Document:

EXHIBIT 10.11

 

EXECUTION COPY

 

MORTGAGEIT,
INC.

 

NOTE
PURCHASE AGREEMENT

 

THIS
NOTE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
March 29, 2004, by and among MORTGAGEIT, INC., a New York corporation
(the “Company”),
and each of those persons and entities, severally and not jointly, whose names
are set forth on the Schedule of Purchasers attached hereto as Schedule I
(which entities and any successors thereto are hereinafter collectively
referred to as the “Purchasers”
and each individually as a “Purchaser”).

 

RECITALS

 

WHEREAS,
the Company seeks financing and the Purchasers desire
to provide such financing and to purchase from the Company senior secured
promissory notes, for an aggregate purchase price of Fifteen Million Dollars
($15,000,000).

 

NOW
THEREFORE, in consideration of the foregoing recitals
and the mutual promises hereinafter set forth, the parties hereto agree as
follows:

 

1.                                      DEFINITIONS.

 

When used in this Agreement, the following terms have the meaning set
forth the below (such meanings being equally applicable to both the singular
and plural forms of the terms defined):

 

“Affiliate”,
as applied to any Person, means any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person.  For the purposes of this definition,
“control” (including, with correlative meanings, the terms “controlling”,
“controlled by” and “under common control with”), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
the ownership of voting securities or by contract or otherwise.  For purposes of this definition, (a) a
Person shall be deemed to be “controlled by” a Person if such Person possesses,
directly or indirectly, power to vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person, provided
that in no event shall the Company be deemed to be controlled by TICC, (b)
members of the immediate family of a Person shall be deemed to be Affiliates of
such Person and (c) members of the board of directors or board of managers or
similar body of the Parent and of the Company shall be deemed to be Affiliates
of the Company.

 

“Balance Sheet”
has the meaning assigned thereto in Section 3.11(a).

 

“Balance Sheet Cash”
means, as of any date of determination, (x) the sum of (i) Cash and Cash
Equivalents and (ii) the par value of mortgage loans held for sale, minus (y)
the

 

1

 

aggregate principal amount of Warehouse Lines outstanding as of such
date.  All the foregoing categories
shall be determined in accordance with GAAP applied on a consistent basis.

 

“Benefit Arrangement”
shall have the meaning assigned thereto in Section 3.19.

 

“Business Day”
means any day other than a Saturday, Sunday or any other day on which
commercial banks in New York, New York are authorized or required to close.

 

“Capital Expenditures”
means, for any period, additions to property and equipment and other capital
expenditures of the Company which, in conformity with GAAP, are included as
“additions to property, plant or equipment” or similar items which would be
reflected in the consolidated statement of cash flow of the Company, including
without limitation, property and equipment which are the subject of Capital
Leases.

 

“Capital Lease”
means any lease (or other agreement conveying the right to use property) the
obligations of which are required to be capitalized on the balance sheet of a
Person in accordance with GAAP

 

“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares,
interests, participations or other equivalents (however designated and whether
voting or nonvoting) of corporate stock, including each class of common stock
and preferred stock of such Person and (ii) with respect to any Person that is
not a corporation, any and all general partnership, limited partnership,
membership or other equity interests of such Person.

 

“Cash”
means money, currency or a credit balance in any demand or deposit account.

 

“Cash Equivalents”
means, as at any date of determination, (i) marketable securities (a) issued or
directly and unconditionally guaranteed as to interest and principal by the government
of the United States of America or (b) issued by any agency of the United
States of America the obligations of which are backed by the full faith and
credit of the United States of America, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after
such date and having, at the time of the acquisition thereof, a rating of at
least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper
maturing no more than one year from the date of creation thereof and having, at
the time of the acquisition thereof, a rating of at least A-1 from S&P or
at least P-1 from Moody’s; and (iv) certificates of deposit or bankers’
acceptances maturing within one year after such date and issued or accepted by
any Purchaser or by any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia that (a) is
at least “adequately capitalized” (as defined in the regulations of its primary
Federal banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000.

 

“CERCLA”
shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. 9601 et  seq.), as amended from time to
time, and any successor statute thereto.

 

2

 

“Change of Control”
means, at any time, (i) any Person or any Persons acting together that would
constitute a “group” for purposes of 
Section 13(d) under the Exchange Act, or any successor provision
thereto, shall acquire beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act, or any successor provision thereto) in a single
transaction or a series of related transactions, of more than (x) at any time
prior to the Company’s initial public offering 50% of the aggregate voting
power of the Company and (y) at any time following the Company’s initial public
offering 35% of the aggregate voting power of the Company; or (ii) the Company
merges into or consolidates with any other Person, or any Person merges into or
consolidates with the Company, except in each case any merger or consolidation
permitted under this Agreement; or (iii) or the Company sells or transfers its
assets, as an entirety or substantially as an entirety, to another Person; (iv)
any “change of control” or similar event under any loan agreement, mortgage,
indenture or other agreement relating to any Indebtedness shall occur; or (v)
at any time following the Company’s initial public offering, during any period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (or similar governing body) of the Company
(together with any new directors whose election by the shareholders of the
Company was proposed by a vote of the majority of directors of the Company then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the Company
then in office; provided, however, that the Merger shall not constitute a
Change of Control.

 

“Closing”
shall have the meaning assigned thereto in Section 2.3.

 

“Closing Date”
shall have the meaning assigned thereto in Section 2.3.

 

“Collateral Agent”
means the Person, initially TICC, serving as Collateral Agent pursuant to
Section 11.8.

 

“Commitment Fee”
shall have the meaning assigned thereto in Section 2.3.

 

“Company”
has the meaning assigned thereto in the preamble.

 

“Company Intellectual
Property” has the meaning assigned thereto in
Section 3.20(a).

 

“Default”
means an Event of Default or an event that with notice or lapse of time or both
would, unless cured or waived, become an Event of Default.

 

“Disclosure Schedule”
has the meaning assigned thereto in the second sentence of Section 3.

 

“Disqualified Stock”
means any Capital Stock or other security of any nature which by its terms (or
by the terms of any security into which it is convertible or for which it is
exchangeable at the option of the holder thereof), or upon the happening of any
event matures (excluding any maturity as the result of an optional redemption
by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is redeemable at the sole option of the holder
thereof, at any time prior to the payment in full in cash by the Obligors of
the Notes.

 

3

 

“Environmental Law”
shall mean the Resource Conservation and Recovery Act (“RCRA”), CERCLA, the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), the Federal Clean Water Act, the Federal Clean
Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment.

 

“Event of Default”
has the meaning assigned thereto in Section 9.1.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

“Financial Statements”
has the meaning assigned thereto in Section 3.11(d).

 

“GAAP”
means those generally accepted accounting principles in the United States of
America, as in effect from time to time; provided, however, for purposes of
computing financial covenants GAAP means generally accepted accounting
principles in the United States of America applied in the preparation of the
Company’s audited balance sheet, statement of income and statement of cash flow
for the fiscal year December 31, 2003, as reflected in such audited
financial statements.  If any changes in
accounting principles from those in effect on the date hereof are hereafter
occasioned by promulgation of rules, regulations, pronouncements or opinions by
or are otherwise required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions), and any of such changes results in a change
in the method of calculation of, or affects the results of such calculation of,
any of the financial covenants, standards or terms found herein, then the
parties hereto agree to enter into and diligently pursue negotiations in order
to amend such financial covenants, standards or terms so as to equitably
reflect such changes, with the desired result that the parties shall be in
substantially the same position from an economic standpoint with respect to the
matters covered thereby after the adoption or implementation of such change as
before the implementation or adoption of such change.

 

“Governmental Authority”
means any federal, state, municipal, foreign or other government, governmental
department, commission, board, bureau, agency or instrumentality, or any
private or public court or tribunal.

 

“Guarantee”
as applied to any Person, shall mean any direct or indirect liability,
contingent or otherwise, of that Person: 
(i) with respect to any underlying Indebtedness, lease, dividend or
other obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide
assurance to the obligee of such liability that the underlying Indebtedness,
lease, dividend or other obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto; (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings; or (iii) under any foreign exchange contract, currency swap
agreement, interest rate swap agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from
fluctuations in currency values or interest rates.  Guarantees shall include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to

 

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make take-or-pay or similar payments if required regardless of
nonperformance by any other party or parties to an agreement, or to maintain
working capital or equity capital of such other Person or otherwise to maintain
the net worth or solvency of such other Person, (c) any liability of such
Person for the obligations of another through any agreement to purchase,
repurchase or otherwise acquire such obligation or any property constituting
security therefor, to provide funds for the payment or discharge of such
obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another, and (d) otherwise to assure or hold
harmless the owner of such obligation against loss in respect thereof.  The amount of any Guarantee shall be equal to
the amount of the obligation so guaranteed or otherwise supported or, if not a
fixed and determined amount, the maximum amount so guaranteed.

 

“Guarantor”
means (i) each Subsidiary of the Company and (ii) following the Merger,
Parent.  

 

“Guaranty Agreement”
mean the Guaranty Agreement, dated as of March 29, 2004, by the Guarantors
in favor of the Collateral Agent for the benefit of the Purchasers, as amended,
supplemented, restated or otherwise modified from time to time.

 

“Hazardous Materials”
shall mean (i) any “hazardous substance”, as defined by CERCLA, (ii) any
“hazardous waste”, as defined by RCRA, (iii) any petroleum product, or (iv) any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material or
substance regulated by any Environmental Laws.

 

“Hedging Agreement”
means any interest rate swap, collar, cap, floor or forward rate agreement or
other agreement regarding the hedging of interest rate risk exposure executed
in connection with hedging the interest rate exposure of any Person and any
confirming letter executed pursuant to such agreement, all as amended,
supplemented, restated or otherwise modified from time to time.

 

“Incentive Plan”
has the meaning assigned thereto in Section 3.2.

 

“Indebtedness”
means, without duplication, as to any Person or Persons (a) indebtedness for
borrowed money; (b) indebtedness for the deferred purchase price of property or
services; (c) indebtedness evidenced by bonds, debentures, notes or other
similar instruments; (d) obligations and liabilities secured by a Lien, other
than a Permitted Lien, upon property owned by such Person, whether or not owing
by such Person and even though such Person has not assumed or become liable for
the payment thereof; (e) obligations and liabilities directly or indirectly
Guaranteed by such Person; (f) obligations or liabilities created or arising
under any conditional sales contract or other title retention agreement with
respect to property used and/or acquired by such Person; (g) obligations of
such Person as lessee under Capital Leases; (h) net liabilities of such Person
under Hedging Agreements and foreign currency exchange agreements, as
calculated on a basis satisfactory to the Majority Purchasers and in accordance
with accepted practice; (i) all obligations of such Person in respect of
bankers’ acceptances and (j) all obligations, contingent or otherwise of such
Person as an account party or applicant in respect of letters of credit.

 

5

 

“Initial
Public Offering” means the underwritten
initial public offering of the common stock, par value $0.01 per share, of
Parent.

 

“Intellectual Property”
means all (i) trademarks and service marks, logos, trade dress, product
configurations, trade names and other indications of origin, applications or
registrations in any jurisdiction pertaining to the foregoing and all goodwill
associated therewith; (ii) inventions (whether or not patentable), discoveries,
improvements, ideas, know-how, formula methodology, research and development,
business methods, processes, technology, software (including password
unprotected interpretive code or source code, object code, development
documentation, programming tools, drawings, specifications and data) and
applications or patents in any jurisdiction pertaining to the foregoing, including
re-issues, continuations, divisions, continuations-in-part, renewals or
extensions; (iii) trade secrets, including confidential information and the
right in any jurisdiction to limit the use or disclosure thereof; (iv)
copyrights in writings, designs, software, mask works or other works,
applications or registrations in any jurisdiction for the foregoing and all
moral rights related thereto; (v) database rights; (vi) Internet Web sites, Web
pages, domain names and applications and registrations pertaining thereto; and
(vii) all rights under agreements relating to the foregoing.

 

“Investment”
means, for any Person:  (a) the
acquisition (whether for cash, property, services or securities or otherwise)
of capital stock, bonds, notes, debentures, partnership or other ownership
interests or other securities of any other Person or any agreement to make any
such acquisition (including, without limitation, any “short sale” or any sale
of any securities at a time when such securities are not owned by the Person entering
into such sale); (b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person), but excluding any such
advance, loan or extension of credit having a term not exceeding 90 days
arising in connection with the sale of inventory or supplies by such Person in
the ordinary course of business; (c) the entering into of any guarantee of, or
other contingent obligation with respect to, Indebtedness or other liability of
any other Person and (without duplication) any amount committed to be advanced,
lent or extended to such Person; or (d) the entering into of any Hedging
Agreement.

 

“IPI Skyscraper”
IPI Skyscraper Mortgage Corporation, a New York corporation.

 

“Lien”
means any lien, mortgage, deed of trust, pledge, security interest, charge or
encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any of the foregoing).

 

“Listed Intellectual
Property” shall have the meaning assigned thereto in
Section 3.20(b).

 

“Majority Purchasers”
means at any given time the Purchasers holding more than fifty percent (50%) of
the then outstanding principal amount of the Notes.

 

“Material Adverse
Effect” means a material adverse effect on (i) the business,
properties, assets, liabilities, profits, results of operations or financial
condition of the Company and its

 

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Subsidiaries, taken as a whole or (ii) the ability of the Company or
any Guarantor to perform its obligations under any of the Transaction
Documents.

 

“Material Agreement”
shall have the meaning assigned thereto in Section 3.14.

 

“Merger”
means the merger of the Company with and into a wholly owned subsidiary of
Parent in connection with the Initial Public Offering.

 

“Merrill Lynch Master
Repurchase Agreement” means that certain Master Repurchase
Agreement dated, as of June 20, 2003, by and between the Company and
Merrill Lynch Commercial Finance Corp. (as may be amended, supplemented or
modified from time to time in accordance with the terms therein).

 

“Moody’s”   means Moody’s Investors Services, Inc. and
any successor entity.

 

“Obligors”
means, collectively, the Company and the Guarantors.

 

“Officer”
means, with respect to any Person, the Chairman of the Board of Directors, the
Chief Executive Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller, or the
Secretary of such Person, or any other officer designated by the Board of
Directors of such Person serving in a similar capacity.

 

“Officers’ Certificate”
means a certificate signed by any Officer of the Company.

 

“Organizational
Documents” has the meaning assigned thereto in
Section 3.1(a).

 

“Parent”
means MortgageIT Holdings, Inc., a Maryland corporation.

 

“Permitted Affiliate
Transactions” means any of the following:

 

(a)                                   reasonable
fees and compensation paid to and indemnity provided on behalf of, officers,
directors, employees, consultants or agents of the Company or any as determined
in good faith by the Company’s Board of Directors or senior management, it
being agreed that the level of compensation paid to the Company’s officers,
directors, employees, consultants and agents as of the Closing Date is
reasonable;

 

(b)                                  transactions
between or among the Company and its wholly owned Subsidiaries or between or
among such wholly owned Subsidiaries; provided that such transactions are not
otherwise prohibited under this Agreement and such Subsidiaries are Guarantors;

 

(c)                                   any
agreement as in effect as of the Closing Date, as set forth on
Schedule 3.25 hereto, or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) or in any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Purchasers in any material respect
than the original agreement as in effect on the Closing Date; and

 

7

 

(d)                                  advances
to officers and employees of the Company in the ordinary course of business and
in compliance with past practice and all applicable laws.

 

“Permitted Indebtedness”
means and includes:

 

(a)                                   Indebtedness
to the Purchasers hereunder;

 

(b)                                  Indebtedness
existing on the date hereof and set forth on the Schedule attached hereto
as Schedule II
(prior to any amendment, modifications, extensions thereof or
supplements thereto after the date hereof);

 

(c)                                   Indebtedness
which is junior in right of payment to the Notes and which is expressly
subordinated to the obligations of the Company to pay principal of and interest
on the Notes on terms acceptable and contain standstill provisions acceptable
to the Majority Purchasers in their sole and absolute discretion;

 

(d)                                  Indebtedness
incurred by the Company and its Subsidiaries pursuant to equipment financing; provided,
that the Company shall at the time of such incurrence be in compliance with its
financial covenants on a pro forma basis;

 

(e)                                   Warehouse
Line financing incurred in the ordinary course of business; and

 

(f)                                     unsecured
Indebtedness in an amount not to exceed an aggregate of $1,000,000.

 

“Permitted Investments”
means:  (a) direct obligations of the
United States of America, or of any agency thereof, or obligations guaranteed
as to principal and interest by the United States of America, or of any agency
thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of America or any State
thereof and having capital, surplus and undivided profits of at least
$500,000,000, maturing not more than 90 days from the date of acquisition
thereof; and (c) commercial paper rated A-1 or better or P-1 by S&P or
Moody’s, respectively, maturing not more than 90 days from the date of acquisition
thereof; in each case so long as the same (x) provide for the payment of
principal and interest (and not principal alone or interest alone) and (y) are
not subject to any contingency regarding the payment of principal or interest.

 

“Permitted Liens”
means:

 

(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.10;

 

(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or that are
being contested in good faith and by appropriate proceedings;

 

8

 

(c) pledges and deposits made in the ordinary course of business in
compliance with workers’ compensation, unemployment insurance and other social
security laws or regulations;

 

(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;

 

(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Company or any of its Subsidiaries;

 

(f) Liens to secure Indebtedness consisting solely of Permitted
Indebtedness of the type described in clause (d) of the definition thereof
secured solely by the equipment purchased with the proceeds of such
Indebtedness, provided that such Liens shall not secure Indebtedness exceeding
in the aggregate $500,000 at any time outstanding;

 

(g) Liens in favor of the Purchasers and/or their agents as are
contemplated hereunder and/or under any of the Transaction Documents,

 

(h) Liens to secure mortgage loans acquired with the proceeds of
Warehouse Lines and related books, records, insurance proceeds and other
related assets; and

 

(i) Liens set forth on Schedule IV hereto.

 

provided that the term “Permitted Liens” other
than those set forth under clauses (f), (g), (h) and (i) shall not include any
Lien securing Indebtedness.

 

“Person”
shall be construed in the broadest sense and means and includes any natural
person, a partnership, a corporation, an association, a joint stock company, a
limited liability company, a trust, a joint venture, an unincorporated organization
and other entity or Governmental Authority.

 

“Plan”
has the meaning assigned thereto in Section 3.2.

 

“Preferred Stock”
has the meaning assigned thereto in Section 3.2.

 

“Proprietary Software”
shall have the meaning assigned thereto in Section 3.21.

 

“Quarterly Perfection
Certificate Update” means a certificate, substantially in the
form of Exhibit F
hereto, of an Officer of the Company.

 

“Related Business”
has the meaning assigned thereto in Section 6.6.

 

“RFC Warehouse
Agreement” means that certain Warehousing Credit and Security
Agreement, dated as of August 1, 2003, by and between the Company and
Residential Funding Corporation (as may be amended, supplemented, modified or
renewed from time to time).

 

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“Restricted Payment”
has the meaning assigned thereto in Section 6.4(a).

 

“Securities Act”
means the Securities Act of 1933, as amended.

 

“Security Agreement”
means the Pledge and Security Agreement, dated as of March 29, 2004, by
the Company in favor of the Collateral Agent, as amended, supplemented,
restated or otherwise modified from time to time.

 

“Series A Common Stock”
has the meaning assigned thereto in Section 3.2.

 

“Series B Common Stock”
has the meaning assigned thereto in Section 3.2.

 

“S&P”
means Standard & Poor’s Ratings Services and any successor entity.

 

“Subsidiary”
means, with respect to any Person, (i) any corporation of which the outstanding
Capital Stock having at least a majority of the votes entitled to be cast in
the election of directors under ordinary circumstances shall at the time be
owned, directly or indirectly, by such Person, (ii) any other Person (other
than a partnership) of which at least a majority of the voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by such
Person or (iii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or one or more Subsidiaries
of such Person (or any combination thereof).

 

“TICC”
means Technology Investment Capital Corp. and its successors and assigns.

 

“Transaction Documents”
means this Agreement, the Security Agreement, the Notes, the Guaranty Agreement
and all other documents executed or delivered by the Company in connection with
the transaction contemplated herein.

 

“UBS Warehouse Facility”
means, collectively, (i) that certain Amended and Restated Mortgage Loan
Purchase Agreement, dated as of January 10, 2003, between the Company and
UBS Warehouse Real Estate Facilities (“UBS”) and (ii) that certain Amended and
Restated Mortgage Loan Repurchase Agreement, dated as of January 10, 2003,
between the Company and UBS (as each may be amended, supplemented or modified
from time to time in accordance with terms hereof).

 

“Warehouse Agreement”
means the agreements set forth on Schedule V hereto.

 

“Warehouse Line”
means any agreement, document or instrument (including any repurchase agreement
or similar agreement) entered into by the Company, the Parent (following the
Merger) or any of its Subsidiaries in the ordinary course of their business
pursuant to which the Parent (following the Merger) or the Company or any of
its Subsidiaries agrees to sell, hypothecate, pledge or otherwise transfer
mortgage loans, or any interest in mortgage loans, to any Person, who is not an
Affiliate of the Parent (following the Merger) or the Company or any of its
Subsidiaries in connection with an extension of credit (or repurchase
arrangement) by such Person to the Parent (following the Merger) or the Company
or any of its Subsidiaries, including, but not limited to, the RFC Warehouse
Agreement, the Merrill Lynch Master Repurchase Agreement and the UBS Warehouse
Facility.

 

10

 

“Warehouse Line Ratio”
means, as of any date of determination, (x) the aggregate principal amount of
Warehouse Lines outstanding as of such date divided by (y) the sum of (i) Cash
and Cash Equivalents and (ii) the par value of mortgage loans held for
sale.  All the foregoing categories
shall be determined in accordance with GAAP applied on a consistent basis.

 

“Works”
shall have the meaning assigned thereto in Section 3.21.

 

2.                                      PURCHASE AND SALE OF NOTES.

 

2.1                               Sale and Issuance of Notes.  Subject to the terms and conditions hereof,
the Company hereby agrees to issue and sell to each Purchaser on the Closing
Date (as defined below), and each Purchaser hereby agrees, severally and not
jointly, to purchase for face value on the Closing Date a senior secured
promissory note containing the terms and conditions set forth herein and in the
form of note attached hereto as Exhibit A (each a “Note” and collectively, the “Notes”), payable to
the order of such Purchaser in the principal amount specified opposite such
Purchaser’s name on Schedule I attached hereto.  The aggregate principal amount of all such
Notes issued on the Closing Date shall be Fifteen Million Dollars
($15,000,000).

 

2.2                               Notes.

 

(a)                                  Security.  Each Note and the obligations of the Company
and the Guarantors under the Transaction Documents shall be secured in
accordance with the terms of the Security Agreement, a form of which is set
forth as Exhibit
B hereto, which shall be executed and delivered by the parties
thereto at the Closing, and pursuant to which the Company and each Guarantor
will grant the Purchasers a security interest in all of such Person’s tangible
and intangible assets and property, other than mortgage loans held for sale
pursuant to Warehouse Agreements.

 

(b)                                 Maturity
Date.  The entire unpaid principal
amount of the Notes and any accrued and unpaid interest thereon shall be due
and payable on March 29, 2007 (the “Maturity Date”), unless such amounts become due and
payable earlier upon acceleration in accordance with the terms hereof or
otherwise.

 

(c)                                  Interest.

 

(i)                                     Interest.  The outstanding principal amount of each
Note shall bear interest at a rate per annum equal to ten percent (10%) payable
quarterly in arrears on the last day of each fiscal quarter, commencing on
June 30, 2004, and on any date that the principal of any Note is repaid or
prepaid (including without limitation the Maturity Date).

 

(ii)                                  Post-Default
Interest.  Notwithstanding clause
(i) above, upon the occurrence and during the continuance of any Event of
Default, upon the written demand of the Majority Purchasers, the outstanding
principal amount on each Note shall bear interest at a rate per annum equal to
fifteen percent (15%).  Interest payable
under this clause (ii) shall be payable within 48 hours of the Company’s
receipt of written demand therefor.

 

11

 

(iii)                               Computation.  All computations of interest payable
hereunder shall be on the basis of a 360 day year consisting of twelve 30-day months
and actual days elapsed in the period of which such interest is payable.

 

2.3                               Closing.  The
closing of the purchase and sale of the Notes to the Purchasers hereunder (the
“Closing”) shall take
place at the offices of Willkie Farr & Gallagher LLP, 787 Seventh Avenue,
New York, NY, at 10:00 A.M. on March 29, 2004 (the “Closing Date”), or at such other time and
place as the Company and the Purchasers mutually agree upon orally or in
writing.  At the Closing, the Company
shall deliver to each Purchaser (a) a Note, pursuant to Section 2.1,
representing the principal amount specified opposite such Purchaser’s name on Schedule I
attached hereto, and (b) by wire transfer of immediately available funds to
such Purchaser’s account, a commitment fee equal to $300,000, which fee shall
be fully earned and non-refundable (the “Commitment Fee”), and such Purchaser shall cause to be
delivered by wire transfer immediately available funds to the Company the
purchase price for the Notes to be purchased by such Purchaser set forth
opposite such Purchaser’s name on Schedule I attached hereto.

 

2.4                               Prepayment.

 

(a)                                  Optional
Prepayment.  The Company may prepay
the Notes in aggregate multiples of $100,000, provided that the Company shall
pay a premium on the amount of principal prepaid of (i) 3.00% with respect to
any prepayment made on or prior to the first anniversary of the Closing Date
and (ii) 0% at any time thereafter, plus in each case accrued and unpaid
interest on the amount of any principal prepaid.  The Company shall pay to each holder of a Note a pro rata portion
of the aggregate amount paid under this clause (a) based on the respective
original principal amounts of the Notes.

 

(b)                                 Mandatory
Prepayment.  The Company shall apply
the net proceeds received by the Company upon the occurrence of any of the
following events to the prepayment of the Notes:

 

(i)                                     a
public offering, Rule 144A offering or private placement of any of the
Company’s debt, equity or hybrid securities (other than Warehouse Lines),
provided that the Company shall have no obligation to use any portion of the
proceeds of the Initial Public Offering to prepay the Notes;

 

(ii)                                  any
incurrence of bank or similar Indebtedness of the Company (other than purchase
money Indebtedness permitted under this Agreement or Warehouse Lines);

 

(iii)                               any
proceeds from insurance proceeds in excess of an aggregate of $1,000,000 during
the term of the Notes; and

 

(iv)                              any
proceeds from sales or other dispositions outside the ordinary course of
business (it being understood that nothing in this Section 2.4(b) shall
authorize any sale or other disposition not expressly permitted by
Section 6.5).

 

12

 

2.5                               Application of Payments.  All payments hereunder shall first be
applied to costs and expenses, then to interest and then to principal.

 

2.6                               Payments Generally.

 

(a)                                  All
payments hereunder and under each other Transaction Document to any Purchaser
shall be made in the lawful money of the United States of America, in
immediately available funds and without set-off, defense, deduction or
counterclaim to the account of such Purchaser most recently designated to the
Company by such Purchaser for such purpose.

 

(b)                                 If
the due date of any payment under this Agreement would otherwise fall on a day
that is not a Business Day, such date shall be extended to the next succeeding
Business Day, and interest shall be payable for any principal so extended for
the period of such extension.

 

(c)                                  The
Company shall pay accrued interest on the principal amount of any Note prepaid
or repaid.

 

2.7                               Pro Rata Sharing.  If any Purchaser shall obtain from the Company or any Guarantor
payment of any principal of or interest on any Note owing to it or payment of
any other amount under this Agreement or any other Transaction Document or the
Guaranty Agreement through the exercise of any right of set-off, banker’s lien
or counterclaim or similar right or otherwise, and, as a result of such
payment, such Purchaser shall have received a greater percentage of the principal
of or interest on the Notes or such other amounts then due hereunder or
thereunder by the Company or any Guarantor to such Purchaser than the
percentage received by any other Purchaser, it shall promptly purchase from
such other Purchasers participations in (or, if and to the extent specified by
such Purchaser, direct interests in) the Notes or such other amounts,
respectively, owing to such other Purchasers (or in interest due thereon, as
the case may be) in such amounts, and make such other adjustments from time to
time as shall be equitable, to the end that all the Purchasers shall share the
benefit of such excess payment (net of any expenses that may be incurred by
such Purchaser in obtaining or preserving such excess payment) pro rata in
accordance with the unpaid principal of and/or interest on the Notes or such
other amounts, respectively, owing to each of the Purchasers.  To such end all the Purchasers shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.

 

2.8                               Set-off. 
The Company agrees that, in addition to (and without limitation of) any
right of set-off, banker’s lien or counterclaim a Purchaser may otherwise have,
each Purchaser shall be entitled, at its option (to the fullest extent
permitted by law), to set off and apply any deposit (general or special, time
or demand, provisional or final), or other indebtedness, held by it for the
credit or account of the Company at any of its offices, in any currency,
against any principal of or interest on any of such Purchaser’s Notes or any
other amount payable to such Purchaser hereunder, that is not paid when due
(regardless of whether such deposit or other indebtedness is then due to the
Company), in which case it shall promptly notify the Company and the other
Purchasers thereof, provided that such Purchaser’s failure to give such
notice shall not affect the validity thereof.

 

13

 

2.9                               Transfer of the Notes.  Except as otherwise provided herein, a
Purchaser may transfer its Notes in whole or in part without the consent of the
Company or any other Purchasers in accordance with this Section 2.9:

 

Upon surrender of any Note at the principal executive office of the
Company or the office of any paying agent located in the United States
designated by the Company for registration of transfer or exchange (and in the
case of a surrender for registration of transfer, accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
address for notices of each transferee of such Note or part thereof), the
Company shall execute and deliver (within five Business Days), at the Company’s
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder
may request; provided, however, that unless an Event of Default has occurred
and is continuing, such Person is not a direct competitor of the Company.  Each such new Note shall be dated and bear
interest from the date to which interest shall have been paid on the
surrendered Note or dated the date of the surrendered Note if no interest shall
have been paid thereon.  The Company may
require payment by such holder or transferee of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes.  Notes shall not be transferred
in denominations of less than $1,000,000, provided that if necessary to enable
the registration of transfer by a holder of its entire holding of Notes, one
Note may be in a denomination of less than $1,000,000.  Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representations set forth in Section 4.

 

3.                                      REPRESENTATIONS AND WARRANTIES OF COMPANY.

 

In order to induce the Purchasers to enter into this Agreement and
consummate the transactions contemplated hereby, the Company hereby makes to
the Purchasers the representations and warranties contained in this Section 3.  Such representations and warranties are
subject to the qualifications and exceptions set forth in the disclosure
schedule delivered to the Purchasers in connection herewith (the “Disclosure Schedule”).  References to the knowledge or awareness of
the Company are deemed to include the actual knowledge of any officer or
director of the Company.

 

3.1                               Company Organization.

 

(a)                                  The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of New York.  Each Guarantor is a company or corporation duly organized and
validly existing in good standing under the laws of the State of New York,
except that IPI Skyscraper is not currently in good standing.  Attached hereto as Exhibit C and Exhibit D,
respectively, are true and complete copies of the Certificate of Incorporation
and the Bylaws of the Company and each Guarantor, each, as amended through the
date hereof (collectively, the “Organizational Documents”), and neither the Company nor
any Guarantor is in violation of any term thereof.

 

14

 

(b)                                 Each
Obligor has all requisite power and authority and has all necessary approvals,
licenses, permits and authorization to own its properties and to carry on its
business as now conducted and as presently contemplated to be conducted.  Each Obligor has all requisite power and
authority to execute and deliver the Transaction Documents and to perform its
obligations hereunder and thereunder.

 

(c)                                  Each
Obligor has filed all necessary documents to qualify to do business as a
foreign corporation in, and each Obligor is in good standing under, the laws of
each jurisdiction in which the conduct of the Company’s business as now
conducted and as presently contemplated to be conducted or the nature of the
property owned requires such qualification, except where the failure to so
qualify would not have a Material Adverse Effect.

 

3.2                               Capitalization.  All of the issued and outstanding shares of
Capital Stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable.  All
the issued and outstanding shares of Capital Stock of each Guarantor have been
duly authorized and validly issued and are owned by the Company.  All of the outstanding Shares of Capital
Stock, options and warrants have been validly issued in compliance with
applicable state and federal securities laws. 
The authorized capital of the Company consists of (a) 24,250,000 shares
of Series A common stock, par value $0.01 per share (“Series A Common Stock”),
(b) 7,500,000 shares of Series B common stock, par value $0.01 per share
(“Series B Common Stock”), and (c) shares of 22,000,000 preferred stock, par
value $0.01 per share (“Preferred Stock”), with 6,250,000 shares designated as
Series A Preferred Stock,  7,000,000
shares designated as Series B Preferred Stock, 6,500,000 shares designated as
Series C Preferred Stock,  and shares of
2,250,000 Preferred Stock remaining undesignated.  The only shares of Capital Stock of the Company issued and
outstanding and reserved for issuance or committed to be issued are as follows:

 

(a)                                  6,250,000
fully paid and non-assessable Shares of Series A Common Stock and 377,046 fully
paid and non-assessable Shares of Series B Common Stock are duly and validly issued
and outstanding;

 

(b)                                 6,250,000
fully paid and non-assessable Shares of Series A Preferred Stock duly and
validly issued and outstanding, and 9,174,800 shares of Series A Common Stock
reserved for issuance upon conversion of the Series A Preferred Stock;

 

(c)                                  4,401,170
fully paid and non-assessable Shares of Series B Preferred Stock duly and
validly issued and outstanding, and 6,709,287 shares of Series A Common Stock
reserved for issuance upon conversion of the Series B Preferred Stock;

 

(d)                                 4,431,803
fully paid and non-assessable Shares of Series C Preferred Stock duly and
validly issued and outstanding, and 5,845,093 shares of Series A Common Stock
reserved for issuance upon conversion of the Series C Preferred Stock;

 

(e)                                  5,000,000
shares of Series B Common Stock authorized by the Company’s 2001 Stock Option
Plan (the “Plan”); total options granted under the Plan as of the Closing cover
4,085,528 shares of Series B Common Stock; no options have been exercised

 

15

 

(shares of Series B Common Stock issued upon exercise of the options
have been included in (a) above; and

 

(f)                                    750,000
shares of Series B Common Stock authorized by the Company’s 1999 Equity
Incentive Stock Compensation Plan (the “Incentive Plan”); total grants under
the Incentive Plan are 377,046 share of Series B Common Stock (shares of Series
B Common Stock granted under the Incentive Plan are included in (a) above).

 

3.3                               Company Proceedings, etc. 
All corporate actions on the part of each Obligor necessary
for the authorization, execution, and delivery of this Agreement and the
Transaction Documents, the performance of all obligations of each Obligor
hereunder and thereunder, and the authorization, issuance and delivery of the
Notes, have been taken or will be taken prior to the Closing.  This Agreement, the Transaction Documents
and the Notes constitute the valid and legally binding obligations of the
Obligor party thereto, enforceable in accordance with their respective terms,
except as limited by (a) applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors’ rights generally, (b) laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (c) state and
federal securities laws with respect to rights to indemnification or
contribution.

 

3.4                               Consents and Approvals.  The execution and delivery by
each Obligor of the Transaction Documents, the performance by each Obligor of
its obligations hereunder and thereunder and the consummation by each Obligor
of the transactions contemplated hereby and thereby do not require any Obligor
to obtain any consent, approval or action of, or make any filing with or give
any notice to, any corporation, person or firm or any public, governmental or
judicial authority.

 

3.5                               Valid Issuance of Notes.  Subject to the representations of the
Purchasers in this Agreement being true and correct, the Notes will be issued
in compliance with all applicable federal and state securities laws.

 

3.6                               Absence of Defaults. 
The execution and delivery of the Transaction Documents and
the performance of its obligations hereunder and thereunder (including the
issuance and sale of the Notes) will not result in a breach of any of the
terms, conditions or provisions of, or constitute a default under, or permit
the acceleration of rights under or termination of, any material indenture,
mortgage, deed of trust, credit agreement, note or other evidence of
indebtedness, or other material agreement of any Obligor or the Organizational
Documents, other than with respect to any breach or default for which a written
waiver or consent has been obtained prior to the Closing Date.  No event has occurred and no condition
exists which, upon notice or the passage of time (or both), would constitute a
default under any of the foregoing or in any license, permit or authorization
to which any Obligor is a party or by which it may be bound.

 

3.7                               Litigation.

 

(a)                                  Except
as set forth on Schedule 3.7(a), there is no action, suit, proceeding or
investigation pending or, to the Company’s knowledge, currently threatened

 

16

 

against any Obligor that questions the validity of this Agreement, the
Notes or any other Transaction Document or the right of any Obligor to enter
into them, or to consummate the transactions contemplated hereby or thereby, or
that might result, either individually or in the aggregate, in any Material
Adverse Effect or in which the amount in controversy exceeds $1,000,000, nor is
the Company aware that there is any basis for the foregoing.  None of the Obligors is a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality. 
Except as set forth on Schedule 3.7(a), there is no
action, suit, proceeding or investigation by any Obligor currently pending or
which any Obligor intends to initiate in which the amount in controversy
exceeds $1,000,000.

 

(b)                                 Set
forth on Schedule 3.7(b)
is a summary of the actions, suits, proceedings or investigations
pending or, to the Company’s knowledge, currently threatened against any
Obligor which are not set forth on Schedule 3.7(a), including the
aggregate amount in controversy of all such litigation and a general
description of the nature of such litigation.

 

3.8                               Solvency.  Immediately
after the Closing and after giving effect to the purchase and sale of the Notes
(a) the fair value of the assets of each Obligor, at a fair valuation, will
exceed its debts and liabilities, subordinated, contingent or otherwise; (b)
the present fair saleable value of the property of each Obligor will be greater
than the amount that will be required to pay the probable liability of its debts
and other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Obligor will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) no Obligor will have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing.

 

3.9                               Subsidiaries.  Except as set forth on Schedule 3.9, the Company does not
have any Subsidiaries.

 

3.10                        Status of Security Interests.  The security interest purported
to be created by the Security Agreement and each Control Agreement constitutes
a first priority security interest in the collateral specified therein, subject
to no other Liens except Permitted Liens.

 

3.11                        Financial Statements.

 

Attached as Schedule 3.11 are true and complete
copies of:

 

(a)                                  the
consolidated balance sheet of the Company as at December 31, 2003 (the “Balance Sheet”), and
the related consolidated statement of income, stockholders equity and cash flow
for the fiscal year ended on such dates, together with the notes thereto, in
each case examined by and accompanied by the report of BDO Seidman, LLP,
independent certified public accountants; and

 

(b)                                 the
unaudited consolidated balance sheet of the Company as at February 29,
2004, and the unaudited consolidated statements of income, stockholders equity
and cash flow for the two month period ended on such date, together with the
notes thereto.

 

17

 

(c)                                  The
financial statements described in clauses (a) and (b) of this
Section 3.11, including the notes thereto, are referred to herein
collectively as the “Financial Statements”. 
The Financial Statements (i) were prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby, (ii)
present fairly the consolidated financial position, results of operations and
changes in financial position of the Company as at such date and for the period
then ended, (iii) are complete, correct and in accordance with the books of
account and records of the Company in all material respects, and (iv) can be
legitimately reconciled with the financial statements and the financial records
maintained and the accounting methods applied by the Company for federal income
tax purposes.  The unaudited financial
statements included in the Financial Statements indicate all adjustments, which
consist of only normal recurring accruals, necessary for such fair
presentations, subject to year-end audit adjustments.  The statements of income included in the Financial Statements do
not contain any items of special or nonrecurring income except as expressly specified
therein, and the balance sheets included in the Financial Statements do not
reflect any write-up or revaluation increasing the book value of any
assets.  The books and accounts of the
Company are complete and correct in all material respects and fairly reflect
all of the transactions, items of income and expense and all assets and
liabilities of the Company consistent with prior practices of the Company.

 

3.12                        Absence of Certain Developments.  Except as set forth on Schedule 3.12,
since December 31, 2003 there has been not been:

 

(a)                                  any
change in the business, financial condition, properties, operations or
prospects of any Obligor from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had or is expected to have a Material Adverse Effect;

 

(b)                                 any
resignation or termination of any officers or key employees of any Obligor, and
the Company, to the best of its knowledge, does not know of the impending resignation
or termination of employment of any such officer of key employee;

 

(c)                                  any
material change, except in the ordinary course of business, in the contingent
obligations of any Obligor by way of guaranty, endorsement, indemnity, warranty
or otherwise;

 

(d)                                 any
damage, destruction or loss, whether or not covered by insurance, which has had
a Material Adverse Effect;

 

(e)                                  any
waiver by any Obligor of a valuable right or of a material debt owed to it in
excess of $100,000;

 

(f)                                    any
direct or indirect loans made by any Obligor to any shareholder, employee,
officer or director of any Obligor, other than advances made in the ordinary
course of business;

 

(g)                                 any
material change in any compensation arrangement or agreement with any employee,
officer, director or shareholder;

 

18

 

(h)                                 any
declaration or payment of any dividend or other distribution of the assets of
the Company;

 

(i)                                     to
the best of the Company’s knowledge, any labor organization activity with respect
to any Obligor’s employees;

 

(j)                                     any
debt, obligation or liability incurred, assumed or guaranteed by any Obligor,
except those for immaterial amounts and for current liabilities incurred in the
ordinary course of business;

 

(k)                                  any
sale, assignment or transfer or any patents, trademarks, copyrights, trade
secrets or other intangible assets;

 

(l)                                     any
change in any Material Agreement in effect that would have a Material Adverse
Effect;

 

(m)                               any
satisfaction or discharge of any Lien or payment of any obligation by any
Obligor, except in the ordinary course of business and that is not material to
the business, properties, financial condition, operations or prospects of the
Company;

 

(n)                                 any
Lien on any Asset of any Obligor except Permitted Liens;

 

(o)                                 any
action, suit, proceeding or investigation against any Obligor, except any such
action, suit, proceeding or investigation that (i) is not material to the
business, properties, financial condition, operations or prospects of the
Company or (ii) is set forth on Schedule 3.7;

 

(p)                                 any
written communication received by any Obligor alleging that the Company or its
products has violated any of the patents or patent related licenses and other
proprietary rights and processes of any other Person; or

 

(q)                                 any
other events or conditions of any character that, either individually or
cumulatively, have resulted in a Material Adverse Effect.

 

3.13                        Compliance with Law.

 

(a)                                  No
Obligor is in material violation of any laws, ordinances, governmental rules or
regulations to which it is subject, including, without limitation, laws or
regulations relating to the environment or to occupational health and safety,
and no material expenditures are or will be required in order to cause its
current operations or properties to comply with any such laws, ordinances,
governmental rules or regulations.

 

(b)                                 Each
Obligor has all licenses, permits, franchises or other governmental
authorizations necessary for the ownership of its property or to the conduct of
its business as now conducted and as presently contemplated to be conducted,
which if violated or not obtained might have a Material Adverse Effect.  No Obligor has finally been denied any
application for any such licenses, permits, franchises or other governmental
authorizations necessary to its business. 
There has not been, and there is no proceeding pending, served or

 

19

 

threatened to suspend, revoke or limit such license, and there is no
circumstance that exists which with notice or passage of time or both, will
result in such revocation, suspension or limitation.

 

3.14                        Material Agreements. 
Schedule 3.14 sets forth a true and complete list of
each contract, agreement, instrument, commitment and other arrangement to which
any Obligor is a party or is otherwise bound which is material to the ongoing
operations, financial condition or prospects of the Company (each, a “Material Agreement”).  Each Material Agreement is valid, binding
and enforceable against the applicable Obligor, in full force and effect and,
to the Company’s knowledge, the other parties thereto, in accordance with its
terms, except as limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors’ rights generally, (b) laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (c) state and federal securities laws with respect to rights to
indemnification or contribution.  No
Obligor is in default or breach under any of the Material Agreements, nor, to
the knowledge of the Company, is any other party thereto in default or breach
thereunder, nor are there facts or circumstances which have occurred which,
with or without the giving of notice or the passage of time or both, would
constitute a material default or breach under any of the Material Agreements.

 

3.15                        Environmental Matters.  Neither any Obligor nor, to the Company’s
knowledge, any other Person has ever caused or permitted any Hazardous Material
to be disposed of in violation of any applicable Environment Laws on or under
any real property now or previously owned, leased or operated by any
Obligor.  None of Obligors has any
liability with respect to Hazardous Materials, and no facts or circumstances
exist which could give rise to liabilities with respect to Hazardous Materials
which could reasonably be expected to result in a liability to any Obligor in
excess of $100,000.

 

3.16                        Employees.

 

(a)                                  Except
as set forth on Schedule 3.16(a), each Obligor is in compliance in all
material respects with all laws regarding employment, wages, hours, equal
opportunity, collective bargaining and payment of social security and other
taxes except to the extent that noncompliance would not, in the aggregate, have
a Material Adverse Effect.  No Obligor
is engaged in any unfair labor practice or discriminatory employment practice
and no complaint of any such practice against any Obligor is filed or, to the
best of the Company’s knowledge, threatened to be filed with or by the National
Labor Relations Board, the Equal Employment Opportunity Commission or any other
administrative agency, federal or state, that regulates labor or employment
practices, nor is any grievance filed or, to the best of the Company’s knowledge,
threatened to be filed, against any Obligor by any employee pursuant to any
collective bargaining or other employment agreement to which any Obligor is a
party or is bound.  Each Obligor is in
compliance with all applicable foreign, federal, state and local laws and
regulations regarding occupational safety and health standards except to the
extent that noncompliance will not have a Material Adverse Effect, and has
received no complaints from any foreign, federal, state or local agency or
regulatory body alleging violations of any such laws and regulations.

 

20

 

(b)                                 Schedule 3.16(b)
sets forth a true and complete list of all Vice President and higher level
officers of the Company and all independent contractors or consultants hired or
engaged by the Company as of the date hereof. 
Except as set forth on Schedule 3.16(b), the employment of
all Persons and officers employed by each Obligor is terminable at will without
any penalty or severance obligation of any kind on the part of the
employer.  Except as set forth on Schedule 3.16(b),
all sums due for employee compensation and benefits and all vacation time owing
to any employees of any of the Obligors have been duly and adequately accrued
on the accounting records of the Obligors.

 

(c)                                  The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of such employee’s
best efforts to promote the interests of the Obligors or that would conflict
with the Company’s business as proposed to be conducted.

 

(d)                                 There
are no strikes, stoppages, slowdowns or other labor disputes against any
Obligor pending or threatened that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse

 

3.17                        Minute Books.  The
minute books of the Obligors made available to the Purchasers contain a
complete summary of all meetings of directors and shareholders since the time
of formation or  incorporation.

 

3.18                        Tax Matters.  There
are no federal, state, county or local taxes due and payable by any Obligor
which have not been paid.  The provisions
for taxes on the Balance Sheet are sufficient for the payment of all accrued
and unpaid federal, state, county and local taxes of the Company whether or not
assessed or disputed as of the respective dates of such balance sheets.  The Company has made provision for the
payment of all taxes which, to the knowledge of the Company, are expected to
become due with respect to the Company’s business, properties and
operations.  Each Obligor has duly filed
all federal, state, county and local tax returns required to have been filed by
it and there are in effect no waivers of applicable statutes of limitations
with respect to taxes for any year.  No
Obligor has not been subject to a federal or state tax audit of any kind.

 

3.19                        Employee Benefit Plans.  No Obligor has any employee
benefit plans (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974) covering former and current employees of the
Company, or under which the Company has any obligation or liability.  Schedule 3.19 lists all material
bonus, commission, profit-sharing, saving, stock option, insurance, deferred
compensation, or fringe or employee benefit plans or arrangements maintained or
provided by any Obligor to its employees or under which any Obligor has any
obligation or liability (each, a “Benefit Arrangement”). 
True and complete copies of all written Benefit Arrangements have been
provided or made available to the Purchasers prior to the date hereof.  The Benefit Arrangements are and have been
administered in substantial compliance with their terms and with the
requirements of applicable law.

 

21

 

3.20                        Intellectual Property.

 

(a)                                  The
Company owns all right, title and interest in and to, or has a valid and
enforceable license to use, all the Intellectual Property used by it in
connection with the Obligors’ business as presently conducted (the “Company Intellectual Property”),
which represents all intellectual property rights necessary to the conduct of
the Obligors’ business as now conducted and as presently contemplated to be
conducted.  The Company is in compliance
with the contractual obligations relating to the protection of such of the
Company Intellectual Property that it uses pursuant to license agreements.  To the Company’s knowledge, there are no
conflicts with or infringements by any third party of any Company Intellectual
Property.  To the Company’s knowledge,
the conduct of the Obligors’ business as currently conducted or as currently
contemplated to be conducted does not conflict with or infringe any proprietary
right of any third party.  There is no
claim, suit, action or proceeding pending or, to the knowledge of the Company,
threatened against any Obligor:  (i)
alleging any such conflict or infringement with any third party’s proprietary
rights; or (ii) challenging the Company’s ownership or use of, or the validity
or enforceability of any Company Intellectual Property.

 

(b)                                 Schedule 3.20(b)
sets forth a complete and current list of all patents, patent applications,
registered trademarks (and applications therefor) and registered copyrights
(and applications therefor) used by any Obligor in connection with its business
as presently conducted (“Listed Intellectual Property”) and the owner of record,
date of application or issuance and relevant jurisdiction as to each.  Except as described in Schedule 3.20(b), all
Listed Intellectual Property is owned by the Company, free and clear of
security interests, liens, encumbrances or claims of any nature. Except as
listed in Schedule 3.20(b),
no Listed Intellectual Property is the subject of any legal or governmental
proceeding before any governmental, registration or other authority in any
jurisdiction, including any office action or other form of preliminary or final
refusal of registration.

 

(c)                                  Schedule 3.20(c)
sets forth a complete list of all:  (i)
licenses, sublicenses and other agreements in which the Company or any
sublicensee of the Company has granted to any person the right to use the
Company Intellectual Property; and (ii) all other consents, indemnifications,
forbearances to sue, settlement agreements and licensing or cross-licensing
arrangements to which the Company is a party relating to the Intellectual
Property or the proprietary rights of any third party.  Except as set forth in Schedule 3.20(c), the
Company is not under any obligation to pay royalties or other payments in
connection with any license, sublicense or other agreement, nor restricted from
assigning its rights under any sublicense or agreement respecting the Company
Intellectual Property nor will the Company otherwise be, as a result of the
execution and delivery of this Agreement or the performance of its obligations
under this Agreement, in breach of any license, sublicense or other agreement relating
to the Company Intellectual Property.

 

(d)                                 No
present or former employee, officer or director of any Obligor, or agent or
outside contractor of the Company, holds any right, title or interest, directly
or indirectly, in whole or in part, in or to any Company Intellectual Property.

 

(e)                                  To
the Company’s knowledge: (i) none of the Company Intellectual Property has been
used, divulged, disclosed or appropriated to the detriment of the Company for
the benefit of any Person other than the Company; and (ii) no employee,
independent contractor or agent of the Company has misappropriated any trade
secrets or other

 

22

 

confidential information of any other Person in the course of the
performance of his or her duties as an employee, independent contractor or
agent of the Company.

 

(f)                                    To
the Company’s knowledge, each Obligor’s transmission, use, modification
(including, but not limited to, framing, if applicable), linking and other
practices in respect of content proprietary to any other Person do not infringe
or violate any proprietary or other right of any such Person and, to the
Company’s knowledge, no claim in respect of any such infringement or violation
is threatened or pending.

 

3.21                        Software.  The
operating and applications computer software programs and databases used by the
Company that are material to the conduct of the Obligors’ business as now
conducted and as presently contemplated to be conducted (collectively, the “Software”) are listed
on Schedule 3.21
hereto.  The Company: (i) holds valid
licenses to use, reproduce, modify, distribute and sublicense all copies of the
Software, other than any portion thereof (collectively, the “Proprietary Software”)
that was developed by or under contract with the Company and (ii) either owns,
or has a perpetual, royalty-free license to use, reproduce, modify, distribute
and sublicense the Proprietary Software and, except as listed on Schedule 3.21,
the Company has not sold, licensed, leased or otherwise transferred or granted
any interest or rights in or to any portion thereof.  To the knowledge of the Company, none of the Software used by any
Obligor, nor any use thereof, conflicts with, infringes upon or violates any
intellectual property or other proprietary right of any other Person and, to
the knowledge of the Company, no claim, suit, action or other proceeding with
respect to any such infringement or violation is threatened or pending.  Except as set forth on Schedule 3.21, the
Company has taken the steps reasonably necessary to protect its right, title
and interest in and to the Proprietary Software, including, without limitation,
the execution of appropriate confidentiality agreements.

 

The Company possesses or has access to the original and all copies of
all documentation and all source code or password protected code, as
applicable, for all the Proprietary Software it owns.  Upon consummation of the transactions contemplated by this
Agreement, the Company will continue to own all the Proprietary Software owned
by it, free and clear of all claims, liens, encumbrances, obligations and
liabilities other than Permitted Liens and, with respect to all agreements for
the lease or license of Proprietary Software which require consents or other
actions as a result of the consummation of the transactions contemplated by
this Agreement in order for the Company to continue to use and operate such
Software after the Closing Date, the Company will have obtained such consents
or taken such other actions so required.

 

Any programs, modifications, enhancements or other inventions,
improvements, discoveries, methods or works of authorship (“Works”) that were
created by employees of the Company were made in the regular course of such
employees’ employment or service relationships with the Company using the
Company’s facilities and resources and, as such, constitute works made for
hire.  Each such employee who has
created Works or any employee who in the regular course of his employment may create
Works and all consultants have signed an assignment or similar agreement with
the Company confirming the Company’s ownership or, in the alternate,
transferring and assigning to the Company all right, title and interest in and
to such programs, modifications, enhancements or other inventions including
copyright and other intellectual property rights therein.

 

23

 

3.22                        Title to Tangible Assets.  Each Obligor has good title to
its properties and assets and good title to all its leasehold estates, in each
case subject to no Liens other than Permitted Liens.  

 

3.23                        Condition of Properties.  All facilities, machinery,
equipment, fixtures, vehicles and other properties owned, leased or used by any
Obligor (a) are in good operating condition and repair, reasonably fit and
usable for the purposes for which they are being used and are presently
contemplated to be used, and adequate and sufficient for such Obligor’s
business as now conducted and as presently contemplated to be conducted, and
(b) conform in all material respects with all applicable ordinances,
regulations and laws.

 

3.24                        Insurance.  The
Obligors’ properties are insured, in the reasonable judgment of the Company,
against such losses and with such insurers as are prudent when considered in light
of the nature of the properties and the business of the Obligors as now
conducted and as presently contemplated to be conducted.  Schedule 3.24 sets forth a true and
complete listing of the insurance policies of the Obligors as in effect on the
date hereof, including in each case the applicable coverage limits, deductibles
and the policy expiration dates.    No
notice of any termination or threatened termination of any of such policies has
been received and such policies are in full force and effect.  Except as set forth in Schedule 3.24, there is
no material claim by the Company pending under such policies.

 

3.25                        Transactions with Related Parties.  Except as disclosed on Schedule 3.25,
no Obligor is not a party to any agreement with any of the managers, officers
or members of any Obligor or any Affiliate or family member of any of the
foregoing under which it: (i) leases any real or personal property (either to
or from such Person), (ii) licenses technology (either to or from such Person),
(iii) is obligated to purchase any tangible or intangible asset from or sell
such asset to such Person, (iv) purchases products or services from such Person
or (v) has borrowed money from or lent money to such Person.  Except as set forth in Schedule 3.25, none of
the Obligors employs as an employee or engage as a consultant any immediate
family member of any of the Obligor’s directors, officers or shareholders.  To the knowledge of the Company, there exist
no agreements among shareholders of any Obligor to act in concert with respect
to their voting or holding of any Obligor’s securities.  

 

3.26                        Interest in Competitors.  Neither any Obligor nor any of
such Obligor’s officers or, to the best of its knowledge, directors, has any
interest, either by way of contract or by way of investment (other than as
holder of not more than 2% of the outstanding capital stock of a publicly
traded Person) or otherwise, directly or indirectly, in any Person other than
the Company that (i) provides any services or designs, produces or sells any
product or product lines or engages in any activity competitive with any
activity currently proposed to be conducted by the Company or any of its
Subsidiaries or (ii) has any direct or indirect interest in any asset or
property, real or personal, tangible or intangible, of the Company.  

 

3.27                        Exchange Act Registration.  As of the closing Date, none of
Parent’s or the Company’s securities are registered, or required to be
registered, under Section 12 of the Exchange Act.

 

24

 

3.28                        Private Offering. 
Neither the Parent, the Company nor anyone acting on their
behalf has sold or has offered any of the Notes for sale to, or solicited
offers to buy from, or otherwise approached or negotiated with respect thereto
with, any prospective purchaser, other than the Purchasers.  Neither the Parent, the Company nor anyone
acting on their behalf shall offer the Notes for issue or sale to, or solicit
any offer to acquire any of the same from, anyone so as to bring the issuance
and sale of such Notes or any part thereof, within the provisions of
Section 5 of the Securities Act. 
Based upon the representations of the Purchasers set forth in
Section 5 of this Agreement, the offer, issuance and sale of the Notes are
and will be exempt from the registration and prospectus delivery requirements
of the Securities Act and have been registered or qualified (or are exempt from
registration and qualification) under the registration, permit or qualification
requirements of all applicable state securities laws.

 

3.29                        Brokerage.  There
are no claims for brokerage commissions or finder’s fees or similar
compensation in connection with the transactions contemplated by this Agreement
based on any arrangement made by or on behalf of the Parent or the
Company,  and the Company agrees to
indemnify and hold the Purchasers harmless against any costs or damages
incurred as a result of any such claim.

 

3.30                        Illegal or Unauthorized Payments; Political Contributions.  Neither any Obligor nor, to the
Company’s knowledge (after reasonable inquiry of its officers and directors),
any of any Obligor’s officers, directors, employees, agents or other
representatives of the Company has, directly or indirectly, made or authorized
any payment, contribution or gift of money, property, or services, whether or
not in contravention of applicable law, (a) as a kickback or bribe to any
Person or (b) to any political organization, or the holder of or any aspirant
to any elective or appointive public office except for personal political
contributions not involving the direct or indirect use of funds of any Obligor.

 

3.31                        Internal Accounting Controls.  The Company has established or is
in the process of establishing a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.

 

3.32                        Material Facts. 
This Agreement, the schedules furnished contemporaneously
herewith, and the certificates or written statements required hereunder to be
furnished to the Purchasers at the Closing by or on behalf of the Obligors,
taken as a whole, do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained
therein or herein, in light of the circumstances in which they were made, not
misleading.

 

3.33                        Foreign Assets Control Regulations, etc.  Neither the payment by the Purchasers to the
Company contemplated hereunder nor the Company’s use of the proceeds of the
Notes will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as

 

25

 

amended) or any enabling legislation or executive order relating
thereto.  Without limiting the
foregoing, neither the Company nor any Subsidiary (i) is or will become a
blocked person described in Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg.
49079 (2001)) or (ii) knowingly engages or will engage in any dealings or
transactions, or be otherwise associated, with any such blocked person.

 

No part of the proceeds from the Notes hereunder will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

 

4.                                      REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.

 

Each Purchaser on behalf of itself and not as to any other Purchaser or
Person hereby severally and not jointly represents and warrants to the Company
as follows:

 

4.1                               Corporate Power.  It has all requisite legal and corporate power and authority to
execute and deliver this Agreement and to carry out and perform its obligations
hereunder.

 

4.2                               Authorization.  It has taken all corporate action required to make all its
obligations in this Agreement the valid and enforceable obligations they
purport to be, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting the
enforcement of creditors’ rights and (ii) as limited by general principles of
equity that restrict the availability of equitable remedies.

 

4.3                               Purchaser Bears Economic Risk.  It has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to the Company so that it is capable of evaluating the merits and risks
of its investment in the Company and has the capacity to protect its own
interests.  It acknowledges that
investment in the private placement transactions involves a high degree of
risk, and represents that it is able, without materially impairing its
financial condition, to hold the Notes for a long period of time and to suffer
a complete loss of its investment.

 

4.4                               Further Limitations on Disposition.  Without in any way limiting the
representations set forth above, each Purchaser further agrees not to make any
disposition of all or any portion of the Notes unless and until:

 

(a)                                  There
is then in effect a Registration Statement under the Act covering such proposed
disposition and such disposition is made in accordance with such Registration
Statement; or

 

(b)                                 The
Purchaser shall have notified the Company in writing of the proposed
disposition.

 

26

 

4.5                               Accredited Investor Status.  It is an “accredited investor” as such term
is defined in Rule 501 under the Securities Act.

 

4.6                               Acquisition for Own Account.  It is acquiring the Notes for its
own account and beneficial interest for investment and not for sale or with a
view to distribution of the Notes or any part thereof, has no present intention
of selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the same, and does not presently
have reason to anticipate a change in such intention.

 

5.                                      AFFIRMATIVE COVENANTS OF THE COMPANY AND ITS
SUBSIDIARIES.

 

The Company covenants and agrees with the Purchasers that, so long as
any amount due under the Notes is outstanding and until payment in full of all
amounts payable by the Company hereunder:

 

5.1                               Payment of Notes. 
The Company shall pay the principal of and interest on the
Notes on the dates and in the manner provided in the Notes and in this Agreement.

 

5.2                               Conduct of Business. 
The Company shall and shall cause each of its Subsidiaries to
carry on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted and do
all things necessary to remain duly formed or incorporated, validly existing
and in good standing as a domestic corporation in its jurisdiction of
incorporation or formation and maintain all requisite authority to conduct its
business in those jurisdictions in which its business is conducted.  The Company shall maintain an office or
agency where (a) Notes may be presented or surrendered for registration of
transfer or for exchange, (b) Notes may be presented or surrendered for
payment, and (c) notices and demands to or upon the Company in respect of the
Notes and this Agreement may be served. 
The Company shall give prior written notice to the Purchasers of the
location, and any change in the location, of such office or agency.

 

5.3                               Notice of Adverse Change.  The Company shall promptly notify the
Purchasers in writing of (a) any change in the business or the operations of
the Company or any Guarantor which could reasonably be expected to have a
Material Adverse Effect, and (b) any information which indicates that any
financial statements which are the subject of any representation contained in
this Agreement, or which are furnished to the Purchasers pursuant to this
Agreement, fail, in any material respect, to present fairly, as of the date
thereof and for the period covered thereby, the financial condition and results
of operations purported to be presented therein, disclosing the nature thereof.

 

5.4                               Notice of Default.  The Company shall promptly notify the Purchasers of any Default
or Event of Default which shall have occurred, which notice shall include a
written statement as to such occurrence, specifying the nature thereof and the
action (if any) which is proposed to be taken with respect thereto.

 

5.5                               Notice of Litigation.  The Company shall promptly notify the
Purchasers of any action, suit or proceeding at law or in equity or by or
before any governmental instrumentality or other agency which, if adversely
determined against any Obligor on the basis

 

27

 

of the allegations and information set forth in the complaint or other
notice of such action, suit or proceeding, or in the amendments thereof, if
any, could be expected to have a Material Adverse Effect or in which the amount
in controversy exceeds $100,000.

 

5.6                               Notice of Default in Other Agreements.  The Company shall promptly notify the
Purchasers of any default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument to which any Obligor is a party (including, without limitation, any
Material Agreement) which default could be expected to have a Material Adverse
Effect.

 

5.7                               Compliance Certificates.  The Company shall deliver to the
Purchasers, within 30 days after the end of each fiscal quarter, an Officers’
Certificate (which shall include a Quarterly Perfection Certificate Update) as
to such Officers’ knowledge, of the Company’s compliance with all conditions
and covenants under this Agreement (without regard to any period of grace or
requirement of notice provided hereunder) and in the event any Default or Event
of Default exists, such Officer shall specify the nature of such Default or
Event of Default.  Each such Officers’
Certificate shall also notify the Purchasers of any change in the Company’s
fiscal year-end.

 

5.8                               Board of Directors. 
The Company shall cause its Board of Directors to hold
meetings at least quarterly.

 

5.9                               Security.  The
Company shall and shall cause each Guarantor to promptly take any and all
actions necessary to execute any definitive documentation (which documentation
shall include customary representations, warranties, covenants, conditions and
agreements, and any UCC financing statements) reasonably requested by the
Purchasers, for obtaining the benefits of the Security Agreement, subject to
the terms and conditions stated therein.

 

5.10                        Taxes.  The
Company will and will cause each of its Subsidiaries to pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or property, except those that are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been made on the
accounting records of the Company.

 

5.11                        Insurance. 
The Company will and will cause each of its Subsidiaries to at all
times maintain with financially sound and reputable insurance companies
insurance covering its assets and its businesses in such amounts and covering
such risks (including, without limitation, hazard, business interruption and public
liability) as is consistent with sound business practice and as may be obtained
at commercially reasonable rates.  The
insurance policies will comply with the provisions of Section 11 of the
Security Agreement.

 

5.12                        Compliance with Laws.  The Company will and will cause each of its
Subsidiaries to comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject except
where the failure to so comply could not reasonably be expected to have a Material
Adverse Effect.

 

28

 

5.13                        Maintenance and Properties.  The Company will and will cause each of its
Subsidiaries to use commercially reasonable efforts to do all things necessary
to maintain, preserve, protect and keep its properties in good repair, working
order and condition, and use commercially reasonable efforts to make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted.

 

5.14                        Inspection. 
At the Purchaser’s expense, the Company will permit each Purchaser, by
its representatives and agents, to inspect any of the properties, licenses,
corporate books and financial records of the Company and its Subsidiaries, to
examine and make copies of the books of accounts and other financial records of
the Company and its Subsidiaries and to discuss the affairs, finances and
accounts of the Company and its Subsidiaries with, and to be advised as to the
same by, their respective offices at such reasonable times and intervals on
reasonable advance written notice to the Company two times per year, prior to
the occurrence of an Event of Default.

 

5.15                        Financial Statements, Etc.  The Company shall deliver
to each Purchaser:

 

(a)                                  Monthly
Financials.  As soon as available
and in any event within 30 days after the end of each of month, a consolidated
statement of income and cash flows of the Company and its Subsidiaries for such
monthly period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated balance sheet of
the Company and its Subsidiaries as at the end of such period, setting forth in
each case in comparative form (i) the corresponding consolidated statements of
income and cash flows for the corresponding period in the preceding fiscal year
to the extent such financial statements are available and (ii) the
corresponding budget or plan for such period.

 

(b)                                 Quarterly
Financials.  As soon as available
and in any event within 60 days after the end of each quarterly fiscal period
of each fiscal year, a consolidated 
statement of income and cash flows of the Company and its Subsidiaries
for such period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated balance sheet of
the Company and its Subsidiaries as at the end of such period, setting forth in
each case in comparative form (i) the corresponding consolidated statements of
income and cash flows for the corresponding period in the preceding fiscal year
to the extent such financial statements are available and (ii) the
corresponding budget or plan for such period.

 

(c)                                  Annual
Financials.  As soon as available
and in any event within 120 days after the end of each fiscal year, audited
consolidated statements of income and cash flows of the Company and its
Subsidiaries for such year and the related audited consolidated balance sheet
of the Company and its Subsidiaries at the end of such year, setting forth in
each case in comparative form (i) the corresponding information as of the end
of and for the preceding fiscal year to the extent such financial statements
are available and (ii) the corresponding budget or plan for such period,
accompanied by an opinion, without a going concern or similar qualification or
exception as to scope or other material qualification or exception, thereon of
the Company’s auditors (which auditors shall be reasonably acceptable to the
Majority Purchasers), which opinion shall state, in substance, that said
financial statements fairly present in all material respects the consolidated
financial condition, results of operations and cash flows of the

 

29

 

Company and its Subsidiaries as at the end of, and for, such fiscal
year in conformity with GAAP.  The
Company shall supply such additional information and detail as to any item or
items contained on any such statement that the Majority Purchasers may
reasonably require.  All such
information will be prepared in conformity with GAAP consistently applied.

 

(d)                                 Regulatory
and Intellectual Property Filings and Notices.  As soon as reasonably practicable but in any event within three
(3) Business Days, upon receipt or delivery, copies of any and all material
notices and other material communications from and to any federal or state
regulatory body with jurisdiction over the Company’s or its Subsidiary’s
products, business and/or processes with respect to the Company or any of the
Company’s products or practices and (ii) with respect to the Company’s
Intellectual Property with counsel to the Company (including any
non-infringement opinions of counsel or advisors to the Company or any other
Person), the United States Patent & Trademark Office and any other
Person.  The Company shall as soon as
reasonably practicable, notify the Purchasers of any infringement or threatened
infringement of the Company’s Intellectual Property may at any time come to its
notice.

 

5.16                        Use of Proceeds.  The proceeds from the sale of the Notes shall be used for general
corporate purposes.  Neither the Company
nor any of its Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying “Margin Stock” within the meaning
of Regulations T, U and X of the Board of Governors of the Federal Reserve
System of the United States of America, and no part of the proceeds of any
extension of credit hereunder will be used to buy or carry any “Margin Stock”.

 

5.17                        Intellectual Property.  At its own expense, and except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect, the Company shall make, execute, endorse, acknowledge file and/or
deliver any documents and take all actions necessary or required to maintain
its ownership rights in the Company Intellectual Property, including, without
limitation, (i) any action reasonably required to protect the Intellectual Property
in connection with any infringement, suspected infringement, passing off, act
of unfair competition or other unlawful interference with the rights of the
Company in and to the Company Intellectual Property, and (ii) any registrations
with the United States Patent & Trademark Office and any corresponding
foreign patent and/or trademark office required for the Company to carry on its
business as presently conducted and as presently proposed to be conducted.  Except for non-exclusive licenses granted in
the ordinary course of business, the Company shall not transfer, assign or
otherwise convey the Intellectual Property, any registrations or applications
thereof and all goodwill associate therewith, to any person or entity.

 

5.18                        Further Assurances. 
At the Purchaser’s reasonable request, the Company shall and
shall cause each of its Subsidiaries to, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Purchasers from time to time
such other documentation, consents, authorizations and approvals in form and
substance reasonably satisfactory to the Purchasers as the Purchasers shall
reasonably deem necessary or appropriate to consummate the transactions
contemplated in any of the Transaction Documents.  In no way limiting the foregoing, upon the exercise by the
Purchasers of any power, right, privilege or remedy pursuant to any Transaction
Document which requires any consent, approval,

 

30

 

registration, qualification or authorization of any Governmental
Authority, the Company shall and shall cause each of its Subsidiaries to
execute and deliver all applications, certifications, instrument and other
documents and papers that the Purchasers may be so required to obtain.

 

5.19                        Certain Changes and Conduct of Business.  From and after the date of this Agreement
and until the Notes are no longer outstanding, the Company shall inform the
Purchasers of all material developments, including without limitation (i)
entering into material agreements outside the ordinary course of business, (ii)
any issuance of debt securities by any Obligor, (iii) the incurrence of any
Indebtedness by any Obligor, (iv) a change in the number of the Board of
Directors of the Company, (v) a sale, lease or transfer of any material portion
of the assets of the Company and (vi) any change in ownership of Capital Stock
of the Company (specifying the details of any such change, including the
identity and ownership amount of any new owner).  The Company shall provide the Purchasers with any written
information provided to the board of directors of the Company.

 

5.20                        Good Standing.  The Company shall pay all amounts due to the
New York State Department of Taxation and Finance necessary to cause IPI
Skyscraper to be in good standing in the State of New York and shall deliver to
each Purchaser a good standing certificate for IPI Skyscraper from the New York
State Department of Taxation and Finance no later than 30 days following the
Closing Date.

 

6.                                      NEGATIVE COVENANTS OF THE COMPANY.

 

The Company covenants and agrees with the Purchasers that, so long as
any amount due under the Notes is outstanding and until payment in full of all
amounts payable by the Company hereunder:

 

6.1                               Limitation on Additional Indebtedness and Liens.

 

(a)                                  The
Company shall not and shall not permit any of its Subsidiaries to incur any
Indebtedness other than Permitted Indebtedness.

 

(b)                                 The
Company shall not and shall not permit any of its Subsidiaries to create,
incur, assume or suffer to exist any Lien upon any of its property, whether now
owned or hereafter acquired other than (i) Liens created pursuant to the
Security Agreement, (ii) those Liens that exist immediately prior to the date
hereof as set forth in the Disclosure Schedules and (iii) Permitted Liens.  The Company shall not and shall not permit
any of its Subsidiaries to be bound by any agreement which limits the ability
of the Company or such Subsidiary to grant Liens other than restrictions (x) as
to property permitted under this Agreement to be sold, on such property pending
sale and (y) as to property subject to purchase money liens constituting a
Permitted Lien, on such property so long as such Permitted Indebtedness secured
thereby is outstanding.

 

(c)                                  The
Company shall not and shall not permit any of its Subsidiaries to create,
designate, authorize, issue or sell any Disqualified Stock.

 

6.2                               Limitation on Transactions with Affiliates.  The Company shall not and shall
not permit any of its Subsidiaries to, directly or indirectly, enter into or
permit to exist any

 

31

 

transaction or series of related transactions (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with, or for the benefit of, any of its Affiliates,
other than Permitted Affiliate Transactions.

 

6.3                               Limitation on Capital Expenditures.  The aggregate amount of Capital Expenditures
made by the Obligors as a whole shall not exceed $5,000,000 in the aggregate
for each of the fiscal years ended December 31, 2004, 2005 and 2006.

 

6.4                               Dividends and Redemptions.  The Company shall not and shall not permit
any of its Subsidiaries to, directly or indirectly, declare or pay any
dividends on account of any shares of class of any of its Capital Stock now or
hereafter outstanding, or set aside or otherwise deposit or invest any sums for
such purpose, or redeem, retire, defease, purchase or otherwise acquire any
shares of any class of its Capital Stock (or set aside or otherwise deposit or
invest any sums for such purpose) for any consideration or apply or set apart
any sum, or make any other distribution (by reduction of capital or otherwise)
in respect of any such shares or agree to do any of the foregoing (each of the
foregoing is herein called a “Restricted Payment”); provided, that any Subsidiary
directly or indirectly wholly owned by the Company may pay dividends on its
Capital Stock; provided that following the Initial Public Offering, the Company
and Parent shall be permitted to pay such dividends as necessary to maintain
Parent’s status as a Real Estate Investment Trust.

 

6.5                               Fundamental Changes; Disposition of Assets;
Acquisitions. 
The Company shall not (i) enter into any transaction of merger or
consolidation, other than the Merger, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, any of its business, assets or property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, whether now owned or hereafter acquired (other than sales of
mortgage loans in the ordinary course of business), including, without limitation,
any Capital Stock of any of its Subsidiaries, or (ii) without the prior written
consent of the Majority Purchasers, which consent shall not be unreasonably
withheld, acquire by purchase or otherwise (other than purchases or other
acquisitions of real property, inventory, materials and equipment in the
ordinary course of business) the business, property or fixed assets of, or
Capital Stock or other evidence of beneficial ownership of, any Person or any
division or line of business or other business unit of any Person unless the
Company shall at the time of such acquisition be in compliance with its
financial covenants on a pro forma basis. 
At least 5 Business Days prior to the consummation of any acquisition, the
Company shall deliver to the Purchasers a certificate of a senior executive
officer of the Company (a) stating the assets to be acquired and, if
applicable, the names of each Subsidiary to be acquired and (b) providing a
computation of pro forma compliance with the financial covenants.  Within 5 Business Days after consummation of
the acquisition, any Subsidiary acquired pursuant to the acquisition shall
become a Guarantor and a Grantor under the Security Agreement and the Company
shall deliver to the Purchasers an opinion of counsel to such Subsidiary as to
the matters covered by the opinion of such counsel delivered pursuant to
Section 8.5.

 

6.6                               Limitation on Lines of Business.  The Company shall, and shall
cause each Subsidiary of the Company to, directly or indirectly, engage
primarily in a Related

 

32

 

Business.  For the purposes of
this Section 6.6, “Related Businesses” shall mean businesses that consist
primarily of, or are related to residential mortgage lending and mortgage
brokerage.

 

6.7                               Investments. 
No Obligor shall make or own any Investment in any Person, including
without limitation any joint venture, other than:

 

(a)                                  Permitted
Investments;

 

(b)                                 operating
deposit accounts with banks;

 

(c)                                  Hedging
Agreements entered into in the ordinary course of the Company’s financial
planning and not for speculative purposes; and

 

(d)                                 investments
by the Company existing on the date hereof in the Capital Stock of its
Subsidiaries and additional contributions after the date hereof in any
Subsidiaries which are Guarantors.

 

No Obligor shall create, acquire or permit to exist any Subsidiary
other than Subsidiaries existing on the date hereof, except to the extent such
creation or acquisition complies with Section 6.5.

 

6.8                               Sales and Lease-Backs.  No Obligor shall, directly or indirectly,
become or remain liable as lessee or as a guarantor or other surety with
respect to any lease of any property (whether real, personal or mixed), whether
now owned or hereafter acquired, which any (a) has sold or transferred or is to
sell or to transfer to any other Person, or (b) intends to use for
substantially the same purpose as any other property which has been or is to be
sold or transferred by any Obligor to any Person in connection with such lease.

 

6.9                               Litigation.  No Obligor shall, and shall cause each Subsidiary of the Company
not to, settle, or agree to indemnify or defend third parties against, any
material lawsuit, (i) except as may be required by judicial or regulatory order
or by agreements entered into prior to the date hereof on a basis consistent
with past practice or (ii), in the case of a settlement, unless the terms of
the settlement require any Obligor to make aggregate transfers of less than
$1,000,000.  For the purpose of this
Section 6.9, a material lawsuit shall be any lawsuit in which the amount
in controversy exceeds $1,000,000.

 

6.10                        Further Assurances. 
At the Majority Purchasers’ reasonable request, each
Obligor shall, at its own expense, make, execute, endorse, acknowledge, file
and/or deliver to the Purchasers from time such other documentation, consents,
authorizations and approvals in form and substance reasonably satisfactory to
the Majority Purchasers as the Majority Purchasers shall reasonably deem
necessary or appropriate to consummate the transactions contemplated in any of
the Transaction Documents.  In no way
limiting the foregoing, upon the exercise by the Majority Purchasers of any
power, right, privilege or remedy pursuant to any Transaction Document which
requires any consent, approval, registration, qualification or authorization of
any Governmental Authority, each Obligor shall execute and deliver all
applications, certifications, instrument and other documents and papers that
the Majority Purchasers may be so required to obtain.

 

33

 

 

7.                                      FINANCIAL COVENANTS OF THE COMPANY.

 

7.1                               Minimum Cash Balance. 
Beginning with the fiscal quarter ended March 31, 2004, the Company
shall not permit the aggregate amount of its Balance Sheet Cash on the last day
of any applicable fiscal quarter year to be less than the correlative amount
indicated:

 

	
  Fiscal Quarter Ended

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2004

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2004

  	
   

  	
  $

  	
  15,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2004 and each fiscal quarter ended thereafter

  	
   

  	
  $

  	
  20,000,000

  	
   

  

 

7.2                               Warehouse Line Ratio.  Beginning with the fiscal quarter ended
March 31, 2004, the Company shall not permit the Warehouse Line Ratio on
the last day of any applicable fiscal quarter to exceed the correlative amount
indicated:

 

	
  Fiscal Quarter Ended

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2004

  	
   

  	
  95

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  June 30,
  2004

  	
   

  	
  95

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2004 and each fiscal quarter ended thereafter

  	
   

  	
  94

  	
  %

  

 

7.3                               Minimum Warehouse Lines. 
Beginning with the fiscal quarter ended March 31, 2004,
the Company shall not permit the aggregate amount of its available Warehouse
Lines (inclusive of the amounts borrowed thereunder) to be less than
$600,000,000.

 

8.                                      PURCHASERS’ CLOSING CONDITIONS.

 

The obligation of the Purchasers to purchase and pay for the Notes on
the Closing Date, as provided in Section 2 hereof, shall be subject to the
performance by the Company of its agreements theretofore to be performed
hereunder and to the satisfaction, prior thereto or concurrently therewith, of
the following further conditions:

 

8.1                               Representations and Warranties.  The representations and
warranties of the Obligors contained in the Transaction Documents shall be true
and correct in all respects on the date hereof and on and as of the Closing
Date as though such warranties and representations were made at and as of such
date, except as otherwise affected by the transactions contemplated hereby.

 

34

 

8.2                               Compliance with Agreement, No Default
or Event of Default.  The Obligors
shall each have performed and complied with all agreements, covenants and
conditions contained in each Transaction Document which are required to be
performed or complied with by it prior to or on the Closing Date.  No Default or Event of Default shall exist
prior to or after giving effect to the transactions contemplated on the Closing
Date.

 

8.3                               Officer’s Certificate.  Each of the Purchasers shall have
received a certificate, dated the Closing Date, signed by each of the Chief
Financial Officer and the Chief Operating Officer of the Company, certifying
that the conditions specified in the foregoing Sections 8.1 and 8.2 hereof have
been fulfilled.

 

8.4                               Injunction.  There
shall be no effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction directing that
the transactions provided for herein or any of them not be consummated as
herein provided.

 

8.5                               Counsel’s Opinion. 
The Purchasers shall have received from the Company’s and
Guarantors’ counsel, Patton Boggs LLP, an opinion, dated the Closing Date,
substantially in the form of Exhibit E hereto.

 

8.6                               Adverse Development. 
There shall have been no developments in the business of the
Company which in the opinion of the Purchasers could have a Material Adverse
Effect.

 

8.7                               Approval of Proceedings.  All proceedings to be taken in
connection with the transactions contemplated by this Agreement, and all
documents incident thereto, shall be satisfactory in form and substance to the
Purchasers and their special counsel, Willkie Farr & Gallagher LLP; and the
Purchasers shall have received copies of all documents or other evidence which
they and Willkie Farr & Gallagher LLP may request in connection with such
transactions and of all records of corporate proceedings in connection
therewith in form and substance satisfactory to the Purchasers and Willkie Farr
& Gallagher LLP.

 

8.8                               Commitment Fee.  The Company shall have paid to the Purchasers the Commitment Fee.

 

8.9                               Other Fees and Expenses.  The Company shall have paid to
the Purchasers all other amounts payable by the Company hereunder, including
the payment of the fees and expenses of Willkie Farr & Gallagher LLP,
counsel to TICC.

 

8.10                        Security Interests.  All action necessary or determined by the Purchasers to be
desirable to create and perfect the security interests purported to be created
by the Security Agreement shall have been taken or completed, including the
filing of Uniform Commercial Code financing statements, delivery of landlord waivers,
delivery of instruments or securities and delivery of “control” agreements
necessary to establish control of deposit accounts and securities accounts as
contemplated by Articles 8 and 9 of the Uniform Commercial Code.   The Company and each of the Guarantors
shall have executed and delivered to the Purchasers a duly executed counterpart
of the Security Agreement.

 

35

 

8.11                        Insurance. 
The Purchasers shall have received evidence that the
insurance required to be maintained under this Agreement and Section 11 of
the Security Agreement is in full force and effect and that the Purchasers (or
their agent) has been named as loss payee or additional insured, as
appropriate, under the applicable insurance policies.

 

9.                                      DEFAULT AND REMEDIES.

 

9.1                               Events of Defaults. 
An “Event of Default” shall exist if one or more of the
following conditions or event shall occur and be continuing (whether or not any
of the following are within the control of the Company):

 

(i)                                     the
Company or any Guarantor shall fail to pay when due (whether at stated maturity
or at a date fixed for optional or mandatory prepayment or otherwise) any
payment of principal, interest, fee or any other amount on or under any of the
Notes or any other Transaction Document and, in the case of any such failure to
pay interest, such failure shall continue unremedied for a period of five
Business Days;

 

(ii)                                  any
representation or warranty made or deemed made by or on behalf of the Company
or any Guarantor in or in connection with any Transaction Document or any
amendment or modification thereof or waiver thereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with any Transaction Document or any amendment or modification
thereof or waiver thereunder, shall prove to have been false or misleading in
any material respect when made or deemed made;

 

(iii)                               the
Company or any Guarantor shall fail to observe or perform any covenant,
condition or agreement contained in any of the Transaction Documents and,
except in the case of any covenant contained in Section 5.15, 6 or 7
hereof, such failure shall continue unremedied for a period of 30 days;

 

(iv)                              any
Guarantor, the Company or any of its Subsidiaries shall become unable, fail
generally or admit in writing its inability to pay its debts as they become
due;

 

(v)                                 any
Guarantor, the Company or any of its Subsidiaries shall (a) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (b) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (vi) of this Section, (c) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Guarantor, the Company or any of its
Subsidiaries or for all or a substantial part of its assets, (d) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (e) make a general assignment for the benefit of creditors or (f)
take any action for the purpose of effecting any of the foregoing;

 

(vi)                              an
involuntary proceeding shall be commenced or an involuntary petition shall be
filed seeking (a) liquidation, reorganization or other relief in respect of any
Guarantor, the Company or any of its Subsidiaries or its debts, or of all or a
substantial part of its assets, under any 
Federal, state or foreign bankruptcy, insolvency, receivership or

 

36

 

similar law now or hereafter in effect or (b) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
any Guarantor, the Company or any of its Subsidiaries or for all or a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

 

(vii)                           any
event or condition shall occur that results in any Indebtedness of any
Guarantor, the Company or any of its Subsidiaries exceeding in the aggregate
$1,000,000 becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any such Indebtedness or any trustee or agent on its or
their behalf to cause any such Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity;

 

(viii)                        any
Liens created by the Security Agreement (other than Liens with respect to
collateral with a fair market value of less than $100,000) shall at any time
not constitute a valid and perfected Lien on the collateral intended to be
covered thereby (to the extent perfection by filing, registration, recordation
or possession is required herein or therein) in favor of the Purchasers, free
and clear of all other Liens (other than Liens permitted under
Section 6.1(b) or under the Security Agreement), or, except for expiration
in accordance with its terms, the Security Agreement shall for whatever reason
be terminated or cease to be in full force and effect, or the enforceability
thereof or any other Transaction Document shall be contested by the Company or
any other obligor thereunder;

 

(ix)                                an
“Event of Default” as defined in the Guaranty Agreement shall occur and be
continuing, or except for expiration in accordance with its terms, the Guaranty
Agreement shall for whatever reason be terminated or cease to be in full force
and effect, or the enforceability thereof shall be contested by any Guarantor;

 

(x)                                   one
or more judgments for the payment of money in an aggregate amount in excess of
$1,000,000 (other than judgments covered by insurance) shall be rendered
against any Guarantor, the Company, any of its Subsidiaries, or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any assets
of any Guarantor, the Company or any such Subsidiary to enforce any such
judgment;

 

(xi)                                a
Change in Control shall have occurred; or

 

(xii)                             any
Material Adverse Effect which, in the good faith determination of the
Purchasers, is reasonably likely to impair the ability of the Company to repay
the Notes on a timely basis shall have occurred.

 

9.2                               Remedies.

 

(a)                                  If
any Event of Default described in clause (v) or (vi) of Section 9.1 shall
have occurred, the principal on and under the Notes then outstanding, together
with accrued interest thereon and all fees and other obligations of the Company
accrued hereunder

 

37

 

and under the other Transaction Documents, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company, and the obligation of the
Purchasers to purchase Notes on any Closing Date shall automatically terminate.

 

(b)                                 If
any other Event of Default described in Section 9.1 shall have occurred,
and at any time thereafter during the continuance of such Event of Default, the
Majority Purchasers may, by notice to the Company, declare the principal on and
under the Notes then outstanding to be due and payable in whole, and thereupon
the principal on and under the Notes so declared to be due and payable,
together with accrued interest thereon and all fees and other obligations of
the Company accrued hereunder and under the other Transaction Documents, shall
become due and payable immediately, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Company and the
obligation of the Purchasers to purchase Notes on any Closing Date shall
automatically terminate.

 

(c)                                  No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this
Agreement or by any other Transaction Document upon any Purchaser shall be
exclusive of any other right, power or remedy referred to herein or therein or
now or hereafter available at law, in equity, by statute or otherwise.

 

10.                               INDEMNIFICATION.

 

10.1                        Indemnification of the Purchasers.  The Company shall indemnify and hold
harmless each Purchaser and its officers, directors, stockholders, partners,
members and trustees, employees, agents, representatives and affiliates against
any and all out-of-pocket losses, damages, liabilities and expenses incurred in
connection with any and all breaches (except for gross negligence or willful
misconduct committed by such Purchaser), actions, suits, proceedings including
investigations and claims of any kind arising out of or in connection with the
execution or delivery of, any advance made under, the indebtedness evidenced
by, or any amendment, waiver or consent (whether or not such amendment, waiver
or consent becomes effective) relating to all or any of the Transaction
Documents or the Guaranty Agreement, including (without limitation) all
out-of-pocket costs and expenses (including, without limitation, attorneys’
fees) in connection with:  (i) any
breach or Event of Default  under or
with respect to any Transaction Document, (ii) enforcing, defending or
declaring any rights or remedies under the Transaction Documents; and (iii)
responding to any subpoena or other legal process or participating (whether
voluntarily or involuntarily) in any legal or other proceeding or investigation
of any nature; and any insolvency or bankruptcy of the Company or any affiliate
thereof.  Without limiting the
generality of the foregoing, the Company shall, upon demand, pay or reimburse
each indemnitee for all indemnified costs and expenses (including attorneys’
fees and expenses) incurred thereby. 
The Company’s obligations under this Section 10.1 shall survive the
payment, transfer, conversion, cancellation, enforcement, amendment, waiver or
release of the Transaction Documents.

 

38

 

11.                               MISCELLANEOUS.

 

11.1                        Assignments; Parties in Interest.  Each of the Transaction Documents
shall inure to the benefit of, and be binding upon, the successors, assigns,
heirs, executors, administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person who shall be a holder of the Notes
from time to time.  The Company may not
assign any of the Transaction Documents or any of its rights, interests, or
obligations thereunder.  Each Purchaser
may assign any of its rights under any of the Transaction Documents; provided,
however, that unless an Event of Default has occurred and is continuing, the
transferee is not a direct competitor of the Company and agrees to be bound by,
and entitled to the benefits of, such Transaction Document as an original party
thereto.  Any such assignment by a
Purchaser to any of its Affiliates shall not be subject to any rights of first
refusal or co-sale rights.

 

11.2                        Confidentiality.

 

(a)                                  Each
party shall use its best efforts to keep confidential, in accordance with its
customary procedures for handling confidential information, any non-public
information supplied to it by any other party pursuant to the Transaction
Documents; provided that nothing contained herein shall limit the disclosure of
any such information (i) to the extent required by statute, rule or regulation
or by any subpoena or court order or similar legal process, (ii) to the extent
any such information is already public or disclosed through no fault of such
party or its affiliates, directors, officers, employees, successors, assigns,
agents or advisors, (iii) to any of its affiliates, directors, officers,
employees, successors, assigns, agents or advisors, (iv) with the consent of
such other party, (v) by any Purchaser in connection with the exercise of any
remedies hereunder or under any other Transaction Document or the Guaranty
Agreement or any suit, action or proceeding relating hereto or thereto or the
enforcement of rights hereunder or thereunder, (vi) by any Purchaser subject to
an agreement containing provisions substantially the same as those of this
Section, to (x) any assignee of or participant in, or any prospective assignee
of or participant in, any of its rights or obligations under this Agreement or
(y)  any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating
to the Company and its obligations.

 

(b)                                 Notwithstanding
any other provision contained herein, the Purchasers shall have the right to
issue a press release or other public statement, in form and substance as shall
be determined by the Purchasers in their sole discretion, with respect to the
transactions contemplated by this Agreement and the Transaction Documents.  The Purchasers shall also have the right to
list the Company as a portfolio company of the Purchasers on the web site or
sites owned and maintained by the Purchasers and in any other marketing
materials as the Purchasers, in their sole discretion, shall determine.

 

11.3                        Counterparts. 
This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

11.4                        Titles and Subtitles.  The titles and subtitles used in the
Transaction Documents are used for convenience only and are not to be
considered in construing or interpreting the Transaction Documents.

 

39

 

11.5                        Notices.  Any
notice, request, demand or other communication required or permitted under the
Transaction Documents shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified, upon the date of
transmittal of services via telecopy to the party to whom notice is given, or
on the third day after deposit in the United States Post Office, by registered
or certified mail, with postage and fees prepaid.  All communications shall be sent to the Company at the address
set forth below and to a Purchaser at the address set forth on Schedule I
attached hereto or at such other address as the Company or such Purchaser may
designate by ten (10) days’ advance written notice to the other parties hereto.

 

MortgageIT, Inc.

33 Maiden Lane, 6th Floor

New York, NY 10038

Attention:  General Counsel

 

with a courtesy copy to:

 

Patton Boggs LLP

2001 Ross Avenue

Suite 3000

Dallas, Texas 75201

Attn:  Charlie Miller

 

11.6                        Expenses.  The
Company agrees to pay or reimburse the Purchasers  for all the following items set forth in this Section 11.6:
(a) up to a maximum amount of $50,000 plus the amounts for costs and expenses
relating to UCC and other collateral searches and filings, all costs and
expenses of the Purchasers including the fees and disbursements of Willkie Farr
& Gallagher LLP, special counsel for the Purchasers, incurred in connection
with the negotiation, preparation, execution and delivery of this Agreement and
the other Transaction Documents and the other instruments and agreements
entered into pursuant hereto and thereto; (b) 
all reasonable costs and expenses of the Purchasers including the fees
and disbursements of counsel for the Purchasers, incurred in connection with
the negotiation, preparation, execution and delivery of any modification,
supplement or waiver of this Agreement and any other Transaction Documents
(whether or not consummated); (c) all reasonable expenses of the Purchasers
including the fees and disbursements of counsel in connection with (i) any
Default and any enforcement or collection proceedings resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding
up or liquidation proceedings, (y) judicial or regulatory proceedings and (z)
workout, restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is consummated) and
(ii) the enforcement of this Section 11.6; and (d) all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Transaction Documents or any other document referred to herein or therein
and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any security
interest contemplated by the Security Agreement or any other document referred
to therein.  Additionally, the Company
agrees to pay or reimburse the Purchasers for all reasonable costs, expenses
and other charges in respect of

 

40

 

any UCC searches performed by a service firm, to be chosen by
Purchasers in their sole discretion, in connection with the transactions
contemplated by this Agreement. 
Payments under this Section shall be made promptly and in any case
no later than 10 days after written demand therefor.

 

11.7                        Amendments and Waivers.  The terms of this Agreement may
be amended, modified or waived only upon the written consent of the Company and
the Majority Purchasers; provided that no such amendment, modification or
waiver shall, in each case without the prior written consent of each affected
Purchaser, (i) reduce in any manner the amount of, or change the currency for,
any payment of principal or interest, (ii) extend the time for payment or
prepayment of any amount payable under this Agreement, (iii) reduce the rate of
interest on any amount payable under this Agreement or the method of
computation thereof, (iv) change the definition of “Majority Purchasers” in
Section 1 or (iv) amend any of Sections 2.7 or 11.7.

 

11.8                        Purchaser Consent.  Each Purchaser hereby consents to the provisions of Schedule III
attached hereto.

 

11.9                        Entire Agreement; Severability.  The Transaction Documents contain
the entire understanding of the parties with respect to the subject matter
hereof and thereof and supersede all prior agreements and understandings among
the parties with respect to such subject matter.  If any provision of any Transaction Document is invalid, illegal
or unenforceable, the balance of the Transaction Document shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances.

 

11.10                 Survival.  Any term or condition set forth in this
Agreement which by its terms or context survives any Closing Date will survive
and be enforceable on and after the Closing Date.  In no way limiting the foregoing it is expressly acknowledged and
agreed by the Company that this Agreement is also intended as a loan agreement
governing certain aspects of the Notes and, therefore, all of the covenants,
representations, warranties, obligations and conditions undertaken by each
Obligor hereunder shall survive for the benefit of each Purchaser for at least
as long as any Note remains outstanding and, without limiting the survival of
any other Sections hereunder pursuant to its terms, in the case of Sections 10,
11.1, 11.2, 11.5, 11.6, 11.7, 11.8, 11.12 and 11.13 as well as this
Section 11.10, shall survive indefinitely.

 

11.11                 Governing Law; Consent to Jurisdiction; Waiver of
Damages.  Governing Law; Consent to
Jurisdiction; Waiver of Damages.  Each
of the Transaction Documents shall be governed by and construed under the law
of the State of New York, without giving effect to the conflicts of law
principles thereof.  Each Obligor hereby
agrees that any suit for the enforcement of the Transaction Documents may be
brought in the Courts of the State of New York, the courts of the United States
for the Southern District of New York, appellate courts from any thereof and
consents to the non-exclusive jurisdiction of such courts.  Each Obligor hereby waives any objection
that it may now or hereafter have to the venue of any such suit or any such
court or that such suit is brought in an inconvenient court. Each party to this
Agreement irrevocably consents to service of process in the manner provided for
notices in Section 11.5.  Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.  
Each Obligor hereby waives, to the

 

41

 

maximum extent not prohibited by law, any right it may have to claim or
recover in any legal action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.

 

11.12                 WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS
AGREEMENT OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF
DUTY AND ALL OTHER CLAIMS.  EACH PARTY
HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

 

42

 

IN
WITNESS WHEREOF, the undersigned have hereunto set
their hands to this Note Purchase Agreement as of the day and year first above
written.

 

	
   

  	
  MORTGAGEIT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LARRY LEWIS

  
	
   

  	
  Name:

  	
  LARRY LEWIS

  
	
   

  	
  Title:

  	
  CHIEF OPERATING OFFICER

  
	
   

  	
   

  	
   

  
	
   

  	
  TECHNOLOGY
  INVESTMENT CAPITAL CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SAUL ROSENTHAL

  
	
   

  	
  Name:

  	
  SAUL ROSENTHAL

  
	
   

  	
  Title:

  	
  CHIEF OPERATING OFFICER

  
					

 

43

 

TABLE
OF CONTENTS

 

	
  1.

  	
  DEFINITIONS.

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  PURCHASE AND SALE OF NOTES.

  	
  11

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1

  	
  Sale and Issuance of Notes

  	
  11

  
	
   

  	
  2.2

  	
  Notes.

  	
  11

  
	
   

  	
  2.3

  	
  Closing

  	
  12

  
	
   

  	
  2.4

  	
  Prepayment.

  	
  12

  
	
   

  	
  2.5

  	
  Application of Payments

  	
  13

  
	
   

  	
  2.6

  	
  Payments Generally.

  	
  13

  
	
   

  	
  2.7

  	
  Pro Rata Sharing

  	
  13

  
	
   

  	
  2.8

  	
  Set-off

  	
  13

  
	
   

  	
  2.9

  	
  Transfer of the Notes

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  REPRESENTATIONS AND WARRANTIES OF COMPANY.

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.1

  	
  Company Organization.

  	
  14

  
	
   

  	
  3.2

  	
  Capitalization

  	
  15

  
	
   

  	
  3.3

  	
  Company Proceedings, etc

  	
  16

  
	
   

  	
  3.4

  	
  Consents and Approvals

  	
  16

  
	
   

  	
  3.5

  	
  Valid Issuance of Notes

  	
  16

  
	
   

  	
  3.6

  	
  Absence of Defaults

  	
  16

  
	
   

  	
  3.7

  	
  Litigation.

  	
  16

  
	
   

  	
  3.8

  	
  Solvency

  	
  17

  
	
   

  	
  3.9

  	
  Subsidiaries

  	
  17

  
	
   

  	
  3.10

  	
  Status of Security Interests

  	
  17

  
	
   

  	
  3.11

  	
  Financial Statements.

  	
  17

  
	
   

  	
  3.12

  	
  Absence of Certain Developments

  	
  18

  
	
   

  	
  3.13

  	
  Compliance with Law.

  	
  19

  
	
   

  	
  3.14

  	
  Material Agreements

  	
  20

  
	
   

  	
  3.15

  	
  Environmental Matters

  	
  20

  
	
   

  	
  3.16

  	
  Employees.

  	
  20

  
	
   

  	
  3.17

  	
  Minute
  Books

  	
  21

  
	
   

  	
  3.18

  	
  Tax
  Matters

  	
  21

  
	
   

  	
  3.19

  	
  Employee Benefit Plans

  	
  21

  
	
   

  	
  3.20

  	
  Intellectual Property.

  	
  21

  
	
   

  	
  3.21

  	
  Software

  	
  23

  
	
   

  	
  3.22

  	
  Title to Tangible Assets

  	
  24

  
	
   

  	
  3.23

  	
  Condition of Properties

  	
  24

  
	
   

  	
  3.24

  	
  Insurance

  	
  24

  
	
   

  	
  3.25

  	
  Transactions with Related Parties

  	
  24

  
	
   

  	
  3.26

  	
  Interest in Competitors

  	
  24

  
	
   

  	
  3.27

  	
  Exchange Act Registration

  	
  24

  
	
   

  	
  3.28

  	
  Private Offering

  	
  25

  
	
   

  	
  3.29

  	
  Brokerage

  	
  25

  
	
   

  	
  3.30

  	
  Illegal or Unauthorized Payments; Political
  Contributions

  	
  25

  
	
   

  	
  3.31

  	
  Internal Accounting Controls

  	
  25

  
	
   

  	
  3.32

  	
  Material
  Facts

  	
  25

  

 

44

 

	
   

  	
  3.33

  	
  Foreign Assets Control Regulations, etc

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  REPRESENTATIONS AND WARRANTIES OF THE
  PURCHASERS.

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Corporate Power

  	
  26

  
	
   

  	
  4.2

  	
  Authorization

  	
  26

  
	
   

  	
  4.3

  	
  Purchaser Bears Economic Risk

  	
  26

  
	
   

  	
  4.4

  	
  Further Limitations on Disposition

  	
  26

  
	
   

  	
  4.5

  	
  Accredited Investor Status

  	
  27

  
	
   

  	
  4.6

  	
  Acquisition for Own Account

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  AFFIRMATIVE COVENANTS OF THE COMPANY AND
  ITS SUBSIDIARIES.

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Payment of Notes

  	
  27

  
	
   

  	
  5.2

  	
  Conduct of Business

  	
  27

  
	
   

  	
  5.3

  	
  Notice of Adverse Change

  	
  27

  
	
   

  	
  5.4

  	
  Notice of Default

  	
  27

  
	
   

  	
  5.5

  	
  Notice of Litigation

  	
  27

  
	
   

  	
  5.6

  	
  Notice of Default in Other Agreements

  	
  28

  
	
   

  	
  5.7

  	
  Compliance Certificates

  	
  28

  
	
   

  	
  5.8

  	
  Board of Directors

  	
  28

  
	
   

  	
  5.9

  	
  Security

  	
  28

  
	
   

  	
  5.10

  	
  Taxes

  	
  28

  
	
   

  	
  5.11

  	
  Insurance

  	
  28

  
	
   

  	
  5.12

  	
  Compliance with Laws

  	
  28

  
	
   

  	
  5.13

  	
  Maintenance and Properties

  	
  29

  
	
   

  	
  5.14

  	
  Inspection

  	
  29

  
	
   

  	
  5.15

  	
  Financial Statements, Etc

  	
  29

  
	
   

  	
  5.16

  	
  Use
  of Proceeds

  	
  30

  
	
   

  	
  5.17

  	
  Intellectual Property

  	
  30

  
	
   

  	
  5.18

  	
  Further Assurances

  	
  30

  
	
   

  	
  5.19

  	
  Certain Changes and Conduct of Business

  	
  31

  
	
   

  	
  5.20

  	
  Good
  Standing

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  NEGATIVE COVENANTS OF THE COMPANY.

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Limitation on Additional Indebtedness and
  Liens.

  	
  31

  
	
   

  	
  6.2

  	
  Limitation on Transactions with Affiliates

  	
  31

  
	
   

  	
  6.3

  	
  Limitation on Capital Expenditures

  	
  32

  
	
   

  	
  6.4

  	
  Dividends and Redemptions

  	
  32

  
	
   

  	
  6.5

  	
  Fundamental Changes; Disposition of Assets;
  Acquisitions

  	
  32

  
	
   

  	
  6.6

  	
  Limitation on Lines of Business

  	
  32

  
	
   

  	
  6.7

  	
  Investments

  	
  33

  
	
   

  	
  6.8

  	
  Sales and Lease-Backs

  	
  33

  
	
   

  	
  6.9

  	
  Litigation

  	
  33

  
	
   

  	
  6.10

  	
  Further Assurances

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  FINANCIAL COVENANTS OF THE COMPANY.

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Minimum
  Cash Balance

  	
  34

  

 

45

 

	
   

  	
  7.2

  	
  Warehouse
  Line Ratio

  	
  34

  
	
   

  	
  7.3

  	
  Minimum Warehouse Lines

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  PURCHASERS’ CLOSING CONDITIONS.

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Representations and Warranties

  	
  34

  
	
   

  	
  8.2

  	
  Compliance with Agreement, No Default or Event of Default

  	
  35

  
	
   

  	
  8.3

  	
  Officer’s Certificate

  	
  35

  
	
   

  	
  8.4

  	
  Injunction

  	
  35

  
	
   

  	
  8.5

  	
  Counsel’s Opinion

  	
  35

  
	
   

  	
  8.6

  	
  Adverse Development

  	
  35

  
	
   

  	
  8.7

  	
  Approval of Proceedings

  	
  35

  
	
   

  	
  8.8

  	
  Commitment
  Fee

  	
  35

  
	
   

  	
  8.9

  	
  Other Fees and Expenses

  	
  35

  
	
   

  	
  8.10

  	
  Security Interests

  	
  35

  
	
   

  	
  8.11

  	
  Insurance

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  DEFAULT AND REMEDIES.

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Events of Defaults

  	
  36

  
	
   

  	
  9.2

  	
  Remedies.

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  INDEMNIFICATION.

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10.1

  	
  Indemnification of the Purchasers

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  MISCELLANEOUS.

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Assignments; Parties in Interest

  	
  39

  
	
   

  	
  11.2

  	
  Confidentiality.

  	
  39

  
	
   

  	
  11.3

  	
  Counterparts

  	
  39

  
	
   

  	
  11.4

  	
  Titles and Subtitles

  	
  39

  
	
   

  	
  11.5

  	
  Notices

  	
  40

  
	
   

  	
  11.6

  	
  Expenses

  	
  40

  
	
   

  	
  11.7

  	
  Amendments and Waivers

  	
  41

  
	
   

  	
  11.8

  	
  Purchaser Consent

  	
  41

  
	
   

  	
  11.9

  	
  Entire Agreement; Severability

  	
  41

  
	
   

  	
  11.10

  	
  Survival

  	
  41

  
	
   

  	
  11.11

  	
  Governing
  Law; Consent to Jurisdiction; Waiver of Damages

  	
  41

  
	
   

  	
  11.12

  	
  WAIVER OF JURY TRIAL

  	
  42

  

 

 

	
  SCHEDULES AND
  EXHIBITS

  	
   

  

 

	
  SCHEDULE

  NUMBER

  	
   

  	
  SCHEDULE NAME

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  Purchasers

  	
   

  
	
  II

  	
   

  	
  Indebtedness

  	
   

  
	
  III

  	
   

  	
  Collateral
  Agent

  	
   

  
	
  IV

  	
   

  	
  Liens

  	
   

  

 

46

 

	
  V

  	
   

  	
  Warehouse
  Agreements

  	
   

  
	
  3.7(a)

  	
   

  	
  Material Litigation

  	
   

  
	
  3.7(b)

  	
   

  	
  Summary of Non-Material Litigation

  	
   

  
	
  3.9

  	
   

  	
  Subsidiaries

  	
   

  
	
  3.11

  	
   

  	
  Financial Statements

  	
   

  
	
  3.12

  	
   

  	
  Absence of Certain Developments

  	
   

  
	
  3.14

  	
   

  	
  Material Agreements

  	
   

  
	
  3.16(a)

  	
   

  	
  Compliance with Employment Laws, Collective Bargaining, Etc.

  	
   

  
	
  3.16(b)

  	
   

  	
  List of Employees

  	
   

  
	
  3.19

  	
   

  	
  Benefit Arrangements

  	
   

  
	
  3.20(b)

  	
   

  	
  Listed Intellectual Property

  	
   

  
	
  3.20(c)

  	
   

  	
  Licenses, Sublicenses and Royalties

  	
   

  
	
  3.21

  	
   

  	
  Proprietary Software

  	
   

  
	
  3.24

  	
   

  	
  Insurance

  	
   

  
	
  3.25

  	
   

  	
  Transactions with Related Parties

  	
   

  

 

 

	
  EXHIBIT

  	
   

  	
  EXHIBIT
  NAME

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  Note

  	
   

  
	
  B

  	
   

  	
  Security
  Agreement

  	
   

  
	
  C

  	
   

  	
  Certificate
  of Incorporation

  	
   

  
	
  D

  	
   

  	
  Bylaws

  	
   

  
	
  E

  	
   

  	
  Opinion
  of Company Counsel

  	
   

  
	
  F

  	
   

  	
  Quarterly
  Perfection Certificate Update

  	
   

  

 

47

 

Exhibit A

 

48

 

Exhibit B

 

49

 

Exhibit C

 

50

 

Exhibit D

 

51

 

Exhibit E

 

52

 

Exhibit F

 

53

 

SCHEDULE I

 

SCHEDULE OF
PURCHASERS

 

	
  Investor Name and Address

  	
   

  	
  Principal
  Amount of

  Notes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Technology
  Investment Capital Corp.

  8 Sound Shore Drive, Suite 215

  Greenwich, Connecticut  06830

  Attention:

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Willkie Farr
  & Gallagher LLP

  787 Seventh Avenue

  New York, NY 10019

  Attention: Steven A. Seidman

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  15,000,000.00

  	
   

  

 

54

 

SCHEDULE II

 

INDEBTEDNESS

 

None.

 

55

 

Table of Contents

 

	
   

  	
   

  

 

 

SCHEDULE III

 

The Collateral Agent

 

Each of the Purchasers hereby irrevocably appoints Technology
Investment Capital Corp., a Maryland corporation, as its agent (the “Collateral
Agent”) and authorizes the Collateral Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Collateral Agent by
the terms hereof and of the other Transaction Documents, together with such
actions and powers as are reasonably incidental thereto.

 

The Person serving as the Collateral Agent hereunder shall have the
same rights and powers in its capacity as a Purchaser as any other Purchaser
and may exercise the same as though it were not the Collateral Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Company or any of its Subsidiaries or
other Affiliate thereof or any Guarantor as if it were not the Collateral Agent
hereunder.

 

The Collateral Agent shall not have any duties or obligations except
those expressly set forth herein and in the other Transaction Documents.  Without limiting the generality of the
foregoing, (a) the Collateral Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default or Event of Default has
occurred and is continuing, (b) the Collateral Agent shall not have any duty to
take any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby and by the other
Transaction Documents that the Collateral Agent is required to exercise in
writing as directed by the Majority Purchasers (or such other number or
percentage of the Purchasers as shall be necessary under the circumstances),
and (c) except as expressly set forth herein, the Collateral Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Company, any of its Subsidiaries or any of the
Guarantors that is communicated to or obtained by the Person serving as
Collateral Agent or any of its Affiliates in any capacity.  The Collateral Agent shall not be liable for
any action taken or not taken by it with the consent or at the request of the
Majority Purchasers (or such other number or percentage of the Purchasers as
shall be necessary under the circumstances) or in the absence of its own gross
negligence or willful misconduct.  The
Collateral Agent shall be deemed not to have knowledge of any Default or Event
of Default unless and until written notice thereof is given to the Collateral
Agent by the Company or a Purchaser, and the Collateral Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or the other Transaction

 

56

 

Documents, (ii) the contents of any certificate, report or other
document delivered hereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein or therein, (iv) the validity, enforceability,
effectiveness or genuineness of the Purchase Agreement or any other Transaction
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Section 8 or elsewhere herein or therein,
other than to confirm receipt of items expressly required to be delivered to
the Collateral Agent.

 

The Collateral Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person.  The Collateral Agent also may rely upon any
statement made to it orally or by telephone and believed by it to be made by
the proper Person, and shall not incur any liability for relying thereon.  The Collateral Agent may consult with legal
counsel (who may be counsel for the Company or any Guarantor), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

The Collateral Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Collateral Agent  and shall not be
responsible for the negligence or misconduct of any such sub-agents selected by
it in good faith.

 

Subject to the appointment and acceptance of a successor Collateral
Agent as provided in this paragraph, the Collateral Agent may resign at any
time by notifying the Purchasers and the Company.  Upon any such resignation, the Majority Purchasers shall have the
right to appoint a successor.  If no
successor shall have been so appointed by the Majority Purchasers and shall
have accepted such appointment within 30 days after the retiring Collateral
Agent gives notice of its resignation, then the retiring Collateral Agent may,
on behalf of the Purchasers, appoint a successor Collateral Agent which shall
be a Person with an office in New York, New York.  Upon the acceptance of its appointment as Collateral Agent
hereunder by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent, and the retiring Collateral Agent shall be discharged from its duties
and obligations hereunder.  After the
Collateral Agent’s resignation hereunder, the provisions of this
Schedule shall continue in effect for the benefit of such retiring
Collateral Agent in respect of any actions taken or omitted to be taken by any
of them while it was acting as Collateral Agent.

 

57

 

Each Purchaser acknowledges that it has, independently and without
reliance upon the Collateral Agent or any other Purchaser and based on such
documents and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. 
Each Purchaser also acknowledges that it will, independently and without
reliance upon the Collateral Agent or any other Purchaser and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any related agreement or any document furnished
hereunder or thereunder.

 

If the Collateral Agent receives conflicting instructions from Purchasers
under circumstances under which each Purchaser is entitled to give instructions
to the Collateral Agent, the Collateral Agent may, but shall not be required,
to take action directed by any Purchaser providing such instructions; provided,
however, notwithstanding the foregoing, in the event that any such Purchaser
does so instruct the Collateral Agent to exercise remedies under this
Agreement, the Purchasers and the Collateral Agent hereby agree to work
together and cooperate in good faith to maximize the value to be obtained in
connection therewith for all Purchasers in connection with such actions (it
being understood that this proviso is meant solely for the benefit of the
Purchasers and not the Company or any Guarantor).

 

To the extent not indemnified by the Company (or the Company fails to
pay any amount payable by it pursuant to such indemnity), the Purchasers hereby
severally in proportion to the outstanding principal amount of the Notes owned
by them indemnify the Collateral Agent and agree to hold it harmless against
all fees, expenses and liabilities (including reasonable attorneys fees and
expenses) incurred or payable by the Collateral Agent in such capacity arising
under or in connection with the Transaction Documents other than those determined
by a final unappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Collateral
Agent.

 

58

 

Table of Contents

 

	
   

  	
   

  

 

 

SCHEDULE IV

 

LIENS

 

 

None.

 

59

 

Table of Contents

 

	
   

  	
   

  

 

 

SCHEDULE V

 

WAREHOUSE AGREEMENTS

 

•                  Amended and
Restated Mortgage Loan Purchase Agreement, dated as of January 10, 2003,
between the Company and UBS and Amended and Restated Mortgage Loan Repurchase
Agreement, dated as of January 10, 2003, between the Company and UBS (as
each may be amended, supplemented or modified from time to time in accordance
with terms hereof).

 

•                  Master
Repurchase Agreement dated, as of June 20, 2003, by and between the
Company and Merrill Lynch Commercial Finance Corp. (as may be amended,
supplemented or modified from time to time in accordance with the terms
therein).

 

•                  Warehousing
Credit and Security Agreement, dated as of August 1, 2003, by and between
the Company and Residential Funding Corporation (as may be amended,
supplemented, modified or renewed from time to time).

 

60Exhibit
10.12

 

FINAL

 

 

MORTGAGE IT

Owner

 

and

 

GMAC MORTGAGE CORPORATION

 

Servicer

 

 

 

LOAN SERVICING AGREEMENT

 

Dated as of September 26, 2003

 

 

 

TABLE OF
CONTENTS

 

	
  WITNESSETH

  	
  1

  
	
   

  	
   

  
	
  ARTICLE I DEFINITIONS

  	
  1

  
	
   

  	
   

  
	
  ARTICLE II ADMINISTRATION
  AND SERVICING OF MORTGAGE LOANS

  	
  10

  
	
  Section 2.01

  	
  Servicer to Act as
  Servicer.

  	
  10

  
	
  Section 2.02

  	
  Liquidation of
  Mortgage Loans.

  	
  11

  
	
  Section 2.03

  	
  Collection of Mortgage
  Loan Payments.

  	
  12

  
	
  Section 2.04

  	
  Establishment of and
  Deposits to Custodial Account.

  	
  12

  
	
  Section 2.05

  	
  Permitted Withdrawals
  From Custodial Account.

  	
  13

  
	
  Section 2.06

  	
  Establishment of and
  Deposits to Escrow Account.

  	
  14

  
	
  Section 2.07

  	
  Permitted Withdrawals
  From Escrow Account.

  	
  15

  
	
  Section 2.08

  	
  Payment of Taxes,
  Insurance and Other Charges.

  	
  15

  
	
  Section 2.09

  	
  Protection of
  Accounts.

  	
  16

  
	
  Section 2.10

  	
  Maintenance of Hazard
  Insurance.

  	
  16

  
	
  Section 2.11

  	
  Maintenance of
  Mortgage Impairment Insurance.

  	
  17

  
	
  Section 2.12

  	
  Maintenance of
  Fidelity Bond and Errors and Omissions Insurance.

  	
  17

  
	
  Section 2.13

  	
  Inspections.

  	
  18

  
	
  Section 2.14

  	
  Restoration of
  Mortgaged Property.

  	
  18

  
	
  Section 2.15

  	
  Maintenance of PMI
  Policy; Claims.

  	
  18

  
	
  Section 2.16

  	
  Title, Management and
  Disposition of REO Property.

  	
  19

  
	
  Section 2.17

  	
  Real Estate Owned
  Reports.

  	
  20

  
	
  Section 2.18

  	
  Liquidation Reports.

  	
  20

  
	
  Section 2.19

  	
  Reports of
  Foreclosures and Abandonments of Mortgaged Property.

  	
  20

  
	
  Section 2.20

  	
  Application of Buydown
  Funds.

  	
  20

  
	
  Section 2.21

  	
  Notification of Adjustments.

  	
  21

  
	
  Section 2.22

  	
  Transfer Notices.

  	
  21

  
	
  Section 2.23

  	
  Privacy.

  	
  22

  
	
  Section 2.24

  	
  Losses and Expenses.

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE III PAYMENTS TO
  OWNER

  	
  25

  
	
  Section 3.01

  	
  Remittances.

  	
  25

  
	
  Section 3.02

  	
  Statements to Owner.

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV GENERAL
  SERVICING PROCEDURES

  	
  26

  
	
  Section
  4.01

  	
  Transfers
  of Mortgaged Property.

  	
  26

  
	
  Section
  4.02

  	
  Satisfaction
  of Mortgages and Release of Mortgage Files.

  	
  26

  
	
  Section 4.03

  	
  Servicing Compensation.

  	
  26

  
	
  Section
  4.04

  	
  Annual
  Independent Public Accountants’ Servicing Report.

  	
  27

  
	
  Section 4.05

  	
  Right to Examine Servicer
  Records.

  	
  28

  

 

i

 

	
  ARTICLE V POSSESSION OF
  MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS;
  SERVICER TO COOPERATE

  	
  29

  
	
  Section 5.01

  	
  Provision of
  Information.

  	
  29

  
	
  Section 5.02

  	
  [Reserved]

  	
   

  
	
  Section
  5.03

  	
  Possession
  of Mortgage Files; Maintenance of Servicing Files.

  	
  29

  
	
  Section
  5.04

  	
  Books
  and Records; Transfers of Mortgage Loans.

  	
  29

  
	
  Section
  5.05

  	
  Custodial
  Agreement; Delivery of Documents.

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI REPRESENTATIONS
  AND WARRANTIES

  	
  31

  
	
  Section
  6.01

  	
  General
  Representations and Warranties.

  	
  31

  
	
  Section 6.02

  	
  Representations,
  Warranties and Covenants of Owner Regarding Individual Mortgage Loans.

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII THE SERVICER

  	
  34

  
	
  Section 7.01

  	
  Indemnification; Third
  Party Claims.

  	
  34

  
	
  Section 7.02

  	
  Merger or
  Consolidation of the Servicer.

  	
  35

  
	
  Section 7.03

  	
  Limitation on
  Liability of Servicer and Others.

  	
  36

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII REMOVAL
  OF MORTGAGE LOANS FROM AGREEMENT

  	
  37

  
	
   

  	
   

  
	
  ARTICLE IX DEFAULT

  	
  38

  
	
  Section
  9.01

  	
  Events of
  Default.

  	
  38

  
	
  Section
  9.02

  	
  Waiver of
  Defaults.

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE X TERMINATION

  	
  40

  
	
  Section
  10.01

  	
  Termination.

  	
  40

  
	
  Section
  10.02

  	
  Termination
  Without Cause.

  	
  40

  
	
  Section
  10.03

  	
  Termination
  With Cause.

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI
  MISCELLANEOUS PROVISIONS

  	
  42

  
	
  Section
  11.01

  	
  Successor to
  Servicer.

  	
  42

  
	
  Section
  11.02

  	
  Amendment.

  	
  43

  
	
  Section
  11.03

  	
  Governing Law.

  	
  43

  
	
  Section
  11.04

  	
  Duration of
  Agreement.

  	
  43

  
	
  Section
  11.05

  	
  Notices.

  	
  43

  
	
  Section
  11.06

  	
  Severability of
  Provisions.

  	
  44

  
	
  Section
  11.07

  	
  Relationship of
  Parties.

  	
  44

  
	
  Section
  11.08

  	
  Execution;
  Successors and Assigns.

  	
  44

  
	
  Section
  11.09

  	
  Assignment by
  Owner.

  	
  44

  
	
  Section
  11.10

  	
  Solicitation of
  Mortgagor.

  	
  44

  
	
  Section
  11.12

  	
  Time of
  Payment.

  	
  45

  
	
  Section
  11.13

  	
  Force Majeure.

  	
  45

  
	
   

  	
   

  	
   

  
	
  TABLE OF
  CONTENTS

  	
  4

  

 

ii

 

	
  GMAC
  MORTGAGE ADDRESSES

  	
  29

  
	
   

  	
   

  	
   

  
	
  GMAC
  MORTGAGE CONTACTS

  	
  31

  
	
   

  	
   

  	
   

  
	
  CUSTOMER
  NOTIFICATION LETTER SAMPLE

  	
  34

  

 

 

 

	
  EXHIBITS

  
	
   

  
	
  Exhibit
  A

  	
   

  	
  Mortgage
  Loan Schedule

  
	
  Exhibit
  B

  	
   

  	
  Contents
  of Each Mortgage Loan File

  
	
  Exhibit
  C

  	
   

  	
  Custodial
  Agreement

  
	
  Exhibit
  D

  	
   

  	
  Eligibility
  Criteria

  
	
  Exhibit
  E

  	
   

  	
  Term
  Sheet

  
	
  Exhibit
  F

  	
   

  	
  Transfer
  Instructions

  
	
  Exhibit
  G

  	
   

  	
  Limited
  Signing Authority

  
	
  Exhibit
  H

  	
   

  	
  Asset
  Plan

  

 

iii

 

LOAN SERVICING AGREEMENT

 

THIS LOAN SERVICING AGREEMENT
(“Agreement”) is entered into this 26th day of September, 2003 by and between GMAC
MORTGAGE CORPORATION, a Pennsylvania corporation (“Servicer”), and MORTGAGE IT a
New York corporation (“Owner”).

 

W I T N E S S E T
H:

 

WHEREAS, Owner originates and owns certain
first lien residential mortgage loans and the related servicing rights;

 

WHEREAS, Servicer is experienced in the
servicing of residential mortgage loans, and has agreed, as an independent
contractor, to service the mortgage loans on behalf of Owner for an interim
period from and after the initial Effective Date;

 

WHEREAS, Owner intends to transfer the
servicing of certain mortgage loans to Servicer initially on a bulk basis, and
subsequently on a flow basis; and

 

WHEREAS,
Owner and Servicer desire to prescribe the terms and
conditions regarding the management and servicing of such mortgage loans.

 

NOW, THEREFORE, in consideration of the
mutual agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
Owner and the Servicer agree as follows:

 

ARTICLE I

DEFINITIONS

 

Whenever used herein, the following words and phrases,
unless the content otherwise requires, shall have the following meanings:

 

Accepted Servicing
Practices: With respect to any Mortgage Loan or REO Property  those
mortgage servicing practices of mortgage lending institutions which service
mortgage loans of the same type as such Mortgage Loan in the jurisdiction where
the related Mortgaged Property is located, exercising the same care in
performing those practices that the Servicer customarily employs and exercises
in servicing and administering mortgage loans for its own account (including,
compliance with all applicable federal, state and local laws).

 

Adjustment Date:  As to each Mortgage Loan, the date on which
the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note and Mortgage.

 

Agreement:  This Loan Servicing Agreement and all
amendments hereof and supplements hereto.

 

1

 

Applicable Requirements:
As of the time of reference, with respect to the Mortgage Loans, REO Property
and the servicing of the Mortgage Loans, all of the following:  (i) all contractual obligations of Owner,
any Originator or Prior Servicer, or the Mortgage Loan Documents, for which
Owner or, by virtue of this Agreement, Servicer is responsible for or at any
time was or hereafter will be responsible; (ii) all applicable federal, state
and local legal and regulatory requirements (including, without limitation, statutes,
rules, regulations and ordinances and including the Privacy Requirements)
binding upon Owner, Servicer, any Originator or Prior Servicer; (iii) all other
applicable requirements and guidelines of each governmental agency, board,
commission, instrumentality and other governmental body or officer having
jurisdiction; (iv) all other applicable judicial and administrative judgments,
orders, stipulations, awards, writs and injunctions;; and (v) Accepted
Servicing Practices.

 

Appraised Value:  With respect to any Mortgage Loan, the
lesser of (i) the value set forth on the appraisal made in connection with the
origination of the related Mortgage Loan as the value of the related Mortgaged
Property, or (ii) the purchase price paid for the Mortgaged Property, provided,
however, that in the case of a refinanced Mortgage Loan, such value shall be
based solely on the appraisal made in connection with the origination of such
Mortgage Loan.

 

Asset Plan:            With respect to any REO Property,
the recommended plan for the disposition of such REO Property, substantially in
the form of Exhibit H.

 

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 Owner.

 

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 Iowa, the State of Connecticut,  the
Commonwealth of Pennsylvania or the State of New York are authorized or
obligated by law or executive order to be closed.

 

Buydown Agreement:  An agreement between the Servicer and a
Mortgagor, or an agreement among the Servicer, a Mortgagor and a seller of a
Mortgaged Property or a third party with respect to a Mortgage Loan which
provides for the application of Buydown Funds.

 

Buydown Funds:   In respect of any Buydown Mortgage Loan,
any amount contributed by the seller of a Mortgaged Property subject to a
Buydown Mortgage Loan, the buyer of such property, the Servicer or any other
source, plus interest earned thereon, in order to enable the Mortgagor to
reduce the payments required to be made from the mortgagor’s funds in the early
years of a Mortgage Loan.

 

Buydown Mortgage Loan:  Any Mortgage Loan in respect of which,
pursuant to a Buydown Agreement, (i) the Mortgagor pays less than the full
monthly payments specified in the Mortgage Note for a specified period, and
(ii) the difference between the payments required under such Buydown Agreement
and the Mortgage Note is provided from Buydown Funds.

 

2

 

Buydown Period:  The period of time when a Buydown Agreement
is in effect with respect to a related Buydown Mortgage Loan.

 

Charge-off Date:  The date defined in Section 2.03 of this
Agreement.

 

Code:  The Internal Revenue Code of 1986, as it may
be amended from time to time or any successor statute thereto, and applicable
U.S. Department of the Treasury regulations issued pursuant thereto.

 

Commencement Date:  The date that Servicer physically assumes
the servicing function. with respect to the first Mortgage Loan serviced
hereunder.

 

Condemnation Proceeds:  All awards or settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents.

 

Custodial Account:
The separate account or accounts created and maintained pursuant to Section 2.04.

 

Custodial Agreement:
The agreement governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other Mortgage Loan Documents, a form of
which is annexed hereto as Exhibit C.

 

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 provided therein.

 

Customer Information:
Any personally identifiable information in any form (written electronic or
otherwise) relating to a Mortgagor, including, but not limited to: a
Mortgagor’s name, address, telephone number, Mortgage Loan number, Mortgage
Loan payment history, delinquency status, insurance carrier or payment
information, tax amount or payment information; the fact that the Mortgagor has
a relationship with the servicer of such Mortgagor’s Mortgage Loan; and any
other non-public personally identifiable information.

 

Cut-off Date:
With respect to each Mortgage Loan, the date Subservicer assumes its
obligations pursuant to this Agreement.

 

Damages:  Any and all assessments, judgments, claims,
liabilities, losses, costs, damages or expenses (including interest, penalties
and reasonable attorneys’ fees, expenses and disbursements in connection with
any action, suit or proceeding and including any such reasonable attorneys’
fees, expenses and disbursements incurred in enforcing any right of
indemnification against any indemnitor); provided that Damages shall not
include punitive, consequential, exemplary or special damages (other than
punitive, consequential, exemplary and special damages required to be paid by
the indemnified party under this Agreement to any Person (other than a party to
this Agreement or any of its Affiliates) arising out of an action or

 

3

 

proceeding by such
Person, which damages shall be deemed to be direct damages to the party
required to pay such punitive, consequential, exemplary or incidental damages).

 

Determination Date:
The date that is two Business Days immediately preceding the related Remittance
Date.

 

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

 

Due Period:  With respect to each Remittance Date, the
period commencing on the second day of the month preceding the month of the
Remittance Date and ending on the first day of the month of the Remittance
Date.

 

Effective Date:  With respect to each Mortgage Loan made
subject to this Agreement, the date that Servicer physically assumes the
servicing function.

 

Eligibility Criteria:  The eligibility criteria for residential
mortgage loans to be delivered by Owner after the initial Effective Date to be
serviced by Servicer under this Agreement, as specified in Exhibit E, as the same may be
amended from time to time with the mutual consent of both parties.

 

Errors and Omissions
Insurance Policy:  An
errors and omissions insurance policy to be maintained by the Servicer pursuant
to Section
2.12.

 

Escrow Account:  The separate account or accounts created and
maintained pursuant to Section 2.06.

 

Escrow Payments:  With respect to any Mortgage Loan, the
amounts constituting ground rents, taxes, assessments, water rates, sewer
rents, municipal charges, mortgage insurance premiums, fire and hazard
insurance premiums, condominium charges, and any other payments required to be
escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any
other related document.

 

Event of Default:  Any one of the conditions or circumstances
enumerated in Section 9.01.

 

Fannie Mae:  The entity formerly known as Federal
National Mortgage Association (FNMA), or any successor thereto.

 

FDIC:  The Federal Deposit Insurance Corporation,
or any successor thereto.

 

Fidelity Bond:  A fidelity bond to be maintained by the
Servicer pursuant to Section 2.12.

 

Float Benefit:  The net economic benefit resulting from
escrow and custodial deposits held for the account of Servicer or Owner
relating to the Mortgage Loan and servicing thereof.

 

Freddie Mac:  The entity formerly known as the Federal
Home Loan Mortgage Corporation (FHLMC), or any successor thereto.

 

4

 

Gross Margin:  With respect to each Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which is added
to the Index in order to determine the related Mortgage Interest Rate, as set
forth in the Mortgage Loan Schedule.

 

High Cost Loan:  A residential mortgage loan that is subject
to the anti-predatory prohibitions of state or local laws and regulations by
virtue of the loan’s high interest rate or total points and fees.

 

HOEPA:  The Home Ownership Equity Protection Act.

 

Index:  With respect to any adjustable rate Mortgage
Loan, the index identified on the Mortgage Loan Schedule and set forth in the
related Mortgage Note for the purpose of calculating the interest thereon.

 

Insurer:  Any entity that insures or guarantees all or
part of the risk of loss of a Mortgage Loan, including, without limitation,
FHA, VA or any provider of a PMI Policy, and the providers of any hazard
insurance policy, flood insurance policy or title insurance policy.

 

Insurance Proceeds:  With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.

 

LIBOR:  means the rate of interest (rounded, if
necessary, to the nearest one hundred-thousandth of a percentage point) for
U.S. dollar deposits of one month maturity as reported on Telerate page 3750 or
the equivalent page on Bloomberg as of 11:00 a.m., London time, on the second
London Business Day prior to the date hereof and on each Business Day
thereafter.

 

Litigation:  Any litigation, arbitration or other
proceeding before any governmental, administrative or arbitral court or
tribunal, or any government investigation or administrative enforcement action.

 

Liquidation Proceeds:  Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee’s sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan.

 

Loan-to-Value Ratio or
LTV:  With respect to
any Mortgage Loan, the ratio of the original loan amount of the Mortgage Loan
at its origination (unless otherwise indicated) to the Appraised Value of the
Mortgaged Property.

 

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

 

Mortgage:  The mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a first lien on an
unsubordinated estate in fee simple in real property securing the Mortgage
Note.

 

5

 

Mortgage File:  The items pertaining to a particular
Mortgage Loan referred to in Exhibit B annexed hereto, and any
additional documents required to be added to the Mortgage File pursuant to this
Agreement.

 

Mortgage Interest Rate:  The annual rate of interest borne on a
Mortgage Note in accordance with the provisions of the Mortgage Note.

 

Mortgage Loan:  An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to
this Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes without limitation the Mortgage File, the Monthly Payments,
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.

 

Mortgage Loan Documents:  With respect to a Mortgage Loan, the
original related Mortgage Note with applicable addenda and riders, the original
related Mortgage and the originals of any required addenda and riders, the
original related Assignment and any original intervening related Assignments,
the original related title insurance policy, related PMI policy, if any, and
the related appraisal report.

 

Mortgage Loan Schedule:  A schedule of Mortgage Loans annexed hereto
as Exhibit
A, or as the same may be supplemented from time to time, such
schedule setting forth the following information with respect to each Mortgage
Loan, each as applicable: (1) the Servicer’s Mortgage Loan number; (2) the city
state and zip code of the Mortgaged Property; (3) a code indicating whether the
Mortgaged Property is a single family residence, two-family residence,
three-family residence, four-family residence, PUD or Condominium; (4) the
current Mortgage Interest Rate; (5) the current net Mortgage Interest Rate; (6)
the current Monthly Payment; (7) the Gross Margin; (8) the original term to
maturity; (9) the scheduled maturity date; (10) the principal balance of the
Mortgage Loan as of the Cut-off Date after deduction of payments of principal
due on or before the Cut-off Date whether or not collected; (11) the
Loan-to-Value Ratio; (12) the next Adjustment Date; (13) the lifetime Mortgage
Interest Rate cap; (14) whether the Mortgage Loan is convertible or not; and
(15) a code indicating the mortgage guaranty insurance Insurer.

 

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.

 

New Loan Data File:
With respect to each Mortgage Loan delivered after the initial Effective Date
by Owner to be serviced by Servicer under this Agreement, the data file
produced

 

6

 

by Owner pursuant to the
Transfer Instructions that is used to enable Servicer to set up each Mortgage
Loan on its servicing system.

 

Originator:  Shall mean, with respect to any Mortgage
Loan, the entity or entities that (a) took the relevant Mortgagor’s loan
application; (b) processed the relevant Mortgagor’s loan application: and/or
(c) closed and/or funded such Mortgage Loan.

 

Owner:
Mortgage IT, or its successor in interest or any successor to the Owner under
this Agreement as herein provided.

 

Pass-Through Transfer:  The sale or transfer of some or all of the
Mortgage Loans by the Owner to a trust to be formed as part of a publicly
issued or privately placed mortgage-backed securities transaction.

 

Person:  Any individual, corporation, partnership,
joint venture, limited liability Servicer, association, joint-stock Servicer,
trust, unincorporated organization, government or any agency or political
subdivision thereof.

 

PMI Policy:  A policy of primary mortgage guaranty
insurance issued by an Insurer.

 

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 and 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.

 

Principal Prepayment
Period:  The month
preceding the month in which the related Remittance Date occurs.

 

Prior Servicer:  All servicers and subservicers, collectively
and individually, other than Owner, which, at any time prior to the applicable
Effective Date, pooled, sold, serviced or subserviced any of the Mortgage
Loans.

 

Privacy Requirements:
Means the obligations imposed by (i) Title V of the Gramm-Leach-Bliley Act, 15
U.S.C. § 6801 et seq.; (ii) the applicable federal regulations implementing
such act and codified at 12 CFR Parts 40, 216, 332,  573, and/or 16 CFR Part 313; (iii) Interagency Guidelines
Establishing Standards For Safeguarding Borrower Information published in final
form on February 1, 2001 (such final guidelines and/or rules the “Interagency
Guidelines”) to establish and maintain an information Security Program; and
(iv) other applicable federal, state and local laws, rules, regulations, and
orders relating to the privacy and security of Customer Information, including
the federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., and similar
state laws.

 

Qualified Depository:  A permissible deposit account or accounts
maintained with (a) GMAC Bank; or (b) a federal or state chartered depository
institution the deposits in which are insured by the FDIC to the applicable
limits and the short-term unsecured debt obligations of which (or, in the case
of a depository institution that is a subsidiary of a holding Servicer, the
short-term unsecured debt obligations of such holding Servicer) are rated A-1
by Standard &

 

7

 

Poor’s Ratings Services
or Prime-1 by Moody’s Investors Service, Inc. (or a comparable rating if
another rating agency is specified by the Owner by written notice to the
Servicer) at the time any deposits are held on deposit therein.

 

Qualified Insurer: A mortgage guaranty insurance Insurer duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Fannie Mae or Freddie Mac.

 

Record Date:  The close of business of the last Business
Day of the month preceding the month of the related Remittance Date.

 

Remittance Date:  The first Business Day of each week
beginning with the first Business Day of the week three weeks following the
Commencement Date..

 

REO Disposition:  The final sale by the Servicer of any REO
Property.

 

REO Disposition Proceeds:  All amounts received with respect to an REO
Disposition pursuant to Section 2.16.

 

REO Property:  A Mortgaged Property acquired by the
Servicer on behalf of the Owner through foreclosure or by deed in lieu of
foreclosure, as described in Section 2.16.

 

Servicer:
GMAC Mortgage Corporation, or its successor in interest or assigns, or any
successor to the Servicer under this Agreement appointed as herein provided.

 

Servicing:              Means the rights, duties and
obligations of Servicer as the servicer of the Mortgage Loans under Applicable
Requirements to administer, collect the payments for the reduction of principal
and application of interest, pay taxes and insurance, remit collected payments,
provide foreclosure services, make Servicing Advances, provide full escrow
administration, and any other obligations required of or for the Mortgage Loans
pursuant to this Agreements together with the right to receive servicing fees,
Float Benefit and any Servicing Activity Fees arising from or connected to the
Mortgage Loans.

 

Servicing Advances:  All customary, reasonable and necessary “out
of pocket” costs and expenses (including reasonable attorney’s fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement or
judicial proceedings, including foreclosures, (c) the management and
liquidation of any REO Property, (d) compliance with the obligations under Section 2.08,
and (e) and other expenses that are the responsibility of the Owner under Section
2.24(b) hereof.

 

Servicing Activity Fees:  All income derived from the Mortgage Loans,
other than payments of principal, interest or Escrow Payments, including,
insufficient fund fees, conversion fees, satisfaction fees,  assumption fees, release fees, foreclosure
fees, and all other incidental fees and charges received by the Servicer.

 

8

 

Servicing Fee:  With respect to each Mortgage Loan, the fee
the Owner shall pay to the Servicer, as set forth on Exhibit E attached hereto and
made a part hereof as more particularly described in Section 4.03 of this
Agreement.

 

Servicing File:  With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Custodian and copies of the
Mortgage Loan Documents listed in the Custodial Agreement the originals of
which are delivered to the Custodian pursuant to Section 5.05.

 

Stated Principal Balance:  As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to
payments of principal due on or before such date, whether or not received,
minus (ii) all amounts previously distributed to the Owner with respect to the
related Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.

 

Term Sheet:  Means the form (substantially in the form
set forth on Exhibit E) specifying the additional terms and conditions
relating either to new Mortgage Loans to be delivered by Owner to be serviced
by Servicer to be serviced by Servicer under this Agreement after the initial
Effective Date as to which terms and conditions the Parties must mutually
agree.

 

Transfer Instructions:  The instructions set forth on Exhibit F,
detailing the procedures pursuant to which Servicer and Owner shall effect the
assumption of the servicing obligations by Servicer, as the same may be amended
or supplemented from time to time with respect to Mortgage Loans delivered on
or after the initial Effective Date to be serviced by Servicer under this
Agreement.

 

Whole Loan Transfer:  Any sale or transfer of some or all of the
Mortgage Loans by the Owner to a third party, which sale or transfer is not a
Pass-Through Transfer.

 

9

 

ARTICLE II

ADMINISTRATION AND SERVICING OF MORTGAGE LOANS

 

Section
2.01         Servicer to Act as Servicer.  The Servicer, as an independent contractor,
shall service and administer the Mortgage Loans and shall have full power and
authority, acting alone or through the delegation of duties to third party
servicing providers, to do any and all things in connection with such servicing
and administration which the Servicer may deem necessary or desirable,
consistent with the terms of this Agreement and with Applicable Requirements
and Servicer may conclusively rely upon the New Loan Data Files, Mortgage
Documents and related books, records and data furnished to it by or on behalf
of Owner, including without limitation, information regarding the presence of
hazard and flood insurance policies.

 

From and after the initial Effective Date, the
Servicer shall assume responsibility under this Agreement to service and
administer additional Mortgage Loans upon the delivery, in accordance with the
Transfer Instructions, of the related New Loan Data File and all related
Mortgage Loan documentation by the Owner provided that any new Mortgage Loans
that the Owner desires to make subject to this Agreement meet the Eligibility
Criteria then in effect.  The Owner
shall provide the New Loan Data File for each Mortgage Loan to the Servicer
promptly upon purchase or origination of the Mortgage Loan by the Owner, and in
no event later than five (5) days before the Servicer is expected to perform
servicing on that Mortgage Loan.  The Owner
shall notify the Servicer within two (2) Business Days, in writing, of any
changes in the information contained in the New Loan Data File.  The Owner agrees to provide the Servicer,
within two (2) Business Days after the Servicer’s request, copies of the
Mortgage Note, the Mortgage or any other documents the Owner has with respect
to a Mortgage Loan that the Servicer deems reasonably necessary in connection
with its performance of the servicing of said Mortgage Loan.

 

Consistent with
the terms of this Agreement and subject to consent from the Owner, the Servicer
may waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer’s reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Owner. Unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of the
Servicer, imminent, the Servicer shall not permit any modification with respect
to any Mortgage Loan. Without limiting the generality of the foregoing, the
Servicer shall continue, and is hereby authorized and empowered, to execute and
deliver on behalf of itself and the Owner, all instruments of satisfaction or
cancellation, or of partial or full release, discharge and all other comparable
instruments, with respect to the Mortgage Loans and with respect to the
Mortgaged Properties. Owner shall provide Servicer with an appointment of
officers substantially in the form set forth on Exhibit G, for the
limited purpose of enabling Servicer to service and to execute assignments,
trustee substitutions, release and similar documents and to enable Servicer to
perform its responsibilities hereunder. 
If requested by Owner, Servicer shall assist Owner in the performance of
such responsibilities.

 

10

 

Section
2.02         Liquidation of Mortgage Loans.  In the event that any payment due
under any Mortgage Loan and not postponed pursuant to Section 2.01 is not paid when
the same becomes due and payable, or in the event the Mortgagor fails to
perform any other covenant or obligation under the Mortgage Loan and such
failure continues beyond any applicable grace period, the Servicer shall take
such action as (1) shall be consistent with Accepted Servicing Practices, (2)
the Servicer shall determine prudently to be in the reasonable interest of the
Owner, and (3) is consistent with any related PMI Policy.  In the event that any payment due under any
Mortgage Loan is not postponed pursuant to Section 2.01 and remains delinquent for a
period of 90 days or any other default continues for a period of 90 days beyond
the expiration of any grace or cure period, the Servicer shall commence foreclosure
proceedings. In such connection, the Servicer shall from its own funds make all
necessary and proper Servicing Advances, provided, however, that the Servicer
shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration or preservation of any Mortgaged
Property, unless it shall determine (a) that such preservation, restoration
and/or foreclosure will increase the proceeds of liquidation of the Mortgage
Loan to Owner after reimbursement to itself for such expenses and (b) that such
expenses will be recoverable by it either through Liquidation Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 2.05) or through Insurance Proceeds
(respecting which it shall have similar priority).

 

Notwithstanding anything to the contrary contained
herein, in connection with a foreclosure or acceptance of a deed in lieu of
foreclosure, (a) the Servicer shall have no obligation to commence foreclosure
proceedings or obtain title to Mortgage Property securing a Mortgage Loan as a
result of or in lieu of foreclosure or otherwise if (i) such Mortgage Loan is
subject to the HOEPA or any regulations related thereto, (ii) such Mortgage
Loan qualifies as a High Cost Loan under a state anti-predatory lending law or
regulation, or (iii) the Servicer determines, in its reasonable judgment, that
foreclosure and/or acquisition of title to Mortgaged Property would expose it
to material risk or liability pertaining to the acts, errors or omissions of
the Originator or Prior Servicers and (b) in the event the Servicer has
reasonable cause to believe that a Mortgaged Property is contaminated by
hazardous or toxic substances or wastes, or if the Owner otherwise requests an environmental
inspection or review of such Mortgaged Property, such an inspection or review
is to be conducted by a qualified inspector. 
The cost for such inspection or review shall be borne by the Owner.  Upon completion of the inspection or review,
the Servicer shall promptly provide the Owner with a written report of the
environmental inspection.

 

After reviewing the environmental inspection report,
the Owner shall determine how the Servicer shall proceed with respect to the
Mortgaged Property.  In the event (a)
the environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the Owner
directs the Servicer to proceed with foreclosure or acceptance of a deed in
lieu of foreclosure, the Servicer shall be reimbursed for all reasonable costs
associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Custodial Account pursuant to Section 2.05 hereof.  In the event the Owner directs the Servicer
not to proceed with foreclosure

 

11

 

or acceptance of a deed
in lieu of foreclosure, the Servicer shall be reimbursed for all Servicing
Advances made with respect to the related Mortgaged Property from the Custodial
Account pursuant to Section 2.05 hereof.

 

Section
2.03         Collection of Mortgage Loan Payments.  Continuously from the date hereof until the
principal and interest on all Mortgage Loans are paid in full, the Servicer
shall proceed diligently to collect all payments due under each of the Mortgage
Loans when the same shall become due and payable and shall take special care in
ascertaining and estimating Escrow Payments and all other charges that will
become due and payable with respect to the Mortgage Loan and the Mortgaged Property,
to the end that the installments payable by the Mortgagors will be sufficient
to pay such charges as and when they become due and payable.

 

Section
2.04         Establishment of and Deposits to
Custodial Account.  The
Servicer shall segregate and hold all funds collected and received pursuant to
a Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more Custodial Accounts, in the form of
time deposit or demand accounts, titled                            ,
in trust for the Owner and/or subsequent Owners of Mortgage Loans, and various
Mortgagors - P & I.”  The Custodial
Account shall be established with a Qualified Depository. Upon request of the
Owner and within ten (10) days thereof, the Servicer shall provide the Owner
with written confirmation of the existence of such Custodial Account.  Any funds deposited in the Custodial Account
shall at all times be insured to the fullest extent allowed by applicable law.  Funds deposited in the Custodial Account may
be drawn on by the Servicer in accordance with Section 2.05.

 

The Servicer shall deposit in the Custodial Account
within two (2) Business Days of Servicer’s receipt, and retain therein, the
following collections received by the Servicer and payments made by the
Servicer after the Cut-off Date, other than payments of principal and interest
due on or before the Cut-off Date, or received by the Servicer prior to the
Cut-off Date but allocable to a period subsequent thereto:

 

(i)            all
payments on account of principal on the Mortgage Loans, including all Principal
Prepayments;

 

(ii)           all
payments on account of interest on the Mortgage Loans adjusted to the Mortgage
Loan Remittance Rate;

 

(iii)          all
Liquidation Proceeds;

 

(iv)          all
Insurance Proceeds including amounts required to be deposited pursuant to Section 2.10
(other than proceeds to be held in a suspense account and applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 2.14), Section 2.11 and Section 2.15;

 

(v)           all
Condemnation Proceeds which are not applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with Section 2.14;

 

12

 

(vi)          any
amount required to be deposited in the Custodial Account pursuant to Section 4.01
or 4.02;

 

(vii)         any
amounts required to be deposited by the Servicer pursuant to Section 2.10
in connection with the deductible clause in any blanket hazard insurance
policy; and

 

(viii)        any
amounts received with respect to or related to any REO Property and all REO
Disposition Proceeds pursuant to Section 2.16.

 

The foregoing requirements for deposit into the
Custodial Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of
late payment charges, assumption fees and other Servicing Activity Fees, to the
extent permitted by Section 4.01, need not be deposited by the
Servicer into the Custodial Account. 
Any interest or other Float Benefit paid on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Servicer and the Servicer shall be entitled to retain and withdraw such
interest from the Custodial Account pursuant to Section 2.05.

 

Section
2.05         Permitted Withdrawals From Custodial
Account.  The Servicer
shall, from time to time, withdraw funds from the Custodial Account for the
following purposes:

 

(i)            to
make payments to the Owner in the amounts and in the manner provided for in Section 3.01;

 

(ii)           to
reimburse itself for unreimbursed Servicing Advances, and for any Servicing
Fees, the Servicer’s right to reimburse itself pursuant to this subclause (iii)
with respect to any Mortgage Loan being limited to related Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and such other amounts as
may be collected by the Servicer from the Mortgagor or otherwise relating to
the Mortgage Loan, it being understood that, in the case of any such reimbursement,
the Servicer’s right thereto shall be prior to the rights of Owner;

 

(iii)          to
pay itself interest or other Float Benefit on funds deposited in the Custodial
Account;

 

(iv)          to
reimburse itself for expenses incurred and reimbursable to it pursuant to Section 7.01;

 

(v)           to
pay any amount required to be paid pursuant to Section 2.16 related to any
REO Property, it being understood that, in the case of any such expenditure or
withdrawal related to a particular REO Property, the amount of such expenditure
or withdrawal from the Custodial Account shall be limited to amounts on deposit
in the Custodial Account with respect to the related REO Property;

 

13

 

(vi)          to
reimburse itself for any Servicing Advances or REO expenses after liquidation
of the Mortgaged Property not otherwise reimbursed above;

 

(vii)         to
remove funds inadvertently placed in the Custodial Account by the Servicer; and

 

(viii)        to
clear and terminate the Custodial Account upon the termination of this
Agreement.

 

In the event that the Custodial Account is interest
bearing, on each Remittance Date, the Servicer shall withdraw all funds from
the Custodial Account except for those amounts which, pursuant to Section 3.01,
the Servicer is not obligated to remit on such Remittance Date.  The Servicer may use such withdrawn funds
only for the purposes described in this Section 2.05.

 

Section
2.06         Establishment of and Deposits to
Escrow Account.  The
Servicer shall segregate and hold all funds collected and received pursuant to
a Mortgage Loan constituting Escrow Payments separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Escrow Accounts, in the form of time deposit or demand accounts, titled, “                                            ,
in trust for the Owner and/or subsequent Owners Residential Mortgage Loans, and
various Mortgagors - T & I.”  The
Escrow Accounts shall be established with a Qualified Depository, in a manner
which shall provide maximum available insurance thereunder. Upon request of the
Owner and within ten (10) days thereof, the Servicer shall provide the Owner
with written confirmation of the existence of such Escrow Account.  Funds deposited in the Escrow Account may be
drawn on by the Servicer in accordance with Section 2.07.

 

The Servicer shall deposit in a suspense account on a
daily basis, and retain therein all amounts representing Insurance Proceeds or
Condemnation Proceeds which are to be applied to the restoration or repair of
any Mortgaged Property. The suspense account shall be established with a
Qualified Depository, in a manner which shall provide maximum available
insurance thereunder.

 

The Servicer shall deposit in the Escrow Account or
Accounts within two (2) Business Days of Servicer’s receipt, and retain
therein:

 

(i)            all
Escrow Payments collected on account of the Mortgage Loans, for the purpose of
effecting timely payment of any such items as required under the terms of this
Agreement;

 

(ii)           all
Insurance Proceeds including amounts required to be deposited pursuant to Section 2.10
(other than proceeds to be held in a suspense account and applied to the
restoration or repair of the Mortgaged Property or released to the Mortgagor in
accordance with Section 2.14); and

 

(iii)          all
payments on account of Buydown Funds.

 

14

 

The Servicer shall make withdrawals from the Escrow
Account only to effect such payments as are required under this Agreement, as
set forth in Section 2.07.  The
Servicer shall be entitled to retain any interest or other Float Benefits paid
on funds deposited in the Escrow Account by the depository institution, other
than interest on escrowed funds required by law to be paid to the
Mortgagor.  To the extent required by
law, the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account may be non-interest bearing or that
interest paid thereon is insufficient for such purposes.

 

Section
2.07         Permitted Withdrawals From Escrow
Account.  Withdrawals
from the Escrow Account or Accounts may be made by the Servicer only:

 

(i)                                     to
effect timely payments of ground rents, taxes, assessments, water rates,
mortgage insurance premiums, condominium charges, fire and hazard insurance
premiums or other items constituting Escrow Payments for the related Mortgage;

 

(ii)                                  to
reimburse the Servicer for any Servicing Advances made by the Servicer pursuant
to Section
2.08 with respect to a related Mortgage Loan, but only from amounts
received on the related Mortgage Loan which represent late collections of
Escrow Payments thereunder;

 

(iii)                               to
refund to any Mortgagor any funds found to be in excess of the amounts required
under the terms of the related Mortgage Loan;

 

(iv)                              for
transfer to the Custodial Account and application to reduce the principal
balance of the Mortgage Loan in accordance with the terms of the related
Mortgage and Mortgage Note;

 

(v)                                 for
application to the restoration or repair of the Mortgaged Property in
accordance with the procedures outlined in Section 2.14;

 

(vi)                              to
remove funds inadvertently placed in the Escrow Account by the Servicer;

 

(vii)                           to
remit to Owner payments on account of Buydown Funds as applicable; and

 

(viii)                        to clear
and terminate the Escrow Account on the termination of this Agreement.

 

Section
2.08         Payment of Taxes, Insurance and
Other Charges.  With
respect to each Mortgage Loan, the Servicer shall maintain accurate records
reflecting the status of ground rents, taxes, assessments, water rates, sewer
rents, and other charges which are or may become a lien upon the Mortgaged
Property and the status of PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or

 

15

 

termination date,
employing for such purpose deposits of the Mortgagor in the Escrow Account
which shall have been estimated and accumulated by the Servicer in amounts
sufficient for such purposes, as allowed under the terms of the Mortgage.  The Servicer assumes full responsibility for
the timely payment of all such bills and shall effect timely payment of all
such charges irrespective of each Mortgagor’s faithful performance in the
payment of same of the making of the Escrow Payments, and the Servicer shall
make advances from its own funds to effect such payments.

 

Section
2.09         Protection of Accounts.   The Servicer may transfer the Custodial
Account or the Escrow Account to a different Qualified Depository from time to
time.

 

Section
2.10         Maintenance of Hazard Insurance.    The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance such that all buildings upon the Mortgaged Property are
insured by an insurer acceptable to Fannie Mae or Freddie Mac against loss by
fire, hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is located, in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the
improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer.  In
the event a hazard insurance policy shall be in danger of being terminated, or
in the event the Insurer shall cease to be acceptable to Fannie Mae or Freddie
Mac, the Servicer shall notify the Owner and the related Mortgagor, and shall
use commercially reasonable efforts, as permitted by applicable law, to obtain
from another qualified Insurer a replacement hazard insurance policy
substantially and materially similar in all respects to the original
policy.  In no event, however, shall a
Mortgage Loan be without a hazard insurance policy at any time, subject only to
Section
2.11 hereof.

 

If the related Mortgaged Property is located in an
area identified by the Flood Emergency Management Agency as having special
flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect with a generally acceptable
insurance carrier acceptable to Fannie Mae or Freddie Mac in an amount
representing coverage equal to the lesser of (i) the minimum amount required,
under the terms of coverage, to compensate for any damage or loss on a
replacement cost basis (or the unpaid balance of the mortgage if replacement
cost coverage is not available for the type of building insured) and (ii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended.

 

If a Mortgage is secured by a unit in a condominium
project, the Servicer shall verify that the coverage required of the owner’s
association, including hazard, flood, liability, and fidelity coverage, is
being maintained in accordance with then current Fannie Mae requirements, and
secure from the owner’s association its agreement to notify the Servicer
promptly of any change in the insurance coverage or of any condemnation or
casualty loss that may have a material effect on the value of the Mortgaged
Property as security.

 

In the event that any Owner or the Servicer shall
determine that the Mortgaged Property should be insured against loss or damage
by hazards and risks not covered by the insurance required to be maintained by
the

 

16

 

Mortgagor pursuant to the
terms of the Mortgage, the Servicer shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor’s attention the desirability of protection of the Mortgaged Property.

 

All policies required hereunder shall name the
Servicer as loss payee and shall be endorsed with standard or union mortgagee
clauses, without contribution, which shall provide for at least 30 days prior
written notice of any cancellation, reduction in amount or material change in
coverage.

 

The Servicer shall not interfere with the Mortgagor’s
freedom of choice in selecting either his or her insurance carrier or agent,
provided, however, that the Servicer shall not accept any such insurance policies
from insurance companies unless such companies are acceptable to Fannie Mae or
Freddie Mac and are licensed to do business in the jurisdiction in which the
Mortgaged Property is located.  The
Servicer shall determine that such policies provide sufficient risk coverage
and amounts, that they insure the property owner, and that they properly
describe the property address.

 

Pursuant to Section 2.04,
any amounts collected by the Servicer under any such policies (other than
amounts to be deposited in the suspense account and applied to the restoration
or repair of the related Mortgaged Property, or property acquired in
liquidation of the Mortgage Loan, or to be released to the Mortgagor, in
accordance with the Servicer’s normal servicing procedures as specified in Section 2.14)
shall be deposited in the Custodial Account subject to withdrawal pursuant to Section 2.05.

 

Section
2.11         Maintenance of Blanket Insurance
Policy.    In the event that the Servicer shall obtain
and maintain a blanket policy insuring against losses arising from fire and
hazards covered under extended coverage on all of the Mortgage Loans, then, to
the extent such policy provides coverage in an amount equal to the amount
required pursuant to Section 2.10 and otherwise complies with
all other requirements of Section 2.10, it shall conclusively be
deemed to have satisfied its obligations as set forth in Section 2.10.  The Servicer shall prepare and make any
claims on the blanket policy as deemed necessary by the Servicer in accordance
with Accepted Servicing Practices.  Any
amounts collected by the Servicer under any such policy relating to a Mortgage
Loan shall be deposited in the Custodial Account subject to withdrawal pursuant
to Section
2.05.  Upon request of any
Owner, the Servicer shall cause to be delivered to such Owner a certified true
copy of such policy and a statement from the insurer thereunder that such
policy shall in no event be terminated or materially modified without 30 days’
prior written notice to such Owner.

 

Section
2.12         Maintenance of Fidelity Bond and
Errors and Omissions Insurance.    The Servicer shall maintain with responsible
companies, at its own expense, a blanket Fidelity Bond and an Errors and
Omissions Insurance Policy, with broad coverage on all officers, employees or
other persons acting in any capacity requiring such persons to handle funds,
money, documents or papers relating to the Mortgage Loans (“Servicer
Employees”).  Any such Fidelity Bond and
Errors and Omissions Insurance Policy shall be in the form of the Mortgage
Banker’s Blanket Bond and shall protect and insure the Servicer against losses,
including forgery,

 

17

 

theft, embezzlement,
fraud, errors and omissions and negligent acts of such Servicer Employees.  Such Fidelity Bond and Errors and Omissions
Insurance Policy also shall protect and insure the Servicer against losses in
connection with the release or satisfaction of a Mortgage Loan without having
obtained payment in full of the indebtedness secured thereby.  No provision of this Section 2.12 requiring such
Fidelity Bond and Errors and Omissions Insurance Policy shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement.  The minimum coverage under
any such Fidelity Bond and Errors and Omissions Insurance Policy shall be at
least equal to the amounts acceptable to Fannie Mae or Freddie Mac.  Upon the request of any Owner, the Servicer
shall cause to be delivered to such Owner a certificate of insurance for such
Fidelity Bond and Errors and Omissions Insurance Policy and a statement from
the surety and the insurer that such Fidelity Bond and Errors and Omissions
Insurance Policy shall in no event be terminated or materially modified without
30 days’ prior written notice to the Owner.

 

Section
2.13         Inspections.  Servicer shall perform inspections on
Mortgaged Property in accordance with the Applicable Requirements.

 

Section
2.14         Restoration of Mortgaged
Property.   The Servicer need not obtain the approval of the
Owner prior to releasing any Insurance Proceeds or Condemnation Proceeds to the
Mortgagor to be applied to the restoration or repair of the Mortgaged Property
if such release is in accordance with Applicable Requirements.  For claims greater than $15,000, at a
minimum the Servicer shall comply with the following conditions in connection
with any such release of Insurance Proceeds or Condemnation Proceeds:

 

(i)  The Servicer shall receive satisfactory
independent verification of completion of repairs and issuance of any required
approvals with respect thereto;

 

(ii)  the Servicer shall take all steps necessary
to preserve the priority of the lien of the Mortgage, including, but not
limited to requiring waivers with respect to mechanics’ and materialmen’s liens;

 

(iii)  the Servicer shall verify that the Mortgage
Loan is not in default; and

 

(iv)  pending repairs or restoration, the Servicer
shall place the Insurance Proceeds or Condemnation Proceeds in a suspense
account.

 

If the Owner is named as an additional loss payee, the
Servicer is hereby empowered to endorse any loss draft issued in respect of
such a claim in the name of the Owner.

 

Section
2.15         Maintenance of PMI Policy;
Claims.    With respect to each Mortgage Loan with an
LTV in excess of 80% and for which a PMI Policy was required and obtained at
origination, the Servicer shall maintain or cause the Mortgagor to maintain in
full force and effect a PMI Policy insuring the portion over 78% until
terminated pursuant to the Homeowners Protection Act of 1998, 12 UCS §4901, et
seq.  In the event that such PMI Policy
shall be terminated other than as required by law, the Servicer shall obtain
from another Qualified Insurer a comparable replacement policy, with a total
coverage equal to the remaining coverage of such

 

18

 

terminated PMI
Policy.  If the insurer shall cease to
be a Qualified Insurer, the Servicer shall determine whether recoveries under
the PMI Policy are jeopardized for reasons related to the financial condition
of such insurer, it being understood that the Servicer shall in no event have
any responsibility or liability for any failure to recover under the PMI Policy
for such reason.  If the Servicer determines
that recoveries are so jeopardized, it shall notify the Owner and the
Mortgagor, if required, and obtain from another Qualified Insurer a replacement
insurance policy.

 

In connection with its activities as servicer, the
Servicer agrees to prepare and present, on behalf of itself and the Owner,
claims to the insurer under any PMI Policy in a timely fashion in accordance
with the terms of such PMI Policy and, in this regard, to take such action as
shall be necessary to permit recovery under any PMI Policy respecting a
defaulted Mortgage Loan.  Pursuant to Section 2.04,
any amounts collected by the Servicer under any PMI Policy shall be deposited
in the Custodial Account, subject to withdrawal pursuant to Section 2.05.

 

Section
2.16         Title, Management and Disposition of
REO Property.   In the event that title to any Mortgaged
Property is acquired in foreclosure or by deed in lieu of foreclosure, the deed
or certificate of sale shall be taken in the name of the Owner, or in the event
the Owner is not authorized or permitted to hold title to real property in the
state where the REO Property is located, or would be adversely affected under
the “doing business” or tax laws of such state by so holding title, the deed or
certificate of sale shall be taken in the name of a nominee for the Owner.  The Person or Persons holding such title
other than the Owner shall acknowledge in writing that such title is being held
as nominee for the Owner.

 

The Servicer shall manage, conserve, protect and
operate each REO Property for the Owner solely for the purpose of its prompt
disposition and sale.  The Servicer,
either itself or through an agent selected by the Servicer, shall manage,
conserve, protect and operate the REO Property in the same manner that it
manages, conserves, protects and operates other foreclosed property for its own
account, and in the same manner that similar property in the same locality as
the REO Property is managed.  The
Servicer shall attempt to sell the same (and may temporarily rent the same for
a period not greater than one year, except as otherwise provided below) on such
terms and conditions as the Servicer deems to be in the reasonable interest of
the Owner.

 

The Servicer shall use commercially reasonable efforts
to dispose of the REO Property as soon as possible and shall sell such REO
Property in any event within one year after title has been taken to such REO
Property, unless the Servicer determines, and gives an appropriate notice to
the Owner to such effect, that a longer period is necessary for the orderly
liquidation of such REO Property.  If a
period longer than one year is permitted under the foregoing sentence and is
necessary to sell any REO Property, the Servicer shall report monthly to the
Owner as to the progress being made in selling such REO Property.

 

The Servicer shall also maintain on each REO Property
fire and hazard insurance with extended coverage in amount which is at least
equal to the maximum insurable value of the improvements which are a part of
such property, liability insurance and, to the extent required and available
under the Flood Disaster Protection Act of 1973, as amended, flood insurance in
the amount required above.

 

19

 

The Servicer shall provide the Owner with an Asset
Plan for each REO Property and the Owner shall 1) consent to such a plan or 2)
if Owner desires the Servicer to revise such a plan, provide the Servicer with
specific changes.  If the Owner does not
respond to the Servicer within three (3) Business Days of its receipt of an
Asset Plan, the Servicer shall consider the Owner’s consent granted.  The disposition of REO Property shall be
carried out by the Servicer in accordance with the Asset Plan.  The proceeds of sale of the REO Property
shall be promptly deposited in the Custodial Account.  As soon as practical thereafter the expenses of such sale shall
be paid and the Servicer shall reimburse itself for any related unreimbursed
Servicing Advances, and unpaid Servicing Fees. On the Remittance Date
immediately following the Principal Prepayment Period in which such sale
proceeds are received the net cash proceeds of such sale remaining in the
Custodial Account shall be distributed to the Owner.

 

The Servicer shall withdraw from the Custodial Account
funds necessary for the proper operation management and maintenance of the REO
Property, including the cost of maintaining any hazard insurance pursuant to Section 2.10
and the fees of any managing agent of the Servicer, or the Servicer
itself.  The Servicer shall make monthly
distributions on each Remittance Date to the Owner of the net cash flow from
the REO Property (which shall equal the revenues from such REO Property net of
the expenses described in this Section 2.16 and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).

 

Section
2.17         Real Estate Owned Reports.   Together with the statement furnished pursuant to Section 3.02,
the Servicer shall furnish to the Owner on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Servicer’s efforts in
connection with the sale of such REO Property and any rental of such REO
Property incidental to the sale thereof for the previous month.  That statement shall be accompanied by such
other information as the Owner shall reasonably request.

 

Section
2.18         Liquidation Reports.    Upon the foreclosure sale of any Mortgaged Property or the
acquisition thereof by the Owner pursuant to a deed in lieu of foreclosure, the
Servicer shall submit to the Owner a liquidation report with respect to such
Mortgaged Property.

 

Section
2.19         Reports of Foreclosures and
Abandonments of Mortgaged Property.   Following the
foreclosure sale or abandonment of any Mortgaged Property, the Servicer shall
report such foreclosure or abandonment as required pursuant to Section 6050J of
the Code.  The Servicer shall file
information reports with respect to the receipt of mortgage interest received
in a trade or business and information returns relating to cancellation of
indebtedness income with respect to any Mortgaged Property as required by the
Code.  Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by the Code.

 

Section
2.20         Application of Buydown Funds.   With respect to each Buydown Mortgage Loan, the Servicer shall
have deposited into the Escrow Account, no later than the last day of the
month, Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to

 

20

 

pay on all Due Dates in
accordance with the terms of the Buydown Agreement, is equal to the full
scheduled Monthly Payments which are required to be paid by the Mortgagor under
the terms of the related Mortgage Note (without regard to the related Buydown
Agreement as if the Mortgage Loan were not subject to the terms of the Buydown
Agreement).  With respect to each
Buydown Mortgage Loan, the Servicer will distribute to the Owner on each
Remittance Date an amount of Buydown Funds equal to the amount that, when added
to the amount required to be paid on such date by the related Mortgagor,
pursuant to and in accordance with the related Buydown Agreement, equals the
full Monthly Payment that would otherwise be required to be paid on such
Mortgage Loan by the related Mortgagor under the terms of the related Mortgage
Note (as if the Mortgage Loan were not a Buydown Mortgage Loan and without
regard to the related Buydown Agreement).

 

If the Mortgagor on a Buydown Mortgage Loan defaults
on such Mortgage Loan during the Buydown Period and the Mortgaged Property
securing such Buydown Mortgage Loan is sold in the liquidation thereof (either
by the Servicer or the insurer under any related Primary Insurance Policy) the
Servicer shall, on the Remittance Date following the date upon which
Liquidation Proceeds or REO Disposition proceeds are received with respect to
any such Buydown Mortgage Loan, distribute to the Owner all remaining Buydown
Funds for such Mortgage Loan then remaining in the Escrow Account.  Pursuant to the terms of each Buydown
Agreement, any amounts distributed to the Owner in accordance with the
preceding sentence will be applied to reduce the outstanding principal balance
of the related Buydown Mortgage Loan. 
If a Mortgagor on a Buydown Mortgage Loan prepays such Mortgage Loan in
it entirety during the related Buydown Period, the Servicer shall be required to
withdraw from the Escrow Account any Buydown Funds remaining in the Escrow
Account with respect to such Buydown Mortgage Loan in accordance with the
related Buydown Agreement.  If a
principal prepayment by a Mortgagor on a Buydown Mortgage Loan during the
related Buydown Period, together with any Buydown Funds then remaining in the
Escrow Account related to such Buydown Mortgage Loan, would result in a
principal prepayment of the entire unpaid principal balance of the Buydown
Mortgage Loan, the Servicer shall distribute to the Owner on the Remittance
Date occurring in the month immediately succeeding the month in which such
Principal Prepayment is received, all Buydown Funds related to such Mortgage
Loan so remaining in the Escrow Account, together with any amounts required to
be deposited into the Custodial Account.

 

Section
2.21         Notification of Adjustments.   With respect to each Mortgage Loan, the Servicer shall adjust the
Mortgage Interest Rate on the related Adjustment Date in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note.  The Servicer shall execute and deliver any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate
adjustments.

 

Section 2.22         Transfer Notices.

 

(a)           Within
fifteen (15) days before the Servicer initiates servicing under this Agreement,
the Servicer and the Owner shall provide any required notice to the Mortgagors
of the transactions contemplated herein through notices prepared and delivered
by the Owner in accordance with Applicable Requirements including the Transfer
Instructions.  The parties shall
cooperate to accomplish such notification in a timely and efficient manner as
will best facilitate

 

21

 

the assumption by the
Servicer of the servicing responsibilities. 
The form of the notice to be sent to Mortgagors shall be approved by the
Owner and the Servicer before mailing.

 

(b)           The
Owner shall notify, or cause to be notified, all Insurers, by overnight or
registered mail, that all insurance premium billings for the Mortgage Loans
must be sent to the Servicer. 
Additionally, the Owner shall, prior to the applicable Effective Date,
obtain the written consent of any Insurers that have the contractual right to
approve the assumption of the servicing responsibilities by the Servicer.

 

(c)           The
Owner, with the reasonable assistance of the Servicer, shall notify the
applicable taxing authorities (except as such is handled through the tax
service company) of the assumption of the servicing responsibilities by the
Servicer and include instructions to deliver all notices and tax bills to the
Servicer or the applicable tax service provider, as the case may be, from and
after the Effective Date.

 

(d)           The
Owner shall notify all attorneys who, on the Effective Date, are providing
legal services to or on behalf of the Owner in connection with pending
foreclosure or Litigation involving one or more of the Mortgage Loans, of the
transfer of the servicing rights and obligations with respect to the Mortgage
Loans to the Servicer.

 

(e)           The
costs and expenses related to the joint Mortgagor notice required to be
provided under this Section 2.22(a) shall be split.  All notifications required to be made under
Sections 2.22(b),
(c)
and (d)
shall be paid by the Owner.

 

Section 2.23         Privacy.

 

(a)           Except
in accordance with this Section 2.23(a), the Servicer shall not
disclose any Customer Information to any Person, including, but not limited to,
any of the Servicer’s employees, agents, or contractors, or any third party not
affiliated with the Servicer.  The
Servicer shall disclose such Customer Information only to the extent permitted
by, or necessary to carry out the Servicer’s express obligations and rights
under, this Agreement and for no other purpose.  If and to the extent required by Applicable Requirements, the
Servicer shall ensure that each vendor or other Person to which the Servicer
intends to disclose Customer Information shall, prior to any such disclosure of
information; agree to: (i) keep confidential any such Customer Information; and
(ii) use or disclose such Customer Information only to the extent necessary to
carry out the Servicer’s express obligations and rights under this Agreement.

 

(b)           Without
limiting the scope of the above, the Servicer shall use at least the same
physical and other security measures to protect all Customer Information in the
Servicer’s possession or control, as the Servicer uses for its own confidential
and proprietary information.

 

(c)           Servicer
shall be deemed to be owner of the Servicing for purposes of the Privacy
Requirements.

 

Section 2.24         Losses and Expenses.  

 

(a)           Owner
shall remain responsible, as between Owner and Servicer, for losses related to
Owner’s investment in the Mortgage Loans as distinct from (and which shall not

 

22

 

include) costs and
expenses related to the performance of the servicing duties delegated to
Servicer hereunder, for which Servicer shall be responsible.  Losses of the type referred to above for
which Owner shall remain responsible include, but are not limited to:  credit losses, special hazard insurance
premiums, earthquake losses, losses resulting from the absence or inadequacy of
hazard insurance or flood insurance for a Mortgaged Property in accordance with
Applicable Requirements, foreclosure losses, REO Property losses, and losses in
connection with the Soldiers and Sailors Relief Act.

 

(b)           Within
five  (5) days after receipt of an
invoice from Servicer or such earlier time as provided for in this Agreement,
Owner shall reimburse Servicer for the following expenses (“Expenses”):  (i) any out-of-pocket expense Servicer
incurs with the prior approval of Owner in connection with its servicing and
administrative obligations set forth in this Agreement to the extent such
expense is not ordinary to the servicing function (but not including salaries,
rent and other general operating expenses of Servicer normally classified as
overhead); (ii) expenses that Owner has expressly agreed to pay or be liable
for hereunder; and (iii) expenses incurred in connection with the performance
by Servicer at the request of Owner of any activity that is not specifically
required to be performed by Servicer under this Agreement and is not reasonably
ancillary to any specific requirements of Owner under this Agreement.  Except as otherwise expressly provided in
this Agreement, each party shall pay its own expenses incurred in connection
with the preparation of and performance under this Agreement, including,
without limitation, its own legal fees and expenses of preparing and delivering
the notices, documents, reports, accountings and any other information required
of it hereunder.

 

Out-of-pocket collection Expenses incurred by Servicer
as a Servicing Advance that will be reimbursed by Owner include Expenses
associated with the following: appraisals (pre- and post-foreclosure), title
work, attorney fees (foreclosure, bankruptcy, and other), legal filing fees,
inspection fees (interviews, drive-bys, clean out inspections after vacated,
professional services such as property surveys, repair inspections,
Environmental Protection Agency inspections, etc.), property maintenance
(utilities, lawn care, snow removal, securing costs, repairs, winterization,
removal of debris, clean-up after vacated), condominium expenses (condo fees,
association fees, etc.), insurance (premiums and deductibles), taxes (property,
estate, assessments), photographs, loss drafts, and travel (transportation,
meals, lodging, rental cars). For individual Servicing Advance Expenses in
excess of $5,000, the Servicer shall obtain the Owner’s consent before
incurring such an Expense.  If such
consent is not provided by Owner to Servicer within 3 Business Days, then such
consent will be deemed granted.

 

(c)           Within
five (5) Business Days following receipt of an invoice from Servicer, Owner
shall reimburse Servicer for Servicing Advances that have been outstanding for
five (5) days or more and the interest due on all unreimbursed Servicing
Advances made under this Agreement in an amount equal to the three-month LIBOR
plus one percent (1.00%) basis points, multiplied by the average daily
outstanding balance of all Servicing Advances. 
Each invoice shall be accompanied by appropriate supporting
documentation describing and regarding the amount and nature of such Servicing
Advances made in accordance with Applicable Requirements and this Agreement.

 

23

 

(d)           (i)            Owner shall be solely responsible
for all guaranty fees, credit enhancement fees, custodial fees (and related
shipping costs), trustee fees, and costs to record assignments.

 

(ii)           Except as otherwise expressly set
forth in this Agreement, Servicer shall be solely responsible for the direct
and indirect internal and administrative costs associated with its obligations
as Servicer of the Mortgage Loans hereunder, said costs to include but not be
limited to: personnel, facilities; supplies; mailing and computer system
expenses, regardless of whether Servicer elects to contract with third party
vendors to perform all or any portion of such internal and administrative
functions.

 

(e)           Except
as otherwise provided in this Section, any Litigation related solely to a
single Mortgage Loan (other than Litigation between or among Owner or any of
its Affiliates, on the one hand, and Servicer and any of its affiliates, on the
other hand) shall be managed by Servicer or its counsel on behalf of Owner,
including foreclosure, evictions, quiet title and bankruptcy filings, at
Servicer’sinternal expense with respect to administration of such Litigation
(excluding third party costs for which Owner shall remain responsible), unless
Owner shall elect otherwise with respect to any particular Litigation(s), in
which case Owner shall manage and administer such Litigation(s) on behalf of
Owner or any of its affiliates. 
Servicer shall not manage (on behalf of Owner or any of its affiliates)
any class action claim in which Owner or any of its affiliates is a defendant
or any Litigation based upon a claim brought by Owner unless Owner shall elect
otherwise with respect to any particular Litigation(s), in which case Servicer
shall manage and administer such Litigation(s) on behalf of Owner or any of its
affiliates.  Servicer shall not, without
the prior written consent of Owner, settle or compromise any claim against
Owner arising out of or relating to any such Litigation.  Servicer shall cooperate in obtaining or making
available information or documents respecting Mortgage Loans involved in
Litigation as may be reasonably required by Owner or its counsel.  Owner shall reimburse Servicer for any
out-of-pocket costs that Servicer incurs in connection with any such Litigation.

 

2.25        Tax
Reporting.     Servicer
shall be responsible for the period that it is Servicing under this Agreement
for preparing, filing with the Internal Revenue Service and any state tax
authorities and delivering to the Mortgagors, as appropriate, all required
reports, forms, notices and filings required under applicable law (including,
without limitation, Form 1098, 1099-INT, 1099-MISC, 1099-A, 1099-C) with
respect to the servicing portfolio for calendar year 2003 and thereafter;
provided that Owner shall be responsible for any required reports for the
period from January 1 to the day before the Effective Date.

 

24

 

ARTICLE III

PAYMENTS TO OWNER

 

Section
3.01         Remittances. 
On each Remittance Date the Servicer shall remit by wire transfer of
immediately available funds to the Owner (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section 2.05),
minus (b) any amounts attributable to Monthly Payments collected but due on a
Due Date or Dates subsequent to the first day of the month of the Remittance
Date,  minus (c) any amounts
attributable to Buydown Funds being held in the Custodial Account, which
amounts shall be remitted on the Remittance Date next succeeding the Due Period
for such amounts; and minus (d) Servicing Fees due Servicer.

 

With respect to any remittance received by the Owner
after the second Business Day following the Business Day on which such payment
was due, the Servicer shall pay to the Owner interest on any such late payment
at an annual rate equal to the Libor Rate plus one percent (1.00%), adjusted as
of the date of each change, but in no event greater than the maximum amount
permitted by applicable law.  Such
interest shall be deposited in the Custodial Account by the Servicer on the
date such late payment is made and shall cover the period commencing with the
day following such second Business Day and ending with the Business Day on
which such payment is made, both inclusive. 
Such interest shall be remitted along with the distribution payable on
the next succeeding Remittance Date. 
The payment by the Servicer of any such interest shall not be deemed (i)
Servicer’s extension of time for payment, or (ii) Servicer’s waiver of any
Event of Default.

 

Section
3.02         Statements to Owner. 
Not later than the Remittance Date, the Servicer shall furnish to the
Owner a monthly remittance advice, with a trial balance report attached
thereto, as to the preceding remittance and the period ending on the last day
of the preceding month.

 

Section
3.03         Monthly Advances by Servicer.  The Servicer shall not be required to
advance delinquent monthly payments to the Owner.

 

25

 

ARTICLE IV

GENERAL SERVICING PROCEDURES

 

Section
4.01         Transfers of Mortgaged
Property.  The Servicer shall use commercially
reasonable efforts to enforce any “due-on-sale” provision contained in any
Mortgage or Mortgage Note and to deny assumption by the person to whom the
Mortgaged Property has been or is about to be sold whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
liable on the Mortgage and the Mortgage Note. 
When the Mortgaged Property has been conveyed by the Mortgagor, the
Servicer shall, to the extent it has knowledge of such conveyance, exercise its
rights to accelerate the maturity of such Mortgage Loan under the “due-on-sale”
clause applicable thereto, provided, however, that the Servicer shall not
exercise such rights if prohibited by law from doing so or if the exercise of
such rights would impair or threaten to impair any recovery under the related
PMI Policy, if any.

 

If the Servicer reasonably believes it is unable under
applicable law to enforce such “due-on-sale” clause, the Servicer shall enter
into (i) upon obtaining consent from Owner, an assumption and modification
agreement with the person to whom such property has been conveyed, pursuant to
which such person becomes liable under the Mortgage Note and the original
Mortgagor remains liable thereon or (ii) in the event the Servicer is unable
under applicable law to require that the original Mortgagor remain liable under
the Mortgage Note and the Servicer has the prior consent of the primary
mortgage guaranty insurer, a substitution of liability agreement with the owner
of the Mortgaged Property pursuant to which the original Mortgagor is released
from liability and the Owner of the Mortgaged Property is substituted as
Mortgagor and becomes liable under the Mortgage Note.  If an assumption fee is collected by the Servicer for entering
into an assumption agreement the fee will be retained by the Servicer as additional
servicing compensation.  In connection
with any such assumption, neither the Mortgage Interest Rate borne by the
related Mortgage Note, the term of the Mortgage Loan, the outstanding principal
amount of the Mortgage Loan nor any other materials terms shall be changed
without Owner’s consent.

 

To the extent that any Mortgage Loan is assumable, the
Servicer shall inquire diligently into the credit worthiness of the proposed
transferee, and shall use the underwriting criteria for approving the credit of
the proposed transferee which are used with respect to underwriting mortgage
loans of the same type as the Mortgage Loans. 
If the credit worthiness of the proposed transferee does not meet such
underwriting criteria, the Servicer diligently shall, to the extent permitted
by the Mortgage or the Mortgage Note and by applicable law, accelerate the
maturity of the Mortgage Loan.

 

Section
4.02         Satisfaction of Mortgages
and Release of Mortgage Files. 
Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer shall notify the Owner in the monthly
remittance advice as provided in Section 3.02, and may request the release
of any Mortgage Loan Documents. The Servicer shall obtain discharge of the
related Mortgage Loan as of record within any related time limit required by
applicable law; provided

 

26

 

that the Owner has
provided, or caused to be provided, within a timeframe which allows Servicer to
reasonably comply with this Section 4.02, all necessary documents.  The Servicer shall maintain the Fidelity
Bond and Errors and Omissions Insurance Policy as provided for in Section 2.12
insuring the Servicer against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.

 

Section
4.03         Servicing
Fee.      As
compensation for the services to be performed hereunder in any full calendar
month during the term of this Agreement or, if the term of this Agreement
begins on other than the first day of the calendar month or ends on other than
the last day of a calendar month, for that portion of such first or last
calendar month of the term of this Agreement during which this Agreement is in
force and effect (a “Partial Calendar Month”), Servicer shall earn the total
Monthly Service Per Loan Fee for any Mortgage Loans in existence on the last
day of the calendar month.  In addition,
with respect to each Mortgage Loan in existence on the last day of the calendar
month, Servicer shall receive all other compensation set forth on Exhibit E
attached hereto and made a part hereof. 
In no event shall the Servicing Fee for any month, beginning the sixth
month after the Commencement Date, be less than an aggregate amount of $2,500
(the “Monthly Minimum Fee”).  This
Monthly Minimum Fee shall be calculated by adding together all fees paid for
the month by Owner pursuant to Exhibit E with the exclusion of the
“Program Initiation Fee” specified in Exhibit E and Float Benefit.  The Program Initiation Fee shall be payable
by Owner to Servicer upon execution of this Agreement and made by wire transfer
of immediately available funds.  The
Monthly Service Per Loan Fee as set forth on Exhibit E shall be adjusted
each anniversary of the Effective Date of this Agreement during the Term
hereof.

 

Additional servicing compensation in the form of assumption fees, to
the extent provided in Section 4.01, late payment charges and
Float Benefit shall be retained by the Servicer to the extent not required to
be deposited in the Custodial Account. 
The Servicer shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.

 

Section
4.04         Annual Independent Public
Accountants’
Servicing Report.  On or
before May 31, of each year beginning May 31, 2004, the Servicer, at its
expense, shall cause a firm of independent public accountants which is a member
of the American Institute of Certified Public Accountants to furnish a
statement to each Owner to the effect that such firm has examined certain
documents and records relating to the servicing of the mortgage loans similar
in nature and that such firm is of the opinion that the provisions of this or
similar Agreements have been complied with, and that, on the basis of such
examination conducted substantially in compliance with the Uniform Single
Attestation Program for Mortgage Bankers, nothing has come to their attention
which would indicate that such servicing has not been conducted in compliance
therewith, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement.  By providing Owner a copy of
a Uniform Single Attestation Program Report from their independent public
accountant’s on an annual basis, the Servicer shall be considered to have
fulfilled its obligations under this Section 4.04.

 

27

 

Section
4.05         Right to Examine Servicer Records. 
  The Owner, or
its designee, shall have the right to examine and audit any and all of the
books, records, or other information of the Servicer, whether held by the Servicer
or by another on its behalf, with respect to or concerning this Agreement or
the Mortgage Loans, during business hours or at such other times as may be
reasonable under applicable circumstances, upon reasonable advance notice.  The Owner shall pay its own travel expenses
associated with such examination.

 

28

 

ARTICLE V

POSSESSION OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY
OF DOCUMENTS; SERVICER TO COOPERATE

 

Section
5.01         Provision of Information.    During the term of this Agreement, the
Servicer shall furnish to the Owner such periodic, special, or other reports or
information, and copies or originals of any documents contained in the
Servicing File for each Mortgage Loan provided for herein.  All other special reports or information not
provided for herein as shall be necessary, reasonable, or appropriate with
respect to the Owner or any regulatory agency will be provided at the Owner’s
expense.  All such reports, documents or
information shall be provided by and in accordance with all reasonable
instructions and directions which the Owner may give.

 

Section
5.02         [Reserved]

 

Section
5.03         Possession of Mortgage
Files; Maintenance of Servicing Files.    The contents of each Mortgage File not
delivered to the Custodian are and shall be held in trust by the Servicer for
the benefit of the Owner as the owner thereof. 
The Servicer shall maintain a Servicing File consisting of a copy of the
contents of each Mortgage File and the originals of the documents in each
Mortgage File not delivered to the Custodian. 
The possession of each Servicing File by the Servicer is at the will of
the Owner for the sole purpose of servicing the related Mortgage Loan, and such
retention and possession by the Servicer is in a custodial capacity only;
provided that Servicer may keep copies of any records it deems necessary for
compliance with any state or federal record retention requirements or as it
deems advisable for use in defending any litigation, action or claim.  The Servicer shall release its custody of
the contents of any Servicing File only in accordance with written instructions
from the Owner, unless such release is required as incidental to the Servicer’s
servicing of the Mortgage Loans.  All such
costs associated with the release, transfer and re-delivery to the Servicer
shall be the responsibility of the Owner.

 

Section
5.04         Books and Records;
Transfers of Mortgage Loans.    All rights arising out of the Mortgage
Loans, including, but not limited to, all funds received on or in connection
with the Mortgage Loans, shall be received and held by the Servicer in trust
for the benefit of the Owner as owner of the Mortgage Loans, and any record
title to the related Mortgages that the Servicer may have or acquire shall be
for the sole purpose of facilitating the servicing and the supervision of the
servicing of the Mortgage Loans.

 

The Servicer shall be responsible for maintaining, and
shall maintain, a complete set of books and records for each Mortgage Loan
which shall be marked clearly to reflect the ownership of each Mortgage Loan by
the Owner.  In accordance with the
Applicable Requirements, the documents are not required for purposes of
realization of Liquidation Proceeds or Insurance Proceeds, documents maintained
by the Servicer may be in the form of microfilm or microfiche or such other
reliable means of recreating original documents, including but not limited to,
optical imagery techniques.

 

29

 

The Servicer shall maintain with respect to each
Mortgage Loan and shall make available for inspection by any Owner or its
designee the related Servicing File during the time the Owner retains ownership
of a Mortgage Loan and thereafter in accordance with Applicable Requirements.

 

The Servicer shall keep at its servicing office books
and records in which, subject to such reasonable regulations as it may
prescribe, the Servicer shall note transfers of Mortgage Loans.  No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms hereof.  For the purposes of this Agreement, the
Servicer shall be under no obligation to deal with any person with respect to
this Agreement or the Mortgage Loans unless the books and records show such
person as the owner of the Mortgage Loan. 
The Owner may, subject to the terms of this Agreement, sell and transfer
one or more of the Mortgage Loans, provided, however, that in no
event shall there be more than [four] Persons at any given time having the
status of “Owner” hereunder.  The Owner
also shall advise the Servicer of the transfer.  Upon receipt of notice of the transfer, the Servicer shall mark
its books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Owner from its obligations hereunder
with respect to the Mortgage Loans sold or transferred.  If the Servicer receives notification of a
transfer less than five (5) Business Days before the last calendar day of the
month, the Servicer’s duties to remit and report as required by Section 3.02
shall begin with the next Due Period.

 

Section
5.05         Custodial Agreement;
Delivery of Documents.  The Servicer
shall forward to the Custodian original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with Section 2.01 or 4.01 within one (1) week of their
execution, provided, however, that the Servicer shall provide the Custodian
with a certified true copy of any such document submitted for recordation
within ten (10) days of its execution, and shall provide the original of any
document submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the original
within sixty days of its submission for recordation.

 

30

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

Section
6.01         General Representations
and Warranties.    Each of the Servicer and Owner hereby represents and warrants to
the other that, as of the initial Effective Date:

 

(a)           Due
Organization and Authority.  It is a
corporation duly organized, validly existing and in good standing under the
laws of the state of incorporation and has all licenses necessary to carry on
its business as now being conducted and is licensed, qualified and in good
standing in each state where a Mortgaged Property is located if the laws of
such state require licensing or qualification in order to conduct business of
the type conducted by it, and in any event it is in compliance with the laws of
any such state to the extent necessary to ensure the enforceability of the
related Mortgage Loan and the servicing of such Mortgage Loan in accordance
with the terms of this Agreement; it has the full corporate power and authority
to execute and deliver this Agreement and to perform in accordance herewith;
the execution, delivery and performance of this Agreement by it and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of it; and all requisite corporate action has been taken by it to
make this Agreement valid and binding upon it in accordance with its terms;

 

(b)           No
Conflicts.  Neither the execution
and delivery of this Agreement, or 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 its terms,
articles of incorporation or by-laws or any legal restriction or any agreement
or instrument to which it is now a party or by which it is bound, or constitute
a default or result in the violation of any law, rule, regulation, order,
judgment or decree to which it or its property is subject, or, in the case of
the Servicer only, impair the ability of the Owner to realize on the Mortgage
Loans, or impair the value of the Mortgage Loans;

 

(c)           Ability
to Service.  In the case of the
Servicer only, the Servicer is an approved seller/servicer of conventional
residential mortgage loans for Fannie Mae or Freddie Mac, with the facilities,
procedures, and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans.  The Servicer is a HUD approved mortgagee.

 

(d)           No
Litigation Pending.  There is no
action, suit, proceeding or investigation pending or threatened against it
which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of it, or in any material impairment of the right or
ability of the it to carry on its business substantially as now conducted, or
in any material liability on the part of it, or which would draw

 

31

 

into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be contemplated herein, or which
would be likely to impair materially the ability of it to perform under the
terms of this Agreement;

 

(e)           No
Consent Required.  No consent,
approval, authorization or order of any court or governmental agency or body is
required for the execution, delivery and performance by it of or compliance by
it with this Agreement, or if required, such approval has been obtained prior
to the applicable Effective Date; and

 

(f)            Selection
Process.  As to the Owner only, the
selection of the Mortgage Loans to be serviced by the Servicer pursuant to this
Agreement was not made in a manner so as to affect adversely the interests of
the Servicer.

 

Section
6.02         Representations, Warranties and Covenants of Owner
Regarding Individual Mortgage Loans.  As to each Mortgage Loan, the Owner hereby represents, warrants
and covenants to the Servicer that as of the applicable Effective Date:

 

(a)           Mortgage
Loans as Described.  The information
set forth in the Mortgage Loan Schedule attached hereto as Exhibit A and the information
contained on the electronic data file delivered to the Servicer is true and correct.

 

(b)           Delivery
of Books and Records.  Owner will,
on or before the applicable Effective Date, deliver, or cause to be delivered,
to the Servicer or the Custodian, as applicable, all of the books, records,
data, files and Mortgage Loan Documents, including records on microfiche or its
equivalent, reasonably required by the Servicer to document and service each
Mortgage Loan; such books, records, data, files and documents contain all of
the items (including but not limited to hazard insurance policies, flood
insurance policies and private mortgage insurance policies) which are required
by the Applicable Requirements to service the Mortgage Loans; are true,
accurate and complete in all material respects; and it is reasonable for
Servicer to rely thereon.

 

(c)           Flood
Insurance.  If any of the Mortgage
Loans are secured by Mortgaged Properties located in Federal Emergency
Management Agency designated flood areas, then (to the extent required by
Applicable Requirements) flood insurance policies are or will be in full force
and effect in the amounts required by Investors under Applicable Requirements
or are insured through Owner’s “gap coverage” flood insurance policy as of the
applicable Effective Date.

 

(d)           Hazard
Insurance.  As of the applicable
Effective Date, all Mortgaged Properties are and will be insured against fire
and have extended coverage insurance in the amounts required by Fannie Mae
under Applicable Requirements; all insurance premiums on such insurance
policies have been or will have been paid in a timely manner; and there have
been or will have been no fire losses on the Mortgaged Properties where Owner’s
estimate of loss is materially greater than the net recovery from the fire
insurance carrier.  To

 

32

 

Owner’s knowledge, there have been no fire losses on
the Mortgaged Properties as to which there is a pending coinsurance claim.

 

(e)           No
Litigation.  There is not pending
or, to Owner’s actual knowledge, threatened Litigation, or any order, injunction,
settlement or decree outstanding, against or relating to the Mortgage Loans or
servicing thereof that could materially adversely affect the servicing of the
Mortgage Loans, the Mortgage Loans or the performance by Owner or Servicer of
their respective obligations under this Agreement.  No Mortgagor is a named plaintiff in any class action lawsuit.

 

(f)            Tax
Service/Flood Service.  Servicer
shall put into place a valid, fully paid, freely transferable, life of the loan
tax service contract and flood service contract as of the Effective Date.  Owner shall reimburse Servicer, for any
costs or expenses incurred to obtain such contracts.

 

(g)           Application
of Payments.  As of the applicable
Effective Date, all calculations required to be made by the Owner or Prior
Servicers with respect to the amount of principal, interest, escrow payments
and other amounts due and owing by a Mortgagor from time to time under each
Mortgage Loan have been made in compliance with all Applicable Requirements.  All invoices transmitted to the Mortgagors
by the Owner or Prior Servicers for principal, interest, escrow payments and
all other amounts due and payable under each Mortgage Loan have been prepared,
and the funds collected from the Mortgagors have been applied for the payment of
such amounts, in compliance with all Applicable Requirements.

 

(h)           Compliance
with Applicable Laws.   Any and all
requirements of any federal, state or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
Mortgage Loan have been satisfied.

 

(i)            High
Cost Loans.  No Mortgage Loan is a
High Cost Loan or subject to HOEPA.

 

33

 

ARTICLE VII

THE SERVICER

 

Section 7.01         Indemnification; Third Party
Claims.  

 

(a)           The Servicer shall indemnify the
Owner, its Affiliates and their respective officers, directors, employees and
agents and hold each of such persons harmless from and against any and all
claims and Damages that the Owner and such persons may sustain resulting from
or related to the failure of the Servicer to perform its duties in compliance
with the terms of this Agreement and for any breach of any representation or
warranty of the Servicer contained herein. 
The Servicer immediately shall notify the Owner if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans, assume (with
the prior written consent of the Owner and with counsel reasonably satisfactory
to the Owner) the defense of any such claim and pay all reasonable expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against the Owner or any
other indemnified Person in respect of such claim, but failure to so notify the
Owner and such other indemnified Persons shall not limit its obligations
hereunder.  The Servicer agrees that it
will not enter into any settlement of any such claim without the consent of the
Owner and such other indemnified Person unless such settlement includes an
unconditional release of the Owner and such other indemnified Person from all
liability that is the subject matter of such claim.

 

(b)           The Owner shall indemnify the
Servicer, its Affiliates, and their respective officers, directors, employees
and agents and hold each of such Persons harmless from and against any and all
claims and Damages that Servicer or such Persons may sustain resulting from or
related to the failure of the Owner to perform its duties in compliance with
the terms of this Agreement and for breach of any representation or warranty of
the Owner contained herein.  The Owner
shall immediately notify the Servicer if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans, assume (with the prior written
consent of the Servicer and with counsel reasonably satisfactory to the
Servicer) the defense of any such claim and pay all reasonable expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against Servicer or such
other indemnified Person in respect of such claim but failure to so notify the
Servicer and such other indemnified Person shall not limit its obligations
hereunder.  The Owner agrees that it
will not enter into any settlement of any such claim without the consent of the
Servicer and such other indemnified Person unless such settlement includes an
unconditional release of the Servicer and such other indemnified Person from
all liability that is the subject matter of such claim.

 

(c)           In addition to the indemnification
set forth in Section 7.01(b) hereof, the Owner shall indemnify and hold
Servicer harmless from and against any Damages resulting from or related to:

 

(1)           any
failure of the Owner, any Prior Servicer or the Originator to have complied
with all Applicable Requirements with respect to the origination, purchase,
sale, securitization or servicing of the Mortgage Loans;

 

34

 

(2)           the
Servicer’s compliance with written instructions of the Owner;

 

(3)           any
outstanding Servicing Advance as to which Servicer is not reimbursed in
accordance with Article II hereof;

 

(4)           the
continuation by Servicer of the past practices of the Owner or any Prior
Servicer that fail to comply with Applicable Requirements;

 

(5)           any
failure of Servicer to comply with Applicable Requirements or the requirements
of this Agreement as a result of there being any incomplete or missing Mortgage
Loan Documents, Mortgage Files or Servicing Files as of the applicable
Effective Date;

 

(6)           any
Litigation commenced against Servicer after the applicable Effective Date as a
result of Servicer’s acting as, or status as, servicer of the Mortgage Loans
hereunder, to the extent that such Litigation does not arise out of or result
from Servicer’s breach of any provision of this Agreement;

 

(7) errors in the adjustment, after the applicable
Effective Date but prior to the completion of an ARM Loan audit paid for by
Owner with respect to such ARM Loan, of the interest rate or payments on an ARM
Loan to the extent arising out of an incorrect adjustment of such interest rate
or payments prior to the applicable Effective Date; or

 

(8) any act or omission or other event or circumstance
to the extent occurring or arising prior to the applicable Effective Date and
related to the origination, purchase, sale, securitization or servicing of the
Mortgage Loans.

 

(d)           The
provisions of this Section 7.01 shall survive termination of
this Agreement.

 

Section
7.02         Merger or Consolidation of the
Servicer.  The Servicer
shall keep in full effect its existence, rights and franchises as a
corporation, and shall obtain and preserve its qualification to do business as
a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement.

 

Any person into which the Servicer may be merged or
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Servicer shall be a party, or any Person succeeding
to the business of the Servicer, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided, however, that the successor or surviving Person
shall be an institution which is a Fannie Mae/Freddie Mac-approved Servicer in
good standing.  Furthermore, in the
event the Servicer transfers or otherwise disposes of all or substantially all
of its assets to an affiliate of the Servicer, such affiliate shall satisfy the
condition above, and shall also be fully liable to the Owner for all of the
Servicer’s obligations and liabilities hereunder.

 

35

 

Section
7.03         Limitation on Liability of Servicer
and Others.  Neither the
Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Owner for any action taken or for
refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment, provided, however, that this provision
shall not protect the Servicer or any such person against any breach of
warranties or representations made herein, or failure to perform its
obligations in strict compliance with any standard of care set forth in this
Agreement or any other liability which would otherwise be imposed under this
Agreement.  The Servicer and any
director, officer, employee or agent of the Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. 
The Servicer shall not be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties to service the
Mortgage Loans in accordance with this Agreement and which in its opinion may
involve it in any expense or liability, provided, however, that the Servicer
may, with the consent of the Owner, undertake any such action which it may deem
necessary or desirable in respect to this Agreement and the rights and duties
of the parties hereto.  In such event,
the Servicer shall be entitled to reimbursement from the Owner of the
reasonable legal expenses and costs of such action.

 

36

 

ARTICLE VIII

REMOVAL OF MORTGAGE LOANS FROM AGREEMENT

 

Servicer
acknowledges and the Owner agrees that with respect to some or all of the
Mortgage Loans, the Owner may effect one or more Whole Loan Transfers.  Servicer shall reasonably cooperate with the
Owner in connection with any Whole Loan Transfer contemplated by the Owner
pursuant to this Section, provided, however, that under no circumstances and in
no event shall such cooperation include any act of Servicer or any event
affecting Servicer which would materially increase Servicer’s liabilities or
obligations beyond those liabilities and obligations contained in this
Agreement (excluding the obligations and liabilities contained in this
Section). Owner will provide Servicer with at least 10 days notice prior to any
sale of any Mortgage Loan and at least 30 days notice prior to the expected
transfer date related to the sale of any Mortgage Loan.  Servicer shall have no obligation to enter
into and/or deliver any agreements or agreement-related documents in connection
with such Whole Loan Transfer other than as required pursuant to its obligation
to service the loans hereunder in accordance with Accepted Servicing
Practices.  Notwithstanding anything
contained herein to the contrary, Servicer shall have no obligation to make any
representations or warranties in connection with any such Whole Loan
Transfer.   Servicer’s inability to
cooperate with Owner based on late delivery of such notice shall result in no
liability to Servicer. Other than recognizing the new owner of the Mortgage
Loans and remitting amounts previously due Owner to such new owner, the Parties
agree that the Servicer will continue to service the Mortgage Loans on behalf
of the new owner in accordance with this Agreement and Servicer shall be under
no obligation to do otherwise. The Owner hereby agrees to reimburse Servicer
for any and all out of pocket expenses incurred by Servicer in connection with
such a Whole Loan Transfer.  For any
Whole Loan Transfer for which the servicing is to be performed by a party other
than Servicer, Owner shall pay Servicer the de-boarding fee specified in
Exhibit E, exclusive of out of pocket expenses that be may incurred. In
connection with any Whole Loan Transfer, Servicer shall not be liable for any
information requested by Owner for inclusion in any disclosure document.  Servicer shall have no obligation for any
expense incurred by any other Party with respect to any Whole Loan Transfer
(including, without limitation, expenses associated with the Owner’s assigning
its interest in a Mortgage Loan to another party, the transfer of existing tax
and/or flood contracts or file delivery). 
The Owner shall defend, indemnify and otherwise hold Servicer harmless
from and against any and all liability arising out of such Whole Loan
Transfer.  Any cooperation, from
Servicer in connection with any Whole Loan Transfer contemplated by this
Section shall not be deemed to include delivery of legal opinions or other
information which would increase the liabilities or obligations of Servicer. It
is understood and agreed by Owner that the right to effectuate such Whole Loan
Transfer as contemplated by this Section is limited to the Owner.

 

All Mortgage Loans
not sold or transferred pursuant to a Whole Loan Transfer shall be subject to
this Agreement and shall continue to be serviced in accordance with the terms
of this Agreement and with respect thereto this Agreement shall remain in full
force and effect.  Owner shall not
effectuate any Pass-Through Transfers.

 

37

 

ARTICLE IX

DEFAULT

 

Section 9.01                            Events of Default.    Each of the following shall constitute an Event of Default on the
part of the applicable Party:

 

(i)                                     any
failure by a Party to remit to the other Party any payment required to be made
under the terms of this Agreement which continues unremedied for a period of
five days after the date upon which written notice of such failure, requiring
the same to be remedied, shall have been given to such Party; or

 

(ii)                                  failure
by either Party duly to observe or perform in any material respect any other of
the covenants or agreements on the part of such Party set forth in this
Agreement or in the Custodial Agreement which continues unremedied for a period
of 90 days after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to such Party or by the
Custodian; or

 

(iii)                               a
decree or order of a court or agency or supervisory authority having
jurisdiction for the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, including bankruptcy, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against a Party and such
decree or order shall have remained in force undischarged or unstayed for a
period of 60 days; or

 

(v)                                 a
Party shall consent to the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Party or of or
relating to all or substantially all of its property; or

 

(vi)                              the
Party shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency, bankruptcy
or reorganization statute, make an assignment for the benefit of its creditors,
voluntarily suspend payment of its obligations or cease its normal business
operations for three Business Days; or

 

(vii)                           with
respect to Servicer only, the Servicer ceases to meet the qualifications of a
Fannie Mae/Freddie Mac servicer and such approvals are not reinstated within
thirty (30) days; or

 

(viii)                        failure by
a Party to maintain the material licenses to do business in any jurisdiction
where the Mortgaged Property is located, but only to the extent such
non-qualification materially and adversely affects such Party’s ability to
perform its obligations hereunder.

 

38

 

Section 9.02                            Waiver of Defaults.  By a written notice, the non-breaching Party
may waive any default by the breaching Party in the performance of its
obligations hereunder and its consequences. 
Upon any waiver of a past default, such default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. 
No such waiver shall extend to any subsequent or other default or impair
any right consequent thereon except to the extent expressly so waived.

 

39

 

ARTICLE X

TERMINATION

 

Section 10.01                     Termination.  The term of this Agreement shall start on
the Commencement Date and continue until the earlier of (i) five (5) years from
the Commencement Date, (ii) the later of the final payment or other liquidation
(or any advance with respect thereto) of the last Mortgage Loan or the
disposition of any REO Property with respect to the last Mortgage Loan and the
remittance of all funds due hereunder; (iii) mutual consent of the Servicer and
the Owner in writing; or (iv) termination with or without cause under the terms
of this Agreement.  The earlier of  such dates is herein referred to as the
“Stated Termination Date.”  Neither
party shall have any obligation to extend this Agreement beyond the Stated
Termination Date, but if this Agreement has not been terminated earlier, each
party agrees to give the other party at least ninety (90) days’ advance written
notice of its intent not to extend the term of this Agreement.  If not terminated this Agreement shall
automatically be extended for one (1) year on the same terms as are then in
effect and shall thereafter continue to be automatically so extended for one
(1) year terms until one party gives the other party notice at least ninety
(90) days prior to any such automatic renewal date of its election not to so
extend this Agreement.   The termination
of this Agreement pursuant to this Article X shall not release either
party from liability for its own misrepresentation or for any breach by it of
any covenant, agreement or warranty herein prior to such termination.

 

Section 10.02                     Termination
Without Cause.  The Owner may
terminate, at its sole option, any rights the Servicer may have hereunder,
without cause, as provided in this Section 10.02 with respect to one or
more Mortgage Loans (provided however, that Owner shall not adversely select
such Mortgage Loans) upon thirty (30) days prior written notice.  Any such notice of termination shall be in
writing and delivered to the Servicer by registered mail as provided in Section 12.05.  In the event that the Servicer is terminated
pursuant to this Section 10.02, the Owner shall pay the Servicer an amount
equal to (1) the costs and expenses of Servicer to transfer the servicing
rights and obligations with respect to such Mortgage Loans and (2) all
outstanding Servicing Advances and other Servicer expenditures for which
Servicer is entitled to reimbursement hereunder, Servicing Fees and other
compensation. In the event the Owner terminates the rights of Servicer pursuant
to the Agreement in their entirety, then Owner shall pay the Servicer, in
addition to the amounts previously mentioned in this Section 10.02, as
liquidated damages, an amount (the “Termination Fee”) equal to (i) if such
termination occurs in the first twelve months following the Commencement Date,
the Monthly Minimum Fee (as defined in Section 4.03 of this Agreement)
multiplied by the number of months remaining until the first year anniversary
of the Commencement Date or (ii) if such termination occurs in the second
twelve months following the Commencement Date, $1,000 multiplied by the number
of months remaining until the second year anniversary of the Commencement
Date.  If the Owner terminates Servicer subsequent
to the second anniversary following the Commencement Date, Servicer shall not
be entitled to a Termination Fee.

 

Section 10.03                     Termination
With Cause.  So long as an Event of
Default shall have occurred and shall not have been remedied, the non-breaching
Party, by notice in writing to the other Party, may, in addition to whatever
rights such party may have at law or equity to damages,

 

40

 

including injunctive
relief and specific performance, terminate all the rights and obligations of the
breaching Party under this Agreement; provided, however, that any termination
by Servicer in respect of an Owner Event of Default shall be effective  sixty
(60)  days
after the notice of termination or such lesser time as the Owner may require to
find a successor servicer.  Upon written
request from the Owner, the Servicer shall prepare, execute and deliver to a
successor any and all documents and other instruments relating to the Mortgage
Loans, place in such successor’s possession all Mortgage Servicing Files and do
or cause to be done all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, including, but not limited to, the
transfer and endorsement or assignment of the Mortgage Loans and related
documents to the successor at the Servicer’s sole expense if the termination is
based on a Servicer Event of Default or Owner’s sole expense if the termination
is based on an Owner Event of Default. The Servicer agrees to cooperate with
the Owner and such successor in effecting the termination of the Servicer’s
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor for administration by it of all amounts which shall
at the time be credited by the Servicer to the Custodial Account, REO Account
or Escrow Account or thereafter received with respect to the Mortgage Loans.
Notwithstanding the foregoing, Servicer may keep copies of any records it deems
necessary for compliance with any state or federal record retention requirements
or as it deems advisable for use in defending any litigation, action or
claim.  No separate termination fee will
be paid to the Servicer in the event of termination by Owner pursuant to this Section 10.03,
unless due to termination by Servicer upon an Owner Event of Default, in which
case all payment provided for pursuant to Section 10.02 shall be due.  Neither Party shall forfeit any amounts due
to it by virtue of such termination.

 

41

 

ARTICLE XI

MISCELLANEOUS PROVISIONS

 

Section 11.01                     Successor
to Servicer.  Prior to
termination of the Servicer’s responsibilities and duties under this Agreement
pursuant to Sections 9.01, 10.01(ii) or 10.02, the Owner shall, (i)
succeed to and assume all of the Servicer’s responsibilities, rights, duties
and obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 7.02 and which shall succeed
to all rights and assume all of the responsibilities, duties and liabilities of
the Servicer under this Agreement prior to the termination of Servicer’s
responsibilities, duties and liabilities under this Agreement.  In connection with such appointment and
assumption, the Owner may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree, subject
to payment of outstanding amounts due to the Servicer.  In the event that the Servicer’s duties,
responsibilities and liabilities under this Agreement should be terminated
pursuant to the aforementioned sections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor.  The resignation or removal of the Servicer pursuant to the
aforementioned sections shall not become effective until a successor shall be
appointed pursuant to this Section 11.01.

 

Any successor appointed
as provided herein shall execute, acknowledge and deliver to the Servicer and
to the Owner an instrument accepting such appointment, whereupon such successor
shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Servicer, with like effect
as if originally named as a party to this Agreement.  Any termination or resignation of the Servicer or termination of
this Agreement pursuant to Section 9.01, 10.01 or 10.02 shall not affect any
claims that either party may have against the other party arising out of the
such other party’s actions or failure to act prior to any such termination or
resignation.

 

The Servicer shall
deliver promptly to the successor servicer the funds in the Custodial Account
and Escrow Account and all Mortgage Files and related documents and statements
held by it hereunder and the Servicer shall account for all funds and shall
execute and deliver such instruments and do such other things as may reasonably
be required to more fully and definitively vest in the successor all such
rights, powers, duties, responsibilities, obligations and liabilities of the Servicer.
Notwithstanding the foregoing, the Servicer may keep copies of any records it
deems necessary for compliance with any state or federal record retention
requirements or as it deems advisable for use in defending any litigation,
action or claim.

 

Upon a successor’s
acceptance of appointment as such, the Servicer shall notify by mail the Owner
of such appointment in accordance with the procedures set forth in Section 11.05.

 

42

 

Section 11.02                     Amendment.  This Agreement may be amended from time to
time by written agreement signed by the Servicer and the Owner.

 

Section 11.03                     Governing
Law.  This Agreement shall be
construed in accordance with the laws of the Commonwealth of Pennsylvania and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.

 

Each of the Servicer and
the Owner hereby knowingly, voluntarily and intentionally waives any and all
rights it may have to a trial by jury in respect or any litigation based on, or
arising out of, under, or in connection with, this Agreement, or any other
documents and instruments executed in connection herewith, or any course of
conduct, course of dealing, statements (whether oral or written), or actions of
the Servicer or the Owner.  This
provision is a material inducement for the Owner to enter into this Agreement

 

Section 11.04                     Duration of
Agreement.  This Agreement shall
continue in existence and effect until terminated as herein provided.  This Agreement shall continue
notwithstanding transfers of the Mortgage Loans by the Owner.

 

Section 11.05                     Notices.  All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid,
addressed as follows:

 

(i)                                     if
to the Servicer:

 

GMAC Mortgage Corporation

100 Witmer Road

Horsham, PA 19044

Attn: Executive
Vice-President National Loan Administration

 

With a copy to:

 

GMAC Mortgage
Corporation

3451 Hammond Ave.

Waterloo, IA
50702-5345

Attention:  General Manager

Telecopier No.:
319.236.5175

 

With a copy to:

 

GMAC Mortgage
Corporation

100 Witmer Rd.

Horsham, PA 19044

Attention:  General Counsel

Telecopier No.:
215.682.1467

 

43

 

or such other
address as may hereafter be furnished to the Owner in writing by the Servicer;

 

(ii)                                  if
to Owner:

 

Mortgage IT

33 Maiden Lane, 6th
Floor

New York, New
York  10038

Attention:  Mike Zigrossi

Telecopier
No.:  212-651-4674

 

or such other
address as may hereafter be furnished to the Servicer in writing by the Owner;

 

Section 11.06                     Severability
of Provisions.  If any one or
more of the covenants, agreements, provisions or terms of this Agreement shall
be held invalid for any reason whatsoever, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement.

 

Section 11.07                     Relationship
of Parties.  Nothing herein
contained shall be deemed or construed to create a partnership or joint venture
between the parties hereto and the services of the Servicer shall be rendered
as an independent contractor and not as agent for the Owner.

 

Section 11.08                     Execution;
Successors and Assigns.  This
Agreement may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute one
and the same agreement. This Agreement shall inure to the benefit of and be
binding upon the Servicer and the Owner and their respective successors and
assigns.

 

Section 11.09                     Assignment by
Owner.  The Owner shall have the
right, with the prior written consent of the Servicer to assign, in whole or in
part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Owner
hereunder, by executing an Assignment and Assumption Agreement and the assignee
or designee shall accede to the rights and obligations hereunder of the Owner
with respect to such Mortgage Loans.  All
references to the Owner in this Agreement shall be deemed to include its
assignee or designee.

 

Section 11.10                     Solicitation
of Mortgagor.  The Servicer agrees
that, after the initial Effective Date, it will not take any action to solicit
the refinancing of any Mortgage Loan. 
It is understood and agreed that general promotions undertaken by the
Servicer or any affiliate of the Servicer which are not targeted solely to the
Mortgagors, including, without limitation, mass mailings based upon
commercially acquired mailing lists, newspaper, radio, television
advertisements, website ads, monthly account statements or “VRU” recorded
communications or from servicing the refinancing needs of a Mortgagor who,
without solicitation, contacts the Servicer in connection with the refinance of
such Mortgage or Mortgage Loan, shall not

 

44

 

constitute solicitation
under this Section.  Notwithstanding
anything to the contrary, this Section shall not prohibit the Servicer
from soliciting any Mortgagor to provide other services including but not
limited to credit cards, insurance investments and banking related services.

 

Section 11.12                     Time of
Payment.  Unless otherwise
specifically set forth in this Agreement, any amount due to Owner or Servicer
under this Agreement will be due and payable thirty (30) days following receipt
by the paying Party of the invoice from the other Party.  All amounts will be payable by wire
transfer, in accordance with payment instructions provided from time to time.

 

Any amount not paid when
due as set forth in this Agreement will bear interest until paid at a rate of
interest equal to the prime rate established from time to time by The Wall
Street Journal, “Money Rates”  plus  two percentage points.   If any portion of an amount due to a Party under
this Agreement is subject to a bona fide dispute between the Parties, the other
Party will pay to that Party on the date such amount is due all amounts not
disputed in good faith.

 

Section 11.13                     Force Majeure.  Servicer will not be responsible for delays
or failures in such performance resulting from acts of God, strikes, riots,
acts of war, terrorism, earthquakes or other similar events.

 

[Intentionally Blank - Next Page
Signature Page]

 

45

 

IN WITNESS WHEREOF, the
Servicer and the Owner have caused their names to be signed hereto by their
respective officers thereunto duly authorized as of the day and year first
above written.

 

	
  MORTGAGE IT

  	
  GMAC MORTGAGE CORPORATION

  
	
   

  	
   

  
	
  Owner

  	
  Servicer

  
	
   

  	
   

  
	
  By:

  	
   /s/ Larry P. Lewis

  	
   

  	
  By:

  	
  /s/ Wes Howland

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   Larry P. Lewis

  	
   

  	
  Name:

  	
  Wes Howland

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
    C.O.O.

  	
   

  	
  Title:

  	
  Vice President

  	
   

  
										

 

46

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss:

  
	
  COUNTY
  OF                      

  	
  )

  	
   

  

 

On the
      day of
               ,
20    before me, a Notary Public in and for said State,
personally appeared                                                                                        ,
known to me to be                                                                                                                                                                                                            of
GMAC MORTGAGE CORPORATION,
the corporation that executed the within instrument and also known
to me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.

 

IN WITNESS WHEREOF, I
have hereunto set my hand affixed my office seal the day and year in this
certificate first above written.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  My Commission expires

  	
   

  	
   

  
				

 

47

 

 

	
  STATE OF

  	
  )

  	
   

  
	
   

  	
  )

  	
  ss:

  
	
  COUNTY
  OF                      

  	
  )

  	
   

  

 

On the
      day of
               ,
20    before me, a Notary Public in and for said State,
personally appeared
                                                        ,
known to me to be the
                                                      
of                                                 ,
the corporation that executed the within instrument and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.

 

IN WITNESS WHEREOF, I
have hereunto set my hand affixed my office seal the day and year in this
certificate first above written.

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  My Commission expires

  	
   

  	
   

  
				

 

48

 

EXHIBIT A

 

MORTGAGE LOAN
SCHEDULE

 

 

EXHIBIT B

 

CONTENTS OF EACH
MORTGAGE FILE

 

With respect to each Mortgage Loan, the Mortgage File shall include, to
the extent available, each of the following items, which shall be available for
inspection by the Owner and any prospective Owner, and which shall be retained
by the Servicer in the Servicing File or delivered to the Custodian:

 

1.                                       The
original Mortgage Note.

 

2.                                       The
original of any guarantee executed in connection with the Mortgage Note (if
any).

 

3.                                       The
original Mortgage, with evidence of recording thereon or a certified true and
correct copy of the Mortgage sent for recordation.

 

4.                                       the
originals or certified true copies of any document sent for recordation of all
assumption, modification, consolidation or extension agreements, with evidence
of recording thereon.

 

5.                                       The
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording (except for the insertion of the name of the assignee
and recording information)..

 

6.                                       Originals
or certified true copies of documents sent for recordation of all intervening assignments
of the Mortgage with evidence of recording thereon.

 

7.                                       The
original PMI Policy or certificate of insurance, where required pursuant to the
Agreement.

 

8.                                       The
original mortgagee policy of title insurance or evidence of title.

 

9.                                       Any
security agreement, chattel mortgage or equivalent executed in connection with
the Mortgage.

 

With respect to each
Mortgage Loan, the Mortgage File shall include each of the following items to
the extent provided to the Servicer:

 

10.                                 The
original hazard insurance policy and, if required by law, flood insurance
policy, in accordance with Section 4.10 of the Agreement.

 

11.                                 Residential
loan application.

 

12.                                 Mortgage
Loan closing statement.

 

49

 

13.                                 Verification
of employment and income, unless originated under the Servicer’s Limited
Documentation program, Fannie Mae Timesaver Plus.

 

14.                                 Verification
of acceptable evidence of source and amount of down payment.

 

15.                                 Credit
report on the Mortgagor.

 

16.                                 Residential
appraisal report.

 

17.                                 Photograph
of the Mortgaged Property.

 

18.                                 Survey
of the Mortgage property, if required by the title Servicer or applicable law.

 

19.                                 Copy
of each instrument necessary to complete identification of any exception set
forth in the exception schedule in the title policy, i.e. map or plat,
restrictions, easements, sewer agreements, home association declarations, etc.

 

20.                                 All
required disclosure statements.

 

21.                                 If
available, termite report, structural engineer’s report, water potability and
septic certification.

 

22.                                 Sales
contract, if applicable.

 

23.                                 Evidence
of payment of taxes and insurance premiums, insurance claim files,
correspondence, current and historical computerized data files, and all other
processing, underwriting and closing papers and records which are customarily
contained in a mortgage loan file and which are required to document the
Mortgage Loan or to service the Mortgage Loan.

 

24.                                 Amortization
schedule, if available.

 

25.                                 Payment
history for any Mortgage Loan that has been closed for more than 90 days.

 

26.                                 Original
power of attorney, if applicable.

 

2

 

EXHIBIT C

CUSTODIAL
AGREEMENT

 

 

EXHIBIT D

 

ELIGIBILITY
CRITERIA

 

	
  Loan Types:

  	
   

  	
  Conventional and
  government

  
	
   

  	
   

  	
   

  
	
  Interest rate types:

  	
   

  	
  Fixed and adjustable
  rate

  
	
   

  	
   

  	
   

  
	
  Lien Position types:

  	
   

  	
  First lien

  
	
   

  	
   

  	
   

  
	
  Collateral types:

  	
   

  	
  1-4 family, residential
  properties

  
	
   

  	
   

  	
   

  
	
  Credit types:

  	
   

  	
  Prime and sub-prime

  
	
   

  	
   

  	
   

  
	
  Age limitations:

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  Geographic limitations:

  	
   

  	
  N/A

  

 

 

EXHIBIT E

 

TERM SHEET

 

Monthly
Service Per Loan Fee

 

	
  Loan Count

  	
   

  	
  Fee

  	
   

  
	
  Performing
  (0-29 days dlq)

  	
   

  	
  $

  	
  15

  	
   

  
	
  Sub-performing
  (30 - 89 days dlq)

  	
   

  	
  $

  	
  25

  	
   

  
	
  Non-performing
  (90+ days dlq)

  	
   

  	
  $

  	
  45

  	
   

  

 

	
  * Minimum 2 months
  service fee

  	
   

  

 

ARM Per Loan Up-Charge
(monthly)                                         $0.25

 

Loan Set Up Fee                                                                                                                                                         $8.00
per loan

Assumes
semi-automated method (Wilma File Format)

 

Default Fees

 

	
  Resolution
  Fees

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Reinstatement

  (90+ Past Due Only)

  	
   

  	
  1.5% UPB

  minimum of $750

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Repayment
  plan

  (90+ Past Due Only)

  	
   

  	
  1.5% UPB

  minimum of $750

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Modification

  (90+ Past Due Only)

  	
   

  	
  1.5%UPB

  minimum of $750

  (with owner approval only)

  	
   

  

 

	
  Disposition
  Fees

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Payoffs

  (90+ Past Due Only)

  	
   

  	
  1.75% Net
  Liquidation

  Proceeds

  minimum of $1000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Redemptions

  	
   

  	
  1.75% Net
  Liquidation

  Proceeds

  minimum of $750

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Third
  Party Sales

  	
   

  	
  1.50% Net
  Liquidation

  Proceeds

  minimum of $750

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Short
  Sales

  (90+ Past Due Only)

  	
   

  	
  1.75% Net
  Liquidation

  Proceeds

  minimum of $1000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Loan
  Sales

  	
   

  	
  1.75% Net
  Liquidation

  Proceeds

  minimum of $750

  (with owner approval)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Deed
  in Lieu

  (90+ Past Due Only)

  	
   

  	
  1.75% UPB

  minimum of $750

  	
   

  

 

 

	
   

  	
  Additional Fees

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  REO

  Disposition Fee

  	
   

  	
  1% of sales
  price

  minimum of $1500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Recovery
  Collection

  (Home Equity Loans Only)

  	
   

  	
  45% of recovered
  amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title

  Remediation Fee

  	
   

  	
  $500

  with owner’s consent and if owner unable to correct

  	
   

  

 

	
  Minimum Charge (monthly)

  	
  $2,500 (assessed after
  month 6)

  	
   

  
	
   

  	
   

  	
   

  
	
  Program Initiation Fee

  	
  $5,000 refunded after
  month 6.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ancillary Income

  	
   

  	
   

  	
   

  	
   

  
	
  Late
  Charges

  	
  Retained by GMACM

  	
   

  	
   

  	
   

  
	
  Principle
  and Interest Float

  	
  Retained by GMACM

  	
   

  	
   

  	
   

  
	
  Escrow
  and Interest Float

  	
  Retained by GMACM

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Servicing Activity Fees

  	
  Retained by GMACM (e.g.
  payoff statements, fax fees)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  De-Boarding Fee Per Loan

  	
  $8.00 per loan
  exclusive of out of pocket transfer related expenses

  	
   

  
	
  Additional Services

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Loan File

  	
   

  	
  First 6 months:

  	
   

  
	
   

  	
  Storage and 

  	
   

  	
  $4.00 per loan
  (one-time)

  	
   

  
	
   

  	
  Document

  	
   

  	
  >6 Months:

  	
   

  
	
   

  	
  Tracking

  	
   

  	
  $2.00 (annually)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Account

  	
   

  	
  Review:

  	
   

  
	
   

  	
  Reconciliation

  	
   

  	
  Imaged- $1.00 per loan

  	
   

  
	
   

  	
   

  	
   

  	
  Not Imaged- $2.00 per
  loan

  	
   

  
	
   

  	
   

  	
   

  	
  Corrections:

  	
   

  
	
   

  	
   

  	
   

  	
  $25.00 per correction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  This service is
  available for new loans boarding our system. 
  This service will compare the HUD1 and Note information to that loaded
  on the servicing system.

  	
   

  

 

 

EXHIBIT F

 

TRANSFER
INSTRUCTIONS

 

TABLE OF CONTENTS

 

	
  I MANUAL TRANSFERS

  	
  6

  
	
   

  	
   

  
	
  II GENERAL REQUIREMENTS

  	
  8

  
	
   

  	
   

  
	
  DEFINITIONS

  	
  8

  
	
  TRANSFER
  OF RECORDS

  	
  8

  
	
  A) ASSIGNMENT
  OF GMAC MORTGAGE LOAN NUMBERS

  	
  8

  
	
  B) SUSPENSE/CORPORATE
  BALANCES

  	
  8

  
	
  C) INTEREST ON ESCROW
  REQUIREMENTS

  	
  8

  
	
  D) YEAR-END
  REPORTING

  	
  9

  
	
  E)
  BUYDOWN REQUIREMENTS

  	
  9

  
	
  F)
  MULTIPLE CO-BORROWERS

  	
  9

  
	
  G)
  CLOSING ESCROW BALANCES

  	
  9

  
	
  H) SECOND
  MORTGAGES

  	
  10

  
	
  I)
  GRADUATED PAYMENTS

  	
  10

  
	
  J)
  BALLOON OR ARM LOANS

  	
  10

  
	
  K) PROGRAM
  DELIVERIES

  	
  10

  
	
  L) RETENTION OF
  SUPPORTING DOCUMENTATION

  	
  10

  
	
  M) LIEN RELEASE

  	
  11

  
	
   

  	
   

  
	
  III MISCELLANEOUS

  	
  12

  
	
  A) PAYMENTS RECEIVED
  AFTER TRANSFER DATE

  	
  12

  
	
  B) CORRESPONDENCE
  RECEIVED AFTER TRANSFER DATE

  	
  12

  
	
  C) RETURN MAIL

  	
  12

  
	
   

  	
   

  
	
  IV BORROWER NOTIFICATION

  	
  13

  
	
   

  	
   

  
	
  V SERVICING FILES

  	
  15

  
	
   

  	
   

  
	
  VI MERS

  	
  16

  
	
   

  	
   

  
	
  VII INVESTOR INFORMATION

  	
  17

  
	
   

  	
   

  
	
  VIII TAX REQUIREMENTS

  	
  18

  
	
   

  	
   

  
	
  IX HAZARD/FLOOD
  INSURANCE REQUIREMENTS

  	
  19

  
	
   

  	
   

  
	
  X ESCROW HOLDBACK FOR
  REPAIRS

  	
  21

  

 

 

	
  XI MI REQUIREMENTS

  	
  22

  
	
   

  	
   

  
	
  XII LENDER-PLACED POOL
  INSURANCE

  	
  24

  
	
   

  	
   

  
	
  XIII LOSS DRAFT

  	
  25

  
	
   

  	
   

  
	
  XXIV LIEN RELEASE

  	
  26

  
	
   

  	
   

  
	
  PAYOFFS

  	
  26

  
	
   

  	
   

  
	
  XV DISHONORED AND
  MISAPPLIED PAYMENTS

  	
  27

  
	
   

  	
   

  
	
  ATTACHMENT 1 – ELECTRONIC DATA FILE

  	
  28

  
	
   

  	
   

  
	
  ATTACHMENT 2 - GMAC MORTGAGE ADDRESSES

  	
  29

  
	
   

  	
   

  
	
  ATTACHMENT 3 - GMAC MORTGAGE CONTACTS

  	
  31

  
	
   

  	
   

  
	
  ATTACHMENT 4 - SERVICING TRANSFER INFORMATION
  ENCLOSURE SHEET

  	
  33

  
	
   

  	
   

  
	
  ATTACHMENT 5 - CUSTOMER NOTIFICATION
  LETTER

  	
  34

  
	
   

  	
   

  
	
  ATTACHMENT 6 – ARM PLAN CODE

  	
  37

  
	
   

  	
   

  
	
  ATTACHMENT 7 – PROGRAMS

  	
  40

  
	
   

  	
   

  
	
  ATTACHMENT 8 – HAZARD CLAIM INFORMATION

  	
  41

  

 

 

I MANUAL TRANSFERS

 

For any portfolio determined
to be a manual conversion process, Seller will provide the following for each
loan included in the manual transfer:

 

A)                                  Electronic
Data Files (WILMA)

 

1.               Owner
will provide a test file (via email in Excel format) of the Electronic Data
File (see below) no later than 30 days prior to the Transfer Date.  Within 48 hours of receipt, GMAC Mortgage
will review the file and advise Seller of any problems.  GMAC Mortgage may request the Owner to
transmit additional information.

 

2.               Within 1 Business
Day after the Transfer Date, Owner shall provide a final Electronic Data File
(data as of Transfer Cutoff Date) of the required fields listed below for each
loan.   Such file shall be sent via
email in Excel format (WinZip file with password or encrypt with PGP).  Within 24 hours of receipt, GMAC Mortgage
will review the file and advise Seller of any problems.

 

3.               All electronic
files shall be delivered (via Email) to Elaine_Kanter@GMACM.com

 

4.               Loans on Electronic
Data Files received in the last three (3) Business Days of the month will not
be guaranteed to be on GMAC Mortgage’s servicing system by month-end.  Any loans which are not on GMAC Mortgage’s
servicing system will not be included on month-end reports.

 

Fields to be on the
Electronic Data File, in the layout order specified.  Fields should be populated with value, dollar, zero or
blank.  Do not use NA.  See field specifications in Attachment 1
(Excel spreadsheet).

 

1.                                       Agency
Pool # (if applicable)

2.                                       Agency
loan number

3.                                       GMAC
MORTGAGE assigned loan number

4.                                       Owner
loan number

5.                                       Current
UPB

6.                                       Agency
Issued UPB

7.                                       Escrow
balance

8.                                       Buydown
Subsidy balance

9.                                       Suspense
balance

10.                                 Accrued
Late Charge balance

11.                                 Late
Charge percentage

12.                                 Late
Charge option

13.                                 Note
Rate

14.                                 Pass
Thru Rate

15.                                 Net
Service Fee Rate

16.                                 Agency
Guaranty Fee Rate

17.                                 P&I
Payment

18.                                 T&I
Payment

19.                                 Total
Customer Payment

20.                                 First
Payment Due Loan

21.                                 Current
Due Date

22.                                 Origination
Date

23.                                 Maturity
Date

24.                                 Pool
Issue Date

25.                                 Remittance
Type/Date

26.                                 Loan
Term

27.                                 Loan
Purpose

28.                                 Financial
Plan Code

29.                                 Number
of Units

30.                                 Original
Loan Amount

31.                                 Appraised
Value

32.                                 Original
LTV Percent

33.                                 Property
Type

34.                                 Occupancy
Code

35.                                 Customer
Last Name

36.                                 Customer
First Name

37.                                 Customer
Middle Name

38.                                 Co-Customer
Last Name

39.                                 Co-Customer
First Name

40.                                 Co-Customer
Middle Name

41.                                 Property
Street Address

42.                                 Property
City

43.                                 Property
County Name

44.                                 Property
State

45.                                 Property
Zip Code

46.                                 Mailing
Street Address

47.                                 Mailing
City

48.                                 Mailing
State

49.                                 Mailing
Zip Code

50.                                 Customer
Home Telephone

51.                                 Customer
Work Telephone

52.                                 Miscellaneous
Cost

53.                                 Customer
Social Security

54.                                 Co-Customer
Social Security

55.                                 Tax
Service Fee

56.                                 Flood
Insurance Required

57.                                 Escrow
Tax monthly

58.                                 Monthly
Escrow Property  Insurance

59.                                 Monthly
Escrow PMI

60.                                 PMI/MI
Company Code

61.                                 PMI/MI
Company Policy

62.                                 PMI
Pool Code

63.                                 PMI
Pool Policy Number

64.                                 Delinquency
Indicator

65.                                 Agency
Funding Date

66.                                 Loan
Type

67.                                 Sales
Price

68.                                 Assumption
Allowed

69.                                 Prepayment
Penalty

70.                                 MERS
Min #

71.                                 GMAC
MORTGAGE Company ID

72.                                 STR
GROUP #

73.                                 MI%
Coverage

74.                                 Points

75.                                 Cash
Settlement Interest

76.                                 GM/GM
Refi Loan Number

77.                                 Grace
Days

78.                                 MI
Up-front Premium

 

 

79.                                 Margin

80.                                 Max
Interest Rate

81.                                 Min
Interest Rate

82.                                 Tax
Contract Number

83.                                 Non
Cash Settlement Interest

84.                                 Product
Code

85.                                 MERS
MOM Flag

86.                                 MERS
Registered Flag

87.                                 MERS
Quality Review Flag

88.                                 Affinity
Name

89.                                 MI
Cancellation Date

90.                                 MI
Termination Date

91.                                 Fidelity
Fund Source

92.                                 Lien
Type

93.                                 Flood
Zone

94.                                 Flood
Vendor

95.                                 Flood
Certificate Number

96.                                 Buydown
Original Total Term

97.                                 Buydown
Term

98.                                 1st
Buydown Subsidy Amount

99.                                 2nd
Buydown subsidy amount

100.                           Original
Buydown Balance

101.                           FNMA
Timely Payment Reward Code (Cash delivery only)

102.                           Converted
Arm to Fixed Rate

103.                           Converted
Construction Loan

104.                           FHLMC
Alt A Program Loan

105.                           Sellers
Correspondent ID

106.                           RHS/RECD/Target
Lending Initiative Loan

107.                           Program
Type

108.                           Converted
Balloon loan

109.                           Documentation
Type (characteristics)

110.                           A
minus Credit Quality Program

111.                           Prepayment
Penalty Loan%

112.                           PI
Change Date

113.                           Interest
Rate Change Date

114.                           Look
back days

115.                           Index

116.                           Rate
Change Frequency

117.                           Payment
Change Frequency

118.                           Rounding
Factor

 

B)                                    Servicing
Files

 

1.               Owner
shall deliver to GMAC Mortgage a servicing file for each loan in the Manual
Transfer.  Files will contain, but not
be limited to, the documents identified below (as applicable) which are
critical for boarding the loans to GMAC Mortgage’s system:

 

•                  Legal Description (Exhibit A) / Tax
Contract (copy)

•                  Homeowner authorization if NY or NJ

•                  Copy of Note with all riders

•                  Buydown agreement/rider

•                  Copy of recorded Mortgage/Deed of
Trust with riders (if recorded copy is not available; provide copy of
unrecorded document)

•                  Funding Letter/First Payment Letter

•                  RESPA/Escrow Account Disclosure

•                  HUD-1 Settlement Statement – final

•                  Loan Application Form 1003 (initial
and final signed application)

•                  Appraisal/PSAR (with all attachments)

•                  Certificate of Flood Zone Rating

•                  Evidence of Insurance

•                  Applicable Mortgage Insurance: PMI
commitment, FHA MIC, VA LGC

•                  PMI Disclosure statement

•                  Tax Certification

•                  System master file record

•                  Payment history from origination to
current year-to-date

 

2.               Please refer to
Section V for information on file labels and shipping.

 

 

II GENERAL REQUIREMENTS

 

DEFINITIONS

For the purpose of these
Transfer Instructions, unless otherwise indicated, all terms shall have the
meanings defined in the Agreement, dated as of March 26, 2003, between
Mortgage IT (Owner) and GMAC Mortgage Corporation (Servicer).

 

•                  Transfer
Date:  The date GMAC Mortgage will
assume physical servicing of the mortgage loans.  Such date to be established by Owner and GMAC Mortgage.

 

•                  Transfer
Cutoff Date:  The end of business on the
Business Day immediately preceding the Transfer Date.

 

TRANSFER OF RECORDS

Seller shall ensure all
documents, files, reports, and similar items are delivered to GMAC
Mortgage.  Any documents transferred
from Owner to GMAC Mortgage at any time in connection herewith shall include
GMAC Mortgage’s loan number and be grouped based on type of material, e.g.
insurance, tax, customer service.

 

All files and related information as detailed within these
Transfer Instructions must be received by GMAC Mortgage no later than three (3)
Business Days after Transfer Date unless otherwise
designated.

 

Unless indicated
otherwise, all information in this Exhibit required effecting the transfer and
all information received subsequent to the transfer, will be delivered to GMAC
Mortgage as follows:

 

GMAC Mortgage
Corporation

3451 Hammond
Avenue

Waterloo, Iowa
50702

Attn: Elaine
Kanter

 

A)                                  ASSIGNMENT OF GMAC MORTGAGE LOAN
NUMBERS

 

1.                                       GMAC
Mortgage will provide loan numbers for Owner to assign and use in data and
record transmissions.   Owner will
assign all loan numbers in sequence.

 

B)                                    SUSPENSE/CORPORATE BALANCES                                 *if applicable

 

1.                                       Report
in loan number order to reflect the negative suspense and/or corporate advance,
and attach sufficient written documentation to support the advance.

 

C)                                    INTEREST ON ESCROW REQUIREMENTS                                                                     *if
applicable

 

1.                                       Owner
will be responsible for posting interest on escrow for each loan on which the
property is located in an area that requires interest to be paid on escrow
accounts, from the closing date of the loan to receipt of loan data by GMAC
Mortgage.

 

 

GENERAL REQUIREMENTS (CONTINUED)

 

D)                                   YEAR-END REPORTING

 

1.                                       Owner will report to the IRS and provide
to Mortgagor all 1099 forms required reflecting the amount of interest and
discount points paid at time of loan closing and any interest paid prior to the
Transfer Date.  Interest paid on subject
mortgage loan while GMAC Mortgage is servicer of record will be reported by
GMAC Mortgage.

 

E)                                     BUYDOWN REQUIREMENTS                                                                           *
if applicable

 

1.                                       List
of all loans in the transfer with buydown subsidy.  If loans are not identified, GMAC Mortgage will bill Owner for
costs associated with the manual identification of a buydown loan.

 

2.                                       Copy
of each Buydown Schedule, Buydown Agreement and HUD1 in the Mortgage Loan file
to include the following for each account:

a)                   Loan number

b)                  Original loan
amount

c)                   First payment
due date

d)                  Current monthly
buydown payment amount

e)                   Next buydown
payment change due date

f)                     Next buydown
payment change amount

g)                  Remaining
buydown funds balance

h)                  Indicate whether
Lender Funded, Builder Funded or Present Value

 

3.                                       All
Buydown balances must be fully funded and, at the time of transfer, the balance
must be equal to the calculated balance of the buydown subsidy as detailed in
each buydown schedule.

 

F)                                     MULTIPLE CO-BORROWERS

 

1.                                       For each loan with multiple
co-borrowers (more than a primary and one co-borrower), Owner shall provide a
listing, in Excel format, to contain the following information:

a)              GMAC Mortgage loan
number

b)             Co-borrower names

c)              Social Security numbers

 

G)                                    CLOSING ESCROW BALANCES                                                                                                              *if
applicable

 

1.                                       Owner
shall ensure all escrow funds collected at closing have been deposited into
the  customer’s escrow account

 

 

GENERAL REQUIREMENTS (CONTINUED)

 

H)                                   SECOND MORTGAGES                                                                                                             *if
applicable

 

1.                                       For
each second mortgage included in the transfer, Owner shall ensure the holder of
the first mortgage is notified of the servicing transfer.  Copies of such notifications are to be
provided to GMAC Mortgage in the Servicing File.

 

2.                                       Listing
of these loans to include: name, address and phone number of the mortgage
company that services the first mortgage.

 

I)                                        GRADUATED PAYMENTS                                           *if
applicable

 

1.                                       Listing
in loan number order, of all GPM loans involved in the transfer to include, but
not be limited to the following for each account

a)                   Loan number

b)                  Current payment
amount

c)                   Next effective
payment change date

d)                  Effect payment
amount with next change date

e)                   Deferred
Interest Balance

f)                     Agency
document

 

J)                                       ARM OR BALLOON LOANS                                                                                                                                *if
applicable

 

1.                                       For each Adjustable Rate Mortgage Loan having an
interest change date within 15-30 Days after the Transfer Date, Owner warrants
periodic Interest Rate and payment adjustments have been made and the customer
has been notified of such adjustments as specified by the Note.  A listing of loans that were not adjusted
due to the release of the index shall be provided.

 

2.                                       Provide a listing of balloon loans or code
appropriately on Attachment 1. 
Attachment 6 identifies GMAC Mortgage’s ARM and Balloon plan codes for
coding on the Electronic Data File.

 

K)                                   PROGRAM DELIVERIES                                                                                                                                                        *if
applicable

 

1.                                       Attachment 7 identifies GMAC Mortgage’s program
codes for coding on the Electronic Data File.

 

L)                                     RETENTION OF SUPPORTING DOCUMENTATION

 

1.                                       Subsequent
to the Transfer Date, Owner will provide GMAC Mortgage, upon request, payment
histories, canceled checks, vouchers, bills and other pertinent documents
within five business days of written request by GMAC Mortgage to assist GMAC
Mortgage in disputes with outside agencies, other than the titleholder or attorney
(e.g. taxing authorities, PMI companies, hazard insurance companies,
etc.).  In those situations involving
attorneys or disputes with the customer, Owner will provide requested
information within 48 hours of written request.

 

 

GENERAL REQUIREMENTS (CONTINUED)

 

M)                                SOLDIERS’ AND SAILORS’
CIVIL RELIEF ACT OF 1940 (SSCRA)

 

1.               Owner shall provide
a listing of all SSCRA loans in loan number order, in Excel format on diskette,
to include the following:

a)              If
subsidized,  provide Soldier and
Sailor subsidy with subsidy start date, payment subsidy amount and full P&I
amount  -OR-

b)             If interest rate reduced to 6%,
provide start date

b)             Copy of government
work order

c)              Copies of Note and
Loan Application

d)             Payment
schedule showing full funding to date of shortage

 

2.                                       Owner
must file claims as applicable for reimbursement of funds expensed during the
time they serviced the loan.

 

 

III MISCELLANEOUS

 

Unless otherwise stated, use Attachment 4 for the following:

 

A)                                  PAYMENTS RECEIVED AFTER TRANSFER DATE

 

As applicable,
forward payments to GMAC Mortgage, identifying all loans with GMAC Mortgage
loan number, on the day received by overnight delivery service to Payment
Processing Unit.  Checks shall be
securely bundled in the same order as listed on Attachment 4.

 

1.                                       Identify
all checks with GMAC Mortgage’s loan number in the upper right corner, and
endorse as follows:

 

Pay to the Order of GMAC Mortgage
without Recourse

 

	
  By

  	
   

  	
   

  
	
  (Signer’s Name)

  
	
  (Signer’s Title)

  
	
  (Owner Name)

  

 

2.                                       Checks
that include funds for multiple accounts—provide detail listing with GMAC
Mortgage’s loan number and the amount due to each account.

 

3.                                       Payoff checks received, but not
applied as of Transfer Cutoff Date, shall be identified with GMAC Mortgage’s
loan number, be properly endorsed and forwarded to GMAC Mortgage as
follows:  Attn: Darcia Meier/Payoff
Processing, 3451 Hammond Avenue, Waterloo, IA 
50702.

 

B)                                    CORRESPONDENCE RECEIVED AFTER
TRANSFER DATE

 

All correspondence,
insurance renewals, cancellation notices, customer inquiries, etc., received
after the Transfer Date should be grouped accordingly and identified with GMAC
Mortgage’s loan number and forwarded to GMAC Mortgage on a daily basis.  Any materials received by Owner which
reasonably requires expedited handling to protect the security, the Owner’s
interest, or the reasonable needs or obligations of GMAC Mortgage as Servicer,
then all such materials shall be sent by overnight delivery.

 

C)                                    RETURN MAIL

 

1.                                       Owner
will ensure all return mail is forwarded to GMAC Mortgage, (including the
envelope with forwarding address information received on returned “Goodbye”
letter).

 

 

IV
CUSTOMER NOTIFICATION

 

A)                                  OWNER WILL ENSURE ALL MORTGAGORS
ARE NOTIFIED OF THE TRANSFER AND WHEN AND WHERE TO MAKE PAYMENTS AFTER THE
TRANSFER DATE.  THE LETTER AFFECTING
SUCH NOTIFICATION SHALL BE SUBJECT TO REVIEW AND APPROVAL BY GMAC
MORTGAGE.  SUCH NOTIFICATION SHALL BE
PROVIDED NO LATER THAN FIFTEEN DAYS PRIOR TO THE TRANSFER DATE.

 

B)                                    To
assist in an efficient transfer process, the customers, and all individuals
involved should be aware of the following:

 

1.                                       GMAC
Mortgage will provide each Mortgagor with a new loan number and will provide a
mortgage account statement as soon as the loans are set up on our system.  Please advise customers to remit future payments
to the address listed below, until they begin receiving mortgage account
statements from GMAC Mortgage:

 

GMAC Mortgage Corporation

Attn:  Payment Processing

PO Box 780

Waterloo, IA 50704-0780

 

2.                                       GMAC
Mortgage will be responsible for IRS reporting for the period of time that GMAC
Mortgage services the loan (1st payment to due GMAC Mortgage through
year-end).  Owner will be responsible
for IRS reporting for the prior period of time.

 

3.                                       GMAC
Mortgage does not collect Condo association dues with the monthly payment. If
condominiums are included in this transfer and you presently collect
association fees, the Mortgagor should be advised to pay those fees directly to
the association.

 

4.                                       GMAC
Mortgage provides the following toll-free Customer Service number for customer
inquiries: 1-800-766-4622.  Customer
Service hours are Monday through Friday 7 a.m. to 9 p.m. CT, and Saturday 9
a.m. to 1 p.m. CT.

 

5.                                       Advise
the customer their optional insurance coverage is not transferable.

 

6.                                       Advise
the customer their automatic payment option is not transferable.  GMAC Mortgage does offer an automatic
payment option and customers may enroll in this service after transfer.

 

7.                                       GMAC
Mortgage offers web site and email capabilities to its customers.

 

Customers
should be advised to forward written inquiries to the following address:

 

GMAC Mortgage
Corporation

Attn:  Customer Service Department

PO Box 4622

Waterloo, Iowa
50704-4622

 

**Sample copy of Customer Notification
Letter (Attachment 5).

 

 

**This letter encompasses the necessary
required regulations in the Servicing Regulation 1990 Housing Act .

 

 

V SERVICING FILES

 

A)                                  Servicing
files shall contain the documents as defined in Section I B.

 

1.                                       Files
will be organized consistently.

 

2.                                       Secure
documents with a two-hole fastener at the top center, in a legal size folder.

 

3.                                       Files
shall be labeled as follows:

 

a)              Owner shall create
bar-coded labels and affix them to the files. 
GMAC Mortgage will provide direction for creating labels under separate
cover.

 

4.                                       Files
shall be boxed in the GMAC Mortgage’s loan number order.

 

B)                                    Servicing
Files to be delivered to GMAC Mortgage’s office 3 Business Days after the
Transfer Date via insured shipping as follows:

 

1.                                       Boxes
should be standard size (15”L x 12”W x 10”H) with double wall construction and
separate lids.  Please ensure boxes are
in good condition.  Boxes should weigh
between 30 to 35 pounds.  If the number
of files being shipped will not completely fill the standard box size, a
smaller box size (e.g., FedEx box) can be used.  Boxes larger than the standard size are not acceptable.

 

2.                                       A
packing list shall be included for validation of receipt by GMAC Mortgage.

 

3.                                       Servicing
Files should be shipped to:

 

Mailing Address:

GMAC MORTGAGE CORPORATION

Loan Set-Up Department

ATTN: Mail Desk

3451 Hammond Avenue

Waterloo, Iowa 50702

 

 

VI  MERS

 

A)                                  Provide
GMAC Mortgage with appropriate data at Transfer Date (in Electronic Data File)

1.                                       MERS
min number

2.                                       Identification
of a MOM (MERS as Original Mortgagee) loan

3.                                       MERS
registered flag

4.                                       MERS
quality review flag

 

B)                                    MERS
org numbers are as follows:

1.                                       1000375
– GMAC Mortgage should be listed as servicer.

2.                                       1001262
– Owner (Mortgage IT) should be listed as investor

 

C)                                    Owner
shall complete the transfer of servicing right to GMAC Mortgage (org ID
1000375) and complete the transfer of beneficial rights to Owner (org ID
1001262).

 

D)                                   For
any loans not previously registered with MERS, GMAC Mortgage has the ability to
register loans with MERS for a $5.00 fee (fee subject to change with 30 day
notice).  Please contact the MERS
Administrator for further details.

 

E)                                     Owner
is responsible for all transfer fees associated with MERS.

 

F)                                     Owner
shall pay for all loans transferred on MERS in error.

 

G)                                    For
any MERS non-MOM
loans, Owner shall ensure an assignment to MERS has been executed and sent for
recording.  Owner will transmit the
recording data to MERS upon receipt.

 

 

VII CASH MOVEMENT

 

A)          Escrow balance, suspense
balance, and any special escrow reflected as of Transfer Cutoff Date will be
transferred to GMAC Mortgage within 24 hours after Transfer Date using the
wiring instructions below:

 

GMAC Mortgage
Corporation

First Union

ABA# 031201467

ACCT#
2100018728719

REF:  Attn: Mortgage IT Flow & Transfer Date
(mmddyy)

 

 

VIII TAX REQUIREMENTS

(As Applicable)

 

A)                                  Ordering
Tax Service

GMAC Mortgage will
order the tax contract if Owner does not provide a First American tax contract
number in the Electronic Data File. 
Cost for the contracts shall be $85.00 per loan to be paid by Owner.

 

B)                                    Payment
of Taxes and Assessments

Owner shall pay, prior to the Transfer Date, property taxes and/or
assessments for loans with escrow accounts that are due or will become
delinquent up to the Transfer Cutoff Date as well as those due within 30 days
after the Transfer Date where bills/tax amounts are available.

 

C)                                    For each escrowed account, Owner will
provide a listing of taxes which are due within 30 days following the Transfer
Date and remain unpaid to include the following:

1.                                       Loan number

2.                                       Tax type (e.g., county, school, city)

3.                                       Tax due date

4.                                       Tax amount due or last paid amount,
whichever is applicable

5.                                       Tax identification number (parcel number)

6.                                       Payee associated with each parcel

 

D)                                   Escrowed
for Defined Timeframe

Owner will provide
a listing of all loans having a predetermined period for taxes to be
maintained, to include, but not limited to:

1.               GMAC Mortgage loan
number

2.               Period of required
escrow

3.               Type of taxes

4.               Customer name

 

*Please update the
Product Code (column 84 in Electronic Data File) accordingly.

 

D)                                   Forward
documentation of any special tax problems to our Tax Department (see Attachment
2).

 

 

IX HAZARD/FLOOD INSURANCE
REQUIREMENTS

(As applicable)

 

A)                                  Insurance
Premium Payment

 

1.                                       Owner shall pay, prior to the Transfer Date, all
insurance premiums due prior to the Transfer Date and within 30 days subsequent
to the Transfer Date where bills have been received prior to the Transfer Date.

 

B)                                    For each escrowed account, Owner will
provide a listing of insurance premiums which are due within 30 days following
the Transfer Date and remain unpaid to include the following:

1.                                       Loan number

2.                                       Payee

3.                                       Policy number

4.                                       Coverage Amount

5.                                       Effective Date of Coverage

6.                                       Expiration Date of Coverage

7.                                       Premium
Amount

 

C)                                    If
applicable, Owner shall provide a listing of loans on lender placed
hazard/binder coverage.

 

D)                                   Owner
shall ensure all loans have life of loan flood contracts.

 

1.                                       If no contracts are in place at the time
of transfer, GMAC Mortgage will order life of loan flood contracts with First
American.  Cost for the contracts shall
be $19.00 to be paid by Owner.

 

2.                                       Life of loan flood contracts with First
American (FAFDS f/k/a FDSI) or Fidelity (FNFS) can transfer at no charge.  Owner shall notify First American and/or
Fidelity to transfer the flood contracts to GMAC Mortgage.

 

3.                                       Life of loan flood contracts with any
provider other than FAFDS or FNFS can be converted at a $2.00 fee if Owner
provides the following information (data may be provided in WILMA file or sent
in a separate file).  Owner shall notify
the flood provider(s) to cancel the contract(s).

4.                           Owner loan number

5.                           Purchaser loan number

6.                           Customer name

7.                           Property address

8.                           Vendor name

9.                           Certificate number

10.                     Flood Zone

 

E)                                     Change
Endorsements

 

1.                                       Owner
shall prepare and submit to each hazard/flood carrier an original Notice of
Change of Mortgagee Clause (loss payable clause) for each loan included in the
transfer.  The mortgagee clause should
read:

 

GMAC Mortgage

Its successors
and/or assigns

PO Box 10430

Van Nuys, CA 91410

 

 

Hazard/Flood Insurance Requirements (continued)

 

F)                                     Documentation
required in the Servicing File:

 

1.                                       Original
or commitment of the homeowner’s, fire and flood insurance policies in the
Servicing File.

2.                                       FEMA
Standard Flood Hazard Determination, in the Servicing File, Form pursuant to
the National Flood Insurance Reform Act of 1994.

3.                                       Loans
secured by condominiums and town homes may have individual Certificates of
Insurance; however, provide a copy of the Master Policy listing for each
condominium or town home project as applicable.

4.                                       Forward
documentation of any special insurance problems to our Insurance Department
under separate cover. (See Attachment 2)

 

 

X ESCROW HOLDBACK FOR REPAIRS

(As applicable)

 

A)          Owner
shall administer all outstanding items relating to Escrow Holdback for repairs.

 

B)            Owner
shall provide a listing for of loans with Escrow Holdback for Repairs.

 

 

XI PMI/MI REQUIREMENTS

(Mortgage
Insurance)

 

A)                                  PMI/MI
Requirements, as applicable:

 

1.                                       Detailed
documentation of the loans and of each MI program:

 

a)              Corporate paid - Monies paid by servicer for premiums due to error
being made.  (e.g., Disclosure
issue)  Funds are not paid from the
customers escrow account.  Life of loan
coverage needs to be placed on these accounts prior to loan transfer.*

 

b)             Lender paid - Funds disbursed out of separate account. When the loan was established
the interest rate was adjusted to pay these premiums.  (Funds are not paid from the customers escrow account)*

 

c)              Escrow
paid  -
MI premiums are escrowed into the monthly payment paid by the customer and
premiums being paid to the MI companies are disbursed from this account.*

 

d)             Escrowed
PMI with a cancelled coverage  - These would be loans we are collecting
funds from customer but due to non-payment of premiums the coverage has been
cancelled.  These items are treated
differently as to when/if we are able to reinstate the coverage.*

 

e)              Cancelled
commitments - These premiums would have been cancelled due to lack of
information or payment made at closing. 
These items need to have life of loan coverage placed prior to transfer
and we need to be provided a report of these accounts. *

 

*Provide
separate reports for A through E to include the GMAC Mortgage loan number,
certificate number, and premium due date.

 

f)                Special programs -
Types of premiums not categorized above.

i)                 GMAC Mortgage
loan number

ii)              Type of waivers, or

iii)           Reduced MI over term,
etc.

 

2.                                       Owner shall pay all mortgage insurance premiums
which will become due during the time they service the loan(s).

 

B)                                    PMI/MI
Notification

 

1.                                       Owner
shall notify the PMI/MI companies of the transfer of servicing to GMAC
Mortgage. Send copies of the notifications to GMAC Mortgage’s MI
Department.  Include on the notice, the
GMAC Mortgage loan number, master policy number, and instructions to send
renewal billings and correspondence to:

GMAC Mortgage
Corporation, its successors and/or assigns

ATTN:  MI Department

P.O. Box 780

Waterloo, Iowa 50704-0780

 

 

MI Requirements (continued)

 

C)                                    Cancellation
and Termination Dates

 

1.                                       Cancellation
Dates and Termination Dates shall be provided in the Electronic Data File.  Owner ensure all the data is accurately
populated (columns 89 and 90).

 

 

XII LENDER-PLACED POOL INSURANCE

 

*if applicable

 

A)                                  Listing
of any Pool insured loans sorted by investor under separate cover, to include:

1.                                       Owner
and insurer loan number

2.                                       Mortgagor’s
Name

3.                                       Loan
type

4.                                       Pool
insurance carrier

5.                                       Payee
cross-reference listing

6.                                       Next
premium due date

7.                                       Actual
Certificate number

8.                                       Premium
Amount

9.                                       Paid
by (is premium paid by investor, Owner, etc.)

10.                                 Master
Policy Number

11.                                 Pool
Expiration Date

 

B)                                    Owner
shall notify the pool insurance carrier of the transfer of servicing and
provide evidence of such notification.

 

C)                                    Master
policies for all pool policies involved in the transfer.

 

 

XIII LOSS DRAFT

 

A)                                  Information Required on Loss Drafts Pending

 

1.                                       Listing of all loans which have a pending loss
draft to include amount of money on deposit for each loss draft.  This listing shall include pending claims
for loans in foreclosure.

 

2.                                       In addition to this listing, GMAC Mortgage should
receive a loss draft file for each loan, which contains the following
information, properly documented:

 

a)              Completed
cover sheet (Attachment 8) attached to outside of the loss draft file.

b)             Date
of loss

c)              Cause
of loss

d)             Amount
of loss

e)              Amount
of insurance proceeds received to date

f)                Information
received from contractors or records of conversation with contractors

g)             Correspondence
from and/or record of conversation with customers and insurance companies

h)             Status
report on repairs

i)                 Inspection
reports, if any

j)                 Report
on receipt of future proceeds, if expected (i.e. date expected, amount, etc.)

 

B)                                    Wire/ACH the balances of all monies in a
restricted field for loss drafts in the timeframes stipulated within the  Agreement, to be included in the wire
transfer of escrow funds.

 

C)                                    Interest on loss draft funds shall be paid
directly to the customer prior to the Transfer Date for all loans in the state
of NY, and all Federally Declared Disaster areas (this includes any investor,
any state, and for every day the funds are held).

 

 

XIV LIEN RELEASE

 

A)                                  As
further detailed below, Owner shall provide an electronic file via email (ASCII
file), diskette (ASCII file), or 3490 cartridge, depending on the size of the
file.  Regardless of the media, the
record length must be fixed at 5364. 
See
Attachment 11 for vendor layout

 

1.                                       On a monthly basis, Owner shall provide a
text file of the following information:

a)              GMAC Mortgage Loan
Number

b)             Deed/Mortgage
origination date

c)              Recording date of
Deed/Mortgage

d)             Recording information
(instrument, book, page, etc.)

e)              Trustor/mortgagor
vesting

f)                Original
beneficiary/mortgagee

g)             Original trustee

h)             Legal description (parcel,
lot, block, section)

 

2.                                       All
electronic files shall be delivered to GMAC Mortgage as follows:

 

GMAC Mortgage
Corporation

Attn: Barb Frost

3451 Hammond
Avenue

Waterloo, IA 50702

Email
Address:  Barb_Frost@gmacm.com

 

PAYOFFS

 

A)                                  In
the event of a payoff, Owner will provide GMAC Mortgage with the recording data
needed to prepare a Release of Lien within 5 Business Days of request by GMAC
Mortgage.

 

 

XV DISHONORED
AND MISAPPLIED PAYMENTS

 

A)                                  Dishonored:  Owner will ensure the returned check has
been presented twice to the bank for good funds prior to requesting
reimbursement from GMAC Mortgage.  Owner
will submit the following applicable documentation related to dishonored
payment which was not reversed by Owner prior to Transfer Cutoff Date:

 

1.                                       Original
returned or dishonored payment should be provided and clearly reflect the
reason the payment was dishonored (e.g. NSF, stop payment, etc.).  In the case of a dishonored draft, adequate
proof should be provided indicating the bank rejected the draft.

2.                                       Payment
history from point of the dishonored payment to the Transfer Cutoff Date

3.                                       GMAC
Mortgage shall reimburse Owner the dishonored payment funds within twenty (20)
days of receipt of applicable documentation.

 

B)                                    Misapplied
Payments:  “Misapplied payment”
shall mean a Mortgagor payment for which funds have been deposited in an
incorrect Escrow Account or applied to an incorrect Mortgagor’s account.  The existence of a canceled Mortgagor
payment bearing the endorsement of Owner, for which funds have not been
allocated to the proper Escrow Accounts, shall be considered conclusive
evidence of a misapplied payment. 
Misapplied payments shall be processed as follows:

 

1.                                       Both
parties shall cooperate in correcting misapplication errors by providing the
payment history from point of error to the Transfer Cutoff Date and a copy of
the canceled check bearing the endorsement of the servicer responsible for the
posting of the missing funds.

2.                                       The
party receiving notice of a misapplied payment occurring prior to the Transfer
Date and discovered after the Transfer Date shall immediately notify the other
party.

3.                                       If
a misapplied payment cannot be identified by either party and said misapplied
payment has resulted in a shortage in a Mortgage account, Owner shall be liable
for the amount of such shortage.  Owner
shall reimburse GMACM for the amount of such shortage within twenty (20) days
after receipt of written demand from GMACM.

4.                                       Any
check issued under the provisions of this paragraph shall be accompanied by a
statement indicating the purpose of the check, the mortgagor and property
address involved, and the corresponding Owner and/or GMACM account number.

 

 

ATTACHMENT 1

 

Reserved for Electronic Data File

 

 

ATTACHMENT
2

 

GMAC MORTGAGE ADDRESSES

 

	
  Express/Street
  Address

  	
  3451 Hammond
  Avenue

  
	
   

  	
  Waterloo, IA
  50702

  
	
   

  	
   

  
	
  Transfer
  Coordinator

  	
  Attn.: Sales
  & Acquisitions

  
	
  Accounting
  Coordinator

  	
  3451 Hammond
  Avenue

  
	
  Investor
  Reconciliation

  	
  P.O. Box 780

  
	
   

  	
  Waterloo, IA
  50704-0780

  
	
   

  	
   

  
	
  Servicing Files

  	
  Attn.: Loan
  Set-up Department

  
	
   

  	
  3451 Hammond
  Avenue

  
	
   

  	
  Waterloo, IA
  50702-5345

  
	
   

  	
   

  
	
  Property Tax
  Correspondence

  	
  Attn.: Tax
  Department

  
	
   

  	
  3451 Hammond
  Avenue

  
	
   

  	
  Waterloo, IA
  50702

  
	
   

  	
   

  
	
  Mortgage
  Insurance Correspondence

  	
  Attn.: PMI
  Department

  
	
   

  	
  3451 Hammond
  Avenue

  
	
   

  	
  Waterloo, IA
  50702

  
	
   

  	
   

  
	
  Hazard Claim
  Issues

  	
  Attn: Hazard
  Claims

  
	
   

  	
  3451 Hammond
  Avenue

  
	
   

  	
  P.O. Box 780

  
	
   

  	
  Waterloo, IA
  50704

  
	
   

  	
   

  
	
  Hazard/Flood
  Insurance

  	
  GMAC Mortgage

  
	
  Correspondence

  	
  % ZC Sterling

  
	
   

  	
  P.O. Box 57003

  
	
   

  	
  Irvine, CA
  92619-7003

  
	
   

  	
   

  
	
  Customer
  Inquiries

  	
  Attn.: Customer
  Service

  
	
   

  	
  P.O. Box 4622

  
	
   

  	
  Waterloo, Iowa
  50704-4622

  
	
   

  	
   

  
	
  Loan
  Payments/Misapplied/NSF

  	
  Attn.: Payment
  Processing Unit

  
	
   

  	
  P.O. Box 780

  
	
   

  	
  Waterloo, IA
  50704-0780

  
	
   

  	
   

  
	
  Default Inquires

  	
  Attn: Default
  Unit

  
	
   

  	
  500 Enterprise

  
	
   

  	
  Horsham, PA
  19044

  
	
   

  	
   

  
	
  Payoff Funds

  	
  Attn.: Payoff
  Unit Residential Servicing

  
	
   

  	
  500 Enterprise,
  Suite 150

  
	
   

  	
  Horsham, PA
  19044

  
	
   

  	
   

  
	
  Document Request

  	
  Attn.: Document
  Management

  
	
   

  	
  3451 Hammond Ave

  

 

 

	
   

  	
  Waterloo, Iowa
  50702

  
	
   

  	
   

  
	
  Wire Funds
  Address

  	
  Beneficiary
  Name: GMAC Mortgage Corporation

  
	
  PI & TI only

  	
  Beneficiary
  Bank: First Union

  
	
   

  	
  ABA #: 031201467

  
	
   

  	
  A/C #:
  2100018728719

  
	
   

  	
  Ref.: Mortgage
  IT

  
	
   

  	
   

  
	
  All other
  communications to

  	
  Attn.: Sales and
  Acquisitions

  
	
   

  	
  3451 Hammond
  Avenue

  
	
   

  	
  Waterloo, IA
  50702

  

 

 

ATTACHMENT
3

 

GMAC MORTGAGE CONTACTS

 

	
  Department

  	
   

  	
  Name

  	
   

  	
  Phone

  
	
  Transfer Coordinator

  	
   

  	
  Elaine Kanter

  	
   

  	
  (319) 236-5558

  
	
  ARM Conversions,

  	
   

  	
  Rachel Weber

  	
   

  	
  (319) 236-5151

  
	
  ARM Set-up

  	
   

  	
  Dana Katz

  	
   

  	
  (319) 236-5321

  
	
  Assumptions

  	
   

  	
  Doris Gilbert

  	
   

  	
  (319) 236-5414

  
	
  Automatic Payment Plans

  	
   

  	
  Jill Bohlken

  	
   

  	
  (319) 236-5260

  
	
  Balloon Reset

  	
   

  	
  Rachel Weber

  	
   

  	
  (319) 236-5151

  
	
  Bankruptcy

  	
   

  	
  Bryan Michaels

  	
   

  	
  (215) 682-1072

  
	
  Buydown Subsidy; SSCRA

  	
   

  	
  Dana Katz

  	
   

  	
  (319) 236-5321

  
	
  Customer Service/VRU – toll free

  	
   

  	
  (800) 766-4622

  	
   

  	
   

  
	
  Escrow Analysis

  	
   

  	
  Mary Baker

  	
   

  	
  (319) 236-4746

  
	
  Hazard Claims

  	
   

  	
  Mary Baker

  	
   

  	
  (319) 236-4746

  
	
  Hazard Insurance

  	
   

  	
  Joan Johnson

  	
   

  	
  (319) 236-5238

  
	
  Investor Reporting

  	
   

  	
  John Felix

  	
   

  	
  (215) 682-1699

  
	
  Loan Set-up Department – WILMA file

  	
   

  	
  Teri Young

  Doug Earles

  	
   

  	
  (319) 236-4680

  (319) 236-5350

  
	
  MERS Administrator

  	
   

  	
  Nichole McBride

  	
   

  	
  (319) 236-7608

  
	
  Mortgage Liens

  	
   

  	
  Jo Gordon

  	
   

  	
  (319) 236-7484

  
	
  Payment Processing/Misapplied/NSF

  	
   

  	
  Vickie Hickson or

  June Bartlett

  	
   

  	
  (319) 236-5525

  (319) 236-5518

  
	
  Payoffs

  	
   

  	
  Fran Vergara

  	
   

  	
  (215) 682-1630

  
	
  Assistant Accounting Coordinator/Cash Reconciliation

  	
   

  	
  Jeannie Cronan- Berends

  	
   

  	
  (319) 236-5146

  

 

Fax Number           (319)
236-4633

 

Email                                                                    First_Last@gmacm.com

Example:  Elaine_Kanter@gmacm.com

 

 

ATTACHMENT
4

 

**For use in
forwarding payments, payoff checks, correspondence, bills, renewals, etc.

 

SERVICING TRANSFER

INFORMATION ENCLOSURE SHEET

 

	
  DATE:

  	
   

  	
  TRANSFER CUTOFF DATE:  

  
	
   

  	
   

  	
   

  	
   

  
	
  TO:

  	
  GMAC Mortgage

  	
   

  	
  FROM :

  
	
   

  	
  Sales &
  Acquisitions

  	
   

  	
   

  
	
   

  	
  Attention: Elaine
  Kanter

  	
   

  	
   

  
	
   

  	
  3451 Hammond Avenue

  	
   

  	
   

  
	
   

  	
  Waterloo, IA  50702

  	
   

  	
   

  

 

	
  GMAC

  MORTGAGE

  Loan

  Number

  	
   

  	
  Last

  Name

  	
   

  	
  Check

  Amount

  	
   

  	
  Check

  Number

  	
   

  	
  Date

  check

  received

  	
   

  	
  Tax

  	
   

  	
  Ins.

  Info

  	
   

  	
  Other

  (please detail)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

ATTACHMENT
5

 

CUSTOMER NOTIFICATION
LETTER SAMPLE

 

DATE

 

CUSTOMER NAME

CUSTOMER ADDRESS

CUSTOMER CITY, STATE,
& ZIP CODE

 

RE:                SELLING COMPANY
ACCOUNT NUMBER

GMAC Mortgage Account Number:

 

We wish to advise you
that the “Servicing Rights” for your Mortgage Loan referenced above have been
sold.  Effective (Transfer Date), GMAC
Mortgage will be your new servicer.  The
original terms and conditions of your Mortgage Loan will remain the same, and
this transfer will have no effect on them.

 

Effective (Transfer
Date), please direct payments to GMAC Mortgage.  All payments due prior to (Transfer Date) should be directed to
(Selling Company Name).

 

GMAC Mortgage will be
contacting you to acknowledge this transfer and provide you with their Mortgage
Account Statement.  If you have not
received a statement before your next scheduled payment is due, please write
your (Selling Company Name) and the GMAC Mortgage account number referenced
above on your check and remit your payment to the following address:

 

GMAC Mortgage

Attention:  Payment Processing

PO Box 780

Waterloo, IA 50704-0780

 

This transfer will not
affect your homeowners/hazard insurance. 
A notification is being sent to your hazard insurance carrier to send
future insurance information to GMAC Mortgage.

 

Your optional insurance
coverage is not transferable to GMAC Mortgage. 
For those of you who had optional insurance and are interested in
obtaining replacement coverage, please contact GMAC Mortgage at the customer
service number listed within this document.

 

If you are currently on
automatic payment withdrawal, GMAC Mortgage is unable to transfer the
data.  For those of you interested in
utilizing automatic payment withdrawal after the transfer, please contact GMAC
Mortgage at the customer service number listed within this document or visit
our web site at www.GMAC Mortgageortgage.com.

 

If you are currently
making your mortgage payment through government allotment or have established a
third party relationship to automatically make payments on your behalf (other
than automatic draft through

 

 

 

your personal checking or
savings account), please ensure you take the necessary steps to advise them of
your new loan number and change the payee to GMAC Mortgage Corporation.

 

You should also be aware
of the following information, which is set out in more detail in section 6 of
the real estate settlement procedures act (RESPA) (12 U.S.C. 2605):

 

During the 60-day period
following the effective date of the transfer of the loan servicing, a loan
payment received by your old servicer before its due date may not be treated by
the new loan servicer as late, and a late fee may not be imposed on you.

 

Section 6 of RESPA (12
U.S.C. 2605) gives you certain consumer rights.  If you send a “qualified written request” to your loan servicer
concerning the servicing of your loan, your servicer must provide you with a
written acknowledgment within 20 business days of receipt of your request.  A “qualified written request” is a written
correspondence, other than notice on a payment coupon or other payment medium
supplied by the servicer, which includes your name and account number, and your
reasons for the request.

 

 

Customer Name

Page -2-

Date

 

Not later than 60
business days after receiving your request, your servicer must make any
appropriate corrections to your account, and must provide you with a written
clarification regarding any dispute. 
During this 60-business day period, your servicer may not provide
information to a consumer reporting agency concerning any overdue payment
related to such period or qualified written request.  However, this does not prevent the servicer from initiating
foreclosure if proper grounds exist under the mortgage documents.

 

A business day is a day
on which the offices of the business entity are open to the public for carrying
on substantially all of its business functions.

 

Section 6 of RESPA also
provides for damages and costs for individuals or classes of individuals in
circumstances where servicers are shown to have violated the requirements of
that section.  You should seek legal
advice if you believe your rights have been violated

 

Future inquiries
regarding the Servicing of your loan should be directed to GMAC Mortgage.  Their correspondence address and toll free
telephone number are as follows:

 

GMAC Mortgage

Attention:  Customer Service Department

PO Box 4622

Waterloo, IA 50704-4622

 

Toll Free
Telephone number 1-800-766-4622

 

Customer Service
Hours

Monday - Friday 7:00 a.m. - 9:00 p.m. (CT)

Saturday 9:00 a.m. - 1:00 p.m. (CT)

 

It has been our pleasure
to service your Mortgage Loan, and we wish you a successful relationship with
GMAC Mortgage.  If you have any
questions regarding the transfer, please call our Customer Service Department
at 1-800-XXX-XXXX ext. XXXX.

 

Sincerely,

 

SELLING COMPANY NAME

 

2

 

ATTACHMENT 6 – ARM PLAN
CODE

 

	
  Loan Types -

  1st Lien

  	
   

  	
  ARM Plan Code

  
	
   

  	
   

  	
  WEEKLY
  1 YEAR

  
	
  1yr/1yr ARM

  	
   

  	
  Plan 1125 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-Bill, 2% period caps

  
	
  1yr/1yr ARM

  	
   

  	
  Plan 1001- Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, Life time caps at the first adjustment and 2%
  period caps thereafter

  
	
  3yr/1yr ARM

  	
   

  	
  Plan 1207 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, 2% period caps

  
	
  3yr/1yr ARM

  	
   

  	
  Plan 1201- Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, Life time caps at the first adjustment and 2%
  period caps thereafter

  
	
  5yr/1yr ARM

  	
   

  	
  Plan 1208 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, 2% period caps

  
	
  5yr/1yr ARM

  	
   

  	
  Plan 1218 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, Life time caps at the first adjustment and 2%
  period caps thereafter

  
	
  7yr/1yr ARM

  	
   

  	
  Plan 1209 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, 2% period caps

  
	
  7yr/1yr ARM

  	
   

  	
  Plan 1219 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, Life time caps at the first adjustment and 2%
  period caps thereafter

  
	
  10yr/1yr ARM

  	
   

  	
  Plan 1211 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, 2% period caps

  
	
  10yr/1yr ARM

  	
   

  	
  Plan 1210 - Assuming a 45 Day
  Lead time, Wkly 1 Yr T-bill, Life time caps at the first adjustment and 2%
  period caps thereafter

  
	
   

  	
   

  	
  1
  YEAR LIBOR’S

  
	
  1yr/1yr ARM

  	
   

  	
  Plan 1951 – 45 Day Lead time, 1
  Year Libor(WSJ), 2% period caps

  
	
  1yr/1yr ARM

  	
   

  	
  Plan 1952 – 45 Day Lead time, 1
  Year Libor(WSJ), Life time caps at the first adjustment and 2% period caps
  thereafter

  
	
  3yr/1yr ARM

  	
   

  	
  Plan 1954 – 45 Day Lead time, 1
  Year Libor(WSJ), 2% period caps

  
	
  3yr/1yr ARM

  	
   

  	
  Plan 1191– 45 Day Lead time, 1
  Year Libor(WSJ), Life time caps at the first adjustment and 2% period caps
  thereafter

  
	
  5yr/1yr ARM

  	
   

  	
  Plan 1179– 45 Day Lead time, 1
  Year Libor(WSJ), 2% period caps

  
	
  5yr/1yr ARM

  	
   

  	
  Plan 1189 – 45 Day Lead time, 1
  Year Libor(WSJ), Life time caps at the first adjustment and 2% period caps
  thereafter

  
	
  7yr/1yr ARM

  	
   

  	
  Plan 1182– 45 Day Lead time, 1
  Year Libor(WSJ), 2% period caps

  
	
  7yr/1yr ARM

  	
   

  	
  Plan 1192 – 45 Day Lead time, 1
  Year Libor(WSJ), Life time caps at the first adjustment and 2% period caps
  thereafter

  
	
  10yr/1yr ARM

  	
   

  	
  Plan 1946– 45 Day Lead time, 1
  Year Libor(WSJ), 2% period caps

  
	
  10yr/1yr ARM

  	
   

  	
  Plan 1956 – 45 Day Lead time, 1
  Year Libor(WSJ), Life time caps at the first adjustment and 2% period caps
  thereafter

  
	
   

  	
   

  	
  6
  Month LIBOR’S(45 day lookback)

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6045 – 45 Day Lead
  time, 6 Month Libor(WSJ), 1% period caps

  

 

 

	
  6mo/6mo ARM

  	
   

  	
  Plan 6088 – 45 Day Lead
  time, 6 Month Libor(WSJ), 1.5% period caps

  
	
  3yr/6mo ARM

  	
   

  	
  Plan 6651 – 45 Day Lead
  time, 6 Month Libor(WSJ), 2% caps at the first adjustment and 1% period caps
  thereafter

  
	
  5yr/6mo ARM

  	
   

  	
  Plan 6051 – 45 Day Lead
  time, 6 Month Libor(WSJ), Life time caps at the first adjustment and 1%
  period caps thereafter

  
	
  7yr/6mo ARM

  	
   

  	
  Plan 6653 – 45 Day Lead
  time, 6 Month Libor(WSJ), Life time caps at the first adjustment and 1%
  period caps thereafter

  
	
  10yr/6mo
  ARM

  	
   

  	
  Plan 6654 – 45 Day Lead
  time, 6 Month Libor(WSJ), Life time caps at the first adjustment and 1%
  period caps thereafter

  
	
   

  	
   

  	
  6
  Month Libor’s(1st business day 1 month before)

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6040 – 1st business day 1
  month before, 6 Month Libor(WSJ), 1.0% caps

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6041 – 1st
  business day 1 month before, 6 Month Libor(WSJ), 1.5% caps

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6042 – 1st
  business day 1 month before, 6 Month Libor(WSJ),2.0% caps

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6039 – 1st
  business day 1 month before, 6 Month Libor(WSJ), 3% caps

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6013 – 1st
  business day 1 month before, 6 Month Libor(WSJ), 2.0% caps at the first
  adjustment and 1% period caps thereafter

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6049 – 1st
  business day 1 month before, 6 Month Libor(WSJ), 3.0% caps at the first
  adjustment and 1% period caps thereafter

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6027 – 1st
  business day 1 month before, 6 Month Libor(WSJ), Lifetime caps at the first
  adjustment and 1% period caps thereafter

  
	
  6mo/6mo ARM

  	
   

  	
  Plan 6028 – 1st
  business day 1 month before, 6 Month Libor(WSJ), Lifetime caps at the first
  adjustment and 2% period caps thereafter

  
	
   

  	
   

  	
  INTEREST
  ONLY 6 Month LIBOR’S

  
	
  3yr/6mo ARM

  	
   

  	
  Plan I105 – 45 Day Lead time, 6
  Month Libor(WSJ), 2% caps at the first adjustment and 1% period caps
  thereafter

  
	
  5yr/6mo ARM

  	
   

  	
  Plan I106 – 45 Day Lead time, 6
  Month Libor(WSJ), Lifetime caps at the first adjustment and 1% period caps
  thereafter

  
	
  7yr/6mo ARM

  	
   

  	
  Plan I107 – 45 Day Lead time, 6
  Month Libor(WSJ), Lifetime caps at the first adjustment and 1% period caps
  thereafter

  
	
  10yr/6mo ARM

  	
   

  	
  Plan I108 – 45 Day Lead time, 6
  Month Libor(WSJ), Lifetime caps at the first adjustment and 1% period caps
  thereafter

  
	
  15 yr FRM

  	
   

  	
  FIXED

  
	
  30 yr FRM

  	
   

  	
  FIXED

  

 

 

BALLOON
PLAN CODES:

 

 

	
  5 YR FHLMC

  	
  Plan RP02

  
	
  5 YR FNMA

  	
  Plan RPO4

  

 

 

	
  7 YR FHLMC

  	
  Plan RPO6

  
	
  7 YR FNMA

  	
  Plan RP08

  

 

 

ATTACHMENT 7 – PROGRAMS

 

	
  Flow Programs

  
	
  050 - Jumbo A

  
	
  080 – FNMA 80/20 program

  
	
  100 – FNMA Flexible 100
  program

  
	
  105 - Full Doc

  
	
  150 - Full/Alt Doc

  
	
  201 - Stated Income

  
	
  202 - No Ratio

  
	
  203 - NINA

  
	
  301 - US Cit Employed Abroad

  
	
  302 - Non-Perm Res Alien

  
	
  303 - Foreign National Full Doc

  
	
  305 - Foreign National Stated
  Income

  
	
  401 - Non-Warrant Condo

  
	
  402 - Rural Prop

  
	
  403 - Mixed Use Prop

  
	
  501 - 90% LTV no MI

  
	
  502 - Lender Paid MI

  
	
  503 - C/O with no MI

  
	
  504 - Super Jumbo

  
	
  600 - Preferred Customer Home
  Equity Loan

  
	
  601 - Preferred Customer Home
  Equity Loan S.I.

  
	
  910 - Stated Income/Stated
  Asset

  
	
  997 - GMAC Select/Super Select

  
	
  998 - Stated Assets/Income
  Verified

  

 

 

ATTACHMENT 8

 

HAZARD CLAIM INFORMATION

 

 

DATE
                    
LOAN NUMBER
                                      
DOL
                              
DMG TYPE                             

 

INVESTOR
                              
INVESTOR#                               
NEAR/TOTAL        REPORTED TO INVESTOR
        

 

MORTGAGOR
                                                                                                                                                                                    

LAST NAME                                                                                                                        FIRST
NAME

 

CO-MORTGAGOR
                                                                                                                                                                              

LAST NAME                                                                                                                        FIRST
NAME

 

PROPERTY
ADDRESS                                                                                                                                                                     

 

                                                                                                                                                                

CITY                                                                                              STATE                                          ZIPCODE

 

TELEPHONE #’S                HOME
                                                                                   MR
WORK
                                        

 

OTHER
                                                                                 MRS
WORK
                                      

 

******************************************************************************************************

 

SELLING
COMPANY CONTACT NAME AND TELEPHONE #
                                                                     

 

CONTRACTOR
                                                                                                                                                                                  

 

ADDRESS
                                                                                                                                                                                        

 

TELEPHONE
#
                                                                                                                                                                                

 

PUBLIC
ADJUSTER
                                                                                                                                                                        

 

ADDRESS
                                                                                                                                                                                        

 

TELEPHONE
#
                                                                                                                                                                                

 

******************************************************************************************************

 

CHECK
AMOUNT
                                        
INS CO
                                        
DEPOSITED
                                      

 

DISBURSEMENTS:

 

•                  DATE
                              
CK AMT                               
CK#
                              
BALANCE
                            

 

PAYABLE
TO
                                                      
SENT TO        CONTR
       TH       
OTHER        REG
       FED EX

 

•                  DATE
                              
CK AMT                               
CK#
                              
BALANCE
                            

 

PAYABLE
TO
                                                      
SENT TO        CONTR
       TH       
OTHER        REG
       FED EX

 

•                  DATE
                              
CK AMT                               
CK#
                              
BALANCE
                            

 

PAYABLE
TO
                                                      
SENT TO        CONTR
       TH       
OTHER        REG
       FED EX

 

•                  DATE
                              
CK AMT                               
CK#
                              
BALANCE
                            

 

PAYABLE
TO                                                       
SENT TO        CONTR
       TH       
OTHER        REG       
FED EX

 

INSPECTIONS:         %
COMPLETE AS OF
                                   %
COMPLETE AS OF
                    

 

 

            %
COMPLETE AS OF
                        
          % COMPLETE
AS OF
                    

 

****************************************************************************************************

 

COMMENTS
                                                                                                                                                                                  

 

 

EXHIBIT G

 

Limited Signing Authority

 

RESOLUTION OF THE BOARD
OF DIRECTORS OF
                                  

 

APPOINTMENT OF CERTAIN
OFFICERS FOR PURPOSES OF EXECUTING CERTAIN DOCUMENTS

 

WHEREAS,
                                      (the
“Company”) desires to execute documents necessary to perfect the release of
mortgage loans and the initiation of foreclosure actions (the “Releases” and
“Foreclosures”) regarding certain mortgage servicing rights sold by
              to
GMAC Mortgage Corporation, and that these Releases and Foreclosures may be best
and most efficiently accomplished by the appointment of certain officers of the
Company with special power to execute the individual documents to be recorded
on behalf of the Company.

 

NOW,THEREFORE, BE IT RESOLVED, that the persons named
on Exhibit A attached hereto be, and each of them hereby are appointed as
officers of the Company to be effective as of the first day of
                              ,
2002 and terminating upon GMAC Mortgage Corporation’s receipt of the last
recorded assignment, as indicated below with full power to execute on behalf of
the Company, by actual or facsimile signature, all documents in connection with
the Releases and Foreclosures; and

 

FURTHER RESOLVED, that the Board is informed and aware
that the persons named on Exhibit A attached hereto are employees of GMAC
Mortgage Corporation, and that they may from time to time be named as officers
by other corporations for purposes similar to that set forth in these
resolutions; and

 

FURTHER RESOLVED, that the foregoing appointments and
grants of power and authority are revocable upon completion of the project related
to the Releases and Foreclosures; and the authority of the persons so appointed
is specifically and strictly limited to the execution of the specific documents
referred to above for the purposes herein authorized; and

 

FURTHER RESOLVED, that the foregoing appointments and
grants of power and authority shall not be deemed to (i) entitle any of the
persons so appointed to receive any compensation or other benefits from the
Company or any of its affiliates or (ii) create any employer-employee relationship
between the Company or any of its affiliates and any such persons; and

 

FURTHER RESOLVED, that the Secretary and each
Assistant Secretary (other than any Assistant Secretary appointed by these
resolutions) of the Company are hereby authorized and directed from time to
time to certify copies of these resolution, the incumbency of the officers
appointed pursuant to these resolutions, and the actual facsimile signatures of
said officers.

 

 

CERTIFICATE OF RESOLUTION

 

I, THE UNDERSIGNED,
Secretary of                                 ,
a
                                    ,
having its principal place of business in
                                    ,
      , hereby certify that the attached is a
true copy of a certain resolution duly adopted by the Board of Directors of the
Owner in accordance with its Bylaws at, and recorded in the minutes of, a
meeting of the Board duly held on
                                      ,
2002 as taken from the minutes of the meeting and compared by me with the
original of the resolution recorded in the minutes.  I further certify that the resolution is in full force and effect
and has not been revoked.

 

IN WITNESS WHEREOF, I set my hand and caused the seal of
                          
to be affixed hereto on this           day
of
                                              ,
2002.

 

	
   

  	
   

  	
   

  
	
   

  	
  Name, title

  

 

Subscribed and sworn to before me this
          day of
                            ,
2002

 

	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  

 

My commission expires:

 

 

Exhibit A

 

	
  Name

  	
   

  	
  Title to
  Which Appointed

  
	
   

  	
   

  	
   

  
	
  Kenneth R. Perkins

  	
   

  	
  Vice President

  
	
  Wesley B. Howland

  	
   

  	
  Vice President

  
	
  Susan Meier

  	
   

  	
  Vice President

  
	
  Lionel Antunes

  	
   

  	
  Vice President

  
	
  Daniel Katella

  	
   

  	
  Vice President

  
	
  Kathy Fitzgerald

  	
   

  	
  Vice President

  
	
  Liz Yeranosian

  	
   

  	
  Vice President

  
	
  Dianna Sandoval

  	
   

  	
  Vice President

  
	
  Joyce Petty

  	
   

  	
  Vice President

  
	
  Laura Siess

  	
   

  	
  Vice President

  
	
  Debi Pond

  	
   

  	
  Assistant Vice President

  
	
  Margie Kwaitanowski

  	
   

  	
  Assistant Vice President

  
	
  Sheryl McNally

  	
   

  	
  Assistant Vice President

  
	
  Jody Delfs

  	
   

  	
  Assistant Vice President

  
	
  Ryan Carnes

  	
   

  	
  Assistant Vice President

  
	
  Roberta Pettengill

  	
   

  	
  Assistant Vice President

  
	
  Vickie Ingamells

  	
   

  	
  Assistant Vice President

  
	
  David Cunningham

  	
   

  	
  Assistant Secretary

  
	
  Jenny Brouwer

  	
   

  	
  Assistant Secretary

  

 

 

Exhibit
H

Form of Asset Plan

 

 

	
  Asset
  Status:

  	
   

  	
  Property
  Information:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  REO Status:

  	
   

  	
  Property Type:

  	
   

  
	
  Other Activities:

  	
   

  	
  Detailed Type:

  	
   

  
	
  Ownership Evidence:

  	
   

  	
  Prop. Condition:

  	
   

  
	
  Ex-Borrower Name:

  	
   

  	
  Project Name:

  	
   

  
	
  Curr. Occupancy:

  	
   

  	
  Unit #1 Square Ft:

  	
   

  
	
  Occ. Info Source:

  	
   

  	
  Rooms:

  	
   

  
	
  Curr Princ. Balance

  	
   

  	
  Bedrooms:

  	
   

  
	
  Est. Accrued Interest:

  	
   

  	
  Bathrooms:

  	
   

  
	
  Advance/Escrow/Susp:

  	
   

  	
  REO Date:

  	
   

  
	
  Full Legal Balance:

  	
   

  	
  Monthly Taxes:

  	
   

  
	
   

  	
   

  	
  Mo. Maint./HOA:

  	
   

  

 

Appraisal
Log:

 

	
   

  	
   

  	
   

  	
   

  	
  Market

  	
   

  	
  Repaired

  	
   

  	
  Quick

  	
   

  	
   

  
	
  Date

  	
   

  	
  Type

  	
   

  	
  Value

  	
   

  	
  Value

  	
   

  	
  Sale

  	
   

  	
  Comments

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Listing
Offer/Contract:

 

	
  Listing
  Broker:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Closing

  Scheduled?

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Offer or

  	
   

  	
  Buyer/

  	
   

  	
  Listing/

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Type

  	
   

  	
  Contract

  	
   

  	
  Listing
  Agent

  	
   

  	
  Counter

  	
   

  	
  Outcome

  	
   

  	
  Comments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Comments/Background:

 

	
  INVESTOR:

  
	
  EVICTION:

  
	
  MI STATUS:

  
	
  PRE-LISTED:

  
	
  LOCATION/MARKET:

  
	
   

  
	
   

  
	
   

  
	
  CONDITION:

  
	
   

  
	
   

  
	
   

  
	
  VALUE:

  
	
   

  
	
   

  

 

	
  Recommended
  Action:

  
	
   

  
	
   

  
	
   

  

 

 

	
  GMAC Mortgage Corporation

  Recommended
  by:

  	
  GMAC Mortgage Corporation

  Approved
  by:

  	
  Mortgage I/T

  Approved
  by:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  Signature

  	
  Signature

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name & Title

  	
  Name & Title

  	
  Name & Title

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00065-of-00352.parquet"}]]