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Exhibit 99.5
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MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
FIRST REPUBLIC BANK
Seller and Servicer
MERRILL LYNCH BANK, USA
Initial Purchaser
Dated as of December 1, 2005
Fixed Rate and Adjustable Rate Mortgage Loans
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TABLE OF CONTENTS
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Page
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SECTION 1.
Definitions...................................................
1
SECTION 2. Agreement to
Purchase......................................... 14
SECTION 3. Mortgage Loan
Schedules....................................... 14
SECTION 4. Purchase
Price................................................ 14
SECTION 5. Examination of Mortgage
Files................................. 15
SECTION 6. Conveyance from Seller to Initial
Purchaser................... 15
Subsection 6.01.
Conveyance of
Mortgage Loans; Possession of
Servicing
Files.................................... 15
Subsection 6.02.
Books and
Records.................................. 15
Subsection 6.03.
Delivery of
Mortgage Loan Documents................ 16
SECTION 7. Representations, Warranties and Covenants of the
Seller:
Remedies for Breach...........................................
17
Subsection 7.01.
Representations
and Warranties Respecting the
Seller............................................. 17
Subsection 7.02.
Representations
and Warranties Regarding Individual
Mortgage Loans..................................... 19
Subsection 7.03.
Remedies for
Breach of Representations and
Warranties......................................... 30
Subsection 7.04.
Repurchase of
Certain Mortgage Loans............... 32
SECTION 8.
Closing.......................................................
32
SECTION 9. Closing
Documents............................................. 33
SECTION 10.
Costs........................................................
34
SECTION 11. Seller's Servicing
Obligation................................ 34
SECTION 12. Removal of Mortgage Loans from Inclusion under this
Agreement
Upon a Reconstitution on One or More Reconstitution Dates....
34
SECTION 12A. Compliance with Regulation
AB............................... 36
Subsection
12A.01. Intent of the Parties; Reasonableness..............
36
Subsection
12A.02. Additional Representations and Warranties of the
Seller............................................. 37
Subsection
12A.03. Information to Be Provided by the Seller...........
38
Subsection
12A.04. Servicer Compliance Statement......................
43
Subsection
12A.05. Report on Assessment of Compliance and Attestation.
44
Subsection
12A.06. Use of Subservicers and Subcontractors.............
45
Subsection
12A.07. Indemnification; Remedies..........................
46
SECTION 13. The
Seller...................................................
49
Subsection
13.01. Additional
Indemnification by the Seller........... 49
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Subsection
13.02. Merger or
Consolidation of the Seller.............. 49
Subsection
13.03. Limitation on
Liability of the Seller and Others... 49
Subsection 13.04. Seller Not to
Resign............................... 50
Subsection
13.05. Transfer of
Servicing.............................. 50
SECTION 14.
Default......................................................
50
Subsection
14.01. Events of
Default.................................. 50
Subsection
14.02. Waiver of
Defaults................................. 52
SECTION 15.
Termination..................................................
52
SECTION 16. Successor to the
Seller...................................... 52
SECTION 17. Financial
Statements......................................... 53
SECTION 18. Mandatory Delivery; Grant of Security
Interest............... 53
SECTION 19.
Notices......................................................
54
SECTION 20. Severability
Clause.......................................... 54
SECTION 21.
Counterparts.................................................
55
SECTION 22. Governing
Law................................................ 55
SECTION 23. Intention of the
Parties..................................... 55
SECTION 24. Successors and
Assigns....................................... 55
SECTION 25.
Waivers......................................................
55
SECTION 26.
Exhibits.....................................................
55
SECTION 27. General Interpretive
Principles.............................. 55
SECTION 28.
Nonsolicitation..............................................
56
SECTION 29. Reproduction of
Documents.................................... 56
SECTION 30. Further
Agreements........................................... 56
SECTION 31.
Amendment....................................................
56
SECTION 32. Force
Majeure................................................
56
SECTION 33. Closing Documents Apply to Amended
Agreement................. 57
SECTION 34. Third Party
Beneficiary...................................... 57
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EXHIBITS
EXHIBIT 1
SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2
FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3
SECURITY RELEASE CERTIFICATION
EXHIBIT 4
ASSIGNMENT AND CONVEYANCE
EXHIBIT 5
CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6
MORTGAGE LOAN DOCUMENTS
EXHIBIT 7
CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 8
ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 9
SERVICING ADDENDUM
EXHIBIT 10 FORM
OF CONFIRMATION
EXHIBIT 11 FORM
OF BACK-UP CERTIFICATION
EXHIBIT 12
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This
is a MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT, dated as
of
December 1, 2005, by and between Merrill Lynch Bank, USA, having an
office at 4
World Financial Center, 9th Floor, New York, New York 10080 (the
"Initial
Purchaser", and the Initial Purchaser or the Person, if any, to
which the
Initial Purchaser has assigned its rights and obligations hereunder
as Purchaser
with respect to a Mortgage Loan, and each of their respective
successors and
assigns, the "Purchaser") and First Republic Bank, having an office
at 111 Pine
Street, San Francisco, California 94111 (the "Seller"),
WITNESSETH:
WHEREAS, the Seller desires to sell, from time to time, to the
Purchaser,
and the Purchaser desires to purchase, from time to time, from the
Seller,
certain conventional fixed rate and adjustable rate residential
first lien
mortgage loans and cooperative loans (collectively, the "Mortgage
Loans") as
described herein on a servicing-retained basis, and which shall be
delivered in
groups of whole loans on various dates as provided herein (each, a
"Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or
other security instrument creating a first lien on a residential
dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule
for the
related Mortgage Loan Package, which is to be annexed hereto on
each Closing
Date as Schedule I (or a supplement thereto); and
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the
conveyance, servicing and control of the Mortgage Loans.
NOW,
THEREFORE, in consideration of the premises and mutual agreements
set
forth herein, and for other good and valuable consideration, the
receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree
as follows:
SECTION 1. Definitions. For purposes of this Agreement the
following
capitalized terms shall have the respective meanings set forth
below.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for
the
adjustment of the Mortgage Interest Rate payable in respect
thereto.
Adjustment Date: With respect to each Mortgage Loan, the date set
forth in
the related Mortgage Note on which the Mortgage Interest Rate on
such Mortgage
Loan is adjusted in accordance with the terms of the related
Mortgage Note.
Agreement: This Mortgage Loan Purchase and Servicing Agreement
including
all exhibits, schedules, amendments and supplements hereto, as may
be amended,
supplemented or otherwise modified from time to time in accordance
with the
terms hereof.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i)
the value thereof as determined by an appraisal made for the
originator of the
Mortgage Loan at the time
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of origination of the Mortgage Loan by an appraiser who met the
minimum
requirements of Fannie Mae and Freddie Mac, and (ii) the purchase
price paid for
the related Mortgaged Property by the Mortgagor with the proceeds
of the
Mortgage Loan, provided, however, in the case of a Refinanced
Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value
determined
by an appraisal made for the originator of such Refinanced Mortgage
Loan at the
time of origination of such Refinanced Mortgage Loan by an
appraiser who met the
minimum requirements of Fannie Mae and Freddie Mac.
Assignment and Conveyance: An assignment and conveyance of the
Mortgage
Loans purchased on a Closing Date in the form annexed hereto as
Exhibit 4.
Assignment of Mortgage: An individual assignment of a Mortgage,
notice of
transfer or equivalent instrument in recordable form, sufficient
under the laws
of the jurisdiction wherein the related Mortgaged Property is
located to give
record notice of the sale of the related Mortgage Loan to the
Purchaser.
Assignment of the Note and Pledge Agreement: With respect to a
Cooperative
Loan, an assignment of the Note and Pledge Agreement.
Assignment of the Proprietary Lease: With respect to a Cooperative
Loan, an
assignment of the related Proprietary Lease.
Business Day: Any day other than a Saturday or Sunday, or a day on
which
banking and savings and loan institutions in the State of
California or the
State of New York are authorized or obligated by law or executive
order to be
closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of
which were
in excess of the principal balance of any existing first mortgage
on the related
Mortgaged Property and related closing costs, and were used to pay
any such
existing first mortgage, related closing costs and subordinate
mortgages on the
related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser from time to
time
shall purchase and the Seller from time to time shall sell to the
Purchaser, the
Mortgage Loans listed on the related Mortgage Loan Schedule with
respect to the
related Mortgage Loan Package.
Closing Documents: With respect to any Closing Date, the documents
required
pursuant to Section 9.
Code: The Internal Revenue Code of 1986, as amended, or any
successor
statute thereto.
Commission: The United States Securities and Exchange
Commission.
Company Information: As defined in Subsection 12A.07(a)(i).
Condemnation Proceeds: All awards, compensation and settlements in
respect
of a taking of all or part of a Mortgaged Property by exercise of
the power of
condemnation or the right of eminent domain.
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Confirmation: With respect to any Mortgage Loan Package purchased
and sold
on any Closing Date, the letter agreement between the Purchaser and
the Seller,
generally in the form annexed hereto as Exhibit 10 (including any
exhibits,
schedules and attachments thereto), setting forth the terms and
conditions of
such transaction and describing the Mortgage Loans to be purchased
by the
Purchaser on such Closing Date. A Confirmation may relate to more
than one
Mortgage Loan Package to be purchased on one or more Closing Dates
hereunder.
Consent: A document executed by a Cooperative (i) consenting to the
sale of
a Cooperative Apartment to the related Mortgagor and (ii)
certifying that all
maintenance charges relating to the Cooperative Apartment have been
paid.
Convertible Mortgage Loan: A Mortgage Loan that by its terms and
subject to
certain conditions contained in the related Mortgage or Mortgage
Note allows the
Mortgagor to convert the adjustable Mortgage Interest Rate on such
Mortgage Loan
to a fixed Mortgage Interest Rate.
Cooperative: A private, non-profit cooperative apartment
corporation which
owns all of the real property that comprises a Project, including
the land,
separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a
Cooperative
Loan.
Cooperative Lien Search: A search for (a) federal tax liens,
mechanics'
liens, lis pendens, judgments of record or otherwise against (i) a
Cooperative,
(ii) the seller of the related Cooperative Apartment and (iii) the
related
Mortgagor if the related Cooperative Loan is a Refinanced Loan, (b)
filings of
Financing Statements and (c) the deed of the related Project into
the
Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by a first lien
on and a
perfected security interest in Cooperative Shares and the related
Proprietary
Lease granting exclusive rights to occupy the related Cooperative
Apartment in
the building owned by the related Cooperative.
Cooperative Shares: The shares of stock allocated to a
Cooperative
Apartment, represented by a Stock Certificate, issued by the
related Cooperative
and owned by the related Mortgagor.
Custodial Account: The separate trust account or accounts, each of
which
shall be an Eligible Account, created and maintained pursuant to
this Agreement,
which shall be entitled "First Republic Bank, as servicer, in trust
for the
Purchaser and various Mortgagors, Fixed Rate and Adjustable Rate
Mortgage
Loans", established at a financial institution acceptable to the
Purchaser.
Custodial Agreement: The custodial agreement designated by the
Purchaser
from time to time governing the retention of the originals of each
Mortgage
Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents.
Custodian: The custodian under the Custodial Agreement, or its
successor in
interest or assigns, or any successor to the Custodian under the
Custodial
Agreement, as therein provided.
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Cut-off Date: The first day of the calendar month in which the
related
Closing Date occurs.
Deleted Mortgage-Loan: A Mortgage Loan replaced or to be replaced
by a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB,
with
respect to any Securitization Transaction.
Determination Date: With respect to each Distribution Date, the
fifteenth
(15th) day of the calendar month in which such Distribution Date
occurs or, if
such fifteenth (15th) day is not a Business Day, the Business Day
immediately
preceding such fifteenth (15th) day.
Distribution Date: The eighteenth (18th) day of each month,
commencing on
the eighteenth day of the month next following the month in which
the related
Cut-off Date occurs, or if such eighteenth (18th) day is not a
Busyness Day, the
first Business Day immediately following such eighteenth (18th)
day.
Due
Date: With respect, to each Distribution Date, the first day of
the
calendar month in which such Distribution Date occurs, which is the
day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any
days of grace.
Due
Period: With respect to each Distribution Date, the period
commencing
on the second day of the month preceding the month of the
Distribution Date and
ending on the first day of the month of the Distribution Date.
Eligible Account: Either (i) an account or accounts maintained with
a
federal or state chartered depository institution or trust company
the
short-term unsecured debt obligations of which (or, in the case of
a depository
institution or trust company that is the principal subsidiary of a
holding
company, the short-term unsecured debt obligations of such holding
company) are
rated A-1 by S&P or Prime-1 by Moody's (or a comparable rating
if another rating
agency is specified by the Initial Purchaser by written notice to
the Seller) at
the time any amounts are held on deposit therein, (ii) an account
or accounts
the deposits in which are fully insured by the FDIC or (iii) a
trust account or
accounts maintained with a federal or state chartered depository
institution or
trust company acting in its fiduciary capacity. Eligible Accounts
may bear
interest.
Escrow Account: The separate trust account or accounts created
and
maintained pursuant to this Agreement which shall be entitled
"First Republic
Bank, as servicer, in trust for the Purchaser and various
Mortgagors, Fixed Rate
and Adjustable Rate Mortgage Loans", established at a financial
institution
acceptable to the Purchaser.
Escrow Payments: The amounts constituting ground rents, taxes,
assessments,
water charges, sewer rents, Primary Insurance Policy premiums, fire
and hazard
insurance premiums and other payments required to be escrowed by
the Mortgagor
with the Mortgagee pursuant to the terms of any Mortgage Note or
Mortgage.
Estoppel Letter: A document executed by a Cooperative certifying,
with
respect to a Cooperative Apartment, (i) the appurtenant Proprietary
Lease will
be in full force and effect as of
4
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the date of issuance thereof, (ii) the related Stock Certificate
was registered
in the related Mortgagor's name and the Cooperative has not been
notified of any
lien upon, pledge of, levy of execution on or disposition of such
Stock
Certificate, and (iii) the Mortgagor is not in default under the
appurtenant
Proprietary Lease and all charges due the Cooperative have been
paid.
Event of Default: Any one of the events enumerated in Section
14.01.
Fannie Mae: Fannie Mae or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property
purchased by the
Seller pursuant to this Agreement), a determination made by the
Seller that all
Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which
the Seller, in its reasonable good faith judgment, expects to be
finally
recoverable in respect thereof have been so recovered. The Seller
shall maintain
records, prepared by a servicing officer of the Seller, of each
Final Recovery
Determination.
Financing Statement: A financing statement in the form of a UCC-1
filed
pursuant to the Uniform Commercial Code to perfect a security
interest in
Cooperative Shares and the related Pledge Instruments.
Financing Statement Change: A financing statement in the form of a
UCC-3
filed to continue, terminate, release, assign or amend an existing
Financing
Statement.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which
the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for
the term of
such Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation or any
successor
thereto.
Gross Margin: With respect to any Fixed Rate Mortgage Loan, the
fixed
percentage amount set forth in the related Mortgage Note and the
related
Mortgage Loan Schedule that is added to the Index on each
Adjustment Date in
accordance with the terms of the related Mortgage Note to determine
the new
Mortgage Interest Rate for such Mortgage Loan.
HUD:
The United States Department of Housing and Urban Development or
any
successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the
index
identified on the related Mortgage Loan Schedule and set forth in
the related
Mortgage Note for the purpose of calculating the Mortgage Interest
Rate thereon.
Initial Closing Date: The Closing Date on which the Initial
Purchaser
purchases and the Seller sells the first Mortgage Loan Package
hereunder.
Initial Purchaser: Merrill Lynch Bank, USA, or any successor.
5
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Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Liquidation Proceeds: Amounts, other than Insurance Proceeds
and
Condemnation Proceeds, received in connection with the liquidation
of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or
otherwise,
or the sale of the related Mortgaged Property if the Mortgaged
Property is
acquired in satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of
any
date of determination, the ratio on such date of the outstanding
principal
amount of the Mortgage Loan to the Appraised Value of the Mortgaged
Property.
Master Servicer: With respect to any Reconstitution, the "master
servicer",
if any, identified in the related transaction documents.
Maximum Mortgage Interest Rate: With respect to each Adjustable
Rate
Mortgage Loan, a rate that is set forth on the related Mortgage
Loan Schedule
and in the related Mortgage Note and is the maximum interest rate
to which the
Mortgage Interest Rate on such Adjustable Rate Mortgage Loan may be
increased on
any Adjustment Date.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware, or
any successor
thereto.
MERS
Mortgage Loan: Any Mortgage Loan registered with MERS on the
MERS
System.
MERS
System: The system of recording transfers of mortgages
electronically
maintained by MERS.
MIN:
The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Interest Rate: With respect to each Adjustable
Rate
Mortgage Loan, a rate that is set forth on the related Mortgage
Loan Schedule
and in the related Mortgage Note and is the minimum interest rate
to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on
any Adjustment
Date.
MOM
Loan: Any Mortgage Loan as to which MERS is acting as mortgagee,
solely
as nominee for the originator of such Mortgage Loan and its
successors and
assigns.
Monthly Advance: The
aggregate of the advances made by the Seller on any
Distribution Date pursuant to Section 11.21.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
combined
monthly payment of principal and interest payable by a Mortgagor
under the
related Mortgage Note on each Due Date.
Moody's: Moody's Investors Service, Inc. or its successor in
interest.
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Mortgage: With respect to a Mortgage Loan, the mortgage, deed of
trust or
other instrument, which creates a first lien on either (i) with
respect to a
Mortgage Loan other than a Cooperative Loan, the fee simple or
leasehold estate
in the related Mortgaged Property or (ii) with respect to a
Cooperative Loan,
the Proprietary Lease and related Cooperative Shares, which in
either case
secures the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in a Mortgage and
the
successors and assigns of such mortgagee or beneficiary.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred
to in Exhibit 5 annexed hereto, and any additional documents
required to be
added to the Mortgage File pursuant to this Agreement or the
related
Confirmation.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate
that interest accrues on such Mortgage Loan from time to time in
accordance with
the provisions of the related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage loan,
including any
Cooperative Loan, sold, assigned and transferred to the Purchaser
pursuant to
this Agreement and the related Confirmation and identified on the
Mortgage Loan
Schedule annexed to this Agreement on the related Closing Date,
which Mortgage
Loan includes without limitation the Mortgage File, the Monthly
Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds,
Insurance
Proceeds, REO Disposition proceeds, and all other rights, benefits,
proceeds and
obligations arising from or in connection with such Mortgage
Loan.
Mortgage Loan Documents: The documents listed in Exhibit 6
hereto.
Mortgage Loan Package: The Mortgage Loans listed on a Mortgage
Loan
Schedule, delivered to the Custodian and the Purchaser at least
five (5)
Business Days prior to the related Closing Date and attached to
this Agreement
as Schedule I (or a supplement thereto) on the related Closing
Date.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package,
the
schedule of Mortgage Loans to be attached hereto as Schedule I (or
a supplement
thereto) on each Closing Date for the Mortgage Loan Package
delivered on such
Closing Date in both hard copy and electronic form, such schedule
setting forth
the following information with respect to each Mortgage Loan in the
Mortgage
Loan Package: (1) the Seller's Mortgage Loan identifying number;
(2) the
Mortgagor's first and last name; (3) the street address of the
Mortgaged
Property including the state and zip code; (4) a code indicating
whether the
Mortgaged Property is owner-occupied and, if so, whether it is the
Mortgagor's
primary or secondary residence; (5) the type of Residential
Dwelling
constituting the Mortgaged Property; (6) the original months to
maturity; (7)
the origination date of the Mortgage Loan and the remaining months
to maturity
from the Cut-off Date, based on the original amortization schedule;
(8) the
Loan-to-Value Ratio at origination and the Cut-off Date; (9) the
Mortgage
Interest Rate at origination and in effect immediately following
the Cut-off
Date; (10) the date on which the first Monthly Payment was due on
the Mortgage
Loan; (11) the stated maturity date; (12) the amount of the Monthly
Payment at
origination; (13) the amount of the Monthly Payment as of the
Cut-off Date; (14)
the
7
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last Due Date on which a Monthly Payment was actually applied to
the unpaid
Stated Principal Balance; (15) the original principal amount of the
Mortgage
Loan; (16) the Stated Principal Balance of the Mortgage Loan as of
the close of
business on the Cut-off Date; (17) the first Adjustment Date and
the Adjustment
Date frequency; (18) the Gross Margin; (19) a code indicating the
purpose of the
loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out
Refinancing);
(20) the Maximum Mortgage Interest Rate under the terms of the
Mortgage Note;
(21) the Minimum Mortgage Interest Rate under the terms of the
Mortgage Note;
(22) the Mortgage Interest Rate at origination; (23) the Periodic
Rate Cap; (24)
the first Adjustment Date immediately following the Cut-off Date;
(25) the
Index; (26) the date on which the first Monthly Payment was due on
the Mortgage
Loan and, if such date is not consistent with the Due Date
currently in effect,
such Due Date; (27) a code indicating the documentation style
(i.e., full,
alternative or reduced); (28) a code indicating if the Mortgage
Loan is subject
to a Primary Insurance Policy; (29) the Appraised Value of the
Mortgaged
Property; (30) the sale price of the Mortgaged Property, if
applicable; (31) a
code indicating if the Mortgage Loan is an interest-only Mortgage
Loan and, if
so, the term of the interest-only period of such Mortgage Loan;
(32) a code
indicating if the Mortgage Loan is subject to a Prepayment Charge
and if so, the
amount and term of such Prepayment Charge; (33) a code indicating
if the
Mortgage Loan is a Cooperative Loan; (34) the initial Servicing Fee
Rate as of
the Cut-off Date; (35) with respect to each MERS Mortgage Loan, the
MIN; (36)
the ratio of the Monthly Payment to the Mortgagor's income; (37)
the Mortgagor's
borrower credit score (i.e., FICO); (38) the ratio of the aggregate
outstanding
principal amount of all debt secured by the Mortgaged Property to
the Appraised
Value of the Mortgaged Property as of the Cut-off Date; (39) a code
indicating
whether the Mortgage Loan is an Adjustable Rate Mortgage Loan or a
Fixed Rate
Mortgage Loan. With respect to the Mortgage Loan Package in the
aggregate, the
Mortgage Loan Schedule shall set forth the following information,
as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the
current
principal balance of the Mortgage Loans; (3) the weighted average
Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average
maturity of
the Mortgage Loans. Schedule I (or a supplement thereto) hereto
shall be
supplemented as of each Closing Date to reflect the addition of the
Mortgage
Loan Schedule with respect to the related Mortgage Loan Package;
and (40)
identify whether title to such Mortgage Loan is in the name of a
corporation or
a natural person.
Mortgage Note: The original executed note or other evidence of the
Mortgage
Loan indebtedness of a Mortgagor.
Mortgaged Property: (a) With respect to each Mortgage Loan, the
Mortgagor's
real property securing repayment of the related Note, consisting of
a fee simple
interest in a single parcel of real property improved by a
Residential Dwelling
and (b) with respect to each Cooperative Loan, the related
Cooperative Shares
and Proprietary Lease.
Mortgagor: The obligor on a Mortgage Note, the owner of the
Mortgaged
Property and the grantor or mortgagor named in the related Mortgage
or Pledge
Agreement and such grantor's or mortgagor's successor's in title to
the
Mortgaged Property.
Net
Mortgage Rate: With respect to any Mortgage Loan (or the related
REO
Property), as of any date of determination, a per annum rate of
interest equal
to the then applicable Mortgage Interest Rate for such Mortgage
Loan minus the
Servicing Fee Rate.
8
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Nonrecoverable Monthly Advance: Any Monthly Advance previously made
or
proposed to be made in respect of a Mortgage Loan or REO Property
that, in the
good faith business judgment of the Seller, will not, or, in the
case of a
proposed Monthly Advance, would not be, ultimately recoverable from
related late
payments, Insurance Proceeds or Liquidation Proceeds on such
Mortgage Loan or
REO Property as provided herein.
Officer's Certificate: A certificate signed by the Chairman of the
Board or
the Vice Chairman of the Board or a President or a Vice President
and by the
Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant
Secretaries of the Person on behalf of whom such certificate is
being delivered,
or, if the Person is not a corporation, by an individual
performing
substantially similar duties.
Opinion of Counsel: A written opinion of counsel, who may be
salaried
counsel for the Person on behalf of whom the opinion is being
given, reasonably
acceptable to each Person to whom such opinion is addressed.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan and
any Adjustment Date therefor, a number of percentage points per
annum that is
set forth in the related Mortgage Loan Schedule and in the related
Mortgage
Note, which is the maximum amount by which the Mortgage Interest
Rate for such
Adjustable Rate Mortgage Loan may increase (without regard to the
Maximum
Mortgage Interest Rate) or decrease (without regard to the Minimum
Mortgage
Interest Rate) on such Adjustment Date from the Mortgage Interest
Rate in effect
immediately prior to such Adjustment Date.
Person: An individual, corporation, limited liability company,
partnership,
joint venture, association, joint-stock company, trust,
unincorporated
organization or government or any agency or political subdivision
thereof.
Pledge Agreement: The specific agreement creating a first lien on
and
pledge of the Cooperative Shares and the appurtenant Proprietary
Lease securing
a Cooperative Loan.
Pledge Instruments: The Stock Power, the Assignment of the
Proprietary
Lease and the Assignment of the Note and Pledge Agreement.
Preliminary Servicing Period: With respect to any Mortgage Loans,
the
period commencing on the related Closing Date and ending on the
date the Seller
enters into a Reconstitution Agreement that amends or restates the
servicing
provisions of this Agreement, or any Reconstitution Date.
Prepayment Charge: With respect to any Mortgage Loan, any
prepayment
penalty or premium thereon payable in connection with a principal
prepayment on
such Mortgage Loan pursuant to the terms of the related Mortgage
Note.
Primary Insurance Policy: A policy of primary mortgage guaranty
insurance
issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on
a
Mortgage Loan that is received in advance of its scheduled Due
Date, that is not
accompanied by an amount of
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interest representing scheduled interest due on any date or dates
in any month
or months subsequent to the month of prepayment.
Project: All real property in a cooperative apartment owned by the
related
Cooperative including the land, separate dwelling units and all
common areas.
Proprietary Lease: A lease on a Cooperative Apartment evidencing
the
possessory interest of the Mortgagor in such Cooperative
Apartment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser
to the Seller pursuant to the related Confirmation in exchange for
the Mortgage
Loans purchased on such Closing Date as calculated as provided in
Section 4.
Qualified Correspondent: Any Person from which the Seller
purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the
Seller and
such Person that contemplated that such Person would underwrite
mortgage loans
from time to time, for sale to the Seller, in accordance with
underwriting
guidelines designated by the Seller ("Designated Guidelines") or
guidelines that
do not vary materially from such Designated Guidelines; (ii) such
Mortgage Loans
were in fact underwritten as described in clause (i) above and were
acquired by
the Seller within one hundred eighty (180) days after origination;
(iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans
were
originated, used by the Seller in origination of mortgage loans of
the same type
as the Mortgage Loans for the Seller's own account or (y) the
Designated
Guidelines were, at the time such Mortgage Loans were underwritten,
designated
by the Seller on a consistent basis for use by lenders in
originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed,
at the time
such Mortgage Loans were acquired by the Seller, pre-purchase or
post-purchase
quality assurance procedures (which may involve, among other
things, review of a
sample of mortgage loans purchased during a particular time period
or through
particular channels) designed to ensure that Persons from which it
purchased
mortgage loans properly applied the underwriting criteria
designated by the
Seller.
Qualified Insurer: Any insurer that meets the requirements of
Fannie Mae
and Freddie Mac.
Qualified Substitute Mortgage Loan: A mortgage loan substituted for
a
Deleted Mortgage Loan pursuant to the terms of this Agreement which
must, on the
date of such substitution, (i) have an outstanding principal
balance, after
application of all scheduled payments of principal and interest due
during or
prior to the month of substitution, not in excess of the Stated
Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the
calendar month
during which the substitution occurs, (ii) have a Mortgage Interest
Rate not
less than (and not more than one percentage point in excess of) the
Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a Net
Mortgage Rate equal
to the Net Mortgage Rate of the Deleted Mortgage Loan, (iv) have a
remaining
term to maturity not greater than (and not more than one year less
than) that of
the Deleted Mortgage Loan, (v) have the same Due Date as the Due
Date of the
Deleted Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the
date of
substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted
Mortgage Loan as of such date, (vii) be covered under a Primary
Insurance Policy
if such mortgage loan has a Loan-to-Value Ratio in excess of
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80%, (viii) conform to each representation and warranty set forth
in Subsection
7.02 of this Agreement, (ix) be the same type of mortgage loan
(i.e. fixed or
adjustable rate with the same Gross Margin and Index as the Deleted
Mortgage
Loan) as the Deleted Mortgage Loan, and (x) not be a Cooperative
Loan unless the
Deleted Mortgage Loan is a Cooperative Mortgage Loan.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of
which
are not in excess of the existing first mortgage loan on the
related Mortgaged
Property and related closing costs, and were used exclusively to
satisfy the
then existing first mortgage loan of the Mortgagor on the related
Mortgaged
Property and to pay related closing costs.
Recognition Agreement: An agreement whereby a Cooperative and a
lender with
respect to a Cooperative Loan (i) acknowledge that such lender may
make, or
intends to make, such Cooperative Loan, and (ii) make certain
agreements with
respect to such Cooperative Loan.
Reconstitution: Any Pass Through Transfer or Whole Loan
Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the
Seller and the Purchaser and/or certain third parties on the
Reconstitution Date
or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in
connection with a Reconstitution as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of the
Mortgage
Loans serviced under this Agreement shall be removed from this
Agreement and
included as part of a Whole Loan Transfer or Securitization
Transaction pursuant
to Section 12 hereof. On such date or dates, the Mortgage Loans
transferred
shall cease to be covered by this Agreement and the Seller's
servicing
responsibilities shall cease under this Agreement with respect to
the related
transferred Mortgage Loans.
Record Date: With respect to each Distribution Date, the last
Business Day
of the month immediately preceding the month in which such
Distribution Date
occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which
were not
used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from
time to time,
and subject to such clarification and interpretation as have been
provided by
the Commission in the adopting release (Asset-Backed Securities,
Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff
of the Commission, or as may be provided by the Commission or its
staff from
time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to
REMICs, which appear in Sections 860A through 860G of the Code, and
related
provisions, and proposed, temporary and final regulations and
published rulings,
notices and announcements promulgated thereunder, as the foregoing
may be in
effect from time to time.
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<PAGE>
REO
Account: The separate trust account or accounts created and
maintained
pursuant to this Agreement which shall be entitled "First Republic
Bank in trust
for the Purchaser, as of [date of acquisition of title], Fixed Rate
and
Adjustable Rate Mortgage Loans".
REO
Disposition: The final sale by the Seller of any REO Property.
REO
Property: A Mortgaged Property acquired as a result of the
liquidation
of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to (i)
the product of the Stated Principal Balance of such Mortgage Loan
times the
greater of (x) the Purchase Price percentage as stated in the
related
Confirmation and (y) 100%, plus (ii) interest on such Stated
Principal Balance
at the Mortgage Interest Rate from and including the last Due Date
through which
interest has been paid by or on behalf of the Mortgagor to the
first day of the
month following the date of repurchase, less amounts received in
respect of such
repurchased Mortgage Loan that are being held in the Custodial
Account for
distribution in connection with such Mortgage Loan.
Residential Dwelling: Any one of the following: (i) a detached
one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family
dwelling unit in an Fannie Mae eligible condominium project, or
(iv) a detached
one-family dwelling in a planned unit development, none of which is
a mobile or
manufactured home.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or
other transfer of some or all of the Mortgage Loans directly or
indirectly to an
issuing entity in connection with an issuance of publicly offered
or privately
placed, rated or unrated mortgage-backed securities or (2) an
issuance of
publicly offered or privately placed, rated or unrated securities,
the payments
on which are determined primarily by reference to one or more
portfolios of
residential mortgage loans consisting, in whole or in part, of some
or all of
the Mortgage Loans.
Servicer: As defined in Subsection 12A.03.
Servicing Addendum: The terms and conditions attached hereto as
Exhibit 9
and incorporated in Section 11 that will govern the servicing of
the Mortgage
Loans by Seller during the Preliminary Servicing Period.
Servicing Advances: All "out-of-pocket" costs and expenses that
are
customary, reasonable and necessary and incurred by the Seller in
the
performance of its servicing obligations, including, but not
limited to, the
cost of (i) preservation, restoration and repair of a Mortgaged
Property, (ii)
any enforcement or judicial proceedings with respect to a Mortgage
Loan,
including foreclosure actions and (iii) the management and
liquidation of REO
Property.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of
Regulation AB, as such may be amended from time to time.
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<PAGE>
Servicing Fee: With respect to each Mortgage Loan, the amount of
the annual
servicing fee the Purchaser shall pay to the Seller, which shall,
for each
calendar month, be equal to one-twelfth of the product of (a) the
Servicing Fee
Rate and (b) the unpaid principal balance of the Mortgage Loan.
Such fee shall
be payable monthly, computed using the same principal amount and
period used to
compute any related interest payment on a Mortgage Loan is
computed. The
obligation of the Purchaser to pay the Servicing Fee is limited to,
and payable
solely from, the interest portion (including recoveries with
respect to interest
from Liquidation Proceeds and other proceeds, to the extent
permitted by Section
11.05) of the related Monthly Payment collected by the Seller, or
as otherwise
provided under Section 11.05. If the Preliminary Servicing Period
includes any
partial month, the Servicing Fee for such month shall be prorated
at a per diem
rate based upon a 30-day month.
Servicing Fee Rate: The per annum rate at which the Servicing Fee
accrues,
which rate shall initially be equal to the rate set forth with
respect to each
Mortgage Loan in the Mortgage Loan Schedule and which rate shall be
increased by
the amount of any increase in the Mortgage Interest Rate for any
such Mortgage
Loan pursuant to the terms of the related Mortgage Note for any
reason other
than an increase in the related Index, including due to termination
of an
automatic debit or direct deposit discount.
Servicing File: With respect to each Mortgage Loan, the file
retained by
the Seller consisting of originals of all documents in the Mortgage
File that
are not delivered to the Purchaser or the Custodian and copies of
the Mortgage
Loan Documents set forth in Exhibit 6 hereto.
S&P: Standard
& Poor's Ratings Group or its successor in interest.
Stated Principal Balance: As to each Mortgage Loan as of any date
of
determination, (i) the principal balance of the Mortgage Loan as of
the Cut-off
Date after giving effect to payments of principal due on or before
such date,
whether or not collected from the Mortgagor on or before such date,
minus (ii)
all amounts previously distributed to the Purchaser with respect to
the related
Mortgage Loan representing payments or recoveries of principal.
Static Pool Information: Static pool information as described in
Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is
not
responsible for the overall servicing (as "servicing" is commonly
understood by
participants in the mortgage-backed securities market) of Mortgage
Loans but
performs one or more discrete functions identified in Item 1122(d)
of Regulation
AB with respect to Mortgage Loans under the direction or authority
of the Seller
or a Subservicer.
Stock Certificates: The certificates evidencing ownership of
the
Cooperative Shares issued by the Cooperative.
Stock Power: An assignment of the Stock Certificate or an
assignment of the
Cooperative Shares issued by the Cooperative.
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<PAGE>
Third-Party Originator: Each Person, other than a Qualified
Correspondent,
that originated Mortgage Loans acquired by the Seller.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage
Loans by the Purchaser to a third party, which sale or transfer is
not a
Securitization Transaction.
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and
the
Purchaser agrees to purchase, from time-to-time, on a
servicing-retained basis,
Mortgage Loans having an aggregate principal balance on the related
Cut-off Date
in an amount as set forth in the related Confirmation, or in such
other amount
as agreed by the Purchaser and the Seller as evidenced by the
actual aggregate
principal balance of the Mortgage Loans accepted by the Purchaser
on the related
Closing Date.
SECTION 3. Mortgage Loan Schedules. The Seller shall deliver the
Mortgage
Loan Schedule for a Mortgage Loan Package to be purchased on a
particular
Closing Date to the Purchaser at least five (5) Business Days prior
to the
related Closing Date.
SECTION 4. Purchase Price. The Purchase Price for each Mortgage
Loan listed
on the related Mortgage Loan Schedule shall be the percentage of
par as stated
in the related Confirmation (subject to adjustment as provided
therein),
multiplied by its Stated Principal Balance as of the related
Cut-off Date. If so
provided in the related Confirmation, portions of the Mortgage
Loans shall be
priced separately.
In
addition to the Purchase Price as described above, the Initial
Purchaser
shall pay to the Seller, at closing, accrued interest on the Stated
Principal
Balance of each Mortgage Loan as of the related Cut-off Date at its
Net Mortgage
Rate from the related Cut-off Date through the day prior to the
related Closing
Date, both inclusive.
The
Purchaser shall own and be entitled to receive with respect to
each
Mortgage Loan purchased, (1) all scheduled principal due after the
related
Cut-off Date, (2) all other recoveries of principal collected after
the related
Cut-off Date (provided, however, that all scheduled payments of
principal due on
or before the related Cut-off Date and collected by the Seller
after the related
Cut-off Date shall belong to the Seller), and (3) all payments of
interest on
the Mortgage Loans net of the Servicing fee (minus that portion of
any such
interest payment that is allocable to the period prior to the
related Cut-off
Date). The Stated Principal Balance of each Mortgage Loan as of the
related
Cut-off Date is determined after application to the reduction of
principal of
payments of principal due on or before the related Cut-off Date
whether or not
collected. Therefore, for the purposes of this Agreement, payments
of scheduled
principal and interest prepaid for a Due Date beyond the related
Cut-off Date
shall not be applied to the principal balance as of the related
Cut-off Date.
Such prepaid amounts (minus the applicable Servicing Fee) shall be
the property
of the Purchaser. The Seller shall deposit any such prepaid amounts
into the
Custodial Account, which account is established for the benefit of
the
Purchaser, for remittance by the Seller to the Purchaser on the
first related
Distribution Date. All payments of principal and interest, less the
applicable
Servicing Fee, due on a Due Date following the related Cut-off Date
shall belong
to the Purchaser.
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<PAGE>
SECTION 5. Examination of Mortgage Files. In addition to the rights
granted
to the Initial Purchaser under the related Confirmation to
underwrite the
Mortgage Loans and review the Mortgage Files prior to the Closing
Date, prior to
the related Closing Date, the Seller shall (a) deliver to the
Custodian in
escrow, for examination with respect to each Mortgage Loan to be
purchased on
such Closing Date, the related Mortgage File, including the
Assignment of
Mortgage, pertaining to each Mortgage Loan, or (b) make the related
Mortgage
File available to the Initial Purchaser for examination at the
Seller's offices
or such other location as shall otherwise be agreed upon by the
Initial
Purchaser and the Seller. Such examination may be made by the
Initial Purchaser
or its designee at any reasonable time before or after the related
Closing Date.
In connection with any such examination, the Initial Purchaser may
not contact
any Mortgagor or any employer of a Mortgagor or any other third
party for
purposes of verification of information in the Mortgage File or
otherwise,
without the prior written consent of the Seller. If the Initial
Purchaser makes
such examination prior to the related Closing Date and identifies
any Mortgage
Loans that do not conform to the terms of the related Confirmation
or the
Initial Purchaser's underwriting standards, such Mortgage Loans
may, at the
Initial Purchaser's option, be rejected for purchase by the Initial
Purchaser.
If not purchased by the Initial Purchaser, such Mortgage Loans
shall be deleted
from the related Mortgage Loan Schedule. The Initial Purchaser may,
at its
option and without notice to the Seller, purchase all or part of
any Mortgage
Loan Package without conducting any partial or complete
examination. The fact
that the Initial Purchaser has conducted or has determined not to
conduct any
partial or complete examination of the Mortgage Files shall not
affect the
Initial Purchaser's (or any of its successors') rights to demand
repurchase or
other relief or remedy provided for in this Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing
Files.
The
Seller, simultaneously with the payment of the Purchase Price,
shall
execute and deliver to the Initial Purchaser an Assignment and
Conveyance with
respect to the related Mortgage Loan Package in the form attached
hereto as
Exhibit 4. The Servicing File retained by the Seller with respect
to each
Mortgage Loan pursuant to this Agreement shall be appropriately
identified in
the Seller's computer system to reflect clearly the sale of such
related
Mortgage Loan to the Purchaser. The Seller shall release from its
custody the
contents of any Servicing File retained by it only in accordance
with this
Agreement, except when such release is required in connection with
a repurchase
of any such Mortgage Loan pursuant to Subsection 7.03 or 7.04.
Subsection 6.02. Books and Records.
Record title to each Mortgage and the related Mortgage Note as of
the
related Closing Date shall be in the name of the Seller, the
Purchaser, the
Custodian or one or more designees of the Purchaser, as the
Purchaser shall
designate. Notwithstanding the foregoing, beneficial ownership of
each Mortgage
and the related Mortgage Note shall be vested solely in the
Purchaser or the
appropriate designee of the Purchaser, as the case may be. All
rights arising
out of the Mortgage Loans including, but not limited to, all funds
received by
the Seller after the related Cut-off Date on or in connection with
a Mortgage
Loan as provided in Section 4 shall be vested in the Purchaser or
one or more
designees of the Purchaser. All such funds received on or in
connection with a
Mortgage Loan as provided in Section 4 shall be received and held
by the
15
<PAGE>
Seller in trust for the benefit of the Purchaser or the assignee of
the
Purchaser, as the case may be, as the owner of the Mortgage Loans
pursuant to
the terms of this Agreement.
It
is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of
the Mortgage
Loans by the Seller and not a pledge of the Mortgage Loans by the
Seller to the
Purchaser to secure a debt or other obligation of the Seller.
Consequently, the
sale of each Mortgage Loan shall be reflected as a sale on the
Seller's business
records, tax returns and financial statements.
Subsection 6.03. Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall from time to
time in
connection with each Closing Date, at least five (5) Business Days
prior to such
Closing Date, deliver and release to the Custodian the Mortgage
Loan Documents
with respect to each Mortgage Loan to be purchased and sold on the
related
Closing Date and set forth on the related Mortgage Loan Schedule
delivered with
such Mortgage Loan Documents.
The
Custodian shall certify its receipt of all such Mortgage Loan
Documents
required to be delivered pursuant to the Custodial Agreement for
the related
Closing Date, as evidenced by the certification of the Custodian in
the form
annexed to the Custodial Agreement. The Purchaser shall be
responsible for
maintaining the Custodial Agreement during the Preliminary
Servicing Period. The
fees and expenses of the Custodian during such period shall be paid
by the
Purchaser.
The
Seller shall forward to the Custodian original documents evidencing
an
assumption, modification, consolidation or extension of any
Mortgage Loan
entered into in accordance with this Agreement within two weeks of
their
execution, provided, however, that the Seller shall provide the
Custodian with a
certified true copy of any such document submitted for recordation
within two
weeks of its execution, and shall provide the original of any
document submitted
for recordation or a copy of such document certified by the
appropriate public
recording office to be a true and complete copy of the original
within ninety
days of its submission for recordation.
In
the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative
Shares, the Seller
immediately shall deliver to the Custodian the new Stock
Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates
shall be
subject to the related Pledge Instruments and shall be subject to
all of the
terms, covenants and conditions of this Agreement.
In
addition, in connection with the assignment of any MERS Mortgage
Loan,
the Seller agrees that it will cause, at the Seller's expense, the
MERS System
to indicate that such Mortgage Loans have been assigned by the
Seller to the
Purchaser in accordance with this Agreement (or deleted, in the
case of Mortgage
Loans that are repurchased in accordance with this Agreement) by
including in
such computer files the information required by the MERS System to
identify the
Purchaser as the beneficial holder of such Mortgage Loans. The
Seller further
agrees that it will not alter the codes referenced in this
paragraph with
respect to any Mortgage Loan during the term of this Agreement
unless and until
such Mortgage Loan is repurchased in accordance with the terms
hereof.
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<PAGE>
If
pursuant to the foregoing provisions the Seller repurchases a
Mortgage
Loan that is a MERS Mortgage Loan, the Seller shall either (i)
cause MERS to
execute and deliver an Assignment of Mortgage in recordable form to
transfer the
Mortgage from MERS to the Seller and shall cause such Mortgage to
be removed
from registration on the MERS System in accordance with MERS' rules
and
regulations or (ii) cause MERS to designate on the MERS System the
Seller or its
designee as the beneficial holder of such Mortgage Loan.
SECTION 7. Representations, Warranties and Covenants of the
Seller:
Remedies for Breach.
Subsection 7.01. Representations and Warranties Respecting the
Seller.
The
Seller represents, warrants and covenants to the Purchaser as of
the
initial Closing Date and each subsequent Closing Date or as of such
date
specifically provided herein or in the applicable Assignment and
Conveyance:
(i)
The Seller is duly
organized, validly existing and in good standing
under the laws of the state of Nevada and has all licenses
necessary
to carry on its business as now being conducted. It is licensed
in,
qualified to transact business in and is in good standing under
the
laws of the state in which any Mortgaged Property is located and
is
and will remain 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 and the servicing of the
Mortgage
Loan in accordance with the terms of this Agreement. No licenses
or
approvals obtained by Seller have been suspended or revoked by
any
court, administrative agency, arbitrator or governmental body and
no
proceedings are pending which might result in such suspension
or
revocation;
(ii)
The Seller has the full power and authority to hold each
Mortgage
Loan, to sell each Mortgage Loan, and to execute, deliver and
perform,
and to enter into and consummate, all transactions contemplated
by
this Agreement. The Seller has duly authorized the execution,
delivery
and performance of this Agreement, has duly executed and
delivered
this Agreement, and this Agreement, assuming due authorization,
execution and
delivery by the Purchaser, constitutes a legal, valid
and binding obligation of the Seller, enforceable against it in
accordance with its terms except as the enforceability thereof may
be
limited by bankruptcy, insolvency or reorganization;
(iii) The execution and delivery of this Agreement by the Seller
and the
performance of and compliance with the terms of this Agreement
will
not violate the Seller's articles of incorporation or by-laws
or
constitute a default under or result in a breach or acceleration
of,
any material contract, agreement or other instrument to which
the
Seller is a parry or which may be applicable to the Seller or
its
assets;
(iv)
The Seller is not in violation of, and the execution and delivery
of
this Agreement by the Seller and its performance and compliance
with
the terms of this Agreement will not constitute a violation
with
respect to, any order or decree of
17
<PAGE>
any court or any order or regulation of any federal, state,
municipal
or governmental agency having jurisdiction over the Seller or
its
assets, which violation might have consequences that would
materially
and adversely affect the condition (financial or otherwise) or
the
operation of the Seller or its assets or might have consequences
that
would materially and adversely affect the performance of its
obligations and duties hereunder;
(v)
The Seller is an
approved seller/servicer for Fannie Mae and Freddie
Mac in good standing. No event has occurred, including but not
limited
to a change in insurance coverage, which would make the Seller
unable
to comply with Fannie Mae, Freddie Mac or HUD eligibility
requirements
or which would require notification to Fannie Mae, Freddie Mac or
HUD;
(vi)
The Seller does not believe, nor does it have any reason or cause
to
believe, that it cannot perform each and every covenant contained
in
this Agreement;
(vii) The Mortgage Note, the Mortgage, the Assignment of Mortgage
and any
other documents required to be delivered with respect to each
Mortgage
Loan pursuant to the Custodial Agreement, have been delivered to
the
Custodian all in compliance with the specific requirements of
the
Custodial Agreement. With respect to each Mortgage Loan, the Seller
is
in possession of a complete Mortgage File in compliance with
Exhibit
5, except for such documents as have been delivered to the
Custodian;
(viii) Immediately prior to the payment of the Purchase Price for
each
Mortgage Loan, the Seller was the owner of record of the
related
Mortgage and the indebtedness evidenced by the related Mortgage
Note
and upon the payment of the Purchase Price by the Purchaser, in
the
event that the Seller retains record title, the Seller shall
retain
such record title to each Mortgage, each related Mortgage Note and
the
related Mortgage Files with respect thereto in trust for the
Purchaser
as the owner thereof and only for the purpose of servicing and
supervising the servicing of each Mortgage Loan;
(ix)
There are no actions or proceedings against, or investigations of,
the
Seller before any court, agency or administrative or other
tribunal
(A) that might prohibit its entering into this Agreement, (B)
seeking
to prevent the sale of the Mortgage Loans or the consummation of
the
transactions contemplated by this Agreement or (C) that might
prohibit
or
materially and adversely affect the performance by the Seller
of
its obligations under, or the validity or enforceability of,
this
Agreement;
(x)
No consent, approval,
authorization or order of any court or
governmental agency or body is required for the execution,
delivery
and performance by the Seller of, or compliance by the Seller
with,
this Agreement or the consummation of the transactions contemplated
by
this Agreement, except for such consents, approvals, authorizations
or
orders, if any, that have been obtained prior to the Closing
Date;
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(xi)
The consummation of the transactions contemplated by this
Agreement
are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and
the
Mortgages and Pledge Agreements by the Seller pursuant to this
Agreement are not subject to the bulk transfer or any similar
statutory provisions;
(xii) The information delivered by the Seller to the Purchaser with
respect
to the Seller's loan loss, foreclosure and delinquency experience
for
the twenty-four (24) months immediately preceding the Closing Date
on
mortgage loans underwritten to the same standards as the
Mortgage
Loans and covering mortgaged properties similar to the
Mortgaged
Properties is true and correct in all material respects;
(xiii) Neither this Agreement nor any written statement, report or
other
document prepared and furnished or to be prepared and furnished by
the
Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement
of
material fact or omits to state a material fact necessary to make
the
statements contained herein or therein not misleading;
(xiv) The transfer of the Mortgage Loans shall be treated as a sale
on the
books and records of Seller, and Seller has determined that, and
will
treat, the disposition of the Mortgage Loans pursuant to this
Agreement for tax and accounting purposes as a sale. Seller
shall
maintain complete records for each Mortgage Loan which shall be
clearly marked to reflect the ownership of each Mortgage Loan
by
Purchaser;
(xv)
The consideration received by the Seller upon the sale of the
Mortgage
loans constitutes fair consideration and reasonably equivalent
value
for such Mortgage Loans;
(xvi) Seller is solvent and will not be rendered insolvent by
the
consummation of the transactions contemplated hereby. The Seller
is
not transferring any Mortgage loan with any intent to hinder, delay
or
defraud any of its creditors; and
(xvii) The Seller is a member of MERS in good standing, and will
comply in
all material respects with the rules and procedures of MERS in
connection with the servicing of the MERS Mortgage Loans for as
long
as such Mortgage Loans are registered with MERS.
Subsection 7.02. Representations and Warranties Regarding
Individual
Mortgage Loans.
The
Seller hereby represents and warrants to the Purchaser that, as to
each
Mortgage Loan, as of the related Closing Date for such Mortgage
Loan:
(i)
The information set forth in the related Mortgage Loan Schedule
is
complete, true and correct;
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(ii)
The Mortgage Loan is in compliance with all requirements set forth
in
the related Confirmation, and the characteristics of the related
Mortgage Loan
Package as set forth in the related Confirmation are true and
correct;
(iii) All payments required to be made up to the close of business
on the
Closing Date for such Mortgage Loan under the terms of the Mortgage
Note have
been made; the Seller has not advanced funds, or induced, solicited
or knowingly
received any advance of funds from a party other than the owner of
the related
Mortgaged Property, directly or indirectly, for the payment of any
amount
required by the Mortgage Note or Mortgage; and there has been no
delinquency,
exclusive of any period of grace, in any payment by the Mortgagor
thereunder
during the last twelve months; and, if the Mortgage Loan is a
Cooperative Loan,
no foreclosure action or private or public sale under the Uniform
Commercial
Code has ever been threatened or commenced with respect to the
Cooperative Loan;
(iv)
There are no delinquent taxes, ground rents, water charges,
sewer
rents, assessments, insurance premiums, leasehold payments, or
other outstanding
charges affecting the related Mortgaged Property;
(v)
The terms of the Mortgage Note and (x) with respect to each
Mortgage
Loan that is not a Cooperative Loan, the Mortgage and (y) with
respect to each
Cooperative Loan, the Pledge Agreement, the Proprietary Lease, and
the Pledge
Instruments, have not been impaired, waived, altered or modified in
any respect,
except by written instruments, recorded in the applicable public
recording
office if necessary to maintain the lien priority of the Mortgage,
and which
have been delivered to the Custodian; the substance of any such
waiver,
alteration or modification has been approved by the insurer under
the Primary
Insurance Policy, if any, and the title insurer, to the extent
required by the
related policy, and is reflected on the related Mortgage Loan
Schedule. The
Financing Statements with respect to each Cooperative Loan are in
full force and
effect;
(vi)
The Mortgage Note and, with respect to each Mortgage Loan that is
not
a Cooperative Loan, the Mortgage and, with respect to each
Cooperative Loan, the
Pledge Agreement are not subject to any right of rescission,
set-off,
counterclaim or defense, including the defense of usury, nor will
the operation
of any of the terms of the Mortgage Note and the Mortgage, or the
exercise of
any right thereunder, render either the Mortgage or the Mortgage
Note
unenforceable, in whole or in part, or subject to any right of
rescission,
set-off, counterclaim or defense, including the defense of usury
and no such
right of rescission, set-off, counterclaim or defense has been
asserted with
respect thereto and no Mortgagor was a debtor in any state or
federal bankruptcy
or insolvency proceeding at the time the Mortgage Loan was
originated;
(vii) All buildings upon the Mortgaged Property and with respect to
any
Cooperative Loan, the related Project, are insured by an insurer
acceptable to
Fannie Mae and Freddie Mac against loss by fire, hazards of
extended coverage
and such other hazards as are customary in the area where the
Mortgaged Property
is located, pursuant to insurance policies conforming to the
requirements of the
Servicing Addendum. All such insurance policies contain a standard
mortgagee
clause naming the Seller, its successors and assigns as mortgagee
and all
premiums thereon have been paid. If the Mortgaged Property is in an
area
identified on a Flood Hazard
20
<PAGE>
Map or Flood Insurance Rate Map issued by the Federal Emergency
Management
Agency as having special flood hazards (and such flood insurance
has been made
available) a flood insurance policy meeting the requirements of the
current
guidelines of the Federal Insurance Administration is in effect
which policy
conforms to the requirements of Fannie Mae and Freddie Mac and in
an amount
representing coverage not less than the greater of (i) the lesser
of (a) the
outstanding principal balance of the Mortgage Loan (plus any
additional amount
required to prevent the Mortgagor from being deemed a co-insurer)
or (b) the
amount necessary to fully compensate for any damage or loss to the
improvements
which are a part of such property on a replacement cost basis, or
(ii) the
maximum amount of insurance which is available under the National
Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973,
as amended.
The Mortgage obligates the Mortgagor thereunder to maintain all
such insurance
at the Mortgagor's cost and expense, and on the Mortgagor's failure
to do so,
authorizes the holder of the Mortgage to maintain such insurance at
Mortgagor's
cost and expense and to seek reimbursement therefor from the
Mortgagor;
(viii) Any and all requirements of any federal, state or local
law
including, without limitation, usury, truth in lending, real estate
settlement
procedures, predatory and abusive lending, consumer credit
protection, equal
credit opportunity, fair housing or disclosure laws applicable to
the
origination and servicing of mortgage loans of a type similar to
the Mortgage
Loans have been complied with;
(ix)
The Mortgage has not been satisfied, cancelled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has not
been released
from the lien of the Mortgage, in whole or in part, nor has any
instrument been
executed that would effect any such satisfaction, cancellation,
subordination,
rescission or release. The Seller has not waived the performance by
the
Mortgagor of any action, if the Mortgagor's failure to perform such
action would
cause the Mortgage Loan to be in default, nor has the Seller waived
any default
resulting from any action or inaction by the Mortgagor;
(x)
The Mortgage is a valid, existing and enforceable first lien on
the
Mortgaged Property, including all improvements on the Mortgaged
Property, and
with respect to Cooperative Loans, including the Proprietary Lease
and the
Cooperative Shares, subject only to (a) the lien of current real
property taxes
and assessments not yet due and payable, (b) covenants, conditions
and
restrictions, rights-of-way, easements and other matters of the
public record as
of the date of recording being acceptable to mortgage lending
institutions
generally and specifically referred to in the lender's title
insurance policy
delivered to the originator of the Mortgage Loan and which do not
adversely
affect the Appraised Value of the Mortgaged Property, and (c) other
matters to
which like properties are commonly subject which do not materially
interfere
with the benefits of the security intended to be provided by the
Mortgage or the
use, enjoyment, value or marketability of the related Mortgaged
Property. Any
security agreement, chattel mortgage or equivalent document related
to and
delivered in connection with the Mortgage Loan establishes and
creates a valid,
existing and enforceable first lien and first priority security
interest on the
property described therein and the Seller has full right to sell
and assign the
same to the Purchaser. The Mortgaged Property was not, as of the
date of
origination of the Mortgage Loan, subject to a mortgage, deed of
trust, deed to
secure debt or other security instrument creating a lien
subordinate to the lien
of the Mortgage;
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<PAGE>
(xi)
The Mortgage Note and (x) with respect to each Mortgage Loan,
the
related Mortgage and (y) with respect to each Cooperative Loan, the
Pledge
Agreement are genuine and each is the legal, valid and binding
obligation of the
maker thereof, enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and (x) with respect to
each
Mortgage Loan, the related Mortgage and (y) with respect to each
Cooperative
Loan, the Pledge Agreement had legal capacity to enter into the
Mortgage Loan
and to execute and deliver the Mortgage Note and the Mortgage or
Pledge
Agreement, and the Mortgage Note and the Mortgage or Pledge
Agreement have been
duly and properly executed by such parties;
(xiii) The proceeds of the Mortgage Loan have been fully disbursed
to or
for the account of the Mortgagor and there is no obligation for the
Mortgagee to
advance additional funds thereunder and any and all requirements as
to
completion of any on-site or off-site improvement and as to
disbursements of any
escrow funds therefor have been complied with. All costs, fees and
expenses
incurred in making or closing the Mortgage Loan and the recording
of the
Mortgage have been paid, and the Mortgagor is not entitled to any
refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note
or Mortgage;
(xiv) The Seller is the sole legal, beneficial and equitable owner
of the
Mortgage Note, and with respect to any Mortgage Loan that is not a
Cooperative
Loan, the Mortgage and, with respect to any Mortgage Loan which is
a
Cooperative, the Pledge Agreement, and has full right to transfer
and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, lien,
pledge, charge, claim or security interest. Immediately upon the
transfer and
assignment contemplated by this Agreement and subject to the terms
hereof, the
Seller shall have transferred all of its right, title and interest
in and to
each Mortgage Loan to the Purchaser, and the Purchaser will hold
good,
marketable and indefeasible title, to and be the sole owner of each
Mortgage
Loan subject to no liens or encumbrances arising through the
Seller;
(xv)
All parties that have had any interest in the Mortgage Loan,
whether
as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in
which they held and disposed of such interest, were) in compliance
with any and
all applicable "doing business" and licensing requirements of the
laws of the
state wherein the Mortgaged Property is located;
(xvi) The Mortgage Loan is covered by an ALTA lender's title
insurance
policy (that has an adjustable rate mortgage endorsement in the
form of ALTA 6.0
or 6.1) and is acceptable to Fannie Mae and Freddie Mac and issued
by a title
insurer acceptable to Fannie Mae and Freddie Mac and qualified to
do business in
the jurisdiction where the Mortgaged Property is located, insuring
(subject to
the exceptions contained in (x)(a) and (b) above) the Seller, its
successors and
assigns as to the first priority lien of the Mortgage in the
original principal
amount of the Mortgage Loan and against any loss by reason of the
invalidity or
unenforceability of the lien resulting from the provisions of the
Mortgage
providing for adjustment in the Mortgage Interest Rate and Monthly
Payment.
Additionally, such lender's title insurance policy affirmatively
insures ingress
and egress to and from the Mortgaged Property, and against
encroachments by or
upon the Mortgaged Property or any interest therein. The Seller is
the sole
insured of such lender's title insurance policy, and such lender's
title
insurance policy is in full force and effect and will be in full
force and
effect upon the consummation of the transactions
22
<PAGE>
contemplated by this Agreement. No claims have been made under such
lender's
title insurance policy, and no prior holder of the related
Mortgage, including
the Seller, has done, by act or omission, anything that would
impair the
coverage of such lender's title insurance policy;
(xvii) There is no default, breach, violation or event of
acceleration
existing under the Mortgage or the Mortgage Note and no event that,
with the
passage of time or with notice and the expiration of any grace or
cure period,
would constitute a default, breach, violation or event of
acceleration, and the
Seller has not waived any default, breach, violation or event of
acceleration;
(xviii) There are no mechanics' or similar liens or claims that
have been
filed for work, labor or material (and no rights are outstanding
that under law
could give rise to such lien) affecting the related Mortgaged
Property that are
or may be liens prior to, or equal or coordinate with, the lien of
the related
Mortgage;
(xix) All improvements that were considered in determining the
Appraised
Value of the related Mortgaged Property lay wholly within the
boundaries and
building restriction lines of the Mortgaged Property, and no
improvements on
adjoining properties encroach upon the Mortgaged Property, except
in each case
for non-complying improvements that do not materially adversely
affect the
Appraised Value. No improvement located on or being part of the
Mortgaged
Property is in violation of any applicable zoning law or
regulation;
(xx)
The Mortgage Loan was originated by the Seller or by a savings
and
loan association, a savings bank, a commercial bank or similar
banking
institution that is supervised and examined by a federal or state
authority, or
by a mortgagee approved as such by the Secretary of HUD pursuant to
Sections
2.03 and 2.11 of the National Housing Act.
(xxi) Principal payments on the Mortgage Loan commenced no more
than sixty
days after the proceeds of the Mortgage Loan were disbursed. The
Mortgage Loan
bears interest at the Mortgage Interest Rate. With respect to each
Mortgage
Loan, the Mortgage Note is payable on the first day of each month
in Monthly
Payments, which (i) in the case of a Fixed Rate Mortgage Loan are
sufficient to
fully amortize the original principal balance over the original
term thereof and
to pay interest at the related Mortgage Interest Rate, and (ii) in
the case of
an Adjustable Rate Mortgage Loan, are changed on each Adjustment
Date, and in
any case (except with respect to each Mortgage Loan identified on
the related
Mortgage Loan Schedule as an interest-only Mortgage Loan) are
sufficient to
fully amortize the original principal balance over the original
term thereof and
to pay interest at the related Mortgage Interest Rate. The Index
for each
Adjustable Rate Mortgage Loan is as defined in the Mortgage Loan
Schedule and
Confirmation. With respect to each Mortgage Loan identified on the
Mortgage Loan
Schedule as an interest-only Mortgage Loan, the interest-only
period shall not
exceed ten (10) years and following the expiration of such
interest-only period,
the remaining Monthly Payments shall be sufficient to fully
amortize the
original principal balance over the remaining term of the Mortgage
Loan. The
Mortgage Note does not permit negative amortization. No Mortgage
Loan is a
Convertible Mortgage Loan;
(xxii) The origination, servicing and collection practices used by
the
Seller with respect to each Mortgage Note and Mortgage have been in
all material
respects legal, proper, prudent
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<PAGE>
and customary in the mortgage origination and servicing industry.
The Mortgage
Loan has been serviced by the Seller and any predecessor servicer
in accordance
with the terms of the Mortgage Note. With respect to escrow
deposits and Escrow
Payments, if any, all such payments are in the possession of, or
under the
control of, the Seller and there exist no deficiencies in
connection therewith
for which customary arrangements for repayment thereof have not
been made. No
escrow deposits or Escrow Payments or other charges or payments due
the Seller
have been capitalized under any Mortgage or the related Mortgage
Note and no
such escrow deposits or Escrow Payments are being held by the
Seller for any
work on a Mortgaged Property that has not been completed;
(xxiii) The Mortgaged Property (and with respect to any Cooperative
Loan,
the Cooperative Unit and related Project) is free of material
damage and waste
and there is no proceeding pending for the total or partial
condemnation
thereof;
(xxiv) The Mortgage and related Mortgage Note contain customary
and
enforceable provisions such as to render the rights and remedies of
the holder
thereof adequate for the realization against the Mortgaged Property
of the
benefits of the security provided thereby, including, (a) in the
case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b)
otherwise by
judicial foreclosure. The Mortgaged Property has not been subject
to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor
has not filed
for protection under applicable bankruptcy laws. There is no
homestead or other
exemption available to the Mortgagor that would interfere with the
right to sell
the Mortgaged Property at a trustee's sale or the right to
foreclose the
Mortgage. The Mortgagor has not notified the Seller and the Seller
has no
knowledge of any relief requested or allowed to the Mortgagor under
the
Servicemembers' Civil Relief Act;
(xxv) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Seller in effect at the time the
Mortgage Loan was
originated; and the Mortgage Note and Mortgage are on forms
acceptable in the
secondary market for purchases and sales of comparable mortgage
loans;
(xxvi) The Mortgage Note is not and has not been secured by any
collateral
except the lien of the corresponding Mortgage on the Mortgaged
Property and the
security interest of any applicable security agreement or chattel
mortgage
referred to in (x) above;
(xxvii) The Mortgage File contains an appraisal of the related
Mortgaged
Property which satisfied the standards of Fannie Mae and Freddie
Mac and was
made and signed, prior to the approval of the Mortgage Loan
application, by a
qualified appraiser, duly appointed by the Seller, who had no
interest, direct
or indirect in the Mortgaged Property or in any loan made on the
security
thereof, whose compensation is not affected by the approval or
disapproval of
the Mortgage Loan and who met the minimum qualifications of Fannie
Mae and
Freddie Mac. Each appraisal of the Mortgage Loan was made in
accordance with the
relevant provisions of the Financial Institutions Reform, Recovery,
and
Enforcement Act of 1989;
(xxviii) In the event the Mortgage constitutes a deed of trust, a
trustee,
duly qualified under applicable law to serve as such, has been
properly
designated and currently so serves and is named in the Mortgage,
and no fees or
expenses are or will become payable by the Purchaser
24
<PAGE>
to the trustee under the deed of trust, except in connection with a
trustee's
sale after default by the Mortgagor;
(xxix) No Mortgage Loan contains provisions pursuant to which
Monthly
Payments are (a) paid or partially paid with funds deposited in any
separate
account established by the Seller, the Mortgagor, or anyone on
behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c)
contains any
other similar provisions that may constitute a "buydown" provision.
The Mortgage
Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not
have a shared appreciation or other contingent interest
feature;
(xxx) The Mortgagor has executed a statement to the effect that
the
Mortgagor has received all disclosure materials required by
applicable law with
respect to the making of adjustable rate mortgage loans and
rescission materials
with respect to Refinanced Mortgage Loans, and such statement is
and will remain
in the Mortgage File. All fees and charges (including finance
charges) and
whether or not financed, assessed, collected or to be collected in
connection
with the origination and servicing of each Mortgage Loan have been
disclosed in
writing to the Mortgagor in accordance with applicable state and
federal law and
regulation;
(xxxi) Except as disclosed on the Mortgage Loan Schedule, each
Mortgage
Loan with an LTV at origination in excess of 80% is and will be
subject to a
Primary Insurance Policy, issued by a Qualified Insurer, which
insures that
portion of the Mortgage Loan in excess of the portion of the
Appraised Value of
the Mortgaged Property required by Fannie Mae. All provisions of
such Primary
Insurance Policy have been and are being complied with, such policy
is in full
force and effect, and all premiums due thereunder have been paid.
Any Mortgage
subject to any such Primary Insurance Policy obligates the
Mortgagor thereunder
to maintain such insurance and to pay all premiums and charges in
connection
therewith. The Mortgage Interest Rate for the Mortgage Loan does
not include any
such insurance premium;
(xxxii) The Mortgaged Property is lawfully occupied under
applicable law;
all inspections, licenses and certificates required to be made or
issued with
respect to all occupied portions of the Mortgaged Property and,
with respect to
the use and occupancy of the same, including but not limited to
certificates of
occupancy, have been made or obtained from the appropriate
authorities;
(xxxiii) No error, omission, misrepresentation, negligence, fraud
or
similar occurrence with respect to a Mortgage Loan has taken place
on the part
of any person, including without limitation the Mortgagor, any
appraiser, any
builder or developer, or any other party involved in the
origination of the
Mortgage Loan or in the application of any insurance in relation to
such
Mortgage Loan;
(xxxiv) The Assignment of Mortgage, if any, is in recordable form
and is
acceptable for recording under the laws of the jurisdiction in
which the
Mortgaged Property is located;
(xxxv) Any principal advances made to the Mortgagor prior to the
Cut-off
Date have been consolidated with the outstanding principal amount
secured by the
Mortgage, and the secured principal amount, as consolidated, bears
a single
interest rate and single repayment term. The lien of the Mortgage
securing the
consolidated principal amount is expressly insured as
25
<PAGE>
having first lien priority by a title insurance policy, an
endorsement to the
policy insuring the mortgagee's consolidated interest or by other
title evidence
acceptable to Fannie Mae and Freddie Mac. The consolidated
principal amount does
not exceed the original principal amount of the Mortgage Loan;
(xxxvi) No Mortgage Loan has a balloon payment feature;
(xxxvii) If the Residential Dwelling on the Mortgaged Property is
a
condominium unit or a unit in a planned unit development (other
than a de
minimis planned unit development) such condominium or planned unit
development
project meets the eligibility requirements of Fannie Mae and
Freddie Mac;
(xxxviii) No Mortgage Loan that is a Cash-out Refinancing was
originated in
the State of Texas;
(xxxix) Interest on each Mortgage Loan is calculated on the basis
of a
360-day year consisting of twelve 30-day months;
(xl)
The Mortgaged Property is in material compliance with all
applicable
environmental laws pertaining to environmental hazards including,
without
limitation, asbestos, and neither the Seller nor, to the Seller's
knowledge, the
related Mortgagor, has received any notice of any violation or
potential
violation of such law. There is no pending action or proceeding
directly
involving any Mortgaged Property of which the Seller is aware in
which
compliance with any environmental law, rule or regulation is an
issue;
(xli) No Mortgage Loan is (a) subject to, covered by or in
violation of the
provisions of the Homeownership and Equity Protection Act of 1994,
as amended,
(b) a "high cost", "covered", "abusive", "predatory", "home loan",
"Oklahoma
Section 10" or "high risk" mortgage loan (or a similarly designated
loan using
different terminology) under any federal, state or local law,
including without
limitation, the provisions of the Georgia Fair Lending Act, New
York Banking
Law, Section 6-1, the Arkansas Home Loan Protection Act, effective
as of June
14, 2003, Kentucky State Statute KRS 360.100, effective as of June
25, 2003, the
New Jersey Home Ownership Security Act of 2002 (the "NJ Act"), the
New Mexico
Home Loan Protection Act (N.M. Stat. Ann. Sections 58-21A-1 et
seq.), the
Illinois High-Risk Home Loan Act (815 Ill. Comp. Stat. 137/1 et
seq.), the
Oklahoma Home Ownership and Equity Protection Act, Nevada Assembly
Bill No. 284,
effective as of Oct. 1, 2003, the Minnesota Residential Mortgage
Originator and
Servicer Licensing Act (MN Stat. Section 58.137), the South
Carolina High-Cost
and Consumer Home Loans Act, effective January 1, 2004, the
Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. Ann. Laws
Ch. 183C) or any other statute or regulation providing assignee
liability to
holders of such mortgage loans, or (c) subject to or in violation
of any such or
comparable federal, state or local statutes or regulations. The
total combined
points and fees charged in connection with the origination of the
Mortgage Loan
does not exceed 8% of the original principal balance of the
Mortgage Loan;
(xlii) The Seller has not authorized the filing of and is not aware
of any
financing statements against the Seller that include a description
of collateral
covering the Mortgage Loans other than any financing statement
related to the
sale of the Mortgage Loans to the Purchaser
26
<PAGE>
pursuant to this Agreement or that has been released or terminated.
The Seller
is not aware of any judgment or tax lien filings against the
Seller;
(xliii) Each Mortgage Loan was originated (within the meaning of
Section
3(a)(41) of the Securities Exchange Act of 1934, as amended) by an
entity that
satisfied at the time of origination the requirements of Section
3(a)(41) of the
Securities Exchange Act of 1934, as amended;
(xliv) No Mortgage Loan is a High Cost Loan or Covered Loan. As
used in
this paragraph, the terms "High Cost Loan" and "Covered Loan" have
the meaning
assigned to them in the Standard & Poor's LEVELS(R) Version 5.6
Glossary
Revised, Appendix E, as most recently updated prior to the
applicable Closing
Date (the "Glossary") where (i) a "High Cost Loan" is each loan
identified in
the column "Category under applicable anti-predatory lending law"
of the table
entitled "Standard & Poor's High Cost Loan Categorization" in
the Glossary as
each such loan is defined in the applicable anti-predatory lending
law of the
State or jurisdiction specified in such table and (ii) a "Covered
Loan" is each
loan identified in the column "Category under applicable
anti-predatory lending
law" of the table entitled "Standard & Poor's High Covered Loan
Categorization"
in the Glossary as each such loan is defined in the applicable
anti-predatory
lending law of the State or jurisdiction specified in such
table;
(xlv) This Agreement constitutes a valid transfer and assignment to
the
Purchaser of all right, title and interest of the Seller in and to
the Mortgage
Loans, all monies due or to become due with respect thereto after
the Cut-off
Date and all proceeds of the Mortgage Loans, subject to the terms
hereof;
(xlvi) No Mortgagor was required to purchase any credit life,
disability,
accident or health insurance product or debt cancellation agreement
as a
condition of obtaining the extension of credit. No Mortgagor
obtained a prepaid
single premium credit life, disability, accident or health
insurance policy in
connection with the origination of the Mortgage Loan, and no
proceeds from any
Mortgage Loan were used to finance single-premium credit insurance
policies or
debt cancellation agreements as part of the origination of, or as a
condition to
closing, such Mortgage Loan;
(xlvii) The Mortgage Loans were not selected from the outstanding
fixed
rate and adjustable rate one to four-family mortgage loans in the
Seller's
portfolio at the related Closing Date as to which the
representations and
warranties set forth in this Agreement could be made in a manner so
as to affect
adversely the interests of the Purchaser;
(xlviii) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Loan
in the event that the Mortgaged Property is sold or transferred
without the
prior written consent of the mortgagee thereunder;
(xlix) The Mortgage Loan was not prepaid in full prior to the
Closing Date
and the Seller has not received notification from a Mortgagor that
a prepayment
in full shall be made after the Closing Date;
(l)
No Mortgage Loan is secured by commercial property or mixed-use
property;
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(li)
Each Mortgage Loan is eligible for sale in the secondary market or
for
inclusion in a Securitization Transaction without unreasonable
credit
enhancement;
(lii) Except as set forth on the related Mortgage Loan Schedule,
none of
the Mortgage Loans are subject to a Prepayment Charge. With respect
to each
Mortgage Loan that is subject to a Prepayment Charge, such
Prepayment Charge is
permissible, enforceable and collectible under applicable federal,
state and
local law;
(liii) With respect to each Cooperative Loan, each Pledge Agreement
creates
a valid, enforceable and subsisting first security interest in the
collateral
securing the related Mortgage Note subject only to (a) the lien of
the related
Cooperative for unpaid assessments representing the Mortgagor's pro
rata share
of the Cooperative's payments for its blanket mortgage, current and
future real
property taxes, insurance premiums, maintenance fees and other
assessments to
which like collateral is commonly subject and (b) other matters to
which like
collateral is commonly subject which do not materially interfere
with the
benefits of the security intended to be provided by the Pledge
Agreement;
provided, however, that the appurtenant Proprietary Lease may be
subordinated or
otherwise subject to the lien of any mortgage on the Project. There
are no liens
against or security interests in the collateral which have priority
over the
lender's security interest in the collateral, and such priority
interest cannot
be created in the future;
(liv) With respect to each Cooperative Loan, all parties to the
Mortgage
Note and the Mortgage Loan had legal capacity to execute and
deliver the
Mortgage Note, the Pledge Agreement, the Proprietary Lease, the
Stock Power, the
Recognition Agreement, the Financing Statement and the Assignment
of the
Proprietary Lease and such documents have been duly and properly
executed by
such parties. Each Stock Power (i) has all signatures guaranteed or
(ii) if all
signatures are not guaranteed, then such Cooperative Shares will be
transferred
by the stock transfer agent of the Cooperative if the Servicer
undertakes to
convert the ownership of the collateral securing the related
Cooperative Loan;
(lv)
With respect to each Cooperative Loan, there is no default in
complying with the terms of the Mortgage Note, the Pledge Agreement
and the
Proprietary Lease and all maintenance charges and assessments
(including
assessments payable in the future installments, which previously
became due and
owing) have been paid. The Seller has the right under the terms of
the Mortgage
Note, Pledge Agreement and Recognition Agreement to pay any
maintenance charges
or assessments owed by the Mortgagor;
(lvi) With respect to each Cooperative Loan, a Cooperative Lien
Search has
been made by a company competent to make the same which company is
acceptable to
Fannie Mae and qualified to do business in the jurisdiction where
the
Cooperative Apartment is located;
(lvii) With respect to each Cooperative Loan, each Pledge
Agreement
contains enforceable provisions such as to render the rights and
remedies of the
holder thereof adequate for the realization of the benefits of the
security
provided thereby. The Pledge Agreement contains an enforceable
provision for the
acceleration of the payment of the unpaid principal balance of the
Mortgage Note
in the event the Cooperative Apartment is transferred or sold
without the
consent of the holder thereof.
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(lviii) In the case of a Cooperative Loan, the related
Cooperative
Apartment is lawfully occupied under applicable law; all
inspections, licenses
and certificates required to be made or issued with respect to all
occupied
portions of the Cooperative Apartment and the related Project and,
with respect
to the use and occupancy of the same, including but not limited to
certificates
of occupancy, have been made or obtained from the appropriate
authorities;
(lix) With respect to each Cooperative Loan, (i) the term of the
related
Proprietary Lease is longer than the term of the Cooperative Loan,
(ii) there is
no provision in any Proprietary Lease which requires the Mortgagor
to offer for
sale the Cooperative Shares owned by such Mortgagor first to the
Cooperative,
(iii) there is no prohibition in any Proprietary Lease against
pledging the
Cooperative Shares or assigning the Proprietary Lease and (iv) the
Recognition
Agreement is on a form of agreement published by the Aztech
Document Systems,
Inc. or includes provisions that are no less favorable to the
lender than those
contained in such agreement;
(lx)
With respect to each Cooperative Loan, each original UCC
financing
statement, continuation statement or other governmental filing or
recordation
necessary to create or preserve the perfection and priority of the
first
priority lien and security interest in the Cooperative Shares and
Proprietary
Lease has been timely and properly made. Any security agreement,
chattel
mortgage or equivalent document related to the Cooperative Loan
establishes in
the Seller a valid and subsisting perfected first lien on and
security interest
in the Mortgaged Property described therein, and the Seller has
full right to
sell and assign the same;
(lxi) The Seller and any predecessor servicer has fully furnished,
in
accordance with the Fair Credit Reporting Act and its implementing
regulations,
accurate and complete information (e.g., favorable and unfavorable)
on its
borrower credit files to Equifax, Experian and Trans Union Credit
Information
Seller (three of the credit repositories), on a monthly basis; and
the Seller
will fully furnish, in accordance with the Fair Credit Reporting
Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and
unfavorable) on its borrower credit files to Equifax, Experian and
Trans Credit
Information Seller (three of the credit repositories), on a monthly
basis. As to
each consumer report (as defined in the Fair Credit Reporting Act,
Public Law
91-508) or other credit information furnished by the Seller to the
Purchaser,
that Seller has full right and authority and is not precluded by
law or contract
from furnishing such information to the Purchaser and the Purchaser
is not
precluded by the terms of the Mortgage Loan Documents from
furnishing the same
to any subsequent or prospective purchaser of such Mortgage;
(lxii) The Seller has complied with all applicable anti-money
laundering
laws and regulations, including without limitation the USA Patriot
Act of 2001
(collectively, the "Anti-Money Laundering Laws"). The Seller has
established an
anti-money laundering compliance program as required by the
Anti-Money
Laundering Laws, has conducted the requisite due diligence in
connection with
the origination of each Mortgage Loan for purposes of the
Anti-Money Laundering
Laws, including with respect to the legitimacy of the applicable
Mortgagor and
the origin of the assets used by the said Mortgagor to purchase the
property in
question, and maintains, and will maintain, sufficient information
to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering
Laws; no
Mortgage Loan is subject to nullification pursuant to Executive
Order 13224 (the
"Executive Order") or the regulations promulgated by
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the Office of Foreign Assets Control of the United States
Department of the
Treasury (the "OFAC Regulations") or in violation of the Executive
Order or the
OFAC Regulations, and no Mortgagor is subject to the provisions of
such
Executive Order or the OFAC Regulations nor listed as a "blocked
person" for
purposes of the OFAC Regulations;
(lxiii) With respect to each Mortgage Loan, neither the related
Mortgage
nor the related Mortgage Note requires the Mortgagor to submit to
arbitration to
resolve any dispute arising out of or relating in any way to the
Mortgage Loan
transaction;
(lxiv) Each Mortgage Loan constitutes a "qualified mortgage" under
Section
860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1);
(lxv) No Mortgage Loan originated or modified on or after October
1, 2002
and prior to March 7, 2003 is secured by a Mortgaged Property
located in the
State of Georgia;
(lxvi) No Mortgage Loan is a "manufactured housing loan" pursuant
to the NJ
Act, and one hundred percent of the amount financed of any purchase
money Second
Lien Mortgage Loan subject to the NJ Act was used for the purchase
of the
related Mortgaged Property; and
(lxvii) With respect to any Mortgage Loan where title to such
Mortgage Loan
is held in the name of a corporation, such Mortgage Loan is (a) a
residential
mortgage loan, (b) identified on the Mortgage Loan Schedule to
indicate that
title is in the name of a corporation, and (c) guaranteed by a
natural person.
Subsection 7.03. Remedies for Breach of Representations and
Warranties.
It
is understood and agreed that the representations and warranties
set
forth in Subsections 7.01 and 7.02 shall survive the delivery of
the Mortgage
Files and the sale of the Mortgage Loans to the Purchaser and shall
inure to the
benefit of the Purchaser, notwithstanding any restrictive or
qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or
lack of examination of any Mortgage File. Upon discovery by either
the Seller or
the Purchaser of a breach of any of the foregoing representations
and warranties
that materially and adversely affects the value of the Mortgage
Loans or the
interest of the Purchaser (or which materially and adversely
affects the
interests of the Purchaser in the related Mortgage Loan in the case
of a
representation and warranty relating to a particular Mortgage
Loan), the party
discovering such breach shall give prompt written notice to the
other.
Within 60 days of the earlier of either discovery by or notice to
the
Seller of any breach of a representation or warranty that
materially and
adversely affects the value of a Mortgage Loan or the Mortgage
Loans, the Seller
shall use its best efforts promptly to cure such breach in all
material respects
and, if such breach cannot be cured, the Seller shall, at the
Purchaser's
option, repurchase such Mortgage Loan at the Repurchase Price.
Notwithstanding
the preceding sentence, within 60 days of the earlier of either
discovery by, or
notice to, the Seller of any breach of the representations or
warranties set
forth in clauses (lxiv), (xli), (xlvi), (lxv), (lxi) and (lxiii) of
Subsection
7.02, the Seller shall repurchase such Mortgage Loan at the
Repurchase Price,
together with all expenses incurred by the Purchaser as a result of
such
repurchase. The Seller shall, at the request of the Purchaser and
assuming that
Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the
Mortgage Loan as provided above, remove such
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<PAGE>
Mortgage Loan and substitute in its place a Qualified Substitute
Mortgage Loan
or Loans; provided that such substitution shall be effected not
later than 120
days after the related Closing Date. If the Seller has no Qualified
Substitute
Mortgage Loan, it shall repurchase the deficient Mortgage Loan. Any
repurchase
of a Mortgage Loan(s) pursuant to the foregoing provisions of this
Subsection
7.03 shall occur on a date designated by the Purchaser and shall be
accomplished
by deposit in the Custodial Account of the amount of the Repurchase
Price for
distribution to the Purchaser on the next scheduled Distribution
Date.
At
the time of repurchase of any deficient Mortgage Loan, the
Purchaser and
the Seller shall arrange for the reassignment of the repurchased
Mortgage Loan
to the Seller and the delivery to the Seller of any documents held
by the
Custodian relating to the repurchased Mortgage Loan. When the
Repurchase Price
is deposited in the Custodial Account, the Seller shall,
simultaneously with
such deposit, give written notice to the Purchaser that such
deposit has taken
place. Upon such repurchase the related Mortgage Loan Schedule
shall be amended
to reflect the withdrawal of the repurchased Mortgage Loan from
this Agreement.
As
to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall
effect such
substitution by delivering to the Purchaser for such Qualified
Substitute
Mortgage Loan or Loans the Mortgage Note, the Mortgage, the
Assignment of
Mortgage and the other Mortgage Loan Documents as are required by
this
Agreement, with the Mortgage Note endorsed as required herein. The
Seller shall
deposit in the Custodial Account the Monthly Payment less the
Servicing Fee due
on such Qualified Substitute Mortgage Loan or Loans in the month
following the
date of such substitution. Monthly Payments due with respect to
Qualified
Substitute Mortgage Loans in the month of substitution will be
retained by the
Seller. For the month of substitution, distributions to the
Purchaser will
include the Monthly Payment due on such Deleted Mortgage Loan in
the month of
substitution, and the Seller shall thereafter be entitled to retain
all amounts
subsequently received by the Seller in respect of such Deleted
Mortgage Loan.
The Seller shall give written notice to the Purchaser that such
substitution has
taken place and shall amend the Mortgage Loan Schedule to reflect
the removal of
such Deleted Mortgage Loan from the terms of this Agreement and the
substitution
of the Qualified Substitute Mortgage Loan. Upon such substitution,
such
Qualified Substitute Mortgage Loan or Loans shall be subject to the
terms of
this Agreement in all respects, and the Seller shall be deemed to
have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of
the date of
substitution, the covenants, representations and warranties set
forth in
Subsections 7.01 and 7.02.
For
any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans,
the Seller
will determine the amount (if any) by which the aggregate principal
balance of
all such Qualified Substitute Mortgage Loans as of the date of
substitution is
less than the aggregate Stated Principal Balance of all such
Deleted Mortgage
Loans (after application of scheduled principal payments due in the
month of
substitution). An amount equal to the product of the amount of such
shortfall
and the greater of (x) the Purchase Price percentage for such
Mortgage Loan set
forth in the related Confirmation and (y) 100% shall be distributed
by the
Seller in the month of substitution pursuant to the Servicing
Addendum.
Accordingly, on the date of such substitution, the Seller will
deposit from its
own funds into the Custodial Account an amount equal to such
amount.
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<PAGE>
In
addition to such cure; repurchase and substitution obligation,
the
Seller shall indemnify the Purchaser and hold it harmless against
any losses,
damages, penalties, fines, forfeitures, reasonable legal fees and
related costs,
judgments, and other costs and expenses resulting from any claim,
demand,
defense or assertion based on or grounded upon, or resulting from,
a breach of
the Seller's representations and warranties contained in Section 7.
It is
understood and agreed that the obligations of the Seller set forth
in this
Subsection 7.03 to cure, repurchase or replace a defective Mortgage
Loan and to
indemnify the Purchaser as provided in this Subsection 7.03
constitute the sole
remedies of the Purchaser respecting a breach of the foregoing
representations
and warranties.
Subsection 7.04. Repurchase of Certain Mortgage Loans.
In
the event that (i) the first Due Date for a Mortgage Loan is
subsequent
to the Cut-off Date and the initial Monthly Payment is not made
within 30 days
of such Due Date or (ii) a Monthly Payment due prior to the related
Cut-off Date
is not made within 30 days of the related Due Date, then, in each
such case, the
Seller will repurchase the affected Mortgage Loans at the
Repurchase Price,
which shall be paid as provided for in Subsection 7.03. In the
event that the
principal balance due on a Mortgage Loan is paid in full within
ninety (90) days
following the related Closing Date, the Seller will pay to
Purchaser within ten
business days of Purchaser notifying Seller of such prepayment an
amount equal
to the product of (A) the amount of such prepayment, times (B) the
excess, if
any, of the purchase price percentage, as set forth in the related
Commitment
Letter, over 100%, less any Prepayment Charges permitted to be
collected by the
Purchaser.
SECTION 8. Closing. The closing for each Mortgage Loan Package
shall take
place on the related Closing Date. At the Purchaser's option, the
closing shall
be either: by telephone, confirmed by letter or wire as the parties
shall agree,
or conducted in person, at such place as the parties shall
agree.
The
closing for the Mortgage Loans to be purchased on each Closing
Date
shall be subject to each of the following conditions:
(a)
all of the
representations and warranties of the Seller under this
Agreement shall be true and correct as of the related Closing Date
and
no event shall have occurred which, with notice or the passage
of
time, would constitute a default under this Agreement;
(b)
the Initial Purchaser
shall receive, or the Initial Purchaser's
attorneys shall have received in escrow, all Closing Documents
as
specified in Section 9, in such forms as agreed upon and acceptable
to
the Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the terms hereof;
(c)
the Seller shall have
delivered and released to the Custodian all
documents required pursuant to this Agreement; and
(d)
all other terms and
conditions of this Agreement shall have been
complied with
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Subject to the foregoing conditions, the Initial Purchaser shall
pay to the
Seller on the related Closing Date the Purchase Price, plus accrued
interest
pursuant to Section 4, by wire transfer of immediately available
funds to the
account designated by the Seller.
SECTION 9. Closing Documents.
(a)
On or before the Initial Closing Date, the Seller shall submit to
the
Initial Purchaser fully executed originals of the following
documents:
1. this
Agreement, in four counterparts;
2. the Custodial
Agreement, in six counterparts;
3. a Custodial
Account Letter Agreement in the form attached as
Exhibit 7 hereto;
4. an Escrow
Account Letter Agreement in the form attached as
Exhibit 8 hereto;
5. an Officer's
Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto; and
6. an Opinion of
Counsel to the Seller, in the form of Exhibit 2
hereto.
(b)
The Closing Documents for the Mortgage Loans to be purchased on
each
Closing Date shall consist of fully executed originals of the
following
documents:
1. the related
Confirmation;
2. the related
Mortgage Loan Schedule, one copy to be attached
hereto and one copy to be attached to the Custodian's
counterpart
of the Custodial Agreement, as the Mortgage Loan Schedule
thereto;
3. a Custodian's
certification, as required under the Custodial
Agreement, in a form acceptable to the Initial Purchaser;
4. an Officer's
Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
5. if requested
by the Initial Purchaser, an Opinion of Counsel to
the Seller, in the form of Exhibit 2 hereto; ---------
6. a Security Release
Certification, in the form of Exhibit 3 hereto
executed by any Person, as requested by the Initial Purchaser,
if
any of the Mortgage Loans has at any time been subject to any
security interest, pledge or hypothecation for the benefit of
such Person;
7. a certificate
or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any
of the Mortgage
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<PAGE>
Loans were acquired by the Seller by merger or acquired or
originated by the Seller while conducting business under a name
other than its present name, if applicable;
8. an Assignment
and Conveyance in the form of Exhibit 4 hereto;
9. information
with respect to the Seller's loan loss, foreclosure
and delinquency experience for the twenty-four (24) months
immediately preceding the Closing Date on mortgage loans
underwritten to the same standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged
Properties; and
10. the Seller's underwriting
guidelines.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen
and the legal fees and expenses of its attorneys. All other costs
and expenses
incurred in connection with the transfer and delivery of the
Mortgage Loans,
including without limitation recording fees, fees for title policy
endorsements
and continuations, fees for recording Assignments of Mortgage, the
fees of the
Custodian and the Seller's attorney's fees, shall be paid by the
Seller.
SECTION 11. Seller's Servicing Obligation. The Seller, as
independent
contract servicer, shall service and administer the Mortgage Loans
during the
Preliminary Servicing Period in accordance with the terms and
provisions set
forth in the Servicing Addendum attached as Exhibit 9, which
Servicing Addendum
is incorporated herein by reference.
SECTION 12. Removal of Mortgage Loans from Inclusion under this
Agreement
Upon a Reconstitution on One or More Reconstitution Dates.
The
Seller and the Initial Purchaser agree that with respect to some or
all
of the Mortgage Loans, the Initial Purchaser may effect either:
(1)
one or more Whole Loan
Transfers; and/or
(2)
one or more
Securitization Transactions.
With
respect to each Whole Loan Transfer or Securitization Transactions,
as
the case may be, entered into by the Initial Purchaser, the Seller
agrees:
(1)
to cooperate fully
with the Purchaser and any prospective purchaser
with respect to all reasonable requests and due diligence
procedures
and with respect to the preparation (including, but not limited
to,
the endorsement, delivery, assignment, and execution) of the
Mortgage
Loan Documents and other related documents, and with respect to
servicing requirements reasonably requested by the rating agencies
and
credit enhancers;
(2)
to execute all
Reconstitution Agreements provided that each of the
Seller and the Purchaser is given an opportunity to review and
reasonably negotiate in good faith the content of such documents
not
specifically referenced or provided for herein;
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<PAGE>
(3)
with respect to any
Whole Loan Transfer or Securitization Transaction,
the Seller shall make the representations and warranties contained
in
Section 7 regarding the Seller and, if such Whole Loan Transfer
or
Securitization Transaction occurs within 12 months of the Closing
Date
or such later period as specified in the related Confirmation,
the
Mortgage Loans as of the date of the Whole Loan Transfer or
Securitization Transaction, modified to the extent necessary to
accurately reflect the pool statistics of the Mortgage Loans as of
the
date of such Whole Loan Transfer or Securitization Transaction and
any
events or circumstances existing subsequent to the related
Closing
Date(s);
(4)
in the case of a
Securitization Transaction, to deliver to the
Purchaser such information, reports, letters and certifications as
are
required pursuant to Section 12A and to indemnify the Purchaser
and
its affiliates as set forth in Section 12A;
(5)
to deliver to the
Purchaser for inclusion in any prospectus or other
offering material such publicly available information regarding
the
Seller, its financial condition and its mortgage loan
delinquency,
foreclosure and loss experience, underwriting and servicing
criteria
and any additional information requested by the Purchaser, and
to
deliver to the Purchaser any similar non-public, unaudited
financial
information, in which case the Purchaser shall bear the cost of
having
such information audited by certified public accountants if the
Purchaser desires such an audit, or as is otherwise reasonably
requested by the Purchaser and which the Seller is capable of
providing without unreasonable effort or expense, and to indemnify
the
Purchaser and its affiliates and the underwriters, placement
agents
and managers in any Securitization Transaction for material
misstatements or omissions or any alleged misstatements or
omissions
contained (i) in such information and (ii) on the Mortgage Loan
Schedule;
(6)
to deliver to the
Purchaser and to any Person designated by the
Purchaser, at the Purchaser's expense, such statements and
audit
letters of reputable, certified public accountants pertaining
to
information provided by the Seller pursuant to clause 5 above as
shall
be reasonably requested by the Purchaser;
(7)
to deliver to the
Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house Opinions of Counsel
as
are customarily delivered by originators or servicers, as the case
may
be, and reasonably determined by the Purchaser to be necessary
in
connection with any Reconstitution, as the case may be, such
in-house
Opinions of Counsel for a Securitization Transaction to be in the
form
reasonably acceptable to the Purchaser, it being understood that
the
cost of any opinions of outside special counsel that may be
required
for a Reconstitution, as the case may be, shall be the
responsibility
of the Purchaser;
(8)
to negotiate and
execute one or more subservicing agreements between
the Seller and any master servicer which is generally considered to
be
a prudent master servicer in the secondary mortgage market,
designated
by the Purchaser in its sole discretion after consultation with
the
Seller and/or one or more custodial and servicing agreements among
the
Purchaser, the Seller and a third party
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<PAGE>
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by
the
Purchaser in its sole discretion after consultation with the
Seller,
in either case for the purpose of pooling the Mortgage Loans
with
other Mortgage Loans for resale or securitization upon terms
consis
