RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
as Purchaser,
and
RESIDENTIAL FUNDING CORPORATION
as Seller
HOME LOAN PURCHASE AGREEMENT
Dated as of June 26, 1998
TABLE OF CONTENTS
Page
ARTICLE IDEFINITIONS
Section 1.1. Definitions..........................................1
ARTICLE IISALE OF HOME LOANS AND RELATED PROVISIONS
Section 2.1. Sale of Home Loans...................................2
Section 2.2. Payment of Purchase Price............................4
ARTICLE IIIREPRESENTATIONS AND WARRANTIES;REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties................4
ARTICLE IVSELLER'S COVENANTS
Section 4.1. Covenants of the Seller.............................11
ARTICLE VSERVICING
Section 5.1. Servicing...........................................11
ARTICLE VIINDEMNIFICATION BY THE SELLERWITH RESPECT TO THE HOME
LOANS
Section 6.1. Indemnification With Respect to the Home Loans......12
Section 6.2. Limitation on Liability of the Seller...............12
ARTICLE VIITERMINATION
Section 7.1. Termination.........................................12
ARTICLE VIIIMISCELLANEOUS PROVISIONS
Section 8.1. Amendment...........................................12
Section 8.2. GOVERNING LAW.......................................13
Section 8.3. Notices.............................................13
Section 8.4. Severability of Provisions..........................13
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Page
Section 8.5. Relationship of Parties.............................13
Section 8.6. Counterparts........................................13
Section 8.7. Further Agreements..................................14
Section 8.8. Intention of the Parties............................14
Section 8.9. Successors and Assigns; Assignment of This Agreement14
Section 8.10. Survival............................................14
Exhibits
Exhibit 1 Home Loan Schedule
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This HOME LOAN PURCHASE AGREEMENT (this "Agreement" or "Home Loan
Purchase Agreement"), dated as of June 26, 1998, is made between Residential
Funding Corporation (the "Seller") and Residential Funding Mortgage Securities
II, Inc. (the
"Purchaser").
W I T N E S S E T H :
WHEREAS, the Seller owns Home Loans and the Related Documents for
the Home Loans indicated on the Home Loan Schedule attached as Exhibit 1 hereto
(collectively, the "Home Loans"), including rights to (a) any property acquired
by foreclosure or deed in lieu of foreclosure or otherwise, and (b) the proceeds
of any insurance policies covering the Home Loans;
WHEREAS, the parties hereto desire that the Seller sell the Home
Loans to the Purchaser pursuant to the terms of this Agreement together with the
Related Documents on the Closing Date;
WHEREAS, pursuant to the Grantor Trust Agreement, the Depositor will
transfer the Home Loans and all of its rights and remedies under this Agreement
to the Grantor Trustee in trust for the benefit of the Holder of the Grantor
Trust Certificate, together with the Related Documents on the Closing Date, in
exchange for the Grantor Trust Certificate;
WHEREAS, the Depositor will sell the Grantor Trust Certificate to the
Issuer on the Closing Date;
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue and transfer to or at the direction of the Depositor, the Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue and
transfer to or at the direction of the Depositor, the Notes; and
WHEREAS, pursuant to the terms of the Servicing Agreement, the Master
Servicer will service the Home Loans directly or through one or more
Subservicers.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. For all purposes of this Home Loan Purchase
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires, capitalized terms not otherwise defined herein shall have
the meanings assigned to such
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terms in the Definitions contained in Appendix A to the Indenture dated June 26,
1998 (the "Indenture"), between Home Loan Trust 1998-HI2, as issuer, and The
Chase Manhattan Bank, as indenture trustee, which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
ARTICLE II
SALE OF HOME LOANS AND RELATED PROVISIONS
Section 2.1. Sale of Home Loans.
(a) The Seller, by the execution and delivery of this Agreement,
does hereby sell, assign, set over, and otherwise convey to the Purchaser,
without recourse, all of its right, title and interest in, to and under the
following, and wherever located: (i) the Home Loans, all interest accruing
thereon and all collections in respect thereof received on or after the Cut-off
Date (other than the Excluded Interest Portion); (ii) property which secured a
Home Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iii) the interest of the Seller in any insurance policies in
respect of the Home Loans; and (iv) all proceeds of the foregoing. Such
conveyance shall be deemed to be made: with respect to the Cut-off Date Loan
Balances, as of the Closing Date, subject to the receipt by the Seller of
consideration therefor as provided herein under clause (b) of Section 2.2.
(b) In connection with such conveyance, the Seller further agrees,
at its own expense, on or prior to the Closing Date to indicate in its books and
records that the Home Loans have been sold to the Purchaser pursuant to this
Agreement and to deliver to the Purchaser true and complete lists of all of the
Home Loans specifying for each Home Loan (i) its account number and (ii) its
Cut-off Date Loan Balance. Such lists, which form part of the Home Loan
Schedule, shall be marked as Exhibit 1 to this Agreement and are hereby
incorporated into and made a part of this Agreement.
(c) In connection with such conveyance by the Seller, the Seller
shall on behalf of the Purchaser deliver to, and deposit with the Custodian, on
or before the Closing Date, the following documents or instruments with respect
to each Home Loan:
(i) the original Mortgage Note endorsed without recourse to the
Grantor Trustee and showing an unbroken chain of endorsement from the
originator thereof to the Person endorsing it or, with respect to any Home
Loan as to which the original Mortgage Note has been permanently lost or
destroyed and has not been replaced, a Lost Note Affidavit;
(ii) the original Mortgage with evidence of recording thereon,
or, if the original Mortgage has not yet been returned from the public
recording office, a copy of
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the original Mortgage certified by the public recording office in which
such original Mortgage has been recorded;
(iii) assignments (which may be included in one or more blanket
assignments if permitted by applicable law) of the Mortgage in recordable
form to "The Chase Manhattan Bank as trustee" c/o the Seller at an address
specified by the Seller;
(iv) originals of any intervening assignments of the Mortgage,
with evidence of recording thereon, or, if the original of any such
intervening assignment has not yet been returned from the public recording
office, a copy of such original intervening assignment certified by the
public recording office in which such original intervening assignment has
been recorded; and
(v) a true and correct copy of each assumption, modification,
consolidation or substitution agreement, if any, relating to the Home
Loan.
Within the time period for the review of each Loan File set forth in
Section 2.3 of the Custodial Agreement, if a material defect in any Loan File is
discovered which may materially and adversely affect the value of the related
Home Loan, or the interests of the Grantor Trustee or the Grantor Trust
Certificateholder in such Home Loan, including the Seller's failure to deliver
any document required to be delivered to the Custodian on behalf of the Grantor
Trustee (provided that a Loan File will not be deemed to contain a defect for an
unrecorded assignment under clause (iii) above if the Seller has submitted such
assignment for recording pursuant to the terms of the following paragraph), the
Seller shall cure such defect, repurchase the related Home Loan at the
Repurchase Price or substitute an Eligible Substitute Loan for the related Home
Loan upon the same terms and conditions set forth in Section 3.1 hereof for
breaches of representations and warranties as to the Home Loans.
Within 60 days after the receipt by the Master Servicer of the
recording information, the Seller at its own expense shall complete and submit
for recording in the appropriate public office for real property records each of
the assignments referred to in clause (iii) above. While such assignment to be
recorded is being recorded, the Custodian shall retain a photocopy of such
assignment. If any assignment is lost or returned unrecorded to the Custodian
because of any defect therein, the Seller is required to prepare a substitute
assignment or cure such defect, as the case may be, and the Seller shall cause
such assignment to be recorded in accordance with this paragraph.
In the event that the Seller delivers to the Custodian on behalf of
the Grantor Trustee any Mortgage Note or assignment in blank, the Seller shall,
or shall cause the Custodian to, complete the endorsement of the Mortgage Note
and the assignment within 45 days after the Closing Date.
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In instances where an original Mortgage or any original intervening
assignment of Mortgage was not, in accordance with clause (ii) or (iv) above,
delivered by the Seller to the respective Custodian prior to or concurrently
with the execution and delivery of this Agreement, the Seller will deliver or
cause to be delivered the originals of such documents to such Custodian promptly
upon receipt thereof.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the property, conveyed to it pursuant to this Section 2.1.
(d) The parties hereto intend that the transactions set forth herein
constitute a sale by the Seller to the Purchaser of all the Seller's right,
title and interest in, to and under the Home Loans and other property as and to
the extent described above. In the event the transactions set forth herein are
deemed not to be a sale, the Seller hereby grants to the Purchaser a security
interest in all of the Seller's right, title and interest in, to and under the
Home Loans and such other property, to secure all of the Seller's obligations
hereunder, and this Agreement shall constitute a security agreement under
applicable law. The Seller agrees to take or cause to be taken such actions and
to execute such documents, including without limitation the filing of all
necessary UCC-1 financing statements filed in the State of Minnesota (which
shall have been submitted for filing as of the Closing Date), any continuation
statements with respect thereto and any amendments thereto required to reflect a
change in the name or corporate structure of the Seller or the filing of any
additional UCC-1 financing statements due to the change in the principal office
of the Seller, as are necessary to perfect and protect the Purchaser's interests
in each Home Loan and the proceeds thereof.
Section 2.2. Payment of Purchase Price.
(a) The "Purchase Price" for the Home Loans shall be an amount equal
to $406,267,520.99 in immediately available funds plus the Class A Common
Shares.
(b) In consideration of the sale of the Home Loans from the Seller
to the Purchaser on the Closing Date, the Purchaser shall pay to the Seller on
the Closing Date by wire transfer of immediately available funds to a bank
account designated by the Seller, the amount specified above in clause (a);
provided, that such payment may be on a net funding basis if agreed by the
Seller and the Purchaser.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties. The Seller represents
and warrants to the Purchaser, as of the Closing Date (or if otherwise specified
below, as of the date so specified):
(a) As to the Seller:
(i) The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
corporate power to own its assets and to transact the business in which it
is currently engaged. The Seller is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which
the character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure to so
qualify would have a material adverse effect on the business, properties,
assets or condition (financial or other) of the Seller;
(ii) The Seller has the power and authority to make, execute,
deliver and perform its obligations under this Agreement and all of the
transactions contemplated under this Agreement, and has taken all
necessary corporate action to authorize the execution, delivery and
performance of this Agreement. When executed and delivered, this Agreement
will constitute the legal, valid and binding obligation of the Seller
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the availability of
equitable remedies;
(iii) The Seller is not required to obtain the consent of any
other Person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity
or enforceability of this Agreement, except for such consents, licenses,
approvals or authorizations, or registrations or declarations, as shall
have been obtained or filed, as the case may be;
(iv) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby by the Seller will not
violate any provision of any existing law or regulation or any order or
decree of any court applicable to the Seller or any provision of the
Certificate of Incorporation or Bylaws of the Seller, or constitute a
material breach of any mortgage, indenture, contract or other agreement to
which the Seller is a party or by which the Seller may be bound; and
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(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its
properties or with respect to this Agreement or the Securities or B-2
Notes which in the opinion of the Seller has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by
this Agreement.
(vi) This Agreement constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect affecting the enforcement of creditors' rights
in general and except as such enforceability may be limited by general
principles of equity (whether considered in a proceeding at law or in
equity);
(vii) This Agreement constitutes a valid transfer and assignment
to the Purchaser of all right, title and interest of the Seller in, to and
under to the Home Loans, all monies due or to become due with respect
thereto, and all proceeds of such Cut-off Date Loan Balances with respect
to the Home Loans and such funds as are from time to time deposited in the
Custodial Account (excluding any investment earnings thereon) as assets of
the Grantor Trust and all other property specified in the definition of
"Grantor Trust" as being part of the corpus of the Grantor Trust conveyed
to the Purchaser by the Seller; and
(viii) The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand or any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Seller or its properties or
might have consequences that would materially adversely affect its
performance hereunder.
(b) As to the Home Loans:
(i) The information set forth in the Home Loan Schedule for such
Home Loans is true and correct in all material respects as of the date or
dates respecting which such information is furnished;
(ii) [Reserved];
(iii) The related Mortgage Note and the Mortgage have not been
assigned or pledged, the Seller has good and marketable title thereto and
the Seller is the sole owner and holder of the Home Loan free and clear of
any and all liens, claims, encumbrances, participation interests,
equities, pledges, charges or security interests of
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any nature and has full right and authority, under all governmental and
regulatory bodies having jurisdiction over the ownership of the applicable
Home Loans to sell and assign the same pursuant to this Agreement;
(iv) To the best of Seller's knowledge, there is no valid offset,
defense or counterclaim of any obligor under any Mortgage;
(v) To the best of Seller's knowledge, there is no delinquent
recording or other tax or fee or assessment lien against any related
Mortgaged Property;
(vi) To the best of Seller's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of the related
Mortgaged Property;
(vii) To the best of Seller's knowledge, there are no mechanics'
or similar liens or claims which have been filed for work, labor or
material affecting the related Mortgaged Property which are, or may be
liens prior or equal to, or subordinate with, the lien of the related
Mortgage, except liens which are fully insured against by the title
insurance policy referred to in clause (xi);
(viii) As of the Cut-off Date, no Home Loan was 30 days or more
delinquent;
(ix) For each Home Loan, the related Loan File contains each of
the documents and instruments specified to be included therein;
(x) The related Mortgage Note and the related Mortgage at the
time it was made complied in all material respects with applicable local,
state and federal laws;
(xi) A policy of title insurance in the form and amount required
by the Program Guide was effective as of the closing of each Home Loan and
each such policy is valid and remains in full force and effect, and a
title search or other assurance of title customary in the relevant
jurisdiction was obtained with respect to each Home Loan as to which no
title insurance policy or binder was issued;
(xii) None of the Mortgaged Properties is a mobile home or a
manufactured housing unit that is not permanently attached to its
foundation;
(xiii) Approximately 19.81% of the Home Loans, by Cut-off Date Loan
Balance, are secured by Mortgaged Properties located in California;
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(xiv) 92.90% of the Home Loans, by Cut-Off Date Loan Balance, had
a Combined Loan-to-Value Ratio in excess of 100%;
(xv) [Reserved];
(xvi) The Seller has not transferred the Home Loans to the
Purchaser with any intent to hinder, delay or defraud any of its
creditors;
(xvii) [Reserved];
(xviii) The Seller will submit for filing or cause to be submitted
for filing UCC-1 financing statements in accordance with the terms of this
Agreement;
(xix) Each Mortgage is substantially similar one to the other and
is an enforceable obligation of the related Mortgagor;
(xx) To the best of Seller's knowledge, the physical property
subject to each Mortgage is free of material damage and is in good repair;
(xxi) The Seller has not received a notice of default of any
senior mortgage loan related to a Mortgaged Property which has not been
cured by a party other than the related Subservicer;
(xxii) [Reserved];
(xxiii) None of the Home Loans are reverse Home Loans;
(xxiv) No Home Loan has a remaining term to maturity of less than
22 months. All of the Home Loans are fixed rate and are fully amortizing.
As of the Cutoff Date, the Loan Rates on the Home Loans range between
9.49% per annum and 19.87% per annum and the weighted average Loan Rate is
approximately 13.88% per annum. The weighted average remaining term to
scheduled maturity of the Home Loans as of the Cut-off Date is
approximately 215 months;
(xxv) (A) Each Mortgaged Property with respect to the Home Loans
consists of a single parcel of real property with a single family
residence erected thereon, manufactured housing or an individual
condominium unit. (B) With respect to the Home Loans (i) approximately
2.04% (by Cut-off Date Loan Balance) are secured by real property improved
by individual condominium units and (ii) approximately 92.11% (by Cut-off
Date Loan Balance) are secured by real property with a single family
residence erected thereon;
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(xxvi) Approximately 99.90% of the Home Loans, by Cut-off Date Loan
Balance, are secured by second mortgages or deeds of trust and
approximately 0.10% of the Home Loans, by Cut-off Date Loan Balance, are
secured by first mortgages or deeds of trust;
(xxvii) If any of the Home Loans are secured by a leasehold
interest, with respect to each leasehold interest, the use of leasehold
estates for residential properties is an accepted practice in the area
where the related Mortgaged Property is located; residential property in
such area consisting of leasehold estates is readily marketable; the lease
is recorded and no party is in any way in breach of any provision of such
lease; the leasehold is in full force and effect and is not subject to any
prior lien or encumbrance by which the leasehold could be terminated; and
the remaining term of the lease does not terminate less than five years
after the maturity date of such Home Loan.
(xxviii) Each Subservicer meets all applicable requirements under
the Servicing Agreement, is properly qualified to service the Home Loans
and has been servicing the Home Loans prior to the Cut-off Date in
accordance with the terms of the Program Guide;
(xxix) For each Home Loan, if required, as of the Cut-off Date,
flood insurance has been obtained which meets all applicable requirements
of Section 3.04 of the Servicing Agreement. For each Home Loan, hazard
insurance has been obtained which meets all applicable requirements of
Section 3.04 of the Servicing Agreement;
(xxx) There is no material default, breach, violation or event of
acceleration existing under the terms of any Mortgage Note or Mortgage and
no event which, with notice and expiration of any grace or cure period,
would constitute a material default, breach, violation or event of
acceleration under the terms of any Mortgage Note or Mortgage, and no such
material default, breach, violation or event of acceleration has been
waived by the Seller or by any other entity involved in originating or
servicing a Home Loan;
(xxxi) No instrument of release or waiver has been executed in
connection with the Home Loans, and no Mortgagor has been released, in
whole or in part from its obligations in connection with a Home Loan;
(xxxii) With respect to each Home Loan that is a second lien, either
(i) no consent for the Home Loan was required by the holder of the related
prior lien or liens or (ii) such consent has been obtained and is
contained in the Loan File; and
(xxxiii) With respect to each Home Loan, either (i) the Home Loan is
assumable pursuant to the terms of the Mortgage Note, or (ii) the Home
Loan contains
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a customary provision for the acceleration of the payment of the unpaid
principal balance of the Home Loan in the event the related Mortgaged
Property is sold without the prior consent of the mortgagee thereunder.
(c) Upon discovery by Seller or upon notice from the Purchaser, the
Grantor Trustee, the Issuer, the Owner Trustee, the Indenture Trustee or any
Custodian, as applicable, of a breach of any representation or warranty in
clause (a) above which materially and adversely affects the interests of the
Grantor Trust Certificateholder in any Home Loan, the Seller shall, within 45
days of its discovery or its receipt of notice of such breach, either (i) cure
such breach in all material respects or (ii) to the extent that such breach is
with respect to a Home Loan or a Related Document, either (A) repurchase such
Home Loan from the Grantor Trust at the Repurchase Price, or (B) substitute one
or more Eligible Substitute Loans for such Home Loan, in each case in the manner
and subject to the conditions and limitations set forth below.
Upon discovery by the Seller or upon notice from the Purchaser, the
Grantor Trustee, the Issuer, the Owner Trustee, the Indenture Trustee or any
Custodian, as applicable, of a breach of any representation or warranty in
clause (b) above with respect to any Home Loan, or upon the occurrence of a
Repurchase Event, which materially and adversely affects the interests of the
Grantor Trust Certificateholder or of the Purchaser in such Home Loan (notice of
which shall be given to the Purchaser and the Grantor Trustee by the Seller, if
it discovers the same), notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation and warranty, the Seller shall,
within 90 days after the earlier of its discovery or receipt of notice thereof,
either cure such breach or Repurchase Event in all material respects or either
(i) repurchase such Home Loan from the Grantor Trust at the Repurchase Price, or
(ii) substitute one or more Eligible Substitute Loans for such Home Loan, in
each case in the manner and subject to the conditions set forth below. The
Repurchase Price for any such Home Loan repurchased by the Seller shall be
deposited or caused to be deposited by the Master Servicer in the Custodial
Account maintained by it pursuant to Section 3.02 of the Servicing Agreement.
The Seller may only substitute an Eligible Substitute Loan or Loans
for a Deleted Loan pursuant to this Section 3.1(b) if the Seller obtains an
Opinion of Counsel generally to the effect that the substitution of an Eligible
Substitute Loan or Loans for a Deleted Loan will not cause an entity level
federal or state income tax to be imposed on the Grantor Trust. The Seller shall
also deliver to the Custodian on behalf of the Grantor Trust, with respect to
such Eligible Substitute Loan or Loans, the original Mortgage Note and all other
documents and agreements as are required by Section 2.1(c), with the Mortgage
Note endorsed as required by Section 2.1(c). No substitution will be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Eligible Substitute Loans in the month of substitution shall not
be part of the Grantor Trust and will be retained by the Master Servicer and
remitted by the Master Servicer to the Seller on the next succeeding Payment
Date, provided that a payment at least equal to the applicable Monthly Payment
has been received by the
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Grantor Trust, for such month in respect of the Deleted Loan. For the month of
substitution, distributions to the Grantor Trust Certificate Account pursuant to
the Servicing Agreement will include the Monthly Payment due on a Deleted Loan
for such month and thereafter the Seller shall be entitled to retain all amounts
received in respect of such Deleted Loan. The Master Servicer shall amend or
cause to be amended the Home Loan Schedule to reflect the removal of such
Deleted Loan and the substitution of the Eligible Substitute Loan or Loans and
the Master Servicer shall deliver the amended Home Loan Schedule to the Grantor
Trustee. Upon such substitution, the Eligible Substitute Loan or Loans shall be
subject to the terms of this Agreement and the Servicing Agreement in all
respects, the Seller shall be deemed to have made the representations and
warranties with respect to the Eligible Substitute Loan contained herein set
forth in Section 3.1(b) (other than clauses (viii), (xiii), (xiv), (xxv)(B) and
(xxvi)) as of the date of substitution, and the Seller shall be obligated to
repurchase or substitute for any Eligible Substitute Loan as to which a
Repurchase Event has occurred as provided herein. In connection with the
substitution of one or more Eligible Substitute Loans for one or more Deleted
Loans, the Master Servicer will determine the amount (such amount, a
"Substitution Adjustment Amount"), if any, by which the aggregate principal
balance of all such Eligible Substitute Loans as of the date of substitution is
less than the aggregate principal balance of all such Deleted Loans (after
application of the principal portion of the Monthly Payments due in the month of
substitution that are to be distributed to the Grantor Trust Certificate Account
in the month of substitution). The Seller shall deposit the amount of such
shortfall into the Custodial Account on the day of substitution, without any
reimbursement therefor.
Upon receipt by the Grantor Trustee on behalf of the Grantor Trust
and the Custodian of written notification, signed by a Servicing Officer, of the
deposit of such Repurchase Price or of such substitution of an Eligible
Substitute Loan (together with the complete related Loan File) and deposit of
any applicable Substitution Adjustment Amount as provided above, the Custodian,
on behalf of the Grantor Trustee shall release to the Seller the related Loan
File for the Home Loan being repurchased or substituted for and the Grantor
Trustee on behalf of the Grantor Trust shall execute and deliver such
instruments of transfer or assignment prepared by the Master Servicer, in each
case without recourse, as shall be necessary to vest in the Seller or its
designee such Home Loan released pursuant hereto and thereafter such Home Loan
shall not be an asset of the Grantor Trust.
It is understood and agreed that the obligation of the Seller to
cure any breach, or to repurchase or substitute for, any Home Loan as to which
such a breach has occurred and is continuing shall, except to the extent
provided in Section 6.1 of this Agreement, constitute the sole remedy respecting
such breach available to the Purchaser, the Grantor Trustee on behalf of the
Grantor Trust Certificateholder, the Issuer, the Certificateholders (or the
Owner Trustee on behalf of the Certificateholders) and the Noteholders (or the
Indenture Trustee on behalf of the Noteholders) against the Seller.
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It is understood and agreed that the representations and warranties
set forth in this Section 3.1 shall survive delivery of the respective Loan
Files to the Grantor Trustee, or the Custodian.
ARTICLE IV
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller. The Seller hereby covenants
that, except for the transfer hereunder, the Seller will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur or assume any
Lien on any Home Loan, or any interest therein, the Seller will notify the
Grantor Trustee, as assignee of the Purchaser, of the existence of any Lien
(other than as provided above) on any Home Loan immediately upon discovery
thereof; and the Seller will defend the right, title and interest of the Grantor
Trustee on behalf of the Grantor Trust Certificateholder, as assignee of the
Purchaser, in, to and under the Home Loans against all claims of third parties
claiming through or under the Seller; provided, however, that nothing in this
Section 4.1 shall be deemed to apply to any Liens for municipal or other local
taxes and other governmental charges if such taxes or governmental charges shall
not at the time be due and payable or if the Seller shall currently be
contesting the validity thereof in good faith by appropriate proceedings.
ARTICLE V
SERVICING
Section 5.1. Servicing. The Seller will service the Home Loans
pursuant to the terms and conditions of the Servicing Agreement and will service
the Home Loans directly or through one or more subservicers in accordance
therewith.
ARTICLE VI
INDEMNIFICATION BY THE SELLER
WITH RESPECT TO THE HOME LOANS
Section 6.1. Indemnification With Respect to the Home Loans. The
Seller shall indemnify and hold harmless the Purchaser from and against any
loss, liability or expense arising from the breach by the Seller of its
representations and warranties in Section 3.1 of this Agreement which materially
and adversely affects the Purchaser's interest in any Home Loan or from the
failure by the Seller to perform its obligations under this Agreement in any
material
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respect, provided that the Seller shall have no obligation to indemnify the
Purchaser in respect of any loss, liability or expense that arises as a result
of the Purchaser's willful malfeasance, bad faith or negligence or as a result
of the breach by the Purchaser of its obligations hereunder.
Section 6.2. Limitation on Liability of the Seller. None of the
directors, officers, employees or agents of the Seller shall be under any
liability to the Purchaser, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement. Except as and to the extent
expressly provided herein or in the Servicing Agreement, the Seller shall not be
under any liability to the Grantor Trust, the Grantor Trustee, the Owner Trust,
the Owner Trustee, the Indenture Trustee or the Securityholders. The Seller and
any director, officer, employee or agent of the Seller may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person respecting any matters arising hereunder.
ARTICLE VII
TERMINATION
Section 7.1. Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the Seller's indemnity obligations as provided herein, upon the
termination of the Owner Trust pursuant to the terms of the Owner Trust
Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1. Amendment. This Agreement may be amended from time to time by
the Seller and the Purchaser by written agreement signed by the Seller and the
Purchaser.
Section 8.2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
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Section 8.3. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:
(i) if to the Seller:
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Distribution-Asset-Backed Group, Home Loan Trust 1998-HI2
or, such other address as may hereafter be furnished to the Purchaser in writing
by the Seller.
(ii) if to the Purchaser:
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Distribution-Asset-Backed Group, Home Loan Trust 1998-HI2
or such other address as may hereafter be furnished to the Seller in writing by
the Purchaser.
Section 8.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions of terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity of
enforceability of the other provisions of this Agreement.
Section 8.5. Relationship of Parties. Nothing herein contained shall
be deemed or construed to create a partnership or joint venture between the
parties hereto, and the services of the Seller shall be rendered as an
independent contractor and not as agent for the Purchaser.
Section 8.6. Counterparts. This Agreement may be executed in one or
more counterparts and by the different parties hereto on separate counterparts,
each of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 8.7. Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
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Section 8.8. Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the Home
Loans, rather than a loan by the Purchaser to the Seller secured by the Home
Loans. Accordingly, the parties hereto each intend to treat the transaction for
federal income tax purposes as a sale by the Seller, and a purchase by the
Purchaser, of the Home Loans. The Purchaser will have the right to review the
Home Loans and the Related Documents to determine the characteristics of the
Home Loans which will affect the federal income tax consequences of owning the
Home Loans and the Seller will cooperate with all reasonable requests made by
the Purchaser in the course of such review.
Section 8.9. Successors and Assigns; Assignment of This Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and their respective successors and assigns. The
obligations of the Seller under this Agreement cannot be assigned or delegated
to a third party without the consent of the Purchaser, which consent shall be at
the Purchaser's sole discretion, except that the Purchaser acknowledges and
agrees that the Seller may assign its obligations hereunder to any Affiliate of
the Seller, to any Person succeeding to the business of the Seller, to any
Person into which the Seller is merged and to any Person resulting from any
merger, conversion or consolidation to which the Seller is a party, provided,
however, such assignment shall not result in a downgrade of the Securities or
B-2 Notes. The parties hereto acknowledge that the Purchaser is acquiring the
Home Loans for the purpose of transferring them to the Grantor Trust in exchange
for the Grantor Trust Certificate which will be backed by the Home Loans, and
then transferring the Grantor Trust Certificate to the Issuer, which will issue
Certificates representing interests in and Notes secured by the Grantor Trust
Certificate. As an inducement to the Purchaser to purchase the Home Loans, the
Seller acknowledges and consents to (i) the assignment by the Purchaser to the
Grantor Trustee of all the Purchaser's rights and remedies against the Seller
pursuant to this Agreement, insofar as such rights relate to Home Loans
transferred to the Grantor Trustee and to the enforcement or exercise of any
right or remedy against the Seller pursuant to this Agreement by the Grantor
Trustee, (ii) the enforcement or exercise of any right or remedy against the
Seller pursuant to this Agreement by or on behalf of the Grantor Trustee and
(iii) the Grantor Trustee's pledge of its interest in this Agreement to the
Issuer and the enforcement by the Indenture Trustee (as pledgee of the Grantor
Trust Certificate) or the Issuer (or the Owner Trustee on behalf of the Issuer
or the Certificateholders) of any such right or remedy against the Seller. Such
enforcement of a right or remedy by the Grantor Trustee, the Indenture Trustee,
the Issuer or the Owner Trustee, as applicable, shall have the same force and
effect as if the right or remedy had been enforced or exercised by the Purchaser
directly.
Section 8.10. Survival. The representations and warranties made herein by
the Seller and the provisions of Article VI hereof shall survive the purchase of
the Home Loans hereunder.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Home Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
as Purchaser
By:
Name: Xxxxx X. Xxxx
Title: Vice President
RESIDENTIAL FUNDING CORPORATION
as Seller
By:
Name: Xxxxx Xxx Xxx
Title: Director
Exhibit 1
HOME LOAN SCHEDULE
TO BE PROVIDED UPON REQUEST
