CWT DRAFT 12/19/00
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MORTGAGE LOAN FLOW PURCHASE AND WARRANTIES AGREEMENT
between
XXXXXX BROTHERS BANK, FSB,
PURCHASER
and
NATIONAL BANK OF COMMERCE,
SELLER
CENTRAL CAROLINA BANK & TRUST,
SELLER
NBC BANK, FSB (MEMPHIS, TN)
SELLER
FIRST MARKET BANK,
SELLER
COMMERCE FINANCE COMPANY
SELLER
CONVENTIONAL, FIXED AND ADJUSTABLE RATE RESIDENTIAL MORTGAGE LOANS
Dated as of August 1, 2001
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TABLE OF CONTENTS
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Page
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SECTION 1. DEFINITIONS......................................................1
SECTION 2. CONVEYANCE FROM SELLER TO PURCHASER..............................8
SECTION 3. PURCHASE PRICE..................................................11
SECTION 4. SERVICING OF THE MORTGAGE LOANS.................................12
SECTION 5. TRANSFER OF SERVICING...........................................12
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF EACH SELLER.......14
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF PURCHASER.........17
SECTION 8. REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL
MORTGAGE LOANS..................................................18
SECTION 9. REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES;
ADDITIONAL REPURCHASE OBLIGATIONS...............................26
SECTION 10. CLOSING.........................................................29
SECTION 11. CLOSING DOCUMENTS...............................................29
SECTION 12. MERGER OR CONSOLIDATION OF THE SELLERS..........................31
SECTION 13. COSTS...........................................................31
SECTION 14. PROTECTION OF CONFIDENTIAL INFORMATION..........................31
SECTION 15. NOTICES.........................................................31
SECTION 16. SEVERABILITY CLAUSE.............................................32
SECTION 17. COUNTERPARTS....................................................32
SECTION 18. PLACE OF DELIVERY AND GOVERNING LAW.............................32
SECTION 19. FURTHER AGREEMENTS..............................................33
SECTION 20. INTENTION OF THE PARTIES........................................33
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SECTION 21. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT........33
SECTION 22. WAIVERS; OTHER AGREEMENTS.......................................34
SECTION 23. EXHIBITS........................................................34
SECTION 24. GENERAL INTERPRETIVE PRINCIPLES.................................34
SECTION 25. REPRODUCTION OF DOCUMENTS.......................................35
SECTION 26. RECORDATION OF ASSIGNMENTS OF MORTGAGE..........................35
SECTION 27. NO PERSONAL SOLICITATION........................................35
EXHIBITS
EXHIBIT A FORM OF ASSIGNMENT AND CONVEYANCE
EXHIBIT B CONTENTS OF EACH MORTGAGE FILE
EXHIBIT C INTERIM SERVICING AGREEMENT
EXHIBIT D-1 FORM OF SELLER'S OFFICER'S CERTIFICATE FOR INITIAL CLOSING
EXHIBIT D-2 FORM OF SELLER'S OFFICER'S CERTIFICATE FOR SUBSEQUENT CLOSINGS
EXHIBIT E FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT H FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT I FORM OF CUSTODIAL AGREEMENT
EXHIBIT J SELLERS' UNDERWRITING GUIDELINES
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MORTGAGE LOAN FLOW PURCHASE AND WARRANTIES AGREEMENT
This is a Mortgage Loan Flow Purchase and Warranties Agreement (the
"Agreement"), dated as of August 1, 2001, by and among XXXXXX BROTHERS BANK, FSB
(the "Purchaser") and each of the following individually: NATIONAL BANK OF
COMMERCE, a national banking association, NBC BANK, FSB (MEMPHIS, TN), a
federally chartered savings bank, FIRST MARKET BANK, a federally chartered
savings bank, CENTRAL CAROLINA BANK & TRUST, a North Carolina bank, and COMMERCE
FINANCE COMPANY, a Tennessee corporation (each, a "Seller" and collectively, the
"Sellers").
WHEREAS, the Sellers agree to sell, and the Purchaser agrees to
purchase, from time to time, certain conventional adjustable and fixed rate
residential first lien mortgage loans (the "Mortgage Loans") on a servicing
released basis as described herein, and which shall be delivered as whole loans;
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or
other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule, which is
attached as Exhibit A to the applicable Assignment and Conveyance; and
WHEREAS, the Purchaser and the Sellers wish to prescribe the manner of
the conveyance, servicing and control of the Mortgage Loans.
NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Sellers
agree as follows:
SECTION 1. DEFINITIONS.
The following terms are defined as follows (except as otherwise agreed
in writing by the parties):
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Agreement: This Mortgage Loan Flow Purchase and Warranties Agreement
and all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: The value set forth in an appraisal made in connection
with the origination of the related Mortgage Loan as the value of the Mortgaged
Property.
Approved Flood Policy Insurer: Any of the following insurers: Flood
Data Services, Inc., Flood Zone, Inc., GEOTrac, or Transamerica Flood Hazard
Certification.
Approved Tax Service Contract Provider: Any of the following providers:
First American, TransAmerica, Lereta or Fidelity.
ARM Mortgage Loan: A Mortgage Loan pursuant to which the interest rate
shall be adjusted from time to time in accordance with the related Mortgage
Note.
Assignment and Conveyance: An Assignment and Conveyance in the form of
Exhibit K hereto.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in the State of New York
are authorized or obligated by law or executive order to be closed.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase and one or more Sellers from time to time shall sell, the
Mortgage Loans listed on the related Mortgage Loan Schedule, which date shall be
set forth in the related Purchase Price and Terms Letter.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Custodial Account: The separate trust account created and maintained
pursuant to Section 2.04 of the Interim Servicing Agreement.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents, a form of which agreement is annexed hereto as Exhibit
I.
Custodian: The custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement, as therein provided.
Cut-off Date: With respect to Mortgage Loans sold on a particular
Closing Date, the date set forth in the related Purchase Price and Terms Letter.
Deleted Mortgage Loan: A Mortgage Loan which is repurchased or
substituted with a Qualified Substitute Mortgage Loan by the applicable Seller
in accordance with the terms of this Agreement.
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Determination Date: The 15th day of the month (or if such day is not a
Business Day, the first Business Day preceding such 15th day) in which the
related Remittance Date occurs.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace. With respect to the Mortgage
Loans for which payment from the Mortgagor is due on a day other than the first
day of the month, such Mortgage Loans will be treated as if the Monthly Payment
is due on the first day of the month following the actual Due Date.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month preceding the month of the Remittance Date and
ending on the first day of the month of the Remittance Date.
Escrow Account: The separate account created and maintained pursuant to
Section 2.06 of the Interim Servicing Agreement (if entered into by the Seller
and the Purchaser).
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any successor
thereto.
FNMA: The Federal National Mortgage Association, or any successor
thereto.
Gross Margin: With respect to each ARM Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each ARM Mortgage Loan,
the date on which an adjustment to the Mortgage Interest Rate with respect to
each Mortgage Loan becomes effective.
Interim Servicer: National Bank of Commerce.
Interim Servicing Agreement: The agreement, attached as Exhibit C
hereto, to be entered into by the Purchaser and Interim Servicer, providing for
the Interim Servicer to service the Mortgage Loans for an interim period as
specified by the Interim Servicing Agreement.
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Lifetime Rate Cap: With respect to each ARM Mortgage Loan, the
provision of each Mortgage Note which provides for an absolute maximum Mortgage
Interest Rate thereunder.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio of the outstanding principal amount of the Mortgage Loan as of the related
Cut-off Date (unless otherwise indicated) to the lesser of (a) the Appraised
Value of the Mortgaged Property and (b) if the Mortgage Loan was made to finance
the acquisition of the related Mortgaged Property, the purchase price of the
Mortgaged Property, expressed as a percentage.
MERS: Mortgage Electronic Registration Systems, Inc. which is the
mortgagee of record for all Mortgage Loans in the MERS System.
MERS(R) System: The electronic registry system, through which MERS is
designated as mortgagee of record for the Mortgage Loans, takes all such actions
as may be required with regard to servicing the Mortgage Loans, including, but
not limited to, executing and, if required in accordance with Accepted Servicing
Practices, recording, any modification, waiver, subordination agreement,
instrument of satisfaction or cancellation, partial or full release, discharge
or any other comparable instruments.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Monthly Payments, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds,
Servicing Rights and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The documents contained in the Mortgage File
pertaining to each Mortgage Loan.
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Mortgage Loan Schedule: A schedule of Mortgage Loans annexed as Exhibit
A to the related Assignment and Conveyance, such schedule setting forth the
following information with respect to each Mortgage Loan: (1) the related Seller
and such Seller's Mortgage Loan identifying number; (2) the Mortgagor's name;
(3) the street address of the Mortgaged Property including the city, state and
zip code; (4) a code indicating the occupancy status; (5) a code indicating
whether the Mortgaged Property is a single family residence, a 2-4 family
residence, a condominium unit or a unit in a planned unit development; (6) the
original months to maturity or the remaining months to maturity from the related
Cut-off Date, in any case based on the original amortization schedule, and if
different, the maturity expressed in the same manner but based on the actual
amortization schedule; (7) the Loan-to-Value Ratio at origination; (8) the
Mortgage Interest Rate as of the Cut-off Date; (9) the date on which the
Mortgage Loan was originated; (10) the stated maturity date; (11) the amount of
the Monthly Payment; (12) the last payment date on which a payment was actually
applied to the outstanding principal balance; (13) the original principal amount
of the Mortgage Loan; (14) the principal balance of the Mortgage Loan as of the
close of business on the related Cut-off Date, after deduction of payments of
principal received on or before the related Cut-off Date; (15) the servicing fee
pursuant to the Interim Servicing Agreement (if applicable); (16) a code
indicating the purpose of the Mortgage Loan; (17) a code indicating the type of
documentation program; (18) a code indicating the loan purpose; (19) with
respect to each ARM Mortgage Loan, the first Interest Rate Adjustment Date; (20)
with respect to each ARM Mortgage Loan, the Gross Margin; (21) with respect to
each ARM Mortgage Loan, the maximum Mortgage Interest Rate under the terms of
the Mortgage Note; and (22) with respect to each ARM Mortgage Loan, the minimum
Mortgage Interest Rate under the terms of the Mortgage Note. With respect to the
Mortgage Loans in the aggregate, the Mortgage Loan Schedule shall set forth the
following information, as of the related Cut-off Date: (1) the number of
Mortgage Loans; (2) the current aggregate outstanding principal balance of the
Mortgage Loans; (3) the weighted average Mortgage Interest Rate of the Mortgage
Loans; and (4) the weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of a Seller, as applicable, and delivered to the Purchaser
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the applicable Seller, reasonably acceptable to the Purchaser.
Periodic Rate Cap: With respect to each ARM Mortgage Loan, the
provision of each Mortgage Note which provides for an absolute maximum amount by
which the Mortgage
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Interest Rate therein may increase on an Interest Rate Adjustment Date above the
Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
Prime Rate: The prime rate announced to be in effect from time to time,
as published as the average rate under the "Money Rates" section of The Wall
Street Journal.
Purchase Price: The price paid on each Closing Date by the Purchaser to
the applicable Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 3 of this Agreement.
Purchase Price and Terms Letter: With respect to each Mortgage Loan
Flow Purchased by the Purchaser on a Closing Date, that certain Purchase Price
and Terms Letter by and between the applicable Sellers and the Purchaser setting
forth the general terms and conditions of the transaction and identifying the
Mortgage Loans to be purchased on the related Closing Date. The date of each
Purchase Price and Terms Letter to which the purchase of Mortgage Loans relates
shall be set forth on the related Assignment and Conveyance.
Purchaser: Xxxxxx Brothers Bank, FSB or its successor in interest or
assigns or any successor to the Purchaser under this Agreement as herein
provided.
Qualified Appraiser: An appraiser, duly appointed by the applicable
Seller, who had no interest, direct or indirect, in the Mortgaged Property or in
any loan made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the 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.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by FNMA or FHLMC.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the applicable Seller for a Deleted Mortgage Loan which must, on
the date of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in the
case of a substitution of more than one mortgage loan for a Deleted Mortgage
Loan, an aggregate principal balance), not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) have a Mortgage Interest Rate not
less than the Mortgage Interest Rate of the Deleted Mortgage Loan and not more
than 2% greater than the Mortgage Interest Rate of the Deleted Mortgage Loan;
(iii) have a remaining term to maturity not greater than and not more than one
year less than that of the Deleted Mortgage Loan; (iv)
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with respect to each ARM Mortgage Loan, have a Gross Margin not less than that
of the Deleted Mortgage Loan; (v) with respect to each ARM Mortgage Loan, have a
maximum Mortgage Interest Rate Cap not less than that of the Deleted Mortgage
Loan; (vi) with respect to each ARM Mortgage Loan, have a maximum periodic
mortgage Interest Rate Cap not less than that of the Deleted Mortgage Loan;
(vii) comply with each representation and warranty set forth in Section 6 and 8,
and (viii) be of the same product type as the Deleted Mortgage Loan.
Reconstitution Agreements: The agreement or agreements entered into by
the Purchaser, the Interim Servicer, and certain third parties with respect to
any or all of the Mortgage Loans serviced hereunder, in connection with a resale
of the Mortgage Loans pursuant to Section 19 hereof, including, but not limited
to, a pooling and servicing agreement and/or a subservicing/master servicing
agreement and related custodial/trust agreement and related documents with
respect to such resale. Such agreement or agreements shall prescribe the rights
and obligations of the Interim Servicer in servicing the related Mortgage Loans
and shall provide for servicing compensation to the Interim Servicer (calculated
on a weighted average basis for all the related Mortgage Loans as of the date of
such sale), net of any guarantee fees due Xxxxxx Xxx or Xxxxxxx Mac, if
applicable, at least equal to the Servicing Fee due the Interim Servicer in
accordance with this Agreement or the servicing fee required pursuant to the
Reconstitution Agreement, whichever is less. The form of relevant Reconstitution
Agreement to be entered into by the Purchaser and/or master servicer or trustee
and the Interim Servicer with respect to such resales shall be reasonably
satisfactory in form and substance to the Purchaser and the Interim Servicer
(giving due regard to any rating agency or master servicing requirements) and
the representations and warranties and servicing provisions contained therein
shall be substantially similar to those contained in this Agreement, unless
otherwise mutually agreed by the parties.
Remittance Date: The 18th day of each month (or if such day is not a
Business Day, the Business Day immediately following such 18th day).
REO Disposition Proceeds: All amounts received with respect to an REO
disposition.
Repurchase Price: With respect to any Mortgage Loan, a price equal to
(i) the Stated Principal Balance of the Mortgage Loan plus (ii) interest on such
Stated Principal Balance at the Mortgage Interest Rate from the date on which
interest has last been paid and distributed to the Purchaser to the date of
repurchase, less amounts received, if any, plus amounts advanced, if any, by any
servicer, in respect of such repurchased Mortgage Loan.
Seller: Each Seller listed in the introductory paragraph of this
Agreement or any of their successors in interest or assigns, or any successor to
a Seller under this Agreement as herein provided.
Servicing File: With respect to each Mortgage Loan the file retained by
the Interim Servicing consisting of originals of all documents in the Mortgage
File, which are not delivered to the Purchaser or the Purchaser's designee, and
copies of the Mortgage Loan Documents listed on Exhibit B hereto
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Servicing Rights: Any and all of the following: (a) any and all rights
to service the Mortgage Loans; (b) any payments to or monies received by the
applicable Seller for servicing the Mortgage Loans; (c) any late fees, penalties
or similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the applicable
Seller thereunder; (e) Escrow Payments or other similar payments with respect to
the Mortgage Loans and any amounts actually collected by the applicable Seller
with respect thereto; (f) all accounts and other rights to payment related to
any of the property described in this paragraph; and (g) any and all documents,
files, records, servicing files, servicing documents, servicing records, data
tapes, computer records, or other information pertaining to the Mortgage Loans
or pertaining to the past, present or prospective servicing of the Mortgage
Loans.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the related Cut-off Date after giving effect to
payments of principal received on or before such date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal or advances in lieu
thereof.
Transfer Date: The date on which the Purchaser, or its designee, shall
receive the transfer of servicing responsibilities and begin to perform the
servicing of the related Mortgage Loans, and the Interim Servicer shall cease
all servicing responsibilities. Such date shall occur on the date provided in
the related Assignment and Conveyance.
Underwriting Guidelines: The underwriting guidelines of each Seller,
attached hereto as Exhibit J.
The parties intend hereby to set forth the terms and conditions upon
which the proposed transactions will be effected, and, in consideration of the
premises and the mutual agreements set forth herein, agree as follows:
SECTION 2. CONVEYANCE FROM SELLER TO PURCHASER.
(a) Tender of Mortgage Loans.
Each Seller may from time to time submit to the Purchaser a list of
Mortgage Loans or a portfolio of Mortgage Loans that such Seller proposes to
sell to the Purchaser hereunder. If the Purchaser elects to purchase such
Mortgage Loans, the Purchaser shall deliver to such Seller a Purchase Price and
Terms Letter with respect to the tendered Mortgage Loans. Such Seller may
withdraw its tender of Mortgage Loans for sale hereunder at any time before the
Seller accepts a Purchase Price and Terms Letter from the Purchaser.
(b) Conveyance of Mortgage Loans; Possession of Mortgage Files.
Each Seller, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, as of
the related Closing Date, all rights, title and interest of such Seller in and
to the related Mortgage Loans, together with the Servicing Rights and Mortgage
Files and all rights and obligations arising under the documents contained
therein. The
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applicable Seller, on the related Closing Date, simultaneously with the delivery
of the Mortgage Loan Schedule with respect to the Mortgage Loans to be sold on
such Closing Date, shall execute and deliver an Assignment and Conveyance.
(c) Delivery of Mortgage Files.
Pursuant to Section 2(e) hereof, the applicable Seller will deliver
each Mortgage File to the Purchaser. The contents of each Servicing File
required to be retained by the Interim Servicer to service the related Mortgage
Loans pursuant to the Interim Servicing Agreement (if entered into) and thus not
delivered to the Purchaser shall be held in trust by the Interim Servicer for
the benefit of Purchaser as the owner thereof. The Interim Servicer's possession
of any portion of the Servicing File is at the will of the Purchaser for the
sole purpose of facilitating servicing of the related Mortgage Loan pursuant to
the Interim Servicing Agreement (if entered into), and such retention and
possession by the Interim Servicer shall be in a custodial capacity only. The
ownership of each Mortgage Note, Mortgage, and the contents of the Mortgage File
and Servicing File will be vested in the Purchaser and the ownership of all
records and documents with respect to the related Mortgage Loan prepared by or
which come into the possession of the Interim Servicer shall immediately vest in
the Purchaser and shall be retained and maintained, in trust, by the Interim
Servicer at the will of the Purchaser in such custodial capacity only. The
Servicing File retained by the Interim Servicer pursuant to the Interim
Servicing Agreement (if entered into) shall be segregated from the other books
and records of the Interim Servicer and shall be appropriately marked to clearly
reflect the sale of the related Mortgage Loan to the Purchaser. The Interim
Servicer shall release from its custody the contents of any Servicing File
retained by it only in accordance with the Interim Servicing Agreement, except
when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Section 9.
(d) Books and Records.
Record title to each Mortgage and the related Mortgage Note shall, as
of the related Closing Date, be in the name of MERS, or will be assigned to MERS
or Purchaser or Purchaser's designee promptly after the Closing Date. All rights
arising out of the Mortgage Loans including, but not limited to, all funds
received by the Seller after the related Cut-off Date on or in connection with a
Mortgage Loan shall be vested in the Purchaser; provided, however, that all
funds received on or in connection with a Mortgage Loan shall be received and
held by the Interim Servicer in trust for the benefit of the Purchaser as the
owner of the Mortgage Loans pursuant to the terms of the Interim Servicing
Agreement.
The sale of each Mortgage Loan shall be reflected on each Seller's
balance sheet and other financial statements as a sale of assets by such Seller.
This Agreement continuously, from the time of its execution, shall be
an official record of each Seller that qualifies as an "insured depository
institution" as that term is defined in Section 1813(c)(2) of Title 12 of the
United States Code, as amended, and each such Seller will maintain a copy of
this Agreement and each agreement related hereto in its official books and
records.
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(e) Delivery of Mortgage Loan Documents.
On or prior to the related Closing Date, the applicable Seller shall
deliver to the Purchaser, or its designee, each of the following documents for
each Mortgage Loan to be sold to the Purchaser on such Closing Date:
(i) The original Mortgage Note endorsed, "Pay to the order of
________________, without recourse" and signed in the name of the Seller by
an authorized officer. In the event that the Mortgage Loan was acquired by
the Seller in a merger, the endorsement must be by "[SELLER], successor by
merger to [name of predecessor]"; and in the event that the Mortgage Loan
was acquired or originated by the Seller while doing business under another
name, the endorsement must be by "[SELLER], formerly known as [previous
name]";
(ii) Original recorded Mortgage with evidence of recording information
thereon except for any Mortgage which has been forwarded to the appropriate
recorder's office for recordation and which has not been returned by such
recording officer, in which case the Seller shall deliver and release to
Purchaser a certified true copy of any such Mortgage so certified by the
Seller with evidence of such Mortgage's delivery to the appropriate
recorder's office. In addition, the Seller shall deliver and release to the
Purchaser the original recorded Mortgage within 90 days after the related
Closing Date;
(iii) Original Assignment of Mortgage, in blank, which assignment shall
be in form and substance acceptable for recording but not recorded. In the
event that the Mortgage Loan was acquired by the Seller in a merger, the
assignment must be by "[SELLER], successor by merger to [name of
predecessor]"; and in the event that the Mortgage Loan was acquired or
originated by the Seller while doing business under another name, the
assignment must be by "[SELLER], formerly known as [previous name]," or
with respect to a Mortgage Loan registered with MERS, an Assignment of
Mortgage to MERS, with evidence of recording thereon;
(iv) Original policy of title insurance, except for those Mortgage
Loans originated within 120 days before the related Closing Date, for which
Mortgage Loans the Seller shall have delivered and released to the
Purchaser the related binders. In addition, the Seller shall deliver to the
Purchaser the original policy of title insurance within 120 days after the
related Closing Date. The policy must be properly endorsed, any necessary
notices of transfer must be forwarded and any other action required to be
taken must be taken in order to fully protect, under the terms of the
policy and applicable law, Purchaser's interest as first mortgagee;
(v) Originals or copies of all assumption, extensions and modification
agreements;
(vi) If required under Section 8, the original or a copy of the policy
of primary mortgage guaranty insurance, or where such insurance is provided
by a master policy, a certified true copy of the master policy and the
original certificate of insurance;
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(vii) Originals or certified copies of recorded intermediate
assignments of the Mortgage, including warehousing assignments, if any; and
(viii)The contents of the Mortgage File for each Mortgage Loan, not
expressly stated herein, and as set forth in Exhibit B hereto, except such
documents retained by the Interim Servicer pursuant to Section 2(a) herein.
The Mortgage Loan Documents listed in (i) - (vii) of this subsection
2(c) shall be delivered to the Purchaser notwithstanding the execution of the
Interim Servicing Agreement by the Purchaser and the Interim Servicer.
Pursuant to the Custodial Agreement delivered to the Purchaser
contemporaneously with the delivery of this Agreement, on or prior to the
related Closing Date, the applicable Seller will deliver and release to the
Custodian those Mortgage Loan Documents listed in (i) - (vii) of this subsection
2(c) and as required by the Custodial Agreement with respect to each Mortgage
Loan a list of which is set forth in the Custodial Agreement.
The Custodian will certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement, as
evidenced by the Initial Certification of the Custodian in the form annexed to
the Custodial Agreement. The Purchaser shall be responsible for maintaining the
Custodial Agreement and shall pay all fees and expenses of the Custodian.
The Interim Servicer shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with the Interim Servicing Agreement
within one week of their execution, provided, however, that the Interim Servicer
shall provide the Custodian with a certified true copy of any such document
submitted for recordation within one week of its execution, and shall provide
the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be a true and
complete copy of the original within sixty days of its submission for
recordation.
SECTION 3. PURCHASE PRICE.
(a) The Purchase Price shall be the percentage of par as stated in the
related Purchase Price and Terms Letter, multiplied by the aggregate principal
balance, as of the related Cut-off Date, of the Mortgage Loans listed on the
final Mortgage Loan Schedule, after application of payments of principal
received on or before the related Cut-off Date. The initial principal amount of
the Mortgage Loans shall be the aggregate principal balance of the Mortgage
Loans, so computed as of the related Cut-off Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the applicable Seller, at closing, accrued interest on the initial
principal amount of the Mortgage Loans at the weighted average Mortgage Interest
Rate less the servicing fee pursuant to and in accordance with the Interim
Servicing Agreement, from the date interest was last received on the Mortgage
Loan through the day prior to the related Closing Date, inclusive.
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(b) The Purchase Price shall be paid to the applicable Seller on the
related Closing Date by wire transfer of immediately available federal funds to
an account designated by such Seller.
(c) The Purchaser shall be entitled to (1) all principal received after
the related Cut-off Date, (2) all other recoveries of late charges, assumption
fees or other charges collected after the related Cut-off Date, and (3) all
payments of interest on the Mortgage Loans at the Mortgage Interest Rate. The
principal balance of each Mortgage Loan as of the related Cut-off Date is
determined after application of payments of principal received on or before the
related Cut-off Date. All payments of principal and interest (minus interest at
the servicing fee rate, pursuant to the Interim Servicing Agreement) due on the
first day of the month after the related Cut-off Date shall belong to the
Purchaser.
SECTION 4. SERVICING OF THE MORTGAGE LOANS.
The Mortgage Loans shall be sold by the applicable Seller to the
Purchaser on a servicing released basis. Subject to, and upon the terms and
conditions of this Agreement and the Interim Servicing Agreement, the applicable
Seller hereby sells, transfers, assigns and delivers to the Purchaser on the
related Closing Date the Servicing Rights.
The Purchaser shall retain the Interim Servicer as the contract
servicer of the Mortgage Loans for an interim period pursuant to and in
accordance with the terms and conditions contained in the Interim Servicing
Agreement. The Purchaser and the Interim Servicer shall execute the Interim
Servicing Agreement on the initial Closing Date in the form attached hereto as
Exhibit C.
Pursuant to the Interim Servicing Agreement, the Interim Servicer shall
begin servicing the Mortgage Loans on behalf of the Purchaser and shall be
entitled to all servicing fees due the Interim Servicer as set forth in the
Interim Servicing Agreement. The Interim Servicer shall conduct such servicing
in accordance with the terms of the Interim Servicing Agreement.
SECTION 5. TRANSFER OF SERVICING.
On the related Transfer Date, the Purchaser, or its designee, shall
assume all servicing responsibilities related to, and the Interim Servicer shall
cease all servicing responsibilities related to, the Mortgage Loans.
On or prior to the related Transfer Date the Interim Servicer shall, at
its sole cost and expense take such steps as may be necessary or appropriate to
effectuate and evidence the transfer of the servicing of the Mortgage Loans to
the Purchaser, or its designee, including but not limited to the following:
(a) Notice to Mortgagors. The Interim Servicer shall a letter advising
the Mortgagor of the transfer of the servicing of the related Mortgage Loan to
the Purchaser, or its designee; in accordance with the provided, however, the
content and format of the letter shall have the prior approval of the Purchaser.
The Interim Servicer shall provide the Purchaser with copies of all such notices
no later than the related Transfer Date. Purchaser shall mail to the
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Mortgagor of each Mortgage the "hello" letter required under the Xxxxxxxx
Xxxxxxxx National Affordable Housing Act of 1990.
(b) Notice to Taxing Authorities and Insurance Companies. The Interim
Servicer shall transmit to the applicable taxing authorities and insurance
companies (including primary mortgage insurance policy insurers, if applicable)
and/or agents, notification of the transfer of the servicing to the Purchaser,
or its designee, and instructions to deliver all notices, tax bills and
insurance statements, as the case may be, to the Purchaser from and after the
related Transfer Date. The Interim Servicer shall provide the Purchaser with
copies of all such notices no later than the related Transfer Date.
(c) Delivery of Servicing Records. The Interim Servicer shall forward
to the Purchaser, or its designee, all servicing records and the Servicing File
in the Interim Servicer's possession relating to each Mortgage Loan including
the information enumerated in the Interim Servicing Agreement.
(d) Escrow Payments. The Interim Servicer shall provide the Purchaser,
or its designee, with immediately available funds by wire transfer in the amount
of the net Escrow Payments and suspense balances and all loss draft balances
associated with the Mortgage Loans. The Interim Servicer shall provide the
Purchaser with an accounting statement of Escrow Payments and suspense balances
and loss draft balances sufficient to enable the Purchaser to reconcile the
amount of such payment with the accounts of the Mortgage Loans. Additionally,
the Interim Servicer shall wire transfer to the Purchaser the amount of any
agency, trustee or prepaid Mortgage Loan payments and all other similar amounts
held by the Interim Servicer.
(e) Payoffs and Assumptions. The Interim Servicer shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Interim Servicer on the Mortgage Loans from the related Cut-off
Date to the related Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
related Transfer Date all payments received by the Interim Servicer on each
Mortgage Loan shall be properly applied by the Interim Servicer to the account
of the particular Mortgagor.
(g) Mortgage Payments Received After Transfer Date. The amount of any
Monthly Payments received by the Interim Servicer after the related Transfer
Date shall be forwarded to the Purchaser by overnight mail on the date of
receipt. The Interim Servicer shall notify the Purchaser of the particulars of
the payment, which notification requirement shall be satisfied if the Interim
Servicer forwards with its payment sufficient information to permit appropriate
processing of the payment by the Purchaser. The Interim Servicer shall assume
full responsibility for the necessary and appropriate legal application of
Monthly Payments received by the Interim Servicer after the related Transfer
Date with respect to Mortgage Loans then in foreclosure or bankruptcy; provided,
for purposes of this Agreement, necessary and appropriate legal application of
such Monthly Payments shall include, but not be limited to, endorsement of a
Monthly Payment to the Purchaser with the particulars of the payment such as the
account number, dollar amount, date received and any special Mortgagor
application instructions.
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(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication errors;
(ii) The party receiving notice of a misapplied payment occurring prior
to the related Transfer Date and discovered after the related Transfer Date
shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the related
Transfer Date cannot be identified and said misapplied payment has resulted
in a shortage in a Custodial Account or Escrow Account, the Interim
Servicer shall be liable for the amount of such shortage. The Interim
Servicer shall reimburse the Purchaser for the amount of such shortage
within thirty (30) days after receipt of written demand therefor from the
Purchaser;
(iv) If a misapplied payment which occurred prior to the related
Transfer Date has created an improper Purchase Price as the result of an
inaccurate outstanding principal balance, a check shall be issued to the
party shorted by the improper payment application within five (5) Business
Days after notice thereof by the other party;
(v) Any check issued under the provisions of this Section 5(h) shall be
accompanied by a statement indicating the corresponding Seller and/or the
Purchaser Mortgage Loan identification number and an explanation of the
allocation of any such payments.
(i) Books and Records. On the related Transfer Date, the books, records
and accounts of the Interim Servicer with respect to the Mortgage Loans shall be
in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Interim Servicer shall, on or before the
related Transfer Date, reconcile principal balances and make any monetary
adjustments required by the Purchaser. Any such monetary adjustments will be
transferred between the Interim Servicer and the Purchaser as appropriate.
(k) IRS Forms. The Interim Servicer shall prepare and file all IRS
forms 1098, 1099 and other applicable forms and reports which are required to be
filed with respect to the period prior to the related Transfer Date in relation
to the servicing and ownership of the Mortgage Loans. The Interim Servicer shall
provide copies of such forms to the Purchaser upon request and shall reimburse
the Purchaser for any costs or penalties incurred by the Purchaser due to the
Interim Servicer's failure to comply with this paragraph. The Purchaser or the
Purchaser's designee shall prepare and file all such reports with respect to any
period commencing on or after the related Transfer Date.
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SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF EACH SELLER.
Each Seller, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Purchaser as of the execution of this Agreement and as of each related
Closing Date:
(a) Due Organization and Authority. Such Seller is an organization as
designated in the introductory paragraph of this Agreement, duly organized,
validly existing and in good standing under the laws of the chartering authority
and has all licenses necessary to carry on its business as now being conducted
and is licensed, qualified and in good standing in each state where a Mortgaged
Property is located if the laws of such state require licensing or qualification
in order to conduct business of the type conducted by such Seller, and in any
event such Seller is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan in
accordance with the terms of this Agreement; such Seller has the full corporate
power and authority to execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered pursuant to this
Agreement) by such Seller and the consummation of the transactions contemplated
hereby have been duly and validly authorized; this Agreement evidences the
valid, binding and enforceable obligation of such Seller; and all requisite
corporate action has been taken by such Seller to make this Agreement valid and
binding upon such Seller in accordance with its terms;
(b) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of such
Seller, and the transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by such Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this Agreement,
the acquisition of the Mortgage Loans by such Seller, the sale of the Mortgage
Loans to the Purchaser or the transactions contemplated hereby, nor the
fulfillment of or compliance with the terms and conditions of this Agreement,
will conflict with or result in a breach of any of the terms, conditions or
provisions of such Seller's charter or by-laws or any legal restriction or any
agreement or instrument to which such 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 such Seller or its property is subject, or impair
the ability of the Purchaser to realize on the Mortgage Loans, or impair the
value of the Mortgage Loans;
(d) Ability to Perform. Such Seller does not believe, nor does it have
any reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. Such Seller is solvent and the sale of the Mortgage
Loans will not cause the Seller to become insolvent. The sale of the Mortgage
Loans is not undertaken with the intent to hinder, delay or defraud any of such
Sellers' creditors. Such Seller that is an "insured depository institution" as
that term is defined in Section 1813(c)(2) of Title 12 of the United States
Code, as amended, is an institution whose accounts are insured by the FDIC;
15
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against such Seller which, either in any one
instance or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of such Seller,
or in any material impairment of the right or ability of such Seller to carry on
its business substantially as now conducted, or in any material liability on the
part of such Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of such Seller contemplated herein, or which
would be likely to impair materially the ability of such Seller to perform under
the terms of this Agreement;
(f) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by such Seller of or compliance by such Seller with
this Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage
Files to the Custodian or the sale of the Mortgage Loans to the Purchaser or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to the related Closing Date;
(g) Selection Process. The Mortgage Loans were not intentionally
selected in a manner so as to affect adversely the interests of the Purchaser;
(h) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of fact or omits to state a fact necessary to make the statements
contained therein not misleading;
(i) Sale Treatment. Such Seller shall treat the disposition of the
Mortgage Loans pursuant to this Agreement as a sale treatment for accounting and
tax purposes;
(j) No Commissions to Third Parties. Such Seller has not dealt with any
broker or agent or anyone else who might be entitled to a fee or commission in
connection with this transaction other than the Purchaser;
(k) Aggregate Mortgage Loan Characteristics. The Mortgage Loans shall
have the characteristics set forth on Exhibit B to the related Assignment and
Conveyance.
(l) Financial Statements. Such Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position at the end of each such period of such Seller and
its subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, such Seller has delivered
information as to its loan gain and loss experience for the immediately
preceding three-year period, in each case with respect to mortgage loans owned
by it and such mortgage loans serviced for others during such period, and all
such information so delivered is true and correct in all material respects.
There has been no change in the business, operations, financial condition,
properties or assets of such Seller since the date of such Seller's financial
statements that would have a material adverse effect on its
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ability to perform its obligations under this Agreement. Such Seller has
completed any forms requested by the Purchaser in a timely manner and in
accordance with the provided instructions;
(m) Fair Consideration. The consideration received by such Seller upon
the sale of the Mortgage Loans under this Agreement constitutes fair
consideration and reasonably equivalent value for the Mortgage Loans;
(n) Insured Depository Institution Representations. National Bank of
Commerce, a national banking association, NBC Bank, FSB (Memphis, TN), a
federally chartered savings bank, Central Carolina Bank & Trust, a North
Carolina bank, and First Market Bank, a federally chartered savings bank, are
each an "insured depository institution" as that term is defined in Section
1813(c)(2) of Title 12 of the United States Code, as amended, and accordingly,
each such Seller makes the following additional representations and warranties:
(i) This Agreement between Purchaser and Sellers conforms to all
applicable statutory and regulatory requirements; and
(ii) This Agreement is (1) executed contemporaneously with the
agreement reached by Purchaser and such Seller, (2) approved by a specific
corporate or banking association resolution by such Seller's board of
directors, which approval shall be reflected in the minutes of said board,
and (3) an official record of such Seller. A copy of such resolution,
certified by a vice president or higher officer of such Seller has been
provided to Purchaser.
(o) Seller's Origination. Such Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon such Seller's Underwriting Guidelines, and is in no way made
as a result of Purchaser's decision to purchase, or not to purchase, or the
price Purchaser may offer to pay for, any such mortgage loan, if originated.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF PURCHASER.
The Purchaser, as a condition to the consummation of the transactions
contemplated hereby, hereby makes the following representations and warranties
to the Sellers as of the execution of this Agreement and as of each related
Closing Date:
(a) Due Organization and Authority. The Purchaser is a corporation,
duly organized, validly existing and in good standing under the laws of the
state of New York and has all licenses necessary to carry on its business as now
being conducted and is licensed, qualified and in good standing in each state
where licensing or qualification is required in order to conduct business of the
type conducted by the Purchaser; the Purchaser has the full corporate power and
authority to execute and deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this Agreement (including
all instruments of transfer to be delivered pursuant to this Agreement) by the
Purchaser and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement evidences the valid, binding and
enforceable obligation of the Purchaser; and all requisite
17
corporate action has been taken by the Purchaser to make this Agreement valid
and binding upon the Purchaser in accordance with its terms;
(b) No Conflicts. Neither the execution and delivery of this Agreement,
the purchase of the Mortgage Loans by the Purchaser or the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, will conflict with or result in a breach of any of
the terms, conditions or provisions of the Purchaser's charter or by-laws or any
legal restriction or any agreement or instrument to which the Purchaser 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 Purchaser or its
property is subject, or impair the ability of the Sellers to enforce the rights
of Sellers hereunder;
(c) Ability to Perform. The Purchaser 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;
(d) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Purchaser which would draw into
question the validity of this Agreement or of any action taken or to be taken in
connection with the obligations of the Purchaser contemplated herein, or which
would be likely to impair materially the ability of the Purchaser to perform
under the terms of this Agreement;
(e) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Purchaser of or compliance by the Purchaser with
this Agreement or the purchase of the Mortgage Loans from the Sellers or the
consummation of the transactions contemplated by this Agreement, or if required,
such approval has been obtained prior to any Closing Date;
(f) Sale Treatment. The Purchaser shall treat the disposition of the
Mortgage Loans pursuant to this Agreement as a sale treatment for accounting and
tax purposes; and
(g) No Commissions to Third Parties. The Purchaser has not dealt with
any broker or agent or anyone else who might be entitled to a fee or commission
in connection with this transaction other than the Seller.
SECTION 8. REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL MORTGAGE
LOANS.
As to each Mortgage Loan sold to the Purchaser on each Closing Date,
the applicable Seller hereby represents and warrants to the Purchaser that as of
the related Closing Date:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note
have been made and
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credited. No payment required under the Mortgage Loan is delinquent nor has any
payment under the Mortgage Loan been delinquent for more than 30 days more than
once in the 12 months preceding the related Closing Date. The first Monthly
Payment shall be made with respect to the Mortgage Loan on its Due Date or
within the grace period, all in accordance with the terms of the related
Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with the
terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
applicable Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor, directly or
indirectly, for the payment of any amount required under the Mortgage Loan,
except for interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the day
which precedes by one month the Due Date of the first installment of principal
and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
except by a written instrument which has been recorded, if necessary to protect
the interests of the Purchaser and which has been delivered to the Purchaser.
The substance of any such waiver, alteration or modification has been approved
by the issuer of any related PMI Policy and the title insurer, to the extent
required by the policy, and its terms are reflected on the related Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement approved by the issuer of any related
PMI Policy and the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Purchaser and the terms of which are reflected in the related Mortgage Loan
Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located pursuant to insurance policies conforming to the requirements of FNMA
and FHLMC. If upon origination of the Mortgage Loan, the Mortgaged Property was
in an area identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available) a flood insurance policy meeting the requirements of the
current guidelines of the
19
Federal Flood Insurance Administration is in effect which policy conforms to the
requirements of FNMA and FHLMC. All individual insurance policies contain a
standard mortgagee clause naming such Seller and its successors and assigns as
mortgagee, and all premiums thereon have been paid. The Mortgage obligates the
Mortgagor thereunder to maintain the hazard insurance policy at the Mortgagor's
cost and expense, and on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at such Mortgagor's cost
and expense, and to seek reimbursement therefor from the Mortgagor. Where
required by state law or regulation, the Mortgagor has been given an opportunity
to choose the carrier of the required hazard insurance, provided the policy is
not a "master" or "blanket" hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser upon
the consummation of the transactions contemplated by this Agreement. Such Seller
has not engaged in, and has no knowledge of the Mortgagor's or any subservicer's
having engaged in, any act or omission which would impair the coverage of any
such policy, the benefits of the endorsement provided for herein, or the
validity and binding effect of either, including, without limitation, no
unlawful fee, commission, kickback or other unlawful compensation or value of
any kind has been or will be received, retained or realized by any attorney,
firm or other person or entity, and no such unlawful items have been received,
retained or realized by such Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
equal credit opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with, and such Seller shall maintain in its possession, available
for the Purchaser's inspection, and shall deliver to the Purchaser on the
related Transfer Date, evidence of compliance with all such requirements;
(h) No Satisfaction of Mortgage. The Mortgage has not been satisfied,
canceled, subordinated or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in whole or in
part, nor has any instrument been executed that would effect any such release,
cancellation, subordination or rescission. Such Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has such
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property is
a fee simple property located in the state identified in the related Mortgage
Loan Schedule and consists of a single parcel of real property with a detached
single family residence erected thereon, or a two- to four-family dwelling, or
an individual condominium unit in a low-rise condominium project, or an
individual unit in a planned unit development, provided, however, that any
condominium unit or planned unit development shall conform with the applicable
FNMA requirements regarding such dwellings and that no residence or dwelling is
a mobile home or a manufactured dwelling. No portion of the Mortgaged Property
is used for commercial purposes;
(j) Valid First Lien. The Mortgage is a valid, subsisting enforceable
and perfected first lien on the Mortgaged Property, including all buildings on
the Mortgaged Property
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and all installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to the foregoing. The
lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not yet
due and payable;
(2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to mortgage lending institutions generally and specifically
referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and (i) referred to or to otherwise
considered in the appraisal made for the originator of the Mortgage Loan or
(ii) which do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable first lien and first priority security interest on
the property described therein and such Seller has full right to sell and assign
the same to the Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to
secure debt or other security instrument creating a lien subordinate to the lien
of the Mortgage;
(k) Validity of Mortgage Documents. The Mortgage Note and the Mortgage
are genuine, and each is the legal, valid and binding obligation of the maker
thereof enforceable in accordance with its terms. All parties to the Mortgage
Note and the Mortgage and any other related agreement had legal capacity to
enter into the Mortgage Loan and to execute and deliver the Mortgage Note and
the Mortgage and any other related agreement, and the Mortgage Note and the
Mortgage and any other related agreement have been duly and properly executed by
such parties. The documents, instruments and agreements submitted for loan
underwriting were not falsified and contain no untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary to
make the information and statements therein not misleading. No fraud was
committed in connection with the origination of the Mortgage Loan. Such Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
21
(m) Ownership. Such Seller is the sole owner of record and holder of
the Mortgage Loan. The Mortgage Loan is not assigned or pledged, and such Seller
has good and marketable title thereto, and has full right to transfer and sell
the Mortgage Loan therein to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) organized under the
laws of such state, or (3) qualified to do business in such state, or (4)
federal savings and loan associations or national banks having principal offices
in such state, or (5) not doing business in such state;
(o) LTV, PMI Policy. The LTV of the Mortgage Loan either is not more
than 80% or the excess over 75% of the Appraised Value is and will be insured as
to payment defaults by a PMI Policy until the LTV of such Mortgage Loan is
reduced to 80%. All provisions of such PMI Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. No action, inaction, or event has occurred and no
state of facts exists that has, or will result in the exclusion from, denial of,
or defense to coverage. If the ARM Mortgage Loan provides for negative
amortization or for the potential for negative amortization, the PMI Policy
insures any increase in the Stated Principal Balance from the original balance
of the Mortgage Note. Any Mortgage Loan subject to a PMI Policy obligates the
Mortgagor thereunder to maintain the PMI Policy and to pay all premiums and
charges in connection therewith. The Mortgage Interest Rate for the Mortgage
Loan as set forth on the Mortgage Loan Schedule is net of any such insurance
premium;
(p) Title Insurance. The Mortgage Loan is covered by an ALTA lender's
title insurance policy or other generally acceptable form of policy of insurance
acceptable to FNMA or FHLMC, issued by a title insurer acceptable to FNMA or
FHLMC and qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring the Seller, its successors and assigns, as to the
first priority lien of the Mortgage in the original principal amount of the
Mortgage Loan (or to the extent that an ARM Mortgage Loan provides for negative
amortization, the maximum amount of negative amortization in accordance with the
Mortgage), and against any loss by reason of the invalidity or unenforceability
of the lien resulting from the provisions of the Mortgage providing for
adjustment in the Mortgage Interest Rate and Monthly Payment, subject only to
the exceptions contained in clauses (1), (2) and (3) of paragraph (j) of this
Section 8. Where required by state law or regulation, the Mortgagor has been
given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. Such Seller is the sole insured of such
lender's title insurance policy, and such lender's title insurance policy is in
full force and effect and will be in force and effect upon the consummation of
the transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the Mortgage,
including such Seller, has done, by act or omission,
22
anything which would impair the coverage of such lender's title insurance policy
including without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by such Seller;
(q) No Defaults. 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 neither such Seller nor its predecessors have waived any
default, breach, violation or event of acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements which
were considered in determining the Appraised Value of the Mortgaged Property lay
wholly within the boundaries and building restriction lines of the Mortgaged
Property and no improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged Property is
in violation of any applicable zoning law or regulation;
(t) Origination: Payment Terms. At the time the Mortgage Loan was
originated, the originator was a mortgagee approved by the Secretary of Housing
and Urban Development pursuant to Sections 203 and 211 of the National Housing
Act or a savings and loan association, a savings bank, a commercial bank or
similar banking institution which is supervised and examined by a Federal or
State authority. The Mortgage Interest Rate is the fixed interest rate set forth
in the Mortgage Note, or, in the case of ARM Mortgage Loans, for which 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 0.125%,
subject to the Periodic Rate Cap and the Lifetime Rate Cap. The Mortgage Note is
payable in equal monthly installments of principal and interest, (which
installments of interest are subject to change due to adjustments to the
Mortgage Interest Rate on each Interest Rate Adjustment Date with respect to ARM
Mortgage Loans), 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;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to the Mortgagor
23
which would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage subject to applicable
federal and state laws and judicial precedent with respect to bankruptcy and
right of redemption;
(v) Conformance with Underwriting Guidelines. The Mortgage Loan was
underwritten in accordance with such Seller's underwriting guidelines in effect
at the time the Mortgage Loan was originated, a copy of which underwriting
guidelines are attached as Exhibit J hereto. The Mortgage Loan is in conformity
with the standards of FHLMC or FNMA under one of their respective home mortgage
purchase programs (except that the principal balance of certain Mortgage Loans
may have exceeded the limits of FNMA and FHLMC) and the Mortgage Note and
Mortgage are on forms acceptable to FHLMC or FNMA;
(w) Occupancy of the Mortgaged Property. As of the related date of
origination of the Mortgage Loan the Mortgaged Property was lawfully occupied
under applicable law. As of the Closing Date all inspections, licenses and
certificates required to be made or issued with respect to all occupied portions
of the Mortgaged Property and, with respect to the use and occupancy of the
same, including but not limited to certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not been
secured by any collateral except the lien of the corresponding Mortgage and the
security interest of any applicable security agreement or chattel mortgage
referred to in (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in the Mortgage, and no
fees or expenses are or will become payable by the Purchaser to the trustee
under the deed of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(z) Acceptable Investment. Such Seller has no knowledge of any
circumstances or conditions 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;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered by
such Seller under this Agreement have been delivered to the Purchaser. Such
Seller is in possession of a complete, true and accurate Mortgage File in
compliance with Exhibit B, except for such documents the originals of which have
been delivered to the Purchaser;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged Property
is a condominium unit or a planned unit development (other than a de minimus
planned unit development) such condominium or planned unit development project
meets FNMA eligibility requirements for sale to FNMA or is located in a
condominium or planned unit development project which has received FNMA project
approval and the representations and warranties
24
required by FNMA with respect to such condominium or planned unit development
have been made and remain true and correct in all respects;
(cc) Due on Sale. The Mortgage contains an enforceable provision
(subject to applicable laws or regulations) for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the Mortgagee thereunder;
(dd) Transfer of Mortgage Loans. 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;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by such Seller, the Mortgagor or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions currently in effect which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage loan
and the Mortgage Loan does not have a shared appreciation or other contingent
interest feature;
(ff) Consolidation of Future Advances. Any future advances made prior
to the related Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term. The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to FNMA and FHLMC. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(gg) Mortgaged Property Undamaged. There is no proceeding pending or,
to the Seller's knowledge, threatened for the total or partial condemnation of
the Mortgaged Property. The Mortgaged Property is undamaged by waste, fire,
earthquake or earth movement, windstorm, flood, tornado or other casualty so as
to affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;
(hh) Collection Practices; Escrow Deposits; ARM Adjustments. The
origination and collection practices used with respect to the Mortgage Loan have
been in accordance with Accepted Servicing Practices and in all respects in
compliance with all applicable laws and regulations. With respect to escrow
deposits and Escrow Payments, all such payments are in the possession of such
Seller and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. All Escrow
Payments have been collected in full compliance with state and federal law. An
escrow of funds is not prohibited by applicable law and has been established in
an amount sufficient to pay for every item which remains unpaid and which has
been assessed but is not yet due and payable. No escrow deposits or Escrow
Payments or other charges or payments due such Seller have been capitalized
under the Mortgage or the Mortgage Note. With respect to each ARM Mortgage Loan,
all Mortgage Interest Rate adjustments have been made in strict compliance
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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;
(ii) Appraisal. The Mortgage File contains an appraisal of the related
Mortgage Property signed prior to the approval of the Mortgage Loan application
by a Qualified Appraiser.
(jj) Soldiers' and Sailors' Relief Act. The Mortgagor has not notified
such Seller, and such Seller has no knowledge of any relief requested or allowed
to the Mortgagor under the Soldiers' and Sailors' Civil Relief Act of 1940;
(kk) Environmental Matters. The Mortgaged Property is free from any and
all toxic or hazardous substances and there exists no violation of any local,
state or federal environmental law, rule or regulation. There is no pending
action or proceeding directly involving any Mortgaged Property of which such
Seller is aware in which compliance with any environmental law, rule or
regulation is an issue; and to the best of such Seller's knowledge, nothing
further remains to be done to satisfy in full all requirements of each such law,
rule or regulation consisting a prerequisite to use and enjoyment of said
property;
(ll) No Construction Loans. No Mortgage Loan was made in connection
with (i) the construction or rehabilitation of a Mortgaged Property or (ii)
facilitating the trade-in or exchange of a Mortgaged Property;
(mm) No Denial of Insurance. The related Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action,
inaction, or event has occurred and no state of fact exists or has existed that
has resulted or will result in the exclusion from, denial of, or defense to
coverage under any applicable pool insurance policy, special hazard insurance
policy, PMI Policy or bankruptcy bond, irrespective of the cause of such failure
of coverage. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by such
Seller or any designee of such Seller or any corporation in which such Seller or
any officer, director, or employee had a financial interest at the time of
placement of such insurance;
(nn) Simple Interest Mortgage Loans None of the Mortgage Loans are
simple interest Mortgage Loans;
(oo) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with FNMA guidelines for such
trusts; and
(pp) Mortgagor Acknowledgment. The Mortgagor has executed a statement
to the effect that the Mortgagor has received all disclosure materials required
by applicable law with respect to the making of adjustable rate mortgage loans.
Such Seller shall maintain such statement in the Mortgage File.
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(qq) Single Premium Credit Life Insurance. None of the proceeds of the
Mortgage Loan were used to finance single-premium credit life insurance
policies;
(rr) Tax Service Contract The related Seller has obtained a life of
loan, transferable real estate Tax Service Contract with an Approved Tax Service
Contract Provider on each Mortgage Loans and such contract is assignable to the
Purchaser without cost;
(ss) Flood Certification Contract. The related Seller has obtained a
life of loan, transferable flood certification contract for each Mortgage Loan
with an Approved Flood Policy Insurer and such contract is assignable to the
Purchaser or the Purchaser's designee without cost;
(tt) Recordation. Each original Mortgage was recorded and, except for
those Mortgage Loans subject to the MERS identification system, all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
related Seller, or is in the process of being recorded;
(uu) Prepayment Fee. With respect to each Mortgage Loan that has a
prepayment fee feature, each such prepayment fee is enforceable and will be
enforced by the Seller, and each prepayment penalty in permitted pursuant to
federal, state and local law. No Mortgage Loan will impose a prepayment penalty
for a term in excess of five years from the date such Mortgage Loan was
originated. Except as otherwise set forth in the Mortgage Loan Schedule, with
respect to each Mortgage Loan that contains a prepayment fee, if the related
Mortgagor makes one or more prepayment(s) within any 12-month period the total
amount of which exceeds twenty percent (20%) of the original principal balance
of the Mortgage Loan, such prepayment fee is at least equal to the lesser of (A)
2.00% of the amount prepaid in excess of 20% of the original principal balance
of such Mortgage Loan, (B) the maximum amount permitted under applicable law or
(C) six months interest at the related Mortgage Interest Rate on the amount
prepaid in excess of 20% of the original principal balance of such Mortgage
Loan; and
(vv) Predatory Lending Regulations; High Cost Loans. None of the
Mortgage Loans are classified as (a) "high cost" loans under the Home Ownership
and Equity Protection Act of 1994 or (b) "high cost," "threshold," or
"predatory" loans under any other applicable state, federal or local law.
SECTION 9. REMEDIES FOR BREACH OF REPRESENTATIONS AND WARRANTIES;
ADDITIONAL REPURCHASE OBLIGATIONS.
(a) It is understood and agreed that the representations and warranties
set forth in Sections 6, 7 and 8 shall survive the sale of the Mortgage Loans to
the Purchaser and the delivery of the Mortgage Loan Documents to the Purchaser
and shall inure to the benefit of the Purchaser, notwithstanding any restrictive
or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage File. Upon discovery by either
the applicable Seller or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of the Mortgage
27
Loans or the interest of the Purchaser or which materially and adversely affects
the interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan (in the case
of any of the foregoing, a "Breach"), the party discovering such Breach shall
give prompt written notice to the other.
Within 60 days of the earlier of either discovery by or notice to the
applicable Seller of any Breach of a representation or warranty, such Seller
shall use reasonable efforts promptly to cure such Breach in all material
respects and, if such Breach cannot be cured, such Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price. In
the event that a Breach shall involve any representation or warranty set forth
in Section 6, and such Breach cannot be cured within 60 days of the earlier of
either discovery by or notice to such Seller of such Breach, all of the Mortgage
Loans shall, at the Purchaser's option, be repurchased by such Seller at the
Repurchase Price. Seller will not be required to repurchase such Mortgage Loan
until receipt of a demand to repurchase contained in a notice of Breach.
However, if the Breach shall involve a representation or warranty set
forth in Section 8 and the applicable Seller discovers or receives notice of any
such Breach within 120 days of the related Closing Date, such Seller shall, at
the Purchaser's option and provided that such Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans, provided that any such
substitution shall be effected not later than 120 days after the related Closing
Date. If the applicable Seller has no Qualified Substitute Mortgage Loan, it
shall repurchase the deficient Mortgage Loan. Any repurchase of a Mortgage Loan
or Loans pursuant to the foregoing provisions of this Section 9 shall be
accomplished by either (a) if the Interim Servicing Agreement has been entered
into and is in effect, deposit in the Custodial Account of the amount of the
Repurchase Price for distribution to Purchaser on the next scheduled Remittance
Date, after deducting therefrom any amount received in respect of such
repurchased Mortgage Loan or Loans and being held in the Custodial Account for
future distribution or (b) if the Interim Servicing Agreement has not been
entered into or is no longer in effect, by direct remittance of the Repurchase
Price to the Purchaser or in accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
applicable Seller shall arrange for the reassignment of the Deleted Mortgage
Loan to such Seller and the delivery to the Seller of any documents held by the
Custodian relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, such Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser and any servicer of the Mortgage Loans that such
repurchase or substitution has taken place, amend the Mortgage Loan Schedule to
reflect the withdrawal of the Deleted Mortgage Loan from this Agreement, and, in
the case of substitution, identify a Qualified Substitute Mortgage Loan and
amend the Mortgage Loan Schedule to reflect the addition of such Qualified
Substitute Mortgage Loan to this Agreement. In connection with any such
substitution, such Seller shall be deemed to have made as to such Qualified
Substitute Mortgage Loan the representations and warranties set forth in this
Agreement except that all such representations and warranties set forth in this
Agreement shall be deemed made as of the date of such substitution. The
applicable Seller shall effect such substitution by delivering to the Custodian
for such Qualified Substitute Mortgage Loan the documents required by Section
2(c), with the Mortgage Note endorsed as required by Section
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2(c). No substitution will be made in any calendar month after the Determination
Date for such month. Such Seller shall deposit in the Custodial Account, or in
the event that the Interim Servicing Agreement has not been entered into , or is
no longer in effect, remit directly to the Purchaser or in accordance with the
Purchaser's instructions, the Monthly Payment less the servicing fee due on such
Qualified Substitute Mortgage Loan or Loans in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by such Seller.
For the month of substitution, distributions to Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of substitution,
and such Seller shall thereafter be entitled to retain all amounts subsequently
received by such Seller in respect of such Deleted Mortgage Loan.
For any month in which the applicable Seller substitutes a Qualified
Substitute Mortgage Loan for a Deleted Mortgage Loan, such Seller shall
determine the amount (if any) by which the aggregate principal balance of all
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of substitution).
The amount of such shortfall shall be paid by such Seller directly to the
Purchaser or in accordance with the Purchaser's instructions, within two (2)
Business Days of such substitution.
In addition to such repurchase or substitution obligation, the
applicable Seller shall indemnify the Purchaser and hold it harmless against any
losses, damages, penalties, fines, forfeitures, including, without limitation,
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 such Seller representations and warranties contained
in this Agreement. It is understood and agreed that the obligations of such
Seller set forth in this Section 9 to cure or repurchase a defective Mortgage
Loan and to indemnify the Purchaser as provided in this Section 9 constitute the
sole remedies of the Purchaser respecting a Breach of the foregoing
representations and warranties.
Any cause of action against a Seller relating to or arising out of the
Breach of any representations and warranties made in Sections 6 and 8 shall
accrue as to any Mortgage Loan upon (i) discovery of such Breach by the
Purchaser or notice thereof by such Seller to the Purchaser, (ii) failures by
such Seller to cure such Breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon such Seller by the Purchaser for compliance with
this Agreement.
(b) With respect to any Mortgage Loan, if the related Mortgagor is
delinquent with respect to the Mortgage Loan's first Monthly Payment, the
applicable Seller shall, upon receipt of notice from the Purchaser, promptly
repurchase such Mortgage Loan from the Purchaser in accordance with Section 9(a)
hereof.
(c) In the event that a Mortgagor exercises the option to convert a
Mortgage Loan to a fixed rate mortgage loan in accordance with the terms of the
related Mortgage Note, the applicable Seller shall repurchase such Mortgage Loan
on or before the first day of the month immediately following the date of such
conversion at a price equal to 100% of the unpaid principal balance of such
Mortgage Loan at the time of such conversion plus 30 days' interest at the
Mortgage Interest Rate.
29
SECTION 10. CLOSING.
The closing for the purchase and sale of the Mortgage Loans shall take
place on the related Closing Date. At the Purchaser's option, the Closing shall
be either: by telephone, confirmed by letter or wire as the parties shall agree;
or conducted in person, at such place as the parties shall agree.
The closing shall be subject to each of the following conditions:
(a) all of the representations and warranties of the Sellers under this
Agreement and under the Interim Servicing Agreement shall be true and correct as
of the related Closing Date and no event shall have occurred which, with notice
or the passage of time, would constitute a default under this Agreement or an
Event of Default under the Interim Servicing Agreement;
(b) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all Closing Documents as specified in Section 10
of this Agreement, in such forms as are agreed upon and acceptable to the
Purchaser, duly executed by all signatories other than the Purchaser as required
pursuant to the respective terms thereof;
(c) The applicable Seller shall have delivered and released to the
Custodian pursuant to this Agreement all documents required pursuant to the
related Custodial Agreement; and
(d) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
applicable Seller on the related Closing Date the Purchase Price, plus accrued
interest pursuant to Section 3 of this Agreement, by wire transfer of
immediately available funds to the account designated by the applicable Seller.
SECTION 11. CLOSING DOCUMENTS.
The Closing Documents shall consist of fully executed originals of the
following documents:
(a) on the initial Closing Date:
1. this Agreement;
2. each of the documents required to be delivered by the applicable
Seller pursuant to Section 2(c) hereof;
3. the Interim Servicing Agreement;
4. the Custodial Agreement;
30
5. Custodial Account Certification or Custodial Account Letter
Agreement as required under the Interim Servicing Agreement;
6. an Escrow Account Certification or Escrow Account Letter Agreement
as required under the Interim Servicing Agreement;
7. an Officer's Certificate from each Seller, in the form of Exhibit
D-1 hereto, including all attachments thereto;
8. an Opinion of Counsel of each Seller, in the form of Exhibit E
hereto;
(b) in addition, on each Closing Date:
1. a Security Release Certification, in the form of Exhibit F hereto
(for a Seller which is a member of the Federal Home Loan Bank
System), executed by the applicable regional Federal Home Loan Bank
and, (ii) if applicable, in the form of Exhibit G hereto executed by
any other person, as requested by the Purchaser, if any of the
Mortgage Loans have at any time been subject to any security
interest, pledge or hypothecation for the benefit of such person and
(iii) if applicable a certificate of the applicable Seller stating
that the Mortgage Loans are not subject to any security interest,
claim, pledge, hypothecation or lien;
2. a Certificate or other evidence of merger or change of name, signed
or stamped by the applicable regulatory authority, if any of the
Mortgage Loans were acquired by the Seller by merger or acquired or
originated by the applicable Seller while conducting business under
a name other than its present name;
3. an Assignment and Conveyance executed by the applicable Seller,
including all exhibits thereto;
4. a Mortgage Loan Schedule attached as Exhibit A to the related
Assignment and Conveyance;
5. a Purchase Price and Terms Letter; and
6. an Officer's Certificate, as may be requested by the Purchaser, in
its sole discretion, in response to a change in any Seller's
operational or financial condition, in the form of Exhibit D-2
hereto.
The applicable Seller shall bear the risk of loss of the Closing
Documents until such time as they are received by the Purchaser or its
attorneys.
31
SECTION 12. MERGER OR CONSOLIDATION OF THE SELLERS.
Each Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which any Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which such
Seller shall be a party, or any Person succeeding to the business of such
Seller, shall be the successor of such Seller hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided however, that
the successor or surviving Person shall have a net worth of at least
$25,000,000.
SECTION 13. COSTS.
The Purchaser shall pay any commissions due its salesmen and the legal
fees and expenses of its attorneys. All other costs and expenses incurred in
connection with the transfer and delivery of the Mortgage Loans, including
recording fees for the Assignments of Mortgages, if the Purchaser elects to
record them, initial MERS registration costs and transfer costs to the Purchaser
as investor, fees for title policy endorsements and continuations and such
Seller's attorney's fees, shall be paid by the applicable Seller.
SECTION 14. PROTECTION OF CONFIDENTIAL INFORMATION.
Each Seller shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the Purchase Price paid by the
Purchaser for the Mortgage Loans, except to the extent that it is appropriate
for such Seller to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies.
SECTION 15. NOTICES.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address shown below, or such other address as may
hereafter be furnished to the other party by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date delivered to or received at the premises of the addressee (as evidenced, in
the case of registered or certified mail, by the date noted on the return
receipt).
If to Purchaser:
Xxxxxx Brothers Bank, FSB
3 World Financial Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Contract Finance
32
If to any Seller:
National Bank of Commerce
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxx Xxxxxxxx
with a copy to:
National Bank of Commerce
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
SECTION 16. SEVERABILITY CLAUSE.
Any part, provision, representation or warranty of this Agreement that
is prohibited or that is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law that prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure, the economic
effect of which is as close as possible to the economic effect of this
Agreement, without regard to such invalidity.
SECTION 17. COUNTERPARTS.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 18. PLACE OF DELIVERY AND GOVERNING LAW.
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THE AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT
PREEMPTED BY FEDERAL LAW.
33
SECTION 19. FURTHER AGREEMENTS.
The Purchaser and each Seller agree to execute and deliver to the
others such additional documents or instruments as may be reasonably necessary
or appropriate to effectuate the purposes of this Agreement.
Without limiting the generality of the foregoing, each Seller shall
cooperate with the Purchaser in connection with the initial resales of the
Mortgage Loans by the Purchaser. In that connection, each Seller shall provide
to the Purchaser any and all information and appropriate verification of
information, whether through letters of its auditors and counsel or otherwise,
as the Purchaser shall reasonably request and are reasonably believed necessary
by the Purchaser in connection with any Reconstitution Agreement. If the Interim
Servicer is servicing the Mortgage Loans at the time of the initial resale, the
Interim Servicer shall execute any Reconstitution Agreement within a reasonable
period of time after receipt of any Reconstitution Agreement which time shall be
sufficient for the Interim Servicer and Interim Servicer's counsel to review
such Reconstitution Agreement, but such time shall not exceed ten (10) Business
Days after such receipt. Prior to incurring any out-of-pocket expenses pursuant
to this paragraph, the Seller shall notify the Purchaser in writing of the
estimated amount of such expense. The Purchaser shall reimburse the Seller for
any such expense following its receipt of appropriate details thereof.
SECTION 20. INTENTION OF THE PARTIES.
It is the intention of the parties that the Purchaser is purchasing,
and the applicable Seller is selling, 100% ownership interest in the Mortgage
Loans and not a debt instrument of the applicable Seller or another security.
Accordingly, the parties hereto each intend to treat the transaction for Federal
income tax purposes as a sale by the Seller, and a purchase by the Purchaser, of
the Mortgage Loans. Moreover, the arrangement under which the Mortgage Loans are
held shall be consistent with classification of such arrangement as a grantor
trust in the event it is not found to represent direct ownership of the Mortgage
Loans. The Purchaser shall have the right to review the Mortgage Loans and the
related Mortgage Loan Files to determine the characteristics of the Mortgage
Loans which shall affect the Federal income tax consequences of owning the
Mortgage Loans and the applicable Seller shall cooperate with all reasonable
requests made by the Purchaser in the course of such review.
SECTION 21. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
This Agreement shall bind and inure to the benefit of and be
enforceable by each Seller and the Purchaser and the respective successors and
assigns of each Seller and the Purchaser. This Agreement shall not be assigned,
pledged or hypothecated by any Seller to a third party without the prior written
consent of the Purchaser.
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
applicable Seller shall be under no obligation to deal with 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
34
Purchaser may, subject to the terms of this Agreement, sell and transfer one or
more of the Mortgage Loans, provided, however, that the transferee will not be
deemed to be a Purchaser hereunder binding upon the applicable Seller unless
such transferee shall agree in writing to be bound by the terms of this
Agreement and an original counterpart of the instrument of transfer and an
assignment and assumption of this Agreement in the form of Exhibit H hereto
executed by the transferee shall have been delivered to the applicable Seller.
The Purchaser also shall advise the applicable Seller of the transfer. Upon
receipt of notice of the transfer, the applicable Seller shall xxxx its books
and records to reflect the ownership of the Mortgage Loans of such assignee, and
shall release the previous Purchaser from its obligations hereunder with respect
to the Mortgage Loans sold or transferred.
SECTION 22. WAIVERS; OTHER AGREEMENTS.
No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.
SECTION 23. EXHIBITS.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
SECTION 24. GENERAL INTERPRETIVE PRINCIPLES.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) 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.
35
SECTION 25. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 26. RECORDATION OF ASSIGNMENTS OF MORTGAGE.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or their comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the applicable Seller's expense in the event recordation is either
necessary under applicable law or requested by the Purchaser at its sole option.
SECTION 27. NO PERSONAL SOLICITATION.
From and after the related Closing Date, the applicable Seller hereby
agrees that it will not take any action or permit or cause any action to be
taken by any of its agents or affiliates, or by any independent contractors on
the applicable Seller's behalf, to personally, by telephone or mail, solicit the
borrower or obligor under any Mortgage Loan for any purpose whatsoever,
including to refinance a Mortgage Loan, in whole or in part, without the prior
written consent of the Purchaser. It is understood and agreed that all rights
and benefits relating to the solicitation of any Mortgagors and the attendant
rights, title and interest in and to the list of such Mortgagors and data
relating to their Mortgages (including insurance renewal dates) shall be
transferred to the Purchaser pursuant hereto on the related Closing Date and the
applicable Seller shall take no action to undermine these rights and benefits.
Notwithstanding the foregoing, it is understood and agreed that offers to
refinance a Mortgage Loan made within 30 days following receipt by the
applicable Seller of a pay-off request from the Mortgagor and promotions
undertaken by the applicable Seller or any affiliate of the applicable Seller
which are directed to the general public at large, including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this Section 27.
36
IN WITNESS WHEREOF, each Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXX BROTHERS BANK, FSB
(Purchaser)
By:
-------------------------------------
Name:
Title:
NATIONAL BANK OF COMMERCE
(Seller)
By:
-------------------------------------
Name:
Title:
CENTRAL CAROLINA BANK & TRUST
(Seller)
By:
-------------------------------------
Name:
Title:
NBC BANK, FSB (MEMPHIS, TN)
(Seller)
By:
-------------------------------------
Name:
Title:
FIRST MARKET BANK
(Seller)
By:
-------------------------------------
Name:
Title:
COMMERCE FINANCE COMPANY
(Seller)
By:
-------------------------------------
Name:
Title:
0
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the _____ day of ____________, 200_ before me, a Notary Public in
and for said State, personally appeared ____________, known to me to be
______________ of Xxxxxx Brothers Bank, FSB, 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 office seal
the day and year in this certificate first above written.
-----------------------------------
Notary Public
My Commission expires _____________
STATE OF _____________ )
) ss.:
COUNTY OF ___________ )
On the _____ day of _______________, 200_ before me, a Notary Public in
and for said State, personally appeared ____________, known to me to be
_____________ of _______________________, 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 office seal
the day and year in this certificate first above written.
-----------------------------------
Notary Public
My Commission expires _____________
STATE OF _____________ )
) ss.:
COUNTY OF ___________ )
On the _____ day of _______________, 200_ before me, a Notary Public in
and for said State, personally appeared ____________, known to me to be
_____________ of _______________________, 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 office seal
the day and year in this certificate first above written.
-----------------------------------
Notary Public
My Commission expires _____________
STATE OF _____________ )
) ss.:
COUNTY OF ___________ )
On the _____ day of _______________, 200_ before me, a Notary Public in
and for said State, personally appeared ____________, known to me to be
_____________ of _______________________, 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 office seal
the day and year in this certificate first above written.
-----------------------------------
Notary Public
My Commission expires _____________
STATE OF _____________ )
) ss.:
COUNTY OF ___________ )
On the _____ day of _______________, 200_ before me, a Notary Public in
and for said State, personally appeared ____________, known to me to be
_____________ of _______________________, 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 office seal
the day and year in this certificate first above written.
-----------------------------------
Notary Public
My Commission expires _____________
STATE OF _____________ )
) ss.:
COUNTY OF ___________ )
On the _____ day of _______________, 200_ before me, a Notary Public in
and for said State, personally appeared ____________, known to me to be
_____________ of _______________________, 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 office seal
the day and year in this certificate first above written.
-----------------------------------
Notary Public
My Commission expires _____________
STATE OF _____________ )
) ss.:
COUNTY OF ___________ )
On the _____ day of _______________, 200_ before me, a Notary Public in
and for said State, personally appeared ____________, known to me to be
_____________ of _______________________, 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 office seal
the day and year in this certificate first above written.
-----------------------------------
Notary Public
My Commission expires _____________
EXHIBIT A
FORM OF ASSIGNMENT AND CONVEYANCE
---------------------------------
On this ____ day of ________, 2000, [Seller] (the "Seller") as a Seller
under that certain Mortgage Loan Flow Purchase and Warranties Agreement, dated
as of August 1, 2001 (the "Purchase Agreement") does hereby sell, transfer,
assign, set over and convey to Xxxxxx Brothers Bank, FSB as the Purchaser (the
"Purchaser") under the Purchase Agreement, without recourse, but subject to the
terms of the Purchase Agreement, all right, title and interest of, in and to the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit
A, together with the Mortgage Files and all rights and obligations arising under
the documents contained therein. Pursuant to Section 2 of the Purchase
Agreement, the Seller has delivered to the Purchaser the documents for each
Mortgage Loan to be purchased. The ownership of each Mortgage Note, Mortgage,
and the contents of the Mortgage File and Servicing File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Seller or the Interim Servicer shall immediately vest in the Purchaser and shall
be retained and maintained, in trust, by the Interim Servicer at the will of the
Purchaser in such custodial capacity only.
The Mortgage Loan characteristics of the Mortgage Loan Package subject
hereto are set forth on Exhibit B hereto.
The related Purchase Price and Terms Letter is dated as of ___________.
The related Transfer Date is ___________________.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Purchase Agreement.
[SELLER]
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
A-1
Exhibit A to Assignment and Conveyance
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]
A-2
Exhibit B to Assignment and Conveyance
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
THE POOL CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
In addition to the representations and warranties set forth in the
Purchase Agreement, the Seller hereby represents and warrants to the Purchaser,
that pool characteristics of the Mortgage Loans delivered on the related Closing
Date [_____________] in connection with that certain Purchase Price and Terms
Letter dated as of [_______], by and between the Purchaser and the Seller are as
follows:
Pool Characteristics. With respect to the aggregate unpaid principal
balance of all Mortgage Loans, (a) no more than ____% of the Mortgage Loans are
secured by real property improved by two- to four- family dwellings, (b) no more
than ___% are secured by real property improved by individual condominium units,
(c) no more than ____% are secured by real property improved by an individual
unit in a planned unit development, and (d) at least ____% are secured by real
property with a detached one family residence erected thereon. With respect to
the aggregate unpaid principal balance of the Mortgage Loans, at least ____% of
the Mortgage Loans have an original term of 360 months, and no more than ___%
have an original term of 180 months. With respect to the aggregate unpaid
principal balance of the Mortgage Loans, (a) at least ____% of the Mortgage
Loans were originated under the Seller's full documentation program (b) no more
than ____% of the Mortgage Loans were originated under the Seller's limited
documentation program which requires asset verification, and (c) no more than
___% were originated under Seller's "no ratio" program. With respect to the
aggregate unpaid principal balance of the Mortgage Loans at the time of
origination, (a) no more than ____% of the Mortgaged Properties were
owner-occupied second homes, (b) no more than ____% of the Mortgaged Properties
were investor properties and (c) at least ____% of the Mortgaged Properties were
owner-occupied primary residences. With respect to the aggregate unpaid
principal balance of the Mortgage Loans, (a) no more than ____% are "cash-out"
refinance mortgage loans, (b) no more than ____% are rate and term refinance
mortgage loans and (c) at least ____% are purchase mortgage loans. With respect
to the aggregate unpaid principal balance of all the Mortgage Loans, the
Mortgaged Properties are located as follows: (i) no more than ____% are located
in [__________], (ii) no more than ____% are located in [___________], and (iii)
no other one state contains more than ____% of the Mortgaged Properties. The
Mortgage Loans have a weighted average remaining term of ___ months. [The
Mortgage Loans have a weighted average loan to value ratio of ____%. No Mortgage
Loan had at origination a loan to value ratio in excess of ____%.]
A-3
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
------------------------------
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to the
Purchaser pursuant to Section 2 of the Purchase Agreement to which this Exhibit
is attached (the "Agreement"):
1. The original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________ without recourse" and signed in
the name of the Seller by an authorized officer.
2. The original of any guarantee executed in connection with the Mortgage
Note.
3. The original Mortgage, with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause
to be delivered the original Mortgage with evidence of recording
thereon on or prior to the related Closing Date because of a delay
caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost or
because such public recording office retains the original recorded
Mortgage, the Seller shall deliver or cause to be delivered to the
Purchaser, a photocopy of such Mortgage, together with (i) in the case
of a delay caused by the public recording office, a Certificate from
the closing attorney or title company stating that such Mortgage has
been dispatched to the appropriate public recording office for
recordation and that the original recorded Mortgage or a copy of such
Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage will be promptly
delivered to the Purchaser upon receipt thereof by the Seller; or (ii)
in the case of a Mortgage where a public recording office retains the
original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete
copy of the original recorded Mortgage.
4. The originals or copies of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon.
5. The original Assignment of Mortgage for each Mortgage Loan, in blank,
in form and substance acceptable for recording, or with respect to a
Mortgage Loan registered with MERS, an original or copy of the
Assignment of Mortgage to MERS, with evidence of recording thereon.
6. Originals or copies of all intervening assignments of the Mortgage with
evidence of recording thereon, or if any such intervening assignment
has not been returned from the applicable recording office or has been
lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be
delivered to the Purchaser, a photocopy of such intervening
B-1
assignment, together with (i) in the case of a delay caused by the
public recording office, an Officer's Certificate of the Seller stating
that such intervening assignment of mortgage has been dispatched to the
appropriate public recording office for recordation and that such
original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public
recording office to be a true and complete copy of the original
recorded intervening assignment of mortgage will be promptly delivered
to the Purchaser upon receipt thereof by the Seller; or (ii) in the
case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case
where an intervening assignment is lost after recordation in a public
recording office, a copy of such intervening assignment certified by
such public recording office to be a true and complete copy of the
original recorded intervening assignment.
7. The original mortgagee policy of title insurance.
8. Any security agreement, chattel mortgage or equivalent executed in
connection with the Mortgage.
9. The original hazard insurance policy and, if required by law, flood
insurance policy, in accordance with Section 8(f) of the Agreement.
10. Residential loan application.
11. Mortgage Loan closing statement.
12. Verification of employment and income except for Mortgage Loans
originated under a Limited Documentation Program.
13. Verification of acceptable evidence of source and amount of
downpayment.
14. Credit report on the Mortgagor.
15. Residential appraisal report.
16. Photograph of the Mortgaged Property.
17. Survey of the Mortgaged Property, if any.
18. All required disclosure statements.
19. If available, termite report, structural engineer's report, water
potability and septic certification.
20. Sales contract.
21. Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files,
correspondence, current and historical
B-2
computerized data files, and all other processing, underwriting and
closing papers and records which are generated in the ordinary course
of business in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
In the event an Officer's Certificate of the Seller is delivered to the
Purchaser because of a delay caused by the public recording office in returning
any recorded document, the Seller shall deliver to the Purchaser, within 90 days
of the related Closing Date, an Officer's Certificate which shall (i) identify
the recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation, and
(iv) specify the date the applicable recorded document will be delivered to
Custodian the applicable recorded document by the date specified in (iv) above.
An extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
B-3
EXHIBIT C
INTERIM SERVICING AGREEMENT
---------------------------
[Intentionally Omitted]
C-1
EXHIBIT D-1
FORM OF SELLER'S OFFICER'S CERTIFICATE
--------------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of [SELLER], a [state] [federally] chartered institution
organized under the laws of the [state of ____________] [United States], (the
"Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy of
the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since the related Cut-off Date.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy of
the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since the related Cut-off-Date.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and
no event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy of
the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Mortgage
Loan Flow Purchase and Warranties Agreement, dated August 1, 2001, by
and between the Company, the Sellers identified therein and Xxxxxx
Brothers Bank, FSB (the "Purchaser") (the "Purchase Agreement") and the
Flow Interim Servicing Agreement, dated August 1, 2001 by and between
the Company and the Purchaser (the "Interim Servicing Agreement") and
to endorse the Mortgage Notes and execute the Assignments of Mortgages
by original [or facsimile] signature, and such resolutions are in
effect on the date hereof and have been in effect without amendment,
waiver, rescission or modification since [Date].
5. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Purchase Agreement, the Interim Servicing Agreement, the sale of the
mortgage loans or the consummation of the transactions contemplated by
the agreements; or (ii) any required consent, approval, authorization
or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Purchase Agreement and the Interim
Servicing Agreement conflicts or will conflict with or results or will
result in a breach of or constitutes or will constitute a default under
the charter or by-laws of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a
D-1
party or by which it is bound or to which it is subject, or any statute
or order, rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is
subject or by which it is bound.
7. There is no action, suit, proceeding or investigation pending or, to
the best of my knowledge, threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity
of the Purchase Agreement and the Interim Servicing Agreement, or the
mortgage loans or of any action taken or to be taken in connection with
the transactions contemplated hereby, or which would be likely to
impair materially the ability of the Company to perform under the terms
of the Purchase Agreement and the Interim Servicing Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an officer or
representative of the Company, signed (a) the Purchase Agreement, (b)
the Interim Servicing Agreement, and (c) any other document delivered
prior hereto or on the date hereof in connection with any purchase
described in the agreements set forth above was, at the respective
times of such signing and delivery, and is now, a duly elected or
appointed, qualified and acting officer or representative of the
Company, who holds the office set forth opposite his or her name on
Exhibit 5, and the signatures of such persons appearing on such
documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions described
and contemplated in the Purchase Agreement and the Interim Servicing
Agreement.
10. The Mortgage Loans are not subject to any security interest, claim,
pledge, hypothecation or lien.
D-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal
of the Company.
Dated: By:
------------------------------ ------------------------------------
Name:
[Seal] ----------------------------------
Title: [Vice] President
I, ________________________, an [Assistant] Secretary of [SELLER],
hereby certify that ____________ is the duly elected, qualified and acting
[Vice] President of the Company and that the signature appearing above is [her]
[his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: By:
------------------------------ ------------------------------------
Name:
[Seal] ----------------------------------
Title: [Vice] President
D-3
EXHIBIT 5 to
Company's Officer's Certificate
Name Title Signature
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
X-0
XXXXXXX X-0
FORM OF SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
[Vice] President of [SELLER], a [state] [federally] chartered institution
organized under the laws of the [state of ____________] [United States], (the
"Company") and further as follows:
1. The charter of the Company in the form attached to that certain
Company's Officer's Certificate dated __________, 2000 by _________ is
in full force and effect on the date hereof and has been in effect
without amendment, waiver, rescission or modification.
2. The bylaws of the Company in the form attached to that certain
Company's Officer's Certificate dated ________ by ________ are in
effect on the date hereof and have been in effect without amendment,
waiver, rescission or modification.
3. Since the last date of issuance of a certificate of good standing of
the Company in the form attached to that certain Company's Officer's
Certificate dated ______ by _________, no event has occurred since the
date thereof which would impair such standing.
4. The resolutions of the Board of Directors of the Company in the form
attached to that certain Company's Officer's Certificate dated ______
by ________ are in effect on the date hereof and have been in effect
without amendment, waiver, rescission or modification.
5. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Flow Purchase and Warranties Agreement
dated as of August 1, 2001, by and between Xxxxxx Brothers Bank, FSB,
the Company and the Sellers identified therein, conflicts or will
conflict with or results or will result in a breach of or constitutes
or will constitute a default under the charter or by-laws of the
Company, the terms of any indenture or other agreement or instrument to
which the Company is a party or by which it is bound or to which it is
subject, or any statute or order, rule, regulations, writ, injunction
or decree of any court, governmental authority or regulatory body to
which the Company is subject or by which it is bound.
6. There is no action, suit, proceeding or investigation pending or
threatened against the Company which, in my judgment, either in any one
instance or in the aggregate, may result in any material adverse change
in the business, operations, financial condition, properties or assets
or the Company or in any material impairment of the right or ability of
the Company to carry on its business substantially as now conducted or
in any material liability on the part of the Company or which would
draw into question the validity of the Agreement or of any action taken
or to be taken in connection with the transactions contemplated
D-5
hereby, or which would be likely to impair materially the ability of
the Company to perform under the terms of the Agreement.
D-6
EXHIBIT E
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
Xxxxxx Brothers Bank, FSB
3 World Financial Center
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General Counsel
to [SELLER] (the "Company"), with respect to certain matters in connection with
the sale by the Company of the Mortgage Loans pursuant to that certain Mortgage
Loan Flow Purchase and Warranties Agreement by and between the Company and
Xxxxxx Brothers Bank, FSB (the "Purchaser"), Group No. _____ dated as of August
1, 2001 (the "Purchase Agreement") which sale is in the form of whole loans,
serviced pursuant to a Flow Interim Servicing Agreement, dated as of August 1,
2001 by and between the Company and the Purchaser (the "Interim Servicing
Agreement"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Purchase Agreement and the Interim Servicing Agreement [and a
Custodial Agreement, Group No. _____ dated as of __________ (the "Custodial
Agreement," together with the Purchase Agreement and the Interim Servicing
Agreement, the "Agreements") by and among the Company, the Purchaser and
____________ (the "Custodian")].
[We] [I] have examined the following documents:
1. the Agreements;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed necessary
and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I] have
relied upon the representations and warranties of the Company contained in the
Agreements. [We] [I] have assumed the authenticity of all documents submitted to
[us] [me] as originals, the genuineness of all signatures, the legal capacity of
natural persons and the conformity to the originals of all documents.
E-1
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly existing and
in good standing under the laws of the [United States] and is qualified
to transact business in, and is in good standing under, the laws of
[the state of incorporation].
2. The Company has the power to engage in the transactions contemplated by
the Agreements and all requisite power, authority and legal right to
execute and deliver the Agreements, and to perform and observe the
terms and conditions of such Agreements
3. [Each of] the Agreements has been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement
enforceable in accordance with its respective terms against the
Company, subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the
application of the rules of equity, including those respecting the
availability of specific performance, none of which will materially
interfere with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original signature in order to
complete the transactions contemplated by the Agreements [and by
original [or facsimile] signature in order to execute the endorsements
to the Mortgage Notes and the Assignments of Mortgages, and the
original [or facsimile] signature of the officer at the Company
executing the endorsements to the Mortgage Notes and the Assignments of
Mortgages represents the legal and valid signature of said officer of
the Company].
5. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Purchase Agreement, the Interim Servicing Agreement, or the sale of the
Mortgage Loans or the consummation of the transactions contemplated by
the Agreements; or (ii) any required consent, approval, authorization
or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of, the Agreements conflicts or will conflict
with or results or will result in a breach of or constitutes or will
constitute a default under the charter or by-laws of the Company, the
terms of any indenture or other agreement or instrument to which the
Company is a party or by which it is bound or to which it is subject,
or violates any statute or order, rule, regulations, writ, injunction
or decree of any court, governmental authority or regulatory body to
which the Company is subject or by which it is bound.
E-2
7. There is no action, suit, proceeding or investigation pending or, to
the best of [our] [my] knowledge, threatened against the Company which,
in [our] [my] judgment, either in any one instance or in the aggregate,
may result in any material adverse change in the business, operations,
financial condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to carry on
its business substantially as now conducted or in any material
liability on the part of the Company or which would draw into question
the validity of the Agreements, or the Mortgage Loans or of any action
taken or to be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the ability of
the Company to perform under the terms of the Agreements.
8. The sale of each Mortgage Note and Mortgage as and in the manner
contemplated by the Agreements is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto as
noteholder and mortgagee.
9. The forms of Assignments of Mortgage are in recordable form, except for
the insertion of the name of the assignee, and upon the name of the
assignee being inserted, are acceptable for recording under the laws of
the state where each related Mortgaged Property is located. The
endorsement of the Mortgage Notes, the delivery to the Purchaser, or
its designee, of the Assignments of Mortgage, and the delivery of the
original endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all protection
available under applicable law against the claims of any present or
future creditors of the Company, and are sufficient to prevent any
other sale, transfer, assignment, pledge or hypothecation of the
Mortgages and the Mortgage Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other person
or entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Very truly yours,
----------------------------------------
[Name]
[Assistant] General Counsel
E-3
EXHIBIT F
SECURITY RELEASE CERTIFICATION
------------------------------
___________________, 2000
Federal Home Loan Bank of
______(the "Association")
------------------------------------
------------------------------------
------------------------------------
Attention:
--------------------------
------------------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that [SELLER] a [type of entity],
organized pursuant to the laws of [the state of incorporation] (the "Company")
has committed to sell to Xxxxxx Brothers Bank, FSB under a Mortgage Loan Flow
Purchase and Warranties Agreement, dated as of August 1, 2001, certain mortgage
loans originated by the Association. The Company warrants that the mortgage
loans to be sold to Xxxxxx Brothers Bank, FSB are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to Xxxxxx
Brothers Bank, FSB shall not be used as additional or substitute collateral for
advances made by the Association. Xxxxxx Brothers Bank, FSB understands that the
balance of the Company's mortgage loan portfolio may be used as collateral or
additional collateral for advances made by the Association, and confirms that it
has no interest therein.
F-1
Execution of this letter by the Association shall constitute a full and
complete release of any security interest, claim, or lien which the Association
may have against the mortgage loans to be sold to Xxxxxx Brothers Bank, FSB.
Very truly yours,
[SELLER]
By:
--------------------------------------
Name:
Title:
Date:
Acknowledged and approved:
FEDERAL HOME LOAN BANK OF
------------------------------------
By:
--------------------------------------
Name:
Title:
Date:
F-2
EXHIBIT G
SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
----------------------------
The financial institution named below hereby relinquishes any and all
right, title and interest it may have in all Mortgage Loans to be purchased by
Xxxxxx Brothers Bank, FSB from the Company named below pursuant to that certain
Mortgage Loan Flow Purchase and Warranties Agreement, dated as of August 1, 2001
and certifies that all notes, mortgages, assignments and other documents in its
possession relating to such Mortgage Loans have been delivered and released to
the Company named below or its designees, as of the date and time of the sale of
such Mortgage Loans to Xxxxxx Brothers Bank, FSB.
Name and Address of Financial Institution
--------------------------------------------
(name)
--------------------------------------------
(Address)
--------------------------------------------
By:
---------------------------------
II. Certification of Release
------------------------
G-1
The Company named below hereby certifies to Xxxxxx Brothers Bank, FSB
that, as of the date and time of the sale of the above-mentioned Mortgage Loans
to Xxxxxx Brothers Bank, FSB, the security interests in the Mortgage Loans
released by the above-named financial institution comprise all security
interests relating to or affecting any and all such Mortgage Loans. The Company
warrants that, as of such time, there are and will be no other security
interests affecting any or all of such Mortgage Loans.
[SELLER]
By:
------------------------------------
Name:
Date:
G-2
EXHIBIT H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated __________ __, 200_, 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, as
Purchaser, all of the right, title and interest of Assignor under that certain
Mortgage Loan Flow Purchase and Warranties Agreement, Conventional Residential
Fixed and Adjustable Rate Mortgage Loans, (the "Purchase Agreement"), and that
certain Interim Servicing Agreement, Conventional Residential Fixed and
Adjustable Rate Mortgage Loans, (the "Interim Servicing Agreement",
collectively, the "Agreements") each dated as of August 1, 2001, by and between
Xxxxxx Brothers Bank, FSB (the "Purchaser"), the Sellers identified therein and
_____________________________________ (the "Seller").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no knowledge of,
any offsets, counterclaims or other defenses available to the Seller with
respect to the Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Agreements, including
without limitation, the transfer of the servicing obligations under the Purchase
Agreement. The Assignor has no knowledge of, and has not received notice of, any
waivers under or amendments or other modifications of, or assignments of rights
or obligations under, the Agreements; and
d. Neither the Assignor nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which would
constitute a distribution of the Mortgage Loans under the
H-1
Securities Act of 1933 (the "33 Act") or which would render the disposition of
the Mortgage Loans a violation of Section 5 of the 33 Act or require
registration pursuant thereto.
3. That Assignee warrants and represents to, and covenants with, the
Assignor and the Seller pursuant to the Agreements that:
a. The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Agreements, the Mortgage Loans, and from
and after the date hereof, the Assignee assumes for the benefit of each of the
Seller and the Assignor all of the Assignor's obligations as Purchaser
thereunder;
b. The Assignee understands that the Mortgage Loans have not been
registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the Mortgage
Loans is in excess of $250,000 and will be paid by cash remittance of the full
purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment for
its own account only and not for any other person;
e. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
f. The Assignee has been furnished with all information regarding
the Mortgage Loans that it has requested from the Assignor or the Seller;
g. Neither the Assignee nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Mortgage Loans, any
interest in the Mortgage Loans or any other similar security to, or solicited
any offer to buy or accept a transfer, pledge or other disposition of the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
from, or otherwise approached or negotiated with respect to the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security with, any
person in any manner which would constitute a distribution of the Mortgage Loans
under the '33 Act or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the '33 Act or require registration pursuant thereto,
nor will it act, nor has it authorized or will it authorize any person to act,
in such manner with respect to the Mortgage Loans; and
h. Either: (1) the Assignee is not an employee benefit plan ("Plan")
within the meaning of section 3(3) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the meaning of
section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and the
Assignee is not directly or indirectly purchasing the Mortgage Loans on behalf
of, investment manager of, as named fiduciary of, as Trustee of, or with assets
of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not result
in a prohibited transaction under section 406 of ERISA or section 4975 of the
Code.
H-2
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
----------------------------------- -----------------------------------
Assignor Assignee
By: By:
-------------------------------- --------------------------------
Its: Its:
------------------------------- -------------------------------
Taxpayer Taxpayer
Identification No. Identification No.
----------------- -----------------
H-3
EXHIBIT I
CUSTODIAL AGREEMENT
-------------------
[Intentionally Omitted]
I-1
EXHIBIT J
SELLERS' UNDERWRITING GUIDELINES
--------------------------------
[Intentionally Omitted]
J-1
