EXECUTION COPY
MORTGAGE LOAN PURCHASE AND
SERVICING AGREEMENT
BEAR STEARNS ASSET BACKED SECURITIES, INC.,
Purchaser
and
IRWIN UNION BANK AND TRUST CO.,
Seller and Master Servicer
Dated as of June 13, 2003
TABLE OF CONTENTS
Page
SECTION 1. Definitions........................................................1
SECTION 2. Agreement to Purchase..............................................9
SECTION 3. Mortgage Loan Schedule.............................................9
SECTION 4. Purchase Price; Near-term Principal Prepayments....................9
Subsection 4.01. Purchase Price......................................9
Subsection 4.02. Near-term Principal Prepayments....................10
SECTION 5. Examination of Mortgage Files.....................................10
SECTION 6. Conveyance from Seller to Purchaser...............................10
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Mortgage Files.....................................10
Subsection 6.02. Books and Records..................................11
Subsection 6.03. Delivery of Mortgage Loan Documents................11
SECTION 7. Representations, Warranties and Covenants of the Seller;
Remedies for Breach...............................................14
Subsection 7.01. Representations and Warranties Respecting
the Seller.........................................14
Subsection 7.02. Representations and Warranties Regarding
Individual Mortgage Loans..........................16
Subsection 7.03. Remedies for Breach of Representations and
Warranties; Repurchase of Near-term Payment
Defaults; Post-Closing Due Diligence...............24
SECTION 8. Closing...........................................................26
Subsection 8.01. Conditions to Purchaser's Obligations..............26
Subsection 8.02. Conditions to Seller's Obligations.................26
SECTION 9. Closing Documents.................................................27
SECTION 10. Costs; Assignments................................................27
SECTION 11. Master Servicer's Servicing Obligations...........................27
SECTION 12. The Seller........................................................28
Subsection 12.01. Indemnification...................................28
Subsection 12.02. Merger or Consolidation of the Seller.............28
Subsection 12.03. Limitation on Liability of the Seller and Others..29
Subsection 12.04. Master Servicer Not to Resign.....................29
Subsection 12.05. No Transfer of Servicing..........................30
SECTION 13. Default..........................................................30
Subsection 13.01. Events of Default.................................30
Subsection 13.02. Waiver of Defaults................................31
SECTION 14. Termination; Servicing Transfer..................................31
Subsection 14.01. Reserved..........................................32
Subsection 14.02. Reserved..........................................32
Subsection 14.03. Limited Power of Attorney.........................32
Subsection 14.04. Supplementary Information.........................32
Subsection 14.05. Reasonable Access.................................32
Subsection 14.06. Facilities........................................33
Subsection 14.07. Reserved..........................................33
Subsection 14.08. Reserved..........................................33
SECTION 15. Successor to the Master Servicer.................................33
SECTION 16. Notices..........................................................33
SECTION 17. [Reserved.]......................................................34
SECTION 18. Severability Clause..............................................34
SECTION 19. Counterparts.....................................................34
SECTION 20. Governing Law....................................................35
SECTION 21. Intention of the Parties.........................................35
SECTION 22. Successors and Assigns...........................................35
SECTION 23. Waivers..........................................................35
SECTION 24. Term Sheet and Exhibits..........................................35
SECTION 25. General Interpretive Principles..................................35
SECTION 26. Reproduction of Documents........................................36
SECTION 27. Nonsolicitation..................................................36
SECTION 28. Survival and Conflicts...........................................36
SECTION 29. Further Agreements and Assurances................................36
EXHIBIT 1 - Reserved
EXHIBIT 2 - Contents of Each Mortgage File
EXHIBIT 3 - Form of Custodial Account Letter Agreement
EXHIBIT 4 - Reserved
EXHIBIT 5 - Servicing Addendum
EXHIBIT 6 - Form of Monthly Data
EXHIBIT 7 - Servicing Transfer Instructions
EXHIBIT 8 - Form of Assignment, Assumption and Recognition Agreement
EXHIBIT 9 - Seller's Underwriting Guidelines
EXHIBIT 10 - Form of Power of Attorney
EXHIBIT 11 - Contents of Data Tape by Loan
EXHIBIT 12 - Contents of Data Tape by Group
EXHIBIT 13 - Certification to be provided by the Servicer with Form 10-K
SCHEDULE I - Mortgage Loan Schedule
SCHEDULE II - Schedule of Actions Against the Seller
MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT (the "Agreement"),
dated as of June 13, 2003, by and between Bear Stearns Asset Backed Securities,
Inc. (the "Purchaser") and Irwin Union Bank and Trust Co., having an office at
500 Washington Street, Columbus, Indiana 47201 (as "Seller" and as "Master
Servicer").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Seller certain residential first, second or third
lien mortgage loans as described herein, related thereto (the "Mortgage Loans")
and which shall be delivered as whole loans;
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or
other security instrument creating a first or junior lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
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.
ACCEPTED SERVICING PRACTICES: With respect to any Mortgage Loan,
mortgage servicing practices (including collection procedures) consistent with
the Master Servicer's normal and usual practices in its general mortgage
servicing activities for mortgage loans of the same type as the Mortgage Loan:
AGENCIES: Fannie Mae and Freddie Mac.
AGREEMENT: This Mortgage Loan Purchase and Servicing Agreement
including all exhibits, schedules, amendments and supplements hereto.
APPRAISED VALUE: With respect to any Mortgaged Property, the appraised
value thereof, determined in the appraisal or other property valuation method
(including borrower stated values) used to establish compliance with the
underwriting criteria applicable to the origination of the related Mortgage Loan
and which appraisal was determined in a manner consistent with standard industry
practices for similar properties.
ASSIGNMENT OF MORTGAGE: An individual assignment, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
conveyance of the Mortgage Loan which may be in the form of one or more
"blanket" assignments covering the Mortgage Loans secured by Mortgaged Property
located in the same jurisdiction.
BID POOL: means the Mortgage Loans and the information relating
thereto as of April 30, 2003 that was included on the initial Data Tape
distributed to the Purchaser by the Seller.
BUSINESS DAY: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the States of New York,
Indiana, California or Nevada are authorized or obligated by law or executive
order to be closed.
CLOSING DATE: June 13, 2003.
CLOSING DOCUMENTS: The documents required pursuant to Section 9.
COMBINED LOAN-TO-VALUE RATIO OR CLTV: means, with respect to any
Mortgage Loan and any date, the ratio, expressed as a percentage, of the sum of
(a)(i) with respect to HELs or HLTV Mortgage Loans, the Cut-Off Date Stated
Principal Balance thereof or (ii) with respect to HELOCs, the Credit Limit of
such HELOC and (b) the outstanding principal balance at origination of such
Mortgage Loan of all other mortgage loans, if any, secured by senior liens on
the related Mortgaged Property, to the Appraised Value.
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.
"CREDIT LIMIT" means, with respect to any HELOC, the maximum principal
balance permitted under the terms of the related Loan Agreement.
CUSTODIAL ACCOUNT: The separate account or accounts, each of which
shall be an Eligible Account, created and maintained pursuant to this Agreement,
which shall be entitled "Irwin Union Bank and Trust Co., in trust for the
Purchaser, Owner of Mortgage Loans, P&I Account."
CUSTODIAN: Wells Fargo Bank Minnesota, National Association.
CUT-OFF DATE: The close of business on May 31, 2003.
DATA TAPE: A data tape containing (i) the information set forth in
Exhibit 11 as of the Cut-Off Date with respect to each Mortgage Loan and (ii)
the information set forth in Exhibit 12 as of the Cut-Off Date with respect to
all of the Mortgage Loans.
DRAW: With respect to any HELOC, a borrowing by the Mortgagor under
the related Loan Agreement.
DUE DATE: The day on which the Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace.
DUE PERIOD: With respect to any Mortgage Loan and Distribution Date,
the calendar month preceding any such Distribution Date.
ELIGIBLE ACCOUNT: An account established and maintained: (i) within
FDIC insured accounts created, maintained and monitored by the Seller so that
all funds deposited therein are fully insured, or (ii) as a trust account with
the corporate trust department of Bank of the West or another depository
institution or trust company organized under the laws of the United States of
America or any one of the states thereof or the District of Columbia which is
not affiliated with the Seller (or any sub-servicer) or (iii) with an entity
which is an institution whose deposits are insured by the FDIC, the unsecured
and uncollateralized long-term debt obligations of which shall be rated "A2" or
higher by Standard & Poor's and "A" or higher by Fitch Ratings or one of the two
highest short-term ratings by any applicable Rating Agency, and which is either
(a) a federal savings association duly organized, validly existing and in good
standing under the federal banking laws, (b) an institution duly organized,
validly existing and in good standing under the applicable banking laws of any
state, (c) a national banking association under the federal banking laws, or (d)
a principal subsidiary of a bank holding company, or (iv) if ownership of the
Mortgage Loans is evidenced by mortgaged-backed securities, the equivalent
required ratings of each Rating Agency, and held such that the rights of the
Purchaser and the owner of the Mortgage Loans shall be fully protected against
the claims of any creditors of the Seller (or any sub-servicer) and of any
creditors or depositors of the institution in which such account is maintained.
In the event that a Custodial Account is established pursuant to clause (iii) or
(iv) of the preceding sentence, the Seller shall provide the Purchaser with
written notice on the Business Day following the date on which the applicable
institution fails to meet the applicable ratings requirements.
EVENT OF DEFAULT: Any one of the events enumerated in Subsection
13.01.
FANNIE MAE: Fannie Mae or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FINAL POOL: means the Mortgage Loans and the information relating
thereto as of the Cut-Off Date.
FREDDIE MAC: Freddie Mac or any successor thereto.
GAAP: Generally accepted accounting principles, consistently applied,
except as noted, subject to year-end adjustments.
GROUP: means each of the HELOCs, collectively, the HELs, collectively
and the HLTV Mortgage Loans, collectively.
HEL: means each Mortgage Loan identified on the Mortgage Loan Schedule
as being a Home Equity Mortgage Loan and which was originated as a closed end,
fixed rate home equity loan that is not a HLTV Mortgage Loan.
HELOC: means each Mortgage Loan identified on the Mortgage Loan
Schedule as being a Home Equity Line of Credit and which was originated as an
adjustable-rate, home equity line of credit.
HLTV MORTGAGE LOANS: means those Mortgage Loans identified on the
Mortgage Loan Schedule as HLTV Mortgage Loans and which were originated as a
closed end fixed rate home equity loan with a loan-to-value rate greater than
100%.
INTEREST ADJUSTMENT DATE: means, with respect to each HELOC, the date
or dates on which the Mortgage Interest Rate thereof is adjusted in accordance
with the related Loan Agreement.
INSURANCE PROCEEDS: With respect to each Mortgage Loan, proceeds of
any insurance policy insuring the Mortgage Loan or the related Mortgaged
Property.
INTEREST PAID TO DATE: With respect to a Mortgage Loan, the last date
to which interest has been paid on such Mortgage Loan, as shown on the books and
records of the Seller as of the Cut-Off Date.
INTEREST RECEIVABLE: As defined in Section 4.01.
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,
other than amounts received following the acquisition of REO Property.
LOAN AGREEMENT: means, with respect to a HELOC, the loan agreement or
credit line agreement pursuant to which the related Mortgagor agrees to pay the
indebtedness evidenced thereby and secured by the related Mortgaged Property, as
modified or amended.
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(R)System.
MERS(R) SYSTEM: The system of recording transfers of mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
MOM LOAN: Any Mortgage Loan as to which MERS is acting as the original
mortgagee, solely as nominee for the originator of such Mortgage Loan and its
successors and assigns.
MONTHLY PAYMENT: With respect to any Mortgage Loan, the scheduled
combined payment of principal and interest payable by a Mortgagor under the
related Mortgage Note or Loan Agreement on each Due Date.
MORTGAGE: The mortgage, deed of trust or other instrument securing a
Mortgage Note or Loan Agreement which creates a first or more junior lien on an
estate in fee simple in real property securing a Mortgage Loan.
MORTGAGEE: The mortgagee or beneficiary named in the Mortgage and the
successors and assigns of such mortgagee or beneficiary.
MORTGAGE FILE: With respect to each Mortgage Loan, the file consisting
of the Mortgage Loan Documents and Related Documents pertaining to a particular
Mortgage Loan and any additional documents required to be added thereto pursuant
to this Agreement.
MORTGAGE INTEREST RATE: With respect to each Mortgage Loan and any
day, the per annum rate of interest applicable under the related Mortgage
Documents.
MORTGAGE LOAN: Each HELOC, each HEL and each HLTV Mortgage Loan or all
of such Mortgage Loans, as the context may require, including 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. The sale of a Mortgage Loan hereunder shall
be, in the absence of manifest error, conclusively established by its inclusion
on the Mortgage Loan Schedule.
MORTGAGE LOAN DOCUMENTS: (a) in the case of a HELOC, the related
Mortgage and Loan Agreement; (b) in the case of a HEL or a HLTV Mortgage Loan,
the related Mortgage and related Mortgage Note and (c) in each case, all other
documents required to be delivered to the Purchaser or its Custodian pursuant to
Subsection 6.03.
MORTGAGE LOAN SCHEDULE: The schedule of Mortgage Loans (which shall
also be provided in an electronic format acceptable to Purchaser), such schedule
setting forth the following information with respect to each Mortgage Loan: (1)
the Seller's Mortgage Loan identifying number; (2) the Mortgagor's last name;
(3) the type of Residential Dwelling constituting the Mortgaged Property; (4) a
code indicating the type of the loan (i.e., HELOC, HEL, HLTV Mortgage Loan); (5)
the original principal amount of the Mortgage Loan; (6) the original months to
maturity; (7) the Mortgage Interest Rate in effect immediately following the
Cut-Off Date; (8) the Stated Principal Balance of the Mortgage Loan as of the
Cut-Off Date; (9) the CLTV; (10) the Credit Limit, if applicable, the gross
margin, if applicable, and (11) the lien position of the Mortgage Loan. With
respect to the Mortgage Loans in the aggregate and by Group, the related
Mortgage Loan Schedule shall set forth the following information, as of the
Cut-Off Date: (1) the total number of Mortgage Loans; (2) the total and average
outstanding principal balances of the Mortgage Loans; (3) the weighted average
margin and Mortgage Interest Rate of the Mortgage Loans; (4) the original and
remaining weighted average maturities of the Mortgage Loans; (5) the lien
positions of the Mortgage Loans, (6) the weighted average Combined Loan-to-Value
Ratio of the Mortgage Loans and (7) the weighted average FICO score.
MORTGAGE NOTE: With respect to a HEL or a HLTV Mortgage Loan, the
mortgage note pursuant to which the Mortgagor agrees to pay the indebtedness
evidenced thereby and secured by a Mortgage on the Mortgaged Property, as
modified or amended.
MORTGAGED PROPERTY: The underlying real property securing a Mortgage
Loan.
MORTGAGOR: The obligor under the related Mortgage Loan Documents.
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.
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.
PASS-THROUGH TRANSFER: The sale of some or all of the Mortgage Loans
to a trust as part of a publicly issued or privately placed, rated or unrated,
mortgage pass-through transaction.
PERSON: An individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
PERMITTED LIENS: Liens for (i) real estate taxes and special
assessments not yet delinquent (provided, that property taxes may be delinquent
up to one year); (ii) as to the Mortgage Loans identified as junior Mortgage
Loans as of the Cut-Off Date on the data tapes provided by the Master Servicer
to, among others, the Purchaser, any senior mortgage loans secured by such
Mortgaged Property; (iii) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording that
are acceptable to mortgage lending institutions generally; (iv) liens prior to
the related senior mortgage, if verified as paid, and liens and judgments of
$5,000 or less, including sewer or maintenance liens, mechanics' liens or UCC
filings that have been included in the first mortgage balance for the purpose of
calculating CLTV for any related Mortgage Loan; (v) liens discovered after final
approval is given on a Mortgage Loan application that are defined as acceptable
and are less than 1.0% of the Appraised Value or less than 10% of the original
Stated Principal Balance of the Mortgage Loan, whichever is less; and (vi) other
matters to which like properties are commonly subject that do not materially
interfere with the benefits of the security intended to be provided to, among
others, the Purchaser by the related Mortgage Loan Documents.
PRINCIPAL PREPAYMENT: With respect to any Mortgage Loan, a payment of
principal by the related Mortgagor in advance of the scheduled Due Date of such
amount.
PURCHASE PRICE: The price paid by the Purchaser in exchange for the
Mortgage Loans on the Closing Date as set forth in Section 4.01 and in the Term
Sheet.
PURCHASE PRICE PERCENTAGE: With respect to any Mortgage Loan, the
purchase price percentage for such Mortgage Loan specified in the Purchase Price
Schedule.
PURCHASE PRICE SCHEDULE: The schedule setting forth the Purchase Price
Percentage for a Group (which may be provided in an electronic format acceptable
to the Purchaser).
PURCHASER: Bear Stearns Asset Backed Securities, Inc., its successors
in interest and assigns.
QUALIFIED SUBSTITUTE MORTGAGE LOAN(S): A Mortgage Loan or Mortgage
Loans that is or are part of the same Group as the substituted Mortgage Loan and
which (i) relates or relate to a detached one-family residence or to the same
type of residential dwelling as the substituted Mortgage Loan and has or have
the same or a better lien priority as the substituted Mortgage Loan with a
Mortgagor having the same or better traditionally ranked credit status and is an
owner-occupied Mortgaged Property, (ii) matures or mature no later than (and not
more than one year earlier than) the substituted Mortgage Loan, (iii) has or
have a Combined Loan-to-Value Ratio or Combined Loan-to-Value Ratios at the time
of such substitution no higher than the Combined Loan-to-Value Ratio of the
substituted Mortgage Loan, (iv) has or have a Stated Principal Balance or Stated
Principal Balances (after application of all payments received on or prior to
the date of substitution) not substantially less and not more than the unpaid
Stated Principal Balance of the substituted Mortgage Loan as of such date, and
(v) complies or comply as of the date of substitution with each representation
and warranty set forth in the Agreement.
RATING AGENCY: Moody's Investors Service, Inc., Standard & Poor's, a
division of The McGraw-Hill Companies, Inc., Fitch Ratings or, in the event that
some or all of the ownership of the Mortgage Loans is evidenced by
mortgage-backed securities, the nationally recognized rating agencies issuing
ratings with respect to such securities, if any.
RECONSTITUTION AGREEMENTS: The agreement or agreements entered into by
the Purchaser, the Seller and certain third parties on the Reconstitution
Date(s) with respect to any or all of the Mortgage Loans serviced hereunder, in
connection with a Pass-Through Transfer or Whole Loan Transfer as set forth in
Section 29, including, but not limited to, a pooling and servicing agreement, a
trust agreement, and/or a subservicing/master servicing agreement and related
custodial/trust agreement and related documents with respect to a Pass-Through
Transfer or Whole Loan Transfer. The form of relevant Reconstitution Agreement
to be entered into by the Purchaser and/or master servicer or trustee and the
Seller with respect to a Pass-Through Transfer or Whole Loan Transfer shall be
reasonably satisfactory in form and substance to the Purchaser and the Seller
(giving due regard to any rating, insurer or master servicing requirements) and
the representations and warranties contained in Section 7.01 and 7.02 hereof
shall be restated by the Seller to the extent set forth in Section 29. Each
Reconstitution Agreement shall provide that the Master Servicer shall be
entitled to receive not less than the Servicing Fee. The Seller will consider in
good faith making any additional representations and warranties reasonably
requested by any Rating Agency in connection with a Pass-Through Transfer and
shall not unreasonably refuse to make any such representation or warranty.
RECONSTITUTION DATE: The date or dates on which any or all of the
Mortgage Loans serviced under this Agreement shall be subject to a Whole Loan
Transfer or Pass-Through Transfer pursuant to Section 29 hereof.
RELATED DOCUMENTS: With respect to each Mortgage Loan, the documents
specified on Exhibit 2 attached hereto, and any documents required to be added
to such documents pursuant to the terms hereof.
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
the Purchase Price paid for the Mortgage Loan, LESS any principal collected with
respect to such Mortgage Loan and applied in reduction of the Stated Principal
Balance thereof, PLUS any accrued and unpaid interest on such Mortgage Loan from
the Closing Date (or, if later, the date interest was last paid through by the
related Mortgagor) up to but not including the date of repurchase.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
SELLER AND MASTER SERVICER: Irwin Union Bank and Trust Co., their
successors in interest and assigns, as permitted by this Agreement.
SELLER'S OFFICER'S CERTIFICATE: A certificate signed by the Chairman
of the Board, President, any Vice President or Treasurer of the Seller stating
the date by which the Seller expects to receive any missing documents sent for
recording from the applicable recording office.
SERVICING ADDENDUM: The terms and conditions attached hereto as
EXHIBIT 5 which will govern the servicing of the Mortgage Loans by the Seller.
SERVICING RIGHTS: With respect to each Mortgage Loan, any and all of
the following: (a) all rights to service the Mortgage Loan; (b) all rights to
receive servicing fees, additional servicing compensation (including without
limitation any late fees, assumption fees, prepayment penalties or premiums due
in connection with a Principal Prepayment, other penalties, fees or similar
payments with respect to the Mortgage Loan or other receipts on or with respect
to the Mortgage Loan), reimbursements for servicing the Mortgage Loan, and any
payments received in respect of the foregoing and proceeds thereof; (c) all
accounts and other rights to payment related to any of the property described in
this paragraph; (d) possession and use of by the Master Servicer of any and all
Mortgage Files, which are not required to be delivered to the Purchaser or its
Custodian pursuant to Subsection 6.03, pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage Loans;
(e) except to the extent otherwise provided in Section 27, all rights and
benefits relating to the direct solicitation of the related Mortgagors for
refinance or modification of the Mortgage Loans and attendant right, title and
interest in and to the list of such Mortgagors and data relating to their
respective Mortgage Loans; (f) all rights, powers and privileges incident to any
of the foregoing; and (g) all agreements or documents creating, defining or
evidencing any of the foregoing rights to the extent they relate to such rights
and all rights of the Seller thereunder including, but not limited to, any
clean-up calls and termination options.
SERVICING RIGHTS PURCHASE PRICE: An amount equal to the Master
Servicer's carrying value as determined by the Master Servicer as of the date of
such transfer and entered on its balance sheet, with respect to the Servicing
Rights and the prepayment penalties. In the event that the date of purchase is
not month-end, the purchase price shall be amortized based on the number of days
from the prior month-end to the date of purchase.
STATED PRINCIPAL BALANCE: As to each Mortgage Loan other than a
Liquidated Mortgage Loan, and as of any day, (i) the principal balance of such
Mortgage Loan as of the Cut-Off Date plus, in the case of a HELOC any Draws
related thereto, minus (ii) in the case of all Mortgage Loans, all collections
credited as principal in respect of any such Mortgage Loan in accordance with
the related Mortgage Documents and applied in reduction of the Stated Principal
Balance thereof. For purposes of this definition, a fully liquidated Mortgage
Loan shall be deemed to have a Stated Principal Balance of zero immediately
following its final liquidation.
SUBSERVICER: Irwin Home Equity Corporation.
TERM SHEET: The Confirmation Letter, dated as of May 16, 2003, that
was executed and delivered by the Seller and the Purchaser to provide for the
sale of the Mortgage Loans pursuant to the terms thereof and to the terms of
this Agreement.
WHOLE LOAN TRANSFER: The sale or transfer of some or all of the
ownership interest in the Mortgage Loans by the Purchaser to one or more third
parties in whole loan or participation format.
SECTION 2. AGREEMENT TO PURCHASE. The Seller agrees to sell, and the
Purchaser agrees to purchase, Mortgage Loans having an aggregate principal
balance on the Cut-Off Date in an amount set forth on the Term Sheet.
SECTION 3. MORTGAGE LOAN SCHEDULE. The Seller shall deliver the Mortgage
Loan Schedule to the Purchaser at least two (2) Business Days prior to the
Closing Date.
SECTION 4. PURCHASE PRICE; NEAR-TERM PRINCIPAL PREPAYMENTS.
Subsection 4.01. PURCHASE PRICE.
The Purchase Price for each Mortgage Loan listed on the Mortgage Loan
Schedule, which shall not include any Mortgage Loan which prepays on or prior to
the Closing Date, shall be the sum of (i) the Purchase Price Percentage
multiplied by the Stated Principal Balance of such Mortgage Loan as of the
Cut-Off Date, after application of payments received on the Mortgage Loans on or
before the Cut-Off Date, plus accrued interest at the applicable mortgage
interest rate, net of the Base Servicing Fee (as defined in the Term Sheet), on
each Mortgage Loan from, and excluding, the Cut-Off Date to, and including, the
day prior to the Closing Date, and (ii) interest accrued on such Mortgage Loan
from the Interest Paid to Date up to and including the Cut-Off Date (referred to
as the "Interest Receivable" for such Mortgage Loan) .
With respect to each Mortgage Loan purchased, the Purchaser shall own
and be entitled to receive (except as otherwise described in this Agreement):
(i) all payments and/or recoveries of principal collected from, and including,
the Cut-Off Date, (ii) with respect to each Mortgage Loan and in accordance with
the Term Sheet, the Interest Receivable and (iii) all payments of interest with
respect to interest accrued on the Mortgage Loans from, and excluding, the
Cut-Off Date .
In the event of a loan repurchase or a loan substitution pursuant to
Section 29(g), the Purchase Price for the Mortgage Loans may be adjusted
post-settlement in accordance with the Term Sheet to reflect the change in
overall loan characteristics. The purchase price differential shall be refunded
to the Purchaser in the event of such change in overall loan characteristics.
Subsection 4.02. NEAR-TERM PRINCIPAL PREPAYMENTS.
In the event any Principal Prepayment in full is made voluntarily by a
Mortgagor (I.E., not made in connection with a Mortgagor's default) on or prior
to sixty-five (65) days after the Closing Date, the Seller shall remit to the
Purchaser an amount equal to the excess, if any, of the Purchase Price
Percentage over par multiplied by the Stated Principal Balance of such Mortgage
Loan as of the Cut-Off Date (each such amount, the "Premium").
SECTION 5. EXAMINATION OF MORTGAGE FILES. Purchaser shall have the right to
examine the Mortgage Files. The fact that the Purchaser has conducted or has
determined not to conduct any partial or complete examination of the Mortgage
Files shall not affect the Purchaser's (or any of its successors') rights to
demand repurchase or any other relief or remedy provided for in this Agreement.
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER.
Subsection 6.01. CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE
FILES.
On the Closing Date, the Seller, simultaneously with the payment of
the Purchase Price, does hereby sell, transfer, assign, set over and convey to
the Purchaser, without recourse, but subject to the terms of this Agreement, all
rights, title and interest of the Seller in and to the Mortgage Loans listed on
the Mortgage Loan Schedule, together with the related Mortgage Files and all
rights and obligations arising under the documents contained therein. Pursuant
to Subsection 6.03 of the Agreement, the Seller shall deliver to the Purchaser
(or, upon Purchaser's request, its designee) the Mortgage Loan Documents. The
contents of each related Mortgage File required to be retained by the Master
Servicer to service the Mortgage Loans pursuant to the Agreement and thus not
delivered to the Purchaser prior to the Closing Date are, and shall be, held in
trust by the Seller for the benefit of the Purchaser as the owner thereof. The
Seller's possession of any portion of each such Mortgage File is at the will of
the Purchaser for the sole purpose of facilitating servicing of the related
Mortgage Loan pursuant to the Agreement, and such retention and possession by
the Seller shall be in a custodial capacity only. The ownership of each Mortgage
Note or Loan Agreement, Mortgage, and the contents of the Mortgage File is
vested in the Purchaser and the ownership of all records and documents with
respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller shall immediately vest in the Purchaser and shall be
retained and maintained, in trust, by the Seller at the will of the Purchaser in
such custodial capacity only.
Any portion of the Mortgage 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 Mortgage File retained by it only in accordance with
this Agreement.
Subsection 6.02. BOOKS AND RECORDS.
Except for each Mortgage Loan that is not a MERS Mortgage Loan, record
title to each Mortgage and the related Mortgage Note or Loan Agreement as of the
Closing Date shall be in the name of the Seller in trust for the benefit of the
Purchaser or one or more designees of the Purchaser, as the Purchaser shall
designate, solely for the purpose of facilitating the servicing of the Mortgage
Loans as described herein. Upon Purchaser's request, the Seller shall transfer,
or cause to be transferred, record title to each Mortgage and the related
Mortgage Note or Loan Agreement to the Purchaser or its designee.
Notwithstanding the foregoing, beneficial ownership of each Mortgage, the
related Mortgage Note or Loan Agreement 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 to which Purchaser is entitled as provided in Section 4
shall be vested in the Purchaser or one or more designees of the Purchaser;
provided, however, that all such funds shall be received and held by the 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 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.
No later than one (1) Business Day prior to the Closing Date, the
Seller shall deliver to the Purchaser, or its Custodian, as agent, the following
Mortgage Loan Documents with respect to each Mortgage Loan to be purchased and
sold on the Closing Date and set forth on the related Mortgage Loan Schedule:
(a) The original Mortgage Note or Loan Agreement endorsed by the
holder of record without recourse in the following form: "Pay to the order
of _________________________________________________, without recourse,"
and signed in the name of the holder of record, and if by Seller, by an
authorized officer. If the Mortgage Loan was acquired by the Seller in a
merger, the endorsement must be by "[Seller], successor by merger to the
[name of predecessor]". If the Mortgage Loan was acquired or originated by
the Seller while doing business under another name, the endorsement must be
by "[Seller] formerly known as [previous name]". None of the Mortgage Notes
may be in the form of a lost note affidavit except with respect to Mortgage
Notes originated through the Seller's retail channel (which the Seller will
identify as being so originated);
(b) In the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original Assignment of Mortgage, from the Seller to "Mortgage
Electronic Registration Systems, Inc., its successors and assigns, as
nominee for Wells Fargo Bank Minnesota, National Association, its
successors and assigns, [Address to be completed]," or otherwise in
accordance with MERS policies or Purchaser's instructions, which assignment
of mortgage shall, but for any blanks requested by Purchaser, be in form
and substance acceptable for recording. If the Mortgage Loan was acquired
or originated by the Seller while doing business under another name, the
Assignment must be by "[Seller] formerly known as [previous name]". If the
Mortgage Loan was acquired by the Seller in a merger, the endorsement must
be by "[Seller], successor by merger to the [name of predecessor]".
(c) Except as provided below and for each Mortgage Loan that is
not a MERS Mortgage Loan, the original Mortgage with evidence of recording
thereon. If in connection with any Mortgage Loan that is not a MERS
Mortgage Loan, the Seller cannot deliver or cause to be delivered the
original Mortgage with evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public recording office where
such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Purchaser a photocopy of such Mortgage. With respect to each MERS Mortgage
Loan, the original Mortgage, noting the presence of the MIN of the Mortgage
Loan and either language indicating that the Mortgage Loan is a MOM Loan or
if the Mortgage Loan was not a MOM Loan at origination, the original
Mortgage and the assignment thereof to MERS, with evidence of recording
indicated thereon, or a copy of the Mortgage certified by the public
recording office in which such Mortgage has been recorded.
(d) Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not been
returned from the applicable public recording office, a true certified
copy, certified by the Seller;
(e) In the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the originals, or copies thereof certified by the public recording
office in which such assignments have been recorded, of all intervening
assignments of mortgage with evidence of recording thereon, or if any such
intervening assignment of mortgage has not been returned from the
applicable recording office or has been lost or if such public recording
office retains the original recorded assignment of mortgage, the Seller
shall deliver or cause to be delivered to the Purchaser, a photocopy of
such intervening assignment of mortgage.
If the Seller cannot deliver the original recorded Mortgage Loan
Documents on the Closing Date, the Seller shall, promptly upon receipt thereof
and in any case not later than 120 days from the Closing Date, deliver such
original documents, including original recorded documents, to the Purchaser or,
upon Purchaser's request, its designee (unless the Seller is delayed in making
such delivery by reason of the fact that such documents shall not have been
returned by the appropriate recording office). If delivery is not completed
within 120 days of the Closing Date, solely due to delays in making such
delivery by reason of the fact that such documents shall not have been returned
by the appropriate recording office, the Seller shall deliver such document to
Purchaser, or upon Purchaser's request, its designee, within such time period as
specified in a Seller's Officer's Certificate. In the event that documents have
not been received by the date specified in the Seller's Officer's Certificate, a
subsequent Seller's Officer's Certificate shall be delivered by such date
specified in the prior Seller's Officer's Certificate, stating a revised date
for receipt of documentation. The procedure shall be repeated until the
documents have been received and delivered based on the exception report(s)
delivered by the Custodian. If delivery is not completed within 180 days of the
Closing Date, solely due to delays in making such delivery by reason of the fact
that such documents shall not have been returned by the appropriate recording
office, the Seller shall continue to use its best efforts to effect delivery as
soon as possible thereafter, provided that if such documents are not delivered
by the 270th day from the date of execution of the Term Sheet, the Seller shall
attach a copy of the missing original recorded document certified by the Seller
and certify that the Mortgage Loan Document relating to such Mortgage Loan has
been sent for recording. In the event that the recording office keeps the
original recorded documents or if such original recorded documents are lost,
then the Seller shall deliver to the Purchaser, or its designee, a county
certified copy of such documents or the Purchaser may require the Seller to
repurchase the related Mortgage Loans at the Repurchase Price in accordance with
Section 7.03 hereof.
The Seller shall forward to the Purchaser original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with this Agreement within two (2)
weeks of their execution, provided, however, that the Seller shall provide the
Purchaser with a certified true copy of any such document submitted for
recordation within two (2) 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 (90) days of its submission for recordation.
If the Purchaser discovers any defect with respect to a Mortgage File,
the Purchaser shall give prompt written specification of such defect to the
Seller, and the Seller shall cure, repurchase or substitute such Mortgage Loan
in accordance with the procedure set forth in Section 7.03.
For each Mortgage Loan that is not a MERS Mortgage Loan (if any), the
Seller shall prepare the Assignments of Mortgage and record the Assignment of
Mortgage for each Mortgage Loan in the name of and at the direction of the
Purchaser. The Seller shall be responsible for all fees in connection with its
recordation of the Assignments of Mortgage and any other fees or costs in
transferring all original documents to the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at its own expense, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Seller to
the Purchaser in accordance with this Agreement by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files the information required by the MERS(R) System
to identify the Purchaser as holder of the beneficial interest of such Mortgage
Loans. The Seller further agrees that it will not alter the information
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 of this Agreement or as otherwise instructed by
Purchaser in writing in accordance with the terms of this Agreement.
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH.
Subsection 7.01. REPRESENTATIONS AND WARRANTIES RESPECTING THE SELLER.
The Seller hereby represents and warrants to the Purchaser as of the
Closing Date that:
(i) The Seller is an Indiana banking corporation duly organized and
validly existing under the laws of the State of Indiana 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. The Seller (including, where appropriate, through its subsidiaries)
has or is in the process of confirming all licenses necessary to carry out its
business as now being conducted, and is (or the Subservicer acting on its behalf
is) licensed and qualified to transact business in and is in good standing under
the laws of each state in which any Mortgaged Property is located or is
otherwise exempt under applicable law from such licensing or qualification or is
otherwise not required under applicable law to effect such licensing or
qualification and no demand for such licensing or qualification has been made
upon Seller by any such state, and in any event the Seller is in compliance with
the laws of any such state to the extent necessary to ensure the enforceability
of each Mortgage Loan and the sale of the Mortgage Loans in accordance with the
terms of this Agreement;
(ii) The Seller has the full power and authority and legal right to
hold, transfer and convey 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 and to conduct its business as presently
conducted. The Seller has duly authorized the execution, delivery and
performance of this Agreement and any agreements contemplated hereby, has duly
executed and delivered this Agreement, and any agreements contemplated hereby,
and this Agreement, assuming due authorization, execution and delivery by the
Purchaser, and each Assignment of Mortgage and any agreements contemplated
hereby, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms and all requisite corporate
action has been taken by the Seller to make this Agreement and all agreements
contemplated hereby valid and binding upon the Seller in accordance with their
terms;
(iii) Neither the execution and delivery of this Agreement by the
Seller, nor the origination or purchase of the Mortgage Loans by the Seller, the
sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, or the performance of or compliance with the
terms and conditions of this Agreement will (a) conflict with any of the terms,
conditions or provisions of the Seller's articles of incorporation or by-laws,
(b) 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 party
or which may be applicable to the Seller or its assets, or (c) result in the
material violation of any law, rule, regulation, order, judgment or decree to
which the Seller or its properties are subject;
(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 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 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 . The Seller is solvent and the sale of the Mortgage Loans will not
cause the Seller to become insolvent. The sale of the Mortgage Loans is not
undertaken with the intent to hinder, delay or defraud any of the Seller's
creditors;
(vi) The Master Servicer (including, where appropriate, through its
subsidiaries) is, or is in the process of confirming that it is, properly
qualified to service the Mortgage Loans and the Subservicer has been servicing
the Mortgage Loans prior to the Cut-Off Date;
(vii) Immediately prior to the payment of the Purchase Price for the
Mortgage Loans, the Seller was the owner of the related Mortgage and the
indebtedness evidenced by the related Mortgage Note or Loan Agreement and upon
the payment of the related 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 or Loan Agreement 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;
(viii) There are no actions or proceedings against, or investigations
of, the Seller before any court, 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, (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 or (d) unless otherwise provided by the Seller
to the Purchaser in writing, that is reasonably likely to have a material
adverse effect on the financial condition of the Seller;
(ix) 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 sale of the Mortgage Loans and delivery of the Mortgage Files to the
Purchaser 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;
(x) 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 Loan Agreements,
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(xi) As of the Closing Date, the origination, servicing and collection
practices used by the Seller and, to the best knowledge of Seller, any prior
originator or servicer since origination with respect to each Mortgage Note or
Loan Agreement and Mortgage have been legal and in material accord with
applicable laws and regulations and the Mortgage Loan Documents, and in all
material respects proper and prudent in the mortgage origination and servicing
business and in accordance with Accepted Servicing Practices. The Seller is duly
qualified, licensed, registered and otherwise authorized if required under all
applicable federal state and local laws, and regulations, if applicable, meets
the minimum capital requirements set forth by its regulator. At the time any
Mortgage Loan is registered by the Seller with MERS, the Seller will be 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;
(xii) In the opinion of Seller, the consideration received by Seller
upon the sale of the Mortgage Loans to Purchaser under this Agreement
constitutes fair consideration for the Mortgage Loans under current market
conditions. The Seller will treat the sale of the Mortgage Loans to the
Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
(xiii) The Seller has delivered to the Purchaser financial statements
for its last two complete fiscal years. All such financial information fairly
presents the pertinent results of operations and financial position for the
period identified and has been prepared in accordance with GAAP consistently
applied throughout the periods involved, except as set forth in the notes
thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Seller since the date of the Seller's
financial information that would have a material adverse effect on its ability
to perform its obligations under this Agreement ;
(xiv) The Seller has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans; and
(xv) The Seller (or its subsidiary) has the computer systems and the
capability to effect a servicing transfer via a "tape-to-tape" method or via a
reasonably acceptable electronic data processing method.
Subsection 7.02. REPRESENTATIONS AND WARRANTIES REGARDING INDIVIDUAL
MORTGAGE LOANS.
The Seller hereby represents and warrants to the Purchaser, with
respect to each Mortgage Loan, as of the Closing Date or such other date
specified herein:
(i) The information set forth in the Mortgage Loan Schedule is
complete, true and correct in all material respects;
(ii) 99.75% of the Mortgage Loans by Stated Principal Balance have no
payment which is greater than 29 days past due and none of the Mortgage Loans
have a payment which is greater than 59 days past due. To the best of Seller's
knowledge, no Mortgage Loan has been dishonored and there are no material
defaults under the terms of the Mortgage Loan, except as set forth in this
paragraph;
(iii) To the best of Seller's knowledge, there is no valid offset,
right of rescission, defense or counterclaim of any obligor under any Mortgage
Note, Loan Agreement or Mortgage, including the obligation of the Mortgagor to
pay the unpaid principal of or interest on such Mortgage Note or Loan Agreement,
and any applicable right of rescission has expired, nor will the operation of
any of the terms of such Mortgage Note, Loan Agreement or Mortgage, or the
exercise of any right thereunder, render either the Mortgage Note, Loan
Agreement or the Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, recoupment, counterclaim or defense, including,
without limitation, the defense of usury, and no such right of rescission,
set-off, recoupment, counterclaim or defense has been asserted with respect
thereto. To the best of Seller's knowledge, no Mortgage Loan is subject to any
pending bankruptcy, insolvency, reorganization or moratorium;
(iv) Other than amounts that constitute Permitted Liens, to the best
of Seller's knowledge, there are no mechanics' liens or similar liens or claims
for work, labor or material affecting any Mortgaged Property which have been
filed (and no rights are outstanding that under law could give rise to such
liens), which are or may be a lien prior to, or equal with, the lien of such
Mortgage;
(v) To the best of Seller's knowledge, as of the Closing Date, there
was and there currently is no material damage to any Mortgaged Property. To the
best of Seller's knowledge, there is no proceeding pending or threatened for the
total or partial condemnation of any of the Mortgaged Properties. The Seller has
not received notification that any such proceedings are scheduled to commence at
a future date.
(vi) To the best of Seller's knowledge, each Mortgage is a valid,
subsisting, enforceable and perfected first or more junior lien on the Mortgaged
Property securing the related Mortgage Note or Loan Agreement, including all
buildings on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems affixed to such
buildings, and all additions, alterations and replacements made at any time with
respect to the foregoing securing the Mortgage Note or Loan Agreement's original
principal balance subject to principles of equity, bankruptcy, insolvency and
other laws of general application affecting the rights of creditors. Each
Mortgaged Property is owned by the Mortgagor in fee simple and is free and clear
of all adverse claims, encumbrances and liens other than Permitted Liens having
priority over the lien of the Mortgage. Any security agreement, chattel mortgage
or equivalent document related to and delivered in connection with the Mortgage
Loan establishes and creates a valid, subsisting enforceable, and perfected lien
and security interest on the property described therein, and immediately prior
to the sale of such Mortgage Loan to the Purchaser pursuant to this Agreement
and the related Term Sheet, the Seller had full right to sell and assign the
same to the Purchaser;
(vii) Each Mortgage Loan complies with, and the Seller has complied
with, applicable local, state and federal laws, regulations and other
requirements including, without limitation, usury, equal credit opportunity,
real estate settlement procedures, the Federal Truth-In-Lending Act and
disclosure laws and all applicable predatory and abusive lending laws, and the
consummation of the transactions contemplated hereby, including without
limitation, the receipt of interest by the owner of such Mortgage Loan, will not
involve the violation of any such laws, rules or regulations. Not more than
thirty percent (30%) of the Mortgage Loans are classified as a "high cost" loan
under Section 32 of the Home Ownership and Equity Protection Act of 1994. Each
Mortgage Loan is being (and has been) serviced in accordance with Accepted
Servicing Practices and applicable state and federal laws, including, without
limitation, the Federal Truth-In-Lending Act and other consumer protection laws,
real estate settlement procedures, usury, equal credit opportunity and
disclosure laws. Seller shall maintain in its possession, available for the
Purchaser's inspection, as appropriate, and shall deliver to the Purchaser or
its designee upon demand, evidence of compliance with all such requirements;
(viii) Neither the Seller nor any prior holder of any Mortgage Loan
has in any material manner impaired, waived, altered or modified the Mortgage,
Mortgage Note or Loan Agreement (except that a Mortgage Loan may have been
modified by a written instrument (a copy of which is in the Mortgage File and
the terms of which are reflected on the Mortgage Loan Schedule) which has been
recorded, if necessary to protect the interests of the owner of such Mortgage
Loan; satisfied, canceled, rescinded or subordinated such Mortgage in whole or
in part; released the applicable Mortgaged Property in whole or in part from the
lien of such Mortgage; or executed any instrument of cancellation, rescission or
satisfaction with respect thereto. No instrument of release or waiver has been
executed in connection with any Mortgage Loan, and no Mortgagor has been
released, in whole or in part from its obligations in connection with a Mortgage
Loan;
(ix) A property profile, title search, limited coverage policy or
title insurance policy was obtained with respect to each Mortgage Loan, to the
extent consistent with the normal credit and underwriting policies of Seller.
(x) To the best of Seller's knowledge, all of the improvements which
were included for the purpose of determining the Appraised Value of the
Mortgaged Property lie wholly within the boundaries and building restriction
lines of such property (and wholly within the project with respect to a
condominium unit), and no improvements on adjoining properties encroach upon the
Mortgaged Property;
(xi) To the best of Seller's knowledge, all parties that have had any
interest in the Mortgage, whether as mortgagee, assignee, pledgee or otherwise,
are (or, during the period in which they held and disposed of such interest,
were) (A) in compliance with or exempt from any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property is located,
and (B) (1) organized under the laws of such state, or (2) qualified to do
business in such state, or (3) federal savings and loan associations or national
banks having principal offices in such state, or (4) not doing business in such
state;
(xii) Each Mortgage Note or Loan Agreement and the applicable Mortgage
are original and genuine, and each is the legal, valid and binding obligation of
the maker thereof, enforceable in accordance with its terms, except as limited
by bankruptcy, insolvency, reorganization, moratorium, receivership and other
similar laws relating to creditors' rights generally or by equitable principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law) and the Seller has taken all action necessary to transfer such rights
of enforceability to the Purchaser. All parties to the Mortgage Note or Loan
Agreement and the Mortgage had legal capacity to execute the Mortgage Note or
Loan Agreement and the Mortgage and each Mortgage Note or Loan Agreement and
Mortgage has been duly and properly executed by such parties;
(xiii) Other than with respect to the undrawn portion of the HELOCs as
of the Cut-Off Date, the proceeds of the Mortgage Loan have been fully
disbursed; there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements. All
costs, fees and expenses incurred in making, closing or recording the Mortgage
Loan were paid and the Mortgagor is not entitled to any refund of amounts paid
or due under the Mortgage Note or Loan Agreement or Mortgage;
(xiv) Each Mortgage contains customary and enforceable provisions that
render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including (i) in the case of a Mortgage designated as a deed of trust, by
trustee's sale, and (ii) otherwise by judicial foreclosure or if applicable,
non-judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the property subject to any senior liens. There is no
homestead or other exemption available to the Mortgagor which would interfere
with such right to foreclose;
(xv) With respect to each Mortgage constituting a deed of trust,
either a trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage or if
no duly qualified trustee has been properly designated and so serves, the
Mortgage contains satisfactory provisions for the appointment of such trustee by
the holder of the Mortgage at no cost or expense to such holder, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor;
(xvi) There are no defaults by Seller in complying with the terms of
the Mortgage, and to the best of Seller's knowledge all taxes, governmental
assessments, water, sewer and municipal charges, leasehold payments or ground
rents or other outstanding charges affecting the Mortgaged Property which
previously became due and owing have been paid;
(xvii) The Mortgage Note or Loan Agreement is not and has not been
secured by any collateral, pledged account or other security other than the lien
of the corresponding Mortgage and such Mortgage does not serve as security for
any other obligation (other than the related first lien mortgage and other
Permitted Liens) and no Mortgage Loan is secured by more than one Mortgaged
Property;
(xviii) There is no material default, breach or event of acceleration
existing under the Mortgage or the applicable Mortgage Note or Loan Agreement;
and no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation or
event of acceleration, and none of (i) the Seller and any of its affiliates (ii)
any servicer or subservicer and (iii) any prior mortgagee, of any Mortgage Loan
has waived any material default, breach or event of acceleration; no foreclosure
action is threatened or has been commenced with respect to the Mortgage Loan;
(xix) There is no obligation on the part of the Seller or any other
party to make any payments with respect to the related Mortgage Loan in addition
to the Monthly Payments required to be made by the applicable Mortgagor and
except in the case of the undrawn portion of the HELOCs as of the Cut-Off Date,
the Mortgage Note or Loan Agreement with respect to any Mortgage Loan does not
permit or obligate the Seller to make future advances to the Mortgagor at the
option of the Mortgagor;
(xx) The Seller has not advanced funds, or induced, solicited or
knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the Mortgage
Loan;
(xxi) RESERVED.
(xxii) Each of the Mortgaged Properties consists of a single parcel of
real property with a detached single-family residence erected thereon (including
a manufactured dwelling deemed to be real estate under applicable state law), or
a two- to four-family dwelling, or a townhouse, or an individual condominium
unit in a condominium project, or an individual unit in a planned unit
development. No Mortgaged Property consists of cooperative housing or stock in a
cooperative housing corporation;
(xxiii) None of the Mortgage Loans provide for deferred interest or
negative amortization. No Mortgaged Property is a timeshare;
(xxiv) The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor. The Mortgage Loan is
not a graduated payment Mortgage Loan;
(xxv) Seller is the sole owner of record and is the holder of the
Mortgage Loan and the indebtedness evidenced by the Mortgage Note or Loan
Agreement. Upon the sale of the Mortgage Loan to the Purchaser, the Seller will
retain the Mortgage File or any part thereof with respect thereto not delivered
to the Purchaser or the Purchaser's designee in trust only for the purpose of
servicing and supervising the servicing of the Mortgage Loan. Upon the transfer
and assignment to the Purchaser, the Mortgage Loan, including the Mortgage Note
or Loan Agreement and the Mortgage, was not subject to an assignment sale or
pledge to any person other than Purchaser and the Seller had good and marketable
title to and was the sole owner thereof and had 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 and has the full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign the Mortgage Loan pursuant to this Agreement and
following the sale of the Mortgage Loan, the Purchaser will own such Mortgage
Loan free and clear of any encumbrance, equity, participation interest, lien
other than Permitted Liens, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan, except for the purposes of servicing the Mortgage Loan as set
forth in this Agreement. After the Closing Date, the Seller will not have any
right to modify or alter the terms of the sale of the Mortgage Loan and the
Seller will not have any obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this Agreement , or as
otherwise agreed to by the Seller and the Purchaser. The Seller acquired any
right, title and interest in and to the Mortgage Loans in good faith and without
notice of any adverse claim;
(xxvi) Other than with respect to the HELOCs, all of the Mortgage
Loans are fixed rate mortgage loans. Unless otherwise indicated on the Mortgage
Loan Schedule, other than with respect to the HELOCs, the Mortgage Note is
payable in monthly installments of principal and interest, with interest
calculated and payable in arrears, sufficient to amortize the Mortgage Loan
fully by the stated maturity date, over an original term of not more than thirty
years from origination. Each HELOC provides for an initial period (the
"Revolving Period") during which the Mortgagor is required to make monthly
payments of interest payable in arrears and requires repayment of the unpaid
principal balance thereof over a period following the Revolving Period which is
not in excess of 122 months. Except with respect to the HELOCs, principal
payments on the Mortgage Loan commenced no more than ninety (90) days after the
funds were disbursed in connection with the Mortgage Loan. All required notices
of interest rate and payment amount adjustments have been sent to the Mortgagor
on a timely basis and the computations of such adjustments were properly
calculated. Installments of interest are subject to change due to the
adjustments to the Mortgage Interest Rate of each interest rate adjustment, with
interest calculated and payable in arrears. All Mortgage interest rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Note. Any interest paid has been properly credited
pursuant to state and local law.
(xxvii) The Mortgage contains a 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, at the option of the mortgagee and such provision
is enforceable;
(xxviii) Each of the Mortgage and, with respect to each Mortgage Loan
that is not a MERS Mortgage Loan, the Assignment of Mortgage is in recordable
form and is acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located;
(xxix) Except with respect to one Mortgage Loan, no Mortgagor has
notified the Seller and the Seller has no other knowledge of any relief
requested or allowed to the Mortgagor under the Soldiers' and Sailors' Civil
Relief Act of 1940;
(xxx) To the best knowledge of Seller, there exists no violation of
any local, state, or federal environmental law, rule or regulation with respect
to the Mortgaged Property which violation has or could have a material adverse
effect on the market value of such Mortgaged Property. The Seller has no
knowledge of any pending action or proceeding directly involving the related
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; and nothing further remains to be done to satisfy in
full all requirements of each such law, rule or regulation constituting a
prerequisite to the use and enjoyment of such Mortgaged Property;
(xxxi) For each Mortgage Loan, the related Mortgage File is complete
and contains a true, accurate and correct copy of each of the documents and
instruments specified to be included therein;
(xxxii) Each Mortgage Note, each Loan Agreement, each Mortgage, each
Assignment of Mortgage and any other documents required pursuant to this
Agreement to be delivered by the Seller hereunder has been delivered to the
Purchaser or its agent;
(xxxiii) As of the Closing Date, no more than 45% (by Stated Principal
Balance) of the Mortgage Loans constitute "real estate mortgages" for the
purposes of Treasury Regulation ss. 301.7701(i)-1(d) under the Code. For this
purpose a Mortgage Loan constitutes a "real estate mortgage" if it satisfies
either test set out in paragraph (a) or paragraph (b) below:
a. The fair market value of the interest in real property
securing the obligation was at least equal to 80 percent of the
adjusted issue price of the obligation at the time the obligation
was originated (or, if later, the time the obligation was
significantly modified). For purposes of this paragraph (a), the
fair market value of the real property interest must be first
reduced by the amount of any lien on the real property interest
that is senior to the obligation being tested, and must be
further reduced by a proportionate amount of any lien that is in
parity with the obligation being tested. The adjusted issue price
of an obligation is its issue price plus the amount of accrued
original issue discount, if any, as of the date of determination.
b. Substantially all of the proceeds of the obligation were
used for one or more of the following purposes: (i) to acquire an
interest in real property; (ii) to improve an interest in real
property; or (iii) to protect an interest in real property, that,
at the origination date, is the only security for the obligation.
For this purpose only, substantially all of the proceeds of the
obligations means two-thirds or more of the gross proceeds. For
purposes of this paragraph, the use of the proceeds of the
related Mortgage Loan to retire an existing lien against the
related Mortgaged Property is considered use of the proceeds to
protect an interest in real property;
(xxxiv) The Seller used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans in the Seller's portfolio; No statement, tape, diskette, form,
report or other document furnished or to be furnished by Seller pursuant to this
Agreement or in connection with the transactions contemplated hereby contains or
will contain any statement that is or will be inaccurate or misleading in any
material respect or omits to state a material fact required to be stated therein
or necessary to make the information and statements therein not misleading;
(xxxv) No fraud, error, negligence, misrepresentation or material
omission of fact with respect to a Mortgage Loan has taken place on the part of
the Seller or the Mortgagor or any other party involved in the origination or
servicing of the Mortgage Loan;
(xxxvi) The Mortgagor has received and has executed, where applicable,
prior to origination of the Mortgage Loan, all disclosure and rescission
materials required by applicable law with respect to the making of the Mortgage
Loan;
(xxxvii) To the best of the Seller's knowledge, there has been no
default on any senior mortgage loan relating to a Mortgaged Property that has
not been cured by a person other than the Seller or an affiliate thereof;
(xxxviii) No HEL or HELOC has a Combined Loan-to-Value Ratio in excess
of 100%. No HLTV Mortgage Loan has a Combined Loan-to-Value Ratio in excess of
125%;
(xxxix) Excluding matters more specifically addressed in other
subsections of this Section 7.02, the Seller has no knowledge of any other
circumstances or condition with respect to the Mortgage, the Mortgaged Property,
the Mortgagor or the Mortgagor's credit standing that could reasonably be
expected to cause the Purchaser to regard the Mortgage Loan as an unacceptable
investment, cause such Mortgage Loan to become delinquent or adversely affect
the value or the marketability of the Mortgage Loan. The Seller did not select
the Mortgage Loans sold to Purchaser based on any adverse selection of mortgage
loans in its portfolio that met Purchaser's purchase parameters for this
transaction, including without limitation, the location or condition of the
Mortgaged Property, payment pattern of the borrower or any other factor that may
adversely affect the expected cost of foreclosing, owning or holding the
Mortgage Loans or related Mortgaged Property or collecting the insurance or
guarantee proceeds related thereto;
(xl) Each Mortgage Loan was originated by or for the Seller pursuant
to, and conforms with, the Seller's underwriting guidelines attached as EXHIBIT
9 hereto;
(xli) No less than 85 percent by Stated Principal Balance of the
Mortgage Loans have a prepayment penalty and at least 25 percent by Stated
Principal Balance have a prepayment penalty for at least three years. With
respect to each Mortgage Loan that has a prepayment penalty feature, each such
prepayment penalty is enforceable and is permitted pursuant to federal, state
and local law. Seller's business practices are to enforce such prepayment
penalty features, subject to waiver at Seller's option for reasonable and
prudent business purposes, including, without limiting the foregoing, a
refinance of the Mortgage Loan by the Seller or any parent, subsidiary or
affiliate of the Seller. No Mortgage Loan will impose a prepayment penalty for a
term in excess of five years from the date such Mortgage Loan was originated;
(xlii) Each Mortgage Loan where the related Mortgage is in first lien
position or where the balance at origination exceeded $100,000 is covered by a
valid and transferable tax service contract with Transamerica Real Estate Tax
Services, Inc. or such other vendor as may be reasonably acceptable to the
Purchaser, which may be assigned without the payment of any fee by the
Purchaser;
(xliii) No Mortgage Loan was originated under a reduced documentation
program;
(xliv) The Mortgage Loans conform to the characteristics set forth in
the Term Sheet;
(xlv) At least 50% of the Mortgage Loans by Stated Principal Balance
in each of the Groups have conforming balances under Fannie Mae and Freddie Mac
published underwriting guidelines;
(xlvi) No Mortgage Loan secured by property in the State of Georgia
and originated on or after October 1, 2002 qualifies as is a "high cost" loan as
defined by applicable Georgia law;
(xlvii) No Mortgage Loan secured by property in the City of New York
and originated on or after February 20, 2003 qualifies as a "high cost" loan
under New York City Local Law No. 36 (2002); and
(xlviii) No Mortgage Loan secured by property in the State of New York
and originated on or after April 1, 2003 qualifies as a "high cost" loan under
New York Banking Law ss.6-1.
Subsection 7.03. REMEDIES FOR BREACH OF REPRESENTATIONS AND
WARRANTIES; REPURCHASE OF NEAR-TERM PAYMENT DEFAULTS; POST-CLOSING DUE
DILIGENCE.
It is understood and agreed that the covenants, representations and
warranties of Seller set forth in this Agreement shall survive 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
Loan Agreement 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
which materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser therein (or which materially and adversely affects the
value of a Mortgage Loan or 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 sixty (60) days of the earlier of either discovery by or notice
to the Seller of any material breach of a representation or warranty regarding a
Mortgage Loan, or the interest of the Purchaser therein, the Seller shall either
promptly cure such breach or, at its option, repurchase such Mortgage Loan at
the Repurchase Price or provide a Qualified Substitute Mortgage Loan. Any
repurchase of a Mortgage Loan or Mortgage Loans pursuant to the foregoing
provisions of this Subsection 7.03 shall occur on a date designated by the
Purchaser with three (3) Business Days notice and shall be accomplished by wire
transfer of immediately available funds on the repurchase date to an account
designated by the Purchaser. Any such repurchases shall not be subject to the
maximum limitation on the repurchases specified in the final sentence of the
fourth paragraph of this Subsection 7.03.
Notwithstanding anything express or implied herein to the contrary,
with respect to any representation or warranty above that is made to the
Seller's knowledge, if the substance of such representation or warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interests of the Purchaser and/or its successors
and assigns, then such inaccuracy shall be deemed a breach of the representation
or warranty for all purposes under this Agreement. Without limiting the
generality of the foregoing, the Seller agrees that it shall be responsible for
curing such deemed breaches and for repurchasing and/or indemnifying the
Purchaser and/or its successors and assigns in accordance with the terms of this
Agreement, to the same extent as if the Seller had possessed knowledge that the
substance of the representation or warranty was inaccurate when the
representation or warranty was made under this Agreement.
In the event that the related borrower has not made each of the two
(2) scheduled Monthly Payments which are due under any Mortgage Loan within 65
days of the Closing Date are not made within thirty (30) days of its Due Date
(as "Early Payment Default"), then not later than five (5) Business Days after
notice to the Seller by the Purchaser (and at the Purchaser's sole option), the
Seller, shall repurchase such Mortgage Loan from the Purchaser pursuant to the
repurchase provisions contained in this Subsection 7.03. The Purchaser shall
notify the Seller of the Mortgage Loans required to be so repurchased no later
than 120 days after the Closing Date. The maximum dollar amount of such
repurchases shall be capped at six percent (6%) of the Stated Principal Balance
of the Mortgage Loans in the Final Pool.
At the time of repurchase, 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 Purchaser and its respective
designees relating to the repurchased Mortgage Loan. Upon the repurchase of a
Mortgage Loan, the Mortgage Loan Schedule shall be amended to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
In addition to such cure and repurchase obligation, the Seller shall
indemnify the Purchaser and hold them harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary 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 any assertion
based on, grounded upon or resulting from a breach or alleged breach of any of
the representations and warranties contained in this Section 7. In addition to
the obligations of the Seller set forth in this Subsection 7.03, the Purchaser
may pursue any and all remedies otherwise available at law or in equity,
including, but not limited to, the right to seek damages.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 7.01 or
7.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement.
If pursuant to the foregoing provisions the Seller repurchases a
Mortgage Loan that is a MERS Mortgage Loan, the Seller shall either (a) cause
MERS to execute and deliver an assignment of the 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(R) System in accordance with MERS'
rules and regulations or (b) cause MERS to designate on the MERS(R) System the
Seller or the Seller's designee as the beneficial holder of such Mortgage Loan.
SECTION 8. CLOSING. The closing for the Mortgage Loans shall take place on
the Closing Date. The closing shall be either by telephone and facsimile,
confirmed by letter or wire as the parties shall agree.
Subsection 8.01. CONDITIONS TO PURCHASER'S OBLIGATIONS.
The obligation of Purchaser to purchase the Mortgage Loans on the
Closing Date is subject to the satisfaction at or prior to the Closing Date of
each of the following conditions (any or all of which may be waived by
Purchaser):
(a) REPRESENTATIONS AND WARRANTIES CORRECT. Each of the
representations and warranties of Seller contained in this Agreement shall be
true and correct as of the Closing Date.
(b) COMPLIANCE WITH COVENANTS. Seller shall have performed and be in
compliance with, in all material respects, all of its respective covenants,
acts, and obligations to be performed on or prior to the Closing Date under this
Agreement .
(c) CLOSING DOCUMENTS. Seller shall have executed and delivered this
Agreement and all other Closing Documents and all other documents required to be
delivered by Seller hereunder.
(d) CORPORATE ACTIONS. All corporate, partnership and other acts
necessary to authorize the execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereunder shall
have been taken by Seller.
(e) MORTGAGE FILE. The Seller shall have delivered to the Purchaser
all of the Mortgage Loan Documents in accordance with Section 6.03 with respect
to each Mortgage Loan.
Subsection 8.02. CONDITIONS TO SELLER'S OBLIGATIONS.
The obligation of Seller to sell the Mortgage Loans on the Closing
Date is subject to the satisfaction at or prior to the Closing Date of each of
the following conditions (any or all of which may be waived by Seller):
(a) PURCHASE PRICE. The Purchase Price shall have been delivered to
Seller by wire transfer of immediately available funds pursuant to Seller's
reasonable instructions.
(b) COMPLIANCE WITH COVENANTS. The Seller shall have performed and be
in compliance with, in all material respects, all of its respective covenants,
acts, and obligations to be performed under this Agreement .
(c) CLOSING DOCUMENTS. Seller shall have executed and delivered this
Agreement.
(d) CORPORATE ACTIONS. All corporate and other acts necessary to
authorize the execution, delivery, and performance of this Agreement and the
consummation of the transactions contemplated hereunder shall have been taken by
Purchaser.
SECTION 9. CLOSING DOCUMENTS.
The Closing Documents for the Mortgage Loans to be purchased on the
Closing Date shall consist of fully executed originals of the following
documents:
1. this Agreement, in two (2) counterparts;
2. upon the request of Purchaser, a Custodial Account Letter
Agreement in the form attached as EXHIBIT 3 hereto;
3. Reserved.
4. the Mortgage Loan Schedule;
5. the Term Sheet;
6. an Opinion of Counsel to the Seller, in a form acceptable to the
Purchaser; and
7. such other documents related to the purchase and sale of the
Mortgage Loans as the Purchaser may reasonably request.
SECTION 10. COSTS; ASSIGNMENTS. The Purchaser shall pay any
commissions due its salesmen, the expenses of its accountants and attorneys and
the expenses and fees of any broker retained by the Purchaser with respect to
the transaction covered by this Agreement. All other costs and expenses incurred
in connection with the transfer and delivery of the Mortgage Loans including,
without limitation, fees for the preparation and recording of intervening
assignments of Mortgage and Assignments of Mortgage, any termination fees owed
to Seller's document custodian, any costs relating to transfer of the Mortgage
File, and other Mortgage Loan records to Purchaser, the costs of delivering
complete master file tape information and other electronically stored
information to the Purchaser, recording fees, the costs of notifying the
Mortgagors, and the legal fees and expenses of its attorneys shall be paid by
the Seller.
SECTION 11. MASTER SERVICER'S SERVICING OBLIGATIONS. The Master
Servicer, as independent contract servicer, and in consideration of its
entitlement to the Servicing Fee, shall service and administer the Mortgage
Loans in accordance with the terms and provisions set forth in this Agreement
and in the Servicing Addendum attached hereto as EXHIBIT 5, which Servicing
Addendum is incorporated herein by reference. The Master Servicer shall not take
any action which would result in the Purchaser's interest in the Mortgage Loans
being adversely affected. In accordance with Accepted Servicing Practices, the
Master Servicer shall not fail to take any practicable and reasonable action
which would result in Purchase's interest in the Mortgage Loans being adversely
affected.
SECTION 12. THE SELLER.
Subsection 12.01. INDEMNIFICATION.
(a) The Seller agrees to indemnify the Purchaser and hold it harmless
from and against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses (including, without limitation, reasonable attorney's fees and
expenses) that the Purchaser may sustain in any way related to (i) any act or
omission on the part of the Seller in receiving, processing, funding or
servicing any Mortgage Loan; (ii) the failure of the Seller to perform in any
way its duties and service the Mortgage Loans in strict compliance with the
terms of this Agreement; and (iii) for breach of any covenant, representation or
warranty of the Seller contained herein. In addition to the obligations of the
Seller set forth in this Subsection 12.01, the Purchaser may pursue any and all
remedies otherwise available at law or in equity, including, but not limited to,
the right to seek damages. The Seller shall immediately notify the Purchaser if
a claim is made by a third party with respect to this Agreement or the Mortgage
Loans, assume (with the consent of the Purchaser and with counsel reasonably
satisfactory to the Purchaser) the defense of any such claim and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
the Purchaser in respect of such claim but failure to so notify the Purchaser
shall not limit its obligations hereunder. The Seller agrees that it will not
enter into any settlement of any such claim without the consent of the
Purchaser. The provisions of this Section 12.01 shall survive termination of
this Agreement.
(b) The Purchaser agrees to indemnify the Seller and hold it harmless
from and against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses (including, without limitation, reasonable attorney's fees and
expenses) that the Seller may sustain in any way related to the breach of any
covenant, representation or warranty of the Purchaser contained herein. In
addition to the obligations of the Purchaser set forth in this Subsection
12.01(b), the Seller may pursue any and all remedies otherwise available at law
or in equity, including, but not limited to, the right to seek damages. The
Purchaser shall immediately notify the Seller if a claim is made by a third
party with respect to this Agreement or the Mortgage Loans, assume (with the
consent of the Seller and with counsel reasonably satisfactory to the Seller)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or the Seller in respect of such claim
but failure to so notify the Seller shall not limit its obligations hereunder.
The Purchaser agrees that it will not enter into any settlement of any such
claim without the consent of the Seller. The provisions of this Section 12.01
shall survive termination of this Agreement.
Subsection 12.02. MERGER OR CONSOLIDATION OF THE SELLER.
The Seller shall keep in full force and effect its existence, rights
and franchises as an Indiana banking corporation under the laws of its formation
in the State of Indiana except as permitted herein, and shall obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement or any of the Mortgage Loans, and
to enable the Seller to perform its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall satisfy any requirements of Section 15 with
respect to the qualifications of a successor to the Seller.
Subsection 12.03. LIMITATION ON LIABILITY OF THE SELLER AND OTHERS.
Neither the Seller nor any of the officers, employees or agents of the
Seller shall be under any liability to the Purchaser for any action taken, or
for refraining from the taking of any action, in good faith in connection with
the servicing of the Mortgage Loans pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Seller or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations in strict compliance with any standard of
care set forth in this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Seller and any officer, employee or agent of the Seller may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Seller shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its obligation to sell, or duty to service, the Mortgage Loans
in accordance with this Agreement and which in its opinion may involve it in any
expenses or liability; provided, however, that the Seller may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities for which
the Purchaser shall be liable, the Seller shall be entitled to reimbursement
therefor from the Purchaser upon written demand except when such expenses, costs
and liabilities are subject to the Seller's indemnification under Subsections
7.03 or 12.01.
Subsection 12.04. MASTER SERVICER NOT TO RESIGN.
The Master Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Seller and the Purchaser or upon the determination that its servicing duties
hereunder are no longer permissible under applicable law and such incapacity
cannot be cured by the Master Servicer in which event the Master Servicer may
resign as servicer. Any such determination permitting the resignation of the
Master Servicer as servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Purchaser which Opinion of Counsel shall be in form and
substance acceptable to the Purchaser. No such resignation shall become
effective until a successor shall have assumed the Master Servicer's
responsibilities and obligations hereunder in the manner provided in Section 15.
Subsection 12.05. NO TRANSFER OF SERVICING.
With respect to the retention of the Master Servicer to service the
Mortgage Loans, the Master Servicer acknowledges that the Purchaser has acted in
reliance upon the Master Servicer's independent status, the adequacy of its
servicing facilities, plant, personnel, records and procedures, its integrity,
reputation and financial standing and the continuance thereof. Without in any
way limiting the generality of this Section, the Master Servicer shall not
either assign this Agreement or the servicing hereunder or delegate its rights
or duties hereunder or any portion thereof, or sell or otherwise dispose of all
or substantially all of its property or assets, without the prior written
approval of the Purchaser, which consent will not be unreasonably withheld.
Irwin Home Equity Corporation shall be a permitted subservicer of the Master
Servicer.
SECTION 13. DEFAULT.
Subsection 13.01. EVENTS OF DEFAULT.
In case one or more of the following Events of Default by the Seller
shall occur and be continuing, that is to say:
(i) any failure by the Master Servicer to remit to the Purchaser any
payment required to be made under the terms of this Agreement which continues
unremedied for a period of three (3) Business Days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Seller by the Purchaser; or
(ii) failure on the part of the Seller duly to observe or perform in
any material respect, within the required time period, any other of the
covenants or agreements on the part of the Seller set forth in this Agreement
which continues unremedied for a period of thirty (30) days (except that such
number of days shall be fifteen (15) in the case of a failure to pay any premium
for any insurance policy required to be maintained under this Agreement) after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Seller by the Purchaser; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Seller and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty (60) days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of, or relating to,
the Seller or of, or relating to, all or substantially all of its property; or
(v) the Seller shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) failure by the Seller (including through its subsidiaries) to be
in compliance with any applicable "doing business" or licensing laws of any
jurisdiction where a Mortgaged Property is located, but only to the extent such
non-compliance materially and adversely affects the Seller's ability to do
business, to originate or service the Mortgage Loans or to perform its other
obligations hereunder; or
(vii) the Seller attempts to assign, sell, pledge or hypothecate its
right to servicing compensation hereunder.
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing to the Seller may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Master Servicer as servicer under this Agreement. On or
after the receipt by the Seller of such written notice, all authority and power
of the Master Servicer to service the Mortgage Loans under this Agreement shall
on the date set forth in such notice pass to and be vested in the successor
appointed pursuant to Section 15.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Subsection 12.04) of the
Seller hereunder, either (i) the successor to the Seller shall represent and
warrant that it is a member of MERS in good standing and shall agree to comply
in all material respects with the rules and procedures of MERS in connection
with the servicing of the Mortgage Loans that are registered with MERS, or (ii)
the predecessor Seller shall cooperate with the successor either (x) in causing
MERS to execute and deliver an assignment of Mortgage in recordable form to
transfer the Mortgage from MERS to the Purchaser and to execute and deliver such
other notices, documents and other instruments as may be necessary or desirable
to effect a transfer of such Mortgage Loan or servicing of such Mortgage Loan on
the MERS(R) System to the successor or (y) in causing MERS to designate on the
MERS(R) System the successor as the servicer of such Mortgage Loan. The
preceding is subject to any limitations required by any guarantor of the
Mortgage Loans.
Subsection 13.02. WAIVER OF DEFAULTS.
The Purchaser may waive any default by the Seller in the performance
of its obligations hereunder and its consequences. Upon any such waiver of a
past default, such default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereon except to the extent expressly so waived.
SECTION 14. TERMINATION; SERVICING TRANSFER. In connection with any
termination pursuant to Section 13 or Servicing Rights purchase pursuant to the
next paragraph, upon request from the Purchaser in connection with any such
termination, the Master Servicer shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Mortgage Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, to prepare notices to the mortgagors and related insurance
companies, or otherwise, at the Seller's sole expense. The Master Servicer
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Master Servicer's responsibilities and rights hereunder as
servicer, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Master Servicer to the Custodial Account or thereafter received with respect
to the Mortgage Loans. The Master Servicer shall follow the servicing transfer
instructions of the Purchaser contained herein and attached hereto as EXHIBIT 7
with respect to servicing transfer procedures. The Master Servicer and Purchaser
will each, at the request of the other, execute and deliver to each other all
such documents that either may reasonably request in order to transfer servicing
to the Purchaser. The Master Servicer shall not be entitled to any transfer fee.
At any time prior to August 31, 2003, and upon 30 days' notice to the
Master Servicer, the Purchaser may purchase the Servicing Rights. The purchase
price of such servicing rights will equal the Servicing Rights Purchase Price.
Furthermore, Purchaser shall have the right to purchase on a separate basis the
Servicing Rights or the prepayment penalties in accordance with the pricing
parameters set forth in the Term Sheet and in this Agreement.
The terms governing the procedures to be followed in the event of a
transfer of servicing shall be as set forth in the Mortgage Loan Purchase and
Interim Servicing Agreement dated as of December 1, 2000 between EMC Mortgage
Corporation and the Seller.
Subsection 14.01. RESERVED.
Subsection 14.02. RESERVED.
Subsection 14.03. LIMITED POWER OF ATTORNEY.
If requested by Purchaser after an Event of Default, Seller shall
furnish to Purchaser a limited power of attorney in the form attached here as
Exhibit 10 appointing Purchaser and any of its employees to act as Seller's
attorney in fact to execute documents pertaining to the discharge and
satisfaction of Mortgages which were recorded in Seller's name and to endorse
checks received by the Purchaser from Mortgagor.
Subsection 14.04. SUPPLEMENTARY INFORMATION.
From time to time the Seller shall furnish to Purchaser such
information supplementary to the information contained in the documents and
schedules delivered pursuant hereto and file such reports as purchaser may
reasonably request.
Subsection 14.05. REASONABLE ACCESS.
The Seller shall give Purchaser its authorized representatives
reasonable access to all documents, files, books, records, accounts, offices and
other facilities of Seller related to the Mortgage Loans transferred hereby, and
permit Purchaser to make such inspections thereof as Purchaser may reasonably
request during normal business hours, provided, however, that such investigation
or inspection shall be conducted in such a manner as to not interfere
unreasonably with Seller's business operations.
Subsection 14.06. FACILITIES.
Seller (or its authorized Subservicer) shall maintain and employ
throughout the term hereof a sufficient number of qualified employees to perform
the servicing activities to be carried out hereunder in an efficient and
professional basis as currently carried out by Seller. If necessary to perform
its duties hereunder, Seller shall employ additional or more qualified
personnel. Seller shall maintain throughout the term hereof physical facilities
from which the servicing activities can be performed in a manner consistent with
the foregoing.
Subsection 14.07. RESERVED.
Subsection 14.08. RESERVED.
SECTION 15. SUCCESSOR TO THE MASTER SERVICER. If the Master Servicer
resigns or is terminated pursuant to this Agreement, the Purchaser shall appoint
a successor servicer. In connection with such appointment and assumption, the
Purchaser may make such arrangements for the compensation of such successor out
of payments on Mortgage Loans as it and such successor shall agree. In the event
that the Master Servicer's duties, responsibilities and liabilities as servicer
under this Agreement should be terminated, the Master Servicer shall discharge
such duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of the Purchaser or such successor. The
termination of the Master Servicer as servicer pursuant to the aforementioned
Section shall not become effective until a successor shall be appointed by the
Purchaser and shall in no event relieve the Master Servicer of the
representations and warranties made pursuant to Subsections 7.01 and 7.02 and
the remedies available to the Purchaser under Subsection 7.03 or 12.01, it being
understood and agreed that the provisions of such Subsections 7.01, 7.02, 7.03
or 12.01 shall be applicable to the Seller notwithstanding any such resignation
or termination of the Master Servicer, or the termination of this Agreement.
SECTION 16. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address as follows:
(i) if to the Seller:
Irwin Union Bank and Trust Co.
500 Washington Street
Columbus, Indiana 47201
Attention: [Ellen Mufson]
with copies to:
Irwin Home Equity Corporation
12677 Alcosta Boulevard
San Ramon, California 94583
Attention: Gary Iorfido
and:
Irwin Home Equity Corporation
12677 Alcosta Boulevard
San Ramon, California 94583
Attention: Edwin Corbin and Mary Rottman
(ii) if to the Purchaser:
Bear Stearns Asset Backed Securities, Inc.
383 Madison Avenue
New York, New York 10179
Attention: Jonathan Lieberman
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 17. [Reserved.]
SECTION 18. SEVERABILITY CLAUSE. Any part, provision, representation
or warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
SECTION 19. COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
SECTION 20. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York without regard to any
conflicts of laws provisions.
SECTION 21. INTENTION OF THE PARTIES. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling the Mortgage
Loans, and not a debt instrument of the Seller or another security. Accordingly,
the parties hereto each intend to treat the transaction for federal income tax
purposes as a sale by the Seller, and a purchase by the Purchaser, of the
Mortgage Loans. The Purchaser shall have the right to review the Mortgage Loans
and the related Mortgage Loan Files to determine the characteristics of the
Mortgage Loans which shall affect the federal income tax consequences of owning
the Mortgage Loans and the Seller shall cooperate with all reasonable requests
made by the Purchaser in the course of such review.
SECTION 22. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of and be enforceable by the Seller and the Purchaser and
the respective successors and assigns of the Seller and the Purchaser. The
Purchaser may assign this Agreement to any Person to whom any Mortgage Loan is
transferred whether pursuant to a sale or financing and to any Person to whom
the servicing or master servicing of any Mortgage Loan is sold or transferred.
Upon any such assignment, the Person to whom such assignment is made shall
succeed to all rights and obligations of the Purchaser under this Agreement. A
form of such assignment is attached as EXHIBIT 8 hereto. This Agreement shall
not be assigned, pledged or hypothecated by the Seller to a third party without
the consent of the Purchaser.
SECTION 23. WAIVERS. No term or provision of this Agreement and a Term
Sheet may be waived or modified unless such waiver or modification is in writing
and signed by the party against whom such waiver or modification is sought to be
enforced.
SECTION 24. TERM SHEET AND EXHIBITS. The Term Sheet and the exhibits
to this Agreement are hereby incorporated and made a part hereof and are an
integral part of this Agreement.
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 26. REPRODUCTION OF DOCUMENTS. This Agreement and all
documents relating thereto, including, without limitation, (a) consents, waivers
and modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 27. NONSOLICITATION. From and after the Closing Date, the
Seller agrees that it will not take any action or cause any action to be taken
by any of its employees, agents or affiliates, or by any independent contractors
acting on the Seller's behalf, to solicit in any manner whatsoever any Mortgagor
to prepay or refinance a Mortgage Loan, except in accordance with Seller's
normal business practices, which business practices include the following: mass
mailings (which shall not be intentionally targeted at the Mortgagors), loan
applications, loan inquiries, leads received by the Seller or the Seller's
parent, subsidiary or an affiliate's internet portals, Mortgagor initiated
refinance or modification inquiries, or the Seller's customer retention efforts
in response to payoff demand statement requests from the Mortgagor. It is
understood and agreed by the Seller and the Purchaser that all rights and
benefits relating to the solicitation of any Mortgagors to refinance any
Mortgage Loans shall be transferred to the Purchaser pursuant hereto on the
Closing Date and the Seller shall take no action to undermine these rights and
benefits. The Seller shall (a) not sell the name of any Mortgagor, and (b) use
its best efforts to prevent the sale of the name of any Mortgagor by the
Seller's wholly owned subsidiaries and affiliates, to any person or entity for
the direct or indirect purpose of allowing such person or entity to solicit the
refinancing of any Mortgage Loan. The obligations of the Seller under 4.02 to
remit the Premium for certain near-term principal prepayments shall not be
affected by this Section 27.
SECTION 28. SURVIVAL AND CONFLICTS. All covenants, agreements,
representations and warranties made in the Term Sheet and herein shall survive
the execution and delivery of this Agreement. In the event of any conflicts
between the terms of this Agreement and the corresponding terms in the Term
Sheet, in each case the provisions in the Term Sheet shall govern.
SECTION 29. FURTHER AGREEMENTS AND ASSURANCES.
(a) The Purchaser and the Seller agree that with respect to some or
all of the Mortgage Loans from time to time the Purchaser may effect a
Pass-Through Transfer or a Whole Loan Transfer, in each case retaining the
Master Servicer as the servicer thereof.
(b) With respect to each such Whole Loan Transfer and Pass-Through
Transfer, as applicable, entered into by the Purchaser, provided that Purchaser
has used its best efforts to negotiate and execute an incentive servicing fee
with the Master Servicer, the Seller agrees to use its best efforts to:
(i) cooperate with the Purchaser, any prospective purchaser, any
Rating Agency or any party to any agreement executed in connection with
such Whole Loan Transfer or Pass-Through Transfer with respect to all
reasonable requests and due diligence procedures;
(ii) execute as originator, servicer or sub-servicer as the case
may be, all applicable Reconstitution Agreements executed in connection
with such Whole Loan Transfer or Pass-Through Transfer that govern the
servicing and administration of the Mortgage Loans (and any agreements and
other documents incidental thereto, including officer's certificates) as
the Purchaser shall reasonably request;
(iii) at the direction of the Purchaser and in lieu of executing
agreements as described in the preceding clause (ii), consent to the
assignment of the Purchaser's rights as the Purchaser hereunder to a
purchaser of, or trustee or master servicer with respect to, any one or
more of the Mortgage Loans, in each case with any modifications to the
servicing provisions hereof as shall be reasonably requested by the
Purchaser;
(iv) execute as Seller any applicable Reconstitution Agreement
executed in connection with such Pass-Through Transfer and restate therein
the same representations and warranties made by it in Sections 7.01 and
7.02 (or a smaller number of representations and warranties regarding the
Mortgage Loans as acceptable to both the Purchaser and the Rating
Agencies); provided that the representations that deal with matters that
have occurred, may have occurred or are asserted not to have occurred
between the date of origination of a Mortgage Loan and the Closing Date
shall only be required to be restated as of the Closing Date or, if
applicable, the date of origination;
(v) deliver to the Purchaser (A), for inclusion in any
prospectus, private placement memorandum or other offering material or
disclosure document for the Pass-Through Transfer such written information
regarding the Seller, its financial condition and its underwriting
guidelines pursuant to which the Mortgage Loans were originated, and as
Master Servicer, its financial condition, delinquency, foreclosure and loss
experience as to the Master Servicer's servicing portfolio (but not as to
loan level information regarding the Mortgage Loans) as shall be reasonably
requested by the Purchaser, including, without limitation, information
concerning the Master Servicer and/or Subservicer's servicing portfolio,
and its delinquency and loss experience through the year ended 2002 and any
applicable stub period in 2003, and (B) a final computer data file of data
for the Mortgage Loans to be included in the Pass-Through Transfer
(collectively, as to each Pass-Through Transfer, the "Irwin Information")
and to indemnify and hold harmless the Purchaser and its Affiliates for any
and all liabilities, losses and expenses arising under the Securities Act
of 1933, as amended, in connection with any material misstatement contained
in such Irwin Information or any omission of a material fact the inclusion
of which was necessary to make such Irwin Information, in light of the
circumstances under which the Irwin Information was made, not misleading;
(vi) deliver to the Purchaser and to any Person designated by the
Purchaser, such statements and audit letters of reputable, certified public
accountants pertaining to the written information provided by the Seller
referred to in clause (v) above as shall be reasonably requested by the
Purchaser;
(vii) deliver to the Purchaser and to any Person designated by
the Purchaser, such opinions of counsel as are customarily delivered by
originators and/or servicers in connection with Whole Loan Transfers or
Pass-Through Transfers;
(viii) provide, on an ongoing basis from information obtained
through its servicing of the Mortgage Loans, any information necessary to
enable the "tax matters person" for any REMIC in a Pass-Through Transfer,
including any master servicer or trustee acting in such capacity, to
perform its obligations in accordance with applicable law and customary
secondary mortgage market standards for securitized transactions rated
"AA/Aa" or higher by the Rating Agencies; and
(ix) provide, on an ongoing basis from information obtained
through its servicing of the Mortgage Loans, any information necessary to
enable the trustee in a Pass-Through Transfer to perform accurate investor
reporting for such transaction.
(c) Except for each Mortgage Loan that is not a MERS Mortgage Loan, in
the event the Purchaser has elected to have the Seller hold record title to the
Mortgages, prior to a Reconstitution Date the Seller or its designee shall
prepare an Assignment of Mortgage in blank from the Seller, acceptable to the
Purchaser in a Whole Loan or Pass-Through Transfer for each Mortgage Loan that
is part of such transfer and shall pay all preparation and recording costs
associated therewith so long as such Assignment of Mortgage has not previously
been recorded at the expense of the Seller. The Seller shall execute each
Assignment or Mortgage, track such Assignments of Mortgage to ensure they have
been recorded and deliver them as required by the trustee or such third party,
as the case may be, upon the Seller's receipt thereof. Additionally, the Seller
shall prepare and execute, at the direction of the Purchaser, any note
endorsements in connection with any and all Reconstitution Agreements.
(d) All Mortgage Loans not sold or transferred pursuant to a Whole
Loan Transfer or a Pass-Through Transfer, shall be subject to this Agreement and
shall continue to be serviced in accordance with the terms of this Agreement and
with respect thereto this Agreement shall remain in full force and effect.
(e) In connection with any Whole Loan Transfer or Pass-Through
Transfer, the Seller agrees to restate its representations and warranties
regarding individual Mortgage Loans under Section 7.02 as of the Closing Date
(or such other date specified in Section 7.02) and to restate its other
representations and warranties set forth in this Agreement as of the
Reconstitution Date.
(f) Purchaser or any third party hired by the Purchaser may conduct a
due diligence review on a pre-settlement basis on a reasonable sample of the
Mortgage Loans for the purpose of securitizing the Mortgage Loans and to insure
that the Mortgage Loans meet the characteristics set forth in the Term Sheet and
this Agreement. No due diligence review of the Mortgage Loans after the Closing
Date shall be done except for any review of the Mortgage Loans by or on behalf
of the Purchaser conducted for purposes of determining whether any Mortgage Loan
is in breach of any of the Mortgage Loan representations or warranties made in
Section 7.02.
(g) If the Purchaser determines in the course of its due diligence
review that any Mortgage Loan is in material nonconformity with any of the
Mortgage Loan requirements set forth in the Term Sheet or in breach of any of
the Mortgage Loan representations or warranties made in this Agreement, the
Seller shall either cure the nonconformity or breach in all material respects or
repurchase the Mortgage Loan. In the event of a repurchase, the price for such
Mortgage Loan shall be the Repurchase Price. In the event of a substitution, the
substituted mortgage loan must be a qualified substitute mortgage loan. A
qualified substitute mortgage loan will be any mortgage loan or mortgage loans
that is part of the same Group as the deleted Mortgage Loan and which satisfies
the requirements for a substitution set forth in the Term Sheet.
(h) All Mortgage Loans that were reported as originated before October
1, 2002 and are secured by property located in the State of Georgia will be
subject to the Purchaser's due diligence review. Any such Mortgage Loan that is
found to be in breach of the representation and warranty made in Section
7.02(xlvi) shall be repurchased by the Seller in accordance with the terms of
the Term Sheet and this Agreement.
* * *
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
IRWIN UNION BANK AND TRUST CO.,
Seller
By: /s/ Edwin K. Corbin
---------------------------------
Name: Edwin K. Corbin
Title: Vice President, Home Equity
Lending
Attest:
Name:
----------------------------
Title:
----------------------------
BEAR STEARNS ASSET BACKED
SECURITIES, INC., Purchaser
By: /s/ Jonathan Lieberman
---------------------------------
Name: Jonathan Lieberman
Title: Senior Managing Director
EXHIBIT 1
[RESERVED]
EXHIBIT 2
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser and
which shall be delivered to the Purchaser or its designee upon its request.
1. Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income, if applicable.
5. Verification of acceptable evidence of source and amount of down
payment, if applicable.
6. Credit report on Mortgagor.
7. Residential appraisal report, if applicable.
8. Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title
policy, i.e., map or plat, restrictions, easements, sewer
agreements, home association declarations, etc., if applicable.
9. All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
10. Hazard insurance policy, if applicable.
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
________________________ __, 2003
To:
(the "Depository")
As the Seller under the Mortgage Loan Purchase and Servicing
Agreement, dated as of ___________________ 2003, we hereby authorize and request
you to establish an account, as a Custodial Account, to be designated as
"__________, in trust for the Purchaser and various Mortgagors, Mortgage Loans,
P&I Account." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller. This letter is submitted to you in
duplicate. Please execute and return one original to us.
_____________
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Date:
----------------------------------
The undersigned, as Depository, hereby certifies that the
above-described account has been established under Account Number ___________ at
the office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above.
Depository
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Date:
----------------------------------
EXHIBIT 4
Reserved.
EXHIBIT 5
SERVICING ADDENDUM
SECTION 11. SERVICING.
Subsection 11.00 ADDITIONAL DEFINITIONS.
ANCILLARY INCOME: Additional servicing compensation in the form of
assumption fees, late payment charges, prepayment penalty fees and other
miscellaneous fees. The Seller's right to Ancillary Income shall terminate if
the Master Servicer is no longer the servicer.
BIF: The Bank Insurance Fund, or any successor thereto.
CODE: The Internal Revenue Code of 1986, or any successor statute
thereto.
COLLECTION PERIOD: Each calendar month, provided that the first
Collection Period shall begin on the day following the Cut-Off Date and end on
June 30, 2003.
DETERMINATION DATE: With respect to each Distribution Date, the close
of business of the last day of the month preceding the month in which such of
Distribution Date occurs.
DISTRIBUTION DATE: The eighteenth (18th) day of each month, commencing
on the eighteenth (18th) day of the month next following the month in which the
Cut-Off Date occurs, or if such eighteenth (18th) day is not a Business Day, the
first Business Day immediately following such eighteenth (18th) day.
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 Master Servicer pursuant to this Agreement), a determination made by the
Master Servicer that all Insurance Proceeds, Liquidation Proceeds and other
payments or recoveries which the Master Servicer, 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 Master Servicer, of each Final Recovery Determination.
MASTER SERVICER CERTIFICATION: A written certification signed by an
officer of the Master Servicer in the form attached hereto as Exhibit 13;
provided that if at the time of the delivery of such certification the
certification requirements of the Sarbanes-Oxley Act of 2002 set forth in the
rules and regulations of the Securities Exchange Act of 1934 or any guidance
issued by the staff of the Securities and Exchange Commission are materially and
adversely different than the required certification as of the Closing Date, the
Master Servicer Certification shall be as agreed to by the Master Servicer and
the Purchaser following a negotiation in good faith to determine how to comply
with any such new requirements.
PERMITTED INVESTMENTS: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed by
the United States of America or any agency or instrumentality of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal and/or state
banking authorities, provided that the commercial paper and/or the
short-term deposit rating and/or the long-term unsecured debt obligations
or deposits of such depository institution or trust company at the time of
such investment or contractual commitment providing for such investment are
rated in one of the two highest rating categories by each Rating Agency and
(b) any other demand or time deposit or certificate of deposit that is
fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed thirty
(30) days and with respect to (a) any security described in clause (i)
above and entered into with a depository institution or trust company
(acting as principal) described in clause (ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America
or any state thereof that are rated in one of the two highest rating
categories by each Rating Agency at the time of such investment or
contractual commitment providing for such investment; provided, however,
that securities issued by any particular corporation will not be Permitted
Investments to the extent that investments therein will cause the then
outstanding principal amount of securities issued by such corporation and
held as Permitted Investments to exceed 10% of the aggregate outstanding
principal balances of all of the Mortgage Loans and Permitted Investments;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or
on a specified date not more than one year after the date of issuance
thereof) which are rated in one of the two highest rating categories by
each Rating Agency at the time of such investment;
(vi) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as
evidenced in writing by each Rating Agency; and
(vii) any money market funds the collateral of which consists of
obligations fully guaranteed by the United States of America or any agency
or instrumentality of the United States of America the obligations of which
are backed by the full faith and credit of the United States of America
(which may include repurchase obligations secured by collateral described
in clause (i)) and other securities and which money market funds are rated
in one of the two highest rating categories by each Rating Agency.
PROVIDED, HOWEVER, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.
PRIME RATE: The prime rate announced to be in effect from time to time
as published as the average rate in the Wall Street Journal (Northeast Edition).
QUALIFIED DEPOSITORY: A depository, the accounts of which are insured
by the FDIC through the BIF or the SAIF and the short term debt ratings and the
long term deposit ratings of which are rated in the highest rating category by
each Rating Agency [provided, that Bank of the West shall be a Qualified
Depository].
REMIC: A "real estate mortgage investment conduit" as such term is
defined in the Code, as amended.
REMIC PROVISIONS: The provisions of the federal income tax law
relating to REMICs, which appear at Sections 860A through 860G of the Code, and
related provisions and regulations promulgated thereunder, as the foregoing may
be in effect from time to time.
SERVICING ADVANCES: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Master Servicer of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement, administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not limited
to, foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Master Servicer specifies the Mortgage Loan(s) to
which such expenses relate and, upon Purchaser's request, provides documentation
supporting such expense (which documentation would be generally acceptable to
Fannie Mae or Freddie Mac), and provided further that any such enforcement,
administrative or judicial proceeding does not arise out of a breach of any
representation, warranty or covenant of the Master Servicer hereunder), (c) the
management and liquidation of the Mortgaged Property if the Mortgaged Property
is acquired in full or partial satisfaction of the Mortgage, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may become
a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy
premiums and fire and hazard insurance coverage, (e) any expenses reasonably
sustained by the Master Servicer with respect to the liquidation of the
Mortgaged Property in accordance with the terms of this Agreement and (f)
compliance with the obligations under this Agreement.
SERVICING FEE: means, with respect to any Collection Period and
Mortgage Loan, the sum of (i) the product of (a) the Servicing Fee Rate
multiplied by a fraction, the numerator of which is the actual number of days in
such Collection Period and the denominator of which is 360 and (b) the Stated
Principal Balance of such Mortgage Loan (other than with respect to REO
Properties) as of the first day of such Collection Period and (ii) the Ancillary
Income. Such fee shall be payable monthly. For each Mortgage Loan, such
servicing fee will be payable solely from amounts representing interest and
Ancillary Income actually received by the Master Servicer from the related
Mortgagor.
SERVICING FEE RATE: means with respect to any Mortgage Loan, 1.00% per
annum.
Subsection 11.01 SELLER TO ACT AS MASTER SERVICER.
Seller, as independent contract servicer, shall service and administer
the Mortgage Loans in accordance with Accepted Servicing Practices and this
Agreement and shall have full power and authority, acting alone, to do or cause
to be done any and all things in connection with such servicing and
administration which the Master Servicer may deem necessary or desirable and
consistent with the terms of this Agreement. Without limiting the generality of
the foregoing, the Master Servicer shall not take any action which would result
in the Purchaser's interest in the Mortgage Loans being adversely affected. In
accordance with Accepted Servicing Practices, the Master Servicer shall not fail
to take any practicable and reasonable action which would result in Purchase's
interest in the Mortgage Loans being adversely affected.
Consistent with the terms of this Agreement and Accepted Servicing
Practices, the Master Servicer may waive, modify or vary any term of any
Mortgage Loan or consent to the postponement of strict compliance with any such
term or in any manner grant indulgence to any Mortgagor; provided, that in the
Master Servicer's determination, such waiver, modification, postponement or
indulgence relates to a reasonable business purpose; and provided further, that
such waiver, modification, postponement or indulgence shall not materially and
adversely affect the interests of the Purchaser; and provided further that such
action is consistent with any requirements of a guarantor with respect to the
Mortgage Loans. Without limiting the generality of the foregoing, during the
Master Servicer shall continue, and is hereby authorized and empowered, to
execute and deliver on behalf of itself, and the Purchaser, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Property. If required by the Master Servicer, the
Purchaser shall furnish the Master Servicer with powers of attorney at the
Purchaser's option and other documents necessary or appropriate to enable the
Master Servicer to carry out its servicing and administrative duties under this
Agreement. In addition, and without limitation, if a HELOC is in default or, in
the judgment of the Master Servicer, such default is reasonably foreseeable, the
Master Servicer may convert such HELOC to a fully amortizing floating rate HEL.
In servicing and administering the Mortgage Loans, the Master Servicer
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account and may take reasonable actions to encourage
or effect the termination of Loan Agreement that have not had an outstanding
Stated Principal Balance for at least 6 months. If Seller elects to utilize a
subservicer to perform any or all of Seller's duties hereunder, Seller shall
remain liable as though such duties were performed directly by Seller and Seller
shall be responsible for the payment of any and all fees of any such
subservicer. Irwin Home Equity Corporation shall be a subservicer with respect
to the Mortgage Loans.
The Seller may, without prior approval from any Person subject to any
limitations imposed by a guarantor, increase the Credit Limit on any HELOC in a
manner consistent with the Master Servicer's customary servicing practices.
The relationship of the Master Servicer, and of any successor to the
Master Servicer as servicer hereunder, to the Purchaser under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or general agent.
In connection with any HELOCs, the Master Servicer shall make any
Mortgage Interest Rate adjustments on each Interest Adjustment Date in
compliance with applicable regulatory adjustable mortgage loan requirements and
the related Loan Agreements. The Seller shall establish procedures to monitor
the Interest Adjustment Dates in order to ensure that it uses a published
interest rate in determining an interest rate change, and it will comply with
such procedures. In the event that a published interest rate is no longer
available, the Master Servicer shall choose a new comparable published interest
rate in accordance with the provisions hereof, the related Loan Agreements and
the Master Servicer's normal servicing practices, and shall provide the related
Mortgagor and the Purchaser with notice of the new published interest rate
sufficient under law and the related Loan Agreement. The Seller shall execute
and deliver all appropriate notices required by the applicable adjustable
mortgage loan laws and regulations and the related Loan Agreements regarding
such adjustments. If the Master Servicer fails to make a timely Mortgage
Interest Rate adjustment in accordance with the terms of the related Loan
Agreement, the Master Servicer shall use its own funds to satisfy any shortfall
in collections on the Mortgage Loans resulting therefrom for so long as such
shortfall shall continue. Any such amount paid by the Master Servicer shall be
reimbursable to it from any subsequent amounts collected on account of the
related Mortgage Loan with respect to such adjustments.
Subsection 11.02 COLLECTION OF MORTGAGE LOAN PAYMENTS.
The Seller shall use its best efforts to collect all payments due
under each Mortgage Loan when the same shall become due and payable and shall,
to the extent such procedures shall be consistent with this Agreement and the
terms and provisions of any related primary mortgage insurance policy, follow
such collection procedures as it follows with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account.
Subsection 11.03 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) With respect to each Mortgage Loan that comes into and continues
in default, the Master Servicer shall exercise its reasonable judgment to
determine whether to (a) foreclosure on the related Mortgaged Property, (b)
write off the unpaid Scheduled Principal Balance thereof as a bad debt, (c) take
a deed in lieu of foreclosure, (d) accept a short sale, (e) arrange for a
repayment plan, (f) agree to a modification thereof in accordance with this
Agreement, or (g) take an unsecured note in each case subject to the rights of
any related senior lien holder. The Seller shall use its best efforts to realize
upon defaulted Mortgage Loans in such a manner as will maximize the receipt of
principal and interest by the Purchaser, taking into account, among other
things, the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Master Servicer shall not be required to expend its own funds toward
the restoration of such property unless it shall determine in its discretion (i)
that such restoration will increase the proceeds of liquidation of the related
Mortgage Loan to the Purchaser after reimbursement to itself for such expenses,
and (ii) that such expenses will be recoverable by the Master Servicer through
Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property,
as contemplated in Subsection 11.05. In the event that any payment due under any
Mortgage Loan is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Master Servicer shall take such action as it shall deem to be in the best
interest of the Purchaser. The Seller shall notify the Purchaser in writing of
the commencement of foreclosure proceedings. In such connection, the Master
Servicer shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the related Mortgaged Property, as contemplated in Subsection
11.05.
(b) Notwithstanding the foregoing provisions of this Subsection 11.03,
with respect to any Mortgage Loan as to which the Master Servicer has received
actual notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the related Mortgaged Property, the Master Servicer shall
not either (i) obtain title to such Mortgaged Property as a result of or in lieu
of foreclosure or otherwise, or (ii) otherwise acquire possession of, or take
any other action, with respect to, such Mortgaged Property if, as a result of
any such action, the Purchaser would be considered to hold title to, to be a
mortgagee-in-possession of, or to be an owner or operator of such Mortgaged
Property within the meaning of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended from time to time, or any
comparable law, unless the Master Servicer has received approval from the
Purchaser and has also previously determined, based on its reasonable judgment
and a prudent report prepared by a Person who regularly conducts environmental
audits using customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Purchaser to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous
substances, hazardous materials, hazardous wastes, or petroleum-based
materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any federal, state or
local law or regulation, or that if any such materials are present for
which such action could be required, that it would be in the best
economic interest of the Purchaser to take such actions with respect
to the affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Subsection 11.03 shall be advanced by the Master Servicer, subject to the Master
Servicer's right to be reimbursed therefor from the Custodial Account as
provided in Subsection 11.05(v).
If the Master Servicer determines, in consultation with the Purchaser,
as described above, that it is in the best economic interest of the Purchaser to
take such actions as are necessary to bring any such Mortgaged Property into
compliance with applicable environmental laws, or to take such action with
respect to the containment, clean-up or remediation of hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials affecting
any such Mortgaged Property, then the Master Servicer shall take such action as
it deems to be in the best economic interest of the Purchaser. The cost of any
such compliance, containment, cleanup or remediation shall be advanced by the
Master Servicer, subject to the Master Servicer's right to be reimbursed
therefor from the Custodial Account as provided in Subsection 11.05(v).
(c) Up to and including the earlier of (i) March 31, 2003 or (ii) the
date of a Pass-Through Transfer, and thereafter only upon the request of the
Purchaser, the Seller shall also notify the Purchaser upon learning of any state
insolvency or federal bankruptcy proceedings in which any Mortgagor is seeking
relief or is the defendant debtor, or of the death or incapacity or any
Mortgagor or guarantor. Such notice shall be provided to the Purchaser or its
designee in the remittance report provided under Section 11.05 for the
applicable Distribution Date.
Subsection 11.04 ESTABLISHMENT OF CUSTODIAL ACCOUNTS; DEPOSITS IN
CUSTODIAL ACCOUNTS.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
with a Qualified Depository, in the form of time deposit or demand accounts.
Funds deposited in the Custodial Account shall at all times be insured by the
FDIC up to the FDIC insurance limits, or must be invested in Permitted
Investments for the benefit of the Purchaser. Upon the request of the Purchaser,
the Master Servicer shall deliver to the Purchaser a Custodial Account Letter
Agreement in the form of Exhibit 3.
The Seller shall deposit in the Custodial Account on a daily basis
within two Business Days of receipt, and retain therein the following payments
and collections received by it subsequent to the related Cut-Off Date:
(i) all payments on account of principal including Principal
Prepayments on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Subsections 11.10 and 11.11, and applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in accordance with
Accepted Servicing Practices, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property which
are not released to the Mortgagor in accordance with Accepted Servicing
Practices, the loan documents or applicable law;
(vi) all proceeds of any Mortgage Loan repurchased in accordance with
Subsection 7.03;
(vii) any amounts required to be deposited by the Master Servicer
pursuant to Subsection 11.11 in connection with the deductible clause in any
blanket hazard insurance policy. Such deposit shall be made from the Master
Servicer's own funds, without reimbursement therefor;
(viii) any amounts required to be deposited by the Master Servicer in
connection with any REO Property pursuant to Subsection 11.13; and
(ix) any amounts required to be deposited in the Custodial Account
pursuant to Subsections 11.19 or 11.20.
The foregoing requirements for deposit in the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, Ancillary Income need not be deposited by the
Master Servicer in the Custodial Account. Such Custodial Account shall be an
Eligible Account. Any interest or earnings on funds deposited in the Custodial
Account by the depository institution shall accrue to the benefit of the Master
Servicer and the Master Servicer shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Subsection 11.05(iii). The
Seller shall give notice to the Purchaser of the location of the Custodial
Account when established and prior to any change thereof.
Subsection 11.05 PERMITTED WITHDRAWALS FROM THE CUSTODIAL ACCOUNT.
The Seller may, from time to time, withdraw from the Custodial Account
for the following purposes:
(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Subsection 11.14;
(ii) to reimburse itself for unreimbursed Servicing Advances, the
Master Servicer's right to reimburse itself pursuant to this subclause (ii) with
respect to any Mortgage Loan being limited to related Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds and such other amounts as may be
collected by the Master Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of such reimbursement, the
Master Servicer's right thereto shall be prior to the rights of the Purchaser,
except that, where the Master Servicer is required to repurchase a Mortgage
Loan, pursuant to Subsection 7.03, the Master Servicer's right to such
reimbursement shall be subsequent to the payment to the Purchaser of the
Repurchase Price pursuant to Subsection 7.03 and all other amounts required to
be paid to the Purchaser with respect to such Mortgage Loans;
(iii) to pay to itself pursuant to Subsection 11.21 as servicing
compensation (a) any interest earned on funds in the Custodial Account (all such
interest to be withdrawn monthly not later than each Distribution Date), and (b)
the Servicing Fee;
(iv) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Subsection 7.03, all amounts received thereon and not
distributed as of the date on which the related Repurchase Price is determined;
(v) to pay, or to reimburse the Master Servicer for advances in
respect of, expenses incurred in connection with any Mortgage Loan pursuant to
Subsection 11.03(b), but only to the extent of amounts received in respect of
the Mortgage Loans to which such expense is attributable;
(vi) to reimburse itself for any expenses that are reimbursable
pursuant to Subsection 11.03;
(vii) Reserved;
(viii) to reimburse itself to the extent principal collections are
available for Draws as set forth in Section 11.25; and
(ix) to clear and terminate the Custodial Account on the termination
of this Agreement.
The Seller shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Custodial Account pursuant to such subclauses (ii), (iii), (iv), (v), (vi)
and (viii) above. The Seller shall provide written notification in the form of
an Officers' Certificate to the Purchaser, on or prior to the next succeeding
Distribution Date, upon making any withdrawals from the Custodial Account
pursuant to subclause (v) above.
Subsection 11.06 RESERVED.
Subsection 11.07 RESERVED.
Subsection 11.08 RESERVED.
Subsection 11.09 TRANSFER OF ACCOUNTS.
The Seller may transfer the Custodial Account to a different Qualified
Depository institution from time to time. Such transfer shall be made only upon
obtaining the prior written consent of the Purchaser. In any case, the Custodial
Account shall be an Eligible Account.
Subsection 11.10 MAINTENANCE OF INSURANCE.
(a) With respect to each Mortgage Loan, the Master Servicer shall
maintain accurate records reflecting the fire and casualty insurance coverage
maintained by the related Mortgagors with respect to the Mortgaged Properties in
accordance with its normal servicing practices. The Master Servicer shall, if it
has received notice of a default or deficiency in respect of the payment of any
ground rents, taxes, assessments, water rates or casualty insurance premiums or
other charges that are or may become a lien upon the related Mortgaged Property,
notify the related Mortgagor and the holder of the first lien on the related
Mortgaged Property.
(b) To the extent permitted under the related Mortgage Loan Documents,
and to the extent the Master Servicer receives notice that a hazard insurance
policy has been cancelled, the Master Servicer shall, to the extent consistent
with its normal servicing practices, cause to be maintained for each Mortgage
Loan hazard insurance naming the Master Servicer or the Subservicer as loss
payee thereunder, and providing extended coverage in an amount at least equal to
the lesser of (i) the maximum insurable value of the improvements securing such
Mortgage Loan from time to time or (ii) the principal balance owing on such
Mortgage Loan from time to time. The Master Servicer shall monitor the
maintenance of any such hazard insurance so obtained in accordance with its
normal servicing practices.
(c) The Master Servicer shall cause to be maintained with respect to
any REO Property fire insurance with extended coverage in an amount at least
equal to the amount necessary to avoid the application of any co-insurance
clause contained in the related hazard insurance policy. Amounts collected by
the Master Servicer under any such policies, other than amounts to be applied to
the restoration or repair of Mortgaged Property or REO Property or amounts
released to the Mortgagor in accordance with the Master Servicer's normal
servicing practices, shall be deposited into the Custodial Account to the extent
provided in Section 11.13.
(d) If, upon the origination of a Mortgage Loan, the related Mortgaged
Property was in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards, and flood insurance
has been made available, the Master Servicer shall cause to be maintained, to
the extent required by the related Mortgage Documents, a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration with a generally acceptable insurance carrier, in an amount
representing coverage at least equal to the lesser of (i) the Stated Principal
Balance of such Mortgage Loan, (ii) the full insurable value of such Mortgaged
Property or (iii) the maximum amount of insurance available under the Flood
Disaster Protection Act of 1973, as amended. With respect to any REO Property,
the Master Servicer shall also maintain, if applicable, flood insurance in an
amount at least equal to the lesser of (i) the maximum insurable value of the
improvements that are a part of such property and (ii) the Stated Principal
Balance owing on the related Mortgage Loan at the time of foreclosure or grant
of deed in lieu of foreclosure plus accrued interest and related liquidation
expenses.
(e) Any amounts collected by the Master Servicer under any insurance
policy maintained pursuant to this Section, other than amounts to be applied to
the restoration or repair of Mortgaged Property or released to a Mortgagor in
accordance with the Master Servicer's normal servicing practices, shall be
deposited into the Custodial Account. Any cost incurred by the Master Servicer
in maintaining any such insurance shall be added to the amount owing under the
related Mortgage Loan where the terms of the related Mortgage Loan Documents so
permit; provided, that the addition of any such cost shall not be taken into
account for purposes of calculating the Stated Principal Balance of such
Mortgage Loan or distributions to be made to the Purchaser. Such costs shall be
recoverable by the Master Servicer pursuant to Section 11.05.
(f) The Master Servicer shall be under no obligation to maintain or
require any Mortgagor to maintain earthquake, title or other additional
insurance, and shall be under no obligation itself to maintain any such
additional insurance on property acquired in respect of any Mortgage Loan, other
than pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
Subsection 11.11 RESERVED.
Subsection 11.12 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.
The Master Servicer shall maintain, at its own expense, with a
responsible company, a banker's blanket fidelity bond and an errors and
omissions insurance policy, in amounts required by Fannie Mae or Freddie Mac and
as are commercially available and at costs that are not generally regarded as
excessive by industry standards. Any fidelity bond shall protect against
dishonest acts of officers and employees. No provision of this Subsection 11.12
requiring the fidelity bond and errors and omissions insurance shall diminish or
relieve the Master Servicer from its duties and obligations as set forth in this
Agreement. Upon request of the Purchaser, the Master Servicer shall cause to be
delivered to the Purchaser a certified true copy of the fidelity bond and
insurance policy and a statement from the surety and the insurer that such
fidelity bond or insurance policy shall in no event be terminated or materially
modified without thirty (30) days' prior written notice to the Purchaser.
The Master Servicer shall be deemed to have complied with this
provision if any of its affiliates has such a fidelity bond and errors and
omissions policy and, by the terms of such policy the coverage afforded
thereunder extends to the Master Servicer.
Subsection 11.13 TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
In the event that title to the Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be taken in the name of the Purchaser or its designee. Any Person or
Persons holding such title other than the Purchaser shall acknowledge in writing
that such title is being held as nominee for the benefit of the Purchaser.
The Seller shall either itself or through an agent selected by the
Master Servicer, manage, conserve, protect and operate each REO Property (and
may temporarily rent the same) in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. If a REMIC election is or is to be made with respect to the arrangement
under which the Mortgage Loans and any REO property are held, the Master
Servicer shall manage, conserve, protect and operate each REO Property in a
manner which does not cause such REO Property to fail to qualify as "foreclosure
property" within the meaning of Section 860G(a)(8) of the Code or result in the
receipt by such REMIC of any "income from non-permitted assets" within the
meaning of Section 860F(a)(2)(B) of the Code or any "net income from foreclosure
property" within the meaning of Section 860G(c)(2) of the Code. The Seller shall
cause each REO Property to be inspected promptly upon the acquisition of title
thereto and shall cause each REO Property to be inspected at least annually
thereafter. The Seller shall make or cause to be made a written report of each
such inspection. Such reports shall be retained in the Mortgage File and copies
thereof shall be forwarded by the Master Servicer to the Purchaser. The Seller
shall use its best efforts to dispose of the REO Property as soon as possible
and shall sell such REO Property in any event within three (3) years after title
has been taken to such REO Property, unless the Master Servicer determines, and
gives appropriate notice to the Purchaser, that a longer period is necessary for
the orderly liquidation of such REO Property. If a period longer than three
years is necessary to sell any REO property, (i) the Master Servicer shall
report monthly to the Purchaser as to the progress being made in selling such
REO Property and (ii) if, with the written consent of the Purchaser, a purchase
money mortgage is taken in connection with such sale, such purchase money
mortgage shall name the Master Servicer as mortgagee, and a separate servicing
agreement among the Master Servicer and the Purchaser shall be entered into with
respect to such purchase money mortgage. Notwithstanding the foregoing, if a
REMIC election is made with respect to the arrangement under which the Mortgage
Loans and the REO Property are held, such REO Property shall be disposed of
within three (3) years or such other period as may be permitted under Section
860G(a)(8) of the Code.
With respect to each REO Property, the Master Servicer shall segregate
and hold all funds collected and received in connection with the operation of
the REO Property separate and apart from its own funds or general assets and
shall deposit or cause to be deposited in the Custodial Account, on a daily
basis within five Business Days of receipt all revenues received with respect to
the related REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Subsection 11.10 hereof and
the fees of any managing agent acting on behalf of the Master Servicer.
The Seller shall furnish to the Purchaser on each Distribution Date, a
statement listing each REO Property for the previous month.
Each REO Disposition shall be carried out by the Master Servicer at
such price and upon such terms as the Purchaser shall direct. If as of the date
title to any REO Property was acquired by the Master Servicer there were
outstanding unreimbursed Servicing Advances with respect to the REO Property,
the Master Servicer, upon an REO Disposition of such REO Property, shall be
entitled to reimbursement for any related unreimbursed Servicing Advances from
proceeds received in connection with such REO Disposition. The proceeds from the
REO Disposition, net of any payment to the Master Servicer as provided above,
shall be deposited in the Custodial Account within two Business Days of receipt.
Subsection 11.14 DISTRIBUTIONS.
On each Distribution Date, the Master Servicer shall distribute to the
Purchaser all amounts credited to the Custodial Account as of the close of
business on the preceding Determination Date, net of charges against or
withdrawals from the Custodial Account pursuant to Subsection 11.05. In
addition, on each Distribution Date, the Master Servicer shall remit to the
Purchaser the amount payable to the Purchaser, if any, pursuant to Subsection
4.02.
All distributions made to the Purchaser on each Distribution Date
shall be based on the Mortgage Loans owned and held by the Purchaser, and shall
be made by wire transfer of immediately available funds to the account of the
Purchaser at a bank or other entity having appropriate facilities therefor, if
the Purchaser shall have so notified the Master Servicer or by check mailed to
the address of the Purchaser.
With respect to any remittance received by the Purchaser on or after
the second Business Day following the Business Day on which such payment was
due, the Master Servicer shall pay to the Purchaser interest on any such late
payment at an annual rate equal to Prime Rate, adjusted as of the date of each
change, plus three percentage points, but in no event greater than the maximum
amount permitted by applicable law. Such interest shall be paid by the Master
Servicer to the Purchaser on the date such late payment is made and shall cover
the period commencing with the day following such second Business Day and ending
with the Business Day on which such payment is made, both inclusive. Such
interest shall be remitted along with such late payment. The payment by the
Master Servicer of any such interest shall not be deemed an extension of time
for payment or a waiver of any Event of Default by the Master Servicer.
Subsection 11.15 REMITTANCE REPORTS.
No later than the Distribution Date, the Master Servicer shall furnish
to the Purchaser or its designee a report in Excel (or compatible) electronic
format (that can be downloaded into a Sybase database) with the fields and
format as further described and set forth in Exhibit 6, together with such other
information with respect to the Mortgage Loans as the Purchaser may reasonably
require to allocate distributions made pursuant to this Agreement and provide
appropriate statements with respect to such distributions. On the same date, the
Master Servicer shall forward to the Purchaser by overnight mail a computer
readable magnetic tape containing the information set forth in the remittance
report with respect to the related Distribution Date.
Subsection 11.16 STATEMENTS TO THE PURCHASER.
No later than the Distribution Date, the Master Servicer shall forward
to the Purchaser or its designee a statement prepared by the Master Servicer
setting forth the status of the Custodial Account as of the close of business on
such Distribution Date and showing, for the period covered by such statement,
the aggregate amount of deposits into and withdrawals from the Custodial Account
of each category of deposit specified in Subsection 11.04 and each category of
withdrawal specified in Subsection 11.05. In addition, no later than the
Distribution Date, the Master Servicer shall provide the Purchaser a statement
with the information described in Subsection 4.02.
In addition, not more than ninety (90) days after the end of each
calendar year, the Master Servicer shall furnish to each Person who was the
Purchaser at any time during such calendar year, (i) as to the aggregate of
remittances for the applicable portion of such year, an annual statement in
accordance with the requirements of applicable federal income tax law, and (ii)
listing of the principal balances of the Mortgage Loans outstanding at the end
of such calendar year.
The Seller shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental taxing
authority or to any Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the Master
Servicer shall provide the Purchaser with such information concerning the
Mortgage Loans as is necessary for the Purchaser to prepare its federal income
tax return as any Purchaser may reasonably request from time to time.
The Master Servicer shall deliver a Data Tape within five Business
Days of the end of each calendar month.
Subsection 11.17 REAL ESTATE OWNED REPORTS.
Together with the statement furnished pursuant to Subsection 11.13,
with respect to any REO Property, the Master Servicer shall furnish to the
Purchaser, upon its request, a statement covering the Master Servicer's efforts
in connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month, together with
the operating statement. Such statement shall be accompanied by such other
information as the Purchaser shall reasonably request.
Subsection 11.18 LIQUIDATION REPORTS.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed-in-lieu of foreclosure, the Master
Servicer shall deliver to the Purchaser, upon its request, within three Business
Days after completion of the foreclosure sale a liquidation report with respect
to such Mortgaged Property.
Subsection 11.19 ASSUMPTION AGREEMENTS.
In any case in which a Mortgaged Property is about to be conveyed by
the related Mortgagor, whether by absolute conveyance, contract of sale or
otherwise, and whether or not such Mortgagor remains liable thereon, and the
Master Servicer has knowledge of such prospective conveyance, the Master
Servicer shall effect assumptions in accordance with the terms of any
due-on-sale provision contained in the related Mortgage Documents. The Master
Servicer shall enforce any due-on-sale provision contained in such Mortgage
Documents to the extent the requirements thereunder for an assumption of the
related Mortgage Loan have not been satisfied, to the extent permitted by such
Mortgage Documents, unless such provision is not exercisable under applicable
law or governmental regulations or, in the Master Servicer's judgment, such
exercise is reasonably likely to result in legal action by such Mortgagor, or
such conveyance is in connection with a permitted assumption of such Mortgage
Loan.
The Master Servicer shall be entitled to (i) execute assumption
agreements, substitution agreements and instruments of satisfaction or
cancellation or of partial or full release or discharge, or any other document
contemplated by this Agreement or other comparable instruments with respect to
the Mortgage Loans and the related Mortgaged Properties, and (ii) approve the
granting of an easement on Mortgaged Property in favor of another Person, any
alteration or demolition of such Mortgaged Property or other similar matters, if
it has determined, exercising its good faith business judgment in the same
manner as it would if it were the owner of the related Mortgage Loan, that the
security for, and the timely and full collection of, such Mortgage Loan would
not be adversely affected thereby. The Master Servicer shall notify the
Purchaser that any such assumption or substitution agreement has been completed
by forwarding to the Custodian the original copy of such assumption or
substitution agreement, which the Custodian shall add to the related Mortgage
File and which shall, for all purposes, be considered part of such Mortgage File
to the same extent as all other documents and instruments constituting a part
thereof. The Master Servicer shall retain as servicing compensation any fee
collected by the Master Servicer for entering into an assumption or substitution
of liability agreement. A partial release pursuant to this Section shall be
permitted only if the Combined Loan-to-Value Ratio for the related Mortgage Loan
after such partial release does not exceed the Combined Loan-to-Value Ratio for
such Mortgage Loan as of the related Cut-Off Date.
Notwithstanding the provisions of this Section or any other provision
of this Agreement, the Master Servicer shall not be deemed to be in default,
breach or violation of any of its obligations hereunder by reason of any
conveyance by a Mortgagor of the related Mortgaged Property or any assumption of
a Mortgage Loan by operation of law with respect to which the Master Servicer
determines in good faith that it may be restricted by law from preventing, for
any reason whatsoever, or if the exercise of such right would impair or threaten
to impair any recovery under any applicable insurance policy or, in the Master
Servicer's judgment, would be reasonably likely to result in legal action by
such Mortgagor.
Subsection 11.20 SATISFACTION OF MORTGAGES AND RELEASE OF MORTGAGE
FILES.
Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Purchaser by a certification of a servicing officer of the Master Servicer
(a "Servicing Officer"), which certification shall include a statement to the
effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant to
Subsection 11.04 have been or will be so deposited, and shall request execution
of any document necessary to satisfy the Mortgage Loan and delivery to it of the
portion of the Mortgage File held by the Purchaser or the Purchaser's designee.
Upon receipt of such certification and request, the Purchaser, shall promptly
release the related mortgage documents to the Master Servicer and the Master
Servicer shall prepare and process any satisfaction or release. No expense
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Custodial Account or the Purchaser.
In the event the Master Servicer satisfies or releases a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or should it otherwise prejudice any right the Purchaser may have under
the mortgage instruments, the Master Servicer, upon written demand, shall remit
to the Purchaser the then outstanding principal balance of the related Mortgage
Loan by deposit thereof in the Custodial Account. The Seller shall maintain the
fidelity bond insuring the Master Servicer against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures set
forth herein.
From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including for this purpose collection under any Primary
Mortgage Insurance Policy, the Purchaser shall, upon request of the Master
Servicer and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the requested portion of the related Mortgage File
held by the Purchaser to the Master Servicer. Such servicing receipt shall
obligate the Master Servicer to return the related Mortgage documents to the
Purchaser when the need therefor by the Master Servicer no longer exists, unless
the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Custodial Account or the Mortgage
File or such document has been delivered to an attorney, or to a public trustee
or other public official as required by law, for purposes of initiating or
pursuing legal action or other proceedings for the foreclosure of the Mortgaged
Property either judicially or non-judicially, and the Master Servicer has
delivered to the Purchaser a certificate of a Servicing Officer certifying as to
the name and address of the Person to which such Mortgage File or such document
was delivered and the purpose or purposes of such delivery. Upon receipt of a
certificate of a Servicing Officer stating that such Mortgage Loan was
liquidated, the servicing receipt shall be released by the Purchaser to the
Master Servicer.
Subsection 11.21 SERVICING COMPENSATION.
As compensation for its services hereunder, the Master Servicer shall
be entitled to receive on the Mortgage Loans the amounts provided for as the
Master Servicer's Servicing Fee (which includes any Ancillary Income). Ancillary
Income shall be retained by the Master Servicer to the extent not required to be
deposited in the Custodial Account. The Seller shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement therefor except as specifically
provided for.
Subsection 11.22 RESERVED.
Subsection 11.23 ACCESS TO CERTAIN DOCUMENTATION.
The Seller shall provide to any federal or state banking or insurance
regulatory authority that may exercise authority over the Purchaser access to
the documentation regarding the Mortgage Loans serviced by the Master Servicer
required by applicable laws and regulations. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Master Servicer.
Subsection 11.24 REPORTS AND RETURNS TO BE FILED BY THE MASTER
SERVICER.
In the event a REMIC election is made, following the foreclosure sale
or abandonment of any Mortgaged Property, the Master Servicer shall report
foreclosure sale or abandonment as required pursuant to Section 60505 of the
Code.
Subsection 11.25 COMPLIANCE WITH REMIC PROVISIONS.
If a REMIC election has been made with respect to the arrangement
under which the Mortgage Loans and REO Property are held, the Master Servicer
shall not take any action, cause the REMIC to take any action or fail to take
(or fail to cause to be taken) any action that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of the
REMIC as a REMIC or (ii) result in the imposition of a tax upon the REMIC
(including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on "contributions" to a REMIC set
forth in Section 860G(d) of the Code) unless the Master Servicer has received an
Opinion of Counsel (at the expense of the party seeking to take such action) to
the effect that the contemplated action will not endanger such REMIC status or
result in the imposition of any such tax.
Notwithstanding anything in this Agreement to the contrary, the Master
Servicer (a) shall not permit any modification with respect to any Mortgage Loan
that would change the Mortgage Interest Rate and (b) shall not (unless the
Mortgagor is in default with respect to the Mortgage Loan or such default is, in
the judgment of the Master Servicer, reasonably foreseeable) make or permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both (i) effect an exchange or reissuance of such Mortgage Loan under Section
1001 of the Code (or Treasury regulations promulgated thereunder) and (ii) cause
any REMIC to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions" after the startup date under
the REMIC Provisions.
The Seller shall not permit the creation of any "interests" (within
the meaning of Section 860G of the Code) in any REMIC. The Seller shall not
enter into any arrangement by which a REMIC will receive a fee or other
compensation for services nor permit a REMIC to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
Subsection 11.26 DRAW AMOUNTS.
The Master Servicer will advance any Draws made with respect to the
HELOCs in accordance with the related Loan Agreements. The Master Servicer shall
retain from principal collections on the HELOCs an amount equal to any Draws
made with respect to the HELOCs. Purchaser shall purchase at par the portion, if
any, of the principal balance of any HELOC attributable to Draws for which the
Master Servicer is not reimbursed from principal collections.
Subsection 11.27. ANNUAL STATEMENT AS TO COMPLIANCE.
The Seller shall deliver to the Purchaser, not later than March 15 of
each year, commencing in 2004, an Officer's Certificate stating as to each
signer thereof that (i) a review of the activities of the Master Servicer during
the preceding calendar year and of its performance under this Agreement has been
made under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Master Servicer has fulfilled all of its
obligations under this Agreement throughout such year, or if there has been a
default in the fulfillment of any such obligation, specifying each such default
known to such officer and the nature and status thereof. The statement required
pursuant to Section 11.27 shall accompany such Officer's Certificate.
Subsection 11.28. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT.
Not later than March 15 of each year, commencing in 2004, the Master
Servicer shall deliver or cause to be delivered to the Purchaser a report,
prepared by the Independent Accountants of the Master Servicer, stating that
such Independent Accountants (i) have conducted an examination of certain
documents and records of the Master Servicer (or an appropriate Affiliate
thereof) relating to the servicing of the mortgage loans being serviced by the
Master Servicer under servicing agreements similar to this Agreement (which
agreements shall be described in a schedule to such report) substantially as
required by the Uniform Single Attestation Program for Mortgage Bankers and (ii)
did not discover any exceptions or errors relating to the servicing activities
of the Master Servicer (including the servicing of Mortgage Loans subject to
this Agreement) that, in the opinion of such Independent Accountants, are
material, except for such exceptions as shall be set forth in such report.
Subsection 11.29. MASTER SERVICER CERTIFICATION.
(a) In the event the Purchaser elects a Pass-Through Transfer with
respect to some or all of the Mortgage Loans and one or more periodic reports,
including an annual report on Form 10-K, must be filed with the Securities and
Exchange Commission subsequent to such transfer with respect to the year ending
on December 31, 2003, the Master Servicer, not later than March 25, 2004, shall
deliver a signed Master Servicer Certification to the Purchaser. Beginning with
the year ending on December 31, 2004, and each year thereafter, if filings under
the Securities Exchange Act of 1934 cannot be suspended because there are more
than 300 security holders with respect to a Pass-Through Transfer at the end of
any year or the Master Servicer and the Purchaser mutually agree to continue
voluntarily to file periodic reports under the Securities Exchange Act of 1934,
as necessary, the Master Servicer shall also deliver a signed Master Servicer
Certification to the Purchaser for any such year. The Master Servicer hereby
authorizes any signed Master Servicer Certification to be filed as part of the
annual report on Form 10-K. The Purchaser agrees to furnish promptly to the
Master Servicer, upon request, any information within its control related to the
Master Servicer Certification as the Master Servicer reasonably deems
appropriate to enable the Master Servicer to prepare and timely deliver any
Master Servicer Certification. To that end, no later than March 1, 2004 the
Purchaser shall cause to be delivered to the Master Servicer a complete copy
(except for the Certification) of the annual report on Form 10-K for 2003 to be
filed by or on behalf of the Purchaser. The copy of the annual report on Form
10-K to be delivered to the Master Servicer shall be sent by overnight or Fedex
delivery or by other similar means.
(b) The Master Servicer and the Purchaser shall each indemnify and
hold harmless the other party and its officers, directors, agents and affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments and other costs and expenses arising out
of or based upon a breach by the Master Servicer or the Purchaser or any of its
officers, directors, agents or affiliates of its respective obligations under
this Subsection 11.29 or the negligence, bad faith or willful misconduct of the
Master Servicer or the Purchaser in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the
indemnified party, then the indemnifying party agrees that it shall contribute
to the amount paid or payable by the indemnified party as a result of the
losses, claims, damages or liabilities of the indemnified party in such
proportion as its appropriate to reflect the relative fault of the indemnifying
party on the one hand and the indemnified party on the other in connection with
a breach of the indemnifying party's obligations under this Subsection 11.29 or
the indemnifying party's negligence, bad faith or willful misconduct in
connection therewith.
EXHIBIT 6
FORM OF MONTHLY DATA
EXHIBIT 7
SERVICING TRANSFER INSTRUCTIONS
EXHIBIT 8
FORM OF ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
This Assignment, Assumption and Recognition Agreement (the
"Agreement") is made and entered into as of [___________], 200[_] (the "Closing
Date"), among [__________________________], a [__________] corporation, having
an address at [___________________] (the "Assignor"),
[_____________________________], a [___________________] corporation, having an
address at [_________________________________] (the "Assignee"), and
[__________________], a [___________] corporation, having an address at
[_________________] (the "Seller"). Any capitalized term used and not otherwise
defined herein shall have the meaning assigned to such term in the Purchase
Agreement (as defined below).
In consideration of the mutual promises and agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. ASSIGNMENT AND ASSUMPTION. Except as expressly provided for herein, the
Assignor hereby grants, transfers and assigns to the Assignee (a) all of
its right, title and interest as "Purchaser" in, to and under that certain
Mortgage Loan Purchase and Servicing Agreement dated as of
[_______________], 200[__] and duly executed by the Seller and Bear Stearns
Asset Backed Securities, Inc. ("BSABS") (the "Purchase Agreement") attached
hereto as Exhibit A, only with respect to the Mortgage Loans, and (b) all
of its right, title and interest in and to each of the mortgage loans
identified in Exhibit B hereto (the "Mortgage Loans"). Notwithstanding
anything to the contrary contained herein, the Assignor is not assigning to
the Assignee any of its right, title and interest as "Purchaser" in, to and
under the Purchase Agreement with respect to any other mortgage loan other
than those set forth on Exhibit B.
Except as is otherwise expressly provided herein, the Assignor makes no
representations, warranties or covenants to the Assignee and the Assignee
acknowledges that the Assignor has no obligations to the Assignee under the
terms of the Purchase Agreement, or otherwise relating to the transaction
contemplated herein (including, but not limited to, any obligation to
repurchase any of the Mortgage Loans or to indemnify the Assignee), and
that all such obligations are assumed by the Seller.
The Assignor acknowledges and agrees that upon execution of this Agreement,
[____________] shall become the "Purchaser" under the Purchase Agreement,
and all representations, warranties and covenants by the "Seller" to the
"Purchaser" under such Purchase Agreement including, but not limited to,
the rights to require repurchase of any Mortgage Loan and to receive
indemnification, shall accrue to Assignee by virtue of this Agreement.
2. CONSIDERATION. In consideration for the sale of the Mortgage Loans to the
Assignee, the Assignee agrees to pay to the Assignor $_______. The Assignee
shall pay the Purchase Price to the Assignor by wire transfer of
immediately available funds to the account designated by the Assignor on or
before the Closing Date, as defined in this Confirmation.
3. SERVICING OF THE MORTGAGE LOANS. The Seller shall service the Mortgage
Loans on behalf of the Assignee in accordance with the Purchase Agreement.
The address of the "Purchaser" set forth in Section 16 of the Purchase
Agreement shall be changed to read as follows:
[___________________]
[___________________]
[___________________]
Attention: [________]
The wire transfer instructions for distributions to the Assignee on each
Distribution Date shall be as follows:
Bank:
ABA Routing Number:
For Credit to:
Attn:
4. STATUS OF PURCHASE AGREEMENT. The Assignor represents and warrants that (a)
the Purchase Agreement attached hereto as Exhibit A is a true, complete and
accurate copy of the Purchase Agreement, (b) the Purchase Agreement with
respect to each of the Mortgage Loans is in full force and effect as of the
date hereof, (c) the Purchase Agreement has not been amended or modified in
any respect, (d) there has been no waiver or modification or any agreement
to waive or modify any provision, nor has any notice of termination been
given, under the Purchase Agreement, (e) the Assignor is not in default,
and has received no notice of default, under the Purchase Agreement, and,
to the best of the Assignor's knowledge, the Seller is not in default under
the Purchase Agreement, and (f) to the best of the Assignor's knowledge,
there are no offsets, claims or defenses available to the Seller with
respect to the Purchase Agreement or Mortgage Loans.
5. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE ASSIGNOR. The Assignor
represents and warrants to, and covenants with, the Assignee that:
c. The Assignor is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
and has all requisite corporate power and authority to acquire, own
and sell the Mortgage Loans;
d. The Assignor has full corporate power and authority to execute,
deliver and perform under this Agreement, and to consummate the
transactions set forth herein. The execution, delivery and performance
of the Assignor of this Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all
necessary corporate action of the Assignor. This Agreement has been
fully executed and delivered by the Assignor and constitutes the valid
and legally binding obligation of the Assignor enforceable against the
Assignor in accordance with its respective terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium or other
similar laws relating to or affecting creditors' rights and to the
application of equitable principles in any proceeding, whether at law
or in equity;
e. No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Assignor in connection with the
execution, delivery or performance by the Assignor of this Agreement,
or the consummation by it of the transactions contemplated hereby;
f. There is no action, suit, proceeding, investigation or litigation
pending or, to the Assignor's knowledge, threatened, which either in
any instance or in the aggregate, if determined adversely to the
Assignor, would adversely affect the sale of the Mortgage Loans to the
Assignee, the execution, delivery or enforceability of this Agreement,
or the Assignor's ability to perform its obligations under this
Agreement;
g. Immediately prior to payment of the Purchase Price for the Mortgage
Loans, the Assignor is the lawful owner of the Mortgage Loans with the
full right to transfer the Mortgage Loans free from any and all claims
and encumbrances whatsoever.
h. The Assignor shall use its reasonable commercial efforts to cause to
be delivered to the Assignee all of the Mortgage Loan Documents in
accordance with Section 6.03 of the Purchase Agreement.
i. Each of the terms and conditions set forth in the Purchase Agreement
which are required to be satisfied on or before the Closing Date by
the Assignor in order for the Assignor to acquire title to the
Mortgage Loans has been satisfied unless waived by the prejudiced
party(ies).
j. The Assignor shall deliver to the Assignee on or before the Closing
Date the following documents:
(1) a fully executed Agreement and Purchase Agreement; and
(2) the Mortgage Loan Schedule;
6. Covenants, Representations and Warranties of the Seller. The Seller
represents and warrants to, and covenants with, the Assignee that:
a. The representations and warranties made by the Seller under Subsection
7.01 and Subsection 7.02 of the Purchase Agreement are true and correct in
all material respects as of the date hereof and no event has occurred
which, with notice or the passage of time, would constitute a default under
the Purchase Agreement.
b. The Seller acknowledges and agrees that upon execution of this
Agreement, [___________] shall become the "Purchaser" under the Purchase
Agreement, and all representations, warranties and covenants by the Seller
as the "Seller" thereunder, including, but not limited to, the
representations, warranties and covenants to repurchase any Mortgage Loan
and to indemnify the "Purchaser", shall accrue to [__________] by virtue of
this Agreement.
7. COVENANTS, REPRESENTATIONS AND WARRANTIES OF ASSIGNEE. The Assignee agrees
to be bound, as "Purchaser", by all of the terms, covenants and conditions
of the Agreement and the Mortgage Loans, and from and after the date
hereof, the Assignee assumes for the benefit of each of the Seller and the
Assignor all of the Assignor's obligations as "Purchaser" thereunder, with
respect to the Mortgage Loans;
8. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with the laws of
[________________], except to the extent preempted by federal law.
9. CONFLICT WITH PURCHASE AGREEMENT. To the extent there is any conflict
between the terms of the Purchase Agreement and this Agreement, the latter
shall be controlling, notwithstanding anything to the contrary contained in
the Purchase Agreement.
10. CAPITALIZED TERMS. All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the
Purchase Agreement.
11. COUNTERPARTS. This Agreement may be executed in any number of counterparts.
Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
[Assignor _______________], [Assignee],
the Assignor the Assignee
By: By:
---------------------------------- ------------------------------------
Its: Its:
---------------------------------- ------------------------------------
[Seller _________________],
the Seller
By:
----------------------------------
Its:
----------------------------------
EXHIBIT 9
SELLER'S UNDERWRITING GUIDELINES
EXHIBIT 10
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
WHEREAS, pursuant to the terms of the Mortgage Loan Purchase and Servicing
Agreement dated as of ________ (the "Agreement"), between __________ ("______")
and Bear Stearns Asset Backed Securities, Inc. ("BSABS"), ______ is selling
certain mortgage loans (the "Mortgage Loans") to BSABS;
AND WHEREAS, ______ is providing this Limited Power of Attorney pursuant to
the Agreement;
NOW, THEREFORE, ______ does hereby make, constitute and appoint BSABS,
______'s true and lawful agent and attorney-in-fact with respect to each
Mortgage Loan in ______'s name, place and stead: (i) to complete (to the extent
necessary) and to cause to be submitted for filing or recording in the
appropriate public filing or recording offices, all assignments of mortgage,
deeds of trust or similar documents, assignments or reassignments of rents,
leases and profits, in each case in favor of BSABS, and all Form UCC-2 or UCC-3
assignments of financing statements and all other comparable instruments or
documents with respect to the Mortgage Loans which are customarily and
reasonably necessary or appropriate to assign agreements, documents and
instruments pertaining to the Mortgage Loans, and to evidence, provide notice of
and perfect such assignments and conveyances in favor of BSABS in the public
records of the appropriate filing and recording offices; (ii) to file or record
in the appropriate public filing or recording offices, all other Mortgage Loan
documents to be recorded under the terms of the Agreement or any such Mortgage
Loan which have not been submitted for filing or recordation by ______ on or
before the date hereof or which have been so submitted but are subsequently lost
or returned unrecorded or unfiled as a result of actual or purported defects
therein, in order to evidence, provide notice of and perfect such documents in
the public records of the appropriate filing and recording offices; and (iii) to
do and perform all acts in connection with the servicing, administration and
management of the Mortgage Loans, including but not limited to:
(1) execute and deliver customary consents or waivers and other instruments and
documents,
(2) consent to transfers of any Mortgaged Property and assumptions of the
Mortgage Notes or Loan Agreements and related Mortgages,
(3) collect any insurance proceeds and other liquidation proceeds,
(4) effectuate foreclosure or other conversion of the ownership of the
Mortgaged Property securing any Mortgage Loan,
(5) execute and deliver any and all instruments of satisfaction or cancellation
or of partial or full release or discharge and all other comparable
instruments, with respect to the Mortgage Loans, and with respect to the
Mortgaged Properties, and
(6) execute all documents customarily and reasonably necessary and appropriate
for the transfer post-foreclosure of the previously Mortgaged Properties to
third parties, and then to collect the sales proceeds from that transfer.
The enumeration of particular powers herein is not intended in any way to
limit the grant to BSABS as ______'s attorney-in-fact of full power and
authority with respect to the Mortgage Loans to complete (to the extent
necessary), file and record any documents, instruments or other writings
referred to above as fully, to all intents and purposes, as ______ might or
could do if personally present, hereby ratifying and confirming whatsoever such
attorney-in-fact shall and may do by virtue hereof; and ______ agrees and
represents to those dealing with such attorney-in-fact that they may rely upon
this Limited Power of Attorney until termination thereof under the provisions of
Article III below. Any and all third parties dealing with BSABS as ______'s
attorney-in-fact may rely completely, unconditionally and conclusively on the
authority of BSABS, as applicable, and need not make any inquiry about whether
BSABS is acting pursuant to the Agreement. Any purchaser, title insurance
company or other third party may rely upon a written statement by BSABS that any
particular Mortgage Loan or related mortgaged real property in question is
subject to and included under this Limited Power of Attorney and the Agreement.
Any act or thing lawfully done hereunder by BSABS shall be binding on
______ and ______'s successors and assigns.
This Limited Power of Attorney shall continue in full force and effect
until the earliest occurrence of any of the following events:
(i) the transfer by BSABS of its servicing obligations under the
Agreement to another servicer;
(ii) with respect to any Mortgage Loan, such Mortgage Loan is no
longer a part of the Agreement; and
(iii) the termination of the Agreement in accordance with its terms.
Nothing herein shall be deemed to amend or modify the Agreement or the
respective rights, duties or obligations of ______ under the Agreement, and
nothing herein shall constitute a waiver of any rights or remedies thereunder.
Capitalized terms used but not defined herein have the respective meanings
assigned thereto in the Agreement.
IN WITNESS WHEREOF, ______ has caused this instrument to be executed and
its corporate seal to be affixed hereto by its officer duly authorized as of
___________, 200_.
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
ACKNOWLEDGEMENT
STATE OF _______________)
) ss:
COUNTY OF ______________)
On this ___ day of __________, 200__, before me appeared
_______________________, to me personally known, who, being by me duly sworn did
say that he/she is the _____________________ of _____________, and that the seal
affixed to the foregoing instrument is the corporate seal of said corporation,
and that said instrument was signed and sealed in behalf of said corporation by
authority of its board of directors, and said ____________ acknowledged said
instrument to be the free act and deed of said corporation.
Name:
-----------------------------------
Notary Public in and for said County
and State
My Commission Expires:
- --------------------------------------
EXHIBIT 11
CONTENTS OF DATA TAPE (BY LOAN)
1. Property Alpha State Code
2. Property Zip Code
3. Cut Off Date
4. Original Balance
5. Current Balance
6. Monthly Payment
7. Origination Date
8. First Payment Date
9. Property Value Amount
10. Product Type
11. Loan Type
12. Index
13. Next Payment
14. Margin
15. Rate Adjustment Frequency
16. Annual Interest Rate
17. Periodic Cap
18. Life Cap
19. Floor
20. Mature Date
21. Original Term
22. Remaining Term
23. Balloon/Full Amort
24. Documentation Type
25. Credit Rating
26. FICO
27. Property Type
28. Occupancy Code
29. Source Originator
30. Lien Position
31. Senior Lien Balance
32. Monthly Income
33. Total Other Debt
34. Housing DSR
35. Debt Service Ratio
36. Prepayment Penalty Indicator
37. Prepayment Term
38. Day Delinquent
39. Bankruptcy Code
40. Bankruptcy Code Description
41. Foreclosure Stop Code
42. Foreclosure Stop code Description
43. Length of Employment
44. Section 32 Loans
45. Sales Status
46. Loan Purpose Code Description
47. CLTV Calculation
48. HI Type
49. LO Type
50. Category Code
51. Prepayment Description
52. Number of Units
53. Conforming
EXHIBIT 12
CONTENTS OF DATA TAPE (ALL LOANS)
1. Total Number of Loans
2. Total Outstanding Balance
3. Average Outstanding Balance
4. WA Margin (HELOC only)
5. WA Coupon
6. WA Remaining Term to Maturity (months)
7. WA Original Term to Maturity (months)
8. WA CLTV
9. WA Debt-to-Income
10. Lien Position
11. Property Type
12. Credit Quality
13. WA FICO
14. Prepayment Penalty
EXHIBIT 13
CERTIFICATION TO BE
PROVIDED BY THE SERVICER WITH FORM 10-K
Re: ____ Home Equity Loan Trust
200_-__, Home Equity Loan
Asset-backed Certificates,
Series 200_-__
I, [identify the certifying individual], a [title] of
_________________________ (the "Servicer") in charge of servicing, certify that:
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution and servicing reports filed in
respect of periods included in the year covered by this annual report
of [_________];
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made,
not misleading as of the last day of the period covered by this annual
report;
3. Based on my knowledge, the distribution information and the servicing
information required to be provided to the Trustee by the Servicer
under the Pooling and Servicing Agreement is included in these
reports;
4. I am responsible for reviewing the activities performed by the
Servicer under the Pooling and Servicing Agreement and based upon my
knowledge and the annual compliance review required under the Pooling
and Servicing Agreement, and except as disclosed in the report, the
Servicer has fulfilled its obligations under the Pooling and Servicing
Agreement; and
5. These reports disclose all significant deficiencies relating to the
Servicer's compliance with the minimum servicing standards based upon
the report provided by an independent public accountant, and after
conducting a review in compliance with the Uniform Single Attestation
Program for Mortgage Bankers or similar standard as set forth in the
Pooling and Servicing Agreement or similar agreement, that is included
in these reports.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Pooling and Servicing Agreement, dated _______________ (the "Pooling
and Servicing Agreement"), among _____________ as depositor,
______________________________ as seller and servicer and _____________________
as trustee.
In giving the certifications above, I have reasonably relied on information
provided by the following unaffiliated third parties: [__________________].
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Date:
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SCHEDULE I
MORTGAGE LOAN SCHEDULE
SCHEDULE II
SCHEDULE OF ACTIONS AGAINST THE SELLER
SEE EXHIBIT A IN TAB 5.