Exhibit 10.40

MORTGAGE LOAN PURCHASE AGREEMENT

 

This Mortgage Loan Purchase Agreement is dated and effective as of September 6,
2002, (the "Agreement"), between E-Loan, Inc., having an address at 5875 Arnold
Road, Dublin, California 94568 (the "Seller"), and Countrywide Home Loans, Inc.,
having an address at 4500 Park Granada, Calabasas, California 91302 (the
"Purchaser").

 

R

E C I T A L S

The Seller desires to sell and transfer to the Purchaser from time to time, and
the Purchaser desires to purchase from the Seller from time to time, certain
mortgage loans identified in a Purchase Confirmation (as defined below) executed
by the Purchaser and the Seller, including all servicing rights relating thereto
(as defined herein, the "Mortgage Loans"), upon such terms set forth below.

In consideration of the promises and the mutual agreements and undertakings set
forth herein, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

ARTICLE I

DEFINITIONS

Unless the context otherwise requires, all capitalized terms used herein shall
have the meanings assigned to such terms in this Article I unless defined
elsewhere herein. Any capitalized term used or defined in a Purchase
Confirmation that conflicts with the corresponding definition set forth herein
shall supercede such term:

Adjustable Rate Mortgage Loan

: Any Mortgage Loan in which the related Mortgage Note contains a provision
whereby the Mortgage Interest Rate is adjusted from time to time in accordance
with the terms of such Mortgage Note.

Agencies: Both Fannie Mae and Freddie Mac.

Agreement: This Mortgage Loan Purchase Agreement, including all exhibits and
supplements hereto, and all amendments hereof.

Appraised Value: With respect to any Mortgage Loan, the value of the related
Mortgaged Property based upon the lesser of (i) the appraisal made for the
originator at the time of origination of the Mortgage Loan or (ii) the purchase
price of the Mortgaged Property at the time of origination of the Mortgage Loan,
provided, however, that in the case of a refinanced Mortgage Loan, such value is
based solely upon the appraisal made at the time of origination of such
refinanced Mortgage Loan.

Assignment of Mortgage: An assignment of the Mortgage, notice of transfer or
equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
sale of the Mortgage to the Purchaser.

Balloon Mortgage Loan: Any Mortgage Loan wherein the Mortgage Note matures prior
to full amortization and requires a final and accelerated payment of principal.

Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a day on
which banking and savings and loan institutions in the State of California, are
authorized or obligated by law or executive order to be closed.

Closing: The consummation of the sale and purchase of each Mortgage Loan
Package.

Closing Date: With respect to each sale and purchase of a Mortgage Loan Package
as contemplated hereunder, the closing date on which the purchase and sale of
the Mortgage Loans constituting a Mortgage Loan Package is consummated, as set
forth in the related Trade Confirmation and Purchase Confirmation.

Conventional Mortgage Loan: A Mortgage Loan that is not insured by the FHA or
guaranteed by the VA.

Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan that contains a
provision whereby the Mortgagor is permitted to convert the Mortgage Loan to a
fixed-rate mortgage loan in accordance with the terms of the related Mortgage
Note.

Custodial Agreement: The agreement, if any, executed by the Seller, the
Purchaser and the Custodian governing the retention of the originals of each
Mortgage Note, Mortgage, Assignment of Mortgage and other Mortgage Loan
Documents, in a form acceptable to the Purchaser.

Custodian: The custodian under the Custodial Agreement, or its successor in
interest or assigns, or any successor to the Custodian under the Custodial
Agreement, as therein provided.

Cut-off Date: With respect to each sale and purchase of a Mortgage Loan Package
as contemplated hereunder, the cut- off date as set forth in the related
Purchase Confirmation.

Due Date: The day of the month on which a Monthly Payment is due on a Mortgage
Loan, exclusive of any days of grace.

Escrow Account: An account or accounts maintained by the Seller, or the Seller's
predecessor in interest, maintained for the deposit of Escrow Payments received
in respect of one or more Mortgage Loans.

Escrow Payments: The amounts held in Escrow Accounts which include amounts being
held for payment of taxes, assessments, water rates, mortgage insurance
premiums, fire and hazard insurance premiums and other payments required to be
escrowed by the Mortgagor pursuant to any Mortgage Loan.

Fannie Mae: The Federal National Mortgage Association or any successor thereto.

Fixed Rate Mortgage Loan: Any Mortgage Loan wherein the Mortgage Interest Rate
set forth in the Mortgage Note is fixed for the term of such Mortgage Loan.

Freddie Mac: The Federal Home Loan Mortgage Corporation, or any successor
thereto.

Government Mortgage Loan: A Mortgage Loan insured by the FHA or guaranteed by
the VA.

Gross Margin: With respect to each Adjustable Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note which amount is added
to the Index in accordance with the terms of the related Mortgage Note to
determine the Mortgage Interest Rate for such Mortgage Loan.

HMDA: The Home Mortgage Disclosure Act, as amended.

HUD: The Department of Housing and Urban Development or any successor thereto.

Index: With respect to each Adjustable Rate Mortgage Loan, the Index shall mean
the rate per annum as set forth in the related Mortgage Loan Schedule with
respect to each Segment.

Initial Purchaser: Countrywide Home Loans, Inc.

Interest Adjustment Date: With respect to each adjustable rate Mortgage Loan,
the date on which an adjustment to the Mortgage Interest Rate on a Mortgage Note
becomes effective.

Interim Servicing Period: The period commencing with the related Closing Date
and ending with the related Servicing Transfer Date.

LGC: A loan guarantee certificate issued by the VA.

Lifetime Mortgage Interest Rate Cap

: The absolute maximum Mortgage Interest Rate payable for an Adjustable Rate
Mortgage Loan, above which the Mortgage Interest Rate shall not be adjusted, as
provided in the related Mortgage Loan Schedule.

Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the ratio of the
original outstanding principal amount to the Appraised Value of the Mortgage
Loan.

MERS

: Mortgage Electronic Registration Systems, Inc. or any successor or assign
thereto.

MERS Mortgage Loan

: Any Mortgage Loan registered with MERS on the MERS System.

MERS System: The electronic system of recording transfers of mortgages
maintained by MERS.

MIC: A mortgage insurance certificate issued by HUD.

Monthly Payment: The scheduled monthly payment of principal and interest on a
Mortgage Loan.

Mortgage: The mortgage, deed of trust or other such instrument securing a
Mortgage Note, which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note or a first lien upon a
leasehold estate of Mortgagor, as the case may be.

Mortgage File: The file containing the Mortgage Loan Documents, all other
documents in connection with the origination of a particular Mortgage Loan and
all documents, files and other information reasonably necessary to service the
Mortgage Loans.

Mortgage Interest Rate: The annual rate at which interest accrues on any
Mortgage Loan, exclusive of any primary mortgage insurance, as adjusted from
time to time in accordance with the provisions of the related Mortgage Note, if
applicable.

Mortgage Loan: A mortgage loan identified in the Mortgage Loan Schedule which is
sold pursuant to this Agreement, which Mortgage Loan includes without limitation
the Mortgage Loan Documents, the Mortgage File, the Monthly Payments, Principal
Prepayments, any related Escrow Accounts, the Servicing Rights and all other
rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan. Unless the context requires otherwise, any reference to the
Mortgage Loans in this Agreement shall refer to the Mortgage Loans constituting
the Mortgage Loan Package.

Mortgage Loan Documents: The following documents pertaining to any Mortgage
Loan:

(a) The original Mortgage Note bearing all intervening endorsements, endorsed
"Pay to the order of __________" and signed in the name of the Seller by an
authorized officer;

(b) The original Assignment of Mortgage for each Mortgage Loan from the Seller
to blank;

(c) The original Mortgage with evidence of recording thereon;

(d) The originals of all intervening assignments of mortgage with evidence of
recording thereon; and

(e) The original mortgagee title insurance policy.

Mortgage Loan Package: The Mortgage Loans sold to the Purchaser pursuant to a
Purchase Confirmation and identified on a Mortgage Loan Schedule.

Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the schedule
of Mortgage Loans included therein and made a part of the related Purchase
Confirmation, which schedule shall include, the following information with
respect to each Mortgage Loan: (i) information sufficient to uniquely identify
such Mortgage Loan; (ii) the Mortgage Interest Rate as of the Cut-off Date;
(iii) with respect to any Adjustable Rate Mortgage Loan, the Gross Margin, the
Periodic Rate Cap, the Lifetime Rate Cap, the next Interest Adjustment Date and
whether such Adjustable Rate Mortgage Loan is a Convertible Mortgage Loan, (iv)
with respect to a LPMI Loan, the LPMI Fee, (v) the LTV at origination; (vi) the
remaining term as of the Cut-off Date and the original term of such Mortgage
Loan, and (vii) any other information pertaining to such Mortgage Loan as may be
reasonably requested by the Purchaser. The information set forth in the Mortgage
Loan Schedule relating to the Mortgage Interest Rate, Periodic Rate Cap and
Lifetime Rate Cap with respect to any LPMI Loan, as applicable, is exclusive of
the LPMI Fee.

Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor
secured by a Mortgage.

Mortgaged Property: The real property securing repayment of the debt evidenced
by a Mortgage Note.

Mortgagor: The obligor on a Mortgage Note.

Net Escrow Payments: Escrow Payment balances remaining after advances by the
Seller for taxes and insurance to the extent documented under a detailed
statement provided to the Purchaser.

Pass-Through Transfer: The sale or transfer of some or all of the Mortgage Loans
to a trust to be formed as part of a publicly or privately traded, rated or
unrated mortgage pass-through, pay- through or other mortgage-backed securities
transaction.

Periodic Mortgage Interest Rate Cap: With respect to each Adjustable Rate
Mortgage Loan, the provision of a Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase or
decrease on an Interest Adjustment Date above the Mortgage Interest Rate
previously in effect, equal to the rate set forth in the related Mortgage Loan
Schedule, as applicable.

Primary Mortgage Insurance Policy: A policy of primary mortgage guaranty
insurance issued by a Qualified Insurer, providing coverage at least equal to
the level of coverage required by the Agencies at the time the related Mortgage
Loan was originated if such Mortgage Loan was to be eligible for sale to, and
securitization by, either Fannie Mae or Freddie Mac.

Principal Prepayment: Any payment or other recovery of principal on a Mortgage
Loan which is received in advance of its scheduled Due Date, including any
prepayment penalty or premium thereon, which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.

Purchase Confirmation: Those certain purchase confirmations substantially in the
form of Exhibit D hereto, executed by the Seller and the Purchaser in connection
with the purchase and sale of each Mortgage Loan Package, which sets forth the
terms relating thereto including a description of the related Mortgage Loans
(including the Mortgage Loan Schedule), the Purchase Price for such Mortgage
Loans, the Closing Date, the Cut-off Date and the Servicing Transfer Date.

Purchase Price: The purchase price to be paid by the Purchaser for the Mortgage
Loans (including the Servicing Rights relating thereto) which, unless otherwise
specified in the Purchase Confirmation, shall equal the product of (a) the
Purchase Price Percentage, times (b) the Stated Principal Balance of the
Mortgage Loans.

Purchase Price Percentage: The purchase price percentage set forth in the
Purchase Confirmation.

Purchase Proceeds: The purchase proceeds to be paid by the Purchaser for the
Mortgage Loans constituting each Mortgage Loan Package, as set forth in a
funding schedule in the form of Exhibit A hereto.

Purchaser: Any entity which purchases the Mortgage Loans pursuant to this
Agreement or its successor in interest or any successor or assign to the
Purchaser under this Agreement as herein provided. Unless the context requires
otherwise, all references to "Purchaser" in this Agreement shall be deemed to
include such Purchaser's successors in interest, assignees or designees.

Qualified Insurer: An insurance company duly qualified as such under the laws of
the states in which the Mortgaged Properties are located, duly authorized and
licensed in such states to transact the applicable insurance business and to
write the insurance provided, approved as an insurer by the Agencies and whose
claims paying ability is rated in the two highest rating categories by the
Standard & Poor's Ratings Group or Moody's Investors Service with respect to
primary mortgage insurance and in the two highest rating categories by Best's
with respect to hazard and flood insurance.

Reconstitution Agreements

: Any of the agreement or agreements entered into by the Purchaser and/or
certain third parties, and if necessary the Seller, on the Reconstitution Date
or Dates with respect to any or all of the Mortgage Loans conveyed hereunder, in
connection with a Whole Loan Transfer or a Pass-Through Transfer as set forth in
Section 4.3.

Reconstitution Date: The date or dates on which any or all of the Mortgage Loans
purchased pursuant to this Agreement shall be reconstituted as part of a Whole
Loan Transfer or a Pass-Through Transfer pursuant to Section 4.3.

Repurchase Price: With respect to any Mortgage Loan, a price equal to the sum of
(a) the product of (i) the unpaid principal balance of the Mortgage Loan at the
time of repurchase, and (ii) the greater of par or the Purchase Price Percentage
(subject to any adjustments as contemplated in the Transaction Documents, if
any), plus (b) interest on such unpaid principal balance at the Mortgage
Interest Rate from the last date through which interest has been paid and
distributed to the Purchaser to the date of repurchase, plus (c) any outstanding
escrow advances and any outstanding servicing advances made by the Purchaser on
account of the Mortgage Loan.

Segment(s): One or more segments of Mortgage Loans (each, a "Segment")
comprising the segment(s) of Mortgage Loans set forth in the related Mortgage
Loan Schedule, whether individually or in the aggregate, as applicable.

Servicing Rights

: With respect to each Mortgage Loan, any and all of the following: (a) all
rights to service the Mortgage Loans; (b) any payments or monies payable or
received for servicing the Mortgage Loans; (c) any late fees, assumption fees,
penalties or similar payments with respect to the Mortgage Loans; (d) all
agreements or documents creating, defining or evidencing any such Servicing
Rights and all rights of the Seller thereunder, including, but not limited to,
any clean-up calls and termination options; (e) Escrow Payments or other similar
payments with respect to the Mortgage Loans and any amounts actually collected
with respect thereto; (f) all accounts and other rights to payments related to
any of the property described in this paragraph; (g) possession and use of any
and all Mortgage Files pertaining to the Mortgage Loans or pertaining to the
past, present, or prospective servicing of the Mortgage Loans; and (h) all
rights, powers and privileges incident to any of the foregoing.

Servicing Transfer Date: With respect to each sale and purchase of Mortgage
Loans as contemplated hereunder, the servicing transfer date as set forth in the
related Purchase Confirmation, or such other date as the Purchaser may select
upon reasonable notice to the Seller.

Stated Principal Balance: The unpaid principal balance of the Mortgage Loans at
the Cut-off Date.

Trade Confirmation: A letter agreement executed by the Seller and the Purchaser
prior to the applicable Closing Date confirming the general terms and conditions
of a prospective transaction contemplated herein and identifying certain of the
loan characteristics of the Mortgage Loans constituting the Mortgage Loan
Package to be purchased hereunder.

Transaction Documents: With respect to any Mortgage Loan Package purchased by
the Purchaser hereunder, the related Trade Confirmation, the related Purchase
Confirmation and this Agreement.

VA: The Department of Veterans Affairs.

Whole Loan Transfer: The sale or transfer by the Purchaser of some or all of the
Mortgage Loans in a whole loan format.

 

ARTICLE II

SALE OF THE MORTGAGE LOANS

Section 2.1 Agreement of Sale. On each Closing Date, the Seller does hereby
agree to sell, convey, transfer and assign to the Purchaser all right, title and
interest in and to the Mortgage Loans, all in accordance with the terms and
conditions set forth herein. The Seller confirms that its agreement to sell,
convey, transfer and assign to Purchaser the Mortgage Loans as provided in this
Agreement shall occur automatically each time it enters into a Purchase
Confirmation with the Purchaser and accepts payment from the Purchaser as
provided herein. On and after each Closing Date, the Seller shall hold the
Mortgage Loan Documents and Mortgage Files in trust for the Purchaser and shall
act only in accordance with the terms of this Agreement and the Purchaser's
instructions with respect thereto.

Section 2.2 Payment of the Purchase Proceeds. On each Closing Date, the
Purchaser shall pay to the Seller the Purchase Proceeds, by wire transfer in
immediately available funds to the account designated by the Seller. Upon
completion of the wire transfer to the Seller's designated account, the
Purchaser shall own the Mortgage Loans and the Servicing Rights, free and clear
of any lien or encumbrance whatsoever.

Section 2.3 Entitlement to Payment on the Mortgage Loans. The Purchaser shall be
entitled to all collections and recoveries of principal and interest received or
applied to any Mortgagor's account after each Cut-off Date. All payments and
remittances on the Mortgage Loans received by the Seller after the Closing Date
and payable to the Purchaser shall be paid promptly to the Purchaser in
accordance to the terms set forth in Article IV or Article V, as applicable.

Section 2.4 Examination of Mortgage Loan Documents by the Purchaser. Prior to
each Closing Date, the Purchaser shall have the right to review the Mortgage
File and, based on its review, decline to purchase any Mortgage Loan which the
Purchaser, in its sole discretion, determines not to be in compliance with each
of the representations and warranties contemplated hereby or which is otherwise
unsatisfactory to the Purchaser in its reasonable discretion. It is expressly
understood by the parties that the Purchaser is purchasing the Mortgage Loans
for the express purpose of reselling such Mortgage Loans to a subsequent
purchaser and, as such, the Purchaser's right to decline to purchase any of the
Mortgage Loans as contemplated above may be directly influenced by the results
of such subsequent purchaser's own due diligence on the Mortgage Loans. The
Seller agrees to deliver or make available to the Purchaser a complete Mortgage
File for each Mortgage Loan on or before such date as may be reasonably
requested by the Purchaser. The fact that the Purchaser has conducted or has
failed to conduct any partial or complete examination of the Mortgage Files
shall not affect the Purchaser's right to demand repurchase or to avail itself
of any other remedy available hereunder. Notwithstanding anything contained
herein to the contrary, should there be a material adverse change in the
characteristics of the Mortgage Loans remaining after the exclusion or rejection
of one or more Mortgage Loans by the Purchaser as contemplated above, the
Purchaser may, in its sole discretion, elect not to purchase the remaining
Mortgage Loans and the Purchaser shall have no liability therefor.

Section 2.5 Delivery of Mortgage Loan Documents. At least two (2) Business Days
prior to each Closing Date, the Seller shall deliver the Mortgage Loan Documents
with respect to each Mortgage Loan to the Purchaser or a bonded third party
custodian (the "Custodian") and, in the case of the latter, shall cause the
Custodian to deliver to the Purchaser a custodian's certification pursuant to
which the Custodian certifies to the Purchaser that (i) with respect to each
Mortgage Loan, it has in its possession originals of each of the Mortgage Loan
Documents, (ii) all of the Mortgage Loan Documents appear on their face to be
genuine originals or copies, as applicable, and (iii) upon the Purchaser's
wiring of the Purchase Proceeds to the Seller, that the Custodian shall hold the
Mortgage Loan Documents with respect to each Mortgage Loan in trust for the
Purchaser and will, subsequent thereto, act only in a manner consistent with the
Purchaser's instructions with respect thereto. In the event that any of the
Mortgage Loan Documents set forth in clauses (c) through (e) of the definition
of Mortgage Loan Documents in Article I have not been delivered to the Purchaser
in the time specified above (the "Missing Documents") either because such
Missing Documents have not been returned by the applicable public recording
office with respect to items (c) and (d), or because the final original title
policy has not yet been issued by the title company with respect to item (e),
then the Seller shall deliver to the Purchaser certified true and correct copies
of the same and shall further deliver the originals of any such Missing
Documents promptly upon its receipt thereof, but in no event later than ninety
(90) days from the Closing Date. If the Seller fails to deliver any of the
Missing Documents relating to a Mortgage Loan within the time specified above,
the Seller shall, upon written request from the Purchaser, repurchase such
Mortgage Loan in accordance with Section 3.3.

Section 2.6 Conditions to Closing. The Purchaser's obligations hereunder with
respect to any Mortgage Loan Package are subject to the fulfillment of the
following conditions precedent. In the event that any of the conditions set
forth below are not satisfied, the Purchaser shall not have any obligation to
purchase any of the Mortgage Loans or to pay the Purchase Proceeds as
contemplated hereunder and shall instead be entitled, in its sole discretion, to
terminate this Agreement in its entirety.

(a) Each of the representations and warranties made by the Seller hereunder
shall be true and correct in all material respects as of the related Closing
Date and no event shall have occurred which, with notice or the passage of time,
would constitute a default under this Agreement.

(b) The Seller shall have delivered to the Purchaser all of the Mortgage Loan
Documents in accordance with Section 2.5 and a complete Mortgage File with
respect to each Mortgage Loan.

(c) Each of the terms and conditions set forth herein which are required to be
satisfied on or before the related Closing Date shall have been satisfied unless
waived by the prejudiced party(ies).

(d) The Seller shall have delivered to the Purchaser on or before the related
Closing Date the following documents:

(1) an executed Agreement;

(2) the Mortgage Loan Schedule, which shall include, without limitation, the
Stated Principal Balance of each Mortgage Loan;

(3) an executed Funding Schedule, in the form of Exhibit A hereto;

(4) an executed Officer's Certificate, in the form of Exhibit B hereto;

(5) an executed Authorized Signatories Agreement, in the form of Exhibit C
hereto;

(6) an executed Purchase Confirmation, in the form of Exhibit D hereto; and

(7) such other documents related to the purchase and sale of the Mortgage Loans
and the Servicing Rights as the Purchaser may reasonably request.

(e) The documents specified in subsection (d)(1) and (d)(5) shall only be
required with respect to the initial Closing Date unless the Purchaser
subsequently requests the Seller to reexecute such documents.

Section 2.7 Record Title. With respect to each Mortgage Loan, record title to
each Mortgage and the related Mortgage Note shall be transferred by the Seller
to the Purchaser. The Seller shall, at the option of the Purchaser, either (i)
prepare and cause to be recorded the Assignment of Mortgage for each Mortgage
Loan and shall, promptly upon its receipt of each original recorded Assignment
of Mortgage from the applicable recording office, deliver the same to the
Purchaser, (ii) prepare and deliver to the Purchaser an original Assignment of
Mortgage either in blank, in either case, within the time and in the manner
specified in Section 2.5, or (iii) with respect to any Mortgage Loan registered
on the MERS System, cause the MERS System to reflect the Purchaser as the owner
of the Mortgage Loan and the Servicing Rights related thereto. The Seller shall
bear the cost and expense related to (A) providing all Assignments of Mortgages
and endorsements of Mortgage Notes for any transfer of record title required
hereunder with respect to the obligations of the Mortgage Notes and the
underlying security interest related to each Mortgage Loan, (B) recording title
of the Mortgage Loans including, but not limited to, recording fees and fees for
title policy endorsements, and (C) causing the MERS System to reflect the
Purchaser as the owner of the Mortgage Loans.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Section 3.1 Representations and Warranties Respecting the Seller. The Seller
represents, warrants and covenants to the Purchaser that, as of each Closing
Date:

Auto paragraph numbering, level 1. (a) The Seller is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and is qualified to transact business in and is in good standing
under the laws of each state where a Mortgaged Property is located or is
otherwise exempt under applicable law from such qualification or is otherwise
not required under applicable law to effect such qualification and no demand for
such qualification has been made upon the Seller by any state having
jurisdiction and in any event the Seller is or will be in compliance with the
laws of any such state to the extent necessary to insure the enforceability of
each Mortgage Note and the sale of the Mortgage Loans and Servicing Rights as
contemplated by this Agreement;

(b) The Seller has the full power and authority to perform, and to enter into
and consummate, all transactions contemplated by this Agreement. The Seller has
the full power and authority to hold each Mortgage Loan and to sell each
Mortgage Loan and the Servicing Rights;

(c) Neither the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans or the Servicing Rights to the Purchaser, the
consummation of the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement, will conflict with
or result in a breach of any of the terms, conditions or provisions of the
Seller's certificate of incorporation or bylaws or result in a material breach
of any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a material default or result
in an acceleration under any of the foregoing, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Seller or its
property is subject;

(d) The Seller is an approved seller/servicer for the Agencies, in good standing
with each such agency, and is a mortgagee approved by the Secretary of HUD
pursuant to sections 203 and 211 of the National Housing Act. No event has
occurred, including but not limited to, a change in insurance coverage, which
would make the Seller unable to comply with Fannie Mae, Freddie Mac or
HUD-eligibility requirements or which would require notification to the Agencies
or HUD;

(e) The Seller does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant contained in this
Agreement;

(f) There is no action, suit, proceeding, investigation or litigation pending
or, to the best of the Seller's knowledge, threatened, which either in any one
instance or in the aggregate, if determined adversely to the Seller, would
adversely affect the sale of the Mortgage Loans or the Servicing Rights to the
Purchaser, or the Seller's ability to perform its obligations under this
Agreement;

(g) No consent, approval, authorization or order of any court or governmental
agency or body is required for the execution, delivery and performance by the
Seller of or compliance by the Seller with this Agreement or the terms of the
Mortgage Loans, the delivery of the Mortgage Files to the Purchaser, the sale of
the Mortgage Loans and the Servicing Rights to the Purchaser or the consummation
of the transactions contemplated by this Agreement, or if required, such
consent, approval, authorization or order has been obtained prior to the related
Closing Date; and

(h) The consummation of the transactions contemplated by this Agreement are in
the ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes, the Mortgages and/or the Servicing Rights by
the Seller pursuant to this Agreement are not subject to the bulk transfer or
any similar statutory provisions in effect and applicable to this transaction.

Section 3.2 Representations and Warranties Regarding Individual Mortgage Loans.
With respect to each Mortgage Loan and unless otherwise indicated in the related
Trade Confirmation and/or Purchase Confirmation, the Seller represents and
warrants to the Purchaser that as of the related Closing Date:

(a) The information set forth in the Mortgage Loan Schedule, the Transaction
Documents and in each Mortgage File is complete, true and correct;

(b) All payments required under the terms of the Mortgage Note to be made on or
prior to the Closing Date have been made; the Seller has not advanced funds, or
induced, solicited or knowingly received any advance of funds from a party other
than the owner of the Mortgaged Property subject to the Mortgage, directly or
indirectly, for the payment of any amount required under the Mortgage Loan; and
there has been no delinquency of thirty (30) days or more in any payment by the
Mortgagor thereunder during the last twelve (12) months. None of the Mortgagors
is deceased and no Mortgage Loan is subject to any pending litigation,
foreclosure, bankruptcy, insolvency, or reorganization proceeding.
Notwithstanding the foregoing, with respect to any Mortgage Loan for which the
Monthly Payment with a Due Date in the month of the related Closing Date has not
been made, the Purchaser has nonetheless agreed to purchase such Mortgage Loan,
provided, however, that if such Monthly Payment is not received by the
Purchaser, whether from the Mortgagor directly or forwarded by the Seller if the
Mortgagor has submitted the payment to the Seller, by the last day of the month
in which such payment is due, the Seller shall be deemed to have breached this
warranty and representation with respect to such Mortgage Loan and such breach
shall further be deemed to materially and adversely affect the value of such
Mortgage Loan and the Purchaser's interest therein, and the Seller shall, at the
Purchaser's option and not later than five (5) Business Days after receipt of
notice from the Purchaser, repurchase such Mortgage Loan at the Repurchase Price
notwithstanding anything contained herein to the contrary. Nothing contained in
this Section 3.2(b) shall in any way limit any other rights of the Purchaser as
provided hereunder;

(c) There are no delinquent taxes, water charges, sewer rents, assessments,
insurance premiums, leasehold payments, including assessments payable in future
installments, or other outstanding charges affecting the related Mortgaged
Property;

(d) The terms of the Mortgage Note and the Mortgage have not been impaired,
waived, altered or modified in any respect, except by written instruments which
are in the Mortgage File and have been or will be recorded, if necessary to
protect the interests of the Purchaser, and which have been delivered to the
Purchaser, all in accordance with this Agreement. The substance of any such
waiver, alteration or modification has been approved by the primary mortgage
guaranty insurer, if any, and by the title insurer, to the extent required by
the related policy, and its terms are reflected on the Mortgage Loan Schedule.
No Mortgagor has been released, in whole or in part, except in connection with
an assumption agreement approved by the primary mortgage insurer, if any, and
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage File and the terms of which are reflected in
the Mortgage Loan Schedule, if executed prior to the related Closing Date;

(e) The Mortgage Note and the Mortgage are not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;

(f) All buildings upon, or comprising part of, the Mortgaged Property are
insured by an insurer acceptable to the Agencies against loss by fire, hazards
of extended coverage and such other hazards as are customary in the area where
the Mortgaged Property is located, and such insurer is licensed to do business
in the state where the Mortgaged Property is located. All such insurance
policies (collectively, the "hazard insurance policy") contain a standard
mortgagee clause naming the Seller, its successors and assigns as mortgagee and
all premiums thereon have been paid. If upon origination of the Mortgage Loan,
the Mortgaged Property was, or was subsequently deemed to be, in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made available),
which require under applicable law that a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
(or any successor thereto) be obtained, such flood insurance policy is in effect
which policy conforms to the requirements of the Agencies. The Mortgage
obligates the Mortgagor thereunder to maintain all such insurance at Mortgagor's
cost and expense and, on the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to maintain such insurance at Mortgagor's cost and expense and
to obtain reimbursement therefor from the Mortgagor. Each Mortgage Loan has in
place a fully-paid life of loan flood certification from a Fannie Mae or Freddie
Mac approved vendor, assigned in care of the Purchaser, which provides for
notification to the Purchaser of changes in designated flood areas which would
affect such Mortgage Loan;

(g) Any and all requirements of any federal, state or local law including,
without limitation, usury, truth in lending, real estate settlement procedures
including, without limitation, the Real Estate Settlement Procedures Act of
1974, as amended, consumer credit and privacy protection, equal credit
opportunity or disclosure laws applicable to the Mortgage Loan have been
complied with in all material respects;

(h) The Mortgage has not been satisfied, canceled, subordinated, or rescinded,
in whole or in part, and the Mortgaged Property has not been released from the
lien of the Mortgage, in whole or in part, nor has any instrument been executed
that would effect any such release, cancellation, subordination or rescission;

(i) The Mortgage is a valid, existing and enforceable first lien on the
Mortgaged Property, including all improvements on the Mortgaged Property, if
any, subject only to (a) the lien of current real property taxes and assessments
not yet due and payable, (b) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record as of the date of
recording being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and which do not adversely affect the Appraised
Value (as defined in clause (i) of such definition) of the Mortgaged Property,
and (c) other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property. The Seller has full right to sell and assign the Mortgage to
the Purchaser;

(j) The Mortgage Note and the related Mortgage are genuine and each is the
legal, valid and binding obligation of the maker thereof, enforceable in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency or reorganization;

(k) All parties to the Mortgage Note and the Mortgage had the legal capacity to
enter into the Mortgage Loan transaction and to execute and deliver the Mortgage
Note and the Mortgage, and the Mortgage Note and the Mortgage have been duly and
properly executed by such parties;

(l) The proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;

(m) The Seller is the sole owner and holder of the Mortgage Loan and the related
Servicing Rights and is the custodian of the related Escrow Account, if
applicable. The Mortgage Loan has neither been assigned nor pledged to any
person other than one of Seller's mortgage warehouse lenders as identified by
the Seller to the Purchaser, and the Seller has good and marketable title
thereto, and has full right to transfer and sell the Mortgage Loan and the
related Servicing Rights to the Purchaser free and clear of any encumbrance,
equity, lien, pledge, charge, claim or security interest and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan and the related Servicing
Rights to the Purchaser pursuant to the terms of this Agreement;

(n) All parties which have had any interest in the Mortgage, whether as
mortgagee, assignee, pledgee or otherwise, are (or, during the period in which
they held and disposed of such interest, were) (a) in compliance with any and
all applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located, and (b) (i) organized under the laws of such
state, or (ii) qualified to do business in such state, or (iii) a federal
savings and loan association or national bank having principal offices in such
state, or (iv) not deemed to be doing business in such state under applicable
law;

(o) The Mortgage Loan is covered by an ALTA lender's title insurance policy
acceptable to the Agencies, issued by a title insurer acceptable to the Agencies
and qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring (subject to the exceptions contained in (i)(a) and (b) above)
the Seller, its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan and against any
loss by reason of the invalidity or unenforceability of the lien resulting from
the provisions of the Mortgage Note and/or Mortgage providing for adjustment in
the Mortgage Interest Rate and Monthly Payment. Additionally, such lender's
title insurance policy affirmatively insures ingress and egress, and against
encroachments by or upon the Mortgaged Property or any interest therein. The
Seller is the sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect and will be in full
force and effect upon the consummation of the transactions contemplated by this
Agreement. No claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage, including the Seller, has done, by
act or omission, anything which would impair the coverage of such lender's title
insurance policy;

(p) There is no default, breach, violation or event of acceleration existing
under the Mortgage or the Mortgage Note and no event which, with the passage of
time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration, and the Seller
has not waived any default, breach, violation or event of acceleration;

(q) There are no mechanics' or similar liens or claims which have been filed for
work, labor or material (and no rights are outstanding that under law could give
rise to such lien) affecting the related Mortgaged Property which are or may be
liens prior to or equal with, the lien of the related Mortgage;

(r) All improvements which were considered in determining the Appraised Value
(as defined in clause (i) of said definition) of the related Mortgaged Property
lay wholly within the boundaries and building restriction lines of the Mortgaged
Property, and no improvements on adjoining properties encroach upon the
Mortgaged Property;

(s) Each Mortgage Loan was originated by a savings and loan association, savings
bank, commercial bank, credit union, insurance company, or mortgage banking
company which is supervised and examined by a federal or state authority, or by
a mortgage originator approved by the Secretary of Housing and Urban Development
pursuant to Sections 2.03 and 2.11 of the National Housing Act;

(t) The origination, servicing and collection practices with respect to each
Mortgage Note and Mortgage including, without limitation, the establishment,
maintenance and servicing of the Escrow Accounts and Escrow Payments, if any,
since origination, have been conducted in all respects in accordance with the
terms of Mortgage Note and in compliance with all applicable laws and
regulations and, unless otherwise required by law or a Fannie Mae or Freddie Mac
standard, in accordance with the proper, prudent and customary practices in the
mortgage origination and servicing business. With respect to the Escrow Accounts
and Escrow Payments, if any, all such payments are in the possession or under
the control of the Seller and there exists no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. No escrow deposits or Escrow Payments or other charges or payments due the
Seller have been capitalized under any Mortgage or the related Mortgage Note.
All Mortgage Interest Rate adjustments have been made in strict compliance with
state and federal law and the terms of the related Mortgage Note. Any interest
required to be paid pursuant to state and local law has been properly paid and
credited;

(u) The Mortgaged Property is free of material damage and waste and there is no
proceeding pending for the total or partial condemnation thereof;

(v) The Mortgage and related Mortgage Note contains customary and enforceable
provisions to render the rights and remedies of the holder thereof adequate for
the realization against the Mortgaged Property of the benefits of the security
intended to be provided thereby, including, (a) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (b) otherwise by judicial
foreclosure. There is no other exemption available to the Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage. The Mortgagor has not notified the Seller
and the Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Soldiers and Sailors Civil Relief Act of 1940;

(w) The Mortgage Note is not and has not been secured by any collateral except
the lien of the applicable Mortgage;

(x) The Mortgage File contains an appraisal of the related Mortgaged Property
signed prior to the approval of the Mortgage Loan application by an appraiser
who meets the minimum requisite qualifications of the Agencies for appraisers,
duly appointed by the originator, who had no interest, direct or indirect, in
the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan; the appraisal is in a form acceptable to the Agencies, with such riders as
are acceptable to the Agencies; such appraisal was conducted in compliance with
all applicable laws and regulations and in accordance with the proper, prudent
and customary practices in the appraisal business and represents the fair market
value of the Mortgaged Property at the time of origination of the related
Mortgage Loan;

(y) 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 to the trustee under the deed of
trust, except in connection with a trustee's sale after default by the
Mortgagor;

(z) No Mortgage Loan contains a permanent or temporary "buydown" provision;

(aa) The Mortgagor has executed one or more statements to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of the Mortgage Loan. The Seller shall maintain all such
statements in the Mortgage File;

(bb) No Mortgage Loan was made in connection with (a) the construction or
rehabilitation of a Mortgaged Property or (b) facilitating the trade-in or
exchange of a Mortgaged Property;

(cc) If any Mortgage Loan is indicated in the Transaction Documents as having a
Primary Mortgage Insurance Policy, such policy provides coverage in an amount at
least equal to that which would be required by the Agencies if such Mortgage
Loan was being delivered for sale to, and securitization by, each Agency. In
addition, and regardless if indicated in the Transaction Documents, each
Mortgage Loan with either an LTV at origination or a current LTV (based on
current market value and amortization) greater than eighty percent (80.00%) is
and will be subject to a Primary Mortgage Insurance Policy which provides
coverage in an amount at least equal to that which would be required by the
Agencies if such Mortgage Loan was being delivered for sale to, and
securitization by, each Agency. With respect to any Mortgage Loan which allows
negative amortization, such Primary Mortgage Insurance Policy shall contain
provisions to cover the potential negative amortization of such Mortgage Loan.
All provisions of any Primary Mortgage Insurance Policy have been and are being
complied with, such policy is in full force and effect, and all premiums due
thereunder have been paid. Any Mortgage subject to any such Primary Mortgage
Insurance Policy obligates the Mortgagor thereunder to maintain such insurance
and to pay all premiums and charges in connection therewith. The Mortgage
Interest Rate for the Mortgage Loan is exclusive of any such insurance premium;

(dd) The Mortgaged Property is lawfully occupied under applicable law and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities;

(ee) No action has been taken or failed to be taken, no event has occurred and
no state of facts exists or has existed on or prior to the Closing Date (whether
or not known to the Seller on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any Primary
Mortgage Insurance Policy (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the insured)
whether arising out of actions, representations, errors, omissions, negligence
or fraud of the Seller, the related Mortgagor or any party involved in the
application for such coverage, including the appraisal, plans and specifications
and other exhibits or documents submitted therewith to the insurer under such
insurance policy, or for any other reason under such coverage, but not including
the failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;

(ff) The Assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located;

(gg) Any future advances made to the Mortgagor prior to the related Closing Date
have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first lien priority
by a title insurance policy, an endorsement to the policy insuring the
mortgagee's consolidated interest or by other title evidence acceptable to the
Agencies. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;

(hh) If the Mortgaged Property is a condominium unit or a planned unit
development, such condominium or planned unit development project meets the
eligibility requirements of the Agencies;

(ii) The Mortgage Note and Mortgage are on forms acceptable to either of the
Agencies;

(jj) The Mortgaged Property is located in the state indicated on the Mortgage
Loan Schedule, and consists of a single parcel of real property with a detached
single family residence erected thereon, or an individual condominium unit, or a
2-4 family dwelling or an individual unit in a planned unit development as
defined by Fannie Mae, none of which is a mobile home or manufactured dwelling;

(kk) There are no circumstances or conditions with respect to the Mortgage, the
Mortgage Property, the Mortgagor, the Mortgage File or the Mortgagor's credit
standing that can reasonably be expected to cause private institutional
investors to regard the Mortgage Loan as an unacceptable investment, cause the
Mortgage Loan to become delinquent, or adversely affect the value or
marketability of the Mortgage Loan;

(ll) The Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event that
the Mortgaged Property is sold or transferred without the prior written consent
of the mortgagee thereunder;

(mm) The Seller has no knowledge of any circumstances existing that could
reasonably be expected to adversely affect the value or the marketability of any
Mortgaged Property or Mortgage Loan or to cause the Mortgage Loans to prepay
during any period materially faster or slower than the mortgage loans of similar
characteristics originated by the Seller generally;

(nn) Each Mortgage Loan is covered by a valid and transferable tax service
contract with Transamerica, or such other vendor as may be reasonably acceptable
to the Purchaser, which may be assigned without the payment of any fee by the
Purchaser;

(oo) Each Mortgage Loan requires monthly payments sufficient to fully amortize
the original principal balance of the Mortgage Loan over the original term of
the Mortgage Loan as set forth in the related Mortgage Note and each monthly
payment is due on the first day of each month. Unless indicated in the Mortgage
Loan Schedule otherwise, no Mortgage Loan has negatively amortized nor shall any
Mortgage Loan have any negative amortization after the related Closing Date.
Except for any initial fixed term as indicated in the Mortgage Loan Schedule,
the Mortgage Interest Rate for each Adjustable Rate Mortgage Loan adjusts
annually in accordance with the related Mortgage Note. With respect to each
Adjustable Rate Mortgage Loan, on each Interest Adjustment Date, the Mortgage
Interest Rate shall be adjusted to equal the Index plus the Gross Margin
(rounded up or down to the nearest 0.125%), subject to the Periodic Mortgage
Interest Rate Cap and the Lifetime Mortgage Interest Rate Cap as set forth in
the respective Mortgage Note and the Mortgage Loan Schedule. Unless indicated in
the Mortgage Loan Schedule otherwise, none of the Adjustable Rate Mortgage Loans
contain a provision allowing the Mortgagor to convert the Mortgage Note from an
adjustable rate mortgage loan to a Fixed Rate Mortgage Loan. With respect to any
Mortgage Loan which has been converted from an Adjustable Rate Mortgage Loan
into a Fixed Rate Mortgage Loan, such conversion was done in strict accordance
with the terms of the related Mortgage Note. The principal and interest due on
each Mortgage Loan is calculated pursuant to the standard amortization (30/360
day interest accrual) method, unless otherwise provided in the Mortgage Note or
applicable law;

(pp) Each Mortgage Loan conforms to, and at the time of origination was
underwritten in accordance with, the credit underwriting guidelines as indicated
in the Trade Confirmation and/or Purchase Confirmation;

(qq) As of the related Closing Date, the Seller shall have received neither
actual nor constructive notice that either a Mortgage Loan will be paid in full
(whether by virtue of a demand statement or otherwise) or that any Mortgagor has
elected to convert the related Mortgage Loan into a Fixed Rate Mortgage Loan in
accordance with the terms of the related Mortgage Note;

(rr) Unless indicated on the related Trade Confirmation and/or Purchase
Confirmation, no Mortgage Loan is subject to the requirements of Reg. Z, Section
226.32 of the Truth in Lending Act (12 C.F.R. Part 226.32);

(ss) No Mortgage Loan contains provisions pursuant to which Monthly Payments are
(a) paid or partially paid with funds deposited in any separate account
established by the Seller, the Mortgagor, or anyone on behalf of the Mortgagor
or (b) paid by any source other than the Mortgagor or contains any other similar
provisions which may constitute a "buydown" provision. The Mortgage Loan is not
a graduated payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature; none of the Mortgage Loans is
currently subject to a completion escrow and with respect to each Mortgage Loan
which was subject to a completion escrow, all appropriate forms were delivered
and are contained in the Mortgage File, including, without limitation, Agency
Form 442.

(tt) No Mortgage Loan is an "equity loan" within the meaning of Section
50(a)(6), Article XVI of the Texas Constitution;

(uu) No error, omission, misrepresentation, negligence, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the part of the
Seller or any other person, including, without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application of any insurance in
relation to such Mortgage Loan; no predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the borrower to repay and the extension of credit which has no
apparent benefit to the borrower, were employed in the origination of the
Mortgage Loan; and

(vv) Any agreement with any servicer of the Mortgage Loans provides for the
termination of the servicer on or prior to the related Servicing Transfer Date
without the payment of any termination fee or other expense by the Purchaser.

Section 3.3 Remedies for Breach of Representations and Warranties. The
representations and warranties set forth in Sections 3.1 and 3.2 shall survive
the sale of the Mortgage Loans to the Purchaser and shall inure to the benefit
of the Purchaser, notwithstanding any restrictive or qualified endorsement on
any Mortgage Note or Assignment of Mortgage or the examination or failure to
examine any Mortgage File. Furthermore, the absence of the Seller in either the
chain of title or endorsement shall in no way limit the Purchaser's recourse
against the Seller as provided in this Section 3.3 for a breach of one or more
of the Seller's representations and warranties made herein. With respect to the
representations and warranties contained in Article III that are made to the
best of the Seller's knowledge, if it is discovered by either the Seller or the
Purchaser that the substance of such representation and warranty is inaccurate
and such inaccuracy materially and adversely affects the value of the related
Mortgage Loan, the Purchaser shall be entitled to all the remedies to which it
would be entitled for a breach of representation or warranty, including, without
limitation, the repurchase requirements contained herein, notwithstanding the
Seller's lack of knowledge with respect to the inaccuracy at the time the
representation or warranty was made. For purposes of this Agreement, the term
"to the best of the Seller's knowledge" means that the Seller reasonably
believes such representation and warranty to be true, and has no knowledge or
notice that such representation or warranty is inaccurate or incomplete, and,
consistent with the standard of care exercised by prudent lending institutions,
the Seller has conducted a reasonable inquiry to assure the accuracy and
completeness of the applicable representation and warranty. Without in any way
limiting the generality of the foregoing, any repurchase request made upon the
Initial Purchaser by either Fannie Mae or Freddie Mac with respect to any
Mortgage Loan shall be deemed to be conclusive evidence of the Seller's breach
of one or more of its representations and warranties made by it hereunder and
shall further be deemed to materially and adversely affect the value of any such
Mortgage Loan, provided, however, that such repurchase request relates to one or
more of the representations and warranties set forth herein. Without in any way
limiting the generality of the foregoing, any repurchase request made upon the
Initial Purchaser by a subsequent purchaser of the Mortgage Loans or a
prospective purchaser's refusal to purchase any such Mortgage Loan from the
Initial Purchaser, which repurchase request or refusal, as applicable, relates
to a breach of any of the representations and warranties contained in Section
3.2, then such repurchase request or refusal, as applicable, shall be deemed to
be conclusive evidence of the Seller's breach of one or more of its
representations and warranties made by it hereunder and shall further be deemed
to materially and adversely affect the value of any such Mortgage Loan. Without
in any way limiting the generality of the foregoing, if the first scheduled
payment due subsequent to the Cut-off Date is not received by the Purchaser,
whether from the Mortgagor directly or forwarded by the Seller if the Mortgagor
has submitted the payment to the Seller, by the last day of the month in which
it is due, the Seller shall, at the Purchaser's option and not later than five
(5) Business Days after receipt of notice of such breach from the Purchaser,
repurchase such Mortgage Loan at the Repurchase Price.

Upon discovery by either the Seller or the Purchaser of a breach of any of the
foregoing representations and warranties which materially and adversely affects
the value of one or more of the Mortgage Loans or the Purchaser's interest
therein, the party discovering such breach shall give prompt written notice to
the other. The Seller shall have a period of sixty (60) days from the earlier of
the discovery of a breach by the Seller or the receipt by the Seller of notice
of a breach within which to correct or cure such breach. If any such breach
cannot be corrected or cured within such sixty (60) day period, the Seller
shall, at the Purchaser's option and not later than sixty (60) days after its
discovery or its receipt of notice of such breach, repurchase such Mortgage Loan
at the Repurchase Price. In the event that a breach shall involve any
representation or warranty set forth in Section 3.1 and such breach cannot be
cured within sixty (60) days of the earlier of either discovery by or notice to
the Seller of such breach, all of the Mortgage Loans shall, at the Purchaser's
option, be repurchased by the Seller at the Repurchase Price. Any repurchase of
a Mortgage Loan(s) pursuant to the foregoing provisions of this Section 3.3
shall be accomplished by wire transfer of immediately available funds on the
repurchase date to an account designated by the Purchaser.

At the time of repurchase, the Purchaser and the Seller shall arrange for the
reassignment of the repurchased Mortgage Loan to the Seller and the delivery to
the Seller of any documents held by the Purchaser or its custodian relating to
such Mortgage Loan. The Seller shall, simultaneously with such reassignment,
give written notice to the Purchaser that such repurchase has taken place.

Any cause of action against the Seller relating to or arising out of the breach
of any representations and warranties made in Sections 3.1 or 3.2 shall accrue
as to any Mortgage Loan upon (i) discovery of such breach by the Purchaser or
notice thereof by the Seller to the Purchaser, (ii) failure by the Seller to
cure such breach or repurchase such Mortgage Loan as specified above, and (iii)
demand upon the Seller by the Purchaser for compliance with the relevant
provisions of this Agreement.

Section 3.4 Indemnification of the Purchaser. In addition to the repurchase
obligations set forth in Section 3.3, the Seller shall defend and indemnify the
Purchaser and hold it harmless against any losses, damages, penalties, fines,
forfeitures, judgments and any related costs including, without limitation,
reasonable and necessary legal fees, resulting from any claim, demand, defense
or liability based upon or arising out of any act or omission on the part of the
Seller in receiving, processing, funding or servicing any Mortgage Loan, or from
any assertion based on, grounded upon or resulting from a breach or alleged
breach of any of the Seller's representations and warranties contained in this
Article III. Without limiting in any way the repurchase obligations of the
Seller set forth in Section 3.3 and indemnification obligations of the Seller
set forth in this Section 3.4, the Purchaser shall have the right to offset from
any amount it owes or is otherwise required to pay to the Seller hereunder or
under any other agreement with the Seller any amount that the Seller owes or is
otherwise required to pay to the Purchaser hereunder or under any other
agreement with the Purchaser. In addition to the obligations of the Seller set
forth in this Article III, the Purchaser may pursue any and all remedies
otherwise available at law or in equity, including, but not limited to, the
right to seek damages.

Section 3.5 Prepayment and Conversion Protection

. In the event that any of the Mortgage Loans are (i) paid in full or (ii)
converted to a Fixed Rate Mortgage Loan, in either case, on or prior to the
Servicing Transfer Date, or (iii) subject to a breach of the representation set
forth in Section 3.2(qq), the Seller shall, with respect to each such Mortgage
Loan, pay to the Purchaser the product of (a) the positive difference, if any,
between the Purchase Price Percentage (subject to any adjustments as
contemplated in the Transaction Documents) and 100%, times (b) the unpaid
principal balance of such Mortgage Loan at the time such Mortgage Loan is paid
in full or converted, as applicable (the "Premium Recapture Amount"). In the
event any Mortgage Loan is paid in full after the related Cut-off Date and on or
prior to the related Closing Date, the Seller shall, in addition to the Premium
Recapture Amount, pay the Purchaser the accrued interest paid by the Purchaser
for such Mortgage Loan. Nothing contained in this Section 3.5 shall in any way
limit the rights of the Purchaser to all collections and recoveries of principal
and interest received or applied to any Mortgagor's account and the Seller's
obligation to remit such recoveries of principal and interest to the Purchaser
as provided in Section 2.3. The rights conferred to the Purchaser under this
Section 3.6 shall be in addition to those rights conferred to the Purchaser
under Section 3.2(b), the Trade Confirmation and/or the Purchase Confirmation.

Section 3.6 Payment Default Protection. If the first Monthly Payment with a Due
Date subsequent to the Closing Date is not received by the Purchaser, whether
from the Mortgagor directly or forwarded by the Seller if the Mortgagor has
submitted the payment to the Seller, by the last day of the month in which such
payment is due, the Seller shall, at the Purchaser's option and not later than
five (5) Business Days after receipt of notice from the Purchaser, repurchase
such Mortgage Loan at the Repurchase Price. The rights conferred to the
Purchaser under this Section 3.6 shall be in addition to those rights conferred
to the Purchaser under Section 3.2(b), the Trade Confirmation and/or the
Purchase Confirmation.

Section 3.7 Post-Closing Appraisal Review

. Without in any way limiting or affecting any rights and remedies of the
Purchaser, including, without limitation, the remedies accorded the Purchaser
under Section 3.3 of this Agreement, the Purchaser shall have the right, within
thirty (30) days after the related Closing Date, or the date on which the
appraisal in the Mortgage File relating to the Mortgaged Property is received by
the Purchaser from the Seller, whichever is later, to obtain an appraisal,
broker's price opinion, drive-by appraisal or any other comparable valuation
measure with respect to any Mortgaged Property (collectively, the "Review
Appraisal"). If the value of a Mortgaged Property as of the date of the original
appraisal, as determined by the Review Appraisal, is less than the value of the
appraisal in the Mortgage File by (i) ten percent (10%) or more for a Mortgage
Loan with an original LTV of less than or equal to eighty percent (80%) or (ii)
five percent (5%) or more for a Mortgage Loan with an original LTV of greater
than eighty percent (80%), the Purchaser may, at the Purchaser's sole option,
notify the Seller of the variance by providing the Seller with a copy of the
Review Appraisal. Upon the Purchaser giving such notice of the variance to the
Seller, the Seller shall repurchase the Mortgage Loan at the Repurchase Price
not later than ten (10) Business Days after the Seller's receipt of such notice
from the Purchaser. The rights conferred to the Purchaser under this Section 3.6
shall be in addition to those rights conferred to the Purchaser under Section
3.2(b), the Trade Confirmation and/or the Purchase Confirmation.

Section 3.8 Post-Closing Examination of Mortgage Loans

. As may be indicated in the related Purchase Confirmation, the parties may
agree that the Purchaser shall have the right, after the Closing Date, to review
the Mortgage File (and such other documents) for each Mortgage Loan in a
Mortgage Loan Package and, based on its review, request the Seller to repurchase
any Mortgage Loan which the Purchaser, in its sole discretion, determines not to
be in compliance with each of the representations and warranties contemplated in
the Transaction Documents or which is otherwise unsatisfactory. With respect to
any Mortgage Loan reviewed by the Purchaser on a post-closing basis which the
Seller is obligated to repurchase from the Purchaser hereunder, the Seller
shall, within five (5) Business Days of the Purchaser's request therefor,
repurchase any such Mortgage Loan at the Repurchase Price.

 

ARTICLE IV

INTERIM SERVICING OF THE MORTGAGE LOANS

Section 4.1 General. The Mortgage Loans will be purchased by the Purchaser and
sold by the Seller on a servicing-released basis and the purchase of the
Mortgage Loans by the Purchaser shall, for all purposes, include all Servicing
Rights relating thereto. From the related Closing Date to the Servicing Transfer
Date, the Seller shall interim service the Mortgage Loans in strict accordance
with the terms of this Agreement and, to the extent not inconsistent herewith,
the servicing standards of the Agencies. Without limiting the generality of the
foregoing, the Seller shall not take, or fail to take, any action which would
result in the Purchaser's interest in the Mortgage Loans being adversely
affected. It is expressly understood by the Seller that, during the Interim
Servicing Period, the Purchaser may either securitize the Mortgage Loans
(whether into one or more Fannie Mae or Freddie Mac mortgage backed securities)
with such securities to be issued during the Interim Servicing Period or market
the Mortgage Loans for sale to a whole loan investor and, as such, the Seller
agrees to comply with all reasonable requests of the Purchaser made prior to the
related Servicing Transfer Date in order to effectuate the foregoing including,
without limitation, any request for information or documentation in connection
with any Mortgage Loan which the Purchaser deems is necessary to carry out the
foregoing including, without limitation, all HMDA data required by the Agencies.

Section 4.2 Reporting and Remittance. Within five (5) Business Days following
the conclusion of each calendar month reporting and remittance cycle occurring
during the Interim Servicing Period (each, a "Reporting Cycle"), if any, the
Seller shall forward to the Purchaser with respect to the Mortgage Loans a full
set of tapes and a trial balance as of the end of each such Reporting Cycle,
which tapes and trial balance shall include information relating to all payment
and other activity on the Mortgage Loans. With respect to any payments of
principal or interest (including all prepayments) received, or applied to any
Mortgagor's account, by the Seller during the Interim Servicing Period (or prior
to the Closing Date, if any such payments were not reflected in the calculation
of the Purchaser Proceeds), the Seller shall remit to the Purchaser all such
payments of principal and interest on the Mortgage Loans no later than the fifth
(5th) day of the month following the conclusion of each Reporting Cycle and,
with respect to the month in which the related Servicing Transfer Date occurs,
no later than the fifth (5th) Business Day thereafter.

Section 4.3 Whole Loan Transfers or Pass-Through Transfers

. The Seller and the Purchaser agree that with respect to some or all of the
Mortgage Loans, the Purchaser may effect either one or more Whole Loan
Transfers, and/or one or more Pass-Through Transfers.

(a) Whole Loan Transfers. With respect to each Whole Loan Transfer entered into
by the Purchaser, the Seller agrees:

(i) to cooperate reasonably with the Purchaser and any prospective purchaser
with respect to all reasonable requests;

(ii) to execute or acknowledge, at the Purchaser's discretion, an assignment by
the Purchaser to a successor purchaser of some or all of the Mortgage Loans,
which Mortgage Loans will be assigned subject to the representations and
warranties set forth in this Agreement; and

(iii) to restate on the Reconstitution Date, all representations and warranties
made by the Seller pursuant to this Agreement with respect to the Mortgage Loans
and with respect to the Seller itself.

(b) Pass Through Transfers. The Purchaser and the Seller agree that in
connection with the completion of a Pass-Through Transfer, the Seller shall:

(i) provide the Purchaser with a certificate of a duly appointed officer of
Seller that restates on the Reconstitution Date all representations and
warranties made by the Seller pursuant to this Agreement with respect to the
Mortgage Loans and with respect to the Seller itself, together with any
additional representations and warranties which may be required to be made by it
in connection with the Pass-Through Transfer;

(ii) if the Seller is required to be a party to any of the Reconstitution
Agreements, to execute any Reconstitution Agreement required to effectuate the
foregoing;

(iii) provide to any master servicer or trustee, as applicable, and/or the
Purchaser any and all publicly available information and appropriate
verification of information which may be reasonably available to the Seller,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser, trustee or a master servicer shall reasonable request as to the
related Mortgage Loans; and

(iv) provide all other assistance reasonably requested by the Purchaser in
connection with completion of the Pass-Through Transfer.

With respect to any Pass-Through Transfer, the Purchaser shall be entitled to
include in any disclosure document any information provided by the Seller and
the Seller acknowledges and agrees that the related investors will be permitted
to rely on such information. If the Purchaser determines that the Seller is
required to be a party to any Reconstitution Agreement, the Seller shall execute
such Reconstitution Agreement within a reasonable period of time, but in no
event shall such time exceed ten (10) Business Days after mutual agreement
between the Purchaser and the Seller as to the terms thereof. In addition to the
foregoing, the Seller acknowledges that the Purchaser may complete a
Pass-Through Transfer on or prior to the Servicing Transfer Date. In such event,
the Seller agrees to undertake all additional obligations as may become
necessary to facilitate the Pass-Through Transfer, including, without
limitation, the assumption of the obligation to act as "master servicer" for the
period starting on the closing of the Pass-Through Transfer through and
including the Servicing Transfer Date and the preparation, execution and
approval of all documents and disclosures incident thereto.

(c) Continuing Liabilities. All of the Mortgage Loans, including those Mortgage
Loans that are subject to a Pass-Through Transfer or a Whole Loan Transfer,
shall continue to be subject to this Agreement, and with respect thereto, this
Agreement shall remain in full force and effect. In no event shall the Seller be
relieved of its obligations set forth in Article III hereof.

 

 

ARTICLE V

TRANSFER OF SERVICING RIGHTS

Section 5.1 Transfer of Servicing. The Seller agrees to act reasonably, in good
faith and in accordance with all applicable laws and regulations and to do all
things necessary to effect the transfer of the Servicing Rights to the Purchaser
on the related Servicing Transfer Date including, without limitation, complying
with all instructions provided by the Purchaser relating to the transfer of the
Servicing Rights.

Section 5.2 Obligations of the Seller Prior to the Servicing Transfer Date.
Without limiting the generality of Section 5.1, the Seller shall take, or cause
to be taken, the following actions with respect to the Mortgage Loans prior to
the related Servicing Transfer Date (or within such time as may otherwise be
specified below) in order to effect the transfer of the Servicing Rights to the
Purchaser on the related Servicing Transfer Date:

(a) Preliminary Test Tape. On or prior to the related Closing Date, the Seller
shall forward to the Purchaser a preliminary test tape (including master file,
escrow file, payee file, ARM master file, ARM history, all HMDA data required by
the Agencies, etc.) containing all of the Mortgage Loans as of the date mutually
agreed upon by the Seller and the Purchaser. The preliminary test tape shall
include all field descriptions and record layouts;

(b) Notice to Hazard Insurers. The Seller shall inform by written notice all
hazard insurance companies and/or their agents of the transfer and request a
change in the loss payee mortgage endorsement clause to the Purchaser's name.
The Seller shall provide the Purchaser with a copy of the notification letter
and an officer's written certification that all hazard insurance companies have
been notified by an identical letter;

(c) Notice to Mortgage Insurance Companies. The Seller shall inform by written
notice all mortgage insurance companies providing any Primary Mortgage Insurance
Policy of the change in insured's name on each such policy to the Purchaser's
name. The Seller shall provide the Purchaser with a copy of one notification
letter and an officer's written certification that all such mortgage insurance
companies have been notified by an identical letter;

(d) Tax Service Contracts. The Seller shall have obtained a life of loan,
transferable real estate tax service contract with a tax service company
reasonably acceptable to the Purchaser on all of the Mortgage Loans and shall
assign all such contracts to the Purchaser or, in the alternative, the Seller
shall notify the Purchaser as to any Mortgage Loans for which it has not
procured the requisite contract and shall pay to the Purchaser a fee for each
such Mortgage Loan equal to the fee or premium that is customarily charged for
each such contract, as determined by the Purchaser in its reasonable discretion;

(e) Flood Certifications. The Seller shall have obtained a life of loan,
transferable flood certification contract for each Mortgage Loan and shall
assign all such contracts to the Purchaser or, in the alternative, the Seller
shall notify the Purchaser as to any Mortgage Loans for which it has not
procured the flood certification referenced above and shall pay to the Purchaser
a fee for each such Mortgage Loan equal to the fee that is customarily charged
for each such contract, as determined by the Purchaser in its reasonable
discretion;

(f) Notice to Mortgagors. The Seller shall, no later than fifteen (15) days
prior to the related Servicing Transfer Date, inform in writing all Mortgagors
of the change in servicer from the Seller to the Purchaser, all in accordance
with applicable law. The Seller shall obtain the Purchaser's approval of the
form of such notifications prior to their mailing. The Seller acknowledges that
the Purchaser's review of this notice shall not be a review for statutory or
regulatory compliance purposes, and that the Seller shall have the sole
responsibility for such compliance. The Seller shall provide the Purchaser with
a copy of one notification letter and an officer's written certification that
all Mortgagors have been notified by an identical letter;

(g) Payment of Real Estate Taxes. The Seller shall make or cause to be made all
payments of all real estate taxes on the Mortgage Loans which (i) will be
delinquent on or prior to the related Servicing Transfer Date, (ii) are required
to be paid within thirty (30) days after the related Servicing Transfer Date to
receive a discount, or (iii) will be delinquent within thirty (30) days after
the related Servicing Transfer Date. If tax bills have not been received by the
Seller by the related Servicing Transfer Date on any Mortgage Loans subject to
this subsection, the Seller shall obtain and pay all tax bills subsequent to the
related Servicing Transfer Date and the Purchaser will promptly reimburse the
Seller upon receipt from the Seller of documentation evidencing such payment. On
non-impounded accounts, the Seller shall ensure that all taxes which would
otherwise be delinquent by the related Servicing Transfer Date, if not paid by
such date, have been paid. With respect to each of the Mortgage Loans which do
not have an impound or escrow account maintained for the payment of taxes and
insurance, the Seller shall hold harmless and indemnify the Purchaser against
any and all costs, expenses, penalties, fines, damages and judgments of whatever
kind arising from the Seller's failure to pay, or cause to be paid, any
delinquent taxes or tax penalties outstanding as of the related Servicing
Transfer Date;

(h) Payment of Insurance Premiums. The Seller shall pay all hazard and flood
insurance and Primary Mortgage Insurance Policy premiums required to be paid
prior to the Servicing Transfer Date or within thirty (30) days after the
Servicing Transfer Date on all impounded accounts relating to the Mortgage Loans
and shall ensure that all premiums required to be paid prior to the Servicing
Transfer Date by the Mortgagors on non-impounded accounts have been paid. With
respect to each of the Mortgage Loans which do not have an impound or escrow
account maintained for the payment of taxes and insurance, the Seller shall hold
harmless and indemnify the Purchaser against any and all costs, expenses,
penalties, fines, damages and judgments of whatever kind arising from the
Seller's failure to ensure that the related Mortgagor is maintaining adequate
insurance coverage on the Mortgaged Property at all times prior to the Servicing
Transfer Date in accordance with the terms of the any document contained in the
Mortgage File or any applicable law or regulation including, without limitation,
adequate flood insurance coverage for all Mortgaged Properties located within an
"A" or "V" flood hazard area;

(i) ARM Adjustments. With respect to each Adjustable Rate Mortgage Loan whose
index value for any Interest Adjustment Date is available on or prior to the
related Servicing Transfer Date, the Seller shall make all such adjustments and
shall inform the related Mortgagors of such adjustments;

(j) Notice to Sub-servicers. On or prior to the related Closing Date, the Seller
shall inform by written notice all sub- servicers who perform servicing
obligations with respect to the Mortgage Loans of the sale of the Mortgage Loans
to the Purchaser and of the transfer of the Servicing Rights to the Purchaser on
the related Servicing Transfer Date. The Seller shall provide the Purchaser with
a copy of the notification letter and an officer's certification that all
sub-servicers have been notified by an identical letter; and

(k) Mortgage Loans in Litigation. On or prior to the related Servicing Transfer
Date, the Seller shall (i) deliver written notification to the Purchaser of any
Mortgage Loan in litigation (including, without limitation, bankruptcy and
foreclosure proceedings) as of the Servicing Transfer Date, including in such
written notification the names and addresses of all parties involved in such
litigation and all documents related to such litigation, (ii) if requested by
the Purchaser, notify the clerk of the court and all counsel of record involved
in such litigation that ownership of such Mortgage Loan has been transferred to
the Purchaser, and (iii) if requested by the Purchaser, cooperate with the
Purchaser and cause the filing of appropriate court documents to substitute the
Purchaser's attorney for the Seller's attorney and remove the Seller as a party
to the litigation and substitute the Purchaser as the real party in interest.

Section 5.3 Obligations of the Seller after the Servicing Transfer Date. Without
limiting the generality of Section 5.1, the Seller shall take, or cause to be
taken, the following actions with respect to the Mortgage Loans within three (3)
Business Days following the related Servicing Transfer Date (or within such time
as may otherwise be specified below):

(a) Tape. The Seller shall furnish to the Purchaser all available computer or
like records requested by the Purchaser reflecting the status of payments,
balances and other pertinent information with respect to the Mortgage Loans as
of the related Servicing Transfer Date (including, without limitation, (i)
master file, (ii) escrow file, (iii) payee file, which includes comprehensive
tax and insurance information identifying payee, payee address, next payment due
date, next amount payable and policy number/parcel number, (iv) ARM master file,
(v) ARM history, and (vi) all HMDA data required by the Agencies). Such records
shall include magnetic tapes reflecting all computer files maintained on the
Mortgage Loans and shall include hard copy trial balance reports as specifically
requested by the Purchaser;

(b) Mortgage File. If the Seller has not already done so, the Seller shall have
forwarded a complete Mortgage File with respect to each Mortgage Loan;

(c) Accounting Reports. The Seller shall furnish to the Purchaser copies of all
accounting reports relating to the Mortgage Loans as of the related Servicing
Transfer Date including, without limitation, a trial balance and reports of
collections, delinquencies, prepaids, curtailments, escrow payments, escrow
balances, partial payments, partial payment balances and other like information
with respect to the Mortgage Loans;

(d) Other Documentation. The Seller shall provide the Purchaser any and all
further documents reasonably required by the Purchaser in order to fully
transfer to the Purchaser possession of all tangible evidence of the Servicing
Rights and escrow, impound and trust funds transferred hereunder;

(e) Transfer of Escrow Funds and Other Proceeds. The Seller shall transfer to
the Purchaser, by wire transfer to the account designated by the Purchaser, an
amount equal to the sum of (i) the Net Escrow Payments, (ii) all undistributed
insurance loss draft funds, (iii) all unapplied funds received by the Seller,
(iv) all unapplied interest on escrow balances accrued through the related
Servicing Transfer Date, (v) all buydown funds held by the Seller as of the
related Servicing Transfer Date, and (vi) all other amounts held by the Seller
with respect to the Mortgage Loans as of the related Servicing Transfer Date for
which the Seller is not entitled to retain (collectively, the "Escrow
Proceeds"). Within five (5) Business Days following the Purchaser's receipt of
the Escrow Proceeds, the Seller and the Purchaser shall resolve any
discrepancies between the Seller's accounting statement and the Purchaser's
reconciliation with respect thereto. No later than ten (10) Business Days
following the related Servicing Transfer Date, the Seller or the Purchaser, as
the case may be, shall transfer to the other, by wire transfer to the designated
account, any amounts to which the other party is entitled; and

(f) Mortgage Payments Received After Servicing Transfer Date. The Seller shall
promptly forward to the Purchaser any payment received by it after the related
Servicing Transfer Date with respect to any of the Mortgage Loans, whether such
payment is in the form of principal, interest, taxes, insurance, loss drafts,
insurance refunds, etc., in the original form received, unless such payment has
been received in cash or by the Seller's lock box facility, in which case the
Seller shall forward such payment in a form acceptable to the Purchaser. The
Seller shall notify the Purchaser of the particulars of the payment, which
notification shall set forth sufficient information to permit timely and
appropriate processing of the payment by the Purchaser.

 

 

ARTICLE VI

MISCELLANEOUS

Section 6.1 Notices. All demands, notices and communications required to be
provided hereunder shall be in writing and shall be deemed to have been duly
given if mailed, by registered or certified mail, postage prepaid, and return
receipt requested, or, if by other means, when received by the other party at
the address as follows:

(i) if to the Seller:

To the address and contact set forth in the related Purchase Confirmation.

With a copy to: General Counsel

(ii) if to the Purchaser:

Countrywide Home Loans, Inc.
4500 Park Granada
Calabasas, California 91302
Attn: Mr. Michael W. Schloessmann, Vice President

With a copy to: General Counsel

or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).

Section 6.2 Intention of the Parties. Pursuant to this Agreement, the Purchaser
is purchasing, and the Seller is selling the Mortgage Loans and not a debt
instrument of the Seller or any other security. Accordingly, the Seller and the
Purchaser shall each treat the transaction for federal income tax purposes as a
sale by the Seller, and a purchase by the Purchaser, of the Mortgage Loans and
the Servicing Rights. The Purchaser shall have the right to review the Mortgage
Loans and the related Mortgage Loan Files to determine the characteristics of
the Mortgage Loans which shall affect the federal income tax consequences of
owning the Mortgage Loans and the Servicing Rights and the Seller shall
cooperate with all reasonable requests made by the Purchaser in the course of
such review.

Section 6.3 Exhibits. The exhibits to this Agreement are hereby incorporated and
made a part hereof and are an integral part of this Agreement.

Section 6.4 General Interpretive Principles. For purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:

(a) the terms defined in this Agreement have the meanings assigned to them in
this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;

(b) accounting terms not otherwise defined herein have the meanings assigned to
them in accordance with generally accepted accounting principles;

(c) references herein to "Sections," "Subsections," "Paragraphs," and other
Subdivisions without reference to a document are to designated Sections,
Subsections, Paragraphs and other subdivisions of this Agreement;

(d) reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

(e) the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular provision; and

(f) the term "include" or "including" shall mean without limitation by reason of
enumeration.

Section 6.5 Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, (b) documents received by any party at the
closing, and (c) financial statements, certificates and other information
previously or hereafter furnished, may be reproduced by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process. The parties agree that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding,
whether or not the original is in existence and whether or not such reproduction
was made by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.

Section 6.6 Further Agreements. The Seller shall execute and deliver to the
Purchaser and the Purchaser shall execute and deliver to the Seller such
reasonable and appropriate additional documents, instruments or agreements as
may be necessary or appropriate to effectuate the purposes of this Agreement.

Section 6.7 Execution of Agreement. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument. This Agreement shall be deemed binding when executed by both the
Purchaser and the Seller. Telecopy signatures shall be deemed valid and binding
to the same extent as the original.

Section 6.8 Successors and Assigns. This Agreement shall bind and inure to the
benefit of and be enforceable by the Seller and the Purchaser and the respective
permitted successors and assigns of the Seller and the successors and assigns of
the Purchaser. This Agreement shall not be assigned, pledged or hypothecated by
the Seller without the consent of the Purchaser. This Agreement may be assigned,
pledged or hypothecated or otherwise transferred or encumbered by the Purchaser,
in whole or part, without the consent of the Seller. If the Purchaser assigns
all of its rights as the Purchaser hereunder relating to some or all of the
Mortgage Loans, the assignee of the Purchaser, upon notification to the Seller,
will become the "Purchaser" hereunder with respect to such Mortgage Loans
assigned hereby.

Section 6.9 Severability Clause. Any part, provision, representation or warranty
of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any relevant
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

Section 6.10 Costs. The Purchaser shall pay any commissions due its salesmen and
the legal fees and expenses of its attorneys and expenses of its custodian. All
other costs and expenses incurred in connection with the transfer and delivery
of the Mortgage Loans, including recording fees, fees for title policy
endorsements and continuations and the Seller's attorney's fees, shall be paid
by the Seller.

Section 6.11 Attorneys' Fees

. If any claim, legal action or any arbitration or other proceeding is brought
for the enforcement of this Agreement or because of a dispute, breach, default
or misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that claim, action or proceeding, in
addition to any other relief to which such party may be entitled.

Section 6.12 Governing Law

. This Agreement shall be governed by and interpreted in accordance with the
laws of the State of California applicable to agreements entered into and wholly
performed within said jurisdiction.

Section 6.13 Survival

. All covenants, agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement.

Section 6.14 Conflicts between Transaction Documents

. In the event of any conflict, inconsistency or ambiguity between the terms and
conditions of this Agreement and either the Trade Confirmation or Purchase
Confirmation, the terms of the Trade Confirmation or Purchase Confirmation, as
the case may be, shall control. In the event of any conflict, inconsistency or
ambiguity between the terms and conditions of the Trade Confirmation and the
Purchase Confirmation, the terms of the Purchase Confirmation shall control.

Section 6.15 Entire Agreement. This Agreement and the related Trade Confirmation
and Purchase Confirmation constitute the entire understanding between the
parties hereto with respect to each Mortgage Loan Package and supersede all
prior or contemporaneous oral or written communications regarding same. The
Seller and the Purchaser understand and agree that no employee, agent or other
representative of the Seller or the Purchaser has any authority to bind such
party with regard to any statement, representation, warranty or other expression
unless said statement, representation, warranty or other expression is
specifically included within the express terms of this Agreement or the related
Trade Confirmation or Purchaser Confirmation. Neither this Agreement nor the
Trade Confirmation nor the Purchase Confirmation shall be modified, amended or
in any way altered except by an instrument in writing signed by both parties.

Section 6.16 Confidentiality. The Seller and the Purchaser hereby acknowledge
and agree that this Agreement shall be kept confidential and its contents will
not be divulged to any party without the other party's consent except to the
extent that it is appropriate for the Seller or the Purchaser to do so in
working with legal counsel, auditors, taxing authorities or other governmental
agencies.

Section 6.17 No Solicitation. From and after the related Closing Date, the
Seller agrees that it will not take any action or cause any action to be taken
by any of its employees, agents or affiliates, or by any independent contractors
acting on the Seller's behalf, to solicit in any manner whatsoever any Mortgagor
for any purpose, including, without limitation, to prepay or refinance a
Mortgage Loan. It is understood and agreed by the Seller and the Purchaser that
all rights and benefits relating to the solicitation of any Mortgagors shall be
transferred to the Purchaser pursuant hereto on the Closing Date and the Seller
shall take no action to undermine these rights and benefits. The Seller shall
use its best efforts to prevent the sale of the name of any Mortgagor to any
person or entity.

Section 6.18 Non-Circumvention. The Seller and the Purchaser understand and
agree that the Purchaser may introduce prospective buyers of the Mortgage Loans
to the Seller, that such buyers are customers of the Purchaser and that
relationships of the Purchaser to such buyers are confidential. The Seller
agrees with respect to a particular buyer of the Mortgage Loans, the Seller will
not, for the purpose of buying and selling other mortgage loans communicate with
or sell such other mortgage loans to such buyer unless such buyer is or has been
independently introduced to the Seller or the Seller has had previous dealings
(other than any transactions involving the Purchaser) with such buyer.

(SIGNATURE PAGE TO FOLLOW)

 

IN WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
date first above written.

COUNTRYWIDE HOME LOANS, INC.,

the Purchaser

 

By: _____________________

Michael W. Schloessmann

Vice President

 

E-LOAN, INC.,

the Seller

 

By: _____________________

Name:

Title:

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF FUNDING SCHEDULE

COUNTRYWIDE HOME LOANS, INC.

Funding Schedule

________________________________

Closing Date [_______________]

 

The Purchase Proceeds due to the Seller for the Mortgage Loans is calculated as
follows:

1)

Aggregate Principal Balance of Mortgage Loans as of [CUT-OFF DATE]:

$[AMOUNT]

2)

Purchase Price Percentage:

[PERCENTAGE]%

3)

Purchase Price Proceeds:

$[AMOUNT]

4)

Accrued Interest @ [xxx]%:

$[AMOUNT]

5)

Total Purchase Proceeds (Item 3 + Item 4):

$[AMOUNT]

The Seller hereby instructs the Purchaser to wire the Purchase Proceeds to the
account designated below on the date hereof:

[WIRE INSTRUCTIONS]

Agreed to and Accepted by:

__________________________

COUNTRYWIDE HOME LOANS, INC.

By: _____________________
Name:
Title:

By: _____________________
Name:
Title:

 

CHL Internal     _________________________

                   _________________________

                   _________________________

                   _________________________

                   _________________________

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF OFFICER'S CERTIFICATE

I, ___________, hereby certify that I am a duly elected ________________ of
_________________, a ____________ corporation (the "Seller"), and further
certify on behalf of the Seller as follows:

1. Attached hereto are true and correct copies of the Certificate of
Incorporation and Bylaws of the Seller as in full force and effect on the date
hereof.

2. Each person who, as an officer or attorney-in-fact of the Seller, signed (a)
the Mortgage Loan Purchase Agreement (the "Purchase Agreement") dated as of
____________________, by and between the Seller and Countrywide Home Loans,
Inc., (b) the Purchase Confirmation (the "Purchase Confirmation") dated as of
____________________, by and between the Seller and Countrywide Home Loans,
Inc., and (c) any other document delivered prior hereto or on the date hereof in
connection with the sale and servicing of Mortgage Loans in accordance with the
Purchase Agreement and/or Purchase Confirmation was, at the respective times of
such signing and delivery, and is as of the date hereof, duly elected or
appointed, qualified and acting as such officer or attorney-in-fact.

3. Set forth below is the name, title and specimen signature of the person who
has been duly elected and qualified to serve in the capacity set forth opposite
his or her name:

Name

Title

Signature

_____________________

_____________________

_____________________

_____________________

_____________________

_____________________

_____________________

_____________________

_____________________

, and the signatures of such persons appearing on such documents are their
genuine signatures.

4. All of the representations and warranties of the Seller contained in Article
III of the Purchase Agreement and/or the Purchase Confirmation were true and
correct in all material respects as of the related Closing Date of the Purchase
Agreement and Purchase Confirmation.

5. The Seller has performed all of its duties and has satisfied all of the
material conditions on its part to be performed or satisfied prior to the
Closing Date pursuant to the Purchase Agreement and/or Purchase Confirmation.

All capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Purchase Agreement.

IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Seller.

Dated: ________________, 200_ _______________________________

By: ____________________________

Its: ____________________________

I, ___________, Secretary of _________________, hereby certify that __________
is a duly elected, qualified and acting _____________________ of
_____________________ and that the signature appearing above is his or her
genuine signature.

IN WITNESS WHEREOF, I have hereunto signed my name.

Dated: ________________, 200_ _______________________________

By: ____________________________

Its: ____________________________

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EXHIBIT C

FORM OF AUTHORIZED SIGNATORIES AGREEMENT

This Authorized Signatories Agreement is dated and effective as of ____________,
200_, between [SELLER], (the "Seller"), and Countrywide Home Loans, Inc. (the
"Purchaser").

RECITALS

The Seller has sold, or proposes to sell from time to time, to the Purchaser
certain mortgage loans including the servicing rights related thereto (the
"Mortgage Loans") in accordance with terms and conditions of that certain
Mortgage Loan Purchase Agreement dated August ___, 2002 by and between the
Seller and the Purchaser (the "Purchase Agreement").

To facilitate the transfer and assignment of the Mortgage Loans from the Seller
to the Purchaser under the Purchase Agreement, the Seller desires to appoint
specific individuals employed by the Purchaser as authorized signatories
(collectively, the "Authorized Signatories") pursuant to a certain Appointment
of Authorized Signatories, the form of which is attached as Exhibit A hereto,
for the sole and exclusive purposes of preparing and executing allonge note
endorsements ("Endorsements") and/or preparing and executing mortgage
assignments or beneficial interests in deeds of trust or similar instruments
("Assignments"), as applicable, with respect to the Mortgage Loans.

In consideration of the promises and the mutual agreements and undertakings set
forth herein, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

The Seller hereby authorizes the Authorized Signatories to prepare and execute
Endorsements and/or Assignments, as applicable, relating to the Mortgage Loans
sold by the Seller to the Purchaser under the Purchase Agreement. Such authority
shall include the authority to record and/or file such Endorsements and
Assignments with all applicable governmental recording agencies and any private
electronic systems, including, without limitation, the MERS® System.

The Purchaser agrees that the preparation and execution of the Endorsements
and/or Assignments by the Authorized Signatories will be performed with due
care.

Other than the authorization granted herein, the Purchaser agrees that the
Authorized Signatories will take no other action in the name of the Seller.

The authority granted by the Seller to the Purchaser herein shall be in full
force and effect and shall apply with respect to any Mortgage Loan sold by the
Seller to the Purchaser under the Purchase Agreement.

The Seller will provide Purchaser with a Secretary's Certificate that
authenticates that the Seller's Board of Directors has taken the necessary
corporate action to allow the appointment of and grant the authorizations to the
Authorized Signatories as permitted herein, which such corporate action shall be
in the form of board resolution substantially in the form of Exhibit B attached
hereto.

IN WITNESS WHEREOF, the parties have duly executed this Authorized Signatories
Agreement as of the date first above written.

E-LOAN, Inc.,

the Seller

By:

Name:

Title:

COUNTRYWIDE HOME LOANS, INC.,

the Purchaser

By:

Michael W. Schloessmann

Vice President

 

Exhibit A

To

Authorized Signatories Agreement

FORM OF APPOINTMENT OF AUTHORIZED SIGNATORIES

Pursuant to the authority granted me by a vote of the Board of Directors of
[SELLER] dated as of [DATE], I hereby appoint the individuals listed below for
the sole and exclusive purpose of executing allonge note endorsements and/or
executing mortgage assignments or beneficial interests in deeds of trust or
similar instruments, as applicable, relating to mortgage loans sold, or to be
sold, by [SELLER], as identified on Exhibit A of that certain Authorized
Signatories Agreement dated as of [DATE], by and between [SELLER] and
Countrywide Home Loans, Inc.

 

[SELLER],

 

By: _______________________

Name:

Title:

 

Dated: _______________, 200_.

 

AUTHORIZED SIGNATORIES:

Araxie Ganoumian

Richard L. Wilson

Beth Wilson

Laura Villasenor

Myleen Evangelista

Christy Dellutri

Robin Dolatowski

Yolanda Perez

Sandra Fennell

Tracy Schreiner

Margaret Hassett

Joe Tharpe

Amy Millet

Margaret McCoy

Heidi Smalley

Nicole Walden

Susan Hahn

Karen Workman

Amy Hamlin

Yolanda Diaz

Mercedes Judilla

Angeles Medina

Debra Terrill

William C. Buell VI

Michael Schloessmann

Greg Petroski

   

Exhibit B

To

Authorized Signatories Agreement

FORM OF UNANIMOUS WRITTEN CONSENT OF DIRECTORS

We the undersigned, being all of the directors currently in office of __________
(the "Company"), do hereby consent, pursuant to the provisions of the Company's
articles of incorporation, by-laws and all other governing documents, to the
taking of and adopting the following actions for and on behalf of the Company:

APPROVED: that each of the following persons, acting singly, be, and each hereby
is, authorized and empowered to appoint assistant secretaries, assistant
mortgage officers, assistant vice presidents, vice presidents or other
authorized signatories, and their successors, on behalf of the Company for the
sole and exclusive purposes of, and with authority expressly limited to,
executing mortgage assignments of beneficial interests in deeds of trust or
similar instruments, note endorsements or allonges and any other documents
necessary to effect the sales of loans to Countrywide Home Loans, Inc. or its
nominee or assignee:

[Insert name of Company officer who is to sign Appointment of Authorized
Signatories]

IN WITNESS WHEREOF, the undersigned have executed this unanimous written consent
as of the ______day of _________________, 200__.

 

____________________ [Insert signature line for each board member]

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EXHIBIT D

FORM OF PURCHASE CONFIRMATION

[COUNTRYWIDE LETTERHEAD]

[DATE]

 

[PURCHASER]

[STREET ADDRESS]

[CITY, STATE AND ZIP]

Attn: [CONTACT, TITLE]

Re: Purchase Confirmation

Gentlemen and Ladies:

This purchase confirmation (the "Purchase Confirmation") between Countrywide
Home Loans, Inc. (the "Purchaser") and [SELLER] (the "Seller") sets forth our
agreement pursuant to which the Purchaser is purchasing, and the Seller is
selling, on a servicing-released basis, those certain mortgage loans identified
in Exhibit A hereto and more particularly described herein (the "Mortgage
Loans").

The purchase, sale and servicing of the Mortgage Loans as contemplated herein
shall be governed by that certain Mortgage Loan Purchase Agreement dated as of
[DATE], between the Purchaser and the Seller (as amended herein and otherwise,
the "Agreement"). By executing this Purchase Confirmation, each of the Purchaser
and the Seller again makes, with respect to itself and each Mortgage Loan as of
the related Closing Date or such other date as indicated in the Agreement, as
applicable, all of the covenants, representations and warranties made by each
such party in the Agreement, except as the same may be amended by this Purchase
Confirmation.

All exhibits hereto are incorporated herein in their entirety. In the event
there exists any inconsistency between the Agreement and this Purchase
Confirmation, the latter shall be controlling notwithstanding anything contained
in the Agreement to the contrary. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement.

1. Assignment and Conveyance of Mortgage Loans. Upon the Purchaser's payment of
the Purchase Proceeds in accordance with Section 2.2 of the Agreement, the
Seller shall sell, transfer, assign and convey to the Purchaser all of the
right, title and interest of the Seller in and to the Mortgage Loans, including
the Servicing Rights relating thereto.

2. Defined Terms. As used in the Agreement, the following defined terms shall
have meanings set forth below.

Closing Date

: [DATE].

Cut-off Date

: [DATE].

Purchase Proceeds

: With respect to [the Mortgage Loans] [each Mortgage Loan] [the Mortgage Loans
in each Segment], and as set forth in
Exhibit A
hereto, the sum of (a) the product of (i) the Cut-off Date Balance of [such
Mortgage Loan] [such Mortgage Loans] [such Segment], and (ii) the purchase price
percentage set forth in
Exhibit A
hereto for such [Mortgage Loan] [Mortgage Loans] [Segment], and (b) [accrued
interest owing to the Seller on the Stated Principal Balance of the Mortgage
Loans at a rate equal to the weighted average Mortgage Interest Rate of such
Mortgage Loans, from the Cut-off Date through the day prior to the Closing Date,
inclusive.] [accrued interest owing to the Seller on the Stated Principal
Balance of each Mortgage Loan at a rate equal to the Mortgage Interest Rate of
each such Mortgage Loan, from the date through which interest has last been paid
(as of the Cut-off Date) through the day prior to the Closing Date, inclusive;
provided, however, with respect to those Mortgage Loans for which interest has
been paid through a date beyond the Closing Date, such accrued interest owing to
Seller shall be reduced by the amount of interest accruing on the Stated
Principal Balance of each such Mortgage Loan at a rate equal to the Mortgage
Interest Rate of such Mortgage Loan, from the Closing Date to the day prior to
the interest paid through date for such Mortgage Loan, inclusive.] [accrued
interest owing to the Purchaser on the Mortgage Loans based on the scheduled
principal balance as of the first day of the month preceding the Cut-off Date at
a rate equal to the weighted average Mortgage Interest Rate of such Mortgage
Loans, from the Closing Date through the thirtieth (30
th
) day of the month in which the Closing Date occurs, inclusive.]

Servicing Transfer Date

: [DATE].

3. Description of Mortgage Loans: Each Mortgage Loan complies with the
specifications set forth below in all material respects.

Loan Type: Each Mortgage Loan is a [Conventional] [Government] Mortgage Loan and
a [Adjustable Rate] [Balloon] [Convertible] [Fixed Rate] Mortgage Loan.

[b. Index: On each Interest Adjustment Date, the applicable index rate shall be
a rate per annum equal to [the weekly average yield on U.S. Treasury securities
adjusted to a constant maturity of one year, as published by the Board of
Governors of the Federal Reserve System in Statistical Release No. H.15] [the
average of interbank offered rates for six- month U.S. dollar denominated
deposits in the London market (LIBOR), as published [in the Wall Street Journal]
[by Fannie Mae] [the 11th District Cost of Funds as made available by the
Federal Home Loan Bank] [the weekly average yield on certificates of deposit
adjusted to a constant maturity of six months as published by the Board of
Governors of the Federal Reserve System in Statistical Release No. H.15 or a
similar publication].

Lien Position: Each Mortgage Loan is secured by a perfected [first] [second]
lien Mortgage.

Underwriting Criteria: Each Mortgage Loan [was underwritten generally in
accordance with the Seller's credit underwriting guidelines in effect at the
time such Mortgage Loan was originated] [conforms to the Fannie Mae or Freddie
Mac mortgage eligibility criteria and is eligible for sale to, and
securitization by, Fannie Mae or Freddie Mac] [conforms in all material respects
to the GNMA mortgage eligibility criteria and is eligible for sale and
securitization into a GNMA mortgage-backed security] [at the time of origination
was underwritten to guidelines which are consistent with an institutional
investor-quality mortgage loan].

4. Additional Stipulations Regarding Mortgage Loan Package.

[a. Prepayment [and Conversion] Protection. In addition to the any rights
afforded the Purchaser in the Agreement, in the event that any of the Mortgage
Loans are (i) paid in full [or (ii) converted to a fixed-rate mortgage loan, in
either case,] on or prior to [DATE], or [(iii)] subject to a breach of the
representation set forth in Section 3.2(qq) of the Agreement, the Seller shall,
with respect to each such Mortgage Loan, pay to the Purchaser the product of (a)
the positive difference, if any, between the Purchase Price Percentage (subject
to any buyup or buydown adjustments as contemplated [in the Trade Confirmation])
and 100%, times (b) the unpaid principal balance of such Mortgage Loan at the
time such Mortgage Loan is paid in full [or converted, as applicable] (the
"Premium Recapture Amount"). In the event any Mortgage Loan is paid in full
after the Cut-off Date and on or prior to the Closing Date, the Seller shall, in
addition to the Premium Recapture Amount, pay the Purchaser the Accrued Interest
paid by the Purchaser for such Mortgage Loan. Nothing contained in this Section
3.5 shall in any way limit the rights of the Purchaser to all collections and
recoveries of principal and interest received or applied to any Mortgagor's
account and the Seller's obligation to remit the such recoveries of principal
and interest to the Purchaser as provided in Section 2.3.]

[b. Payment Default Protection. In addition to any rights afforded the Purchaser
in the Agreement, if the [first Monthly Payment with a Due Date subsequent to
the Closing Date][first Monthly Payment due under the Mortgage Note] is not
received by the Purchaser, whether from the Mortgagor directly or forwarded by
the Seller if the Mortgagor has submitted the payment to the Seller, [by the
last day of the month in which such payment is due][within [INSERT] ([INSERT)
days of its related Due Date], the Seller shall, at the Purchaser's option and
not later than five (5) Business Days after receipt of notice from the
Purchaser, repurchase such Mortgage Loan at the Repurchase Price. The rights
conferred to the Purchaser under this Section 3.6 shall be in addition to those
rights conferred to the Purchaser under Section 3.2(b).]

[c. Post-Closing Appraisal Review. In addition to any rights afforded the
Purchaser in the Agreement, the Purchaser shall have the right, within [thirty
(30) days][twelve (12) months] after the Closing Date, or the date on which the
appraisal in the Mortgage File relating to the Mortgaged Property is received by
the Purchaser from the Seller, whichever is later, to obtain an appraisal,
broker's price opinion, drive-by appraisal or any other comparable valuation
measure with respect to any Mortgaged Property (collectively, the "Review
Appraisal"). If the value of a Mortgaged Property, as determined by the Review
Appraisal, is less than the value of the appraisal in the Mortgage File by (i)
ten percent (10%) or more for a Mortgage Loan with an original LTV of less than
or equal to eighty percent (80%) or (ii) five percent (5%) or more for a
Mortgage Loan with an original LTV of greater than eighty percent (80%), the
Seller shall, at the Purchaser's sole option, repurchase the related Mortgage
Loan at the Repurchase Price not later than five (5) Business Days after the
Seller's receipt of notice requesting same from the Purchaser.]

[d. Missing and Deficient Documents. Pursuant to Section 2.5 of the Agreement,
the Seller is required to deliver to the Purchaser the Mortgage Loan Documents
at least two (2) Business Days prior to the Closing Date. The Seller and the
Purchaser acknowledge that as of the Closing Date, with respect to the Mortgage
Loans identified in Exhibit E hereto, the Seller has not delivered the related
Mortgage Loan Documents in accordance with Section 2.5 (the "Missing Documents")
or, with respect to certain other Mortgage Loans also identified in Exhibit E
hereto, certain Mortgage Loan Documents and/or Mortgage Files are deficient
and/or incomplete for reasons detailed in Exhibit E (the "Deficient Documents").
[Pursuant to Section 2.4 of the Agreement, the Purchaser has the right, prior to
the Closing Date, to review the Mortgage File and, based on its review, decline
to purchase any Mortgage Loan which the Purchaser, in its sole discretion,
determines not to be in compliance with each of the representations and
warranties contained in the Agreement or which is otherwise unsatisfactory to
the Purchaser in its reasonable discretion. The Seller and the Purchaser
acknowledge that as of the Closing Date, with respect to the Mortgage Loans
identified in Exhibit E hereto, the Seller has not delivered the related
Mortgage Files in accordance with Section 2.4 (the "Missing Mortgage Files"),
and as a result, the Purchaser has been unable to complete its review of the
affected Mortgage Loans prior to the Closing Date.

In consideration of the Purchaser's agreement to purchase the Mortgage Loans
identified in Exhibit E hereto on the Closing Date notwithstanding the
foregoing, the Seller shall, with respect to Mortgage Loans with Missing
Documents, deliver such Missing Documents to the Purchaser [no later than
[DATE]][within thirty (30) days of the Closing Date], and, with respect to
Mortgage Loans with Deficient Documents, cure such Deficient Documents to the
satisfaction of the Purchaser [no later than [DATE][within thirty (30) days of
the Closing Date][and, with respect to Missing Mortgage Files, deliver such
Missing Mortgage Files to the Purchaser no later than [DATE]][within thirty (30)
days of the Closing Date]. In the event that the Seller fails to comply with the
requirements of the foregoing sentence, the Seller shall, upon written notice
from the Purchaser, repurchase any such Mortgage Loan at the Repurchase Price
within one (1) Business Day after the Seller's receipt of such written notice.
[In addition, with respect to Missing Mortgage Files that are delivered to the
Purchaser within the time frame required herein, the Purchaser shall have the
right to complete its review of the related Mortgage Loan as contemplated under
Section 2.4 of the Agreement, and, if as a result of such review, the Purchaser
determines that it would have declined to purchase such Mortgage Loan, the
Seller shall, upon written notice from the Purchaser, repurchase such Mortgage
Loan at the Repurchase Price within one (1) Business Day after the Seller's
receipt of such written notice.] The fact that the Purchaser decides not to
require the Seller to repurchase any such Mortgage Loan where the Seller may
otherwise be required to repurchase such Mortgage Loan hereunder shall not
affect the Purchaser's right to demand repurchase of such Mortgage Loan or to
avail itself of any other rights and remedies available to it under the
Agreement. Nothing contained herein shall be deemed to waive any rights,
remedies or privileges of the Purchaser including, without limitation, the
remedies accorded the Purchaser under Sections 3.3 and 3.4.]

Kindly acknowledge your agreement to the terms of this Purchase Confirmation by
signing in the appropriate space below and returning this Purchase Confirmation
to the undersigned. Telecopy signatures shall be deemed valid and binding to the
same extent as the original.

COUNTRYWIDE HOME LOANS, INC.

[SELLER]

By: _____________________

By: _____________________

Michael W. Schloessmann
Vice President

Name:
Title:

 

 

Exhibit A to Purchase Confirmation

Mortgage Loans

(attached)

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