INACCURACY).
FREDDIE MAC SHALL ALSO HAVE THE RIGHT
TO REQUIRE PAYMENT BY THE SPONSOR OF A PREPAYMENT PREMIUM IN CONNECTION WITH ANY
RELEASE EVENT CAUSED BY A REPURCHASE INACCURACY, WHICH REMEDIES IN ADDITION TO
THE RECOVERY OF ENFORCEMENT COSTS FROM THE SPONSOR, PROCEEDING UNDER THE
GUARANTY (WHICH FREDDIE MAC MAY DO IF THE SPONSOR HAS FAILED TO PERFORM ITS
OBLIGATIONS WHEN REQUIRED UNDER THIS SECTION) AND TAKING ACTION AS PROVIDED IN
SUBSECTION (D) BELOW SHALL BE THE SOLE RIGHTS AND REMEDIES AVAILABLE TO FREDDIE
MAC AS THE RESULT OF AN INACCURACY.
IN THE EVENT THE INACCURACY IS NON-MONETARY
AND SUCH THAT IT CAN BE CORRECTED, BUT NOT WITHIN 60 DAYS, FREDDIE MAC SHALL NOT
PURSUE ANY REMEDIES HEREUNDER IF CORRECTIVE ACTION IS INSTITUTED BY THE SPONSOR
WITHIN SUCH 60 DAYS AND DILIGENTLY PURSUED UNTIL THE INACCURACY IS CURED,
PROVIDED SUCH INACCURACY MUST BE CURED NOT LATER THAN THE EARLIER OF 90 DAYS
AFTER THE DISCOVERY OR RECEIPT OF NOTICE OF SUCH INACCURACY, AS SET FORTH IN
SUBSECTION 2.4(B) ABOVE; IF A CURE CANNOT BE EFFECTED WITHIN SUCH 90-DAY PERIOD,
THE SPONSOR SHALL HAVE THE OPTIONS SET FORTH IN CLAUSE (I) OR (II) ABOVE EXCEPT
AS PROVIDED ABOVE WITH RESPECT TO A REPURCHASE INACCURACY.
(D)
IF SPONSOR FAILS TO CURE AN INACCURACY WITHIN THE TIME PROVIDED IN
SUBSECTION (C) ABOVE, AND FAILS TO REPURCHASE THE RELATED BONDS OR PROVIDE
INDEMNIFICATION IN ACCORDANCE WITH THE PROVISIONS OF SUBSECTION 2.4(C) ABOVE,
FREDDIE MAC, AFTER WRITTEN NOTICE TO THE SPONSOR, SHALL HAVE THE RIGHT, BUT NOT
THE OBLIGATION, TO CURE ANY SUCH INACCURACY, AND ANY COSTS, FEES OR EXPENSES
ACTUALLY INCURRED BY FREDDIE MAC SHALL BE A CREDIT ADVANCE AND SHALL BE PAID BY
THE SPONSOR IN ACCORDANCE HEREWITH.
AMOUNTS EXPENDED BY THE SPONSOR TO CURE AN
INACCURACY SHALL BE AT THE SOLE COST AND EXPENSE OF THE SPONSOR.
(E)
THE ASSUMPTIONS SET FORTH IN SECTION 2.2 OF THIS AGREEMENT, THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 2.2 OF THIS AGREEMENT, AND
FREDDIE MAC'S RIGHT TO RELY ON THEM, SHALL NOT BE AFFECTED OR LIMITED BY ANY
INVESTIGATION (INCLUDING ANY PRE-PURCHASE REVIEW OF DOCUMENTATION) MADE BY, OR
ON BEHALF OF, FREDDIE MAC, EXCEPT TO THE EXTENT THAT THE SPONSOR CAN
28
ESTABLISH THAT ONE OR MORE OF THE FOLLOWING FREDDIE MAC EMPLOYEES HAD ACTUAL
KNOWLEDGE (AS OPPOSED TO IMPUTED KNOWLEDGE ARISING FROM THE RECEIPT OF THE
DOCUMENTS REQUIRED TO BE DELIVERED BY THE SPONSOR HEREUNDER) OF SUCH INACCURACY
OR BREACH PRIOR TO THE CLOSING DATE AND DID NOT INFORM THE SPONSOR OF SUCH
INACCURACY OR BREACH PRIOR TO THE CLOSING DATE:
Clayton A. Davis; W. Kimball Griffith; Christopher Propert; Shaun Smith; Michael
McRoberts; David Brickman; Victoria Bourgeois; Stephen G. Johnson; Margaret F.
Smith; Brian E. King; and Xiangxiu Meng
provided that the inclusion of Christopher Propert in the list of Freddie Mac
employees shall not imply a waiver of the attorney-client privilege, which may
be asserted by Freddie Mac.
(F)
WHENEVER AN ASSUMPTION SET FORTH IN SECTION 2.1 IS QUALIFIED BY
THE