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FORM OF MORTGAGE LOAN PURCHASE AGREEMENT

Mortgage Agreement

FORM OF MORTGAGE LOAN PURCHASE AGREEMENT | Document Parties: WACHOVIA BANK, NATIONAL ASSOCIATION | Wachovia Mortgage Loan Trust, LLC You are currently viewing:
This Mortgage Agreement involves

WACHOVIA BANK, NATIONAL ASSOCIATION | Wachovia Mortgage Loan Trust, LLC

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Title: FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
Date: 6/28/2005

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EXHIBIT 4 .3

 

 

 

 

WACHOVIA MORTGAGE LOAN TRUST, LLC,

as Purchaser,

and

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Seller and Servicer,

 

 

_______________________________________

 

MORTGAGE LOAN PURCHASE AGREEMENT

_______________________________________

 

Dated as of ______ __, 200_

 

 

 



 

TABLE OF CONTENTS

 

Page

 

 

 

 

ARTICLE I

DEFINITIONS

 

 

 

Section 1.1

Definitions

1

 

 

 

Section 1.2

Other Definitional Provisions

2

 

ARTICLE II

SALE OF MORTGAGE LOANS AND RELATED PROVISIONS

 

 

 

Section 2.1

Sale of Mortgage Loans

2

 

 

 

Section 2.2

Sale of Subsequent Mortgage Loans

5

 

 

 

Section 2.3

Payment of Purchase Price

7

 

 

 

Section 2.4

Allocation

8

 

 

 

Section 2.5

Draws During the Rapid Amortization Period.

8

 

 

 

Section 2.6

Security Interest.

8

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH

 

 

 

Section 3.1

Representations and Warranties of the Seller

9

 

ARTICLE IV

SELLER’S COVENANTS

 

 

 

Section 4.1

Covenants of the Seller

17

 

ARTICLE V

[RESERVED]

 

ARTICLE VI

LIMITATION OF LIABILITY

 

 

 

Section 6.1

Limitation on Liability of the Seller

18

 

ARTICLE VII

TERMINATION

 

 

 

Section 7.1

Termination

18

 

 

 

Section 8.1

Amendment

18

 

 

 

Section 8.2

GOVERNING LAW

18

 

 

 

Section 8.3

Notices

19

 

 

 

 

 

 

 

i

 

 

 



 

TABLE OF CONTENTS

(continued)

Page

 

 

 

 

 

ARTICLE VIII

MISCELLANEOUS PROVISIONS

 

 

 

Section 8.4

Severability of Provisions

20

 

 

 

Section 8.5

Relationship of Parties

20

 

 

 

Section 8.6

Counterparts

20

 

 

 

Section 8.7

Further Agreements

20

 

 

 

Section 8.8

Intention of the Parties

20

 

 

 

Section 8.9

Successors and Assigns; Assignment of this Agreement

21

 

 

 

Section 8.10

Survival

21

 

 

 

Section 8.11

Third-Party Beneficiary

21

 

 

 

EXHIBIT 1

MORTGAGE LOAN SCHEDULE

1-1

 

 

 

EXHIBIT 2

FORM OF SUBSEQUENT TRANSFER AGREEMENT

2-1

 

 

 

EXHIBIT 3

FORM OF ADDITION NOTICE

3-1

 

 

 

EXHIBIT 4

FORM OF INITIAL CERTIFICATION

4-1

 

 

 

EXHIBIT 5

FORM OF FINAL CERTIFICATION

5-1

 

 

 

EXHIBIT 6

Standard & Poor’s LEVELS® Glossary, Version 5.6 Revised, Appendix E

6-1

 

 

 

ii

 

 

 



 

 

 

This Mortgage Loan Purchase Agreement (this “ Agreement ”), dated as of ______ __, 200_, is made by and between Wachovia Bank, National Association, as seller (in such capacity, the “ Seller ”) and as servicer (in such capacity, the “ Servicer ”), and Wachovia Mortgage Loan Trust, LLC, as purchaser (the “ Purchaser ” or the “ Depositor ”).

WITNESSETH :

WHEREAS, the Seller, in the ordinary course of its business acquires and originates mortgage loans and acquired or originated all of the mortgage loans listed on the Mortgage Loan Schedule attached as Exhibit 1 hereto (the “ Initial Mortgage Loans ”);

WHEREAS, the Seller owns the Initial Mortgage Loans, the Cut-Off Date Principal Balances and the Related Documents for the Initial Mortgage Loans, including rights to (a) any property acquired by foreclosure or deed in lieu of foreclosure or otherwise, and (b) the proceeds of any insurance policies covering the Initial Mortgage Loans;

WHEREAS, the parties hereto desire that: (i) the Seller sell the Cut-Off Date Principal Balances of the Initial Mortgage Loans to the Purchaser on the Closing Date pursuant to the terms of this Agreement together with the Related Documents, and all Additional Balances relating to the Initial Mortgage Loans created on or after the Cut-Off Date and prior to the Rapid Amortization Period, (ii) the Seller may sell the applicable Cut-Off Date Principal Balances of the Subsequent Mortgage Loans to the Purchaser on one or more Subsequent Transfer Dates pursuant to the terms of the related Subsequent Transfer Agreement and all Additional Balances relating to the Subsequent Mortgage Loans created on or after the applicable Subsequent Cut-Off Date and prior to the Rapid Amortization Period and (iii) the Seller make certain representations and warranties on the Closing Date and on each Subsequent Transfer Date as applicable;

WHEREAS, pursuant to the terms of the Trust Agreement and the applicable Subsequent Transfer Agreement, the Depositor will transfer the Mortgage Loans and other Transferred Property to the Issuer and the Issuer will issue the Certificates;

WHEREAS, pursuant to the terms of the Servicing Agreement, the Servicer will service the Mortgage Loans;

WHEREAS, pursuant to the terms of the Indenture, the Issuer will issue the Notes, secured by the Trust Estate;

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

ARTICLE I

 

DEFINITIONS

Section 1.1 Definitions . For all purposes of this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the definitions contained in Appendix A to the indenture dated as of ______ __, 200_ (the “ Indenture ”), among Wachovia Mortgage Loan Trust, LLC [______] Trust, a Delaware statutory trust (the “ Issuer ”),

 

 

 

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[____________], a national banking association, as indenture trustee (the “ Indenture Trustee ”) and Wachovia Bank, National Association, as paying agent (the “ Paying Agent ”), which is incorporated by reference herein. All other capitalized terms used herein shall have the meanings specified herein.

Section 1.2 Other Definitional Provisions . All terms defined in this Agreement (including those incorporated by reference) shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document, to the extent not defined, shall have the respective meanings given to them under GAAP. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under GAAP, the definitions contained in this Agreement or in any such certificate or other document shall control.

The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; the term “including” shall mean “including without limitation” “or” shall include “and/or” and the term “proceeds” shall have the meaning ascribed thereto in the UCC.

The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as the feminine and neuter genders of such terms.

Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

ARTICLE II

 

SALE OF MORTGAGE LOANS AND RELATED PROVISIONS

Section 2.1 Sale of Mortgage Loans .

(a) The Seller, by the execution and delivery of this Agreement, does hereby sell, transfer, assign, set over, and otherwise convey to the Purchaser, without recourse (except as expressly provided herein), all of its right, title and interest, whether now owned or existing or hereafter created, arising, or acquired, in, to and under the Initial Transferred Property; provided , however , that the Purchaser does not assume the obligation under any Loan Agreement to fund Draws by the Mortgagor thereunder or any other obligation arising under or related to the Related Documents, and the Purchaser shall not be obligated or permitted to fund any such Draws, it being agreed that the Seller will retain the obligation to fund future Draws.

 

 

 

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(b) The Initial Mortgage Loans, including the Cut-Off Date Principal Balances of such Initial Mortgage Loans, and all other related Initial Transferred Property, shall be sold by the Seller and purchased by the Purchaser on the Closing Date. The Subsequent Mortgage Loans, including the Cut-Off Date Principal Balances of such Subsequent Mortgage Loans, and all other related Subsequent Transferred Property, shall be sold by the Seller and purchased by the Purchaser on the related Subsequent Transfer Date. Additional Balances and the related Transferred Property arising after the Cut-Off Date or related Subsequent Cut-Off Date, as applicable, through and including the date immediately preceding the commencement of the Rapid Amortization Period shall be sold by the Seller and purchased by the Purchaser on the later of the Closing Date (or with respect to Subsequent Mortgage Loans, the applicable Subsequent Transfer Date) and the date of creation of such Additional Balance.

(c) In connection with the conveyance by the Seller of the Initial Mortgage Loans and any Subsequent Mortgage Loans, the Seller further agrees, at its own expense, on or prior to the Closing Date with respect to the Cut-Off Date Principal Balances of the Initial Mortgage Loans and on or prior to the related Subsequent Cut-Off Date in the case of any Subsequent Mortgage Loans, to indicate in its books and records that the Initial Mortgage Loans have been sold to the Purchaser pursuant to this Agreement, and, in the case of the Subsequent Mortgage Loans, pursuant to the related Subsequent Transfer Agreement and to deliver to the Purchaser true and complete lists of all of the Mortgage Loans specifying for each Mortgage Loan the information contained in the Mortgage Loan Schedule. The Mortgage Loan Schedule shall be marked as Exhibit 1 to this Agreement and is hereby incorporated into and made a part of this Agreement.

(d) In connection with the conveyance by the Seller of the Initial Mortgage Loans and any Subsequent Mortgage Loans, the Seller shall on behalf of the Purchaser deliver to and deposit with the Servicer prior to the Closing Date, in the case of an Initial Mortgage Loan, and prior to the related Subsequent Transfer Date, in the case of a Subsequent Mortgage Loan, with respect to (i) below, or within 90 days of the Closing Date in the case of an Initial Mortgage Loan, and, 90 days of the related Subsequent Transfer Date, in the case of a Subsequent Mortgage Loan, with respect to (ii) through (v) below, the following documents or instruments with respect to each Mortgage Loan:

(i) the original Loan Agreement endorsed or assigned without recourse in blank (which endorsement shall contain either an original signature or a facsimile signature of an authorized officer of the Seller and which assignment may be included in one or more blanket assignments if permitted by applicable law) or, with respect to any Mortgage Loan as to which the original Loan Agreement has been permanently lost or destroyed and has not been replaced, a Lost Note Affidavit; provided that any such endorsement or assignment may be completed after the Closing Date or Subsequent Transfer Date, as applicable, so long as such endorsement or assignment is completed prior to the earlier of (A) 90 days after the Closing Date or Subsequent Transfer Date, as applicable, and (B) the date on which the Servicer is required to prepare the Assignments of Mortgage pursuant to Section 3.17 of the Servicing Agreement;

(ii) the original Mortgage with evidence of recording thereon, or, if the original Mortgage has not yet been returned from the public recording office, a copy of the original Mortgage certified by the Seller that such Mortgage has been sent for recording, or a county certified copy of such Mortgage in the event the recording office keeps the original or if the original is lost;

 

 

 

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(iii) originals of any intervening assignments of the Mortgage from the originator to the Seller, with evidence of recording thereon, or, if the original of any such intervening assignment has not yet been returned from the public recording office, a copy of such original intervening assignment certified by the Seller that such original intervening assignment has been sent for recording; and

(iv) a true and correct copy of each assumption, modification, consolidation or substitution agreement, if any, relating to such Mortgage Loan;

Within 90 days following delivery of the Mortgage Files to the Servicer pursuant to the preceding paragraph, the Servicer shall review the Mortgage Files and deliver to the Indenture Trustee and the Enhancer an initial certification in the form attached hereto as Exhibit 4 evidencing the status of the completeness of the Mortgage Files. If, in the course of such review, a material defect in any Mortgage File is discovered which may materially and adversely affect the value of the related Mortgage Loan, or the interests of the Indenture Trustee (as pledgee of the Mortgage Loans), the Noteholders, the Enhancer or the Certificateholders, including the Seller’s failure to deliver any document required to be delivered to the Servicer on behalf of the Indenture Trustee, the Seller shall cure such defect, repurchase the related Mortgage Loan at the Repurchase Price or substitute an Eligible Substitute Loan therefor upon the same terms and conditions set forth in Section 3.1 hereof for breaches of representations and warranties as to the Mortgage Loans.

Upon receipt of all documents required to be included in the Mortgage Files and no later than within one year of the Closing Date, the Servicer shall deliver to the Indenture Trustee and the Enhancer a final certification in the form attached hereto as Exhibit 5 evidencing the completeness of the Mortgage Files.

The Seller on behalf of the Purchaser will deliver the original Loan Agreements to the Servicer, endorsed or assigned in blank, to effect the transfer to the Purchaser of the Loan Agreements and all related Mortgages and Related Documents. Concurrently herewith, the Purchaser has contracted to sell the Mortgage Loans to the Issuer, and the Issuer, in turn, has Granted its right, title and interest in the Mortgage Loans and other Transferred Property constituting the Trust Estate to the Indenture Trustee to secure payments on the Notes. To avoid the unnecessary expense and administrative inconvenience associated with the execution and recording of multiple assignment documents, the Seller may execute one or more assignments of mortgages naming the Indenture Trustee as assignee. Notwithstanding the fact that assignments of mortgages naming the Indenture Trustee as assignee have not been prepared and delivered, the parties hereto acknowledge and agree that the Mortgage Loans shall for all purposes be deemed to have been transferred from the Seller to the Purchaser, from the Purchaser to the Issuer, and from the Issuer to the Indenture Trustee.

In instances where an original Mortgage or any original intervening assignment of Mortgage was not, in accordance with clause (iii) above, delivered by the Seller to the Servicer, as provided above, the Seller will deliver or cause to be delivered the originals or certified copies of such documents to the Servicer promptly upon receipt thereof. If an Assignment of Mortgage is required to be prepared under Section 3.17 of the Servicing Agreement, the Seller will promptly execute such Assignment of Mortgage upon request of the Servicer.

 

 

 

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Upon sale of the Initial Mortgage Loans, the ownership of each related Loan Agreement (subject to the proviso in Section 2.1(a)), each related Mortgage and the contents of the related Mortgage File shall be vested in the Purchaser and the ownership of all records and documents with respect to the Mortgage Loans that are prepared by or that come into the possession of the Seller, as the seller of the Mortgage Loans hereunder, or by the Servicer under the Servicing Agreement shall immediately vest in the Purchaser, and shall be retained and maintained in trust by the Servicer at the will of the Purchaser, in such custodial capacity only; provided , however , that if Wachovia is no longer the Servicer under the Servicing Agreement, any records and documents that come into the possession of the Seller shall be promptly delivered to the Servicer. The Seller’s records will accurately reflect the sale of the Mortgage Loans by it to the Purchaser.

The Purchaser hereby acknowledges its acceptance of all right, title and interest to the property conveyed to it pursuant to this Section 2.1.

Section 2.2 Sale of Subsequent Mortgage Loans .

(a) Subject to the conditions set forth in paragraphs (b) and (c) below (the satisfaction of which (other than the conditions specified in paragraphs (b)(i), (b)(ii) and (b)(iii)) shall be evidenced by an Officer’s Certificate of the Seller dated the date of the related Subsequent Transfer Date), in consideration of the Purchaser’s payment of the purchase price provided for in Section 2.3 on one or more Subsequent Transfer Dates, the Seller may, on the related Subsequent Transfer Date, sell, transfer, assign, set over and convey to the Purchaser without recourse (except as expressly provided herein), all of the right, title and interest of the Seller whether now owned or existing or hereafter created, arising, or acquired, in, to and under the Subsequent Transferred Property; provided , however , that the Purchaser does not assume the obligation under any Loan Agreement to fund Draws by the Mortgagor thereunder or any other obligation arising under or related to the Related Documents, and the Purchaser shall not be obligated or permitted to fund any such Draws, it being agreed that the Seller will retain the obligation to fund future Draws. Any transfer to the Purchaser by the Seller of Subsequent Mortgage Loans shall be absolute, and is intended by the Purchaser and the Seller to constitute and to be treated as a sale of such Subsequent Mortgage Loans by the Seller to the Purchaser.

The Purchaser on each Subsequent Transfer Date shall acknowledge, by execution of the related Subsequent Transfer Agreement, its acceptance of all right, title and interest to the related Subsequent Mortgage Loans and other property, existing on the Subsequent Transfer Date and thereafter created, conveyed to it pursuant to this Section 2.2.

The Purchaser shall be entitled to all scheduled principal payments due on and after each Subsequent Cut-Off Date, all other payments of principal due and collected on and after each Subsequent Cut-Off Date, all payments of interest on any related Subsequent Mortgage Loans due on or after the related Subsequent Cut-Off Date, all interest accruing thereon, all monies due or to become due thereon and all collections in respect thereof received on or after the Subsequent Cut-Off Date.

Upon sale of the Subsequent Mortgage Loans, the ownership of each related Loan Agreement (subject to the proviso in Section 2.1(a)), each related Mortgage and the contents of the related Mortgage File shall be vested in the Purchaser and the ownership of all records and documents with respect to the Subsequent Mortgage Loans that are prepared by or that come into

 

 

 

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the possession of the Seller, as the seller of the Subsequent Mortgage Loans, or by the Servicer under the Servicing Agreement shall immediately vest in the Purchaser, and shall be retained and maintained in trust by the Servicer at the will of the Purchaser, in such custodial capacity only; provided , however , that if Wachovia is no longer the Servicer under the Servicing Agreement, any records and documents that come into the possession of the Seller shall be promptly delivered to the Servicer. The Seller’s records will accurately reflect the sale of the Subsequent Mortgage Loans by it to the Purchaser.

(b) The Seller may transfer to the Purchaser, Subsequent Mortgage Loans and the other property and rights related thereto described in Section 2.2(a), and the Purchaser shall pay for such Subsequent Mortgage Loans, only upon the satisfaction of each of the following conditions on or prior to the related Subsequent Transfer Date:

(i) the Seller shall have provided the Indenture Trustee, the Issuer, the Purchaser, Rating Agencies and the Enhancer with a timely Addition Notice substantially in the form of Exhibit 3, which notice shall be given no later than seven Business Days prior to the related Subsequent Transfer Date, and shall designate the Subsequent Mortgage Loans to be sold to the Purchaser and the aggregate Principal Balance of such Subsequent Mortgage Loans as of the related Subsequent Cut-Off Date;

(ii) the Seller shall have delivered to the Purchaser, the Indenture Trustee and the Enhancer a duly executed Subsequent Transfer Agreement substantially in the form of Exhibit 2, (A) confirming the satisfaction of each condition precedent and making the representations specified in this Section 2.2(b) and in the related Subsequent Transfer Agreement and (B) including a Mortgage Loan Schedule listing the Subsequent Mortgage Loans;

(iii) as of each Subsequent Transfer Date, as evidenced by delivery to the Indenture Trustee of the Subsequent Transfer Agreement in the form of Exhibit 2, the Seller shall not be insolvent, made insolvent by such transfer or aware of any pending insolvency;

(iv) such sale and transfer shall not result in a material adverse tax consequence to the Purchaser or the Issuer or due to any action or inaction on the part of the Seller, to the Securityholders or the Enhancer;

(v) the Revolving Period shall not have terminated; and

(vi) the Enhancer and each Rating Agency (each, an “ Approval Party ”) shall have approved the sale of the Subsequent Mortgage Loans (which approval shall not be unreasonably withheld) within five (5) Business Days of receipt of an electronic file containing the information regarding the Subsequent Mortgage Loans that was delivered to each Approval Party prior to the Closing Date with respect to the Initial Mortgage Loans; provided, that if an Approval Party shall not have notified the respective Seller within such five (5) Business Days that such Approval Party does not so approve, such sale of Subsequent Mortgage Loans shall be deemed approved by such Approval Party.

The obligation of the Purchaser to purchase a Subsequent Mortgage Loan on any Subsequent Transfer Date is subject to the following conditions: (i) each such Subsequent Mortgage Loan must satisfy the representations and warranties specified in the related Subsequent Transfer

 

 

 

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Agreement and this Agreement; (ii) the Seller has not selected such Subsequent Mortgage Loans in a manner that it reasonably believes is adverse to the interests of the Noteholders or the Enhancer; and (iii) as of the related Subsequent Cut-Off Date each Subsequent Mortgage Loan will satisfy the following criteria: (A) such Subsequent Mortgage Loan may not be 30 or more days contractually delinquent as of the related Subsequent Cut-Off Date; (B) the original stated term to maturity of such Subsequent Mortgage Loan will not exceed 480 months; (C) such Subsequent Mortgage Loan must have an outstanding Principal Balance of at least $1,000 and no more than $________ as of the related Subsequent Cut-Off Date; (D) such Subsequent Mortgage Loan will be underwritten substantially in accordance with the criteria set forth under “ Description of the Mortgage Loans – Underwriting Standards” in the Prospectus Supplement; (E) such Subsequent Mortgage Loan shall not provide for negative amortization; and (F) following the purchase of the Subsequent Mortgage Loan by the issuer, the Mortgage Loans must have a weighted average loan margin, a weighted average remaining term to maturity and a weighted average CLTV Ratio at origination, as of each respective Subsequent Cut-Off Date, which would not vary materially from the Initial Mortgage Loans.

(c) Within five Business Days after each Subsequent Transfer Date, the Seller shall deliver to the Purchaser, the Rating Agencies, the Indenture Trustee and the Enhancer a copy of the Mortgage Loan Schedule reflecting the Subsequent Mortgage Loans in electronic format.

Section 2.3 Payment of Purchase Price .

(a) The purchase price (the “ Purchase Price ”) for the Initial Mortgage Loans and the related Initial Transferred Property to be paid by the Purchaser to the Seller on the Closing Date shall be an amount equal to one-hundred percent (100%) of the related Cut-Off Date Principal Balances. The Purchase Price paid for any Subsequent Mortgage Loans and related Subsequent Transferred Property to be paid by the Purchaser to the Seller on any Subsequent Transfer Date shall be one-hundred percent (100%) of the related Cut-Off Date Principal Balances thereof (as identified on the Mortgage Loan Schedule attached to the related Subsequent Transfer Agreement provided by the Seller). In the case of each Additional Balance and the related Transferred Property sold hereunder created on or after the Cut-Off Date or any Subsequent Cut-Off Date, as applicable, and prior to the commencement of the Rapid Amortization Period, the Purchase Price thereof shall be 100% of the principal amount of the related Draw under the related Loan Agreement on the later of the Closing Date or any Subsequent Cut-Off Date, as applicable, and the date of the creation of such Additional Balance, adjusted to reflect such factors as the Seller and the Purchaser mutually agree will result in a purchase price determined to be the fair market value of such Additional Balance and the related Transferred Property.

(b) In consideration of the sale of the Initial Mortgage Loans and the related Transferred Property by the Seller to the Purchaser on the Closing Date, the Purchaser shall pay to the Seller on the Closing Date by wire transfer of immediately available funds to a bank account designated by the Seller, the amount specified above in paragraph (a) for the Initial Mortgage Loans and the related Transferred Property. In consideration of the sale of any Subsequent Mortgage Loan and the related Transferred Property by the Seller to the Purchaser on any Subsequent Transfer Date, the Purchaser shall pay to the Seller by wire transfer of immediately available funds to a bank account designated by the Seller, the amount specified above in paragraph (a) for the applicable Subsequent Mortgage Loans and the related Transferred Property.

 

 

 

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(c) [Reserved]

(d) With respect to each Additional Balance transferred hereunder with respect to any Mortgage Loan, the Purchaser shall pay or cause to be paid to the Seller or its designee the Purchase Price specified above for such Additional Balance and the related Transferred Property in cash on the Payment Date in the calendar month immediately following the calendar month in which such Additional Balance was created.

(e) The Seller shall have no obligation to sell any Transferred Property to the Purchaser if the Seller is not paid the purchase price for such Transferred Property as provided herein.

Section 2.4 Allocation . Except with respect to Liquidation Loss Amounts and Subsequent Recovery Amounts, the Seller, the Servicer, and the Purchaser agree that all collections on the Mortgage Loans will be allocated and applied as provided by the terms of the related Loan Agreements or by applicable law. Except with respect to Liquidation Loss Amounts and Subsequent Recovery Amounts, if the Loan Agreement or applicable law does not specify a method of allocation and application for particular collections, such collections shall be allocated and applied (i) first to interest, pro rata (based on the amounts coming due on such date) among the amounts coming due on such date) and (ii) then to principal, in the order of the dates on which such amounts for principal were first incurred or, in the case of Promotional Advances, first to Promotional Advances. If, as a result of the provisions of this Section 2.4, collections are allocated to Excluded Draws, such collections shall not be property of the Purchaser or its assignees and shall be paid by the Servicer to the Seller as provided in Section 2.5. Liquidation Loss Amounts and Subsequent Recovery Amounts shall be allocated as provided in the definition of Excluded Amount.

Section 2.5 Draws During the Rapid Amortization Period . During the Rapid Amortization Period, any Excluded Draw shall not be deemed Additional Balances, and the ownership of such Excluded Draws shall be retained by the Seller except as provided herein. Payments and collections allocable pursuant to Section 2.4 to an Excluded Draw shall not be deposited into the Custodial Account, the Distribution Account or the Note Payment Account, and shall be distributed by the Servicer to the Seller no less frequently than monthly in accordance with reasonable instructions provided by the Seller.

Section 2.6 Security Interest . (a) The parties hereto intend that the transactions set forth herein and in the Subsequent Transfer Agreements each constitute a sale by the Seller to the Purchaser of all the Seller’s right, title and interest in and to the Mortgage Loans and the other Transferred Property, including for accounting purposes, and not a secured borrowing. In the event the transactions set forth herein or in any Subsequent Transfer Agreement are deemed not to be a sale, the Seller hereby grants to the Purchaser a security interest in the Transferred Property to secure all of the Seller’s obligations hereunder, and this Agreement shall and hereby does constitute a security agreement under applicable law. The Seller agrees to take or cause to be taken such actions and to execute such documents, including without limitation the authorization and filing of any continuation statements with respect to the UCC financing statements filed with respect to the Mortgage Loans by the Purchaser on the Closing Date, if any, and any amendments thereto required to reflect a change in the name or corporate structure of the Seller or the filing of any additional UCC financing statements due to the change in the principal office or jurisdiction of organization of the Seller as are necessary to perfect and protect the Purchaser’s and its assignee’s interests in the

 

 

 

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Transferred Property. The Seller shall file any such continuation statements or amendments on a timely basis.

(b) To the extent that the Seller retains any interest in the Transferred Property, the Seller hereby grants to the Indenture Trustee for the benefit of the Noteholders a security interest in the Transferred Property, to secure the performance of all of the obligations of the Seller hereunder and under the other Basic Documents. With respect to this security interest, the Indenture Trustee shall have all of the rights that it has under the Indenture and the Basic Documents and all of the rights of a secured creditor under the UCC.

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES;

REMEDIES FOR BREACH

Section 3.1 Representations and Warranties of the Seller . The Seller represents and warrants to the Purchaser, as of the Closing Date or, as applicable, as of each Subsequent Transfer Date (or if otherwise specified below, as of the date so specified):

(a) As to the Seller:

(i) The Seller is a national banking association duly organized and validly existing under the laws of the United States of America and is in compliance with the laws of each state in which any Mortgaged Property is located to the extent necessary to ensure the enforceability of each Mortgage Loan;

(ii) The Seller has the power and authority to make, execute, deliver and perform its obligations under this Agreement and each Subsequent Transfer Agreement to which it is a party and all of the transactions contemplated under this Agreement and each such Subsequent Transfer Agreement, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and each such Subsequent Transfer Agreement;

(iii) The Seller is not required to obtain the consent of any other Person or any consents, licenses, approvals or authorizations from, or registrations or declarations with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement or each such Subsequent Transfer Agreement, except for such consents, licenses, approvals or authorizations, or registrations or declarations, as shall have been obtained or filed, as the case may be;

(iv) The execution and delivery of this Agreement and any Subsequent Transfer Agreement to which it is a party by the Seller and its performance and compliance with the terms of this Agreement and each such Subsequent Transfer Agreement will not violate the Seller’s Articles of Association or Bylaws or constitute a material default (or an event which, with notice or lapse of time, or both, would constitute a material default) under, or result in the material breach of, any material contract, agreement or other instrument to which the Seller is a party or which may be applicable to the Seller or any of its assets;

(v) There are no pending or, to the best of the Seller's knowledge, threatened, actions, suits, proceedings or investigations before any court, tribunal, administrative

 

 

 

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agency, arbitrator or governmental body that, if decided adversely, would materially and adversely affect (A) the condition (financial or otherwise), business or operations of the Seller, (B) the ability of the Seller to perform its obligations under, or the validity or enforceability of, the Basic Documents to which it is a party or (C) the transactions contemplated by this Agreement;

(vi) This Agreement and each Subsequent Transfer Agreement to which it is a party constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights in general, as they may be applied in the context of the insolvency of a national banking association, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law), and by public policy considerations underlying the securities laws, to the extent that such public policy considerations limit the enforceability of the provisions of this Agreement which purport to provide indemnification from liabilities under applicable securities laws;

(vii) This Agreement constitutes a valid transfer and assignment to the Purchaser of all right, title and interest of the Seller in and to the Initial Mortgage Loans, including the Cut-Off Date Principal Balances now existing and all Additional Balances thereafter arising to and including the day immediately preceding the Rapid Amortization Period, all monies due or to become due with respect thereto, and all proceeds of such Cut-Off Date Principal Balances with respect to the Initial Mortgage Loans; and this Agreement and the related Subsequent Transfer Agreement, when executed and delivered, will constitute a valid transfer and assignment to the Purchaser of all right, title and interest of the Seller in and to the Subsequent Mortgage L


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