THORNBURG MORTGAGE HOME LOANS,
INC.
AMENDED AND RESTATED
CORRESPONDENT LOAN PURCHASE
AGREEMENT
(SERVICING RETAINED LOANS)
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This AMENDED AND RESTATED CORRESPONDENT
LOAN PURCHASE AGREEMENT (this "Agreement") dated as of March 25,
2002, is between THORNBURG MORTGAGE HOME LOANS, INC., a Delaware
corporation ("TMHL"), and the seller named below (the
"Correspondent").
PRELIMINARY STATEMENT
WHEREAS, TMHL and the Correspondent are
parties to that certain Correspondent Loan Purchase Agreement dated
as of September 15, 1999 (the "Original Agreement");
WHEREAS, TMHL and the Correspondent
desire to amend and restate the Original Agreement in its entirety
as set forth herein;
WHEREAS, in reliance upon the
representations and warranties of the Correspondent contained
herein, the Correspondent Sellers Guide and the Master Servicer
Guide which are incorporated by reference herein, and in the
Correspondent Application attached hereto as Exhibit A, TMHL has
agreed to purchase from the Correspondent, from time to time, and
the Correspondent has agreed to sell to TMHL, from time to time,
certain Eligible Loans meeting the criteria set forth in the
Correspondent Sellers Guide;
WHEREAS, the Correspondent may retain the
servicing of such Eligible Loans, in which instance the
Correspondent and TMHL desire to prescribe the terms and conditions
of such servicing as set forth in the Correspondent Sellers Guide
and the Master Servicer Guide, as hereinafter defined;
WHEREAS, TMHL has or is about to contract
with the Master Servicer to master service such Eligible Loans, and
may in the future contract with another master servicer to master
service such Eligible Loans;
WHEREAS, Correspondent shall service such
Eligible Loans in accordance with the Master Servicer Guide and
shall recognize the Master Servicer as the master servicer of such
Eligible Loans; and
WHEREAS, TMHL may transfer and assign,
from time to time, Eligible Loans in Pass-Through Transfers
(hereinafter defined) or Agency Transfers.
NOW, THEREFORE, in consideration of the
mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, TMHL and the Correspondent agree as
follows:
Section 1. Definitions. Unless
otherwise defined herein, the capitalized terms used herein shall
have the meanings set forth in the Correspondent Sellers Guide or
the Master Servicer Guide. This Agreement shall be deemed to
be the "Mortgage Servicing Contract" or "MSC" as such terms are
used in the Master Servicer Guide.
Section 2. Delivery of the Guides.
TMHL has provided to the Correspondent and the Correspondent has
received and reviewed the Guides, which are incorporated by
reference in their entirety into this Agreement. The Correspondent
has had the opportunity to ask questions of TMHL concerning the
Guides. The Correspondent understands and agrees that TMHL's and/or
the Master Servicer's interpretation of the Guides, as applicable,
shall be final and binding on the Correspondent in all respects.
The Correspondent Sellers Guide is amended as provided in Exhibit D
attached hereto.
Section 3. Sale and Conveyance of
Eligible Loans; Possession of Mortgage Files.
(a) Regarding the purchase of each
Eligible Loan or Eligible Loans, Correspondent agrees to provide
TMHL with its wire transfer instructions. TMHL shall issue a
Verification of Purchase and Wire Transfer by facsimile to
Correspondent following such purchase(s).
(b) On each Purchase Date, the
Correspondent, upon the receipt of the Purchase Price therefor,
does hereby sell, transfer, assign, set over and convey to TMHL,
without recourse, but subject to the terms and provisions of this
Agreement, all the right, title, and interest of the Correspondent
in and to one or more Eligible Loans meeting the requirements of
this Agreement. In full consideration for the sale of each of the
Eligible Loans by the Correspondent to TMHL pursuant to this
Agreement, on each Purchase Date TMHL shall pay to the
Correspondent the Purchase Price, as adjusted as set forth in the
Correspondent Sellers Guide, for the Eligible Loans purchased on
such Purchase Date.
(c) The Correspondent will deliver
the following items to TMHL on the Effective Date:
(i) an executed original of this
Agreement;
(ii) the Officers' Certificate,
substantially in the form of Exhibit B;
(iii) the Opinion of Counsel,
substantially in the form of Exhibit C, which shall be acceptable
to TMHL in its sole discretion;
(iv) a certificate or other
evidence of merger or change of name, signed or stamped by the
applicable regulatory authority, if any of the Eligible Loans which
were acquired through merger or originated by the Correspondent
while conducting business under a name other than its present
name;
(v) the written approval of any
receiver, conservator or trustee that is (or may be) necessary for
consummation of the transactions contemplated by this Agreement,
which written approval shall be dated no more that twenty (20) days
prior to the Effective Date; and
(vi) any consents or approvals
required by any and all applicable laws, rules or regulations or
pursuant to contract to consummate the transactions contemplated
hereby.
(d) Upon payment for the related
Eligible Loan pursuant to this Section 3, the beneficial ownership
of each Mortgage Note, each Mortgage, and each of the other
documents comprising the Mortgage File with respect to each
Eligible Loan is hereby vested in TMHL, and the ownership of all
records and documents with respect to each Eligible Loan prepared
by or which come into the possession of the Correspondent is hereby
immediately vested in TMHL and shall be held and maintained, in
trust, by the Correspondent at the will of TMHL in such custodial
capacity only.
(e) In the event an Eligible Loan
purchased by TMHL is prepaid in full by a borrower within one
hundred twenty (120) days of the purchase of the Eligible Loan by
TMHL, the Correspondent shall pay TMHL the premium, if any, paid by
TMHL to the Correspondent for such Eligible Loan.
(f) In the event any borrower fails
to make the first payment within 30 days of its due date on an
Eligible Loan, the Correspondent shall repurchase such Eligible
Loan from TMHL, at TMHL's sole option, pursuant to the
Correspondent Sellers Guide.
Section 4. Application and
Amendment of the Guides; Approval Notification Letter.
(a) The interpretation of TMHL and
the Master Servicer, as applicable, of the Guides shall be final
and binding on the parties hereto in all respects. Regardless of
whether specifically identified as such, each requirement,
standard, instruction or statement in the Guides, the Correspondent
Application, this Agreement and any Approval Notification Letter
shall be deemed to be a representation and warranty by the
Correspondent to TMHL. TMHL or the Master Servicer may amend,
alter, modify, supplement, replace or restate the Guides (an
"Amendment") at any time, and from time to time, in its sole
discretion without the consent of the Correspondent. TMHL shall
give written notice of an Amendment to the Correspondent, and the
Amendment shall become effective immediately or as specifically
provided therein; provided, however, no Amendment of the
Correspondent Sellers Guide shall be effective with respect to an
outstanding Approval Notification Letter unless consented to by the
Correspondent. In the event of any inconsistencies between the
provisions of this Agreement and the Guides, this Agreement shall
control.
(b) In the event of any
inconsistencies between the provisions of this Agreement (including
the Guides) and the Approval Notification Letter, the Approval
Notification Letter shall control.
Section 5. Representations,
Warranties and Covenants of the Correspondent; TMHL's
Remedies.
(a) The Correspondent hereby makes to
TMHL as of the Effective Date all of the Correspondent's
representations, and warranties set forth in the Guides (other than
those representations and warranties that relate only to individual
Eligible Loans, which are made or effective as set forth in the
Correspondent Sellers Guide) and grants to TMHL the remedies set
forth hereunder and in the Guides with respect to a breach of such
representations and warranties. The Correspondent also hereby
covenants with TMHL that the Correspondent shall continue to comply
with all of the Correspondent's representations, warranties and
covenants set forth in the Guides, each Approval Notification
Letter and this Agreement. The warranties, obligations and
representations stated in the Guides are hereby made or undertaken
by the Correspondent with respect to each of the Eligible Loans to
be sold and serviced by it on behalf of TMHL, unless expressly
waived in writing by TMHL. All warranties made by the Correspondent
shall survive (i) any investigation made by or on behalf of TMHL,
its assignee or designee, (ii) liquidation of the Eligible Loan,
(iii) purchase of the Eligible Loan by TMHL, its designee or
assignee, (iv) repurchase of the Eligible Loan by the
Correspondent, and (v) termination of this Agreement or similar
event, and all such warranties shall inure to the benefit of TMHL.
The Correspondent shall supply evidence that is satisfactory
to TMHL of its compliance with any provisions of the
Guides.
(b) If, after purchase of any
Eligible Loan by TMHL, any of the representations or warranties of
the Correspondent contained herein or in the Correspondent Sellers
Guide or the Master Servicer Guide are untrue, TMHL may, at its
option, without regard to the Correspondent's actual or implied
knowledge of the untruth of such warranty (except to the extent the
warranty is expressly conditioned upon the Correspondent's actual
knowledge), in addition to and without limitation as to any other
remedy accruing to TMHL, require the Correspondent to repurchase
said Eligible Loan pursuant to the Guides. It is contemplated that
a third party may purchase from TMHL the Eligible Loans purchased
by TMHL from the Correspondent, and the Correspondent agrees that
TMHL may, in its own name or in the name of the third party,
exercise any rights or remedies at law or in equity on behalf of
itself or such third party.
(c) The Correspondent shall
indemnify TMHL and the Master Servicer from and hold TMHL and the
Master Servicer harmless against all losses, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and
any other costs, fees, and expenses heretofore or hereafter
resulting from a material breach of any warranty, obligation or
representation contained in or made pursuant to this Agreement or
from any claim, demand, defense or assertion against or involving
TMHL, the Master Servicer or its assignee or transferee of any
Eligible Loan based on or grounded upon, or resulting from such
breach or a breach of any representation, warranty or obligation
made by TMHL in reliance upon any warranty, obligation or
representation made by the Correspondent contained in or made
pursuant to this Agreement. The Correspondent hereby acknowledges
TMHL's intent to sell the Eligible Loans to third parties in
reliance upon the Correspondent's warranties, obligations and
representations. The obligations of the Correspondent under this
Section shall survive delivery and payment for the Eligible Loans,
liquidation or repurchase of the Eligible Loans and termination of
this Agreement or the expiration hereof.
Section 6. Correspondent's
Duties.
The Correspondent shall diligently
perform all duties incident to the selling and servicing of all
Eligible Loans that may be sold by the Correspondent, from time to
time. In the performance of such duties, the Correspondent shall
employ procedures and exercise the same care that it would maintain
for loans held in its own portfolio and in accordance with
standards of practice, diligence, prudence and competence
maintained by prudent mortgage lenders in the jurisdiction where
the property is located. The Correspondent shall also comply with
all of the provisions of the Guides and with all other reasonable
requirements and instruction of TMHL and the Master Servicer, as
applicable. The Correspondent shall perform such services at its
sole expense except as otherwise expressly provided in the Guides.
The Correspondent agrees to service each of such Eligible Loans
continuously beginning with the Purchase Date for such Eligible
Loans until either all interest and principal on each Eligible Loan
has been paid in full, the Eligible Loan has been liquidated as
provided in the Guides, or such servicing duties are terminated by
TMHL or the Master Servicer.
Section 7. Compensation.
Unless otherwise set forth herein, the
servicing fees to be paid to Correspondent for each Eligible Loan
serviced by the Correspondent shall be set forth in the related
Lock In Reservation.
Section 8. Costs and Expenses;
Right of Setoff.
(a) The Correspondent shall pay all
fees and expenses incurred in connection with the transactions
contemplated by this Agreement, including without limitation
transfer fees, recording fees, fees for title policy endorsements
and continuations, attorneys' fees and costs associated with the
physical delivery and insured shipment of the Mortgage Files to
TMHL and/or TMHL's document custodian(s).
(b) TMHL and its successors and
assigns shall be entitled to setoff against any amount to be paid
by it to the Correspondent for such amounts as may be due from the
Correspondent under this Agreement.
Section 9. No Solicitation
Rights.
Subject to the provisions set forth in
this Section 9, from and after the date hereof, neither the
Correspondent, nor any of its Affiliates shall solicit, by means of
direct mail, or telephonic or personal solicitation, the Mortgagors
of any Eligible Loans for purposes of prepayment of such Eligible
Loans. Solicitations undertaken by the Correspondent or any
affiliate of the Correspondent that are directed to the general
public at large (as opposed to directed specifically at the
Mortgagors), including without limitation mass mailings based on
commercially acquired mailing lists, and newspaper, radio and
television advertisements, shall not constitute solicitation under
this Section 9.
TMHL shall not solicit the customers of
Correspondent by means of direct mail, telephone or personal
solicitation. Notwithstanding the foregoing, solicitations
undertaken by TMHL or any affiliate that are directed to the
general public at large (as opposed to directed specifically at the
Mortgagors,) including without limitation mass mailings based on
commercially acquired mailing lists, and newspaper, radio and
television advertisements, shall not constitute solicitation under
this Section 9.
Section 10. Conditions to
Purchase.
The obligations of TMHL to purchase any
Eligible Loans are subject to the satisfaction prior to or on each
applicable Purchase Date (or on such other date as expressly
provided for herein) of the following conditions, any one or more
of which may be waived in writing by TMHL:
(a) All of the representations and
warranties of the Correspondent set forth in the Guides shall be
true and correct as of the applicable Purchase Date, and no event
shall have occurred which, with notice or the passage of time,
would constitute a Default or breach under this Agreement or under
the Guides.
(b) On each Purchase Date, TMHL
shall have received the documents and instruments required to be
delivered to TMHL on or before such Purchase Date pursuant to the
Guides, duly executed by all signatories other than TMHL as
required pursuant to the respective terms thereof.
(c) All other terms and conditions
to be performed on or prior to the applicable Purchase Date (or
such other date as expressly provided for herein) by the
Correspondent shall have been duly complied with and performed in
all respects pursuant to this Agreement, the applicable Approval
Notification Letter and the Guides.
Section 11. Termination or
Suspension Upon Default.
(a) Upon the occurrence of a
Default hereunder or under the Correspondent Sellers Guide or a
default under the Master Servicer Guide as defined therein under
either of the Guides, TMHL shall have the right, at its option and
in its sole discretion, to immediately suspend or terminate the
selling privileges of the Correspondent under this Agreement, in
addition to whatever rights TMHL may have at law or in equity to
damages, including injunctive relief and specific performance. In
the event TMHL or the Correspondent suspends or terminates the
selling privileges under this Agreement, the Correspondent shall
not be relieved of its servicing obligations unless expressly
terminated in accordance with this Agreement, the Correspondent
Sellers Guide or the Master Servicer Guide nor shall the
Correspondent be relieved of its other obligations with respect to
Eligible Loans previously purchased by TMHL including, without
limitation, representations and warranties made herein and in the
Correspondent Sellers Guide. TMHL may also immediately terminate
the selling privileges during or after a suspension of the selling
privileges. A termination of this Agreement or suspension or
termination of the selling privileges of the Correspondent due to a
Default shall also terminate or suspend any outstanding obligations
of TMHL as evidenced by Approval Notification Letters to purchase
Eligible Loans from the Correspondent. TMHL may waive any Default,
and upon any waiver, such Default shall cease to exist. No such
waiver shall extend to any subsequent or other Default or impair
any right consequent thereto except to the extent expressly waived.
Suspension or termination of the selling privileges of the
Correspondent or this Agreement shall not imply any termination of
servicing.
(b) TMHL may terminate the
servicing rights and obligations of the Correspondent in accordance
with this Agreement, the Correspondent Sellers Guide or the Master
Guide. Notwithstanding the prior sentence, in no event may
the servicing rights and obligations of the Correspondent be
terminated without cause.
Section 12. Master
Servicer.
Correspondent acknowledges that TMHL has
appointed the Master Servicer as its master servicer.
Notwithstanding anything to the contrary contained in this
Agreement, TMHL shall have the right, in its sole discretion, to
appoint and designate (such action, the "Appointment") another
master servicer as shall be reasonably acceptable to the
Correspondent (in either case, a "Master Servicer"), as master
servicer of some or all of the Eligible Loans then subject to this
Agreement. The Correspondent shall service to, remit to, and report
to, the Master Servicer, all in accordance with the terms of the
Master Servicer Guide and the servicing provisions set forth in
this Agreement. The Correspondent shall execute any
agreements, certificates and documents reasonably requested by the
Master Servicer or TMHL to carry out the terms of this Section
12.
Upon the Appointment, the Correspondent
shall correspond and communicate solely with the Master Servicer,
as if the Master Servicer were "TMHL" hereunder. Furthermore, the
Master Servicer shall have all rights as designee of TMHL to
enforce the representations and warranties, and all other covenants
and conditions set forth in this Agreement, and the Correspondent
shall follow the instructions of the Master Servicer under this
Agreement as if such instructions were the instructions of TMHL.
The Master Servicer shall have the right to give any waivers or
consents required or allowed under this Agreement on behalf of
TMHL, and shall furthermore be empowered to enter into and execute
and deliver any amendments or modifications to this Agreement as
TMHL's designee hereunder, and such amendments or modifications
shall be binding upon TMHL as if TMHL had executed and delivered
the same. All amounts due TMHL under this Agreement shall be
remitted to the Master Servicer in accordance with the Master
Servicer's instructions.
From and after the Appointment of the
Master Servicer pursuant to this Section 12 until the Master
Servicer Termination (as defined below) the Correspondent shall be
required to recognize and deal with the Master Servicer under this
Agreement.
The Correspondent shall treat the Master
Servicer as TMHL under this Agreement in accordance with the
provisions of this Section 12 unless and until the Correspondent
receives written notice from TMHL under this Agreement TMHL has
terminated the Master Servicer (such notice, the "Master Servicer
Termination"). Upon receipt of the Master Servicer Termination, the
Correspondent shall no longer recognize or deal with the Master
Servicer as TMHL's designee hereunder, but shall instead deal
directly with TMHL or such other designee appointed by TMHL by
Appointment in accordance with this Section. From and after the
receipt of the Master Servicer Termination, the Correspondent shall
service the Eligible Loans in accordance with the provisions of
this Agreement.
Section 13. Miscellaneous
Provisions.
(a) Amendment. Except as provided
in Section 4 concerning the Guides and Section 3 concerning the
Approval Notification Letters, this Agreement may be amended from
time to time by the Correspondent and TMHL solely by written
agreement signed by the Correspondent and TMHL.
(b) Governing Law. This Agreement
shall be governed by, construed and interpreted in accordance with
the laws of the State of New York.
(c) Consent to Jurisdiction. The
parties agree that, except as set forth in the Master Servicer
Guide, all legal actions and proceedings arising out of or related
to this Agreement, or the transactions contemplated hereby, shall
be brought in a Federal Court or State Court located in the State
of New York, and the parties hereby waive any objections to
summons, service of process, jurisdiction over the person or
subject matter, or the venue of the courts listed above.
(d)
Reproduction of Documents. This Agreement
and all documents relating hereto, including without limitation (i)
consents, waivers, and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and
(iii) financial statements, certificates, and other information
previously or hereafter furnished, may be reproduced by any
photographic, facsimile transmission, photostatic, microfilm,
microcard, 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.
(e) Notices. All demands, notices
and communications hereunder shall be in writing and shall be
deemed to have been duly given if personally delivered at or mailed
by registered mail, postage prepaid, or by a nationally recognized
overnight courier service, to the following:
If to the Correspondent:
First Republic Bank
111 Pine Street
San Francisco, CA 94111
Attention: Cathy Myers, Director of
Secondary Marketing
or such other address as may hereafter be
furnished to TMHL in writing by the Correspondent, and
If to TMHL:
Thornburg Mortgage Home Loans,
Inc.
119 East Marcy Street
Santa Fe, NM 87501
Attention: Ron Chicaferro,
President
or such other address as may hereafter be
furnished to the Correspondent by TMHL in writing.
(f) Severability of Provisions. If
any one or more of the covenants, agreements, provisions, or terms
of this Agreement shall be held invalid for any reason whatsoever,
then such covenants, agreements, provisions, or terms shall be
deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect
the validity or enforceability of the other covenants, agreements,
provisions, or terms of this Agreement or the rights of TMHL
hereunder. If the invalidity of any part, provision,
representation, or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this
Agreement, the parties shall negotiate in good faith to develop a
structure the economic effect of which is nearly as possible the
same as the economic effect of this Agreement without regard to
such invalidity.
(g) Counterparts. This Agreement
may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original, such counterparts,
together, shall constitute one and the same agreement.
(h) Successors and Assigns. (A)
This Agreement shall inure to the benefit of and be binding upon
the Correspondent and TMHL and their respective successors and
assigns
