SECTION 330:10-9-3. Repurchase requirements

(a)   If any document or documents constituting a part of a mortgage file are defective or incomplete in any material respect, the affected participant shall cure the defect within a period of 60 days from the time the Trustee notifies the responsible participant of the existence of the defect. Each participant covenants and agrees that, if any material defect cannot be cured within such 60 day period, the participant will, not later than 90 days after the Trustee's notice to it respecting such defect, purchase the related mortgage loan from the Agency at a price equal to:

(1)   100% of the principal remaining unpaid on such mortgage loan, plus

(2)   interest thereon to the date of the purchase. It is understood and agreed that the obligation of the participant to purchase the mortgage loan as to which a material defect in a constituent document exists shall constitute the sole remedy respecting such defect available to the Agency or the Trustee.

(b)   The representations, warranties and covenants made by each participant for the mortgage loans pursuant to the agreement will service the sale of the mortgage loans by the participant to the Agency and the representations, warranties and covenants shall inure to the benefit of the transferees and assigns of the Agency which, under the Indenture, include the Trustee and the bondholders. Upon discovery by a participant or the Trustee of a branch of any of the representations, warranties and covenants which materially and adversely affects the value of any mortgage loan or the interest of the Agency in any mortgage loan, the party discovering such breach shall give prompt written notice to the other. Within 60 days of its discovery or its receipt of notice of breach, a participant shall cure such breach in all material respects or, not later than 90 days after such discovery, purchase the mortgage loan from the Agency in the manner and at the purchase price set forth in the Agreement. It is understood and agreed that the obligation of a participant to purchase the mortgage loan as to which a breach has occurred and is continuing shall constitute the sole remedy against the participant respecting such breach available to the Agency or the Trustee.