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EXHIBIT 6(o)
Public Securities Association [PSA LOGO]
00 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
Telephone (000) 000-0000
MASTER REPURCHASE AGREEMENT
Dated as of: JUNE 22, 1999
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Between:
IMPAC WAREHOUSE LENDING GROUP
and
AUSTIN FUNDING CORPORATION.
1. Applicability
From time to time the parties hereto may enter into transactions in which
one party ("Seller") agrees to transfer to the other ("Buyer") securities or
financial instruments ("Securities") against the transfer of funds by Buyer,
with a simultaneous agreement by Buyer to transfer to Seller such Securities at
a date certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a "Transaction" and shall be governed
by this Agreement, including any supplemental terms or conditions contained in
Annex 1 hereto, unless otherwise agreed in writing.
2. Definitions
(a) "Act of Insolvency", with respect to any party, (i) the commencement by
such party as debtor of any case or proceeding under any bankruptcy, insolvency,
reorganization, liquidation, dissolution or similar law, or such party seeking
the appointment of a receiver, trustee, custodian or similar official for such
party or any substantial part of its property, or (ii) the commencement of any
such case or proceeding against such party, or another seeking such an
appointment, or the filing against a party of an application for a protective
decree under the provisions of the Securities Investor Protection Act of 1970,
which (A) is consented to or not timely contested by such party, (B) results in
the entry of an order for relief, such an appointment, the issuance of such a
protective decree or the entry of an order having a similar effect, or (C) is
not dismissed within 15 days, (iii) the making by a party of a general
assignment for the benefit of creditors, or (iv) the admission in writing by a
party of such party's inability to pay such party's debts as they become due;
(b) "Additional Purchased Securities", Securities provided by Seller to
Buyer pursuant to Paragraph 4(a) hereof;
(c) "Buyer's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of a percentage (which may be equal to
the percentage that is agreed to as the Seller's Margin Amount under
subparagraph (q) of this Paragraph), agreed to by Buyer and Seller prior to
entering into the Transaction, to the Repurchase Price for such Transaction as
of such date;
(d) "Confirmation", the meaning specified in Paragraph 3(b) hereof;
(e) "Income", with respect to any Security at any time, and principal
thereof then payable and all interest, dividends or other distributions thereon;
(f) "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;
(g) "Margin Excess", the meaning specified in Paragraph 4(b) hereof;
(h) "Market Value", with respect to any Securities as of any date, the
price for such Securities on such date obtained from a generally recognized
source agreed to by the parties or the most recent closing bid quotation from
such a source, plus accrued Income to the extent not included therein (other
than any Income credited or transferred to, or applied to the obligations of,
Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to
market practice for such Securities);
(i) "Price Differential", with respect to any transaction hereunder as of
any date, the aggregate amount obtained by daily application of the Pricing Rate
for such Transaction to the Purchase Price for such Transaction on a 360 day per
year basis for the actual number of days during the period commencing on (and
including) the Purchase Date for such Transaction and ending on (but excluding)
the date of determination (reduced by any amount of such Price Differential
previously paid by Seller to Buyer with respect to such Transaction);
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(j) "Pricing Rate", the per annum percentage rate for determination of the
Price Differential;
(k) "Prime Rate", the prime rate of U.S. money center commercial banks as
published in The Wall Street Journal;
(1) "Purchase Date", the date on which Purchased Securities are transferred
by Seller to Buyer;
(m) "Purchase Price", (i) on the Purchase Date, the price at which
Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter,
such price increased by the amount of any cash transferred by Buyer to Seller
pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash
transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to
reduce Seller's obligations under clause (ii) of Paragraph 5 hereof;
(n) "Purchased Securities", the Securities transferred by Seller to Buyer
in a Transaction hereunder, and any Securities substituted therefor in
accordance with Paragraph 9 hereof. The term "Purchased Securities" to Paragraph
4(a) and shall exclude Securities returned pursuant to Paragraph 4(b);
(o) "Repurchase Date", the date on which Seller is to repurchase the
Purchased Securities from Buyer, including any date determined by application of
the provisions of Paragraphs 3(c) or 11 hereof;
(p) "Repurchase Price", the price at which Purchased Securities are to be
transferred from Buyer to Seller upon termination of a Transaction, which will
be determined in each case (including Transactions terminable upon demand) as
the sum of the Purchase Price and the Price Differential as of the date of such
determination, increased by any amount determined by the application of the
provisions of Paragraph 11 hereof;
(q) "Seller's Margin Amount", with respect to any Transaction as of any
date, the amount obtained by application of a percentage (which may be equal to
the percentage that is agreed to as the Buyer's Margin Amount under
subparagraph (c) of this Paragraph), agreed to by Buyer and Seller prior to
entering into the Transaction, to the Repurchase Price for such Transaction as
of such date.
3. Initiation; Confirmation; Termination
(a) An agreement to enter into a Transaction may be made orally or in
writing at the initiation of either Buyer or Seller. On the Purchase Date for
the Transaction, the Purchased Securities shall be transferred to Buyer or its
agent against the transfer of the Purchase price to an account of Seller.
(b) Upon agreeing to enter into a Transaction hereunder, Buyer or Seller
(or both), as shall be agreed, shall promptly deliver to the other party a
written confirmation of each Transaction (a "Confirmation"). The Confirmation
shall describe the Purchased Securities (including CUSIP number, if any),
identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase
Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on
demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction,
and (v) any additional terms or conditions of the Transaction not inconsistent
with this Agreement. The Confirmation, together with this Agreement, shall
constitute conclusive evidence of the terms agreed between Buyer and Seller with
respect to the Transaction to which the Confirmation relates, unless with
respect to the Confirmation specific objection is made promptly after receipt
thereof. In the event of any conflict between the terms of such Confirmation and
this Agreement, this Agreement shall prevail.
(c) In the case of transactions terminable upon demand, such demand shall
be made by Buyer or Seller, no later than such time as is customary in
accordance with market practice, by telephone or otherwise on or prior to the
business day on which such termination will be effective. On the date specified
in such demand, or on the date fixed for termination in the case of Transactions
having a fixed term, termination of the Transaction will be effected by transfer
to Seller or its agent of the purchased Securities and any Income in respect
thereof received by Buyer (and not previously credited or transferred to, or
applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against
the transfer of the Repurchase Price to an account of Buyer.
4. Margin Maintenance
(a) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is acting as
Buyer is less than the aggregate Buyer's Margin Amount for all such Transactions
(a "Margin Deficit"), the Buyer may by notice to Seller require Seller in such
Transactions, at Seller's option, to transfer to Buyer cash or additional
Securities reasonably acceptable to Buyer ("Additional Purchased Securities"),
so that the cash and aggregate Market Value of the Purchased Securities,
including any such Additional Purchased Securities, will thereupon equal or
exceed such aggregate Buyer's Margin Amount (decreased by the amount of any
Margin Deficit as of such date arising from any Transactions in which such Buyer
is acting as Seller).
(b) If at any time the aggregate Market Value of all Purchased Securities
subject to all Transactions in which a particular party hereto is acting as
Seller exceeds the aggregate Seller's Margin Amount for all such Transactions
at such time (a "Margin Excess"), then Seller may by notice to Buyer require
Buyer in such Transactions, at Buyer's option to transfer cash or Purchased
Securities to Seller, so that the aggregate Market Value of the Purchased
Securities, after deduction of any such cash or any Purchased Securities so
transferred, will thereupon not exceed such aggregate Seller's Margin Amount
(increased by the amount of any Margin Excess as of such date arising from any
Transactions in which such Seller is acting as Buyer).
(c) Any cash transferred pursuant to this Paragraph shall be attributed to
such Transactions as shall be agreed upon by Buyer and Seller.
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(d) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer or Seller (or both) under
subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin
Deficit or Margin Excess exceeds a specified dollar amount or a specified
percentage of the Repurchase Prices for such Transactions (which amount or
percentage shall be agreed to by Buyer and Seller prior to entering into any
such Transactions).
(e) Seller and Buyer may agree, with respect to any or all Transactions
hereunder, that the respective rights of Buyer and Seller under subparagraphs
(a) and (b) of this Paragraph to require the elimination of a Margin Deficit or
a Margin Excess, as the case may be, may be exercised whenever such a Margin
Deficit or Margin Excess exists with respect to any single Transaction hereunder
(calculated without regard to any other Transaction outstanding under this
Agreement).
5. Income Payments
Where a particular Transaction's term extends over an Income payment date
on the Securities subject to that Transaction, Buyer shall, as the parties may
agree with respect to such Transaction (or, in the absence of any agreement, as
Buyer shall reasonably determine in its discretion), on the date such Income is
payable either (i) transfer to or credit to the account of Seller an amount
equal to such Income payment or payments with respect to any Purchased
Securities subject to such Transaction or (ii) apply the Income payment or
payments to reduce the amount to be transferred to Buyer by Seller upon
termination of the Transaction. Buyer shall not be obligated to take any action
pursuant to the preceding sentence to the extent that such action would result
in the creation of a Margin Deficit, unless prior thereto or simultaneously
therewith Seller transfers to Buyer cash or Additional Purchased Securities
sufficient to eliminate such Margin Deficit.
6. Security Interest
Although the parties intend that all transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to be
loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Securities with respect to all Transactions hereunder and all proceeds thereof.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder shall be
in immediately available funds. All Securities transferred by one party hereto
to the other party (i) shall be in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment in blank and
such other documentation as the party receiving possession may reasonably
request, (ii) shall be transferred on the book-entry system of a Federal Reserve
Bank, or (iii) shall be transferred by any other method mutually acceptable to
Seller and Buyer. As used herein with respect to Securities, "transfer" is
intended to have the same meaning as when used in Section 8-313 of the New York
Uniform Commercial Code or, where applicable, in any federal regulation
governing transfers of the Securities.
8. Segregation of Purchased Securities
To the extent required by applicable law, all Purchased Securities in the
possession of Seller shall be segregated from other securities in its possession
and shall be identified as subject to this Agreement. Segregation may be
accomplished by appropriate identification on the books and records of the
holder, including a financial intermediary or a clearing corporation. Title to
all Purchased Securities shall pass to Buyer an, unless otherwise agreed by
Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging
in repurchase transactions with the Purchased Securities or otherwise pledging
or hypothecating the Purchased Securities, but no such transaction shall relieve
Buyer of its obligations to transfer Purchased Securities to Seller pursuant to
Paragraphs 3, 4, or 11 hereof, or of Buyer's obligation to credit or pay Income
to, or apply Income to the obligations of, Seller pursuant to Paragraph 5
hereof.
Required Disclosure for Transactions in Which the Seller Retains Custody
of the Purchased Securities
Seller is not permitted to substitute other securities for those subject to
this Agreement and therefore must keep Buyer's securities segregated at all
times, unless in this Agreement Buyer grants Seller the right to substitute
other securities. If Buyer grants the right to substitute, this means that
Buyer's securities will likely be commingled with Seller's own securities
during the trading day. Buyer is advised that, during any trading day that
Buyers securities are commingled with Seller's securities, the [will]* [may]**
be subject to liens granted by Seller to [its clearing bank]* [third parties]**
and may be used by Seller for deliveries on other securities transactions.
Whenever the securities are commingled, Seller's ability to resegregate
substitute securities for Buyer will be subject to Seller's ability to satisfy
[the clearing]* [any]** lien or to obtain substitute securities.
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* Language to be used under 17 C.F.R. Section 403.4(e) if Seller is a
government securities broker or dealer other than a financial institution.
** Language to be used under 17 C.F.R. Section 403.4(d) if Seller is a
financial institution.
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9. Substitution
(a) Seller may, subject to agreement with and acceptance by Buyer,
substitute other Securities for any Purchased Securities. Such substitution
shall be made by transfer to Buyer of such other Securities and transfer to
Seller of such Purchased Securities. After substitution, the substituted
Securities shall be deemed to be Purchased Securities.
(b) In Transactions in which the Seller retains custody of Purchased
Securities, the parties expressly agree that Buyer shall be deemed, for purposes
of subparagraph (a) of this Paragraph, to have agreed to and accepted in this
Agreement substitution by Seller of other Securities for Purchased Securities;
provided, however, that such other Securities shall have a Market Value at least
equal to the Market Value of the Purchased Securities for which they are
substituted.
10. Representations
Each of Buyer and Seller represents and warrants to the other that (i) it
is duly authorized to execute and deliver this Agreement, to enter into the
Transactions contemplated hereunder and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing in advance of any Transaction by the other party hereto, as
agent for a disclosed principal), (iii) the person signing this Agreement on its
behalf is duly authorized to do so on its behalf (or on behalf of any such
disclosed principal), (iv) it has obtained all authorizations of any
governmental body required in connection with this Agreement and the
Transactions hereunder and such authorizations are in full force and effect and
(v) the execution, delivery and performance of this Agreement and the
Transactions hereunder will not violate any law, ordinance, charter, by-law or
rule applicable to it or any agreement by which it is bound or by which any of
its assets are affected. On the Purchase Date for any Transaction Buyer and
Seller shall each be deemed to repeat all the foregoing representations made by
it.
11. Events of Default
In the event that (i) Seller fails to repurchase or Buyer fails to transfer
Purchased Securities upon the applicable Repurchase Date, (ii) Seller or Buyer
fails, after one business day's notice, to comply with Paragraph 4 hereof, (iii)
Buyer fails to comply with Paragraph 5 hereof, (iv) an Act of Insolvency occurs
with respect to Seller or Buyer, (v) any representation made by Seller or Buyer
shall have been incorrect or untrue in any material respect when made or
repeated or deemed to have been made or repeated, or (vi) Seller or Buyer shall
admit to the other its inability to, or its intention not to, perform any of its
obligations hereunder (each an "Event of Default"):
(a) At the option of the nondefaulting party, exercised by written notice
to the defaulting party (which option shall be deemed to have been exercised,
even if no notice is given, immediately upon the occurrence of an Act of
Insolvency), the Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur.
(b) In all Transactions in which the defaulting party is acting as Seller,
if the nondefaulting party exercises or is deemed to have exercised the option
referred to in subparagraph (a) of the Paragraph, (i) the defaulting party's
obligations hereunder to repurchase all Purchased Securities in such
Transactions shall thereupon become immediately due and payable, (ii) to the
extent permitted by applicable law, the Repurchase Price with respect to each
such Transaction shall be increased by the aggregate amount obtained by daily
application of (x) the greater of the Pricing Rate for such Transaction or the
Prime Rate to (y) the Repurchase Price for such Transaction as of the Repurchase
Date as determined pursuant to subparagraph (a) of this Paragraph (decreased as
of any day by (A) any amounts retained by the nondefaulting party with respect
to such Repurchase Price pursuant to clause (iii) of the subparagraph, (B) any
proceeds from the sale of Purchased Securities pursuant to subparagraph (d)(l)
of this Paragraph, and (C) any amounts credited to the account of the defaulting
party pursuant to subparagraph (e) of the Paragraph) on a 360 day per year basis
for the actual number of days during the period from and including the date of
the Event of Default giving rise to such option to but excluding the date of
payment of the Repurchase Price as so increased, (iii) all Income paid after
such exercise or deemed exercise shall be retained by the nondefaulting party
and applied to the aggregate unpaid Repurchase Prices owed by the defaulting
party, and (iv) the defaulting party shall immediately deliver to the
nondefaulting party any Purchased Securities subject to such Transactions then
in the defaulting party's possession.
(c) In all Transactions in which the defaulting party is acting as Buyer,
upon tender by the nondefaulting party of payment of the aggregate Repurchase
Prices for all such Transactions, the defaulting party's right, title and
interest in all Purchased Securities subject to such Transactions shall be
deemed transferred to the nondefaulting party, and the defaulting party shall
deliver all such Purchased Securities to the non-defaulting party.
(d) After one business day's notice to the defaulting party (which notice
need not be given if an Act of Insolvency shall have occurred, and which may be
the notice given under subparagraph (a) of this Paragraph or the notice referred
to in clause (ii) of the first sentence of this Paragraph), the nondefaulting
party may:
(i) as to Transactions in which the defaulting party is acting as
Seller, (A) immediately sell, in a recognized market at such price or
prices as the nondefaulting party may reasonably deem satisfactory, any or
all Purchased Securities subject to such Transactions and apply the
proceeds thereof to the aggregate
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unpaid Repurchase Prices and any other amounts owing by the defaulting
party hereunder or (B) in its sole discretion elect, in lieu of selling all
or a portion of such Purchased Securities, to give the defaulting party
credit for such Purchased Securities in an amount equal to the price
therefor on such date, obtained from a generally recognized source or the
most recent closing bid quotation from such a source, against the aggregate
unpaid Repurchase Prices and any other amounts owing by the defaulting
party hereunder; and
(ii) as to the Transactions in which the defaulting party is acting as
Buyer, (A) purchase securities ("Replacement Securities") of the same class
and amount as any Purchased Securities that are not delivered by the
defaulting party to the nondefaulting party as required hereunder or (B) in
its sole discretion elect, in lieu of purchasing Replacement Securities, to
be deemed to have purchased Replacement Securities at the price therefor on
such date, obtained from a generally recognized source or the most recent
closing bid quotation from such a source.
(e) As to Transactions in which the defaulting party is acting as Buyer,
the defaulting party shall be liable to the nondefaulting party (i) with respect
to Purchased Securities (other than Additional Purchased Securities), for any
excess of the price paid (or deemed paid) by the nondefaulting party for
Replacement Securities therefor over the Repurchase Price for such Purchased
Securities and (ii) with respect to Additional Purchased Securities, for the
price paid (or deemed paid) by the nondefaulting party for the Replacement
Securities therefor. In addition, the defaulting party shall be liable to the
nondefaulting party for interest on such remaining liability with respect to
each such purchase (or deemed purchase) of Replacement Securities from the date
of such purchase (or deemed purchase until paid in full by Buyer. Such interest
shall be at a rate equal to the greater of the Pricing Rate for such Transaction
or the Prime Rate.
(f) For purposes of this Paragraph 11, the Repurchase Price for each
Transaction hereunder in respect of which the defaulting party is acting as
Buyer shall not increase above the amount of such Repurchase Price for such
Transaction determined as of the date of the exercise or deemed exercise by the
nondefaulting party of its option under subparagraph (a) of this Paragraph.
(g) The defaulting party shall be liable to the nondefaulting party for the
amount of all reasonable legal or other expenses incurred by the nondefaulting
party in connection with or as a consequence of an Event Of Default, together
with interest thereon at a rate equal to the greater of the Pricing Rate for the
relevant Transaction or the Prime Rate.
(h) The nondefaulting party shall have, in addition to its rights
hereunder, any rights otherwise available to it under an other agreement or
applicable law.
12. Single Agreement
Buyer and Seller acknowledge that, and have entered hereunto and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that, all Transactions hereunder constitute a single business and
contractual relationship and have been made in consideration of each other.
Accordingly, each of Buyer and Seller agrees (i) to perform all of its
obligations in respect of each Transaction hereunder, and that a default in the
performance of any such obligations shall constitute a default by it in respect
of all Transactions hereunder, (ii) that each of them shall be entitled to set
off claims and apply property held by them in respect of any Transaction against
obligations owing to them in respect of any other Transactions hereunder and
(iii) that payments, deliveries and other transfers made by either of them in
respect of any Transaction shall be deemed to have been made in consideration of
payments, deliveries and other transfers in respect of any other Transactions
hereunder, and the obligations to make any such payments, deliveries and other
transfers may be applied against each other and netted.
13. Notices and Other Communications
Unless another address is specified in writing by the respective party to
whom any notice or other communication is to be given hereunder, all such
notices or communications shall be in writing or confirmed in writing and
delivered at the respective addresses set forth in Annex II attached hereto.
14. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.
15. Non-assignability; Termination
The rights and obligations of the parties under this Agreement and under
any Transaction shall not be assigned by either party without the prior written
consent of the other party. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. This Agreement may be cancelled by
either party upon giving written notice to the other, except that this Agreement
shall, notwithstanding such notice, remain applicable to any Transactions then
outstanding.
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16. Governing Law
This Agreement shall be governed by the laws of the State of New York
without giving effect to the conflict of law principles thereof.
17. No Waivers, Etc.
No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder. No modification or waiver of any provision of this agreement and no
consent by any party to a departure herefrom shall be effective unless and until
such shall be in writing and duly executed by both of the parties hereto.
Without limitation on any of the foregoing, the failure to give a notice
pursuant to subparagraphs 4(a) or 4(b) hereof will not constitute a waiver of
any right to do so at a later date.
18. Use of Employee Plan Assets
(a) If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") are intended to be
used by either party hereto (the "Plan Party") in a Transaction, the Plan Party
shall so notify the other party prior to the Transaction. The Plan Party shall
represent in writing to the other party that the Transaction does not constitute
a prohibited transaction under ERISA or is otherwise exempt therefrom, and the
other party may proceed in reliance thereon but shall not be required so to
proceed.
(b) Subject to the last sentence of subparagraph (a) of this Paragraph, any
such Transaction shall proceed only if Seller furnishes or has furnished to
Buyer its most recent available audited statement of its financial condition
and its most recent subsequent unaudited statement of its financial condition.
(c) By entering into a Transaction pursuant to this Paragraph, Seller shall
be deemed (i) to represent to Buyer that since the date of Seller's latest such
financial statements, there has been no material adverse change in Seller's
financial condition which Seller has not disclosed to Buyer, and (ii) to agree
to provide Buyer with future audited and unaudited statements of its financial
condition as they are issued, so long as it is a Seller in any outstanding
transaction involving a Plan Party.
19. Intent
(a) The parties recognize that each Transaction is a "repurchase agreement"
as that term is defined in Section 101 of Title 11 of the United States Code, as
amended (except insofar as the type of Securities subject to such Transaction or
the term of such Transaction would render such definition inapplicable), and a
"securities contract" as that term is defined in Section 741 of Title 11 of the
United States Code, as amended.
(b) It is understood that either party's right to liquidate Securities
delivered to it in connection with Transactions hereunder or to exercise
any other remedies pursuant to Paragraph 11 hereof, is a contractual right to
liquidate such Transaction as described in Sections 555 and 559 of Title 11 of
the United States Code, as amended.
20. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a) in the case of Transactions in which one of the parties is a broker or
dealer registered with the Securities and Exchange Commission ("SEC") under
Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the Securities
Investor Protection Corporation has taken the position that the provisions of
the Securities Investor Protection Act of 1970 ("SIPA") do not protect the other
party with respect to any Transaction hereunder;
(b) in the case of Transactions in which one of the parties is a government
securities broker or a government securities dealer registered with the SEC
under Section 15C of the 1934 Act, SIPA will not provide protection to the other
party with respect to any Transaction hereunder; and
(c) in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation, the Federal Savings and Loan Insurance Corporation or the
National Credit Union Share Insurance Fund, as applicable.
IMPAC WAREHOUSE LENDING GROUP, INC. AUSTIN FUNDING CORPORATION.
By /s/ [ILLEGIBLE] By /s/ [ILLEGIBLE]
-------------------------------- ----------------------------------
Title Vice President Title President
----------------------------- -------------------------------
Date 6-29-99 Date 6-24-99
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ANNEX I
SUPPLEMENTAL TERMS AND CONDITIONS
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ANNEX II
NAMES AND ADDRESSES FOR COMMUNICATIONS BETWEEN PARTIES
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ANNEX I
SUPPLEMENTAL TERMS AND CONDITIONS
The Master Repurchase Agreement between Impac Warehouse Lending Group
("Buyer") and AUSTIN FUNDING CORPORATION ("Seller"), dated as of JUNE 22, 1999
is amended and supplemented as set forth below. All capitalized terms used
herein that are defined in the Master Repurchase Agreement are used herein as
defined therein except to the extent such terms are amended or supplemented
herein.
1. Paragraph 1 of the Master Repurchase Agreement is amended by adding the
following after the word "instruments" and before the parenthetical
"("Securities")" in the second line thereof:
"or whole mortgage loans or any interests in any whole mortgage loans,
including, without limitation, mortgage participation certificates and
mortgage passthrough certificates".
2. Subparagraph 2(a) of the Master Repurchase Agreement is amended by
adding the following after the word "any" and before the word "bankruptcy" in
the second line thereof:
"conservatorship or receivership (within the meaning of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989),".
3. Subparagraph 2(a) of the Master Repurchase Agreement is further amended
by adding the following after the word "a" and before the word "receiver" in
the third line thereof:
"conservator,".
4. Subparagraph 2(h) of the Master Repurchase Agreement is amended by
deleting the defined term "Market Value" and replacing it with the defined term
"Assumed Repurchase Value", and the term Market Value throughout the Master
Repurchase Agreement shall be deemed to denote the Assumed Repurchase Value.
5. Subparagraph 2(h) of the Master Repurchase Agreement is amended by
adding at the end thereof:
"except that the Assumed Repurchase Value of any Securities that are
loans secured by mortgages or deeds of trust on residential dwellings (such
loans, "Mortgage Loans") as of any date shall be the dollar amount ascribed
to such Mortgage Loans on that date by Buyer in its reasonable and sole
discretion, and shall not include any Income on such Mortgage Loans paid to
and held by Seller pursuant to Paragraph 5 hereof, and the Assumed
Repurchase Value of any Additional Purchased Securities shall be the fair
market value thereof as determined by Buyer
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in its reasonable and sole discretion"
6. Subparagraph 3(b) of the Master Repurchase Agreement is amended by
adding at the end of the first sentence of Paragraph 3(b):
"In the case of Transactions involving Securities that are Mortgage
Loans, (a) the Purchased Securities shall be identified on a detailed
listing to be provided by Seller to Buyer (a "Mortgage Loan Schedule")
attached to a Certificate of Seller in the form attached hereto, (b) the
Confirmation shall be sent by Seller to Buyer, (c) the documents contained
in the Mortgage File (as defined in Paragraph 7) shall be delivered at the
option of the Buyer to the Buyer, or the Custodian, and held by the
Custodian pursuant to the terms of a Custody Agreement, dated of even date
herewith (the "Custody Agreement"), among Seller, Buyer and Custodian
pursuant to which Custodian shall, among other things, issue Trust
Receipts, as defined therein (the "Trust Receipts"), and (d) the Mortgage
Loans shall be serviced for Buyer by Seller pursuant to the Servicing
Agreement, dated of even date herewith (the "Servicing Agreement"), between
Seller and Buyer."
7. Paragraph 3(b) of the Master Repurchase Agreement is further amended by
deleting the last sentence and replacing it with the following:
"In the event of any conflict between the terms of such Confirmation
and this Agreement, the terms of such Confirmation shall prevail."
8. Subparagraph 3(c) of the Master Repurchase Agreement is amended by
adding at the end of the first sentence of Paragraph 3(c);
"In the case of Transactions involving Securities that are Mortgage
Loans, (i) which meet the requirements of the Seller's Warranties
Agreement, such demand by Buyer may not be made prior to 60 days following
the date of the Transaction in which the Securities were originally
conveyed to Buyer provided no event of default has occurred; (ii) which do
not meet the requirements of the Seller's Warranties Agreement in all
material respects, such demand by Buyer may be made at any time; or (iii)
Seller may repurchase at any time, irrespective of whether the particular
Mortgage Loans(s) meets the requirements of the Seller's Warranties
Agreement. In any case, such demand either by Buyer or by Seller shall be
for a repurchase of all Purchased Securities subject to the related
Transaction and such demand shall be made no later than 5:00 p.m. New York
City time on the business day preceding the day on which such termination
will be effective, which termination shall also be on a business day. Upon
receipt of the Repurchase Price in immediately available funds, Buyer shall
deliver the Trust Receipt for such Transaction to Custodian for further
disposition in accordance with the terms of the Custody Agreement."
9. Paragraph 4 of the Master Repurchase Agreement is amended by adding a
11
new subparagraph (f) as follows:
"(f) In the case of Transactions involving Securities that are
Mortgage Loans, (i) the percentage used in calculating Buyer's Margin
Amount for such Transaction shall be the percentage specified in the
Confirmation and (ii) Additional Purchased Securities shall be limited to
obligations issued by the United States government or mortgaged-backed
securities issued by the Federal National Mortgage Association ("FNMA") or
guaranteed by the Government National Mortgage Association ("GNMA") and
otherwise acceptable to Buyer in its sole discretion, and (iii) the
provisions of subparagraphs (b), (d) and (e) of this Paragraph shall not
apply."
10. Paragraph 5 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence of Paragraph 5:
"Notwithstanding the foregoing and except as provided in Paragraph 11
of this Agreement, in the case of Transactions involving Securities that
are Mortgage Loans, Seller shall be deemed to hold for the benefit of, and
in trust for, Buyer all Income, including without limitation all scheduled
and unscheduled principal and interest payments, received by Seller with
respect to such Mortgage Loans. Seller shall service the Mortgage Loans, or
supervise the servicing of the Mortgage Loans, for the benefit of Buyer in
accordance with the terms of the Servicing Agreement. On the 10th day of
each month, Seller will provide Buyer with reports substantially identical
in form to ENMA's form 2010 remittance report with respect to all Mortgage
Loans then involved in any Transaction hereunder. Within three business
days of its receipt of each such report, Buyer either (i) shall determine
that a Margin Deficit has occurred and direct Seller to pay to Buyer all
Income received in the period covered by such report to the extent of such
Margin Deficit, in which case Buyer shall be deemed to have released any
excess Income to Seller, or (ii) shall determine that a Margin Deficit has
not occurred, in which case Buyer shall be deemed to have released all such
Income to Seller."
11. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the word "the" and before the words "Purchased Securities" in
the fourth line thereof
"Seller's right (including the power to convey title thereto), title
and interest in and to the".
12. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the words "Purchased Securities" and before the word "with" in
the fourth line thereof.
", the contractual right to receive payments, including the right to
payments
12
of principal and interest and the right to enforce such payments, arising
from or under any of the Purchased Securities, the contractual right to
service each Mortgage Loan, any sub-servicing agreements with respect to
each Mortgage Loan, and all documents in each Mortgage File,".
13. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the word "all" and before the word "proceeds" in the fifth line
thereof:
"income, payments, products and".
14. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following after the word "thereof" and before the period in the fifth line
thereof:
"(the "Collateral")".
15. Paragraph 6 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence of Paragraph 6:
"In such event, the parties hereto intend to create for the benefit of
Buyer, as secured party, a legally valid and enforceable first priority
perfected security interest in the Collateral. On or prior to each Purchase
Date, Seller shall cause to be filed in the appropriate filing offices of
the jurisdiction in which Seller maintains its place of business, or its
chief executive office if Seller has more than one place of business, in
accordance with applicable law, Uniform Commercial Code financing
statements naming Seller as debtor, Buyer as secured party, and the
Collateral as collateral."
16. Paragraph 7 of the Master Repurchase Agreement is amended by adding the
following at the end of the last sentence of Paragraph 7:
"In the case of Transactions involving Securities that are Mortgage
Loans, the transfer of such Mortgage Loans for the purposes of this
Paragraph 7 shall include the delivery to the Buyer or Custodian, as
directed by the Buyer, the following documents (the "Mortgage File") with
respect to each Mortgage Loan, as set forth in the Custody Agreement:
subject, however, to the paragraph immediately following clause (xii)
below;"
(i) the original note or other evidence of indebtedness (the "Mortgage
Note") of the obligor thereon (each such obligor, a "Mortgagor"), endorsed
to the order of or assigned to Seller by the holder/payee thereof, without
recourse, and endorsed by Seller, without recourse, in blank;
(ii) the original mortgage, deed of trust or other instrument (the
"Mortgage") creating a first lien on the underlying property securing the
Mortgage Loan (the "Mortgaged Property"), naming Seller as the "mortgagee"
or "beneficiary"
13
thereof, and bearing on the face thereof the address of Seller as provided
in Paragraph 13 of this Agreement, or, if the Mortgage does not name Seller
as the mortgagee/beneficiary, the Mortgage, together with an instrument of
assignment assigning the Mortgage, individually or together with other
Mortgages, to Seller and bearing on the face thereof the address of Seller
as provided in Paragraph 13 of this Agreement, and, in either case, bearing
evidence that such instruments have been recorded in the appropriate
jurisdiction where the Mortgaged Property is located (or, in lieu of the
original of the Mortgage or the assignment thereof, a duplicate or
conformed copy of the Mortgage or the instrument of assignment, if any,
together with a certificate of either the closing attorney or an officer of
the title insurer that issued the related title insurance policy, or a
certificate of receipt from the recording office, certifying that such copy
or copies represent true and correct copy(ies) of the original(s) and that
such original(s) have been or are currently submitted to be recorded in the
appropriate governmental recording office of the jurisdiction where the
Mortgaged Property is located);
(iii) an original assignment of Mortgage, in blank, which assignment
shall be in form and substance acceptable for recording and, in the event
that the Seller acquired the Mortgage Loan in a merger, the assignment must
be by "[Seller], successor by merger to [name of predecessor]";
(iv) any intervening assignment of the Mortgage not included in (ii)
above, including any warehousing assignment;
(v) any assumption, modification, extension or guaranty agreement;
(vi) the Lender's title insurance policy, or, if such policy has not
been issued, a written commitment or interim binder issued by the title
insurance company evidencing that the required title insurance coverage is
in effect and unconditionally guaranteeing the holder of the Mortgage Loan
that the lender's title insurance policy will be issued;
(vii) if applicable, any policy or certificate of primary mortgage
guaranty insurance;
(viii) if the Mortgage Note or Mortgage or any other material document
or instrument relating to the Mortgage Loan has been signed by a person on
behalf of the Mortgagor, the power of attorney or other instrument that
authorized and empowered such person to sign with recording information
thereon;
(ix) with respect to FHA insured Mortgage Loans, the original FHA
Insurance Contract, together with a completed HUD Form 92080 "Mortgagee
Record Change" with the Purchasing Mortgagees name left blank;
14
(x) with respect to VA guaranteed Mortgage Loans, the original VA Loan
Guaranty Certificate;
(xi) with respect to each Mortgage Loan which is subject to the
provisions of the Homeownership and Equity Protection Act of 1994, a copy
of a notice to each entity which was a purchaser or assignee of the
Mortgage Loan, satisfying the provisions of such Act and the regulations
issued thereunder, to the effect that the Mortgage Loan is subject to
special truth in lending rules; and
(xii) any other document as may be requested by Buyer.
"Notwithstanding the above, Seller shall, at least one Business Day
prior to the related Purchase Date, deliver to or cause to be delivered to
Buyer or Custodian, as directed by Buyer, originals or true copies of such
documents contained in the Mortgage File; and within forty-eight (48) hours
after such purchase date Seller shall deliver or cause to be delivered to
Buyer or Custodian, as directed by Buyer, the originals (to the extent not
previously delivered) of all such documents in the Mortgage File. Failure
by Seller to deliver or cause to be delivered such documents within such
time periods specified in the immediately preceding sentence shall
constitute an Event of Default under the Master Repurchase Agreement.
Seller shall cause each closing agent to hold any originals of such
documents in the Mortgage File held by such closing agent prior to delivery
thereof to Buyer or Custodian, as directed by Buyer, in trust and as bailee
for Buyer.
In addition to the documents contained in the Mortgage File, Seller
shall deliver to buyer on or prior to the Purchase Date for such
Transaction a security release certification acceptable to Buyer,
certifying the release of any security interest of a third party which may
have existed with respect to any of the Mortgage Loans subject to such
Transaction during the 45-day period prior to the related Purchase Date.
Seller shall include on each Mortgage Loan Schedule a code indicating
whether the Mortgage Loan is subject to the Homeownership and Equity
Protection Act of 1994."
Seller shall cause to be maintained a servicing file ("Servicing
File") with respect to each Mortgage Loan that shall contain the following
documents:
(a) copies of all the documents contained in the Mortgage File;
(b) any instrument necessary to complete identification of any
exception set forth in the exception schedule in the title
insurance policy (e.g., map or plat, restrictions, easements,
sewer agreements,
15
home association declarations, etc.);
(c) a survey of the Mortgaged Property;
(d) any hazard insurance policy or flood insurance policy, with
extended coverage of the hazard insurance policy;
(e) the Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending, real estate settlement procedure forms or other
disclosure statements required by law;
(f) the residential loan application, if applicable;
(g) any verification of employment and income;
(h) if applicable, any verification of acceptable evidence of source
and amount of downpayment;
(i) any credit report on the borrower under the Mortgage Loan;
(j) each residential appraisal report;
(k) a photograph of the Mortgaged Property;
(l) any tax receipts, insurance premiums, ledger sheets, payment
records, insurance claim files and correspondence, current and
historical computerized data files, underwriting standards used
for origination and all other papers and records developed or
originated by the Seller, any servicer or others, required to
document the Mortgage Loan or to service the Mortgage Loan; and
(m) any other document as may be requested by Buyer.
Seller shall cause to be delivered to Buyer each Servicing File upon Event of
Default by Seller under the Master Repurchase Agreement.
17. Paragraph 8 of the Master Repurchase Agreement is amended by deleting
the last sentence of Paragraph 8 and substituting the following:
"Title to all Purchased Securities (except for Securities that are
Mortgage Loans) shall pass to Buyer. In the case of Purchased Securities
that are Mortgage
16
Loans, upon transfer of the Mortgage Loans to Buyer as set forth in
Paragraph 3(a) of this Agreement and until termination of any Transactions
as set forth in Paragraphs 3(c) or 11 of this Agreement, ownership of each
Mortgage Loan, including each document in the related Mortgage File, is
vested in Buyer. Upon transfer of the Mortgage Loans to Buyer as set forth
in Paragraph 3(a) of this Agreement and until termination of any
Transactions as set forth in Paragraphs 3(c) or 11 of this Agreement,
record title in the name of Seller to each Mortgage shall be retained by
Seller in trust, for the benefit of Buyer, for the sole purpose of
facilitating the servicing and the supervision of the servicing of the
Mortgage Loans pursuant to the Servicing Agreement. Unless otherwise agreed
by Buyer and Seller, nothing in this Agreement shall preclude Buyer from
engaging in repurchase transactions with the Purchased Securities or
otherwise pledging or hypothecating the Purchased Securities, but no such
transaction shall relieve Buyer of its obligations to transfer Purchased
Securities (and, with respect to the Mortgage Loans, not substitutes
therefor) to Seller pursuant to Paragraphs 3, 4 or 11 hereof. Upon
termination of any Transactions as set forth in Paragraph 3(c) of this
Agreement, Buyer agrees to execute promptly endorsements of the Mortgage
Notes, assignments of the Mortgages and UCC-3 assignments, to the extent
that such documents are prepared by Seller for Buyer's execution, are
delivered to Buyer by Seller and are necessary to reconvey, without
recourse, to Seller and perfect title of like tenor to that conveyed to
Buyer to the related Mortgage Loans. Buyer agrees to cooperate with Seller
to identify documents that may be required to effect such reconveyance and
perfection of title to Seller."
18. Subparagraph 9(b) of the Master Repurchase Agreement is amended by
adding the following after the word "substituted" and before the period in the
fifth line thereof:
"; provided, further, that, in the case of Transactions involving
Securities that are Mortgage Loans, the retention by Seller of custody of
any document in any Mortgage File or otherwise shall be held by Seller in
trust Buyer for purposes of servicing or supervising the servicing of the
related Mortgage Loan and shall not be deemed to constitute Seller's
retention of custody of the Purchased Securities for purposes of this
subparagraph".
19. Paragraph 10 of the Master Repurchase Agreement is amended by adding
the following clauses at the end of the first sentence of Paragraph 10 after the
word "affected" and before the period:
", (vi) Seller and Buyer have entered into the Transaction described
in each Confirmation contemporaneously with the sale of the Purchased
Securities by Seller to Buyer and the transfer of the Purchase Price by
Buyer to Seller, or, in the event that the Transaction is deemed to
constitute a loan, contemporaneously with the grant of the security
interest in the Collateral by Seller to Buyer pursuant to Paragraph 6
hereof and the transfer of the consideration therefor, consisting of the
17
extension of the Purchase Price, which represents the loan proceeds, by
Buyer to Seller, (vii) the board of directors of Seller has approved the
form of Confirmation and the Master Repurchase Agreement, and such approval
is reflected in the minutes of said board, and (viii) each Confirmation,
the Master Repurchase Agreement, the Custody Agreement and the Servicing
Agreement have been and shall be, continuously, from the time of their
execution, a corporate record of Seller."
20. Paragraph 11 is amended by inserting the words ", other than any
representation made by Seller as to a particular Mortgage Loan," after the words
"made by Seller or Buyer" on the fourth line thereof.
21. Paragraph 11 is further amended by deleting the word "or" immediately
preceding clause (vi) and by adding at the end of such clause, immediately
preceding the parenthesis, the following:
(vii) Buyer shall have reasonably determined that Seller is or will be
unable to meet its commitments under this Agreement, the Custody
Agreement, the Guaranty, the Sellers Warranties Agreement, the
Servicing Agreement and any other related agreement (such
agreements, the "Transaction Documents") and shall have notified
Seller of such determination and such other party shall not have
responded with appropriate information to the contrary to the
satisfaction of the notifying party within 24 hours;
(viii) The Master Repurchase Agreement shall for any reason cease to
create a valid, first priority security interest in any of the
Purchased Securities purported to be covered thereby;
(ix) A final judgment by any competent court in the United States of
America for the payment of money in an amount of at least $100,000
is rendered against Seller, and the same remains undischarged for
a period of 30 days during which execution of such judgment is not
effectively stayed;
(x) Seller shall fail to observe or perform any of the covenants or
agreements under any Transaction Document, which failure
materially and adversely affects the rights of the Buyer;
(xi) Any event of default or any event which with notice, the passage
of time or both shall constitute an event of default shall occur
and be continuing under any repurchase or other financing
agreement for borrowed funds or indenture for borrowed funds by
which Seller is bound or affected shall occur and be continuing;
(xii) In the good faith judgment of Buyer, a material adverse change
shall have
18
occurred in the business, operations, properties, prospects or
condition (financial or otherwise) of Seller;
(xiii) Seller shall request written assurances as to the financial
well-being of Buyer and such assurances shall not have been
provided within 24 hours of such request;
(xiv) Seller shall be in default with respect to any normal and
customary covenants under any debt contract or agreement, any
servicing agreement or any lease to which it is a party, which
default could materially and adversely affect the financial
condition of Seller (which covenants include, but are not limited
to, an Act of Insolvency of Seller or the failure of Seller to
make required payments under such contract or agreement as they
become due);
(xv) Any representation or warranty made by Seller in any Transaction
Document shall have been incorrect or untrue in any material
respect (to the extent that such representation or warranty does
not incorporate a materiality limitation in its terms) when made
or repeated or when deemed to have been made or repeated;
(xvi) Seller shall fail to promptly notify Buyer of (i) the acceleration
of any debt obligation or the termination of any credit facility
of Seller, respectively; (ii) the amount and maturity of any such
debt assumed after the date hereof; (iii) any adverse developments
with respect to pending or future litigation involving Seller,
respectively; and (iv) any other developments which might
materially and adversely affect the financial condition of Seller;
(xvii) Seller's audited annual financial statements or the notes thereto
or other opinions or conclusions stated therein shall be qualified
or limited by reference to Seller's status as a "going concern";
(xviii) Seller shall fail to maintain a tangible net worth of no less than
$935,435. The term "tangible net worth" shall mean the excess of
all of the Seller's assets (excluding any value for goodwill,
trademarks, patents, copyrights, organization expense and other
similar intangible items) over all its liabilities as completed
and determined in accordance with generally accepted accounting
principles consistently applied.
(xx) Seller shall fail to deliver to Buyer or Custodian as directed by
Buyer the documents in the Mortgage File within the time period
specified in 1 Paragraph 7 of the Master Repurchase Agreement.
19
22. Subparagraph 11(d) of the Master Repurchase Agreement is amended by
deleting the words that precede Subparagraph 11(d)(i) and replacing them with
the words "The nondefaulting party may with concurrent notice to the defaulting
party:".
23. Subparagraph 11(d)(i) of the Master Repurchase Agreement is amended by
inserting the words "or in any other commercially reasonable manner" after the
word "market" and before the word "at", on the second line thereof.
24. Subparagraph 11(d)(i) of the Master Repurchase Agreement is amended by
adding the following after the word "hereunder" and before the semi-colon:
"and in either case upon the determination and receipt by Buyer, in a
manner deemed final and complete by Buyer in its sole discretion, of the
aggregate unpaid Repurchase Prices and any other amounts owing by the
defaulting party, including, without limitation, any unpaid fees, expenses
or other amounts owing to the Custodian under the Custody Agreement, or to
which Buyer is otherwise entitled hereunder, Buyer shall transfer the
portion of the Purchased Securities and proceeds thereof, including without
limitation, any proceeds of a sale of the servicing rights to the Mortgage
Loans, held by Buyer following such receipt to either (i) Seller, if in
Buyer's sole discretion Seller is legally entitled thereto, (ii) such other
party or person as is in Buyer's reasonable judgment is legally entitled
thereto, or (iii) if Buyer cannot determine in its reasonable judgment the
person or party entitled thereto, a court of competent jurisdiction."
25. Paragraph 11 of the Master Repurchase Agreement is amended by adding a
new Subparagraph (j) as follows:
"(j) Seller acknowledges that any delay in the ability of Buyer to
exercise its remedies pursuant to Paragraph 11 hereof shall result in
irreparable injury to Buyer."
26. Paragraph 13 of the Master Repurchase Agreement is amended by deleting
the text thereof and replacing it with the following:
20
"Any notice or communication in respect of this Agreement will be
sufficiently given to a party if in writing and delivered in person, sent
by certified or registered mail, return receipt requested, or by overnight
courier or given by facsimile transfer at the following address or
facsimile number:
If to [BUYER]:
Impac Warehouse Lending Group
0000 Xxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
If to [SELLER]:
AUSTIN FUNDING CORPORATION
000 XXXXXXXX XXX., XXXXX #000
XXXXXX, XX 00000
Attention: Xxxxx XxXxxxxx
Facsimile Number: (000) 000-0000
A notice or communication will be effective:
(i) if delivered by hand or sent by overnight courier, on the day and
time it is delivered;
(ii) If sent by facsimile transfer, on the day it is sent; or
(iii) if sent by certified or registered mail, return receipt requested,
three days after dispatch.
Either party may by notice to the other change the address or facsimile
number at which notices or communications are to be given to it."
27. Paragraph 14 of the Master Repurchase Agreement is amended by inserting
the words "with respect to Securities that consist of mortgage loans" after the
word "transactions" and before the period on the second line thereof.
21
28. Intentionally Omitted
29. Intentionally Omitted
30. Subparagraph 20(c) is amended by deleting the words "the Federal
Savings and Loan Insurance Corporation" in the third line thereof and
substituting therefor the following:
"through either the Bank Insurance Fund or the Savings Association
Insurance Fund,".
31. This Annex I is executed and shall be construed as an agreement
supplemental to the Master Repurchase Agreement and, as provided in the Master
Repurchase Agreement, this Annex I forms a part thereof.
32. All of the covenants, stipulations, promises and agreements in this
Annex I shall bind the successors and assigns of the parties hereto, whether
expressed or not.
33. This Annex I may be executed in any number of counterparts, each of
which shall be an original but such counterparts shall together constitute but
one and the same instrument.
34. Seller shall promptly provide such further assurances or agreements as
Buyer may request in order to effect the purposes of this Master Repurchase
Agreement, including without limitation, the delivery of any further documents
to ensure that Buyer maintains a first priority perfected security interest in
the Collateral pursuant to Paragraph 6 hereof and to carry into effect the
purpose, of the Transaction Documents.
35. Buyer is hereby appointed the attorney-in-fact of Seller for the
purpose of carrying out the provisions of this Agreement and taking any action
and executing or endorsing any instruments that Buyer may deem necessary or
advisable to accomplish the purposes hereof, including, without limitation,
completing or correcting any endorsement of a Mortgage Note or assignment of a
Mortgage, which appointment as attorney-in-fact is irrevocable and coupled with
an interest. Without limiting the generality of the foregoing, Buyer shall have
the right and power during the occurrence and continuation of any Event of
Default to receive, endorse and collect all checks made payable to the order of
Seller representing any payment on account of the principal of or interest on
any of the Collateral and to give full discharge for the same.
36. Seller shall promptly pay as and when payment is due all, and Buyer
shall not be liable for any, expenses, fees and charges incurred by Buyer or
Seller (other than the salaries and overhead of Buyer and its affiliates)
arising out of or related in any way, to the administration and enforcement of
this Agreement or the Custody Agreement ("Costs"), including, without
limitation, legal expenses, the fees and expenses of the Custodian, recording
and filing fees and any costs associated with reconveyance of the Purchased
Securities and, in the event that any Costs are incurred by Buyer, Seller shall
reimburse Buyer on demand of Buyer accompanied by a statement describing the
circumstances and the nature of the Cost, by wire transfer of immediately
available federal funds.
22
37. Seller and Buyer contemplate that all Mortgage Loans purchased by Buyer
and subject to repurchase pursuant to this Master Repurchase Agreement shall
have an average daily balance (in principal amount) of $1,500,000 (the "Minimum
Usage Amount"). If, within forty-five (45) days of the date hereof, Seller shall
not have sold any Mortgage Loans to Buyer pursuant to this Master Repurchase
Agreement, Seller shall promptly pay Buyer $1,500. If at any time after
forty-five (45) days after the Seller shall have commenced selling Mortgage
Loans to Buyer, pursuant to this Master Repurchase Agreement but the average
daily balance (in principal amount) of all Mortgage Loans held by Buyer is less
than the Minimum Usage Amount, Seller shall pay Buyer a fee to be determined by
Buyer in its sole discretion, provided, however such fee shall not exceed $1,500
during any thirty (30) day period.
38. This Annex I shall supersede any existing annex to or modification of
the Master Repurchase Agreement.
[BUYER] [SELLER]
IMPAC WAREHOUSE LENDING GROUP AUSTIN FUNDING CORPORATION
By: /s/ XXXXX XXXXXXX By: /s/ XXXXX XXXXXXXX
------------------------------ ------------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxx XxXxxxxx
---------------------------- ----------------------------
Title: Vice President Title: President
--------------------------- ---------------------------
Date: 6-29-99 Date: 6-24-99
---------------------------- ----------------------------
23
CERTIFICATE OF SELLER
I, ________________, hereby certify that I am the duly appointed
________________ of _________________, a ____________________ (the "Seller").
The undersigned hereby represents, warrants and covenants on behalf of the
Seller as follows:
1. Pursuant to the sale of the mortgage loans set forth on Annex I hereto
(the "Mortgage Loans") by the Seller to Impac Warehouse Lending Group ("Impac")
pursuant to a Master Repurchase Agreement, dated as of JUNE 22, 1999 between the
Company and Impac, the Company hereby sells, transfers, assigns, sets over and
otherwise conveys to Impac all of its right (including the power to convey title
thereto), title and interest in and to each document, including, without
limitation, those documents set forth on Exhibit A hereto, held by or on behalf
of the Company with respect to each Mortgage Loan.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: 6-24-99
-----------------
------------------------
By: /s/ XXXXX XXXXXXXX
--------------------------
Name: Xxxxx XxXxxxxx
------------------------
Title: President
-----------------------
24
================================================================================
IMPAC WAREHOUSE LENDING GROUP
Initial Purchaser
and
AUSTIN FUNDING CORPORATION
Seller
SELLER'S WARRANTIES AGREEMENT
Dated as of JUNE 22,1999
Mortgage Loans
-----------------------
================================================================================
25
This is a Seller's Warranties Agreement, dated and effective as of JUNE
22, 1999 and is executed between IMPAC WAREHOUSE LENDING GROUP, a California
corporation, as the initial purchaser ("Initial Purchaser"), and AUSTIN FUNDING
CORPORATION as the seller ("Seller").
PRELIMINARY STATEMENTS
From time to time, the Initial Purchaser will be purchasing from the
Seller pursuant to a Master Repurchase Agreement dated as of the Closing Date
between the Seller and the Initial Purchaser (the "Master Repurchase Agreement")
the mortgage loans which are subject to this Agreement, and the Seller has
agreed to make certain representations and warranties with respect thereto.
In consideration of the premises and the mutual agreements hereinafter
set forth, the Initial Purchaser and the Seller agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Capitalized terms not defined herein shall have the meanings given to
them in the Master Repurchase Agreement. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings specified in this Article:
"Agreement": This Seller's Warranties Agreement including all exhibits
hereto, amendments hereof and supplements hereto.
"Appraised Value": With respect to any Mortgage 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.
"Assignment": An individual assignment of the Mortgage, notice of
transfer or equivalent instrument, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
or transfer of the Mortgage Loan.
"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a
legal holiday in the State of New York, or (iii) a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to be closed.
"Closing Date": The date on which the Initial Purchaser funds any
purchase pursuant to the Master Repurchase Agreement.
"Cut-off Date": The first day of the month in which the related
Purchase Date occurs.
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"Due Date": The date of each month on which each Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
"Escrow Account": An account maintained by the Seller for the deposit
of Escrow Payments received in respect of one or more Mortgage Loans.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, common charges in condominiums and planned unit
developments, mortgage insurance premiums, fire and hazard insurance premiums
and other payments which have been escrowed by the Mortgagor with the mortgagee
pursuant to any Mortgage Loan.
"FHA": The Federal Housing Administration or any successor thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation or any successor
organization.
"FNMA": The Federal National Mortgage Association or any successor
organization. "Initial Purchaser": Impac Warehouse Lending Group
"Interim Period": The period of time from the Closing Date to the
Servicing Transfer Date, during which period the Seller shall service the
Mortgage Loans on behalf of the Purchaser.
"Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan, the
original principal balance of such Mortgage Loan divided by the Appraised Value
of the related Mortgaged Property.
"Master Repurchase Agreement": As defined in the Preliminary Statement
hereto.
"Monthly Payment": The scheduled monthly payment of principal and
interest on a Mortgage Loan which is payable by a Mortgagor under the related
Mortgage Note.
Mortgage": The mortgage, deed of trust or other instrument creating a
lien on real property securing the Mortgage Note.
"Mortgage File": The mortgage documents pertaining to a particular
Mortgage Loan which are specified in Exhibit A hereto.
"Mortgage Interest Rate": The annual rate at which interest accrues on
any Mortgage Loan.
"Mortgage Loan": An individual Mortgage Loan, including but not limited
to, all documents included in the Mortgage File, the Monthly Payments, principal
prepayments, cash liquidations, primary insurance proceeds, other insurance
proceeds, condemnation proceeds, liquidation proceeds, and any and all rights,
benefits, proceeds and obligations arising therefrom or in connection therewith,
which is sold by the Seller to the Initial Purchaser and which is the subject of
this Agreement. The Mortgage Loans originally subject to this Agreement are
identified on the
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Mortgage Loan Schedule.
"Mortgage Loan Schedule": The list of Mortgage Loans subject to this
Agreement and identified on the schedule attached to the related Certificate of
Seller, which list shall set forth the following information with respect to
each Mortgage Loan:
(i) the loan number;
(ii) the Mortgagor's name;
(iii) the street address of the Mortgaged Property, including
city, state and zip code;
(iv) the Mortgage Interest Rate as of the Cut-off Date;
(v) the original term;
(vi) the original principal balance;
(vii) the first payment date;
(viii) the remaining term to amortized maturity and the stated
maturity date;
(ix) the Monthly Payment as of the Cut-off Date;
(x) the outstanding principal balance as of the Cut-off Date,
after giving effect to all payments of principal received on
or before such date;
(xi) the Loan-to-Value Ratio at origination;
(xii) a code indicating whether the Mortgaged Property is occupied
by owner;
(xiii) a code indicating the lien priority of the related Mortgage;
(xiv) a code indicating the type of residential dwelling;
(xv) a code indicating the credit grade of the related Mortgagor;
(xvi) with respect to each adjustable rate Mortgage Loan, the
index;
(xvii) with respect to each adjustable rate Mortgage Loan, the
margin;
(xviii) with respect to each adjustable rate Mortgage Loan, the
Mortgage Interest Rate at origination; and
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(xix) with respect to each adjustable rate Mortgage Loan, the
Monthly Payment at origination.
Such schedule shall also set forth the weighted average of the amounts set forth
in (iv) and (viii) above and the total of the amounts described under (x) above
for all of the Mortgage Loans. Such list may be in the form of more than one
list, collectively setting forth all of the information required.
"Mortgage Note": The note of a Mortgagor secured by a Mortgage.
"Mortgaged Property": The underlying real property securing repayment
of a Mortgage Note.
"Mortgagor": The obligor on a Mortgage Note.
"Purchaser": Impac Warehouse Lending Group as Initial Purchaser and
holder of the Mortgage Loans and any subsequent holder or holders of the
Mortgage Loans.
"Refinanced Mortgage Loan": A Mortgage Loan which was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy an
existing mortgage.
"Related Documents": The documents, other than this Agreement, entered
into between the Seller and the Initial Purchaser with respect to the Mortgage
Loans, which documents consist of (a) each Confirmation, (b) the Master
Repurchase Agreement, (c) the Servicing Agreement, and (d) the Custody
Agreement.
"Seller": AUSTIN FUNDING CORPORATION or its successor in interest or
any successor under this Agreement appointed as herein provided.
"Servicing Agreement": The Servicing Agreement dated JUNE 22, 1999
between the Purchaser and the Seller.
"Underwriting Guidelines": The underwriting guidelines used by the
Seller in connection with the origination of the Mortgage Loans and, if
applicable, which have been submitted to and approved by the Initial Purchaser.
"VA": The United States Department of Veterans Affairs or any successor
thereto.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER;
REPURCHASE AND SUBSTITUTION;
REVIEW OF MORTGAGE LOANS
Section 2.01 Representations and Warranties of the Seller.
The Seller represents and warrants to the Purchaser that as of the
Closing Date and as of each date thereafter on which the Master Repurchase
Agreement is in effect:
(i) The Seller is duly organized, validly existing and in good
standing under the laws of KANSAS and is qualified to transact business in and
is in good standing under the laws of each state where a Mortgaged Property is
located or is otherwise exempt under applicable law from such qualification or
is otherwise not required under applicable law to effect such qualification; no
demand for such qualification has been made upon the Seller by any state having
jurisdiction; and in any event the Seller is or will be in compliance with the
laws of any such state to the extent necessary to insure the enforceability of
each Mortgage Loan and the servicing of the Mortgage Loans in accordance with
the terms of the Servicing Agreement;
(ii) The Seller has the full power and authority to hold each
Mortgage Loan, to sell each Mortgage Loan and to execute, deliver and perform,
and to enter into and consummate, all transactions contemplated by this
Agreement and each Related Document. The Seller has duly authorized the
execution, delivery and performance of this Agreement and the Related Documents,
has duly executed and delivered this Agreement, and this Agreement and the
Related Documents, assuming due authorization, execution and delivery by the
Initial Purchaser each constitutes a legal, valid and binding obligation of the
Seller, enforceable against it in accordance with its terms;
(iii) Neither the execution and delivery of this Agreement and
the Related Documents, the acquisition or origination of the Mortgage Loans by
the Seller, the sale of the Mortgage Loans to the Initial Purchaser, the
consummation of the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement and the Related
Documents, 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;
(iv) There is no litigation pending or, to the Seller's
knowledge, threatened, which if determined adversely to the Seller would
adversely affect the sale of the Mortgage Loans to the Initial Purchaser, the
execution, delivery or enforceability of this Agreement or any Related Document,
or the ability of the Seller to service the Mortgage Loans or which would have a
material adverse effect on the financial condition of the Seller;
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(v) 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
and the Related Documents, the delivery of the Mortgage Files to the Purchaser
for the benefit of the Purchaser, the sale of the Mortgage Loans to the Initial
Purchaser or the consummation of the transactions contemplated by this Agreement
and the Related Documents;
(vi) The consummation of the transactions contemplated by this
Agreement and the Related Documents 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 as contemplated by this Agreement and the
Related Documents are not subject to the bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction;
(vii) The Seller used no adverse selection procedures in
selecting the Mortgage Loans from among the outstanding home mortgage loans in
the Seller's portfolio at the Closing Date as to which the representations and
warranties set forth in Section 2.02 could be made and had outstanding principal
balances on the Cut-off Date of at least $10,000;
(viii) The Seller has good and marketable title to, and is the
sole owner of, the Mortgage Loan, free and clear of any lien, charge or
encumbrance or any ownership or participation interest in favor of any other
person, and the mortgage note has not been assigned, pledged, hypothecated or
otherwise transferred to any person; and
(ix) Neither this Agreement nor any statement, report or other
document prepared and furnished by or on behalf of the Seller pursuant to this
Agreement or any Related Document 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.
Section 2.02 Representations and Warranties as to Individual Mortgage
Loans.
The Seller hereby represents and warrants to the Purchaser that, as to
each Mortgage Loan, as of the related Purchase Date and each date thereafter up
to the related Repurchase Date:
(i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Closing Date;
(ii) All payments required to be made for such Mortgage Loan
under the terms of the Mortgage have been made; the Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds from a
party other than the owner of the Mortgaged Property subject to the Mortgage,
directly or indirectly, for the payment of any amount required by the Mortgage
Loan, except for interest accruing from the date of the mortgage note or date of
disbursement of the Mortgage Loan proceeds, whichever is greater, to the day
that precedes by one month the due date of the first installment of principal
and interest; and there has been no delinquency of more than thirty days in any
payment by the Mortgagor thereunder at any time since
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the origination of the Mortgage Loan;
(iii) There are no delinquent taxes, ground rents, water
charges, sewer rents or assessments, including assessments payable in future
installments, or other outstanding charges affecting the related Mortgaged
Property;
(iv) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by written
instruments, the substance of which waiver, alteration or modification has been
approved by the primary mortgage guaranty insurer, if any, and is reflected on
the Mortgage Loan Schedule. No instrument of waiver, alteration or modification
has been executed, and no Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement approved by the primary
mortgage insurer, if any, and which assumption agreement is part of the Mortgage
File and the terms of which are reflected in the Mortgage Loan Schedule;
(v) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(vi) All buildings 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 customary in the area where the Mortgaged Property
is located, pursuant to insurance policies conforming to the requirements
imposed by FNMA for similar mortgage loans which are serviced under its MBS
program in an amount at least equal to the outstanding principal balance of the
applicable Mortgage Loan (without coinsurance). If the Mortgaged Property is in
an area identified on a Flood Hazard Map or Flood Insurance Rate Map issued by
the Federal Emergency Management Agency as having special flood hazards (and
such flood insurance has been made available) a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to the requirements of FNMA
and FHLMC. All such insurance policies (collectively, the "hazard insurance
policy") contain a standard mortgagee clause naming the Seller, its successors
and assigns as mortgagee and all premiums thereon have been paid. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to maintain such insurance at Mortgagor's cost and expense and
to seek reimbursement therefor from the Mortgagor;
(vii) 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 in all
material respects;
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(viii) The Mortgage has not been satisfied, canceled or
subordinated, in whole, or rescinded, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission;
(ix) The Mortgage is a valid, subsisting and enforceable lien on
the Mortgaged Property, including all improvements on the Mortgaged Property
subject only to (a) the lien of any prior mortgage, (b) the lien of current real
property taxes and assessments not yet due and payable, (c) covenants,
conditions and restrictions, rights of way, easements and other matters of the
public record as of the date of recording being 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 which do
not adversely affect the Appraised Value of the Mortgaged Property, and (d)
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 and enforceable first or second lien
and first or second priority security interest on the property described
therein;
(x) The Mortgage Note and the Mortgage are genuine, and each is
the legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms. The mortgage note is on a form acceptable to FNMA and
FHLMC. 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;
(xi) 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. The Mortgagor under the Mortgage Note is a
natural person. The debt of the Mortgage Loan is evidenced by one mortgage note
only;
(xii) The proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder, and any
and all requirements as to completion of any on-site or off-site improvements
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan and
the recording of the mortgage were paid, and the mortgagor is not entitled to
any refund of any amounts paid or due under the mortgage note or mortgage. Any
future advance made prior to the date such Mortgage Loan was delivered to
Custodian 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 consolidated principal
amount does not exceed the original principal amount of the Mortgage Loan.
(xiii) The Mortgage Note and the Mortgage have not been assigned
or pledged, and the Seller has good and marketable title thereto, and the Seller
is the sole owner thereof and has full
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right to transfer and sell the Mortgage Loan to the Initial Purchaser free and
clear of any encumbrance, equity, lien, pledge, charge, claim or security
interest;
(xiv) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period
in which they held and disposed of such interest, were) in compliance with any
and all applicable licensing and "doing business" requirements of the laws of
the state wherein the Mortgaged Property is located;
(xv) The Mortgage Loan is covered by an ALTA lender's title
insurance policy acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to FNMA and FHLMC and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the exceptions
contained in (ix)(a) through (d) above) the Seller, its successors and assigns
as to the first priority lien of the Mortgage in the original principal amount
of the Mortgage Loan. 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 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 full 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;
(xvi) There is no default, breach, violation or event of
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 of
acceleration, and the Seller has not waived any default, breach, violation or
event of acceleration;
(xvii) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such lien) affecting the related Mortgaged Property
which are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage;
(xviii) All improvements which were considered in determining
the Appraised Value of the related 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. The Mortgaged Property is lawfully
occupied under applicable law, and all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of such
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;
(xix) The Mortgage Loan was originated by the Seller or a
savings association, a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a federal or state authority or
by a mortgagee approved by the Secretary of Housing and Xxxxx
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Xxxxxxxxxxx xxxxxxxx to Section 203 of the National Housing Act. With respect to
adjustable rate Mortgage Loans, the Mortgage Interest Rate is adjusted on each
interest rate adjustment date to equal the index plus the gross margin, rounded
up or down to the nearest 1/8%, subject to the mortgage interest rate cap. With
respect to fixed rate Mortgage Loans, the mortgage note is payable in equal
monthly installments of principal and interest which are sufficient to amortize
the principal balance of the Mortgage Loan over its term and pay interest at
the Mortgage Interest Rate. With respect to adjustable rate Mortgage Loans,
installments of interest 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. No Mortgage Loan is an interest only
mortgage loan. No Mortgage Note provides for negative amortization. No
adjustable rate Mortgage Loan is convertible to a fixed interest rate mortgage
loan. Interest on each Mortgage Loan is calculated on the basis of a 360-day
year consisting of twelve 30-day months;
(xx) The Mortgage contains the usual and customary "due-on-sale"
clause or other similar provision for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event the related Mortgaged
Property is sold without the prior consent of the mortgagee thereunder;
(xxi) The Mortgaged Property is free of damage and waste and
there is no proceeding pending for the total or partial condemnation thereof.
The mortgaged property is in good repair and 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;
(xxii) 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, (a) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (b) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgaged Property or is not currently
subject to any bankruptcy proceeding or foreclosure proceeding and the Mortgagor
or is not currently seeking protection under applicable bankruptcy laws. There
is no homestead or other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the mortgage. No Mortgagor has requested relief under the
Soldiers and Sailors Civil Relief Act of 1940
(xxiii) The Mortgage Loan was originated in accordance with the
Underwriting Guidelines. 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;
(xxiv) The Mortgage Note is not and has not been secured by any
collateral except
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the lien of the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to in (ix) above;
(xxv) The Mortgage File contains an appraisal of the related
Mortgaged Property, on a form acceptable to FNMA or FHLMC 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 such appraisal met the requirements of applicable laws and regulations
governing the originator thereof at the time of origination of the Mortgage
Loan, and the appraisal satisfies the requirements of Title XI of the Federal
Institutions Reform, Recovery, and Enforcement Act of 1989 and the regulations
promulgated thereunder, all as in effect on the date the Mortgage Loan was
originated. The determination of the Appraised Value of the Mortgaged Property
was based on sales of comparable properties;
(xxvi) 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 Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;
(xxvii) No Mortgage Loan contains provisions pursuant to which
Monthly Payments are (a) paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any other similar provisions which may constitute a "buydown"
provision. No Mortgage Loan is a graduated payment mortgage loan or growing
equity mortgage loan;
(xxviii) The Mortgagor has executed a statement to the effect
that the Mortgagor has received all disclosure materials required by applicable
law with respect thereto. Such statement is included in the Mortgage File;
(xxix) [Intentionally Omitted]
(xxx) No Mortgage Loan was made in connection with (a) the
construction or rehabilitation of a Mortgaged Property or (b) facilitating the
sale or exchange of a Mortgaged Property by the lender;
(xxxi) No error, omission, misrepresentation, negligence, fraud
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 of
the Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
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(xxxii) The Seller has no knowledge of any circumstances or
condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or
the Mortgagor's credit standing 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;
(xxxiii) The Mortgaged Property is located in the state
indicated on 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, or an individual unit in a planned unit development as defined by
FNMA, none of which is a mobile home;
(xxxiv) The original LTV Of the Mortgage Loan was not more than
100%;
(xxxv) With respect to each Mortgage Loan which is subject to
the provisions of the Homeownership and Equity Protection Act of 1994; the
Mortgage Loan is identified as such on the Mortgage Loan Schedule, the related
Mortgage File contains a notice from the originator, and a copy of a notice to
each entity which was a purchaser or assignee of the Mortgage Loan, satisfying
the provisions of such Act and the regulations issued thereunder, to the effect
that the Mortgage Loan is subject to special truth in lending rules.
(xxxvi) All Escrow Accounts are maintained with Seller and have
been maintained in accordance with applicable law and the terms of the Mortgage
Loans. The Escrow Payments required by the Mortgages which have been paid to the
Seller for the account of the Borrower are on deposit in the appropriate Escrow
Account. No escrow deposits or Escrow Payments or other charges or payments due
the Seller have been capitalized under any Mortgage or the related Mortgage
Note;
(xxxvii) Except for such documents that are held by the
Custodian or a servicer of the related Mortgage Loan, the Seller is in
possession of a complete mortgage file (including a copy of the survey of the
mortgaged property, if any; an original hazard insurance policy and, if required
by law, flood insurance policy, with extended coverage of the hazard insurance
policy; a Mortgage Loan closing statement; a Mortgage Loan application;
verification of employment and income, if any, evidence of source and amount of
downpayment; credit report on the mortgagor; an appraisal report; a photograph
of the mortgaged property; an executed Truth-in-Lending disclosure statement and
rescission rights waiver and a copy of all other materials required by law to be
delivered to the mortgagor; a contract of sale, if any, and any other documents
customarily collected or created, and retained, in connection with the
origination of mortgage loans). Seller has delivered, or caused to be delivered,
to the Buyer or Custodian as directed by Buyer, each document required to be so
delivered under the Custody Agreement;
(xxxviii) All funds received by the Seller in connection with
the Mortgage Loans, including, without limitation, foreclosure proceeds, fire
insurance proceeds from fire losses, condemnation proceeds and principal
reductions, have been applied to reduce the principal balance
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of the Mortgage Loans in question or deposited in the Escrow Account, or for
reimbursement of repairs to the Mortgaged Property or as otherwise required by
applicable law;
(xxxix) The Seller and any current or prior mortgagee or
servicer of the Mortgage Loans have complied in all respects material to the
value of the Servicing Rights with every applicable federal, state, or local
law, statute, and ordinance, and any rule, regulation, or order issued
thereunder including, without limitation, the fair housing, anti-redlining,
equal credit opportunity, truth-in-lending, real estate settlement procedures,
fair credit reporting, and every other prohibition against unlawful
discrimination in residential lending or governing consumer credit, and also
including, without limitation, the Consumer Credit Reporting Act, Equal Credit
Opportunity Act of 1975 and Regulation B, Fair Credit Reporting Act,
Truth-in-Lending Law, in particular, Regulation Z as amended, the Flood Disaster
Protection Act of 1973, the Real Estate Settlement Procedures Act of 1974 as
amended, and state and local consumer credit codes and laws, and the
origination, collection and all other practices of the originator, the Seller
and all prior servicers in connection with the origination or servicing of each
Mortgage and Mortgage Note are and have been in all respects legal, proper,
prudent and customary 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 note. Any interest
required to be paid pursuant to state and local law has been properly paid and
credited; and
(xl) Neither the Seller nor any of its agents or affiliates has
contacted or shall contact any Mortgagor for the purpose of inducing or
encouraging the early prepayment or refinancing of the related Mortgage Loan,
nor has the Seller or any of its agents or affiliates utilized, nor shall they
utilize, any information held or acquired by the Seller or such agency or
affiliates in their capacity as mortgagees or servicers of the Mortgage Loans to
derive any other incidental income or benefit from the servicing thereof, nor
has the Seller or such agents or affiliates given, nor will they give, a list of
Mortgagors to any person for such purpose or to derive any other incidental
income or benefit from the servicing thereof; provided, however that the
foregoing shall not be construed to limit or impair other activities of the
Seller in its capacities other than as servicer of the Mortgage Loans,
including, without limitation, the provision of banking and related services to
customers (which may include the Mortgagors under the Mortgage Loans other than
in their capacity as such) in the ordinary course and any general solicitation
or encouragement of such customers to prepay or refinance existing mortgages or
to purchase or renew insurance in connection therewith so long as the provisions
of such services and any such solicitation or encouragement does not result in
the refinancing of a Mortgage Loan by the Seller or any affiliate of the Seller.
Section 2.03 Breach of Representation or Warranty.
It is understood and agreed that the representations and warranties set
forth in Sections 2.01 and 2.02 shall survive the sale of the Mortgage Loans to
the Purchaser and shall inure to the benefit of the Purchaser and its successors
and assigns, notwithstanding any restrictive or qualified endorsement on any
Mortgage Note or Assignment or the examination of any Mortgage File and without
regard to any applicable statute of limitations. Upon discovery by Seller of a
breach of any
38
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of the foregoing representations and warranties which materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser in any
Mortgage Loan, the Seller shall give prompt written notice to the Purchaser.
The Seller shall indemnify the Purchaser and hold it or them harmless
against any loss, damages, penalties, fines, forfeitures, 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's representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Seller set forth in this
Section 2.03 to indemnify the Purchaser as provided in this Section 2.03 are in
addition to any other remedies of the Purchaser respecting a breach of the
foregoing representations and warranties.
39
-15-
ARTICLE III
MISCELLANEOUS PROVISIONS
Section 3.01 Amendment.
This Agreement may be amended from time to time by the Purchaser and
the Seller only by written agreement signed by the Purchaser and the Seller.
Section 3.02 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York except to the extent preempted by Federal law.
Section 3.03 Notices.
Any notices or other communications permitted or required hereunder
shall be in writing and shall be deemed conclusively to have been given if
personally delivered at or mailed by registered mail, postage prepaid, and
return receipt requested or transmitted by telex, telegraph or telecopier and
confirmed by a similar mailed writing, if (i) in the case of the Seller and
AUSTIN FUNDING CORPORATION Attention: XXXXX XXXXXXXX or such other address as
may hereafter be furnished to the Purchaser in writing by the Seller and (ii) in
the case of the Purchaser, Impac Warehouse Lending Group 0000 Xxxx Xxxxxx,
Xxxxxxx Xxxxx, XX 00000, Attention: Xxxxx Xxxxxxx, or such other address as may
be furnished to the Seller in writing by the Purchaser.
Section 3.04 Severability Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, the invalidity
of any such covenant, agreement, provision or term of this Agreement shall in no
way affect the validity or enforceability of the other provisions of this
Agreement, provided, however, that if the invalidity of any covenant, agreement
or provision 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 as nearly as possible the
same as the economic effect of this Agreement.
40
-16-
Section 3.05 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 3.06 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(iii) references herein to "Articles", "Sections",
"Subsections", "Paragraphs", and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to
a Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(v) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 3.07 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, 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.
41
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Section 3.08 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one instrument. It shall not be necessary in making proof of this
Agreement or any counterpart thereof to produce or account for any other
counterpart.
Section 3.09 Entire Agreement, Successors and Assigns.
Except as otherwise provided herein, this Agreement together with the
Related Documents constitutes the entire agreement between the parties hereto
and supersedes all rights and prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
This Agreement shall not be assignable in whole or in part by the Seller. The
Purchaser may assign this Agreement, in whole or in part. The Purchaser shall
give the Seller prompt written notice of any such assignment, provided, however,
that any failure to give such notice shall not be deemed to condition, qualify
or affect any obligation of the Seller hereunder. This Agreement and any rights,
remedies, obligations or liabilities under or by reason of the Agreement shall
inure to the benefit of and be binding on the parties hereto or their respective
successors and permitted assigns.
IN WITNESS WHEREOF, the Seller and the Initial Purchaser have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
IMPAC WAREHOUSE LENDING GROUP
By: /s/ XXXXX XXXXXXX
------------------------------------
Name: Xxxxx Xxxxxxx
----------------------------------
Title: Vice President
---------------------------------
AUSTIN FUNDING CORPORATION
By: /s/ XXXXX XXXXXXXX
------------------------------------
Name: Xxxxx XxXxxxxx
----------------------------------
Title: President
---------------------------------
42
STATE OF CALIFORNIA )
)SS.
COUNTY OF )
On the 24 day of June, 1999 before me, a Notary Public in and for said State,
personally appeared Xxxxx XxXxxxxx, known to me to be a President of and AUSTIN
FUNDING CORPORATION a corporation that executed the within instrument, and also
known to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official
seal the day and year in this certificate first above written.
/s/ XXXXX X. XXXX
-----------------------------
XXXXX X. XXXX Notary Public
[SEAL] NOTARY PUBLIC, STATE OF TEXAS
MY COMMISSION EXPIRES My Commission expires:
AUG. 14,2000
43
STATE OF CALIFORNIA )
)SS.
COUNTY OF )
On the 29th day of June, 1999 before me, a Notary Public in and for
said State, personally appeared Xxxxx Xxxxxxx known to me to be Vice President
of Impac Warehouse Lending Group, the corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official
seal the day and year in this certificate first above written.
/s/ XXXXX XX
-----------------------------
Notary Public
My Commission expires: Jan. 8, 2002
XXXXX XX
COMMISSION # 1168008
[SEAL] NOTARY PUBLIC - CALIFORNIA
ORANGE COUNTY
MY COMM. EXPIRES Jan 8, 2002
44
EXHIBIT A
CONTENTS OF MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser.
1 The original note or other evidence of indebtedness (the
"Mortgage Note") of the obligor thereon (each such obligor,
a "Mortgagor"), endorsed to the order of or assigned to
Seller by the holder/payee thereof, without recourse, and
endorsed by Seller, without recourse, in blank.
2 The original mortgage, deed of trust or other instrument
(the "Mortgage") creating a first lien on the underlying
property securing the Mortgage Loan (the "Mortgaged
Property"), naming Seller as the "mortgagee" or
"beneficiary" thereof, and bearing on the face thereof the
address of Seller, or, if the Mortgage does not name Seller
as the mortgagee/beneficiary, the Mortgage, together with an
instrument of assignment assigning the Mortgage,
individually or together with other Mortgages, to Seller and
bearing on the face thereof the address of Seller, and, in
either case, bearing evidence that such instruments have
been recorded in the appropriate jurisdiction where the
Mortgaged Property is located (or, in lieu of the original
of the Mortgage or the assignment thereof, a duplicate or
conformed copy of the Mortgage or the instrument of
assignment, if any, together with a certificate of either
the closing attorney or an officer of the title insurer that
issued the related title insurance policy, or a certificate
of receipt from the recording office, certifying that such
copy or copies represent true and correct copy(ies) of the
original(s) and that such original(s) have been or are
currently submitted to be recorded in the appropriate
governmental recording office of the jurisdiction where the
Mortgaged Property is located).
3 An original assignment of Mortgage, in blank, which
assignment shall be in form and substance acceptable for
recording and, in the event that the Seller acquired the
Mortgage Loan in a merger, the assignment must be by
"[Seller], successor by merger to [name of predecessor]".
4 Any intervening assignment of the Mortgage not included in
(ii) above, including any warehousing assignment.
5 Any assumption, modification, extension or guaranty
agreement.
6 The Lender's title insurance policy, or, if such policy has
not been issued, a written commitment or interim binder
issued by the title insurance company evidencing that the
required title insurance coverage is in effect and
unconditionally guaranteeing the holder of the Mortgage Loan
that the lender's title insurance policy will be issued.
45
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7 Any instrument necessary to complete identification of any
exception set forth in the exception schedule in the title
insurance policy (e.g., map or plat, restrictions,
easements, sewer agreements, home association declarations,
etc.).
8 A survey of the Mortgaged Property.
9 Any hazard insurance policy or flood insurance policy, with
extended coverage of the hazard insurance policy.
10 The Mortgage Loan closing statement (Form HUD-1) and any
other truth-in-lending, real estate settlement procedure
forms or other disclosure statements required by law.
11 The residential loan application, if applicable.
12 Any verification of employment and income.
13 Any verification of acceptable evidence of source and amount
of downpayment.
14 Any credit report on the borrower under the Mortgage Loan.
15 Each residential appraisal report.
16 A photograph of the Mortgaged Property.
17 If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has
been signed by a person on behalf of the Mortgagor, the
power of attorney or other instrument that authorized and
empowered such person to sign with recording information
thereon.
18 Any policy or certificate of primary mortgage guaranty
insurance.
19 Any tax receipts, insurance premiums, ledger sheets, payment
records, insurance claim files and correspondence, current
and historical computerized data files, underwriting
standards used for origination and all other papers and
records developed or originated by the Seller, any servicer
or others, required to document the Mortgage Loan or to
service the Mortgage Loan.
46
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20 With respect to FHA insured Mortgage Loans, the original FHA
Insurance Contract, together with a completed HUD Form 92080
"Mortgagee Record Change" with the Purchaser's name left
blank.
21 With respect to VA guaranteed Mortgage Loans, the original
VA Guaranty Certificate.
47
===============================================================================
IMPAC WAREHOUSE LENDING GROUP
Initial Holder
and
AUSTIN FUNDING CORPORATION
Servicer
SERVICING AGREEMENT
Dated as of JUNE 22,1999
Mortgage Loans
---------------------
===============================================================================
48
TABLE OF CONTENTS
PRELIMINARY STATEMENT
ARTICLE I
Section Title
1.01 Defined Terms.
ARTICLE II
2.01 Record Title and Possession of Mortgage Files.
2.02 Books and Records.
2.03 Transfer of Mortgage Loans.
ARTICLE III
3.01 Representations and Warranties as to the Company.
ARTICLE IV
4.01 Company to Act as Servicer.
4.02 Establishment of Custodial Account; Deposits in Custodial Account.
4.03 Permitted Withdrawals from the Custodial Account.
4.04 Establishment of the Escrow Account; Deposits in Escrow Account.
4.05 Permitted Withdrawals from the Escrow Account.
4.06 Title, Management and Disposition of REO Property.
ARTICLE V
5.01 Distribution.
ARTICLE VI
6.01 Company Shall Provide Information as Reasonably Required.
ARTICLE VII
7.01 Indemnification; Third Party Claims.
7.02 Merger or Consolidation of the Company.
7.03 Limitation on Liability of the Company and Others.
7.04 Company Not to Resign.
-1-
49
Section Title
ARTICLE VIII
8.01 Events of Default.
8.02 Waiver of Defaults.
ARTICLE IX
9.01 Termination.
9.02 Termination Without Cause.
ARTICLE X
10.01 Successor to the Company.
10.02 Amendment.
10.03 Recordation of Agreement.
10.04 Governing Law.
10.05 Notices.
10.06 Severability of Provisions.
10.07 Exhibits.
10.08 General Interpretive Principles.
10.09 Reproduction of Documents.
10.10 Entire Agreement.
EXHIBITS
A Custodial Account Letter Agreement
B Escrow Account Letter Agreement
C REO Account Letter Agreement
D Form of Assignment and Certification
E Mortgage Loan Schedule
F Monthly Trial Balance Format
-2-
50
This is a Servicing Agreement, dated and effective as of JUNE 22, 1999
is executed between IMPAC WAREHOUSE LENDING GROUP, a California corporation, as
the initial holder ("Initial Holder"), and AUSTIN FUNDING CORPORATION as
servicer ("Company").
PRELIMINARY STATEMENTS
From time to time, the Initial Purchaser will be purchasing from the
Seller pursuant to a Master Repurchase Agreement dated as of the Closing Date
between the Seller and the Initial Purchaser (the "Master Repurchase
Agreement") the mortgage loans which are subject to this Agreement, and the
Seller has agreed to make certain representations and warranties with respect
thereto.
In consideration of the premises and the mutual agreements hereinafter
set forth, the Initial Holder and the Company agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Capitalized terms not defined herein shall have the meanings given to
them in the Warranties Agreement. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meaning specified in this Article:
"Agreement": This Servicing Agreement including all exhibits hereto,
amendments hereof and supplements hereto.
"Assignment": An assignment of the Mortgage, notice of transfer or
equivalent instrument, sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the sale or
transfer of the Mortgage Loan, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county,
if permitted by law.
"Actual Principal Balance": With respect to any Mortgage Loan as of
any date of determination, (i) the outstanding principal balance as of the
Cut-off Date after application of principal payments due on or before such date
whether or not received, minus (ii) the aggregate of all amounts previously
distributed to the Holder with respect to the Mortgage Loan representing
payments or recoveries of principal or Monthly Advances in lieu thereof.
"Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a
legal holiday in the State of California, or (iii) a day on which banking
institutions in the state where the initial Holder or any subsequent Holder has
its principal place of business are authorized or obligated by law or
51
executive order to be closed.
"Cash Liquidation": Recovery of all cash proceeds by the Company with
respect to the termination of any defaulted Mortgage Loan other than a Mortgage
Loan which became an REO Property, including all Insurance Proceeds,
Liquidation Proceeds, Condemnation Proceeds and other payments or recoveries
whether made at one time or over a period of time which the Company deems to be
finally recoverable, in connection with the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale or otherwise.
"Closing Date": JUNE 22,1999
"Company": AUSTIN FUNDING CORPORATION or its successor in interest or
any successor under this Agreement appointed as herein provided.
"Condemnation Proceeds": All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"Custodial Account": The separate account or accounts created and
maintained pursuant to Section 4.02.
"Determination Date": The 20th day of the month of the related
Remittance Date or if such 20th day is not a Business Day, the Business Day
immediately following such 20th day.
"Due Date": The day of the month of the related Remittance Date on
which each Monthly Payment is due on a Mortgage Loan, exclusive of any days of
grace.
"Due Period": With respect to any Remittance Date, the period
commencing on the first day of the month preceding the month of such Remittance
Date and ending on the last day of the month preceding the month of such
Remittance Date.
"Eligible Account": An account maintained with the depository
institution approved as such by FNMA and which is insured by the FDIC to the
limits established by such corporation.
"Escrow Account": The separate trust account or accounts created and
maintained pursuant to Section 4.03.
"Escrow Payments": The amounts constituting ground rents, taxes,
assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
"Event of Default": Any one of the conditions or circumstances
enumerated in Section 8.01.
"FDIC": The Federal Deposit Insurance Corporation or any successor
organization.
52
"FHLMC": The Federal Home Loan Mortgage Corporation or any successor
organization.
Fidelity Bond": A fidelity bond to be maintained by the Company
pursuant to Section 4.12.
"First Remittance Date": The 25th day of the month following the date
hereof, or if such day is not a Business Day, the first Business Day immediately
preceding such day, provided that, if such 25th day is not a Business Day by
reason of clause (iii) of the definition of Business Day and the Company has not
received written notice of such fact from the Holder, the First Remittance Date
shall be the immediately following Business Day.
"FNMA": The Federal National Mortgage Association or any successor
organization.
"Holder": The Initial Holder of the Mortgage Loans and any subsequent
holder or holders of the Mortgage Loans.
"Guide": All terms and provisions of Part I, Part II, Part IV, Part V
and Part VI of the FNMA Servicing Guide, June 30, 1990 Version, as amended from
time to time, which relate to MBS pool mortgages serviced under the special
servicing option.
"Initial Holder": Impac Warehouse Lending Group
"Insurance Proceeds": Proceeds of any title policy, hazard policy or
other insurance policy covering a Mortgage Loan, to the extent such proceeds are
not to be applied to the restoration of the related Mortgaged Property or
released to the Mortgagor in accordance with the procedures that the Company
would follow in servicing mortgage loans held for its own account.
"Late Collections": With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, proceeds of
any REO Disposition or otherwise, which represent late payments or collections
of Monthly Payments due but delinquent for a previous Due Period and not
previously recovered.
"Liquidation Proceeds": Amounts, other than Condemnation Proceeds and
Insurance Proceeds, received by the Company in connection with the liquidation
of a defaulted Mortgage Loan through trustee's sale, foreclosure sale or
otherwise, other than amounts received following the acquisition of an REO
Property pursuant to the Guide.
"Loan-to-Value Ratio" or "LTV": As of any date of determination with
respect to any Mortgage Loan, the principal balance of such Mortgage Loan
divided by the appraised value of the related Mortgaged Property, as such
appraised value is derived from the LTV at origination shown on the Mortgage
Loan Schedule.
"Monthly Advance": The aggregate of the Delinquency Advances (as
defined in the Guide) made by the Company on any Remittance Date.
53
"Monthly Payment": The scheduled monthly payment of principal and
interest on a Mortgage Loan which is payable by a Mortgagor under the related
Mortgage Note.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on real property securing the Mortgage Note.
"Mortgage File": The mortgage documents pertaining to a particular
Mortgage Loan which were delivered to the Company by the prior servicer and any
additional documents developed or received by the Company in servicing such
Mortgage Loan which are reasonably necessary to document or service the
Mortgage Loan.
"Mortgage Impairment Insurance Policy": A mortgage impairment or
blanket hazard insurance policy as described by the Guide.
"Mortgage Interest Rate": The annual rate at which interest accrues on
any Mortgage Loan.
"Mortgage Loan": An individual Mortgage Loan, including but not limited
to, all documents included in the Mortgage File, the Monthly Payments, Principal
Prepayments, Cash Liquidations, Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, proceeds from REO Dispositions and any and all rights,
benefits, proceeds and obligations arising therefrom or in connection therewith,
the Mortgage Loan which is sold by the Company to the Initial Holder and which
is the subject of this Agreement. The Mortgage Loans originally subject to this
Agreement are identified on the Mortgage Loan Schedule.
"Mortgage Loan Remittance Rate": With respect to each Mortgage Loan,
the annual rate of interest payable to the Holder which shall equal the Mortgage
Interest Rate less the Servicing Fee Rate.
"Mortgage Loan Schedule": The list of Mortgage Loans subject to this
Agreement and identified on the schedules delivered to the Holder from time to
time pursuant to the Master Repurchase Agreement.
"Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
"Mortgaged Property": The underlying real property securing repayment
of a Mortgage Note.
"Mortgagor": The obligor on a Mortgage Note.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice President and by
the Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Company, and delivered to the Holder as required by this
Agreement.
54
"Opinion of Counsel": A written opinion of counsel, who may be an
employee of the Company, acceptable to Holder.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"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, 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 Period": As to any Remittance Date, the calendar
month preceding the month of distribution.
"Record Date": The close of business of the last Business Day of the
month preceding the month of the related Remittance Date.
"Remittance Date": The 25th day of any month, beginning with the First
Remittance Date, or if such 25th day is not a Business Day, the first Business
Day immediately preceding such day, provided that, if such 25th day is not a
Business Day by reason of clause (iii) of the definition of Business Day and
the Company has not received written notice of such fact from the Holder, the
Remittance Date shall be the immediately following Business Day.
"REO Account": The separate trust account or accounts created and
maintained pursuant to Section 4.06.
"REO Disposition": The final sale by the Company of any REO Property.
"REO Property": A Mortgaged Property acquired by the Company on behalf
of the Holder as described in the Guide.
"Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred by the Company in the performance of its
servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures and (iii) the
management and liquidation of the REO Property pursuant to Section 4.06, all in
accordance with this Agreement, the Guide and any related fee schedules
published by FNMA.
"Servicing Fee": With respect to each Mortgage Loan, the amount of the
annual contractual fee payable to the Company, in its capacity as servicer
which shall be equal to the product of (i) the Servicing Fee Rate, and (ii) the
outstanding principal amount of each Mortgage Loan. The Servicing Fee shall be
payable monthly and shall be computed on the basis of the same principal amount
and for the period respecting which any related interest payment on a Mortgage
Loan is computed. The Servicing Fee shall be payable only at the time of and
with respect to those
55
Mortgage Loans for which payment is in fact made of the entire amount of the
Monthly Payments. The obligation of the Holder to pay the Servicing Fee is
limited to, and payable solely from, the interest portion of such Monthly
Payments collected by the Company, or as otherwise provided under Section 4.03.
"Servicing Fee Rate": (servicing for "A-" thru "C" product @ .375%)
(All Libor Adjustables @ .375%)
(Fixed rate "A" product @ .25%)
"Servicing Officer": Any officer of the Company involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished by the Company to the
Holder upon request, as such list may from time to time be amended.
"Sub-Servicer": A servicer appointed by the Company pursuant to the
Guide.
"Sub-Servicing Agreement": Any agreement entered into by the Company
with a Sub-Servicer pursuant to the Guide.
"Warranties Agreement": The Seller's Warranties Agreement dated as of
the date hereof between the Company and the Initial Holder.
56
ARTICLE II
RECORD TITLE AND POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Record Title and Possession of Mortgage Files.
During such period as the Mortgage Loans are owned by Holder pursuant
to the Repurchase Agreement (the "Purchase Period") record title to the
Mortgage Loans shall be retained by the Holder, and possession of the Mortgage
Files not delivered to the Holder shall be retained by the Company as provided
in this Agreement, in trust and as bailee and agent for the Holder as the owner
thereof, for the sole purpose of servicing the Mortgage Loans; unless otherwise
directed by Buyer. During the Purchase Period, the ownership of each Mortgage
Loan, including the Mortgage Note, the Mortgage, the contents of the related
Mortgage File and all rights, benefits, proceeds and obligations arising
therefrom or in connection therewith, is vested in the Holder. During the
Purchase Period all rights arising out of the Mortgage Loans including, but not
limited to, all funds received on or in connection with the Mortgage Loans and
all records or documents with respect to the Mortgage Loans prepared by or
which come into the possession of the Company shall be received and held by the
Company in trust for the benefit of the Holder as the owners of the Mortgage
Loans. Any portion of the Mortgage Files retained by the Company shall be
segregated from the other books and records of the Company and shall be
appropriately marked to clearly reflect the ownership of the Mortgage Loans by
the Holder. The Company shall release its custody of the contents of the
Mortgage Files only in accordance with written instructions of the Holder,
except when such release is required as incidental to the Company's servicing
of a foreclosure or collection action or a satisfaction of a Mortgage.
Section 2.02 Books and Records.
The Company shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the Mortgage Loans which shall be
clearly marked to reflect the ownership of the Mortgage Loan by the Holder.
Section 2.03 Transfer of Mortgage Loans.
Holder shall have the right, without the consent of Company, to assign
its interest under this Agreement with respect to some or all of the Mortgage
Loans, and designate any person to exercise any rights of Holder hereunder, and
the assignee or designee shall accede to the rights and obligations hereunder
of Holder with respect to such Mortgage Loans. All references to Holder shall
be deemed to include its assignee or designee.
The Company shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Company
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms hereof. For the
purposes of this Agreement, the Company shall be under no obligation to deal
with
57
any person with respect to this Agreement or the Mortgage Loans unless the
books and records show such person as the owner of the Mortgage Loan. The
Holder may, subject to the terms of this Agreement, sell and transfer, in whole
or in part, the Mortgage Loans, provided that no such sale and transfer shall
be binding upon the Company unless such transferee shall agree in writing in
the form of Assignment attached hereto as Exhibit D, to be bound by the terms
of this Agreement and an executed copy of such Assignment shall have been
delivered to the Company. Upon receipt thereof, the Company shall xxxx its
books and records to reflect the ownership of the Mortgage Loan by such
assignee, and the previous Holder shall be released from its obligations
hereunder to the extent such obligations relate to Mortgage Loans sold by the
Holder. This Agreement shall be binding upon and inure to the benefit of the
Holder and Company and their permitted successors, assignees and designees.
58
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01 Representations and Warranties of the Company.
The Seller represents and warrants to the Purchaser that as of the
Closing Date and as of each date thereafter on which the Master Repurchase
Agreement is in effect:
(i) The Company is duly organized, validly existing and in
good standing under the laws of KANSAS and is qualified to transact business in
and is in good standing under the laws of each state where a Mortgaged Property
is located or is otherwise exempt under applicable law from such qualification
or is otherwise not required under applicable law to effect such qualification
and no demand for such qualification has been made upon the Company by any
state having jurisdiction and in any event the Company is or will be in
compliance with the laws of any such state to the extent necessary to insure
the enforceability of each Mortgage Loan and the servicing of the Mortgage
Loans in accordance with the terms of this Agreement;
(ii) The Company has the full power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to enter
into and consummate, all transactions contemplated by this Agreement. The
Company has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Initial Holder
constitutes a legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms;
(iii) 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
Company's certificate of limited partnership and partnership agreement or any
legal restriction or any agreement or instrument to which the Company 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 Company or its
property is subject;
(iv) [Intentionally Omitted]
(v) The Company 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;
(vi) There is no litigation pending or, to the Company's
knowledge, threatened, which if determined adversely to the Company would
adversely affect the execution, delivery or enforceability of this Agreement,
or the ability of the Company to service the Mortgage Loans hereunder in
accordance with the terms hereof or which would have a material adverse effect
on the financial condition of the Company; and
59
(vii) 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 this
Agreement or the consummation of the transactions contemplated by this
Agreement.
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ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with the Guide and all applicable
federal, state and local laws relating to the performance of its duties as
Mortgage Loan servicer hereunder. Notwithstanding any provision to the
contrary in this Agreement, the Company shall not be required to (i) establish
a Custodial Account, an Escrow Account or an REO Account or otherwise segregate
or hold in trust, or provide remittance statements with respect to, any funds
collected in respect of the Mortgage Loans, nor shall the Company be entitled to
receive a Servicing Fee or any other payment hereunder from the Holder, or (ii)
remit any funds to the Holder, until the Company shall have received written
notice from the Holder requesting such services, whereupon the Company shall
promptly, and in any event within five (5) Business Days, commence and maintain
such services, provided, however, that the Company shall provide to the Initial
Holder monthly commencing in the month following the Closing Date, on or about
the ____ day of each month, a Trial Balance in the format of Exhibit F. For
this purpose, the Guide is incorporated by reference in this Agreement, subject
to the following deletions and modifications:
(a) Deletions: the following provisions of the Guide are not
incorporated for purposes of this Agreement:
Part I, Section 206.01;
Part IV, Sections 509 and 513; and
Part VI, Chapter III.
(b) Modifications: The following provisions of the Guide are
incorporated in this Agreement subject to the following modifications:
(i) Part I, Section 202 is modified to provide that
all references to consents, guidelines and policies of FNMA
refer to consent of the Holder.
(ii) Part II, Section 101 is amended to provide that
recoveries on the Mortgage Loans shall be applied by the
Company in accordance with the provisions of the Mortgage
Note and Mortgage or, absent such provisions, as provided in
such Section 101.
(iii) The last paragraph of Part II, Section 101.03
and any other provision of the Guide of like tenor are
amended to provide that the Company shall not be obligated to
make a Monthly Advance to the extent that it reasonably
determines that it would not be recoverable from proceeds of
the related Mortgage Loan, any such determination to be
evidenced by an Officer's Certificate delivered to the
Holder.
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(iv) Part III, Section 103 is modified to provide for
the Holder's acknowledgement that not all Mortgage Loans
provide for Escrow Payments.
(V) Part IV, Section 507 is amended to incorporate
only the first paragraph, and such Section 507 and other
provisions of the Guide inconsistent with Section 4.03 of
this Agreement are modified to provide that the Company shall
be reimbursed for Delinquency Advances, Servicing Advances
and unpaid Servicing Fees from collections and recoveries on
the related Mortgage Loan or REO Property, or, if such
collections and recoveries are insufficient, from the P&I
custodial account generally, with the Company's right to such
reimbursement to be prior to the rights of the Holder, all as
further described in Section 4.03 of this Agreement.
(vi) Provisions of Part V which are inconsistent
with Section 4.06 of this Agreement are superseded by such
Section 4.06.
(vii) Part VI, Section 101 is modified. The term P&I
Custodial Account shall mean the Custodial Account under this
Agreement, and the T&I Custodial Account shall mean the
Escrow Account under this Agreement.
(viii) Provisions of Chapter 2 of Part VI which are
inconsistent with Section 5.01 of this Agreement are
superseded by such Section 5.01.
(c) Whenever the following terms are referred to in the
Guide, they shall have the meaning given to them below.
(i) "servicer" shall mean the Company.
(ii) "Pass Through Rate" shall mean the current
weighted average Mortgage Loan Remittance Rate.
(iii) "we" or "us" shall mean the Holder.
(d) The reference to "Servicing Fee" in Section 205.03 shall
have the meaning given to it in this Agreement.
Section 4.02 Establishment of Custodial Accounts; Deposits in
Custodial Accounts.
The Company shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand Eligible Accounts. The creation of any
Custodial Account shall be evidenced by a letter agreement in the form shown in
Exhibit A hereto. A copy of such letter agreement shall be furnished to the
Holder.
The Company shall deposit in the Custodial Account on a daily basis,
and retain therein the following payments and collections received or made by
it on or subsequent to the Cut-off Date, or
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received by it prior to the Cut-off Date but allocable to a period subsequent
thereto, other than in respect of principal due on or before the Cut-off Date,
and interest accrued prior to the Cut-off Date, on the Mortgage Loans:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage
Loans adjusted to the Mortgage Loan Remittance Rate;
(iii) all proceeds from a Cash Liquidation;
(iv) all Insurance Proceeds, other than proceeds to be held
in the Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Company's normal
servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged
Property which are not released to the Mortgagor in accordance with the
Company's normal servicing procedures, the loan documents or applicable law;
(vi) any Monthly Advances;
(vii) any amounts required to be deposited by the Company
pursuant to the Guide in connection with the deductible clause in any blanket
hazard insurance policy, such deposit being made from the Company's own funds,
without reimbursement therefor;
(viii) [intentionally omitted]
(ix) any amounts required to be deposited by the Company in
connection with any REO Property pursuant to the Guide; and
(x) any other amounts required to be deposited in the
Custodial Account pursuant to the Guide.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees need not be deposited by the Company in the Custodial Account. Any
interest paid on funds deposited in the Custodial Account by the depository
institution shall accrue to the benefit of the Company and the Company shall be
entitled to retain and withdraw such interest from the Custodial Account
pursuant to Section 4.03(iv).
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Section 4.03 Permitted Withdrawals From the Custodial Account.
The Company may, from time to time, withdraw from the Custodial
Account for the following purposes:
(i) to make payments to the Holder in the amounts and in the
manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the Company's
right to reimburse itself pursuant to this subclause (ii) being limited to
amounts received on the related Mortgage Loan which represent late collections
(net of the related Servicing Fees) respecting which any such advance was made
it being understood that, in the case of such reimbursement, the Company's
right thereto shall be prior to the rights of Holder except that, where the
Company has made a monthly advance when it was required to repurchase a
Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing
Advances, Monthly Advances and any unpaid Servicing Fee, the Company's right to
reimburse itself pursuant to this subclause (iii) with respect to any Mortgage
Loan being limited to related proceeds from Cash Liquidation, Liquidation
Proceeds, Condemnation Proceeds and other Insurance Proceeds;
(iv) to pay to itself as servicing compensation (a) any
interest earned on funds in the Custodial Account (all such interest to be
withdrawn monthly not later than each Remittance Date), and (b) the Servicing
Fee from that portion of any payment or recovery as to interest to a particular
Mortgage Loan;
(v) to reimburse itself for unreimbursed Servicing Advances
and Monthly Advances to the extent that the Company has determined that such
advances will not be recoverable from proceeds or payments on the related
Mortgage Loan, any such reimbursement to be evidenced by an Officer's
Certificate delivered to each Holder detailing the basis of such determination;
(vi) to reimburse itself to the extent provided in Section
7.01; and
(vii) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.04 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Company shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
Eligible Accounts. The creation of any Escrow Account shall be evidenced by a
letter agreement in the form of Exhibit B hereto. A copy of such letter
agreement shall be furnished to the Holder.
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The Company shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein, (i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items
as required under the terms of this Agreement, and (ii) all Insurance Proceeds
which are to be applied to the restoration or repair of any Mortgaged Property.
The Company shall make withdrawals therefrom only to effect such payments as
are required under this Agreement, and for such other purposes as shall be as
set forth in or, in accordance with, the Guide. The Company shall be entitled
to retain any interest paid on funds deposited in the Escrow Account by the
depository institution other than interest on escrowed funds required by law to
be paid to the Mortgagor and, to the extent required by law, the Company shall
pay interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes.
Section 4.05 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Company (i) to
effect timely payments of ground rents, taxes, assessments, water rates,
mortgage insurance premiums, and comparable items (ii) to reimburse Company for
any Servicing Advance made by the Company with respect to a related Mortgage
Loan but only from amounts received on the related Mortgage Loan which
represent late payments or collections of Escrow Payments thereunder, (iii) to
refund to the Mortgagor any funds as may be determined to be overages, (iv) for
transfer to the Custodial Account in accordance with the terms of this
Agreement, (v) for application to restoration or repair of the Mortgaged
Property, (vi) to pay to the Company, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account, or (vii) to clear and terminate the Escrow Account on the termination
of this Agreement. As part of its servicing duties, the Company shall pay to
the Mortgagors interest on funds in Escrow Account, to the extent required by
law, and to the extent that interest earned on funds in the Escrow Account is
insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
Section 4.06 Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Company for the benefit of the Holder (the
"Owner").
The Company shall either itself or through an agent selected by the
Company, manage, conserve, protect and operate each foreclosed and REO Property
on behalf of the Holder, 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 REO Property managed
for FNMA. The Company shall cause each REO Property to be inspected promptly
upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least annually thereafter. The Company shall make or cause the
Company to be made a written report of each such inspection. Such reports shall
be retained in the Mortgage File and copies thereof shall be forwarded by the
Company to the Holder. The Company shall attempt to sell the same (and may
temporarily rent the same) on such terms and conditions as directed by the
Holder.
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The Company shall segregate and hold all funds collected and received
in connection with the operation of the REO Properties separate and apart from
its own funds or general assets and shall establish and maintain an REO Account
in the form of a non-interest bearing demand Eligible Account. The creation of
any REO Account shall be evidenced by a letter agreement in the form shown in
Exhibit C hereto, in the case of an account held by a depository. An original
of such letter agreement shall be furnished to the Holder upon request.
The Company shall deposit or cause to be deposited, on a daily basis
in the REO 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, including the cost of
maintaining any hazard insurance pursuant to the Guide hereof and, with the
consent of the Holder, the fees of any managing agent acting on behalf of the
Company. In the event that the Holder withholds its consent pursuant to the
preceding sentence, the related REO Property shall be managed by the Holder
itself. The Company shall not be entitled to retain interest paid or other
earnings, if any, on funds deposited in such REO Account. On or before each
Determination Date, the Company shall withdraw from each REO Account and
deposit into the Custodial Account the net income from the REO Property on
deposit in the REO Account.
The Company shall furnish to the Holder on each Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operation statement shall be accompanied
by such other information as the Holder shall reasonably request.
The Company shall dispose of the REO Property as soon as possible and
shall sell such REO Property in any event within one year after taking title to
such REO Property, unless the Company determines, and gives an appropriate
notice to the Holder and the Holder agrees in writing, that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than one year is permitted under this Agreement and is necessary to sell any
REO Property, the Company shall report monthly to the Holder as to the progress
being made in selling such REO Property.
Each REO Disposition shall be carried out by the Company at such price
and upon such terms and conditions as approved by the Holder. If as of the date
title to any REO Property was acquired by the Company there were outstanding
unreimbursed Servicing Advances with respect to the REO Property, the Company,
upon an REO Disposition of such REO Property, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances from proceeds
received in connection with such REO Disposition. The proceeds from the REO
Disposition, net of any payment to the Company as provided above, shall be
deposited in the REO Account and shall be remitted to the Holder within five
(5) business days of property settlement.
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ARTICLE V
PAYMENTS TO THE HOLDER
Section 5.01 Distributions.
On each Remittance Date, the Company shall make distributions in
compliance with Paragraph 10 of Annex I to the Master Repurchase Agreement.
All distributions made to the Holder on each Remittance Date will be
made to the Holder of record on the preceding Record Date and shall be made by
wire transfer of immediately available funds to the account of the Holder at a
bank or other entity having appropriate facilities.
With respect to any remittance received by the Holder after the
Remittance Date, the Company shall pay to the Holder interest on any such late
payment at an annual rate equal to the rate of interest as is publicly
announced from time to time at its principal office by Chemical Bank, New York,
New York, as its prime lending rate, adjusted as of the date of each change,
plus three percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be paid by the Company to the
Holder on the date such late payment is made and shall cover the period
commencing with the day following such Remittance Date and ending with the
Business Day on which such payment is made, both inclusive. Such interest shall
be remitted along with such late payment. The payment by the Company of any
such interest shall not be deemed an extension of time for payment or a waiver
of any Event of Default by the Holder.
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ARTICLE VI
REPORTS TO BE PREPARED BY COMPANY
Section 6.01 Company Shall Provide Information as Reasonably Required.
The Company shall furnish to each Holder during the term of this
Agreement, such periodic, special or other reports, information or
documentation, whether or not provided for herein, as shall be necessary,
reasonable or appropriate in respect to Holder, or otherwise in respect to the
purposes of this Agreement, including any reports, information or documentation
reasonably required to comply with any regulations regarding any supervisory
agents or examiners of the Holder all such reports or information to be as
provided by and in accordance with such applicable instructions and directions
as the Holder may reasonably request and which do not entail material
additional expense to the Company. The Company agrees to execute and deliver
all such instruments and take all such action as the Holder, from time to time,
may reasonably request in order to effectuate the purpose and to carry out the
terms of this Agreement.
Section 6.02 Delinquency Report.
The Company is responsible for providing a monthly delinquency report
to the Holder.
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ARTICLE VII
THE COMPANY
Section 7.01 Indemnification; Third Party Claims.
The Company agrees to indemnify the Holder and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Holder may sustain in any way related to either a breach by the Company of the
representations and warranties contained in Section 3.01 or the failure of the
Company to perform its duties and service the Mortgage Loans in accordance with
the terms of this Agreement. The Company shall immediately notify the Holder if
a claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the consent of the Holder) 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 Holder in respect of such claim. The Company shall follow any
written instructions received from the Holder in connection with such claim.
The Company shall provide the Holder with prompt written notice of any
material correspondence received or developed by the Company in respect of such
claim, and any other related developments of which the Company becomes aware,
and consult with the Holder regarding the conduct of any defense. The Company
shall provide to the Holder statements detailing each incurral of $1,000 which
the Company believes to be reimbursable to it pursuant to this Section 7.01
promptly following such incurral but in no event more frequently than monthly
(an "Accounting"). Unless the claim in any way relates to a breach of the
Company's representations or warranties in this Agreement or the failure of the
Company to service and administer the Mortgage Loans in compliance with the
terms of this Agreement, the Company shall be entitled to reimbursement from
the Holder of all amounts incurred by it pursuant to this Section 7.01 within
thirty (30) days following receipt by the Holder of the related Accounting.
Section 7.02 Merger or Consolidation of the Company.
The Company will keep in full effect its existence, rights and
franchises as a limited partnership under the laws of the state under which it
is organized, and will preserve its qualification to do business as a foreign
entity 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 Company may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person shall be an institution approved to service
mortgage loans for FNMA.
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The Holder shall be notified in writing of any such changes.
Section 7.03 Limitation on Liability of the Company and Others.
Neither the Company nor any of the officers, employees or agents of the
Company shall be under any liability to the Holder 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 Company or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in compliance with this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Company and any officer, employee or agent of the Company 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 Company shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement; provided, however, that the Company may, with the consent of the
Holder, undertake any such action which it may deem necessary or desirable in
respect to this Agreement and the rights and duties of the parties hereto. In
such event, the legal expenses and costs of such action taken with the written
approval of the Holder and any liability resulting therefrom shall be expenses,
costs and liabilities for which the Holder will be liable, the Company shall be
entitled to be reimbursed therefor from the Holder upon written demand.
Section 7.04 Company Not to Resign.
The Company shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Company and the Holder, which consent shall not be unreasonably withheld or
upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Company. Any
such determination permitting the resignation of the Company shall be evidenced
by an Opinion of Counsel to such effect delivered to the Holder which Opinion
of Counsel shall be in form and substance acceptable to the Holder. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
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ARTICLE VIII
DEFAULT
Section 8.01 Events of Default.
In case one or more of the following Events of Default by the Company
shall occur, that is to say:
(i) any failure by the Company to remit to the Holder any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of three days after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Company by the Holder; or
(ii) failure on the part of the Company duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Company 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 date on which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Company by the Holder; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, 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 Company and such decree or
order shall have remained in force undischarged or unstayed for a period of
sixty days; or
(iv) the Company shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Company or of or relating to all or substantially all of its property; or
(v) the Company shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of
any applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Company shall, for any reason, become incapacitated
to perform its duties and obligations under this Agreement by operation of law
or otherwise; or
(vii) an Event of Default under the Master Repurchase
Agreement shall have occurred;
(viii) [intentionally omitted]
71
then, and in each and every such case, the Holder, by notice in
writing to the Company may, in addition to whatever rights the Holder may have
at law or equity to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Company under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. On or
after the receipt by the Company of such written notice, all authority and
power of the Company under this Agreement and any Sub-Servicing Agreement,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the successor appointed pursuant to Section 10.01. Upon written
request from the Holder, the Company shall prepare, execute and deliver, any
and all documents and other instruments, place in such successor's possession
all Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Company's sole expense. The Company
agrees to cooperate with the Holder and such successor in effecting the
termination of the Company's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Company to the
Custodial Account, REO Account or Escrow Account or thereafter received with
respect to the Mortgage Loans.
Section 8.02 Waiver of Defaults.
The Holder may waive any default by the Company in the performance of
its obligations hereunder and its consequences. Upon any such waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
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ARTICLE IX
TERMINATION
Section 9.01 Termination.
In addition to the termination rights arising from the occurrence of
an Event of Default, the respective obligations and responsibilities of the
Company shall terminate upon: (i) the later of the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan or
the disposition of all REO Property and the remittance of all funds due
hereunder; or (ii) by mutual consent of the Company and the Holder in writing.
Section 9.02 Termination Without Cause.
Except as provided in this Section 9.02, the Holder may, at its or
their sole option, terminate any rights the Company may have hereunder, without
cause, upon at least 60 days' prior written notice, which notice shall be
accompanied by payment to the Company, as liquidated damages, of 1.00% of the
then Assumed Principal Balance of the Mortgage Loans. Any such notice of
termination shall be in writing and delivered to the Company as provided in
Section 10.05 of this Agreement.
73
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 1O.01 Successor to the Company.
Prior to termination of Company's responsibilities and duties under
this Agreement pursuant to Sections 7.04, 8.01, 9.01 or 9.02, the Holder shall
(i) succeed to and assume all of the Company's responsibilities, rights, duties
and obligations under this Agreement, or (ii) appoint a successor which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Company under this Agreement prior to the termination of
Company's responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Holder may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Company's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned Sections, the Company shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of Company pursuant to the aforementioned Sections shall not become effective
until a successor shall be appointed pursuant to this Section and shall in no
event relieve the Company of the representations and warranties made pursuant
to Section 3.01.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Company and to the Holder an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Company, with like effect as if originally named as a party to this Agreement.
Any termination or resignation of the Company or this Agreement pursuant to
Section 7.04, 8.01, 9.01, or 9.02 shall not affect any claims that the Holder
may have against the Company arising prior to any such termination or
resignation.
The Company shall timely deliver to the successor the funds in the
Custodial Account, REO Account and the Escrow Account and the Mortgage Files
and related documents and statements held by it hereunder and the Company
shall account for all funds. The Company shall execute and deliver such
instruments and do such other things all as may reasonably be required to more
fully and definitely vest and confirm in the successor all such rights, powers,
duties, responsibilities, obligations and liabilities of the Company,
including, without limitation, execution and delivery of transfer of servicing
notices in accordance with the Real Estate Settlement Procedures Act and any
other state or federal law. The successor shall make arrangements as it may
deem appropriate to reimburse the Company for amounts the Company actually
expended pursuant to this Agreement which the successor is entitled to retain
hereunder and which would otherwise have been recovered by the Company pursuant
to this Agreement but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Holder shall
notify by mail the
74
Company of such appointment.
Section 10.02 Amendment.
This Agreement may be amended from time to time by the Company and the
Holder by written agreement signed by the Company and the Holder.
Section 10.03 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any of all the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Company at the Company's expense on direction of Holder accompanied by an
opinion of counsel to the effect that such recordation materially and
beneficially affects the interest of the Holder or is necessary for the
administration or servicing of the Mortgage Loans.
Section 10.04 Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, except to the extent preempted by Federal
law.
Section 10.05 Notices.
Any notices or other communications permitted or required hereunder
shall be in writing and shall be deemed conclusively to have been given if
personally delivered at or mailed by registered mail, postage prepaid, and
return receipt requested or transmitted by telex, telegraph or telecopier and
confirmed by a similar mailed writing, if (i) in the case of the Company AUSTIN
FUNDING CORPORATION Attention: XXXXX XXXXXXXX or such other address as may
hereafter be furnished to the Holder in writing by the Company and (ii) in the
case of the Holder, Impac Warehouse Lending Group, 0000 Xxxx Xxxxxx, Xxxxxxx
Xxxxx, XX 00000, Attention: Xxxxx Xxxxxxx, or such other address as may be
furnished to the Company in writing by the Holder.
Section 10.06 Severability Provisions.
If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, the
invalidity of any such covenant, agreement, provision or term of this Agreement
shall in no way affect the validity or enforceability of the other provisions
of this Agreement, provided, however, that if the invalidity of any covenant,
agreement or provision 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 as nearly as possible the
same as the economic effect of this Agreement.
75
Section 10.07 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 10.08 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well as the
singular, and the use of any gender herein shall be deemed to include the other
gender;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(iii) references herein to "Articles", "Sections",
"Subsections", "Paragraphs", and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections, Paragraphs and
other subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to
a Section is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to Paragraphs and
other subdivisions;
(v) the words "herein", "hereof", "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
provision; and
(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration.
Section 10.09 Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, 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.
76
Section 10.10 Entire Agreement.
This Agreement is the entire agreement between the parties hereto.
Without limiting the generality of the preceding sentence, each Holder
acknowledges that no affiliate of the Company expressly or impliedly has made
any representation, warranty or promise of performance with respect to the
Company and, if made, such representation, warranty or promise shall not be
relied upon unless made in writing by a duly authorized officer.
IN WITNESS WHEREOF, the Company and the Initial Holder have caused
their names to be signed hereto by their respective officers thereunto duly
authorized as of the day and year first above written.
IMPAC WAREHOUSE LENDING GROUP
By: /s/ XXXXX XXXXXXX
-----------------------------------
Name: Xxxxx Xxxxxxx
---------------------------------
Title: Vice President
--------------------------------
AUSTIN FUNDING CORPORATION
By: /s/ XXXXX XXXXXXXX
-----------------------------------
Name: Xxxxx XxXxxxxx
---------------------------------
Title: President
--------------------------------
77
STATE OF______________ )
)SS.
COUNTY OF_____________ )
On the 24 day of June, 1999 before me, a Notary Public in and for
said State, personally appeared Xxxxx XxXxxxxx, known to me to be President of
AUSTIN FUNDING CORPORATION the corporation that executed the within instrument
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official
seal the day and year in this certificate first above written.
/s/ XXXXX X. XXXX
===================================== -------------------------------
XXXXX X. XXXX Notary Public
[SEAL] Notary Public, State of Texas
My Commission Expires
XXX. 00, 0000 Xx Commission expires:
=====================================
78
STATE OF CALIFORNIA )
)SS.
COUNTY OF ORANGE )
On the 29th day of June, 1999 before me, a Notary Public in and for
said State, personally appeared Xxxxx Xxxxxxx, known to me to be a Vice
President of Impac Warehouse Lending Group, the corporation that executed the
within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my official
seal the day and year in this certificate first above written.
/s/ XXXXX XX
---------------------------
Notary Public
My Commission expires: Jan. 8, 2002
=========================================
XXXXX XX
COMMISSION # 1168008
[SEAL] NOTARY PUBLIC - CALIFORNIA
ORANGE COUNTY
MY COMM. EXPIRES JAN 8, 2002
=========================================
79
EXHIBIT A
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To:
------------------------------------
------------------------------------
------------------------------------
(the "Depository")
As "Company" under the Servicing Agreement, dated as of ______________,
1999, Conventional Mortgage Loans, _______________ (the "Agreement"), we hereby
authorize and request you to establish an account, as a Custodial Account
pursuant to Section 4.02 of the Agreement, to be designated as "[Company], in
trust for the Holder -- Conventional Mortgage Loans -- Servicing Agreement dated
______________, 1997 with Impac Warehouse Lending Group". All deposits in the
account shall be subject to withdrawal therefrom by order signed by the Company.
This letter is submitted to you in duplicate. Please execute and return one
original to us.
-------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
The undersigned, as "Depository", hereby certifies that the above
described account has been established under Account Number __________________,
at the office of the depository indicated above, and agrees to honor withdrawals
on such account as provided above. The amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation to the
limit established by such corporation or the National Credit Union
Administration.
-------------------------------------
(name of Depository)
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
80
EXHIBIT B
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
(date)
To:
------------------------------------
------------------------------------
------------------------------------
(the "Depository")
As "Company" under the Servicing Agreement, dated as of ______________,
1999, Conventional Mortgage Loans, ________________ (the "Agreement") we hereby
authorize and request you to establish an account, as an Escrow Account pursuant
to Section 4.04 of the Agreement, to be designated as "_____________, in trust
for the Holder -- Conventional Mortgage Loans -- _____________ as tenants in
common". All deposits in the account shall be subject to withdrawal therefrom by
order signed by the Company. This letter is submitted to you in duplicate.
Please execute and return one original to us.
-------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
The undersigned, as "Depository", hereby certifies that the above
described account has been established under Account Number ______________, at
the office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above. The amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation to the limit
established by such corporation.
-------------------------------------
(name of Depository)
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
81
EXHIBIT C
FORM OF REO ACCOUNT LETTER AGREEMENT
(date)
To:
------------------------------------
------------------------------------
------------------------------------
(the "Depository")
As "Company" under the Servicing Agreement, dated as of _____________,
1999, Conventional Mortgage Loans, ________________ (the "Agreement") we hereby
authorize and request you to establish an account, as an REO Account pursuant to
Section 4.06 of the Agreement, to be designated as "_______________________, in
trust for the Holder - Conventional Mortgage Loans - ______________________".
All deposits in the account shall be subject to withdrawal therefrom by order
signed by the Company. This letter is submitted to you in duplicate. Please
execute and return one original to us.
[COMPANY]
-------------------------------------
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
The undersigned, as "Depository", hereby certifies that the above
described account has been established under Account Number _______________, at
the office of the depository indicated above, and agrees to honor withdrawals on
such account as provided above. The amount deposited at any time in the account
will be insured by the Federal Deposit Insurance Corporation to the limit
established by such corporation.
-------------------------------------
(name of Depository)
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
82
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
ASSIGNMENT AND ASSUMPTION, dated ______________, 1999, between
______________________________________, a ____________ corporation ("Assignor"),
and _____________________________________________________, a ___________________
corporation ("Assignee"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and other
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 and assigns to Assignee all of
the right, title and interest of Assignor, as Holder, in, to and under that
certain Servicing Agreement, Conventional Mortgage Loans, ___________________
(the "Servicing Agreement"), dated ________________, 1996, by and between
___________________________________ and
__________________________________________________________ (the "Company").
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 Company with
respect to the and Servicing Agreement; and
c. The Assignor has not agreed to any amendment or other
modification of the Servicing Agreement unless disclosed to Assignee, including
without limitation the transfer of the servicing obligations under the Servicing
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 Servicing Agreement.
3. The Assignee warrants and represents to, and covenants with, the
Assignor that:
a. The Assignee agrees to be bound, as Holder, by all of the terms,
covenants and conditions of the Servicing Agreement;
b. The Assignee has been furnished with all information regarding
the Servicing Agreement that it has requested from Assignor; and
83
-2-
c. The Assignee's address for purposes of all notices and
correspondence related to the Servicing Agreement is:
--------------------
--------------------
--------------------
The Assignee's wire transfer instructions for purposes of all remittances
and payments related to the Servicing Agreement are:
--------------------
--------------------
--------------------
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption 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.
---------------- --------------------
84
EXHIBIT E
MONTHLY TRIAL BALANCE FORMAT
85
CUSTODY AGREEMENT
This CUSTODY AGREEMENT dated as of JUNE 22, 1999 by and among IMPAC
WAREHOUSE LENDING GROUP (IWLG), a California corporation, having an address at
0000 Xxxx Xxxxxx, Xxxxxxx Xxxxx, XX 00000 ("Buyer"), Bankers Trust Company,
having an address at 0 Xxxx Xxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000,
("Custodian"), AUSTIN FUNDING CORPORATION having an address at 000 XXXXXXXX
XXX., XXXXX #000, XXXXXX, XX, 00000 ("Seller").
W I T N E S S E T H:
WHEREAS, the Seller and the Buyer may, from time to time, enter into
transactions (each, a "Transaction") in which the Buyer agrees to purchase from
the Seller certain one- to four-family residential mortgage loans (the "Mortgage
Loans"), with a simultaneous agreement by the Seller to repurchase such Mortgage
Loans on demand as provided in a Master Repurchase Agreement, dated as of JUNE
22, 1999 between the Seller and the Buyer (the "Master Repurchase Agreement")
and a Confirmation between the Seller and the Buyer (the "Confirmation"; as to
each Transaction, the related Confirmation and the Master Repurchase Agreement
are referred to collectively as the "Repurchase Agreement");
WHEREAS, pursuant to the terms of a Servicing Agreement, dated as of
JUNE 22, 1999 between the Buyer and the Seller (the "Servicing Agreement"), the
Seller will service the Mortgage Loans for the Buyer; and
WHEREAS, the Buyer has directed the Seller, and the Seller has agreed,
to deliver certain documents with respect to the Mortgage Loans subject to each
Transaction to the Custodian, and the Custodian has agreed to take and maintain
possession of such documents in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual undertakings herein
expressed, the parties hereto agree as follows:
1. All capitalized terms not otherwise defined herein have the
respective meanings set forth in the Repurchase Agreement.
2. On or before the effective date for each Transaction (the "Purchase
Date"), the Seller shall deliver, or cause to be delivered, to the Custodian a
schedule of Mortgage Loans subject to such Transaction ("Mortgage Loan
Schedule"), and the Seller shall deliver, or shall cause to be delivered, and
shall release to the Custodian the following documents pertaining to each of the
Mortgage Loans identified in the Mortgage Loan Schedule, which documents the
Custodian shall hold for the benefit of the Buyer, its successors or assigns, as
the owner thereof:
(i) the original note or other evidence of indebtedness (the
"Mortgage Note") of the obligor thereon (each such obligor, a
"Mortgagor"), endorsed to the order of or assigned to Seller
by the holder/payee thereof, without recourse, and endorsed by
Seller, without recourse, in blank;
86
(ii) the original mortgage, deed of trust or other instrument (the
"Mortgage") creating a first lien on the underlying property
securing the Mortgage Loan (the "Mortgaged Property"), naming
Seller as the "mortgagee" or "beneficiary" thereof, and
bearing on the face thereof the address of Seller, or, if the
Mortgage does not name Seller as the mortgagee/beneficiary,
the Mortgage, together with an instrument of assignment
assigning the Mortgage, individually or together with other
Mortgages, to Seller and bearing on the face thereof the
address of Seller, and, in either case, bearing evidence that
such instruments have been recorded in the appropriate
jurisdiction where the Mortgaged Property is located (or, in
lieu of the original of the Mortgage or the assignment
thereof, a duplicate or conformed copy of the Mortgage or the
instrument of assignment, if any, together with a certificate
of either the closing attorney or an officer of the title
insurer that issued the related title insurance policy, or a
certificate of receipt from the recording office, certifying
that such copy or copies represent true and correct copy(ies)
of the original(s) and that such original(s) have been or are
currently submitted to be recorded in the appropriate
governmental recording office of the jurisdiction where the
Mortgaged Property is located);
(iii) an original assignment of Mortgage, in blank, which assignment
shall be in form and substance acceptable for recording and,
in the event that the Seller acquired the Mortgage Loan in a
merger, the assignment must be by "[Seller], successor by
merger to [name of predecessor]";
(iv) any intervening assignment of the Mortgage not included in
(ii) above, including any warehousing assignment;
(v) any assumption, modification, extension or guaranty agreement;
(vi) Lender's title insurance policy, or, if such policy has not
been issued, a written commitment or interim binder issued by
the title insurance company evidencing that the required title
insurance coverage is in effect and unconditionally
guaranteeing the holder of the Mortgage Loan that the lender's
title insurance policy will be issued;
(vii) any instrument necessary to complete identification of any
exception set forth in the exception schedule in the title
insurance policy (e.g., map or plat, restrictions, easements,
sewer agreements, home association declarations, etc.); and
87
(viii) if the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan has
been signed by a person on behalf of the Mortgagor, the
original power of attorney or other instrument that authorized
and empowered such person to sign bearing evidence that such
instrument has been recorded, if so required, in the
appropriate jurisdiction where the Mortgaged Property is
located (or, in lieu thereof, a duplicate or conformed copy of
such instrument, together with a certificate of receipt from
the recording office, certifying that such copy represents a
true and complete copy of the original and that such original
has been or is currently submitted to be recorded in the
appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located).
From time to time, the Seller shall forward to the Custodian additional original
documents evidencing an assumption or modification of a Mortgage Loan approved
by the Seller. All documents held by the Custodian as to each Mortgage Loan
pursuant to this Section 2 are referred to herein as the "Custodian's Mortgage
File". On the respective Purchase Date for each Transaction, the Seller shall
deliver to the Buyer a Certificate of the Seller, in the form attached hereto as
Exhibit One, with respect to all of the Mortgage Loans and related documents
described in this Section 2 sold to the Buyer on such Purchase Date in
connection with such Transaction.
3. The Buyer hereby appoints the Custodian, in its independent
corporate capacity, as the custodian of the Buyer and any successor to or
assignee of the Buyer, and the Custodian hereby accepts and agrees to act as
custodian for the Buyer and any successor to or assignee of the Buyer in
accordance with the terms and conditions of this Agreement. With respect to each
Custodian's Mortgage File delivered to the Custodian, the Custodian is solely
and exclusively the custodian for the Buyer or its successor or assignee for all
purposes (including, but not limited to, the perfection of the security interest
of the Buyer in such Mortgage Loans to the extent that the Seller shall be
deemed to have pledged the Mortgage Loans to Buyer pursuant to Section 6 of the
Repurchase Agreement). The Custodian shall hold in its possession at 0 Xxxx
Xxxxx 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, all Custodian's Mortgage Files
received by it from the Seller from time to time for the sole and exclusive use
and benefit of the Buyer and the Buyer's successors and assignees as provided
herein and, except as otherwise expressly provided herein, shall make
disposition thereof only in accordance with the written instructions of the
Buyer. The Custodian shall segregate and maintain continuous custody of all
documents constituting the Custodian's Mortgage Files received by it in secure
and fireproof facilities, all in accordance with customary standards for such
custody.
4. When the Custodian has received from the Seller possession of each
Custodian's Mortgage File for the related Transaction, the Custodian shall
verify that:
(a) all documents required to be delivered to it pursuant to this
Agreement are in the Custodian's possession;
(b) such documents have been reviewed by the Custodian and appear
regular on their face and relate to the Mortgage Loans and neither
the Mortgage Note, the Mortgage nor the Assignment of Mortgage
contains evidence of any claims, liens, security interests,
encumbrances or restrictions on transfer;
88
(c) based only on the Custodian's examination of the foregoing
documents:
(i) the information set forth on the Mortgage Loan Schedule
with respect to each Mortgage Loan accurately reflects the
information contained in the documents contained in each
Custodian's Mortgage File as to, (A) the name of the
respective Mortgagor, (B) the address of the respective
Mortgaged Property, (C) the original principal amount of
the related Mortgage Note;
(ii) the Mortgage Note and the Mortgage each bears an original
signature or signatures purporting to be the signature or
signatures of the person or persons named as the maker and
mortgagor or grantor or, in the case of copies of the
Mortgage permitted under paragraph 2(a)(ii), that such
copies bear a reproduction of such signature or signatures;
(iii) the principal amount of the indebtedness secured by the
Mortgage is identical to the original principal amount of
the Mortgage Note;
(iv) if the Note does not name "[Seller]" as the holder or
payee, the Mortgage Note bears original endorsements that
complete the chain of ownership from the original holder or
payee to "[Seller]"; and
(v) if the Mortgage does not name "[Seller]" as the mortgagee
or beneficiary, the original of the Assignment of Mortgage
and any intervening assignments of mortgage bear the
original signature purporting to be the signature of the
named mortgagee or beneficiary (and any other necessary
party including subsequent assignors) or in the case of
copies permitted under paragraph 2(a)(ii), that such copies
bear a reproduction of such signature or signatures and
that the Assignment of Mortgage and any intervening
assignments of mortgage complete the chain of title from
the originator to "[Seller]";
(d) each Mortgage Note has been endorsed as noted in paragraph 2(a)(i)
herein and each Assignment of Mortgage has been completed as noted
in paragraph 2(a)(iii) herein; and
(e) the Lender's title insurance policy, or written commitment to
issue or interim binder for such policy, is for not less than the
original principal amount of the Mortgage Note and insures that
the Mortgage constitutes a first lien, senior in priority to all
other mortgages, deeds of trust, security interests and other
contractual liens.
89
In making such verification, the Custodian may rely conclusively on the Mortgage
Loan Schedule and the documents constituting the Custodian's Mortgage File, and
the Custodian shall have no obligation to independently verify the correctness
of such Mortgage Loan Schedule or any document. Upon completing such
verification, the Custodian shall advise the Buyer of its receipt of all such
Custodian's Mortgage Files and shall forward to the Buyer on the Purchase Date a
trust receipt in the form annexed hereto as Exhibit Two (the "Trust Receipt")
with respect to the Mortgage Loans (other than any Mortgage Loan paid in full or
any Mortgage Loan specifically identified on the Schedule of Exceptions attached
to the Trust Receipt as not covered by such Trust Receipt) listed on the
Mortgage Loan Schedule for such Transaction. If the Custodian determines from
such verification that any discrepancy or deficiency exists with respect to a
Custodian's Mortgage File, the Custodian shall note such discrepancy on the
Schedule of Exceptions attached to the Trust Receipt, and, upon the request of
the Seller, the Custodian shall deliver a copy of the Schedule of Exceptions to
the Seller. During the life of the Mortgage Loans, in the event the Custodian
discovers any defect with respect to the Custodian's Mortgage File, the
Custodian shall give written specification of such defect to the Seller and the
Buyer. Except as specifically provided above, the Custodian shall be under no
duty to review, inspect or examine such documents to determine that any of them
are enforceable or appropriate for their prescribed purpose.
5. Each Trust Receipt, upon initial issuance or reissuance upon
transfer, shall be dated the date of issuance thereof and shall evidence the
receipt and possession of the Custodian's Mortgage File by the Custodian on
behalf of the holder of the Trust Receipt and the holder's right to possess the
Custodian's Mortgage File with respect to which that Trust Receipt is issued.
Prior to due surrender of a Trust Receipt pursuant to Paragraph 6, the Custodian
shall treat the individual person or entity in whose name any Trust Receipt is
registered as the individual person or entity entitled to possession of the
Custodian's Mortgage File evidenced by such Trust Receipt for all purposes
whatsoever, subject to the terms of this Agreement, and the Custodian shall not
be affected by notice of any facts to the contrary. No Trust Receipt shall be
valid for any purpose unless substantially in the form set forth in Exhibit Two
to this Agreement and executed by manual signature of an authorized officer of
the Custodian, and such signature upon any Trust Receipt shall be conclusive
evidence, and the only evidence, that such Trust Receipt has been duly delivered
under this Agreement. Trust Receipts bearing the manual signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Custodian shall bind the Custodian, notwithstanding
that such individuals or any of them have ceased to be so authorized prior to
the delivery of those Trust C Receipts. Each Trust Receipt shall have attached
thereto a schedule, in the format of the Mortgage Loan Schedule, identifying
the Mortgage Loans for which the Trust Receipt is issued. The Custodian shall
keep a register in which the Custodian shall provide for the registration of
transfers of Trust Receipts as herein provided and in which it shall record the
name and address of the person to whom each Trust Receipt is issued. In the
event that the Trust Receipt is lost, stolen, mutilated or destroyed, the
Custodian shall issue a new Trust Receipt to the registered holder of such lost,
stolen, mutilated or destroyed Trust Receipt upon receiving a reasonably
satisfactory commitment from such holder to indemnify the Custodian and hold the
Custodian harmless in respect of the issuance of such new Trust Receipt.
90
6. Upon receipt of written directions from the Buyer at any time, and
upon the prior tender by the Buyer of the applicable Trust Receipt, the
Custodian shall deliver all or any portion of the Custodian's Mortgage Files
held by it to the Buyer, or to such other party as the Buyer may direct, and to
the place indicated in any such written direction from the Buyer and shall
deliver to the Buyer a new Trust Receipt with respect to the Custodian's
Mortgage Files retained by the Custodian. Upon receipt by the Custodian of
written notification from the Buyer that the Buyer has sold all or a portion of
the Mortgage Loans, which notification shall state the name and address of the
purchaser and the date of sale and shall be accompanied by the original Trust
Receipt or Trust Receipts for such Mortgage Loans delivered to the Buyer, the
Custodian shall change its records to reflect that such purchaser is the owner
of such Mortgage Loans and the related Custodian's Mortgage Files and shall
immediately, upon the direction of the Buyer, either deliver the applicable
Custodian's Mortgage Files to such purchaser or issue a Trust Receipt in the
name of such purchaser. The Custodian shall then deliver to the Buyer a new
Trust Receipt reflecting all Mortgage Loans evidenced by the surrendered Trust
Receipts with respect to which the Custodian still holds the related Custodian's
Mortgage Files on behalf of the Buyer. The Buyer shall deliver to the Seller a
copy of any written requests made pursuant to this Paragraph 6. Every Trust
Receipt presented or surrendered for transfer shall be duly endorsed by the
holder thereof, or be accompanied by a written instrument of transfer, duly
executed by the holder thereof and such holder's prospective transferee. No
service charge against the presenter of a Trust Receipt shall be made for any
registration or transfer of any Trust Receipt, but the Custodian may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer of any Trust Receipt, which shall be
paid by the transferee. Each Trust Receipt surrendered for registration of
transfer shall be canceled by the Custodian. Any purchaser of a Mortgage Loan
shall succeed to all the rights and obligations of the Buyer under this
Agreement with respect to such Mortgage Loan and the related Custodian's
Mortgage File.
7. In the event that any specific Mortgage Loan document is required by
the Seller, in its capacity as the servicer pursuant to the Servicing Agreement,
either (a) because such Mortgage Loan has been paid in full and is to be
released by the Seller, in its capacity as the servicer pursuant to the
Servicing Agreement, to the maker of the respective Mortgage Note, or (b) to
facilitate enforcement and collection procedures with respect to any Mortgage
Note, the Seller, in its capacity as the servicer pursuant to the Servicing
Agreement, shall send to the Custodian a certificate in the form of Exhibit
Three. The Custodian shall promptly send a copy of such certificate to the
Buyer, and in the event that Buyer consents to the release of such documents,
the Buyer will return such copy to the Custodian with such consent indicated
thereon. Notwithstanding anything to the contrary herein, the Custodian shall in
no event release to the Buyer any documents contained in a Custodian's Mortgage
File without the written authorization of the Buyer. Any Trust Receipt issued
while any documents are outstanding with the Seller, in its capacity as the
servicer pursuant to the Servicing Agreement, shall reflect that the Custodian
holds such documents as custodian for the Buyer pursuant to this Agreement, but
the Schedule of Exceptions shall specify that the Custodian has released such
documents to the Seller, in its capacity as the servicer pursuant to the
Servicing Agreement, pursuant to this paragraph. All documents so released to
the Seller, in its capacity as the servicer pursuant to the Servicing Agreement,
shall be held by it in trust for the benefit of the Buyer in accordance with
Paragraph 9(b) of the Repurchase Agreement. In the case of documents released
pursuant to clause (b) above, the Seller shall return to the Custodian the
Custodian's Mortgage File, or such other documents that have been released to
the Seller, when the Seller's need therefor in connection with such enforcement
or collection procedures no longer exists, unless the Mortgage Loan shall be
liquidated, in which case, upon receipt
91
of a certification to this effect from the Seller to the Custodian in the form
annexed hereto as Exhibit Three, the Seller's receipt shall be released by the
Custodian to the Seller, and the Custodian shall thereupon reflect any such
liquidation on the list of Mortgage Loans maintained by it pursuant to Paragraph
13 of this Agreement.
8. It is understood that Custodian will charge such fees for its
services under this Agreement as are set forth in a separate agreement between
the Custodian and the Seller, the payment of which, together with the
Custodian's expenses in connection herewith, shall be solely the obligation of
the Seller.
9. The Buyer, with or without cause, may (i) require the Custodian to
complete the endorsements on the Mortgage Notes, and to complete the Assignments
of Mortgages and/or (ii) upon thirty (30) days written notice, remove and
discharge the Custodian, or any successor Custodian there after appointed, from
the performance of its duties under this Agreement by written notice from the
Buyer to the Custodian or the successor Custodian, with a copy of such notice to
the Seller. Having given notice of such removal, the Buyer shall promptly
appoint by written instrument a successor Custodian to act on behalf of the
Buyer. One original counterpart of such instrument shall be delivered to the
Buyer, one copy shall be delivered to the Seller and one copy shall be delivered
to the successor Custodian. In the event of any such removal, the Custodian
shall promptly transfer to the successor Custodian, as directed by the Buyer,
all of the Custodian's Mortgage Files being administered under this Agreement
and shall complete the Assignments of Mortgage and endorse the Mortgage Notes to
the successor Custodian, if, and in the form, directed by the Buyer. In the
event of any such appointment, the Seller shall not be responsible for any fees
of the successor Custodian in excess of the fees formerly paid to the Custodian.
10. The Custodian may terminate its obligations under this Agreement
upon at least sixty (60) days written notice to the Seller and the Buyer. In the
event of such termination, the Seller shall appoint a successor Custodian,
subject to approval by the Buyer. If the Seller is unable to appoint a successor
Custodian within a reasonable period of time, the Buyer shall appoint a
successor Custodian. The payment of such successor Custodian's fees and expenses
shall be the sole responsibility of the Buyer. Upon such appointment, the
Custodian shall promptly transfer to the successor Custodian, or as directed,
all Custodian's Mortgage Files being administered under this Agreement and shall
complete the Assignments of Mortgage and endorse the Mortgage Notes as, and if,
requested by the Buyer. The Custodian's obligations hereunder shall not in any
event be terminated until the Custodian's Mortgage Files have been delivered to
the successor Custodian or to the Buyer.
11. Upon reasonable prior written notice to the Custodian, the Buyer
and its agents, accountants, attorneys and auditors will be permitted during
normal business hours to examine the Custodian's Mortgage Files.
12. The Custodian shall, at its own expense, maintain at all times
during the existence of this Agreement and keep in full force and effect (a)
fidelity insurance, (b) theft of LID documents insurance, (c) forgery insurance
and (d) insurance covering the risk of errors and omissions. All such insurance
shall be in amounts, with standard coverage and subject to deductibles, as are
customary for insurance typically maintained by banks that act as custodian in
similar transactions. A certificate of the respective insurer as to each such
policy shall be furnished to the Buyer, upon request, containing the insured's
statement or endorsement that such insurance shall not terminate prior to
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receipt by the Buyer, by registered mail, of ten (10) days notice thereof.
13. Upon the request of the Buyer at any time, the Custodian shall
provide to the Buyer a list of all the Mortgage Loans for which Custodian holds
a Custodian's Mortgage File pursuant to this Agreement and a list of documents
missing from each Custodian's Mortgage File. Such list may be in the form of a
copy of the Mortgage Loan Schedules with manual deletions to specifically denote
any Mortgage Loans paid off, liquidated or repurchased since the date of this
Agreement.
14. Upon the request of the Buyer and at the cost and expense of the
Buyer, the Custodian shall provide the Buyer with copies of the Mortgage Notes,
Mortgages, Assignments of Mortgage and other documents contained in the
Custodian's Mortgage File relating to one or more of the Mortgage Loans.
15. By execution of this Agreement, the Custodian warrants that it does
not currently hold, and during the existence of this Agreement shall not hold,
any adverse interest, by way of security or otherwise, in any Mortgage Loan, and
hereby waives and releases any such interest that it may have in any Mortgage
Loan as of the date hereof. Notwithstanding any other provisions of this
Agreement and without limiting the generality of the foregoing, the Custodian
shall not at any time exercise or seek to enforce any claim, right or remedy,
including any statutory or common law rights of set-off, if any, that the
Custodian may otherwise have against all or any part of a Custodian's Mortgage
File, Mortgage Loan or proceeds of either.
15A. The Custodian represents and warrants to, and covenants that:
(a) The Custodian is (i) a New York corporation duly organized,
validly existing and in good standing under the laws of New York and (ii)
duly qualified and in good standing and in possession of all requisite
authority, power, licenses, permits and franchises in order to execute,
deliver and comply with its obligations under the terms of this
Agreement;
(b) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary corporate action and the execution
and delivery of this Agreement by the Custodian in the manner
contemplated herein and the performance of and compliance with the terms
hereof by it will not (i) violate, contravene or create a default under
any applicable laws, licenses or permits to the best of its knowledge, or
(ii) violate, contravene or create a default under any charter document
or bylaw of the Custodian or, to the best of the Custodian's knowledge,
any contract, agreement or instrument to which the Custodian or by which
any of its property may be bound and will not result in the creation of
any lien, security interest or other charge or encumbrance upon or with
respect to any of its property;
(c) The execution and delivery of this Agreement by the Custodian
and the performance of and compliance with its obligations and covenants
hereunder do not require the consent or approval of any governmental
authority, or, if such consent or approval is required, it has been
obtained; and
93
(d) This Agreement, and each Trust Receipt issued hereunder, when
executed and delivered by the Custodian will constitute valid, legal and
binding obligations of the Custodian, enforceable against the Custodian
in accordance with their respective terms, except (i) as the enforcement
thereof may be limited by applicable debtor relief laws and (ii) that
certain equitable remedies may not be available regardless of whether
enforcement is sought in equity or law.
16. All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered to the other
party at the address shown on the first page hereof, or such other address as
may hereafter be furnished to the other party by like notice.
17. Each authorized representative (an "Authorized Representative") of
the Buyer is authorized to give and receive notices, requests and instructions
and to deliver certificates and documents in connection with this Agreement on
behalf of the Buyer and the specimen signature for each such Authorized
Representative of the Buyer initially authorized hereunder is set forth on
Exhibit Four hereof. From time to time, the Buyer shall deliver to the Custodian
a revised Exhibit Four, reflecting changes in the information previously given,
but the Custodian shall be entitled to rely conclusively on the last Exhibit
Four until receipt of a superseding Exhibit Four. Each Authorized Representative
of the Seller is authorized to give and receive notices, requests and
instructions and to deliver certificates and documents in connection with this
Agreement on behalf of the Seller and the specimen signature for each such
Authorized Representative of the Seller initially authorized hereunder is set
forth on Exhibit Five hereof. From time to time, the Seller shall deliver to the
Custodian a revised Exhibit Five, reflecting changes in the information
previously given, but the Custodian shall be entitled to rely conclusively on
the last Exhibit Five until receipt of a superseding Exhibit Five.
18. The Seller shall indemnify and hold the Custodian and its
directors, officers, agents and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against it or them hereunder and under the
Repurchase Agreement.
19. The duties and obligations of the Custodian shall be determined
solely by the express provisions of this Agreement. The Custodian shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement or as set forth in a written amendment
to this Agreement executed by the parties hereto or their successors or assigns.
The Custodian shall not assign, transfer, pledge or grant a security interest in
any of its rights, benefits or privileges hereunder, nor shall the Custodian
delegate or appoint any other person or entity to perform or carry out any of
its duties, responsibilities or obligations under this Agreement. Any act or
instrument purporting to effect any such assignment, transfer, pledge, grant,
delegation or appointment shall be void. No representations, warranties,
covenants (other than those expressly made by the Custodian in this Agreement)
or obligations of the Custodian shall be implied with respect to this Agreement
or the Custodian's services hereunder. Without limiting the generality of
the foregoing, the Custodian:
(a) shall have no duties or obligations other than those
specifically set forth herein
94
or as may subsequently be agreed in writing by the parties hereto and shall use
the same degree of care and skill as is reasonably expected of financial
institutions acting in comparable capacities;
(b) will be regarded as making no representations and having no
responsibilities (except as expressly set forth herein) as to the validity,
sufficiency, value, genuineness, ownership or transferability of any
certificates or Mortgage Loans represented thereby, and will not be required to
and will not make any representations as to the validity, value or genuineness
of Mortgage Loans;
(c) shall not be obligated to take any legal action hereunder that
might in its judgment involve any expense or liability unless it has been
furnished with reasonable indemnity;
(d) may rely on and shall be protected in acting in good faith
upon any certificate, instrument, opinion, notice, letter, telegram or other
document, or any security, delivered to it and in good faith believed by it to
be genuine and to have been signed by the proper party or parties;
(e) may rely on and shall be protected in acting in good faith
upon the written instructions of the Seller and such employees and
representatives of the Seller as the Seller may hereinafter designate in
writing;
(f) may consult counsel satisfactory to it (including counsel for
the Seller and the Buyer) and the opinion of such counsel shall be full and
complete authorization and protection in respect of any action taken, suffered,
or omitted by it hereunder in good faith and in furtherance of its duties
hereunder, in accordance with the opinion of such counsel;
(g) shall not be liable for any error of judgment, or for any act
done or step taken or omitted by it, in good faith, or for any mistake of fact
or law, or for anything that it may do or refrain from doing in connection
therewith, except in the case of negligent performance or omission; and
(h) may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or through agents or attorneys, provided,
however, that the execution of such trusts or powers by any such agents or
attorneys shall not diminish, or relieve the Custodian for, responsibility
therefor to the same degree as if the Custodian itself had executed such trusts
or powers.
20. For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed to be an original, and together
shall constitute and be one and the same instrument.
21. The Buyer shall have the right, without the consent of the
Custodian or the Seller, to assign, in whole or in part, its interests under
this Agreement in all of the Mortgage Loans subject to any Transaction, and
designate any person to exercise any rights of the Buyer, hereunder, and the
assignee or designee shall accede to the rights and obligations hereunder of the
Buyer with respect to such Mortgage Loans. All references to the Buyer shall be
deemed to include its assignee or designee. In connection with any such
assignment, the Custodian may require that arrangements reasonably satisfactory
to it be made for the exchange of previously executed and outstanding Trust
Receipts for a Trust Receipt representing such assignment.
95
22. This Agreement shall terminate with respect to any Transaction upon
the earlier of (a) the repurchase of all of the Mortgage Loans subject to such
Transaction by the Seller pursuant to the Repurchase Agreement, which repurchase
shall be evidenced by a notice from the Buyer to the Custodian stating that
beneficial ownership of the Mortgage Loans has been transferred to the Seller,
or (b) the Buyer's election to obtain possession of the Mortgage Loans subject
to a Transaction following an Event of Default (as defined in the Repurchase
Agreement) by the Seller, which election shall be evidenced by a notice from the
Buyer to the Custodian stating that the Seller is in default under the
Repurchase Agreement, a copy of which notice shall be simultaneously delivered
to the Seller, and delivery of the Custodian's Mortgage Files pursuant to the
Buyer's instructions.
23. Neither the failure nor any delay on the part of any party hereto
to exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or any other right, remedy, power or privilege, nor shall any waiver of any
right, remedy, power or privilege with respect to any occurrence be construed as
a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed
by the party or parties purportedly granting such waiver.
24. The provisions of this Agreement are independent of and severable
from each other, and no provision shall be affected or rendered invalid or
unenforceable by virtue of the fact that for any reason any other provision or
provisions may be invalid or unenforceable in whole or in part.
25. This Agreement constitutes the entire agreement and understanding
of the parties with respect to the matters and transactions contemplated by this
Agreement and supersedes any prior agreement and understandings with respect to
those matters and transactions.
26. This 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.
27. This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that 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. 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.
28. The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
29. For purposes of this Agreement, except as otherwise expressly
provided or
96
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) a reference to a Subsection without further reference to a
Section is a reference to such Subsection as contained in the
same Section in which the reference appears, and this rule
shall also apply to Paragraphs and other subdivisions;
(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.
97
IN WITNESS WHEREOF, Seller, Buyer and Custodian have caused their names
to be signed hereto by their respective officers thereunto duly authorized, all
as of the date first written above.
AUSTIN FUNDING CORPORATION
as Seller
By: /s/ XXXXX XXXXXXXX
--------------------------------------
Name: Xxxxx XxXxxxxx
------------------------------------
Title: President
-----------------------------------
IMPAC WAREHOUSE LENDING GROUP
as Buyer
By: /s/ XXXXX XXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
BANKERS TRUST COMPANY,
as Custodian
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
98
EXHIBIT ONE
CERTIFICATE OF SELLER
I, ____________________________, hereby certify that I am the duly
elected _______________________________ of AUSTIN FUNDING CORPORATION (the
"Seller"). All terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms in the Custody Agreement, dated as of JUNE 22,
1999 among the Seller, Impac Warehouse Lending Group (the "Buyer"), Bankers
Trust Company, as custodian.
The undersigned hereby represents, warrants and covenants on behalf of
the Seller that, pursuant to the sale of the mortgage loans set forth on Annex 1
hereto (the "Mortgage Loans") by the Seller to Buyer pursuant to a Master
Repurchase Agreement, dated as of JUNE 22, 1999 between the Seller and the
Buyer, the Seller sells, transfers, assigns, sets over and otherwise conveys to
Buyer all of its right (including the power to convey title thereto), title and
interest in and to each document held by or on behalf of the Seller with respect
to each Mortgage Loan. Any such documents that have not been delivered to the
Custodian shall be held by the Seller, in trust for the benefit of the Buyer and
shall be delivered to the Buyer or its assignee or designee upon demand.
IN WITNESS WHEREOF, I have hereunto signed my name, this ____ day of
________ 1999.
By: /s/ XXXXX XXXXXXXX
----------------------------------
Name: Xxxxx XxXxxxxx
Title: President
99
ANNEX 1
MORTGAGE LOAN SCHEDULE
100
ANNEX 2
(1) the original note or other evidence of indebtedness (the "Mortgage
Note") of the obligor thereon (each such obligor, a "Mortgagor").
(2) the original mortgage, deed of trust or other instrument (the
"Mortgage") creating a first lien on the underlying property securing
the Mortgage Loan (the "Mortgaged Property").
(3) the original assignment of the Mortgage.
(4) any intervening assignment of the Mortgage, including any warehousing
assignment.
(5) any assumption, modification, extension or guaranty agreement.
(6) any lender's title insurance policy and any written commitment or
interim binder issued by the title insurance company evidencing that
the required title insurance coverage is in effect and unconditionally
guaranteeing the holder of the Mortgage Loan that the lender's title
insurance policy will be issued.
(7) any instrument necessary to complete identification of any exception
set forth in the exception schedule in the title insurance policy
(e.g., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.).
(8) any survey of the Mortgaged Property.
(9) any hazard insurance policy or flood insurance policy, with extended
coverage of the hazard insurance policy.
(10) any Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending, real estate settlement procedure forms or other
disclosure statements required by law.
(11) any residential loan application.
(12) any verification of employment and income.
(13) any verification of acceptable evidence of source and amount of
downpayment.
(14) any credit report on the borrower under the Mortgage Loan.
(15) any residential appraisal report.
(16) any photograph of the Mortgaged Property.
101
(17) any power of attorney or other instrument that authorized and empowered
any person other than the Mortgagor to sign the Mortgage Note or
Mortgage or any other material document or instrument relating to the
Mortgage Loan not signed by the Mortgagor.
(18) any tax receipts, insurance premiums, ledger sheets, payment records,
insurance claim files and correspondence, current and historical
computerized data files, underwriting standards used for origination
and all other papers and records developed or originated by the Seller,
any servicer or others, required to document the Mortgage Loan or to
service the Mortgage Loan.
102
EXHIBIT TWO
TRUST RECEIPT
TRANSACTION NUMBER________
________________,199__
To: [BUYER]
Reference is made to the Custody Agreement among Impac Warehouse
Lending Group (the "Buyer"), __________________________ (the "Seller") and
______________________ _______________________, as custodian (the "Custodian")
dated as of ___________ 1, 1999 (the "Custody Agreement"), pursuant to which the
Seller has delivered to the Custodian, with respect to each Mortgage Loan set
forth on Schedule A hereto (the "Mortgage Loan Schedule"), the documents set
forth in Section 2 of the Custody Agreement.
With respect to each Mortgage Loan listed on the Mortgage Loan Schedule
and except as otherwise noted on the Schedule of Exceptions set forth on
Schedule B hereto, the Custodian confirms that (1) the Custodian has received
all of the documents required to be delivered to the Custodian pursuant to
Section 2 of the Custody Agreement, (2) the Custodian has reviewed each
Custodian's Mortgage File in accordance with Section 4 of the Custody Agreement,
and the documents contained in each Custodian's Mortgage File conform to the
requirements set forth in Section 4 of the Custody Agreement, and (3) the
Custodian has physical possession of the documents in each Custodian's Mortgage
File and will continue to hold each Custodian's Mortgage File as bailee of and
agent for, and for the sole and exclusive use and benefit of, the addressee of
this Trust Receipt, until such addressee directs the Custodian to the contrary
in accordance with the Custody Agreement.
All terms used herein and not otherwise defined herein shall have the
respective meaning ascribed to such term in the Custody Agreement.
[CUSTODIAN]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
103
SCHEDULE A
MORTGAGE LOAN SCHEDULE
104
SCHEDULE B
SCHEDULE OF EXCEPTIONS
105
EXHIBIT THREE
REQUEST FOR RELEASE OF DOCUMENTS
To: [CUSTODIAN]
Re: Custody Agreement, dated as of ___________________ 1,
1999, among Impac Warehouse Lending Group ("Buyer"),
__________________________ ("Seller"), and
___________________ as custodian ("Custodian")
In connection with the administration of the Mortgage Loans held by you
as Custodian for the Buyer pursuant to the above-captioned Custody Agreement, we
request the release, and hereby acknowledge receipt, of the (Custodian's
Mortgage File/[specify documents]) for the Mortgage Loan described below, for
the reason indicated.
Mortgage Loan Number:
Reason for Requesting Documents (check one)
1 Mortgage Loan Paid in Full
--- (Seller, in its capacity as servicer, hereby
certifies that all amounts received in connection
therewith will be held in trust for the Buyer as
provided in the Master Repurchase Agreement, dated as
of _____________ 1, 199__, between the Seller and the
Buyer (the "Repurchase Agreement").
2. Mortgage Loan Liquidated by _________________________
--- (Seller, in its capacity as servicer, hereby
certifies that all proceeds of foreclosure, insurance
or other liquidation have been finally received and
will be held in trust for the Buyer as provided in
the Repurchase Agreement.)
3. Mortgage Loan in Foreclosure.
---
4. Other (explain)
--- ----------------------------
----------------------------
106
If box 1 or 2 above is checked, and if all or part of the Custodian's
Mortgage File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your possession
relating to the above specified Mortgage Loan.
If box 3 or 4 above is checked, upon our return of all of the above
documents to you as Custodian, please acknowledge your receipt by signing in the
space indicated below, and returning this form.
----------------------------------------
as Servicer
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
Release of documents consented to:
[BUYER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Documents returned
to Custodian:
[CUSTODIAN]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
107
EXHIBIT FOUR
AUTHORIZED OFFICERS OF THE BUYER
Name Specimen Signature
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
108
EXHIBIT FIVE
AUTHORIZED OFFICERS OF THE SELLER
Name Specimen Signature
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
