MORTGAGE SERVICING
PURCHASE AND SALE AGREEMENT
HOMEBANC MORTGAGE CORPORATION
AND
CAROLINA FIRST BANK
June 6, 1995
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1 Definitions . . . . . . . . . . . . . . . . . . . 1
1.2 Singular/Plural; Gender; Captions . . . . . . . . 7
ARTICLE 2
PURCHASE AND SALE OF SERVICING
2.1 Purchase and Sale . . . . . . . . . . . . . . . . 8
2.2 Assumption . . . . . . . . . . . . . . . . . . . 8
2.3 Purchase Price . . . . . . . . . . . . . . . . . 9
2.4 Payment . . . . . . . . . . . . . . . . . . . . . 9
2.5 Adjustments . . . . . . . . . . . . . . . . . . . 10
2.6 Default Interest . . . . . . . . . . . . . . . . 11
ARTICLE 3
COVENANTS
3.1 Cooperation . . . . . . . . . . . . . . . . . . . 11
3.2 Access . . . . . . . . . . . . . . . . . . . . . 12
3.3 Confidentiality . . . . . . . . . . . . . . . . . 12
3.4 Consents . . . . . . . . . . . . . . . . . . . . 12
3.5 Solicitation . . . . . . . . . . . . . . . . . . 13
3.6 Mortgage Payments Received Before the Transfer
Date . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Notice to Mortgagors, Insurers, Etc. . . . . . . 14
3.8 Interest on Escrow Accounts . . . . . . . . . . . 15
3.9 Assignments . . . . . . . . . . . . . . . . . . . 15
3.10 Advances . . . . . . . . . . . . . . . . . . . . 16
3.11 Escrow Account Balances . . . . . . . . . . . . . 17
3.12 Delivery of Loan Documents and Servicing
Records . . . . . . . . . . . . . . . . . . . . . 18
3.13 Document Custodian . . . . . . . . . . . . . . . 18
3.14 Investor Reporting . . . . . . . . . . . . . . . 18
3.15 Mortgage Payments and Correspondence Received
After
Transfer Date . . . . . . . . . . . . . . . . . . 18
3.16 Costs and Expenses . . . . . . . . . . . . . . . 19
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Organization . . . . . . . . . . . . . . . . . . 20
4.2 Authority . . . . . . . . . . . . . . . . . . . . 20
4.3 Enforceability . . . . . . . . . . . . . . . . . 21
4.4 No Conflicts . . . . . . . . . . . . . . . . . . 21
4.5 Title . . . . . . . . . . . . . . . . . . . . . . 21
4.6 Compliance . . . . . . . . . . . . . . . . . . . 22
4.7 Mortgages . . . . . . . . . . . . . . . . . . . . 22
4.8 Accounts Receivable . . . . . . . . . . . . . . . 24
4.9 Broker . . . . . . . . . . . . . . . . . . . . . 24
4.10 Bulk Transfer . . . . . . . . . . . . . . . . . . 25
4.11 No Litigation Pending . . . . . . . . . . . . . . 25
4.12 No Consent or Notice Required . . . . . . . . . . 25
4.13 No Inquiries . . . . . . . . . . . . . . . . . . 26
4.14 Notice of Relief Requested Pursuant to the
Soldiers
and Sailors Relief Act of 1940 . . . . . . . . . 26
4.15 Disclosure . . . . . . . . . . . . . . . . . . . 26
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
5.1 Organization . . . . . . . . . . . . . . . . . . 27
5.2 Authority . . . . . . . . . . . . . . . . . . . . 27
5.3 Enforceability . . . . . . . . . . . . . . . . . 27
5.4 No Conflicts . . . . . . . . . . . . . . . . . . 28
5.5 Compliance . . . . . . . . . . . . . . . . . . . 28
5.6 Servicing . . . . . . . . . . . . . . . . . . . . 28
5.7 Broker . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification by Seller . . . . . . . . . . . . 29
6.2 Indemnification by Purchaser . . . . . . . . . . 30
6.3 Loss . . . . . . . . . . . . . . . . . . . . . . 31
6.4 Mitigation . . . . . . . . . . . . . . . . . . . 31
6.5 Notice . . . . . . . . . . . . . . . . . . . . . 32
6.6 Inspection . . . . . . . . . . . . . . . . . . . 32
6.7 Defense . . . . . . . . . . . . . . . . . . . . . 33
6.8 Opportunity to Cure . . . . . . . . . . . . . . . 34
6.9 Recoupment . . . . . . . . . . . . . . . . . . . 34
6.10 Survival . . . . . . . . . . . . . . . . . . . . 34
6.11 Escrow; Sole Remedy . . . . . . . . . . . . . . . 35
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ARTICLE 7
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
7.1 Accuracy of Representations and Warranties . . . 36
7.2 Compliance with Conditions . . . . . . . . . . . 36
7.3 No Actions . . . . . . . . . . . . . . . . . . . 36
7.4 Interim Servicing Agreement . . . . . . . . . . . 37
7.5 Consents and Approvals . . . . . . . . . . . . . 37
7.6 Sale Documents . . . . . . . . . . . . . . . . . 37
7.7. Transfer Documents . . . . . . . . . . . . . . . 38
ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
8.1 Accuracy of Representations and Warranties . . . 39
8.2 Compliance with Conditions . . . . . . . . . . . 39
8.3 No Actions . . . . . . . . . . . . . . . . . . . 39
8.4 Interim Servicing Agreement . . . . . . . . . . . 40
8.5 Consents and Approvals . . . . . . . . . . . . . 40
8.6 Sale Documents . . . . . . . . . . . . . . . . . 40
8.7 Transfer Documents . . . . . . . . . . . . . . . 41
ARTICLE 9
TERMINATION
9.1 Events of Termination . . . . . . . . . . . . . . 42
9.2 Requirements and Effect of Termination . . . . . 43
ARTICLE 10
MISCELLANEOUS
10.1 Notices . . . . . . . . . . . . . . . . . . . . . 44
10.2 Arbitration . . . . . . . . . . . . . . . . . . . 46
10.3 Entire Agreement; Amendment . . . . . . . . . . . 47
10.4 Binding Effect; Assignment . . . . . . . . . . . 47
10.5 Counterparts . . . . . . . . . . . . . . . . . . 48
10.6 Governing Law . . . . . . . . . . . . . . . . . . 48
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MORTGAGE SERVICING PURCHASE AND SALE AGREEMENT
This Mortgage Servicing Purchase and Sale Agreement is
entered into this 6th day of June 1995, by and between HomeBanc
Mortgage Corporation, a Georgia corporation ("Seller") and
Carolina First Bank, a South Carolina banking corporation
("Purchaser").
W I T N E S S E T H :
WHEREAS, Seller owns the right to service the Mortgages; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, all right, title and interest in
and to the Servicing in accordance with the terms and conditions
of this Agreement;
NOW, THEREFORE, in consideration of the mutual benefits to
be derived from this Agreement and of the representations,
warranties, conditions and promises hereinafter contained, Seller
and Purchaser hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. For the purposes of this Agreement and
any amendments hereto, the following terms shall have the
following meanings:
"Accrual Rate": A simple interest rate per annum, adjusted
weekly, equal to the Federal Funds Rate.
"Advances": Payments of principal, interest, taxes,
insurance premiums, ground rents, assessments, condominium
charges and similar charges advanced by Seller, with respect to
the Mortgages as required by the Servicing Agreements.
"Agency": FHLMC or FNMA, as applicable.
"Agreement": This Mortgage Servicing Purchase and Sale
Agreement and all exhibits and schedules attached hereto or
delivered pursuant hereto.
"Business Day": Any day other than a Saturday, Sunday, or
any other day on which banking institutions in the State of
Georgia or South Carolina are authorized or obligated by law or
by executive order to be closed.
"Confidentiality Agreement": That certain Confidentiality
Agreement between Purchaser and Seller dated May 2, 1995.
"Cut Off Date": May 31, 1995.
2
"Delinquency Rate": A simple interest rate per annum,
adjusted weekly, equal to the lesser of (i) the Federal Funds
Rate, plus six percent (6%) or (ii) the maximum rate allowed by
law.
"Delinquent Mortgage": A Mortgage (i) with respect to which
the payments by the mortgagor are ninety (90) days or more past
due as of the Cut Off Date, (ii) with respect to which
foreclosure proceedings have been instituted and are pending or
have been completed, or a deed in lieu of foreclosure has been
accepted or is pending, or (iii) with respect to which any
action, suit or processing before a court, governmental agency or
arbitrator has been instituted and is pending (other than (A) any
action, suit or proceeding seeking to recover ad valorem taxes,
and (B) any action, suit or proceeding under any bankruptcy,
reorganization, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction), all of (i), (ii) and (iii)
as of the Cut Off Date. For purposes of this definition,
payments by a mortgagor are considered ninety (90) days past due
on the Cut Off Date when the payments due for three months have
not been received by Seller in full on or before the Cut Off Date
(e.g., a Mortgage is 90 days past due on the Cut Off Date if each
of the payments due on the immediately preceding March 1, April 1
and May 1 has not been received by Seller in full on the Cut Off
Date).
"Earnest Money Deposit": The Three Million Two Hundred
Twenty Five Thousand Two Hundred Fifty Dollar ($3,225,250)
deposit made by Purchaser in Trust Company Bank together with any
interest earned thereon.
3
"Escrow Accounts": All escrow, impound and custodial
accounts maintained under the Servicing Agreements or otherwise
relating to the Mortgages including, without limitation, all
accounts established for purposes of receiving funds for the
payment of principal and interest, or taxes, insurance premiums,
ground rents, assessments, condominium charges, buy-down funds,
optional insurance funds and other charges relating to the
Mortgages.
"Escrow Agent": Trust Company Bank.
"Escrow Agreement": As defined in Section 6.11.
"Escrowed Funds": As defined in Section 6.11.
"Federal Funds Rate": For each calendar week, the rate of
interest per annum (rounded to the nearest 1/100 of 1%) which is
the weighted average of the rates on overnight federal funds
transactions arranged the first Business Day of each week by
federal funds brokers computed and released by the Federal
Reserve Bank of New York (or any successor) in substantially the
same manner as such Federal Reserve Bank currently computes and
releases the weighted average it refers to as the "Federal Funds
Effective Rate" at the date of this Agreement.
"FHLMC": The Federal Home Loan Mortgage Corporation.
4
"FNMA: The Federal National Mortgage Association.
"Interim Servicing Agreement": As defined in Section 2.1
hereof.
"Investor": Any Person who owns Mortgages or interests
therein subject to Servicing Agreements and for whom Seller
services the Mortgages.
"Loss": As defined in Section 6.3 hereof.
"Mortgages": Each of those loans secured by a first
priority lien on a 1-4 family residence, the Servicing for which
is to be sold and transferred pursuant to this Agreement and
described generally on EXHIBIT A hereto.
"Person": An individual, corporation, joint venture,
partnership, trust, limited liability company, unincorporated
association, government or any department or agency thereof, or
any other entity.
"PMI": The default insurance provided by private insurance
companies on certain Mortgages.
"Private Investor": Any Investor other than FHLMC or FNMA.
5
"Purchase Price": As defined in Section 2.3 hereof, subject
to adjustment as provided by Section 2.5 hereof.
"Purchase Price Percentage": As defined in Section 2.3
hereof.
"Purchaser": As defined in the recitals hereof.
"Records": All loan files, insurance files, tax records,
collector records, documents, ledgers, computer printouts and
other records, data or information relating to the Mortgages, the
Escrow Accounts or the Servicing.
"Purchaser Indemnitees": As defined in Section 6.1 hereof.
"Sale Date": June 6, 1995.
"Seller": As defined in the recitals hereof.
"Seller Indemnitee": As defined in Section 6.2 hereof.
"Seller's knowledge" or "best of Seller's knowledge" or
"Purchaser's knowledge" or "best of Purchaser's knowledge": The
actual knowledge of the executive officers of Seller or
Purchaser, as the case may be, or that knowledge any such person
would have obtained upon
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a reasonable examination of the records
of Seller in the ordinary course of his or her duties for Seller.
"Servicing": The rights and responsibilities of the Seller
with respect to servicing the Mortgages under the Servicing
Agreements, including, without limitation: (i) the right to
receive servicing fees, management fees, late charges,
insufficient funds fees and other ancillary income; (ii) all
right, title and interest of Seller in the Mortgages; (iii) the
right to hold and administer the Escrow Accounts; and (iv) all
obligations of Seller under the Servicing Agreements.
"Servicing Agreements": The agreements relating to the
rights and obligations of Seller as servicer of the Mortgages and
all other agreements otherwise pertaining to the rights and
obligations of Seller relating to the Mortgages and the
Servicing, including, without limitation, servicing agreements,
guaranty agreements, custodial agreements, indemnity agreements,
repurchase agreements, loan sale agreements, loan participation
agreements and others.
"Transfer Date": August 16, 1995, as to Mortgages serviced
for FHLMC and August 31, 1995, for all other Mortgages.
1.2 Singular/Plural; Gender; Captions. Where the context
so requires or permits, the use of the singular form includes the
plural, and the use of the plural form includes the singular, and
the use of any gender includes any and all genders. The captions
used in this
7
Agreement are inserted for convenience only and are
in no way intended to describe, interpret, define or limit the
scope or content of this Agreement or any provision hereof.
ARTICLE 2
PURCHASE AND SALE OF SERVICING
2.1 Purchase and Sale. Subject to the terms and conditions
of this Agreement, on the Sale Date Seller shall sell, transfer,
assign and convey to Purchaser, and Purchaser shall acquire from
Seller, all beneficial right, title and interest in and to the
Servicing, free and clear of all liens, charges and encumbrances,
except for customary liens and encumbrances imposed by Investors
pursuant to the Servicing Agreements. On the Sale Date,
Purchaser and Seller shall execute and deliver the Interim
Servicing Agreement substantially in the form of EXHIBIT B hereto
(the "Interim Servicing Agreement") evidencing the sale of such
beneficial right, title and interest and providing for the
servicing of the Mortgages between the Sale Date and the Transfer
Date and the compensation of Seller in connection therewith.
2.2 Assumption. From and after the Sale Date, Purchaser
shall assume the responsibility to service the Mortgages for
which Servicing is transferred hereunder in accordance with the
terms and conditions of the Servicing Agreements. Purchaser
shall not be responsible for any obligations or liabilities of
Seller except those obligations or liabilities specifically set
forth in the Servicing Agreements with respect to the Mortgages
and arising after the Sale Date.
8
2.3 Purchase Price. The purchase price (the "Purchase
Price") for the Servicing shall be an amount equal to 1.33% (the
"Purchase Price Percentage") of the aggregate unpaid principal
balance on the Cut Off Date of the Mortgages for which Servicing
is sold, excluding the aggregate unpaid principal balance of any
such Mortgages which on the Cut Off Date are Delinquent
Mortgages.
2.4 Payment. The Purchase Price shall be paid by Purchaser
to Seller, as follows:
(a) On the Sale Date, (i) Purchaser shall pay to
Seller by wire transfer of immediately available funds as
instructed by Seller an amount equal to sixty percent (60%) of
the Purchase Price, as determined on the Sale Date based on
Seller's good faith examination of its records pertaining to the
Servicing and the Mortgages, (ii) Purchaser shall cause the
Earnest Money Deposit, excluding any interest earned thereon, to
be released to Seller, and (iii) interest earned on the Earnest
Money Deposit shall be released to Purchaser;
(b) On the second Transfer Date, Purchaser shall pay
to Seller by wire transfer of immediately available funds as
instructed by Seller an amount equal to fifteen percent (15%) of
the Purchase Price, plus interest on that amount from the Sale
Date to the Transfer Date at the Accrual Rate; and
(c) On the other dates specified in Section 2.5
hereof, Seller or Purchaser, as the case may be, shall pay to the
other party the amount of the Purchase Price and interest
9
adjustments required to be paid thereunder by wire transfer of
immediately available funds as instructed by the receiving party.
2.5 Adjustments.
(a) If at any time within ninety (90) days after the
Transfer Date, the unpaid principal balance of any of the
Mortgages at the Cut Off Date, the status of Mortgages as
Delinquent Mortgages or any other information used in computing
the amount of the Purchase Price shall be found after calculation
of such amount to be incorrect, then the Purchase Price shall be
upwardly or downwardly adjusted, as appropriate, on the basis of
the appropriate information, and Purchaser shall promptly pay to
Seller the remainder of the Purchase Price due and owing plus
interest on such amount from the Sale Date to the date of payment
calculated at the Accrual Rate, or Seller shall promptly
reimburse Purchaser for overpayments of the Purchase Price plus
interest on such amount from the Sale Date to the date of payment
calculated at the Accrual Rate; and
(b) If at any time within twelve (12) months after the
Sale Date, a Private Investor cancels a Servicing Agreement
solely because of the failure of Seller to obtain such Private
Investor's consent (as required by the applicable Servicing
Agreement) to the transfer of Servicing to Purchaser hereunder or
because of Seller's failure to properly service the Mortgages
under the Interim Servicing Agreement, then Seller shall pay to
Purchaser an amount equal to the Purchase Price Percentage (or if
such termination occurs between the Sale Date and the second
Transfer Date, 85% of the Purchase Price Percentage) multiplied
10
by the unpaid principal balance, as of the date of cancellation
of the Servicing Agreement, of the Mortgage Loans serviced under
the canceled Servicing Agreement (other than Mortgage Loans that
on the Cut Off Date were Delinquent Mortgages). Purchaser shall
promptly pay to Seller any termination fees payable by or on
behalf of the Private Investor upon termination of the Servicing
Agreement to the extent received by Purchaser. Any adjustment
that occurs before the second Transfer Date will be settled at
the second Transfer Date.
2.6 Default Interest. Any payment due to Seller or
Purchaser under this Article 2 that is not made on the due date
thereof shall bear interest from the due date to the date paid at
the Delinquency Rate, and Seller or Purchaser, as the case may
be, shall be entitled to receive such interest in addition to the
payment otherwise due.
ARTICLE 3
COVENANTS
3.1 Cooperation. Seller and Purchaser shall cooperate
fully with each other and their respective counsel and other
representatives and advisors in connection with the steps
required to be taken as part of their respective obligations
under this Agreement.
3.2 Access. Seller shall allow Purchaser and its
attorneys, accountants, consultants and other authorized
representatives full access during normal business hours to
11
all of the properties, books, contracts, commitments, files, records
and other materials of Seller relating to the Servicing as may
reasonably be requested by Purchaser.
3.3 Confidentiality. Each party understands that certain
information which has been furnished and will be furnished in
connection with this transaction is confidential and proprietary,
and each party agrees that it will maintain the confidentiality
of such information and will not disclose it to others or use it
except in connection with the acquisition contemplated by this
Agreement, without the consent of the party furnishing such
information. Information that is generally known in the industry
concerning a party or among such party's creditors generally or
which has been disclosed to the other party by third parties who
have a right to do so shall not be deemed confidential or
proprietary information for these purposes. If the proposed
acquisition is not consummated, each party agrees to promptly
return to the other all confidential materials, and all copies
thereof, which have been furnished to it in connection with the
transactions contemplated hereby. Purchaser and Seller
acknowledge and agree that the provisions of this Section 3.3 are
in addition to and do not supersede the Confidentiality
Agreement, which shall survive the execution and termination of
this Agreement.
3.4 Consents. Seller and Purchaser shall use their
respective best efforts to obtain, prior to the Transfer Date,
the consents and approvals of Investors and other Persons
required by law or pursuant to contract to consummate the
transfer of Servicing contemplated hereby on the Transfer Date.
All such consents will be obtained without any cost or expense to
Purchaser and will be obtained without any adverse modification
in the terms of any of the
12
Servicing Agreements or the imposition
of any burdensome provisions or conditions on Purchaser (other
than such provisions or conditions as are customarily imposed by
Investors or other Persons in transactions of this nature).
3.5 Solicitation. From and after the date of this
Agreement, Seller shall not directly solicit mortgagors under the
Mortgages for purposes of refinancing any of the Mortgages. From
the date of this Agreement through the Transfer Date, Purchaser
shall not directly solicit mortgagors under the Mortgages for
purposes of refinancing any of the Mortgages. Nothing in this
Agreement shall prohibit Seller or Purchaser from taking
applications from mortgagors who initiate refinancing action on
their own or from making mass mailings (based on commercially
acquired mailing lists) and newspaper, radio and television
advertisements. If Seller breaches this covenant, Purchaser's
remedy shall be the right to reimbursement of the value of the
Servicing relating to the relevant Mortgages, which will be
deemed to be an amount equal to the Purchase Price Percentage of
the outstanding principal balance of the relevant Mortgages
immediately before refinancing; provided, however, that Purchaser
shall have no right to such reimbursement if the relevant
Mortgage was excluded from the calculation of the Purchase Price
for the Servicing (e.g., by being a Delinquent Mortgage on the
Cut Off Date).
3.6 Mortgage Payments Received Before the Transfer Date.
Prior to the Transfer Date, all payments received by Seller with
respect to each Mortgage shall be properly applied by Seller to
the account of the particular mortgagor. If Purchaser receives
any
13
payment on a Mortgage prior to the Transfer Date, Purchaser
shall forward such payment promptly to Seller by overnight mail.
3.7 Notice to Mortgagors, Insurers, Etc.
(a) Seller shall, at Seller's expense, mail to the
mortgagor of each Mortgage, no later than fifteen (15) days
before the Transfer Date, a letter advising the mortgagor of the
transfer of Servicing to Purchaser as required by the Servicing
Agreements and applicable law, the form and content of which
shall have been approved by Purchaser in the exercise of its
reasonable judgment. Purchaser shall, at Purchaser's expense,
mail to the mortgagor of each Mortgage, no sooner than the date
of Seller's notice pursuant to this Section 3.7 and no later than
fifteen (15) days before the Transfer Date, a letter advising the
mortgagor of the transfer of the Servicing to Purchaser as
required by the Servicing Agreements and applicable law, the form
and content of which shall have been approved by Seller in the
exercise of its reasonable judgment; and
(b) Seller shall, at Seller's expense, transmit to the
applicable taxing authorities, tax servicers, and insurance
companies and/or agents, no later than fifteen (15) days before
the Transfer Date, notification of the assignment of the
Servicing to Purchaser and instructions to deliver all notices,
tax bills and insurance statements, as the case may be, to
Purchaser from and after the Transfer Date. Such notification
shall request that any applicable insurance companies and/or
agents make any notations necessary to indicate the changed mortgagee.
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3.8 Interest on Escrow Accounts. Seller shall pay interest
on the Escrow Accounts accrued through the Transfer Date to the
extent interest with respect to such accounts is required to be
paid by law or contract for the benefit of mortgagors under the
Mortgages, and Purchaser shall pay such interest on the Escrow
Accounts accruing from and after the Transfer Date in accordance
with the terms of the Interim Servicing Agreement. Seller shall
deposit the interest earned in the appropriate Escrow Accounts
prior to the Sale Date. Seller shall be responsible for
reporting all interest paid by Seller for the account of
mortgagors under the Mortgages, and Purchaser shall be
responsible for reporting all interest paid by Purchaser for the
account of such mortgagors, to the Internal Revenue Service and
the mortgagors as required by the Internal Revenue Code.
3.9 Assignments.
(a) On or before the Transfer Date, Seller shall
assign to Purchaser, by appropriate endorsements and assignments,
all of Seller's right, title and interest in and to the Servicing
Agreements and the Mortgages, including all related notes,
mortgages, deeds of trust, deeds to secure debt and other
instruments related to the Mortgages as required by the
applicable Investor, and Seller shall also prepare assignments of
the mortgages, deeds of trust and security deeds relating to the
Mortgages from Purchaser to the applicable Investor as required
by the applicable Investor;
(b) On or before the Transfer Date, Seller shall
forward the assignments of mortgages, deeds of trust and deeds to
secure debt from Seller to Purchaser required by
15
Section 3.9(a) hereof to appropriate state or local recording
offices, shall cause them to be properly recorded, and shall
provide to Purchaser copies of such executed assignments with a
certification that each assignment has been submitted for
recording;
(c) On the Transfer Date Seller shall deliver to
Purchaser such other appropriately executed and authenticated
instruments of sale, assignment, transfer and conveyance,
including limited powers of attorney, reasonably necessary in
order to accomplish the transfer to Purchaser of all of Seller's
rights related to the Servicing; and
(d) All assignments, endorsements and other
instruments executed by Seller hereunder shall be reasonably
satisfactory in form and substance to Purchaser, and shall be
prepared, executed, filed and recorded (as applicable) at
Seller's sole cost and expense.
3.10 Advances. Purchaser shall provide Seller, on the
Transfer Date, with immediately available funds in an amount
equal to the unreimbursed Advances made by Seller with respect to
the Mortgages prior to the Transfer Date, which were made in the
ordinary course of business in accordance with generally accepted
standards of the mortgage banking business. The amount of such
Advance reimbursement shall be based on Seller's reasonable
estimate of such Advances as of the Transfer Date. Within five
(5) Business Days after the Transfer Date, Seller shall provide
Purchaser with an itemization of all such unreimbursed Advances
made by Seller with respect to the Mortgages prior to the
Transfer Date. Within fifteen (15) Business Days after receipt
of such documentation, Purchaser shall review the accuracy of
Seller's calculations, and if necessary, the amount of such
Advance
16
reimbursements shall be adjusted and Purchaser shall pay
to Seller the remainder of such Advance reimbursement due and
owing, if any, or Seller shall reimburse Purchaser for any
overpayments of such Advance reimbursements, as applicable, in
immediately available funds. All Advances to be made after the
Transfer Date with respect to the Mortgages for which Servicing
is transferred to Purchaser shall be the sole responsibility of
the Purchaser, subject to indemnification and reimbursement as
provided elsewhere in this Agreement.
3.11 Escrow Account Balances. Seller shall provide
Purchaser on the Business Day next following the Transfer Date
with immediately available funds in the amount of the Escrow
Account balances associated with the Mortgages for which the
Servicing is transferred to Purchaser, such amount to be based on
Seller's reasonable estimate as of the Transfer Date. Within
five (5) Business Days after the Transfer Date, Seller shall
provide Purchaser with an accounting statement of the actual
Escrow Account balances as of the Transfer Date sufficient to
enable Purchaser to reconcile the amount of such payment with the
accounts of the related Mortgages. Within fifteen (15) Business
Days after receipt of such documentation, Purchaser shall review
the accuracy of Seller's accounting statement of the Escrow
Account balances and, if necessary, the amount of Escrow Account
balances transferred shall be adjusted and Seller shall pay to
Purchaser any additional amounts of Escrow Account balances or
Purchaser shall reimburse Seller for any overpayments of Escrow
Account balances, as applicable, in immediately available funds.
3.12 Delivery of Loan Documents and Servicing Records.
Seller shall deliver to Purchaser, at Seller's expense, on or
before the Transfer Date all Servicing Records in
17
Seller's possession relating to each Mortgage, including without
limitation the information set forth in EXHIBIT C hereto. The
information to be transferred by "tape to tape" transmission
shall be delivered to Purchaser by means of a computer tape which
shall be formatted in a manner approved by Purchaser, but
Purchaser shall pay directly, or at Seller's option shall
reimburse Seller, for the cost of any necessary reformatting.
3.13 Document Custodian. Seller shall cooperate with
Purchaser in delivering to Purchaser's document custodian a
complete custodial file for each Mortgage. Each such custodial
file shall contain all documents required by applicable Investor
requirements.
3.14 Investor Reporting. Seller shall make the first
payment following the Transfer Date of principal and interest due
Investors relating to the Mortgages and will pay all related
guaranty fees for that month. Purchaser shall provide Seller the
funds necessary to pay these amounts by wiring immediately
available funds to Seller no later than twenty-four (24) hours
prior to the required remittance date. Seller shall provide a
certified statement verifying the funds to be furnished by
Purchaser pursuant to this Section 3.14 prior to the wire of such
funds by Purchaser.
3.15 Mortgage Payments and Correspondence Received After
Transfer Date. The amount of any Mortgage payments and any
correspondence relating to any of the Mortgages received by
Seller after the Transfer Date shall, if received within 60 days
after the Transfer Date, forthwith be mailed to Purchaser, in the
form received, by U.S. mail and, if received more than 60 days
after the Transfer Date, shall be returned to sender.
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3.16 Costs and Expenses. Costs and expenses incurred in
connection with the transactions contemplated hereby shall be
paid as follows:
(a) Subject to the express provisions of this
Agreement, Seller shall pay all fees and expenses of its brokers
(including Hamilton, Carter, Smith & Co., Incorporated), agents,
representatives, counsel and accountants and shall pay all costs
associated with the transfer of the Servicing to Purchaser,
including, without limitation, transfer fees of Investors,
charges of Seller's custodian(s), costs associated with physical
file transfer to Purchaser and/or Purchaser's document
custodian(s), and all other costs associated with the preparation
and filing of Mortgage assignments or any other transfer
documents, if the transactions contemplated hereby are
consummated; and
(b) Subject to the express provisions of this
Agreement, Purchaser shall pay the expenses incurred by it in
connection with the transactions contemplated hereby, including,
without limitation, the fees and expenses of its brokers, agents,
representatives, counsel and accountants, data conversion
charges, and any charges imposed by Purchaser's custodian for
receipt, retention and other actions relating to Mortgage Records
transferred hereunder. If the transactions contemplated hereby
are consummated, Purchaser shall pay all expenses incurred by it
in connection with its servicing of the Mortgages after the
Transfer Date.
ARTICLE 4
19
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants as follows:
4.1 Organization. Seller is a corporation organized and
validly existing under the laws of Georgia. Seller is properly
licensed and qualified to transact business in all appropriate
jurisdictions with respect to the conduct of all activities
performed with respect to the origination, sale and servicing of
the Mortgages, except where the failure to be so licensed or
qualified would not have a material adverse effect on the
Servicing to be sold hereunder.
4.2 Authority. Seller has all requisite corporate power,
authority and capacity to enter into this Agreement and the
Interim Servicing Agreement and to perform the obligations
required hereunder, thereunder and under the other documents,
instruments and agreements required to be executed by Seller
pursuant hereto and thereto. The execution and delivery of this
Agreement, the Interim Servicing Agreement and all documents,
instruments and agreements required to be executed and delivered
by Seller pursuant hereto and thereto, and the consummation of
the transactions contemplated hereby and thereby, have been duly
and validly authorized by all necessary corporate action of
Seller.
4.3 Enforceability. This Agreement, the Interim Servicing
Agreement and all documents, instruments and agreements required
to be executed and delivered by Seller pursuant hereto and
thereto constitute valid and legally binding obligations of
Seller,
20
enforceable in accordance with their respective terms,
except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency and other laws affecting the
enforcement of creditors' rights generally and by general
principles of equity.
4.4 No Conflicts. The execution, delivery and performance
by Seller of this Agreement, the Interim Servicing Agreement and
the other agreements and instruments required to be executed,
delivered and performed by Seller pursuant hereto and thereto do
not and will not result in a breach of the terms and conditions
of, or constitute or result in a default under, the articles of
incorporation or bylaws of Seller, or any law, rule, regulation,
judgment, order, writ, injunction, decree, agreement or
instrument or any other restriction or obligation to which Seller
is a party or by which it may be bound or the Servicing
materially affected.
4.5 Title. Seller is the lawful owner of the Servicing,
has the sole right and authority to transfer the Servicing as
contemplated hereby, and is not contractually obligated to sell,
deliver or transfer any rights to the Servicing to any other
Person. The transfer, assignment and delivery of the Servicing
in accordance with the terms and conditions of this Agreement
shall vest in Purchaser all rights as servicer free and clear of
any and all claims, charges, defenses, offsets and encumbrances
of any kind or nature whatsoever, except those customarily
imposed by Investors under the Servicing Agreements.
4.6 Compliance. To the best of Seller's knowledge, Seller
has complied in all material respects with (i) all obligations
under all contracts to which it was or is a party
21
relating to the origination, sale and servicing of the Mortgages
and the issuance and sale of the securities for which the Mortgages
serve as collateral, including the Servicing Agreements, all
requirements of Investors, issuers of PMI, and tax servicers,
and (ii) with all applicable laws, rules, regulations, ordinances,
orders, injunctions and decrees, with respect to and which might
affect any of the Mortgages or the Servicing.
4.7 Mortgages. To the best of Seller's knowledge, as to
each Mortgage:
(a) The note, mortgage, deed of trust, deed to secure
debt and other loan documents are genuine, enforceable, duly
executed by a borrower of legal capacity, conform to all
applicable laws and regulations, and properly completed, and all
material documents, including documents pertaining to
underwriting, with respect to such Mortgage required by the
applicable Investor or any issuer of PMI to be in the loan files
related to such Mortgage are contained therein and have been
properly completed and are accurate in all material respects and,
where applicable, executed, attested and notarized;
(b) The security interest granted by the borrower is a
valid first lien on the property described in the note, mortgage,
deed of trust, deed to secure debt and other relevant loan
documents and is enforceable in accordance with its terms and the
laws of the jurisdiction in which the property securing the
Mortgage is located;
(c) No payment of principal of or interest on the
Mortgage has been forgiven, suspended or rescheduled and no
waiver, alteration or modification has been made
22
to the terms or provisions of the Mortgage, except with Investor
approval where required and otherwise in accordance with prudent
and customary practices of the mortgage banking industry;
(d) Each Mortgage is covered by a policy of PMI if so
required by the terms of any agreement or any law, rule or
regulation applicable to such Mortgage; Seller has complied in
all material respects with all applicable provisions of the PMI
insurance contract or policy and all laws and regulations related
thereto; and any such insurance contract is in full force and
effect with respect to each such Mortgage required to be so
insured;
(e) All hazard, flood and other insurance policies
required by an Investor or an issuer of PMI to be maintained have
been issued and are in full force and effect; and
(f) All applicable taxes, special assessments, ground
rents, and insurance premiums have been paid when due by Seller.
(g) Escrow Accounts have been established for the
Mortgages as required by an applicable Investor or an issuer of
PMI and such Escrow Accounts have been maintained and
administrated in accordance with those requirements consistent
with prescribed and customary practices of the mortgage banking
industry.
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(h) Seller has not advanced funds (other than in
strict accordance with applicable Investor requirements), 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 under the Mortgage, except for
interest accruing from the date of the Mortgage note or date of
disbursement of the Mortgage loan proceeds, whichever is greater,
to the day which precedes by one month the due date of the first
installment of principal and interest.
(i) In the event the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become
payable by the Purchaser, or the related Investor, or their
respective successors and assigns to the trustee under the deed
of trust, except in connection with a trustee's sale after
default by the mortgagor.
4.8 Accounts Receivable. To the best of Seller's
knowledge, Seller's Advances are valid and subsisting accounts
receivable owing to Seller and are not subject to any set off or
charges of the account debtors arising from acts or omissions of
Seller.
4.9 Broker. Except for Hamilton, Carter, Smith & Co.,
Incorporated (whose fees shall be paid by Seller), no broker or
finder has acted on behalf of Seller in connection with this
Agreement or the transactions contemplated hereby, and Seller has
not made any agreement to pay any agent, finder, broker or any
other representative any fee or
24
commission in the nature of a finder's or originator's fee
arising out of or in connection with the subject matter of this
Agreement.
4.10 Bulk Transfer. The transfer, assignment and conveyance
of the Servicing by Seller pursuant to this Agreement is not
subject to the Uniform Commercial Code - Bulk Transfers as
enacted in Georgia and codified at Article 6 of Title 11 of the
Official Code of Georgia Annotated.
4.11 No Litigation Pending. There is no action, suit
proceeding or investigation (including, but not limited to, any
regulatory enforcement actions, letters of consent or takeover
actions) pending or, to Seller's knowledge, threatened against
Seller which, either in one instance or in the aggregate, may
result in any material adverse change in the business,
operations, financial condition, properties or assets of Seller,
or in any material impairment of the right or ability of Seller
to carry on its business substantially as now conducted, or in
any material liability on the part of Seller, or which would draw
into question the validity of this Agreement or of any action
taken or to be taken in connection with the obligations of Seller
contemplated herein, or which would be likely to materially
impair the value of the Servicing or the ability of Seller to
perform under the terms of this Agreement.
4.12 No Consent or Notice Required. No notice, consent,
approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and
performance by Seller of or compliance by Seller with this
Agreement or, if required,
25
Seller will use its best efforts to
obtain such consent, approval, authorization or order or give
such notice prior to the applicable Transfer Date.
4.13 No Inquiries. Seller has not been the subject of an
audit by an Agency or any other agency of a state or the federal
government or any provider of a PMI policy, which audit
(i) included material allegations of failure to comply with
applicable loan origination, servicing or claims procedures which
were not responded to and resolved with such Agency or other
agency of a state or federal government or any provider of a PMI
policy, or (ii) resulted in a request for repurchase of Mortgages
or indemnification in connection with the Mortgages, except as
set forth on Schedule 4.13 attached hereto.
4.14 Notice of Relief Requested Pursuant to the Soldiers and
Sailors Relief Act of 1940. To Seller's knowledge, Seller has
not received any currently effective notice from any Mortgagor or
other party with respect to any Mortgage of a request for relief
pursuant to or invoking any other provisions of the Soldiers and
Sailors Relief Act of 1940.
4.15 Disclosure. All information provided by Hamilton,
Carter, Smith & Co., Incorporated in the Offering Number EC-4200
in connection with the transaction contemplated by this Agreement
describing the Servicing, presented the Servicing information
fairly and accurately, in all material respects, in accordance
with the Seller's regularly prepared books and records.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants as follows:
5.1 Organization. Purchaser is a banking corporation
organized and validly existing under the laws of South Carolina.
Purchaser is qualified to transact business in each jurisdiction
in which such qualification is necessary to perform its
obligations following the purchase and assumption of the
Servicing hereunder.
5.2 Authority. Purchaser has all requisite corporate
power, authority and capacity to enter into this Agreement and
the Interim Servicing Agreement and to perform the obligations
required of it hereunder, thereunder and under the other
documents, instruments and agreements required to be executed by
Purchaser pursuant hereto and thereto. The execution and
delivery of this Agreement and the Interim Servicing Agreement
and all documents, instruments and agreements required to be
executed and delivered by Purchaser pursuant hereto and thereto,
and the consummation of the transactions contemplated hereby and
thereby, have been duly and validly authorized by all necessary
corporate action of Purchaser.
5.3 Enforceability. This Agreement, the Interim Servicing
Agreement and all documents, instruments and agreements required
to be executed and delivered by Purchaser pursuant hereto and
thereto constitute valid and legally binding obligations of
Purchaser,
27
enforceable in accordance with their respective terms,
except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency and other laws affecting the
enforcement of creditors' rights generally and by general
principles of equity.
5.4 No Conflicts. The execution, delivery and performance
of this Agreement, the Interim Servicing Agreement and the other
agreements and instruments required to be executed, delivered and
performed by Purchaser pursuant hereto and thereto do not and
will not result in a breach of the terms and conditions, or
constitute or result in a default under, the articles of
incorporation or bylaws of Purchaser, or any law, rule,
regulation, judgment, order, writ, injunction, decree, agreement
or instrument or other restriction or obligation to which
Purchaser is a party or by which it or any of its properties or
assets may be bound or affected, the breach of which or default
under which would have a material adverse effect on the business
or assets of Purchaser taken as a whole or the ability of
Purchaser to consummate the transactions contemplated hereby and
perform its obligations hereunder.
5.5 Compliance. Purchaser is an approved FHLMC and FNMA
seller/servicer in good standing.
5.6 Servicing. After the Transfer Date for the period of
time that Purchaser owns the Servicing, Purchaser shall service
the Mortgages in accordance with the terms of the Servicing
Agreements, all requirements of Investors, issuers of PMI, all
applicable laws, rules, regulations, ordinances, orders,
injunctions and decrees with respect to and which
28
might affect any of the Mortgages or the Servicing, and prudent
standards and practices generally accepted in the mortgage banking
industry.
5.7 Broker. No broker or finder has acted on behalf of
Purchaser in connection with this Agreement or the transactions
contemplated hereby, and Purchaser has made no agreement to pay
any agent, finder, broker or any other representative any fee or
commission in the nature of a finder's or originator's fee
arising out of or in connection with the subject matter of this
Agreement.
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification by Seller. Seller shall indemnify and
hold harmless Purchaser and, as applicable, any of the officers,
directors, employees and agents of Purchaser (collectively,
"Purchaser Indemnitees") against and in respect of, and shall
reimburse Purchaser Indemnitees for, any Loss suffered or
incurred by Purchaser Indemnitees after the Sale Date which
result from:
(a) A breach of any representation or warranty of
Seller contained in this Agreement or the Interim Servicing
Agreement (which, for these purposes, shall be deemed made
without any qualification otherwise contained therein regarding
"Seller's knowledge");
29
(b) A breach by Seller of any covenant or agreement of
Seller contained in this Agreement or the Interim Servicing
Agreement;
(c) Any errors or omissions of Seller or its
predecessors in originating, selling, or servicing any of the
Mortgages prior to the Transfer Date; and
(d) All amounts paid by Purchaser pursuant to Section
5.4 of the Escrow Agreement, which amounts were properly payable
by Seller.
6.2 Indemnification by Purchaser. Purchaser shall
indemnify and hold harmless Seller and, as applicable, any of the
officers, directors, employees and agents of Seller
(collectively, "Seller Indemnitees") against and in respect of,
and shall reimburse Seller Indemnitees for, any Loss suffered or
incurred by Seller Indemnitees after the Sale Date which results
from:
(a) A breach of any representation or warranty of
Purchaser contained in this Agreement or the Interim Servicing
Agreement;
(b) A breach by Purchaser of any covenant or agreement
of Purchaser contained in this Agreement or the Interim Servicing
Agreement;
(c) Any errors or omissions of Purchaser or its
successors in servicing any of the Mortgages on or after the
Transfer Date; and
30
(d) All amounts paid by Seller pursuant to Section 5.4
of the Escrow Agreement, which amounts were properly payable by
Purchaser.
6.3 Loss. For purposes of this Agreement, "Loss" shall
mean any unreimbursed out-of-pocket cost, including reasonable
attorneys' fees and disbursements, incurred by the Person seeking
indemnification, but excluding all costs associated with such
Person's overhead (including, without limitation, the salaries
and benefits of its employees and the use and occupancy of its
facilities and equipment). Notwithstanding anything herein to
the contrary, Seller shall have no obligation to indemnify and
hold Purchaser Indemnitees harmless (i) for any Loss with respect
to any separate claim for indemnification (which, based on the
facts and circumstances of the particular claim, may be limited
to a Loss suffered with respect to a particular Mortgage and in
other cases may not be so limited) which is less than $1,000, and
(ii) unless the aggregate amount of covered Losses exceeds
$50,000, in which case only the amount of covered Losses in
excess of $50,000 shall be indemnifiable.
6.4 Mitigation. As a condition precedent to Seller's
obligations of indemnification hereunder, Purchaser shall
mitigate the amount of the Loss, including, without limitation,
the taking of such actions and the exercising of the degree of
care that Purchaser exercises with respect to the servicing of
other loans for its own account, and, in any case, not less than
the actions or degree of care which is consistent with prudent
standards and practices in the mortgage banking industry.
Without limiting the foregoing, Seller shall have no
responsibility for any Loss attributable to or increased as a
result of the failure by Purchaser
31
to perform and discharge its obligations as servicer of the
Mortgages after the applicable Transfer Date in strict accordance
with applicable law and regulations, applicable Investor
agreements, guidelines, regulations and procedures and applicable
requirements of issuers of PMI.
6.5 Notice. As a condition precedent to Seller's
obligations of indemnification hereunder, Purchaser shall notify
Seller in writing of any event or discovery that may give rise to
Seller's obligations hereunder (including, without limitation,
any breach or alleged breach of Seller's representations,
warranties or covenants, any claim instituted or asserted against
Purchaser, and any notice received from an Investor), in a
reasonably prompt manner after such discoveries or events become
known to Purchaser, but in no event more than thirty (30) days
thereafter (or such shorter period of time as may be necessary to
allow Purchaser to exercise its rights of defense and cure
hereunder). Any such notice shall describe the event or
discovery, describe the basis upon which Purchaser believes that
Seller is obligated hereunder, and include Purchaser's good faith
estimate of the amount of identifiable Loss associated with the
claim. Seller shall not have any obligation to indemnify any
Purchaser Indemnitee with respect to a claim unless Seller
receives notice of the claim in the manner set forth above before
the third (3rd) anniversary of the Sale Date.
6.6 Inspection. Purchaser shall provide Seller with copies
of all such records and data related to any claim for
indemnification hereunder as Seller may from time to time
reasonably request for purposes of verifying the existence or
amount of the claim or for purposes of contesting, defending or
settling the claim. Seller shall also have the right to
32
inspect the records of Purchaser during normal business hours and
without imposition of unreasonable burden on Purchaser, for the
foregoing purposes. Seller shall reimburse Purchaser for any
reasonable out-of-pocket costs actually incurred by Purchaser at
Seller's request in connection with such inspections but in no
event shall Seller be liable for any of Purchaser's overhead costs,
if any, associated with such inspections.
6.7 Defense. Subject to the terms and conditions set forth
below, Seller shall have the right to contest, defend or settle
any claim for indemnification based on a request, demand or
action made or asserted by any third party. Seller shall notify
Purchaser of its election to contest or defend the claim with the
third party within fifteen (15) days of the receipt of notice
thereof and of all information reasonably requested by Seller to
evaluate the claim. If Seller elects to contest or defend the
claim, (i) it shall do so at its own expense, and (ii) Purchaser
shall have the right to monitor and participate in the defense of
any such claim and to employ its own counsel, but Seller shall
not be liable to any Purchaser Indemnitee for any of Purchaser
Indemnitee's fees or expenses in connection with such activities,
including, without limitation, the fees and disbursements of its
counsel. If Seller elects not to contest or defend any such
claim, (iii) Purchaser shall have the right to contest or defend
the claim, (iv) the cost of such defense, including reasonable
attorneys' fees and disbursements, shall be paid by Seller if
Seller is responsible for the indemnification of Purchaser
relating to the claim, and (v) Seller shall have the right to
monitor and participate in the defense of such claim and to
employ counsel in connection therewith at its own expense.
Seller shall have no liability for any Loss arising or resulting
from the compromise
33
or settlement of any claim effected without
its consent, which consent shall not be unreasonably withheld.
6.8 Opportunity to Cure. Seller shall have sixty (60) days
(or such shorter period required by applicable law) from the date
of receipt by Seller of written notice of a claim for
indemnification hereunder within which to cure the condition or
breach giving rise to such claim provided that such cure period
shall not absolve Seller for any liability to Purchaser for
Losses suffered by Purchaser prior to such cure.
6.9 Recoupment. If a Purchaser Indemnitee recoups from any
third party any amount theretofore paid by or on behalf of Seller
to that Purchaser Indemnitee under this Article 6, that Purchaser
Indemnitee shall promptly reimburse Seller the full amount so
recouped.
6.10 Survival. The representations, warranties and
covenants of Seller and Purchaser contained in this Agreement and
the Interim Servicing Agreement (including the provisions of this
Article 6) shall survive for three (3) years after the Sale Date
(unless limited herein or therein to a shorter period of time),
but the sole remedy of Seller and Purchaser for a breach of any
such representation, warranty or covenant (other than as provided
in Articles 7 and 8 hereof) shall be to assert a claim for
indemnification under this Article 6.
34
6.11 Escrow; Sole Remedy. On the Transfer Date, Seller
shall deposit $645,000 (the "Escrowed Funds") into an escrow
account established with the Escrow Agent to be held,
administered and distributed in accordance with the terms of this
Agreement and an escrow agreement in substantially the form
attached hereto as EXHIBIT F (the "Escrow Agreement") to be
entered into by and among Purchaser, Seller and the Escrow Agent
on the Transfer Date to secure Seller's indemnification
obligations hereunder. Purchaser's sole and exclusive remedy for
satisfaction of a claim for indemnification pursuant to this
Article VI shall be to make a claim against the Escrowed Funds
and regardless of the amount of the Escrowed Funds, Seller shall
have no liability or obligation to Purchaser for any
indemnification obligation hereunder other than as Purchaser may
satisfy from the Escrowed Funds. The Escrow Agreement shall
provide that Purchaser may draw on the Escrowed Funds upon
presentation to the Escrow Agent of either (i) written
instructions executed by both Purchaser and Seller authorizing
the disbursement or (ii) a final unappealable judgment from the
arbitration procedure conducted pursuant to Section 10.2 hereof
finding that Seller has an indemnification obligation to
Purchaser hereunder and directing the disbursement of a specified
amount of funds thereunder. The Escrowed Funds shall be reduced
by, and released to Seller in the amount equal to, one-third of
the original amount on each of the first three anniversaries of
the Sale Date such that as of and after the third anniversary of
the Sale Date, the amount of the Escrowed Funds shall be zero
(such disbursements are hereinafter referred to as the "Periodic
Disbursements"); provided, however, that if on any of the first
three anniversaries of the Sale Date the Purchaser has made a
claim or claims for indemnification which has not been resolved
(the "Unresolved Claims"), or if claims have been made against,
and paid out of, the Escrowed Funds ("Resolved Claims"), then the
35
Escrowed Funds shall be reduced by, and released to Seller in an
amount equal to, the applicable cumulative Periodic
Disbursements, less the amount of the Unresolved Claims and the
amount of Resolved Claims; provided, further, however, that any
such Periodic Disbursement that would have been distributed to
Seller but for an Unresolved Claim or Claims shall be released to
Seller or Purchaser, as the case may be, as and when such
Unresolved Claims are resolved.
ARTICLE 7
CONDITIONS PRECEDENT TO THE PURCHASER'S OBLIGATIONS
Purchaser's obligations under this Agreement are subject to
the fulfillment prior to or on the Sale Date and/or the Transfer
Date, as the case may be, of each of the following conditions,
any one or more of which may be waived in writing by Purchaser:
7.1 Accuracy of Representations and Warranties. Seller's
representations and warranties contained herein shall be true and
correct in all material respects as of the Sale Date and the
Transfer Date, except to the extent such representations and
warranties expressly relate only to an earlier date, and except
for changes contemplated by this Agreement or approved by
Purchaser.
36
7.2 Compliance with Conditions. Seller shall have
performed and complied in all material respects with all
conditions and agreements required by this Agreement to be
performed or complied with prior to or on the Sale Date and the
Transfer Date.
7.3 No Actions. There shall not have been commenced or, to
the knowledge of Seller, threatened prior to or on the Sale Date
any action, suit or proceeding which would materially and
adversely affect the Servicing (taken as a whole) or Seller's
ability to consummate the transactions contemplated hereby.
7.4 Interim Servicing Agreement. Seller shall have
executed and delivered the Interim Servicing Agreement on the
Sale Date.
7.5 Consents and Approvals. Seller shall have obtained
prior to or on the Transfer Date the consents and approvals
required by Section 3.4 hereof; provided, however, that this
condition shall not require the receipt of consents from Private
Investors.
7.6 Sale Documents. Seller shall have delivered to
Purchaser on the Sale Date:
(a) A certificate executed on behalf of Seller by an
authorized officer of Seller dated as of the Sale Date,
certifying in such detail as Purchaser may reasonably request to
the fulfillment of the conditions specified in Sections 7.1, 7.2
and 7.3 hereof;
37
(b) A copy of the resolutions of Seller's Board of
Directors approving the execution, delivery and performance of
this Agreement, certified as of the Sale Date by the Secretary or
an Assistant Secretary of Seller;
(c) A certificate of incumbency, dated as of the Sale
Date, as to the officers of the Seller executing this Agreement
and the certificates, instruments and other agreements executed
and delivered hereunder, executed by the Secretary or an
Assistant Secretary and one other officer of Seller; and
(d) An opinion of Nelson Mullins Riley & Scarborough,
L.L.P., dated as of the Sale Date, to the effect of EXHIBIT D
hereto and in form and substance reasonably acceptable to
Purchaser (including, to the extent applicable, the opinions of
other counsel upon which such counsel is relying in form and
substance reasonably acceptable to Purchaser).
7.7. Transfer Documents. Seller shall have delivered to
Purchaser on the Transfer Date:
(a) A certificate executed on behalf of Seller by an
authorized officer of Seller, dated as of the Transfer Date,
certifying in such detail as Purchaser may reasonably request to
the fulfillment of the conditions specified in Sections 7.1, 7.2,
7.3 and 7.5 hereof, including, without limitation, copies of such
notices, evidences of consent and other matters as Purchaser may
reasonably request; and
38
(b) A certificate of incumbency, dated as of the
Transfer Date, as to the officers of the Seller executing this
Agreement and the certificates, instruments and other agreements
executed and delivered hereunder, executed by the Secretary or an
Assistant Secretary and one other officer of Seller.
ARTICLE 8
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
All of Seller's obligations under this Agreement are subject
to the fulfillment prior to or on the Sale Date and/or the
Transfer Date, as the case may be, of each of the following
conditions, any one or more of which may be waived in writing by
Seller:
8.1 Accuracy of Representations and Warranties. The
representations and warranties of Purchaser contained herein
shall be true and correct in all material respects as of the Sale
Date and the Transfer Date, except to the extent such
representations and warranties expressly relate only to an
earlier date, and except for changes contemplated by this
Agreement or approved by Seller.
8.2 Compliance with Conditions. Purchaser shall have
performed and complied in all material respects with all
conditions and agreements required by this Agreement to be
performed or complied with by it prior to or on the Sale Date and
the Transfer Date.
39
8.3 No Actions. There shall not have been commenced or, to
the knowledge of Purchaser, threatened prior to or on the Sale
Date any action, suit or proceeding which may materially and
adversely affect the Servicing (taken as a whole) or Purchaser's
ability to consummate the transactions contemplated hereby.
8.4 Interim Servicing Agreement. Purchaser shall have
executed and delivered the Interim Servicing Agreement on the
Sale Date.
8.5 Consents and Approvals. Seller and Purchaser shall
have obtained prior to or on the Transfer Date all consents and
approvals contemplated by Section 3.4 hereof; provided, however,
that this condition shall not require the receipt of consents
from Private Investors.
8.6 Sale Documents. Purchaser shall have delivered to
Seller on the Sale Date:
(a) A certificate executed on behalf of Purchaser by
an authorized officer of Purchaser, dated as of the Sale Date,
certifying in such detail as Seller may reasonably request to the
fulfillment of the conditions specified in Sections 8.1, 8.2 and
8.3 hereof;
(b) A copy of the resolutions of the board of
directors of Purchaser approving the execution, delivery and
performance of this Agreement, certified as of the Sale Date by
the Secretary or an Assistant Secretary of Purchaser;
40
(c) A certificate of incumbency, dated as of the Sale
Date, as to the officers of the Purchaser executing this
Agreement and the certificates, instruments and other agreements
executed and delivered hereunder, executed by the Secretary or an
Assistant Secretary and one other officer of Purchaser; and
(d) An opinion of Wyche, Burgess, Freeman and Parham,
counsel to Purchaser, dated as of the Sale Date, to the effect of
EXHIBIT E hereto and in form and substance reasonably acceptable
to Seller (including, to the extent applicable, the opinions of
other counsel upon which such counsel is relying in form and
substance reasonably acceptable to Seller).
8.7 Transfer Documents. Purchaser shall have delivered to
Seller on the Transfer Date:
(a) A certificate executed on behalf of Purchaser by
an authorized officer of Purchaser, dated as of the Transfer
Date, certifying in such detail as Seller may reasonably request
to the fulfillment of the conditions specified in Sections 8.1,
8.2, 8.3 and 8.5 hereof, including, without limitation, copies of
such notices, evidences of consent and other matters as Seller
may reasonably request; and
(b) A certificate of incumbency, dated as of the
Transfer Date, as to the officers of the Purchaser executing this
Agreement and the certificates, instruments and other
41
agreements executed and delivered hereunder, executed by the
Secretary or an Assistant Secretary and one other officer of
Purchaser.
ARTICLE 9
TERMINATION
9.1 Events of Termination. To the extent and under the
circumstances set forth below, this Agreement may be terminated
at any time by Purchaser or Seller prior to the Transfer Date
upon written notice to the other party:
(a) By Purchaser or Seller, if FNMA or FHLMC
disapproves or fails to timely approve the transfer of Servicing
in accordance with Section 3.4 hereof;
(b) By Purchaser or Seller, if any action, suit or
proceeding of the type the absence of which would be a condition
precedent to either party's obligations described in Sections 7.3
or 8.3, respectively, shall have been commenced, or, to the
knowledge of either party hereto, threatened;
(c) By Purchaser or Seller, if the other shall
materially breach any material term of this Agreement and such
breach shall not have been cured within thirty (30) days
following notice thereof by the other party, but in any event
prior to the Transfer Date; and
42
(d) By Purchaser or Seller, if the conditions
precedent to its obligation to consummate on the Sale Date or
Transfer Date the transactions contemplated hereby have not been
satisfied or waived on or prior to the Sale Date or Transfer
Date, or such later date as may be mutually agreed upon in
writing by the parties hereto; provided, however, that neither
Purchaser nor Seller shall have any obligation to waive a
condition precedent to its obligation or to extend the date for
satisfaction thereof.
9.2 Requirements and Effect of Termination.
(a) Upon valid and proper termination of this
Agreement pursuant to any provision of Section 9.1, all right,
title and interest in or to the Servicing, the Records, the
Escrow Accounts and the Mortgages shall revert to Seller and no
party hereto shall have any liability or further obligation to
the other party hereunder except as provided in Section 3.3,
Section 3.16, Article 6 and this Section 9.2;
(b) Except as specifically set forth or referred to in
Section 9.2(c) below, if this Agreement is terminated or the
transaction contemplated hereby is not consummated, the amount of
Purchase Price theretofore paid to Seller, net of all amounts
received by Purchaser under the Interim Servicing Agreement,
shall be immediately refunded by Seller to Purchaser, together
with interest on such amount at the Accrual Rate from the date of
payment to Seller to the date of refund to Purchaser;
43
(c) If the sale of Servicing to Purchaser is not
consummated on or before the Transfer Date because (i) of
financial and/or regulatory constraints on Purchaser or its
affiliates, or (ii) Seller, with Purchaser's assistance, is
unable to obtain the approval of FNMA or FHLMC to transfer the
Servicing to Purchaser or FNMA or FHLMC rescinds its approval
prior to the Transfer Date, and the approval is withheld or
rescinded primarily because Purchaser is not financially eligible
and is not in compliance with FNMA or FHLMC requirements, and
none of the foregoing are attributable to the fault of Seller,
Seller shall be entitled to retain Two Hundred Fifty Thousand and
no/100 Dollars ($250,000) of the Earnest Money Deposit, it being
agreed by Purchaser and Seller that such sum is a reasonable
estimate of the loss Seller would sustain on account of the
decline in the net market value in the Servicing and on account
of costs and expenses incurred by Seller with respect to this
transaction; and
(d) If either Purchaser or Seller fail to consummate
the purchase and sale of the Servicing in breach of their
obligations under this Agreement, the party that so breaches
shall reimburse the other for all reasonable costs and expenses,
including travel, consultation and legal costs incurred in
connection with the transactions that are the subject of this
Agreement and that were incurred prior to the breach. If both
parties so breach the Agreement, or if the transaction is not
consummated for reasons other than the breach by either party,
the provisions of this Section 9.2(d) shall be of no effect.
44
ARTICLE 10
MISCELLANEOUS
10.1 Notices. All notices, requests, demands and other
communications which are required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have
been duly given if delivered by hand, by facsimile transmission
or by registered or certified mail, return receipt requested,
postage prepaid:
(a) If to Purchaser, to:
Mr. Joseph C. Reynolds
Chief Mortgage Officer
Carolina First Bank
1420 Lady Street
P.O. Box 12249
Columbia, South Carolina 29211
Fax: (803) 929-5365
With a copy to:
William P. Crawford, Jr., Esq.
Wyche, Burgess, Freeman & Parham
P.O. Box 728
Greenville, South Carolina 29602
Fax: (803) 242-8324
(b) If to Seller to:
HomeBanc Mortgage Corporation
5775 Glenridge Drive
Building E, Suite 500
Atlanta, Georgia 30328
Fax: (404) 303-4017
45
With a copy to:
Jeffrey A. Allred, Esq.
Nelson Mullins Riley & Scarborough, L.L.P.
400 Colony Square, Suite 2200
1201 Peachtree Street, N.E.
Atlanta, Georgia 30316
Fax: (404) 817-6050
or to such other address as Purchaser or Seller shall have
specified in writing to the other. Any notice given by personal
delivery or facsimile transmission shall be deemed to have been
delivered on the date of the receipt of such delivery or
transmission at the address set forth above (or such other
address designated pursuant hereto) and any notice given by
certified mail shall be deemed to have been delivered on the
third Business Day following the date on which it was deposited
in the United States postal system. Notice in writing may be
given by a method other than as described above and such notice
shall be deemed delivered on the date actually received.
10.2 Arbitration. Any controversy or claim between
Purchaser and Seller arising out of or relating to this Agreement
including, but not limited to, a claim based on or arising from
any Unresolved Claim, will, at the request of any party, be
determined by arbitration. The arbitration shall be conducted in
Atlanta, Georgia in accordance with the United States Arbitration
Act (Title 9, U.S. Code), notwithstanding any choice of law
provision in this Agreement, and under the Commercial Rules of
the American Arbitration Association. The arbitrator(s) shall
give effect to the statutes of limitation in determining any
claim. Any controversy concerning whether an issue is arbitrable
shall be determined by the arbitrator(s). The arbitrator(s)
shall set forth in writing the reasons for the award, which shall
be final, and
46
judgment upon the arbitration award may be entered
in any court having jurisdiction thereof. The institution and
maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests
such action for judicial relief. Absent a different allocation
by the arbitrator(s) based on the relevant merits of the parties'
respective positions, each party shall bear one half of the costs
and expenses of the arbitration (excluding each party's own legal
costs and other expenses which shall be borne by the party as
incurred), including compensation to the arbitrator(s), which
compensation shall be negotiated among the parties and the
arbitrator(s).
10.3 Entire Agreement; Amendment. This Agreement, the
documents, instruments and agreements to be executed and
delivered pursuant to this Agreement, and the Confidentiality
Agreement, constitute the entire agreement between the parties
with respect to the subject of the transactions contemplated
hereby and supersede all prior agreements with respect thereto.
This Agreement may be amended and any provision hereof waived,
but only in writing signed by the party against whom such
amendment or waiver is sought to be enforced. The waiver by any
party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other subsequent
breach.
10.4 Binding Effect; Assignment. This Agreement shall inure
to the benefit of and be binding upon the parties hereto. This
Agreement, and any rights or obligations hereunder, may not be
assigned or delegated by Purchaser, provided that nothing in this
Section 10.3 or in this Agreement otherwise shall prevent
Purchaser from transferring,
47
selling or assigning to any party the Servicing purchased
hereunder. This Agreement, and any rights or obligations hereunder,
may be assigned or delegated by Seller after the Sale Date to any
then current or former holders of capital stock of Seller or their
designees, but such delegation shall not relieve Seller of primary
responsibility for its obligations hereunder.
10.5 Counterparts. This Agreement may be executed in
counterparts, each of which, when so executed and delivered,
shall be deemed to be an original and all of which, taken
together, shall constitute one and the same agreement.
10.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of South
Carolina.
48
IN WITNESS WHEREOF, each of the undersigned parties has
caused this Agreement to be duly executed and delivered by one of
its duly authorized officers, all as of the date first above
written.
"SELLER"
HOMEBANC MORTGAGE CORPORATION
By:
Its:
"PURCHASER"
CAROLINA FIRST BANK
By:
Its:
49
Schedule 4.13
Indemnification Agreements
Investor Loan No. Name Origination Date Agreement Date Expiration Date Loan Balance
FNMA 1038896 Byron Chapman 8/28/92 11/28/93 11/28/98 $39,765.00
FNMA 1038895 Byron Chapman 8/28/92 11/28/93 11/28/98 $39,765.00
FNMA 1038894 Byron Chapman 8/28/92 11/28/93 11/28/98 $39,765.00
FNMA 1039229 V. Olson & M. Miller 8/28/92 12/1/93 12/1/98 $123,080.00
FNMA 1040481 Toe & Soon Kwak 12/15/92 12/1/93 12/1/98 $73,381.00
$315,758.00
Investor Loan No. Name Origination Date Agreement Date Expiration Date Loan Balance
Carrollton 1054197 Dennis Cox 2/18/94 4/27/94 4/27/99 $32,540.00
EXHIBIT A
TO MORTGAGE
SERVICING PURCHASE
AND SALE AGREEMENT
LOAN LISTING
[BULK LOAN LISTING RETAINED IN FILE]
EXHIBIT B
TO MORTGAGE
SERVICING PURCHASE
AND SALE AGREEMENT
INTERIM SERVICING AGREEMENT
This Interim Servicing Agreement (the "Interim
Servicing Agreement") is made and entered into the ___ day of
June, 1995, by and between HomeBanc Mortgage Corporation, a
Georgia corporation ("Seller"), and Carolina First Bank, a South
Carolina banking corporation ("Purchaser").
W I T N E S S E T H :
WHEREAS, Purchaser and Seller have entered into a
Mortgage Servicing Purchase and Sale Agreement, dated June ___,
1995 (the "Purchase Agreement"), pursuant to which Seller agreed
to sell, transfer and assign to Purchaser Servicing rights
relating to certain Mortgages pursuant to Servicing Agreements
with certain Investors; and
WHEREAS, the parties desire to set forth the general
terms upon which the interim servicing of the Mortgages shall be
accomplished from the Sale Date through the Transfer Date;
NOW, THEREFORE, in consideration of the mutual
promises, covenants and conditions, and upon the terms and
subject to the conditions set forth herein and the terms and
conditions of the Purchase Agreement, Seller and Purchaser hereby
agree as follows:
1. Performance of Duties by Seller. Seller will
service each Mortgage following the requirements of the Servicing
Agreements as in effect as of the date hereof and as subsequently
amended from time to time, exercising the same degree of care
that Seller exercises with respect to the servicing of other
loans for its own account.
2. Collection. Seller will use its best efforts to
collect all sums due and payable under the terms of each
Mortgage. All payments required to be made by a mortgagor that
are collected by Seller, except late charges and other ancillary
fees, shall be deposited as follows:
(a) All payments of principal and interest and of
Maintenance Charges (as hereinafter defined) shall be deposited
in trust accounts in a financial institution whose deposits are
insured by the Federal Deposit Insurance Corporation ("FDIC").
(b) Trust accounts for principal and interest shall be
in the name of the Seller, in trust for the Investors.
(c) Trust accounts for Maintenance Charges (as
hereinafter defined) shall be in the name of Seller, in trust for
the mortgagors under each of the Mortgages.
3. Remittance of Principal and Interest Collections.
Seller will remit to the Investors all principal and interest
payments on the Mortgages collected during the
2
preceding month, less the servicing fee in accordance with the
remittance schedule stipulated in the Servicing Agreements.
4. Maintenance Charges The term "Maintenance
Charges," as used herein, means all payments for whatever purpose
except for principal and interest, late charges or other
ancillary fees required by the terms of the applicable Mortgage
or otherwise to be made by a mortgagor to the mortgagee under the
Mortgage. Seller shall apply the amounts received by it
applicable to Maintenance Charges in accordance with the terms of
each Mortgage, the contract of insurance, the Servicing
Agreements and this Interim Servicing Agreement. Seller shall
keep those funds in its possession, but segregated from its
general corporate funds, in a financial institution the deposits
of which are insured by the FDIC. From these funds, Seller shall
pay, when due, the hazard insurance premiums, and shall obtain,
when available, and pay the official statements for taxes and
assessments or other special charges against the mortgaged
premises, but the obligation of Seller to make such payments
shall be limited to the amount received by it from the mortgagor
applicable to such Maintenance Charges or advanced by Seller for
such purposes. Subject to the termination provisions of Article
9 of the Purchase Agreement, Purchaser shall be responsible for
the payment of all interest accruing from and after the Transfer
Date on the related Escrow Accounts that is payable to mortgagors
under the terms of the Mortgages or applicable state law.
Purchaser shall reimburse Seller for any such payments made from
the funds of Seller promptly upon receipt of a certified
statement relating thereto, together with supporting
documentation if requested by Purchaser.
3
5. Hazard Insurance. Seller shall, at all times
during the term of any Mortgage, take all reasonable and
necessary action to cause all of the buildings upon the mortgaged
premises to be kept insured against loss or damage by fire or
other hazards and for such amounts required by the applicable
Servicing Agreements. Where required by the Investors, issuers
of PMI or any applicable law, rule, regulation, decree or
ordinance, Seller shall retain the originals or microfilm copies
of such insurance policies for the benefit of the Investors.
6. Records of Seller. Seller shall keep detailed and
materially accurate records for each Mortgage and the collections
thereon. Purchaser or its authorized representative may examine
such records at such time or times as it may elect during
Seller's business hours.
7. Reports by Seller. During the term of this
Interim Servicing Agreement, Seller shall provide Purchaser with
the reports listed on SCHEDULE A hereto, at the intervals
specified in SCHEDULE A beginning with Investor cut-off dates on
or after May 31, 1995.
8. Compliance with Regulations. Seller shall comply
with, and shall use its best efforts to cause each mortgagor
under each Mortgage to comply with, all applicable federal and
state statutes and regulations and Investor and PMI company
requirements during its servicing of the Mortgages under this
Interim Servicing Agreement.
4
9. Default and Foreclosure. If foreclosure
proceedings are instituted, Seller shall foreclose, manage and
protect the mortgaged premises in the manner and to the extent
required by the applicable Servicing Agreements and as customary
in the mortgage banking industry. Subject to the termination
provisions set forth in Article 9 of the Purchase Agreement and
to the indemnification provisions set forth in Article 6 of the
Purchase Agreement, Purchaser shall be responsible for out-of-
pocket costs and expenses incurred with respect to such
activities from and after the Sale Date.
10. Servicing Fees.
(a) Seller shall receive: (i) $6.00 per month for each
Mortgage serviced (the "Sub-Servicing Fee"); (ii) any interest
earned on custodial bank balances; and (iii) all late charges,
NSF fees and such other ancillary fees, if any, collected with
respect to the Mortgages ("Ancillary Income").
(b) Purchaser shall receive for each Mortgage an
amount (the "Servicing Fee") payable from the interest portion of
each monthly installment applicable to principal and interest
collected by Seller, which equals (i) the amount, if any, in
excess of the net yield required to be passed through to the
Investor, less all applicable guaranty fees, computed on the same
principal amount and for the same period as the interest portion
for said installments less (ii) the Sub-Servicing Fee.
5
(c) Commencing with the first Investor reporting cut-
off date following the Sale Date, Seller shall remit the
Servicing Fee to Purchaser by the tenth (10th) calendar day of
the month following the reporting cut-off date.
11. Termination of Agreement. This Interim Servicing
Agreement shall terminate as to the relevant Mortgages on the
earlier to occur of the Transfer Date or the date of termination
of the Purchase Agreement.
12. Miscellaneous.
(a) This Interim Servicing Agreement shall constitute
and be deemed a separate agreement with respect to each Mortgage
to which it applies.
(b) The term "mortgagor" shall be deemed to include
not only the maker of the note or bond and the mortgagor or
grantor in the security instruments but also any subsequent owner
of the mortgaged premises assuming payment of the Mortgage.
(c) Any notice, demand or request arising under or
required by this Interim Servicing Agreement shall be in writing
and shall be given in accordance with the provisions of the
Purchase Agreement.
6
(d) This Interim Servicing Agreement may be executed
in counterparts, each of which, when so executed and delivered,
shall be deemed to be an original and all of which, taken
together, shall constitute one and the same agreement.
(e) Unless the context otherwise requires, capitalized
terms used herein shall have the same meanings given thereto in
the Purchase Agreement.
IN WITNESS WHEREOF, each of the undersigned parties have
caused this Interim Servicing Agreement to be duly executed and
delivered by one of its duly authorized officers, all as of the
date first above written.
HOMEBANC MORTGAGE CORPORATION
By:
Its:
CAROLINA FIRST BANK
By:
Its:
7
SCHEDULE A
to
Interim Servicing Agreement
The following reports as of the Investor cut-off date each
month, in the format produced on Seller's FIServ data processing
system, delivered within ten (10) days following the cut-off
date:
Investor Trial Balance
Security Balance
Cut-Off Transaction Journal
Prepayment Report
Delinquent Report
Curtailment Report
Seller shall use its reasonable best efforts to provide
Purchaser with such of the above information by verbal report
within three (3) business days following the cut-off date so as
to allow Purchaser the opportunity to estimate accounting entries
for its servicing operations for the preceding month.
A-1
EXHIBIT C
TO MORTGAGE
SERVICING PURCHASE
AND SALE AGREEMENT
SERVICING INFORMATION AND DOCUMENTATION
A. The following information with respect to each Mortgage in a
format sufficient to enable its tape-to-tape transmission to
Purchaser:
1. Property Address 10. Type of Loan
2. Borrower's Name 11. Term of Loan
3. Mailing Address 12. Maturity Date of Loan
4. Loan Number 13. Delinquency Pattern
5. Interest Rate 14. Date and Type of Last
Activity
6. Principal Balance
15. Principal and Interest
7. Original Loan Amount Constant
16. Social Security Number
8. Interest Due of Mortgagor
17. Legal Description of the
9. Next Due Date Mortgaged Property
18. Calendar year-to-date
and most recent twelve
(12) month history, if
required by Purchaser
B. The following information and documents with respect to each
Mortgage:
1. Transaction history file
2. For each Mortgage on which Seller escrows real estate
taxes, tax payments receipt for past twelve (12) months
which Seller has received
3. Collection records and property address listing
4. All flood, hazard insurance and mortgage insurance
policies
5. All available tax records, including prior year receipts
6. All title policies and title opinions
7. Microfilm of case files to the extent available
8. Copy of letter to appropriate insurance companies/agents
requesting endorsements to reflect Closing to Purchaser
and new address
9. Other documents or information that Purchaser may
reasonably request which are reasonably available to
Seller
10. Copy of note and recorded mortgage or certified copy of
mortgage
11. Copy of letter to the appropriate taxing authorities or tax
servicers notifying them of the transfer of Servicing to
Purchaser
12. Copy of Seller's notice of transfer letters to each borrower
and insurer which shall inform the borrower and insurers to
address all communication and remittances to the Purchaser
13. Copy of credit package
14. Available information concerning all pending items, including
but not limited to partial releases, mortgage life or
mortgage disability claims and litigation
C. On an aggregate basis, a schedule enumerating each Mortgage
which requires special handling with a statement of the
reasons therefor and all relevant documentation attached
D. A certified copy of each Servicing Agreement
2
EXHIBIT D
TO MORTGAGE
SERVICING PURCHASE
AND SALE AGREEMENT
[LETTERHEAD OF NELSON MULLINS RILEY & SCARBOROUGH, L.L.P.]
June __, 1995
Carolina First Bank
P.O. Box 12249
Columbia, South Carolina 29211
Re: Mortgage Servicing Purchase and Sale Agreement dated June
___, 1995 (the "Agreement") by and between HomeBanc Mortgage
Corporation, a Georgia corporation ("HomeBanc"), and
Carolina First Bank, a South Carolina bank (the "Purchaser")
Ladies and Gentlemen:
We have acted as counsel to HomeBanc in connection with the
preparation of the Agreement and the Interim Servicing Agreement
dated June ___, 1995, between HomeBanc and Purchaser (the
"Interim Servicing Agreement") and have participated in the
closing of the transactions contemplated thereby (the
"Transaction"). This opinion is rendered to you in compliance
with Section 7.6 of the Agreement.
This opinion letter is limited by, and is in accordance
with, the Interpretative Standards attached hereto as Schedule 1
(the "Interpretive Standards") which are incorporated in this
opinion letter by this reference. Capitalized terms used in this
opinion letter and not otherwise defined herein shall have the
meanings assigned to such terms in the Interpretive Standards and
the Agreement. If there is a conflict between definitions of a
term, the definition in the Interpretive Standards shall control
over any conflicting definition.
Our opinions herein are limited solely to the federal laws
of the United States of America and the internal laws of the
State of Georgia, without reference to choice of law provisions
and we express no opinion herein concerning the laws of any other
jurisdiction. In this regard we note that the Agreement contains
a provision to the effect that the law of the State of South
Carolina are intended to be the governing laws. For purposes of
the opinion, we have assumed that the laws of the State of South
Carolina (including all
Carolina First Bank
June 1, 1995
Page 2
applicable interpretations thereof) are
identical in all relevant respects to the laws to the State of
Georgia.
In the capacity described above, we have considered such
matters of law and fact, including the examination of originals
or copies, certified or otherwise identified to our satisfaction,
of such records and documents of HomeBanc, certificates of
officers and representatives of HomeBanc, certificates of public
officials and such other documents as we have deemed appropriate
as a basis for the opinions hereinafter set forth.
Based on the foregoing, it is our opinion that:
1. HomeBanc is a corporation existing under the laws of
the State of Georgia.
2. HomeBanc has the corporate power to execute and deliver
the Agreement and the Interim Servicing Agreement to
perform its obligations thereunder.
3. HomeBanc has duly authorized its execution and delivery
of the Agreement and the Interim Servicing Agreement
and all performance by it thereunder and has duly
executed and delivered the Agreement and the Interim
Servicing Agreement.
4. The execution and delivery by HomeBanc of the Agreement
and the Interim Servicing Agreement do not, and if
HomeBanc were now to perform its obligations under the
Agreement and the Interim Servicing Agreement such
performance would not, result in any:
(i) violation of HomeBanc's Articles of Incorporation
or bylaws:
(ii) violation of any existing federal or state
constitution, statute, regulation, rule, order or
law to which HomeBanc are subject; or
(iii) violation of any judicial or administrative
decree, writ, judgment or order to which, to our
knowledge, HomeBanc is subject.
5. The Transaction is not subject to the Uniform
Commercial Code - Bulk Transfers law as enacted under
Georgia law and codified by Article 6 of Title 11 of
the Official Code of Georgia Annotated.
6. No consent, approval, authorization or other action by,
or filing with, any governmental authority of the
United States, the State of Georgia or the State of
South Carolina is required for Seller's execution and
delivery of the Agreement
Carolina First Bank
June 1, 1995
Page 3
and the Interim Servicing Agreement and consummation of
the Transaction other than the approval of the Investors
as contemplated by the Agreement.
7. The Agreement and the Interim Servicing Agreement are
enforceable against HomeBanc.
This opinion letter is for your exclusive use solely in
connection with the Transaction, and may not be relied upon by
any other person or for any other purpose without our prior
written consent.
Very truly yours,
NELSON MULLINS RILEY &
SCARBOROUGH, L.L.P.
By:
EXHIBIT E
TO MORTGAGE
SERVICING PURCHASE
AND SALE AGREEMENT
[LETTERHEAD OF WYCHE, BURGESS, FREEMAN & PARHAM]
June ___, 1995
HomeBanc Mortgage Corporation
5775 Glenridge Drive
Building E, Suite 500
Atlanta, Georgia 30348-5338
Re: Mortgage Servicing Purchase and Sale Agreement dated June
___, 1995, (the "Agreement") by and between HomeBanc
Mortgage Corporation, a Georgia corporation ("HomeBanc
Mortgage"), and Carolina First Bank, a South Carolina bank
(the "Purchaser")
Ladies and Gentlemen:
We have acted as counsel to Purchaser in connection with the
preparation of the Agreement and that certain Interim Servicing
Agreement dated June ___, 1995 by and between HomeBanc and Pur-
chaser (the "Interim Servicing Agreement") and have participated
in the closing of the transactions contemplated thereby (the
"Transaction"). This opinion is rendered to you in compliance
with Section 8.8 of the Agreement.
This opinion letter is limited by, and is in accordance
with, the Interpretative Standards attached hereto as Schedule 1
(the "Interpretive Standards") which are incorporated in this
opinion letter by this reference. Capitalized terms used in this
opinion letter and not otherwise defined herein shall have the
meanings assigned to such terms in the Interpretive Standards and
the Agreement. In the event of a conflict between definitions of
a term, the definition in the Interpretive Standards shall
control over any conflicting definition.
HomeBanc Mortgage Corporation
June 1, 1995
Page 2
Our opinions herein are limited solely to the laws of the
United States of America and the internal laws of the State of
South Carolina, without reference to choice of law provisions and
we express no opinion herein concerning the laws of any other
jurisdiction.
In the capacity described above, we have considered such
matters of law and fact, including the examination of originals
or copies, certified or otherwise identified to our satisfaction,
of such records and documents of the Purchaser, certificates of
officers and representatives of the Purchaser, certificates of
public officials and such other documents as we have deemed
appropriate as a basis for the opinions hereinafter set forth.
Based on the foregoing, it is our opinion that:
1. Purchaser was duly organized as a bank under the laws of the
state of South Carolina and is existing in good standing
under the laws of the state of South Carolina.
2. Purchaser has the corporate power to execute and deliver the
Agreement and Interim Servicing Agreement and to perform its
obligations thereunder.
3. Purchaser has duly authorized its execution and delivery of
the Agreement and the Interim Servicing Agreement and all
performance by it thereunder and has duly executed and
delivered the Agreement and the Interim Servicing Agreement.
4. The execution and delivery by Purchaser of the Agreement and
the Interim Servicing Agreement did not, and if Purchaser
were now to perform its obligations under the Agreement and
the Interim Servicing Agreement such performance would not,
result in any:
(i) violation of Purchaser's articles of incorpora-
tion or bylaws:
(ii) violation of any existing federal or state
constitution, statute, regulation, rule, order or law
to which Purchaser is subject;
(iii) violation of any judicial or administrative
decree, writ, judgment or order to which, to our
knowledge, Purchaser is subject.
5. No consent, approval, authorization or other action by, or
filing with, any governmental authority of the United
States, the State of Georgia or the State of South Carolina
is required for Purchaser's execution and delivery of the
Agreement and the Interim Servicing Agreement and consum-
mation of the Transaction other than the approval of the
Investors as contemplated by the Agreement.
HomeBanc Mortgage Corporation
June 1, 1995
Page 3
6. The Agreement and the Interim Servicing Agreement are
enforceable against Purchaser.
This opinion letter is for your exclusive use solely in
connection with the Transaction, and may not be relied upon by
any other person or for any other purpose without our prior
written consent.
Very truly yours,
Wyche, Burgess, Freeman & Parham
By:
EXHIBIT F
TO MORTGAGE
SERVICING PURCHASE
AND SALE AGREEMENT
ESCROW AGREEMENT
This Escrow Agreement (the "Agreement") is entered into as
of the _______ day of August, 1995, by and among Carolina First
Bank, a South Carolina banking corporation ("Purchaser"),
HomeBanc Mortgage Corporation, a Georgia corporation ("HomeBanc")
and Trust Company Bank of Georgia, a Georgia banking corporation
("Escrow Agent").
W I T N E S S E T H :
WHEREAS, Seller and Purchaser are parties to that certain
Mortgage Servicing Purchase and Sale Agreement dated as of
June ___, 1995 (the "Purchase and Sale Agreement"), pursuant to
which Purchaser has acquired from Seller the Seller's Servicing
(as defined in the Purchase and Sale Agreement); and
WHEREAS, pursuant to the provisions of the Purchase and Sale
Agreement, Seller and Purchaser have entered into this Agreement
with the Escrow Agent for the purposes set forth below.
NOW, THEREFORE, in consideration of the premises, the
covenants and agreements made herein, and of other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties hereto
hereby agree as follows:
ARTICLE 1
PURPOSE OF ESCROW
This Agreement is made pursuant to the provisions of the
Purchase and Sale Agreement for the purpose of protecting and
preserving the rights of indemnity of the Purchaser pursuant to
Section 6.11 of the Purchase and Sale Agreement. Purchaser shall
have no right to any of the Escrowed Property (as defined below)
unless or until all or a portion of the Escrowed Property becomes
distributable to the Purchaser pursuant to the terms hereof.
Possession of the Escrowed Property by the Escrow Agent hereunder
shall be for the benefit of the Seller.
ARTICLE 2
ESCROWED PROPERTY
The escrowed property shall consist of the $645,000
deposited with the Escrow Agent on the date hereof (the "Escrowed
Property")(receipt of which by the Escrow Agent is hereby
acknowledged) pursuant to the provisions of Section 6.11 of the
Purchase and Sale Agreement, and all income and interest earned
thereon while held in escrow. The Escrow Agent shall hold,
invest and distribute the Escrowed Property as provided herein.
ARTICLE 3
INVESTMENT OF ESCROWED PROPERTY
3.1 Investment. At any time, and from time to time,
the Escrow Agent shall invest and reinvest upon written
instructions of Seller the Escrowed Property in Investment
Securities. As used herein Investment Securities means: (i)
United States government securities or securities of agencies of
the United States government which are
2
guaranteed by the United States government; (ii) securities of
governmental agencies, if the same are covered by a bank repurchase
agreement; and (iii) certificates of deposit or money market
accounts of the Escrow Agent. Any interest or other income received
with respect to, or gains realized upon the sale or redemption of,
such Investment Securities shall be credited to and held as part of
the Escrowed Property, and any costs or expenses incurred in
connection with the purchase or sale of such Investment Securities
and losses realized upon the sale or redemption thereof likewise
shall be charged against the Escrowed Property.
3.2 Losses; Withdrawal. The Escrow Agent shall not
have any liability for any loss sustained as a result of any
investment made pursuant to the Seller's instructions or as a
result of any liquidation of any such investment prior to its
maturity or for the failure of the parties to give the Escrow
Agent any instruction to invest or reinvest the Escrowed
Property, including any earnings thereon. The Escrow Agent
further agrees that all Escrowed Property, including any interest
thereon as provided above shall be available for withdrawal on
not less than five (5) days' prior written notice.
3.3 Tax Identification Number. In connection with any
investment of the Escrowed Property, the Seller shall provide the
Escrow Agent with its taxpayer identification number. Failure to
provide such information may cause the Escrow Agent, to be
required to withhold tax on any interest payable hereunder.
3
ARTICLE 4
DISTRIBUTION OF ESCROWED PROPERTY
4.1 Claims Distributions. Distributions of the
Escrowed Property shall be made upon resolution of each claim by
Purchaser for indemnification under the Purchase and Sale
Agreement (a "Claim") as follows:
(a) Upon receipt of joint instructions signed by both
Purchaser and Seller certifying their agreement for resolution of
a Claim, the Escrow Agent shall promptly deliver to Purchaser (or
such other person as Purchaser and Seller may instruct) the
amount of Escrowed Property equal to the amount of the resolved
Claim as designated in the joint instructions; and
(b) Upon receipt of a final unappealable order or
judgment of the arbitrator(s) in a proceeding conducted in
accordance with Section 10.2 of the Purchase and Sale Agreement
(a "Final Order") finding that Seller has an obligation to
Purchaser for a Claim, the Escrow Agent shall distribute to the
Purchaser (or such other person as specified in the Final Order)
the amount of Escrowed Property specified to be distributed in
the Final Order.
4.2 Periodic Distributions. Distributions of the
Escrowed Property shall be made periodically as follows:
4
(a) On each of June ___, 1996, 1997 and 1998, the
Escrow Agent shall distribute to Seller an amount of Escrowed
Property equal to (i) the lesser of (A) $215,000, $430,000 and
$645,000, respectively, or (B) such amount of Escrowed Property
remaining in escrow, plus (ii) all interest and income received
on the Escrowed Property to the date of the distribution (a
"Periodic Distribution"), less (iii) the amounts of all Resolved
Claims (as defined in the Purchase and Sale Agreement), and less
(iv) the amount of any Claims that Purchaser shall in good faith
have asserted in writing to the Escrow Agent which remains
unresolved by agreement or a Final Order on that date (an
"Unresolved Claim"); and
(b) The Escrow Agent shall distribute to Seller or
Purchaser, as the case may be, any such Periodic Distributions
that would have been distributed to Seller but for an Unresolved
Claim or Claims as, when and to the extent such Unresolved Claims
are resolved.
ARTICLE 5
ESCROW AGENT MATTERS
5.1 Appointment of Escrow Agent. The Escrow Agent is
hereby appointed, and the Escrow Agent hereby agrees to serve
under this Agreement, as escrow agent upon the terms expressly
set forth in this Agreement.
5.2 Representations and Warranties of Escrow Agent.
The Escrow Agent makes no representation and has no
responsibility as to the validity or sufficiency of this
Agreement, except that the Escrow Agent represents and warrants
to the Purchaser and the Seller as follows:
5
(a) The Escrow Agent is a banking corporation duly
organized and validly existing in good standing under the laws of
Georgia.
(b) The compliance by the Escrow Agent with all the
provisions of this Agreement are within its corporate powers and
are legal and will not conflict with, result in any breach of any
of the provisions of, or constitute a default under any
agreement, charter instrument, bylaw or other instrument to which
the Escrow Agent is a party or by which it may be bound.
(c) No consent, approval or authorization of, or
filing, registration or qualification with, any governmental
authority on the part of the Escrow Agent is required as a
condition to the execution, delivery and performance of this
Agreement by the Escrow Agent.
(d) The execution, delivery and performance of this
Agreement has been approved by all necessary corporate action on
behalf of the Escrow Agent; this Agreement has been executed and
delivered by the duly authorized officer or agent of the Escrow
Agent; and this Agreement, when duly executed and delivered by
the other parties hereto, will be a legal, valid and binding
obligation of the Escrow Agent, enforceable in accordance with
its terms, except as such enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally and subject to the
application of general principles of equity.
6
5.3 Compensation, Expenses, Etc. of Escrow Agent. The
Escrow Agent shall be paid the fees and reimbursements in the
amount and manner specified on SCHEDULE A attached hereto, and
each of Purchaser and Seller shall pay the Escrow Agent one-half
of such fees and reimbursements. All fees shall be paid in
United States currency at the office of the Escrow Agent set
forth in this Agreement. The Escrow Agent shall have a first
lien on the escrow funds held by it for compensation,
reimbursement and indemnification.
5.4 Indemnification. Purchaser and Seller jointly and
severally agree to indemnify, defend and hold the Escrow Agent
harmless from and against any and all loss, damage, tax,
liability and expense, including the legal costs and expenses of
defending itself against any claim or liability in connection
with its performance hereunder, that may be incurred by the
Escrow Agent arising out of or in connection with its duties,
obligations or performance as Escrow Agent hereunder, except (i)
as caused by its gross negligence or willful misconduct and (ii)
for taxes on, based on or measured by any fees or compensation
received by the Escrow Agent for services rendered under this
Agreement. The terms of this Section 5.4 shall survive the
termination of this Agreement and, with respect to claims arising
in connection with the Escrow Agent's duties while acting as
such, the resignation or removal of the Escrow Agent. The Escrow
Agent shall give prompt written notice to Purchaser and Seller of
any claim against the Escrow Agent with respect to any such
expenses, and shall take such actions as the Purchaser and Seller
may reasonably request, at the cost and expense of Purchaser and
Seller, to permit Purchaser and Seller to contest any such
claims, whether in the name of the Escrow Agent, the Purchaser or
the Seller.
7
Purchaser and Seller agree to contribute equally to
the satisfaction of claims and the payment of expenses relating
to their obligations under this Section, and each agrees that if
the other shall satisfy or pay more than one half of any such
cost or expense that it shall have a right of contribution
against the other for the amount of the other's obligation so
paid or satisfied.
5.5 Obligations of the Escrow Agent.
(a) The duties and obligations of the Escrow Agent are
those herein specifically provided and no other. The Escrow
Agent shall not have any liability under, nor duty to inquire
into, the terms and provisions of any agreement or instrument,
other than this Agreement. Its duties are ministerial in nature
and the Escrow Agent shall not incur any liability whatsoever
other than for its own willful misconduct or gross negligence.
Without limiting the generality of the foregoing, it is expressly
understood and agreed by the parties hereto that all references
in this Agreement to the Purchase and Sale Agreement are for the
convenience of the parties hereto other than the Escrow Agent and
the Escrow Agent shall have no obligations or duties with respect
thereto.
(b) The Escrow Agent shall not incur any liability for
following the instructions herein contained or expressly provided
for, or written instructions given by the parties hereto.
(c) The Escrow Agent shall not have any responsibility
for the genuineness or validity of any document or other material
presented to or deposited with it nor any
8
liability for any action taken, suffered or omitted in accordance
with any written instructions or certificates given to it hereunder
and believed by it to be signed by the proper party or parties.
(d) The Escrow Agent may consult with counsel of its
choice, including in-house counsel, and shall not be liable for
any action taken, suffered or omitted by it in accordance with
the advice of such counsel.
(e) In the event that the Escrow Agent shall be
uncertain as to its duties or rights hereunder or shall receive
instructions, claims or demands from any party hereto which, in
its opinion, conflict with any of the provisions of this
Agreement, it shall be entitled to refrain from taking any action
and its sole obligation shall be to keep safely all property held
in escrow until it shall be directed otherwise in writing by all
of the other parties hereto or by a final order or judgment of a
court of competent jurisdiction.
(f) The Escrow Agent shall not be required to
institute legal proceedings of any kind and shall not be required
to initiate or defend any legal proceedings which may be
instituted against it in respect of the subject matter of this
Agreement. If the Escrow Agent elects to act it will do so only
to the extent that it is indemnified to its satisfaction against
the cost and expense of such defense or initiation.
(g) The Escrow Agent shall not be bound by any
modifications, amendment, termination, cancellation, rescission
or supersession of this Agreement unless the
9
same shall be in writing and signed by all of the other parties
hereto and, if its rights, duties, immunities or indemnities as
Escrow Agent are affected thereby, unless it shall have given its
prior written consent thereto.
5.6 Resignation, Removal and Replacement of Escrow Agent.
(a) The Escrow Agent may at any time resign by giving
written notice of its resignation to the parties hereto at their
respective addresses set forth in this Agreement, at least ten
(10) days prior to the date specified for such resignation to
take effect, and, upon the effective date of such resignation,
all property then held by the Escrow Agent shall be delivered by
it to such person as may be designated in joint written
instructions executed by the Purchaser and Seller, whereupon all
of the Escrow Agent's duties and obligations hereunder shall
cease and terminate. If no such person shall have been
designated by such time, all duties and obligations of the Escrow
Agent shall nevertheless cease and terminate. The Escrow Agent's
sole responsibility thereafter shall be to keep safely all
property then held by it pursuant to this Agreement and to
deliver the same to a person or persons designated by joint
written instructions executed by Purchaser and Seller or in
accordance with the directions of a final order of judgment of a
court of competent jurisdiction.
(b) The Purchaser and Seller may at any time remove
the Escrow Agent for or without cause by an instrument or
instruments in writing signed by both and delivered to the Escrow
Agent, such removal to be effective upon the acceptance of
appointment by a successor pursuant to this Section 5.6.
10
(c) In case the office of the Escrow Agent shall
become vacant for any reason, the Seller and the Purchaser may
appoint a successor Escrow Agent (eligible as provided in Section
5.7), to fill such vacancy by an instrument or instruments in
writing delivered to such successor Escrow Agent and the retiring
Escrow Agent, and absent such action by Seller and Purchaser, the
vacancy may be filled by action of a court of competent
jurisdiction. Upon the appointment of any successor Escrow Agent
pursuant to this Section 5.6, the successor Escrow Agent shall
immediately and without further act succeed to all the rights and
obligations of the retiring Escrow Agent under this Agreement as
if originally named herein, and the retiring Escrow Agent at the
expense of the Purchaser and Seller shall duly sign, transfer and
deliver to such successor Escrow Agent all the rights and monies
at the time held by the retiring Escrow Agent under this
Agreement and shall execute and deliver such proper instruments
as may be reasonably requested to evidence such assignment,
transfer and delivery.
5.7 Eligibility of Escrow Agent. The Escrow Agent
shall always be a state or national bank or trust company in good
standing, organized under the laws of the United States of
America or one of the states thereof, authorized under such laws
to exercise corporate trust powers, and having a capital and
surplus (as shown by its latest financial statement published to
its shareholders) aggregating at least $50,000,000, and having
its principal corporate trust office in a jurisdiction acceptable
to Purchaser and Seller. In case at any time the Escrow Agent
shall cease to be eligible in accordance with the provisions of
this Section 5.7, the Escrow Agent shall resign immediately in
the manner and with the effect specified in Section 5.6.
11
ARTICLE 6
AMENDMENT, REVOCATION AND TERMINATION
This Agreement may be amended only by an instrument in
writing executed by or on behalf of each of the parties hereto.
This Agreement and the escrow created hereunder is irrevocable.
Upon distribution of all the Escrowed Property in accordance with
the terms of this Agreement to Purchaser and Seller, in
accordance with their respective interests determined pursuant to
the provisions hereof, this Agreement shall terminate and the
Escrow Agent, at the request and expense of the Purchaser and
Seller, will execute and deliver to the Purchaser and Seller a
proper instrument or instruments acknowledging the satisfaction
and termination of this Agreement.
ARTICLE 7
MISCELLANEOUS
7.1 Notices. Any notice, permitted or required to be
given pursuant to this Agreement, shall be sufficiently given if
sent by registered or certified mail return receipt requested or
by hand delivery (including overnight delivery service) to each
of the other parties at the addresses given below or to such
other address as a party may designate by notice to each of the
other parties. Any notice called for by this Agreement shall be
deemed given if (i) delivered by hand, when delivered, or (ii)
sent by certified mail, when mailed.
(a) To Purchaser:
Mr. Joseph C. Reynolds
Chief Mortgage Officer
Carolina First Bank
1420 Lady Street
P.O. Box 12249
Columbia, South Carolina 29211
Fax: (803) 929-5365
12
With a copy to:
William P. Crawford, Jr., Esq.
Wyche, Burgess, Freeman & Parham
P.O. Box 728
Greenville, South Carolina 29602
Fax: (803) 242-8324
(b) To Seller:
HomeBanc Mortgage Corporation
5775 Glenridge Drive
Building E, Suite 500
Atlanta, Georgia 30328
Fax: (404) 303-4017
With a copy to:
Jeffrey A. Allred, Esq.
Nelson Mullins Riley & Scarborough, L.L.P.
400 Colony Square, Suite 2200
1201 Peachtree Street, N.E.
Atlanta, Georgia 30316
Fax: (404) 817-6050
(c) To Escrow Agent:
Trust Company Bank of Georgia
7.2 Entire Agreement. This Agreement, the Purchase
and Sale Agreement, and the Interim Servicing Agreement between
Purchaser and Seller (and the agreements and instruments
referenced therein) supersede all prior discussions and
agreements between and among the parties with respect to the
matters contained herein and contain the sole and entire
agreement between the parties hereto with respect to the matters
contained herein and therein.
13
7.3 Counterparts; Headings. This Agreement may be
executed in any number of counterparts, each of which will be
deemed an original, but all of which will constitute one and the
same instrument. The headings in this Agreement are for the
purpose of reference only and shall not limit or define the
meaning hereof.
7.4 Binding Effect. This Agreement will be binding
upon and will inure to the benefit of the parties hereto and
their respective successors, executors, administrators and
assigns.
7.5 Assignment. This Agreement may not be assigned by
any party without the consent of the others provided, however,
that this Agreement, and any rights or obligations hereunder, may
be assigned or delegated by Seller without the prior consent of
Purchaser or Escrow Agent after the Sale Date (as defined in the
Purchase and Sale Agreement) to any then current or former
holders of capital stock of Seller or their designees, but such
delegation shall not relieve Seller of primary responsibility for
its obligations hereunder.
7.6 Governing Law. The rights, duties and obligations
of the Escrow Agent under this Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia,
and any action brought in respect thereof shall be brought in the
courts of the State of Georgia, located in the County of Fulton,
the jurisdiction of such courts being irrevocably consented to by
the parties hereto.
14
7.7 Further Assurances. Purchaser, Seller and Escrow
Agent each will, at any time and from time to time after the date
hereof, upon the request of one of the other, do, execute,
acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney,
receipts, acknowledgments, acceptances and assurances as may be
reasonably required to satisfy and perform the obligations of
such party hereunder.
7.8 Singular/Plural; Gender. Where the context
requires or permits, the use of the singular form includes the
plural, and the use of the plural form includes the singular, and
the use of any gender includes any and all genders.
15
IN WITNESS WHEREOF, the parties have, or have caused this
Agreement to be, duly executed, delivered and sealed as of the
day first above written.
CAROLINA FIRST BANK
By:
Title:
HOMEBANC MORTGAGE CORPORATION
By:
Title:
TRUST COMPANY BANK OF GEORGIA
By:
Title:
16
SCHEDULE A
SCHEDULE OF FEES AND EXPENSES
[To be provided by Escrow Agent.]