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
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
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.1
Amendment....................................................18
Section 8.2
GOVERNING LAW................................................18
Section 8.3
Notices......................................................19
-i-
TABLE OF CONTENTS
(continued)
Page
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(R) 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"),
[____________],
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.
1
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.
2
(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;
3
(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.
4
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 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.
5
(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
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.
6
(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.
7
(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
Transferred
Property.
The
Seller
shall
file
any
such
continuation
statements
or
amendments on a timely basis.
8
(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
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;
9
(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
Loans,
including
the
Cut-Off
Date
Principal
Balances
of
the
Subsequent
Mortgage
Loans,
all
monies
due or to become
due with
respect
thereto,
and all proceeds of such Cut-Off Date Principal Balances and
nothing
has been done by the
Seller
to
impair
the
rights
of the
Purchaser,
the
Trustee,
the Paying Agent, the Enhancer or the
Securityholders
with respect
thereto; and
(viii)......The Seller is not in default
with
respect to any order or decree
of any
court or any
order,
regulation
or
demand
of any
federal,
state,
municipal or governmental
agency,
which default might have consequences that
would materially and adversely
affect the condition
(financial or otherwise)
or operations of the Seller or its properties or might have
consequences that
would materially adversely affect its performance hereunder.
(b)
As to each Initial
Mortgage Loan (except as otherwise
specified below)
as of the Closing
Date,
or as to each
Subsequent
Mortgage
Loan (except as
otherwise specified below) as of the related Subsequent Transfer
Date:
(i)
The
information
pertaining
to each
Mortgage
Loan
set
forth in the
Mortgage
Loan
Schedule
delivered
by the Seller was true and correct in all
material
respects as of the date or dates
respecting
which such information
is initially furnished;
(ii)
Each Mortgaged
Property is improved by a residential
dwelling,
which,
to the best of the Seller's
knowledge,
does not
constitute
property
other
than real property under state law;
10
(iii) Each
Mortgage
Loan is being
serviced by the Seller and there was only
one
originally
executed Loan
Agreement not stamped as a duplicate copy with
respect to each such Mortgage Loan;
(iv)
The
Loan
Agreement
with
respect
to
each
Mortgage
Loan
bears
an
adjustable Loan Rate;
(v)
Immediately prior to the transfer and assignment herein
contemplated or
under the related Subsequent
Trans
