the sole class of residual interest in the
Class B-2 REMIC and shall be represented by the Class R-2 Certificate. The
Class B2-R Interest does not have an interest rate or a principal balance.
The Class B-3 REMIC shall issue the following classes of interests.
The Class B-3 Certificates shall represent the regular interest in the Class B-3
REMIC and the Class B3-R Interest shall represent the sole class of residual
interest in the Class B-3 REMIC.
Class B-3 REMIC Class B-3 REMIC
Designation Interest Rate Principal Amount
----------- ------------- ----------------
Class B-3 REMIC (1) (1)
Regular Interest
Class B3-R (2) (2)
(1) The Class B-3 REMIC shall issue one regular interest which shall be
represented by the Class B-3 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-3 Interest issued by the Upper-Tier
REMIC.
(2) The Class B3-R Interest is the sole class of residual interest in the
Class B-3 REMIC and shall be represented by the Class R-3 Certificate. The
Class B3-R Interest does not have an interest rate or a principal balance.
The Class X REMIC shall issue the following classes of interests.
The Class X/N Regular Interest shall represent the regular interest in the Class
X REMIC and the Class X-R Interest shall represent the sole class of residual
interest in the Class X REMIC.
Class X REMIC Class X REMIC
Designation Interest Rate Principal Amount
------------- ------------- ----------------
Class X/N Regular (1) (1)
Interest
Class X-R (2) (2)
(1) The Class X REMIC shall issue one regular interest, the Class X/N Regular
Interest, which shall be represented by the Class N and X Certificates and
shall be entitled to 100% of all amounts payable on the Class X Interest
issued by the Upper-Tier REMIC.
(2) The Class X-R Interest is the sole class of residual interest in the Class
X REMIC and shall be represented by the Class R-2 Certificate. The Class
X-R Interest does not have an interest rate or a principal balance.
The Class M-1, Class B-1, Class B-2 and Class B-3 Certificates will
represent not only the ownership of the regular interest issued by the Class M-1
REMIC, the Class B-1 REMIC, Class B-2 REMIC and the Class B-3 REMIC,
respectively, but also the right to receive payments from the Excess Reserve
Fund Account in respect of any Basis Risk Carry Forward Amounts. The Class X and
Class N Certificates will represent ownership of the Class X/N Regular Interest,
each of which shall be treated as an interest in a partnership if held by more
than one Person for federal income tax purposes, and such Persons do not hold
both the Class N and Class X Certificates proportionately. The Class N and Class
X Certificates (or a partnership, the beneficial owners of which are the Class N
and Class X Certificates, as the case may be) will represent beneficial
ownership of the Class X/N Interest and amounts in the Excess Reserve Fund
Account, subject to the obligation to make payments from the Excess Reserve Fund
Account in respect of Basis Risk Carry Forward Amounts. For federal income tax
purposes, the Trustee will treat a Class N and Class X Certificateholders'
obligation to make payments from the Excess Reserve Fund Account as payments
made pursuant to an interest rate cap contract written by the Class N and Class
X Certificateholders (or a partnership, the beneficial owners of which are the
Class N and Class X Certificates, as the case may be), in favor of each Class of
LIBOR Certificates. Such rights of the Class N and Class X Certificateholders
(or a partnership, the beneficial owners of which are the Class N and Class X
Certificates, as the case may be) and LIBOR Certificateholders shall be treated
as held in a portion of the Trust Fund that is treated as a grantor trust under
subpart E, Part I of subchapter J of the Code.
For federal income tax purposes, the Trustee will treat a LIBOR
Certificateholder's right to receive payments from the Excess Reserve Fund
Account as payments made pursuant to an interest rate cap contract written by
the Class N and Class X Certificateholders (or a partnership, the beneficial
owners of which are the Class N and Class X Certificates, as the case may be).
Such rights of the LIBOR Certificateholders shall be treated as held in a
portion of the Trust Fund that is treated as a grantor trust under subpart E,
Part I of subchapter J of the Code.
The minimum denomination for each of the Class A-1 Certificates and
the Subordinated Certificates, will be $25,000 and $250,000, respectively, with
integral multiples of $1 in excess thereof, except that one Certificate in each
Class may be issued in a different amount. The minimum denomination for the
Class N Certificate will be $50,000 initial Class N Notional Amount with
integral multiples of $1,000 in excess thereof. The minimum denomination for (a)
each of the Class R-1 and Class R-2 Certificates will be a 100% Percentage
Interest in such Class and (b) the Class X Certificates will be a 10% Percentage
Interest in such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates...... All Classes of Certificates other than the
Physical Certificates.
Delay Certificates........... None.
ERISA-Restricted
Certificates............... Class M-1, Class B-1, Class B-2, Class B-3, Class
N, Class X and Class R Certificates; any
certificate with a rating below the lowest
applicable permitted rating under the
Underwriters' Exemption.
LIBOR Certificates........... The Class A-1 Certificates and the Subordinated
Certificates
Non-Delay Certificates....... Class A-1, Class X and Subordinated Certificates.
Offered Certificates......... The Class A-1 Certificates.
Physical Certificates........ Class N, Class X and Class R Certificates.
Private Certificates......... The Subordinated Certificates and the Class N,
Class X and Class R Certificates.
Rating Agencies.............. Xxxxx'x and Standard & Poor's.
Regular Certificates......... All Classes of Certificates other than the Class
R-1 and Class R-2 Certificates.
Residual Certificates........ Class R-1 and Class R-2 Certificates.
Subordinated Certificates.... Class M-1, Class B-1, Class B-2 and Class B-3
Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01 of this Agreement.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account, the Excess Reserve Fund Account or the Policy Payment
Account. Each Account shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of the LIBOR Certificates or the Class N
Certificates, the amount of interest accrued during the related Interest Accrual
Period at the applicable Pass-Through Rate on the related Class Certificate
Balance or the Class N Notional Amount, as applicable, immediately prior to such
Distribution Date, as reduced by such Class's share of Net Prepayment Interest
Shortfalls and Relief Act Interest Shortfalls for the related Due Period
allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to the Purchase Agreements.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and at
any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate.
Adjustment Date: As to any Mortgage Loan, the first Due Date on
which the related Mortgage Interest Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Interest Rate
adjusts as set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advance Facility Notice: As defined in Section 10.07.
Advance Financing Person: The Person to whom the Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
have been assigned pursuant to Section 10.07.
Advance Reimbursement Amounts: As defined in Section 10.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" 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.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Remittance Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: (i) With respect to any First Lien Mortgage Loan,
the value of the related Mortgaged Property based upon the appraisal made for
the Original Mortgage Loan Seller at the time of origination of the Mortgage
Loan or the sales price of the Mortgaged Property at such time of origination,
whichever is less, and (ii) with respect to any Second Lien Mortgage Loan, the
value, determined pursuant to the Underwriting Guidelines, of the related
Mortgaged Property as of the origination of the Second Lien Mortgage Loan;
provided, however, that in the case of a refinanced Mortgage Loan, such value is
based solely upon the appraisal made at the time of origination of such
refinanced Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Assumed Scheduled Payment: For any Due Period and with respect to
any Mortgage Loan that is delinquent in respect of its Balloon Payment
(including any REO Property as to which the Balloon Payment would have been past
due), an amount equal to the sum of (a) the principal portion of the Scheduled
Payment that would have been due on such Mortgage Loan on the related Due Date
based on the constant payment required by the related Mortgage Note or the
original amortization schedule thereof (as calculated with interest at the
related Mortgage Interest Rate), if applicable, assuming such Balloon Payment
has not become due, after giving effect to any modification of such Mortgage
Loan, and (b) interest on the Stated Principal Balance of such Mortgage Loan at
the applicable Mortgage Interest Rate (net of interest at the Servicing Fee
Rate).
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees and the
Premium Amount payable with respect to such Distribution Date) and principal due
on the Due Date on such Mortgage Loans in the related Due Period and received on
or prior to the related Determination Date, together with any P&I Advances in
respect thereof (including without limitation P&I Advances in respect of Assumed
Scheduled Payments); (ii) (A) all Condemnation Proceeds, Insurance Proceeds and
Liquidation Proceeds during the related Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any) and (B) amounts received in reimbursement for
Servicing Advances made by the Trustee from funds on deposit in the Distribution
Account; (iii) all partial or full prepayments on the Mortgage Loans received
during the related Prepayment Period together with all Compensating Interest
thereon; and (iv) amounts received with respect to such Distribution Date as the
Substitution Adjustment Amount or purchase price in respect of a Deleted
Mortgage Loan or a Mortgage Loan repurchased by an Original Mortgage Loan
Seller, the Responsible Party, the Purchaser or the Depositor as of such
Distribution Date; reduced by (y) amounts in reimbursement for P&I Advances and
Servicing Advances previously made with respect to the Mortgage Loans and other
amounts as to which the Servicer, the Depositor or the Trustee (or co-trustee)
are entitled to be paid or reimbursed pursuant to this Agreement (including
without limitation Servicing Advances to be made by the Trustee in respect of
such Distribution Date from funds in the Distribution Account).
Balloon Mortgage Loan: Any Mortgage Loan that provided on the date
of origination for an amortization schedule extending beyond its stated maturity
date.
Balloon Payment: With respect to any Balloon Mortgage Loan as of any
date of determination, the Scheduled Payment payable on the stated maturity date
of such Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Overcollateralized Amount, if any, for
such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon the WAC Cap, the excess of (i) the amount of interest such Class of
Certificates would otherwise be entitled to receive on such Distribution Date
had such rate been calculated as the sum of LIBOR and the applicable
Pass-Through Margin on such Class of Certificates for such Distribution Date,
over (ii) the amount of interest payable on such Class of Certificates at the
WAC Cap, as applicable, and (B) the Basis Risk Carry Forward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the aggregate of the Basis Risk Carry Forward Amounts for such Distribution
Date; provided, however, that with respect to any Distribution Date, the Basis
Risk Payment shall not exceed the Class X Distributable Amount.
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
BPO: A broker's price opinion.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of New
York and Texas, (b) the State in which the Servicer's servicing operations are
located, or (c) the State in which the Trustee's operations are located, are
authorized or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class N, Class X or Class R Certificates, at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates. The Class N, Class X and
Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any affiliate of the Depositor in
determining which Certificates are registered in the name of an affiliate of the
Depositor.
Certification: As defined in Section 8.12(b).
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificates: The Class A-1 Certificates.
Class A-1 Certificates: All Certificates bearing the Class
designation of "Class A-1 Certificates."
Class A-1 Certificate Deficiency Amount: With respect to any
Distribution Date and the Class A-1 Certificates, an amount equal to the excess,
if any, of (x) the Insured Amounts for such Class for such Distribution Date
over (y) the amount of Available Funds allocated to pay such Insured Amounts
pursuant to Section 4.02(a).
Class A-1 Certificate Insurance Policy: The Financial Guaranty
Insurance Policy No. AB0691BE, and all endorsements thereto dated the Closing
Date, issued by the Class A-1 Certificate Insurer for the benefit of the Class
A-1 Certificateholders.
Class A-1 Certificate Insurer: Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance corporation, and its successors in interest.
Class A-1 Certificate Insurer Default: The existence and continuance
of any of the following:
(a) the Class A-1 Certificate Insurer shall have failed to make a
required payment when due under the Class A-1 Certificate Insurance Policy
in accordance with its terms;
(b) the Class A-1 Certificate Insurer shall have (i) filed a
petition or commenced any case or proceeding under any provision or
chapter of the United States Bankruptcy Code, the New York State Insurance
Law or any other similar federal or state law relating to insolvency,
bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a
general assignment for the benefit of its creditors or (iii) had an order
for relief entered against it under the United States Bankruptcy Code, the
New York State Insurance Law or any other similar federal or state law
relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization that is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or any other competent regulatory authority shall have entered a
final and nonappealable order, judgment or decree (i) appointing a
custodian, trustee, agent, or receiver for the Class A-1 Certificate
Insurer or for all or any material portion of its property or (ii)
authorizing the taking of possession by a custodian, trustee, agent, or
receiver of the Class A-1 Certificate Insurer (or the taking of possession
of all or any material portion of property of the Class A-1 Certificate
Insurer).
Class A-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Class Certificate Balance of the Class
A-1 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 86.50% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class A-1 Principal Parity Deficit: With respect to any Distribution
Date, the excess of (i) the Class Certificate Balance of the Class A-1
Certificates on such Distribution Date, after taking into account any reduction
from sources other than the Class A-1 Certificate Insurance Policy of such Class
Certificate Balance on such Distribution Date, over (ii) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date. With respect
to the Distribution Date occurring in September 2003, the Class A-1 Principal
Parity Deficit shall equal zero.
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the Class
designation of "Class B-1 Certificates."
Class B-1 Interest: The Upper-Tier Regular Interest held by the
Class B-1 REMIC as specified and described in the Preliminary Statement and the
related footnote thereto.
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class Certificate
Balance of the Class A-1 Certificates (after taking into account the
distribution of the Class A-1 Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), and (C) the Class Certificate Balance of the
Class B-1 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 94.00% (rounded to two decimal places) of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class B1-R Interest: The residual interest in the Class B-1 REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class B-1 REMIC: As described in the Preliminary Statement.
Class B-2 Certificates: All Certificates bearing the Class
designation of "Class B-2 Certificates."
Class B-2 Interest: The Upper-Tier Regular Interest held by the
Class B-2 REMIC as specified and described in the Preliminary Statement and the
related footnote thereto.
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class Certificate
Balance of the Class A-1 Certificates (after taking into account the
distribution of the Class A-1 Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), and (D) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) 96.00% (rounded to two decimal
places) of the aggregate Stated Principal Balances of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B2-R Interest: The residual interest in the Class B-2 REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class B-2 REMIC: As described in the Preliminary Statement.
Class B-3 Certificates: All Certificates bearing the Class
designation of "Class B-3 Certificates."
Class B3-R Interest: The residual interest in the Class B-3 REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class B-3 REMIC: As described in the Preliminary Statement.
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class Certificate
Balance of the Class A-1 Certificates (after taking into account the
distribution of the Class A-1 Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class B-3
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 98.00% (rounded to two decimal places) of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date over the Overcollateralization Floor.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class LT-R Interest: The residual interest in the Lower-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class M Certificates: The Class M-1 Certificates.
Class M-1 Certificates: All Certificates bearing the Class
designation of "Class M-1 Certificates."
Class M-1 Interest: The Upper-Tier Regular Interest held by the
Class M-1 REMIC as specified and described in the Preliminary Statement and the
related footnote thereto.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the Class Certificate
Balance of the Class A-1 Certificates (after taking into account the
distribution of the Class A-1 Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 92.00%
(rounded to two decimal places) of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class M1-R Interest: The residual interest in the Class M-1 REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class M-1 REMIC: As described in the Preliminary Statement.
Class N Certificates: All Certificates bearing the Class designation
of "Class N Certificates."
Class N Notional Amount: With respect to the Class N Certificates
and any Distribution Date, an amount equal to the Original Class N Notional
Amount reduced by the aggregate distributions made to the Class N Certificates
pursuant to Section 4.02 in reduction of the Class N Notional Amount.
Class R Certificates: The Class R-1 and Class R-2 Certificates.
Class R-1 Certificates: All Certificates bearing the Class
designation of "Class R-1 Certificates."
Class R-2 Certificates: All Certificates bearing the Class
designation of "Class R-2 Certificates."
Class UT-R Interest: The residual interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class X Certificates: All Certificates bearing the Class designation
of "Class X Certificates."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect to interest, the amount of interest that has accrued on
the Class X Interest and not applied as an Extra Principal Distribution Amount
on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus (ii) as a distribution in
respect of principal, any portion of the principal balance of the Class X
Interest which is distributable as an Overcollateralization Reduction Amount,
minus (iii) any amounts paid pursuant to Sections 4.02(a)(iii)(A)-(H).
Class X/N Regular Interest: A regular interest in the Class X REMIC
as specified and described in the Preliminary Statement and the related footnote
thereto.
Class X Interest: The Upper Tier Regular Interest held by the Class
X REMIC as specified and described in the Preliminary Statement and the related
footnote thereto.
Class X-R Interest: The residual interest in the Class X REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class X REMIC: As described in the Preliminary Statement.
Closing Date: August 25, 2003.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio: As of the date of origination and as
to any Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the
(a) sum of (i) the outstanding principal balance of the Second Lien Mortgage
Loan as of the date of origination and (ii) the outstanding principal balance as
of the date of origination of any mortgage loan or mortgage loans that are
senior or equal in priority to the Second Lien Mortgage Loan and which are
secured by the same Mortgaged Property to (b) the Appraised Value.
Compensating Interest: For any Distribution Date, the lesser of (a)
the Prepayment Interest Shortfall, if any, for such Distribution Date, with
respect to voluntary Principal Prepayments in Full by the Mortgagor (excluding
any payments made upon liquidation of the Mortgage Loan), and (b) one-half of
the Servicing Fee payable to the Servicer for such Distribution Date.
Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, Attn: Institutional Trust Services/Structured Finance
0Services - GSAMP 0000-XXX, XXXXX Trust 2003-SEA, Mortgage Pass-Through
Certificates, facsimile no. (000) 000-0000 and which is the address to which
notices to and correspondence with the Trustee should be directed.
Corresponding Class and Corresponding REMIC: The Class of interests
in any Trust REMIC created under this Agreement that correspond to the Class of
interests in another such Trust REMIC or to a Class of Certificates and the
Trust REMIC in which the corresponding Certificate represents the related
regular interest issued for such Trust REMIC in the manner set out below:
Corresponding
Class of
Certificates or
Lower Tier Upper Tier Regular Class X/N Regular Corresponding
Class Designation Interest Interest REMIC
----------------- ------------------ ----------------- -------------
Class LT-A-1 Class A-1 Class A-1 Upper-Tier REMIC
Class LT-M-1 Class M-1 Class M-1 Class M-1 REMIC
Class LT-B-1 Class B-1 Class B-1 Class B-1 REMIC
Class LT-B-2 Class B-2 Class B-2 Class B-2 REMIC
Class LT-B-3 Class B-3 Class B-3 Class B-3 REMIC
N/A Class X Class X/N Class X REMIC
Cumulative Loss Percentage: As of any date of determination, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses on the Mortgage Loans for the period from the Cut-off
Date to the date of determination and the denominator of which is the Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.
Cumulative Loss Event: With respect to any Distribution Date, a
Cumulative Loss Event occurs if the Cumulative Loss Percentage exceeds the
applicable percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
--------------------------------------------------------------------------------
September 2003 through August 2007 7.00% of the Cut-Off Date Pool Principal
Balance
September 2007 through August 2008 8.50% of the Cut-Off Date Pool Principal
Balance
September 2008 through August 2009 9.50% of the Cut-Off Date Pool Principal
Balance
September 2009 and thereafter 11.50% of the Cut-Off Date Pool
Principal Balance
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting of items (a) - (h) as listed on Exhibit K
hereto.
Cut-off Date: August 1, 2003.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date).
Data Tape Information: The information provided by the Responsible
Party as of the Cut-off Date to the Depositor setting forth the following
information with respect to each Mortgage Loan: (1) the Responsible Party's
Mortgage Loan identifying number; (2) the Mortgagor's name; (3) the street
address of the Mortgaged Property including the city, state and zip code; (4) a
code indicating whether the Mortgaged Property is owner-occupied, a second home
or investment property; (5) the number and type of residential units
constituting the Mortgaged Property (i.e., a single family residence, a 2-4
family residence, a unit in a condominium project or a unit in a planned unit
development, manufactured housing); (6) the original months to maturity or the
remaining months to maturity from the 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; (7) with respect to
First Lien Mortgage Loans, the Loan-to-Value Ratio at origination and with
respect to Second Lien Mortgage Loans, the Combined Loan-to-Value Ratio at
origination; (8) the Mortgage Interest Rate as of the Cut-off Date; (9) the date
on which the Scheduled Payment was due on the Mortgage Loan and, if such date is
not consistent with the Due Date currently in effect, such Due Date; (10) the
stated maturity date; (11) the amount of the Scheduled Payment as of the Cut-off
Date; (12) the last payment date on which a Scheduled Payment was actually
applied to pay interest and the outstanding principal balance; (13) the original
principal amount of the Mortgage Loan; (14) the principal balance of the
Mortgage Loan as of the close of business on the Cut-off Date, after deduction
of payments of principal due and collected on or before the Cut-off Date; (15)
with respect to Adjustable Rate Mortgage Loans, the Adjustment Date; (16) with
respect to Adjustable Rate Mortgage Loans, the Gross Margin; (17) with respect
to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (19) with respect to Adjustable Rate Mortgage
Loans, the Periodic Mortgage Interest Rate Cap under the terms of the Mortgage
Note; (20) the type of Mortgage Loan (i.e., fixed rate, adjustable rate, first
lien, second lien); (21) a code indicating the purpose of the loan (i.e.,
purchase, rate and term refinance, equity take-out refinance); (22) a code
indicating the documentation style (i.e., full documentation, limited
documentation or stated income); (23) the loan credit classification (as
described in the Underwriting Guidelines); (24) a code indicating if a Mortgage
Loan is a Balloon Mortgage Loan; (25) a code indicating if the Mortgage Loan has
PMI coverage and the name of PMI insurer; (26) a code indicating if Mortgage
Loan is a ground lease; (27) the Mortgage Interest Rate as of origination; (28)
the amount of Escrow Payments as of the Cut-off Date; (29) the date of
origination; (30) the Mortgage Interest Rate adjustment period; (31) the
Mortgage Interest Rate floor; (32) amount of xxxxxxxxxxxx X&X Advances and
Servicing Advances as of Cut-off Date; (33) the current Loan-to-Value Ratio;
(34) the Due Date for the first Scheduled Payment; (35) the original Scheduled
Payment due; (36) with respect to the related Mortgagor, the debt-to-income
ratio; (37) the Appraised Value of the Mortgaged Property; (38) a code
indicating if the Mortgage Loan is in foreclosure; (39) a code indicating if the
Mortgage Loan is in bankruptcy; (40) a code indicating a Mortgage Loan's
delinquency status (i.e., 30 Day Delinquency), if any. With respect to the
Mortgage Loans in the aggregate: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except for such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: A Mortgage Loan repurchased by an Original
Mortgage Loan Seller pursuant to the terms of the applicable Original Mortgage
Loan Seller Agreement, repurchased by the Responsible Party pursuant to Section
2.03(d), or repurchased by the Purchaser pursuant to the Sale and Warranties
Agreement.
Delinquency Event: With respect to any Distribution Date, a
Delinquency Event occurs if the Rolling Three Month Delinquency Rate exceeds the
applicable Delinquency Ratio set forth below with respect to such Distribution
Date:
Distribution Date Occurring In Delinquency Ratio
------------------------------ -----------------
February 2004 through August 2005 20.00% of the Pool Stated Principal
Balance
September 2005 through August 2006 22.50% of the Pool Stated Principal
Balance
September 2006 and thereafter 25.00% of the Pool Stated Principal
Balance
Delinquency Ratio: With respect to any Distribution Date, the
percentage equivalent to a fraction (a) the numerator of which equals the
aggregate Stated Principal Balances of all 90+ Day Delinquent Mortgage Loans and
(b) the denominator of which is the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date. Solely for purposes of calculating
the Delinquency Ratio, 90+ Day Delinquent Mortgage Loans shall include Mortgage
Loans with respect to which any portion of a Scheduled Payment is, as of the
last day of the prior Due Period, three months or more past due (without giving
effect to any grace period) or which are in foreclosure, converted to REO
property or for which the Mortgagor has filed for bankruptcy.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation, and
its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Moody's, F1+ by Fitch and A-1 by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the 18th
day of the calendar month in which such Distribution Date occurs, or if such
18th day is not a Business Day, the Business Day immediately preceding such 18th
day.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.27(b) in the name of the Trustee
for the benefit of the Certificateholders and designated "JPMorgan Chase Bank in
trust for registered holders of GSAMP Trust 2003-SEA Mortgage Pass-Through
Certificates, Series 2003-SEA." Funds in the Distribution Account shall be held
in trust for the Certificateholders and the Class A-1 Certificate Insurer for
the uses and purposes set forth in this Agreement and may be invested in
Permitted Investments.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day, the
next succeeding Business Day, commencing in September 2003.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due for Payment: (i) With respect to an Insured Amount, the
Distribution Date on which Insured Amounts are due and payable pursuant to the
terms hereof and (ii) with respect to a Preference Amount, the Business Day on
which the documentation required by the Class A-1 Certificate Insurer has been
received by the Class A-1 Certificate Insurer.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
the Distribution Date occurs and ending on the first day of the calendar month
in which the Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by Standard & Poor's, F1+ by
Fitch and P-1 by Moody's (and a comparable rating if another Rating Agency is
specified by the Depositor by written notice to the Servicer) at the time any
amounts are held on deposit therein, (ii) a trust account or accounts maintained
with a federal or state chartered depository institution or trust company acting
in its fiduciary capacity or (iii) any other account acceptable to each Rating
Agency and the Class A-1 Certificate Insurer. Eligible Accounts may bear
interest, and may include, if otherwise qualified under this definition,
accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b) of this Agreement.
Event of Default: As defined in Section 7.01.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.27(a) in the name of the
Trustee for the benefit of the Regular Certificateholders and designated
"JPMorgan Chase Bank in trust for registered holders of GSAMP Trust 2003-SEA,
Mortgage Pass-Through Certificates, Series 2003-SEA." Funds in the Excess
Reserve Fund Account shall be held in trust for the Regular Certificateholders
for the uses and purposes set forth in this Agreement. Amounts on deposit in the
Excess Reserve Fund Account shall not be invested.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate and the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Overcollateralization Deficiency for such Distribution
Date.
Xxxxxx Xxx: The Federal National Mortgage Association and its
successors in interest.
Xxxxxx Mae Guides: The Xxxxxx Xxx Seller's Guide and the Xxxxxx Mae
Servicer's Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Responsible Party as contemplated by this Agreement), a determination
made by the Servicer that all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds and other payments or recoveries which the Servicer, in its
reasonable good faith judgment, expects to be finally recoverable in respect
thereof have been so recovered. The Servicer shall maintain records, prepared by
a Servicing Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:
Month of
Final Scheduled
Distribution Date
-----------------
Class A-1 Certificates ................................... February 2033
Class M-1 Certificates.................................... February 2033
Class B-1 Certificates.................................... February 2033
Class B-2 Certificates.................................... February 2033
Class B-3 Certificates.................................... February 2033
Class X Certificates...................................... February 2033
Class N Certificates...................................... February 2033
Class R Certificates...................................... February 2033
Finance America: Finance America, LLC, a Delaware limited liability
company, and its successors in interest.
Finance America Agreements: The Finance America Purchase Agreement
and the Assignment and Recognition Agreement, dated as of August 25, 2003, among
the Purchaser, the Depositor and Finance America.
Finance America Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as being purchased from Finance America.
Finance America Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of December 19, 2002, between the Purchaser and
Finance America.
First Franklin: First Franklin Financial Corporation, a Delaware
corporation, and its successors in interest.
First Franklin Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as being purchased from First Franklin.
First Franklin Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreements, dated as of March 1, 2003, between the Purchaser and
First Franklin.
First Lien Mortgage Loan: Any Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch Ratings, or any successor thereto. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch Ratings, Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - GSAMP
Trust 2003-SEA, or such other address as Fitch may hereafter furnish to the
Depositor and the Servicer.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan purchased
pursuant to the Purchase Agreements.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, and its successors in interest.
Xxxxxxx Mac Guides: The Xxxxxxx Mac Seller's & Servicer's Guide and
all amendments or additions thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Interest Rate.
High Cost Mortgage Loan: A Mortgage Loan classified as (a) a "high
cost" loan under the Home Ownership and Equity Protection Act of 1994 or (b) a
"high cost," "threshold," "covered" or "predatory" 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).
Household: Household Financial Services, Inc., a Delaware
corporation, and its successors in interest.
Household Agreements: The Household Purchase Agreement and the
Assignment and Recognition Agreement, dated as of August 25, 2003, among the
Purchaser, the Depositor and Household.
Household Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as being purchased from Household.
Household Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of September 6, 2002, between the Purchaser and
Household.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Interest Rate set forth as
such on the related Mortgage Note.
Insurance Agreement: The Insurance and Indemnity Agreement, dated as
of August 25, 2003, among the Depositor, the Servicer, the Trustee and the Class
A-1 Certificate Insurer.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Amounts: With respect to the Class A-1 Certificates, an
amount equal to the sum of:
(i) for each Distribution Date, the sum of the Accrued Certificate
Interest Distribution Amount for the Class A-1 Certificates and any Unpaid
Interest Amounts, if any, allocable to the Class A-1 Certificates on such
Distribution Date; plus
(ii) for each Distribution Date prior to the Final Scheduled
Distribution Date, the Class A-1 Principal Parity Deficit, if any, on such
Distribution Date; and
(iii) on the Final Scheduled Distribution Date, the Class
Certificate Balance of the Class A-1 Certificates on the Final Scheduled
Distribution Date, after giving effect to distributions made on such date
from sources other than Class A-1 Certificate Insurance Policy.
Insured Payments: With respect to any Distribution Date, the
aggregate amount actually paid by the Class A-1 Certificate Insurer to the
Trustee in respect of (i) Insured Amounts for any Distribution Date and (ii)
Preference Amounts for any given Business Day.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and each Class of Lower Tier Regular Interests and any Distribution
Date, the period commencing on the Distribution Date occurring in the month
preceding the month in which the current Distribution Date occurs and ending on
the day immediately preceding the current Distribution Date (or, in the case of
the first Distribution Date, the period from and including the Closing Date to
but excluding such first Distribution Date). For purposes of computing interest
accruals on each Class of Non-Delay Certificates, each Interest Accrual Period
has the actual number of days in such month and each year is assumed to have 360
days.
Investment Account: As defined in Section 3.12(a).
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Remittance Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent for such Due Period and not previously recovered.
Late Payment Rate: The greater of (i) the rate of interest, as it is
publicly announced by Citibank, N.A. at its principal office in New York, New
York as its prime rate (any change in such prime rate of interest to be
effective on the date such change is announced by Citibank, N.A.) plus 2% and
(ii) the then applicable highest Pass-Through Rate on the Class A-1
Certificates. The Late Payment Rate shall be computed on the basis of a year of
360 days and the actual number of days elapsed. In no event shall the Late
Payment Rate exceed the maximum rate permissible under any applicable law
limiting interest rates.
Lender: As defined in Section 10.07.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loan to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) that it has received
all amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
Liquidation Event: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. With respect
to any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
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 as of the Cut-off Date (unless otherwise indicated), to
either (a) if the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the least of (i) the purchase price of the Mortgaged
Property, (ii) the Appraisal Value of the Mortgaged Property at origination, or
(iii) the Review Appraisal Value of the Mortgaged Property; or (b) if the
Mortgage Loan was a refinancing or modification, the Appraisal Value of the
Mortgaged Property at the time of the refinancing or modification.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower Tier Regular Interest: Each of the Class LT-A-1, Class LT-M-1,
Class LT-B-1, Class LT-B-2, Class LT-B-3 and Class LT-Accrual Interests as
described in the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement.
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class X Certificates.
MERS: As defined in Section 2.01.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Responsible Party has designated or will designate MERS as, and has taken or
will take such action as is necessary to cause MERS to be, the mortgagee of
record, as nominee for the Responsible Party, in accordance with MERS Procedure
Manual and (b) the Responsible Party has designated or will designate the Trust
as the Investor on the MERS(R)System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R)System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b)
the address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Custodial File, the Servicing File,
the Scheduled Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds, Prepayment
Premiums 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 mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto
as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Responsible Party's, SPFC's, or Original
Mortgage Loan Seller's, as applicable, 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) the original months to maturity or the remaining
months to maturity from the 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; (5) with respect to First
Lien Mortgage Loans, the Loan-to-Value Ratio at origination and with respect to
Second Lien Mortgage Loans, the Combined Loan-to-Value Ratio at origination, to
the extent available; (6) the Mortgage Interest Rate as of the Cut-off Date; (7)
the date on which the Scheduled Payment was due on the Mortgage Loan and, if
such date is not consistent with the Due Date currently in effect, such Due
Date; (8) the stated maturity date; (9) the amount of the Scheduled Payment as
of the Cut-off Date; (10) the last payment date on which a Scheduled Payment was
actually applied to pay interest and the outstanding principal balance; (11) the
original principal amount of the Mortgage Loan; (12) the principal balance of
the Mortgage Loan as of the close of business on the Cut-off Date, after
deduction of payments of principal due and collected on or before the Cut-off
Date; (13) with respect to Adjustable Rate Mortgage Loans, the Adjustment Date;
(14) with respect to Adjustable Rate Mortgage Loans, the Gross Margin; (15) with
respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms
of the Mortgage Note; (16) with respect to Adjustable Rate Mortgage Loans, a
code indicating the type of Index; (17) with respect to Adjustable Rate Mortgage
Loans, the Periodic Mortgage Interest Rate Cap under the terms of the Mortgage
Note; (18) the type of Mortgage Loan (i.e., fixed rate or adjustable rate); (19)
a code indicating the lien status of the Mortgage Loan; (20) the Mortgage
Interest Rate as of origination; (21) the amount of Escrow Payments as of the
Cut-off Date; (22) the date of origination; (23) the Mortgage Interest Rate
adjustment period; (24) the Mortgage Interest Rate floor; (25) amount of
xxxxxxxxxxxx X&X Advances and Servicing Advances as of Cut-off Date; (26) the
Due Date for the first Scheduled Payment; (27) the original Scheduled Payment
due; (28) the Appraised Value of the Mortgaged Property; (29) a code indicating
the Mortgage Loan is in bankruptcy, to the extent available; (30) a code
indicating a Mortgage Loan's delinquency status (i.e., 30 Day Delinquency), if
any, to the extent available. With respect to the Mortgage Loans in the
aggregate: (1) the number of Mortgage Loans; (2) the current aggregate
outstanding principal balance of the Mortgage Loans; (3) the weighted average
Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum of
the Compensating Interest payments made on such Distribution Date.
90+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, three months or more past due (without giving effect to any grace
period).
Non-Delay Certificates: As specified in the Preliminary Statement.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer or the Trustee, as applicable, will
not or, in the case of a proposed P&I Advance, would not be ultimately
recoverable from related late payments, Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as
provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer or the Trustee, as
applicable, will not or, in the case of a proposed Servicing Advance, would not,
be ultimately recoverable from related Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans and listed
on a list delivered to the Trustee and the Class A-1 Certificate Insurer
pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably acceptable to
the Trustee and the Class A-1 Certificate Insurer; provided, that any Opinion of
Counsel relating to (a) qualification of any Trust REMIC as a REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact independent of the
Servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Servicer of the Mortgage Loans or in an
affiliate of either and (iii) is not connected with the Servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Optional Termination Date: The date determined as follows:
(i) The Servicer or its affiliate may cause the Optional Termination
Date to occur on the Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans, as of the last day of the related
Due Period, is equal to 10.00% or less of the Cut-off Date Pool Principal
Balance; and
(ii) In the event the Servicer or its affiliate does not exercise
its right to cause the Optional Termination Date to occur within sixty
(60) days of when it is first permitted to do so, the Class A-1
Certificate Insurer may cause the Optional Termination Date to occur on
the Distribution Date on which the aggregate Stated Principal Balance of
the Mortgage Loans, as of the last day of the related Due Period, is equal
to 10.00% or less of the Cut-off Date Pool Principal Balance.
In the event that both the Servicer and the Class A-1 Certificate
Insurer have the call rights described above, at such time as those rights may
be exercised, the first Person to provide notice to exercise the call right will
have the right to purchase the Mortgage Loans.
Original Class N Notional Amount: $6,975,000.
Original Mortgage Loan Sellers: WMC, Finance America, First
Franklin, Xxxxx Fargo and Household.
Original Mortgage Loan Seller Agreements: The Finance America
Agreements, the First Franklin Purchase Agreement, the Household Agreements, the
Xxxxx Fargo Agreements and the WMC Agreements.
Original Mortgage Loan Seller Mortgage Loans: The Mortgage Loans
identified on the Mortgage Loan Schedule as being purchased from the Original
Mortgage Loan Sellers.
Original Mortgage Loan Seller Repurchase Price: The "Repurchase
Price" as defined in the applicable Original Mortgage Loan Seller Agreements.
Original Sale Date: With respect to the Finance America Mortgage
Loans, December 19, 2002, with respect to the First Franklin Mortgage Loans,
March 31, 2003, with respect to the Responsible Party Mortgage Loans, September
16, 2002, October 30, 2002, December 23, 2002 or March 5, 2003, as applicable,
with respect to the Xxxxx Fargo Mortgage Loans, June 24, 2002, or July 11, 2002,
as applicable, with respect to the WMC Mortgage Loans, September 25, 2002, and
with respect to the Household Mortgage Loans, September 6, 2002.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the LIBOR Certificates as of such Distribution Date (after giving effect to
the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Total Monthly Excess Spread.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property and any
Remittance Date, the advance made by the Servicer or the Trustee in respect of
such Remittance Date representing the payment of principal and interest (in the
case of a Second Lien Mortgage Loan, only interest), net of the Servicing Fee
for such Mortgage Loan, that was due during the related Due Period on the
Mortgage Loans and that was delinquent on the related Remittance Date, or in the
case of any Balloon Mortgage Loan the Balloon Payment for which is delinquent,
the applicable Assumed Scheduled Payment, and in the case of REO Property, only
REO Imputed Interest.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1 Certificates, 0.400%; Class
M-1 Certificates, 2.250%; Class B-1 Certificates, 4.250%; Class B-2
Certificates, 4.500%; and Class B-3 Certificates, 4.500%. On the first
Distribution Date after the Optional Termination Date, the Pass-Through Margins
shall increase to: Class A-1 Certificates, 0.800%; Class M-1 Certificates,
3.375%; Class B-1 Certificates, 6.375%; Class B-2 Certificates, 6.750%; and
Class B-3 Certificates, 6.750%.
Pass-Through Rate: For each Class of Certificates (other than the
Class X and Class N Certificates), the Class X/N Regular Interest, each Upper
Tier Regular Interest and each Lower Tier Regular Interest, the per annum rate
set forth or calculated in the manner described in the Preliminary Statement.
With respect to the Class N Certificates, 8.50% per annum.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Interest Rate Cap: With respect to each Adjustable
Rate Mortgage Loan, the provision of each Mortgage Note which provides for an
absolute maximum amount by which the Mortgage Interest Rate therein may increase
or decrease on an Adjustment Date above or below the Mortgage Interest Rate
previously in effect. The Periodic Mortgage Interest Rate Cap for each
Adjustable Rate Mortgage Loan is the rate set forth on the Mortgage Loan
Schedule.
Periodic Mortgage Interest Rate Floor: With respect to each
Adjustable Rate Mortgage Loan, the provision of each Mortgage Note which
provides for an absolute minimum amount by which the Mortgage Interest Rate
therein may increase or decrease on an Adjustment Date above or below the
Mortgage Interest Rate previously in effect. The Periodic Mortgage Interest Rate
Floor for each Adjustable Rate Mortgage Loan is the rate set forth on the
Mortgage Loan Schedule.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) evidence of ownership of a proportionate interest in specified
obligations described in (i) above;
(iii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by any Depository Institution and rated F1+ by Fitch, P-1 by
Xxxxx'x or A-1+ by S&P;
(iv) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(v) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(vi) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by each Rating Agency that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vii) money market mutual funds, including, without limitation any
mutual fund for which the Trustee or any affiliate of the Trustee serves
as investment manager, administrator, shareholder servicing agent, and/or
custodian or subcustodian, notwithstanding that (i) the Trustee or an
affiliate of the Trustee receives fees from such funds for services
rendered, (ii) the Trustee charges and collects fees for services rendered
pursuant to this Agreement, which fees are separate from the fees received
from such funds, and (iii) services performed for such funds and pursuant
to this Agreement may at times duplicate those provided to such funds by
the Trustee or its affiliates;
(viii) trust funds, trust accounts, interest-bearing demand or time
deposits (including certificates of deposit) which are held in banks
having general obligations rated at least "A" category by S&P or Xxxxx'x;
(ix) a trust account with The JPMorgan Chase Bank;
(x) a deposit of any bank (including that of the Trustee and its
affiliates), trust company or financial institution authorized to engage
in the banking business having a combined capital and surplus of at least
$500,000,000, whose long term, unsecured debt is rated in the "A" category
by S&P or "A" or higher by Xxxxx'x; and
(xi) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to the Rating Agencies (without regard to
the Class A-1 Certificate Insurance Policy) as a permitted investment of
funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual Certificate
is attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of such Person or any other U.S.
Person, (vi) an "electing large partnership" within the meaning of Section 775
of the Code and (vii) any other Person so designated by the Depositor based upon
an Opinion of Counsel that the Transfer of an Ownership Interest in a Residual
Certificate to such Person may cause any Trust REMIC to fail to qualify as a
REMIC at any time that the Certificates are outstanding. The terms "United
States," "State" and "international organization" shall have the meanings set
forth in Section 7701 of the Code or successor provisions. A corporation will
not be treated as an instrumentality of the United States or of any State or
political subdivision thereof for these purposes if all of its activities are
subject to tax and, with the exception of Xxxxxxx Mac, a majority of its board
of directors is not selected by such government unit.
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.
Physical Certificates: As specified in the Preliminary Statement.
Policy Payment Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.06(c) in the name of the Trustee
for the benefit of the Class A-1 Certificateholders and the Class A-1
Certificate Insurer, and designated "JPMorgan Chase Bank in trust for Ambac
Assurance Corporation and the registered holders of GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates, Series 2003-SEA, Class A-1".
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Preference Amount: Any payments of principal or interest on a Class
A-1 Certificate which has become Due for Payment and which is made to a Holder
of a Class A-1 Certificate by or on behalf of the Trustee which has been deemed
a preferential transfer and was previously recovered from such Holder pursuant
to the United States Bankruptcy Code or other similar law in accordance with a
final, nonappealable order of a court having competent jurisdiction and which
have not theretofore been repaid to such Holder.
Preference Claim: As defined in Section 4.06(f).
Premium Amount: With respect to any Distribution Date, the product
of the Premium Rate and the Class Certificate Balance of the Class A-1
Certificates immediately prior to such Distribution Date.
Premium Rate: The "Premium Percentage" as defined in the Insurance
Agreement.
Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the related Prepayment Period
the subject of a Principal Prepayment that was applied by the Servicer to reduce
the outstanding principal balance of such Mortgage Loan on a date preceding the
Due Date in the succeeding Prepayment Period, an amount equal to the product of
(a) the Mortgage Interest Rate net of the Servicing Fee Rate for such Mortgage
Loan, (b) the amount of the Principal Prepayment for such Mortgage Loan, (c)
1/360 and (d) the number of days commencing on the date on which such Principal
Prepayment was applied and ending on the last day of the related Prepayment
Period.
Prepayment Period: With respect to any Remittance Date, the calendar
month preceding the calendar month in which such Remittance Date occurs.
Prepayment Premium: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment in Full pursuant to the terms
of the related Mortgage Note.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Premium 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.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicer on or
prior to the Determination Date or advanced by the Servicer or the Trustee prior
to the related Remittance Date (including the portion of Insurance Proceeds or
Condemnation Proceeds allocable to principal), and all Principal Prepayments
received during the related Prepayment Period, (ii) the Liquidation Proceeds on
the Mortgage Loans allocable to principal actually collected by the Servicer
during the related Prepayment Period, (iii) the portion of the purchase price
allocable to principal with respect to each Deleted Mortgage Loan, the
repurchase obligation for which arose during the related Prepayment Period, that
was repurchased during the period from the prior Distribution Date through the
Remittance Date for the current Distribution Date, (iv) the principal portion of
all Substitution Adjustment Amounts with respect to the substitutions of
Mortgage Loans that occur during the calendar month in which such Distribution
Date occurs, (v) the principal portion of all Assumed Scheduled Payments for the
related Due Period advanced by the Servicer or the Trustee, as applicable,
pursuant to Section 4.01 in respect of such Distribution Date, and (vi) the
allocable portion of the proceeds received with respect to the termination of
the Trust Fund (to the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated August 20,
2003, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Purchase Agreements: The Original Mortgage Loan Seller Agreements,
the SPFC Purchase Agreements and the Responsible Party Purchase Agreements.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, as purchaser of the Mortgage Loans under the Purchase Agreements,
and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of any amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last day of the month
immediately preceding the related Distribution Date (or if such day is not a
Business Day, on the immediately preceding Business Day).
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Reimbursement Amount: As of any Distribution Date, the sum of (x)
(i) all Insured Payments paid by the Class A-1 Certificate Insurer, but for
which the Class A-1 Certificate Insurer has not been reimbursed prior to such
Distribution Date pursuant to Section 4.02, plus (ii) interest accrued on such
Insured Payments not previously repaid calculated at the Late Payment Rate from
the date the Trustee received the related Insured Payments or the date such
Insured Payments were made, and (y) without duplication (i) any amounts then due
and owing to the Class A-1 Certificate Insurer under the Insurance Agreement, as
certified to the Trustee by the Class A-1 Certificate Insurer plus (ii) interest
on such amounts at the Late Payment Rate.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
or any similar state statutes.
Remaining Mortgage Loan: As defined in the Sale and Warranties
Agreement.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no later
than 12:30 PM, Central Time on the Business Day immediately preceding such
Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Interest Rate net of the
Servicing Fee Rate that would have been applicable to the related Mortgage Loan
had it been outstanding) on the unpaid principal balance of the Mortgage Loan as
of the date of acquisition thereof (as such balance is reduced pursuant to
Section 3.15 by any income from the REO Property treated as a recovery of
principal).
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reporting Date: The 20th day of each calendar month or the
immediately preceding Business Day if the 20th is not a Business Day.
Repurchase Price: With respect to any Mortgage Loan, an amount equal
to the sum of (i) the unpaid principal balance of such Mortgage Loan as of the
date of repurchase, (ii) interest on such unpaid principal balance of such
Mortgage Loan at the Mortgage Interest Rate from the last date through which
interest has been paid and distributed to the Trustee to the date of repurchase,
(iii) all unreimbursed Servicing Advances and (iv) all expenses incurred by the
Servicer, the Trust or the Trustee, as the case may be, in respect of a breach
or defect, including, without limitation, (a) expenses arising out of the
Servicer's or Trustee's, as the case may be, enforcement of the Responsible
Party's, GSMC's or the Original Mortgage Loan Sellers', as applicable,
repurchase obligation, to the extent not included in clause (iii), and (b) any
costs and damages incurred by the Trust in connection with any violation by such
Mortgage Loan of any predatory lending law or abusive lending law.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee, substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers who at such time shall be officers to whom, with respect to a
particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject, in each case having direct
responsibility for the administration of this Agreement.
Responsible Party: NC Capital Corporation, a California corporation,
and its successors in interest.
Responsible Party Mortgage Loans: The Mortgage Loans identified on
the Mortgage Loan Schedule as being purchased from the Responsible Party.
Responsible Party Purchase Agreements: The Mortgage Loan Purchase
and Warranties Agreements, dated as of September 16, 2002, November 1, 2002, as
amended as of December 23, 2002 and March 1, 2003, respectively, between the
Responsible Party and the Purchaser, a copy of each of which, without the
mortgage loan schedule exhibit, is attached hereto as Exhibit P.
Review Appraisal Value: As defined in the Underwriting Guidelines.
Rolling Three Month Delinquency Rate: With respect to any
Distribution Date, a fraction, expressed as a percentage, equal to the average
of the Delinquency Ratio for each of the three immediately preceding Due
Periods.
Rule 144A Letter: As defined in Section 5.02(b).
Sale and Warranties Agreement: The Sale and Warranties Agreement,
dated as of August 25, 2003, among the Depositor, the Purchaser and the Trustee.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
(including any Balloon Payment) which, unless otherwise specified herein, shall
give effect to any related Debt Service Reduction and any Deficient Valuation
that affects the amount of the monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 13.50%.
Servicer: Xxxxxx Loan Servicing LP, a Delaware limited partnership,
and its successors and assigns, in its capacity as servicer hereunder.
Servicer's Assignee: As defined in Section 10.07.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer, or, in the case of the
Purchaser, incurred prior to the Cut-off Date, in the performance of its
servicing obligations in connection with a default delinquency or other
unanticipated event, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property, and (iv) the performance of its obligations under Sections 3.01, 3.09,
3.13 and 3.15. The Servicer and the Trustee shall not be required to make any
Nonrecoverable Servicing Advances.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan. Such fee shall be payable monthly, and
shall be pro rated for any portion of a month during which the Mortgage Loan is
serviced by the Servicer under this Agreement. The Servicing Fee is payable
solely from the interest portion (including recoveries with respect to interest
from Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds and
proceeds received with respect to REO Properties, to the extent permitted by
Section 3.11) of such Scheduled Payment collected by the Servicer or as
otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee in the Custodial File
and copies of the Mortgage Loan Documents set forth in Exhibit K hereto.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by the
Servicer, to which the Servicer may pledge, and assign all of its right, title
and interest in, to and under Section 6.06 of this Agreement.
Similar Law: As defined in Section 5.02(b).
Six-Month LIBOR Index: With respect to each applicable Adjustable
Rate Mortgage Loan, the rate as determined on the basis of rates at which
six-month U.S. dollar deposits are offered to prime banks in the London
interbank market on such date as provided in the related Mortgage Note.
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for
which the Mortgagor has filed for bankruptcy.
Specified Overcollateralized Amount: Prior to the Stepdown Date, an
amount equal to 1.00% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 2.00% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of LIBOR Certificates has been reduced
to zero, to a minimum amount equal to the Overcollateralization Floor; provided,
however, that if, on any Distribution Date, a Trigger Event has occurred, the
Specified Overcollateralized Amount shall not be reduced to the applicable
percentage of the then current aggregate Stated Principal Balance of the
Mortgage Loans until the Distribution Date on which a Trigger Event is no longer
occurring.
SPFC: Southern Pacific Funding Corp., and its successors in
interest.
SPFC Mortgage Loans: The Mortgage Loans identified on the Mortgage
Loan Schedule as being purchased from SPFC.
SPFC Purchase Agreements: The purchase agreements pursuant to which
the Purchaser acquired the SPFC Mortgage Loans.
SPV: As defined in Section 10.07.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be Standard & Poor's, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance
Group - GSAMP Trust 2003-SEA, or such other address as Standard & Poor's may
hereafter furnish to the Depositor and the Servicer.
Start-up Day: As defined in Section 2.06.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date, minus (ii) all amounts previously remitted to the Trustee with respect to
the related Mortgage Loan representing payments or recoveries of principal
including advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received by the Servicer on
or prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date and any unscheduled principal payments and other
unscheduled principal collections received during the related Prepayment Period.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate Class Certificate Balances of the Class A-1 Certificates have been
reduced to zero, and (b) the later to occur of (i) the Distribution Date in
September 2006, and (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subservicer: As defined in Section 3.02(a).
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the
Responsible Party for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in a Request for Release, substantially in the form
of Exhibit J, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of the Stated Principal Balance of the Deleted Mortgage Loan; (ii) be
accruing interest at a rate no lower than and not more than 1% per annum higher
than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio no
higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to
maturity no greater than (and not more than one year less than that of) the
Deleted Mortgage Loan; and (v) comply with each representation and warranty set
forth in Section 2.03.
Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03(g).
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 9.01.
30 Day Delinquency: The failure of the Mortgagor to make any
Scheduled Payment due under the Mortgage Note on or prior to the date which is
30 days after such payment's Due Date.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected on the Mortgage Loans
received by the Servicer on or prior to the related Determination Date or
advanced by the Servicer for the related Remittance Date (net of Expense Fees
and the Premium Amount) over (ii) the sum of the interest payable to the Classes
of Certificates and amounts payable to the Class A-1 Certificate Insurer on such
Distribution Date pursuant to Section 4.02(a)(i).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event exists if (i) the quotient (expressed as a percentage) of (1) the rolling
three month average of the aggregate unpaid principal balance of 60+ Day
Delinquent Mortgage Loans, divided by (2) the aggregate unpaid principal balance
of the Mortgage Loans as of the last day of the related Due Period, equals or
exceeds 115% of the Senior Enhancement Percentage as of the last day of the
prior Due Period or (ii) the quotient (expressed as a percentage) of (x) the
aggregate amount of Realized Losses incurred since the Cut-off Date through the
last day of the related Prepayment Period divided by (y) the Cut-off Date Pool
Principal Balance, exceeds the applicable percentages set forth below with
respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
------------------------------ ---------------
September 2006 through August 2007 1.50% for the first month, plus an
additional 1/12th of 1.50% for each
month thereafter
September 2007 through August 2008 3.00% for the first month, plus an
additional 1/12th of 1.50% for each
month thereafter
September 2008 through August 2009 4.50% for the first month, plus an
additional 1/12th of 1.75% for each
month thereafter
September 2009 and thereafter 6.25%
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) with respect to the
Class A-1 Certificates only, the rights of the Trustee under the Class A-1
Certificate Insurance Policy; (v) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing; and (vi) the rights of the Depositor under
the Sale and Warranties Agreement and the Original Mortgagor Loan Seller
Agreements (solely insofar as the Sale and Warranties Agreement and the Original
Mortgagor Loan Seller Agreements relate to the Mortgage Loans).
Trust REMIC: Any of the Lower Tier REMIC, the Upper Tier REMIC, the
Class M-1 REMIC, the Class B-1 REMIC, the Class B-2 REMIC, the Class B-3 REMIC
and the Class X REMIC.
Trustee: JPMorgan Chase Bank, a New York banking corporation, and
its successors in interest, and, if a successor trustee is appointed hereunder,
such successor.
Trustee Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to one month's interest at the related Trustee Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the preceding Distribution
Date (or as of the Closing Date in the case of the first Distribution Date) or,
in the event of any payment of interest which accompanies a Principal Prepayment
in Full made by the Mortgagor, interest at the Trustee Fee Rate on the Stated
Principal Balance of such Mortgage Loan for the period covered by such payment
of interest.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0040% per
annum.
Trustee Float Period: With respect to the Distribution Date and the
related amounts in the Distribution Account, the period commencing on the
Business Day immediately preceding such Distribution Date and ending on such
Distribution Date.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any state
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control all substantial decisions of the
trust. Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Underwriters' Exemption: Any exemption listed in footnote 1 of, and
amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487 (2002),
or any successor exemption.
Underwriting Guidelines: The underwriting guidelines, if any,
attached to the applicable Purchase Agreements.
Unpaid Interest Amounts: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from prior Distribution Dates remaining unpaid and (b)
interest on such unpaid amount at the applicable Pass-Through Rate (to the
extent permitted by applicable law).
Upper Tier Regular Interest: As described in the Preliminary
Statement.
Upper Tier REMIC: As described in the Preliminary Statement.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class N
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date; provided,
however, on and after the date on which the Class N Notional Amount Certificates
is reduced to zero, the percentage of all the Voting Rights allocated among the
Holders of the Class N Certificates shall be 0% and the percentage of all the
Voting Rights allocated among the Holder of the Class X Certificates shall be
2%.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage
Interest Rates then in effect on the beginning of the related Due Period on the
Mortgage Loans, less solely for the purposes of determining the Pass-Through
Rate on the Class A-1 Certificates, the Premium Rate, and (ii) a fraction, the
numerator of which is 30 and the denominator of which is the actual number of
days in the Interest Accrual Period related to such Distribution Date.
Xxxxx Fargo: Xxxxx Fargo Home Mortgage, Inc., a California
corporation, and its successors in interest.
Xxxxx Fargo Agreements: The Xxxxx Fargo Purchase Agreements and the
Assignment and Recognition Agreement, dated as of August 25, 2003, among the
Purchaser, the Depositor and Xxxxx Fargo.
Xxxxx Fargo Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as being purchased from Xxxxx Fargo.
Xxxxx Fargo Purchase Agreements: The Mortgage Loan Purchase and
Warranties Agreements dated as of June 24, 2002 and July 11, 2002, respectively,
between the Purchaser and Xxxxx Fargo.
WMC: WMC Mortgage Corp., a California corporation, and its
successors in interest.
WMC Agreements: The WMC Purchase Agreements and the Assignment and
Recognition Agreement, dated as of August 25, 2003, among the Purchaser, the
Depositor and WMC.
WMC Mortgage Loans: The Mortgage Loans identified on the Mortgage
Loan Schedule as being purchased from WMC.
WMC Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of September 25, 2002, between the Purchaser and WMC.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders and the Class A-1 Certificate Insurer, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund,
together with all rights of the Depositor under the Original Mortgage Loan
Seller Agreements and the Sale and Warranties Agreement (solely insofar as such
Original Mortgage Loan Seller Agreements and the Sale and Warranties Agreement
relate to the Mortgage Loans), and the Trustee, on behalf of the Trust, hereby
accepts the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to the Trustee for
the benefit of the Certificateholders and the Class A-1 Certificate Insurer the
following documents or instruments with respect to each Mortgage Loan so
assigned:
(i) the original Mortgage Note (except for up to 3.00% of the
Mortgage Notes for which there is a lost note affidavit and the copy of
the Mortgage Note) together with all riders thereto bearing all
intervening endorsements showing a complete chain of endorsement from the
Original Mortgage Loan Seller to the last endorsee, endorsed "Pay to the
order of _____________, without recourse" and signed in the name of the
last endorsee by an authorized officer. To the extent that there is no
room on the face of the Mortgage Notes for endorsements, the endorsement
may be contained on an allonge, if state law so allows and the Trustee is
so advised by the Depositor that state law so allows;
(ii) the original of any guarantee executed in connection with the
Mortgage Note (if provided);
(iii) except for up to 5.00% of the Mortgage Loans, the original
Mortgage with evidence of recording thereon or a certified true copy of
such Mortgage submitted for recording together with all riders thereto. If
in connection with any Mortgage Loan, the Responsible Party, the Original
Mortgage Loan Sellers or the Purchaser, as applicable, cannot deliver or
cause to be delivered the original Mortgage with evidence of recording
thereon on or prior to the Closing Date because of a delay caused by the
public recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such public
recording office retains the original recorded Mortgage, the Responsible
Party, the Original Mortgage Loan Sellers or the Purchaser, as applicable
(to the extent that it has not previously delivered the same to the
Purchaser or the Trustee), shall deliver or cause to be delivered to the
Trustee, a photocopy of such Mortgage, together with (A) in the case of a
delay caused by the public recording office, an Officer's Certificate of
the Responsible Party, the Original Mortgage Loan Sellers or the
Purchaser, as applicable (or certified by the title company, escrow agent,
or closing attorney), stating that such Mortgage has been dispatched to
the appropriate public recording office for recordation and that the
original recorded Mortgage or a copy of such Mortgage certified by such
public recording office to be a true and complete copy of the original
recorded Mortgage will be promptly delivered to the Trustee upon receipt
thereof by the Responsible Party, the Original Mortgage Loan Sellers or
the Purchaser, as applicable; or (B) in the case of a Mortgage where a
public recording office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage;
(iv) except for up to 1.00% of the Mortgage Loans, the originals of
all assumption, modification, consolidation or extension agreements (if
provided), with evidence of recording thereon or a certified true copy of
such agreement submitted for recording;
(v) except for up to 5.00% of the Mortgage Loans and each of the
MERS Designated Mortgage Loan, the original Assignment of Mortgage for
each Mortgage Loan endorsed in blank and in recordable form;
(vi) except for up to 5.00% of the Mortgage Loans and each of the
originals of all intervening Assignments of Mortgage (if any) evidencing a
complete chain of assignment from the Responsible Party, the applicable
Original Mortgage Loan Seller or the Purchaser, as applicable (or MERS
with respect to each MERS Designated Mortgage Loan) to the last endorsee
with evidence of recording thereon, or if any such intervening assignment
has not been returned from the applicable recording office or has been
lost or if such public recording office retains the original recorded
Assignments of Mortgage, the Responsible Party, the Original Mortgage Loan
Sellers or the Purchaser, as applicable (to the extent that it has not
previously delivered the same to the Purchaser or the Trustee), shall
deliver or cause to be delivered to the Trustee, a photocopy of such
intervening assignment, together with (A) in the case of a delay caused by
the public recording office, an Officer's Certificate of the Responsible
Party, the Original Mortgage Loan Sellers or the Purchaser, as applicable
(or certified by the title company, escrow agent, or closing attorney),
stating that such intervening Assignment of Mortgage has been dispatched
to the appropriate public recording office for recordation and that such
original recorded intervening Assignment of Mortgage or a copy of such
intervening Assignment of Mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to the
Trustee upon receipt thereof by the Responsible Party, the Original
Mortgage Loan Sellers or the Purchaser, as applicable, or (B) in the case
of an intervening assignment where a public recording office retains the
original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording
office, a copy of such intervening assignment certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment;
(vii) except for up to 6.00% of the Mortgage Loans, the original or
duplicate lender's title policy and any riders thereto or, any one of an
original title binder, an original or copy of the preliminary title report
or an original or copy of the title commitment, and if, copies then
certified by the title company; and
(viii) a security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage (if provided).
The Depositor shall use reasonable efforts to assist the Trustee and
the Servicer in enforcing the obligations of the Original Mortgage Loan Sellers
or the Purchaser under the Original Mortgage Loan Seller Agreements or the Sales
and Warranties Agreement, respectively.
Each Mortgage Loan for which a Mortgage Note is missing shall be
evidenced by a lost note affidavit as of the Closing Date. In the event, for
purposes of the Closing Date, one or more lost note affidavits are provided to
cover multiple missing Mortgage Notes, the Responsible Party shall deliver (or
the Depositor, as applicable, shall deliver or shall use reasonable efforts to
cause the Original Mortgage Loan Sellers or the Purchaser, as applicable, to
deliver) to the Trustee the applicable individual lost note affidavits within
ten (10) Business Days of the Closing Date. If the Responsible Party, the
Depositor, the Original Mortgage Loan Sellers or the Purchaser fail to deliver
the required individual lost note affidavits within the specified period of
time, the Trustee shall notify the Responsible Party, the Depositor, the
Original Mortgage Loan Sellers or the Purchaser, as applicable, to take such
remedial actions, including, without limitation, the repurchase by the
Responsible Party, the Original Mortgage Loan Sellers or the Purchaser of such
Mortgage Loan within 30 days of the Closing Date.
The Responsible Party shall deliver (or the Depositor, as
applicable, shall deliver or shall use reasonable efforts to cause the Original
Mortgage Loan Sellers or the Purchaser, as applicable to deliver) to the Trustee
the applicable recorded document promptly upon receipt from the respective
recording office but in no event later than 150 days from the Closing Date.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Servicer shall take all reasonable actions as are necessary at the expense
of the Depositor to cause the Trust to be shown as the owner of the related
Mortgage Loan on the records of MERS for the purpose of the system of recording
transfers of beneficial ownership of mortgages maintained by MERS.
From time to time, the Responsible Party shall forward with respect
to the Responsible Party Mortgage Loans, to the Trustee additional original
documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan approved by the Responsible Party
in accordance with the terms of this Agreement. The Depositor shall provide or
shall use reasonable efforts to cause the Original Mortgage Loan Sellers or the
Purchaser, as applicable to forward, with respect to the Original Mortgage Loan
Sellers Mortgage Loans or the Remaining Mortgage Loans, to the Trustee
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
Original Mortgage Loan Sellers or the Purchaser in accordance with the terms of
the Original Mortgage Loan Seller Agreements or the Sale and Warranties
Agreement, as applicable. All such mortgage documents held by the Trustee as to
each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the Responsible Party shall deliver
(or the Depositor, as applicable, shall use reasonable efforts to cause the
Original Mortgage Loan Sellers or the Purchaser, as applicable, to deliver) to
the Trustee Assignments of Mortgages, in blank, for each applicable Mortgage
Loan (except with respect to each MERS Designated Mortgage Loan). The
Responsible Party shall cause (or the Depositor, as applicable, shall use
reasonable efforts to cause the Original Mortgage Loan Sellers or the Purchaser,
as applicable, to cause) the Assignments of Mortgage with completed recording
information to be provided to the Servicer in a reasonably acceptable manner. No
later than thirty (30) Business Days following the later of the Closing Date and
the date of receipt by the Servicer of the fully completed Assignments of
Mortgages in recordable form, the Servicer shall promptly submit or cause to be
submitted for recording, at the expense of the Responsible Party, the Original
Mortgage Loan Sellers or the Purchaser pursuant to the Original Mortgage Loan
Seller Agreements or the Sale and Warranties Agreement, as applicable, at no
expense to the Trust Fund, the Trustee, the Class A-1 Certificate Insurer, the
Servicer or the Depositor in the appropriate public office for real property
records, each Assignment of Mortgage referred to in Section 2.01(b)(v);
provided, however, that the Servicer shall not be held responsible or liable for
any loss that occurs because an Assignment of Mortgage was not recorded, but
only to the extent the Servicer has not received prior knowledge of the act or
omission that causes such loss. Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan if the Trustee, each
Rating Agency, the Servicer and the Class A-1 Certificate Insurer have each
received an opinion of counsel, satisfactory in form and substance to the
Trustee, each Rating Agency, the Servicer and the Class A-1 Certificate Insurer,
to the effect that the recordation of such Assignments of Mortgage in any
specific jurisdiction is not necessary to protect the Trustee's interest in the
related Mortgage Note. If the Assignment of Mortgage is to be recorded, the
Mortgage shall be assigned by the Responsible Party at the Responsible Party's
expense (or the Depositor, as applicable, shall use reasonable efforts to cause
the Original Mortgage Loan Sellers or the Purchaser, to assign at the Original
Mortgage Loan Sellers' expense or the Purchaser's expense, pursuant to the
Original Mortgage Loan Seller Agreements or the Sale and Warranties Agreement)
to "JPMorgan Chase Bank as trustee under the Pooling and Servicing Agreement
dated as of August 1, 2003, GSAMP Trust 2003-SEA." In the event that any such
assignment is lost or returned unrecorded because of a defect therein, with
respect to the Responsible Party Mortgage Loans, the Responsible Party shall
promptly prepare a substitute assignment to cure such defect and thereafter
cause each such assignment to be duly recorded. If there is such a defect with
respect to an Original Mortgage Loan Seller Mortgage Loan, the Trustee shall
take such actions, with the Depositor's consent, to enforce the rights of the
Trust as "Purchaser" under the Original Mortgage Loan Seller Agreements or the
Sale and Warranties Agreement.
On or prior to the Closing Date, the Depositor shall deliver to the
Trustee and the Servicer a copy of the Data Tape Information in electronic,
machine readable medium in a form mutually acceptable to the Depositor, the
Servicer and the Trustee. Within ten (10) Business Days of the Closing Date, the
Depositor shall deliver a copy of the complete Mortgage Loan Schedule to the
Trustee and the Servicer.
In the event, with respect to any Responsible Party Mortgage Loans,
that such original or copy of any document submitted for recordation to the
appropriate public recording office is not so delivered to the Trustee within 90
days following the Closing Date, and in the event that the Responsible Party
does not cure such failure within 30 days of discovery of receipt of written
notification of such failure from the Depositor or the Trustee, the related
Mortgage Loan shall be repurchased by the Responsible Party at the price and in
the manner specified in Section 2.03. In the event, with respect to any Original
Mortgage Loan Seller Mortgage Loans, that such original or copy of any document
submitted for recordation to the appropriate public recording office is not so
delivered to the Trustee within 180 days of the applicable Original Sale Date as
specified in the Original Mortgage Loan Seller Agreements, the Trustee shall
notify the Depositor and the Depositor shall take or cause to be taken such
remedial actions under the Original Mortgage Loan Seller Agreements against the
Original Mortgage Loan Sellers, as may be permitted to be taken thereunder,
including without limitation, if applicable, the repurchase by the Original
Mortgage Loan Sellers, of such Mortgage Loan. The foregoing repurchase remedy
shall not apply in the event that the Responsible Party or the Original Mortgage
Loan Sellers, as applicable, cannot deliver such original or copy of any
document submitted for recordation to the appropriate public recording office
within the specified period due to a delay caused by the recording office in the
applicable jurisdiction; provided, that the Responsible Party or the Original
Mortgage Loan Sellers, as applicable, shall instead deliver a recording receipt
of such recording office or, if such recording receipt is not available, an
officer's certificate of an officer of the Responsible Party or the Original
Mortgage Loan Sellers, as applicable, confirming that such document has been
accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the Responsible Party or the Original Mortgage Loan Sellers, as applicable,
shall be deemed to have been satisfied upon delivery by the Responsible Party or
the Original Mortgage Loan Sellers, as applicable, to the Trustee prior to the
Closing Date of a copy of such Mortgage or assignment, as the case may be,
certified (such certification to be an original thereof) by the public recording
office to be a true and complete copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "GSAMP Trust 2003-SEA" and
JPMorgan Chase Bank is hereby appointed as Trustee in accordance with the
provisions of this Agreement.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee acknowledges receipt of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit E, and declares that it
holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders and the Class A-1 Certificate Insurer.
The Trustee acknowledges that it will maintain possession of the related
Mortgage Notes in the State of New York, unless otherwise permitted by the
Rating Agencies.
Prior to and as a condition to the Closing, the Trustee shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor, the Servicer and the Class A-1 Certificate Insurer an Initial
Certification prior to the Closing Date, or as the Depositor agrees to, on the
Closing Date, certifying receipt of a Mortgage Note and Assignment of Mortgage
for each Mortgage Loan. The Trustee shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
On the Closing Date, the Trustee shall ascertain whether all
documents required to be reviewed by it are in its possession, and shall deliver
to the Depositor, the Servicer and the Class A-1 Certificate Insurer an Initial
Certification, in the form annexed hereto as Exhibit E, and shall deliver to the
Depositor, the Servicer and the Class A-1 Certificate Insurer a Document
Certification and Exception Report, in the form annexed hereto as Exhibit F,
within 90 days after the Closing Date to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in such certification as an
exception and not covered by such certification): (i) all documents required to
be reviewed by it are in its possession; (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan; (iii)
based on its examination and only as to the foregoing documents, the information
set forth in items (1), (2) and (8) of the Mortgage Loan Schedule and items (1),
(2) and (10) of the Data Tape Information respecting such Mortgage Loan is
correct; and (iv) each Mortgage Note has been endorsed as provided in Section
2.01 of this Agreement. The Trustee shall not be responsible to verify the
validity, sufficiency or genuineness of any document in any Custodial File.
The Trustee shall retain possession and custody of each Custodial
File in accordance with and subject to the terms and conditions set forth
herein. The Servicer shall promptly deliver to the Trustee, upon the execution
or receipt thereof, the originals of such other documents or instruments
constituting the Custodial File as come into the possession of the Servicer from
time to time.
The Responsible Party shall deliver (or the Depositor, as
applicable, shall use reasonable efforts to cause the Original Mortgage Loan
Sellers or the Purchaser, as applicable, to deliver) to the Servicer copies of
all trailing documents required to be included in the Custodial File at the same
time the original or certified copies thereof are delivered to the Trustee,
including but not limited to such documents as the title insurance policy and
any other Mortgage Loan documents upon return from the public recording office.
The documents shall be delivered by the Responsible Party at the Responsible
Party's expense (or the Depositor, as applicable, shall use reasonable efforts
to cause the Original Mortgage Loan Sellers or the Purchaser, as applicable, to
deliver at the Original Mortgage Loan Sellers' expense pursuant to the Original
Mortgage Loan Seller Agreements or the Purchaser's expense pursuant to the Sale
and Warranties Agreement) to the Servicer and in no event shall the Servicer be
responsible for such expense.
Section 2.03 Representations, Warranties and Covenants of the
Responsible Party and the Servicer. (a) The Servicer hereby makes the
representations and warranties set forth in Schedule II hereto to the Depositor,
the Trustee and the Class A-1 Certificate Insurer as of the Closing Date.
(b) The Responsible Party hereby makes the representations and
warranties set forth in Schedule III and Schedule IV hereto, to the Depositor,
the Servicer, the Class A-1 Certificate Insurer and the Trustee.
(c) It is understood and agreed by the Servicer and the Responsible
Party that the representations and warranties set forth in this Section 2.03
shall survive the transfer of the Responsible Party Mortgage Loans by the
Depositor to the Trustee, and shall inure to the benefit of the Depositor, the
Trustee and the Class A-1 Certificate Insurer notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage File. Upon discovery by any of
the Responsible Party, the Depositor, the Trustee, the Class A-1 Certificate
Insurer or the Servicer of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other.
(d) Within 30 days of the earlier of either discovery by or notice
to the Responsible Party that any Responsible Party Mortgage Loan does not
conform to the requirements as determined in the Trustee's review of the related
Custodial File or within 60 days of the earlier of either discovery by or notice
to the Responsible Party of any breach of a representation or warranty set forth
in Section 2.03(b) that materially and adversely affects the value of any
Responsible Party Mortgage Loan or the interest of the Trustee, the Class A-1
Certificate Insurer or the Certificateholders therein, the Responsible Party
shall use its best efforts to cause to be remedied a material defect in a
document constituting part of a Mortgage File or promptly to cure such breach in
all material respects and, if such defect or breach cannot be remedied, the
Responsible Party shall, (i) if such 30 or 60 day period, as applicable, expires
prior to the second anniversary of the Closing Date, remove such Responsible
Party Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund and
substitute in its place a Substitute Mortgage Loan, in the manner and subject to
the conditions set forth in this Section 2.03, or (ii) at the Depositor's
option, repurchase such Responsible Party Mortgage Loan at the Repurchase Price;
provided, however, that any such substitution pursuant to clause (i) above shall
not be effected prior to the delivery to the Trustee and the Class A-1
Certificate Insurer of the Opinion of Counsel required by Section 2.04, if any,
and a Request for Release substantially in the form of Exhibit J, and the
Mortgage File for any such Substitute Mortgage Loan; provided, further, that
with respect to any representations and warranties which are made to the best of
the Responsible Party's knowledge, if it is discovered by the Responsible Party,
the Servicer, the Depositor, the Class A-1 Certificate Insurer or the Trustee
that the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Responsible
Party Mortgage Loan or the interest of the Certificateholders or which
materially and adversely affects the value of a Responsible Party Mortgage Loan
or the interests of the Certificateholders or the Class A-1 Certificate Insurer
in the related Mortgage Loan in the case of a representation and warranty
relating to a particular Responsible Party Mortgage Loan, notwithstanding the
Responsible Party's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation and warranty. In the event that a breach shall involve
any representation or warranty set forth in Schedule III, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Responsible Party of such breach, all of the Responsible Party Mortgage Loans
shall be repurchased by the Responsible Party at the Repurchase Price.
Notwithstanding the foregoing, a breach (x) which causes a Mortgage Loan not to
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code or (y) by the Responsible Party of any of the representations and
warranties set forth in clauses (47), (48), (49), (51) or (59) of Schedule III,
in each case, will be deemed automatically to materially and adversely affect
the value of such Mortgage Loan and the interests of the Trustee and
Certificateholders in such Mortgage Loan. In the event that the Trustee receives
notice of a breach by the Responsible Party of any of the representations and
warranties set forth in clauses (47), (48), (49), (51) or (59) of Schedule III,
the Trustee shall give notice of such breach to the Responsible Party and
request the Responsible Party to repurchase the Mortgage Loan at the Repurchase
Price within sixty (60) days of the Responsible Party's receipt of such notice.
The Responsible Party shall repurchase each such Deleted Mortgage Loan within 30
days of the earlier of discovery or receipt of notice with respect to each such
Deleted Mortgage Loan.
(e) With respect to any Substitute Mortgage Loan or Loans, the
Responsible Party shall deliver to the Trustee for the benefit of the
Certificateholders and the Class A-1 Certificate Insurer, the Mortgage Note, the
Mortgage, the related assignment of the Mortgage, and such other documents and
agreements as are required by Section 2.01, with the Mortgage Note endorsed and
the Mortgage assigned as required by Section 2.01. No substitution is permitted
to be made in any calendar month after the Determination Date for such month.
Scheduled Payments due with respect to Substitute Mortgage Loans in the Due
Period of substitution shall not be part of the Trust Fund and will be retained
by the Responsible Party on the next succeeding Distribution Date. For the Due
Period of substitution, distributions to Certificateholders will include the
Scheduled Payment due on any Deleted Mortgage Loan for such Due Period and
thereafter the Responsible Party shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan.
(f) In connection with any repurchase or substitution of a Mortgage
Loan pursuant to this Section 2.03 or Section 2.08, the Servicer shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the
removal of such Deleted Mortgage Loan and, based on information provided by the
Responsible Party or WMC under the WMC Agreements, as applicable, the
substitution of the Substitute Mortgage Loan or Loans and the Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee. The Servicer shall
have no liability with respect to the information provided by WMC or the
Responsible Party related to a Substitute Mortgage Loan. Upon such substitution,
the Substitute Mortgage Loan or Loans shall be subject to the terms of this
Agreement in all respects, and the Responsible Party or WMC, as applicable,
shall be deemed to have made with respect to such Substitute Mortgage Loan or
Loans, as of the date of substitution, the representations and warranties made
pursuant to Section 2.03(b) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Collection Account of the amount required to
be deposited therein in connection with such substitution as described in the
following paragraph, the Trustee shall release the Mortgage File held for the
benefit of the Certificateholders relating to such Deleted Mortgage Loan to the
Responsible Party or WMC, as applicable, and shall execute and deliver at the
direction of the Responsible Party or WMC, as applicable, such instruments of
transfer or assignment prepared by the Responsible Party or WMC, as applicable,
in each case without recourse, as shall be necessary to vest title in the
Responsible Party or WMC, as applicable, or its designee, the Trustee's interest
in any Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
(g) For any month in which the Responsible Party or WMC under the
WMC Agreements, as applicable, substitutes one or more Substitute Mortgage Loans
for one or more Deleted Mortgage Loans, the Servicer will determine the amount
(if any) by which the aggregate unpaid principal balance of all such Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all such Deleted Mortgage Loans (after application of the
scheduled principal portion of the Scheduled Payments due in the Due Period of
substitution). The amount of such shortage (the "Substitution Adjustment
Amount") plus an amount equal to the aggregate of any unreimbursed Advances with
respect to such Deleted Mortgage Loans shall be remitted by the Responsible
Party (or, in the case of WMC Mortgage Loans, the Depositor shall use reasonable
efforts to cause WMC to remit) to the Servicer for deposit into the Collection
Account on or before the next Remittance Date.
(h) In addition to such repurchase or substitution obligations, the
Responsible Party shall indemnify the Depositor, any of its Affiliates, the
Servicer, the Class A-1 Certificate Insurer and the Trustee and hold such
parties harmless against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach by the Responsible Party of any
of its representations and warranties contained in the Responsible Party
Purchase Agreements or this Agreement. (i) In the event that a Mortgage Loan
shall have been repurchased pursuant to this Agreement, the Original Mortgage
Loan Seller Agreements or the Sale and Warranties Agreement, the proceeds from
such repurchase shall be deposited in the Collection Account by the Servicer
pursuant to Section 3.10 on or before the next Remittance Date and upon such
deposit of the Repurchase Price or the Original Mortgage Loan Sellers Repurchase
Price, as applicable, the delivery of the Opinion of Counsel required by Section
2.04, if applicable, and receipt of a Request for Release in the form of Exhibit
J hereto, the Trustee shall release the related Custodial File held for the
benefit of the Certificateholders to such Person as directed by the Servicer,
and the Trustee shall execute and deliver at such Person's direction such
instruments of transfer or assignment prepared by such Person, in each case
without recourse, as shall be necessary to transfer title from the Trustee. It
is understood and agreed that the obligation under this Agreement of any Person
to cure, repurchase or replace any Mortgage Loan as to which a breach has
occurred and is continuing, together with any related indemnification
obligations of the Responsible Party under this Agreement or the applicable
Original Mortgage Loan Sellers under the applicable Original Mortgage Loan
Seller Agreements shall constitute the sole remedy against such Persons
respecting such breach available to Certificateholders, the Depositor, the
Servicer or the Trustee on their behalf.
The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Custodial Files to the Trustee for
the benefit of the Certificateholders.
Section 2.04 Delivery of Opinion of Counsel in Connection with
Substitution; Non-Qualified Mortgages. (a) Notwithstanding any contrary
provision of this Agreement, no substitution pursuant to Section 2.03 shall be
made more than 90 days after the Closing Date unless the Responsible Party
delivers to the Trustee an Opinion of Counsel, which Opinion of Counsel shall
not be at the expense of either the Trustee or the Trust Fund, addressed to the
Trustee and the Class A-1 Certificate Insurer, to the effect that such
substitution will not (i) result in the imposition of the tax on "prohibited
transactions" on any Trust REMIC or "contributions" after the Start-up Day, as
defined in Sections 860F(a)(2) and 860G(d) of the Code, respectively, or (ii)
cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding.
(b) Upon discovery by the Depositor, the Responsible Party, the
Servicer or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall promptly (and in any event within five (5) Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Trustee shall require the Responsible Party to
repurchase the affected Mortgage Loan within 30 days of the earlier of discovery
or receipt of notice in the same manner as it would a Mortgage Loan for a breach
of representation or warranty made pursuant to Section 2.03. The Trustee shall
reconvey to the Responsible Party the Mortgage Loan to be released pursuant
hereto in the same manner, and on the same terms and conditions, as it would a
Mortgage Loan repurchased for breach of a representation or warranty contained
in Section 2.03.
Section 2.05 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates and for
the benefit of the Class A-1 Certificate Insurer (and all references in this
Agreement for the benefit of or actions on behalf of the Class A-1
Certificateholders, individually or collectively, shall be deemed to include the
Class A-1 Certificate Insurer). The Trustee shall cooperate with all reasonable
requests by the Class A-1 Certificate Insurer regarding action to preserve or
enforce the Class A-1 Certificate Insurer's rights or interests under this
Agreement and the Class A-1 Certificates.
Section 2.06 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Start-up Day" for purposes of the REMIC Provisions shall be the Closing
Date. The "latest possible maturity date" is February 25, 2033, which is the
Distribution Date following the latest Mortgage Loan maturity date.
Amounts payable to the Class M-1 Certificates (other than any Basis
Risk Carry Forward Amounts) shall be deemed paid from the Upper Tier REMIC in
respect of the Class M-1 Interest to the Class M-1 REMIC as holder of the Class
M-1 Interest. Amounts payable to the Class B-1 Certificates (other than any
Basis Risk Carry Forward Amounts) shall be deemed paid from the Upper Tier REMIC
in respect of the Class B-1 Interest to the Class B-1 REMIC as holder of the
Class B-1 Interest. Amounts payable to the Class B-2 Certificates (other than
any Basis Risk Carry Forward Amounts) shall be deemed paid from the Upper Tier
REMIC in respect of the Class B-2 Interest to the Class B-2 REMIC as holder of
the Class B-2 Interest. Amounts payable to the Class B-3 Certificates (other
than any Basis Risk Carry Forward Amounts) shall be deemed paid from the Upper
Tier REMIC in respect of the Class B-3 Interest to the Class B-3 REMIC as holder
of the Class B-3 Interest. Amounts paid to the Class N and Class X Certificates
(prior to any reduction for any Basis Risk Payment) shall be deemed paid (i)
first, from the Upper Tier REMIC in respect of the Class X Interest to the Class
X REMIC as holder of the Class X Interest and (ii) then from the Class X REMIC
in respect of the Class X/N Regular Interest to the holders of the Class N and
Class X Certificates. If the Class N and Class X Certificates are held by more
than one person and such Persons do not hold both the Class N and Class X
Certificates proportionately, payments on the Class X/N Regular Interest shall
be deemed paid to a partnership, the partners of which are the Holders of Class
N and the Class X Certificates.
Section 2.07 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee, the
Servicer, the Class A-1 Certificate Insurer and the Responsible Party that as of
the date of this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
Servicer and the Trustee, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, 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);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders and
the Class A-1 Certificate Insurer, all right, title, and interest of the
Depositor thereto as note holder and mortgagee or (ii) to grant to the Trustee,
for the benefit of the Certificateholders and the Class A-1 Certificate Insurer,
the security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.07 shall survive delivery of the
respective Custodial Files to the Trustee or to a custodian, as the case may be,
and shall inure to the benefit of the Trustee.
Within 30 days of the earlier of either discovery by or notice to
the Depositor of a breach of the representations and warranties set forth in
clause (h) above that materially and adversely affects the value of any Mortgage
Loan or the interest of the Trustee or the Certificateholders or the Class A-1
Certificate Insurer therein, the Depositor shall use its best efforts to
promptly cure such breach in all material respects and if such defect or breach
cannot be remedied, the Depositor shall either (i) if such 30-day period expires
prior to the second anniversary of the Closing Date, remove such Deleted
Mortgage Loan from the Trust Fund and substitute in its place a Substitute
Mortgage Loan, in the manner and subject to the conditions set forth in Section
2.03, or (ii) repurchase such Mortgage Loan at the Repurchase Price. The
Depositor shall repurchase each such Deleted Mortgage Loan within 30 days of the
earlier of discovery or receipt of notice with respect to each such Deleted
Mortgage Loan. Any such substitution or repurchase shall be conducted in the
same manner as set forth in Section 2.03. The obligations of the Depositor to
cure such breach or to substitute or purchase any Mortgage Loan constitute the
sole remedies respecting a material breach of any such representation or
warranty to the Holders of the Certificates and the Trustee.
Section 2.08 Original Mortgage Loan Seller and Purchaser Mortgage
Loan Obligations. Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by an Original Mortgage Loan Sellers under any
Original Mortgage Loan Seller Agreement or the Purchaser under the Sale and
Warranties Agreement, the party discovering such breach shall give prompt
written notice thereof to the other parties (other than the Responsible Party),
the Purchaser and the applicable Original Mortgage Loan Sellers. The Trustee
shall take such action, with the Depositor's consent (such consent not to be
unreasonably withheld), with respect to such breach under the Original Mortgage
Loan Seller Agreements or the Sale and Warranties Agreement as may be necessary
or appropriate to enforce the rights of the Trust with respect thereto.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders and the Class A-1 Certificate Insurer, the
Servicer shall service and administer the Mortgage Loans in accordance with the
terms of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or (iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with the servicing standards set forth above, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. The Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Servicer shall also comply in the performance of this Agreement with all
reasonable rules and requirements of each insurer under any standard hazard
insurance policy. Subject to Section 3.16, the Trustee shall execute, at the
written request of the Servicer, and furnish to the Servicer and any Subservicer
such documents as are necessary or appropriate to enable the Servicer or any
Subservicer to carry out their servicing and administrative duties hereunder,
and the Trustee hereby grants to the Servicer, and this Agreement shall
constitute, a power of attorney to carry out such duties including a power of
attorney to take title to Mortgaged Properties after foreclosure on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
the Servicer for the purposes described herein to the extent necessary or
desirable to enable the Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of the Servicer or any Subservicers under
such powers of attorney.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer, or the Trustee pursuant to Section 4.01,
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the timely payment of taxes and assessments on the Mortgaged
Properties, which advances shall be Servicing Advances reimbursable in the first
instance from related collections from the Mortgagors pursuant to Section
3.09(b), and further as provided in Section 3.11. Any cost incurred by the
Servicer, the Trustee or by Subservicers in effecting the timely payment of
taxes and assessments on a Mortgaged Property shall not be added to the unpaid
principal balance of the related Mortgage Loan, notwithstanding that the terms
of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Interest Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for (A) a reduction of interest payments resulting
from the application of the Soldiers' and Sailors' Relief Act of 1940, as
amended, or any similar state statutes or (B) as provided in Section 3.07, the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Servicer, reasonably foreseeable) or (ii) permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (A) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or final, temporary or proposed Treasury regulations
promulgated thereunder) and (B) cause any Trust REMIC to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions" after the Start-up Day under the REMIC Provisions, or (iii)
waive any Prepayment Premiums, except as set forth in Section 3.07.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers (a) The Servicer may enter into subservicing agreements with
subservicers (each, a "Subservicer"), for the servicing and administration of
the Mortgage Loans ("Subservicing Agreements").
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
The Servicer will examine each Subservicing Agreement and will be familiar with
the terms thereof. The terms of any Subservicing Agreement will not be
inconsistent with any of the provisions of this Agreement. The Servicer and the
Subservicers may enter into and make amendments to the Subservicing Agreements
or enter into different forms of Subservicing Agreements; provided, however,
that any such amendments or different forms shall be consistent with and not
violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Trustee and the Class A-1
Certificate Insurer, without the consent of the Trustee and the Class A-1
Certificate Insurer. Any variation without the consent of the Trustee and the
Class A-1 Certificate Insurer from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Subservicing Accounts, or
credits and charges to the Subservicing Accounts or the timing and amount of
remittances by the Subservicers to the Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Servicer shall
deliver to the Trustee, the Depositor and the Class A-1 Certificate Insurer
copies of all Subservicing Agreements, and any amendments or modifications
thereof, promptly upon the Servicer's execution and delivery of such
instruments. Unless a Class A-1 Certificate Insurer Default exists, the Servicer
shall not terminate any Subservicing Agreement without the prior written consent
of the Class A-1 Certificate Insurer.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement and the rights and obligations of any
Subservicer pursuant to any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement. In the event of termination of
any Subservicer, all servicing obligations of such Subservicer shall be assumed
simultaneously by the Servicer without any act or deed on the part of such
Subservicer or the Servicer, and the Servicer either shall service directly the
related Mortgage Loans or shall enter into a Subservicing Agreement with a
successor Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee and the Class A-1 Certificate
Insurer for the servicing and administering of the Mortgage Loans in accordance
with the provisions of Section 3.01 without diminution of such obligation or
liability by virtue of such Subservicing Agreements or arrangements or by virtue
of indemnification from the Subservicer and to the same extent and under the
same terms and conditions as if the Servicer alone were servicing and
administering the Mortgage Loans. The Servicer shall be entitled to enter into
any agreement with a Subservicer for indemnification of the Servicer by such
Subservicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee, or the successor Servicer if the successor Servicer is
not the Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee prior to the Trustee assuming
such rights and obligations, unless the Trustee elects to terminate any
Subservicing Agreement in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee,
deliver to the assuming party all documents and records relating to each
Subservicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided, that
any extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, in the event that any Mortgage Loan is in default
or, in the judgment of the Servicer, such default is reasonably foreseeable, the
Servicer, consistent with the standards set forth in Section 3.01, may also
waive, modify or vary any term of such Mortgage Loan (including modifications
that would change the Mortgage Rate, forgive the payment of principal or
interest or extend the final maturity date of such Mortgage Loan), accept
payment from the related Mortgagor of an amount less than the Stated Principal
Balance in final satisfaction of such Mortgage Loan, or consent to the
postponement of strict compliance with any such term or otherwise grant
indulgence to any Mortgagor (any and all such waivers, modifications, variances,
forgiveness of principal or interest, postponements, or indulgences collectively
referred to herein as "forbearance"); provided, however, that the terms of any
Mortgage Loan may only be waived, modified or varied once following the Cut-off
Date while the Mortgage Loan remains outstanding; provided, further, that the
final maturity date of any Mortgage Loan may not be extended beyond the Final
Scheduled Distribution Date for the LIBOR Certificates. In the event the
Servicer shall have permitted the modification, waiver or amendment to any term
of any Mortgage Loans in an aggregate principal amount equal to 2.00% or more of
the Cut-Off Date Pool Principal Balance, the Servicer may not thereafter permit
any modification, waiver or amendment to any term of any Mortgage Loan without
the prior consent of the Class A-1 Certificate Insurer. The Servicer may not
waive, in whole or in part, a Prepayment Premium; provided, however, the
Servicer shall not be required to enforce the collection of a Prepayment Premium
if (A) the enforceability thereof is limited (1) by bankruptcy, insolvency,
moratorium, receivership, or other similar law relating to creditors' rights
generally or (2) due to acceleration in connection with a foreclosure or other
involuntary payment, (B) the enforceability is otherwise limited or prohibited
by applicable law or (C) the Servicer has not received the required
documentation necessary to enforce the collection. The Servicer's analysis
supporting any forbearance and the conclusion that any forbearance meets the
standards of Section 3.01 shall be reflected in writing in the Servicing File.
(b) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account within a reasonable period of time prior to any change
thereof.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more accounts
(collectively, the "Subservicing Account"). The Subservicing Account shall be an
Eligible Account and shall otherwise be acceptable to the Servicer. The
Subservicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Subservicer's
receipt thereof, all proceeds of Mortgage Loans received by the Subservicer less
its servicing compensation to the extent permitted by the Subservicing
Agreement, and shall thereafter deposit such amounts in the Subservicing
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account. The Subservicer shall thereafter deposit such
proceeds in the Collection Account or remit such proceeds to the Servicer for
deposit in the Collection Account not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) The Servicer shall ensure that each of the Mortgage Loans
shall be covered by a paid-in-full, life-of-the-loan tax service contract in
effect with respect to each Mortgage Loan (each, a "Tax Service Contract"). In
the event a Mortgage Loan is not covered by a Tax Service Contract, the Servicer
shall obtain a Tax Service Contract for the applicable Mortgage Loan at the
Depositor's expense. Each Tax Service Contract shall be assigned to the Trustee,
or its designee, at the Servicer's expense in the event that the Servicer is
terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. To the
extent the related Mortgage Loan provides for Escrow Payments, the Servicer
shall establish and maintain, or cause to be established and maintained, one or
more accounts (the "Escrow Accounts"), which shall be Eligible Accounts. The
Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all collections from the Mortgagors (or related advances from
Subservicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments")
collected on account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in no event more than two Business Days
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i)
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items; (ii) reimburse the Servicer (or a Subservicer to the extent provided in
the related Subservicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; or
(vi) recover amounts deposited in error. As part of its servicing duties, the
Servicer or Subservicers shall pay to the Mortgagors interest on funds in Escrow
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Escrow Accounts is insufficient, to pay such interest from its
or their own funds, without any reimbursement therefor. To the extent that a
Mortgage does not provide for Escrow Payments, the Servicer shall determine
whether any such payments are made by the Mortgagor in a manner and at a time
that is necessary to avoid the loss of the Mortgaged Property due to a tax sale
or the foreclosure as a result of a tax lien. If any such payment has not been
made and the Servicer receives notice of a tax lien with respect to the Mortgage
Loan being imposed, the Servicer will, to the extent required to avoid loss of
the Mortgaged Property, advance or cause to be advanced funds necessary to
discharge such lien on the Mortgaged Property. The Servicer assumes full
responsibility for the payment of all such bills within such time and shall
effect 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 the
Servicer shall make advances from its own funds to effect such payments;
provided, however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the Trustee, the
Servicer shall establish and maintain, or cause to be established and
maintained, one or more Eligible Accounts (such account or accounts, the
"Collection Account"), held in trust for the benefit of the Trustee. On behalf
of the Trustee, the Servicer shall deposit or cause to be deposited in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Servicer's receipt thereof, and shall
thereafter deposit in the Collection Account, in no event more than two Business
Days after the deposit of such funds into the clearing account, as and when
received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with prudent and customary servicing practices and Liquidation
Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Premiums collected by the Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee and the Depositor of the location of
the Collection Account maintained by it when established and prior to any change
thereof.
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to the Remittance Date, to remit to the Trustee (A)
the Trustee Fee with respect to such Distribution Date, (B) the Premium
Amount with respect to such Distribution Date, for payment to the Class
A-1 Certificate Insurer, and (C) all Available Funds in respect of the
related Distribution Date;
(ii) to reimburse the Servicer, or the Trustee for P&I Advances, but
only to the extent of amounts received which represent Late Collections
(net of the related Servicing Fees) of Scheduled Payments on Mortgage
Loans with respect to which such P&I Advances were made in accordance with
the provisions of Section 4.01;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections,
Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds or other
amounts as may be collected by the Servicer from a Mortgagor, or otherwise
received with respect to such Mortgage Loan (or the related REO Property);
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on the Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Responsible Party, with respect to each Mortgage
Loan that has previously been repurchased or replaced pursuant to this
Agreement all amounts received thereon subsequent to the date of purchase
or substitution, as the case may be;
(vi) to reimburse the Servicer or the Trustee for any P&I Advance or
Servicing Advance previously made which the Servicer or the Trustee, as
applicable, has determined to be a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance in accordance with the provisions of
Section 4.01;
(vii) to pay, or to reimburse the Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan pursuant to
Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the Trustee for
expenses incurred by or reimbursable to the Servicer, the Depositor or the
Trustee, as the case may be, pursuant to Section 6.03 or Section 8.05;
(ix) to reimburse the Servicer, the Trustee or the Class A-1
Certificate Insurer, as the case may be, for expenses reasonably incurred
in respect of the breach or defect giving rise to the repurchase
obligation under Section 2.03 of this Agreement that were included in the
Repurchase Price of the Mortgage Loan, including any expenses arising out
of the enforcement of the repurchase obligation, to the extent not
otherwise paid pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error;
(xi) to withdraw any amounts held in the Collection Account and not
required to be remitted to the Trustee on the Remittance Date occurring in
the month in which such amounts are deposited into the Collection Account,
to reimburse the Servicer or the Trustee for xxxxxxxxxxxx X&X Advances;
(xii) to clear and terminate the Collection Account upon termination
of this Agreement;
(xiii) to pay to the Purchaser, (i) any Prepayment Premiums
collected with respect to such Distribution Date, (ii) the amount of any
principal payments collected for any Mortgage Loans that were due prior to
the Cut-off Date and (iii) the amount of any interest payments collected
for any Mortgage Loans that were due and accruing prior to the Cut-off
Date; and
(xiv) to pay to the Purchaser any unreimbursed Servicing Advance
with respect to each Mortgage Loan in priority to the Servicer but to the
same extent and at the same time as the Servicer is entitled to be
reimbursed as provided for in clause (iii) above (including, without
limitation, if and when any such Servicing Advances are determined to be a
Nonrecoverable Servicing Advance in accordance with the provisions of
Section 4.01).
(b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (iv), (v), (vi), (vii), (viii) and
(ix) above. The Servicer shall provide written notification to the Depositor, on
or prior to the next succeeding Remittance Date, upon making any withdrawals
from the Collection Account pursuant to subclause (a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account and the
Distribution Account. (a) The Servicer may invest the funds in the related
Collection Account and the Trustee may invest funds in the Distribution Account
during the Trustee Float Period, and shall (except during the Trustee Float
Period), invest such funds in the Distribution Account at the direction of the
Depositor (for purposes of this Section 3.12, such Accounts are referred to as
an "Investment Account"), in one or more Permitted Investments bearing interest
or sold at a discount, and maturing, unless payable on demand no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from such account pursuant to this Agreement. All such Permitted
Investments shall be held to maturity, unless payable on demand. Any investment
of funds in an Investment Account shall be made in the name of the Trustee. The
Trustee shall be entitled to sole possession (except with respect to investment
direction of funds held in the related Account and any income and gain realized
thereon in any Account other than the Distribution Account during the Trustee
Float Period) over each such investment, and any certificate or other instrument
evidencing any such investment shall be delivered directly to the Trustee or its
agent, together with any document of transfer necessary to transfer title to
such investment to the Trustee. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Trustee may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account held by or on behalf of the Servicer, shall
be for the benefit of the Servicer and shall be subject to its withdrawal in the
manner set forth in Section 3.11. The Servicer shall deposit in the Collection
Account the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee, shall be for the
benefit of the Depositor (except for any income or gain realized from the
investment of funds on deposit in the Distribution Account during the Trustee
Float Period, which shall be for the benefit of the Trustee). The Depositor
shall deposit in the Distribution Account (except with respect to the Trustee
Float Period, in which case the Trustee shall deposit) the amount of any loss of
principal incurred in respect of any such Permitted Investment made with funds
in such accounts immediately upon realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings.
(e) The Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain of the
Permitted Investments, (ii) using Affiliates to effect transactions in certain
Permitted Investments and (iii) effecting transactions in certain Permitted
Investments.
Section 3.13 Maintenance of Hazard Insurance, Errors and Omissions
and Fidelity Coverage. (a) The Servicer shall cause to be maintained for each
First Lien Mortgage Loan fire insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the least of (i) the
current principal balance of such First Lien Mortgage Loan, (ii) the amount
necessary to fully compensate for any damage or loss to the improvements that
are a part of such property on a replacement cost basis and (iii) the maximum
insurable value of the improvements which are a part of such Mortgaged Property,
in each case in an amount not less than such amount as is necessary to avoid the
application of any coinsurance clause contained in the related hazard insurance
policy. The Servicer shall also cause to be maintained fire insurance with
extended coverage on each REO Property in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the outstanding principal balance of the related
First Lien Mortgage Loan at the time it became an REO Property, plus accrued
interest at the Mortgage Interest Rate and related Servicing Advances. The
Servicer will comply in the performance of this Agreement with all reasonable
rules and requirements of each insurer under any such hazard policies. Any
amounts to be collected by the Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or amounts to be released to the Mortgagor in accordance
with the procedures that the Servicer would follow in servicing loans held for
its own account, subject to the terms and conditions of the related Mortgage and
Mortgage Note) shall be deposited in the Collection Account, subject to
withdrawal pursuant to Section 3.11. Any cost incurred by the Servicer in
maintaining any such insurance shall not, for the purpose of calculating
distributions to the Trustee, be added to the unpaid principal balance of the
related First Lien Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in force and as
shall require such additional insurance. If the Mortgaged Property or REO
Property is at any time in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be maintained a
flood insurance policy in respect thereof. Such flood insurance shall be in an
amount equal to the lesser of (i) the unpaid principal balance of the related
First Lien Mortgage Loan and (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).
In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of B:VI or better in
Best's (or such other rating that is comparable to such rating) insuring against
hazard losses on all of the First Lien Mortgage Loans, it shall conclusively be
deemed to have satisfied its obligations as set forth in the first two sentences
of this Section 3.13, it being understood and agreed that such policy may
contain a deductible clause, in which case the Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property or REO
Property a policy complying with the first two sentences of this Section 3.13,
and there shall have been one or more losses which would have been covered by
such policy, deposit to the Collection Account from its own funds the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.
(b) The Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of the Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Xxxxxxx Mac if it were the purchaser of the
Mortgage Loans, unless the Servicer has obtained a waiver of such requirements
from Xxxxxx Mae or Xxxxxxx Mac. The Servicer shall also maintain a fidelity bond
in the form and amount that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac, unless the Servicer has obtained a waiver of such requirements from Xxxxxx
Mae or Xxxxxxx Mac. The Servicer shall provide the Trustee and the Class A-1
Certificate Insurer upon request with copies of any such insurance policies and
fidelity bond. The Servicer shall be deemed to have complied with this provision
if an Affiliate of the Servicer has such errors and omissions and fidelity bond
coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days' prior written notice to the Trustee. The Servicer shall also cause
each Subservicer to maintain a policy of insurance covering errors and omissions
and a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in its sole business
judgment, the Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to enforce
such "due-on-sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, the Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note, the Servicer has the prior
consent of the primary mortgage guaranty insurer, if any, and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. The
Servicer is also authorized to enter into a substitution of liability agreement
with such person, pursuant to which the original Mortgagor is released from
liability and such person is substituted as the Mortgagor and becomes liable
under the Mortgage Note; provided, that no such substitution shall be effective
unless such person satisfies the underwriting criteria of the Servicer and has a
credit risk rating at least equal to that of the original Mortgagor. In
connection with any assumption, modification or substitution, the Servicer shall
apply such underwriting standards and follow such practices and procedures as
shall be normal and usual in its general mortgage servicing activities and as it
applies to other mortgage loans owned solely by it. The Servicer shall not take
or enter into any assumption and modification agreement, however, unless (to the
extent practicable in the circumstances) it shall have received confirmation, in
writing, of the continued effectiveness of any applicable hazard insurance
policy, or a new policy meeting the requirements of this Section is obtained.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Interest Rate
and the amount of the Scheduled Payment) may be amended or modified, except as
otherwise required pursuant to the terms thereof. The Servicer shall notify the
Trustee that any such substitution, modification or assumption agreement has
been completed by forwarding to the Trustee the executed original of such
substitution or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. The Servicer
shall use its best efforts, consistent with customary servicing practices as
described in Section 3.01, to foreclose upon or otherwise comparably convert
(which may include an acquisition of REO Property) the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07, and which are not released from this
Agreement pursuant to any other provision hereof. The Servicer shall not
foreclose on any Mortgage Loan that was more than 30 days contractually
delinquent as of the Closing Date unless the Mortgagor fails to make one or more
Scheduled Payments after the Closing Date; provided, however, that such
restriction shall not apply if the Mortgagor makes the first three consecutive
Scheduled Payments after the Closing Date; provided, further, that such
restriction shall not apply if the Mortgage Loan has been modified after the
Closing Date and the Mortgage Loan fails to perform in accordance with such
modification.
The Servicer shall use reasonable efforts to realize upon such
defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and interest by the Trustee, taking into account, among other things,
the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which a Mortgaged Property shall have suffered
damage from an uninsured cause, the Servicer shall not be required to expend its
own funds toward the restoration of such property unless it shall determine in
its sole discretion (i) that such restoration will increase the net proceeds of
liquidation of the related Mortgage Loan to the Trustee, after reimbursement to
itself for such expenses, and (ii) that such expenses will be recoverable by the
Servicer through Insurance Proceeds, Condemnation Proceeds or Liquidation
Proceeds from the related Mortgaged Property, as contemplated in Section 3.11.
The Servicer shall be responsible for all other costs and expenses incurred by
it in any such proceedings; provided, however, that it shall be entitled to
reimbursement thereof from the related property, as contemplated in Section
3.11.
The proceeds of any Liquidation Event or REO Disposition, as well as
any recovery resulting from a partial collection of Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Servicer or any Subservicer for any related unreimbursed Servicing
Advances, pursuant to Section 3.11 or 3.17; second, to accrued and unpaid
interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage Interest
Rate, to the date of the liquidation or REO Disposition, or to the Due Date
prior to the Remittance Date on which such amounts are to be distributed if not
in connection with a Liquidation Event or REO Disposition; third, to reimburse
the Servicer or the Trustee for any related xxxxxxxxxxxx X&X Advances, pursuant
to Section 3.11; and fourth, as a recovery of principal of the Mortgage Loan. If
the amount of the recovery so allocated to interest is less than a full recovery
thereof, that amount will be allocated as follows: first, to unpaid Servicing
Fees; and second, as interest at the Mortgage Interest Rate (net of the
Servicing Fee Rate). The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Servicer or any Subservicer pursuant
to Section 3.11 or 3.17. The portions of the recovery so allocated to interest
at the Mortgage Interest Rate (net of the Servicing Fee Rate) and to principal
of the Mortgage Loan shall be applied as follows: first, to reimburse the
Servicer or any Subservicer for any related unreimbursed Servicing Advances in
accordance with Section 3.11 or 3.17, and second, to the Trustee in accordance
with the provisions of Section 4.02, subject to the last paragraph of Section
3.17 with respect to certain excess recoveries from an REO Disposition.
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 Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee with a written report of the
environmental inspection.
After reviewing the environmental inspection report, the Depositor
shall determine how the Servicer shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Depositor directs the Servicer to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, (i) the Servicer shall be
reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse the Servicer, the
Servicer shall be entitled to be reimbursed from amounts in the Collection
Account pursuant to Section 3.11 and (ii) the Depositor shall notify the Class
A-1 Certificate Insurer that the environmental inspection report indicates that
the Mortgaged Property is contaminated by toxic substances or waste. In the
event the Depositor directs the Servicer not to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed
from general collections for all Servicing Advances made with respect to the
related Mortgaged Property from the Collection Account pursuant to Section 3.11.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will, in accordance with Accepted Servicing Practices, notify the
Trustee of the payment in full by a certification in the form of Exhibit J
hereto (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.10 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Custodial File by completing a Request for Release. Upon receipt of
such certification and Request for Release, the Trustee shall promptly release
the related Custodial File to the Servicer within three (3) Business Days. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee, of a Request for Release,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and the Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the Servicer to return each and every document previously
requested from the Custodial File to the Trustee when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee to the Servicer or its designee. Upon receipt of a Request for Release
under this Section 3.16, the Trustee shall deliver the related Custodial File to
the Servicer by regular mail, unless the Servicer requests that the Trustee
deliver such Custodial File to the Servicer by overnight courier (in which case
such delivery shall be at the Servicer's expense); provided, however, that in
the event the Servicer has not previously received copies of the relevant
Mortgage Loan Documents necessary to service the related Mortgage Loan in
accordance with Accepted Servicing Practices, the Responsible Party shall
reimburse (or the Depositor, as applicable, shall use reasonable best efforts to
cause the Original Mortgage Loan Sellers or the Purchaser, as applicable, to
reimburse) the Servicer for any overnight courier charges incurred for the
requested Custodial Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
Servicer shall cause the deed or certificate of sale to be issued in the name of
the Trustee, on behalf of the Certificateholders.
(b) The Servicer shall manage, conserve, protect and operate each
REO Property for the Trustee solely for the purpose of its prompt disposition
and sale. The Servicer, either itself or through an agent selected by the
Servicer, shall manage, conserve, protect and operate the 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 Servicer shall attempt to
sell the same (and may temporarily rent the same for a period not greater than
one year, except as otherwise provided below) on such terms and conditions as
the Servicer deems to be in the best interest of the Trustee. The Servicer shall
notify the Trustee from time to time as to the status of each REO Property.
(c) The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible (subject to the Trustee's right to veto any
proposed sale of REO Property) and shall sell such REO Property in any event
within three years after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than three years is permitted under the
foregoing sentence and is necessary to sell any REO Property, the Servicer shall
report monthly to the Trustee as to the progress being made in selling such REO
Property. Notwithstanding its veto rights, the Trustee has no obligation with
respect to REO Dispositions.
(d) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.
(e) The Servicer shall deposit net of reimbursement to the Servicer
for any related outstanding Servicing Advances and unpaid Servicing Fees
provided in Section 3.11, or cause to be deposited, on a daily basis in the
Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.
(f) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(g) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition shall be
retained by the Servicer as additional servicing compensation.
(h) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, any REO Property as soon as possible, but in no
event later than the conclusion of the third calendar year beginning after the
year of its acquisition by the REMIC unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee, the
Servicer and the Class A-1 Certificate Insurer, to the effect that the holding
by the Lower Tier REMIC of such REO Property subsequent to such period will not
result in the imposition of taxes on "prohibited transactions" as defined in
Section 860F of the Code or cause any Trust REMIC to fail to qualify as a REMIC
under the REMIC Provisions or comparable provisions of relevant state laws at
any time. The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale in a manner which does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) or result in the
receipt by the Lower Tier REMIC of any "income from non-permitted assets" within
the meaning of Section 860F(a)(2)(B) of the Code or any "net income from
foreclosure property" which is subject to taxation under Section 860G(a)(1) of
the Code. Pursuant to its efforts to sell such REO Property, the Servicer shall
either itself or through an agent selected by the Servicer protect and conserve
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Trustee on behalf of the
Certificateholders and the Class A-1 Certificate Insurer, rent the same, or any
part thereof, as the Servicer deems to be in the best interest of the Trustee on
behalf of the Certificateholders and the Class A-1 Certificate Insurer for the
period prior to the sale of such REO Property; provided, however, that any rent
received or accrued with respect to such REO Property qualifies as "rents from
real property" as defined in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Mortgage Loan, the Servicer shall adjust the Mortgage Interest Rate on the
related Adjustment Date and shall adjust the Scheduled Payment on the related
mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. The
Servicer shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate and Scheduled Payment adjustments. The Servicer shall
promptly, upon written request therefor, deliver to the Trustee such
notifications and any additional applicable data regarding such adjustments and
the methods used to calculate and implement such adjustments. Upon the discovery
by the Servicer or the receipt of notice from the Trustee that the Servicer has
failed to adjust a Mortgage Interest Rate or Scheduled Payment in accordance
with the terms of the related Mortgage Note, the Servicer shall deposit in the
Collection Account from its own funds the amount of any interest loss caused as
such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall provide, or cause the
Subservicer to provide, to the Depositor, the Trustee, the Class A-1 Certificate
Insurer, the OTS or the FDIC and the examiners and supervisory agents thereof
access to the documentation regarding the Mortgage Loans in its possession
required by applicable regulations of the OTS. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Servicer, the Depositor, the Trustee
or any Subservicer. Nothing in this Section shall derogate from the obligation
of such party to observe any applicable law prohibiting disclosure of
information regarding the Mortgagors and the failure of such party to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. The Servicer shall account fully to the
Trustee for any funds received by the Servicer or which otherwise are collected
by the Servicer as Liquidation Proceeds, Condemnation Proceeds or Insurance
Proceeds in respect of any Mortgage Loan. All Mortgage Files and funds collected
or held by, or under the control of, the Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including, but not limited to, any funds on deposit in its
Collection Account, shall be held by the Servicer for and on behalf of the
Trustee and shall be and remain the sole and exclusive property of the Trustee,
subject to the applicable provisions of this Agreement. The Servicer also agrees
that it shall not create, incur or subject any Mortgage File or any funds that
are deposited in the Collection Account, the Distribution Account or any Escrow
Account, or any funds that otherwise are or may become due or payable to the
Trustee for the benefit of the Certificateholders and the Class A-1 Certificate
Insurer, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Insurance Proceeds and Condemnation Proceeds related to such Mortgage
Loan, the Servicing Fee with respect to each Mortgage Loan (less any portion of
such amounts retained by any Subservicer). In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of related late collections and as
otherwise permitted in Section 3.11. Except as provided in Section 6.06, the
right to receive the Servicing Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Servicer's responsibilities
and obligations under this Agreement; provided, however, that the Servicer may
pay from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Premiums) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer will
deliver or cause to be delivered to the Depositor, the Rating Agencies, the
Class A-1 Certificate Insurer and the Trustee on or before March 15th of each
calendar year, commencing in 2004, an Officer's Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Servicer during
the preceding calendar year and of performance under this Agreement or a similar
agreement has been made under such officers' supervision, and (ii) to the best
of such officers' knowledge, based on such review, the Servicer has fulfilled
all of its obligations under this Agreement 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. Promptly
after receipt of such Officer's Certificate, the Depositor shall review such
Officer's Certificate and, if applicable, consult with the Servicer as to the
nature of any defaults by the Servicer in the fulfillment of any of the
Servicer's obligations.
Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements. Not later than March 15th of each calendar year
commencing in 2004, the Servicer, at its expense, shall cause a nationally
recognized firm of independent certified public accountants to furnish to the
Depositor, the Servicer, the Rating Agencies, the Class A-1 Certificate Insurer
and the Trustee a report stating that (i) it has obtained a letter of
representation regarding certain matters from the management of the Servicer
which includes an assertion that the Servicer has complied with certain minimum
residential mortgage loan servicing standards, identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of residential mortgage
loans during the most recently completed calendar year and (ii) on the basis of
an examination conducted by such firm in accordance with standards established
by the American Institute of Certified Public Accountants, such representation
is fairly stated in all material respects, subject to such exceptions and other
qualifications that may be appropriate. In rendering its report such firm may
rely, as to matters relating to the direct servicing of residential mortgage
loans by Subservicers, upon comparable reports of firms of independent certified
public accountants rendered on the basis of examinations conducted in accordance
with the same standards (rendered within one year of such report) with respect
to those Subservicers. Promptly after receipt of such report, the Depositor
shall review such report and, if applicable, consult with the Servicer as to the
nature of any defaults by the Servicer in the fulfillment of any of the
Servicer's obligations.
Section 3.24 Trustee to Act as Servicer. (a) In the event that the
Servicer shall for any reason no longer be the Servicer hereunder (including by
reason of an Event of Default), the Trustee or its successor shall thereupon
assume all of the rights and obligations of the Servicer hereunder arising
thereafter (except that the Trustee shall not be (i) liable for losses of the
predecessor Servicer pursuant to Section 3.10 or any acts or omissions of the
predecessor Servicer hereunder, (ii) obligated to make Advances if it is
prohibited from doing so by applicable law, (iii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, including but not
limited to repurchases or substitutions pursuant to Section 2.03, (iv)
responsible for expenses of the Servicer pursuant to Section 2.03 or (v) deemed
to have made any representations and warranties of the Servicer hereunder). Any
such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided, that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected and held by it
and otherwise use its best efforts to effect the orderly and efficient transfer
of the Subservicing Agreement to the assuming party.
Section 3.25 Compensating Interest. The Servicer shall remit to the
Trustee on each Remittance Date an amount from its own funds equal to
Compensating Interest payable by the Servicer for such Remittance Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer shall fully furnish, in accordance
with the Fair Credit Reporting Act and its implementing regulations, accurate
and complete information (e.g., favorable and unfavorable) on the related
Mortgagor credit files to Equifax, Experian, and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) The Servicer shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.
Section 3.27 Excess Reserve Fund Account; Distribution Account. (a)
The Trustee shall establish and maintain the Excess Reserve Fund Account, on
behalf of the Class N and Class X Certificateholders, to receive any Basis Risk
Payment and to pay to the LIBOR Certificateholders any Basis Risk Carry Forward
Amounts. On each Distribution Date, the Trustee shall deposit the amount of any
Basis Risk Payments for such date into the Excess Reserve Fund Account.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class of LIBOR Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(F), the lesser of the Class X
Distributable Amount (to the extent remaining after the distributions specified
in Sections 4.02(a)(iii)(A)-(E)) and the aggregate Basis Risk Carry Forward
Amount and (2) withdraw from the Excess Reserve Fund Account amounts necessary
to pay to such Class or Classes of Certificates the applicable Basis Risk Carry
Forward Amounts. Such payments shall be allocated to those Classes based upon
the amount of Basis Risk Carry Forward Amount owed to each such Class and shall
be paid in the priority set forth in Section 4.02(a)(iii)(G). In the event that
the Certificate Balance of any Class of Certificates is permanently reduced
because of Applied Realized Loss Amounts, the applicable Certificateholders will
not be entitled to receive Basis Risk Carry Forward Amounts on the written down
amounts on such Distribution Date or any future Distribution Dates, even if
funds are otherwise available for distribution.
The Trustee shall account for the Excess Reserve Fund Account as an
outside reserve fund within the meaning of Treasury Regulations Section
1.860G-2(h) and not as an asset of any Trust REMIC created pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund Account are the
Class N and Class X Certificateholders (or a partnership, the beneficial holders
of which are the Class N and Class X Certificates, as the case may be). For all
federal income tax purposes, amounts transferred by the Class X REMIC to the
Excess Reserve Fund Account shall be treated as distributions by the Trustee in
respect of the Class X/N Regular Interest from the Class X REMIC to the Class N
and Class X Certificateholders (or to a partnership, the beneficial holders of
which are the Class N and Class X Certificates, as the case may be).
Any Basis Risk Carry Forward Amounts paid by the Trustee to the
LIBOR Certificateholders shall be accounted for by the Trustee as amounts paid
first to the Holders of the Class N and Class X Certificates (or a partnership,
the beneficial holders of which are the Class N and Class X Certificates, as the
case may be) (as recipient of 100% of amounts payable in respect of the Class
X/N Regular Interest) and then to the respective Class or Classes of LIBOR
Certificates. In addition, the Trustee shall account for the rights of Holders
of each Class of LIBOR Certificates to receive payments of Basis Risk Carry
Forward Amounts as rights in a separate limited recourse interest rate cap
contract written by the Class N and Class X Certificateholders (or such
partnership) in favor of Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve Fund
Account except as expressly set forth in this Section 3.27(a).
(b) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Trustee shall, promptly upon
receipt on the Business Day received, deposit in the Distribution Account and
retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02.
Section 3.28 Optional Purchase of Delinquent Mortgage Loans. Each of
the Depositor and the Servicer, in each case, in its sole discretion, shall have
the option, but shall not be obligated, to purchase any 90+ Delinquent Mortgage
Loans from the Trust Fund. During the first ten (10) days after a Mortgage Loan
becomes a 90+ Delinquent Mortgage Loan, the Depositor shall have the exclusive
option to purchase such 90+ Delinquent Mortgage Loan. The purchase price for any
such Mortgage Loan shall be 100% of the unpaid principal balance of such
Mortgage Loan plus accrued and unpaid interest on the related Mortgage Loan at
the applicable Mortgage Interest Rate, plus the amount of any unreimbursed
Servicing Advances made by the Servicer or the Trustee. Upon receipt of such
purchase price, the Servicer shall provide to the Trustee a Request for Release
and the Trustee shall promptly release to the Depositor or the Servicer, as
applicable, the Mortgage File relating to the Mortgage Loan being repurchased.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the First Lien Mortgage
Loans, which Scheduled Payments were not received as of the close of business on
the related Determination Date, (ii) with respect to Second Lien Mortgage Loans
for which Scheduled Payments were not received as of the close of business on
the related Determination Date, the interest portion of the aggregate amount of
Scheduled Payments (net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date, (iii) with respect to each of the
Balloon Mortgage Loans as to which the related Balloon Payment was due during or
prior to the related Due Period and delinquent as to the end of the related Due
Period (including any REO Property as to which the Balloon Payment would have
been past due) the aggregate Assumed Scheduled Payments for the related Due
Period, plus (iv) with respect to each REO Property, which REO Property was
acquired during or prior to the related Prepayment Period and as to which such
REO Property an REO Disposition did not occur during the related Prepayment
Period, an amount equal to the REO Imputed Interest that would have been due on
the related Due Date in respect of the related Mortgage Loans.
(b) On the Remittance Date, the Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case, it will cause to be made an appropriate entry in the records of
Collection Account that Amounts Held for Future Distribution have been, as
permitted by this Section 4.01, used by the Servicer in discharge of any such
P&I Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of P&I Advances to be made by the Servicer with respect to the
Mortgage Loans and REO Properties. Any Amounts Held for Future Distribution and
so used shall be appropriately reflected in the Servicer's records and replaced
by the Servicer by deposit in the Collection Account on or before any future
Remittance Date to the extent required.
(c) In the event the Servicer fails to make a required P&I Advance
on any Remittance Date, the Trustee shall make such P&I Advance by depositing
the amount thereof in the Distribution Account on the related Distribution Date
and shall succeed to the Servicer's rights with respect to reimbursement of such
P&I Advance.
(d) The obligation of the Servicer and the Trustee to make such P&I
Advances is mandatory, notwithstanding any other provision of this Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(e) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by the Servicer or
the Trustee if such P&I Advance or Servicing Advance would, if made, constitute
a Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Trustee and the Class A-1
Certificate Insurer. The Trustee may conclusively rely on a determination by the
Servicer that a P&I Advance or Servicing Advance made by the Servicer, if made
would constitute a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance.
(f) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds and Condemnation Proceeds)
with respect to the related Mortgage Loan.
(g) In the event the Servicer fails to make a required Servicing
Advance, the Trustee shall make such Servicing Advance; provided, however, that
the Trustee shall not be required to make Servicing Advances from its own funds.
Any required Servicing Advances not made by the Servicer shall be paid as
necessary by the Trustee from funds on deposit in the Distribution Account. The
Trustee shall not be entitled to reimbursement for any amounts advanced by the
Trustee from funds in the Distribution Account; any amounts received in
reimbursement of any such Servicing Advance shall be included in Available Funds
for the next applicable Distribution Date. The Trustee shall not make a
Servicing Advance that is determined to be a Nonrecoverable Servicing Advance.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall pay the Premium Amount for such Distribution Date to the
Class A-1 Certificate Insurer from amounts withdrawn from the Collection Account
pursuant to Section 3.11(a)(i)(B) and, from funds on deposit in the Distribution
Account, make the disbursements and transfers from amounts then on deposit in
the Distribution Account in the following order of priority and to the extent of
the Available Funds remaining:
(i) to the holders of each Class of LIBOR Certificates and the Class
A-1 Certificate Insurer in the following order of priority:
(A) to the Class A-1 Certificates, the Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amounts for
such Class on such Distribution Date;
(B) to the Class A-1 Certificate Insurer, any Reimbursement
Amount;
(C) to the Class M-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(D) to the Class B-1 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(E) to the Class B-2 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date; and
(F) to the Class B-3 Certificates, the Accrued Certificate
Interest Distribution Amount for such Class on such Distribution
Date;
(ii) (A) on each Distribution Date (a) before the related Stepdown
Date or (b) with respect to which a Trigger Event is in effect, to the
holders of the related Class or Classes of LIBOR Certificates then
entitled to distributions of principal and the Class A-1 Certificate
Insurer as set forth below, from amounts remaining on deposit in the
Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to the Principal Distribution Amount in the
following order of priority:
(a) to the Class A-1 Certificates, until the Class Certificate
Balance thereof is reduced to zero;
(b) to the Class A-1 Certificate Insurer, the amount of any
remaining Reimbursement Amount; and
(c) sequentially to the Class M-1, Class B-1, Class B-2 and
Class B-3 Certificates, in that order, until the respective Class
Certificate Balances are reduced to zero;
(B) on each Distribution Date (a) on and after the related
Stepdown Date and (b) as long as a Trigger Event is not in effect, to the
holders of the related Class or Classes of LIBOR Certificates then
entitled to distribution of principal and the Class A-1 Certificate
Insurer, from amounts remaining on deposit in the Distribution Account
after making distributions pursuant to clause (i) above, an amount equal
to, the Principal Distribution Amount in the following amounts and order
of priority:
(a) the lesser of (x) the Principal Distribution Amount and (y)
the Class A-1 Principal Distribution Amount to the Class A-1
Certificates, until the Class Certificate Balance thereof is reduced
to zero;
(b) to the Class A-1 Certificate Insurer, the amount of any
remaining Reimbursement Amount;
(c) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class
A-1 Certificates in clause (ii)(B)(a) above, to the Class A-1
Certificate Insurer in clause (ii)(B)(b) above, and (y) the Class
M-1 Principal Distribution Amount to the Class M-1 Certificates,
until the Class Certificate Balance thereof has been reduced to
zero;
(d) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class
A-1 Certificates in clause (ii)(B)(a) above, to the Class A-1
Certificate Insurer in clause (ii)(B)(b) above, to the Class M-1
Certificates in clause (ii)(B)(c) above and (y) the Class B-1
Principal Distribution Amount to the Class B-1 Certificates, until
the Class Certificate Balance thereof has been reduced to zero;
(e) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class
A-1 Certificates in clause (ii)(B)(a) above, to the Class A-1
Certificate Insurer in clause (ii)(B)(b) above, to the Class M-1
Certificates in clause (ii)(B)(c) above and to the Class B-1
Certificates in clause (ii)(B)(d) above, and (y) the Class B-2
Principal Distribution Amount to the Class B-2 Certificates, until
the Class Certificate Balance thereof has been reduced to zero; and
(f) the lesser of (x) the excess of (i) the Principal
Distribution Amount over (ii) the amount distributed to the Class
A-1 Certificates in clause (ii)(B)(a) above, to the Class A-1
Certificate Insurer in clause (ii)(B)(b) above, to the Class M-1
Certificates in clause (ii)(B)(c) above and to the Class B-1
Certificates in clause (ii)(B)(d) above, to the Class B-2
Certificates in clause (ii)(B)(e) above, and (y) the Class B-3
Principal Distribution Amount to the Class B-3 Certificates, until
the Class Certificate Balance thereof has been reduced to zero.
(iii) any amount remaining after the distributions in clauses (i)
and (ii) above shall be distributed in the following order of priority:
(A) to the Class A-1 Certificate Insurer, the amount of any
remaining Reimbursement Amount;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amounts for such Class;
(C) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amounts for such Class;
(D) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amounts for such Class;
(E) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amounts for such Class;
(F) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(G) from funds on deposit in the Excess Reserve Fund Account,
an amount equal to any Basis Risk Carry Forward Amount with respect
to any LIBOR Certificate for such Distribution Date to the LIBOR
Certificates in the same order and priority in which Accrued
Certificate Interest Distribution Amount is allocated among those
Classes of Certificates;
(H) from any remaining amounts not distributed pursuant to
Sections 4.02(a)(iii)(A)-(G), to the holders of the Class N
Certificates, in the following order of priority (1) the Accrued
Certificate Interest Distribution Amount for such Class for such
Distribution Date, (2) any Unpaid Interest Amounts for such Class
for such Distribution Date, and (3) any other remaining amounts,
after application pursuant to clauses (1) and (2) of this paragraph
(H), to reduce the Class N Notional Amount until the Class N
Notional Amount has been reduced to zero;
(I) to the holders of the Class X Certificates, the remainder
of the Class X Distributable Amount not distributed pursuant to
Sections 4.02(a)(iii)(A)-(H); and
(J) to the holders of the Class R-1 Certificates, any
remaining amount in respect of the Lower Tier REMIC and Upper Tier
REMIC and to the Class R-2 Certificates any remaining amount in
respect of the Class M-1 REMIC, the Class B-1 REMIC, Class B-2
REMIC, Class B-3 REMIC and Class X REMIC.
In the event the Class Certificate Balance of any Class of
Certificates has been reduced to zero, that Class of Certificates shall no
longer be entitled to receive any related unpaid Basis Risk Carry Forward
Amounts.
(b) [Reserved].
(c) [Reserved].
(d) On any Distribution Date, any Relief Act Interest Shortfalls and
Net Prepayment Interest Shortfalls for such Distribution Date will be allocated
pro rata, as a reduction of the Accrued Certificate Interest for the Class A,
Class M and Class B Certificates, based on the amount of interest to which such
Classes would otherwise be entitled on such Distribution Date.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor, each Rating Agency and the Class
A-1 Certificate Insurer a statement setting forth with respect to the related
distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis Risk
Carry Forward Amount covered by withdrawals from the Excess Reserve Fund
Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk Carry Forward Amount not covered by
amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates and
the Class N Notional Amount after giving effect to the distribution of
principal on such Distribution Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date; (vi) the amount of the Servicing Fees paid to or retained by the
Servicer or Subservicer (with respect to the Subservicers, in the
aggregate) with respect to such Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of Advances included in the distribution on such
Distribution Date and the aggregate amount of Advances reported by the
Servicer as outstanding as of the close of business on the Determination
Date immediately preceding such Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) For each of the preceding 12 calendar months, or all calendar
months since the related Cut-off Date, whichever is less, the aggregate
dollar amount of the Scheduled Payments (A) due on all Outstanding
Mortgage Loans on each of the Due Dates in each such month and (B)
delinquent 60 days or more on each of the Due Dates in each such month;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the loan number and Stated Principal
Balance of such Mortgage Loan as of the close of business on the
Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xii) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xiii) whether a Trigger Event has occurred and is continuing
(including the calculation of thereof and the aggregate outstanding
balance of all 60+ Day Delinquent Mortgage Loans);
(xiv) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xv) the aggregate amount of Applied Realized Loss Amounts incurred
during the preceding calendar month and aggregate Applied Realized Loss
Amounts through such Distribution Date;
(xvi) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xvii) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xviii) Prepayment Premiums collected by Servicer;
(xix) the Reimbursement Amount immediately prior to such
Distribution Date, and the amount of any payments to the Class A-1
Certificate Insurer on account thereof on such Distribution Date;
(xx) the Cumulative Loss Percentage; and
(xxi) the amount distributed on the Class X Certificates.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, the Servicer, the Depositor and
the Class A-1 Certificate Insurer is limited to the availability, timeliness and
accuracy of the information derived from the Servicer. The Trustee will provide
the above statement via the Trustee's internet website. The Trustee's website
will initially be located at xxx.xxxxxxxx.xxx/xxx and assistance in using the
website can be obtained by calling the Trustee's investor relations desk at
0-000-000-0000. A paper copy of the above statement will also be made available
upon request.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this
Section 4.03 aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than the Reporting Date, the Servicer shall furnish to
the Trustee a monthly remittance advice statement (in a format mutually agreed
upon by the Servicer and the Trustee) containing such information as shall be
reasonably requested by the Trustee to provide the reports required by Section
4.03(a) as to the accompanying remittance and the period ending on the close of
business on the last Business Day of the immediately preceding month (the
"Servicer Remittance Report").
The Servicer shall furnish to the Trustee an individual loan
accounting report, as of the last Business Day of each month, to document
Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report (in
electronic format) shall be received by the Trustee no later than the Reporting
Date, which report shall contain the following:
(i) with respect to each Scheduled 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 Premiums, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the Servicer
during the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Servicer during
the prior distribution period pursuant to Section 3.11;
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, or (3)
91 days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired;
(vii) with respect to each Mortgage Loan which has been altered,
modified or varied, the reason for such modification (i.e., extension of
maturity date, Mortgage Interest Rate);
(viii) with respect to each Mortgage Loan which has been altered,
modified or varied, the number and aggregate outstanding principal balance
of such Mortgage Loan (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days,
or (3) 91 days or more; (b) as to which foreclosure has commenced; and (c)
as to which REO Property has been acquired; and
(ix) with respect to each Mortgage Loan, the amount of any Realized
Losses for such Mortgage Loan.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
Until all of the LIBOR Certificates are paid in full, the Trustee will at all
times retain at least four Reference Banks for the purpose of determining LIBOR
with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinate Certificates then outstanding in reduction of the Class Certificate
Balance thereof. In the event Applied Realized Loss Amounts are allocated to any
Class of Certificates, their Class Principal Balances shall be permanently
reduced by the amount so allocated, and no funds will be distributable with
respect to the written down amounts (including without limitation Basis Risk
Carry Forward Amounts) or with respect to interest on the written down amounts
on that Distribution Date or any future Distribution Dates, even if funds are
otherwise available for distribution.
Section 4.06 The Class A-1 Certificate Insurance Policy. (a) Not
later than two (2) Business Days prior to each Distribution Date, the Trustee
shall determine with respect to such Distribution Date, the amount to be on
deposit in the Distribution Account on such Distribution Date to the extent of
Available Funds, excluding the amount of any Insured Amounts and Preference
Amounts.
(b) If on any Distribution Date there is a Class A-1 Certificate
Deficiency Amount, the Trustee shall complete a notice in the form of Exhibit A
to the Class A-1 Certificate Insurance Policy and submit such notice to the
Class A-1 Certificate Insurer no later than 12:00 noon New York City time on the
second Business Day preceding such Distribution Date as a claim for an Insured
Amount in an amount equal to such Class A-1 Certificate Deficiency Amount.
(c) The Trustee shall establish a separate Eligible Account for the
benefit of Holders of the Class A-1 Certificates and the Class A-1 Certificate
Insurer (the "Policy Payment Account") over which the Trustee shall have
exclusive control and sole right of withdrawal. The Trustee shall deposit upon
receipt any amount paid under the Class A-1 Certificate Insurance Policy in the
Policy Payment Account and distribute such amount only for purposes of payment
to the Class A-1 Certificateholders of the Insured Amount for which a claim was
made and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Trustee or the Trust Fund or to pay any other
Class of Certificates. Amounts paid under the Class A-1 Certificate Insurance
Policy, to the extent needed to pay the Class A-1 Certificate Deficiency Amount,
shall be transferred to the Distribution Account on the related Distribution
Date and disbursed by the Trustee to the Class A-1 Certificateholders in
accordance with Section 4.02. It shall not be necessary for such payments to be
made by checks or wire transfers separate from the checks or wire transfers used
to pay other distributions to the Class A-1 Certificateholders with other funds
available to make such payment. However, the amount of any payment of principal
or of interest on the Class A-1 Certificates to be paid from funds transferred
from the Policy Payment Account shall be noted as provided in paragraph (d)
below and in the statement to be furnished to Holders of the Class A-1
Certificates pursuant to Section 4.03(a). Funds held in the Policy Payment
Account shall not be invested. Any funds remaining in the Policy Payment Account
on the first Business Day following a Distribution Date shall be returned to the
Class A-1 Certificate Insurer pursuant to the written instructions of the Class
A-1 Certificate Insurer by the end of such Business Day.
(d) The Trustee shall keep a complete and accurate record of the
amount of interest and principal paid in respect of any Class A-1 Certificate
from moneys received under the Class A-1 Certificate Insurance Policy. The Class
A-1 Certificate Insurer shall have the right to inspect such records at
reasonable times during normal business hours upon one Business Day's prior
notice to the Trustee.
(e) In the event that the Trustee has received a certified copy of
an order of the appropriate court that any Insured Amount has been voided in
whole or in part as a preference payment under applicable bankruptcy law, the
Trustee shall so notify the Class A-1 Certificate Insurer, shall comply with the
provisions of the Class A-1 Certificate Insurance Policy to obtain payment by
the Class A-1 Certificate Insurer of such Preference Amount in the amount of
such voided Insured Amount, and shall, at the time it provides notice to the
Class A-1 Certificate Insurer, notify, by mail to the Class A-1
Certificateholders of the affected Certificates that, in the event any Class A-1
Certificateholder's Insured Amount is so recovered, such Class A-1
Certificateholder will be entitled to payment pursuant to the Class A-1
Certificate Insurance Policy, a copy of which shall be made available through
the Trustee, the Class A-1 Certificate Insurer or the Class A-1 Certificate
Insurer's fiscal agent, if any, and the Trustee shall furnish to the Class A-1
Certificate Insurer or its fiscal agent, if any, its records evidencing the
payments which have been made by the Trustee and subsequently recovered from the
Class A-1 Certificateholders, and dates on which such payments were made.
(f) The Trustee shall promptly notify the Class A-1 Certificate
Insurer and its fiscal agent of any proceeding or the institution of any action,
of which a Responsible Officer of the Trustee has actual knowledge, seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any distribution made with
respect to the Class A-1 Certificates. Each Class A-1 Certificateholder, by its
purchase of Class A-1 Certificates, the Servicer, the Depositor and the Trustee
agree that, the Class A-1 Certificate Insurer (so long as no Class A-1
Certificate Insurer Default exists) may at any time during the continuation of
any proceeding relating to a Preference Claim direct all matters relating to
such Preference Claim, including, without limitation, (i) the direction of any
appeal of any order relating to such Preference Claim and (ii) the posting of
any surety, supersedes or performance bond pending any such appeal. In addition
and without limitation of the foregoing, the Class A-1 Certificate Insurer shall
be subrogated to, and each Class A-1 Certificateholder and the Trustee hereby
delegates and assigns to the Class A-1 Certificate Insurer, to the fullest
extent permitted by law, the rights of the Trustee and each Class A-1
Certificateholder in the conduct of any such Preference Claim, including,
without limitation, all rights of any party to any adversary proceeding or
action with respect to any court order issued in connection with any such
Preference Claim.
(g) The Trustee shall, upon retirement of the Class A-1
Certificates, furnish to the Class A-1 Certificate Insurer a notice of such
retirement, and, upon retirement of the Class A-1 Certificates and the
expiration of the term of the Class A-1 Certificate Insurance Policy, surrender
the Class A-1 Certificate Insurance Policy to the Class A-1 Certificate Insurer
for cancellation.
(h) The Trustee will hold the Class A-1 Certificate Insurance Policy
in trust as agent for the Holders of the Class A-1 Certificates for the purpose
of making claims thereon and distributing the proceeds thereof. Neither the
Class A-1 Certificate Insurance Policy nor the amounts paid on the Class A-1
Certificate Insurance Policy will constitute part of the Trust Fund created by
this Agreement. Each Holder of Class A-1 Certificates, by accepting its Class
A-1 Certificates, appoints the Trustee as attorney-in-fact for the purpose of
making claims on the Class A-1 Certificate Insurance Policy.
Section 4.07 Effect of Payments by the Class A-1 Certificate
Insurer; Subrogation. Anything herein to the contrary notwithstanding, any
payment with respect to principal of or interest on the Class A-1 Certificates
which is made with moneys received pursuant to the terms of the Class A-1
Certificate Insurance Policy shall not be considered payment of the Class A-1
Certificates from the Trust Fund. The Depositor, the Servicer and the Trustee
acknowledge, and each Holder by its acceptance of a Class A-1 Certificate
agrees, that without the need for any further action on the part of the Class
A-1 Certificate Insurer, the Depositor, the Servicer, the Trustee or the
Certificate Registrar (a) to the extent the Class A-1 Certificate Insurer makes
payments, directly or indirectly, on account of principal of or interest on the
Class A-1 Certificates to the Holders of such Class A-1 Certificates, the Class
A-1 Certificate Insurer will be fully subrogated to, and each Class A-1
Certificateholder, the Servicer and the Trustee hereby delegate and assign to
the Class A-1 Certificate Insurer, to the fullest extent permitted by law, the
rights of such Holders to receive such principal and interest from the Trust
Fund, including, without limitation, any amounts due to the Class A-1
Certificateholders in respect of securities law violations arising from the
offer and sale of the Class A-1 Certificates, and (b) the Class A-1 Certificate
Insurer shall be paid such amounts from the sources and in the manner provided
herein for the payment of such amounts and as provided in this Agreement. The
Trustee and the Servicer shall cooperate in all respects with any reasonable
request by the Class A-1 Certificate Insurer for action to preserve or enforce
the Class A-1 Certificate Insurer's rights or interests under this Agreement
without limiting the rights or affecting the interests of the Holders as
otherwise set forth herein.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount which must be in excess of the applicable minimum denomination)
and aggregate denominations per Class set forth in the Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor as directed by that
Certificateholder by written wire instructions provided to the Trustee or (y),
in the event that no wire instructions are provided to the Trustee, by check
mailed by first class mail to such Certificateholder at the address of such
holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the countersignature and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the Trustee
on a continuous basis, an adequate inventory of Certificates to facilitate
transfers.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing. In the event, the
Depositor or an Affiliate transfers the Class X Certificates, or a portion
thereof, to another Affiliate, it shall notify the Trustee in writing of the
affiliated status of the transferee. The Trustee shall have no liability
regarding the lack of notice with respect thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to the initial transfer of the Class N, Class X and Class R
Certificates on the Closing Date, in the event that a transfer of a Private
Certificate which is a Physical Certificate is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such transfer shall certify to the Trustee in writing the facts surrounding the
transfer in substantially the form set forth in Exhibit H (the "Transferor
Certificate") and either (i) there shall be delivered to the Trustee a letter in
substantially the form of Exhibit I (the "Rule 144A Letter") or (ii) in the case
of the Class X Certificates, there shall be delivered to the Trustee at the
expense of the transferor an Opinion of Counsel that such transfer may be made
without registration under the Securities Act. In the event that a transfer of a
Private Certificate which is a Book-Entry Certificate is to be made in reliance
upon an exemption from the Securities Act and such laws, in order to assure
compliance with the Securities Act and such laws, the Certificateholder desiring
to effect such transfer will be deemed to have made as of the transfer date each
of the certifications set forth in the Transferor Certificate in respect of such
Certificate and the transferee will be deemed to have made as of the transfer
date each of the certifications set forth in the Rule 144A Letter in respect of
such Certificate, in each case as if such Certificate were evidenced by a
Physical Certificate. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to eligibility
set forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee and the Servicer shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee and
the Depositor and the Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.
Except with respect to the transfer of the Subordinated
Certificates, the Class N and the Class X Certificates on the Closing Date, no
transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, (ii) in the case of an
ERISA-Restricted Certificate other than a Residual Certificate or a Class X
Certificate that has been the subject of an ERISA-Qualifying Underwriting and
the purchaser is an insurance company, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
other than a Residual Certificate or Class X Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee and the Servicer, which Opinion of Counsel
shall not be an expense of the Trustee, the Servicer or the Trust Fund,
addressed to the Trustee, to the effect that the purchase or holding of such
ERISA-Restricted Certificate will not result in the assets of the Trust Fund
being deemed to be "plan assets" and subject to the prohibited transaction
provisions of ERISA and the Code or similar violation of Similar Law and will
not subject the Trustee or the Servicer to any obligation in addition to those
expressly undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is not
a Private Certificate or a Residual Certificate, in the event the representation
letter referred to in the preceding sentence is not furnished, such
representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquirer's) acceptance of the
ERISA-Restricted Certificates. In the event that such representation is
violated, or any attempt to transfer to a plan or arrangement subject to Section
406 of ERISA, a plan subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement or
using the assets of any such plan or arrangement, without such Opinion of
Counsel, such attempted transfer or acquisition shall be void and of no effect.
Neither the Class R Certificates nor the Class X Certificates may be
sold to any employee benefit plan subject to Title I of ERISA, any plan subject
to Section 4975 of the Code, or any plan subject to any Similar Law or any
person investing on behalf of or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact not a Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Trustee shall be paid and
delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Responsible Party or the Servicer, to the effect that the elimination of such
restrictions will not cause any Trust REMIC to fail to qualify as a REMIC at any
time that the Certificates are outstanding or result in the imposition of any
tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement which, based on an Opinion of
Counsel furnished to the Trustee, is reasonably necessary (a) to ensure that the
record ownership of, or any beneficial interest in, a Residual Certificate is
not transferred, directly or indirectly, to a Person that is not a Permitted
Transferee and (b) to provide for a means to compel the Transfer of a Residual
Certificate which is held by a Person that is not a Permitted Transferee to a
Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor at its option
advises the Trustee in writing that it elects to terminate the book-entry system
through the Depository, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
definitive, fully-registered Certificates (the "Definitive Certificates") to
Certificate Owners requesting the same. Upon surrender to the Trustee of the
related Class of Certificates by the Depository, accompanied by the instructions
from the Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of Certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee and the
Certificate Registrar, duly executed by the Certificateholder or his attorney
duly authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Certificate Registrar in accordance with its customary practice. No
service charge shall be made for any registration of transfer or exchange of
Private Certificates, but the Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicer, the Class
A-1 Certificate Insurer and the Trustee such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, countersign and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Class A-1
Certificate Insurer, the Trustee, the Depositor and any agent of the Servicer,
the Class A-1 Certificate Insurer, the Depositor or the Trustee may treat the
Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Class A-1 Certificate Insurer, the Trustee, the Depositor nor any agent of the
Servicer, the Class A-1 Certificate Insurer, the Depositor or the Trustee shall
be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies in New York City where Certificates may be surrendered for
registration of transfer or exchange. The Trustee initially designates its
Corporate Trust Offices for such purposes. The Trustee will give prompt written
notice to the Certificateholders of any change in such location of any such
office or agency.
Section 5.07 Rights of the Class A-1 Certificate Insurer to Exercise
Rights of Class A-1 Certificateholders. (a) By accepting its Class A-1
Certificate, each Class A-1 Certificateholder agrees that, unless a Class A-1
Certificate Insurer Default exists, the Class A-1 Certificate Insurer shall be
deemed to be the Class A-1 Certificateholders for all purposes (other than with
respect to the receipt of payment on the Class A-1 Certificates) and shall have
the right to exercise all rights of the Class A-1 Certificateholders under this
Agreement and under the Class A-1 Certificates without any further consent of
the Class A-1 Certificateholders.
(b) All notices, statement reports, certificates or opinions
required by this Agreement to be sent to any Class A-1 Certificateholder shall
also be sent to the Class A-1 Certificate Insurer.
Section 5.08 Class A-1 Certificate Insurer Default. Notwithstanding
anything elsewhere in this Agreement or in the Certificates to the contrary, if
a Class A-1 Certificate Insurer Default exists, or if and to the extent the
Class A-1 Certificate Insurer has delivered its written renunciation of all of
its rights under this Agreement, all provisions of this Agreement which (a)
permit the Class A-1 Certificate Insurer to exercise rights of the Class A-1
Certificateholders, (b) restrict the ability of the Certificateholders, the
Servicer or the Trustee to act without the consent or approval of the Class A-1
Certificate Insurer, (c) provide that a particular act or thing must be
acceptable to the Class A-1 Certificate Insurer, (d) permit the Class A-1
Certificate Insurer to direct (or otherwise to require) the actions of the
Trustee, the Servicer or the Certificateholders, (e) provide that any action or
omission taken with the consent, approval or authorization of the Class A-1
Certificate Insurer shall be authorized hereunder or shall not subject the party
taking or omitting to take such action to any liability hereunder or (f) have a
similar effect, shall be of no further force and effect and the Trustee shall
administer the Trust Fund and perform its obligations hereunder solely for the
benefit of the Holders of the Class A-1 Certificates. Nothing in the foregoing
sentence, nor any action taken pursuant thereto or in compliance therewith,
shall be deemed to have released the Class A-1 Certificate Insurer from any
obligation or liability it may have to any party or to the Class A-1
Certificateholders hereunder, under any other agreement, instrument or document
(including, without limitation, the Class A-1 Certificate Insurance Policy) or
under applicable law. At such time as the Class A-1 Certificates are no longer
outstanding hereunder, and no amounts owed to the Class A-1 Certificate Insurer
hereunder remain unpaid, the Class A-1 Certificate Insurer's rights hereunder
shall terminate.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or the
Servicer. The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each 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 respective duties under this Agreement.
Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, Xxxxxx Xxx or
Xxxxxxx Mac, and provided, further, that such merger, consolidation or
succession does not adversely affect the then current rating or ratings on the
LIBOR Certificates.
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer nor any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders 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;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, the Servicer and any director,
officer, employee or agent of the Depositor and the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Depositor and the
Servicer and any director, officer, employee or agent of the Depositor and the
Servicer shall be indemnified by the Trust Fund and held harmless against any
loss, liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, 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 willful misfeasance, bad faith or negligence (or gross negligence in
the case of the Depositor) in the performance of duties hereunder or by reason
of reckless disregard of obligations and duties hereunder. Neither the Depositor
nor the Servicer shall be under any obligation to appear in, prosecute or defend
any legal action that is not incidental to its respective duties hereunder and
which in its opinion may involve it in any expense or liability; provided,
however, that each of the Depositor and the Servicer may in its discretion
undertake any such action (or direct the Trustee to undertake such actions
pursuant to Section 2.03 for the benefit of the Certificateholders) that it may
deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Servicer shall be entitled
to be reimbursed therefor out of the Collection Account.
Section 6.04 Limitation on Resignation of the Servicer. The Servicer
shall not assign this Agreement or resign from the obligations and duties hereby
imposed on it except (i) by mutual consent of the Servicer, the Depositor, the
Trustee and the Class A-1 Certificate Insurer or (ii) upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by the Servicer. Any such determination
permitting the resignation of the Servicer under clause (ii) above shall be
evidenced by an Opinion of Counsel to such effect delivered to the Depositor,
the Trustee and the Class A-1 Certificate Insurer which Opinion of Counsel shall
be in form and substance acceptable to the Depositor, the Trustee and the Class
A-1 Certificate Insurer. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder.
Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims. The Servicer shall indemnify the Responsible Party, the Depositor, the
Trustee and the Class A-1 Certificate Insurer and hold them harmless against any
and all claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain in any way related to any breach by the
Servicer of (i) any of its representations and warranties referred to in Section
2.03(a), (ii) any error in any tax or information return prepared by the
Servicer, or (iii) the failure of the Servicer to perform its duties and service
the Mortgage Loans in compliance with the terms of this Agreement. The Servicer
immediately shall notify the Depositor, the Trustee and the Class A-1
Certificate Insurer if such claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Depositor, the Trustee and the Class A-1 Certificate Insurer) the defense of any
such claim and pay all expenses in connection therewith, including reasonable
counsel fees, and promptly pay, discharge and satisfy any judgment or decree
which may be entered against it or the Responsible Party, the Depositor, the
Class A-1 Certificate Insurer or the Trustee in respect of such claim.
Section 6.06 Servicing Rights Pledge. Notwithstanding Sections 6.04,
7.02 and 10.07, the Servicer shall have the right, subject to the succeeding
sentence, to pledge and assign all of the Servicer's right, title and interest
in, to and under this Agreement to the Servicing Rights Pledgee, for the benefit
of certain lenders. If, as a result of a default by the Servicer under any such
financing arrangement, the lenders acquire these servicing rights and appoint a
successor Servicer under this Agreement, any such successor Servicer must be
approved by the Class A-1 Certificate Insurer and must meet all requirements for
successor Servicers under Section 7.02. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor Servicer, the entire
amount of the Servicing Fee and other compensation payable to the Servicer
pursuant hereto shall thereafter be payable to such successor Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default," wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor, by the Trustee, or by the Class A-1 Certificate
Insurer or to the Servicer, the Depositor and the Trustee by Certificateholders
entitled to at least 25% of the Voting Rights; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of thirty days (except that such number of days shall be fifteen in the
case of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement) after the earlier of (i) the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Depositor, the Class A-1 Certificate Insurer
or by the Trustee, or to the Servicer, the Depositor and the Trustee by
Certificateholders of Certificates entitled to at least 25% of the Voting Rights
or the Class A-1 Certificate Insurer and (ii) actual knowledge of such failure
by a Servicing Officer of the Servicer; provided, however, that in the case of a
failure or breach that cannot be cured within 30 days after notice or actual
knowledge by the Servicer, the cure period may be extended for an additional 30
days upon delivery by the Servicer to the Trustee of a certificate to the effect
that the Servicer believes in good faith that the failure or breach can be cured
within such additional time period and the Servicer is diligently pursuing
remedial action; or
(c) 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 Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) the Servicer 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 Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or
(g) if a Cumulative Loss Event or Delinquency Event occurs; or
(h) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders or the Class A-1 Certificate Insurer and
which continues unremedied for a period of thirty days after the date upon which
written notice of such breach is given to the Servicer by the Trustee, the Class
A-1 Certificate Insurer or by the Depositor, or to the Servicer, the Trustee,
the Depositor or the Class A-1 Certificate Insurer by Certificateholders
entitled to at least 25% of the Voting Rights in the Certificates or the Class
A-1 Certificate Insurer.
If an Event of Default described in clauses (a) through (h) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, with the consent
of the Class A-1 Certificate Insurer, or at the direction of the Class A-1
Certificate Insurer (or, if a Class A-1 Certificate Insurer Default exists, at
the direction of 51% of the Voting Rights) shall, by notice in writing to the
Servicer (with a copy to each Rating Agency), terminate all of the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder; provided, however, that the Trustee shall not be required to give
written notice to the Servicer of the occurrence of an Event of Default
described in clauses (b) through (h) of this Section 7.01 unless and until a
Responsible Officer of the Trustee has actual knowledge of the occurrence of
such an Event of Default. In the event that a Responsible Officer of the Trustee
has actual knowledge of the occurrence of an event of default described in
clause (a) of this Section 7.01, the Trustee shall give written notice to the
Servicer of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence. On and after the receipt by the Servicer of such written notice, all
authority and power of the Servicer hereunder, whether with respect to the
Mortgage Loans or otherwise, shall pass to and be vested in the Trustee. The
Trustee is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Servicer to pay
amounts owed pursuant to Article VIII. The Servicer agrees to cooperate with the
Trustee in effecting the termination of the Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee of
all cash amounts which shall at the time be credited to the Collection Account,
or thereafter be received with respect to the Mortgage Loans.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid portion of the Servicing Fees to which the Servicer would have been
entitled and to continue to receive reimbursement for all outstanding P&I
Advances made by the Servicer and Servicing Advances, including Servicing
Advances incurred prior to but not invoiced until after the date of termination,
in accordance with the terms of this Agreement.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 3.24
or Section 7.01, the Trustee shall, subject to and to the extent provided in
Section 3.06, be the successor to the Servicer in its capacity as servicer under
this Agreement and the transactions set forth or provided for herein and shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances or Servicing Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Mortgage Loans that the Servicer would have been entitled
to charge to the Collection Account if the Servicer had continued to act
hereunder including, if the Servicer was receiving the Servicing Fee, the
Servicing Fee and the income on investments or gain related to the Collection
Account (in addition to income on investments or gain related to the
Distribution Account for the benefit of the Trustee). Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in accordance
with this Section 7.02, the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making P&I Advances and
Servicing Advances pursuant to Section 4.01 or if it is otherwise unable to so
act, or if the Class A-1 Certificate Insurer (or, if a Class A-1 Certificate
Insurer Default exists, the Holders entitled to a majority of the Voting Rights)
so requests, appoint, or petition a court of competent jurisdiction to appoint,
any established mortgage loan servicing institution the appointment of which (i)
is acceptable to the Class A-1 Certificate Insurer and (ii) does not adversely
affect the then current rating of the Certificates by each Rating Agency, as the
successor to the Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer hereunder. Any successor
to the Servicer shall be an institution which is a Xxxxxx Xxx- and Xxxxxxx
Mac-approved seller/servicer in good standing, which has a net worth of at least
$30,000,000, which is willing to service the Mortgage Loans and which executes
and delivers to the Depositor, the Trustee and the Class A-1 Certificate Insurer
an agreement accepting such delegation and assignment, containing an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 incurred prior to termination of the Servicer under Section 7.01),
with like effect as if originally named as a party to this Agreement; provided,
that each Rating Agency acknowledges that its rating of the Certificates
(without taking into account the Class A-1 Certificate Insurance Policy) in
effect immediately prior to such assignment and delegation will not be qualified
or reduced, as a result of such assignment and delegation. Pending appointment
of a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.05, act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it, the Depositor, the Class A-1
Certificate Insurer and such successor shall agree; provided, however, that no
such compensation shall be in excess of the Servicing Fee Rate and amounts paid
to the Servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor to the Servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, the terminated Servicer shall provide notices to the Mortgagors, transfer
the Servicing Files to a successor Servicer and pay all of its own out-of-pocket
costs and expenses at its own expense. In addition, all reasonable out-of-pocket
costs and expenses of a servicing transfer incurred by parties other than the
terminated Servicer (excluding set-up costs and other administrative expenses of
the successor Servicer, in which case the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund), shall be paid by the terminated Servicer promptly upon presentation
of reasonable documentation of such costs and if such predecessor Servicer
defaults in its obligations to pay such costs, such costs shall be paid by the
successor Servicer or the Trustee (in which case the successor Servicer or the
Trustee, as the case may be, shall be entitled to reimbursement therefor from
the Trust Fund). If the Trustee is the predecessor Servicer (except in the case
where the Trustee in its role as successor Servicer is being terminated pursuant
to Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor Servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of Servicer, in accordance with applicable federal and
state law, and shall, during the term of its service as Servicer, maintain in
force the policy or policies that the Servicer is required to maintain pursuant
to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders, the Class A-1
Certificate Insurer and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders, the Class A-1
Certificate Insurer and each Rating Agency notice of each such Event of Default
hereunder known to the Trustee, unless such Event of Default shall have been
cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own bad faith or willful misfeasance; provided, however, that:
(a) unless an Event of Default known to the Trustee has occurred and
is continuing, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights relating to the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
Opinion of Counsel, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties and the Trustee shall have no
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such Opinion of Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates or the Class A-1 Certificate Insurer; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee may
require indemnity satisfactory to the Trustee against such cost, expense or
liability as a condition to taking any such action. The reasonable expense of
every such examination shall be paid by the Servicer or, if paid by the Trustee,
shall be repaid by the Servicer upon demand from the Servicer's own funds;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it, and none
of the provisions contained in this Agreement shall in any event require the
Trustee to perform, or be responsible for the manner of performance of, any of
the obligations of the Servicer under this Agreement except during such time, if
any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security and except with respect to the investment of funds in the Distribution
Account not made at the direction of the Depositor during the Trustee Float
Period;
(h) the Trustee shall not be deemed to have knowledge of an Event of
Default until a Responsible Officer of the Trustee shall have received written
notice thereof except as otherwise provided in Section 7.01 with respect to the
Event of Default described in 7.01(a);
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act; and
(k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers granted
hereunder.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility (i) for filing or recording
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer), (ii) to see to any insurance (unless the Trustee shall have become
the successor Servicer), or (iii) to confirm or verify the contents of any
reports or certificates of the Servicer delivered to the Trustee pursuant to
this Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties.
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and,
during the Trustee Float Period, any interest or investment income earned on
funds deposited in the Distribution Account. The Trustee and any director,
officer, employee, or agent of the Trustee shall be indemnified by the Trust
Fund and held harmless against any loss, liability, or expense (including
reasonable attorney's fees) incurred in connection with any claim or legal
action relating to:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to Section 6.05,
(ii) resulting from any breach of the Responsible Party's obligations in
connection with this Agreement for which the Responsible Party has performed its
obligation to indemnify the Trustee pursuant to Section 2.03(h), or (iii)
incurred because of willful misfeasance, bad faith, or negligence in the
performance of any of the Trustee's duties under this Agreement. This indemnity
shall survive the termination of this Agreement or the resignation or removal of
the Trustee under this Agreement. Without limiting the foregoing, except as
otherwise agreed upon in writing by the Depositor and the Trustee, and except
for any expense, disbursement, or advance arising from the Trustee's negligence,
bad faith, or willful misfeasance, the Trust Fund shall pay or reimburse the
Trustee, for all reasonable expenses, disbursements, and advances incurred or
made by the Trustee in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the Certificates;
(B) the reasonable compensation, expenses, and disbursements of any
accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform services
under this Agreement; and
(C) printing and engraving expenses in connection with preparing any
Definitive Certificates.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other expenses.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings (without
regard to the Class A-1 Certificate Insurance Policy) of the Certificates (or
having provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation or
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or the
Servicer and its affiliates; provided, however, that such entity cannot be an
affiliate of the Depositor or the Servicer other than the Trustee in its role as
successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer, each Rating Agency
and the Class A-1 Certificate Insurer not less than 60 days before the date
specified in such notice, when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee (which successor shall be acceptable to the Class
A-1 Certificate Insurer) by written instrument, in triplicate, one copy of which
shall be delivered to the Trustee, one copy to the Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicer and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06, the Class A-1 Certificate Insurer has consented to
such appointment (which consent shall not be unreasonably withheld) and its
appointment does not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC described in the
Preliminary Statement and that in such capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to each Trust REMIC
described in the Preliminary Statement containing such information and at the
times and in the manner as may be required by the Code or state or local tax
laws, regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty days of the Closing Date, the Trustee will apply
for an employer identification number from the Internal Revenue Service via Form
SS-4 or any other acceptable method for all tax entities and shall also furnish
to the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of the Lower Tier REMIC, the Upper
Tier REMIC, the Class M-1 REMIC, the Class B-1 REMIC, the Class B-2 REMIC, the
Class B-3 REMIC and the Class X REMIC be treated as a REMIC on the federal tax
return for its first taxable year (and, if necessary, under applicable state
law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee (a "Non-Permitted Transferee"), or an agent (including a broker,
nominee or other middleman) of a Non-Permitted Transferee, or a pass-through
entity in which a Non-Permitted Transferee is the record holder of an interest
(the reasonable cost of computing and furnishing such information may be charged
to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the fair market value and adjusted
basis of the assets determined at such intervals as may be required by the Code,
as may be necessary to prepare the foregoing returns, schedules, statements or
information; and
(k) as and when necessary and appropriate, represent each Trust
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of any Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Trustee shall treat the rights of the LIBOR Certificateholders
to receive Basis Risk Carry Forward Amounts as the beneficial ownership interest
in a grantor trust and not as an obligations of any Trust REMIC created
hereunder, for federal income tax purposes.
In the event that the beneficial ownership of the Class N and the
Class X Certificates is held by a single Person for federal income tax purposes
or both such Certificates are held proportionately by more than one Person, such
Person(s) shall be treated as the beneficial owner(s) of the Class X/N Regular
Interest and the Excess Reserve Fund Account represented thereby. In the event
that beneficial ownership of the Class N and the Class X Certificates is held by
two or more Persons for federal income tax purposes and such Persons do not hold
both the Class N and Class X Certificates proportionately, the Trustee shall
treat the Class N Certificateholders and the Class X Certificateholders as
partners in a partnership that owns the Class X/N Regular Interest and the
Excess Reserve Fund Account and shall not treat the Class N and Class X
Certificates as an interest in any REMIC created hereunder. By acquiring the
Class N and the Class X Certificates, the respective Holders will agree to treat
the Class N and the Class X Certificates in the manner described in the
preceding sentence for federal income tax purposes in the event that the
beneficial ownership of the Class N and the Class X Certificates is separated in
such a manner. In such event, (i) a separate capital account shall be
established and maintained for each Holder of a Class N or Class X Certificate
in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv), which shall
be credited with income or gain and debited by any expenses or losses and
distributions allocable to such Certificates, (ii) the Class N Certificates
shall be allocated income in an amount equal to interest at the Pass-Through
Rate thereon and any original issue discount that would be reportable thereon if
the Class N Certificate were a debt instrument issued on the date ownership of
the Class N and Class X Certificates is separated, with a principal balance
equal to its Class N Notional Amount, (iii) the Class X Certificates shall be
allocated the excess of all income accrued with respect to the Class X/N Regular
Interest, net of accruals (under any reasonable method) of any "cap premiums"
deemed received by the partnership in respect of the obligation of the Class X/N
Regular Interest to pay Basis Risk Carry Forward Amounts over the amount of
income allocated to the Class N Certificates in (ii) above, (iv) expenses of the
partnership shall be allocated based on which one of such Classes economically
bears such expense, (v) neither the Class N nor the Class X Certificates shall
be responsible for restoring any deficit to its capital account, (vi) upon
termination of the Trust Fund pursuant to Article IX, all amounts available for
distribution to Holders of the Class N and Class X Certificates shall be
distributed in accordance with their positive capital account balances, first to
the Class N Certificates until their Class N Notional Amount and any accrued but
unpaid interest thereon are reduced to zero, and then to the Class X
Certificates, and (vii) the Trustee shall maintain books and records with
respect to the partnership on a calendar year basis (unless a different taxable
year shall be required by the Code) and shall prepare or cause to be prepared,
and shall cause the Holder of the largest Percentage Interest of the Class X
Certificates to sign and file or cause to be filed all federal and state tax and
information returns for the partnership, and shall furnish or cause to be
furnished Schedule K-1's to the Holders of the Class N and Class X Certificates
at the time required by the Code. Unless otherwise directed by a majority of the
Percentage Interests of the Class X and Class N Certificates, the Trustee shall
not make an election under Section 754 of the Code. All reasonable costs and
expenses incurred by the Trustee in connection with such preparation and filing
shall be paid by the Depositor. The Holder of the largest Percentage Interest of
the Class X Certificates, by acceptance of its Class X Certificate, agrees to
act as "tax matters partner" (within the meaning of Section 6231(a)(7) of the
Code and to sign and timely file all federal and state partnership tax and
information returns prepared by the Trustee pursuant to this Section 8.11.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value, if any, to each
Class of Certificates of the right to receive Basis Risk Carry Forward Amounts
from the Excess Reserve Fund Account. Thereafter, the Depositor shall provide to
the Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including any
minimum tax imposed on any Trust REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Trustee if such tax arises out of or
results from negligence of the Trustee in the performance of any of its
obligations under this Agreement, (ii) the Servicer, in the case of any such
minimum tax, and otherwise if such tax arises out of or results from a breach by
the Servicer of any of its obligations under this Agreement, (iii) the
Responsible Party if such tax arises out of or results from the Responsible
Party's obligation to repurchase a Mortgage Loan pursuant to Section 2.03, or
(iv) in all other cases, or if the Trustee, the Servicer or the Responsible
Party fails to honor its obligations under the preceding clause (i), (ii), or
(iii), any such tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and the Servicer
shall reasonably cooperate with the Depositor in connection with the Trust's
satisfying the reporting requirements under the Exchange Act. The Trustee shall
prepare on behalf of the Trust any Forms 8-K and 10-K customary for similar
securities as required by the Exchange Act and the Rules and Regulations of the
Securities and Exchange Commission thereunder, and the Trustee shall sign and
file (via the Securities and Exchange Commission's Electronic Data Gathering and
Retrieval System) such Forms on behalf of the Depositor, if an officer of the
Depositor signs the Certification pursuant to paragraph (b) of this Section
8.12, or otherwise on behalf of the Trust. In the event the Trustee is signing
on behalf of the Depositor pursuant to the preceding sentence, the Depositor
hereby grants to the Trustee a limited power of attorney to execute and file
each such document on behalf of the Depositor. Such power of attorney shall
continue until the earlier of either (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust. The Trustee shall prepare such Form 10-K to be signed
by the Depositor and the Depositor shall sign such form. The Depositor agrees to
promptly furnish to the Trustee, from time to time upon request, such further
information, reports, and financial statements within its control related to
this Agreement and the Mortgage Loans as the Trustee reasonably deems
appropriate to prepare and file all necessary reports with the Securities and
Exchange Commission.
(b) The Depositor shall prepare or cause to be prepared the Current
Report on Form 8-K attaching this Agreement as an Exhibit. Thereafter, within 15
days after each Distribution Date, commencing with the Distribution Date
occurring in September 2003 and ending with the Distribution Date following the
filing of a Form 15 Suspension Notice with respect to the Trust Fund, the
Trustee shall, in accordance with industry standards, file with the Securities
and Exchange Commission via the Electronic Data Gathering and Retrieval System
(XXXXX), a Form 8-K with a copy of the statement to the Certificateholders for
such Distribution Date as an exhibit thereto. Prior to January 30, 2004, the
Trustee shall, in accordance with industry standards, file a Form 15 Suspension
Notification with respect to the Trust Fund, if applicable. Prior to March 31,
2004, the Trustee shall file (but will not execute) a Form 10-K, in substance
conforming to industry standards, with respect to the Trust Fund. Such Form 10-K
shall include as exhibits the Servicer's annual statement of compliance
described under Section 3.22 and the accountant's report described under Section
3.23, in each case to the extent they have been timely delivered to the Trustee.
If they are not so timely delivered, the Trustee shall file an amended Form 10-K
including such documents as exhibits reasonably promptly after they are
delivered to the Trustee. The Trustee shall have no liability with respect to
any failure to properly prepare or file such periodic reports resulting from or
relating to the Trustee's inability or failure to obtain any information not
resulting from its own negligence, willful misconduct or bad faith. The Form
10-K shall also include a certification in the form attached hereto as Exhibit L
(the "Certification"), which shall, except as described below, be signed by the
senior officer of the Depositor in charge of securitization.
(c) In the event the Certification is to be signed by an officer of
the Depositor, the Trustee shall sign a certification (in the form attached
hereto as Exhibit M) for the benefit of the Depositor and its officers,
directors and Affiliates in respect of items 1 through 3 of the Certification
(provided, however, that the Trustee shall not undertake an analysis of the
accountant's report attached as an exhibit to the Form 10-K), and the Servicer
shall sign a certification (in the form attached hereto as Exhibit N) for the
benefit of the Depositor, the Trustee and their officers, directors and
Affiliates in respect of items 4 and 5 of the Certification. Each such
certification shall be delivered to the Depositor and the Trustee by March 20th
of each year (or if not a Business Day, the immediately preceding Business Day).
The Certification attached hereto as Exhibit L shall be delivered to the Trustee
for filing by March 25th of each year (or if not a Business Day, the immediately
preceding Business Day). In addition, (i) the Trustee shall indemnify and hold
harmless the Depositor and its officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith, and (ii) the Servicer shall indemnify and hold harmless
the Depositor, the Trustee and their respective officers, directors and
Affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach of the Servicer's obligations
under this Section 8.12(c) or the Servicer's negligence, bad faith or willful
misconduct in connection therewith. If the indemnification provided for herein
is unavailable or insufficient to hold harmless the indemnified party, then (i)
the Trustee agrees in connection with a breach of the Trustee's obligations
under this Section 8.12(c) or the Trustee's negligence, bad faith or willful
misconduct in connection therewith that it shall contribute to the amount paid
or payable by the Depositor as a result of the losses, claims, damages or
liabilities of the Depositor in such proportion as is appropriate to reflect the
relative fault of the Depositor on the one hand and the Trustee on the other and
(ii) the Servicer agrees that it shall contribute to the amount paid or payable
by the Depositor and/or the Trustee as a result of the losses, claims, damages
or liabilities of the Depositor and/or the Trustee in such proportion as is
appropriate to reflect the relative fault of the Depositor or the Trustee, as
the case may be, on the one hand and the Servicer on the other in connection
with a breach of the Servicer's obligations under this Section 8.12(c) or the
Servicer's negligence, bad faith or willful misconduct in connection therewith.
(d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.
Section 8.13 Tax Classification of the Excess Reserve Fund Account.
For federal income tax purposes, the Trustee shall treat the Excess Reserve Fund
Account as beneficially owned by the holder of the Class X and Class N
Certificates (or a partnership, the beneficial owners of which are the Class N
and Class X Certificates, as the case may be) and shall treat such portion of
the Trust Fund as a grantor trust under subpart E, Part I of subchapter J of the
Code. The Trustee shall treat the rights that each Class of LIBOR Certificates
has to receive payments of Basis Risk Carry Forward Amounts from the Excess
Reserve Fund Account as rights to receive payments under an interest rate cap
contract written by the Class N and Class X Certificateholders (or a
partnership, the beneficial owners of which are the Class N and Class X
Certificates, as the case may be) in favor of each Class. Accordingly, each
Class of LIBOR Certificates will comprise two components - a regular interest in
the Corresponding REMIC and an interest in an interest rate cap contract. The
Trustee shall allocate the issue price for a Class of Certificates between two
components for purposes of determining the issue price of the Upper Tier Regular
Interest component based on information received from the Depositor.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on or after the
Optional Termination Date, by the Servicer or its affiliate or the Class A-1
Certificate Insurer, of all Mortgage Loans (and REO Properties) at the price
equal to the sum of (i) 100% of the unpaid principal balance of each Mortgage
Loan (other than in respect of REO Property) plus accrued and unpaid interest
thereon at the applicable Mortgage Interest Rate and (ii) the lesser of (x) the
appraised value of any REO Property as determined by the higher of two
appraisals completed by two independent appraisers selected by the Person
seeking to purchase such Mortgage Loans, at the expense of such Person, plus
accrued and unpaid interest on the related Mortgage Loan at the applicable
Mortgage Interest Rates and (y) the unpaid principal balance of each Mortgage
Loan related to any REO Property, in each case plus accrued and unpaid interest
thereon at the applicable Mortgage Interest Rate ("Termination Price") and (b)
the later of (i) the maturity or other Liquidation Event (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
No such purchase will be permitted without the consent of the Class
A-1 Certificate Insurer, if such purchase would result in a draw on the Class
A-1 Certificate Insurance Policy or would cause any previous draws or other
amounts owing to the Class A-1 Certificate Insurer hereunder or under the
Insurance Agreement to remain unpaid.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder. If the Servicer or the
Class A-1 Certificate Insurer elects to terminate the Trust Fund pursuant to
clause (a) of Section 9.01, at least 20 days prior to the date the Notice of
Final Distribution is to be mailed to the affected Certificateholders, the
Depositor shall notify the Servicer, the Trustee and the Class A-1 Certificate
Insurer of the date the Depositor intends to terminate the Trust Fund and of the
applicable repurchase price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not later than the 20th day of the month of
such final distribution. Any such Notice of Final Distribution shall specify (a)
the Distribution Date upon which final distribution on the Certificates will be
made upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Depositor or its designee the Custodial
Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due the Servicer, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, an amount up to an amount
equal to (i) as to each Class of Regular Certificates (except the Class X
Certificate), the Certificate Balance thereof or Class N Notional Amount with
respect to the Class N Certificates plus for each such Class and the Class X
Certificate accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02, (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the Distribution Account (other than the amounts retained
to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event the
Majority Class X Certificateholder or the Servicer exercises its purchase option
with respect to the Mortgage Loans as provided in Section 9.01, the Trust Fund
shall be terminated in accordance with the following additional requirements,
unless the Trustee has been supplied with an Opinion of Counsel, at the expense
of the Depositor, to the effect that the failure to comply with the requirements
of this Section 9.03 will not (i) result in the imposition of taxes on
"prohibited transactions" on any Trust REMIC as defined in Section 860F of the
Code, or (ii) cause any Trust REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Depositor, and, within 90 days of such sale, shall distribute to the
Certificateholders the proceeds of such sale in complete liquidation of each of
the Trust REMICs; and
(b) The Trustee shall attach a statement to the final federal income
tax return for each of the Trust REMICs stating that pursuant to Treasury
Regulations Section 1.860F-1, the first day of the 90-day liquidation period for
each such Trust REMIC was the date on which the Trustee sold the assets of the
Trust Fund to the Depositor.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Responsible Party, the Servicer and the Trustee
without the consent of any of the Certificateholders but with the consent of the
Class A-1 Certificate Insurer (i) to cure any ambiguity or mistake, (ii) to
correct any defective provision herein or to supplement any provision herein
which may be inconsistent with any other provision herein, (iii) to add to the
duties of the Depositor or the Servicer, (iv) to add any other provisions with
respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided, that any action pursuant to clause (iv) or (v) above shall
not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall not
be an expense of the Trustee or the Trust Fund), adversely affect in any
material respect the interests of any Certificateholder; provided, further, that
the amendment shall not be deemed to adversely affect in any material respect
the interests of the Certificateholders if the Person requesting the amendment
obtains a letter from each Rating Agency stating that the amendment would not
result in the downgrading or withdrawal of the respective ratings then assigned
to the Certificates (which in the case of the Class A-1 Certificates, will be
without regard to the Class A-1 Certificate Insurance Policy); it being
understood and agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. The
Trustee, the Depositor, the Responsible Party and the Servicer also may at any
time and from time to time amend this Agreement, but without the consent of the
Certificateholders to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or helpful to (i) maintain the qualification of
each Trust REMIC under the REMIC Provisions, (ii) avoid or minimize the risk of
the imposition of any tax on any Trust REMIC pursuant to the Code that would be
a claim at any time prior to the final redemption of the Certificates or (iii)
comply with any other requirements of the Code; provided, that the Trustee has
been provided an Opinion of Counsel, which opinion shall be an expense of the
party requesting such opinion but in any case shall not be an expense of the
Trustee or the Trust Fund, to the effect that such action is necessary or
helpful to, as applicable, (i) maintain such qualification, (ii) avoid or
minimize the risk of the imposition of such a tax or (iii) comply with any such
requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Responsible Party, the Trustee and the Class A-1
Certificate Insurer with the consent of the Holders of Certificates evidencing
Percentage Interests aggregating not less than 662/3% of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) adversely affect in
any material respect the interests of the Holders of any Class of Certificates
in a manner other than as described in clause (i), without the consent of the
Holders of Certificates of such Class evidencing, as to such Class, Percentage
Interests aggregating not less than 662/3%, or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all such Certificates then
outstanding.
The Responsible Party shall be obligated to execute any amendment to
this Agreement, unless such amendment would adversely affect in any material
respect the rights or obligations of the Responsible Party.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any Trust REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding and (ii) the party seeking such amendment shall
have provided written notice to the Rating Agencies (with a copy of such notice
to the Trustee) of such amendment, stating the provisions of the Agreement to be
amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
or any of its Affiliates or by the Responsible Party shall be deemed not to be
outstanding (and shall not be considered when determining the percentage of
Certificateholders consenting or when calculating the total number of
Certificates entitled to consent) for purposes of determining if the requisite
consents of Certificateholders under this Section 10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee to enter into an
amendment which modifies its obligations or liabilities without its consent and
in all cases without receiving an Opinion of Counsel (which Opinion shall not be
an expense of the Trustee or the Trust Fund), satisfactory to the Trustee that
(i) such amendment is permitted and is not prohibited by this Agreement and that
all requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Notwithstanding the foregoing, in the event any Class A-1
Certificates remain outstanding, any amendment to this Agreement shall require
the prior written consent of the Class A-1 Certificate Insurer if such amendment
adversely affects in any respect the rights or interest of the Class A-1
Certificate Insurer or of the Class A-1 Certificateholders (without regard to
the Class A-1 Certificate Insurance Policy). The Trustee may conclusively rely
on an Opinion of Counsel to the effect that the rights or interests of the Class
A-1 Certificate Insurer will not be adversely affected.
Section 10.02 Recordation of Agreement; Counterparts. 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 or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the expense of the Trust, but only upon receipt of
an Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this 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 but one and
the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders and the Class A-1 Certificate Insurer, of a security interest
in all of the assets transferred, whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders and the
Class A-1 Certificate Insurer, 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 Trust Fund, 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. The Depositor shall arrange for filing any Uniform Commercial
Code continuation statements in connection with any security interest granted or
assigned to the Trustee for the benefit of the Certificateholders.
Section 10.05 Notices. (a) The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.03, 2.07 or 3.28; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:
1. Each report to Certificateholders described in Section 4.03.
All directions, demands and notices hereunder shall be in writing
and shall be deemed to have been duly given when delivered to (a) in the case of
the Depositor or GS Mortgage Securities Corp. or Xxxxxxx, Xxxxx & Co., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Principal Finance Group/Xxxxxxxxxxx
X. Xxxxxxx and Asset Management Group/Senior Asset Manager (and, in the case of
the Officer's Certificate delivered pursuant to Section 3.22, to
PricewaterhouseCoopers LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxx), or such other address as may be
hereafter furnished to the Trustee and the Servicer by the Depositor in writing;
(b) in the case of the Servicer, Xxxxxx Loan Servicing LP, 0000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxx, Xxxxx 00000, Attention: Secretary, or such other address as may
be hereafter furnished to the Depositor and the Trustee by the Servicer in
writing; (c) in the case of the Trustee to the Corporate Trust Office, JPMorgan
Chase Bank, 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: Institutional Trust Services/Structured Finance Services - GSAMP
2003-SEA, or such other address as the Trustee may hereafter furnish to the
Depositor or Servicer; (d) in the case of the Responsible Party, NC Capital
Corporation, 00000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxx Xxxxxxxx, President, or such other address as the Responsible Party may
hereafter furnish to the Depositor, the Trustee or the Servicer; and (e) in the
case of each of the Rating Agencies, the address specified therefor in the
definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Assignment; Sales; Advance Facilities. (a) The
Servicer is hereby authorized to enter into a financing or other facility (any
such arrangement, an "Advance Facility"), the documentation for which complies
with Section 10.07(e) below, under which (1) the Servicer assigns or pledges its
rights under this Agreement to be reimbursed for any or all Advances to (i) a
special-purpose bankruptcy-remote entity (an "SPV") (or to a Person, who
simultaneously assigns or pledges such rights to an SPV) or (ii) a lender (a
"Lender"), which, in the case of an SPV, in turn, directly or through other
assignees and/or pledgees, assigns or pledges such rights to a Person, which may
include a trustee acting on behalf of holders of debt instruments (any such
Person or any such Lender, an "Advance Financing Person"), and/or (2) an Advance
Financing Person agrees to fund some or all Advances required to be made by the
Servicer pursuant to this Agreement. No consent of the Trustee,
Certificateholders or any other party shall be required before the Servicer may
enter into an Advance Facility nor shall the Trustee or the Certificateholders
be a third party beneficiary of any obligation of an Advance Financing Person to
the Servicer. Notwithstanding the existence of any Advance Facility under which
an Advance Financing Person agrees to fund Advances, the Servicer shall remain
obligated pursuant to this Agreement to make Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility. If a Servicer enters into an Advance Facility,
and for so long as an Advance Financing Person remains entitled to receive
reimbursement for any Advances outstanding and previously unreimbursed pursuant
to this Agreement, then, to the extent prohibited under such Advance Facility,
such Servicer shall not be permitted to reimburse itself for Advances pursuant
to Section 3.11(a) of this Agreement, but instead such Servicer's assignee and
designee (the "Servicer's Assignee") shall have the right to receive from the
Collection Account collections that such Servicer would otherwise have the right
to receive from the Collection Account pursuant to said Section 3.11(a) of this
Agreement, amounts available to reimburse previously unreimbursed Advances
("Advance Reimbursement Amounts"). Amounts reimbursable to the Servicer's
Assignee from the Collection Account pursuant to Section 3.11 (a) shall be
remitted by the Trustee to the Servicer's Assignee, upon receipt of a written
notice identifying the Servicer's Assignee and a related Officer's Certificate,
and the Servicer's Assignee shall have no right to withdraw funds directly from
the Collection Account. The Servicer shall provide an Officer's Certificate to
the Trustee stating the amount of reimbursements the Servicer's Assignee is
entitled to receive pursuant to Section 3.11(a).
(b) If the Servicer enters into an Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee and the
Class A-1 Certificate Insurer a written notice of the existence of such Advance
Facility (an "Advance Facility Notice"), stating the identity of the Advance
Financing Person and the Servicer's Assignee, and specifying what Advances are
covered by the Advance Facility. An Advance Facility may be terminated by the
joint written direction of the Servicer and the related Advance Financing
Person.
(c) Advance Reimbursement Amounts (i) shall consist solely of
amounts in respect of Advances for which the Servicer would be permitted to
reimburse itself in accordance with Section 3.11(a), assuming the Servicer had
made the related Advance(s) and (ii) shall not consist of amounts payable to a
successor Servicer in accordance with Section 3.11(a) to the extent permitted
under Section 10.07(e) below.
(d) An Advance Financing Person who receives an assignment or pledge
of rights to receive Advance Reimbursement Amounts and/or whose obligations are
limited to the funding of Advances pursuant to an Advance Facility shall not be
required to meet the criteria for qualification as a Subservicer.
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which an Advance
shall have been made and be outstanding shall be allocated on a "first-in, first
out" ("FIFO") basis. In the event that some or all of an Advance Reimbursement
Amount related to Advances that were made by a Person other than such
predecessor Servicer or its related Advance Financing Person shall have been
paid in error to the Servicer's Assignee related to such predecessor Servicer,
then such Servicer's Assignee shall be required to remit any portion of such
Advance Reimbursement Amount to each Person entitled to such portion of such
Advance Reimbursement Amount. At any time when an Advance Financing Person shall
have ceased funding Advances, including without limitation due to a servicing
transfer pursuant to Article VII, and the Servicer's Assignee shall have
received from the Collection Account Advance Reimbursement Amounts sufficient to
reimburse all Advances, the right to reimbursement for which were assigned to
the Servicer's Assignee, then the Servicer's Assignee and the Advance Financing
Person and the Servicer related to such Servicer's Assignee and Advance
Financing Person shall deliver a written notice to the Trustee terminating the
Advance Facility. Without limiting the generality of the foregoing, the Servicer
shall remain entitled to be reimbursed by the Advance Financing Person for all
Advances funded by the Servicer to the extent the related Advance Reimbursement
Amounts have not been assigned or pledged to such Advance Financing Person or
Servicer's Assignee.
(f) For purposes of any Officer's Certificate of the Servicer made
pursuant to Section 4.01(e), any Nonrecoverable P&I Advance or Nonrecoverable
Servicing Advance referred to therein may have been made by such Servicer or any
predecessor Servicer. In making its determination that any Advance theretofore
made has become a Nonrecoverable P&I Advance or Nonrecoverable Servicing
Advance, the Servicer shall apply the same criteria in making such determination
regardless of whether such P&I Advance or Servicing Advance shall have been made
by the Servicer or any predecessor Servicer.
Section 10.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.09 Inspection and Audit Rights. The Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor,
the Class A-1 Certificate Insurer or the Trustee during such Person's normal
business hours, to examine all the books of account, records, reports and other
papers of such Person relating to the Mortgage Loans, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants selected by the Depositor or the Trustee and to discuss its
affairs, finances and accounts relating to the Mortgage Loans with its officers,
employees and independent public accountants (and by this provision the Servicer
hereby authorizes said accountants to discuss with such representative such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested. Any reasonable out-of-pocket expense of the
Servicer incident to the exercise by the Depositor, the Class A-1 Certificate
Insurer or the Trustee of any right under this Section 10.09 shall be borne by
the Servicer.
Section 10.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.11 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW)
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.12 The Class A-1 Certificate Insurer Default. Any right
conferred to Class A-1 Certificate Insurer shall be suspended during any period
in which a Class A-1 Certificate Insurer Default exists. At such time as the
Class A-1 Certificates are no longer outstanding hereunder, and no amounts owed
to the Class A-1 Certificate Insurer hereunder remain unpaid, the Class A-1
Certificate Insurer's rights hereunder shall terminate.
Section 10.13 Third Party Beneficiary. The parties agree that the
Class A-1 Certificate Insurer is an intended third party beneficiary to this
Agreement and shall be entitled to rely upon and directly enforce the rights
granted to it under this Agreement.
* * * * * * *
IN WITNESS WHEREOF, the Depositor, the Trustee, the Servicer and the
Responsible Party have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first above
written.
GS MORTGAGE SECURITIES CORP.,
as Depositor
By: /s/ Xxxxx Xxxx
--------------------------------------
Name: Xxxxx Xxxx
Title: Vice President
JPMORGAN CHASE BANK,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Assistant Vice President
XXXXXX LOAN SERVICING LP,
as Servicer
By: /s/ Xxxxxx XxXxxxx
--------------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
NC CAPITAL CORPORATION,
as Responsible Party
By: /s/ X.X. Xxxxxxxxx
--------------------------------------
Name: X.X. Xxxxxxxxx
Title: CFO
SCHEDULE I
Mortgage Loan Schedule
(As delivered to Trustee on Closing Date)
SCHEDULE II
GSAMP Mortgage Loan Trust 2003-SEA,
Mortgage Pass-Through Certificates
Representations and Warranties of the Servicer
XXXXXX LOAN SERVICING LP (the "Servicer") hereby makes the representations and
warranties set forth in this Schedule II to the Depositor, the Trustee and the
Class A-1 Certificate Insurer, as of the Closing Date, or if so specified
herein, as of the Cut-off Date.
(1) The Servicer is a Delaware limited partnership duly organized, validly
existing and in good standing under the laws of Delaware and is duly authorized
and qualified to transact any and all business contemplated by this Pooling and
Servicing Agreement to be conducted by the Servicer in any state in which a
Mortgaged Property is located or is otherwise not required under applicable law
to effect such qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its ability
to enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of this Pooling and Servicing Agreement;
(2) The Servicer has the full power and authority to service each Mortgage
Loan, and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Pooling and Servicing Agreement and has duly
authorized by all necessary action on the part of the Servicer the execution,
delivery and performance of this Pooling and Servicing Agreement; and this
Pooling and Servicing Agreement, assuming the due authorization, execution and
delivery thereof by the Depositor, the Responsible Party and the Trustee,
constitutes a legal, valid and binding obligation of the Servicer, enforceable
against the Servicer in accordance with its terms, except to the extent that (a)
the enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought;
(3) The execution and delivery of this Pooling and Servicing Agreement by
the Servicer, the servicing of the Mortgage Loans by the Servicer hereunder, the
consummation by the Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Servicer and will not (A) result in a
breach of any term or provision of the organizational documents of the Servicer
or (B) conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement or
instrument to which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Servicer's knowledge, would in the
future materially and adversely affect, (x) the ability of the Servicer to
perform its obligations under this Pooling and Servicing Agreement or (y) the
business, operations, financial condition, properties or assets of the Servicer
taken as a whole;
(4) The Servicer is an approved seller/servicer for Xxxxxx Xxx and an
approved servicer for Xxxxxxx Mac in good standing;
(5) No litigation is pending against the Servicer that would materially
and adversely affect the execution, delivery or enforceability of this Pooling
and Servicing Agreement or the ability of the Servicer to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance with
the terms hereof;
(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 Servicer of, or compliance by the Servicer with, this Pooling
and Servicing Agreement or the consummation by the Servicer of the transactions
contemplated by this Pooling and Servicing Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior to
the Closing Date;
(7) The Servicer covenants that its computer and other systems used in
servicing the Mortgage Loans operate in a manner such that the Servicer can
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement; and
(8) With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer provided monthly
reports to the three credit repositories, the Servicer has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (i.e., 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.
SCHEDULE III
Representations and Warranties of the Responsible Party
as to the Responsible Party Mortgage Loans
The Responsible Party hereby makes the representations and warranties set
forth in this Schedule III as to the Responsible Party Mortgage Loans only to
the Depositor, the Servicer, the Class A-1 Certificate Insurer and the Trustee,
as of the Closing Date (or such other date as may be expressly set forth below):
(1) Mortgage Loans as Described. The Responsible Party has delivered to
the Purchaser the Data Tape Information and that Data Tape Information and the
information set forth on the Mortgage Loan Schedule as it relates to Responsible
Party Mortgage Loans is true and correct, including, without limitation, the
terms of the Prepayment Penalties, if any, as of the Cut-off Date (except that
paid through date information is as of the applicable Original Sale Date);
(2) Payments Current. Except as indicated on the Mortgage Loan Schedule,
as of the applicable Original Sale Date, all payments required to be made up to
the Original Sale Date for the Mortgage Loan under the terms of the Mortgage
Note, other than payments not yet 30 days delinquent as of the applicable
Original Sale Date, have been made and credited. Except as indicated on the
Mortgage Loan Schedule, as of the applicable Original Sale Date, no Mortgage
Loan had a 30 Day Delinquency at any time since the origination of the Mortgage
Loan;
(3) No Outstanding Charges. Except as indicated on the Mortgage Loan
Schedule for Responsible Party Mortgage Loans that had a 30 Day Delinquency as
of the applicable Original Sale Date, there are no defaults in complying with
the terms of the Mortgage, and 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 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.
Neither the Responsible Party nor any Affiliate has advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required under
the Mortgage Loan, except for interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage Loan proceeds, whichever is
earlier, to the date which precedes by one month the Due Date of the first
installment of principal and interest;
(4) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage
have not been impaired, waived, altered or modified in any respect from the date
of origination, except by a written instrument which has been recorded, if
necessary to protect the interests of the Purchaser, and which has been
delivered to the Trustee and the terms of which are reflected in the Mortgage
Loan Schedule, the Data Tape Information or included in the Mortgage File.
Except as indicated on the Mortgage Loan Schedule, no Mortgage Loan has been
modified so as to restructure the payment obligations or re-age the Mortgage
Loan. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule. No Mortgagor has been
released, in whole or in part, except in connection with an assumption
agreement, approved by the title insurer, to the extent required by the policy,
and which assumption agreement is part of the Mortgage Loan File delivered to
the Trustee and the terms of which are reflected in the Mortgage Loan Schedule
and the Data Tape Information;
(5) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including, without limitation, the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or Federal bankruptcy or insolvency proceeding, at the
time the Mortgage Loan was originated;
(6) Hazard Insurance. Pursuant to the terms of the Mortgage, all buildings
or other improvements upon the Mortgaged Property are insured by a generally
acceptable insurer against loss by fire, hazards of extended coverage and such
other hazards as are provided for in the Xxxxxx Xxx Guides or in the Xxxxxxx Mac
Guides, as well as all additional requirements set forth in Section 3.13 of the
Pooling and Servicing Agreement. If required by the National Flood Insurance Act
of 1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Xxx Guides and
Xxxxxxx Mac Guides, as well as all additional requirements set forth in Section
3.13 of the Pooling and Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Responsible Party and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Trustee upon
the consummation of the transactions contemplated by this Agreement. The
Responsible Party has not engaged in, and has no knowledge of the Mortgagor or
any servicer having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of such policy, including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Responsible Party;
(7) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law, including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
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 Responsible Party shall maintain in its
possession, available for the Purchaser's or the Trustee's inspection, and shall
deliver to the Purchaser upon demand, any evidence of compliance with all such
requirements;
(8) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
cancelled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. The Responsible Party 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
Responsible Party waived any default resulting from any action or inaction by
the Mortgagor;
(9) Location and Type of Mortgaged Property. The Mortgaged Property is a
fee simple property located in the state identified in the Mortgage Loan
Schedule and consists of a single parcel of real property with a detached single
family residence erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a low rise condominium project, or an individual
unit in a planned unit development or a de minimis planned unit development
which is in each case four stories or less; provided, however, that any
condominium unit, planned unit development, mobile home (double wide only) or
manufactured dwelling shall conform with the applicable Xxxxxx Xxx and Xxxxxxx
Mac requirements regarding such dwellings and that no Mortgage Loan is secured
by a single parcel of real property with a cooperative housing corporation, a
log home or, a mobile home erected thereon or by a mixed use property, a
property in excess of 10 acres or other unique property types. 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.
With respect to any Mortgage Loan secured by a Mortgaged Property improved by
manufactured housing, (i) the related manufactured housing unit is permanently
affixed to the land, and (ii) the related manufactured housing unit and the
related land are subject to a Mortgage properly filed in the appropriate public
recording office and naming the Responsible Party as mortgagee;
(10) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected first or second lien (as applicable) of record on a
single parcel of real estate constituting the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(i) the lien of current real property taxes and assessments
not yet due and payable;
(ii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal;
(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 the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
and
(iv) with respect to Second Lien Mortgage Loans, the lien of
the first mortgage on the Mortgaged Property
The Mortgaged Property was not, as of the date of origination of the
Mortgage Loan, subject to a second lien mortgage loan (or other subordinate lien
mortgage loan) which itself is not a Second Lien Mortgage Loan. The Mortgaged
Property with respect to any Second Lien Mortgage Loan is not subject to a first
lien mortgage loan which is itself not a Mortgage Loan;
(11) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms. All parties to the Mortgage Note, the Mortgage and any other
such related agreement had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related
parties. No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination or servicing of the Mortgage Loan. The Responsible Party has
reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of
the representations set forth herein;
(12) Full Disbursement of Proceeds. The Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(13) Ownership. Immediately prior to the transfer contemplated by
the applicable Responsible Party Purchase Agreement, the Responsible Party
was the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note. The Mortgage Loan was not
assigned or pledged, and the Responsible Party had good, indefeasible and
marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest,
and has full right and authority subject to no interest or participation
of, or agreement with, any other party, to sell and assign each Mortgage
Loan pursuant to the applicable Responsible Party Purchase Agreement and
following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest;
(14) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or (ii) qualified
to do business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal office
in such state, or (3) not doing business in such state;
(15) CLTV. LTV. No Mortgage Loan that is a Second Lien Mortgage Loan
has CLTV in excess of 100%. No Mortgage Loan has an LTV greater than 100%;
(16) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac with respect
to Mortgage Loans, and each such title insurance policy is issued by a
title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do
business in the jurisdiction where the Mortgaged Property is located,
insuring the Responsible Party, its successors and assigns, as to the
first priority lien (with respect to First Lien Mortgage Loans) or second
priority lien (with respect to Second Lien Mortgage Loans) of the Mortgage
in the original principal amount of the Mortgage Loan, subject only to the
exceptions contained in clauses (i), (ii), (iii) and (iv) of
representation 10 of this Schedule III, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Scheduled
Payment. Where required by state law or regulation, the Mortgagor has been
given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. The title policy does
not contain any special exceptions (other than the standard exclusions)
for zoning and uses and has been marked to delete the standard survey
exception or to replace the standard survey exception with a specific
survey reading. The Responsible Party, its successors and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's
title insurance policy is valid and remains in full force and effect and
will be in force and effect upon the consummation of the transactions
contemplated by this Agreement. No claims have been made under such
lender's title insurance policy, and no prior holder of the related
Mortgage, including the Responsible Party, 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 Responsible Party;
(17) No Defaults. Except as indicated on the Mortgage Loan Schedule
as of the applicable Original Sale Date, other than payments due but not
yet 30 days or more delinquent, there is no default, breach, violation or
event which would permit acceleration existing under the Mortgage or the
Mortgage Note and no event which, with the passage of time or with notice
and the expiration of any grace or cure period, would constitute a
default, breach, violation or event which would permit acceleration, and
neither the Responsible Party nor any of its Affiliates nor any of their
respective predecessors have waived any default, breach, violation or
event which would permit acceleration;
(18) No Mechanics' Liens. There are no mechanics' or similar liens
or claims which have been filed for work, labor or material (and no rights
are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage;
(19) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. There are no improvements located on
or part of the Mortgaged Property that are in violation of any applicable
zoning law or regulation;
(20) Origination; Payment Terms. Either (a) 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 other similar institution which is supervised
and examined by a federal or state authority or (b) the following
requirements have been met with respect to the Mortgage Loan: the
Responsible Party meets the requirements set forth in clause (a), and (i)
such Mortgage Loan was underwritten in accordance with standards
established by the Responsible Party, using application forms and related
credit documents approved by the Responsible Party, (ii) the Responsible
Party approved each application and the related credit documents before a
commitment by the correspondent was issued, and no such commitment was
issued until the Responsible Party agreed to fund such Mortgage Loan,
(iii) the closing documents for such Mortgage Loan were prepared on forms
approved the Responsible Party, and (iv) such Mortgage Loan was actually
funded by the Responsible Party and was purchased by the Responsible Party
at closing or soon thereafter. The documents, instruments and agreements
submitted for loan underwriting were not falsified and contain no untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the information and statements therein
not misleading. No Mortgage Loan contains terms or provisions which would
result in negative amortization. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection
with the Mortgage Loan. The Mortgage Interest Rate, Lifetime Rate Cap and
Periodic Mortgage Interest Rate Cap are as set forth on the Mortgage Loan
Schedule hereto (including in the case of Adjustable Rate Mortgage Loans,
the interest rate and payment limitations set forth on Mortgage Loan
Schedule hereto). All Mortgage Loans have Due Dates on the first day of
each month except as specified on the Mortgage Loan Schedule. Each
Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the
Mortgage Interest Rate on each Adjustment Date, with interest calculated
and payable in arrears and is not calculated on a simple interest basis.
The monthly principal payments on each Mortgage Loan is sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an
original term of not more than thirty years from commencement of
amortization. Each Mortgage Loan is payable on the first day of each
month. There is no negative amortization allowed in the terms of any
Mortgage Note. None of the Mortgage Loans allows for negative amortization
or the conversion of the interest rate thereon from an adjustable rate to
a fixed rate or from a fixed rate to an adjustable rate;
(21) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the Mortgaged Property
of the benefits of the security provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(22) Index. Except as indicated on the Mortgage Loan Schedule with
respect to Adjustable Rate Mortgage Loans, the Index set forth in the
Mortgage Note is LIBOR;
(23) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property 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;
(24) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage;
(25) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(26) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Purchaser;
(27) Transfer of Mortgage Loans. The Assignment of Mortgage is in
recordable form, other than the assignee's name and recording information
not yet returned from the recording office, and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged
Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Responsible Party is not subject
to the bulk transfer or similar statutory provisions in effect in any
applicable jurisdiction;
(28) Due-On-Sale. The Mortgage contains an enforceable provision for
the acceleration of the payment of the unpaid principal balance of the
Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder,
and to the best of the Responsible Party's knowledge, such provision is
enforceable;
(29) No Buydown Provisions No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Scheduled Payments are paid or partially paid with funds deposited in any
separate account established by the Responsible Party, the Mortgagor, or
anyone on behalf of the Mortgagor, or paid by any source other than the
Mortgagor nor does it contain any other similar provisions which may
constitute a "buydown" provision. The Mortgage Loan is not a graduated
payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(30) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
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;
(31) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated
principal amount is expressly insured as having first or second lien
priority (as applicable) by a title insurance policy, an endorsement to
the policy insuring the mortgagee's consolidated interest or by other
title evidence acceptable to Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the
Mortgage Loan;
(32) Mortgaged Property Undamaged; No Condemnation Proceedings. On
the Original Sale Date, and to the best of the Responsible Party's
knowledge, as of the Closing Date, 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 Responsible
Party has no knowledge of any such proceedings in the future;
(33) Collection Practices; Escrow Payments; Interest Rate
Adjustments. The origination, servicing and collection practices used by
the Responsible Party and its Affiliates and any prior servicer with
respect to the Mortgage Loan have been in all respects in compliance with
Accepted Servicing Practices, applicable laws and regulations, and have
been in all respects legal and proper and prudent in the mortgage
origination and servicing business. With respect to escrow deposits and
Escrow Payments, if any, all such payments are in the possession of, or
under the control of the Responsible Party 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 in
full compliance with state and federal law and the provisions of the
related Mortgage Note and Mortgage. An escrow of funds is not prohibited
by applicable law and has been established in an amount sufficient to pay
for every item that remains unpaid and has been assessed but is not yet
due and payable. No escrow deposits or Escrow Payments or other charges or
payments due to the Responsible Party have been capitalized under the
Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have
been made in strict compliance with state and federal law and the terms of
the related Mortgage and Mortgage Note on the related Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with
respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage
Note. The Responsible Party and its Affiliates executed and delivered any
and all notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the
Scheduled Payment adjustments. Any interest required to be paid pursuant
to state, federal and local law has been properly paid and credited;
(34) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a convertible Mortgage Loan;
(35) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or
will result in the exclusion from, denial of, or defense to coverage under
any insurance policy or bankruptcy bond related to the Mortgage Loans,
irrespective of the cause of such failure of coverage. In connection with
the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by the Responsible Party or by
any officer, director, or employee of the Responsible Party or any
designee of the Responsible Party or any corporation in which the
Responsible Party or any officer, director, or employee had a financial
interest at the time of placement of such insurance;
(36) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or
regulation. 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 Mortgaged Property; and
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;
(37) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Responsible Party, and the Responsible Party has no knowledge
of any relief requested or allowed to the Mortgagor under the Soldiers'
and Sailors' Civil Relief Act of 1940;
(38) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed by a qualified appraiser, acceptable to
the Responsible Party, 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 the appraisal and appraiser both satisfy the
requirements of the Xxxxxx Xxx Guides or the Xxxxxxx Mac Guides, and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated;
(39) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor received all disclosure materials required
by, and the Responsible Party has complied with all applicable law with
respect to the making of the Mortgage Loans;
(40) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or
rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(41) Value of Mortgaged Property. The Responsible Party has no
knowledge of any circumstances existing that could reasonably be expected
to adversely affect the value or the marketability of any Mortgaged
Property or Mortgage Loan or to cause the Mortgage Loans to prepay during
any period materially faster or slower than similar mortgage loans held by
the Responsible Party generally secured by properties in the same
geographic area as the related Mortgaged Property;
(42) No Defense to Insurance Coverage. The Responsible Party has
caused or will cause to be performed any and all acts required to preserve
the rights and remedies of the Purchaser 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 coinsured, joint loss payee and mortgagee
rights in favor of the Purchaser. No action has been taken or failed to be
taken, no event has occurred and no state of facts exists or has existed
on or prior to the Closing Date (whether or not known to the Responsible
Party on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any applicable
special hazard insurance policy or bankruptcy bond (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
Responsible Party, the related Mortgagor or any party involved in the
application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason
of such insurer's breach of such insurance policy or such insurer's
financial inability to pay;
(43) Escrow Analysis. With respect to each Mortgage with an Escrow
Account, the Responsible Party or its Affiliate 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;
(44) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices
and the Responsible Party has reported the Mortgagor credit files to each
of the three primary credit repositories monthly in a timely manner;
(45) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by the Responsible Party to the Purchaser, that the
Responsible Party has full right and authority and is not precluded by law
or contract from furnishing such information to the Purchaser;
(46) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage of
the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to
cure, such default, (b) allow the termination of the lease in the event of
damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than 15 years; (5) the term of
such lease does not terminate earlier than five years after the maturity
date of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a widely accepted practice;
(47) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless
otherwise indicated on the Mortgage Loan Schedule. No Mortgage Loan has a
Prepayment Penalty period in excess of five (5) years from the date of
origination and no Mortgage Loan originated on or after October 1, 2002
has a Prepayment Penalty period in excess of three (3) years from the date
of origination.
(48) Predatory Lending Regulations. None of the Mortgage Loans is a
High Cost Mortgage Loan. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to
the ability of the Mortgagor to repay and the extension of credit which
has no apparent benefit to the Mortgagor, were employed in the origination
of the Mortgage Loan;
(49) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan
were used to finance a single-premium credit life insurance policy;
(50) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service
contract and a paid in full, life of loan, flood certification contract
and each of these contracts is assignable to the Purchaser;
(51) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(52) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with the Xxxxxx
Xxx Guides for such trusts;
(53) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment
to the Purchaser) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as
against creditors of the Responsible Party, or is in the process of being
recorded;
(54) FICO Scores. Each Mortgage Loan has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500;
(55) Compliance with Anti-Money Laundering Laws. The Responsible
Party has complied with all applicable anti-money laundering laws and
regulations, including without limitation the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering Laws"); the Responsible Party
has established an anti-money laundering compliance program as required by
the Anti-Money Laundering Laws, has conducted the requisite due diligence
in connection with the origination of each Mortgage Loan for purposes of
the Anti-Money Laundering Laws, including with respect to the legitimacy
of the applicable Mortgagor and the origin of the assets used by the said
Mortgagor to purchase the property in question, and maintains, and will
maintain, sufficient information to identify the applicable Mortgagor for
purposes of the Anti-Money Laundering Laws.
(56) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines. The Mortgage
Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Xxx and
the Responsible Party has not made any representations to a Mortgagor that
are inconsistent with the mortgage instruments used;
(57) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be
expected to cause private institutional investors who invest in sub-prime
mortgage loans to regard the Mortgage Loan as an unacceptable investment,
cause the Mortgage Loan to become delinquent, or adversely affect the
value or marketability of the Mortgage Loan, or cause the Mortgage Loans
to prepay during any period materially faster or slower than the mortgage
loans originated by the Responsible Party generally;
(58) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Responsible Party's and its Affiliates' underwriting guidelines;
(59) Georgia Loans. No Mortgage Loan originated on or after October
1, 2002 is secured by property located in the State of Georgia; and
(60) Payoffs. No Mortgage Loans prepaid in full prior to the Closing
Date.
SCHEDULE IV
The Responsible Party hereby makes the representations and warranties set forth
in this Schedule IV to the Depositor, the Servicer, the Class A-1 Certificate
Insurer and the Trustee, as of the Closing Date.
(a) Due Organization and Authority. The Responsible Party is a
corporation duly organized, validly existing and in good standing
under the laws of the state of California and has all licenses
necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state wherein it
owns or leases any material properties or where a Mortgaged Property
is located, if the laws of such state require licensing or
qualification in order to conduct business of the type conducted by
the Responsible Party, and in any event the Responsible Party is in
compliance with the laws of any such state to the extent necessary;
the Responsible Party has the full corporate power, authority and
legal right to execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance of
this Agreement by the Responsible Party and the consummation of the
transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby
have been duly executed and delivered and constitute the valid,
legal, binding and enforceable obligations of the Responsible Party,
regardless of whether such enforcement is sought in a proceeding in
equity or at law; and all requisite corporate action has been taken
by the Responsible Party to make this Agreement and all agreements
contemplated hereby valid and binding upon the Responsible Party in
accordance with their terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this
Agreement, will conflict with or result in a breach of any of the
terms, conditions or provisions of the Responsible Party's charter,
by-laws or other organizational documents or any legal restriction
or any agreement or instrument to which the Responsible Party is now
a party or by which it is bound, or constitute a default or result
in an acceleration under any of the foregoing, or result in the
violation of any law, rule, regulation, order, judgment or decree to
which the Responsible Party or its property is subject, or result in
the creation or imposition of any lien, charge or encumbrance that
would have an adverse effect upon any of its properties pursuant to
the terms of any mortgage, contract, deed of trust or other
instrument;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Responsible Party,
before any court, administrative agency or other tribunal (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement, (iii) which, either in any one instance or in the
aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of
the Responsible Party, or in any material impairment of the right or
ability of the Responsible Party to carry on its business
substantially as now conducted, or in any material liability on the
part of the Responsible Party, or which would draw into question the
validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Responsible Party
contemplated herein, or which would be likely to impair materially
the ability of the Responsible Party to perform under the terms of
this Agreement, or (iv) relating to fraud, unlawful acts, or the
Responsible Party's servicing or closing practices;
(d) No Consent Required. No consent, approval, authorization or order
of, or registration or filing with, or notice to any court or
governmental agency or body including HUD, the FHA or the VA is
required for the execution, delivery and performance by the
Responsible Party of or compliance by the Responsible Party with
this Agreement or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained
prior to the Closing Date; and
(e) Ability to Perform. The Responsible Party does not believe, nor does
it have any reason or cause to believe, that it cannot perform each
and every covenant contained in this Agreement.
EXHIBIT A
FORM OF CLASS A, CLASS M AND CLASS B CERTIFICATES
[To be added to the Class M-1, Class B-1, Class B-2, and Class B-3 Certificates
while they remain Private Certificates: IF THIS CERTIFICATE IS A PHYSICAL
CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED
UNLESS THE PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER (THE
"TRANSFEROR LETTER") IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO
HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A RULE 144A LETTER (THE "144A
LETTER") IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN OR (II)
THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE
TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.]
[To be added to the Class M-1, Class B-1, Class B-2 and Class B-3 Certificates.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
Certificate No. :
Cut-off Date : August 1, 2003
First Distribution Date : September 25, 2003
Initial Certificate Balance
of this Certificate
("Denomination") :
Initial Certificate
Balances of all
Certificates of this Class : Class Principal Amount
Class A-1 [$99,087,000]
Class M-1 [$2,923,000]
Class B-1 [$1,062,000]
Class B-2 [$1,063,000]
Class B-3 [$1,060,000]
CUSIP : Class CUSIP No.
Class A-1 [00000XXX0]
Class M-1 [00000XXX0]
Class B-1 [00000XXX0]
Class B-2 [00000XXX0]
Class B-3 [00000XXX0]
ISIN : Class A-1 [US36228FVH62]
Class M-1 [US36228FVJ29]
Class B-1 [US36228FVK91]
Class B-2 [US36228 FVL74]
Class B-3 [US36228FVM57]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates, Series 2003-SEA
[Class A-] [Class M-] [Class B-]
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Responsible Party, the Servicer or the Trustee referred to below
or any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement, dated as of August
1, 2003 (the "Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), NC Capital
Corporation, as Responsible Party (the "Responsible Party"), and JPMorgan Chase
Bank, as trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
[If this is a Class M-1, Class B-1, Class B-2 or Class B-3
Certificate]
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, Section 4975 of the Code
or any materially similar provisions of applicable Federal, state or local law
("Similar Law"), or a person acting on behalf of or investing plan assets of any
such plan, which representation letter shall not be an expense of the Trustee,
or (ii) if the transferee is an insurance company, a representation letter that
it is purchasing such Certificates with the assets of its general account and
that the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, or (iii) in the case of a Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, or a plan
or arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments) or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee and the Servicer, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicer or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such Certificate will not
result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code and will
not subject the Trustee or the Servicer to any obligation in addition to those
expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK,
not in its individual capacity, but
solely as
Trustee
By:_____________________________________
Countersigned:
By:___________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-SEA Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Responsible Party and the Servicer, the Trustee and the
Class A-1 Certificate Insurer with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
[If this is a Class A-1 Certificate:] [So long as no Class A-1
Certificate Insurer Default has occurred and is continuing, the Voting Rights to
which this Certificate are entitled will be exercisable solely by the Class A-1
Certificate Insurer.]
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
__________________________________________________________________________.
Dated:
_____________________________________
Signature by or on behalf of
assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
_______________________________________________________________________________,
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
_______________________________________________________________________________.
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT B
FORM OF CLASS N CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
DIRECT OR INDIRECT INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND
CERTAIN OTHER ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE AND THE SERVICER, TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND
BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE PROHIBITED TRANSACTION
PROVISIONS OF TITLE I OF ERISA AND THE CODE OR SIMILAR VIOLATION OF SIMILAR LAW
AND WILL NOT SUBJECT THE TRUSTEE OR THE SERVICER TO ANY OBLIGATION IN ADDITION
TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : August 1, 2003
First Distribution
Date : September 25, 2003
Initial Notional
Balance of this
Certificate
("Denomination") : $6,975,000
Original Class N
Notional Amount : $6,975,000
CUSIP : [36228XF8]
ISIN : [US63228XF88]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates, Series 2003-SEA
Class N
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Payments in reduction of the Class N Notional Amount in respect of
this Certificate are distributable monthly as set forth herein. Accordingly, the
Class N Notional Amount represented by this Certificate may be less than the
Denomination as set forth herein. This Certificate does not evidence an
obligation of, or an interest in, and is not guaranteed by the Depositor, the
Responsible Party, the Servicer or the Trustee referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_________________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the Initial Notional Amount of this Certificate by the Original Class N
Notional Amount) in certain monthly distributions pursuant to a Pooling and
Servicing Agreement dated as of August 1, 2003 (the "Agreement") among GS
Mortgage Securities Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing
LP, as servicer (the "Servicer"), NC Capital Corporation, as Responsible Party
(the "Responsible Party") and JPMorgan Chase Bank, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
The Pass-Through Rate for this Certificate on each Distribution Date
will be the per annum rate specified above. Any distribution of the proceeds of
any remaining assets of the Trust will be made only upon presentment and
surrender of this Certificate at the offices designated by the Trustee for such
purpose, or the office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA, Section 4975 of the Code
or any materially similar provisions of applicable Federal, state or local law
("Similar Law"), or a person acting on behalf of or investing plan assets of any
such plan, which representation letter shall not be an expense of the Trustee,
or (ii) if the transferee is an insurance company, a representation letter that
it is purchasing such Certificates with the assets of its general account and
that the purchase and holding of such Certificates are covered under Sections I
and III of PTCE 95-60, or (iii) in the case of a Certificate presented for
registration in the name of an employee benefit plan subject to ERISA, or a plan
or arrangement subject to Section 4975 of the Code (or comparable provisions of
any subsequent enactments) or a plan subject to Similar Law, or a trustee of any
such plan or any other person acting on behalf of any such plan or arrangement
or using such plan's or arrangement's assets, an Opinion of Counsel satisfactory
to the Trustee and the Servicer, which Opinion of Counsel shall not be an
expense of the Trustee, the Servicer or the Trust Fund, addressed to the
Trustee, to the effect that the purchase or holding of such Certificate will not
result in the assets of the Trust Fund being deemed to be "plan assets" and
subject to the prohibited transaction provisions of ERISA and the Code and will
not subject the Trustee or the Servicer to any obligation in addition to those
expressly undertaken in this Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK,
not in its individual capacity, but
solely as
Trustee
By:_____________________________________
Countersigned:
By_____________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-SEA Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party, the Trustee and the Class
A-1 Certificate Insurer with the consent of the Holders of Certificates affected
by such amendment evidencing the requisite Percentage Interest, as provided in
the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:
________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________,
_______________________________________________________________________________
for the account of____________________________________________________________,
account number ______________, or, if mailed by check, to_____________________.
Applicable statements should be mailed to_____________________________________,
________________________________________________________________________________
This information is provided by__________________________________,
the assignee named above, or_________________________________________________,
as its agent.
EXHIBIT C-1
FORM OF CLASS R-1 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN TWO "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. In the event that such
representation is violated, or any attempt IS MADE to transfer to a plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code OR A PLAN SUBJECT TO SIMILAR LAW, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Certificate No. : 1
Cut-off Date : August 1, 2003
First Distribution Date
: September 25, 2003
Percentage Interest of
this Certificate :
("Denomination") 100%
CUSIP : [00000XXX0]
ISIN : [US63228FVP88]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates, Series 2003-SEA
Class R-1
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R-1 Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer, the Responsible Party
or the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [_____________________] is the registered owner
of the Percentage Interest specified above of any monthly distributions due to
the Class R-1 Certificates pursuant to a Pooling and Servicing Agreement dated
as of August 1, 2003 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), NC Capital Corporation, as responsible party (the "Responsible
Party"), and JPMorgan Chase Bank, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R-1
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in New York, New York.
No transfer of a Class R-1 Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R-1 Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-1 Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R-1 Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-1 Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R-1 Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R-1 Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R-1 Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class R-1 Certificate, (C) not to cause income with respect to the Class R-1
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class R-1 Certificate or to cause the Transfer of the Ownership Interest in this
Class R-1 Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class R-1 Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK,
not in its individual capacity, but
solely as
Trustee
By:_____________________________________
Countersigned:
By:___________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
not in its individual capacity,
but solely as Trustee
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-SEA Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party, the Trustee and the Class
A-1 Certificate Insurer with the consent of the Holders of Certificates affected
by such amendment evidencing the requisite Percentage Interest, as provided in
the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to________________________________________________,
_______________________________________________________________________________
for the account of____________________________________________________________,
account number ______________, or, if mailed by check, to_____________________.
Applicable statements should be mailed to_____________________________________,
_______________________________________________________________________________
This information is provided by___________________________________,
the assignee named above, or__________________________________________________,
as its agent.
EXHIBIT C-2
FORM OF CLASS R-2 CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FIVE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. In the event that such
representation is violated, or any attempt IS MADE to transfer to a plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code OR A PLAN SUBJECT TO SIMILAR LAW, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Certificate No. : 1
Cut-off Date : August 1, 2003
First Distribution Date
: September 25, 2003
Percentage Interest of
this Certificate :
("Denomination") 100%
CUSIP : [00000XXX0]
ISIN : [US63228FXE14]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates, Series 2003-SEA
Class R-2
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R-2 Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer, the Responsible Party
or the Trustee referred to below or any of their respective affiliates. Neither
this Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [_____________________] is the registered owner
of the Percentage Interest specified above of any monthly distributions due to
the Class R-2 Certificates pursuant to a Pooling and Servicing Agreement dated
as of August 1, 2003 (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer (the
"Servicer"), NC Capital Corporation, as responsible party (the "Responsible
Party"), and JPMorgan Chase Bank, as trustee (the "Trustee"). To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R-2
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in New York, New York.
No transfer of a Class R-2 Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R-2 Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-2 Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R-2 Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-2 Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R-2 Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R-2 Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R-2 Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class R-2 Certificate, (C) not to cause income with respect to the Class R-2
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class R-2 Certificate or to cause the Transfer of the Ownership Interest in this
Class R-2 Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class R-2 Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK,
not in its individual capacity, but
solely as
Trustee
By:______________________________________
Countersigned:
By:___________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
not in its individual capacity,
but solely as Trustee
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-SEA Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party, the Trustee and the Class
A-1 Certificate Insurer with the consent of the Holders of Certificates affected
by such amendment evidencing the requisite Percentage Interest, as provided in
the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
________________________________________________________________________________
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
________________________________________________________________________________
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
DIRECT OR INDIRECT INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND
CERTAIN OTHER ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : August 1, 2003
First Distribution
Date : September 25, 2003
Percentage Interest of
this Certificate
("Denomination") : 100%
CUSIP : [00000XXX0]
ISIN : [US63228FVN31]
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates, Series 2003-SEA
Class X
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Servicer, the
Responsible Party or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Pooling and Servicing
Agreement dated as of August 1, 2003 (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as
servicer (the "Servicer"), NC Capital Corporation, as Responsible Party (the
"Responsible Party"), and JPMorgan Chase Bank, as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
This Certificate will be entitled to distributions only to the
extent set forth in the Agreement. In addition, any distribution of the proceeds
of any remaining assets of the Trust will be made only upon presentment and
surrender of this Certificate at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable Federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
JPMORGAN CHASE BANK,
not in its individual capacity, but
solely as
Trustee
By:______________________________________
Countersigned:
By:___________________________________
Authorized Signatory of
JPMORGAN CHASE BANK,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2003-SEA
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2003-SEA Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Responsible Party, the Trustee and the Class
A-1 Certificate Insurer with the consent of the Holders of Certificates affected
by such amendment evidencing the requisite Percentage Interest, as provided in
the Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in New York, New
York, accompanied by a written instrument of transfer in form satisfactory to
the Trustee and the Certificate Registrar duly executed by the holder hereof or
such holder's attorney duly authorized in writing, and thereupon one or more new
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest in the Trust Fund will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor, the Servicer, the Responsible Party and the Trustee
and any agent of the Depositor or the Trustee may treat the Person in whose name
this Certificate is registered as the owner hereof for all purposes, and neither
the Depositor, the Trustee, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to repurchase, in whole, from the Trust Fund all remaining
Mortgage Loans and all property acquired in respect of the Mortgage Loans at a
purchase price determined as provided in the Agreement. The obligations and
responsibilities created by the Agreement will terminate as provided in Section
9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:
_________________________________________
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to_________________________________________________,
________________________________________________________________________________
for the account of_____________________________________________________________,
account number ______________, or, if mailed by check, to______________________.
Applicable statements should be mailed to______________________________________,
________________________________________________________________________________
This information is provided by____________________________________,
the assignee named above, or___________________________________________________,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Class A-1 Certificate Insurer]
_______________________________
_______________________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities Corp.,
as Depositor, Xxxxxx Loan Servicing LP, as Servicer, NC Capital
Corporation, as Responsible Party, and JPMorgan Chase Bank, as
Trustee, GSAMP Trust, 2003-SEA
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, for each Mortgage Loan listed in the Mortgage Loan Schedule (other than
any Mortgage Loan listed in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse";
and
(ii) a duly executed Assignment of Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or the perfection or priority of any Mortgage.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Trustee
By:______________________________________
Name:____________________________________
Title:___________________________________
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF TRUSTEE
[date]
[Depositor]
[Servicer]
[Responsible Party]
[Class A-1 Certificate Insurer]
_______________________________
_______________________________
Re: Pooling and Servicing Agreement among GS Mortgage Securities Corp.,
as Depositor, Xxxxxx Loan Servicing LP, as Servicer, NC Capital
Corporation, as Responsible Party and JPMorgan Chase Bank, as
Trustee, GSAMP Trust, 2003-SEA
Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:
(i) The original Mortgage Note, endorsed in the form provided in
Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement
from the originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) A duly executed Assignment of Mortgage in the form
provided in Section 2.01 of the Pooling and Servicing Agreement; or,
if the Responsible Party has certified or the Trustee otherwise
knows that the related Mortgage has not been returned from the
applicable recording office, a copy of the Assignment of Mortgage
(excluding information to be provided by the recording office).
(iv) The original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment
from the originator to the last endorsee.
(v) The original or duplicate original lender's title policy and
all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title commitment,
or a copy thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2) and (8) of
the Mortgage Loan Schedule and the Data Tape Information accurately reflects
information set forth in the Custodial File.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability, recordability or genuineness of any of the documents contained
in each Mortgage File of any of the Mortgage Loans identified on the Mortgage
Loan Schedule or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan or the perfection or priority of any
Mortgage. Notwithstanding anything herein to the contrary, the Trustee has made
no determination and makes no representations as to whether (i) any endorsement
is sufficient to transfer all right, title and interest of the party so
endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Trustee
By:______________________________________
Name:____________________________________
Title:___________________________________
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
GSAMP Trust 2003-SEA,
Mortgage Pass-Through Certificates
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and
says as follows:
1. The undersigned is an officer of ___________________, the proposed Transferee
of an Ownership Interest in a Residual Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement dated as of August 1, 2003 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), NC Capital
Corporation, as Responsible Party (the "Responsible Party"), and JPMorgan Chase
Bank, as trustee (the "Trustee"). Capitalized terms used, but not defined herein
or in Exhibit 1 hereto, shall have the meanings ascribed to such terms in the
Agreement. The Transferee has authorized the undersigned to make this affidavit
on behalf of the Transferee for the benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the date of the
Transfer, a Permitted Transferee. The Transferee is acquiring its Ownership
Interest in the Certificate for its own account. The Transferee has no knowledge
that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax will be
imposed on Transfers of the Certificate to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will be
imposed on a "pass-through entity" holding the Certificate if at any time during
the taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any Person to whom
the Transferee attempts to Transfer its Ownership Interest in the Certificate,
and in connection with any Transfer by a Person for whom the Transferee is
acting as nominee, trustee or agent, and the Transferee will not Transfer its
Ownership Interest or cause any Ownership Interest to be Transferred to any
Person that the Transferee knows is not a Permitted Transferee. In connection
with any such Transfer by the Transferee, the Transferee agrees to deliver to
the Trustee a certificate substantially in the form set forth as Exhibit H to
the Agreement (a "Transferor Certificate") to the effect that such Transferee
has no actual knowledge that the Person to which the Transfer is to be made is
not a Permitted Transferee.
7. The Transferee has historically paid its debts as they have come due, intends
to pay its debts as they come due in the future, and understands that the taxes
payable with respect to the Certificate may exceed the cash flow with respect
thereto in some or all periods and intends to pay such taxes as they become due.
The Transferee does not have the intention to impede the assessment or
collection of any tax legally required to be paid with respect to the
Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section 7701(a)(30).
10. The Transferee is aware that the Certificate may be a "noneconomic residual
interest" within the meaning of proposed Treasury regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to be attributable
to a foreign permanent establishment or fixed base, within the meaning of an
applicable income tax treaty, of the Transferee or any other U.S. person.
12. Check one of the following:
[_] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[_] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to
which income from the Certificate will only be taxed in the
United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the
transfer, the Transferee had gross assets for financial
reporting purposes (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury
Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury
Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii)
and (iii) and Section 1.860E-1(c)(5) of the U.S. Treasury
Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and
reinvestment assumptions, tax rates and other factors specific
to the Transferee) that it has determined in good faith.
[_] None of the above.
1. The Transferee is not an employee benefit plan that is subject to Title I of
ERISA or a plan that is subject to Section 4975 of the Code or a plan subject to
any Federal, state or local law that is substantially similar to Title I of
ERISA or Section 4975 of the Code, and the Transferee is not acting on behalf of
or investing plan assets of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this _____ day of ____________, 20__.
_________________________________________
Print Name of Transferee
By:______________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
______________________________________
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this______day of__________,_20__.
_________________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
JPMorgan Chase Bank,
as Trustee,
0 Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Institutional Trust Services/Structured Finance Services - GSAMP
2003-SEA
Re: GSAMP Trust, 2003-SEA, Mortgage Pass-Through Certificates, Class [ ]
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (A) we have no
knowledge the Transferee is not a Permitted Transferee, (B) after conducting a
reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (C) we have no
reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_________________________________________
Print Name of Transferor
By:____________________________________
Authorized Officer
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
JPMorgan Chase Bank,
as Trustee,
0 Xxx Xxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Institutional Trust Services/Structured Finance Services - GSAMP
2003-SEA
Re: GSAMP Trust 2003-SEA, Mortgage Pass-Through Certificates, Class [ ]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are not an employee benefit plan that
is subject to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or a plan or arrangement that is subject to Section 4975 of
the Internal Revenue Code of 1986, as amended (the "Code"), or a plan subject to
any Federal, state or local law materially similar to the foregoing provisions
of ERISA or the Code, nor are we acting on behalf of any such plan or
arrangement nor using the assets of any such plan or arrangement to effect such
acquisition, or, with respect to a Class X Certificate, the purchaser is an
insurance company that is purchasing this certificate with funds contained in an
"insurance company general account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60, (e) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Certificates, any
interest in the Certificates or any other similar security to, or solicited any
offer to buy or accept a transfer, pledge or other disposition of the
Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, and (f) we are a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and have completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex 2. We
are aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned and/or
invested on a discretionary basis $ 1 in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A and (ii) the
Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
--------------------------------
1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.
4. For purposes of determining the aggregate amount of securities owned and/or
invested on a discretionary basis by the Buyer, the Buyer used the cost of such
securities to the Buyer and did not include any of the securities referred to in
the preceding paragraph, except (i) where the Buyer reports its securities
holdings in its financial statements on the basis of their market value, and
(ii) no current information with respect to the cost of those securities has
been published. If clause (ii) in the preceding sentence applies, the securities
may be valued at market. Further, in determining such aggregate amount, the
Buyer may have included securities owned by subsidiaries of the Buyer, but only
if such subsidiaries are consolidated with the Buyer in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Buyer's direction.
However, such securities were not included if the Buyer is a majority-owned,
consolidated subsidiary of another enterprise and the Buyer is not itself a
reporting company under the Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and understands
that the seller to it and other parties related to the Certificates are relying
and will continue to rely on the statements made herein because one or more
sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer will notify
each of the parties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_________________________________________
Print Name of Transferor
By:______________________________________
Name:
Title:
Date:____________________________________
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the parties listed
in the Rule 144A Transferee Certificate to which this certification relates with
respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief Financial Officer
or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A"), because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $______ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or more
registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the parties listed
in the Rule 144A Transferee Certificate to which this certification relates are
relying and will continue to rely on the statements made herein because one or
more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer
will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned will notify
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
_________________________________________
Print Name of Transferor
By:______________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date:____________________________________
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: [Address]
Re:
In connection with the administration of the Mortgage Loans held by
you as the Trustee on behalf of the Certificateholders, we request the release,
and acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number:
Send Custodial File to:
Reason for Requesting Documents (check one)
____1. Mortgage Loan Paid in Full. (The Company hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Section 2.03 of the Pooling and
Servicing Agreement. (The Company hereby certifies that the
repurchase price has been credited to the Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Company hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to the
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).____________________________________________________
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
XXXXXX LOAN SERVICING LP
By:______________________________________
Name:_________________________________
Title:________________________________
Date:_________________________________
[Acknowledged receipt by]
JPMORGAN CHASE BANK, not in its
individual capacity, but solely as Trustee
By:____________________________________
Name:
Title:
Date:
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Trustee, as applicable:
(a) The original Mortgage Note together with all riders thereto
bearing all intervening endorsements, showing a complete chain of
endorsement from the originator to the last endorsee endorsed "Pay
to the order of _________________, without recourse" and signed
(which may be by facsimile signature) in the name of the last
endorsee by an authorized officer. To the extent that there is no
room on the face of the Mortgage Notes for endorsements, the
endorsement may be contained on an allonge, if state law so allows
and the Trustee is so advised by the Responsible Party that state
law so allows.
(b) The original of any guaranty executed in connection with the
Mortgage Note.
(c) The original Mortgage, with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording
together with all riders thereto. If in connection with any Mortgage
Loan, the Responsible Party cannot deliver or cause to be delivered
the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public
recording office where such Mortgage has been delivered for
recordation or because such Mortgage has been lost or because such
public recording office retains the original recorded Mortgage, the
Responsible Party shall deliver or cause to be delivered to the
Trustee, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, an Officer's
Certificate of the Responsible Party or a certificate from an escrow
company, a title company or closing attorney stating that such
Mortgage has been dispatched to the appropriate public recording
office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to
be a true and complete copy of the original recorded Mortgage will
be promptly delivered to the Trustee upon receipt thereof by the
Responsible Party; or (ii) in the case of a Mortgage where a public
recording office retains the original recorded Mortgage or in the
case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original
recorded Mortgage.
(d) The originals of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon or a
certified true copy of such agreement submitted for recording.
(e) Except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan endorsed in
blank.
(f) Originals of all intervening Assignments of Mortgage (if any)
evidencing a complete chain of assignment from the Responsible Party
(or MERS with respect to each MERS Designated Mortgage Loan) to the
last endorsee with evidence of recording thereon or a certified true
copy of such intervening Assignments of Mortgage submitted for
recording, or if any such intervening assignment has not been
returned from the applicable recording office or has been lost or if
such public recording office retains the original recorded
Assignments of Mortgage, the Responsible Party shall deliver or
cause to be delivered to the Trustee, a photocopy of such
intervening assignment, together with (i) in the case of a delay
caused by the public recording office, an Officer's Certificate of
the Responsible Party or a certificate from an escrow company, a
title company or a closing attorney stating that such intervening
Assignment of Mortgage has been dispatched to the appropriate public
recording office for recordation and that such original recorded
intervening Assignment of Mortgage or a copy of such intervening
Assignment of Mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded
intervening Assignment of Mortgage will be promptly delivered to the
Trustee upon receipt thereof by the Responsible Party; or (ii) in
the case of an intervening assignment where a public recording
office retains the original recorded intervening assignment or in
the case where an intervening assignment is lost after recordation
in a public recording office, a copy of such intervening assignment
certified by such public recording office to be a true and complete
copy of the original recorded intervening assignment.
(g) The original mortgagee title insurance policy or attorney's
opinion of title and abstract of title or, in the event such
original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true
and complete by the title insurance company.
(h) The original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
(i) Residential loan application.
(j) Mortgage Loan closing statement.
(k) Verification of employment and income, if applicable.
(l) Verification of acceptable evidence of source and amount of
down payment.
(m) Credit report on Mortgagor.
(n) Residential appraisal report.
(o) Photograph of the Mortgaged Property.
(p) Survey of the Mortgaged Property.
(q) Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
(r) All required disclosure statements.
(s) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(t) Sales contract, if applicable.
(u) Original powers of attorney, if applicable, with evidence of
recording thereon, if required.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K
Re: GSAMP Trust 2003-SEA (the "Trust") Mortgage Pass-Through
Certificates, Series 2003-SEA, issued pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 2003 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor, NC Capital Corporation, as responsible party, JPMorgan
Chase Bank, as trustee (the "Trustee") and Xxxxxx Loan Servicing LP,
as servicer (the "Servicer")
I, [identify the certifying individual], certify that:
1. I have reviewed this annual report on Form 10-K ("Annual Report"), and all
reports on Form 8-K containing distribution reports (collectively with
this Annual Report, the "Reports") filed in respect of periods included in
the year covered by this Annual Report, of the Trust;
2. Based on my knowledge, the information in the Reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by this Annual Report;
3. Based on my knowledge, the distribution or servicing information required
to be provided to the Trustee by the Servicer under the Pooling and
Servicing Agreement for inclusion in the Reports is included in the
Reports;
4. Based on my knowledge and upon the annual compliance statement included in
this Annual Report and required to be delivered to the Trustee in
accordance with the terms of the Pooling and Servicing Agreement, and
except as disclosed in the Reports, the Servicer has fulfilled its
obligations under the Pooling and Servicing Agreement; and
5. The Reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon the
report provided by an independent public accountant, after conducting a
review in compliance with the Uniform Single Attestation Program for
Mortgage Bankers or similar procedure, as set forth in the Pooling and
Servicing Agreement, that is included in the Reports.
In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee and the
Servicer.
Dated:________________________________
______________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF TRUSTEE CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAMP Trust 2003-SEA (the "Trust") Mortgage Pass-Through,
Certificates Series 2003-SEA, issued pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 2003 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), NC Capital Corporation, as responsible
party, JPMorgan Chase Bank, as trustee (the "Trustee") and Xxxxxx
Loan Servicing LP, as servicer (the "Servicer")
The Trustee certifies to the Depositor and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. The Trustee has reviewed the annual report on Form 10-K (the "Annual
Report") for the fiscal year [___], and all reports on Form 8-K containing
distribution reports filed in respect of periods included in the year
covered by the Annual Report (collectively with the Annual Report, the
"Reports"), of the Trust;
2. To the best of our knowledge and, to the extent information was provided
to the Trustee by the Servicer, based solely upon the information provided
to us by the Servicer, the information in the Reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of
the last day of the period covered by the Annual Report; and
3. To the best of our knowledge, the distribution or servicing information
required to be provided to the Trustee by the Servicer under the Pooling
and Servicing Agreement for inclusion in the Reports is included in the
Reports.
Date:
JPMORGAN CHASE BANK, not in its
individual capacity, but solely as
Trustee
By:______________________________________
Name:____________________________________
Title:___________________________________
EXHIBIT N
FORM OF SERVICER CERTIFICATION TO BE PROVIDED TO DEPOSITOR
Re: GSAMP Trust 2003-SEA (the "Trust") Mortgage Pass-Through
Certificates, Series 2003-SEA, issued pursuant to the Pooling and
Servicing Agreement, dated as of August 1, 2003 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), NC Capital Corporation, as responsible
party, JPMorgan Chase Bank, as trustee (the "Trustee") and Xxxxxx
Loan Servicing LP, as servicer (the "Servicer")
I, [identify the certifying individual], certify to the Depositor, the Trustee,
and their respective officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. 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
2. 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 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.
Dated:________________________________
______________________________________
[Signature]
[Title]
EXHIBIT O
ORIGINAL MORTGAGE LOAN SELLER AGREEMENTS
[See Attached]
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-------------------
XXXXXXX SACHS MORTGAGE COMPANY,
Purchaser
FINANCE AMERICA, LLC,
Seller
-------------------
Dated as of December 15, 2002
Conventional,
Adjustable and Fixed Rate Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. Definitions......................................................
SECTION 2. Agreement to Purchase............................................
SECTION 3. Mortgage Schedules...............................................
SECTION 4. Purchase Price...................................................
SECTION 5. Examination of Mortgage Files....................................
SECTION 6. Conveyance from Seller to Purchaser..............................
Subsection 6.01 Conveyance of Mortgage Loans...............................
Subsection 6.02 Books and Records..........................................
Subsection 6.03 Delivery of Mortgage Loan Documents........................
Subsection 6.04 Quality Control Procedures.................................
SECTION 7. Servicing of the Mortgage Loans..................................
SECTION 8. Representations, Warranties and Covenants of the Seller;
Remedies for Breach..............................................
Subsection 8.01 Representations and Warranties Regarding the
Seller.....................................................
Subsection 8.02 Representations and Warranties Regarding
Individual Mortgage Loans..................................
Subsection 8.03 Remedies for Breach of Representations and
Warranties.................................................
Subsection 8.04 Repurchase of Mortgage Loans With Early Payment
Defaults...................................................
Subsection 8.05 Repurchase of Certain Mortgage Loans That Prepay
in Full......................... ..........................
Subsection 8.06 Purchaser's Right to Review................................
SECTION 9. Closing..........................................................
SECTION 10. Closing Documents................................................
SECTION 11. Costs............................................................
SECTION 12. Cooperation of Seller with a Reconstitution......................
SECTION 13. The Seller.......................................................
Subsection 13.01 Additional Indemnification by the Seller...................
Subsection 13.02 Merger or Consolidation of the Seller......................
SECTION 14. Financial Statements.............................................
SECTION 15. Mandatory Delivery; Grant of Security Interest...................
SECTION 16. Notices..........................................................
SECTION 17. Severability Clause..............................................
SECTION 18. Counterparts.....................................................
SECTION 19. Governing Law....................................................
SECTION 20. Intention of the Parties.........................................
SECTION 21. Successors and Assigns; Assignment of Purchase Agreement.........
SECTION 22. Waivers..........................................................
SECTION 23. Exhibits.........................................................
SECTION 24. General Interpretive Principles..................................
SECTION 25. Reproduction of Documents........................................
SECTION 26. Further Agreements...............................................
SECTION 27. Recordation of Assignments of Mortgage...........................
SECTION 28. No Solicitation..................................................
SECTION 29. Confidentiality..................................................
SECTION 30. Waiver of Trial by Jury..........................................
SECTION 31. Submission To Jurisdiction; Waivers..............................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C MORTGAGE LOAN SCHEDULE FIELDS
EXHIBIT D MORTGAGE LOAN SCHEDULE
EXHIBIT E FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT F FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT G INTENTIONALLY OMITTED
EXHIBIT H FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT I UNDERWRITING GUIDELINES
EXHIBIT J INTENTIONALLY OMITTED
EXHIBIT K SERVICER ACKNOWLEDGMENT
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT, dated as of
December 15, 2002 ("Agreement"), by and between Xxxxxxx Xxxxx Mortgage Company,
a New York limited partnership, having an office at 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 (the "Purchaser") and Finance America, LLC, a Delaware limited
liability company, having an office at 00000 Xxxxx Xxxxxx, Xxxxxx, XX 00000 (the
"Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain first lien, adjustable
and fixed rate residential mortgage loans (the "Mortgage Loans") on a servicing
released basis as described herein, and which shall be delivered as a pool of
whole loans on the date as provided herein (the "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance, and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1 Definitions
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to
this Agreement the Mortgage Interest Rate of which is adjusted from time to time
in accordance with the terms of the related 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.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association, or any successor thereto.
Appraised Value: The value of the related Mortgaged Property based
upon the appraisal made for the originator at the time of origination of the
Mortgage Loan or the sales price of the Mortgaged Property at such time of
origination, whichever is less; provided, however, that in the case of a
refinanced Mortgage Loan, such value is based solely upon the appraisal made at
the time of origination of such refinanced Mortgage Loan.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Authorized Signatory: Any of (i) Managing Director, (ii) Manager,
Funded Asset Management or (iii) Supervisor, Collateral Management.
Business Day: Any day other than (i) a Saturday or Sunday or (ii) a
day on which banking and savings and loan institutions in (a) the State of New
York, (b) the state in which the Servicer's servicing operations are located or
(c) the State in which the Custodian's operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date: December 19, 2002 or such other date as is mutually
agreed upon by the parties.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a Fixed
Rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Credit File pursuant to this Agreement.
Custodial Account: The separate account or accounts created and
maintained pursuant to the Servicing Agreement.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: Deutsche Bank National Trust Company, or any successor
thereto under the Custodial Agreement.
Cut-off Date: December 15, 2002.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The 15th calendar day (or if such 15th day is
not a Business Day, the Business Day immediately preceding such 15th day) of
each month.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Eligible Account: Any of (i) an account maintained with a federal or
state chartered depository institution or trust company the short-term unsecured
debt obligations of which (or, in the case of a depository institution or trust
company that is a subsidiary of a holding company, the short-term unsecured debt
obligations of such holding company) are rated A-1 by Standard & Poor's or
Prime-1 by Xxxxx'x (or a comparable rating if another Rating Agency is specified
by the Purchaser by written notice to the Seller) at the time any amounts are
held on deposit therein, (ii) an account or accounts the deposits in which are
fully insured by the FDIC, or (iii) a trust account or accounts maintained with
a federal or state chartered depository institution or trust company acting in
its fiduciary capacity.
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 required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Mae: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
FDIC: Federal Deposit Insurance Corporation, or any successor
hereto.
Fitch: Fitch, Inc., or any successor thereto.
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on the Mortgage Loan Schedule.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R)System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related origination date (unless otherwise indicated),
to the Appraised Value of the Mortgaged Property.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Custodian as the Investor on the MERS(R)
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and its successors in
interest.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first 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 lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents required to be delivered to
the Custodian pursuant to Section 6.03 hereof with respect to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, a copy of
which will be attached hereto as Exhibit D setting forth the information
attached hereto as Exhibit C.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may increase or decrease on
an Interest Rate Adjustment Date above or below the Mortgage Interest Rate
previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller and the Purchaser.
Purchaser: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than, and not more than 1% greater than, the
Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term
to maturity not greater than, and not more than one year less than, that of the
Deleted Mortgage Loan (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Index and lien
priority); and (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 8 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer of a Securitization Transfer.
Reconstitution Agreement: As defined in Section 12.
Reconstitution Date: As defined in Section 12.
Repurchase Price: With respect to any Mortgage Loan, a price equal
the then outstanding principal balance of the Mortgage Loan to be repurchased,
plus (b) accrued interest thereon at the Mortgage Interest Rate from the date on
which interest had last been paid through the date of such repurchase, plus (c)
the amount of any outstanding advances owed to any servicer, and plus (d) all
costs and expenses reasonably incurred by the Purchaser or any servicer arising
out of or based upon such breach, including without limitation costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: Finance America, LLC, a Delaware limited liability company
and its successors in interest.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans but not including any
Prepayment Penalties; (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such servicing
rights and all rights of the Seller thereunder; (e) Escrow Payments or other
similar payments with respect to the Mortgage Loans and any amounts actually
collected by the Seller with respect thereto; (f) all accounts and other rights
to payment related to any of the property described in this paragraph; and (g)
any and all documents, files, records, servicing files, servicing documents,
servicing records, data tapes, computer records, or other information pertaining
to the Mortgage Loans or pertaining to the past, present or prospective
servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal received on or before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 8.03 which is entitled to the benefits of the indemnifications set
forth in such Section and Section 13.01.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans, and the Seller shall cease all servicing
responsibilities. Such date shall occur on the day indicated by the Purchaser to
the Seller in accordance with the Servicing Agreement.
Underwriting Guidelines: The underwriting guidelines of the Seller
as of November 15, 2002, a copy of which is attached hereto as Exhibit I.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be the
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the Closing Date deleted. The Mortgage Loan Schedule shall be
attached hereto as Exhibit D.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the principal balance, as of the Cut-off
Date, of such Mortgage Loan, after application of payments of principal received
on or before the Cut-off Date. The initial principal amount of the Mortgage
Loans shall be the aggregate principal balance of the Mortgage Loans, so
computed as of the Cut-off Date. If so provided in the Purchase Price and Terms
Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued but unpaid interest on the
principal balance of the Mortgage Loans as of the Cut-off Date at the weighted
average Mortgage Interest Rate, from the date through which interest on the
Mortgage Loan has been paid through (the "Paid-Through Date") through the day
prior to the Closing Date, inclusive. The Purchase Price plus accrued interest
as set forth in the preceding paragraph shall be paid to the Seller by wire
transfer of immediately available funds to an account designated by the Seller
in writing.
The Purchaser shall be entitled to (1) all principal received after
the Cut-off Date, (2) all other recoveries of late charges, assumption fees,
prepayment penalties or other charges collected after the Cut-off Date, and (3)
all payments of interest on the Mortgage Loans at the Mortgage Interest Rate.
The principal balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal received on or before the Cut-off
Date.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall either (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, including a copy of the Assignment of Mortgage (except with
respect to each MERS Designated Mortgage Loan ), pertaining to each Mortgage
Loan, or (b) make the related Mortgage File available to the Purchaser for
examination at such other location as shall otherwise be acceptable to the
Purchaser. Such examination of the Mortgage Files may be made by the Purchaser
or its designee at any reasonable time before or after the Closing Date. The
Purchaser may, at its option and without notice to the Seller, purchase some or
all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files or
the Credit Files shall not impair in any way the Purchaser's (or any of its
successor's) rights to demand repurchase, substitution or other remedy as
provided in this Agreement.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans and the
Mortgage Files and all rights and obligations arising under the documents
contained therein.
Subsection 6.02 Books and Records
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser, MERS or one or
more designees of the Purchaser, as the Purchaser shall select. Notwithstanding
the foregoing, each Mortgage and related Mortgage Note shall be possessed solely
by the Purchaser or the appropriate designee of the Purchaser, as the case may
be. All rights arising out of the Mortgage Loans including, but not limited to,
all funds received by the Seller after the Cut-off Date on or in connection with
a Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller in trust for the benefit
of the Purchaser or the appropriate designee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, , including but not limited to flood certifications, documentation
evidencing insurance coverage and periodic inspection reports. 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, microfiche or electronic imaging so long as the
Seller complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
ten (10) Business Days prior to the Closing Date the documents and instruments
in the Mortgage File for each Mortgage Loan.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the certification and trust receipt of the
Custodian in the form annexed to the Custodial Agreement. The Seller shall
comply with the terms of the Custodial Agreement and the Purchaser shall pay all
fees and expenses of the Custodian from and after the Closing Date.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event the original of any copy of any document submitted for
recordation to the appropriate public recording office, is not so delivered to
the Custodian or to such other Person as the Purchaser shall designate in
writing, within 180 days following the Closing Date, the related Mortgage Loan
shall, upon the request of the Purchaser, be repurchased by the Seller at the
price and in the manner specified in Subsection 8.03. The foregoing repurchase
obligation shall not apply in the event that the Seller cannot deliver such
original or copy of any document submitted for recordation to the appropriate
public recording office within the specified period due to a delay caused by the
recording office in the applicable jurisdiction, provided that (i) the Seller
shall deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of a servicing officer of the
Seller, confirming that such documents have been accepted for recording (upon
request of the Purchaser and delivery by the Purchaser to the Seller of a
schedule of the related Mortgage Loans, the Seller shall reissue and deliver to
the Purchaser or its designee said officer's certificate relating to the related
Mortgage Loans), and (ii) such document is delivered within twelve (12) months
of the Closing Date.
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.
Subsection 6.04 Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies in a manner consistent with accepted industry procedures, on a regular
basis, the existence and accuracy of the legal documents, credit documents,
property appraisals, and underwriting decisions. The program shall include
evaluating and monitoring the overall quality of the Seller's loan production
and the servicing activities of the Seller.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. The Seller shall take any actions necessary to cause
the current servicer to terminate servicing the Mortgage Loans on behalf of the
Seller. The Seller shall be responsible for all servicing fees with respect to
the Mortgage Loans accruing through the Closing Date. The Purchaser agrees to
cause or permit the Successor Servicer to continue to provide performance data
with respect to the Mortgage Loans on a monthly basis following the Closing
Date.
SECTION 8. Representations, Warranties and Covenants of the Seller; Remedies
for Breach.
Subsection 8.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation or formation and has all licenses
necessary to carry on its business as now being conducted and is licensed,
qualified and in good standing in each state wherein it owns or leases any
material properties or where a Mortgaged Property is located, if the laws of
such state require licensing or qualification in order to conduct business of
the type conducted by the Seller, and in any event the Seller is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan in accordance with the terms of this
Agreement; the Seller has the full corporate power, authority and legal right to
hold, transfer and convey the Mortgage Loans and to execute and deliver this
Agreement and to perform its obligations hereunder; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation of the
transactions contemplated hereby have been duly and validly authorized; this
Agreement and all agreements contemplated hereby have been duly executed and
delivered and constitute the valid, legal, binding and enforceable obligations
of the Seller, regardless of whether such enforcement is sought in a proceeding
in equity or at law; and all requisite corporate action has been taken by the
Seller to make this Agreement and all agreements contemplated hereby valid and
binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter, by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject, or result in the creation or
imposition of any lien, charge or encumbrance that would have an adverse effect
upon any of its properties pursuant to the terms of any mortgage, contract, deed
of trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (ii) which, either in any one instance or in
the aggregate, is likely to result in any material adverse change in the
business, operations, financial condition, properties or assets of the Seller,
or in any material impairment of the right or ability of the Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement, or (iv) relating to fraud, predatory lending, or
the Seller's servicing or closing practices;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body is required for the execution, delivery and performance by the
Seller of or compliance by the Seller with this Agreement or the Mortgage Loans,
the delivery of a portion of the Mortgage Files to the Custodian or the sale of
the Mortgage Loans or the consummation of the transactions contemplated by this
Agreement, or if required, such approval has been obtained prior to the Closing
Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 8.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. 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 this Agreement, shall be delivered to
the Custodian all in compliance with the specific requirements of this
Agreement. With respect to each Mortgage Loan, the Seller will be in possession
of a complete Mortgage File in compliance with Exhibit A hereto, except for such
documents as will be delivered to the Custodian;
(i) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, 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;
(j) Financial Statements. The Seller has delivered to the Purchaser
financial statements as requested by the Purchaser. All such financial
statements fairly present the pertinent results of operations and changes in
financial position for each of such periods and the financial position at the
end of each such period of the Seller and its subsidiaries and have been
prepared in accordance with generally accepted accounting principles
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 obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(k) Loan Experience. The Seller has delivered information as to its
loan experience as requested by the Purchaser, and all such information so
delivered shall be true and correct in all material respects;
(l) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(m) Sale Treatment. The Seller acknowledges that under generally
accepted accounting principles the transfer of the Mortgage Loans may be treated
as a sale on the books and records of the Seller and the Seller has determined
that the disposition of the Mortgage Loans pursuant to this Agreement will be
afforded sale treatment for tax and accounting purposes;
(n) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, and upon the sale of the Mortgage Loans to the
Purchaser, the Seller will retain the Mortgage Files with respect thereto in
trust only for the purpose of servicing and supervising the servicing of each
Mortgage Loan;
(o) Reasonable Purchase Price. The consideration received by the
Seller upon the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;
(p) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(q) Reports. On or prior to the date which is two Business Days
after the Closing Date, Seller has provided the Custodian and the Purchaser with
a MERS Report reflecting the Custodian as Investor with respect to each MERS
Designated Mortgage Loan and no Person as Interim Funder for each MERS
Designated Mortgage Loan;
(r) MERS Designations. With respect to each MERS Designated Mortgage
Loan, on the Closing Date, the Seller has initiated the process of designating
the Custodian as the Investor on the MERS(R) System. With respect to each MERS
Designated Mortgage Loan, no Person is listed as Interim Funder on the MERS(R)
System.
Subsection 8.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments not yet 30 days delinquent, have been made and credited. No
payment required under the Mortgage Loan is 30 days or more delinquent nor has
any payment under the Mortgage Loan been 30 days or more delinquent at any time
since the origination of the Mortgage Loan;
(c) No Outstanding Charges. Except for payment defaults of less than
30 days, there are no defaults in complying with the terms of the Mortgage, and
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 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 under the Mortgage Loan, except for interest accruing from the date of
the Mortgage Note or date of disbursement of the Mortgage Loan proceeds,
whichever is earlier, to the day which precedes by one month the Due Date of the
first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at, or
subsequent to, the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer acceptable under the Xxxxxx Xxx Guides against loss
by fire, hazards of extended coverage and such other hazards as are provided for
in the Xxxxxx Mae Guides or by Xxxxxxx Mac, in an amount which is at least 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 or the loss payee from becoming a
co-insurer. If required by the National Flood Insurance Act of 1968, as amended,
each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms to Xxxxxx Mae and Xxxxxxx Mac, with a
generally acceptable insurance carrier acceptable under the Xxxxxx Mae Guides in
an amount representing coverage not less than the lesser of (i) the aggregate
unpaid principal balance of the Mortgage Loan, (ii) maximum amount of insurance
which is available under the National Flood Insurance Act of 1968, as amended
(regardless of whether the area in which such Mortgaged Property is located is
participating in such program), and (iii) the full replacement value of the
improvements which are part of such Mortgaged Property. All individual insurance
policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid and
such policies may not be reduced, terminated or cancelled without 30 days' prior
written notice to the mortgagee. The Mortgage obligates the Mortgagor thereunder
to maintain the hazard insurance policy at the Mortgagor's cost and expense, and
on the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's or any servicer's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of such
policy, including, without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage Loan
Schedule except that with respect to real property located in jurisdictions in
which the use of leasehold estates for residential properties is a
widely-accepted practice, the Mortgaged Property may be a leasehold estate and
consists of a single parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, or an individual
residential condominium unit in a condominium project, or an individual unit in
a planned unit development or a manufactured home and that no residence or
dwelling is a mobile home, provided, however, that any condominium unit or
planned unit development shall conform with the Underwriting Guidelines. In the
case of any Mortgaged Properties that are manufactured homes (a "Manufactured
Home Mortgage Loans"), (i) such Manufactured Home Mortgage Loan conforms with
the applicable Xxxxxx Xxx or Xxxxxxx 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;
(j) Valid First Lien. Each Mortgage is a valid and subsisting first
lien of record on a single parcel of real estate constituting the Mortgaged
Property, including all buildings and improvements on the Mortgaged Property and
all installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time, with respect to the related
Mortgage Loan, which exceptions are generally acceptable to prudent mortgage
lending companies, and such other exceptions to which similar properties are
commonly subject and which do not individually, or in the aggregate, materially
and adversely affect the benefits of the security intended to be provided by
such Mortgage. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of
the date of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (a) specifically referred to or
otherwise considered in the appraisal made for the originator
of the Mortgage Loan or (b) which do not adversely affect the
Appraised Value of the Mortgaged Property set forth in such
appraisal; and
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the
use, enjoyment, value or marketability of the related
Mortgaged Property;
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and Seller has full right to sell and
assign the same to Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms, 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 a proceeding in equity or
a law). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. To the best of the
Seller's knowledge, the documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary to
make the information and statements therein not misleading. No fraud or, to the
best of the Seller's knowledge, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on the
part of any Person, including without limitation, the Mortgagor, any appraiser,
any builder or developer, or any other party involved in the origination or
servicing of the Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership; The Seller is the sole owner and holder of the
Mortgage Loan. The Mortgage Loan has neither been assigned nor pledged, and the
Seller has good and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan and the related Servicing Rights to the Purchaser free
and clear of any encumbrance, equity, lien, pledge, chare, claim or security
interest and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan and the related Servicing Rights to the Purchaser pursuant to the
terms of this Agreement.
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 95%;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac 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 original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (1), (2), (3) of paragraph (j) of
this Subsection 8.02, and in the case of Adjustable Rate Mortgage Loans, against
any loss by reason of the invalidity or unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment to the Mortgage
Interest Rate and Monthly Payment. Where required by state law or regulation,
the Mortgagor has been given the opportunity to choose the carrier of the
required mortgage title insurance. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. The title policy does not
contain any special exceptions (other than the standard exclusions) for zoning
and uses and has been marked to delete the standard survey exception or to
replace the standard survey exception with a specific survey reading. The
Seller, its successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and remains
in full force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development pursuant
to Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal or
state authority. No Mortgage Loan contains terms or provisions which would
result in negative amortization. Principal payments on the Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection with
the Mortgage Loan. The Mortgage Interest Rate as well as the Lifetime Rate Cap
and the Periodic Cap are as set forth on the Mortgage Loan Schedule. The
Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the description of
pool characteristics attached as Exhibit J hereto, the Mortgage Loan is payable
on the first day of each month. There are no Convertible Mortgage Loans which
contain a provision allowing the Mortgagor to convert the Mortgage Note from an
adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached hereto as Exhibit I). The Mortgage Note and Mortgage
are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and the Seller has not made
any representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy,
have been made or obtained from the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing (other than the status of the
Mortgage Loan as a subprime mortgage loan) that can reasonably be expected to
cause private institutional investors to regard the Mortgage Loan as an
unacceptable investment, cause the Mortgage Loan to become delinquent, or
adversely affect the value or marketability of the Mortgage Loan, or cause the
Mortgage Loans to prepay during any period materially faster or slower than the
mortgage loans originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under this Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project is acceptable to Seller and underwritten in accordance with the
Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. None of the Mortgage Loans are, by their terms,
assumable;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first 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 Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller or the current servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper and prudent in
the mortgage origination and servicing business. With respect to escrow deposits
and Escrow Payments, all such payments are in the possession of, or under the
control of, the current servicer 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 in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage. An
escrow of funds is not prohibited by applicable law and has been established in
an amount sufficient to pay for every item that remains unpaid and has been
assessed but is not yet due and payable. No escrow deposits or Escrow Payments
or other charges or payments due the Seller have been capitalized under the
Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been
made in strict compliance with state and federal law and the terms of the
related Mortgage and Mortgage Note on the related Interest Rate Adjustment Date.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) No Violation of Environmental Laws. To the best of the Seller's
knowledge, the Mortgaged Property is free from any and all toxic or hazardous
substances and there exists no violation of any local, state or federal
environmental law, rule or regulation. To the best of the Seller's knowledge,
(a) 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; (b) there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and (c) 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;
(ll) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(mm) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a qualified appraiser 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 the appraisal and appraiser both satisfy the requirements of Xxxxxx
Xxx or Xxxxxxx Mac and Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 and the regulations promulgated thereunder, all as
in effect on the date the Mortgage Loan was originated;
(nn) Disclosure Materials. The Mortgagor has received all disclosure
materials required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans;
(oo) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(pp) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(qq) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser 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 coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any applicable, special
hazard insurance policy, or bankruptcy bond (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, the related Mortgagor or any party involved
in the application for such coverage, including the appraisal, plans and
specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason of such
insurer's breach of such insurance policy or such insurer's financial inability
to pay;
(rr) Escrow Analysis. With respect to each Mortgage for which taxes
and insurance are being escrowed, the current servicer 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;
(ss) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
related servicer has reported the Mortgagor credit files monthly to each of the
three credit repositories in a timely manner;
(tt) Credit Information. 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, that 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;
(uu) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(vv) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise set
forth on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(ww) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," or "predatory" loans
under, any other applicable state, federal or local law. No Mortgage Loan
originated on or after October 1, 2002 is secured by property located in the
State of Georgia.
(xx) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(yy) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(zz) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(aaa) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae guidelines for
such trusts;
(bbb) Recordation. Each original Mortgage was recorded and, except
for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been 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;
(ccc) FICO Scores. Except as set forth in the Underwriting
Guidelines, each Mortgage Loan has a non-zero FICO score. No Mortgage Loan has a
Mortgagor with a FICO score of less than 500; and
(ddd) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws").
Subsection 8.03 Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 8.01 and 8.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, within seven (7) Business Days of Seller's receipt of
request from the Purchaser, repurchase such Mortgage Loan at the Repurchase
Price. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (vv), (ww), (xx) or (zz) of
Subsection 8.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price. In the event that a breach shall involve any representation or
warranty set forth in Subsection 8.01, and such breach cannot be cured within 60
days of the earlier of either discovery by or notice to the Seller of such
breach, all of the Mortgage Loans shall, at the Purchaser's option, be
repurchased by the Seller at the Repurchase Price. However, if the breach shall
involve a representation or warranty set forth in Subsection 8.02 (other than
the representations and warranties set forth in clauses (vv), (ww), (xx) or (zz)
of such Subsection) and the Seller discovers or receives notice of any such
breach within 120 days of the Closing Date, the Seller shall, at the Purchaser's
option and provided that the Seller has a Qualified Substitute Mortgage Loan,
rather than repurchase the Mortgage Loan as provided above, remove such Mortgage
Loan (a "Deleted Mortgage Loan") and substitute in its place a Qualified
Substitute Mortgage Loan or Loans, provided that any such substitution shall be
effected not later than 120 days after the Closing Date. If the Seller has no
Qualified Substitute Mortgage Loan, it shall repurchase the deficient Mortgage
Loan. Any repurchase of a Mortgage Loan or Loans pursuant to the foregoing
provisions of this Subsection 8.03 shall be accomplished by direct remittance of
the Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03, with the Mortgage Note endorsed as required by Subsection 6.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment on such
Qualified Substitute Mortgage Loan or Loans in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by the Seller. For
the month of substitution, distributions to the Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of substitution,
and the Seller shall thereafter be entitled to retain all amounts subsequently
received by the Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold it
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 8.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser as provided in this Subsection 8.03 constitute
the sole remedies of the Purchaser and the Successor Servicer respecting a
breach of the foregoing representations and warranties. For purposes of this
paragraph, "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 and "Successor Servicer" shall mean the Person then acting as the
Successor Servicer under this Agreement and any and all Persons who previously
were "Successor Servicers" under this Agreement.
Upon the request of the Purchaser, the Seller hereby agrees to
execute a recognition agreement in the form of Exhibit K hereto recognizing the
servicer designated by the Purchaser therein as the Successor Servicer.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 8.01 and
8.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
SUBSECTION 8.04 Repurchase of Mortgage Loans With Early Payment Defaults.
With respect to each Mortgage Loan, if the related Mortgagor fails
to make the first or second Monthly Payment due after the Closing Date before
the date which is 45 days after the related Due Date (the "Early Payment Default
Date"), the Seller, at the Purchaser's option exercised in its sole discretion,
shall, within seven (7) Business Days of Seller's receipt of notice of
Purchaser's request for repurchase, repurchase such Mortgage Loan from the
Purchaser at a price equal to the Repurchase Price. The Purchaser shall request
repurchase of any Mortgage Loans to be repurchased pursuant to this Subsection
8.04 on or before the date which is ninety (90) days after the related Early
Payment Default Date.
Subsection 8.05 Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
perform on-site due diligence at the premises of the Sellers with respect to the
Mortgage Loans. The Sellers will provide information and otherwise cooperate
with the due diligence reviews of the Purchaser, its co-investor's, its
financial partner's, and the rating agencies. The Sellers shall make the legal
files and the credit files, together with any payment histories, collection
histories, bankruptcy histories, broker's price opinions, to the extent
available, and any other information with respect to the Mortgage Loans
requested by the Purchaser, available at the Sellers' offices for review by
Purchaser or its agents during normal business hours before the Closing Date.
The Purchaser shall have the right to order additional broker's price opinions
in its sole discretion.
The Purchaser shall have the right to reject any Mortgage Loan (a)
for which the Mortgage File documentation is missing or defective in whole or in
part, (b) for which (i) the related broker's price opinion varies more than 10%
below the appraisal provided in connection with the origination of the related
Mortgage Loan or (ii) the loan to value ratio calculated based upon the broker's
price opinion is greater than 100%, (c) which does not conform to the Seller's
underwriting guidelines, (d) which does not conform to the terms of the Purchase
Price and Terms Letter or is in breach of the representations and warranties set
forth herein, or (e) which does not conform to the terms of any applicable
federal, state or local law or regulation. Purchaser shall use its best efforts
to notify the Seller of any such rejected Mortgage Loan immediately upon
discovery, but in any case shall use its best efforts to notify the Seller of
any such rejected Mortgage Loan no later than December 11, 2002.
The Seller shall provide the Purchaser with a pool of potential
substitute Mortgage Loan for the Purchaser's review on or prior to December 5,
2002. If any Mortgage Loan is rejected pursuant to this Section 8.05, the Seller
may, with the Purchaser's prior consent (which consent shall not be unreasonably
withheld), substitute another Mortgage Loan for such rejected Mortgage Loan
prior to the Closing Date. Any substitute Mortgage Loan shall be of the same,
type, quality and character as the rejected Mortgage Loan, and shall be in
material compliance with the representations and warranties contained in this
Agreement.
Notwithstanding the foregoing, the Purchaser may purchase all or
part of the Mortgage Loans without conducting any partial or complete due
diligence examination. The fact that the Purchaser has conducted or failed to
conduct any partial or complete examination of the files shall not affect the
Purchaser's (or any of its successor's) rights to demand repurchase or other
relief for breach of Mortgage Loan representations and warranties, missing or
defective documents or as otherwise provided in the Purchase Agreement.
SECTION 9. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 10 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required hereunder; and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 10. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Mortgage Loan Schedule, one copy to be attached hereto, and one copy
to be attached to the Custodian's counterpart of the Custodial Agreement;
3. a Custodian's Certification, as required under this Agreement;
4. an Officer's Certificate, in the form of Exhibit E hereto with respect to
the Seller, including all attachments thereto;
5. an Opinion of Counsel of the Seller (who may be an employee of the
Seller), in the form of Exhibit F hereto ("Opinion of Counsel of the
Seller");
6. a Security Release Certification, in the form of Exhibit G or H, as
applicable, hereto executed by any person, as requested by the Purchaser,
if any of the Mortgage Loans have at any time been subject to any security
interest, pledge or hypothecation for the benefit of such person;
7. a certificate or other evidence of merger or change of name, signed or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated by
the Seller while conducting business under a name other than its present
name, if applicable; and
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 11. Costs.
The Purchaser shall pay its due diligence fees and the legal fees
and expenses of its counsel. All servicing fees incurred prior to the Closing
Date, and all costs and expenses incurred in connection with the transfer of the
Mortgage Loans, fees to transfer files and prepare assignments/endorsements, all
initial recording fees, if any, for the assignments of mortgage for all Mortgage
Loans not recorded in the name of MERS, all fees, if any, for transferring
record ownership on the MERS system of Mortgage Loans recorded in the name of
MERS, custodial fees, including the costs associated with clearing exceptions,
(including costs to record intervening assignments and any existing assumption
and modification agreements), together with the fees and expenses of Seller's
counsel, shall be payable by the Seller.
SECTION 12. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the 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) one or more third party purchasers in one or more Whole Loan
Transfers; or
(ii) one or more trusts or other entities to be formed as part of
one or more Securitization Transfers.
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 any
assignment, assumption and recognition agreement or other agreements required by
the Purchaser (a "Reconstitution Agreement") assigning the representations and
warranties set forth in the Purchase Agreement to the related third party
purchaser or securitization trust. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants or purchasers in such Reconstitution: (i) any and all
information and appropriate verification of information which may be reasonably
available to the Seller or its affiliates, whether through letters of its
auditors and counsel or otherwise, as the Purchaser or any such other
participant shall request (provided, if the Seller is required to engage a third
party service provider to fulfill a Purchaser request pursuant to this
subsection, the Purchaser shall reimburse the Seller for any reasonable
out-of-pocket costs incurred by the Seller with respect to such service
provider); (ii) delivering an opinion of counsel (which may be from in-house
counsel) in form and substance satisfactory to the Seller and Purchaser if
requested by the Purchaser; and (iii) to execute, deliver and satisfy all
conditions set forth in any indemnity agreement required by the Purchaser or any
such participant (provided, that such agreement shall set forth an indemnity
substantially similar to that set forth in this paragraph). Moreover, the Seller
agrees to cooperate with all reasonable requests made by the Purchaser to effect
such Reconstitution Agreements. The Seller shall indemnify the Purchaser, each
Affiliate designated by the Purchaser, each Person who controls the Purchaser or
such Affiliate and the Successor Servicer and hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Seller regarding the Seller, the Mortgage Loans
or the Underwriting Guidelines which is set forth in any offering document
prepared in connection with any Reconstitution. For purposes of the previous
sentence, "Purchaser" shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were "Purchasers" under
this Agreement.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 13. The Seller.
Subsection 13.01 Additional Indemnification by the Seller.
The Seller shall indemnify the Purchaser and the Successor Servicer
and hold it harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees (including (without limitation) legal fees
incurred in connection with the enforcement of the Seller's indemnification
obligation under this Subsection 13.01) and related costs, judgments, and any
other costs, fees and expenses that the Purchaser or the Successor Servicer may
sustain in any way related to the failure of the Seller to perform its duties
under this Agreement or any breach of any of Seller's representations,
warranties or covenants set forth in this Agreement, and to perform its duties
in strict compliance with the terms of any Reconstitution Agreement entered into
pursuant to Section 12.
Subsection 13.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 14. Financial Statements.
Financial information regarding the Seller may be provided to
prospective purchasers for a period of two (2) years following the Closing Date;
provided, however, that such information will be limited to the audited
financial statements of the Seller for the two (2) years preceding such
disclosure; and such information may only be provided if the prospective
purchaser has executed a written confidentiality agreement, addressed to the
Seller, stating that all non-public information will be used only for the
purposes of evaluating the proposed investment and that the prospective
purchaser has required such information as integral to its decision-making
process. Copies of any such confidentiality agreements must be delivered by the
Purchaser to the Seller within five (5) Business Days of receipt thereof by the
Purchaser.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 15. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the Closing Date. The Seller hereby grants to the Purchaser a lien
on and a continuing security interest in each Mortgage Loan and each document
and instrument evidencing each such Mortgage Loan to secure the performance by
the Seller of its obligations under the Purchase Price and Terms Agreement, and
the Seller agrees that it shall hold such Mortgage Loans in custody for the
Purchaser subject to the Purchaser's (i) right to reject any Mortgage Loan (or
Qualified Substitute Mortgage Loan) under the terms of this Agreement and to
require another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be
substituted therefor, and (ii) obligation to pay the Purchase Price for the
Mortgage Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
SECTION 16. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
Finance America, LLC
00000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
With a copy to
Finance America, LLC
00000 Xxxxxxxx Xx., Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (972) 960-8330 ext. 28
Fax: (000) 000-0000
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
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 17. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 18. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be 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 the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes and accounting purposes as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans.
Moreover, the arrangement under which the Mortgage Loans are held shall be
consistent with classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans which
shall affect the Federal income tax consequences of owning the Mortgage Loans
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION 21. Successors and Assigns; Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, with written
notice to the Seller. There shall be no limitation on the number of assignments
or transfers allowable by the Purchaser with respect to the Mortgage Loans and
this Agreement. In the event the Purchaser assigns this Agreement, and the
assignee assumes any of the Purchaser's obligations hereunder, the Seller
acknowledges and agrees to look solely to such assignee, and not to the
Purchaser, for performance of the obligations so assumed. The Purchaser shall
deliver written notice to the Seller of any such assumption of the Purchaser's
obligations and upon delivery thereof the Purchaser shall be relieved from any
liability to the Seller with respect to such obligations. The Successor Servicer
shall be an intended 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.
SECTION 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 26. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 27. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, for Mortgage Loans which
are not registered with MERS, each of the Assignments of Mortgage is subject to
recordation in all appropriate public offices for real property records in all
the counties or their comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected at the Seller's expense in
the event recordation is either necessary under applicable law or requested by
the Purchaser at its sole option.
SECTION 28. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Seller's behalf (other than
contractors not acting at the direction of the Seller), to personally, by
telephone or mail, solicit the borrower or obligor under any Mortgage Loan for
any purpose whatsoever, including to refinance a Mortgage Loan, in whole or in
part, without the prior written consent of the Purchaser. It is understood and
agreed that all rights and benefits relating to the solicitation of any
Mortgagors and the attendant rights, title and interest in and to the list of
such Mortgagors and data relating to their Mortgages (including insurance
renewal dates) shall be transferred to the Purchaser pursuant hereto on the
Closing Date and the Seller shall take no action to undermine these rights and
benefits. Notwithstanding the foregoing, it is understood and agreed that
promotions undertaken by the Seller or any affiliate of the Seller which are
directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, internet (other
than e-mail) radio and television advertisements shall not constitute
solicitation under this Section 28.
SECTION 29. Confidentiality.
The Seller understands and agrees that this Agreement, any other
agreements executed in connection with the sale contemplated hereunder, any
agreements executed in connection with any Reconstitution, and any offering
circulars or other disclosure documents produced in connection with any
Reconstitution are confidential and proprietary to the Purchaser, and the Seller
agrees to hold such documents confidential and not to divulge such documents to
anyone except (a) to the extent required by law or judicial order or to enforce
its rights or remedies under this Agreement, (b) to the extent such information
enters into the public domain other than through the wrongful act of the Seller,
or (c) as is necessary in working with legal counsel, auditors, agents, taxing
authorities or other governmental agencies.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller and the Purchaser each hereby irrevocably and
unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE OTHER PARTY SHALL
HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT
THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
[SIGNATURES COMMENCE ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX SACHS MORTGAGE COMPANY,
a New York limited partnership
(Purchaser)
By:XXXXXXX XXXXX REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:_______________________________
Name:_____________________________
Title:____________________________
FINANCE AMERICA, LLC
(Seller)
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an certificate executed by an
Authorized Signatory of the Seller (or certified by the title company, escrow
agent, or closing attorney) stating that such Mortgage has been dispatched to
the appropriate public recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such public recording
office to be a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the Seller; or (ii)
in the case of a Mortgage where a public recording office retains the original
recorded Mortgage or in the case where a Mortgage is lost after recordation in a
public recording office, a copy of such Mortgage certified by such public
recording office to be a true and complete copy of the original recorded
Mortgage;
(c) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(d) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded only
if recordation is either necessary under applicable law or commonly required by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[Seller], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[Seller], formerly
known as [previous name]";
(e) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Seller (or MERS with
respect to each MERS Designated Mortgage Loan) to the Last Endorsee with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment;
(f) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a copy of the related policy
binder or commitment for title;
(g) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage;
(h) the original powers of attorney, if applicable, with evidence of
recording thereon, if required.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
(a) Any security agreement, chattel mortgage or equivalent executed
in connection with the Mortgage.
(b) The original hazard insurance policy and, if required by law,
flood insurance policy.
(c) Residential loan application.
(d) Mortgage Loan closing statement.
(e) All applicable verification of employment and income except for
Mortgage Loans originated under a Limited Documentation Program.
(f) Verification of acceptable evidence of source and amount of
downpayment.
(g) Credit report on the Mortgagor.
(h) Residential appraisal report.
(i) Photograph of the Mortgaged Property.
(j) Survey of the Mortgaged Property, if any.
(k) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(l) All required disclosure statements (other than the 3-day
packages, copies of which shall be retained by the Seller and made available
upon request).
(m) If available, termite report, structural engineer's report,
water potability and septic certification.
(n) Sales contract, if it is a purchase transaction.
(o) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
EXHIBIT C
MORTGAGE LOAN SCHEDULE FIELDS
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the city,
state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or investment property;
(5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing);
(6) the original months to maturity or the remaining months to
maturity from the 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;
(7) with respect to First Lien Loans, the LTV at the origination;
(8) the Mortgage Interest Rate as of the Cut-off Date;
(9) 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;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the Cut-off Date;
(12) the last payment date on which a payment was actually applied
to the outstanding principal balance;
(13) the original principal amount of the Mortgage Loan;
(14) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(15) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(17) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
(18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(20) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Floor under the terms of the Mortgage Note;
(21) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable Rate,
First Lien);
(22) a code indicating the purpose of the loan (i.e., purchase, rate
and term refinance, equity take-out refinance);
(23) a code indicating the documentation style (i.e. full,
alternative or reduced);
(24) the loan credit classification (as described in the
Underwriting Guidelines);
(25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(27) a description of the Prepayment Penalty, if applicable (which
may be delivered separately);
(28) the Mortgage Interest Rate as of origination;
(29) the credit risk score (FICO score) at origination;
(30) the date of origination;
(31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage;
(33) the Mortgage Interest Rate floor;
(34) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other);
(35) the Current CLTV;
(36) the Due Date for the first Monthly Payment;
(37) the original Monthly Payment due;
(38) with respect to the related Mortgagor, the debt-to-income
ratio;
(39) the Appraised Value of the Mortgaged Property;
(40) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property;
(41) the MERS Identification Number.
With respect to the Mortgage Loans in the aggregate:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(4) the weighted average maturity of the Mortgage Loans.
Exhibit D
EXHIBIT D
MORTGAGE LOAN SCHEDULE
Exhibit E
EXHIBIT E
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________ Finance America, LLC, a [state] [federally]
chartered institution organized under the laws of the [state of ____________]
[United States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver the Mortgage Loan Purchase
and Warranties Agreement, dated as of December 15, 2002, by and between
Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") and the Company (the
"Purchase Agreement"), and to endorse the Mortgage Notes and execute the
Assignments of Mortgages by original [or facsimile] signature], and such
resolutions are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the sale of the mortgage loans or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter or by-laws of the Company, the
terms of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is subject, or
any statute or order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the Company is
subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, is likely to
result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, or the mortgage loans or of any action taken or to
be taken in connection with the transactions contemplated hereby, or which
would be likely to impair materially the ability of the Company to perform
under the terms of the Purchase Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________ Finance America, LLC, hereby certify that ____________ is the
duly elected, qualified and acting [Vice] President of the Company and that the
signature appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit F
EXHIBIT F
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to Finance America, LLC (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"), dated as of
December 15, 2002 (the "Purchase Agreement") which sale is in the form of whole
loans. Capitalized terms not otherwise defined herein have the meanings set
forth in the Purchase Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Purchase Agreement and all requisite
power, authority and legal right to execute and deliver the
Purchase Agreement and to perform and observe the terms and
conditions of the Purchase Agreement.
3. The Purchase Agreement has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Purchase Agreement.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the with the Purchase Agreement and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under
the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations,
writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject
or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements to which it
is a party or the Mortgage Loans or of any action taken or to
be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement is sufficient to
fully transfer to the Purchaser all right, title and interest
of the Company thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed. The Assignments of Mortgage are in
recordable form, except for the insertion of the name of the
assignee, and upon the name of the assignee being inserted,
are acceptable for recording under the laws of the state where
each related Mortgaged Property is located. The endorsement of
the Mortgage Notes, the delivery to the Purchaser, or its
designee, of the Assignments of Mortgage, and the delivery of
the original endorsed Mortgage Notes to the Purchaser, or its
designee, are sufficient to permit the Purchaser to avail
itself of all protection available under applicable law
against the claims of any present or future creditors of the
Company, and are sufficient to prevent any other sale,
transfer, assignment, pledge or hypothecation of the Mortgages
and the Mortgage Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
Exhibit G
EXHIBIT G
INTENTIONALLY OMITTED
Exhibit H
EXHIBIT H
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to Xxxxxxx Sachs Mortgage Company from the Company named below pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement, dated as of
December 15, 2002, and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company named below or its designees, as of the
date and time of the sale of such Mortgage Loans to Xxxxxxx Xxxxx Mortgage
Company.
Name and Address of Financial Institution
--------------------------------
(name)
--------------------------------
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies Xxxxxxx Sachs Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loans to Xxxxxxx Xxxxx Mortgage Company the security interests in the
Mortgage Loans released by the above-named financial institution comprise all
security interests relating to or affecting any and all such Mortgage Loans. The
Company warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
-----------------------------
By:__________________________
Title:_________________________
Date:_________________________
Exhibit I
EXHIBIT I
UNDERWRITING GUIDELINES
Exhibit J
EXHIBIT J
[INTENTIONALLY OMITTED]
Exhibit K
EXHIBIT K
SERVICER ACKNOWLEDGMENT
As of [_________]
Finance America, LLC
00000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Letter Agreement in connection with the purchase by Xxxxxxx Sachs
Mortgage Company (the "Purchaser") and the sale by Finance America,
LLC (the "Company") of mortgage loans pursuant to that certain
Mortgage Loan Purchase and Warranties Agreement (the "Agreement"),
dated as of December 15, 2002, by and between the Company and the
Purchaser
Ladies and Gentlemen:
In connection with the above-referenced transaction, and in
consideration of the mutual agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Purchaser and the Company hereby agree as follows:
1. Unless otherwise specified in this letter agreement, all capitalized terms
herein shall have the meaning as provided in the Agreement.
2. The Purchaser hereby requests, and the Company hereby acknowledges, that
[SERVICER] shall be the "Successor Servicer" under the agreement.
3. This letter may be executed in any number of counterparts each of which
shall constitute one and the same instrument, and either party hereto may
execute this letter by signing any such counterpart.
[the remainder of this page intentionally left blank]
4. This letter shall be deemed in effect when a fully executed counterpart
thereof is received by the Company in the State of New York and shall be
deemed to have been made in the State of New York. This letter shall be
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 the laws of the State of New York except to
the extent preempted by Federal law.
Very truly yours,
XXXXXXX XXXXX MORTGAGE COMPANY
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Accepted and Agreed:
FINANCE AMERICA, LLC
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------
XXXXXXX SACHS MORTGAGE COMPANY
Purchaser
FIRST FRANKLIN FINANCIAL CORPORATION,
Seller
----------
Dated as of March 1, 2003
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. Definitions......................................................
SECTION 2. Agreement to Purchase............................................
SECTION 3. Mortgage Loan Schedules..........................................
SECTION 4. Purchase Price...................................................
SECTION 5. Examination of Mortgage Files....................................
SECTION 6. Conveyance from Seller to Purchaser..............................
Subsection 6.01 Conveyance of Mortgage Loans...............................
Subsection 6.02 Books and Records..........................................
Subsection 6.03 Delivery of Mortgage Files.................................
Subsection 6.04 Quality Control Procedures.................................
SECTION 7. Servicing of the Mortgage Loans..................................
SECTION 8. Representations, Warranties and Covenants of the Seller;
Remedies for Breach..............................................
Subsection 8.01 Representations and Warranties Regarding the
Seller.....................................................
Subsection 8.02 Representations and Warranties Regarding
Individual Mortgage Loans..................................
Subsection 8.03 Remedies for Breach of Representations and
Warranties.................................................
SECTION 9. Closing..........................................................
SECTION 10. Closing Documents................................................
SECTION 11. Costs............................................................
SECTION 12. Cooperation of Seller with a Reconstitution......................
SECTION 13. The Seller.......................................................
Subsection 13.01 Additional Indemnification by the Seller; Third
Party Claims...............................................
Subsection 13.02 Merger or Consolidation of the Seller......................
SECTION 14. Financial Statements.............................................
SECTION 15. Grant of Security Interest.......................................
SECTION 16. Notices..........................................................
SECTION 17. Severability Clause..............................................
SECTION 18. Counterparts.....................................................
SECTION 19. Governing Law....................................................
SECTION 20. Intention of the Parties.........................................
SECTION 21. Successors and Assigns; Assignment of Purchase Agreement.........
SECTION 22. Waivers..........................................................
SECTION 23. Exhibits.........................................................
SECTION 24. General Interpretive Principles..................................
SECTION 25. Reproduction of Documents........................................
SECTION 26. Further Agreements...............................................
SECTION 27. Recordation of Assignments of Mortgage...........................
SECTION 28. No Solicitation..................................................
SECTION 29. Waiver of Trial by Jury..........................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H RESERVED
EXHIBIT I REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT J SELLER'S UNDERWRITING GUIDELINES
EXHIBIT K MORTGAGE LOAN SCHEDULE
EXHIBIT L DELINQUENT MORTGAGE LOANS
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of March 1, 2003, by and between Xxxxxxx Xxxxx Mortgage
Company, a New York limited partnership, having an office at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and First Franklin Financial
Corporation, a Delaware corporation, having an office at 0000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate B/C, residential first and second lien mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered as a pool of whole loans on the date as provided herein (the
"Closing Date");
WHEREAS, each Mortgage Loan 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 Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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 Xxxxxx Xxx Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement
and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
set forth in an appraisal made in connection with the origination of the related
Mortgage Loan as the value of the related Mortgaged Property, and (ii) with
respect to any Second Lien Loan, the value, determined pursuant to the Seller's
Underwriting Guidelines, of the related Mortgaged Property as of the origination
of the Second Lien Loan.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
or executive order to be closed, or (iii) the State in which the Purchaser's or
the Seller's operations are located, are authorized or obligated by law to be
closed.
Closing Date: March 31, 2003, or such other date as is mutually
agreed upon by the parties.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
documents contained in the related Mortgage File.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Custodial Agreement: The agreement between the Purchaser and the
Custodian governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other documents constituting the Mortgage
Files.
Custodian: JPMorgan Chase Bank, or its successor in interest or
permitted assigns, or any successor to the Custodian under the Custodial
Agreement as therein provided.
Cut-off Date: March 1, 2003.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased by
the Seller in accordance with the terms of this Agreement.
Determination Date: The 20th day of each calendar month.
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
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 required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx
Mae Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
First Lien Loan: Any Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan that accrues interest on a
fixed Mortgage Interest Rate set forth in the related Mortgage Note.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on Exhibit I hereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Servicer: Altegra Credit Company or Option One Mortgage
Corporation.
Interim Servicing Agreement: Shall mean the servicing agreement
between the Seller and a Interim Servicer providing for the servicing and
administration of the related Mortgage Loans by such Interim Servicer for the
benefit of the Seller.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on 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 lien, in the case of a First Lien Loan, or a second lien, in the case of a
Second Lien Loan, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on the
Mortgage Note with respect to each Mortgage Loan.
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 Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, 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 Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit K, setting forth the following information with respect to
each Mortgage Loan: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the Mortgaged Property
is owner-occupied, a second home or investment property; (5) the number and type
of residential units constituting the Mortgaged Property (i.e. a single family
residence, a 2-4 family residence, a unit in a condominium project or a unit in
a planned unit development, manufactured housing); (6) the original months to
maturity or the remaining months to maturity from the 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; (7)
the Loan-to-Value Ratio at origination; (8) with respect to First Lien Loans,
the LTV and with respect to Second Lien Loans, the CLTV; (9) the Mortgage
Interest Rate as of the 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
amount of the Monthly Payment as of the Cut-off Date; (13) the last payment date
on which a Monthly Payment was actually applied to pay interest and the
outstanding principal balance; (14) the original principal amount of the
Mortgage Loan; (15) the principal balance of the Mortgage Loan as of the close
of business on the Cut-off Date, after deduction of payments of principal due
and collected on or before the Cut-off Date; (16) with respect to Adjustable
Rate Mortgage Loans, the Interest Rate Adjustment Date; (17) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (18) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (19) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (20) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Cap under the terms of the Mortgage Note; (21) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Floor under the
terms of the Mortgage Note; (22) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate, First Lien, Second Lien); (23) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e. full, alternative or
reduced); (25) the loan credit classification (as described in the Underwriting
Guidelines); (26) whether such Mortgage Loan provides for a Prepayment Penalty;
(27) the Prepayment Penalty period of such Mortgage Loan, if applicable; (28)
the Mortgage Interest Rate as of origination; (29) the credit risk score (FICO
score) at origination; (30) the date of origination; (31) the Mortgage Interest
Rate adjustment period; (32) the Mortgage Interest Rate floor; (33) the one year
payment history; (34) the Due Date for the first Monthly Payment; (35) the
original Monthly Payment due; (36) with respect to the related Mortgagor, the
debt-to-income ratio; (37) the Appraised Value of the Mortgaged Property; and
(38) the sales price of the Mortgaged Property if the Mortgage Loan was
originated in connection with the purchase of the Mortgaged Property. With
respect to the Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall
set forth the following information, as of the Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: The Mortgage Interest Rate with
respect to a Mortgage Loan minus the servicing fee rate payable to the
Servicer.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase on an Interest Rate
Adjustment Date above or below the Mortgage Interest Rate previously in effect.
The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate set
forth on the Mortgage Loan Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Loan Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
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 payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller and the Purchaser.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: 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 Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
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, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer, Agency Transfer or a
Securitization Transfer.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found, a price
equal to the sum of (a) the product of (i) the Purchase Price Percentage (as
defined in the Purchase Price and Terms Agreement) multiplied by (ii) the then
outstanding principal balance of the Mortgage Loan to be repurchased, plus (b)
accrued interest on any Mortgage Loans which was less than 60 days delinquent on
the Cut-off Date (not to exceed 59 days worth) at the Mortgage Interest Rate
from the date on which interest had last been paid through the date of such
repurchase, plus (c) the amount of any outstanding advances owed to any
servicer, plus (d) all actual and necessary costs and expenses incurred by the
Purchaser or any servicer arising out of or based upon such breach, including
without limitation actual and necessary costs and expenses incurred in the
enforcement of the Seller's repurchase obligation hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: First Franklin Financial Corporation, its successors in
interest and assigns.
Servicing Agreement: An agreement entered into by the Purchaser and
the Successor Servicer, providing for the Successor Servicer to service the
Mortgage Loans as specified by the Servicing Agreement after the termination of
any Interim Servicer by the Purchaser.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the documents in the Mortgage File which have been delivered to the
Custodian as provided in Section 6.03 hereof.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller or Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans but not
including any Prepayment Penalties; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Seller thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all accounts
and other rights to payment related to any of the property described in this
paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Successor Servicer: Any servicer appointed by the Purchaser
pursuant to the Servicing Agreement.
Transfer Date: Shall mean the earlier of (i) the date on which the
servicing and administration of the Mortgage Loans is transferred to the
Servicer and (ii) the date which is two months following the Closing Date.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit J.
VA: The Veterans Administration, an agency of the United States of
America, or any successor thereto.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Loan Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Loan Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be the
Preliminary Mortgage Loan Schedule with any Mortgage Loans which have not been
funded prior to the Closing Date deleted. The Mortgage Loan Schedule shall be
attached hereto as Exhibit K.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date as set forth on the Mortgage Loan Schedule. If so provided in the
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans which are less than 60 days delinquent as
of the Cut-off Date at the weighted average Net Mortgage Interest Rate of those
Mortgage Loans from the Cut-off Date through the day prior to the Closing Date,
inclusive; provided, however, the total amount of accrued interest shall not
exceed 59 days' interest. The Purchase Price plus accrued interest as set forth
in the preceding paragraph shall be paid to the Seller by wire transfer of
immediately available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
(minus that portion of any such payment which is allocable to the period prior
to the Cut-off Date). The outstanding principal balance of each Mortgage Loan as
of the Cut-off Date is determined after application of payments of principal due
on or before the Cut-off Date, to the extent actually collected, together with
any unscheduled principal prepayments collected prior to the Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to the Cut-off Date, but to be applied on a due date beyond the Cut-off Date
shall not be applied to the principal balance as of the Cut-off Date. Such
prepaid amounts shall be the property of the Purchaser. The Seller cause any
such prepaid amounts to be remitted to the Interim Servicer for subsequent
remittance to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least three (3) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan.
At least five (5) Business Days prior to the Closing Date, with
respect to each Mortgage Loan to be purchased, the Seller shall make the related
Servicing Files and Credit Files available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser.
Such examination of the Mortgage Files may be made by the Purchaser
or its designee at any reasonable time before or after the Closing Date. The
Purchaser may, at its option and without notice to the Seller, purchase some or
all of the Mortgage Loans without conducting any partial or complete
examination. The fact that the Purchaser or its designee has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files or
the Credit Files shall not affect the Purchaser's (or any of its successor's)
rights to demand repurchase, substitution or other relief as provided herein.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the Closing Date, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in the
manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans, the
Servicing Rights, the Mortgage Files, the Servicing and Credit Files, and all
rights and obligations arising under the documents contained therein.
Subsection 6.02. Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller after the Cut-off Date on or in connection with a
Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller or the Interim Servicer
in trust for the benefit of the Purchaser or the appropriate designee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to
the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03. Delivery of Mortgage Files.
The Seller shall, as directed by the Purchaser, deliver and release
to the Custodian no later than three (3) Business Days prior to the Closing Date
the Mortgage Files with respect to each Mortgage Loan to be purchased by the
Purchaser on the Closing Date.
The Custodian shall certify its receipt of all such Mortgage Files
for the Closing Date to the Purchaser, as evidenced by the Initial Certification
of the Custodian in the form annexed to the Custodial Agreement.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document listed on Exhibit A as constituting a part
of the Mortgage Files and required to be delivered to the Custodian pursuant to
this Section 6.03, including an original or copy of any document submitted for
recordation to the appropriate public recording office, is not so delivered to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, on the Closing Date (other than with respect to the Assignments of
Mortgage which shall be delivered to the Custodian in blank on or prior to the
Closing Date and recorded subsequently by the Purchaser or its designee or
document submitted for recordation to the appropriate public recording office),
and in the event that the Seller does not cure such failure within 90 days of
discovery or receipt of written notification of such failure from the Purchaser,
the related Mortgage Loan shall, upon the request of the Purchaser, be
repurchased by the Seller at the price and in the manner specified in Subsection
9.03. The foregoing repurchase obligation shall not apply in the event that the
Seller cannot deliver an original document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided that (i)
the Seller shall instead deliver a recording receipt of such recording office
or, if such recording receipt is not available, an officer's certificate of an
officer of the Seller, confirming that such documents have been accepted for
recording; provided that, upon request of the Purchaser and delivery by the
Purchaser to the Seller of a schedule of the Mortgage Loans, the Seller shall
reissue and deliver to the Purchaser or its designee said officer's certificate
and (ii) such document is delivered within twelve (12) months of the Closing
Date.
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.
Subsection 6.04. 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
shall include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller. The program is to ensure
that the Mortgage Loans are originated and serviced in accordance with Accepted
Servicing Standards and the Underwriting Guidelines; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. For the period beginning on the Closing Date and
ending on the Transfer Date, the Seller shall cause each Interim Servicer to
service and administer the Mortgage Loans for the benefit of the Purchaser in
accordance with the related Interim Servicing Agreement. The Seller shall take
any actions necessary to cause each Interim Servicer to terminate servicing the
Mortgage Loans on behalf of the Seller. In such connection the Seller shall
cause each Interim Servicer to enter into an Assignment, Assumption and
Recognition Agreement (each, an "Assignment Agreement") whereby the related
Interim Servicer will recognize the Purchaser as the owner of the Mortgage Loans
and shall service and administer such Mortgage Loans for the benefit of the
Purchaser on an interim servicing basis.
In addition, the Seller shall, or shall cause the Inteirm Servicer
to notify the related mortgagors of the transfer of servicing to the Servicer in
accordance with the requirements of the RESPA and the Xxxxxxxx Xxxxxxxx National
Affordable Housing Act of 1990. On or before the Transfer Date, the Seller shall
or shall cause the Interim Servicer to prepare, execute and deliver to the
Servicer any and all documents and other instruments, place in the Servicer's
possession all Mortgage Loan Documents necessary or appropriate to effect the
purposes of such notice of termination, including but not limited to the
transfer and endorsement or assignment of the related Mortgage Loans and related
documents, at the Seller's sole expense. The Servicer shall, and shall cause the
Interim Servicer to cooperate fully with the Purchaser and the Servicer in
effecting the termination of the Interim Servicer's responsibilities and rights
with respect to the servicing and administration of the Mortgage Loans.
On the Transfer Date, the Servicer shall, and shall cause the
Interim Servicer to comply with this Section 7 to effect a complete transfer of
the servicing and administration of the Mortgage Loans.
SECTION 8. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 8.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller, regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. 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 6.03 hereof, shall be
delivered to the Custodian. With respect to each Mortgage Loan, the Seller will
be in possession of a complete Mortgage File in compliance with Exhibit A
hereto, except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the Closing Date in
the form attached as Exhibit I hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this 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;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last one completed fiscal year and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
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 obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(l) Reserved.
(m) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(n) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(o) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(p) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(q) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note.
Subsection 8.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. Except with respect to a Mortgage Loan set
forth on Exhibit L hereto, all payments required to be made up to the Closing
Date for the Mortgage Loan under the terms of the Mortgage Note, other than
payments for which the related due date was not thirty or more days prior to the
Closing Date, have been made and credited;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and 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 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or Federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Mae Guides or by
Xxxxxxx Mac. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
is in effect which policy conforms to Xxxxxx Mae or Xxxxxxx Mac. All individual
insurance policies contain a standard mortgagee clause naming the Seller and its
successors and assigns as mortgagee, and all premiums thereon have been paid.
The Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor's cost and expense, and on the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor's cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. The Seller
has not engaged in, and has no knowledge of the Mortgagor's or any servicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of such policy, without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
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;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or an
individual condominium unit an individual unit in a planned unit development or
a de minimis planned unit development stories or less, provided, however, that
any mobile home (double wide only) or manufactured dwelling shall conform with
the applicable Xxxxxx Mae and Xxxxxxx Mac requirements regarding such dwellings
and that no Mortgage Loan is secured by a single parcel of real property with a
cooperative housing corporation or, except as described in Exhibit I, a mobile
home erected thereon or by a mixed-use property, a property in excess of 10
acres, or other unique property types. 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. With respect to any
Mortgage Loan secured by a Mortgaged Property improved by manufactured housing,
(i) the related manufactured housing unit is permanently affixed to the land,
and (ii) the related manufactured housing unit and the related land are subject
to a Mortgage properly filed in the appropriate public recording office and
naming the Seller as mortgagee.
(j) Valid First and Second Lien. Each Mortgage is a valid,
subsisting, enforceable and perfected first lien, with respect to First Lien
Loans, or second lien, with respect to Second Lien Loans, of record on a single
parcel of real estate constituting the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time, with respect to the foregoing. The lien of the Mortgage is
subject only to:
(1) with respect to Second Lien Loans, the lien of the first
mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Loan, in either
case, on the property described therein and Seller has full right to sell and
assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. [No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of the Seller, or, to the best of the Seller's
knowledge, any other Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination or servicing of the Mortgage Loan.] The Seller has reviewed all of
the documents constituting the Servicing File and has made such inquiries as it
deems necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage with the exception of
proceeds due under the Seller's dividend loan program;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the Closing Date, the Seller will have no right to modify
or alter the terms of the sale of the Mortgage Loan and the Seller will have no
obligation or right to repurchase the Mortgage Loan or substitute another
Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV. Except with respect to a Mortgage Loan set forth on
Exhibit L hereto, no Mortgage Loan has an LTV or a CLTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac 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 or second
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan, subject only to the exceptions contained in clauses (1) and (2) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The title policy does not contain any special exceptions (other than the
standard exclusions) for zoning and uses and has been marked to delete the
standard survey exceptions or to replace the standard survey exception with a
specific survey reading. The Seller, its successors and assigns, are the sole
insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Except with respect to a Mortgage Loan set forth on
Exhibit L hereto, other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration. With respect to each Second Lien Loan,
(i) the prior mortgage is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such prior mortgage or
the related mortgage note, (iii) no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, and either (A)
the prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Loan to receive notice of, and
affords such mortgagee an opportunity to cure any default by payment in full or
otherwise under the prior mortgage;
(r) No Mechanics' Liens. Except as insured against by the title
insurance policy, 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 or coordinate with, the lien of the
related Mortgage;
(s) Location of Improvements; No Encroachments. Except as insured
against by the title insurance policy, all improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay wholly within the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged Property. No
improvement located on or being part of the Mortgaged Property is in violation
of any applicable zoning law or regulation;
(t) Origination; Payment Terms. At the time the Mortgage Loan was
originated, the originator was a (i) 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 other similar institution which is supervised
and examined by a federal or state authority. The documents, instruments and
agreements submitted for loan underwriting were not falsified and contain no
untrue statement of material fact or omit to state a material fact required to
be stated therein or necessary to make the information and statements therein
not misleading. No Mortgage Loan contains terms or provisions which would result
in negative amortization. Principal payments on the Mortgage Loan commenced no
more than sixty days after funds were disbursed in connection with the Mortgage
Loan. The Mortgage Interest Rate as well as the Lifetime Rate Cap and the
Periodic Rate Cap, are as set forth on Exhibit I hereto. The Mortgage Note is
payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans, are
subject to change due to the adjustments to the Mortgage Interest Rate on each
Interest Rate Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity date, over
an original term of not more than thirty years from commencement of
amortization. Unless otherwise specified on the description of pool
characteristics attached as Exhibit I hereto, the Mortgage Loan is payable on
the first day of each month. There are no Convertible Mortgage Loans which
contain a provision allowing the Mortgagor to convert the Mortgage Note from an
adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Standards. Except with
respect to a Mortgage Loan set forth on Exhibit L hereto, the Mortgage Loan was
underwritten in accordance with the Underwriting Standards (a copy of which is
attached hereto as Exhibit J). The Mortgage Note and Mortgage are on forms
acceptable to Xxxxxxx Mac or Xxxxxx Mae and the Seller has not made any
representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Reserved;
(aa) Reserved;
(bb) Condominiums/Planned Unit Developments. Except with respect to
a Mortgage Loan set forth on Exhibit L hereto, if the Mortgaged Property is a
condominium unit or a planned unit development (other than a de minimis planned
unit development) such condominium or planned unit development project such
Mortgage Loan was originated in accordance with, and the Mortgaged Property
meets the guidelines set forth in the Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the documents contained in the Mortgage File provide that after the first
Interest Rate Adjustment Date of each such Adjustable Rate Mortgage Loan, such
Adjustable Rate Mortgage Loan may only be assumed if the party assuming such
Adjustable Rate Mortgage Loan meets certain credit requirements stated in the
documents contained in the related Mortgage File related Mortgage Loan
Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Interim Servicer, the Seller and any prior servicer with respect to the Mortgage
Loan have been in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and proper
and prudent in the mortgage origination and servicing business. With respect to
escrow deposits and Escrow Payments (other than with respect to Second Lien
Loans for which the mortgagee under the prior mortgage lien is collecting Escrow
Payments), all such payments are in the possession of, or under the control of,
the Interim Servicer or 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 in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage. An
escrow of funds is not prohibited by applicable law and has been established in
an amount sufficient to pay for every item that remains unpaid and has been
assessed but is not yet due and payable. No escrow deposits or Escrow Payments
or other charges or payments due the Seller have been capitalized under the
Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been
made in strict compliance with state and federal law and the terms of the
related Mortgage and Mortgage Note on the related Interest Rate Adjustment Date.
If, pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller
executed and delivered any and all notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Interest
Rate and the Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
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 Mortgaged Property; and 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;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified 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 the appraisal and appraiser both satisfy
the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated or pursuant to Seller's automated appraisal methodology as set forth
in the Seller's Underwriting Guidelines;
(oo) Disclosure Materials. The Seller has complied with, all
applicable law with respect to the making of the Mortgage Loans;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. Except with respect to a Mortgage
Loan set forth on Exhibit L hereto, the Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser 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 coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (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, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. 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;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Interim Servicer has reported the Mortgagor credit files to each of the three
credit repositories in a timely manner;
(uu) Credit Information. 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, that 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
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(ww) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and (i) with respect to Mortgage
Loans originated prior to October 1, 2002, no Mortgage Loan has a Prepayment
Penalty period in excess of five years, and (ii) with respect to Mortgage Loans
originated on or after October 1, 2002, no Mortgage Loan has a Prepayment
Penalty period in excess of five years;
(xx) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," "covered," or
"predatory" loans under, any other applicable state, federal or local law. No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan. None of the Mortgage Loans
that are secured by residential real property in North Carolina contains
prepayment penalties that (i) exceed, in the aggregate, more that two percent of
the amount prepaid or (ii) may be collected more than 30 months after loan
closing. Mortgage Loans secured by first lien residential real property in North
Carolina in amounts of $150,000 or less that contain permitted prepayment
penalties must qualify as "alternative mortgage transactions" within the meaning
of the Alternative Mortgage Transaction Parity Act;
(yy) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(zz) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae Guides for such
trusts;
(ccc) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) 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;
(ddd) FICO Scores. Except with respect to a Mortgage Loan set forth
on Exhibit L hereto, each Mortgagor has a non-zero FICO score. No Mortgage Loan
has a Mortgagor with a FICO score of less than 500;
(eee) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws; and
(fff) Georgia Loans. No Mortgage Loan originated on or after October
1, 2002, is secured by Mortgaged Property located in the State of Georgia.
(ggg) Credit Reporting. The Seller has furnished or has caused the
Interim Servicer to furnish, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information on its
borrower credit files with respect to each Mortgage Loan to Equifax, Experian
and Trans Union Credit Information Company, on a monthly basis.
Subsection 8.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 8.01 and 8.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File and notwithstanding the fact that any such representation or warranty was
made to the best of the Seller's knowledge. Upon discovery by either the Seller
or the Purchaser of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan (a "Deleted Mortgage Loan") at
the Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. Notwithstanding the above sentence, within 60 days of
the earlier of either discovery by, or notice to, the Seller of any breach of
the representations or warranties set forth in clauses (ww), (xx), (yy), (aaa)
or (fff) of Subsection 8.02, the Seller shall repurchase such Mortgage Loan at
the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Subsection 8.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price. Any repurchase of
a Mortgage Loan or Loans pursuant to the foregoing provisions of this Subsection
8.03 shall be accomplished by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase, the Purchaser and the Seller shall
arrange for the reassignment of the Deleted Mortgage Loan to the Seller and the
delivery to the Seller of any documents held by the Custodian relating to the
Deleted Mortgage Loan. The Seller shall, simultaneously with such reassignment,
give written notice to the Purchaser that such repurchase has taken place and
amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement.
In addition to such repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Seller representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 8.03 to cure or repurchase a defective Mortgage Loan and to indemnify
the Purchaser as provided in this Subsection 8.03 constitute the sole remedies
of the Purchaser respecting a breach of the foregoing representations and
warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 8.01 and
8.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
SECTION 9. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to Section 6.03 hereof; and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 10. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. an Assignment Agreement relating to each Interim Servicing
Agreement;
3. the Mortgage Loan Schedule, to be attached hereto;
4. a Custodian's Initial Certification issued to the Purchaser in
accordance with the Custodial Agreement;
5. an Officer's Certificate, in the form of Exhibit E hereto with
respect to the Seller, including all attachments thereto;
6. an Opinion of Counsel of the Seller (who may be an employee of
the Seller), in the form of Exhibit F hereto ("Opinion of
Counsel of the Seller");
7. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
8. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
9. the Underwriting Guidelines to be attached hereto as Exhibit
J; and
10. Exhibit I to this Agreement.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 11. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller. In addition, the
Seller shall pay any Outstanding Charges as described in Subsection 8.02(c)
hereof that become known to the Purchaser up to the sale date.
SECTION 12. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the 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) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(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.
With respect to any Reconstitution, the Seller agrees to cooperate
fully with the Purchaser, any prospective purchaser, any rating agency or any
party to any agreement executed in connection with such Reconstitution, with
respect to all reasonable requests and due diligence procedures and to use its
best efforts to facilitate such Reconstitution.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 13. The Seller.
Subsection 13.01. Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees (including (without limitation) legal fees incurred in connection
with the enforcement of the Seller's indemnification obligation under this
Subsection 14.01) and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Seller to perform its duties under this Agreement and the Interim Servicer to
service the Mortgage Loans in strict compliance with the terms of the Interim
Servicing Agreement or this Agreement. The Seller immediately shall notify the
Purchaser if a claim is made by a third party with respect to this Agreement or
the Mortgage Loans, assume (with the prior written 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 Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of any Interim Servicer to service and administer
the Mortgage Loans in strict compliance with the terms of the Interim Servicing
Agreement or this Agreement.
Subsection 13.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
SECTION 14. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed fiscal year respecting which such statements are available,
as well as a Consolidated Statement of Condition of the Seller at the end of the
last fiscal year covered by such Consolidated Statement of Operations. The
Seller shall also make available any comparable interim statements to the extent
any such statements have been prepared by the Seller (and are available upon
request to members or stockholders of the Seller or the public at large). The
Seller, if it has not already done so, agrees to furnish promptly to the
Purchaser copies of the statements specified above.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 15. Grant of Security Interest.
The Seller hereby grants to the Purchaser a lien on and a continuing
security interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligations under the Purchase Price and Terms Agreement, and the Seller
agrees that it shall hold such Mortgage Loans in custody for the Purchaser
subject to the Purchaser's (i) right to reject any Mortgage Loan under the terms
of this Agreement, and (ii) obligation to pay the Purchase Price for the
Mortgage Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
SECTION 16. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
First Franklin Financial Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxxx Xxxx
with a copy to:
First Franklin Financial Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxx
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 17. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 18. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be 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 the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 21. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. If the Purchaser assigns any or all of its rights as
Purchaser hereunder, the assignee of the Purchaser will become the "Purchaser"
hereunder to the extent of such assignment. Any such assignment by the Purchaser
shall be accompanied by the delivery and execution of an Assignment and
Assumption Agreement (the "Assignment and Assumption Agreement") in the form
attached hereto as Exhibit G.
SECTION 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 26. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 27. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 28. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without the prior written consent of the Purchaser.
It is understood and agreed that all rights and benefits relating to the
solicitation of any Mortgagors and the attendant rights, title and interest in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the Closing Date and the Seller shall take no action to
undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that promotions undertaken by the Seller or any affiliate
of the Seller which are directed to the general public at large, including,
without limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 28.
SECTION 29. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX SACHS MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By:XXXXXXX XXXXX REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:________________________________
Name:______________________________
Title:_____________________________
FIRST FRANKLIN FINANCIAL CORPORATION
(Seller)
By:________________________________
Name:______________________________
Title:_____________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. If the
Mortgage Loan was acquired by the Seller in a merger, the endorsement must be by
"[Last Endorsee], successor by merger to [name of predecessor]". If the Mortgage
Loan was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "First Franklin Financial Corporation, successor by merger to
[name of predecessor]". If the Mortgage Loan was acquired or originated by the
Seller while doing business under another name, the Assignment of Mortgage must
be by "First Franklin Financial Corporation, formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment of
mortgage where a public recording office retains the original recorded
intervening assignment of mortgage or in the case where an intervening
assignment of mortgage is lost after recordation in a public recording office, a
copy of such intervening assignment of mortgage certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver the Mortgage Loan Purchase
and Warranties Agreement, dated as of March 1, 2003, by and between
__________________ (the "Purchaser") and the Company (the "Purchase
Agreement") and to endorse the Mortgage Notes and execute the Assignments
of Mortgages by original or facsimile signature, and such resolutions are
in effect on the date hereof and have been in effect without amendment,
waiver, rescission or modification since ________________________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the sale of the mortgage loans or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement conflicts or will
conflict with or results or will result in a breach of or constitutes or
will constitute a default under the charter or by-laws of the Company, the
terms of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is subject, or
any statute or order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the Company is
subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement, or the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would be
likely to impair materially the ability of the Company to perform under
the terms of the Purchase Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Vice] President
[Seal]
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
_____________________________ _______________________ ________________________
_____________________________ _______________________ ________________________
_____________________________ _______________________ ________________________
_____________________________ _______________________ ________________________
_____________________________ _______________________ ________________________
_____________________________ _______________________ ________________________
_____________________________ _______________________ ________________________
Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Sachs Mortgage Company (the "Purchaser"), dated as of
_________ __, 200_ (the "Purchase Agreement") which sale is in the form of whole
loans, delivered to the Purchaser or its designee as described in the Purchase
Agreement. Capitalized terms not otherwise defined herein have the meanings set
forth in the Purchase Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Purchase Agreement and all requisite
power, authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of the Purchase Agreement.
3. The Purchase Agreement has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Purchase Agreement.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of, or
compliance by the Company with, the Purchase Agreement and the
sale of the Mortgage Loans by the Company or the consummation
of the transactions contemplated by the Purchase Agreement or
(ii) any required consent, approval, authorization or order
has been obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Purchase Agreement
conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under
the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations,
writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject
or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Purchase Agreement to
which it is a party or the Mortgage Loans or of any action
taken or to be taken in connection with the transactions
contemplated thereby, or which would be likely to impair
materially the ability of the Company to perform under the
terms of the Purchase Agreement.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement is sufficient to
fully transfer to the Purchaser all right, title and interest
of the Company thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in Exhibit A attached to
the Purchase Agreement. The Assignments of Mortgage are in
recordable form, except for the insertion of the name of the
assignee, and upon the name of the assignee being inserted,
are acceptable for recording under the laws of the state where
each related Mortgaged Property is located. The endorsement of
the Mortgage Notes, the delivery to the Purchaser, or its
designee, of the Assignments of Mortgage, and the delivery of
the original endorsed Mortgage Notes to the Purchaser, or its
designee, are sufficient to permit the Purchaser to avail
itself of all protection available under applicable law
against the claims of any present or future creditors of the
Company, and are sufficient to prevent any other sale,
transfer, assignment, pledge or hypothecation of the Mortgages
and the Mortgage Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[____________
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to
_____________________________ under a Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, certain mortgage loans originated by the
Association. The Company warrants that the mortgage loans to be sold to
___________________________________ are in addition to and beyond any collateral
required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
___________________________________ shall not be used as additional or
substitute collateral for advances made by the Association.
___________________________________ understands that the balance of the
Company's mortgage loan portfolio may be used as collateral or additional
collateral for advances made by the Association, and confirms that it has no
interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to
_____________________________________.
Very truly yours,
________________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
Acknowledged and approved:
_________________________________
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to ___________________________________ from the Company named below pursuant
to that certain Mortgage Loan Purchase and Warranties Agreement, dated as of
______ __, 200_, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to the Company named below or its designees, as of the date and
time of the sale of such Mortgage Loans to
_________________________________________.
Name and Address of Financial Institution
_________________________________
(name)
_________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to
___________________________________ that, as of the date and time of the sale of
the above-mentioned ___________________________________ the security interests
in the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
________________________________
By:_____________________________
Title:__________________________
Date:___________________________
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ______________, between
__________________________________, a ___________________ corporation
("Assignor") and ________________________________, a __________________
corporation ("Assignee"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers, conveys and assigns to
Assignee, as Purchaser, all of the right, title and interest of Assignor with
respect to the mortgage loans listed on Exhibit A attached hereto (the "Mortgage
Loans"), and with respect to such Mortgage Loans, in, to and under that certain
Mortgage Loan Purchase and Warranties Agreement (Conventional Fixed and
Adjustable Rate, B/C Residential Mortgage Loans) (the "Purchase Agreement"),
between Assignor and First Franklin Financial Corporation (the "Seller").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. 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;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Purchase Agreement. 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, the Purchase Agreement; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans, or any interest in
the Mortgage Loans or otherwise approached or negotiated with respect to the
Mortgage Loans, or any interest in the Mortgage with any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act of 1933, as amended (the "1933 Act") or
which would render the disposition of the Mortgage Loans a violation of Section
5 of the 1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller pursuant to the Purchase Agreement 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 and Assumption Agreement, and
to consummate the transactions set forth herein. The execution, delivery and
performance of the Assignee of this Assignment and Assumption 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
and Assumption 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;
c. To the best of Assignee's knowledge, 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 and Assumption Agreement, or the consummation by it of the
transactions contemplated hereby;
d. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Purchase Agreement, the Mortgage
Loans, and from and after the date hereof, the Assignee assumes for the benefit
of each of the Seller, the Assignor and the Custodian all of the Assignor's
obligations as Purchaser thereunder; including, without limitation, the
limitation on assignment set forth in Section 22 of the Purchase Agreement;
e. The Assignee understands that the Mortgage Loans have not
been registered under the 1933 Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the
Mortgage Loans is in excess of $250,000 and will be paid by cash remittance of
the full purchase price within 60 days of the sale;
g. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person;
h. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
i. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Seller;
j. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans or any interest in
the Mortgage Loans, or otherwise approached or negotiated with respect to the
Mortgage Loans or any interest in the Mortgage Loans with any person in any
manner which would constitute a distribution of the Mortgage Loans under the
1933 Act or which would render the disposition of the Mortgage Loans a violation
of Section 5 of the 1933 Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.
4. (a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans, this Assignment and Assumption
Agreement and the Purchase Agreement is:
The Assignee's wire instructions for purposes of all remittances and
payments related to the Mortgage Loans are:
(b). The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment and Assumption
Agreement is:
5. This Assignment and Assumption Agreement shall be 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, except to the extent preempted by federal law.
6. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. This Assignment and
Assumption Agreement may not be assigned by the Assignee without the express
written consent of the Assignor. Any entity into which the Assignor or Assignee
may be merged or consolidated shall, without the requirement for any further
writing, be deemed the Assignor or Assignee, respectively, hereunder.
7. No term or provision of this Assignment and Assumption 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.
8. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Agreements by the
Assignor.
9. Notwithstanding the assignment of the Agreements by either the
Assignor or Assignee, this Assignment and Assumption Agreement shall not be
deemed assigned by the Assignor or the Assignee unless assigned by separate
written instrument.
10. For the purpose for facilitating the execution of this
Assignment and Assumption Agreement as herein provided and for other purposes,
this Assignment and Assumption 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.
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
______________________________ __________________________________
Assignor Assignee
By:___________________________ By:_______________________________
Its:__________________________ Its:______________________________
Taxpayer Taxpayer
Identification No.____________ Identification No.________________
Exhibit H
EXHIBIT H
RESERVED
Exhibit I
EXHIBIT I
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
THE MORTGAGE LOANS
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
Exhibit J
EXHIBIT J
SELLER'S UNDERWRITING GUIDELINES
Exhibit K
EXHIBIT K
MORTGAGE LOAN SCHEDULE
Exhibit L
EXHIBIT L
DELINQUENT MORTGAGE LOANS
LOAN SALE AGREEMENT
BY AND BETWEEN
HOUSEHOLD FINANCIAL SERVICES, INC.
AND
XXXXXXX XXXXX MORTGAGE COMPANY
DATED AS OF SEPTEMBER 6th, 2002
TABLE OF CONTENTS
SECTION 1 DEFINITIONS
Section 1.1 Defined Terms................................................
Section 1.2 Other Terms..................................................
SECTION 2 PURCHASE OF MORTGAGE LOANS AND TRANSFER OF SERVICING
Section 2.1 Agreement to Sell and Purchase Mortgage Loans................
Section 2.2 Delivery of Mortgage Loan Documents..........................
Section 2.3 Purchase of Mortgage Loans and Servicing Rights..............
Section 2.4 Purchase Price and Xxxxxxx Money Deposit.....................
Section 2.5 Intentionally Omitted........................................
Section 2.6 Transfer of Servicing........................................
SECTION 3 SETTLEMENT
Section 3.1 Place and Time of Settlement.................................
Section 3.2 Seller's Deliveries at Settlement............................
Section 3.3 Buyer's Deliveries at Settlement.............................
SECTION 4 REPRESENTATIONS AND WARRANTIES
Section 4.1 General Representations and Warranties of Seller.............
Section 4.2 Representations and Warranties of Seller Regarding the
Mortgage Loans...........................................................
Section 4.3 Representations and Warranties of Seller Regarding the
Mortgage Loans...........................................................
Section 4.4 General Representations and Warranties of Buyer..............
SECTION 5 PRE-SETTLEMENT COVENANTS
Section 5.1 Continued Servicing..........................................
Section 5.2 Preparation of Assignments...................................
Section 5.3 IRS Reporting................................................
Section 5.4 Compliance with Law..........................................
Section 5.5 No Sale of Assets............................................
Section 5.6 Private Mortgage Insurance...................................
SECTION 6 POST-SETTLEMENT COVENANTS
Section 6.1 Notice of Servicing Transfer.................................
Section 6.2 IRS Examination..............................................
Section 6.3 Tax on Sale..................................................
Section 6.4 Books and Records............................................
Section 6.5 Post-Sale Mortgage Loan Payments.............................
Section 6.6 Transfer of Servicing Rights and PMI.........................
Section 6.7 Post-Sale Mortgage Loan Payments.............................
Section 6.8 Transfer of Servicing Rights.................................
SECTION 7 CONDITIONS TO SETTLEMENT
Section 7.1 Conditions to Buyer's Obligations............................
Section 7.2 Intentionally Omitted........................................
Section 7.3 Conditions to Seller's Obligations...........................
SECTION 8 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES; .............
SECTION 9 POST-SETTLEMENT AND ADJUSTMENTS
Section 9.1 Repurchase Obligations.......................................
Section 9.2 Repurchase Price.............................................
Section 9.3 First Payment Default........................................
Section 9.4 Premium Rebate...............................................
Section 9.5 Post-Settlement Adjustment to Purchase Price.................
SECTION 10 INDEMNIFICATION
Section 10.1 Seller's Indemnification....................................
Section 10.2 Buyer's Indemnification.....................................
Section 10.3 Indemnification Procedures..................................
SECTION 11 INTENTIONALLY OMITTED
SECTION 12 MISCELLANEOUS
Section 12.1 No Waiver..................................................
Section 12.2 Amendment and Modification.................................
Section 12.3 Notices....................................................
Section 12.4 Expenses...................................................
Section 12.5 No Remedy Exclusive........................................
Section 12.6 Independent Contractor.....................................
Section 12.7 Severability...............................................
Section 12.8 Entire Agreement...........................................
Section 12.9 Assignment.................................................
Section 12.10 Captions...................................................
Section 12.11 Governing Law..............................................
Section 12.12 Counterparts...............................................
Section 12.13 Drafting...................................................
Section 12.14 Choice of Forum............................................
Section 12.15 WAIVER OF JURY TRIAL......................................
EXHIBITS
Exhibit A - Mortgage Loan Schedule
Exhibit B-1 - Contents of Legal File
Exhibit B-2 - Contents of Credit File
Exhibit C - Collateral Custodian Report
Exhibit D - Corporate Advances
Exhibit E - Form of Escrow Agreement
Exhibit F - Form of Power of Attorney
LOAN SALE AGREEMENT
THIS LOAN SALE AGREEMENT ("Agreement") is made and entered into this
6th day of September, 2002 by and between HOUSEHOLD FINANCIAL SERVICES, INC., a
Delaware corporation ("HFS", with its Affiliates, or "Seller"), and XXXXXXX
XXXXX MORTGAGE COMPANY a New York limited partnership ("Buyer").
WHEREAS, Seller is engaged in the business of originating,
acquiring, selling and servicing fixed and adjustable rate mortgage loans, and
Buyer has proposed to purchase certain mortgage loans and Buyer has reviewed and
accepted all such mortgage loans; and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to
purchase from Seller those mortgage loans contemplated herein.
NOW THEREFORE, in consideration of the promises and other covenants
contained herein, Buyer and Seller agree as follows:
SECTION 1 DEFINITIONS
Section 1.1 Defined Terms
"Accepted Servicing Practices" means with respect to any Mortgage
Loan, those mortgage servicing practices (i) which conform with applicable law,
and (ii) of prudent mortgage lending institutions that service mortgage loans of
the same type as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
"Affiliate" means, with respect to any Person, any other Person
that, directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with the Person specified.
"Appraised Value" means the amount set forth in an appraisal in
connection with the origination of each Mortgage Loan as the value of the
Mortgaged Property.
"Assignment of Mortgage" means an assignment of the Mortgage, notice
of transfer or equivalent instrument, in recordable form, which when recorded is
sufficient under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect of record the sale of the Mortgage to the Buyer,
or its assignee.
"Bid Percentage" means a percentage of the aggregate Mortgage
Balances of all Mortgage Loans listed on the Mortgage Loan Schedule attached
hereto as Exhibit A, such percentage determined by Buyer in its sole discretion,
on which the Purchase Price is based.
"Business Day" means any day other than (a) Saturday or Sunday, or
(b) a day on which financial institutions in the States of New York, Delaware or
Illinois are authorized or required by law, executive order or governmental
decree to be closed.
"Buyer" means XXXXXXX XXXXX MORTGAGE COMPANY, a New York limited
partnership, and its Affiliates.
"Collateral Custodian Report" means the Collateral Custodian Report
detailing the contents of the Legal File of each Mortgage Loan attached hereto
as Exhibit C, such report being provided on an inclusion and an exception basis.
"Corporate Advances" shall mean amounts actually paid (or in the
case of interest advances, deferred) by Seller with respect to a Mortgage Loan
for purposes of servicing, collecting and/or preserving the Mortgage and the
Mortgage Balance, including, but not limited to, any and all expenses paid to
third parties, interest advances, taxes, insurance, maintenance fees and any
other similar fees and expenses, all as more scheduled on Exhibit D.
"Credit File" means with respect to any Mortgage Loan and to the
extent in Seller's possession, the file containing those items listed in Exhibit
B-2 annexed hereto and any or all of the following: all loan applications,
correspondence, general credit information, file maintenance information,
payment histories, credit information files, records, executed notes (which may
be copies), documents, disclosures, receipts, drafts, instruments, notices,
acknowledgments, mortgages (which may be copies), deeds of trust (which may be
copies), security deeds (which may be copies), title insurance policies, title
opinions, property appraisals, property surveys, insurance policies, property
insurance policies, mortgage insurance policies, flood insurance policies,
guarantees, and any like and other information relating to the Mortgage Loans
that is maintained in individual loan files or on a loan-by-loan basis,
including such data stored on microfilm, microfiche, magnetic tape, computer
disc, or in any other form.
"Cut-off Date" means August 31, 2002.
"Due Date" means the day of the month on which each Monthly Payment
is due on a Mortgage Loan, exclusive of any days of grace.
"Due Diligence Period" means the period ending when Buyer executes
this Agreement and submits same to Seller for counter-execution. During such
period Seller shall have made the Mortgage Files pertaining to the Mortgage
Loans available to Buyer at its offices.
"Xxxxxxx Money Deposit" A non-refundable xxxxxxx money deposit in an
amount of $13,509,996.16, tendered upon Buyers' delivery of this Agreement to
Seller and held by Household Bank, FSB. subject to the form of escrow agreement
attached hereto as Exhibit E. Seller's counter-execution of this Agreement will
make the Xxxxxxx Money Deposit non-refundable to Buyer.
"ECOA" means the Equal Credit Opportunity Act, 15 U.S.C.ss.1601.
"Escrow Payment" means 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 required to be escrowed by
the Obligor with the mortgagee pursuant to the Mortgage or any other document.
"Xxxxxx Mae" means Xxxxxx Xxx.
"First Mortgage Loan" means those Mortgage Loans secured by a valid
Mortgage that represents a first lien.
"Xxxxxxx Mac" means Xxxxxxx Mac.
"GNMA" means the Governmental National Mortgage Association.
"Interest Rate Adjustment Date" means the date on which the Mortgage
Interest Rate is adjusted with respect to each adjustable rate Mortgage Loan.
The next Interest Rate Adjustment Date is the date set forth on the Mortgage
Loan Schedule.
"IRS" means the Internal Revenue Service.
"Legal Fees" means with respect to any indemnified party, any and
all fees, costs, and expenses of any kind reasonably incurred by such party or
its counsel investigating, preparing for, defending against, or providing
evidence, producing documents, or taking other action with respect to, any
threatened or asserted claim.
"Legal File" means with respect to any Mortgage Loan, the file
containing those items listed in Exhibit B-1 annexed hereto.
"Loan-To-Value Ratio" or "LTV" means with respect to any Mortgage
Loan, the ratio of the outstanding principal amount of the Mortgage Loan and, if
the Mortgage Loan purchased hereunder is secured by a second lien, any lien on
the Mortgaged Property senior to the lien of the Mortgage Loan as of the
origination date to the lesser of (a) the Appraised Value of the Mortgaged
Property and (b) if the Mortgage Loan was made to finance the acquisition of the
related Mortgaged Property, the purchase price of the Mortgaged Property,
expressed as a percentage.
"Monthly Payment" means the scheduled monthly payment of principal
and interest on a Mortgage Loan.
"Mortgage" means, with respect to a Mortgage Loan, any mortgage,
deed of trust, security deed, or other similar instrument creating a lien on
residential real property to secure repayment of such Mortgage Loan, or a true
and correct copy thereof.
"Mortgage File" means collectively, the Credit File and the Legal
File for any Mortgage Loan.
"Mortgage Interest Rate" means the annual rate of interest borne on
a Note, net of any primary mortgage guaranty insurance premium.
"Mortgage Loan" means an individual Mortgage Loan which is sold
pursuant to this Agreement and is shown on the Mortgage Loan Schedule.
"Mortgage Loan Schedule" means the list of Mortgage Loans sold
hereunder attached hereto as Exhibit A, which data is as of the Cut-off Date.
"Mortgaged Property" means, with respect to each Mortgage, the
property subject to such Mortgage.
"Note" means, with respect to a Mortgage Loan, the original
promissory note executed by the respective Obligor to evidence such Obligor's
indebtedness under such Mortgage Loan.
"Obligor" means, with respect to an Mortgage Loan, any person
obligated for payment of such Mortgage Loan or who has transferred or assigned
any property interest to Seller to secure payment of such Mortgage Loan.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, limited liability partnership,
limited liability company, unincorporated organization or government or any
agency or political subdivision thereof.
"Premium" means the product of the Principal Balance times the Bid
Percentage, minus the Principal Balance.
"Prepayment Penalty" means with respect to each Mortgage Loan, the
fee, if any, payable upon the prepayment, in whole or in part, of such Mortgage
Loan, as set forth in the related Mortgage Note.
"Principal Balance" means, with respect to a Mortgage Loan, the
unpaid principal balance of such Mortgage Loan as of the close of business on
the Cut-off Date, as shown on the books and records of Seller; provided that the
Principal Balance shall not include any accrued but unpaid fees or charges.
"Purchase Price" means, the price paid by Buyer for the Mortgage
Loans acquired pursuant to this Agreement, which shall be calculated according
to the following formula:
(a) the product of
(i) the Bid Percentage of [ ]% and
(ii) the aggregate of all Principal Balances of all Mortgage
Loans listed on the Mortgage Loan Schedule
(b) plus
(i) the aggregate of all accrued but unpaid interest on each
of the Mortgage Loans at the applicable per annum
interest rate, as set forth on the Mortgage Loan
Schedule from the paid-to-date of interest up to, but
not including the Settlement Date.
(c) plus
(ii) A percentage of the aggregate amount of Corporate
Advances as detailed on Exhibit D. The percentage
applied to such aggregate Corporate Advances shall be
48.849%.
"Remittance Date" means ten (10) Business Days following the Service
Transfer Date.
"RESPA" means the Real Estate Settlement Procedures Act, 12
U.S.C.ss.2601 et seq.
"Second Lien Mortgage Loan" means those Mortgage Loans secured by a
Mortgage which is a second priority lien Mortgage.
"Seller" means Household Financial Services, Inc., a Delaware
corporation, and its Affiliates.
"Service Transfer Date" means September 27, 2002, time being of the
essence with respect to this date and on which date Seller transfers to Buyer or
Buyer's designee all servicing responsibilities relating to all the Mortgage
Loans sold on the Settlement Date pursuant to Section 2.6.
"Servicing Fee" means, with respect to each Mortgage Loan serviced
by the Seller prior to the Transfer Date, a fee payable monthly equal to
one-twelfth of the product of (a) the Servicing Fee Rate and (b) the outstanding
principal balance of such Mortgage Loan. Such fee shall be payable monthly and
shall be pro-rated for any portion of a month during which the Mortgage Loan is
serviced by the Seller hereunder.
"Servicing Fee Rate" means 0.50% per annum.
"Settlement" means the satisfaction of the conditions set forth in
Section 7, and the sale and purchase of, the Mortgage Loans listed on the
Mortgage Loan Schedule.
"Settlement Date" means September 10, 2002, time being of the
essence with respect to this date.
"Successor Servicer" means a servicer designated by the Buyer which
is entitled to the benefits of the indemnifications set forth in Section 10.01.
"TILA" means the Truth in Lending Act, 15 U.S.C.ss.1600 et seq.
Section 1.2 Other Terms
(a) Accounting and financial terms used herein and not otherwise
defined in this Agreement shall be construed in accordance with generally
accepted accounting definitions and principles as consistently applied.
(b) Words used in this Agreement in the singular, where the context
so permits, shall be deemed to include the plural and vice versa.
SECTION 2 PURCHASE OF MORTGAGE LOANS AND TRANSFER OF SERVICING
Section 2.1 Agreement to Sell and Purchase Mortgage Loans. Seller agrees
to sell and Buyer agrees to buy Seller's right, title and interest in and to the
Mortgage Loans, as outlined on the Mortgage Loan Schedule attached hereto and as
delivered from Seller to Buyer one (1) Business Day prior to the Settlement
Date, subject to the terms, provisions, conditions, limitations, waivers and
disclaimers set forth in this Agreement. The Mortgage Loans shall be transferred
pursuant to this Agreement. The purchase shall be without recourse against the
Seller, except as specifically set forth in this Agreement.
Section 2.2 Delivery of Mortgage Loan Documents.
On or prior to the Settlement Date, the Seller shall deliver and release
to the Buyer, at the Seller's place of business, the Legal File for each
Mortgage Loan. Such documents shall be organized by loan number and boxed for
pickup by the Buyer or its designee. However, to the extent Seller continues to
service the Mortgage Loans after Settlement, the Credit File shall be retained
by Seller and delivered to Buyer no later than three (3) days following the
Service Transfer Date.
The Seller shall deliver to the Buyer, on or prior to the Settlement Date,
the Collateral Custodian Report. In the event that: (a) Seller notifies Buyer on
or prior to the Settlement Date that certain documents which should be contained
in the Legal Files required by Buyer are not listed on the Collateral Custodian
Report or (b) within 90 days of the Settlement Date, Buyer determines that any
such items are missing and so notifies Seller within such 90 day period, and the
Seller does not cure such documents missing from the Legal File within 90 days
(or a greater period as authorized by Buyer) of receipt of written notification
of such missing Legal File document from the Buyer, the related Mortgage Loan
shall, upon the written request of the Buyer, be repurchased by the Seller at
the price and in the manner specified in Subsection 9.1(a). Failure by Buyer to
notify Seller within such 90 day time period following the Settlement Date of
any missing Legal File document shall constitute Buyer's waiver of the rights
relating to the applicable Mortgage Loan under this Section 2.2. The foregoing
repurchase obligation shall not apply in the event that the Seller cannot
deliver such original or copy of any document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction, provided that (i)
the Seller shall deliver a recording receipt of such recording office or, if
such recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such documents have been delivered for
recording (upon request of the Buyer and delivery by the Buyer to the Seller of
a schedule of the related Mortgage Loans, the Seller shall reissue and deliver
to the Buyer or its designee said officer's certificate relating to the related
Mortgage Loans), and (ii) such document is delivered within twelve (12) months
of the Settlement Date.
The Buyer shall pay all initial recording fees, if any, for the
Assignments of Mortgage from Seller and any other fees or costs in transferring
all original documents to the custodian or, upon written request of the Buyer,
to the Buyer or the Buyer's designee. The Buyer or the Buyer's designee shall be
responsible for recording the Assignments of Mortgage and for the costs
associated therewith pursuant to the preceding sentence.
Section 2.3 Purchase of Mortgage Loans and Servicing Rights.
(a) Subject to the terms and conditions set forth in this Agreement,
(i) Seller shall sell, transfer, assign, and convey to Buyer,
without recourse, but subject to the terms of this Agreement, and
Buyer shall purchase and take on the Settlement Date, all of
Seller's right, title, and interest in and to the Mortgage Loans
listed in the Mortgage Loan Schedule;
(ii) Seller shall sell, transfer, assign, and convey to Buyer,
and Buyer shall purchase and take on the Settlement Date, all of
Seller's right, title, and interest in and to all escrow deposits
held in connection with the Mortgage Loans listed in the Mortgage
Loan Schedule; and
(iii) Seller shall also irrevocably assign to Buyer, and Buyer
shall take on the Settlement Date, Seller's right to service each
Mortgage Loan sold pursuant to this Agreement and to collect all
servicing and ancillary servicing fees in connection with such
Mortgage Loan.
(b) The Buyer shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected
after the Cut-off Date, and (3) all payments of interest on the Mortgage
Loans after the paid-to date.
Section 2.4 Purchase Price and Xxxxxxx Money Deposit. The Purchase Price
for the Loans purchased at Settlement shall be based on the Bid Percentage set
forth in the definition of the term Purchase Price and shall be calculated
according to the formula set forth in the definition of the term Purchase Price.
The Purchase Price shall be adjusted by any Xxxxxxx Money Deposit held by
Seller.
The Xxxxxxx Money Deposit will be held pursuant to the Escrow Agreement.
If, however, this sale shall fail to close for any reason except Seller's
default, the Xxxxxxx Money Deposit shall be forfeited to the Seller as
liquidated damages resulting from the Buyer's inducement to the Seller to
execute this Agreement and remove the Mortgage Loans from Seller's continued
exposure of the Mortgage Loans to the marketplace and Seller's possible sale of
the Mortgage Loans to other potential purchasers. Such amount is agreed upon
between Seller and Buyer as liquidated damages, due to the difficulty and
inconvenience of ascertaining and measuring actual damages and the uncertainty
thereof and not as a penalty.
Section 2.5 Intentionally Omitted.
Section 2.6 Transfer of Servicing. As of the Settlement Date, Seller shall
transfer to Buyer any and all rights to service the Mortgage Loans sold on the
Settlement Date, including but not limited to Seller's right to receive all
payments and receivables with respect to the Mortgage Loans, ownership of Escrow
Payments, and all servicing rights as owner and holder of the Mortgage Loans. In
connection therewith, upon execution of this Agreement, Seller shall execute
each Limited Power of Attorney attached as Exhibit G hereto and shall deliver
them to Buyer. Notwithstanding the foregoing, Seller shall continue to service
the Mortgage Loans for Buyer following the Settlement Date and until the
corresponding Service Transfer Date as set forth in Section 5.1, and Buyer shall
assume responsibility for servicing the Mortgage Loans on and after such Service
Transfer Date. The Service Transfer Date shall be on or before September 27,
2002, time being of the essence with respect to this date. Seller shall ensure
that all escrow balances are received by Buyer within five (5) Business Days of
the Service Transfer Date. If such balances are not received by Buyer within
five (5) Business Days, Seller shall remit to Buyer in immediately available
funds, an amount equal to said balances.
SECTION 3 SETTLEMENT
Section 3.1 Place and Time of Settlement. Settlement shall take place via
facsimile and wire transfer with original documents delivered via overnight
courier, to arrive on or before the Settlement Date. The Settlement Date shall
be on or before September 10, 2002, time being of the essence with respect to
this date.
Section 3.2 Seller's Deliveries at Settlement. Upon Settlement, Seller
shall deliver the following to Buyer:
(a) No later than three (3) Business Days prior to the Settlement
Date, the form of notice of servicing transfer, to be sent by Seller on the
Settlement Date after receipt of the Purchase Prices, pursuant to Section 6.1
for each Mortgage Loan as required by RESPA;
(b) all other documents, instruments and writings required to be
delivered by Seller prior to or at such Settlement pursuant to Section 7.1 of
this Agreement.
Section 3.3 Buyer's Deliveries at Settlement. At Settlement, Buyer shall
deliver the Purchase Price for the Mortgage Loans sold at such Settlement by
wire transfer of immediately available funds in U.S. dollars to the account
designated by Seller.
SECTION 4 REPRESENTATIONS AND WARRANTIES
Section 4.1 General Representations and Warranties of Seller. As of the
Settlement Date, Seller represents and warrants as follows:
(a) Organization. Seller is a corporation, duly organized, validly
existing, and in good standing under the laws of the State of Illinois, and is
qualified and authorized to transact business in, and is in good standing under
the laws of, each jurisdiction in which any Mortgaged Property is located or is
otherwise exempt under applicable law from such qualification. Seller has the
requisite corporate power and authority to own and operate its properties, to
carry on its business as it is now being conducted, and to consummate the
transactions contemplated by this Agreement.
(b) Authorization. Seller has the requisite corporate power and
authority to execute and deliver this Agreement and the Limited Powers of
Attorney attached as Exhibit G, and to consummate the transactions contemplated
hereby. The execution, delivery, and performance of this Agreement and the
Limited Power of Attorney attached as Exhibit G, and the consummation of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action, and no other corporate proceedings on the part of
Seller are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement and the Limited Powers of
Attorney attached as Exhibit G, have been duly executed and delivered by Seller
and constitute legal, valid, and binding obligations of Seller, enforceable
against Seller in accordance with their terms, except that such enforcement may
be affected by bankruptcy, by other insolvency laws, or by general principles of
equity.
(c) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of Seller, and the transfer, assignment and conveyance of the Notes and
the Mortgages by Seller pursuant to this Agreement are not subject to the bulk
transfer or any similar statutory provisions in effect in any applicable
jurisdiction.
(d) No Conflict or Violation. The execution and delivery of this
Agreement by Seller does not, and the performance of this Agreement by Seller
will not, (i) result in a violation of or conflict with any provisions of the
charter or by-laws or equivalent governing instruments of Seller, (ii) violate
any law, rule, regulation, code, ordinance, judgment, injunction, order, writ,
decree, or ruling applicable to Seller, or (iii) conflict with or violate any
agreement, permit, concession, grant, franchise, license, or other governmental
authorization or approval necessary for sale of the Mortgage Loans by Seller.
(e) Litigation. There is no action, suit, proceeding or governmental
investigation or inquiry is pending or, to the knowledge of Seller, threatened
against Seller, before any court, administrative agency or other tribunal
asserting the invalidity of this Agreement, seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or which, if adversely
determined, either in any one instance or in the aggregate, would (a) have a
material adverse effect on the business, operations, financial condition,
properties or assets of the Seller, or (b) cause any material impairment of the
right or ability of the Seller to carry on its business substantially as now
conducted, or (c) cause any material liability on the part of the Seller, or (d)
draw into question the validity of this Agreement or of any action taken or to
be taken in connection with the obligations of the Seller contemplated herein,
or (e) be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) Intentionally Omitted.
(g) Accuracy of Statements. Neither this Agreement, nor any
statement, report, or other document furnished or to be furnished pursuant to
this Agreement, or in connection with the transaction contemplated hereby,
contains any untrue statement of fact, or omits to state a fact, necessary to
make the statements contained therein not misleading.
(h) Intentionally Omitted.
(i) Ability to Perform: Solvency. Seller does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. Seller is solvent and sale of the Mortgage
Loans will not cause Seller to become insolvent.
(j) No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the execution,
delivery and performance by Seller of or compliance by Seller with this
Agreement or the Mortgage Loans, or the sale of the Mortgage Loans to the Buyer
or the consummation of the transactions contemplated by this Agreement, or if
required, such approval has been obtained prior to the Settlement Date.
(k) Commissions to Third Parties. Seller has not dealt with any
broker or agent or other Person who might be entitled to a fee, commission or
compensation in connection with this transaction other than the Buyer except
Seller's financial advisor, who shall be compensated solely by Seller, pursuant
to a separate agreement.
Section 4.2 Representations and Warranties of Seller Regarding
the Mortgage Loans. With respect to each Mortgage Loan, Seller represents and
warrants to Buyer that, as of the Settlement Date:
(a) Predatory Lending Regulations. Except as set forth on the
Mortgage Loan Schedule, none of the Mortgage Loans are (i) covered by the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") or (ii) in violation of
"high cost", "threshold," or "predatory" laws under any other applicable state
or local law. The related Mortgagor has been provided with all disclosure
materials required by HOEPA and the regulation promulgated thereto with respect
to any Mortgage Loans subject to HOEPA and Seller has complied with the
requirements of any state or local law with respect to `high cost', `threshold'
or `predatory' loans.
(b) Collateral Custodian Report. The Collateral Custodian Report
attached hereto as Exhibit C is true and complete in all material respects.
(c) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loans
have been complied with by Seller and, if Seller is not the originator of any
such Mortgage Loan, by the originator of such Mortgage Loan, and the
consummation of the transactions contemplated hereby will not involve the
violation of any such laws or regulations.
(d) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Obligor credit files to each of the three credit
repositories in a timely manner;
(f) Title to Mortgage Loans. Seller has good title to and is the
sole owner of record and holder of the Mortgage Loan and the indebtedness
evidenced by each Note. Unless as otherwise disclosed in the Mortgage Files,
Seller is the original mortgagee or assignee of the Mortgage. Seller has good,
indefeasible and marketable title to the Mortgage Loan, and has full right to
transfer and sell the Mortgage Loan to the Buyer free and clear of any
encumbrance, equity interest, participation interest, lien, pledge, charge,
claim or security interest, and has full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell and
assign each Mortgage Loan pursuant to this Agreement and immediately upon the
sale of each Mortgage Loan, Buyer will own such Mortgage Loan free and clear of
any encumbrance, equity interest, participation interest, lien, pledge, charge,
claim or security interest.
(g) No Litigation Pending. There is no action, suit, proceeding,
governmental investigation or inquiry is pending or, to the knowledge of Seller,
threatened before any court, administrative agency or other tribunal with
respect to the compliance of any Mortgage Loan with HOEPA or any federal, state
or local law with respect to `high cost', `threshold' or `predatory' loans.
Section 4.3 Representations and Warranties of Seller Regarding the
Mortgage Loans. With respect to each Mortgage Loan, Seller represents and
warrants to Buyer that, as of the Settlement Date (unless an alternate date is
indicated in the applicable representation and warranty):
(a) Accuracy of the Mortgage Loan Schedule. The Mortgage Loan is as
described in the Mortgage Loan Schedule attached hereto and the information
contained in the Mortgage Loan Schedule is true and correct in all material
respects as of the Cut-off Date.
(b) Origination. Each Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Section
203 and 211 of the National Housing Act or a savings and loan association, a
savings bank, a commercial bank, a credit union, an insurance company, or
similar institution which is supervised and examined by a Federal or State
authority.
(c) Genuineness of Signatures. The Note and the Mortgage are
genuine, and each is the legal, valid and binding obligation of the Obligor
thereunder, enforceable in accordance with its terms, subject to bankruptcy laws
and other similar laws of general application affecting rights of creditors and
subject to the rules of equity, including those respecting the availability of
specific performance. All parties to the Note and the Mortgage and any other
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Note and the Mortgage and any other related agreement,
and the Note and the Mortgage and any other related agreement have been duly and
properly executed by such parties.
(d) Payments. Unless otherwise specified by Seller in the Mortgage
Loan Schedule delivered to Buyer pursuant to Section 2.1 hereof or otherwise
specifically agreed to by Buyer at the Settlement Date, as of the Cut-off Date,
each Mortgage Loan has a next due date of 8/1/02 or greater.
(e) No Delinquent Charges. There are no delinquent taxes,
governmental assessments, insurance premiums, water, sewer and municipal
charges, leasehold payments or ground rents.
(f) Original Terms Unmodified. The terms of the Note and Mortgage
have not been impaired, waived, altered or modified in any respect, except by
(a) a written instrument which has been recorded, if necessary to protect the
interests of the Buyer or (b) by interest extension if indicated as such in the
Mortgage Loan Schedule. No Obligor has been released, in whole or in part,
except in connection with an assumption agreement approved by the title insurer,
to the extent required by the policy, and which assumption agreement is part of
the Legal File.
(g) Absence of Defenses. The Mortgage and the Note are not subject
to any right of rescission, set-off, counterclaim, or defense (including the
defense of deceptive trade practice or usury), based on the invalidity or
unenforceability of the Note and/or Mortgage or on any conduct of Seller or any
of its officers, employees, representatives, or Affiliates in originating or
servicing the Mortgage Loan prior to the Settlement Date. Nor will the operation
of any of the terms of the Mortgage or Note, or the exercise of any right
thereunder, render the Mortgage or Note unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim, or defense (including
the defense of usury) based on any such invalidity, unenforceability or conduct.
No right of rescission, set-off, counterclaim, or defense with respect thereto
has been asserted to Seller or, to Seller's knowledge, has been asserted to any
other person.
(h) Hazard and Flood Insurance. Pursuant to the terms of the
Mortgage, all improvements upon the Mortgaged Property are insured by an insurer
acceptable to Xxxxxx Xxx against loss by fire and such other risks (excluding
mud slides and earthquakes) as are usually insured against in the broad form of
extended coverage hazard insurance from time to time available, including flood
hazards if upon origination of the Mortgage Loan, the Mortgaged Property was in
an area identified in the Federal Register by the Federal Emergency Management
Agency as having special flood hazards (and if flood insurance was required by
federal regulation and such flood insurance has been made available). All such
insurance policies (collectively, the "hazard insurance policy") meet the
requirements of the current guidelines of the Federal Insurance Administration,
conform to the requirements of the Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide, and are a standard policy of insurance for the locale where
the Mortgaged Property is located. The amount of the insurance is at least in
the amount of the full insurable value of the Mortgaged Property on a
replacement cost basis or the unpaid balance of the Mortgage Loan, whichever is
less. The hazard insurance policy names (and will name) the Obligor as the
insured and contains a standard mortgagee loss payable clause in favor of Seller
(or Seller's servicer) and its successors and assigns. The Mortgage obligates
the Obligor thereunder to maintain the hazard insurance policy at the Obligor's
cost and expense, and on the Obligor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Obligor's cost and
expense, and to seek reimbursement therefor from the Obligor. Where required by
state law or regulation, the Obligor 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 Buyer upon the consummation of the transactions contemplated
by this Agreement. Seller has not engaged in, and has no knowledge of the
Obligor's or any subservicer's having engaged in, any act or omission which
would impair the coverage of any such policy, the benefits of the endorsement
provided for therein, or the validity and binding effect of either.
(i) No Satisfaction of Mortgage or Note. Neither the Mortgage nor
the Note has been satisfied, cancelled, subordinated or rescinded, in whole or
in part, and the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that would
effect any such release, cancellation, subordination or rescission.
(j) Location and Type of Mortgaged Property. The Mortgaged Property
consists of a single parcel of real property with a single family residence
erected thereon, or a two to four-family dwelling, or an individual condominium
unit in a low-rise or high-rise condominium project, or an individual unit in a
planned unit development. The Mortgaged Property is either a fee simple estate
or a long-term residential lease. If the Mortgage Loan is secured by a long-term
residential lease, (A) the terms of such lease expressly permit the mortgaging
of the leasehold estate, the assignment of the lease without the lessor's
consent (or the lessor's consent has been obtained) and the acquisition by the
holder of the Mortgage of the rights of the lessee upon foreclosure or
assignment in lieu of foreclosure or provide the holder of the Mortgage with
substantially similar protection; (B) the terms of such lease do not (i) allow
the termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to cure,
such default, (ii) allow the termination of a lease in the event of damage or
destruction as long as the Mortgage is in existence or (iii) prohibit the holder
of the Mortgage from being insured under the hazard insurance policy relating to
the Mortgaged Property; (C) the original term of such lease is not less than 15
years; (D) the term of such lease does not terminate earlier than five years
after the maturity date of the Note; and (E) the Mortgaged Property is located
in a jurisdiction in which the use of leasehold estates for residential
properties is a widely-accepted practice. No portion of the Mortgaged Property
is used for commercial purposes.
(k) Valid Lien. The Mortgage for any First Mortgage Loan creates a
valid, subsisting, enforceable and perfected first lien on the Mortgaged
Property, and the Mortgage for any Second Lien Mortgage Loan creates a valid,
subsisting, enforceable and perfected lien on the Mortgaged Property, and in
each case includes all buildings on the Mortgaged Property and all installations
and mechanical, electrical, plumbing, heating and air conditioning systems
located in or annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to "Permitted Exceptions," which consist of the
following:
(1) the lien of current real property taxes and assessments
that are not delinquent;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions generally
and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan;
(3) 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; and
(4) a valid lien of a higher priority in the case of a Second
Lien Mortgage Loan.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with a First Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien and first priority
security interest on the property described therein, and with respect to a
Second Lien Mortgage Loan, a perfected security interest, and Seller has full
right to sell and assign the same to the Buyer.
(l) Validity of Mortgage Documents; No Fraud. The Note and the
Mortgage and every other agreement, if any, executed and delivered by the
Obligor in connection with the Mortgage Loan are genuine, and each is the legal,
valid and binding obligation of the maker thereof enforceable in accordance with
its terms. All parties to the Note, the Mortgage and each other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Note, the Mortgage and each other such related agreement, and the
Note, the Mortgage and each other such related agreement have been duly and
properly executed by the respective Obligors. No fraud was committed in
connection with the origination of the Mortgage Loan.
(m) Full Disbursement of Proceeds. Each Mortgage Loan has been
closed, and the proceeds of the Mortgage Loan have been fully disbursed and
there is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and as to
disbursements of any escrow funds therefor have been complied with. All costs,
fees and expenses incurred in making or closing the Mortgage Loan and the
recording of the Mortgage were paid, and the Obligor is not entitled to any
refund of any amounts paid or due under the Note or Mortgage.
(n) Doing Business. All parties which have had an interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) (a) organized under the
laws of such state, or (b) qualified to do business in such state, or (c)
federal savings and loan associations, savings banks, or national banks having
principal offices in such state, or (d) not doing business in such state.
(o) Title Insurance. The Mortgage Loan is covered by either (a) an
attorney's opinion of title and abstract of title the form and substance of
which is acceptable to Xxxxxx Mae or (b) an ALTA lender's title insurance policy
or other generally acceptable form of policy of insurance issued by a title
insurer qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring Seller, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of a First
Mortgage Loan, and as to the applicable priority lien on the Mortgage in the
original principal amount of a Second Lien Mortgage Loan, subject only to the
Permitted Exceptions and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the Mortgage Interest Rate and Monthly Payment.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. Where required by state law or regulation, the Obligor has
been given the opportunity to choose the carrier of such lender's title
insurance policy. Seller, its successors and assigns are the sole insureds of
such lender's title insurance policy, and such lender's title insurance policy
is valid and remains in full force and effect and will be in full force and
effect upon the sale of the Mortgage Loan to the Buyer. No claims have been made
under such lender's title insurance policy, and no prior holder of the mortgage,
including Seller, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy
(p) No Defaults. There is no default, breach, violation or event of
acceleration existing under the Mortgage or the Note or related documents and no
event which, with the passage of time or with notice and the expiration of any
applicable grace or cure period, would constitute a default, breach, violation
or event of acceleration.
(q) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage.
(r) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property and no improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation; provided,
that in no event shall a legal non-conforming use of the Mortgaged Property be
considered a violation of any such zoning law or regulation.
(s) Payment Terms. For fixed-rate Mortgage Loans, the Note is
payable in equal monthly installments (other than the last payment) of principal
and interest. For adjustable-rate Mortgage Loans, the Mortgage Interest Rate is
adjusted in accordance with the terms of the Note and the Note is payable each
month and, during an adjustment period or initial period, in equal monthly
installments of principal and interest. All required notices of interest rate
and payment amount adjustments have been sent to the Obligor on a timely basis
and the computations of such adjustments were properly calculated. Installments
of interest are subject to change due to the adjustments to the Mortgage
Interest Rate of each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years from
commencement of amortization. All Mortgage interest rate adjustments have been
made in strict compliance with state and federal law and the terms of the
related Note.
(t) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by an Obligor 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 Obligor 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) Occupancy of the Mortgaged Property. Unless otherwise specified
by Seller in the Mortgage Loan Schedule delivered pursuant to Section 2.1
hereof, or otherwise agreed to by Buyer at the Settlement Date, the Mortgaged
Property is lawfully occupied by the Obligor under the laws of the applicable
jurisdiction. 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.
(v) No Additional Collateral. The 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 the "Valid Lien" representation above.
(w) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Buyer to the
trustee under the deed of trust, except in connection with a trustee's sale
after default by the Obligor.
(x) Due on Sale. The Mortgage for a First Mortgage Loan contains a
provision for the acceleration of the payment of the unpaid principal balance of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the mortgagee thereunder, at
the option of the mortgagee. This provision provides that the mortgagee cannot
exercise its option if either (a) the exercise of such option is prohibited by
federal law or (b) (i) the Obligor causes to be submitted to the mortgagee
information required by the mortgagee to evaluate the intended transferee as if
a new loan were being made to such transferee and (ii) the mortgagee reasonably
determines that the mortgagee's security will not be impaired by the assumption
of such Mortgage Loan by the transferee and that the risk of breach of any
covenant or agreement in the Mortgage Files is acceptable to the mortgagee. To
the best of Seller's knowledge, such provision is enforceable.
(y) Transfer of Mortgage Loans. Each of the Mortgage and 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.
(z) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by Seller, the Obligor or anyone on behalf of the Obligor,
or paid by any source other than the Obligor nor does it contain any other
similar provisions currently in effect 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.
(aa) Mortgaged Property Condition; No Condemnation Proceedings.
There is no proceeding pending or, to the best of Seller's knowledge, 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.
(bb) Collection Practices; Escrow Deposits. The origination,
servicing and collection practices used by Seller with respect to the Mortgage
Loan have been in accordance with Accepted Servicing Practices and are in all
respects in compliance with all applicable laws and regulations. With respect to
escrow deposits and Escrow Payments, all such payments are in possession of
Seller or the servicer of such Mortgage Loan 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 in full compliance with
state and federal law.
(cc) Soldiers' and Sailors' Relief Act. The Obligor has not notified
the Seller and the Seller has no knowledge of any relief requested or allowed
to, the Obligor under the Soldiers' and Sailors' Civil Relief Act of 1940.
(dd) Environmental Matters. To the best of the Seller's knowledge,
there exists no violation of any local, state or federal environmental law, rule
or regulation in respect of the Mortgaged Property which violation has or could
have a material adverse effect on the market value of such Mortgaged Property.
(ee) Obligor Acknowledgment. The Obligor has executed a statement to
the effect that the Obligor has received all disclosure materials required by
applicable law with respect to the making of adjustable rate mortgage loans.
(ff) No Construction Loans. The Mortgage Loan was not made in
connection with (a) the construction or rehabilitation of a Mortgaged Property
or (b) facilitating the trade-in or exchange of a Mortgaged Property.
(gg) Right of Rescission. With respect to refinance Mortgage Loans,
the Obligor's right of rescission has not been waived.
(hh) No Negative Amortization. The Mortgage Loan is not subject to,
or potentially subject to, negative amortization.
(ii) North Carolina High-Cost Home Loans. The Mortgage Loan is not a
"high-cost home loan" as defined by Section 24.1.1 of the North Carolina General
Statutes.
(jj) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise as
set forth on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years.
(kk) Corporate Advances. Exhibit D is true and correct in all
material respects as of the Cut-off Date.
Section 4.4 General Representations and Warranties of Buyer. As of the
Settlement Date, Buyer represents and warrants as follows:
(a) Organization. Buyer is a limited partnership, duly organized,
validly existing, and in good standing under the laws of the state of its
incorporation, and is qualified and authorized to transact business in, and is
in good standing under the laws of, each jurisdiction in which any Mortgaged
Property is located or is otherwise exempt under applicable law from such
qualification. Buyer has the requisite power and authority to own and operate
its properties, to carry on its business as it is now being conducted, and to
consummate the transactions contemplated by this Agreement.
(b) Authorization of this Agreement. Buyer has the requisite
corporate power and authority to execute and deliver this Agreement, and to
consummate the transactions contemplated hereby. The execution, delivery, and
performance of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporation action, and no other corporate proceedings on the part of Buyer are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Buyer and constitutes a legal, valid, and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms, except that such
enforcement may be affected by bankruptcy, by other insolvency laws, or by
general principles of equity.
(c) No Conflict or Violation. The execution and delivery of this
Agreement by Buyer does not, and the performance of this Agreement by Buyer will
not, (i) result in a violation of or conflict with any provisions of the charter
or by-laws or equivalent governing instruments of Buyer, (ii) violate any law,
rule, regulation, code, ordinance, judgment, injunction, order, writ, decree, or
ruling applicable to Buyer, or (iii) conflict with or violate any agreement,
permit, concession, grant, franchise, license, or other governmental
authorization or approval necessary for purchase of the Mortgage Loans by Buyer.
No regulatory approvals or consents are required with respect to Buyer's
consummation of the transactions contemplated by this Agreement.
(d) Litigation. No action, suit, proceeding, or governmental
investigation or inquiry is currently pending, or to the knowledge of Buyer,
threatened against Buyer which, if adversely determined, would have a material
adverse effect on the business, combined assets or financial condition of Buyer
or on the Mortgage Loans or would prevent the consummation of the transactions
contemplated by this Agreement.
(e) Financial Condition. If requested in writing by Seller prior to
the date hereof, Buyer has previously furnished Seller with Buyer's most recent
balance sheet, which has been prepared in accordance with generally accepted
accounting principles. Each of the balance sheets set forth Buyer's financial
condition as of the date thereof, and there have been no material adverse
changes in Buyer's business or financial condition since that date.
(f) Accuracy of Statements. Neither this Agreement, nor any
statement, report, or other document furnished or to be furnished pursuant to
this Agreement, or in connection with the transaction contemplated hereby,
contains any untrue statement of fact by Buyer or omits to state a fact
necessary to make the statements of Buyer contained therein not misleading.
(g) Ability to Perform; Solvency. Buyer does not believe, nor does
it have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. Buyer is solvent and the purchase of the
Mortgage Loans will not cause Buyer to become insolvent.
(h) No Consent Required. No consent, approval, authorization or
order of any court or governmental agency or body is required for the execution,
delivery and performance by Buyer of or compliance by Buyer with this Agreement
or the Mortgage Loans, or the purchase of the Mortgage Loans by Buyer or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the Settlement Date.
(i) No Commissions to Third Parties. Buyer has not dealt with any
broker or agent or other Person who might be entitled to a fee, commission, or
compensation in connection with this transaction other than Seller's financial
advisor, who shall be compensated solely by Seller, pursuant to a separate
agreement..
SECTION 5 PRE-SETTLEMENT COVENANTS
Seller covenants and agrees that:
Section 5.1 Continued Servicing. . The Buyer shall retain the Seller as
the contract servicer of the Mortgage Loans for an interim period pursuant to
and in accordance with the terms and conditions set forth in this section from
the Settlement Date through the Service Transfer Date. Seller shall continue
servicing the Mortgage Loans on Seller's system in conformance with all of the
requirements of the Mortgage Files and applicable law and in accordance with
Accepted Servicing Practices. Seller shall send out at its expense the notice
required to be provided to Obligors for any Interest Rate Adjustment scheduled
to occur up to 10 days after the Service Transfer Date. As consideration for
servicing the Mortgage Loans during the period from the Settlement Date up to
but not including the Service Transfer Date, the Seller shall retain the
Servicing Fee, which shall be prorated for any portion of a month during which
the Mortgage Loan is serviced by the Seller pursuant to this Agreement. The
Seller shall be obligated to make all advances on the Mortgage Loans with
respect to taxes and insurance premiums due and owing and other customary and
reasonable Corporate Advances that Seller would have otherwise made in its
ordinary course of business. Any other servicing advances shall be made with the
prior written consent of the Buyer. The Seller shall retain for the benefit of
the Buyer in a segregated account in a depository institution insured by the
FDIC, and shall remit (or, if the account is held be the Servicer, shall cause
the Servicer to remit) to the Buyer on the Remittance Date, (a) all amounts
received from any source with respect to the Mortgage Loans minus (b) the
Servicing Fee owed the Seller with respect to the Mortgage Loans and minus (c)
all Corporate Advances made from the Cut-off Date through the Service Transfer
Date.
Section 5.2 Preparation of Assignments. Prior to the Settlement Date,
Seller shall, at its sole expense, prepare and deliver an Assignment of Mortgage
in form and substance acceptable to Buyer and its counsel and any other security
documents corresponding to each Mortgage Loan to be sold on such Settlement
Date. Assuming proper recordation, each such assignment shall be sufficient to
perfect the transfer of Seller's security interest in the corresponding
Mortgaged Property. Such Assignments of Mortgage shall be contained in the Legal
File and may, at the Seller's option, be delivered in MERS format.
Section 5.3 IRS Reporting. To the extent required by law, Seller shall
report to the IRS and each Obligor the amount of interest paid (including
without limitation, the obligations with respect to Forms 1098 and 1099 and back
up withholding with respect to same, if required) by such Obligor on the
Mortgage Loan on which he is the Obligor from the date of the advance made by
Seller to such Obligor through and including the Service Transfer Date, and
Buyer shall thereafter report to the IRS and each Obligor the amount of interest
paid by such Obligor on the Mortgage Loan on which he is the Obligor.
Section 5.4 Compliance with Law. From the date of this Agreement to the
Service Transfer Date, Seller shall comply with all applicable state and Federal
rules and regulations including those requiring the giving of notices, and where
applicable, Seller warrants that it will comply with the National Housing Act of
1934, as from time to time amended, the Servicemen's Readjustment Act of 1944,
as amended, and with all rules and regulations issued under said either such
act.
Section 5.5 Intentionally Omitted
Section 5.6 Private Mortgage Insurance. Seller shall provide commercially
reasonable assistance for Buyer to make any notification to private mortgage
insurance companies necessary to ensure continuation of such insurance upon
transfer of the Mortgage Loans to Buyer.
SECTION 6 POST-SETTLEMENT COVENANTS
Section 6.1 Servicing Transfer. Seller and Buyer shall each comply with,
and Seller shall assist Buyer in complying with, the notice requirements for the
transfer of servicing rights as set forth in RESPA and Regulation X. Such
compliance by each party shall include, without limitation, sending its own
notices of the transfer of servicing from Seller to Buyer, at its sole expense.
For each Mortgage Loan, Seller shall deposit such notice in the United States
mail, after its receipt of the Purchase Price, on, or on the day following, the
Settlement Date on which such Mortgage Loan is sold. Seller's notice to each
Obligor shall state that any payments due from such Obligor that are due 15 or
more days after the date on which Seller sends such notice shall be made to
Buyer. Seller's assistance to Buyer shall include providing Buyer with any
information that Seller has or has access to and that Buyer reasonably requires
to complete its notices. Buyer shall approve any such notices sent by Seller,
and Seller shall have the right to approve any such notices sent by Buyer, prior
to the date mailed. To enable the parties to determine the Service Transfer
Date, Seller shall, with respect to all Mortgage Loans sold on the Settlement
Date, send all notices pursuant to this Section 6.1 on the same day, and shall,
upon sending such notices, inform Buyer of the date on which such notices are
sent. Within 10 days of the Settlement Date, Seller shall deliver to Buyer a
copy of the notice sent with respect to each Mortgage Loan sold on such
Settlement Date. The Seller shall provide reasonable assistance to Buyer, such
that Buyer may transmit to the applicable taxing authorities and insurance
companies (including primary mortgage insurance policy insurers, if applicable)
and/or agents, notification of the transfer of the servicing to the Buyer, or
its designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Buyer from and after the Service Transfer
Date. The Seller shall provide the Buyer, or its designee, with immediately
available funds by wire transfer in the amount of the net Escrow Payments and
suspense balances associated with the related Mortgage Loans.
Section 6.2 IRS Examination. Buyer and Seller shall cooperate fully with
each other in connection with any examination conducted by any tax authority
after the Settlement Date, provided that nothing herein shall be construed as
obligating Buyer or Seller to disclose or furnish any tax information not
related to the transfer of the Mortgage Loans. Buyer and Seller shall inform
each other promptly of any material developments in the course of any such
examination, the results of any such examination, and any proceeding related
thereto.
Section 6.3 Tax on Sale. Each party shall promptly pay in full and when
due any tax or other governmental charge or fee imposed upon it under applicable
law on the sale of the Mortgage Loans from Seller to Buyer pursuant to this
Agreement.
Section 6.4 Books and Records. Seller and its Successor Servicer and Buyer
each agree to keep and maintain such books and records so as to meet and comply
with all applicable laws, and the requirements or recommendations of ECOA and
TILA. The same shall be available to Buyer or Seller, as the case may be, at any
time, upon written request, during business hours, for examination and audit to
the extent required to determine compliance with such laws.
Section 6.5 Post-Sale Mortgage Loan Payments. Seller agrees that it will
remit to Buyer, within five (5) business days after receipt, any payment on a
Mortgage Loan including, without limitation, all payments of principal and
interest, late charges, and bad check charges received from an Obligor on or
after the Remittance Date to an address as specified by Buyer.
Section 6.6 Transfer of Servicing Rights and PMI. Seller shall use
commercially reasonable efforts to assist Buyer in the transfer from Seller to
Buyer of servicing rights for each Mortgage Loan, including assisting Buyer with
any notices to private mortgage insurance companies, if applicable. Such efforts
will include assisting in the conversion and transfer of data from Seller's
servicing systems to Buyer's system by providing conversion tapes and other
necessary materials to effect such conversion and transfer. Seller shall also
furnish loan master lists, systems data and other information reasonably
requested by Buyer to conduct a pre-conversion performance test.
SECTION 7 CONDITIONS TO SETTLEMENT
Section 7.1 Conditions to Buyer's Obligations. The obligations of Buyer to
purchase the Mortgage Loans at the Settlement are subject to the satisfaction at
or prior to such Settlement, of each of the following conditions (any or all of
which may be waived by Buyer):
(a) Representations and Warranties Correct. Each of the
representations and warranties of Seller contained in this Agreement shall be
true and correct in all material respects in accordance with their terms as of
the date of this Agreement, and on and as of such Settlement Date with the same
force and effect as though made on and as of such Settlement Date.
(b) Compliance with Covenants. Seller shall have performed and be in
compliance with, in all material respects, all of its respective covenants,
acts, and obligations to be performed under this Agreement.
(c) Opinion of Counsel. Seller shall have delivered to Buyer an
opinion of counsel of the Seller (which may be internal counsel) in form and
substance acceptable to the Buyer.
(d) Corporate Documents. On or before the Settlement Date, if Buyer
so requests in writing at least three (3) business prior to the Settlement Date,
Seller shall have delivered to Buyer:
(i) a certificate of its jurisdiction of incorporation dated
not earlier than the date of the tenth day preceding the Settlement
Date, to the effect that Seller is a corporation validly existing
and in good standing (if applicable) under the laws of such
jurisdiction as of such date;
(ii) a certificate of the Secretary or Assistant Secretary of
Seller attaching (A) evidence of such corporate action or
authorization as is necessary to approve of this Agreement and the
authorization of the officers of Seller to sign this Agreement,
which action or authorization shall continue to be in force as of
the Settlement Date, and (B) specimen signatures of the officers of
Seller authorized to sign this Agreement;
(iii) a copy, certified as true by the Secretary or Assistant
Secretary of Seller, of the charter and the by-laws of Seller; and
(iv) all other documents, instruments, and writing required to
be delivered by Seller pursuant to this Agreement.
(e) Corporate Actions. All corporate and other acts necessary to
authorize the execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereunder shall have been taken by
Seller.
(f) Access to Information; Due Diligence. Buyer and its
representatives shall have had access to such information and records of Seller
as Buyer shall have reasonably requested to ascertain Seller's compliance with
the Agreement, and execution of this Agreement shall mean that all such
information and records are satisfactory to Buyer and its representatives in
accordance with the terms of this Agreement.
(g) No Pending Litigation. There shall not be pending or, to the
best of Seller' knowledge upon reasonable due inquiry and investigation,
threatened any suit, action, injunction, investigation, inquiry, or other
proceeding against either of the parties before any court or government agency,
which, in Buyer's good faith judgment, has resulted or is reasonably likely to
result in an order staying or judgment restraining or prohibiting the
transactions contemplated hereby or subjecting a party to material liability on
the grounds that it has breached any law or regulation or otherwise acted
improperly in connection with the transactions contemplated hereby.
(h) Other Documents: Buyer shall have received each of the
following:
1. this Agreement;
2. the Mortgage Loan Schedule;
3. a Legal File Inventory.
Section 7.2 Intentionally Omitted.
Section 7.3 Conditions to Seller's Obligations. The obligations of Seller
to sell the Mortgage Loans at the Settlement are subject to the satisfaction at
or prior to such Settlement, of each of the following conditions (any or all of
which may be waived by Seller):
(a) Purchase Price. The Purchase Price shall have been delivered to
Seller pursuant to Seller's reasonable instructions in accordance with Section
3.3.
(b) Representations and Warranties Correct. Each of the
representations and warranties of Buyer contained in this Agreement shall be
true and correct in all material respects in accordance with their terms as of
the date of this Agreement, and on and as of such Settlement Date with the same
force and effect as though made on and as of such Settlement Date.
(c) Compliance with Covenants. Buyer shall have performed and be in
compliance with, in all material respects, all of its respective covenants,
acts, and obligations to be performed under this Agreement.
(d) Corporate Documents. On or before the Settlement Date, if Seller
so requests, Buyer shall have delivered to Seller:
(i) a certificate of its limited partnership dated not earlier
than the date of the tenth day preceding the Settlement Date, to the
effect that Buyer is a limited partnership validly existing and in
good standing (if applicable) under the laws of such jurisdiction as
of such date;
(ii) a certificate of the Secretary or Assistant Secretary of
Seller attaching (A) evidence of such corporate action or
authorization as is necessary to approve this Agreement and the
authorization of the officers of Buyer to sign this Agreement, which
action or authorization shall continue to be in force as of the
Settlement Date, and (B) specimen signatures of the officers of
Buyer authorized to sign this Agreement,
(iii) a copy, certified as true by the Secretary or Assistant
Secretary of Buyer, of the charter and the by-laws of Buyer; and
(iv) all other documents, instruments and writings required to
be delivered by Buyer pursuant to this Agreement.
(e) Corporate Actions. All corporate and other acts necessary to
authorize the execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereunder shall have been taken by
Buyer.
(f) No Pending Litigation. There shall not be pending or, to the
best of Buyer's knowledge upon reasonable due inquiry and investigation,
threatened any suit, action, injunction, investigation, inquiry, or other
proceeding against either of the parties before any court or government agency,
which, in Seller's good faith judgment, has resulted or is reasonably likely to
result in an order staying or judgment restraining or prohibiting the
transactions contemplated hereby or subjecting a party to material liability on
the grounds that it has breached any law or regulation or otherwise acted
improperly in connection with the transactions contemplated hereby.
SECTION 8 SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES; REPURCHASE
OBLIGATION OF SELLER
It is understood and agreed that the covenants, representations and
warranties set forth in this Agreement shall survive (i) any investigation made
by or on behalf of Buyer, its assignee or designee, (ii) liquidation of the
applicable Mortgage Loan, (iii) termination of this Agreement, and (iv) transfer
and delivery of the Mortgage Files to Buyer. The representations and warranties
set forth in Section 4.3 shall terminate three (3) years from the date on which
such representation or warranty is made. All other covenants, representations
and warranties shall survive for the life of the related Mortgage Loan. It is
further understood that the covenants, representations and warranties set forth
in this Agreement shall inure to the benefit of Buyer, its Affiliates that
receive assignment of Mortgage Loans, any assignee of the Buyer or any holder of
an endorsement of a Note.
XXXXXXX 0 XXXX-XXXXXXXXXX XXXXXXXXXX AND ADJUSTMENTS
Section 9.1 Repurchase Obligations.
In the event that
(a) pursuant to the terms and conditions of Section 2.2,
Seller has failed to deliver to Buyer any Legal File document
required hereunder with respect to any Mortgage Loan sold on the
Settlement Date within the applicable time period for delivery
therefore and such failure has materially and adversely affected
Buyer's ability to securitize, service or obtain payment on such
Mortgage Loan or,
(b) with respect to any Mortgage Loan, there has been a breach
of any of Seller's warranties, representations, covenants or
agreements contained in this Agreement, other than those described
in Section 9.1(a),
Buyer shall give Seller notice of such failure, breach, or action. If Seller
fails to cure such failure, breach or action within 30 days of Seller's receipt
of such notice, Seller shall immediately repurchase such Mortgage Loan at the
Repurchase Price set forth in Section 9.2.
Section 9.2 Repurchase Price. In the event Seller repurchases a Mortgage
Loan from Buyer pursuant to Section 9.1 above, the Repurchase Price shall be an
amount equal to
(a) the product of
(i) the Bid Percentage and
(ii) the Principal Balance of such Mortgage Loan,
(b) minus the aggregate amount of principal paid to Buyer on such
Mortgage Loan from the Settlement Date up to, but not including, the date of
repurchase,
(c) plus accrued but unpaid interest up to and including the date of
repurchase,
(d) plus any reasonable and customary out-of-pocket expenses paid to
third parties relating to such Mortgage Loan (the "Repurchase Price"),
(e) plus any amount actually paid to Seller for Corporate Advances.
Upon payment of the Repurchase Price as set forth herein, Buyer shall deliver
the Mortgage Files relating to such repurchased Mortgage Loan and shall execute
and deliver such instruments of transfer or assignment, in each case without
recourse, as shall be necessary to vest in Seller title to such repurchased
Mortgage Loan on a servicing released basis. Buyer shall pay all out-of-pocket
costs incurred in delivering the Mortgage File to the Seller. Except for the
negligence or willful misconduct of Buyer or Buyer's representative, the Buyer
shall have no liability for the failure by the courier to deliver the Mortgage
File to the Seller for any reason whatsoever.
Section 9.3 First Payment Default. In the event that (a) any Mortgage Loan
with a next due date of 8/31/02 or less does not make its first payment due to
the Buyer within 30 days of the Cut-off Date or (b) any Mortgage Loan with a
next due date of 9/1/02 or greater does not makes its first payment due to the
Buyer within 30 days of such first payment due date (a "First Payment Default
Loan"), and such First Payment Default Loan is greater than 29 days delinquent
on the 90th day following the first due date which was due the Purchaser, Seller
agrees to promptly repurchase such First Payment Default Loan at the Repurchase
Price (assuming a full reimbursement of premium).
Section 9.4 Premium Rebate. In the event that a Premium is paid by the
Buyer to the Seller on a Mortgage Loan and such Mortgage Loan is prepaid in full
by the Borrower, other than by a refinancing by the Buyer or any of its
subsidiaries or affiliates, within three (3) months of Settlement Date, the
Seller shall, upon demand by the Buyer, refund to the Buyer the Premium paid by
the Buyer to the Seller as follows: if prepayment in full is within one (1)
month of the Settlement Date, 3/3rds of the Premium shall be refunded; if
prepayment in full is between one (1) and two (2) months of the Settlement Date,
2/3rds of the Premium shall be refunded; if prepayment in full is between two
(2) and three (3) months of the Settlement Date, 1/3rd of the Premium shall be
refunded. In the event any Mortgage Loan is prepaid in full later than three (3)
months from the Settlement Date of such Mortgage Loan, no refund shall be due.
In the event the Note carries a prepayment penalty, the Buyer agrees to
recapture the Premium rebate from the proceeds of the prepayment penalty and
then from Seller, if there is any deficient balance according to the refund
calculation specified above..
Section 9.5 Post-Settlement Adjustments to Purchase Price. Within 60 days
after the Settlement Date, the first party shall notify the other party in
writing of any miscalculations, misapplied payments, unapplied payments or other
accounting errors (each, a "Discrepancy") which the first party has discovered
and which affects the Principal Balance of any of the Mortgage Loans purchased
on such Settlement Date or the Purchase Price for the Mortgage Loans purchased
on such Settlement Date. Notice to the other party under this Section 9.4 shall
include copies of documents sufficient to describe each Discrepancy. Buyer shall
pay Seller or Seller shall pay Buyer, as the case may be, an amount sufficient
to correct such Discrepancy, with all such adjustments calculated using the
Premium. Any amounts due hereunder shall be paid within 10 days of notice by the
first party to the other party.
SECTION 10 INDEMNIFICATION
Section 10.1 Seller's Indemnification.
(a) Seller agrees to indemnify and hold harmless Buyer, its
Affiliates, the Successor Servicer, officers, directors, employees, agents,
successors, and assigns, and related entities from and to reimburse them for,
any loss, cost, expense, damage, liability, claim or Legal Fees (including,
without limitation, legal fees incurred in connection with the enforcement of
the Seller's indemnification obligation under this Section 10.1) relating to,
arising out of, based upon, or resulting from:
(i) Seller's ownership of or actions with respect to the
Mortgage Loans;
(ii) Breach of any of Seller's representations and warranties
contained in this Agreement;
(iii) Breach of, or failure to perform, any of Seller's
covenants or agreements contained in or made pursuant to this
Agreement; or
(iv) any loss, cost, expense, damage, liability, claim or
Legal Fees arising from any action, suit, proceeding or governmental
investigation or inquiry before any court, administrative agency or
other tribunal with respect to the compliance of any Mortgage Loan
with HOEPA or any federal, state or local law with respect to `high
cost', 'threshold' or 'predatory' loans.
(b) The obligations of Seller under this Section shall survive (i)
the transfer and delivery of the Mortgage Loans to Buyer, (ii) any investigation
made by or on behalf of Buyer, its assignee or designee, (iii) liquidation of
the applicable Mortgage Loan, and (iv) termination of this Agreement.
(c) Notwithstanding the foregoing, Seller shall not have any
liability in respect of the representations or warranties on the part of Seller
herein contained to the extent such liability would not have arisen but for
Buyer's own willful misconduct or negligence.
Within one (1) year of the Settlement Date and upon the reasonable request of
the Buyer, the Seller hereby agrees to execute a recognition agreement
recognizing the servicer designated by the Buyer therein as the Successor
Servicer.
For purposes of this paragraph, "Buyer" shall mean the Person then acting as the
Buyer under this Agreement and any and all Persons who previously were "Buyers"
under this Agreement and "Successor Servicer" shall mean the Person then acting
as the Successor Servicer under this Agreement and any and all Persons who
previously were "Successor Servicers" under this Agreement.
Section 10.2 Buyer's Indemnification.
(a) Buyer agrees to indemnify and hold harmless Seller, its
Affiliates, officers, directors, employees, agents, successors, and assigns, and
related entities from, and to reimburse them for, any loss, cost, expense,
damage, liability, or claim (including without limitation, all Legal Fees)
relating to, arising out of, based upon, or resulting from:
(i) Buyer's ownership of or actions with respect to the
Mortgage Loans;
(ii) Buyer's breach of any of its representations and
warranties contained in this Agreement; or
(iii) Buyer's breach of or failure to perform any of Buyer's
covenants or agreements contained in or made pursuant to this
Agreement.
(b) The obligations of Buyer under this Section shall survive (i)
the transfer and delivery of the Mortgage Loans to Buyer, (ii) any investigation
made by or on behalf of Seller, its assignee or designee, (iii) liquidation of
the applicable Mortgage Loan, and (iv) termination of this Agreement.
(c) Notwithstanding the foregoing, Buyer shall not have any
liability in respect of the representations or warranties on the part of Buyer
herein contained to the extent such liability would not have arisen but for
Seller's own willful misconduct or negligence.
Section 10.3 Indemnification Procedures.
(a) Within 10 days after receipt by a party of any claim or the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Agreement,
deliver a claim notice to the indemnifying party; provided, however, that the
omission to so notify the indemnifying party shall not relieve the indemnifying
party from any liability that the indemnifying party may have to the indemnified
party otherwise than under this subsection unless such delay has materially
prejudiced the indemnifying party. In the event that such claim is made or
action brought against the indemnified party and the indemnified party notifies
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. The indemnifying party shall give prompt notice to the
indemnified party of whether it intends to participate and/or assume the
indemnified party's defense.
The indemnified party may also employ separate counsel in any action
or claim and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless: (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing; (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel; or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party. If such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party, it being
understood, however, the indemnifying party shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(in addition to local counsel) at any time for all such indemnified parties,
which firm shall be designated in writing by the indemnified party.
(b) The indemnifying party shall remit payment for the amount of a
valid and substantiated claim for indemnification hereunder within 15 Business
Days of the receipt of a claim notice therefor. Upon the payment in full of any
claim hereunder, the indemnifying party shall be subrogated to the rights of the
indemnified party against any person with respect to the subject matter of such
claim. In the event of a dispute, the parties shall proceed in good faith to
negotiate a resolution of such dispute.
(c) 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. No indemnifying
party shall, without prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action. The indemnified party shall have the
right to reject any settlement approved by the indemnifying party if the
indemnified party waives its right to indemnification hereunder. The indemnified
party shall have the right to settle any third party claim over the objection of
the indemnifying party; provided, however, that if the indemnifying party is
contesting such claim in good faith and has assumed the defense of such claim
from the indemnified party, the indemnified party waives any right to indemnity
therefor.
(d) In the event that the indemnifying party reimburses the
indemnified party with respect to any third party claim and the indemnified
party subsequently receives reimbursement from another person with respect to
that third party claim, then the indemnified party shall remit such
reimbursement from such other person to the indemnifying party within 30 days of
receipt thereof.
SECTION 11 INTENTIONALLY OMITTED
SECTION 12 MISCELLANEOUS
Section 12.1 No Waiver. In no event shall a term or provision of this
Agreement be deemed to have been waived, modified or amended, unless said
waiver, modification or amendment is in writing and signed by the parties
hereto. Notwithstanding any investigation conducted before or after the purchase
of any Mortgage Loan, and notwithstanding any actual or implied knowledge or
notice of any facts or circumstances which Buyer may have as a result of such
investigation or otherwise, Buyer shall be entitled to rely upon the warranties,
representations, and covenants of Seller in this Agreement, and the obligations
of Seller with respect thereto shall survive the purchase of said Mortgage Loans
by Buyer and inure to the benefit of Buyer's Affiliates and all assignees of
said Mortgage Loans.
Section 12.2 Amendment and Modification. Subject to applicable law, this
Agreement may not be amended, modified, or supplemented except in writing signed
by both parties.
Section 12.3 Notices. All notices, requests, demands, consents, approvals,
agreements, or other communications to or by a party to this Agreement shall:
(a) be in writing addressed to the authorized address of the
recipient set out in Section 12.3(c) of this Agreement or to such other address
as such recipient may have notified the sender;
(b) be signed by an authorized officer of the sender; and
(c) be delivered in person or sent by registered or certified mail
return receipt requested, facsimile transmission, or by overnight courier and be
deemed to be duly given or made:
(i) in the case of delivery in person when delivered to the
recipient at such address;
(ii) in the case of registered or certified mail three days
after the date of mailing;
(iii) in the case of overnight courier two days after shipment
or the date of receipt, whichever is earlier; or
(iv) in the case of facsimile transmission when received in
legible form by the recipient at such address and in the event that
the recipient has been requested to acknowledge receipt of the
entire facsimile transmission upon the sending or receiving the
acknowledgment of receipt (which acknowledgment the recipient will
promptly give);
but if such delivery or dispatch is later than 5:00 p.m. local time on a day on
which business is generally carried on in the place to which such communication
is sent or occurs on a day on which business is not generally carried on in the
place to which such communication is sent, it will be deemed to have been duly
given or made at the commencement of business on the next day on which business
is generally carried on in that place.
Notices may be sent
To Seller: Household Financial Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Vice President
Business Relationship Risk Management
Facsimile No.: (000) 000-0000
with a copy to: Household Financial Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: General Counsel
Facsimile No.: (000) 000-0000
To Buyer: Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
or to such other address as Buyer and Seller shall have specified in writing to
each other.
Section 12.4 Expenses. Each party hereto shall bear its own expenses,
including the fees of any attorneys, accountants, or others engaged by such
party, in connection with this Agreement and the transactions contemplated
hereby, except as otherwise expressly provided herein.
Section 12.5 No Remedy Exclusive. No remedy under this Agreement is
intended to be exclusive of any other available remedy, but each remedy shall be
cumulative and shall be in addition to other remedies under this Agreement or
existing at law or in equity.
Section 12.6 Independent Contractor. Nothing herein contained shall be
deemed or construed to create a partnership or joint venture between Seller and
Buyer. In the performance of its duties or obligations under this Agreement or
any other contract, commitment, undertaking, or agreement made pursuant to this
Agreement, neither Seller nor Buyer shall be deemed to be, or permit itself to
be, understood to be the employee or agent of the other and shall at all times
take whatever measures as are necessary to insure that its status shall be that
of an independent contractor operating as a separate entity. None of Seller's or
Buyer's employees, agents or servants is entitled to the benefits that are
provided to the employees of the other party. Each party is solely interested in
the results obtained under this contract and therefore the manner and means of
conducting the other party's business affairs are under the sole control of such
other party and such other party shall be solely and entirely responsible for
its acts and for the acts of its agents, employees, and servants.
Section 12.7 Severability. If any one or more of the provisions of this
Agreement shall be held to be invalid, illegal, or unenforceable, the validity,
legality, and enforceability of the remaining provisions of this Agreement shall
not be affected thereby. To the extent permitted by applicable law, each party
hereto waives any provision of law which renders any provision of this Agreement
invalid, illegal, or unenforceable in any respect, unless material to the
purpose of this Agreement.
Section 12.8 Entire Agreement. Seller and Buyer each acknowledges that no
representations, agreements, or promises were made to such party by the other
party or any of its employees other than those representations, agreements, or
promises specifically contained herein. This Agreement and any Schedules and
Exhibits hereto constitute the entire agreement and understanding of the parties
with respect to the matters and transactions contemplated hereby. This Agreement
supersedes any prior agreement and understanding with respect to these matters
and transactions.
Section 12.9 Assignment. Except as set forth in the following sentence,
neither party shall have the right to assign any of its duties, obligations, or
rights under this Agreement without the prior written consent of the other,
which consent shall not be unreasonably withheld. Buyer shall have the right to
assign its rights under this Agreement to any Affiliate or to any trust created
to effect a securitization involving the Mortgage Loans, and in such event no
such assignment shall relieve either party of any liability under this
Agreement.
Section 12.10 Captions. The captions in this Agreement are for convenience
only, do not form a part hereof, and do not in any way modify, interpret, or
construe the intentions of the parties hereto.
Section 12.11 Governing Law. This Agreement shall be governed by and be
construed in accordance with the laws of the State of Delaware, without regard
to the conflicts of laws rules thereof.
Section 12.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which counterparts shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
Section 12.13 Drafting. Each party acknowledges that its legal counsel
participated in the preparation of this Agreement. The Parties therefore
stipulate that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement to favor any party against the other.
Section 12.14 Choice of Forum. Any judicial proceeding brought against any
of the parties hereto with respect to this Agreement shall be brought in any
court of competent jurisdiction in Xxxx County, Illinois or in the Federal
District Court for the Northern District of the State of Illinois irrespective
of where such party may be located at the time of such proceeding, and by
execution and delivery of this Agreement, each of the parties to this Agreement
hereby consents to the exclusive jurisdiction of any such court and waives any
defense or opposition to such jurisdiction.
SECTION 12.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
Section 12.16 No Solicitation. For a period of one (1) year from and after
the Settlement Date, the Seller agrees that it will not take any action or
permit or cause any action to be taken by any of its agents or affiliates, or by
any independent contractors on the Seller's behalf, to personally, by telephone
or mail, solicit the borrower or Obligor under any Mortgage Loan for any purpose
whatsoever, including to refinance a Mortgage Loan, in whole or in part, without
the prior written consent of the Buyer. It is understood and agreed that all
rights and benefits relating to the solicitation of any Mortgagors and the
attendant rights, title and interest in and to the list of such Mortgagors and
data relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Buyer pursuant hereto on the Settlement Date and the Seller
shall take no action to undermine these rights and benefits. Notwithstanding the
foregoing, it is understood and agreed that promotions undertaken by the Seller
or any affiliate of the Seller which are directed to the general public at
large, including, without limitation, mass mailing based on commercially
acquired mailing lists, newspaper, radio and television advertisements shall not
constitute solicitation under this Section 12.16.
IN WITNESS WHEREOF, Buyer and Seller have caused their respective
duly authorized representatives to execute this Agreement as of the date first
above written.
SELLER:
HOUSEHOLD FINANCIAL SERVICES, INC.
By:
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
BUYER:
XXXXXXX XXXXX MORTGAGE COMPANY
------------------------------------------
By:
------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A
MORTGAGE LOAN SCHEDULE
Loan Number
Documentation Type
Credit Grade
Loan Purpose
Obligor Name
Property Address
Property City
Property State
Property Zip
Current Principal Balance
Original Term, including Balloon information
Origination Date
Prepayment Penalty Flag
Rate-Fixed/Adjustable
Index
Gross Margin
Current Mortgage Interest Rate
Rate Adjustment Periods
Rate Adjustment Caps
Rate Floor
Rate Ceiling
1st Payment Due Date
Next Due Date
Lien Position
Senior Balances
LTV-Combined (CLTV) at Origination
Property Type
Occupancy at Origination
Principal Balance as of Origination
Maturity Date
Monthly Payment Amount
Interest Rate Calculation Method
Section 32 Loan Flag
Extended Flag
EXHIBIT B-1
CONTENTS OF LEGAL FILE
With respect to each Mortgage Loan, the Legal File shall include each of
the following items, which shall be delivered to the Buyer.
1. The original Note, bearing all intervening endorsements, endorsed,
"Pay to the order of ____________, without recourse" and signed in
the name of Seller by an authorized officer or by facsimile
signature or a lost note affidavit in a form reasonably acceptable
to Buyer.
2. Either: (i) the original recorded Mortgage with recording
information thereon, together with a certified true copy of the
original power-of-attorney showing the recording information thereon
if the Mortgage was executed by an attorney-in-fact, (ii) a
certified true copy of the Mortgage and of the power-of-attorney (if
applicable), the originals of which have been transmitted for
recording, until such time as the originals are returned by the
public recording office in which case the Seller shall deliver the
original recorded Mortgage within 5 business days of receipt from
the County Records Office; (iii) a copy of the Mortgage certified by
the public recording office in those instances where the public
recording office retains the original or the original is lost,
together with a duplicate original mortgagee's certificate of title
if the Mortgage is registered under the Torrens system; or (iv) a
certified true copy of the Mortgage, certified by the public
recording office appropriate to where the Mortgaged Property is
located.
3. The original Assignment of Mortgage for each Mortgage Loan, in
blank, in form and substance acceptable to Buyer and its counsel,
which form may be in a MERS format, and for recording but not
recorded, signed in the name of Seller by an authorized officer;
provided, however, that certain recording information will not be
available if, as of the Settlement Date, Seller has not received the
related recorded Mortgage from the recorder's office.
4. A copy of the title search and mortgage title insurance commitment
or the original mortgage title insurance policy issued by an
approved ALTA title insurance company on such form and subject to
such exceptions outlined in this Agreement; provided, however, that
if the original is not available as of the date the Mortgage is
delivered to Buyer, Seller shall deliver the original in accordance
with the time period specified herein.
5. Originals of all intervening assignments, if any, with evidence of
recording thereon, or certified true copies with evidence that the
originals have been transmitted for recording until such time as the
originals are returned by the public recording office, or a copy of
each such assignment certified by the public recording office if
such office retains the original, or if such original is lost.
6. Originals of all assumption, modification or consolidation
agreements with evidence of recording thereon, if any.
7. Original guarantee, if any.
8. The original of any security agreement, chattel mortgage or
equivalent, executed in connection with the Mortgage, if any.
EXHIBIT B-2
CONTENTS OF CREDIT FILE
With respect to each Mortgage Loan, the Credit File shall generally include each
of the following items, to the extent in Seller's possession:
1. A copy of the original Note, bearing all intervening endorsements,
endorsed, "Pay to the order of _____________, without recourse" and signed
in the name of Seller by an authorized officer or by facsimile signature.
2. A copy of either: (i) the original recorded Mortgage with recording
information thereon, together with a certified true copy of the original
power-of-attorney showing the recording information thereon if the
Mortgage was executed by an attorney-in-fact; (ii) a certified true copy
of the Mortgage and of the power-of-attorney (if applicable) the originals
of which has been transmitted for recording, until such time as the
originals are returned by the public recording office; or (iii) a copy of
the Mortgage certified by the public recording office in those instances
where the public recording office retains the original or the original is
lost, together with a duplicate original mortgagee's certificate of title
if the Mortgage is registered under the Torrens system.
3. A copy of the original Assignment of Mortgage for each Mortgage Loan, in
blank, in form and substance acceptable to Buyer and its counsel, and for
recording but not recorded; provided, however, that certain recording
information will not be available if, as of the Settlement Date, Seller
has not received the related recorded Mortgage from the recorder's office.
4. A copy of the original policy of title insurance (or, if such policy has
not yet been issued by the insurer, the preliminary title report).
5. A copy of all intervening assignments, if any, with evidence of recording
thereon, or certified true copies with evidence that the originals have
been transmitted for recording until such time as the originals are
returned by the public recording office, or a copy of each such assignment
certified by the public recording office if such office retains the
original, or if such original is lost.
6. A copy of all assumption and modification agreements, if any.
7. A survey or plat of the Mortgaged Property (except if the Mortgaged
Property is a condominium unit), unless the title insurance contains a 116
or "no survey" endorsement.
8. Original or a copy of the hazard insurance policy (or certificate of
insurance for a condominium or planned unit development unit) and
certificate or original policy of flood insurance, if applicable. (In lieu
of an insurance policy for each Mortgage Loan, Seller may carry a Mortgage
Impairment Policy meeting the requirements of Xxxxxx Xxx or Xxxxxxx Mac).
9. Mortgage Loan closing statement or a copy thereof.
10. Residential loan application or a copy thereof.
11. Verification of employment and income (if applicable).
12. Verification of evidence of source and amount of down payment (if
applicable).
13. Credit report on the Obligor.
14. Residential appraisal report.
15. Photograph of the property.
16. (a) Payment records and current and historical computerized data files;
and
(b) tax receipts, insurance premium receipts, ledger sheets, insurance
claim files and correspondence, correspondence, and all other papers
and records developed or originated by Seller or others, required to
document the Mortgage Loan or to service the Mortgage Loan provided,
however, that these items may be provided no later than 15 days
after the Service Transfer Date.
17. A copy of the guarantee, if any.
18. Copies of any security agreement, chattel mortgage or equivalent, executed
in connection with the Mortgage, if any.
19. Copy of each instrument necessary to complete identification of any
exception set forth in the title policy, if any.
20. All required disclosure statements, including a copy of the HUD good faith
estimate, HUD-1 settlement statement and TILA disclosure statement
prepared in connection with the Mortgage Loan indicating that the Obligor
has received all disclosures required by the RESPA and TILA.
21. Termite reports, structural engineer's report, water potability and septic
certification, if any.
22. Sales contract, if any.
23. If the Mortgaged Property is a leasehold estate, a copy of the lease with
evidence of recording thereon (or, if such recorded copy has not yet been
returned to Seller by the applicable recording office, a copy thereof
certified by Seller to be a true, correct and complete copy of such lease
sent for recording).
EXHIBIT C
COLLATERAL CUSTODIAN REPORT
EXHIBIT D
CORPORATE ADVANCES
EXHIBIT E
Form of Escrow Agreement
ESCROW AGREEMENT dated as of September 6, 2002 by and among Household Financial
Services, Inc. (the "Seller"), Xxxxxxx Sachs Mortgage Company (the "Buyer") and
Household Bank, FSB (the "Escrow Agent").
BACKGROUND
The Seller desires to sell and the Buyer desires to purchase certain mortgage
loans of the Seller (the "Mortgage Loans"). The Seller and the Buyer have agreed
to establish an escrow fund to be maintained by the Escrow Agent. The Buyer has
agreed to deposit the sum of $$13,509,996.16 (the "Escrow Funds") with the
Escrow Agent simultaneously executing a Loan Sale Agreement dated September 6,
2002 (the "Loan Sale Agreement")
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Escrow Agent. The Seller and the Buyer hereby appoint
and designate the Escrow Agent to act as such and authorize and
instruct the Escrow Agent to deliver the monies deposited into
escrow as herein provided, and the Escrow Agent agrees to act as
agent, subject to the terms and conditions set forth herein.
2. Delivery of Funds. Immediately upon notification (or if after
business hours, by 10:00 AM on the next business morning following
the notification), by Seller to Buyer that Seller has accepted
Buyer's final bid to the Seller, the Buyer shall deliver the Escrow
Funds to the Escrow Agent by wire transfer of immediately available
funds to the following account:
Bank Name: Household Bank, FSB
Bank Address: 0000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, XX 00000
Bank ABA: 000000000
Credit Acct: HFS Service Clearing
Credit Acct Num: 0190047725
Attention: Xxxxx Xxxxxx
Reference: Escrow Funds In Trust For Loan Sale
3. Investment of Funds. The Escrow Agent shall invest the Escrow Funds
in a interest-bearing account which shall bear interest at the
prevailing Federal Funds rate.
4. Distribution of Escrow Funds. The Escrow Agent shall pay the Escrow
Funds to the Seller on the Closing Date (as defined in the Loan Sale
Agreement) pursuant to wire instructions as provided by the Seller
to the Escrow Agent. This Escrow Agreement shall terminate upon such
payment, except for Section 10 hereto which shall specifically
survive the termination of this Escrow Agreement. In the event that
the Buyer does not close its purchase of the Mortgage Loans for any
reason other than as a result of a default under the Loan Sale
Agreement by Seller, all of the Escrow Funds, which constitutes
liquidated damages, will be remitted by the Escrow Agent to the
Seller in immediately available funds to the account designated in
writing by the Seller. Pursuant to the Loan Sale Agreement, upon
closing of the purchase of the Mortgage Loans including receipt of
the Purchase Price, the Escrow Funds thereon will be credited to
Buyer's payment of the Purchase Price for the Mortgage Loans.
5. Compensation and Expenses. The Escrow Agent shall not be paid a fee.
6. Nature of the Escrow Agent's Duties. The duties of the Escrow Agent
hereunder shall be entirely administrative and not discretionary.
The Escrow Agent shall be obligated to act only as provided in the
Escrow Agreement except as required by any order, judgment or decree
of any court, in which case the Escrow Agent shall not be liable as
a result of its compliance with such order, judgment or decree. The
Escrow Agent shall not be liable to any third party as a result of
any action or omission taken or made by the Escrow Agent. No rights
herein are intended to be granted to any third-party beneficiary.
7. Releases. Upon termination of this Escrow Agreement or resignation
of the Escrow Agent pursuant to Section 8 hereof, the Seller and the
Buyer shall release the Escrow Agent from any and all liability
arising out of its execution and performance under this Escrow
Agreement, such release to be in a form satisfactory to the Escrow
Agent.
8. Right To Resign. The Escrow Agent shall have the right to resign at
any time by giving ten (10) days' prior written notice to the Buyer
and the Seller. In the event of such resignation, the Buyer and the
Seller shall select a successor to the Escrow Agent within ten (10)
days after notice of resignation. Any such successor to the Escrow
Agent shall have, from and after appointment or succession hereunder
, all the right, title, interest, duties and powers, and immunities
which are by the provisions of this Escrow Agreement granted to and
vested in the Escrow Agent named herein.
9. Notices. Any notice or demand required or permitted to be given or
made to or upon any party hereto pursuant to any of the provisions
of this Escrow Agreement shall be deemed to have been duly given or
made for all purposes if (i) in writing and delivered by hand, or
sent by certified or registered mail, postage prepaid, return
receipt requested, or (ii) sent by facsimile transmission or other
electronic means and followed by a copy delivered or sent in the
manner provided in clause (i) above, to such party at the following
address:
To the Buyer:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
To the Seller:
Household Financial Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: Vice President
Business Relationship Risk Management
Facsimile No.: (000) 000-0000
with a copy to: Household Financial Services, Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attn: General Counsel
Facsimile No.: (000) 000-0000
To the Escrow Agent:
Household Bank, FSB
0000 Xxxxxxx Xxxx
Xxxxxxxx Xxxxxxx, XX 00000
or at such other address as any party hereto may at any time, or
from time to time, direct by notice given to the other parties in
accordance with this Section. The date of giving or making of any
such notice or demand shall be the earlier of the date of actual
receipt, or five (5) business days after such notice or demand is
sent, or, if sent in accordance with clause (ii) the business day
next following the day such notice or demand is actually
transmitted.
10. Indemnification. The Buyer and the Seller agree to and hereby do
waive any suit, claim, demand or cause of action of any kind, at law
or in equity, which it or they may have or may assert against the
Escrow Agent, its partners, employees, and agents arising out of or
relating to the execution or performance by the Escrow Agent of this
Escrow Agreement, except for any loss, liability or expense incurred
by reason of Escrow Agent's willful misfeasance, bad faith or
negligence. The Buyer and the Seller further agree to jointly and
severally indemnify, defend and save harmless the Escrow Agent, its
partners, employees, and agents, against and from any and all
claims, demands, costs, liabilities and expenses, including
reasonable counsel fees and court costs, which may be asserted
against it or to which it may be exposed or which it may incur by
reason of its execution or performance of this Escrow Agreement,
except for any loss, liability or expense incurred by reason of
Escrow Agent's willful misfeasance, bad faith or negligence. This
section shall specifically survive the termination of this Escrow
Agreement.
11. Miscellaneous
11.1 This Escrow Agreement sets forth the entire understanding
among the parties hereto with respect to the subject matter
hereof.
11.2 This Escrow Agreement shall not be amended or supplemented
except in a written document signed by all the parties hereto.
No rights herein shall be assigned by the Seller or the Buyer
without the prior consent of the Escrow Agent.
11.3 No failure to exercise, delay in exercising, or single or
partial exercise of any right, power or remedy by any party
shall preclude any other or further exercise of the same or
any other right, power or remedy. If any provision of this
Escrow Agreement is construed to be invalid, illegal or
unenforceable, the remaining portions hereof shall not be
affected thereby and shall be enforceable without regard
thereto.
11.4 The headings of any of the Sections in this Escrow Agreement
are inserted for convenience of reference only and shall
neither constitute a part of this Escrow Agreement nor affect
its meaning, construction or effect.
11.5 In the event any legal questions arise concerning the
administration of this Escrow Agreement, the Escrow Agent may
consult its counsel and rely absolutely upon the opinions of
such counsel, which may include members or employees of its
firm.
11.6 The Escrow Agent may rely absolutely upon the genuineness and
authorization of the signature and purported signature of any
party upon any agreement, instruction, notice, release,
receipt or other document delivered to it pursuant to this
Escrow Agreement.
11.7 In the event of any conflict between the terms of this Escrow
Agreement and the terms of the Buyer's Final Bid, the terms of
this Escrow Agreement shall prevail.
11.8 This Escrow Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their
permitted successors and assigns.
11.9 All questions arising under this Escrow Agreement, including
its interpretation, validity, effect and performance, and the
remedies and enforcement hereunder, shall be governed by the
laws of the State of Illinois pertaining to contracts made and
to be performed solely therein.
11.10 Should any dispute or controversy arise concerning the Escrow
Agent's duties, or should the Seller and the Buyer be unable
to agree upon any terms or provisions hereof, the Escrow Agent
reserves the right to seek the order of any court at the
expense of the Seller and the Buyer. The Escrow Agent may also
deposit the Escrow Funds with the court for the court's
disposition, whereupon this Escrow Agreement and the Escrow
Agent's appointment and duties hereunder shall terminate.
11.11 This Escrow Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
11.12 Buyer acknowledges that Escrow Agent is an Affiliate of
Seller.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
on the day first above written.
Xxxxxxx Sachs Mortgage Company, as Buyer
By: ________________________________
Name:
Title:
Household Financial Services, Inc, as Seller
By: ________________________________
Name: Xxxxx Xxxxxx
Title: Vice President
Household Bank, FSB
By: ___________________________________
Name: _________________________________
Title: ________________________________
Exhibit F
Limited Power of Attorney
Whereas, Household Financial Services, Inc., and its Affiliates
(collectively, "Seller") has sold certain Mortgage Loans to Xxxxxxx Sachs
Mortgage Company, and its Affiliates (collectively, "Buyer") pursuant to that
certain Loan Sale Agreement dated September 6, 2002 ("Agreement"). (Capitalized
terms not otherwise defined herein shall have the meaning set forth in the
Agreement.)
Now, therefore, Seller does hereby constitute and appoint Buyer the true
and lawful attorney-in-fact of Seller and in Seller's name, place and stead for
the following, and only the following purposes:
(i) executing, acknowledging, and delivering to Buyer any assignment of
Mortgage or other document necessary to transfer to, or vest in
Buyer or to protect the right, title and interest of Buyer in and to
those Mortgage Loans provided, however, that any endorsement given
or made pursuant hereto with respect to any Note other instrument
evidencing a Mortgage Loan or an interest therein shall be so given
or made without recourse and without any representation or warranty
of any kind, except to the extent otherwise expressly provided in
the Agreement.
(ii) endorsing, as agent for Seller, any checks or other instruments
(made payable to Seller) received as payment with respect to the
Mortgage Loans after each related purchase.
Seller intends that this Limited Power of Attorney ("POA") is coupled with
an interest and not revocable.
Seller further grants to Buyer as its attorney-in-fact full authority to
act in any manner both proper and necessary to exercise the foregoing powers,
and ratifies every act that Buyer may lawfully perform in exercising those
powers by virtue thereof.
Buyer shall indemnify, defend and hold harmless Seller, its successors and
assigns, from and against any and all losses, costs, expenses, (including,
without limitation, reasonable attorneys' fees), damages, liabilities, demands,
or claims of any kind whatsoever ("Claims") arising out of (i) any act taken by
Buyer pursuant to this POA, which act results in a Claim solely by virtue of the
unlawful use of this POA (and not a result of a Claim related to the underlying
instrument with respect to which the POA has been used), or (ii) any use or
misuse of this POA in any manner or by any person or entity not expressly
authorized hereby.
IN WITNESS WHEREOF, Seller has executed this Limited Power of Attorney
this 10th day of September, 2002.
Seller: Household Financial Services, Inc.
By:
Name: Xxxxx Xxxxxx
Title: Vice President
STATE OF __________________
COUNTY OF __________________
On this, the ___________ day of ______________________, __________, the
foregoing instrument was acknowledged before me, a notary public, in and for the
State of _______________________, by _______________________________, personally
known to me, by me duly sworn, did say he/she is the
_________________________________ of _______________________________________.
_________________________________
Notary Public
My Commission Expires: _____________ SEAL
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------
XXXXXXX SACHS MORTGAGE COMPANY
Purchaser
WMC MORTGAGE CORP.,
Seller
----------
Dated as of September 16, 2002
Conventional,
Fixed and Adjustable Rate Non-Prime Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. Definitions ................................................
SECTION 2. Agreement to Purchase ......................................
SECTION 3. Mortgage Schedules .........................................
SECTION 4. Purchase Price .............................................
SECTION 5. Examination of Mortgage Files ..............................
SECTION 6. Conveyance from Seller to Purchaser ........................
Subsection 6.01 Conveyance of Mortgage Loans .........................
Subsection 6.02 Books and Records ....................................
Subsection 6.03 Delivery of Mortgage Loan Documents ..................
Subsection 6.04 Quality Control Procedures ...........................
SECTION 7. Servicing of the Mortgage Loans ............................
SECTION 8. [RESERVED] .................................................
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach ........................................
Subsection 9.01 Representations and Warranties Regarding the
Seller ...............................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans ............................
Subsection 9.03 Remedies for Breach of Representations and
Warranties ...........................................
Subsection 9.04 Repurchase of Mortgage Loans With First Payment
Defaults .............................................
SECTION 10. Closing ....................................................
SECTION 11. Closing Documents ..........................................
SECTION 12. Costs ......................................................
SECTION 13. Cooperation of Seller with a Reconstitution ................
SECTION 14. The Seller .................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims .........................................
Subsection 14.02 Merger or Consolidation of the Seller ................
SECTION 15. Financial Statements .......................................
SECTION 16. Mandatory Delivery; Grant of Security Interest .............
SECTION 17. Notices ....................................................
SECTION 18. Severability Clause ........................................
SECTION 19. Counterparts ...............................................
SECTION 20. Governing Law ..............................................
SECTION 21. Intention of the Parties ...................................
SECTION 22. Successors and Assigns; Assignment of Purchase Agreement ...
SECTION 23. Waivers ....................................................
SECTION 24. Exhibits ...................................................
SECTION 25. General Interpretive Principles ............................
SECTION 26. Reproduction of Documents ..................................
SECTION 27. Further Agreements .........................................
SECTION 28. Recordation of Assignments of Mortgage .....................
SECTION 29. No Solicitation ............................................
SECTION 30. Waiver of Trial by Jury ....................................
SECTION 31. Submission To Jurisdiction; Waivers ........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT H SELLER'S UNDERWRITING GUIDELINES
EXHIBIT I MORTGAGE LOAN SCHEDULE
EXHIBIT J MORTGAGE LOAN SCHEDULE FIELDS
EXHIBIT K PREMIUM ADJUSTMENT PERCENTAGE
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of September 16, 2002, by and between Xxxxxxx Xxxxx
Mortgage Company, a New York limited partnership, having an office at 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and WMC Mortgage Corp., a
California corporation, having an office at 0000 Xxxxxx Xxxxxx, Xxxxxxxx Xxxxx,
Xxxxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate non-prime residential first and second lien mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered as a pool of whole loans on the date as provided herein (the
"Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first and second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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 Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement
and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
of the related Mortgaged Property based upon the appraisal made for the
originator at the time of origination of the Mortgage Loan or the sales price of
the Mortgaged Property at such time of origination, whichever is less; provided,
however, that in the case of a refinanced Mortgage Loan, such value is based
solely upon the appraisal made at the time of origination of such refinanced
Mortgage Loan, and (ii) with respect to any Second Lien Loan, the value,
determined pursuant to the Underwriting Guidelines, of the related Mortgaged
Property as of the origination of the Second Lien Loan.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
or executive order to be closed, or (iii) the State in which the Custodian's
operations are located, are authorized or obligated by law to be closed.
Closing Date: September 25, 2002, or such other date as is mutually
agreed upon by the parties.
CLTV: As of the date of origination and as to any Second Lien Loan,
the ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of the date of origination and (ii)
the outstanding principal balance as of the date of origination of any mortgage
loan or mortgage loans that are senior or equal in priority to the Second Lien
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Current CLTV: As of any date and as to any Second Lien Loan, the
ratio, expressed as a percentage, of the (a) sum of (i) the outstanding
principal balance of the Second Lien Loan as of such date and (ii) the
outstanding principal balance as of such date of any mortgage loan or mortgage
loans that are senior or equal in priority to the Second Lien Loan and which are
secured by the same Mortgaged Property to (b) the Appraised Value.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents.
Custodian: Deutsche Bank National Trust Company, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: September 16, 2002.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The 20th day of each calendar month.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow 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 required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the HUD,
or any successor thereto and including the Federal Housing Commissioner and the
Secretary of Housing and Urban Development where appropriate under the FHA
Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
FHA Regulations: Regulations promulgated by HUD under the National
Housing Act, codified in 24 Code of Federal Regulations, and other HUD issuances
relating to FHA insured mortgage loans, including the related handbooks,
circular, notices and mortgagee letters.
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on Exhibit I hereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Material Adverse Change: (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, condition
(financial or otherwise) or prospects of Seller or Servicer; (b) a material
impairment of the ability of Seller of Servicer, as applicable, to perform under
each Purchase Agreement, each Interim Servicing Agreement, each Custodial
Agreement or any related agreements (the "Operative Agreements"); or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability of any Operative Agreement against Seller or Servicer, as
applicable (unless such material adverse effect is directly caused by an action
of the Purchaser which can be remedied by the Purchaser).
Market Change Event: (a) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange or on NASDAQ; (b)
a general moratorium on commercial banking activities declared by either Federal
or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; or (c) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in clause (c) in the judgment of the Purchaser or
Seller, as applicable, makes it impracticable or inadvisable to proceed with the
transactions as contemplated in this letter agreement on the terms and in the
manner contemplated in this letter agreement.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate the Custodian as the Investor on the MERS(R)
System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: 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.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, 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 listed in Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit I, setting forth the information set forth on Exhibit J with
respect to each Mortgage Loan.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President or 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.
Operative Agreements: Each of the Purchase Agreement, the Interim
Servicing Agreement (if entered into), the Custodial Agreement or any related
agreements.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth on the Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Premium Adjustment Percentage: As set forth on Exhibit K.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain Purchase Price and
Terms Letter, dated as of July 12, 2002, by and between the Seller and the
Purchaser.
Purchaser: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the originator, 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 Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
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, approved as an insurer by Xxxxxx
Xxx and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transfer in order to achieve
the desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be paid to the
Purchaser by the Seller in the month of substitution); (ii) have a Mortgage
Interest Rate not less than and not more than 1% greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Lifetime Rate
Cap, Index and lien priority); and (v) comply with each representation and
warranty (respecting individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer of a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transfer pursuant to Section 13, including, but not limited to, a
seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transfer.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 22nd calendar day (or if such 22nd calendar day
is not a Business Day, the first Business Day immediately preceding).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement or the Servicing
Agreement is found, a price equal to the then outstanding principal balance of
the Mortgage Loan to be repurchased, plus accrued interest thereon at the
Mortgage Interest Rate from the date on which interest had last been paid
through the date of such repurchase, plus the amount of any outstanding advances
owed to any servicer, plus all reasonable and customary out-of-pocket costs and
expenses incurred by the Purchaser or any servicer arising out of or based upon
such breach, including without limitation reasonable and customary costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: WMC Mortgage Corp., its successors in interest and assigns.
Servicer: Fairbanks Capital Corp., and its successors in interest.
Servicing Fee: With respect to each Mortgage Loan serviced by the
Seller prior to the Transfer Date, a fee payable monthly equal to one-twelfth of
the product of (a) the Servicing Fee Rate and (b) the outstanding principal
balance of such Mortgage Loan. Such fee shall be payable monthly and shall be
pro-rated for any portion of a month during which the Mortgage Loan is serviced
by the Seller hereunder. The obligation of the Purchaser to pay the Servicing
Fee is limited to, and the Servicing Fee is payable solely from, the interest
portion (including recoveries with respect to interest from Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds (each as defined in the
Servicing Agreement), to the extent permitted by the Servicing Agreement) of
such Monthly Payment collected by the Seller or Servicer.
Servicing Fee Rate: 0.50% per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller or Servicer consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller or Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans but not
including any Prepayment Penalties; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Seller thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all accounts
and other rights to payment related to any of the property described in this
paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 9.03 which is entitled to the benefits of the indemnifications set
forth in such Section and Section 14.01.
Thirty-day Delinquency: The failure of the Mortgagor to make any
Monthly Payment due under the Mortgage Note on or prior to the date which is 30
days after such payment's Due Date.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit H.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date. The Mortgage Loan Schedule shall be the
Preliminary Mortgage Schedule with those Mortgage Loans which have not been
funded prior to the Closing Date deleted. The Mortgage Loan Schedule shall be
attached hereto as Exhibit I.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date, as set forth on the Mortgage Loan Schedule. If so provided in the
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the Cut-off Date at the weighted
average Mortgage Interest Rate of those Mortgage Loans from the date through
which interest on the Mortgage Loan has been paid through (the "Paid-through
Date") the day prior to the Closing Date, inclusive. The Purchase Price plus
accrued interest as set forth in the preceding paragraph shall be paid to the
Seller by wire transfer of immediately available funds to an account designated
by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
after the Paid-through Date. The outstanding principal balance of each Mortgage
Loan as of the Cut-off Date is determined after application of payments of
principal due on or before the Cut-off Date, to the extent actually collected,
together with any unscheduled principal prepayments collected prior to the
Cut-off Date; provided, however, that payments of scheduled principal and
interest paid prior to the Cut-off Date, but to be applied on a due date beyond
the Cut-off Date shall not be applied to the principal balance as of the Cut-off
Date. Such prepaid amounts shall be the property of the Purchaser. The Seller
shall cause any such prepaid amounts to be remitted to the Servicer for
subsequent remittance to the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage (except with respect to each MERS
Designated Mortgage), pertaining to each Mortgage Loan.
At least ten (10) Business Days prior to the Closing Date, with
respect to each Mortgage Loan to be purchased, the Seller shall make the related
Servicing Files and Credit Files available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser.
Such examination of the Mortgage Files may be made by the Purchaser
or its designee at any reasonable time before or after the Closing Date. If the
Purchaser makes such examination prior to the Closing Date and determines, in
its sole discretion, that any Mortgage Loans are unacceptable to the Purchaser
for any reason, such Mortgage Loans shall be deleted from the Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files or the Credit Files shall not affect the Purchaser's (or any of
its successor's) rights to demand repurchase, substitution or other relief as
provided herein.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the Closing Date, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in the
manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans, the
Servicing Rights, the Mortgage Files, the Servicing and Credit Files, and all
rights and obligations arising under the documents contained therein.
Subsection 6.02. Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller after the Cut-off Date on or in connection with a
Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller in trust for the benefit
of the Purchaser or the appropriate designee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Xxxxxx Mae or Xxxxxxx Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the National Flood Insurance Act of 1968, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller may be in the
form of microfilm or microfiche so long as the Seller complies with the
requirements of the Xxxxxx Mae Guides.
Subsection 6.03. Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall deliver and
release to the Custodian no later than five (5) Business Days prior to the
Closing Date those Mortgage Loan Documents as required by the Custodial
Agreement with respect to each Mortgage Loan, a list of which is set forth in
the Custodial Agreement.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the Initial Certification of the Custodian in the
form annexed to the Custodial Agreement. The Purchaser shall pay and initial
setup fee charged by the Custodian. The Seller shall comply with the terms of
the Custodial Agreement and the Purchaser shall pay all fees and expenses of the
Custodian from and after the Closing Date.
The Seller shall forward to the Custodian, or to such other Person
as the Purchaser shall designate in writing, original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian, or to
such other Person as the Purchaser shall designate in writing, with a certified
true copy of any such document submitted for recordation within two weeks of its
execution, and shall promptly provide the original of any document submitted for
recordation or a copy of such document certified by the appropriate public
recording office to be a true and complete copy of the original within ninety
days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, on the Closing Date (other than with respect to the
Assignments of Mortgage which shall be delivered to the Custodian in blank on or
prior to the Closing Date and recorded subsequently by the Purchaser or its
designee or document submitted for recordation to the appropriate public
recording office), and in the event that the Seller does not cure such failure
within 30 days of discovery or receipt of written notification of such failure
from the Purchaser, the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in the manner specified
in Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its
designee said officer's certificate and (ii) such document is delivered within
twelve (12) months of the Closing Date..
Subsection 6.04. 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
shall include evaluating and monitoring the overall quality of the Seller's loan
production and the servicing activities of the Seller in accordance with
industry standards.
SECTION 7. Servicing of the Mortgage Loans.
(a) The Mortgage Loans have been sold by the Seller to the Purchaser
on a servicing released basis. The Purchaser shall retain the Seller as the
contract servicer of the Mortgage Loans for an interim period pursuant to and in
accordance with the terms and conditions set forth in this section; provided
that if the Transfer Date has not occurred on or prior to the date which is 60
days after the Closing Date, the Purchaser and the Seller hereby agree to
negotiate in good faith and enter into a more detailed interim servicing
agreement mutually acceptable to the parties. On the Closing Date, the Seller
shall begin, or shall cause the Servicer to begin servicing the Mortgage Loans
on behalf of the Purchaser in accordance with the Accepted Servicing Practices
and the following provisions of this section.
(b) As consideration for servicing the Mortgage Loans during the
period from the Closing Date up to but not including the Transfer Date, the
Seller shall retain the Servicing Fee, which shall be prorated for any portion
of a month during which the Mortgage Loan is serviced by the Seller pursuant to
this Agreement.
(c) In servicing the Mortgage Loans, the Seller shall comply with
(i) all applicable laws, rules and regulations with respect thereto and (ii)
Accepted Servicing Practices, unless otherwise set forth herein. The Seller
shall take no action with respect to any Mortgage Loan, including entering into
any litigation, or any agreement with the related borrower, without the prior
written consent of the Purchaser. The Seller shall promptly notify the Purchaser
in writing of any action which should be taken with respect to any Mortgage Loan
in accordance with Accepted Servicing Practices. The Seller shall take no
action, and shall not refrain from taking action, which, in either case, (A)
would impair the ability of the Purchaser to realize on or enforce the Mortgage
Note or the lien of the Mortgage or any other document related thereto or (B)
would jeopardize the rights or remedies available to the Purchaser with respect
to any Mortgage Loan or otherwise impair the ability of the Purchaser to realize
on the Mortgaged Property with respect to such Mortgage Loan.
(d) The Seller shall be obligated to make all advances on the
Mortgage Loans with respect to taxes and insurance premiums due and owing (the
"T&I Servicing Advances"). Any other servicing advances shall be made with the
prior written consent of the Purchaser. The Seller shall be required to notify
the Purchaser in writing of all advances required to be made in order to further
protect and preserve the Purchaser's interest in the Mortgage Loans and the
underlying Mortgaged Property (the "Other Servicing Advances," together with the
T&I Servicing Advances, the "Servicing Advances"), and shall make such Other
Servicing Advances in a timely fashion unless otherwise instructed by the
Purchaser. The Seller shall be entitled to reimbursement for all Servicing
Advances from the Purchaser within 15 business days following the Transfer Date.
(e) The Seller shall retain for the benefit of the Purchaser in a
segregated account in a depository institution insured by the FDIC, and shall
remit (or, if the account is held be the Servicer, shall cause the Servicer to
remit) to the Purchaser on the earlier to occur of the Remittance Date of each
month and the Transfer Date (a) all amounts received from any source with
respect to the Mortgage Loans minus (b) the Servicing Fee owed the Seller with
respect to the Mortgage Loans. On or prior to the Remittance Date the Seller
shall deliver to the Purchaser a remittance advice which shall be in the form of
FNMA 2010 (except that such report shall reflect the fact that servicing is on
an "actual" basis) and shall additionally specify the number of days which each
Mortgage Loan is delinquent, and shall contain an explanation of all Servicing
Advances made, the status of all Mortgage Loans in foreclosure or otherwise the
subject of litigation, and the status of all other collection efforts with
respect to each Mortgage Loan.
(f) The Seller agrees to indemnify and hold the Purchaser harmless
from any liability, claim, loss or damage (including, without limitation, any
reasonable legal fees, judgments or expenses relating to such liability, claim,
loss or damage reasonable legal fees incurred in connection with the enforcement
of the Seller's indemnification obligation under this Subsection) to the
Purchaser directly or indirectly resulting from the Seller's or the Servicer's
failure: (i) to observe and perform any or all of Seller's duties, obligations,
covenants, agreements, warranties or representations contained in this Section
7; or (ii) to comply with all applicable requirements with respect to the
servicing of the Mortgage Loans as set forth herein.
(g) The Seller may perform any of its servicing responsibilities
hereunder or may cause the Servicer to perform any such servicing
responsibilities on its behalf, but the use by the Seller of the Servicer shall
not release the Seller from any of its obligations hereunder and the Seller
shall remain responsible hereunder for all acts and omissions of the Servicer as
fully as if such acts and omissions were those of the Seller. The Seller shall
pay all fees and expenses of the Subservicer from its own funds.
(h) Notwithstanding any of the provisions of this Agreement relating
to agreements or arrangements between the Seller and the Servicer or any
reference herein to actions taken through the Servicer or otherwise, the Seller
shall not be relieved of its obligations to the Purchaser and shall be obligated
to the same extent and under the same terms and conditions as if it alone were
servicing and administering the Mortgage Loans. The Seller shall be entitled to
enter into an agreement with the Servicer for indemnification of the Seller by
the Servicer and nothing contained in this Agreement shall be deemed to limit or
modify such indemnification.
SECTION 8. Transfer of Servicing.
On the Transfer Date, the Purchaser, or its designee, shall assume
all servicing responsibilities related to, and the Seller and the Servicer shall
cease all servicing responsibilities related to the Mortgage Loans.
On or prior to the Transfer Date, the Seller shall, or shall cause
the Servicer to, at its sole cost and expense, take such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Purchaser, or its designee,
including but not limited to the following:
(a) Notice to Mortgagors. The Seller shall, or shall cause the
Servicer to, mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with copies of all
such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall, or shall cause the Servicer to, transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser from and after the Transfer Date. The Seller shall, or shall cause the
Servicer to, provide the Purchaser with copies of all such notices no later than
the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall, or shall cause
the Servicer to, forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Seller's or Servicer's possession relating
to each related Mortgage Loan including the information enumerated in the
Servicing Agreement (with respect to each such Mortgage Loan, for an interim
period, as specified therein).
(d) Escrow Payments. The Seller shall, or shall cause the Servicer
to, provide the Purchaser, or its designee, with immediately available funds by
wire transfer in the amount of the net Escrow Payments and suspense balances and
all loss draft balances associated with the related Mortgage Loans. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with an accounting
statement of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall, or shall
cause the Servicer to, wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Seller or the Servicer.
(e) Payoffs and Assumptions. The Seller shall, or shall cause the
Servicer to, provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Seller or the Servicer on the related
Mortgage Loans from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller or the Servicer on each
related Mortgage Loan shall be properly applied by the Seller or the Servicer to
the account of the particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of
any related Monthly Payments received by the Seller or the Servicer after the
Transfer Date shall be forwarded to the Purchaser by overnight mail on the date
of receipt. The Seller shall, or shall cause the Servicer to, notify the
Purchaser of the particulars of the payment, which notification requirement
shall be satisfied if the Seller or the Servicer forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Purchaser. The Seller shall, or shall cause the Servicer to, assume full
responsibility for the necessary and appropriate legal application of such
Monthly Payments received by the Seller or the Servicer after the Transfer Date
with respect to related Mortgage Loans then in foreclosure or bankruptcy;
provided, for purposes of this Agreement, necessary and appropriate legal
application of such Monthly Payments shall include, but not be limited to,
endorsement of a Monthly Payment to the Purchaser with the particulars of the
payment such as the account number, dollar amount, date received and any special
Mortgagor application instructions and the Seller shall comply with the
foregoing requirements with respect to all Monthly Payments received by the it
after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the Transfer Date and discovered after the
Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall, or shall cause the Servicer to, reimburse the Purchaser for
the amount of such shortage within thirty (30) days after receipt of
written demand therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result
of an inaccurate outstanding principal balance, a check shall be
issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller and the Servicer with respect to the related Mortgage
Loans shall be in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, or shall cause the Servicer
to, on or before the Transfer Date, reconcile principal balances and make any
monetary adjustments required by the Purchaser. Any such monetary adjustments
will be transferred between the Seller or the Servicer and the Purchaser as
appropriate.
(k) IRS Forms. The Seller shall, or shall cause the Servicer to,
file all IRS Forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall, or shall cause the Servicer to,
provide copies of such forms to the Purchaser upon request and shall reimburse
the Purchaser for any costs or penalties incurred by the Purchaser due to the
Seller's failure to comply with this paragraph.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller (subject to bankruptcy and other laws affecting
creditor's rights), regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller (taken as a
whole), or in any material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in any material
liability on the part of the Seller, or which would draw into question the
validity of this Agreement or the Mortgage Loans or of any action taken or to be
taken in connection with the obligations of the Seller contemplated herein, or
which would be likely to impair materially the ability of the Seller to perform
under the terms of this Agreement;
(f) No Consent Required. Except for the recording of the Assignments
of Mortgage, no consent, approval, authorization or order of, or registration or
filing with, or notice to any court or governmental agency or body including
HUD, the FHA or the VA is required for the execution, delivery and performance
by the Seller of or compliance by the Seller with this Agreement or the Mortgage
Loans, the delivery of a portion of the Mortgage Files to the Custodian or the
sale of the Mortgage Loans or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been obtained prior to the
Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. 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 the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the Closing Date in
the form attached as Exhibit G hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, 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 material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the context in which they were made;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no material 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 obligations under this Agreement;
(l) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(m) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(n) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(o) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(p) Owner of Record. At the time of the sale of the Mortgage Loans,
the Seller is the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note, except for the Assignments of Mortgage which
have been sent for recording, and upon recordation the Seller will be the owner
of record of each Mortgage and the indebtedness evidenced by each Mortgage Note.
(q) Reports. On or prior to the Closing Date, Seller has provided
the Custodian and the Purchaser with a MERS Report listing the Custodian as the
Investor with respect to each MERS Designated Mortgage Loan;
(r) MERS Designations. With respect to each MERS Designated Mortgage
Loan, the Seller has designated the Custodian as the Investor and no Person is
listed as Interim Funder on the MERS(R) System.
Subsection 9.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments for which the related due date was not thirty or more days prior
to the Closing Date, have been made and credited. No Mortgage Loan has a
Thirty-day Delinquency nor has the Mortgage Loan had a Thirty-day Delinquency at
any time since the origination of the Mortgage Loan. The first Monthly Payment
shall be made with respect to the Mortgage Loan on its Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and 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 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any valid right
of rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any valid right of rescission, set-off, counterclaim or defense, including
without limitation the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with respect thereto, and no
Mortgagor was a debtor in any state or Federal bankruptcy or insolvency
proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac in an amount which is at least 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 or the loss payee from becoming a co-insurer. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is covered
by a flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration is in effect which policy conforms to
Xxxxxx Xxx and Xxxxxxx Mac in an amount representing coverage not less than the
lesser of (i) the aggregate unpaid principal balance of the Mortgage Loan, (ii)
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968, as amended (regardless of whether the area in which such
Mortgaged Property is located is participating in such program), and (iii) the
full replacement value of the improvements which are part of such Mortgaged
Property. All individual insurance policies contain a standard mortgagee clause
naming the Seller and its successors and assigns as mortgagee, and all premiums
thereon have been paid. The Mortgage obligates the Mortgagor thereunder to
maintain the hazard insurance policy at the Mortgagor's cost and expense, and on
the Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Mortgagor's cost and expense, and to
seek reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier of
the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not engaged in, and has no
knowledge of the Mortgagor's or any servicer's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits of the
endorsement provided for herein, or the validity and binding effect of such
policy, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. 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. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, and (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee.
(j) Valid First and Second Lien. Each Mortgage is a valid and
subsisting first lien, with respect to First Lien Loans, or second lien, with
respect to Second Lien Loans, of record on a single parcel of real estate
constituting the Mortgaged Property, including all buildings and improvements on
the Mortgaged Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at any time,
with respect to the foregoing. In no event shall any Mortgage Loan be in a lien
position more junior than a second lien. The lien of the Mortgage is subject
only to:
(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal;
(3) 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;
and
(4) with respect to Second Lien Loans, the lien of the first
mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Loan, in either
case, on the property described therein and Seller has full right to sell and
assign the same to Purchaser. Except as set forth on the Mortgage Loan Schedule,
the Mortgaged Property was not, as of the date of origination of the Mortgage
Loan, subject to a mortgage, deed of trust, deed to secure debt or other
security instrument creating a lien subordinate to the lien of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(subject to bankruptcy and other laws affecting creditor's rights). All parties
to the Mortgage Note, the Mortgage and any other such related agreement had
legal capacity to enter into the Mortgage Loan and to execute and deliver the
Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the
Mortgage and any other such related agreement have been duly and properly
executed by other such related parties. No fraud, error, omission (other than
omissions in accordance with the Seller's Underwriting Guidelines with respect
to Mortgage Loans originated under a Limited Documentation Program),
misrepresentation or similar occurrence with respect to a Mortgage Loan has
taken place on the part of any Person, including without limitation, the
Mortgagor, any appraiser, any builder or developer, or any other party involved
in the underwriting, origination or servicing of the Mortgage Loan. The Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. As of the time of the sale of the Mortgage Loans, the
Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note. The Mortgage Loan is not assigned
or pledged, and the Seller has good, indefeasible and marketable title thereto,
and has full right to transfer and sell the Mortgage Loan to the Purchaser free
and clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and has full right and authority subject to
no interest or participation of, or agreement with, any other party, to sell and
assign each Mortgage Loan pursuant to this Agreement and following the sale of
each Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of
any encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the Closing Date, the Seller will
have no right to modify or alter the terms of the sale of the Mortgage Loan and
the Seller will have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV. No Mortgage Loan that is a Second Lien Loan has a
CLTV in excess of 100%. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
(with respect to First Lien Loans) or second priority lien (with respect to
Second Lien Loans) of the Mortgage in the original principal amount of the
Mortgage Loan, subject only to the exceptions contained in clauses (1), (2), (3)
and (4) of paragraph (j) of this Subsection 9.02, and in the case of Adjustable
Rate Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exception or to replace the standard survey exception
with a specific survey reading. The Seller, its successor and assigns, are the
sole insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration. With respect to each Second Lien Loan,
(i) the prior mortgage is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such prior mortgage or
the related mortgage note, (iii) as of the Closing Date, no event which, with
the passage of time or with notice and the expiration of any grace or cure
period, would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the Second Lien Loan to
receive notice of, and affords such mortgagee an opportunity to cure any default
by payment in full or otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims (except those which have been expressly insured over in the related title
insurance policy) 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 or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Except as set forth on the Mortgage
Loan Schedule, either (a) 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 other
similar institution which is supervised and examined by a federal or state
authority, or (b) the following requirements have been met with respect to the
Mortgage Loan: the Seller meets the requirements set forth in clause (a), and
(i) such Mortgage Loan was underwritten in accordance with standards established
by the Seller, using application forms and related credit documents approved by
the Seller, (ii) the Seller approved each application and the related credit
documents before a commitment by the correspondent was issued, and no such
commitment was issued until the Seller agreed to fund such Mortgage Loan, (iii)
the closing documents for such Mortgage Loan were prepared on forms approved by
the Seller, and (iv) such Mortgage Loan was actually funded by the Seller and
was purchased by the Seller at closing or soon thereafter. No Mortgage Loan
contains terms or provisions which would result in negative amortization.
Principal payments on the Mortgage Loan commenced no more than sixty days after
funds were disbursed in connection with the Mortgage Loan. The Mortgage Interest
Rate as well as the Lifetime Rate Cap and the Periodic Cap, are as set forth on
Exhibit I hereto. The Mortgage Note is payable in equal monthly installments of
principal and interest, which installments of interest, with respect to
Adjustable Rate Mortgage Loans, are subject to change due to the adjustments to
the Mortgage Interest Rate on each Interest Rate Adjustment Date, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than thirty
years from commencement of amortization. Unless otherwise specified on the
description of pool characteristics attached as Exhibit G hereto, the Mortgage
Loan is payable on the first day of each month (subject to a grace period set
forth in the related Mortgage Note). There are no Convertible Mortgage Loans
which contain a provision allowing the Mortgagor to convert the Mortgage Note
from an adjustable interest rate Mortgage Note to a fixed interest rate Mortgage
Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with the Underwriting Guidelines (including approved
variances in connection with compensating factors permitted thereunder). The
Mortgage Note and Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae
and the Seller has not made any representations to a Mortgagor that are
inconsistent with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property 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;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under the Custodial Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Exhibit A hereto, except for such documents the
originals of which have been delivered to the Custodian;
(aa) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such Mortgage Loan was originated in
accordance with, and the Mortgaged Property meets the guidelines set forth in
the Seller's Underwriting Guidelines;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(cc) Due-On-Sale. With respect to each Mortgage Loan, the Mortgage
contains an enforceable provision (other than with respect to transfers of the
Mortgaged Property with respect to which applicable law required that
due-on-sale provisions may not be enforced) for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(dd) Assumability. 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;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(ff) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or, to the Seller's knowledge, 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;
(hh) Collection Practices; Interest Rate Adjustments. The
origination, servicing and collection practices used by the Servicer, the
Seller, and any prior servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper and prudent in
the mortgage origination and servicing business. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(ii) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(jj) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
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 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;
(kk) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(ll) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
originator, 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 the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(mm) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Seller has complied with, all applicable law with respect to the making
of the Mortgage Loans. The Seller shall maintain such statement in the Mortgage
File;
(nn) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(oo) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(pp) No Defense to Insurance Coverage. The Seller has caused to be
performed any and all acts required to preserve the rights and remedies of the
Purchaser 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 coinsured, joint loss payee
and mortgagee rights in favor of the Purchaser. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or has
existed on or prior to the Closing Date (whether or not known to the Seller on
or prior to such date) which has resulted or will result in an exclusion from,
denial of, or defense to coverage under any primary mortgage insurance
(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, the
related Mortgagor or any party involved in the application for such coverage,
including the appraisal, plans and specifications and other exhibits or
documents submitted therewith to the insurer under such insurance policy, or for
any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(qq) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(rr) Credit Information. 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, that 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
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(ss) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(tt) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(uu) Predatory Lending Regulations. No more than 0.25% of the
Mortgage Loans are (i) covered by the Home Ownership and Equity Protection Act
of 1994 or (ii) in violation of, or classified as "high cost", "threshold,",
"predatory" or "covered" loans under, any other applicable state, federal or
local law ("Covered Loans"). With respect to any Covered Loan, the related
Mortgagor has been provided with all disclosure materials required by Section
226.32 of the Federal Reserve Board Regulation Z with respect to any Mortgage
Loans subject to such Section of the Federal Reserve Board Regulation Z, if
applicable, and has complied with the requirements of any federal, state or
local law with respect to `high cost', `threshold', `covered' or `predatory'
loans. No predatory or deceptive lending practices were employed in the
origination of the Mortgage Loan;
(vv) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(ww) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(xx) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(yy) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Xxx guidelines for
such trusts;
(zz) Recordation. Each original Mortgage was recorded and (except
for those Mortgage Loans subject to the MERS identification system) all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been, or are in the process of being, 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;
(aaa) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500; and
(bbb) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws.
Subsection 9.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price,
together with all expenses incurred by the Purchaser as a result of such
repurchase. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (ww), (xx), (yy) or (aaa) of
Subsection 9.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price, together with all reasonable and customary out-of-pocket
expenses incurred by the Purchaser as a result of such repurchase. In the event
that a breach shall involve any representation or warranty set forth in
Subsection 9.01, and such breach cannot be cured within 60 days of the earlier
of either discovery by or notice to the Seller of such breach, all of the
Mortgage Loans shall, at the Purchaser's option, be repurchased by the Seller at
the Repurchase Price. However, if the breach shall involve a representation or
warranty set forth in Subsection 9.02 (other than the representations and
warranties set forth in clauses (ww), (xx), (yy) or (aaa) of such Subsection)
and the Seller discovers or receives notice of any such breach within 120 days
of the Closing Date, the Seller shall, at the Purchaser's option and provided
that the Seller has a Qualified Substitute Mortgage Loan, rather than repurchase
the Mortgage Loan as provided above, remove such Mortgage Loan (a "Deleted
Mortgage Loan") and substitute in its place a Qualified Substitute Mortgage Loan
or Loans, provided that any such substitution shall be effected not later than
120 days after the Closing Date. If the Seller has no Qualified Substitute
Mortgage Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase
of a Mortgage Loan or Loans pursuant to the foregoing provisions of this
Subsection 9.03 shall be accomplished by direct remittance of the Repurchase
Price to the Purchaser or its designee in accordance with the Purchaser's
instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment on such Qualified Substitute
Mortgage Loan or Loans in the month following the date of such substitution.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution shall be retained by the Seller. For the month of
substitution, distributions to the Purchaser shall include the Monthly Payment
due on any Deleted Mortgage Loan in the month of substitution, and the Seller
shall thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and the Successor Servicer and hold it
harmless against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Seller representations and
warranties contained in this Agreement or any Reconstitution Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase a defective Mortgage Loan
and to indemnify the Purchaser and Successor Servicer as provided in this
Subsection 9.03 constitute the sole remedies of the Purchaser and Successor
Servicer respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph, "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 and "Successor Servicer" shall mean the Person
then acting as the Successor Servicer under this Agreement and any and all
Persons who previously were "Successor Servicers" under this Agreement.
Upon the request of the Purchaser, the Seller hereby agrees to
execute a recognition agreement recognizing the servicer designated by the
Purchaser therein as the Successor Servicer.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04. Repurchase of Mortgage Loans With Early Payment
Defaults.
If the related Mortgagor fails to make the first Monthly Payment due
to the Purchaser after the Closing Date on or before the date which is
forty-five days after the related Due Date, the Seller, at the Purchaser's
option exercised in its sole discretion, shall repurchase such Mortgage Loan
from the Purchaser at a price equal to the percentage of par as stated in the
Purchase Price and Terms Agreement (subject to adjustment as provided therein)
multiplied by the then outstanding principal balance of such Mortgage Loan, plus
accrued and unpaid interest thereon from the date to which interest was last
paid through the day prior to the repurchase date at the applicable Mortgage
Interest Rate, plus any outstanding advances owed to any servicer in connection
with such Mortgage Loan.
Subsection 9.05. Repurchase of Certain Mortgage Loans That Prepay in
Full.
With respect to Mortgage Loans without Prepayment Penalties, in the
event that any such Mortgage Loan is prepaid in full on or before the date which
is twelve months after the Closing Date, the Seller shall pay the Purchaser,
within three (3) Business Days of such prepayment in full, the product of (a)
the difference between the Purchase Price for such Mortgage Loan and the
outstanding principal balance of such Mortgage Loan as of the Cut-off Date and
(ii) the Premium Adjustment Percentage.
Subsection 9.06. Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
review each Mortgage File and Credit File, to conduct property inspections,
obtain appraisal recertifications, drive-by appraisals, brokers price opinions
and otherwise to underwrite the Mortgage Loans and to reject any Mortgage Loan
which in the Purchaser's sole opinion is an unacceptable investment. In
addition, the Purchaser shall have the right to reject any Mortgage Loan which
in the Purchaser's sole determination (i) fails to conform to the Underwriting
Guidelines, (ii) the value of the Mortgaged Property pursuant to any brokers
price opinion is 15% or more below the original appraised value of the Mortgaged
Property; (iii) any Mortgage Loan Document in the related Mortgage File is
missing or defective in whole or in part; or (iv) the Mortgage Loan does not
conform to the terms of this letter agreement or is in breach of the
representations and warranties set forth in Section 9.02.
Notwithstanding the foregoing, the fact that the Purchaser or its
designee has conducted or failed to conduct the review/due diligence procedures
specified above or any other partial or complete examination of the Mortgage
Files or Credit Files shall not impair in any way the Purchaser's or any of its
successors' rights to demand repurchase, substitution or any other remedy
provided under this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with in all material respects; and
(vi) No Material Adverse Change or Market Change Event shall have
occurred since the date of the Purchase Price and Terms
Agreement.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, any account certifications and all
other documents required thereunder;
3. the Custodial Agreement, dated as of the Cut-off Date;
4. the Mortgage Loan Schedule, one copy to be attached hereto,
and one copy to be attached to the Custodian's counterpart of
the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. an Officer's Certificate, in the form of Exhibit C hereto with
respect to the Seller, including all attachments thereto;
7. an Opinion of Counsel of the Seller (who may be an employee of
the Seller), in the form of Exhibit D hereto ("Opinion of
Counsel of the Seller") or such other form as is mutually
acceptable to the Purchaser and the Seller;
8. an Opinion of Counsel of the Custodian (who may be an employee
of the Custodian), in the form of an exhibit to the Custodial
Agreement;
9. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
10. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
11. the Underwriting Guidelines to be attached hereto as Exhibit
H;
12. Exhibit G to this Agreement; and
13. a MERS Report reflecting the Custodian as Investor and no
Person as Interim Funder for each MERS Designated Mortgage
Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees, any commissions (if
any) due its salesmen, the fees and expenses of its counsel, any initial setup
fee of the Custodian and any costs and expenses of the Custodian for the ongoing
maintenance of the Mortgage Loan files over the lives of the Mortgage Loans, and
all recording fees for transfers, if any, for the assignments of mortgage for
all Mortgage Loans not recorded in the name of MERS, for the assignments of
mortgage to the Purchaser or the Purchaser's assignee (regardless of when
recorded), all fees, if any, for transferring record ownership on the MERS
system of Mortgage Loans recorded in the name of MERS. All servicing fees
incurred prior to the related Closing Date, and all costs and expenses incurred
in connection with the transfer of the Mortgage Loans, fees to transfer files
and prepare assignments/endorsements, including the costs associated with
clearing exceptions, (including costs to record intervening assignments and any
existing assumption and modification agreements), any costs or expenses charged
by the Seller's custodian with respect to the Mortgage Loans and the fees and
expenses of Seller's counsel, shall be payable by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the 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) Xxxxxx Mae under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Xxx Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(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;
provided that Purchaser shall not enter into more than five
Reconstitutions of the Mortgage Loans in the first year after the Closing Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Mae or Xxxxxxx 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 Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that there shall be no more than four transferees of the Purchaser at
any one time.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) (a) to restate the
representations and warranties set forth in this Agreement as of the settlement
or closing date in connection with such Reconstitution (each, a "Reconstitution
Date"); provided, that with respect to the representations and warranties set
forth in Section 9.02(b) and 9.02(q), the Seller shall only restate such
representations and warranties as of the Closing Date, and, provided further,
that with respect to the representation and warranty set forth in Section
9.02(gg), the Seller's restatement of such representation and warranty as of the
Reconstitution Date shall be qualified "to the best of the Seller's knowledge",
or (b) make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be, or
such representations and warranties as may be required by any Rating Agency or
prospective purchaser of the related securities or such Mortgage Loans, in
connection with such Reconstitution. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants in such Reconstitution: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Seller or its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request; (ii)
such additional representations, warranties, covenants, 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.
The Seller shall not be required to incur any out-of-pocket costs, expenses or
liability, except as contemplated in this section, in connection with the
Seller's obligations pursuant to this section. The Seller shall indemnify the
Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Seller regarding the Seller, the Seller's
servicing practices or performance, the Mortgage Loans or the Underwriting
Guidelines set forth in any offering document prepared in connection with any
Reconstitution. The Seller shall indemnify or cause the Servicer to indemnify
the Purchaser, each Affiliate designated by the Purchaser and each Person who
controls the Purchaser or such Affiliate and hold each of them harmless from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Servicer regarding the Servicer, the servicer's
servicing practices or performance, the Mortgage Loans or the Underwriting
Guidelines set forth in any offering document prepared in connection with any
Reconstitution. For purposes of the previous sentence, "Purchaser" shall mean
the Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement. Moreover, the
Seller agrees to cooperate with all reasonable requests made by the Purchaser to
effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller, acceptable to the prospective
purchaser or trustee, as applicable, for each Mortgage Loan that is part of the
Reconstitution and shall pay all preparation and recording costs associated
therewith. In connection with the Reconstitution, the Seller shall (except with
respect to each MERS Designated Mortgage Loan) execute each assignment of
mortgage, track such Assignments of Mortgage to ensure they have been recorded
and deliver them as required by the prospective purchaser or trustee, as
applicable, upon the Seller's receipt thereof. Additionally, the Seller shall
prepare and execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01. Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and Successor Servicer and
hold it harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees (including (without limitation) legal fees incurred in
connection with the enforcement of the Seller's indemnification obligation under
this Subsection 14.01) and related costs, judgments, and any other costs, fees
and expenses that the Purchaser or the Successor Servicer may sustain in any way
related to the failure of the Seller to perform its duties under this Agreement
and the Servicer to service the Mortgage Loans in strict compliance with the
terms of this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13 or any breach of any of Seller's representation, warranties and
covenants set forth in this Agreement (provided that such cost shall not include
any lost profits). The Seller immediately shall notify the Purchaser if a claim
is made by a third party with respect to this Agreement or any Reconstitution
Agreement or the Mortgage Loans, assume (with the prior written 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 Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9, or is in
any way related to the failure of the Seller or Servicer to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement.
Subsection 14.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
The Purchaser agrees that it shall not disclose the financial
statements of the Seller except to the extent (a) the disclosure is reasonably
believed the Purchaser to be required in connection with regulatory requirements
or other legal requirements relating to its affairs; (b) they are disclosed to
any one or more of the Purchaser'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) they are
that is 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 Ratings Agency or other 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 disclosure is reasonably believed by such party to be necessary for the
enforcement of such party's rights under this Agreement.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the Closing Date. As of the closing of the sale of the Mortgage
Loans, the Seller hereby grants to the Purchaser a lien on and a continuing
security interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligations under the Purchase Price and Terms Agreement, and the Seller
agrees that it shall hold such Mortgage Loans in custody for the Purchaser
subject to the Purchaser's (i) right to reject any Mortgage Loan (or Qualified
Substitute Mortgage Loan) under the terms of this Agreement and to require
another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be substituted
therefor, and (ii) obligation to pay the Purchase Price for the Mortgage Loans.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, sent by
facsimile, by registered or certified mail, return receipt requested, or, if by
other means, when received by the other party at the address as follows:
(i) if to the Seller:
WMC Mortgage Corp.
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
cc: Xxxxxx X. Xxxxxxxxx, General Counsel
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
Fax: (000) 000-0000
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 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be 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 the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. 1Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. After the Closing Date, this Agreement shall not be assigned, pledged
or hypothecated by the Seller to a third party without the prior written consent
of the Purchaser, which consent may be withheld by the Purchaser in its sole
discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller. There shall be no limitation on the
number of assignments or transfers allowable by the Purchaser with respect to
the Mortgage Loans and this Agreement. In the event the Purchaser assigns this
Agreement, and the assignee assumes any of the Purchaser's obligations
hereunder, the Seller acknowledges and agrees to look solely to such assignee,
and not to the Purchaser, for performance of the obligations so assumed and the
Purchaser shall be relieved from any liability to the Seller with respect
thereto. The Successor Servicer shall be an intended 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.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Purchaser's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the Closing Date and the Seller shall take no action to undermine these
rights and benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Seller or any affiliate of the Seller which
are directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Confidentiality.
The Seller understands and agrees that the Operative Agreements, any
other agreements executed in connection with the sale contemplated hereunder,
any agreements executed in connection with the securitization of the Mortgage
Loans, and any offering circulars or other disclosure documents produced in
connection with such securitization are confidential and proprietary to the
Purchaser, and the Seller agrees to hold such documents confidential and not to
divulge such documents to anyone except (a) to the extent required by law or
judicial order or to enforce its rights or remedies under this letter agreement
or the Operative Agreements, (b) to the extent such information enters into the
public domain other than through the wrongful act of the Seller, or (c) as is
necessary in working with legal counsel, auditors, rating agencies, agents,
taxing authorities or other governmental agencies.
SECTION 31. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 32. Submission To Jurisdiction; Waivers.
Each of the Seller and the Purchaser hereby irrevocably and
unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX SACHS MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By: XXXXXXX XXXXX REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:________________________________
Name:______________________________
Title:_____________________________
WMC MORTGAGE CORP.
(Seller)
By:______________________________________
Name:____________________________________
Title:___________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon, if required;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan in blank, in form and
substance acceptable for recording. If the Mortgage Loan was acquired by the
Seller in a merger, the Assignment of Mortgage must be made by "WMC Mortgage
Corp., successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another name,
the Assignment of Mortgage must be by "WMC Mortgage Corp., formerly known as
[previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the originator to the Last
Endorsee (or MERS with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to the Custodian, a photocopy
of such intervening assignment, together with (i) in the case of a delay caused
by the public recording office, an Officer's Certificate of the Seller (or
certified by the title company, escrow agent, or closing attorney) stating that
such intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office, a
copy of such intervening assignment certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company;
(h) original powers of attorney, if applicable, or, if in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered the
original power of attorney with evidence of recording thereon, if applicable, on
or prior to the Closing Date because of a delay caused by the public recording
office, the Seller shall deliver or cause to be delivered to the Custodian, a
photocopy of such power of attorney, together with an Officer's Certificate of
the Seller (or certified by the title company, escrow agent, or closing
attorney) stating that such power of attorney has been dispatched to the
appropriate public recording office for recordation and that the original
recorded power of attorney or a copy of such power of attorney certified by such
public recording office to be a true and complete copy of the original recorded
power of attorney will be promptly delivered to the Custodian upon receipt
thereof by the Seller; and
(i) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 180 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the anticipated date the applicable recorded
document will be delivered to the Custodian. An extension of the date specified
in (iv) above may be requested from the Purchaser, which consent shall not be
unreasonably withheld.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment except for Mortgage Loans originated under a Limited Documentation
Program.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of WMC Mortgage Corp., a state chartered institution organized
under the laws of the state of California (the "Company") and further as
follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Mortgage Loan
Purchase and Warranties Agreement, dated as of September 16, 2002, by and
between Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") and the Company
(the "Purchase Agreement"), and the Custodial Agreement dated as of
September 16, 2002 by and among the Company, the Purchaser and Deutsche
Bank National Trust Company (the "Custodial Agreement") and to endorse the
Mortgage Notes and execute the Assignments of Mortgages by original or
facsimile signature, and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Servicing Agreement, the Custodial
Agreement, the sale of the mortgage loans or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement conflicts or will conflict with or
results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any
indenture or other agreement or instrument to which the Company is a party
or by which it is bound or to which it is subject, or any statute or
order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is subject
or by which it is bound.
7. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Servicing Agreement, (c) the Custodial Agreement and
(d) any other document delivered or on the date hereof in connection with
any purchase described in the agreements set forth above was, at the
respective times of such signing and delivery, and is now, a duly elected
or appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such documents
are their genuine signatures.
8. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement, the Servicing
Agreement and the Custodial Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
WMC MORTGAGE CORP.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Vice] President
[Seal]
I, ________________________, an [Assistant] Secretary of WMC
Mortgage Corp., hereby certify that ____________ is the duly elected, qualified
and acting [Vice] President of the Company and that the signature appearing
above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
WMC MORTGAGE CORP.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
---- ----- ---------
_____________________________ _____________________ ____________________________
_____________________________ _____________________ ____________________________
_____________________________ _____________________ ____________________________
_____________________________ _____________________ ____________________________
_____________________________ _____________________ ____________________________
_____________________________ _____________________ ____________________________
_____________________________ _____________________ ____________________________
Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to WMC Mortgage Corp. (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"), dated as of
September 16, 2002 (the "Purchase Agreement") which sale is in the form of whole
loans, delivered pursuant to a Servicing Agreement, dated as of September 16,
2002, by and between Purchaser and the Company (the "Servicing Agreement") and
the Custodial Agreement dated as of September 16, 2002 among the Purchaser, the
Company, and Deutsche Bank National Trust Company (the "Custodial Agreement"
and, collectively with the Purchase Agreement, the "Agreements"). Capitalized
terms not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Servicing Agreement;
3. the Custodial Agreement;
4. the form of Assignment of Mortgage;
5. the form of endorsement of the Mortgage Notes; and
6. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a corporation, duly organized, validly existing
and in good standing under the laws of California and is
qualified to transact business in, and is in good standing
under, the laws of California.
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed
and delivered by the Company, and is a legal, valid and
binding agreement enforceable in accordance with its
respective terms against the Company, subject to bankruptcy
laws and other similar laws of general application
affecting rights of creditors and subject to the
application of the rules of equity, including those
respecting the availability of specific performance, none
of which will materially interfere with the realization of
the benefits provided thereunder or with the Purchaser's
ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature
the endorsements to the Mortgage Notes and the Assignments
of Mortgages, and the original [or facsimile] signature of
the officer at the Company executing the endorsements to
the Mortgage Notes and the Assignments of Mortgages
represents the legal and valid signature of said officer of
the Company.
6. Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for
the execution, delivery and performance by the Company of
or compliance by the with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of
the transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreements
conflicts or will conflict with or results or will result
in a breach of or constitutes or will constitute a default
under the charter or by-laws of the Company, the terms of
any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it
is subject, or violates any statute or order, rule,
regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the
Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened
against the Company which, in [our] [my] judgment, either
in any one instance or in the aggregate, may result in any
material adverse change in the business, operations,
financial condition, properties or assets of the Company or
in any material impairment of the right or ability of the
Company to carry on its business substantially as now
conducted or in any material liability on the part of the
Company or which would draw into question the validity of
the Agreements to which it is a party or the Mortgage Loans
or of any action taken or to be taken in connection with
the transactions contemplated thereby, or which would be
likely to impair materially the ability of the Company to
perform under the terms of the Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Custodial Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage
Notes have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable
form, except for the insertion of the name of the assignee,
and upon the name of the assignee being inserted, are
acceptable for recording under the laws of the state where
each related Mortgaged Property is located. The
endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to
the Purchaser, or its designee, are sufficient to permit
the Purchaser to avail itself of all protection available
under applicable law against the claims of any present or
future creditors of the Company, and are sufficient to
prevent any other sale, transfer, assignment, pledge or
hypothecation of the Mortgages and the Mortgage Notes by
the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
________________________________
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that WMC Mortgage Corp. a corporation,
organized pursuant to the laws of California] (the "Company") has committed to
sell to Xxxxxxx Sachs Mortgage Company ("Purchaser") under a Mortgage Loan
Purchase and Warranties Agreement, dated as of September 16, 2002, certain
mortgage loans originated by the Association. The Company warrants that the
mortgage loans to be sold to Purchaser are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Purchaser shall not be used as additional or substitute collateral for advances
made by the Association. Purchaser understands that the balance of the Company's
mortgage loan portfolio may be used as collateral or additional collateral for
advances made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to
___________________________________.
Very truly yours,
WMC MORTGAGE CORP.
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
Acknowledged and approved:
__________________________
By:_______________________________
Name:_____________________________
Title:____________________________
Date:_____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by Xxxxxxx Xxxxx Mortgage Company ("Purchaser") from the Company named below
pursuant to that certain Mortgage Loan Purchase and Warranties Agreement, dated
as of September 16, 2002, and certifies that all notes, mortgages, assignments
and other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company named below or its designees, as of the
date and time of the sale of such Mortgage Loans to Purchaser.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to Xxxxxxx Sachs Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loan, the security interests in the Mortgage Loans released by the
above-named financial institution comprise all security interests relating to or
affecting any and all such Mortgage Loans. The Company warrants that, as of such
time, there are and will be no other security interests affecting any or all of
such Mortgage Loans.
WMC MORTGAGE CORP.
By:_____________________________
Title:__________________________
Date:___________________________
Exhibit I
EXHIBIT G
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL CHARACTERISTICS OF
THE MORTGAGE LOANS
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
With respect to both aggregate outstanding principal balance of all
the Mortgage Loans, (a) no more than ___% of the Mortgage Loans are secured by
real property improved by two- to four- family dwellings, (b) no more than ___%
are secured by real property improved by individual condominium units, (c) no
more than ___% are secured by real property improved by an individual unit in a
planned unit development, and (d) at least ___% are secured by real property
with a detached one family residence erected thereon. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, (a) no more than ____%
are "cash-out" refinance mortgage loans, (b) no more than ____% are rate and
term refinance mortgage loans and (c) at least ____% are purchase mortgage
loans. With respect to the aggregate unpaid principal balance of the Mortgage
Loans at the time of origination, (a) no more than ____% of the Mortgaged
Properties were owner-occupied second homes, (b) no more than ____% of the
Mortgaged Properties were investor properties and (c) at least ____% of the
Mortgaged Properties were owner-occupied primary residences. With respect to the
aggregate unpaid principal balance of the Mortgage Loans, the weighted average
FICO Score shall be at least _______. No Mortgage Loan shall have a FICO Score
less than ___. With respect to the aggregate unpaid principal balance of the
Mortgage Loans, (i) no more than __% of the Mortgage Loans were originated under
the Seller's `stated documentation' program, (ii) no more than __% of the
Mortgage Loans were originated under a documentation program which is lacking
ratio verification, (iii) no more than __% of the Mortgage Loans have no
documentation and (iv) at least _________% of the Mortgage Loan were originated
under the Seller's `full documentation' program. The maximum Mortgage Interest
Rate on the Mortgage Loans as of the Cut-off Date was ____%. The minimum
Mortgage Interest Rate on the Mortgage Loans as of the Cut-off Date was ____%.
The Mortgage Loans have a weighted average remaining term of ___ months. The
maximum original principal balance of the Mortgage Loans is $_______________.
The minimum original principal balance of the Mortgage Loans is $______________.
The average original principal balance of the Mortgage Loans is $
_______________. With respect to the aggregate unpaid principal balance of the
Mortgage Loans: (a) __% of the Mortgaged Properties will be located in
[_______]; (b) __% of the Mortgaged Properties will be located in [______] and
(c) not more than __% of the Mortgaged Properties will be located in any other
single state. The Mortgage Loan, as of the date of its origination, has an LTV
equal to or less than ___%. The weighted average LTV of all the Mortgage Loans
as of their respective dates of origination was not greater than ____%
Exhibit J
EXHIBIT H
SELLER'S UNDERWRITING GUIDELINES
Exhibit H
EXHIBIT I
MORTGAGE LOAN SCHEDULE
EXHIBIT J
MORTGAGE LOAN SCHEDULE FIELDS
(1) the Seller's Mortgage Loan identifying number;
(2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the
city, state and zip code;
(4) a code indicating whether the Mortgaged Property is
owner-occupied, a second home or investment property;
(5) the number and type of residential units constituting the
Mortgaged Property (i.e. a single family residence, a 2-4 family residence, a
unit in a condominium project or a unit in a planned unit development,
manufactured housing);
(6) the original months to maturity or the remaining months to
maturity from the 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;
(7) with respect to First Lien Loans, the LTV and with respect to
Second Lien Loans, the CLTV, each at the origination;
(8) the Mortgage Interest Rate as of the Cut-off Date;
(9) 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;
(10) the stated maturity date;
(11) the amount of the Monthly Payment as of the Cut-off Date;
(12) the last payment date on which a payment was actually
applied to the outstanding principal balance;
(13) the original principal amount of the Mortgage Loan;
(14) the principal balance of the Mortgage Loan as of the close of
business on the Cut-off Date, after deduction of payments of principal due and
collected on or before the Cut-off Date;
(15) with respect to Adjustable Rate Mortgage Loans, the Interest
Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross
Margin;
(17) with respect to Adjustable Rate Mortgage Loans, the Lifetime
Rate Cap under the terms of the Mortgage Note;
(18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index;
(19) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Cap under the terms of the Mortgage Note;
(20) with respect to Adjustable Rate Mortgage Loans, the Periodic
Rate Floor under the terms of the Mortgage Note;
(21) the type of Mortgage Loan (i.e., Fixed Rate, Adjustable
Rate, First Lien, Second Lien);
(22) a code indicating the purpose of the loan (i.e., purchase,
rate and term refinance, equity take-out refinance);
(23) a code indicating the documentation style (i.e. full,
alternative or reduced);
(24) the loan credit classification (as described in the
Underwriting Guidelines);
(25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if
applicable;
(27) a description of the Prepayment Penalty, if applicable;
(28) the Mortgage Interest Rate as of origination;
(29) the credit risk score (FICO score) at origination;
(30) the date of origination;
(31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage;
(33) the Mortgage Interest Rate floor;
(34) the Mortgage Interest Rate calculation method (i.e., 30/360,
simple interest, other);
(35) a code indicating whether the Mortgage Loan is a Section 32
Mortgage Loan;
(36) a code indicating whether the Mortgage Loan is assumable;
(37) a code indicating whether the Mortgage Loan has been modified;
(38) the Current CLTV;
(39) the one year payment history, if applicable;
(40) the Due Date for the first Monthly Payment;
(41) the original Monthly Payment due;
(42) with respect to the related Mortgagor, the debt-to-income
ratio;
(43) with respect to Second Lien Loans, the outstanding principal
balance of the superior lien;
(44) the Appraised Value of the Mortgaged Property;
(45) the sales price of the Mortgaged Property if the Mortgage
Loan was originated in connection with the purchase of the Mortgaged
Property;
(46) the MERS Identification Number.
With respect to the Mortgage Loans in the aggregate:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and
(4) the weighted average maturity of the Mortgage Loans.
EXHIBIT K
PREMIUM ADJUSTMENT PERCENTAGE
For the period from the Closing Date to, but excluding the date which is 12/12
one month after the Closing Date:
________________________________________________________________________________
For the period from the date which is one month after the Closing Date 11/12
to, but excluding the date which is two month after the Closing Date:
________________________________________________________________________________
For the period from the date which is two months after the Closing Date 5/6
to, but excluding the date which is three months after the Closing Date:
________________________________________________________________________________
For the period from the date which is three months after the Closing 3/4
Date to, but excluding the date which is four months after the Closing
Date:
________________________________________________________________________________
For the period from the date which is four months after the Closing Date 2/3
to, but excluding the date which is five months after the Closing Date:
________________________________________________________________________________
For the period from the date which is five months after the Closing Date 7/12
to, but excluding the date which is six months after the Closing Date:
________________________________________________________________________________
For the period from the date which is six months after the Closing Date 1/2
to, but excluding the date which is seven months after the Closing Date:
________________________________________________________________________________
For the period from the date which is seven months after the Closing 5/12
Date to, but excluding the date which is eight months after the Closing
Date:
________________________________________________________________________________
For the period from the date which is eight months after the Closing 1/3
Date to, but excluding the date which is nine months after the Closing
Date:
________________________________________________________________________________
For the period from the date which is nine months after the Closing Date 1/4
to, but excluding the date which is ten months after the Closing Date:
________________________________________________________________________________
For the period from the date which is ten months after the Closing Date 1/6
to, but excluding the date which is eleven months after the Closing
Date:
________________________________________________________________________________
For the period from the date which is eleven months after the Closing 1/12
Date to, but excluding the date which is twelve months after the Closing
Date:
________________________________________________________________________________
================================================================================
XXXXXXX XXXXX MORTGAGE COMPANY
(Purchaser)
and
XXXXX FARGO HOME MORTGAGE, INC.
(Seller)
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of August 15, 2002
WFHM Pools 5493, 5494, 5495, 5496, 5497, 5498, 5499 and 5500
================================================================================
TABLE OF CONTENTS
1. Purchase and Sale.......................................................
2. Transfer of Ownership...................................................
4. Repurchase..............................................................
5. Covenants of the Seller.................................................
6. Conditions to Obligation of the Purchaser...............................
7. Certain Fees and Expenses...............................................
8. Servicing...............................................................
9. Indemnification.........................................................
9. Securitization..........................................................
10. Notices.................................................................
11. Miscellaneous...........................................................
12. Severability of Provisions..............................................
EXHIBITS
Schedule I Mortgage Loan Schedule
Exhibit A Interim Servicing Agreement
Exhibit B Contents of Mortgage Loan File
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (the "Agreement"), dated as of August 15,
2002, is between Xxxxxxx Xxxxx Mortgage Company, having an address at 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (such entity, and its successors and assigns,
being referred to herein as the "Purchaser"), and Xxxxx Fargo Home Mortgage,
Inc., a California corporation having an address at 0 Xxxx Xxxxxx, Xxx Xxxxxx,
Xxxx 00000-0000 (the "Seller").
The Purchaser and the Seller hereby recite and agree as follows:
RECITALS
WHEREAS, Schedule I attached hereto and made a part hereof lists fixed rate,
government and conventional, residential mortgage loans as defined herein (the
"Mortgage Loans"), each having an original term to stated maturity of not more
than 30 years; which have an aggregate outstanding principal balance as of the
close of business on the Cut-off Date of approximately $___________ that
comprise pools referred to as Mortgage Loan Pools 5493, 5494, 5495, 5496, 5497,
5498, 5499 and 5500 which are currently owned by the Seller that the Seller
desires to sell to the Purchaser on a servicing released basis as described
herein;
WHEREAS, capitalized terms used herein and not defined herein shall have the
meanings assigned to them in the Interim Servicing Agreement attached hereto as
Exhibit A;
WHEREAS, the Mortgage Loans shall be delivered as whole loans on a
servicing-released basis and shall be interim serviced by the Seller pursuant to
the Interim Servicing Agreement until the Transfer Date;
WHEREAS, the parties intend hereby to set forth the terms and conditions upon
which the proposed transactions will be effected; and
NOW THEREFORE, in consideration of the mutual promises herein made and other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
DEFINITIONS
Whenever used herein, the following capitalized words and phrases, unless the
content otherwise requires, shall have the following meanings:
Agency or Agencies: Any one or all of Xxxxxx Mae, Xxxxxxx Mac, FHA or VA, as
applicable.
Appraisal Report: A report setting forth the fair market value of a Mortgage
Property as determined by an appraiser who, at the time the appraisal was
conducted, met the minimum qualifications of the applicable Agency for
appraisers of residential mortgage loans.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the value
set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgage Property, or (ii) the
purchase price paid for the Mortgage Property, provided, however, in the case of
a refinance Mortgage Loan, such value shall be based solely on the appraisal
made in connection with the origination of such Mortgage Loan.
Assignment: An individual assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to give record
notice of the sale of the Mortgage to the Purchaser.
Borrower: The individual obligated to repay a Mortgage Loan. (The Borrower may
be the beneficiary or beneficiaries of an Illinois land trust when the Mortgage
Property is located in Illinois.)
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day on
which banking and savings and loan institutions in the City of New York, or
states where the parties are authorized or obligated by law or executive order
to be closed.
Code: The Internal Revenue Code of 1986, as it may be amended from time to time
or any successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Co-op Shares: Shares issued by private non-profit housing corporations.
Curtailment: A partial prepayment by the Borrower of principal on a Mortgage
Loan that otherwise is current, which prepayment is not accompanied by an amount
representing the full amount of scheduled interest due on the related Mortgage
Loan.
Custodian: J PMorgan Chase Bank, or such other entity appointed by the
Purchaser.
Due Date: With respect to a Mortgage Loan, the day of each month on which a
Monthly Payment and, where applicable, any Escrow Funds payment is due as stated
in the related Mortgage Note. The Due Date for all Mortgage Loans shall be the
first day of each month.
Escrow Funds: All funds collected with respect to a Mortgage Loan by the Interim
Servicer to cover related Escrow Items according to the provisions of the
Interim Servicing Agreement.
Escrow Item: An expense required to be paid by a Borrower under the related
Security Instrument including, without limitation, taxes, special assessments,
ground rents, water, sewer and other governmental impositions or charges that
are or may become liens on the related Mortgage Property prior to that of the
related Security Instrument, as well as Hazard Insurance, Flood Insurance and
Primary Mortgage Insurance premiums.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
FHA: Federal Housing Administration and its successors.
FHA Mortgage Loan: A Mortgage Loan insured by FHA.
Flood Insurance: An insurance policy insuring against flood damage to a
Mortgage Property, where required.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Hazard Insurance: A fire and casualty extended coverage insurance policy
insuring against loss or damage from fire and other perils covered within the
scope of standard extended hazard coverage naming the Interim Servicer, its
successors and assigns, as a mortgagee under a standard mortgagee clause,
together with all riders and endorsements thereto.
HUD: The United States Department of Housing and Urban Development and its
successors.
Insurance Policy: Any insurance policy for a Mortgage Loan required hereunder,
including, without limitation, the loan guaranty of the VA, the insurance issued
by FHA, Primary Mortgage Insurance, Hazard Insurance, Flood Insurance, pool
insurance and Title Insurance policies.
Insurance Proceeds: Proceeds from an Insurance Policy, other than such proceeds
which are applied by the Borrower or held to be applied by the Borrower to the
restoration of the related Mortgage Property.
Interim Servicer : Xxxxx Fargo Home Mortgage, Inc., the entity that has entered
into this Agreement with the Purchaser and any successors or permitted assigns
of Xxxxx Fargo Home Mortgage, Inc.
LGC: With respect to each VA Mortgage Loan, the Loan Guaranty Certificate issued
by the VA as a guarantee that the federal government will repay to the lender a
specified percentage of the loan balance in the event of the Borrower's default.
Liquidation: Application of full payment to a Mortgage Loan which results in the
release of the lien of the related Security Instrument on any related Mortgage
Property, whether through foreclosure and sale of the related REO, condemnation,
prepayment in full or otherwise, or the realization of all sums from the final
disposition of the related REO.
Liquidation Proceeds: The amount received by the Interim Servicer which
ultimately relates to the Liquidation of a Mortgage Loan.
Loan Originator: The entity that closes a Mortgage Loan in its own name.
Loan-to-Value (LTV): The ratio that results when the Unpaid Principal Balance of
a Mortgage Loan is divided by the Appraised Value of the related Mortgage
Property.
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.
MIC: With respect to each FHA Mortgage Loan, the Mortgage Insurance Certificate
issued by HUD/FHA as evidence that a mortgage has been insured and that a
contract of mortgage insurance exists between HUD/FHA and the lender
incorporating the HUD/FHA regulation identified in the certificate.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
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 Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest due in the applicable month under the terms of
the related Mortgage Note.
Mortgage: The Mortgage, deed of trust, or other instrument securing a Mortgage
Note, which creates a first lien on an unsubordinated estate in fee simple in
real property securing the Mortgage Note.
Mortgage Interest Rate: The interest rate payable by the Borrower on a Mortgage
Loan according to the terms of the Mortgage Note.
Mortgage Loan: A mortgage loan identified on Schedule I, including without
limitation, the related Mortgage Loan Documents, any related REO and all other
material and information collected by the Interim Servicer in connection with
the Mortgage Loan including Monthly Payments, Liquidation Proceeds, Insurance
Proceeds and all other rights, benefits and proceeds arising from or in
connection with such Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the original related
Mortgage Note with applicable addenda and riders, the original related Security
Instrument and the originals of any required addenda and riders, the original
related Assignment and any original intervening related Assignments, the
original related Title Insurance policy, the related MIC or LGC, if applicable,
the related Primary Mortgage Insurance policy, if any, and the related Appraisal
Report made at the time such Mortgage Loan was originated, and all other
documents described in Exhibit B.
Mortgage Loan File: With respect to each Mortgage Loan, a file which contains
the documents specified in Exhibit B hereof, as well as any other documents that
come into the Seller's or Interim Servicer's possession with respect to such
Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as Schedule
I, such schedule setting forth the following information with respect to each
Mortgage Loan: (1) the Seller's Mortgage Loan number; (2) the address, city,
state and zip code of the Mortgage Property; (3) a code indicating whether the
Mortgage Property is a single family residence, two-family residence,
three-family residence, four-family residence or planned unit development; (4)
the purpose of the Mortgage Loan; (5) the current Mortgage Interest Rate; (6)
the current Monthly Payment; (7) the original term to maturity; (8) the
scheduled maturity date (and, if different, the stated maturity date indicated
on the Mortgage Note on its date of origination); (9) the principal balance of
the Mortgage Loan as of the Cut-off Date; (10) the Loan-to-Value Ratio; (11) the
due date of the Mortgage Loan; (12) a code indicating whether the Mortgage is
insured by FHA or guaranteed by VA; (13) the amount of any delinquencies and the
due date of any delinquent payments; (14) the CPI twelve month pay string; (15)
a code indicating whether a Mortgage Loans is a MERS Loan and (16) a code
indicating whether the Mortgage Loan is covered by a PMI Policy.
Mortgage Note: A manually executed written instrument evidencing the related
Borrower's promise to repay a stated sum of money, plus interest, to the related
Loan Originator and its successors and assigns by a specific date according to a
schedule of monthly principal and interest payments.
Mortgage Property: Land, improvements thereon and other property subject to the
lien of a Security Instrument, which may include Co-op Shares or residential
long-term leases, securing repayment of the debt evidenced by the related
Mortgage Note.
Mortgagee: The secured party to which a Security Instrument initially grants a
lien on the related Mortgage Property.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board or the
Vice Chairman of the Board or a President or a Vice President or an Assistant
Vice President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Person on behalf of whom such
certificate is being delivered.
Opinion of Counsel: A written opinion of counsel, who may be in-house counsel to
the Seller.
Person: Any individual, corporation, limited liability company, partnership,
joint venture, association, joint-stock company, trust or unincorporated
organization.
PMI Policy: A policy of Primary Mortgage Insurance issued by a generally
accepted insurer with respect to certain Mortgage Loans.
Preliminary Title Report: A report issued by a title insurance company in
anticipation of issuing a Title Insurance policy which evidences existing liens
and gives a preliminary opinion as to the absence of any encumbrance on title to
a Mortgage Property, except liens to be removed on or before purchase or
refinance, as the case may be, by the Borrower and permitted encumbrances.
Primary Mortgage Insurance: Insurance obtained from a primary mortgage insurer
which insures the holder of a Mortgage Note against loss in the event the
related Borrower defaults under such Mortgage Note or the related Security
Instrument, including all riders and endorsements thereto.
Prudent Servicing Practices: Such practices including the servicing and
administration of the Mortgage Loans in accordance with this Agreement,
customary mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loans in the
jurisdictions where the related Mortgaged Properties are located, the terms of
the related Mortgage Loan documents and applicable law.
Purchase Price and Terms Letter: That certain letter agreement between the
Purchaser and the Seller dated July 25, 2002.
Qualification Defect: With respect to a Mortgage Loan, (a) a defective document
in the Mortgage File, (b) the absence of a document in the Mortgage Loan file,
or (c) the breach of any representation, warranty or covenant with respect to
the Mortgage Loan made by the Seller, but, in each case, only if the affected
Mortgage Loan would cease to qualify as a "qualified mortgage" for purposes of
the REMIC Provisions.
Real Estate Owned (REO): Any Mortgage Property the title to which is acquired on
behalf of the Purchaser through foreclosure, deed-in-lieu of foreclosure,
abandonment or reclamation from bankruptcy in connection with a defaulted
Mortgage Loan.
REMIC: A "real estate mortgage investment conduit" within the meaning of Section
860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a REMIC,
which appear at Section 860A through 860G of Subchapter M of Chapter l, Subtitle
A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Securitization Closing Date: The date on which a pass-through transaction with
respect to the Mortgage Loans is completed by the Purchaser or an affiliate of
the Purchaser.
Security Instrument: A written instrument creating a valid first lien on a
Mortgage Property. A Security Instrument may be in the form of a mortgage, deed
of trust, deed to secure debt or security deed, including any riders and addenda
thereto.
Servicing Fee: For each Mortgage Loan, the compensation due the Interim Servicer
as defined in the Interim Servicing Agreement.
Title Insurance: An American Land Title Association (ALTA) mortgage loan title
policy form or other form of Title Insurance Policy acceptable to the applicable
Agency, including all riders and endorsements thereto, insuring that the
Security Instrument constitutes a valid first lien on the related Mortgage
Property subject only to permitted encumbrances.
Unpaid Principal Balance: With respect to any Mortgage Loan as of any date, the
outstanding principal balance then payable by the Borrower under the terms of
the Mortgage Note.
VA: The United States Department of Veterans Affairs and its successors.
VA Mortgage Loan: A Mortgage Loan guaranteed by the VA.
1. Purchase and Sale.
(a) The Seller hereby agrees to sell, and the Purchaser agrees to
purchase, the Mortgage Loans having an aggregate principal balance
as of the close of business on August 6, 2002 (the "Cut-Off Date")
as listed on Schedule I attached hereto (the "Mortgage Loan
Schedule") as of August 15, 2002 or such other date as agreed to by
the Purchaser and the Seller (the "Closing Date"), for a purchase
price, payable to the Seller on the Closing Date in immediately
available funds (the "Purchase Price"), equal to the sum of (i) the
product of the "Purchase Price Percentage" as defined by the
Purchaser Price and terms Letter and the Unpaid Principal Balance of
the Mortgage Loans, as of the Cut-Off Date, (ii) plus accrued
interest at the Mortgage Interest Rate on each Mortgage Loan that is
less than sixty (60) days delinquent; and
(b) Upon payment of the Purchase Price, the Seller shall transfer,
assign, set over and otherwise convey to the Purchaser all the
right, title and interest, including the Servicing Rights, of the
Seller in and to the Mortgage Loans identified in the Mortgage Loan
Schedule, including all interest and principal received by the
Seller on or with respect to the Mortgage Loans after the Cut-Off
Date, together with all of the Seller's right, title and interest in
and to the proceeds of any related title, hazard, primary mortgage
or other insurance policies. The Seller shall, with the Purchaser's
consent, amend or modify Schedule I on or prior to the Closing Date
if necessary to reflect the actual Mortgage Loans transferred by the
Seller and accepted by the Purchaser on the Closing Date in
accordance with Section 2(c).
2. Transfer of Ownership.
(a) Upon sale of the Mortgage Loans, the ownership of each Mortgage
Note and the other Mortgage Loan Documents with respect to each
Mortgage Loan shall be vested in the Purchaser and the ownership
of all other records and documents with respect to the related
Mortgage Loan prepared by or which come into the possession of
the Seller shall immediately vest in the Purchaser. The Seller
shall promptly deliver to the Custodian any documents that come
into its possession required to be contained in the Mortgage Loan
File with respect to each of the Mortgage Loans following the
sale of the Mortgage Loans to the Purchaser. Prior to such
delivery, the Seller shall hold any such documents for the
benefit of the Purchaser, its successors and assigns.
(b) Delivery of Mortgage Loan Documents.
(i) On or before the Closing Date, the Seller shall deliver to
the Custodian the Mortgage Note, the Mortgage, the
Assignment of the related Security Instrument, for each VA
Mortgage Loan the original LGC and for each FHA Mortgage
Loan the original MIC, for each Mortgage Loan which is
subject to a PMI Policy, the certificate of primary
mortgage insurance, and the title insurance policy,
together with all other documents described in Exhibit B
hereto to the extent available;
(ii) Within one hundred eighty (180) days of the Closing Date, the
Seller shall deliver to the Custodian all documents required
to be contained in the Mortgage Loan File described in Exhibit
B hereto not previously delivered on the Closing Date,
provided however, the Seller may obtain extensions of this
180-day period by providing an Officer's Certificate and, in
some cases, an Opinion of Counsel, to the Purchaser or its
assigns. As long as the defect is not a "Qualification Defect
for a "REMIC" and will not, in the Purchaser's reasonable
judgment, adversely effect the execution of any Securitization
Agreement, successive 30-day extensions can be obtained, up to
a maximum of 240 days from the date of the first notice. In
the event a defect is a "Qualification Defect" the Seller
shall cure such defect or repurchase the Mortgage Loan
pursuant to this Agreement, within seventy-five (75) calendar
days of receiving notice of such defect;
(iii) All documents with respect to any Mortgage Loan in the
possession of the Seller or the Interim Servicer following the
Closing Date shall be held by the Seller or the Interim
Servicer in its capacity as the Interim Servicer solely for
the purpose of servicing or facilitating the servicing of the
Mortgage Loans and as bailee and agent for the Purchaser, its
successors and assigns, and shall only be released in
accordance with the terms of the Interim Servicing Agreement.
(c) Examination of Mortgage Loan Documents; Acceptance of Mortgage
Loans.
Prior to the Closing Date, the Seller shall make the Mortgage Loan
Documents included in the Mortgage Loan File available to the
Purchaser or its designee for examination at the Seller's offices or
at such other place as the Seller shall specify. The Purchaser or a
designee may review the Mortgage Loan Documents to verify that the
documents required to be included in each Mortgage Loan File are
available. If a Mortgage Loan File is incomplete or defective or a
Mortgage Loan does not conform to the requirements of this Agreement
and such omissions or defects cannot be cured prior to the Closing
Date, the Mortgage Loan shall be deleted from the Mortgage Loan
Schedule.
(d) Recordation of Assignments of Mortgage.
Subject to the sale of the Mortgage Loans by the Seller to the
Purchaser in accordance with the terms of this Agreement, the Seller
shall prepare and record all Assignments with respect to each
Mortgage Loan required to be contained in the related Mortgage Loan
File as of the Closing Date in the public recording office for the
jurisdiction in which the related Mortgage Property is located. The
Seller shall be obligated for the cost of preparing and recording
the initial Assignments with respect to each Mortgage Loan. Seller
certified copies of the Assignments shall be delivered to the
Custodian on or prior to the Closing Date, in the name directed by
the Purchaser. The Seller shall promptly arrange for and pay for
recordation of such Assignments. After return from the recording
offices, the assignments shall be delivered to the Custodian as part
of the legal documentation. The Purchaser shall be obligated for the
cost of preparing and recording any additional Assignments and
hereby acknowledges that in no event shall the Seller or the Interim
Servicer pay the cost of recording assignments in connection with a
subsequent sale of the Mortgage Loans by the Purchaser.
In addition, on or before the Closing Date, the Purchaser will
provide the Seller with its MERS registration number and 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,
and will not permit the Servicer to, and the Servicer 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.
3. Representations and Warranties.
(a) The Seller hereby represents and warrants to the Purchaser that, as
of the Closing Date:
(i) Due Organization and Authority.
The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of California
and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good
standing in each state where a Mortgage Property is located if
the laws of such state require licensing or qualification in
order to conduct business of the type conducted by the Seller,
and in any event the Seller is in compliance with the laws of
any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan and the servicing
of such Mortgage Loan in accordance with the terms of this
Agreement; the Seller has the full corporate power and
authority to execute and deliver this Agreement and to perform
in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the
Seller; and all requisite corporate action has been taken by
the Seller to make this Agreement valid and binding upon the
Seller in accordance with its terms;
(ii) Ordinary Course of Business.
The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the
Seller, who is in the business of selling loans, and the
transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(iii) No Conflicts.
Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Seller, the sale of
the Mortgage Loans to the Purchaser or the transactions
contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms of the articles of
incorporation or by-laws or any legal restriction or any
agreement or instrument to which the Seller is now a party or
by which it is bound, or constitute a default or result in the
violation of any law, rule, regulation, order, judgment or
decree to which the Seller or its property is subject, or
impair the ability of the Purchaser to realize on the Mortgage
Loans, or impair the value of the Mortgage Loans;
(iv) Ability to Service.
The Seller is an approved seller/servicer of residential
mortgage loans for the Agencies, as applicable, with the
facilities, procedures, and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as
the Mortgage Loans. The Seller is in good standing to sell
mortgage loans to and service mortgage loans for the Agencies,
as applicable, and no event has occurred, including but not
limited to a change in insurance coverage, which would make
the Seller unable to comply with the applicable Agency
eligibility requirements or which would require notification
to an Agency, as applicable.
(v) Ability to Perform.
The Seller does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent
and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans is not
undertaken to hinder, delay or defraud any of the Seller's
creditors;
(vi) No Litigation Pending.
There is no action, suit, proceeding or investigation pending
or threatened against the Seller which, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in
any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be contemplated
herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this
Agreement;
(vii) No Consent Required.
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 the sale of the Mortgage Loans
as evidenced by the consummation of the transactions
contemplated by this Agreement, or if required, such approval
has been obtained prior to the Closing Date;
(viii) No Untrue Information.
Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of fact or omits to state
a fact necessary to make the statements contained therein not
misleading;
(ix) Sale Treatment.
The Seller has determined that the disposition of the Mortgage
Loans pursuant to this Agreement will be afforded sale
treatment for accounting and tax purposes;
(x) No Brokers' Fees.
The Seller has not dealt with any broker, investment banker,
agent or other Person that may be entitled to any commission
or compensation in the connection with the sale of the
Mortgage Loans; and
(xi) MERS Status
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.
(b) The Seller hereby represents and warrants to the Purchaser that,
with respect to the Mortgage Loans, or each Mortgage Loan, as the
case may be, as of the Closing Date:
(i) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedule
attached hereto as Schedule I is true and correct;
(ii) No Outstanding Charges.
There are no defaults by the Seller in complying with the
terms of the Mortgage Note or Mortgage and all taxes,
governmental assessments, insurance premiums, water, sewer and
municipal charges, which previously became due and owing have
been paid, or an escrow of funds has been established for
every such item which remains unpaid and which has been
assessed but is not yet due and payable;
(iii) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except
by a written instrument which has been recorded, if necessary
to protect the interests of the Purchaser and which has been
delivered to the Purchaser. The substance of any such waiver,
alteration or modification has been approved by the issuer of
any related guaranty certificate or Primary Mortgage Insurance
policy and the title insurer, to the extent required by the
policy, and its terms are reflected on the Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by
the issuer of any related guaranty certificate or Primary
Mortgage Insurance policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part
of the Mortgage Loan File delivered to the Purchaser and the
terms of which are reflected in the Mortgage Loan Schedule;
(iv) No Defenses.
The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(v) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgage 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;
(vi) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are
genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its terms.
All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage
Note and the Mortgage have been duly and properly executed by
such parties;
(vii) No Fraud.
All the documents executed in connection with the Mortgage
Loan including, but not limited to, the Mortgage Note and the
Mortgage are free of fraud and any misrepresentation, are
signed by the persons they purport to be signed by, and
witnessed or, as appropriate, notarized by the persons whose
signatures appear as witnesses or notaries, and each such
document constitutes the valid and binding legal obligation of
the signatories and is enforceable in accordance with its
terms;
(viii) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with, 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. All
inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgage
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;
(ix) Location and Type of Mortgage Property.
The Mortgage Property is located in the state identified in
the Mortgage Loan Schedule and consists of a contiguous parcel
of real property with a detached single family residence
erected thereon, 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 townhouse,
provided, however, that any condominium project or planned
unit development shall conform with the applicable Agency
requirements regarding such dwellings, and no residence or
dwelling is a mobile home or a manufactured dwelling. As of
the respective appraisal date for each Mortgage Property, no
portion of the Mortgage Property was being used for commercial
purposes. If the Mortgage Property is a condominium unit or a
planned unit development (other than a de minimus planned unit
development) such condominium or planned unit development
project meets the applicable Agency eligibility requirements
or is located in a condominium or planned unit development
project which has received Agency project approval and the
representations and warranties required by the Agency with
respect to such condominium or planned unit development have
been made and remain true and correct in all respects;
(x) Valid First Lien.
The Mortgage is a valid, subsisting and enforceable first lien
on the Mortgage Property, including all buildings on the
Mortgage Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems
located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of
the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in
the lender's title insurance policy delivered to the
originator of the Mortgage Loan and (i) referred to or
otherwise considered in the appraisal made for the
originator of the Mortgage Loan and (ii) which do not
adversely affect the Appraised Value of the Mortgage
Property set forth in such appraisal; and
(3) 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 Mortgage Property.
Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, subsisting and
enforceable first lien and first priority security interest on
the property described therein and the Seller has full right
to sell and assign the same to the Purchaser.
(xi) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed,
except for escrows established or created due to seasonal
weather conditions, and there is no requirement for future
advances thereunder. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(xii) Ownership.
The Seller is the sole owner of record and holder of the
Mortgage Loan and the related Mortgage Note and the Mortgage
are not assigned or pledged, and the Seller has good and
marketable title thereto and has full right and authority to
transfer and sell the Mortgage Loan to the Purchaser. The
Seller is transferring the Mortgage Loan free and clear of any
and all encumbrances, liens, pledges, equities, participation
interests, claims, charges or security interests of any nature
encumbering such Mortgage Loan;
(xiii) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank, a credit
union, an insurance company, or similar institution which is
supervised and examined by a federal or state authority or by
a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 or the National
Housing Act. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the
state wherein the Mortgage Property is located, and any
qualification requirements of the applicable Agency and (2)
organized under the laws of such state, or (3) qualified to do
business in such state, or (4) federal savings and loan
associations or national banks having principal offices in
such state, or (5) not doing business in such state;
(xiv) Primary Mortgage Insurance.
With respect to any Mortgage Loan subject to a PMI Policy as
indicated on the Mortgage Loan Schedule, all provisions of
such PMI Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due
thereunder have been paid. Any Mortgage Loan subject to a PMI
policy obligates the Mortgagor thereunder to maintain the PMI
policy and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan as
set forth on the Mortgage Loan Schedule is net of any such
insurance premium;
(xv) FHA Insurance/VA Guaranty.
Each FHA Mortgage Loan was underwritten in accordance with FHA
standards and is fully-insured by the FHA, which insurance is
in full force and effect, and the Mortgage Loan is not subject
to any defect which would diminish or impair the FHA
insurance, and all prior transfers, if any, of the Mortgage
Loan have been, and the transactions herein contemplated are,
in compliance with the FHA regulations, and no circumstances
exist with respect to the FHA Mortgage Loans which would
permit the FHA to deny coverage under the FHA insurance; and
Each VA Mortgage Loan was underwritten in accordance with VA
standards and is guaranteed by the VA, which guaranty is in
full force and effect, and the Mortgage Loan is not subject to
any defect which would diminish or impair the VA guaranty
(other than a potential valuation of the Mortgage Property),
and all prior transfers, if any, of the Mortgage Loan have
been, and the transactions herein contemplated are, in
compliance with the VA regulations, and no circumstances exist
with respect to the VA Mortgage Loan which would permit the VA
to deny coverage under the VA guaranty.
(xvi) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title
insurance policy (or in the case of any Mortgage Loan secured
by a Mortgaged Property located in a jurisdiction where such
policies are generally not available, an opinion of counsel of
the type customarily rendered in such jurisdiction in lieu of
title insurance) or other generally acceptable form of policy
of insurance acceptable to the Agency, as applicable, issued
by a title insurer acceptable to the Agency, as applicable,
and qualified to do business in the jurisdiction where the
Mortgage Property is located, insuring the Seller, its
successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage
Loan, subject only to the exceptions contained in clauses (1),
(2) and (3) of paragraph (x) of this Section 3(b). The Seller
is the sole insured of such lender's title insurance policy,
and such lender's title insurance policy is in full force and
effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and
no prior holder of the Mortgage, including the Seller, has
done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(xvii) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens)
affecting the related Mortgage Property which are or may be
liens prior to, or equal or coordinate with, the lien of the
related Mortgage which are not insured against by the Title
Insurance policy referenced in Section (xvi) above;
(xviii) Location of Improvements; No Encroachments.
Except as insured against by the Title Insurance policy
referenced in Section (xvi) above, all improvements which were
considered in determining the Appraised Value of the Mortgage
Property lay wholly within the boundaries and building
restriction lines of the Mortgage Property and no improvements
on adjoining properties encroach upon the Mortgage Property.
No improvement located on or being part of the Mortgage
Property is in violation of any applicable zoning law or
regulation;
(xix) Customary Provisions.
The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgage
Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right
to sell the Mortgage Property at a trustee's sale or the right
to foreclose the Mortgage;
(xx) Occupancy of the Mortgage Property.
As of the date of origination, the Mortgage Property was
lawfully occupied under applicable law.
(xxi) No Additional Collateral.
The Mortgage Note is not and has 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 (x) above;
(xxii) Deeds of Trust.
In the event the Mortgage constitutes 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 the Mortgage, and no fees or expenses are or will
become payable by the Mortgagee to the trustee under the deed
of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxiii) Transfer of Mortgage Loans.
As to any Mortgage Loan which is not a MERS Mortgage Loan, the
Assignment is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the
Mortgage Property is located;
(xxiv) Mortgage Property Undamaged.
The Mortgage Property is undamaged by water, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty
so as to affect adversely the value of the Mortgage Property
as security for the Mortgage Loan or the use for which the
premises were intended;
(xxv) Collection Practices; Escrow Deposits.
The collection practices used with respect to the Mortgage
Loan have been in accordance with the Mortgage Note, the
Mortgage and Prudent Servicing Practices, and have been in all
material respects legal and proper and in accordance with the
rules and regulations of the applicable Agency. All Escrow
Items have been collected in full compliance with state and
federal law. An escrow of funds is not prohibited by
applicable law and has been established to pay for every item
that remains unpaid and has been assessed but is not yet due
and payable. No escrow deposits or Escrow Items or other
charges or payments due the Seller have been capitalized under
the Mortgage Note;
(xxvi) No Condemnation.
To the best of Seller's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of
the related Mortgage Property;
(xxvii) The Appraisal.
The Mortgage Loan Documents contain an appraisal of the
related Mortgage Property by an appraiser who had no interest,
direct or indirect, in the Mortgage 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 the appraisal and the appraiser both satisfy the
applicable requirements of Title XI of the Financial
Institution Reform, Recovery, and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated;
(xxviii) Insurance.
The Mortgage Property securing each Mortgage Loan is insured
by an insurer acceptable to the applicable Agency against loss
by fire and such hazards as are covered under a standard
extended coverage endorsement, in an amount which is not less
than the lesser of 100% of the insurable value of the Mortgage
Property and the outstanding principal balance of the Mortgage
Loan, but in no event less than the minimum amount necessary
to fully compensate for any damage or loss on a replacement
cost basis; if the Mortgage Property is a condominium unit, it
is included under the coverage afforded by a blanket policy
for the project; the insurance policy contains a standard
clause naming the originator of such mortgage loan, its
successor and assigns, as insured mortgagee; if the
improvements on the Mortgage Property are in an area
identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in
effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (A)
the outstanding principal balance of the Mortgage Loan, (B)
the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster
Protection Act, as amended; and the Mortgage obligates the
mortgagor thereunder to maintain all such insurance at the
mortgagor's cost and expense and the Seller has not acted or
failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and
enforceability thereof;
(xxix) Soldiers' and Sailors' Civil Relief Act.
The Mortgagor has not notified the Seller, and the Seller has
no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940, as amended;
(xxx) No Violation of Environmental Laws.
There is no pending action or proceeding directly involving
any Mortgage Property of which the Seller is aware in which
compliance with any environmental law, rule or regulation is
an issue; 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;
(xxxi) Homeownership and Equity Protection Act.
No Mortgage Loan is subject to the provisions of the Home
Ownership and Equity Protection Act of 1994;
(xxxii) Payment Terms.
The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, with
interest in arrears, providing for full amortization by
maturity over a scheduled term of no more than 30 years. No
Mortgage Loan has a shared appreciation or other contingent
interest feature, or permits negative amortization;
(xxxiii) Loan-to-Value Ratio.
The Loan-to-Value Ratio of each Mortgage Loan was less than
125% at the time of its origination or refinancing, as
applicable; and
(xxxiv) Underwriting Guidelines.
The Mortgage Loan was underwritten in accordance with the
Seller's under-writing guidelines in effect at the time of
origination with exceptions thereto exercised in a reasonable
manner.
4. Repurchase.
(a) If any document required to be delivered by the Seller in respect
of any Mortgage Loan pursuant to Section 2(b) is not delivered as
required or is found to be defective in any material respect or
in the event of a breach of any of the representations and
warranties of the Seller made in Section 3, which breach
materially and adversely affects the value of any Mortgage Loan
or the Purchaser's interest therein, and the Seller cannot
deliver such document or cure such defect or breach within 90
days after written notice thereof, the Seller will be required,
within 90 days of such notice, or in the case of a defect or
breach which cannot be cured, within 60 days of such notice, at
the Purchaser's option (or the option of the Purchaser's assignee
or successor), to repurchase such Mortgage Loan, at a price equal
to the product of the Unpaid Principal Balance of the Mortgage
Loan as of the date of repurchase and the Purchase Price
Percentage paid by the Purchaser, plus interest on such Unpaid
Principal Balance at the Mortgage Interest Rate from the date on
which interest has last been paid and distributed through the
date of repurchase, and (i) in the case of a Mortgage Loan
repurchased prior to the Transfer Date, less amounts received or
advanced in respect of such repurchased Mortgage Loan which are
being held by the Interim Servicer for distribution to the
Purchaser, or (ii) in the case of a Mortgage Loan repurchased
after the Transfer Date, plus amounts advanced by the Purchaser
in respect of such repurchased Mortgage Loan.
(b) Any amounts payable by the Seller pursuant to Section 4(a) shall be
paid in immediately available funds to the Purchaser (or its
successor or assignee, if applicable). The Purchaser will deliver to
the Seller for the benefit of the Seller (or its successor or
assignee, if applicable), at the time of repurchase of any Mortgage
Loan, the documents in respect thereof specified in Section 2(b)(i).
(c) Each of the representations and warranties of the Seller
contained herein shall survive the purchase and sale of the
Mortgage Loans pursuant hereto and shall continue in full force
and effect, notwithstanding any restrictive or qualified
endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement. The representations and
warranties shall not be impaired by any review and examination of
documents to be delivered in respect of each Mortgage Loan under
Section 2(b)(i) or other documents evidencing or relating to the
Mortgage Loans or any failure on the part of the Purchaser or any
successor or assignee thereof to review or examine such
documents.
(d) In addition to such repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the
representations and warranties contained in this Agreement. The
Purchaser and the Seller hereby agree that the sole remedy for
the breach of any representation and warranty hereunder shall be
pursuant to the terms of this Section 4 and Section 9.
5. Covenants of the Seller.
The Seller hereby covenants to the Purchaser as follows:
(a) Not later than the Closing Date, the Seller shall take all steps
required of it to effectuate the transfer of the Mortgage Loans to
the Purchaser, free and clear of any lien, charge, or encumbrance.
(b) The Seller shall record its transfer of the Mortgage Loans to the
Purchaser as a sale of its interest therein under generally accepted
accounting principles. The Seller shall also report the transfer as
a sale in all financial statements and reports to regulatory and
supervisory agencies and authorities to which it reports, if any.
For federal income tax purposes, the Seller will treat the transfer
of the Mortgage Loans as a sale.
6. Conditions to Obligation of the Purchaser.
The obligation of the Purchaser hereunder to purchase the Mortgage
Loans is subject to the accuracy in all material respects of all of
the representations and warranties of the Seller contained in
Section 3(a) (as of the Closing Date and subject to such exceptions
acceptable to the Purchaser as are noted in the Officer's
Certificate of the Seller) and no event shall have occurred which,
with notice or the passage of time, would constitute a default under
this Agreement and all other terms and conditions of this Agreement
shall have been complied with.
7. Certain Fees and Expenses.
(a) The Seller shall pay all of its own expenses incurred in connection
with this Agreement and the transfer of the Mortgage Loans as
contemplated hereunder.
(b) The Purchaser shall pay all of its own expenses incurred in
connection with this Agreement.
8. Servicing.
The Mortgage Loans shall be serviced by the Seller in accordance with the
terms of the applicable Interim Servicing Agreement. The Seller shall be
entitled to servicing fees calculated as provided therein.
9. Indemnification.
In addition to any repurchase and cure obligations of the Seller, and any
and all other remedies available to the Purchaser under this Agreement,
the Seller shall indemnify and hold harmless the Purchaser and the
Purchaser's designees, including, without limitation, any subsequent
holder of any Mortgage Note, against all losses, damages, penalties,
fines, claims, forfeitures, lawsuits, court costs, reasonable attorney's
fees, judgments, and any other costs, fees, and expenses resulting from
any act or failure to act or any breach of any warranty, obligation,
representation, or covenant contained in or made pursuant to this
Agreement by any agent, employee, representative or officer of the Seller.
The indemnification obligations of the Seller hereunder shall survive the
termination of this Agreement.
10. Securitization
(a) The Seller agrees to cooperate and take such actions as are
reasonably required by the Purchaser in connection with the resale
or Securitization of the Mortgage Loans by the Purchaser, including
delivering an opinion of counsel (which can be an opinion of
in-house counsel to the Seller) reasonably acceptable to the
Purchaser; provided that any out-of-pocket, third party expenses
incurred by the Seller in connection with the foregoing shall be
paid by the Purchaser.
(b) In connection with a Securitization, the Seller agrees to represent
to the Purchaser and the depositor, the trustee and the initial
purchaser of the securities in the Securitization (1) that the
Seller, in its capacity as Interim Servicer, has serviced the
Mortgage Loans in accordance with the terms of the Interim Servicng
Agreement, and otherwise complied with all covenants and obligations
thereunder, and (2) that the Seller/Interim Servicer has taken no
action that would, nor omitted to take any required action the
omission of which would, have the effect of impairing the mortgage
insurance or guarantee on the Mortgage Loans.
(c) The Seller also agrees to represent the accuracy of any information
provided to the Purchaser by the Seller in its capacity as servicer
on or before the Securitization Closing Date.
(d) The Seller also agrees to make all representations and warranties
with respect to the Mortgage Loans as of the Closing Date and with
respect to the Seller itself as of the closing date of each
Securitization.
11. Notices.
All demands, notices and communications hereunder (A) shall be in writing,
(B) may be delivered by facsimile, provided that a signed original copy of
such demand, notice or communication is promptly provided to the recipient
by overnight mail or an overnight delivery service, (C) shall be effective
only upon receipt and (D) shall, if sent to the Purchaser, be addressed to
it at Xxxxxxx Xxxxx Mortgage Company, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, Attention: Xxxxx Xxxxxxx, or if sent to the Seller, be
addressed to it at Xxxxx Fargo Home Mortgage, Inc., 000 xxxxx 0xx Xxxxxx,
Xxxxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxx, MAC X4801-097 with a
copy to Xxxxx Fargo Home Mortgage, Inc., 0 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx
00000-0000, Attention: General Counsel MAC X2401-06T.
12. Miscellaneous.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, notwithstanding any New York or other
choice of law rules to the contrary. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a
writing signed by the party against whom enforcement of such change,
waiver, discharge or termination is sought. This Agreement may be signed
in any number of counterparts, each of which shall be deemed an original,
which taken together shall constitute one and the same instrument. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Purchaser and the Seller and their respective successors and assigns;
provided that, this Agreement may not be pledged, assigned or hypothecated
by the Seller without the written consent of the Purchaser.
13. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
(Signatures follow)
IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
XXXXXXX SACHS MORTGAGE COMPANY
(Purchaser)
By: ___________________________
Name: _________________________
Title: ________________________
XXXXX FARGO HOME MORTGAGE, INC.
(Seller)
By: ___________________________
Name: _________________________
Title: ________________________
Schedule I
Mortgage Loan Schedule
EXHIBIT A
INTERIM SERVICING AGREEMENT
EXHIBIT B
MORTGAGE LOAN FILES
Mortgage Loan File Requirements. For each Mortgage Loan, the Seller shall
deliver a Mortgage Loan File to the Purchaser that contains each of the
following documents:
(a) the original Mortgage Note bearing all intervening
endorsements, endorsed "paid to the order of
_________________, without recourse" and signed in the name
of the Seller by an authorized officer or a lost note
affidavit in a form acceptable to the Purchaser with a copy
of the Mortgage Note attached thereto; the Seller shall
assure that the related Mortgage Note shall include all
prior and intervening endorsements as are necessary to show
a complete chain of endorsements from the respective Loan
Originator to the respective prior owner of such Mortgage
Loan;
(b) either the recorded original related Security Instrument
pertaining to such Mortgage Loan, together with any addenda and
riders, or a copy certified by Seller to be a true and correct copy
or the original recorded document, or if the related Security
Instrument is in the process of being recorded, a photocopy of the
related Security Instrument, certified by the Seller or an officer
of the respective prior owner of such Mortgage Loan or by the
applicable title insurance company, closing/settlement/escrow agent
or company or closing attorney to be a true and correct copy of the
related Security Instrument transmitted for recordation; provided,
however, if the Purchaser requires a clerk certified copy of the
original recorded Security Instrument, the Seller shall request such
from the appropriate recording office and furnish it to the
Purchaser as soon a practicable and in no event later than 90 days
of Purchaser's request;
(c) the original Assignment of the related Security Instrument for
each Mortgage Loan in blank. The Assignment of the related security
instrument must be duly recorded only if recordation is either
necessary under applicable law or commonly required by private
institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser;
(d) each recorded original, or a copy certified by the Seller to be
a true and correct copy of the original recorded, intervening
Assignment of the Security Instrument as is necessary to show a
complete chain of title from the respective Loan Originator to the
respective prior owner of such Mortgage Loan or, if any such
original is unavailable because it is in the process of being
recorded, a photocopy of such intervening Assignment certified by
the Seller or an officer of the prior owner of such Mortgage Loan to
be a true and correct copy of such intervening Assignment submitted
for recordation; provided, however, if the Purchaser requires a
clerk certified copy of the original recorded intervening
Assignment, the Seller shall request such from the appropriate
recording office and furnish it to the Purchaser as soon a
practicable and in no event later than 90 days after Purchaser's
request;
(e) either an original Title Insurance policy or a Final Title
Condition Report pertaining to such Mortgage Loan or, with respect
to loans secured by properties in jurisdictions where title policies
are not available, the original attorney's opinion of title; in the
event that the policy has not been issued or is not otherwise
available, (i) a written binding ALTA commitment for such a policy
(or a photocopy thereof) issued by the respective title insurance
company or (ii) a Preliminary Title Report (or a photocopy thereof)
if the Mortgage Property are in a state designated by the Purchaser
as a Preliminary Title Report state;
(f) for each Mortgage Loan listed on Schedule I to this Agreement
which has Primary Mortgage Insurance pursuant to the related
Mortgage Loan Documents, a Primary Mortgage Insurance policy or a
certificate of Primary Mortgage Insurance (or a photocopy thereof)
issued by the respective insurer or its agent indicating that such a
policy is in effect;
(g) originals of each assumption agreement, modification, written
assurance or substitution agreement pertaining to such Mortgage
Loan, if any, or, if any such document is in the process of being
recorded, a photocopy of such document, certified by an officer of
the respective prior owner of such Mortgage Loan or by the
applicable title insurance company, closing/settlement/escrow agent
or company or closing attorney to be a true and correct copy of such
document transmitted for recordation;
(h) for each Mortgage Loan which is secured by a residential
long-term lease, a copy of the lease with evidence of recording
indicated thereon, or, if the lease is in the process of being
recorded, a photocopy of the lease, certified by an officer of the
respective prior owner of such Mortgage Loan or by the applicable
title insurance company, closing/settlement/escrow agent or company
or closing attorney to be a true and correct copy of the lease
transmitted for recordation; and
(i) for each VA Mortgage Loan the original LGC;
(j) for each FHA Mortgage Loan the original MIC, or evidence thereof
via FHA Connection (with duplicate MIC to follow within fifteen (15)
days);
(k) for each Mortgage Loan secured by Co-op Shares, the originals of
the following documents or instruments:
(i) The stock certificate;
(ii) The stock power executed in blank;
(iii) The executed proprietary lease;
(iv) The executed recognition agreement;
(v) The executed assignment of recognition agreement;
(vi) The executed UCC-1 financing statement with evidence of
recording thereon; and
(vii) 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 Seller
with evidence of recording thereon (or in a form suitable for
recordation).
Notwithstanding paragraphs (a) and (d) above, the Purchaser acknowledges
that the Seller may deliver (i) a Mortgage Note for which the chain of
endorsements is not identical to that of the intervening Assignments with
respect to such Mortgage Note, which shall not affect the enforceability of such
Mortgage Note, and/or (ii) intervening Assignments which are not identical to
the chain of endorsements with respect to such Mortgage Note, which shall not
affect the validity of such intervening Assignments; provided, however, that
such acknowledgment shall in no way operate to negate the Purchaser's remedies
for Seller's breach of the representations and warranties under this Agreement.
Execution Copy
--------------------------------------------------------------------------------
XXXXXXX XXXXX MORTGAGE COMPANY
(Purchaser)
and
XXXXX FARGO HOME MORTGAGE, INC.
(Seller)
MORTGAGE LOAN PURCHASE AGREEMENT
Dated as of June 24, 2002
WFHM Pools 5446, 5447, 5448, 5449 and 5450
--------------------------------------------------------------------------------
TABLE OF CONTENTS
1. PURCHASE AND SALE...........................................................
2. TRANSFER OF OWNERSHIP. .....................................................
4. REPURCHASE. ................................................................
5. COVENANTS OF THE SELLER. ...................................................
6. CONDITIONS TO OBLIGATION OF THE PURCHASER. .................................
7. CERTAIN FEES AND EXPENSES...................................................
8. SERVICING...................................................................
9. INDEMNIFICATION.............................................................
9. SECURITIZATION..............................................................
10. NOTICES. ..................................................................
11. MISCELLANEOUS..............................................................
12. SEVERABILITY OF PROVISIONS. ...............................................
EXHIBITS
Schedule I Mortgage Loan Schedule
Exhibit A Interim Servicing Agreement
Exhibit B Contents of Mortgage Loan File
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (the "Agreement"), dated as of June 24,
2002, is between Xxxxxxx Xxxxx Mortgage Company, having an address at 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 (such entity, and its successors and assigns,
being referred to herein as the "Purchaser"), and Xxxxx Fargo Home Mortgage,
Inc., a California corporation having an address at 0 Xxxx Xxxxxx, Xxx Xxxxxx,
Xxxx 00000-0000 (the "Seller").
The Purchaser and the Seller hereby recite and agree as follows:
RECITALS
WHEREAS, Schedule I attached hereto and made a part hereof lists fixed rate,
government and conventional, residential mortgage loans as defined herein (the
"Mortgage Loans"), each having an original term to stated maturity of not more
than 30 years; which have an aggregate outstanding principal balance as of the
close of business on the Cut-off Date of approximately $10,305,821.14 that
comprise pools referred to as Mortgage Loan Pools 5446, 5447, 5448, 5449 and
5450 which are currently owned by the Seller that the Seller desires to sell to
the Purchaser on a servicing released basis as described herein;
WHEREAS, capitalized terms used herein and not defined herein shall have the
meanings assigned to them in the Interim Servicing Agreement attached hereto as
Exhibit A;
WHEREAS, the Mortgage Loans shall be delivered as whole loans on a
servicing-released basis and shall be interim serviced by the Seller pursuant to
the Interim Servicing Agreement until the Transfer Date;
WHEREAS, the parties intend hereby to set forth the terms and conditions upon
which the proposed transactions will be effected; and
NOW THEREFORE, in consideration of the mutual promises herein made and other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
DEFINITIONS
Whenever used herein, the following capitalized words and phrases, unless the
content otherwise requires, shall have the following meanings:
Agency or Agencies: Any one or all of Xxxxxx Xxx, Xxxxxxx Mac, FHA or VA, as
applicable.
Appraisal Report: A report setting forth the fair market value of a Mortgage
Property as determined by an appraiser who, at the time the appraisal was
conducted, met the minimum qualifications of the applicable Agency for
appraisers of residential mortgage loans.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i) the value
set forth on the appraisal made in connection with the origination of the
related Mortgage Loan as the value of the related Mortgage Property, or (ii) the
purchase price paid for the Mortgage Property, provided, however, in the case of
a refinance Mortgage Loan, such value shall be based solely on the appraisal
made in connection with the origination of such Mortgage Loan.
Assignment: An individual assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to give record
notice of the sale of the Mortgage to the Purchaser.
Borrower: The individual obligated to repay a Mortgage Loan. (The Borrower may
be the beneficiary or beneficiaries of an Illinois land trust when the Mortgage
Property is located in Illinois.)
Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day on
which banking and savings and loan institutions in the City of New York, or
states where the parties are authorized or obligated by law or executive order
to be closed.
Code: The Internal Revenue Code of 1986, as it may be amended from time to time
or any successor statute thereto, and applicable U.S. Department of the Treasury
regulations issued pursuant thereto.
Co-op Shares: Shares issued by private non-profit housing corporations.
Curtailment: A partial prepayment by the Borrower of principal on a Mortgage
Loan that otherwise is current, which prepayment is not accompanied by an amount
representing the full amount of scheduled interest due on the related Mortgage
Loan.
Custodian: J PMorgan Chase Bank, or such other entity appointed by the
Purchaser.
Due Date: With respect to a Mortgage Loan, the day of each month on which a
Monthly Payment and, where applicable, any Escrow Funds payment is due as stated
in the related Mortgage Note. The Due Date for all Mortgage Loans shall be the
first day of each month.
Escrow Funds: All funds collected with respect to a Mortgage Loan by the Interim
Servicer to cover related Escrow Items according to the provisions of the
Interim Servicing Agreement.
Escrow Item: An expense required to be paid by a Borrower under the related
Security Instrument including, without limitation, taxes, special assessments,
ground rents, water, sewer and other governmental impositions or charges that
are or may become liens on the related Mortgage Property prior to that of the
related Security Instrument, as well as Hazard Insurance, Flood Insurance and
Primary Mortgage Insurance premiums.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
FHA: Federal Housing Administration and its successors.
FHA Mortgage Loan: A Mortgage Loan insured by FHA.
Flood Insurance: An insurance policy insuring against flood damage to a Mortgage
Property, where required.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
Hazard Insurance: A fire and casualty extended coverage insurance policy
insuring against loss or damage from fire and other perils covered within the
scope of standard extended hazard coverage naming the Interim Servicer, its
successors and assigns, as a mortgagee under a standard mortgagee clause,
together with all riders and endorsements thereto.
HUD: The United States Department of Housing and Urban Development and its
successors.
Insurance Policy: Any insurance policy for a Mortgage Loan required hereunder,
including, without limitation, the loan guaranty of the VA, the insurance issued
by FHA, Primary Mortgage Insurance, Hazard Insurance, Flood Insurance, pool
insurance and Title Insurance policies.
Insurance Proceeds: Proceeds from an Insurance Policy, other than such proceeds
which are applied by the Borrower or held to be applied by the Borrower to the
restoration of the related Mortgage Property.
Interim Servicer : Xxxxx Fargo Home Mortgage, Inc., the entity that has entered
into this Agreement with the Purchaser and any successors or permitted assigns
of Xxxxx Fargo Home Mortgage, Inc.
LGC: With respect to each VA Mortgage Loan, the Loan Guaranty Certificate issued
by the VA as a guarantee that the federal government will repay to the lender a
specified percentage of the loan balance in the event of the Borrower's default.
Liquidation: Application of full payment to a Mortgage Loan which results in the
release of the lien of the related Security Instrument on any related Mortgage
Property, whether through foreclosure and sale of the related REO, condemnation,
prepayment in full or otherwise, or the realization of all sums from the final
disposition of the related REO.
Liquidation Proceeds: The amount received by the Interim Servicer which
ultimately relates to the Liquidation of a Mortgage Loan.
Loan Originator: The entity that closes a Mortgage Loan in its own name.
Loan-to-Value (LTV): The ratio that results when the Unpaid Principal Balance of
a Mortgage Loan is divided by the Appraised Value of the related Mortgage
Property.
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.
MIC: With respect to each FHA Mortgage Loan, the Mortgage Insurance Certificate
issued by HUD/FHA as evidence that a mortgage has been insured and that a
contract of mortgage insurance exists between HUD/FHA and the lender
incorporating the HUD/FHA regulation identified in the certificate.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
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 Payment: With respect to any Mortgage Loan, the scheduled monthly
payment of principal and interest due in the applicable month under the terms of
the related Mortgage Note.
Mortgage: The Mortgage, deed of trust, or other instrument securing a Mortgage
Note, which creates a first lien on an unsubordinated estate in fee simple in
real property securing the Mortgage Note.
Mortgage Interest Rate: The interest rate payable by the Borrower on a Mortgage
Loan according to the terms of the Mortgage Note.
Mortgage Loan: A mortgage loan identified on Schedule I, including without
limitation, the related Mortgage Loan Documents, any related REO and all other
material and information collected by the Interim Servicer in connection with
the Mortgage Loan including Monthly Payments, Liquidation Proceeds, Insurance
Proceeds and all other rights, benefits and proceeds arising from or in
connection with such Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the original related
Mortgage Note with applicable addenda and riders, the original related Security
Instrument and the originals of any required addenda and riders, the original
related Assignment and any original intervening related Assignments, the
original related Title Insurance policy, the related MIC or LGC, if applicable,
the related Primary Mortgage Insurance policy, if any, and the related Appraisal
Report made at the time such Mortgage Loan was originated, and all other
documents described in Exhibit B.
Mortgage Loan File: With respect to each Mortgage Loan, a file which contains
the documents specified in Exhibit B hereof, as well as any other documents that
come into the Seller's or Interim Servicer's possession with respect to such
Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as Schedule
I,, such schedule setting forth the following information with respect to each
Mortgage Loan:: (1) the Seller's Mortgage Loan number; (2) the address, city,
state and zip code of the Mortgage Property; (3) a code indicating whether the
Mortgage Property is a single family residence, twofamily residence,
three-family residence, four-family residence or planned unit development; (4)
the purpose of the Mortgage Loan; (5) the current Mortgage Interest Rate; (6)
the current Monthly Payment; (7) the original term to maturity; (8) the
scheduled maturity date (and, if different, the stated maturity date indicated
on the Mortgage Note on its date of origination); (9) the principal balance of
the Mortgage Loan as of the Cut-off Date; (10) the Loan-to-Value Ratio; (11) the
due date of the Mortgage Loan; (12) a code indicating whether the Mortgage is
insured by FHA or guaranteed by VA; (13) the amount of any delinquencies and the
due date of any delinquent payments; (14) the CPI twelve month pay string and
(15) a code indicating whether the Mortgage Loan is covered by a PMI Policy.
Mortgage Note: A manually executed written instrument evidencing the related
Borrower's promise to repay a stated sum of money, plus interest, to the related
Loan Originator and its successors and assigns by a specific date according to a
schedule of monthly principal and interest payments.
Mortgage Property: Land, improvements thereon and other property subject to the
lien of a Security Instrument, which may include Co-op Shares or residential
long-term leases, securing repayment of the debt evidenced by the related
Mortgage Note.
Mortgagee: The secured party to which a Security Instrument initially grants a
lien on the related Mortgage Property.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the Board or the
Vice Chairman of the Board or a President or a Vice President or an Assistant
Vice President and by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Person on behalf of whom such
certificate is being delivered.
Opinion of Counsel: A written opinion of counsel, who may be in-house counsel to
the Seller.
Person: Any individual, corporation, limited liability company, partnership,
joint venture, association, joint-stock company, trust or unincorporated
organization.
PMI Policy: A policy of Primary Mortgage Insurance issued by a generally
accepted insurer with respect to certain Mortgage Loans.
Preliminary Title Report: A report issued by a title insurance company in
anticipation of issuing a Title Insurance policy which evidences existing liens
and gives a preliminary opinion as to the absence of any encumbrance on title to
a Mortgage Property, except liens to be removed on or before purchase or
refinance, as the case may be, by the Borrower and permitted encumbrances.
Primary Mortgage Insurance: Insurance obtained from a primary mortgage insurer
which insures the holder of a Mortgage Note against loss in the event the
related Borrower defaults under such Mortgage Note or the related Security
Instrument, including all riders and endorsements thereto.
Prudent Servicing Practices: Such practices including the servicing and
administration of the Mortgage Loans in accordance with this Agreement,
customary mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loans in the
jurisdictions where the related Mortgaged Properties are located, the terms of
the related Mortgage Loan documents and applicable law.
Purchase Price and Terms Letter: That certain letter agreement between the
Purchaser and the Seller dated May 23, 2002.
Qualification Defect: With respect to a Mortgage Loan, (a) a defective document
in the Mortgage File, (b) the absence of a document in the Mortgage Loan file,
or (c) the breach of any representation, warranty or covenant with respect to
the Mortgage Loan made by the Seller, but, in each case, only if the affected
Mortgage Loan would cease to qualify as a "qualified mortgage" for purposes of
the REMIC Provisions.
Real Estate Owned (REO): Any Mortgage Property the title to which is acquired on
behalf of the Purchaser through foreclosure, deed-in-lieu of foreclosure,
abandonment or reclamation from bankruptcy in connection with a defaulted
Mortgage Loan.
REMIC: A "real estate mortgage investment conduit" within the meaning of Section
860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to a REMIC,
which appear at Section 860A through 860G of Subchapter M of Chapter l, Subtitle
A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Securitization Closing Date: The date on which a pass-through transaction with
respect to the Mortgage Loans is completed by the Purchaser or an affiliate of
the Purchaser.
Security Instrument: A written instrument creating a valid first lien on a
Mortgage Property. A Security Instrument may be in the form of a mortgage, deed
of trust, deed to secure debt or security deed, including any riders and addenda
thereto.
Servicing Fee: For each Mortgage Loan, the compensation due the Interim Servicer
as defined in the Interim Servicing Agreement.
Title Insurance: An American Land Title Association (ALTA) mortgage loan title
policy form or other form of Title Insurance Policy acceptable to the applicable
Agency, including all riders and endorsements thereto, insuring that the
Security Instrument constitutes a valid first lien on the related Mortgage
Property subject only to permitted encumbrances.
Unpaid Principal Balance: With respect to any Mortgage Loan as of any date, the
outstanding principal balance then payable by the Borrower under the terms of
the Mortgage Note.
VA: The United States Department of Veterans Affairs and its successors.
VA Mortgage Loan: A Mortgage Loan guaranteed by the VA.
1. Purchase and Sale.
(a) The Seller hereby agrees to sell, and the Purchaser agrees to
purchase, the Mortgage Loans having an aggregate principal balance
as of the close of business on June 14, 2002 (the "Cut-Off Date") as
listed on Schedule I attached hereto (the "Mortgage Loan Schedule")
as of June 24, 2002 or such other date as agreed to by the Purchaser
and the Seller (the "Closing Date"), for a purchase price, payable
to the Seller on the Closing Date in immediately available funds
(the "Purchase Price"), equal to the sum of (i) the product of the
"Purchase Price Percentage" as defined by the Purchaser Price and
terms Letter and the Unpaid Principal Balance of the Mortgage Loans,
as of the Cut-Off Date, (ii) plus accrued interest at the Mortgage
Interest Rate on each Mortgage Loan that is less than sixty (60)
days delinquent; and
(b) Upon payment of the Purchase Price, the Seller shall transfer,
assign, set over and otherwise convey to the Purchaser all the
right, title and interest, including the Servicing Rights, of the
Seller in and to the Mortgage Loans identified in the Mortgage Loan
Schedule, including all interest and principal received by the
Seller on or with respect to the Mortgage Loans after the Cut-Off
Date, together with all of the Seller's right, title and interest in
and to the proceeds of any related title, hazard, primary mortgage
or other insurance policies. The Seller shall, with the Purchaser's
consent, amend or modify Schedule I on or prior to the Closing Date
if necessary to reflect the actual Mortgage Loans transferred by the
Seller and accepted by the Purchaser on the Closing Date in
accordance with Section 2(c).
2. Transfer of Ownership.
(a) Upon sale of the Mortgage Loans, the ownership of each Mortgage Note
and the other Mortgage Loan Documents with respect to each Mortgage
Loan shall be vested in the Purchaser and the ownership of all other
records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser. The Seller shall promptly deliver
to the Custodian any documents that come into its possession
required to be contained in the Mortgage Loan File with respect to
each of the Mortgage Loans following the sale of the Mortgage Loans
to the Purchaser. Prior to such delivery, the Seller shall hold any
such documents for the benefit of the Purchaser, its successors and
assigns.
(b) Delivery of Mortgage Loan Documents.
(i) On or before the Closing Date, the Seller shall deliver to the
Custodian the Mortgage Note, the Mortgage, the Assignment of
the related Security Instrument, for each VA Mortgage Loan the
original LGC and for each FHA Mortgage Loan the original MIC,
for each Mortgage Loan which is subject to a PMI Policy, the
certificate of primary mortgage insurance, and the title
insurance policy, together with all other documents described
in Exhibit B hereto to the extent available;
(ii) Within one hundred eighty (180) days of the Closing Date, the
Seller shall deliver to the Custodian all documents required
to be contained in the Mortgage Loan File described in Exhibit
B hereto not previously delivered on the Closing Date,
provided however, the Seller may obtain extensions of this
180-day period by providing an Officer's Certificate and, in
some cases, an Opinion of Counsel, to the Purchaser or its
assigns. As long as the defect is not a "Qualification Defect
for a "REMIC" and will not, in the Purchaser's reasonable
judgment, adversely effect the execution of any Securitization
Agreement, successive 30-day extensions can be obtained, up to
a maximum of 240 days from the date of the first notice. In
the event a defect is a "Qualification Defect" the Seller
shall cure such defect or repurchase the Mortgage Loan
pursuant to this Agreement, within seventy-five (75) calendar
days of receiving notice of such defect;
(iii) All documents with respect to any Mortgage Loan in the
possession of the Seller or the Interim Servicer following the
Closing Date shall be held by the Seller or the Interim
Servicer in its capacity as the Interim Servicer solely for
the purpose of servicing or facilitating the servicing of the
Mortgage Loans and as bailee and agent for the Purchaser, its
successors and assigns, and shall only be released in
accordance with the terms of the Interim Servicing Agreement.
(c) Examination of Mortgage Loan Documents; Acceptance of Mortgage
Loans.
Prior to the Closing Date, the Seller shall make the Mortgage Loan
Documents included in the Mortgage Loan File available to the
Purchaser or its designee for examination at the Seller's offices or
at such other place as the Seller shall specify. The Purchaser or a
designee may review the Mortgage Loan Documents to verify that the
documents required to be included in each Mortgage Loan File are
available. If a Mortgage Loan File is incomplete or defective or a
Mortgage Loan does not conform to the requirements of this Agreement
and such omissions or defects cannot be cured prior to the Closing
Date, the Mortgage Loan shall be deleted from the Mortgage Loan
Schedule.
(d) Recordation of Assignments of Mortgage.
Subject to the sale of the Mortgage Loans by the Seller to the
Purchaser in accordance with the terms of this Agreement, the Seller
shall prepare and record all Assignments with respect to each
Mortgage Loan required to be contained in the related Mortgage Loan
File as of the Closing Date in the public recording office for the
jurisdiction in which the related Mortgage Property is located. The
Seller shall be obligated for the cost of preparing and recording
the initial Assignments with respect to each Mortgage Loan. Seller
certified copies of the Assignments shall be delivered to the
Custodian on or prior to the Closing Date, in the name directed by
the Purchaser. The Seller shall promptly arrange for and pay for
recordation of such Assignments. After return from the recording
offices, the assignments shall be delivered to the Custodian as part
of the legal documentation. The Purchaser shall be obligated for the
cost of preparing and recording any additional Assignments and
hereby acknowledges that in no event shall the Seller or the Interim
Servicer pay the cost of recording assignments in connection with a
subsequent sale 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, and will not permit the Servicer to, and
the Servicer agrees that it will not, alter the information
refer-enced 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.
3. Representations and Warranties.
(a) The Seller hereby represents and warrants to the Purchaser that, as
of the Closing Date:
(i) Due Organization and Authority.
The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of California
and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good
standing in each state where a Mortgage Property is located if
the laws of such state require licensing or qualification in
order to conduct business of the type conducted by the Seller,
and in any event the Seller is in compliance with the laws of
any such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan and the servicing
of such Mortgage Loan in accordance with the terms of this
Agreement; the Seller has the full corporate power and
authority to execute and deliver this Agreement and to perform
in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the
Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement
evidences the valid, binding and enforceable obligation of the
Seller; and all requisite corporate action has been taken by
the Seller to make this Agreement valid and binding upon the
Seller in accordance with its terms;
(ii) Ordinary Course of Business.
The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the
Seller, who is in the business of selling loans, and the
transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not
subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(iii) No Conflicts.
Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Seller, the sale of
the Mortgage Loans to the Purchaser or the transactions
contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms of the articles of
incorporation or by-laws or any legal restriction or any
agreement or instrument to which the Seller is now a party or
by which it is bound, or constitute a default or result in the
violation of any law, rule, regulation, order, judgment or
decree to which the Seller or its property is subject, or
impair the ability of the Purchaser to realize on the Mortgage
Loans, or impair the value of the Mortgage Loans;
(iv) Ability to Service.
The Seller is an approved seller/servicer of residential
mortgage loans for the Agencies, as applicable, with the
facilities, procedures, and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as
the Mortgage Loans. The Seller is in good standing to sell
mortgage loans to and service mortgage loans for the Agencies,
as applicable, and no event has occurred, including but not
limited to a change in insurance coverage, which would make
the Seller unable to comply with the applicable Agency
eligibility requirements or which would require notification
to an Agency, as applicable.
(v) Ability to Perform.
The Seller does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent
and the sale of the Mortgage Loans will not cause the Seller
to become insolvent. The sale of the Mortgage Loans is not
undertaken to hinder, delay or defraud any of the Seller's
creditors;
(vi) No Litigation Pending.
There is no action, suit, proceeding or investigation pending
or threatened against the Seller which, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to
carry on its business substantially as now conducted, or in
any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be contemplated
herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this
Agreement;
(vii) No Consent Required.
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 the sale of the Mortgage Loans
as evidenced by the consummation of the transactions
contemplated by this Agreement, or if required, such approval
has been obtained prior to the Closing Date;
(viii) No Untrue Information.
Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of fact or omits to state
a fact necessary to make the statements contained therein not
misleading;
(ix) Sale Treatment.
The Seller has determined that the disposition of the Mortgage
Loans pursuant to this Agreement will be afforded sale
treatment for accounting and tax purposes;
(x) No Brokers' Fees.
The Seller has not dealt with any broker, investment banker,
agent or other Person that may be entitled to any commission
or compensation in the connection with the sale of the
Mortgage Loans; and
(xi) MERS Status
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.
(b) The Seller hereby represents and warrants to the Purchaser that,
with respect to the Mortgage Loans, or each Mortgage Loan, as the
case may be, as of the Closing Date:
(i) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedule
attached hereto as Schedule I is true and correct;
(ii) No Outstanding Charges.
There are no defaults by the Seller in complying with the
terms of the Mortgage Note or Mortgage and all taxes,
governmental assessments, insurance premiums, water, sewer and
municipal charges, which previously became due and owing have
been paid, or an escrow of funds has been established for
every such item which remains unpaid and which has been
assessed but is not yet due and payable;
(iii) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except
by a written instrument which has been recorded, if necessary
to protect the interests of the Purchaser and which has been
delivered to the Purchaser. The substance of any such waiver,
alteration or modification has been approved by the issuer of
any related guaranty certificate or Primary Mortgage Insurance
policy and the title insurer, to the extent required by the
policy, and its terms are reflected on the Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by
the issuer of any related guaranty certificate or Primary
Mortgage Insurance policy and the title insurer, to the extent
required by the policy, and which assumption agreement is part
of the Mortgage Loan File delivered to the Purchaser and the
terms of which are reflected in the Mortgage Loan Schedule;
(iv) No Defenses.
The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(v) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgage 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;
(vi) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are
genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its terms.
All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage
Note and the Mortgage have been duly and properly executed by
such parties;
(vii) No Fraud.
All the documents executed in connection with the Mortgage
Loan including, but not limited to, the Mortgage Note and the
Mortgage are free of fraud and any misrepresentation, are
signed by the persons they purport to be signed by, and
witnessed or, as appropriate, notarized by the persons whose
signatures appear as witnesses or notaries, and each such
document constitutes the valid and binding legal obligation of
the signatories and is enforceable in accordance with its
terms;
(viii) Compliance with Applicable Laws.
Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been complied with, 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. All
inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgage
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;
(ix) Location and Type of Mortgage Property.
The Mortgage Property is located in the state identified in
the Mortgage Loan Schedule and consists of a contiguous parcel
of real property with a detached single family residence
erected thereon, 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 townhouse,
provided, however, that any condominium project or planned
unit development shall conform with the applicable Agency
requirements regarding such dwellings, and no residence or
dwelling is a mobile home or a manufactured dwelling. As of
the respective appraisal date for each Mortgage Property, no
portion of the Mortgage Property was being used for commercial
purposes. If the Mortgage Property is a condominium unit or a
planned unit development (other than a de minimus planned unit
development) such condominium or planned unit development
project meets the applicable Agency eligibility requirements
or is located in a condominium or planned unit development
project which has received Agency project approval and the
representations and warranties required by the Agency with
respect to such condominium or planned unit development have
been made and remain true and correct in all respects;
(x) Valid First Lien.
The Mortgage is a valid, subsisting and enforceable first lien
on the Mortgage Property, including all buildings on the
Mortgage Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems
located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of
the date of recording acceptable to mortgage lending
institutions generally and specifically referred to in
the lender's title insurance policy delivered to the
originator of the Mortgage Loan and (i) referred to or
otherwise considered in the appraisal made for the
originator of the Mortgage Loan and (ii) which do not
adversely affect the Appraised Value of the Mortgage
Property set forth in such appraisal; and
(3) 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 Mortgage Property.
Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, subsisting and
enforceable first lien and first priority security interest on
the property described therein and the Seller has full right
to sell and assign the same to the Purchaser.
(xi) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed,
except for escrows established or created due to seasonal
weather conditions, and there is no requirement for future
advances thereunder. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(xii) Ownership.
The Seller is the sole owner of record and holder of the
Mortgage Loan and the related Mortgage Note and the Mortgage
are not assigned or pledged, and the Seller has good and
marketable title thereto and has full right and authority to
transfer and sell the Mortgage Loan to the Purchaser. The
Seller is transferring the Mortgage Loan free and clear of any
and all encumbrances, liens, pledges, equities, participation
interests, claims, charges or security interests of any nature
encumbering such Mortgage Loan;
(xiii) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank, a credit
union, an insurance company, or similar institution which is
supervised and examined by a federal or state authority or by
a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 or the National
Housing Act. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the
state wherein the Mortgage Property is located, and any
qualification requirements of the applicable Agency and (2)
organized under the laws of such state, or (3) qualified to do
business in such state, or (4) federal savings and loan
associations or national banks having principal offices in
such state, or (5) not doing business in such state;
(xiv) Primary Mortgage Insurance.
With respect to any Mortgage Loan subject to a PMI Policy as
indicated on the Mortgage Loan Schedule, all provisions of
such PMI Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due
thereunder have been paid. Any Mortgage Loan subject to a PMI
policy obligates the Mortgagor thereunder to maintain the PMI
policy and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan as
set forth on the Mortgage Loan Schedule is net of any such
insurance premium;
(xv) FHA Insurance/VA Guaranty.
Each FHA Mortgage Loan was underwritten in accordance with FHA
standards and is fully-insured by the FHA, which insurance is
in full force and effect, and the Mortgage Loan is not subject
to any defect which would diminish or impair the FHA
insurance, and all prior transfers, if any, of the Mortgage
Loan have been, and the transactions herein contemplated are,
in compliance with the FHA regulations, and no circumstances
exist with respect to the FHA Mortgage Loans which would
permit the FHA to deny coverage under the FHA insurance; and
Each VA Mortgage Loan was underwritten in accordance with VA
standards and is guaranteed by the VA, which guaranty is in
full force and effect, and the Mortgage Loan is not subject to
any defect which would diminish or impair the VA guaranty
(other than a potential valuation of the Mortgage Property),
and all prior transfers, if any, of the Mortgage Loan have
been, and the transactions herein contemplated are, in
compliance with the VA regulations, and no circumstances exist
with respect to the VA Mortgage Loan which would permit the VA
to deny coverage under the VA guaranty.
(xvi) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title
insurance policy (or in the case of any Mortgage Loan secured
by a Mortgaged Property located in a jurisdiction where such
policies are generally not available, an opinion of counsel of
the type customarily rendered in such jurisdiction in lieu of
title insurance) or other generally acceptable form of policy
of insurance acceptable to the Agency, as applicable, issued
by a title insurer acceptable to the Agency, as applicable,
and qualified to do business in the jurisdiction where the
Mortgage Property is located, insuring the Seller, its
successors and assigns, as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage
Loan, subject only to the exceptions contained in clauses (1),
(2) and (3) of paragraph (x) of this Section 3(b). The Seller
is the sole insured of such lender's title insurance policy,
and such lender's title insurance policy is in full force and
effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and
no prior holder of the Mortgage, including the Seller, has
done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy;
(xvii) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens)
affecting the related Mortgage Property which are or may be
liens prior to, or equal or coordinate with, the lien of the
related Mortgage which are not insured against by the Title
Insurance policy referenced in Section (xvi) above;
(xviii) Location of Improvements; No Encroachments.
Except as insured against by the Title Insurance policy
referenced in Section (xvi) above, all improvements which were
considered in determining the Appraised Value of the Mortgage
Property lay wholly within the boundaries and building
restriction lines of the Mortgage Property and no improvements
on adjoining properties encroach upon the Mortgage Property.
No improvement located on or being part of the Mortgage
Property is in violation of any applicable zoning law or
regulation;
(xix) Customary Provisions.
The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgage
Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right
to sell the Mortgage Property at a trustee's sale or the right
to foreclose the Mortgage;
(xx) Occupancy of the Mortgage Property.
As of the date of origination, the Mortgage Property was
lawfully occupied under applicable law.
(xxi) No Additional Collateral.
The Mortgage Note is not and has 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 (x) above;
(xxii) Deeds of Trust.
In the event the Mortgage constitutes 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 the Mortgage, and no fees or expenses are or will
become payable by the Mortgagee to the trustee under the deed
of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(xxiii) Transfer of Mortgage Loans.
As to any Mortgage Loan which is not a MERS Mortgage Loan, the
Assignment is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the
Mortgage Property is located;
(xxiv) Mortgage Property Undamaged.
The Mortgage Property is undamaged by water, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty
so as to affect adversely the value of the Mortgage Property
as security for the Mortgage Loan or the use for which the
premises were intended;
(xxv) Collection Practices; Escrow Deposits.
The collection practices used with respect to the Mortgage
Loan have been in accordance with the Mortgage Note, the
Mortgage and Prudent Servicing Practices, and have been in all
material respects legal and proper and in accordance with the
rules and regulations of the applicable Agency. All Escrow
Items have been collected in full compliance with state and
federal law. An escrow of funds is not prohibited by
applicable law and has been established to pay for every item
that remains unpaid and has been assessed but is not yet due
and payable. No escrow deposits or Escrow Items or other
charges or payments due the Seller have been capitalized under
the Mortgage Note;
(xxvi) No Condemnation.
To the best of Seller's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of
the related Mortgage Property;
(xxvii) The Appraisal.
The Mortgage Loan Documents contain an appraisal of the
related Mortgage Property by an appraiser who had no interest,
direct or indirect, in the Mortgage 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 the appraisal and the appraiser both satisfy the
applicable requirements of Title XI of the Financial
Institution Reform, Recovery, and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on
the date the Mortgage Loan was originated;
(xxviii) Insurance.
The Mortgage Property securing each Mortgage Loan is insured
by an insurer acceptable to the applicable Agency against loss
by fire and such hazards as are covered under a standard
extended coverage endorsement, in an amount which is not less
than the lesser of 100% of the insurable value of the Mortgage
Property and the outstanding principal balance of the Mortgage
Loan, but in no event less than the minimum amount necessary
to fully compensate for any damage or loss on a replacement
cost basis; if the Mortgage Property is a condominium unit, it
is included under the coverage afforded by a blanket policy
for the project; the insurance policy contains a standard
clause naming the originator of such mortgage loan, its
successor and assigns, as insured mortgagee; if the
improvements on the Mortgage Property are in an area
identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in
effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (A)
the outstanding principal balance of the Mortgage Loan, (B)
the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster
Protection Act, as amended; and the Mortgage obligates the
mortgagor thereunder to maintain all such insurance at the
mortgagor's cost and expense and the Seller has not acted or
failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and
enforceability thereof;
(xxix) Soldiers' and Sailors' Civil Relief Act.
The Mortgagor has not notified the Seller, and the Seller has
no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940, as amended;
(xxx) No Violation of Environmental Laws.
There is no pending action or proceeding directly involving
any Mortgage Property of which the Seller is aware in which
compliance with any environmental law, rule or regulation is
an issue; 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;
(xxxi) Homeownership and Equity Protection Act.
No Mortgage Loan is subject to the provisions of the Home
Ownership and Equity Protection Act of 1994;
(xxxii) Payment Terms.
The Mortgage Note is payable on the first day of each month in
equal monthly installments of principal and interest, with
interest in arrears, providing for full amortization by
maturity over a scheduled term of no more than 30 years. No
Mortgage Loan has a shared appreciation or other contingent
interest feature, or permits negative amortization;
(xxxiii) Loan-to-Value Ratio.
The Loan-to-Value Ratio of each Mortgage Loan was less than
125% at the time of its origination or refinancing, as
applicable; and
(xxxiv) Underwriting Guidelines.
The Mortgage Loan was underwritten in accordance with the
Seller's under-writing guidelines in effect at the time of
origination with exceptions thereto exercised in a reasonable
manner.
4. Repurchase.
(a) If any document required to be delivered by the Seller in respect of
any Mortgage Loan pursuant to Section 2(b) is not delivered as
required or is found to be defective in any material respect or in
the event of a breach of any of the representations and warranties
of the Seller made in Section 3, which breach materially and
adversely affects the value of any Mortgage Loan or the Purchaser's
interest therein, and the Seller cannot deliver such document or
cure such defect or breach within 90 days after written notice
thereof, the Seller will be required, within 90 days of such notice,
or in the case of a defect or breach which cannot be cured, within
60 days of such notice, at the Purchaser's option (or the option of
the Purchaser's assignee or successor), to repurchase such Mortgage
Loan, at a price equal to the product of the Unpaid Principal
Balance of the Mortgage Loan as of the date of repurchase and the
Purchase Price Percentage paid by the Purchaser, plus interest on
such Unpaid Principal Balance at the Mortgage Interest Rate from the
date on which interest has last been paid and distributed through
the date of repurchase, and (a) in the case of a Mortgage Loan prior
to the Transfer Date, less amounts received or advanced in respect
of such repurchased Mortgage Loan which are being held by the
Interim Servicer for distribution to the Purchaser, or (b) in the
case of a Mortgage Loan after the Transfer Date, plus amounts
advanced by the Purchaser in respect of such repurchased Mortgage
Loan.
(b) Any amounts payable by the Seller pursuant to Section 4(a) shall be
paid in immediately available funds to the Purchaser (or its
successor or assignee, if applicable). The Purchaser will deliver to
the Seller for the benefit of the Seller (or its successor or
assignee, if applicable), at the time of repurchase of any Mortgage
Loan, the documents in respect thereof specified in Section 2(b)(i).
(c) Each of the representations and warranties of the Seller contained
herein shall survive the purchase and sale of the Mortgage Loans
pursuant hereto and shall continue in full force and effect,
notwithstanding any restrictive or qualified endorsement on the
Mortgage Notes and notwithstanding subsequent termination of this
Agreement. The representations and warranties shall not be impaired
by any review and examination of documents to be delivered in
respect of each Mortgage Loan under Section 2(b)(i) or other
documents evidencing or relating to the Mortgage Loans or any
failure on the part of the Purchaser or any successor or assignee
thereof to review or examine such documents.
(d) In addition to such repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of the
representations and warranties contained in this Agreement. The
Purchaser and the Seller hereby agree that the sole remedy for the
breach of any representation and warranty hereunder shall be
pursuant to the terms of this Section 4 and Section 9.
5. Covenants of the Seller.
The Seller hereby covenants to the Purchaser as follows:
(a) Not later than the Closing Date, the Seller shall take all steps
required of it to effectuate the transfer of the Mortgage Loans to
the Purchaser, free and clear of any lien, charge, or encumbrance.
(b) The Seller shall record its transfer of the Mortgage Loans to the
Purchaser as a sale of its interest therein under generally accepted
accounting principles. The Seller shall also report the transfer as
a sale in all financial statements and reports to regulatory and
supervisory agencies and authorities to which it reports, if any.
For federal income tax purposes, the Seller will treat the transfer
of the Mortgage Loans as a sale.
6. Conditions to Obligation of the Purchaser.
The obligation of the Purchaser hereunder to purchase the Mortgage
Loans is subject to the accuracy in all material respects of all of
the representations and warranties of the Seller contained in
Section 3(a) (as of the Closing Date and subject to such exceptions
acceptable to the Purchaser as are noted in the Officer's
Certificate of the Seller) and no event shall have occurred which,
with notice or the passage of time, would constitute a default under
this Agreement and all other terms and conditions of this Agreement
shall have been complied with.
7. Certain Fees and Expenses.
(a) The Seller shall pay all of its own expenses incurred in connection
with this Agreement and the transfer of the Mortgage Loans as
contemplated hereunder.
(b) The Purchaser shall pay all of its own expenses incurred in
connection with this Agreement.
8. Servicing.
The Mortgage Loans shall be serviced by the Seller in accordance with the
terms of the applicable Interim Servicing Agreement. The Seller shall be
entitled to servicing fees calculated as provided therein.
9. Indemnification.
In addition to any repurchase and cure obligations of the Seller, and any
and all other remedies available to the Purchaser under this Agreement,
the Seller shall indemnify and hold harmless the Purchaser and the
Purchaser's designees, including, without limitation, any subsequent
holder of any Mortgage Note, against all losses, damages, penalties,
fines, claims, forfeitures, lawsuits, court costs, reasonable attorney's
fees, judgments, and any other costs, fees, and expenses resulting from
any act or failure to act or any breach of any warranty, obligation,
representation, or covenant contained in or made pursuant to this
Agreement by any agent, employee, representative or officer of the Seller.
The indemnification obligations of the Seller hereunder shall survive the
termination of this Agreement.
9. Securitization
(a) The Seller agrees to cooperate and take such actions as are
reasonably required by the Purchaser in connection with the resale
or Securitization of the Mortgage Loans by the Purchaser, including
delivering an opinion of counsel (which can be an opinion of
in-house counsel to the Seller) reasonably acceptable to the
Purchaser; provided that any out-of-pocket, third party expenses
incurred by the Seller in connection with the foregoing shall be
paid by the Purchaser.
(b) In connection with a Securitization, the Seller agrees to represent
to the Purchaser and the depositor, the trustee and the initial
purchaser of the securities in the Securitization (1) that the
Seller, in its capacity as Interim Servicer, has serviced the
Mortgage Loans in accordance with the terms of the Interim Servicng
Agreement, and otherwise complied with all covenants and obligations
thereunder, and (2) that the Seller/Interim Servicer has taken no
action that would, nor omitted to take any required action the
omission of which would, have the effect of impairing the mortgage
insurance or guarantee on the Mortgage Loans. The Seller also agrees
to represent the accuracy of any information provided to the
Purchaser by the Seller in its capacity as servicer on or before the
Securitization Closing Date.
10. Notices.
All demands, notices and communications hereunder (A) shall be in writing,
(B) may be delivered by facsimile, provided that a signed original copy of
such demand, notice or communication is promptly provided to the recipient
by overnight mail or an overnight delivery service, (C) shall be effective
only upon receipt and (D) shall, if sent to the Purchaser, be addressed to
it at Xxxxxxx Xxxxx Mortgage Company, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, XX 00000, Attention: Xxxxx Xxxxxxx, or if sent to the Seller, be 23
addressed to it at Xxxxx Fargo Home Mortgage, Inc., 000 xxxxx 0xx Xxxxxx,
Xxxxxxxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxx, MAC X4801-097 with a
copy to Xxxxx Fargo Home Mortgage, Inc., 0 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx
00000-0000, Attention: General Counsel MAC X2401-06T.
11. Miscellaneous.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York, notwithstanding any New York or other
choice of law rules to the contrary. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a
writing signed by the party against whom enforcement of such change,
waiver, discharge or termination is sought. This Agreement may be signed
in any number of counterparts, each of which shall be deemed an original,
which taken together shall constitute one and the same instrument. This
Agreement shall bind and inure to the benefit of and be enforceable by the
Purchaser and the Seller and their respective successors and assigns;
provided that, this Agreement may not be pledged, assigned or hypothecated
by the Seller without the written consent of the Purchaser.
12. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement
and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
(Signatures follow)
IN WITNESS WHEREOF, the Purchaser and the Seller have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
XXXXXXX SACHS MORTGAGE COMPANY
(Purchaser)
By: _________________________________
Name: _______________________________
Title: ______________________________
XXXXX FARGO HOME MORTGAGE, INC.
(Seller)
By: _________________________________
Name: _______________________________
Title: ______________________________
Schedule I
----------
Mortgage Loan Schedule
----------------------
EXHIBIT A
INTERIM SERVICING AGREEMENT
EXHIBIT B
MORTGAGE LOAN FILES
Mortgage Loan File Requirements. For each Mortgage Loan, the Seller shall
deliver a Mortgage Loan File to the Purchaser that contains each of the
following documents:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "paid to the order of _________________, without recourse"
and signed in the name of the Seller by an authorized officer or a
lost note affidavit in a form acceptable to the Purchaser with a
copy of the Mortgage Note attached thereto; the Seller shall assure
that the related Mortgage Note shall include all prior and
intervening endorsements as are necessary to show a complete chain
of endorsements from the respective Loan Originator to the
respective prior owner of such Mortgage Loan;
(b) either the recorded original related Security Instrument pertaining
to such Mortgage Loan, together with any addenda and riders, or a
copy certified by Seller to be a true and correct copy or the
original recorded document, or if the related Security Instrument is
in the process of being recorded, a photocopy of the related
Security Instrument, certified by the Seller or an officer of the
respective prior owner of such Mortgage Loan or by the applicable
title insurance company, closing/settlement/escrow agent or company
or closing attorney to be a true and correct copy of the related
Security Instrument transmitted for recordation; provided, however,
if the Purchaser requires a clerk certified copy of the original
recorded Security Instrument, the Seller shall request such from the
appropriate recording office and furnish it to the Purchaser as soon
a practicable and in no event later than 90 days of Purchaser's
request;
(c) the original Assignment of the related Security Instrument for each
Mortgage Loan in blank. The Assignment of the related security
instrument must be duly recorded only if recordation is either
necessary under applicable law or commonly required by private
institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser;
(d) each recorded original, or a copy certified by the Seller to be a
true and correct copy of the original recorded, intervening
Assignment of the Security Instrument as is necessary to show a
complete chain of title from the respective Loan Originator to the
respective prior owner of such Mortgage Loan or, if any such
original is unavailable because it is in the process of being
recorded, a photocopy of such intervening Assignment certified by
the Seller or an officer of the prior owner of such Mortgage Loan to
be a true and correct copy of such intervening Assignment submitted
for recordation; provided, however, if the Purchaser requires a
clerk certified copy of the original recorded intervening
Assignment, the Seller shall request such from the appropriate
recording office and furnish it to the Purchaser as soon a
practicable and in no event later than 90 days after Purchaser's
request;
(e) either an original Title Insurance policy or a Final Title Condition
Report pertaining to such Mortgage Loan or, with respect to loans
secured by properties in jurisdictions where title policies are not
available, the original attorney's opinion of title; in the event
that the policy has not been issued or is not otherwise available,
(i) a written binding ALTA commitment for such a policy (or a
photocopy thereof) issued by the respective title insurance company
or (ii) a Preliminary Title Report (or a photocopy thereof) if the
Mortgage Property are in a state designated by the Purchaser as a
Preliminary Title Report state;
(f) for each Mortgage Loan listed on Schedule I to this Agreement which
has Primary Mortgage Insurance pursuant to the related Mortgage Loan
Documents, a Primary Mortgage Insurance policy or a certificate of
Primary Mortgage Insurance (or a photocopy thereof) issued by the
respective insurer or its agent indicating that such a policy is in
effect;
(g) originals of each assumption agreement, modification, written
assurance or substitution agreement pertaining to such Mortgage
Loan, if any, or, if any such document is in the process of being
recorded, a photocopy of such document, certified by an officer of
the respective prior owner of such Mortgage Loan or by the
applicable title insurance company, closing/settlement/escrow agent
or company or closing attorney to be a true and correct copy of such
document transmitted for recordation;
(h) for each Mortgage Loan which is secured by a residential longterm
lease, a copy of the lease with evidence of recording indicated
thereon, or, if the lease is in the process of being recorded, a
photocopy of the lease, certified by an officer of the respective
prior owner of such Mortgage Loan or by the applicable title
insurance company, closing/settlement/escrow agent or company or
closing attorney to be a true and correct copy of the lease
transmitted for recordation; and
(i) for each VA Mortgage Loan the original LGC;
(j) for each FHA Mortgage Loan the original MIC, or evidence thereof via
FHA Connection (with duplicate MIC to follow within fifteen (15)
days);
(k) for each Mortgage Loan secured by Co-op Shares, the originals of the
following documents or instruments:
(i) The stock certificate;
(ii) The stock power executed in blank;
(iii) The executed proprietary lease;
(iv) The executed recognition agreement;
(v) The executed assignment of recognition agreement;
(vi) The executed UCC-1 financing statement with evidence of
recording thereon; and
(vii) 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 Seller
with evidence of recording thereon (or in a form suitable for
recordation).
Notwithstanding paragraphs (a) and (d) above, the Purchaser acknowledges that
the Seller may deliver (i) a Mortgage Note for which the chain of endorsements
is not identical to that of the intervening Assignments with respect to such
Mortgage Note, which shall not affect the enforceability of such Mortgage Note,
and/or (ii) intervening Assignments which are not identical to the chain of
endorsements with respect to such Mortgage Note, which shall not affect the
validity of such intervening Assignments; provided, however, that such
acknowledgment shall in no way operate to negate the Purchaser's remedies for
Seller's breach of the representations and warranties under this Agreement.
EXHIBIT P
RESPONSIBLE PARTY PURCHASE AGREEMENTS
[See Attached]
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
-------------------
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
NC CAPITAL CORPORATION,
Seller
-------------------
Dated as of September 16, 2002
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.................................................
SECTION 2. AGREEMENT TO PURCHASE.......................................
SECTION 3. MORTGAGE SCHEDULES..........................................
SECTION 4. PURCHASE PRICE..............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES...............................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER.........................
Subsection 6.01 Conveyance of Mortgage Loans..........................
Subsection 6.02 Books and Records.....................................
Subsection 6.03 Delivery of Mortgage Loan Documents...................
Subsection 6.04 Quality Control Procedures............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS.............................
SECTION 8. [RESERVED]..................................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.........................................
Subsection 9.01 Representations and Warranties Regarding the
Seller................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.............................
Subsection 9.03 Remedies for Breach of Representations and
Warranties............................................
Subsection 9.04 Repurchase of Mortgage Loans With First Payment
Defaults..............................................
SECTION 10. CLOSING.....................................................
SECTION 11. CLOSING DOCUMENTS...........................................
SECTION 12. COSTS.......................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.................
SECTION 14. THE SELLER..................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims..........................................
Subsection 14.02 Merger or Consolidation of the Seller.................
SECTION 15. FINANCIAL STATEMENTS........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST..............
SECTION 17. NOTICES.....................................................
SECTION 18. SEVERABILITY CLAUSE.........................................
SECTION 19. COUNTERPARTS................................................
SECTION 20. GOVERNING LAW...............................................
SECTION 21. INTENTION OF THE PARTIES....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT....
SECTION 23. WAIVERS.....................................................
SECTION 24. EXHIBITS....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES.............................
SECTION 26. REPRODUCTION OF DOCUMENTS...................................
SECTION 27. FURTHER AGREEMENTS..........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE......................
SECTION 29. NO SOLICITATION.............................................
SECTION 30. WAIVER OF TRIAL BY JURY.....................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS.........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H FORM OF CUSTODIAL AGREEMENT
EXHIBIT I REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT J ORIGINATOR'S UNDERWRITING GUIDELINES
EXHIBIT K MORTGAGE LOAN SCHEDULE
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
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This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of September 16, 2002, by and between Xxxxxxx Xxxxx
Mortgage Company, a New York limited partnership, having an office at 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and NC Capital Corporation, a
California corporation, having an office at 00000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate B/C, residential first mortgage loans (the "Mortgage Loans") on a
servicing released basis as described herein, and which shall be delivered as a
pool of whole loans on the date as provided herein (the "Closing Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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 Xxxxxx Xxx Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
or executive order to be closed, or (iii) the State in which the Custodian's
operations are located, are authorized or obligated by law to be closed.
Closing Date: September 25, 2002, or such other date as is mutually
agreed upon by the parties.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which agreement is annexed hereto as Exhibit
H.
Custodian: Deutsche Bank National Trust Company, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: September 16, 2002.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Determination Date: The 20th day of each calendar month.
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
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 required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or its successor in interest.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on Exhibit I hereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first 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 lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage 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 Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, 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 listed in Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit K, setting forth the following information with respect to
each Mortgage Loan: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the Mortgaged Property
is owner-occupied, a second home or investment property; (5) the number and type
of residential units constituting the Mortgaged Property (i.e. a single family
residence, a 2-4 family residence, a unit in a condominium project or a unit in
a planned unit development, manufactured housing); (6) the original months to
maturity or the remaining months to maturity from the 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; (7)
the Loan-to-Value Ratio at origination; (8) the Mortgage Interest Rate as of the
Cut-off Date; (9) 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; (10) the stated maturity date; (11) the amount of the Monthly
Payment as of the Cut-off Date; (12) the last payment date on which a Monthly
Payment was actually applied to pay interest and the outstanding principal
balance; (13) the original principal amount of the Mortgage Loan; (14) the
principal balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of payments of principal due and collected on or
before the Cut-off Date; (15) with respect to Adjustable Rate Mortgage Loans,
the Interest Rate Adjustment Date; (16) with respect to Adjustable Rate Mortgage
Loans, the Gross Margin; (17) with respect to Adjustable Rate Mortgage Loans,
the Lifetime Rate Cap under the terms of the Mortgage Note; (18) with respect to
Adjustable Rate Mortgage Loans, a code indicating the type of Index; (19) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Cap under the terms
of the Mortgage Note; (20) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate Floor under the terms of the Mortgage Note; (21) the type of
Mortgage Loan (i.e., Fixed Rate, Adjustable Rate, First Lien); (22) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (23) a code indicating the documentation style (i.e.
full, alternative or reduced); (24) the loan credit classification (as described
in the Underwriting Guidelines); (25) whether such Mortgage Loan provides for a
Prepayment Penalty; (26) the Prepayment Penalty period of such Mortgage Loan, if
applicable; (27) ) a description of the Prepayment Penalty, if applicable; (28)
the Mortgage Interest Rate as of origination; (29) the credit risk score (FICO
score) at origination; (30) the date of origination; (31) the Mortgage Interest
Rate adjustment period; (32) the Mortgage Interest Rate adjustment percentage;
(33) the Mortgage Interest Rate floor; (34) the Mortgage Interest Rate
calculation method (i.e., 30/360, simple interest, other); (35) a code
indicating whether the Mortgage Loan is a Section 32 Mortgage Loan; (36) a code
indicating whether the Mortgage Loan is assumable; (37) a code indicating
whether the Mortgage Loan has been modified; (38) the one year payment history;
(39) the Due Date for the first Monthly Payment; (40) the original Monthly
Payment due; (41) with respect to the related Mortgagor, the debt-to-income
ratio; (42) the Appraised Value of the Mortgaged Property; and (44) the sales
price of the Mortgaged Property if the Mortgage Loan was originated in
connection with the purchase of the Mortgaged Property. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the Cut-off Date: (1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage Loans; and (4)
the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any master
servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or any master servicer of the Mortgage
Loans or in an Affiliate of either and (iii) is not connected with the Seller or
any master servicer of the Mortgage Loans as an officer, employee, director or
person performing similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth on the Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
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 payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the Originator, 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 Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
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, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transfer in order to achieve
the desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan (the amount of any shortfall will be paid to the
Purchaser by the Seller in the month of substitution); (ii) have a Mortgage
Interest Rate not less than and not more than 1% greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one year less than that of the
Deleted Mortgage Loan (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Periodic Rate Cap, Lifetime Rate
Cap, Index and lien priority); and (v) comply with each representation and
warranty (respecting individual Mortgage Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer of a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and/or the Originator and the Purchaser and/or certain third
parties on the Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a Securitization Transfer pursuant to Section 13, including, but not
limited to, a seller's warranties and servicing agreement with respect to a
Whole Loan Transfer, and a pooling and servicing agreement and/or
seller/servicer agreements and related custodial/trust agreement and documents
with respect to a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found, a price
equal to the then outstanding principal balance of the Mortgage Loan to be
repurchased, plus accrued interest thereon at the Mortgage Interest Rate from
the date on which interest had last been paid through the date of such
repurchase, plus the amount of any outstanding advances owed to any servicer,
and plus all costs and expenses incurred by the Purchaser or any servicer
arising out of or based upon such breach, including without limitation costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: NC Capital Corporation, its successors in interest and
assigns.
Servicer: Ocwen Federal Bank, FSB or its permitted successors and
assigns under the Servicing Agreement.
Servicing Agreement: The agreement to be entered into by the
Purchaser and the Servicer, providing for the Originator to service the Mortgage
Loans as specified by the Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller or Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans but not
including any Prepayment Penalties; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Seller thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all accounts
and other rights to payment related to any of the property described in this
paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Thirty-day Delinquency: The failure of the Mortgagor to make any
Monthly Payment due under the Mortgage Note on or prior to the date which is 30
days after such payment's Due Date.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit J.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by the
Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the Mortgage
Loan Schedule for the Mortgage Loans to be purchased on the Closing Date to the
Purchaser at least two (2) Business Days prior to the Closing Date. The Mortgage
Loan Schedule shall be the Preliminary Mortgage Schedule with those Mortgage
Loans which have not been funded prior to the Closing Date deleted. The Mortgage
Loan Schedule shall be attached hereto as Exhibit K.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date as set forth on the Mortgage Loan Schedule. If so provided in the
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the Cut-off Date at the weighted
average Net Mortgage Interest Rate of those Mortgage Loans from the Cut-off Date
through the day prior to the Closing Date, inclusive. The Purchase Price plus
accrued interest as set forth in the preceding paragraph shall be paid to the
Seller by wire transfer of immediately available funds to an account designated
by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
(minus that portion of any such payment which is allocable to the period prior
to the Cut-off Date). The outstanding principal balance of each Mortgage Loan as
of the Cut-off Date is determined after application of payments of principal due
on or before the Cut-off Date, to the extent actually collected, together with
any unscheduled principal prepayments collected prior to the Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to the Cut-off Date, but to be applied on a due date beyond the Cut-off Date
shall not be applied to the principal balance as of the Cut-off Date. Such
prepaid amounts shall be the property of the Purchaser. The Seller cause any
such prepaid amounts to be remitted to the Servicer for subsequent remittance to
the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan.
At least ten (10) Business Days prior to the Closing Date, with
respect to each Mortgage Loan to be purchased, the Seller shall make the related
Servicing Files and Credit Files available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser.
Such examination of the Mortgage Files may be made by the
Purchaser or its designee at any reasonable time before or after the Closing
Date. If the Purchaser makes such examination prior to the Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
Mortgage Loan Schedule, and may be replaced by a Qualified Substitute Mortgage
Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its option
and without notice to the Seller, purchase some or all of the Mortgage Loans
without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial or
complete examination of the Mortgage Files or the Credit Files shall not affect
the Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief as provided herein.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the Closing Date, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in the
manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans, the
Servicing Rights, the Mortgage Files, the Servicing and Credit Files, and all
rights and obligations arising under the documents contained therein.
Subsection 6.02. Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller or the Originator after the Cut-off Date on or in
connection with a Mortgage Loan shall be vested in the Purchaser or one or more
designees of the Purchaser; provided, however, that all funds received on or in
connection with a Mortgage Loan shall be received and held by the Seller or the
Originator in trust for the benefit of the Purchaser or the appropriate designee
of the Purchaser, as the case may be, as the owner of the Mortgage Loans
pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Originator to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Originator to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Mae or Xxxxxxx Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or Originator
may be in the form of microfilm or microfiche so long as the Seller or
Originator complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03. Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall deliver and
release to the Custodian no later than five (5) Business Days prior to the
Closing Date those Mortgage Loan Documents as required by the Custodial
Agreement with respect to each Mortgage Loan, a list of which is set forth in
the Custodial Agreement.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the Initial Certification of the Custodian in the
form annexed to the Custodial Agreement. The Seller shall comply with the terms
of the Custodial Agreement and the Purchaser shall pay all fees and expenses of
the Custodian from and after the Closing Date.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, on the Closing Date (other than with respect to the
Assignments of Mortgage which shall be delivered to the Custodian in blank on or
prior to the Closing Date and recorded subsequently by the Purchaser or its
designee or document submitted for recordation to the appropriate public
recording office), and in the event that the Seller does not cure such failure
within 30 days of discovery or receipt of written notification of such failure
from the Purchaser, the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in the manner specified
in Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its
designee said officer's certificate and (ii) such document is delivered within
twelve (12) months of the Closing Date..
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.
Subsection 6.04. Quality Control Procedures.
The Seller shall, or shall cause the Originator to, 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 shall include evaluating and monitoring the
overall quality of the Originator's loan production and the servicing activities
of the Originator. The program is to ensure that the Mortgage Loans are
originated and serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Pursuant to the Servicing Agreement, on the Closing
Date, the Servicer shall begin servicing the Mortgage Loans on behalf of the
Purchaser in accordance with the Servicing Agreement. The Seller shall take any
actions necessary to cause the Servicer to terminate servicing the Mortgage
Loans on behalf of the Seller.
SECTION 8. [RESERVED].
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller, regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. 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 the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the Closing Date in
the form attached as Exhibit I hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, 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;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
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 obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(l) Loan Experience. The Seller has made available information on
its web page as to its loan gain and loss experience in respect of foreclosures,
its loan delinquency experience for the immediately preceding three-year period,
prepayment speed and individual loan loss severities and delinquency histories
for at least the immediately preceding year, in each case with respect to
mortgage loans owned by it and such mortgage loans serviced for others during
such period, and all such information so delivered shall be true and correct in
all material respects;
(m) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(n) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(o) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(p) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(q) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note.
Subsection 9.02. Representations and Warranties Regarding
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that,
as to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
Closing Date for the Mortgage Loan under the terms of the Mortgage Note, other
than payments for which the related due date was not thirty or more days prior
to the Closing Date, have been made and credited. No Mortgage Loan has a
Thirty-day Delinquency nor has the Mortgage Loan had a Thirty-day Delinquency at
any time since the origination of the Mortgage Loan. The first Monthly Payment
shall be made with respect to the Mortgage Loan on its Due Date or within the
grace period, all in accordance with the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and 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 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or Federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance Act of
1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac,
as well as all additional requirements set forth in Section 2.10 of the
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's or any servicer's having engaged in, any act
or omission which would impair the coverage of any such policy, the benefits of
the endorsement provided for herein, or the validity and binding effect of such
policy, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Xxx and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. 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. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, and (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee.
(j) Valid First Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien on the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time with respect to the foregoing. The lien of the Mortgage is
subject only to:
(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and the Seller has full right to sell
and assign the same to the Purchaser.;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination or servicing of the Mortgage Loan. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the Closing Date, the Seller will have no right to modify
or alter the terms of the sale of the Mortgage Loan and the Seller will have no
obligation or right to repurchase the Mortgage Loan or substitute another
Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac 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 original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (1) and (2) of paragraph (j) of this
Subsection 9.02, and in the case of adjustable rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The title policy does not
contain any special exceptions (other than the standard exclusions) for zoning
and uses and has been marked to delete the standard survey exceptions or to
replace the standard survey exception with a specific survey reading. The
Seller, its successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and remains
in full force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) 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 other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. No Mortgage Loan contains terms or
provisions which would result in negative amortization. Principal payments on
the Mortgage Loan commenced no more than sixty days after funds were disbursed
in connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Cap, are as set forth on Exhibit I hereto.
The Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the description of
pool characteristics attached as Exhibit I hereto, the Mortgage Loan is payable
on the first day of each month. There are no Convertible Mortgage Loans which
contain a provision allowing the Mortgagor to convert the Mortgage Note from an
adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Standards. The Mortgage
Loan was underwritten in accordance with the Underwriting Standards (a copy of
which is attached hereto as Exhibit J). The Mortgage Note and Mortgage are on
forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and neither the Seller nor the
Originator has made any representations to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property 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;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in sub-prime mortgage loans
to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage
Loan to become delinquent, or adversely affect the value or marketability of the
Mortgage Loan, or cause the Mortgage Loans to prepay during any period
materially faster or slower than the mortgage loans originated by the Seller
generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. 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;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first 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 Xxxxxx Xxx and Xxxxxxx Mac. The consolidated
principal amount does not exceed the original principal amount of the Mortgage
Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Servicer, the Seller, the Originator and any prior servicer with respect to the
Mortgage Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all respects legal
and proper and prudent in the mortgage origination and servicing business. With
respect to escrow deposits and Escrow Payments, all such payments are in the
possession of, or under the control of, the Servicer, the Seller or the
Originator 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 in full compliance with state and federal law and
the provisions of the related Mortgage Note and Mortgage. An escrow of funds is
not prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed but
is not yet due and payable. No escrow deposits or Escrow Payments or other
charges or payments due the Seller have been capitalized under the Mortgage or
the Mortgage Note. All Mortgage Interest Rate adjustments have been made in
strict compliance with state and federal law and the terms of the related
Mortgage and Mortgage Note on the related Interest Rate Adjustment Date. If,
pursuant to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with respect to
each Mortgage Note which required a new index to be selected, and such selection
did not conflict with the terms of the related Mortgage Note. The Seller or the
Originator executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
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 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;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
Originator, 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 the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Originator has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall cause the Originator to maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser 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 coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (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, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Originator 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;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(uu) Credit Information. 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, that 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
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(ww) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and no Mortgage Loan has a
Prepayment Penalty period in excess of five years;
(xx) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," or "predatory" loans
under, any other applicable state, federal or local law. No predatory or
deceptive lending practices, including, without limitation, the extension of
credit without regard to the ability of the Mortgagor to repay and the extension
of credit which has no apparent benefit to the Mortgagor, were employed in the
origination of the Mortgage Loan;
(yy) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(zz) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Xxx guidelines for
such trusts;
(ccc) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) 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;
(ddd) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500; and
(eee) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws.
Subsection 9.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price,
together with all expenses incurred by the Purchaser as a result of such
repurchase. Notwithstanding the above sentence, within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in clauses (ww), (xx), (yy) or (aaa) of
Subsection 9.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price. However, if the
breach shall involve a representation or warranty set forth in Subsection 9.02
(other than the representations and warranties set forth in clauses (ww), (xx),
(yy) or (aaa) of such Subsection) and the Seller discovers or receives notice of
any such breach within 120 days of the Closing Date, the Seller shall, at the
Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the Closing Date.
If the Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage Loan or Loans pursuant to
the foregoing provisions of this Subsection 9.03 shall be accomplished by direct
remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
the Custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03 and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03 and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The Seller shall
cause the Originator to remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment on such
Qualified Substitute Mortgage Loan or Loans in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by the Seller. For
the month of substitution, distributions to the Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of substitution,
and the Seller shall thereafter be entitled to retain all amounts subsequently
received by the Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and other costs and expenses resulting from any claim,
demand, defense or assertion based on or grounded upon, or resulting from, a
breach of the Seller representations and warranties contained in this Agreement
or any Reconstitution Agreement. It is understood and agreed that the
obligations of the Seller set forth in this Subsection 9.03 to cure, substitute
for or repurchase a defective Mortgage Loan and to indemnify the Purchaser as
provided in this Subsection 9.03 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.04. Repurchase of Mortgage Loans With First Payment
Defaults.
If the related Mortgagor fails to make the Monthly Payment due on
October 1, 2002 on or prior to the fifteenth day of the month following the
month in which such Due Date occurs (a "First Payment Default"), the Seller, at
the Purchaser's option, shall repurchase such Mortgage Loan from the Purchaser
at the Repurchase Price; provided, that Seller shall not be required to
repurchase any Mortgage Loan for which Purchaser does not notify the Seller of
the First Payment Default within 90 days of the date of such First Payment
Default.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
SECTION 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, any account certifications and all
other documents required thereunder;
3. the Custodial Agreement, dated as of the Cut-off Date, in the
form attached as Exhibit H hereto;
4. the Mortgage Loan Schedule, one copy to be attached hereto,
and one copy to be attached to the Custodian's counterpart of
the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. an Officer's Certificate, in the form of Exhibit E hereto with
respect to the Seller, including all attachments thereto;
7. an Opinion of Counsel of the Seller (who may be an employee of
the Seller), in the form of Exhibit F hereto ("Opinion of
Counsel of the Seller");
8. an Opinion of Counsel of the Custodian (who may be an employee
of the Custodian), in the form of an exhibit to the Custodial
Agreement;
9. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
10. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
11. the Underwriting Guidelines to be attached hereto as Exhibit
J; and
12. Exhibit I to this Agreement.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the 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) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(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;
provided that Purchaser shall not enter into more than five
Reconstitutions of the Mortgage Loans in the first year after the Closing Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx 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 Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that there shall be no more than four transferees of the Purchaser at
any one time.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) (a) to restate the
representations and warranties set forth in this Agreement as of the settlement
or closing date in connection with such Reconstitution (each, a "Reconstitution
Date"); provided, that with respect to the representations and warranties set
forth in Section 9.02(b) and 9.02(q), the Seller shall only restate such
representations and warranties as of the Closing Date, and, provided further,
that with respect to the representation and warranty set forth in Section
9.02(hh), the Seller's restatement of such representation and warranty as of the
Reconstitution Date shall be qualified "to the best of the Seller's knowledge",
or (b) make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be, or
such representations and warranties as may be required by any Rating Agency or
prospective purchaser of the related securities or such Mortgage Loans, in
connection with such Reconstitution. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants in such Reconstitution: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Seller or its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request; (ii)
such additional representations, warranties, covenants, opinions of counsel,
letters from auditors, and certificates of public officials or officers of the
Seller or the Originator 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. The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser and each Person who controls the Purchaser or such
Affiliate and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Seller or the Originator regarding the Seller, the Originator, the Seller's and
Originator's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement. Moreover, the Seller agrees to cooperate with all reasonable requests
made by the Purchaser to effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause the
Originator to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01. Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees (including (without limitation) legal fees incurred in connection
with the enforcement of the Seller's indemnification obligation under this
Subsection 14.01) and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Seller to perform its duties under this Agreement and the Originator to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written 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 Purchaser promptly
shall reimburse the Seller for all amounts advanced by it pursuant to the
preceding sentence, except when the claim is in any way related to the Seller's
indemnification pursuant to Section 9, or is in any way related to the failure
of the Originator or the Seller to service and administer the Mortgage Loans in
strict compliance with the terms of this Agreement or any Reconstitution
Agreement.
Subsection 14.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser
on or before the Closing Date. The Seller hereby grants to the Purchaser a lien
on and a continuing security interest in each Mortgage Loan and each document
and instrument evidencing each such Mortgage Loan to secure the performance by
the Seller of its obligations under the Purchase Price and Terms Agreement, and
the Seller agrees that it shall hold such Mortgage Loans in custody for the
Purchaser subject to the Purchaser's (i) right to reject any Mortgage Loan (or
Qualified Substitute Mortgage Loan) under the terms of this Agreement and to
require another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be
substituted therefor, and (ii) obligation to pay the Purchase Price for the
Mortgage Loans. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under this
Agreement or afforded by law or equity and all such rights and remedies may be
exercised concurrently, independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
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 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be 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 the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. If the Purchaser assigns any or all of its rights as
Purchaser hereunder, the assignee of the Purchaser will become the "Purchaser"
hereunder to the extent of such assignment. Any such assignment by the Purchaser
shall be accompanied by the delivery and execution of an Assignment and
Assumption Agreement (the "Assignment and Assumption Agreement") in the form
attached hereto as Exhibit G.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the Closing Date and the Seller shall take no action to undermine these
rights and benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Seller or any affiliate of the Seller which
are directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL
HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX SACHS MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By:XXXXXXX XXXXX REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:______________________________
Name:____________________________
Title:___________________________
NC CAPITAL CORPORATION
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "NC Capital Corporation, successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"NC Capital Corporation, formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
----------------------------
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of [the Mortgage Loan
Purchase and Warranties Agreement, dated as of _______ __, 200_, by and
between __________________ (the "Purchaser") and the Company (the
"Purchase Agreement"), and the Custodial Agreement dated as of _____ __,
200_ by and among the Company, [New Century Mortgage Corporation, as
Originator, NC Capital Corporation, as Seller, the Purchaser and
______________[CUSTODIAN] (the "Custodial Agreement") and to endorse the
Mortgage Notes and execute the Assignments of Mortgages by original or
facsimile signature, and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Custodial Agreement, the sale of the
mortgage loans or the consummation of the transactions contemplated by the
agreements; or (ii) any required consent, approval, authorization or order
has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement and the Custodial
Agreement conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the charter or
by-laws of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement and the Custodial Agreement, or the mortgage loans or of any
action taken or to be taken in connection with the transactions
contemplated hereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the Purchase
Agreement and the Custodial Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Custodial Agreement and (c) any other document
delivered or on the date hereof in connection with any purchase described
in the agreements set forth above was, at the respective times of such
signing and delivery, and is now, a duly elected or appointed, qualified
and acting officer or representative of the Company, who holds the office
set forth opposite his or her name on Exhibit 5, and the signatures of
such persons appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Custodial
Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of __________
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"), dated as of
_________ __, 200_ (the "Purchase Agreement") which sale is in the form of whole
loans, delivered pursuant to a Custodial Agreement dated as of _____ __, 200_
among the Purchaser, the Company, and [CUSTODIAN] (the "Custodial Agreement"
and, collectively with the Purchase Agreement, the "Agreements"). Capitalized
terms not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Custodial Agreement;
3. the form of Assignment of Mortgage;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the with the Agreements and the sale of the
Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements to which it
is a party or the Mortgage Loans or of any action taken or to
be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Custodial Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to ________________________
under a Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __,
200_, certain mortgage loans originated by the Association. The Company warrants
that the mortgage loans to be sold to ___________________________________ are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
___________________________________ shall not be used as additional or
substitute collateral for advances made by the Association. ___________________
________________ understands that the balance of the Company's mortgage loan
portfolio may be used as collateral or additional collateral for advances made
by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to _________________
_______________________________.
Very truly yours,
______________________________
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Acknowledged and approved:
_________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to ___________________________________ from the Company named below pursuant
to that certain Mortgage Loan Purchase and Warranties Agreement, dated as of
______ __, 200_, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to the Company named below or its designees, as of the date and
time of the sale of such Mortgage Loans to ___________________________________.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:______________________________
II. Certification of Release
------------------------
The Company named below hereby certifies to ________________________
___________ that, as of the date and time of the sale of the above-mentioned
___________________________________ the security interests in the Mortgage Loans
released by the above-named financial institution comprise all security
interests relating to or affecting any and all such Mortgage Loans. The Company
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
_______________________________
By:____________________________
Title:_________________________
Date:__________________________
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ______________, between
__________________________________, a ____________________________ corporation
("Assignor") and ________________________________, a __________________________
corporation ("Assignee"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers, conveys and assigns to
Assignee, as Purchaser, all of the right, title and interest of Assignor with
respect to the mortgage loans listed on Exhibit A attached hereto (the "Mortgage
Loans"), and with respect to such Mortgage Loans, in, to and under (a) that
certain Mortgage Loan Purchase and Warranties Agreement, Conventional
Residential Adjustable Rate and Fixed Rate Mortgage Loans (the "Purchase
Agreement"), and (b) that certain Custodial Agreement, dated as of
______________, 200_ among the Seller, the Originator, the Purchaser and
________________________ (the "Custodian") (the "Custodial Agreement"); and (c)
The Purchase Agreement and the Custodial Agreement are collectively referred to
as the "Agreements").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. 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 Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Agreements. 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, the Agreements; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans, or any interest in
the Mortgage Loans or otherwise approached or negotiated with respect to the
Mortgage Loans, or any interest in the Mortgage with any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act of 1933, as amended (the "1933 Act") or
which would render the disposition of the Mortgage Loans a violation of Section
5 of the 1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller pursuant to the Agreements 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 and Assumption Agreement, and
to consummate the transactions set forth herein. The execution, delivery and
performance of the Assignee of this Assignment and Assumption 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
and Assumption 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;
c. To the best of Assignee's knowledge, 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 and Assumption Agreement, or the consummation by it of the
transactions contemplated hereby;
d. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Agreements, the Mortgage Loans, and
from and after the date hereof, the Assignee assumes for the benefit of each of
the Seller, the Assignor and the Custodian all of the Assignor's obligations as
Purchaser thereunder; including, without limitation, the limitation on
assignment set forth in Section 22 of the Purchase Agreement;
e. The Assignee understands that the Mortgage Loans have not
been registered under the 1933 Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the
Mortgage Loans is in excess of $250,000 and will be paid by cash remittance of
the full purchase price within 60 days of the sale;
g. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person;
h. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
i. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Seller;
j. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans or any interest in
the Mortgage Loans, or otherwise approached or negotiated with respect to the
Mortgage Loans or any interest in the Mortgage Loans with any person in any
manner which would constitute a distribution of the Mortgage Loans under the
1933 Act or which would render the disposition of the Mortgage Loans a violation
of Section 5 of the 1933 Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.
4. (a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans, this Assignment and Assumption
Agreement and the Agreements is:
The Assignee's wire instructions for purposes of all remittances and
payments related to the Mortgage Loans are:
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment and Assumption
Agreement is:
5. This Assignment and Assumption Agreement shall be 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, except to the extent preempted by federal law.
6. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. This Assignment and
Assumption Agreement may not be assigned by the Assignee without the express
written consent of the Assignor. Any entity into which the Assignor or Assignee
may be merged or consolidated shall, without the requirement for any further
writing, be deemed the Assignor or Assignee, respectively, hereunder.
7. No term or provision of this Assignment and Assumption 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.
8. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Agreements by the
Assignor.
9. Notwithstanding the assignment of the Agreements by either the
Assignor or Assignee, this Assignment and Assumption Agreement shall not be
deemed assigned by the Assignor or the Assignee unless assigned by separate
written instrument.
10. For the purpose for facilitating the execution of this
Assignment and Assumption Agreement as herein provided and for other purposes,
this Assignment and Assumption 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.
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
______________________________ ______________________________
Assignor Assignee
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
Taxpayer Taxpayer
Identification No.____________ Identification No.____________
Exhibit H
EXHIBIT H
FORM OF CUSTODIAL AGREEMENT
---------------------------
Exhibit I
EXHIBIT I
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
-------------------------------------------------------
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
Exhibit J
EXHIBIT J
ORIGINATOR'S UNDERWRITING GUIDELINES
------------------------------------
Exhibit K
EXHIBIT K
MORTGAGE LOAN SCHEDULE
----------------------
EXECUTION COPY
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
---------------
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
NC CAPITAL CORPORATION,
Seller
---------------
Dated as of November 1, 2002
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.................................................
SECTION 2. AGREEMENT TO PURCHASE.......................................
SECTION 3. MORTGAGE SCHEDULES..........................................
SECTION 4. PURCHASE PRICE..............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES...............................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER.........................
Subsection 6.01 Conveyance of Mortgage Loans..........................
Subsection 6.02 Books and Records.....................................
Subsection 6.03 Delivery of Mortgage Loan Documents...................
Subsection 6.04 Quality Control Procedures............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS.............................
SECTION 8. [RESERVED]..................................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.........................................
Subsection 9.01 Representations and Warranties Regarding the
Seller................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans.............................
Subsection 9.03 Remedies for Breach of Representations and
Warranties............................................
SECTION 10. CLOSING.....................................................
SECTION 11. CLOSING DOCUMENTS...........................................
SECTION 12. COSTS.......................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.................
SECTION 14. THE SELLER..................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims..........................................
Subsection 14.02 Merger or Consolidation of the Seller.................
SECTION 15. FINANCIAL STATEMENTS........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST..............
SECTION 17. NOTICES.....................................................
SECTION 18. SEVERABILITY CLAUSE.........................................
SECTION 19. COUNTERPARTS................................................
SECTION 20. GOVERNING LAW...............................................
SECTION 21. INTENTION OF THE PARTIES....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT....
SECTION 23. WAIVERS.....................................................
SECTION 24. EXHIBITS....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES.............................
SECTION 26. REPRODUCTION OF DOCUMENTS...................................
SECTION 27. FURTHER AGREEMENTS..........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE......................
SECTION 29. NO SOLICITATION.............................................
SECTION 30. WAIVER OF TRIAL BY JURY.....................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS.........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H FORM OF CUSTODIAL AGREEMENT
EXHIBIT I REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT J ORIGINATOR'S UNDERWRITING GUIDELINES
EXHIBIT K MORTGAGE LOAN SCHEDULE
EXHIBIT L DELINQUENT MORTGAGE LOANS
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
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This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of November 1, 2002, by and between Xxxxxxx Xxxxx
Mortgage Company, a New York limited partnership, having an office at 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and NC Capital Corporation, a
California corporation, having an office at 00000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate B/C, residential first and second lien mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered as a pool of whole loans on the date as provided herein (the
"Closing Date");
WHEREAS, each Mortgage Loan 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 Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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 Xxxxxx Xxx Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
set forth in an appraisal made in connection with the origination of the related
Mortgage Loan as the value of the related Mortgaged Property, and (ii) with
respect to any Second Lien Loan, the value, determined pursuant to the Seller's
Underwriting Guidelines, of the related Mortgaged Property as of the origination
of the Second Lien Loan.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
or executive order to be closed, or (iii) the State in which the Custodian's
operations are located, are authorized or obligated by law to be closed.
Closing Date: November 22, 2002, or such other date as is mutually
agreed upon by the parties.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which agreement is annexed hereto as Exhibit
H.
Custodian: JPMorgan Chase Bank, or its successor in interest or
permitted assigns, or any successor to the Custodian under the Custodial
Agreement as therein provided.
Cut-off Date: November 1, 2002.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased by the
Seller in accordance with the terms of this Agreement.
Determination Date: The 20th day of each calendar month.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
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 required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
First Lien Loan: Any Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on Exhibit I hereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on 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 lien, in the case of a First Lien Loan, or a second lien, in the case of a
Second Lien Loan, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage 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 Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, 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 listed in Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit K, setting forth the following information with respect to
each Mortgage Loan: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the Mortgaged Property
is owner-occupied, a second home or investment property; (5) the number and type
of residential units constituting the Mortgaged Property (i.e. a single family
residence, a 2-4 family residence, a unit in a condominium project or a unit in
a planned unit development, manufactured housing); (6) the original months to
maturity or the remaining months to maturity from the 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; (7)
the Loan-to-Value Ratio at origination; (8) with respect to First Lien Loans,
the LTV and with respect to Second Lien Loans, the CLTV; (9) the Mortgage
Interest Rate as of the 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
amount of the Monthly Payment as of the Cut-off Date; (13) the last payment date
on which a Monthly Payment was actually applied to pay interest and the
outstanding principal balance; (14) the original principal amount of the
Mortgage Loan; (15) the principal balance of the Mortgage Loan as of the close
of business on the Cut-off Date, after deduction of payments of principal due
and collected on or before the Cut-off Date; (16) with respect to Adjustable
Rate Mortgage Loans, the Interest Rate Adjustment Date; (17) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (18) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (19) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (20) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Cap under the terms of the Mortgage Note; (21) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Floor under the
terms of the Mortgage Note; (22) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate, First Lien, Second Lien); (23) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e. full, alternative or
reduced); (25) the loan credit classification (as described in the Underwriting
Guidelines); (26) whether such Mortgage Loan provides for a Prepayment Penalty;
(27) the Prepayment Penalty period of such Mortgage Loan, if applicable; (28) )
a description of the Prepayment Penalty, if applicable; (29) the Mortgage
Interest Rate as of origination; (30) the credit risk score (FICO score) at
origination; (31) the date of origination; (32) the Mortgage Interest Rate
adjustment period; (33) the Mortgage Interest Rate adjustment percentage; (34)
the Mortgage Interest Rate floor; (35) the Mortgage Interest Rate calculation
method (i.e., 30/360, simple interest, other); (36) a code indicating whether
the Mortgage Loan is a Section 32 Mortgage Loan; (37) a code indicating whether
the Mortgage Loan is assumable; (38) a code indicating whether the Mortgage Loan
has been modified; (39) the one year payment history; (40) the Due Date for the
first Monthly Payment; (41) the original Monthly Payment due; (42) with respect
to the related Mortgagor, the debt-to-income ratio; (43) the Appraised Value of
the Mortgaged Property; (44) the sales price of the Mortgaged Property if the
Mortgage Loan was originated in connection with the purchase of the Mortgaged
Property; and (45) with respect to Second Lien Loans, the outstanding principal
balance of the superior lien. With respect to the Mortgage Loans in the
aggregate, the Mortgage Loan Schedule shall set forth the following information,
as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any master
servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or any master servicer of the Mortgage
Loans or in an Affiliate of either and (iii) is not connected with the Seller or
any master servicer of the Mortgage Loans as an officer, employee, director or
person performing similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth on the Mortgage Loan Schedule.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
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 payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the Originator, 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 Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
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, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transfer in order to achieve
the desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer of a Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and/or the Originator and the Purchaser and/or certain third
parties on the Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a Securitization Transfer pursuant to Section 13, including, but not
limited to, a seller's warranties and servicing agreement with respect to a
Whole Loan Transfer, and a pooling and servicing agreement and/or
seller/servicer agreements and related custodial/trust agreement and documents
with respect to a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found, a price
equal to the sum of (a) the product of (i) the Purchase Price Percentage (as
defined in the Purchase Price and Terms Agreement) multiplied by (ii) the them
outstanding principal balance of the Mortgage Loan to be repurchased, plus (b)
accrued interest on any Mortgage Loans which was less than 60 days delinquent on
the Cut-off Date (not to exceed 59 days worth) at the Mortgage Interest Rate
from the date on which interest had last been paid through the date of such
repurchase, plus (c) the amount of any outstanding advances owed to any
servicer, plus (d) all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such breach, including without limitation
costs and expenses incurred in the enforcement of the Seller's repurchase
obligation hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: NC Capital Corporation, its successors in interest and
assigns.
Servicer: Ocwen Federal Bank, FSB or its permitted successors and
assigns under the Servicing Agreement.
Servicing Agreement: The agreement to be entered into by the
Purchaser and the Servicer, providing for the Originator to service the Mortgage
Loans as specified by the Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller or Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans but not
including any Prepayment Penalties; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Seller thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all accounts
and other rights to payment related to any of the property described in this
paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit J.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Agreement: Any Reconstitution Agreement in respect of
a Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation format pursuant to a
Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by the
Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the Mortgage
Loan Schedule for the Mortgage Loans to be purchased on the Closing Date to the
Purchaser at least two (2) Business Days prior to the Closing Date. The Mortgage
Loan Schedule shall be the Preliminary Mortgage Schedule with those Mortgage
Loans which have not been funded prior to the Closing Date deleted. The Mortgage
Loan Schedule shall be attached hereto as Exhibit K.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date as set forth on the Mortgage Loan Schedule. If so provided in the
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans which are less than 60 days delinquent as
of the Cut-off Date at the weighted average Net Mortgage Interest Rate of those
Mortgage Loans from the Cut-off Date through the day prior to the Closing Date,
inclusive; provided, however, the total amount of accrued interest shall not
exceed 59 days' interest. The Purchase Price plus accrued interest as set forth
in the preceding paragraph shall be paid to the Seller by wire transfer of
immediately available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
(minus that portion of any such payment which is allocable to the period prior
to the Cut-off Date). The outstanding principal balance of each Mortgage Loan as
of the Cut-off Date is determined after application of payments of principal due
on or before the Cut-off Date, to the extent actually collected, together with
any unscheduled principal prepayments collected prior to the Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to the Cut-off Date, but to be applied on a due date beyond the Cut-off Date
shall not be applied to the principal balance as of the Cut-off Date. Such
prepaid amounts shall be the property of the Purchaser. The Seller cause any
such prepaid amounts to be remitted to the Servicer for subsequent remittance to
the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan.
At least five (5) Business Days prior to the Closing Date, with
respect to each Mortgage Loan to be purchased, the Seller shall make the related
Servicing Files and Credit Files available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser.
Such examination of the Mortgage Files may be made by the
Purchaser or its designee at any reasonable time before or after the Closing
Date. If the Purchaser makes such examination prior to the Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
Mortgage Loan Schedule. The Purchaser may, at its option and without notice to
the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files or the Credit Files shall not affect the Purchaser's (or any of
its successor's) rights to demand repurchase, substitution or other relief as
provided herein.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the Closing Date, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in the
manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans, the
Servicing Rights, the Mortgage Files, the Servicing and Credit Files, and all
rights and obligations arising under the documents contained therein.
Subsection 6.02. Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller or the Originator after the Cut-off Date on or in
connection with a Mortgage Loan shall be vested in the Purchaser or one or more
designees of the Purchaser; provided, however, that all funds received on or in
connection with a Mortgage Loan shall be received and held by the Seller or the
Originator in trust for the benefit of the Purchaser or the appropriate designee
of the Purchaser, as the case may be, as the owner of the Mortgage Loans
pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Originator to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Originator to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or Originator
may be in the form of microfilm or microfiche so long as the Seller or
Originator complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03. Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall deliver and
release to the Custodian no later than five (5) Business Days prior to the
Closing Date those Mortgage Loan Documents as required by the Custodial
Agreement with respect to each Mortgage Loan, a list of which is set forth in
the Custodial Agreement.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the Initial Certification of the Custodian in the
form annexed to the Custodial Agreement. The Seller shall comply with the terms
of the Custodial Agreement and the Purchaser shall pay all fees and expenses of
the Custodian from and after the Closing Date.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, on the Closing Date (other than with respect to the
Assignments of Mortgage which shall be delivered to the Custodian in blank on or
prior to the Closing Date and recorded subsequently by the Purchaser or its
designee or document submitted for recordation to the appropriate public
recording office), and in the event that the Seller does not cure such failure
within 30 days of discovery or receipt of written notification of such failure
from the Purchaser, the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in the manner specified
in Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its
designee said officer's certificate and (ii) such document is delivered within
twelve (12) months of the Closing Date..
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.
Subsection 6.04. Quality Control Procedures.
The Seller shall, or shall cause the Originator to, 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 shall include evaluating and monitoring the
overall quality of the Originator's loan production and the servicing activities
of the Originator. The program is to ensure that the Mortgage Loans are
originated and serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Pursuant to the Servicing Agreement, on the Closing
Date, the Servicer shall begin servicing the Mortgage Loans on behalf of the
Purchaser in accordance with the Servicing Agreement. The Seller shall take any
actions necessary to cause the Servicer to terminate servicing the Mortgage
Loans on behalf of the Seller.
SECTION 8. [RESERVED].
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01. Representations and Warranties Regarding the
Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller, regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. 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 the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the Closing Date in
the form attached as Exhibit I hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, 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;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
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 obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(l) Loan Experience. The Seller has made available information on
its web page as to its loan gain and loss experience in respect of foreclosures,
its loan delinquency experience for the immediately preceding three-year period,
prepayment speed and individual loan loss severities and delinquency histories
for at least the immediately preceding year, in each case with respect to
mortgage loans owned by it and such mortgage loans serviced for others during
such period, and all such information so delivered shall be true and correct in
all material respects;
(m) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(n) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(o) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(p) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(q) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note.
Subsection 9.02. Representations and Warranties Regarding
Individual Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. Except with respect to a Mortgage Loan set
forth on Exhibit L hereto, all payments required to be made up to the Closing
Date for the Mortgage Loan under the terms of the Mortgage Note, other than
payments for which the related due date was not thirty or more days prior to the
Closing Date, have been made and credited;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and 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 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or Federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance Act of
1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac,
as well as all additional requirements set forth in Section 2.10 of the
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's or any servicer's having engaged in, any act
or omission which would impair the coverage of any such policy, the benefits of
the endorsement provided for herein, or the validity and binding effect of such
policy, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. 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. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, and (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee.
(j) Valid First and Second Lien. Each Mortgage is a valid,
subsisting, enforceable and perfected first lien, with respect to First Lien
Loans, or second lien, with respect to Second Lien Loans, of record on a single
parcel of real estate constituting the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time, with respect to the foregoing. The lien of the Mortgage is
subject only to:
(1) With respect to Second Lien Loans, the lien of the first
mortgage on the Mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Loan, in either
case, on the property described therein and Seller has full right to sell and
assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination or servicing of the Mortgage Loan. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the Closing Date, the Seller will have no right to modify
or alter the terms of the sale of the Mortgage Loan and the Seller will have no
obligation or right to repurchase the Mortgage Loan or substitute another
Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV. No Mortgage Loan has an LTV or a CLTV greater than
100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac 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 original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (1) and (2) of paragraph (j) of this
Subsection 9.02, and in the case of adjustable rate Mortgage Loans, against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The title policy does not
contain any special exceptions (other than the standard exclusions) for zoning
and uses and has been marked to delete the standard survey exceptions or to
replace the standard survey exception with a specific survey reading. The
Seller, its successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and remains
in full force and effect and will be in force and effect upon the consummation
of the transactions contemplated by this Agreement. No claims have been made
under such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Except with respect to a Mortgage Loan set forth on
Exhibit L hereto, other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration With respect to each Second Lien Loan,
(i) the prior mortgage is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such prior mortgage or
the related mortgage note, (iii) no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, and either (A)
the prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Loan to receive notice of, and
affords such mortgagee an opportunity to cure any default by payment in full or
otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) 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 other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. No Mortgage Loan contains terms or
provisions which would result in negative amortization. Principal payments on
the Mortgage Loan commenced no more than sixty days after funds were disbursed
in connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Cap, are as set forth on Exhibit I hereto.
The Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the description of
pool characteristics attached as Exhibit I hereto, the Mortgage Loan is payable
on the first day of each month. There are no Convertible Mortgage Loans which
contain a provision allowing the Mortgagor to convert the Mortgage Note from an
adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Standards. The Mortgage
Loan was underwritten in accordance with the Underwriting Standards (a copy of
which is attached hereto as Exhibit J). The Mortgage Note and Mortgage are on
forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and neither the Seller nor the
Originator has made any representations to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property 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;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in sub-prime mortgage loans
to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage
Loan to become delinquent, or adversely affect the value or marketability of the
Mortgage Loan, or cause the Mortgage Loans to prepay during any period
materially faster or slower than the mortgage loans originated by the Seller
generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. 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;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Servicer, the Seller, the Originator and any prior servicer with respect to the
Mortgage Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all respects legal
and proper and prudent in the mortgage origination and servicing business. With
respect to escrow deposits and Escrow Payments (other than with respect to
Second Lien Loans for which the mortgagee under the prior mortgage lien is
collecting Escrow Payments), all such payments are in the possession of, or
under the control of, the Servicer, the Seller or the Originator 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 in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Originator executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
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 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;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
Originator, 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 the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Originator has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall cause the Originator to maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser 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 coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (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, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Originator 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;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(uu) Credit Information. 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, that 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
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(ww) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and (i) with respect to Mortgage
Loans originated prior to October 1, 2002, no Mortgage Loan has a Prepayment
Penalty period in excess of five years, and (ii) with respect to Mortgage Loans
originated on or after October 1, 2002, no Mortgage Loan has a Prepayment
Penalty period in excess of three years;
(xx) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," "covered," or
"predatory" loans under, any other applicable state, federal or local law. No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan. None of the Mortgage Loans
that are secured by residential real property in North Carolina contains
prepayment penalties that (i) exceed, in the aggregate, more that two percent of
the amount prepaid or (ii) may be collected more than 30 months after loan
closing. Mortgage Loans secured by first lien residential real property in North
Carolina in amounts of $150,000 or less that contain permitted prepayment
penalties must qualify as "alternative mortgage transactions" within the meaning
of the Alternative Mortgage Transaction Parity Act;
(yy) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(zz) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae guidelines for
such trusts;
(ccc) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) 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;
(ddd) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500;
(eee) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws; and
(fff) Georgia Loans. No Mortgage Loan originated on or after October
1, 2002, is secured by Mortgaged Property located in the State of Georgia.
Subsection 9.03. Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan (a "Deleted Mortgage Loan") at
the Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. Notwithstanding the above sentence, within 60 days of
the earlier of either discovery by, or notice to, the Seller of any breach of
the representations or warranties set forth in clauses (ww), (xx), (yy), (aaa)
or (fff) of Subsection 9.02, the Seller shall repurchase such Mortgage Loan at
the Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price. Any repurchase of
a Mortgage Loan or Loans pursuant to the foregoing provisions of this Subsection
9.03 shall be accomplished by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase, the Purchaser and the Seller shall
arrange for the reassignment of the Deleted Mortgage Loan to the Seller and the
delivery to the Seller of any documents held by the Custodian relating to the
Deleted Mortgage Loan. The Seller shall, simultaneously with such reassignment,
give written notice to the Purchaser that such repurchase has taken place and
amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement.
In addition to such repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Seller representations and warranties contained in this Agreement or any
Reconstitution Agreement. It is understood and agreed that the obligations of
the Seller set forth in this Subsection 9.03 to cure or repurchase a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Subsection 9.03
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, any account certifications and all
other documents required thereunder;
3. the Custodial Agreement, dated as of the Cut-off Date, in the
form attached as Exhibit H hereto;
4. the Mortgage Loan Schedule, one copy to be attached hereto,
and one copy to be attached to the Custodian's counterpart of
the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. an Officer's Certificate, in the form of Exhibit E hereto with
respect to the Seller, including all attachments thereto;
7. an Opinion of Counsel of the Seller (who may be an employee of
the Seller), in the form of Exhibit F hereto ("Opinion of
Counsel of the Seller");
8. an Opinion of Counsel of the Custodian (who may be an employee
of the Custodian), in the form of an exhibit to the Custodial
Agreement;
9. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
10. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
11. the Underwriting Guidelines to be attached hereto as Exhibit
J; and '
12. Exhibit I to this Agreement.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the 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) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(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;
provided that Purchaser shall not enter into more than five
Reconstitutions of the Mortgage Loans in the first year after the Closing Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx 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 Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that there shall be no more than four transferees of the Purchaser at
any one time.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) (a) to restate the
representations and warranties set forth in this Agreement as of the settlement
or closing date in connection with such Reconstitution (each, a "Reconstitution
Date"); provided, that with respect to the representations and warranties set
forth in Section 9.02(b) and 9.02(q), the Seller shall only restate such
representations and warranties as of the Closing Date, and, provided further,
that with respect to the representation and warranty set forth in Section
9.02(hh), the Seller's restatement of such representation and warranty as of the
Reconstitution Date shall be qualified "to the best of the Seller's knowledge",
or (b) make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be, or
such representations and warranties as may be required by any Rating Agency or
prospective purchaser of the related securities or such Mortgage Loans, in
connection with such Reconstitution. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants in such Reconstitution: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Seller or its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request; (ii)
such additional representations, warranties, covenants, opinions of counsel,
letters from auditors, and certificates of public officials or officers of the
Seller or the Originator 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. The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser and each Person who controls the Purchaser or such
Affiliate and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Seller or the Originator regarding the Seller, the Originator, the Seller's and
Originator's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement. Moreover, the Seller agrees to cooperate with all reasonable requests
made by the Purchaser to effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause the
Originator to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01. Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees (including (without limitation) legal fees incurred in connection
with the enforcement of the Seller's indemnification obligation under this
Subsection 14.01) and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Seller to perform its duties under this Agreement and the Originator to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written 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 Purchaser promptly
shall reimburse the Seller for all amounts advanced by it pursuant to the
preceding sentence, except when the claim is in any way related to the Seller's
indemnification pursuant to Section 9, or is in any way related to the failure
of the Originator or the Seller to service and administer the Mortgage Loans in
strict compliance with the terms of this Agreement or any Reconstitution
Agreement.
Subsection 14.02. Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Mortgage Loans otherwise
acceptable to the Purchaser on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in each
Mortgage Loan and each document and instrument evidencing each such Mortgage
Loan to secure the performance by the Seller of its obligations under the
Purchase Price and Terms Agreement, and the Seller agrees that it shall hold
such Mortgage Loans in custody for the Purchaser subject to the Purchaser's (i)
right to reject any Mortgage Loan under the terms of this Agreement, and (ii)
obligation to pay the Purchase Price for the Mortgage Loans. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
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 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be 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 the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. If the Purchaser assigns any or all of its rights as
Purchaser hereunder, the assignee of the Purchaser will become the "Purchaser"
hereunder to the extent of such assignment. Any such assignment by the Purchaser
shall be accompanied by the delivery and execution of an Assignment and
Assumption Agreement (the "Assignment and Assumption Agreement") in the form
attached hereto as Exhibit G.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the Closing Date and the Seller shall take no action to undermine these
rights and benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Seller or any affiliate of the Seller which
are directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED
MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS
ADDRESS SET FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL
HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX SACHS MORTGAGE COMPANY,
a New York limited partnership
(Purchaser)
By:XXXXXXX XXXXX REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:______________________________
Name:____________________________
Title:___________________________
NC CAPITAL CORPORATION
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "NC Capital Corporation, successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"NC Capital Corporation, formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
----------------------------
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of [the Mortgage Loan
Purchase and Warranties Agreement, dated as of _______ __, 200_, by and
between __________________ (the "Purchaser") and the Company (the
"Purchase Agreement"), and the Custodial Agreement dated as of _____ __,
200_ by and among the Company, [New Century Mortgage Corporation, as
Originator, NC Capital Corporation, as Seller, the Purchaser and
______________[CUSTODIAN] (the "Custodial Agreement") and to endorse the
Mortgage Notes and execute the Assignments of Mortgages by original or
facsimile signature, and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Custodial Agreement, the sale of the
mortgage loans or the consummation of the transactions contemplated by the
agreements; or (ii) any required consent, approval, authorization or order
has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement and the Custodial
Agreement conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the charter or
by-laws of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement and the Custodial Agreement, or the mortgage loans or of any
action taken or to be taken in connection with the transactions
contemplated hereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the Purchase
Agreement and the Custodial Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Custodial Agreement and (c) any other document
delivered or on the date hereof in connection with any purchase described
in the agreements set forth above was, at the respective times of such
signing and delivery, and is now, a duly elected or appointed, qualified
and acting officer or representative of the Company, who holds the office
set forth opposite his or her name on Exhibit 5, and the signatures of
such persons appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Custodial
Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Sachs Mortgage Company (the "Purchaser"), dated as of
_________ __, 200_ (the "Purchase Agreement") which sale is in the form of whole
loans, delivered pursuant to a Custodial Agreement dated as of _____ __, 200_
among the Purchaser, the Company, and [CUSTODIAN] (the "Custodial Agreement"
and, collectively with the Purchase Agreement, the "Agreements"). Capitalized
terms not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Custodial Agreement;
3. the form of Assignment of Mortgage;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the with the Agreements and the sale of the
Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or
decree of any court, governmental authority or regulatory body
to which the Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements to which it
is a party or the Mortgage Loans or of any action taken or to
be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Custodial Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable form,
except for the insertion of the name of the assignee, and upon
the name of the assignee being inserted, are acceptable for
recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage
Notes, the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-----------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
----------------------------------------
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to ________________________
under a Mortgage Loan Purchase and Warranties Agreement, dated as of ______ __,
200_, certain mortgage loans originated by the Association. The Company warrants
that the mortgage loans to be sold to ___________________________________ are in
addition to and beyond any collateral required to secure advances made by the
Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
___________________________________ shall not be used as additional or
substitute collateral for advances made by the Association. ________________
___________________ understands that the balance of the Company's mortgage loan
portfolio may be used as collateral or additional collateral for advances made
by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to __________________
____________________________________.
Very truly yours,
_________________________
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
Acknowledged and approved:
__________________________
By:_____________________________
Name:___________________________
Title:__________________________
Date:___________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to ___________________________________ from the Company named below pursuant
to that certain Mortgage Loan Purchase and Warranties Agreement, dated as of
______ __, 200_, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to the Company named below or its designees, as of the date and
time of the sale of such Mortgage Loans to ____________________________________.
Name and Address of Financial Institution
________________________________
(name)
________________________________
(Address)
By:_____________________________
II. Certification of Release
------------------------
The Company named below hereby certifies to ________________________
___________ that, as of the date and time of the sale of the above-mentioned
___________________________________ the security interests in the Mortgage Loans
released by the above-named financial institution comprise all security
interests relating to or affecting any and all such Mortgage Loans. The Company
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
_____________________________
By:__________________________
Title:_______________________
Date:________________________
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ______________, between
__________________________________, a ___________________ corporation
("Assignor") and ________________________________, a __________________
corporation ("Assignee"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers, conveys and assigns to
Assignee, as Purchaser, all of the right, title and interest of Assignor with
respect to the mortgage loans listed on Exhibit A attached hereto (the "Mortgage
Loans"), and with respect to such Mortgage Loans, in, to and under (a) that
certain Mortgage Loan Purchase and Warranties Agreement, Conventional
Residential Adjustable Rate and Fixed Rate Mortgage Loans (the "Purchase
Agreement"), and (b) that certain Custodial Agreement, dated as of
______________, 200_ among the Seller, the Originator, the Purchaser and
________________________ (the "Custodian") (the "Custodial Agreement"); and (c)
The Purchase Agreement and the Custodial Agreement are collectively referred to
as the "Agreements").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. 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 Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Agreements. 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, the Agreements; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans, or any interest in
the Mortgage Loans or otherwise approached or negotiated with respect to the
Mortgage Loans, or any interest in the Mortgage with any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act of 1933, as amended (the "1933 Act") or
which would render the disposition of the Mortgage Loans a violation of Section
5 of the 1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with,
the Assignor and the Seller pursuant to the Agreements 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 and Assumption Agreement, and
to consummate the transactions set forth herein. The execution, delivery and
performance of the Assignee of this Assignment and Assumption 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
and Assumption 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;
c. To the best of Assignee's knowledge, 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 and Assumption Agreement, or the consummation by it of the
transactions contemplated hereby;
d. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Agreements, the Mortgage Loans, and
from and after the date hereof, the Assignee assumes for the benefit of each of
the Seller, the Assignor and the Custodian all of the Assignor's obligations as
Purchaser thereunder; including, without limitation, the limitation on
assignment set forth in Section 22 of the Purchase Agreement;
e. The Assignee understands that the Mortgage Loans have not
been registered under the 1933 Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the
Mortgage Loans is in excess of $250,000 and will be paid by cash remittance of
the full purchase price within 60 days of the sale;
g. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person;
h. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
i. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Seller;
j. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans or any interest in
the Mortgage Loans, or otherwise approached or negotiated with respect to the
Mortgage Loans or any interest in the Mortgage Loans with any person in any
manner which would constitute a distribution of the Mortgage Loans under the
1933 Act or which would render the disposition of the Mortgage Loans a violation
of Section 5 of the 1933 Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.
4. (a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans, this Assignment and Assumption
Agreement and the Agreements is:
The Assignee's wire instructions for purposes of all remittances and
payments related to the Mortgage Loans are:
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment and Assumption
Agreement is:
5. This Assignment and Assumption Agreement shall be 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, except to the extent preempted by federal law.
6. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. This Assignment and
Assumption Agreement may not be assigned by the Assignee without the express
written consent of the Assignor. Any entity into which the Assignor or Assignee
may be merged or consolidated shall, without the requirement for any further
writing, be deemed the Assignor or Assignee, respectively, hereunder.
7. No term or provision of this Assignment and Assumption 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.
8. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Agreements by the
Assignor.
9. Notwithstanding the assignment of the Agreements by either the
Assignor or Assignee, this Assignment and Assumption Agreement shall not be
deemed assigned by the Assignor or the Assignee unless assigned by separate
written instrument.
10. For the purpose for facilitating the execution of this
Assignment and Assumption Agreement as herein provided and for other purposes,
this Assignment and Assumption 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.
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
______________________________ ______________________________
Assignor Assignee
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
Taxpayer Taxpayer
Identification No.____________ Identification No.____________
Exhibit H
EXHIBIT H
FORM OF CUSTODIAL AGREEMENT
---------------------------
Exhibit I
EXHIBIT I
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
-------------------------------------------------------
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
Exhibit J
EXHIBIT J
ORIGINATOR'S UNDERWRITING GUIDELINES
------------------------------------
Exhibit K
EXHIBIT K
MORTGAGE LOAN SCHEDULE
----------------------
Exhibit L
EXHIBIT L
DELINQUENT MORTGAGE LOANS
-------------------------
Exhibit P
AMENDMENT NO. 1
TO THE MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This is Amendment No. 1 (the "Amendment No. 1"), dated as of
December 23, 2002 (the "Amendment Date"), by and between Xxxxxxx Xxxxx Mortgage
Company (the "Purchaser"), and NC Capital Corporation (the "Seller") to that
certain Mortgage Loan Purchase and Warranties Agreement dated as of November 1,
2002 (the "Existing Purchase Agreement").
W I T N E S S E T H
WHEREAS, the Purchaser and the Seller have agreed, subject to the
terms and conditions of this Amendment No. 1 that the Existing Purchase
Agreement be amended to provide for the sale by the Sellers and the purchase by
the Purchaser of the additional mortgage loans listed on Exhibit A hereto (the
"Additional Mortgage Loans") under the terms of the Existing Purchase Agreement.
Accordingly, the Purchaser and the Seller hereby agree, in
consideration of the mutual premises and mutual obligations set forth herein,
that the Existing Purchase Agreement is hereby amended as follows:
1. The Seller, simultaneously with the execution and delivery of this
Amendment No. 1, hereby sells, transfers, assigns, sets over and conveys
to the Purchaser, without recourse, but subject to the terms of the
Existing Purchase Agreement, all right, title and interest of the Sellers
in and to the Additional Mortgage Loans, together with the Servicing
Rights and Mortgage Files and all rights and obligations arising under the
documents contained therein.
2. Solely with respect to the Additional Mortgage Loans, Section 1 of the
Existing Purchase Agreement is hereby amended by deleting the definitions
of Closing Date, Cut-off Date and Repurchase Price and replacing them with
the following language:
Closing Date: December 23, 2002 or such other date as mutually
agreed to by the Transaction Parties and the Purchaser.
Cut-off Date: December 1, 2002
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is
found, a price equal to the sum of (a) the product of (i) the
Purchase Price Percentage (as defined in Amendment 1 to the Master
Repurchase Agreement ("Amendment 1")) multiplied by (ii) the them
outstanding principal balance of the Mortgage Loan to be
repurchased, plus (b) accrued interest on any Mortgage Loans which
was less than 60 days delinquent on the Cut-off Date (not to exceed
59 days worth) at the Mortgage Interest Rate from the date on which
interest had last been paid through the date of such repurchase,
plus (c) the amount of any outstanding advances owed to any
servicer, plus (d) all costs and expenses incurred by the Purchaser
or any servicer arising out of or based upon such breach, including
without limitation costs and expenses incurred in the enforcement of
the Seller's repurchase obligation hereunder.
3. Solely with respect to the Additional Mortgage Loans, Section 2 of the
Existing Purchase Agreement is hereby amended by deleting the existing
language and replacing it with the following :
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off
Date in an amount as set forth on Exhibit A to Amendment 1, or in
such other amount as agreed by the Purchaser and the Seller as
evidenced by the actual aggregate principal balance of the Mortgage
Loans accepted by the Purchaser on the Closing Date.
4. Solely with respect to the Additional Mortgage Loans, the first paragraph
of Section 4 of the Existing Purchase Agreement is hereby amended by
deleting the existing language and replacing it with the following :
The Purchase Price for each Mortgage Loan shall be [_______]%
multiplied by the aggregate principal balance, as of the Cut-off
Date, of the Mortgage Loans, after application of scheduled payments
of principal due on or before the Cut-off Date, to the extent such
payments were actually received. The initial principal amount of the
Mortgage Loans shall be the aggregate principal balance of the
Mortgage Loans, so computed as of the Cut-off Date as set forth on
the Mortgage Loan Schedule.
5. Effective Date. This Amendment shall become effective on the date (the
"Amendment Effective Date") on which the following conditions precedent
shall have been satisfied:
(a) On the Amendment Effective Date, the Purchaser shall have received
the following, each of which shall be satisfactory to the Purchaser:
(i) this Amendment, executed and delivered by a duly authorized
officer of the Seller and the Purchaser;
(ii) such other documents as the Purchaser or counsel to the
Purchaser may reasonably request.
(b) On the Amendment Effective Date, (i) the Seller shall be in
compliance with all the representations and warranties set forth in
Section 9.01 of the Existing Purchase Agreement, as amended by this
Amendment No. 1, on its part to be observed or performed, (ii) no
default shall have occurred and be continuing on such date.
6. Except as expressly amended and modified by this Amendment, the Existing
Purchase Agreement shall continue to be, and shall remain, in full force
and effect in accordance with its terms.
7. This Amendment No. 1 shall be 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.
8. This Amendment No. 1 may be executed in one or more counterparts and by
different parties hereto on separate counterparts, each of which, when so
executed, shall constitute one and the same agreement.
9. This Amendment No. 1 shall inure to the benefit of and be binding upon the
Purchaser and the Sellers under the Existing Purchase Agreement, and their
respective successors and permitted assigns.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the parties have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day and
year first above written.
XXXXXXX SACHS MORTGAGE COMPANY
(Purchaser)
By:____________________________________
Name:
Title:
NC CAPITAL CORPORATION
(Servicer)
By:____________________________________
Name:
Title:
EXHIBIT A
ADDITIONAL MORTGAGE LOANS
==============================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
----------
XXXXXXX XXXXX MORTGAGE COMPANY
Purchaser
NC CAPITAL CORPORATION,
Seller
----------
Dated as of March 1, 2003
Conventional,
Fixed and Adjustable Rate, B/C Residential Mortgage Loans
==============================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
Subsection 6.01 Conveyance of Mortgage Loans...........................
Subsection 6.02 Books and Records......................................
Subsection 6.03 Delivery of Mortgage Loan Documents....................
Subsection 6.04 Quality Control Procedures.............................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. [RESERVED]...................................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH..........................................
Subsection 9.01 Representations and Warranties Regarding the
Seller.................................................
Subsection 9.02 Representations and Warranties Regarding
Individual Mortgage Loans..............................
Subsection 9.03 Remedies for Breach of Representations and
Warranties.............................................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims..............................................
Subsection 14.02 Merger or Consolidation of the Seller..................
SECTION 15. FINANCIAL STATEMENTS.........................................
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST...............
SECTION 17. NOTICES......................................................
SECTION 18. SEVERABILITY CLAUSE..........................................
SECTION 19. COUNTERPARTS.................................................
SECTION 20. GOVERNING LAW................................................
SECTION 21. INTENTION OF THE PARTIES.....................................
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 23. WAIVERS......................................................
SECTION 24. EXHIBITS.....................................................
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 26. REPRODUCTION OF DOCUMENTS....................................
SECTION 27. FURTHER AGREEMENTS...........................................
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 29. NO SOLICITATION..............................................
SECTION 30. WAIVER OF TRIAL BY JURY......................................
SECTION 31. SUBMISSION TO JURISDICTION; WAIVERS..........................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H FORM OF CUSTODIAL AGREEMENT
EXHIBIT I REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
EXHIBIT J ORIGINATOR'S UNDERWRITING GUIDELINES
EXHIBIT K MORTGAGE LOAN SCHEDULE
EXHIBIT L DELINQUENT MORTGAGE LOANS
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of March 1, 2003, by and between Xxxxxxx Xxxxx Mortgage
Company, a New York limited partnership, having an office at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser") and NC Capital Corporation, a
California corporation, having an office at 00000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, XX 00000 (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate B/C, residential first and second lien mortgage loans (the
"Mortgage Loans") on a servicing released basis as described herein, and which
shall be delivered as a pool of whole loans on the date as provided herein (the
"Closing Date");
WHEREAS, each Mortgage Loan 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 Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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 Xxxxxx Xxx Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement
and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor
thereto.
Appraised Value: (i) With respect to any First Lien Loan, the value
set forth in an appraisal made in connection with the origination of the related
Mortgage Loan as the value of the related Mortgaged Property, and (ii) with
respect to any Second Lien Loan, the value, determined pursuant to the
Originator's Underwriting Guidelines, of the related Mortgaged Property as of
the origination of the Second Lien Loan.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
or executive order to be closed, or (iii) the State in which the Custodian's
operations are located, are authorized or obligated by law to be closed.
Closing Date: March __, 2003, or such other date as is mutually
agreed upon by the parties.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of the (a) sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as of
such date of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Loan and which are secured by the same Mortgaged
Property to (b) the Appraised Value.
Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which agreement is annexed hereto as Exhibit
H.
Custodian: JPMorgan Chase Bank, or its successor in interest or
permitted assigns, or any successor to the Custodian under the Custodial
Agreement as therein provided.
Cut-off Date: March 1, 2003.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased by
the Seller in accordance with the terms of this Agreement.
Determination Date: The 20th day of each calendar month.
Due Date: The day of the month on which the Monthly Payment is
due on a Mortgage Loan, exclusive of any days of grace.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
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 required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Xxxxxx Xxx: Xxxxxx Xxx, f/k/a the Federal National Mortgage
Association, or any successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx
Mae Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
First Lien Loan: Any Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A Mortgage Loan that accrues interest on a
fixed Mortgage Interest Rate set forth in the related Mortgage Note.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: Xxxxxxx Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum set forth on Exhibit I hereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Insured Depository Institution: Insured Depository Institution shall
have the meaning ascribed to such term by Section 1813(c)(2) of Title 12 of the
United States Code, as amended from time to time.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the
Originator generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor
thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan, or
a second lien, in the case of a Second Lien Loan, on 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 lien, in the case of a First Lien Loan, or a second lien, in the case of a
Second Lien Loan, upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on the
Mortgage Note with respect to each Mortgage Loan.
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 Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, 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 listed in Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached
hereto as Exhibit K, setting forth the following information with respect to
each Mortgage Loan: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the Mortgaged Property
is owner-occupied, a second home or investment property; (5) the number and type
of residential units constituting the Mortgaged Property (i.e. a single family
residence, a 2-4 family residence, a unit in a condominium project or a unit in
a planned unit development, manufactured housing); (6) the original months to
maturity or the remaining months to maturity from the 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; (7)
the Loan-to-Value Ratio at origination; (8) with respect to First Lien Loans,
the LTV and with respect to Second Lien Loans, the CLTV; (9) the Mortgage
Interest Rate as of the 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
amount of the Monthly Payment as of the Cut-off Date; (13) the last payment date
on which a Monthly Payment was actually applied to pay interest and the
outstanding principal balance; (14) the original principal amount of the
Mortgage Loan; (15) the principal balance of the Mortgage Loan as of the close
of business on the Cut-off Date, after deduction of payments of principal due
and collected on or before the Cut-off Date; (16) with respect to Adjustable
Rate Mortgage Loans, the Interest Rate Adjustment Date; (17) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (18) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (19) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (20) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Cap under the terms of the Mortgage Note; (21) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Floor under the
terms of the Mortgage Note; (22) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate, First Lien, Second Lien); (23) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e. full, alternative or
reduced); (25) the loan credit classification (as described in the Underwriting
Guidelines); (26) whether such Mortgage Loan provides for a Prepayment Penalty;
(27) the Prepayment Penalty period of such Mortgage Loan, if applicable; (28) a
description of the Prepayment Penalty, if applicable; (29) the Mortgage Interest
Rate as of origination; (30) the credit risk score (FICO score) at origination;
(31) the date of origination; (32) the Mortgage Interest Rate adjustment period;
(33) the Mortgage Interest Rate adjustment percentage; (34) the Mortgage
Interest Rate floor; (35) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (36) a code indicating whether the Mortgage
Loan is a Section 32 Mortgage Loan; (37) a code indicating whether the Mortgage
Loan is assumable; (38) a code indicating whether the Mortgage Loan has been
modified; (39) the one year payment history; (40) the Due Date for the first
Monthly Payment; (41) the original Monthly Payment due; (42) with respect to the
related Mortgagor, the debt-to-income ratio; (43) the Appraised Value of the
Mortgaged Property; (44) the sales price of the Mortgaged Property if the
Mortgage Loan was originated in connection with the purchase of the Mortgaged
Property; and (45) with respect to Second Lien Loans, the outstanding principal
balance of the superior lien. With respect to the Mortgage Loans in the
aggregate, the Mortgage Loan Schedule shall set forth the following information,
as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the weighted
average Mortgage Interest Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Interest Rate: The Mortgage Interest Rate with
respect to a Mortgage Loan minus the servicing fee rate payable to the
Servicer.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of the Mortgage Loans in a
REMIC or (b) compliance with the REMIC Provisions, must be (unless otherwise
stated in such Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of the Seller and any master servicer of the Mortgage Loans, (ii)
does not have any material direct or indirect financial interest in the Seller
or any master servicer of the Mortgage Loans or in an Affiliate of either and
(iii) is not connected with the Seller or any master servicer of the Mortgage
Loans as an officer, employee, director or person performing similar functions.
Originator: New Century Mortgage Corporation, its successors in
interest and assigns.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase on an Interest Rate
Adjustment Date above or below the Mortgage Interest Rate previously in effect.
The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate set
forth on the Mortgage Loan Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Loan Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
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 payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of the transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller, the Originator and the Purchaser.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, and any successor to
the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller or
the Originator, 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 Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on the date
the Mortgage Loan was originated.
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, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transfer in order to achieve
the desired ratings for the securities to be issued in connection with such
Securitization Transfer).
Rating Agency: Any of Fitch, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: A Whole Loan Transfer, Agency Transfer or a
Securitization Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and/or the Originator and the Purchaser and/or certain third
parties on the Reconstitution Date or Dates with respect to any or all of the
Mortgage Loans sold hereunder, in connection with a Whole Loan Transfer, Agency
Transfer or a Securitization Transfer pursuant to Section 13, including, but not
limited to, a seller's warranties and servicing agreement with respect to a
Whole Loan Transfer, and a pooling and servicing agreement and/or
seller/servicer agreements and related custodial/trust agreement and documents
with respect to a Securitization Transfer.
Reconstitution Date: As defined in Section 13.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found, a price
equal to the sum of (a) the product of (i) the Purchase Price Percentage (as
defined in the Purchase Price and Terms Agreement) multiplied by (ii) the then
outstanding principal balance of the Mortgage Loan to be repurchased, plus (b)
accrued interest on any Mortgage Loans which was less than 60 days delinquent on
the Cut-off Date (not to exceed 59 days worth) at the Mortgage Interest Rate
from the date on which interest had last been paid through the date of such
repurchase, plus (c) the amount of any outstanding advances owed to any
servicer, plus (d) all costs and expenses incurred by the Purchaser or any
servicer arising out of or based upon such breach, including without limitation
costs and expenses incurred in the enforcement of the Seller's repurchase
obligation hereunder.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securitization Transfer: The sale or transfer of some or all of the
Mortgage Loans to a trust or other entity as part of a publicly-issued or
privately-placed, rated or unrated mortgage pass-through or other
mortgage-backed securities transaction.
Seller: NC Capital Corporation, its successors in interest and
assigns.
Servicer: Ocwen Federal Bank, FSB or its permitted successors and
assigns under the Servicing Agreement.
Servicing Agreement: The agreement to be entered into by the
Purchaser and the Servicer, providing for the Servicer to service the
Mortgage Loans as specified by the Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in Section 2 of the Custodial
Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller or Servicer for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans but not
including any Prepayment Penalties; (d) all agreements or documents creating,
defining or evidencing any such servicing rights to the extent they relate to
such servicing rights and all rights of the Seller thereunder; (e) Escrow
Payments or other similar payments with respect to the Mortgage Loans and any
amounts actually collected by the Seller with respect thereto; (f) all accounts
and other rights to payment related to any of the property described in this
paragraph; and (g) any and all documents, files, records, servicing files,
servicing documents, servicing records, data tapes, computer records, or other
information pertaining to the Mortgage Loans or pertaining to the past, present
or prospective servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent actually
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal.
Underwriting Guidelines: The underwriting guidelines of the
Originator, a copy of which is attached hereto as Exhibit J.
VA: The Veterans Administration, an agency of the United States of
America, or any successor thereto.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Well Capitalized: Well Capitalized shall mean, with respect to any
Insured Depository Institution, the maintenance by such Insured Depository
Institution of capital ratios at or above the required minimum levels for such
capital category under the regulations promulgated pursuant to Section 1831(o)
of the United States Code, as amended from time to time, by the Appropriate
Federal Banking Agency for such institution, as such regulation may be amended
from time to time.
Whole Loan Agreement: Any Reconstitution Agreement in respect of
a Whole Loan Transfer.
Whole Loan Transfer: The sale or transfer by Purchaser of some
or all of the Mortgage Loans in a whole loan or participation format pursuant
to a Reconstitution Agreement.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell, and the Purchaser agrees to purchase,
Mortgage Loans having an aggregate principal balance on the Cut-off Date in an
amount as set forth in the Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate principal balance of the Mortgage Loans accepted by the Purchaser on
the Closing Date.
SECTION 3. Mortgage Loan Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Loan Schedule").
The Seller is obligated to deliver those Mortgage Loans owned by the
Seller and funded by the Originator pursuant to the original terms of the
Originator's commitment to the mortgagor. The Seller shall deliver the Mortgage
Loan Schedule for the Mortgage Loans to be purchased on the Closing Date to the
Purchaser at least two (2) Business Days prior to the Closing Date. The Mortgage
Loan Schedule shall be the Preliminary Mortgage Loan Schedule with those
Mortgage Loans which have not been funded prior to the Closing Date deleted. The
Mortgage Loan Schedule shall be attached hereto as Exhibit K.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan shall be the percentage of
par as stated in the Purchase Price and Terms Agreement (subject to adjustment
as provided therein), multiplied by the aggregate principal balance, as of the
Cut-off Date, of the Mortgage Loans, after application of scheduled payments of
principal due on or before the Cut-off Date, to the extent such payments were
actually received. The initial principal amount of the Mortgage Loans shall be
the aggregate principal balance of the Mortgage Loans, so computed as of the
Cut-off Date as set forth on the Mortgage Loan Schedule. If so provided in the
Purchase Price and Terms Agreement, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans which are less than 60 days delinquent as
of the Cut-off Date at the weighted average Net Mortgage Interest Rate of those
Mortgage Loans from the Cut-off Date through the day prior to the Closing Date,
inclusive; provided, however, the total amount of accrued interest shall not
exceed 59 days' interest. The Purchase Price plus accrued interest as set forth
in the preceding paragraph shall be paid to the Seller by wire transfer of
immediately available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (l) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all payments of interest on the Mortgage Loans
(minus that portion of any such payment which is allocable to the period prior
to the Cut-off Date). The outstanding principal balance of each Mortgage Loan as
of the Cut-off Date is determined after application of payments of principal due
on or before the Cut-off Date, to the extent actually collected, together with
any unscheduled principal prepayments collected prior to the Cut-off Date;
provided, however, that payments of scheduled principal and interest paid prior
to the Cut-off Date, but to be applied on a due date beyond the Cut-off Date
shall not be applied to the principal balance as of the Cut-off Date. Such
prepaid amounts shall be the property of the Purchaser. The Seller cause any
such prepaid amounts to be remitted to the Servicer for subsequent remittance to
the Purchaser.
SECTION 5. Examination of Mortgage Files.
At least five (5) Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser or its designee in escrow, for examination
with respect to each Mortgage Loan to be purchased, the related Mortgage File,
including a copy of the Assignment of Mortgage, pertaining to each Mortgage
Loan.
At least five (5) Business Days prior to the Closing Date, with
respect to each Mortgage Loan to be purchased, the Seller shall make the related
Servicing Files and Credit Files available to the Purchaser for examination at
such other location as shall otherwise be acceptable to the Purchaser.
Such examination of the Mortgage Files may be made by the
Purchaser or its designee at any reasonable time before or after the Closing
Date. If the Purchaser makes such examination prior to the Closing Date and
determines, in its sole discretion, that any Mortgage Loans are unacceptable to
the Purchaser for any reason, such Mortgage Loans shall be deleted from the
Mortgage Loan Schedule. The Purchaser may, at its option and without notice to
the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files or the Credit Files shall not affect the Purchaser's (or any of
its successor's) rights to demand repurchase, substitution or other relief as
provided herein.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the Closing Date, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan at the price and in the
manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all
right, title and interest of the Seller in and to the Mortgage Loans, the
Servicing Rights, the Mortgage Files, the Servicing and Credit Files, and all
rights and obligations arising under the documents contained therein.
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of the Seller, an Affiliate of the Seller, the Purchaser or one or more
designees of the Purchaser, as the Purchaser shall select. Notwithstanding the
foregoing, each Mortgage and related Mortgage Note shall be possessed solely by
the Purchaser or the appropriate designee of the Purchaser, as the case may be.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller or the Originator after the Cut-off Date on or in
connection with a Mortgage Loan shall be vested in the Purchaser or one or more
designees of the Purchaser; provided, however, that all funds received on or in
connection with a Mortgage Loan shall be received and held by the Seller or the
Originator in trust for the benefit of the Purchaser or the appropriate designee
of the Purchaser, as the case may be, as the owner of the Mortgage Loans
pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
The Seller shall or shall cause the Originator to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or shall cause
the Originator to maintain in its possession, available for inspection by the
Purchaser, and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the National Flood Insurance Act of 1968, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller or Originator
may be in the form of microfilm or microfiche so long as the Seller or
Originator complies with the requirements of the Xxxxxx Xxx Guides.
Subsection 6.03 Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall deliver and
release to the Custodian no later than five (5) Business Days prior to the
Closing Date those Mortgage Loan Documents as required by the Custodial
Agreement with respect to each Mortgage Loan, a list of which is set forth in
the Custodial Agreement.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
Closing Date, as evidenced by the Initial Certification of the Custodian in the
form annexed to the Custodial Agreement. The Seller shall comply with the terms
of the Custodial Agreement and the Purchaser shall pay all fees and expenses of
the Custodian from and after the Closing Date.
The Seller shall or shall cause the Originator to forward to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true copy of any such document submitted for
recordation within two weeks of its execution, and shall promptly provide the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not so
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, on the Closing Date (other than with respect to the
Assignments of Mortgage which shall be delivered to the Custodian in blank on or
prior to the Closing Date and recorded subsequently by the Purchaser or its
designee or document submitted for recordation to the appropriate public
recording office), and in the event that the Seller does not cure such failure
within 30 days of discovery or receipt of written notification of such failure
from the Purchaser, the related Mortgage Loan shall, upon the request of the
Purchaser, be repurchased by the Seller at the price and in the manner specified
in Subsection 9.03. The foregoing repurchase obligation shall not apply in the
event that the Seller cannot deliver an original document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its
designee said officer's certificate and (ii) such document is delivered within
twelve (12) months of the Closing Date.
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.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Originator to, 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 shall include evaluating and monitoring the
overall quality of the Originator's loan production and the servicing activities
of the Originator. The program is to ensure that the Mortgage Loans are
originated and serviced in accordance with Accepted Servicing Standards and the
Underwriting Guidelines; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Pursuant to the Servicing Agreement, on the Closing
Date, the Servicer shall begin servicing the Mortgage Loans on behalf of the
Purchaser in accordance with the Servicing Agreement. The Seller shall take any
actions necessary to cause the Servicer to terminate servicing the Mortgage
Loans on behalf of the Seller.
SECTION 8. [RESERVED].
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of the Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller, regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the Closing Date as to which the representations and warranties set forth in
Subsection 9.02 could be made and such selection was not made in a manner so as
to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. 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 the Custodial Agreement, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Seller will be
in possession of a complete Mortgage File in compliance with Exhibit A hereto,
except for such documents as will be delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 11 on the Closing Date in
the form attached as Exhibit I hereto;
(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, 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;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
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 obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(l) Loan Experience. The Seller has made available information on
its web page as to its loan gain and loss experience in respect of foreclosures,
its loan delinquency experience for the immediately preceding three-year period,
prepayment speed and individual loan loss severities and delinquency histories
for at least the immediately preceding year, in each case with respect to
mortgage loans owned by it and such mortgage loans serviced for others during
such period, and all such information so delivered shall be true and correct in
all material respects;
(m) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(n) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(o) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(p) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as a
result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated; and
(q) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note.
Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. Except with respect to a Mortgage Loan set
forth on Exhibit L hereto, all payments required to be made up to the Closing
Date for the Mortgage Loan under the terms of the Mortgage Note, other than
payments for which the related due date was not thirty or more days prior to the
Closing Date, have been made and credited;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and 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 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one month the Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has been
approved by the title insurer, if any, to the extent required by the policy, and
its terms are reflected on the Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
Loan File delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing and the terms of which are reflected in the Mortgage
Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or Federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance Act of
1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac,
as well as all additional requirements set forth in Section 2.10 of the
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's or any servicer's having engaged in, any act
or omission which would impair the coverage of any such policy, the benefits of
the endorsement provided for herein, or the validity and binding effect of such
policy, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity and disclosure laws or unfair and deceptive practices
laws applicable to the Mortgage Loan have been complied with, the consummation
of the transactions contemplated hereby will not involve the violation of any
such laws or regulations, and the Seller shall maintain in its possession,
available for the Purchaser's inspection, and shall deliver to the Purchaser
upon demand, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. 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. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, and (ii) the
related manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee.
(j) Valid First and Second Lien. Each Mortgage is a valid,
subsisting, enforceable and perfected first lien, with respect to First Lien
Loans, or second lien, with respect to Second Lien Loans, of record on a single
parcel of real estate constituting the Mortgaged Property, including all
buildings and improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems located
in or annexed to such buildings, and all additions, alterations and replacements
made at any time, with respect to the foregoing. The lien of the Mortgage is
subject only to:
(1) with respect to Second Lien Loans, the lien of the first
mortgage on the Mortgaged Property;
(2) the lien of current real property taxes and assessments
not yet due and payable;
(3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(4) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected (A) first lien and first priority security
interest with respect to each First Lien Loan, or (B) second lien and second
priority security interest with respect to each Second Lien Loan, in either
case, on the property described therein and Seller has full right to sell and
assign the same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms. All parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage
Note, the Mortgage and any other such related agreement have been duly and
properly executed by other such related parties. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination or servicing of the Mortgage Loan. The Seller has
reviewed all of the documents constituting the Servicing File and has made such
inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the Closing Date, the Seller will have no right to modify
or alter the terms of the sale of the Mortgage Loan and the Seller will have no
obligation or right to repurchase the Mortgage Loan or substitute another
Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV. No Mortgage Loan has an LTV or a CLTV greater than
100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for which
the related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to Xxxxxx Xxx or Xxxxxxx Mac and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac 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 or second
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan, subject only to the exceptions contained in clauses (1) and (2) of
paragraph (j) of this Subsection 9.02, and in the case of Adjustable Rate
Mortgage Loans, against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by
state law or regulation, the Mortgagor has been given the opportunity to choose
the carrier of the required mortgage title insurance. Additionally, such
lender's title insurance policy affirmatively insures ingress and egress, and
against encroachments by or upon the Mortgaged Property or any interest therein.
The title policy does not contain any special exceptions (other than the
standard exclusions) for zoning and uses and has been marked to delete the
standard survey exceptions or to replace the standard survey exception with a
specific survey reading. The Seller, its successors and assigns, are the sole
insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be in
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
Seller;
(q) No Defaults. Except with respect to a Mortgage Loan set forth on
Exhibit L hereto, other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration. With respect to each Second Lien Loan,
(i) the prior mortgage is in full force and effect, (ii) there is no default,
breach, violation or event of acceleration existing under such prior mortgage or
the related mortgage note, (iii) no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration thereunder, and either (A)
the prior mortgage contains a provision which allows or (B) applicable law
requires, the mortgagee under the Second Lien Loan to receive notice of, and
affords such mortgagee an opportunity to cure any default by payment in full or
otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. Either (a) 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 other similar institution which is supervised and examined
by a federal or state authority, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. No Mortgage Loan contains terms or
provisions which would result in negative amortization. Principal payments on
the Mortgage Loan commenced no more than sixty days after funds were disbursed
in connection with the Mortgage Loan. The Mortgage Interest Rate as well as the
Lifetime Rate Cap and the Periodic Rate Cap, are as set forth on Exhibit I
hereto. The Mortgage Note is payable in equal monthly installments of principal
and interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years from
commencement of amortization. Unless otherwise specified on the description of
pool characteristics attached as Exhibit I hereto, the Mortgage Loan is payable
on the first day of each month. There are no Convertible Mortgage Loans which
contain a provision allowing the Mortgagor to convert the Mortgage Note from an
adjustable interest rate Mortgage Note to a fixed interest rate Mortgage Note;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Standards. The Mortgage
Loan was underwritten in accordance with the Underwriting Standards (a copy of
which is attached hereto as Exhibit J). The Mortgage Note and Mortgage are on
forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and neither the Seller nor the
Originator has made any representations to a Mortgagor that are inconsistent
with the mortgage instruments used;
(w) Occupancy of the Mortgaged Property. As of the Closing Date the
Mortgaged Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property 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;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in sub-prime mortgage loans
to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage
Loan to become delinquent, or adversely affect the value or marketability of the
Mortgage Loan, or cause the Mortgage Loans to prepay during any period
materially faster or slower than the mortgage loans originated by the Seller
generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A hereto, except for such
documents the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the first Interest Rate
Adjustment Date of each such Adjustable Rate Mortgage Loan, such Adjustable Rate
Mortgage Loan may only be assumed if the party assuming such Adjustable Rate
Mortgage Loan meets certain credit requirements stated in the related Mortgage
Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second, as applicable, lien priority by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Servicer, the Seller, the Originator and any prior servicer with respect to the
Mortgage Loan have been in all respects in compliance with Accepted Servicing
Practices, applicable laws and regulations, and have been in all respects legal
and proper and prudent in the mortgage origination and servicing business. With
respect to escrow deposits and Escrow Payments (other than with respect to
Second Lien Loans for which the mortgagee under the prior mortgage lien is
collecting Escrow Payments), all such payments are in the possession of, or
under the control of, the Servicer, the Seller or the Originator 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 in
full compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. An escrow of funds is not prohibited by applicable
law and has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate adjustments have been made in strict compliance with state and federal law
and the terms of the related Mortgage and Mortgage Note on the related Interest
Rate Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same index
was used with respect to each Mortgage Note which required a new index to be
selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Originator executed and delivered any and all
notices required under applicable law and the terms of the related Mortgage Note
and Mortgage regarding the Mortgage Interest Rate and the Monthly Payment
adjustments. Any interest required to be paid pursuant to state, federal and
local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, or bankruptcy bond, irrespective of
the cause of such failure of coverage. In connection with the placement of any
such insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the Seller or
any designee of the Seller or any corporation in which the Seller or any
officer, director, or employee had a financial interest at the time of placement
of such insurance;
(ll) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
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 Mortgaged Property; and 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;
(mm) Soldiers' and Sailors' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of
1940;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the Seller or the
Originator, 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 the appraisal and
appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx Mac and Title
XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
and the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Originator has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall cause the Originator to maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser 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 coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the Closing Date (whether or not known to
the Seller on or prior to such date) which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any primary mortgage
insurance (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, the related Mortgagor or any party involved in the application for such
coverage, including the appraisal, plans and specifications and other exhibits
or documents submitted therewith to the insurer under such insurance policy, or
for any other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy or
such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Originator 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;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices and the
Servicer has reported the Mortgagor credit files to each of the three credit
repositories in a timely manner;
(uu) Credit Information. 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, that 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
shall hold the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages or Servicing Rights thereto;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(ww) Prepayment Penalty. Each Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note unless otherwise
indicated on the Mortgage Loan Schedule hereof, and (i) with respect to Mortgage
Loans originated prior to October 1, 2002, no Mortgage Loan has a Prepayment
Penalty period in excess of five years, and (ii) with respect to Mortgage Loans
originated on or after October 1, 2002, no Mortgage Loan has a Prepayment
Penalty period in excess of three years;
(xx) Predatory Lending Regulations. None of the Mortgage Loans are
(i) covered by the Home Ownership and Equity Protection Act of 1994 or (ii) in
violation of, or classified as "high cost", "threshold," "covered," or
"predatory" loans under, any other applicable state, federal or local law. No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan. None of the Mortgage Loans
that are secured by residential real property in North Carolina contains
prepayment penalties that (i) exceed, in the aggregate, more that two percent of
the amount prepaid or (ii) may be collected more than 30 months after loan
closing. Mortgage Loans secured by first lien residential real property in North
Carolina in amounts of $150,000 or less that contain permitted prepayment
penalties must qualify as "alternative mortgage transactions" within the meaning
of the Alternative Mortgage Transaction Parity Act;
(yy) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life insurance policy;
(zz) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae Guides for such
trusts;
(ccc) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) 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;
(ddd) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500;
(eee) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA Patriot Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws;
(fff) Georgia Loans. No Mortgage Loan originated on or after October
1, 2002, is secured by Mortgaged Property located in the State of Georgia; and
(ggg) Credit Reporting. The Seller has furnished or has caused the
Servicer to furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information on its borrower
credit files with respect to each Mortgage Loan to Equifax, Experian and Trans
Union Credit Information Company, on a monthly basis.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note or
Assignment of Mortgage or the examination or failure to examine any Mortgage
File. Upon discovery by either the Seller or the Purchaser of a breach of any of
the foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to
the Seller of any breach of a representation or warranty which materially and
adversely affects the value of the Mortgage Loans or the interest of the
Purchaser therein (or which materially and adversely affects the value of the
applicable Mortgage Loan or the interest of the Purchaser therein in the case of
a representation and warranty relating to a particular Mortgage Loan), the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan (a "Deleted Mortgage Loan") at
the Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. Notwithstanding the above sentence, within 60 days of
the earlier of either discovery by, or notice to, the Seller of any breach of
the representations or warranties set forth in clauses (ww), (xx), (yy), (aaa)
or (fff) of Subsection 9.02, the Seller shall repurchase such Mortgage Loan at
the Repurchase Price, together with all expenses incurred by the Purchaser as a
result of such repurchase. In the event that a breach shall involve any
representation or warranty set forth in Subsection 9.01, and such breach cannot
be cured within 60 days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price. Any repurchase of
a Mortgage Loan or Loans pursuant to the foregoing provisions of this Subsection
9.03 shall be accomplished by direct remittance of the Repurchase Price to the
Purchaser or its designee in accordance with the Purchaser's instructions.
At the time of repurchase, the Purchaser and the Seller shall
arrange for the reassignment of the Deleted Mortgage Loan to the Seller and the
delivery to the Seller of any documents held by the Custodian relating to the
Deleted Mortgage Loan. The Seller shall, simultaneously with such reassignment,
give written notice to the Purchaser that such repurchase has taken place and
amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement.
In addition to such repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Seller representations and warranties contained in this Agreement or any
Reconstitution Agreement. It is understood and agreed that the obligations of
the Seller set forth in this Subsection 9.03 to cure or repurchase a defective
Mortgage Loan and to indemnify the Purchaser as provided in this Subsection 9.03
constitute the sole remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on the Closing
Date shall be subject to each of the following conditions:
(i) at least two Business Days prior to the Closing Date, the
Seller shall deliver to the Purchaser via electronic medium
acceptable to the Purchaser, a listing on a loan-level basis
of the necessary information to compute the Purchase Price of
the Mortgage Loans delivered on the Closing Date (including
accrued interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or
the passage of time, would constitute a default under this
Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied
with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 11. Closing Documents.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement;
2. the Servicing Agreement, any account certifications and all
other documents required thereunder;
3. the Custodial Agreement, dated as of the Cut-off Date, in the
form attached as Exhibit H hereto;
4. the Mortgage Loan Schedule, one copy to be attached hereto,
and one copy to be attached to the Custodian's counterpart of
the Custodial Agreement;
5. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial
Agreement;
6. an Officer's Certificate, in the form of Exhibit E hereto with
respect to the Seller, including all attachments thereto;
7. an Opinion of Counsel of the Seller (who may be an employee of
the Seller), in the form of Exhibit F hereto ("Opinion of
Counsel of the Seller");
8. an Opinion of Counsel of the Custodian (who may be an employee
of the Custodian), in the form of an exhibit to the Custodial
Agreement;
9. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser, if any of the Mortgage Loans have at any
time been subject to any security interest, pledge or
hypothecation for the benefit of such person;
10. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by
merger or acquired or originated by the Seller while
conducting business under a name other than its present name,
if applicable;
11. the Underwriting Guidelines to be attached hereto as Exhibit
J; and
12. Exhibit I to this Agreement.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs.
The Purchaser shall pay any commissions due its salesmen and the
legal fees and expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage, and
the Seller's attorney's fees, shall be paid by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to some or all
of the Mortgage Loans, after the 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) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(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;
provided that Purchaser shall not enter into more than five
Reconstitutions of the Mortgage Loans in the first year after the Closing Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx 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 Seller, and in
connection with a Securitization Transfer, a pooling and servicing agreement in
form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that there shall be no more than four transferees of the Purchaser at
any one time.
With respect to each Whole Loan Transfer and each Securitization
Transfer entered into by the Purchaser, the Seller agrees (1) to cooperate fully
with the Purchaser and any prospective purchaser with respect to all reasonable
requests and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) (a) to restate the
representations and warranties set forth in this Agreement as of the settlement
or closing date in connection with such Reconstitution (each, a "Reconstitution
Date"); provided, that with respect to the representations and warranties set
forth in Section 9.02(b) and 9.02(q), the Seller shall only restate such
representations and warranties as of the Closing Date, and, provided further,
that with respect to the representation and warranty set forth in Section
9.02(hh), the Seller's restatement of such representation and warranty as of the
Reconstitution Date shall be qualified "to the best of the Seller's knowledge",
or (b) make the representations and warranties set forth in the related
selling/servicing guide of the master servicer or issuer, as the case may be, or
such representations and warranties as may be required by any Rating Agency or
prospective purchaser of the related securities or such Mortgage Loans, in
connection with such Reconstitution. The Seller shall use its reasonable best
efforts to provide to such master servicer or issuer, as the case may be, and
any other participants in such Reconstitution: (i) any and all information and
appropriate verification of information which may be reasonably available to the
Seller or its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request; (ii)
such additional representations, warranties, covenants, opinions of counsel,
letters from auditors, and certificates of public officials or officers of the
Seller or the Originator 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. The Seller shall indemnify the Purchaser, each Affiliate
designated by the Purchaser and each Person who controls the Purchaser or such
Affiliate and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by or on behalf of the
Seller or the Originator regarding the Seller, the Originator, the Seller's and
Originator's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement. Moreover, the Seller agrees to cooperate with all reasonable requests
made by the Purchaser to effect such Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Originator hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Originator, as applicable, acceptable to the prospective purchaser or trustee,
as applicable, for each Mortgage Loan that is part of the Reconstitution and
shall pay all preparation and recording costs associated therewith. In
connection with the Reconstitution, the Seller shall execute or shall cause the
Originator to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by the
prospective purchaser or trustee, as applicable, upon the Seller's receipt
thereof. Additionally, the Seller shall prepare and execute or shall cause the
Originator to execute, at the direction of the Purchaser, any note endorsement
in connection with any and all seller/servicer agreements.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees (including (without limitation) legal fees incurred in connection
with the enforcement of the Seller's indemnification obligation under this
Subsection 14.01) and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the failure of the
Seller to perform its duties under this Agreement and the Originator to service
the Mortgage Loans in strict compliance with the terms of this Agreement or any
Reconstitution Agreement entered into pursuant to Section 13. The Seller
immediately shall notify the Purchaser if a claim is made by a third party with
respect to this Agreement or any Reconstitution Agreement or the Mortgage Loans,
assume (with the prior written 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 Purchaser promptly
shall reimburse the Seller for all amounts advanced by it pursuant to the
preceding sentence, except when the claim is in any way related to the Seller's
indemnification pursuant to Section 9, or is in any way related to the failure
of the Originator or the Seller to service and administer the Mortgage Loans in
strict compliance with the terms of this Agreement or any Reconstitution
Agreement.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Seller shall be a party, or any Person succeeding to the business of the
Seller, shall be the successor of the Seller hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements.
The Seller understands that in connection with the Purchaser's
marketing of the Mortgage Loans, the Purchaser shall make available to
prospective purchasers audited financial statements of the Seller for the most
recently completed three fiscal years respecting which such statements are
available, as well as a Consolidated Statement of Condition of the Seller at the
end of the last two fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to members or stockholders of the Seller or the
public at large). The Seller, if it has not already done so, agrees to furnish
promptly to the Purchaser copies of the statements specified above. The Seller
shall also make available information on its servicing performance with respect
to loans serviced for others, including delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest.
The sale and delivery on the Closing Date of the Mortgage Loans is
mandatory from and after the date of the execution of the Purchase Price and
Terms Agreement, it being specifically understood and agreed that each Mortgage
Loan is unique and identifiable on the date hereof and that an award of money
damages would be insufficient to compensate the Purchaser for the losses and
damages incurred by the Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver (i) each
of the related Mortgage Loans or (ii) one or more Mortgage Loans otherwise
acceptable to the Purchaser on or before the Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in each
Mortgage Loan and each document and instrument evidencing each such Mortgage
Loan to secure the performance by the Seller of its obligations under the
Purchase Price and Terms Agreement, and the Seller agrees that it shall hold
such Mortgage Loans in custody for the Purchaser subject to the Purchaser's (i)
right to reject any Mortgage Loan under the terms of this Agreement, and (ii)
obligation to pay the Purchase Price for the Mortgage Loans. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 17. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Seller:
NC Capital Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
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 18. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all
such counterparts shall constitute one and the same instrument.
SECTION 20. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be 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 the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by Federal law.
SECTION 21. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for Federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the Federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 22. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party without the prior written consent of the Purchaser,
which consent may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. If the Purchaser assigns any or all of its rights as
Purchaser hereunder, the assignee of the Purchaser will become the "Purchaser"
hereunder to the extent of such assignment. Any such assignment by the Purchaser
shall be accompanied by the delivery and execution of an Assignment and
Assumption Agreement (the "Assignment and Assumption Agreement") in the form
attached hereto as Exhibit G.
SECTION 23. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 27. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 28. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 29. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the borrower or obligor under any
Mortgage Loan for any purpose whatsoever, including to refinance a Mortgage
Loan, in whole or in part, without (i) the prior written consent of the
Purchaser; or (ii) written notice from the related borrower or obligor under a
Mortgage Loan of such party's intention to refinance such Mortgage Loan. It is
understood and agreed that all rights and benefits relating to the solicitation
of any Mortgagors and the attendant rights, title and interest in and to the
list of such Mortgagors and data relating to their Mortgages (including
insurance renewal dates) shall be transferred to the Purchaser pursuant hereto
on the Closing Date and the Seller shall take no action to undermine these
rights and benefits. Notwithstanding the foregoing, it is understood and agreed
that promotions undertaken by the Seller or any affiliate of the Seller which
are directed to the general public at large, including, without limitation, mass
mailing based on commercially acquired mailing lists, newspaper, radio and
television advertisements shall not constitute solicitation under this Section
29.
SECTION 30. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 31. Submission To Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY
THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX SACHS MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By:XXXXXXX XXXXX REAL ESTATE
FUNDING CORP., a New York
corporation, as General Partner
By:______________________________
Name:____________________________
Title:___________________________
NC CAPITAL CORPORATION
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
Exhibit A
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Custodian, or to such other Person as the Purchaser shall designate in writing,
pursuant to Section 6 of the Mortgage Loan Purchase and Warranties Agreement to
which this Exhibit is attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To the
extent that there is no room on the face of the Mortgage Notes for endorsements,
the endorsement may be contained on an allonge, if state law so allows and the
Custodian is so advised by the Seller that state law so allows. If the Mortgage
Loan was acquired by the Seller in a merger, the endorsement must be by "[Last
Endorsee], successor by merger to [name of predecessor]". If the Mortgage Loan
was acquired or originated by the Last Endorsee while doing business under
another name, the endorsement must be by "[Last Endorsee], formerly known as
[previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly delivered to
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording. The Assignment of Mortgage must be
duly recorded only if recordation is either necessary under applicable law or
commonly required by private institutional mortgage investors in the area where
the Mortgaged Property is located or on direction of the Purchaser as provided
in this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "NC Capital Corporation, successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"NC Capital Corporation, formerly known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the Originator to the Last
Endorsee with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such intervening assignment of mortgage has been
dispatched to the appropriate public recording office for recordation and that
such original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment of
mortgage where a public recording office retains the original recorded
intervening assignment of mortgage or in the case where an intervening
assignment of mortgage is lost after recordation in a public recording office, a
copy of such intervening assignment of mortgage certified by such public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
Exhibit B
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of [the Mortgage Loan
Purchase and Warranties Agreement, dated as of _______ __, 200_, by and
between __________________ (the "Purchaser") and the Company (the
"Purchase Agreement"), and the Custodial Agreement dated as of _____ __,
200_ by and among the Company, [New Century Mortgage Corporation, as
Originator, NC Capital Corporation, as Seller, the Purchaser and
______________[CUSTODIAN] (the "Custodial Agreement") and to endorse the
Mortgage Notes and execute the Assignments of Mortgages by original or
facsimile signature, and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or
modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, the Custodial Agreement, the sale of the
mortgage loans or the consummation of the transactions contemplated by the
agreements; or (ii) any required consent, approval, authorization or order
has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement and the Custodial
Agreement conflicts or will conflict with or results or will result in a
breach of or constitutes or will constitute a default under the charter or
by-laws of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its business
substantially as now conducted or in any material liability on the part of
the Company or which would draw into question the validity of the Purchase
Agreement and the Custodial Agreement, or the mortgage loans or of any
action taken or to be taken in connection with the transactions
contemplated hereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the Purchase
Agreement and the Custodial Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, (b) the Custodial Agreement and (c) any other document
delivered or on the date hereof in connection with any purchase described
in the agreements set forth above was, at the respective times of such
signing and delivery, and is now, a duly elected or appointed, qualified
and acting officer or representative of the Company, who holds the office
set forth opposite his or her name on Exhibit 5, and the signatures of
such persons appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement and the Custodial
Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:____________________ By:___________________________
Name:_________________________
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:____________________ By:___________________________
Name:_________________________
Title: [Assistant] Secretary
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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Exhibit D
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
(date)
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain matters
in connection with the sale by the Company of the Mortgage Loans pursuant to
that certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and Xxxxxxx Sachs Mortgage Company (the "Purchaser"), dated as of
_________ __, 200_ (the "Purchase Agreement") which sale is in the form of whole
loans, delivered pursuant to a Custodial Agreement dated as of _____ __, 200_
among the Purchaser, the Company, and [CUSTODIAN] (the "Custodial Agreement"
and, collectively with the Purchase Agreement, the "Agreements"). Capitalized
terms not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Custodial Agreement;
3. the form of Assignment of Mortgage;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed
and delivered by the Company, and is a legal, valid and
binding agreement enforceable in accordance with its
respective terms against the Company, subject to bankruptcy
laws and other similar laws of general application
affecting rights of creditors and subject to the
application of the rules of equity, including those
respecting the availability of specific performance, none
of which will materially interfere with the realization of
the benefits provided thereunder or with the Purchaser's
ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature
the endorsements to the Mortgage Notes and the Assignments
of Mortgages, and the original [or facsimile] signature of
the officer at the Company executing the endorsements to
the Mortgage Notes and the Assignments of Mortgages
represents the legal and valid signature of said officer of
the Company.
6. Either (i) no consent, approval, authorization or order of
any court or governmental agency or body is required for
the execution, delivery and performance by the Company of
or compliance by the with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of
the transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreements
conflicts or will conflict with or results or will result
in a breach of or constitutes or will constitute a default
under the charter or by-laws of the Company, the terms of
any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it
is subject, or violates any statute or order, rule,
regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the
Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation
pending or, to the best of [our] [my] knowledge, threatened
against the Company which, in [our] [my] judgment, either
in any one instance or in the aggregate, may result in any
material adverse change in the business, operations,
financial condition, properties or assets of the Company or
in any material impairment of the right or ability of the
Company to carry on its business substantially as now
conducted or in any material liability on the part of the
Company or which would draw into question the validity of
the Agreements to which it is a party or the Mortgage Loans
or of any action taken or to be taken in connection with
the transactions contemplated thereby, or which would be
likely to impair materially the ability of the Company to
perform under the terms of the Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Custodial Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage
Notes have been duly endorsed as provided in the Custodial
Agreement. The Assignments of Mortgage are in recordable
form, except for the insertion of the name of the assignee,
and upon the name of the assignee being inserted, are
acceptable for recording under the laws of the state where
each related Mortgaged Property is located. The
endorsement of the Mortgage Notes, the delivery to the
Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to
the Purchaser, or its designee, are sufficient to permit
the Purchaser to avail itself of all protection available
under applicable law against the claims of any present or
future creditors of the Company, and are sufficient to
prevent any other sale, transfer, assignment, pledge or
hypothecation of the Mortgages and the Mortgage Notes by
the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
--------------------------------
[Name]
[Assistant] General Counsel
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[____________
______(the "Association")]
_______________________________
_______________________________
_______________________________
Attention:
_______________________________
_______________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to
_____________________________ under a Mortgage Loan Purchase and Warranties
Agreement, dated as of ______ __, 200_, certain mortgage loans originated by the
Association. The Company warrants that the mortgage loans to be sold to
___________________________________ are in addition to and beyond any collateral
required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
___________________________________ shall not be used as additional or
substitute collateral for advances made by the Association.
___________________________________ understands that the balance of the
Company's mortgage loan portfolio may be used as collateral or additional
collateral for advances made by the Association, and confirms that it has no
interest therein.
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to
___________________________________.
Very truly yours,
----------------------------
By:__________________________
Name:________________________
Title:_________________________
Date:_________________________
Acknowledged and approved:
--------------------------
By:______________________________
Name:___________________________
Title:____________________________
Date:____________________________
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by to ___________________________________ from the Company named below pursuant
to that certain Mortgage Loan Purchase and Warranties Agreement, dated as of
______ __, 200_, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to the Company named below or its designees, as of the date and
time of the sale of such Mortgage Loans to
__________________________________________.
Name and Address of Financial Institution
--------------------------------
(name)
--------------------------------
(Address)
By:_____________________________
II. Certification of Release
The Company named below hereby certifies to
___________________________________ that, as of the date and time of the sale of
the above-mentioned ___________________________________ the security interests
in the Mortgage Loans released by the above-named financial institution comprise
all security interests relating to or affecting any and all such Mortgage Loans.
The Company warrants that, as of such time, there are and will be no other
security interests affecting any or all of such Mortgage Loans.
-----------------------------
By:__________________________
Title:_________________________
Date:_________________________
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ______________, between
__________________________________, a ___________________ corporation
("Assignor") and ________________________________, a __________________
corporation ("Assignee"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the mutual covenants herein contained, the
parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers, conveys and assigns to
Assignee, as Purchaser, all of the right, title and interest of Assignor with
respect to the mortgage loans listed on Exhibit A attached hereto (the "Mortgage
Loans"), and with respect to such Mortgage Loans, in, to and under (a) that
certain Mortgage Loan Purchase and Warranties Agreement (Conventional Fixed and
Adjustable Rate, B/C Residential Mortgage Loans) (the "Purchase Agreement"),
between Assignor and NC Capital Corporation and (b) that certain Custodial
Agreement, dated as of ______________, 200_ among the Seller, the Originator,
the Purchaser and ________________________ (the "Custodian") (the "Custodial
Agreement"; and together with the Purchase Agreement, the "Agreements").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. 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 Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Agreements. 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, the Agreements; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans, or any interest in
the Mortgage Loans or otherwise approached or negotiated with respect to the
Mortgage Loans, or any interest in the Mortgage with any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution of the
Mortgage Loans under the Securities Act of 1933, as amended (the "1933 Act") or
which would render the disposition of the Mortgage Loans a violation of Section
5 of the 1933 Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller pursuant to the Agreements 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 and Assumption Agreement, and
to consummate the transactions set forth herein. The execution, delivery and
performance of the Assignee of this Assignment and Assumption 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
and Assumption 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;
c. To the best of Assignee's knowledge, 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 and Assumption Agreement, or the consummation by it of the
transactions contemplated hereby;
d. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Agreements, the Mortgage Loans, and
from and after the date hereof, the Assignee assumes for the benefit of each of
the Seller, the Assignor and the Custodian all of the Assignor's obligations as
Purchaser thereunder; including, without limitation, the limitation on
assignment set forth in Section 22 of the Purchase Agreement;
e. The Assignee understands that the Mortgage Loans have not
been registered under the 1933 Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the
Mortgage Loans is in excess of $250,000 and will be paid by cash remittance of
the full purchase price within 60 days of the sale;
g. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person;
h. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
i. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Seller;
j. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans or any interest in
the Mortgage Loans, or otherwise approached or negotiated with respect to the
Mortgage Loans or any interest in the Mortgage Loans with any person in any
manner which would constitute a distribution of the Mortgage Loans under the
1933 Act or which would render the disposition of the Mortgage Loans a violation
of Section 5 of the 1933 Act or require registration pursuant thereto, nor will
it act, nor has it authorized or will it authorize any person to act, in such
manner with respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.
4. (a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans, this Assignment and Assumption
Agreement and the Agreements is:
The Assignee's wire instructions for purposes of all remittances and
payments related to the Mortgage Loans are:
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment and Assumption
Agreement is:
5. This Assignment and Assumption Agreement shall be 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, except to the extent preempted by federal law.
6. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. This Assignment and
Assumption Agreement may not be assigned by the Assignee without the express
written consent of the Assignor. Any entity into which the Assignor or Assignee
may be merged or consolidated shall, without the requirement for any further
writing, be deemed the Assignor or Assignee, respectively, hereunder.
7. No term or provision of this Assignment and Assumption 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.
8. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Agreements by the
Assignor.
9. Notwithstanding the assignment of the Agreements by either the
Assignor or Assignee, this Assignment and Assumption Agreement shall not be
deemed assigned by the Assignor or the Assignee unless assigned by separate
written instrument.
10. For the purpose for facilitating the execution of this
Assignment and Assumption Agreement as herein provided and for other purposes,
this Assignment and Assumption 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.
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
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Assignor Assignee
By:___________________________ By:___________________________
Its:__________________________ Its:__________________________
Taxpayer Taxpayer
Identification No.____________ Identification No.____________
Exhibit H
EXHIBIT H
FORM OF CUSTODIAL AGREEMENT
Exhibit I
EXHIBIT I
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF THE MORTGAGE LOANS
Pool Characteristics of the Mortgage Loans as delivered on the
Closing Date:
Exhibit J
EXHIBIT J
ORIGINATOR'S UNDERWRITING GUIDELINES
Exhibit K
EXHIBIT K
MORTGAGE LOAN SCHEDULE
EXHIBIT L
DELINQUENT MORTGAGE LOANS