EXHIBIT 99.1
EXECUTION COPY
XXXXXX XXXXXXX ABS CAPITAL I, INC.
as Purchaser,
and
XXXXXX XXXXXXX XXXX XXXXXX CREDIT CORPORATION
as Seller
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HOME EQUITY LOAN PURCHASE AGREEMENT
Dated as of January 1, 2005
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Home Equity Loans
Table of Contents
Page
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ARTICLE I.
DEFINITIONS.
Section 1.1. Definitions.................................................1
ARTICLE II.
SALE OF HOME EQUITY LOANS AND RELATED PROVISIONS
Section 2.1. Sale of Home Equity Loans...................................2
Section 2.2. Payment of Purchase Price...................................5
Section 2.3. Optional Retransfers of Home Equity Loans...................6
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties.......................7
ARTICLE IV.
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller....................................18
ARTICLE V.
SERVICING
Section 5.1. Servicing..................................................18
ARTICLE VI.
INDEMNIFICATION BY THE SELLER WITH RESPECT TO THE HOME EQUITY LOANS
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Section 6.1. Indemnification With Respect to the Home Equity Loans......18
Section 6.2. Limitation on Liability of the Seller......................19
ARTICLE VII.
TERMINATION
Section 7.1. Termination................................................19
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
Section 8.1. Amendment..................................................19
Section 8.2. GOVERNING LAW..............................................19
Section 8.3. Notices....................................................19
Section 8.4. Severability of Provisions.................................20
Section 8.5. Relationship of Parties....................................20
Section 8.6. Counterparts...............................................20
Section 8.7. Further Agreements.........................................20
Section 8.8. Intention of the Parties...................................20
Section 8.9. Successors and Assigns; Assignment of This Agreement.......21
Section 8.10. Survival...................................................21
Section 8.11. Third Party Beneficiary....................................21
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Exhibits
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Exhibit 1 Home Equity Loan Schedule
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This HOME EQUITY LOAN PURCHASE AGREEMENT (this "Agreement"),
dated as of January 1, 2005, is made between Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit
Corporation (the "Seller") and Xxxxxx Xxxxxxx ABS Capital I Inc. (the
"Purchaser").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Seller owns Cut-off Date Loan Balances and the
Related Documents for the home equity lines of credit (the "Revolving Credit
Loans") and the adjustable-rate closed end mortgage loans (the "Mortgage
Loans") indicated on the Home Equity Loan Schedule attached as Exhibit 1
hereto (the Revolving Credit Loans and the Mortgage Loans are collectively
referred to as the "Home Equity Loans"), including rights to (a) any property
acquired by foreclosure or deed in lieu of foreclosure or otherwise, and (b)
the proceeds of any insurance policies covering the Home Equity Loans;
WHEREAS, the parties hereto desire that the Seller sell the
Cut-off Date Loan Balances of the Home Equity Loans to the Purchaser pursuant
to the terms of this Agreement together with the Related Documents on the
Closing Date, and thereafter, with respect to the Revolving Credit Loans, all
Additional Balances created on or after the Cut-off Date;
WHEREAS, pursuant to the terms of the Servicing Agreement,
the Servicer will service the Home Equity Loans directly or through one or
more Subservicers;
WHEREAS, pursuant to the terms of the Trust Agreement, the
Purchaser will transfer on the Closing Date, the Home Equity Loans to the
Issuer in exchange for the cash proceeds of the Securities;
WHEREAS, pursuant to the terms of the Trust Agreement, the
Issuer will issue and transfer to or at the direction of the Purchaser, the
Certificates;
WHEREAS, pursuant to the terms of the Indenture, the Issuer
will issue and transfer to or at the direction of the Purchaser, the Notes,
secured by the Trust Estate, including the Home Equity Loans;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS.
Section 1.1. Definitions. For all purposes of this Home Equity Loan
Purchase Agreement, except as otherwise expressly provided herein or unless
the context otherwise requires, capitalized terms not otherwise defined herein
shall have the meanings assigned to such
terms in the Definitions contained in Appendix A to the Indenture dated as of
January 1, 2005 (the "Indenture"), between MSDWCC HELOC Trust 2005-1, as
issuer and Xxxxx Fargo Bank, National Association, as indenture trustee, which
is incorporated by reference herein. All other capitalized terms used herein
shall have the meanings specified herein.
ARTICLE II.
SALE OF HOME EQUITY LOANS AND RELATED PROVISIONS
Section 2.1. Sale of Home Equity Loans.
(a) The Seller, by the execution and delivery of this Agreement, does
hereby sell, assign, set over, and otherwise convey for all non-tax purposes
to the Purchaser, without recourse, all of its right, title and interest in,
to and under the following, and wherever located: (i) the Home Equity Loans
(including without limitation the Cut-off Date Loan Balances and, with respect
to the Revolving Credit Loans, all Additional Balances) and all interest
accruing thereon and all collections in respect thereof received on or after
the Cut-off Date; (ii) property which secured a Home Equity Loan and which has
been acquired by foreclosure or deed in lieu of foreclosure; (iii) the
interest of the Seller in any insurance policies in respect of the Home Equity
Loans; and (iv) all proceeds of the foregoing; provided, however, that with
respect to the Revolving Credit Loans, the Purchaser does not assume the
obligation under each Loan Agreement to fund Draws to the Mortgagor
thereunder, and the Purchaser shall not be obligated or permitted to fund any
such Draws, it being agreed that the Seller will retain the obligation to fund
future Draws. Such conveyance shall be deemed to be made: (1) with respect to
the Home Equity Loans, as of the Closing Date; and (2) with respect to each
Revolving Credit Loan, the amount of each Additional Balance created on or
after the Cut-off Date, as of the later of the Closing Date and the date that
the corresponding Draw was made pursuant to the related Loan Agreement,
subject to the receipt by the Seller of consideration therefor as provided
herein under clause (b) of Section 2.2.
(b) In connection with such conveyance, the Seller further agrees, at
its own expense, on or prior to the Closing Date with respect to the Loan
Balance of the Home Equity Loans to indicate in its books and records that the
Home Equity Loans have been sold to the Purchaser pursuant to this Agreement
and to deliver to the Purchaser true and complete lists of all of the Home
Equity Loans specifying for each Home Equity Loan (i) its account number and
(ii) its Cut-off Date Loan Balance. Such lists, which form part of the Home
Equity Loan Schedule shall be marked as Exhibit 1 to this Agreement and are
hereby incorporated into and made a part of this Agreement.
(c) In connection with such conveyance by the Seller, the Seller
shall on behalf of the Purchaser deliver to, and deposit with the respective
Custodian, on or before the Closing Date, the following documents or
instruments with respect to each Home Equity Loan:
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(i) the original Mortgage Note or Credit Line Agreement, as
applicable, endorsed without recourse in blank or, with respect to
any Home Equity Loan as to which the original Mortgage Note has been
permanently lost or destroyed and has not been replaced, a Lost Note
Affidavit, substantially in the form attached hereto as Exhibit A;
(ii) the original Mortgage with evidence of recording thereon,
or, if the original Mortgage has not yet been returned from the
public recording office, a copy of the original Mortgage, or a
certified copy of such Mortgage in the event the recording office
keeps the original or if the original is lost;
(iii) Assignments of Mortgage (which may be included in one or
more blanket assignments if permitted by applicable law) in blank;
(iv) originals of any intervening assignments of the Mortgage,
with evidence of recording thereon, or, if the original of any such
intervening assignment has not yet been returned from the public
recording office, a copy of such original intervening assignment
certified by the public recording office in which such original
intervening assignment has been recorded;
(v) a true and correct copy of each assumption, modification,
consolidation or substitution agreement, if any, relating to the
Home Equity Loan; and
(vi) the (a) original policy of title insurance or (b)
ownership report, if applicable (or a preliminary title report if
the original title insurance policy or ownership report has not been
received from the title insurance company or if a preliminary title
report is the documentation required by Seller).
Within the time period for the review of each Mortgage File set
forth in Section 2.3 of the Custodial Agreement, if a material defect in any
Mortgage File is discovered which may materially and adversely affect the
value of the related Home Equity Loan, or the interests of the Indenture
Trustee (as pledgee of the Home Equity Loans), the Noteholders, the
Certificateholders or the Credit Enhancer in such Home Equity Loan, including
the Seller's failure to deliver any document required to be delivered to the
Custodian on behalf of the Indenture Trustee, the Seller shall cure such
defect, repurchase the related Home Equity Loan at the Repurchase Price or
substitute an Eligible Substitute Loan for the related Home Equity Loan upon
the same terms and conditions set forth in Section 3.1 hereof for breaches of
representations and warranties as to the Home Equity Loans.
Notwithstanding the foregoing, with respect to any Home Equity Loan
with respect to which the Mortgage Note has not been (a) delivered and
certified to or (b) prepaid in full on or prior to July 27, 2005, the Seller
shall be obligated to repurchase the related Home Equity Loan on such date. In
addition, with respect to the Revolving Credit Loans listed on Exhibit 1
hereto, if the Mortgage File described above has not been (a) delivered and
certified to or (b) prepaid in
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full on or prior to July 27, 2005, the Seller shall be obligated to repurchase
such Revolving Credit Loan on such date.
If (a) the short-term senior unsecured debt rating of Xxxxxx Xxxxxxx
by Standard & Poor's is reduced below "A-1" or (b) the long-term senior
unsecured debt obligations of Xxxxxx Xxxxxxx & Co. are downgraded below a
rating of "A3" by Xxxxx'x or "A-" by Standard & Poor's, the Seller, at its own
expense, shall cause the Assignments of Mortgage as so completed to be
delivered for recording in favor of the Indenture Trustee (which may be a
blanket assignment if permitted by applicable law) in the appropriate public
office for real property or other records within 60 days of the occurrence of
such event, except that the Seller need not cause to be recorded any
Assignment of Mortgage which relates to a Home Equity Loan in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel acceptable to
the Credit Enhancer, delivered by the Seller (at the Seller's expense) to the
Credit Enhancer, the recordation of such assignment is not necessary to
protect the Indenture Trustee's, the Securityholders' and the Credit
Enhancer's interest in the related Home Equity Loan. The preceding sentence
notwithstanding, each Assignment of Mortgage shall be submitted for recording
by the Seller in the manner described above, notwithstanding the delivery of
any Opinion of Counsel, at the expense of the Seller, upon the earliest to
occur of: (i) reasonable direction by the Credit Enhancer, (ii) the occurrence
of an Event of Servicer Termination, (iii) the occurrence of a servicing
transfer as described in the Servicing Agreement and (iv) with respect to any
one Assignment of Mortgage for any Home Equity Loan, the institution of
foreclosure proceedings.
While such assignment to be recorded is being recorded, the Custodian
shall retain a photocopy of such assignment. If any assignment is lost or
returned unrecorded to the Custodian because of any defect therein, the Seller
is required to prepare a substitute assignment or cure such defect, as the
case may be, and the Seller shall cause such assignment to be recorded in
accordance with this paragraph.
In instances where an original Mortgage or any original intervening
assignment of Mortgage was not, in accordance with clauses (ii) and (iv) of
this Section 2.1(c), delivered by the Seller to the respective Custodian prior
to or concurrently with the execution and delivery of this Agreement, the
Seller will deliver or cause to be delivered the originals of such documents
to such Custodian promptly upon receipt thereof.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the property, conveyed to it pursuant to this Section 2.1.
(d) The parties hereto intend that the transactions set forth herein
constitute a sale by the Seller to the Purchaser of all the Seller's right,
title and interest in and to the Home Equity Loans and other property as and
to the extent described above. In the event the transactions set forth herein
are deemed not to be a sale, the Seller hereby grants to the Purchaser a
security interest in
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all of the Seller's right, title and interest in, to and under the Home Equity
Loans and such other property, to secure all of the Seller's obligations
hereunder, and this Agreement shall constitute a security agreement under
applicable law. The Seller agrees to take or cause to be taken such actions
and to execute such documents, including without limitation the filing of all
necessary UCC-1 financing statements filed in the State of Illinois (which
shall have been submitted for filing as of the Closing Date) and in the State
of Delaware (which shall have been submitted for filing within 30 days of the
Closing Date), any continuation statements with respect thereto and any
amendments thereto required to reflect a change in the name or corporate
structure of the Seller or the filing of any additional UCC-1 financing
statements due to the change in the principal office of the Seller, as are
necessary to perfect and protect the Purchaser's interests in each Home Equity
Loan and the proceeds thereof.
Section 2.2. Payment of Purchase Price.
(a) The "Purchase Price" for the Home Equity Loans (including the
Additional Balances) shall be (1) with respect to the Home Equity Loans, an
amount equal to $753,650,055 in immediately available funds, together with the
Certificates, in respect of the Cut-off Date Loan Balances thereof and (2) in
the case of each Revolving Credit Loan, any Additional Balance transferred
hereunder created on or after the Cut-off Date, the principal amount of the
related Draw under the Loan Agreement on the later of the Closing Date and the
date of the creation of such Additional Balance.
(b) In consideration of the sale of the Home Equity Loans from the
Seller to the Purchaser on the Closing Date, the Purchaser shall pay to the
Seller on the Closing Date by wire transfer of immediately available funds to
a bank account designated by the Seller, the amount specified above in clause
(1) of Section 2.2(a) for the Home Equity Loans. With respect to each
Revolving Credit Loan and any related Additional Balance transferred hereunder
with respect to any Revolving Credit Loan, the Issuer as assignee of the
Purchaser shall pay or cause to be paid to the Seller or its designee the
portion of the Purchase Price specified above in clause (2) of Section 2.2(a)
for such Additional Balance in one of the following ways, as applicable: (i)
for any Collection Period during the Managed Amortization Period, so long as a
Rapid Amortization Event has not occurred, (a) a cash payment pursuant to
Section 3.03(ii) of the Servicing Agreement and Section 2.2(a)(2) hereof in an
amount equal to the related Draw, if then available from Principal Collections
during the related Collection Period on the Revolving Credit Loans, and (b) to
the extent aggregate Draws exceed Principal Collections on all of the
Revolving Credit Loans for such Collection Period, an increase in the
aggregate principal amount of the Class L Certificates, as of the Payment Date
corresponding to the Collection Period in which such Additional Balances on
the Revolving Credit Loans were created, equal to the amount by which such
Additional Balances exceeded Principal Collections on all of the Revolving
Credit Loans for such Collection Period, and (ii) for any Collection Period
after the end of the Managed Amortization Period, so long as a Rapid
Amortization Event has not occurred, an increase in the
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aggregate principal amount of the Class L Certificates as of each Payment Date
in an aggregate amount equal to the total of the related Draws for the
corresponding Collection Period.
Section 2.3. Optional Retransfers of Home Equity Loans. Subject to
the conditions set forth below, the Seller may, but shall not be obligated to,
require the retransfer of Home Equity Loans from the Trust to the Seller as of
the close of business on a Payment Date (the "Transfer Date"). On the fifth
Business Day (the "Transfer Notice Date") prior to the Transfer Date
designated in such notice, the Seller shall give the Indenture Trustee, the
Credit Enhancer and the Servicer a notice of the proposed retransfer that
contains a list of the Home Equity Loans to be retransferred and any
additional information reasonably requested by the Indenture Trustee, the
Credit Enhancer or the Servicer. Such retransfers of Home Equity Loans shall
be permitted upon the satisfaction of the following conditions:
1. no Rapid Amortization Event has occurred;
2. the Class O Certificateholder Interest as of such Transfer Date
(after giving effect to such removal) exceeds the Minimum Class
O Certificateholder Interest;
3. the removal of any Home Equity Loans on any Transfer Date
during the Managed Amortization Period shall not, in the
reasonable belief of the Seller, cause a Rapid Amortization
Event;
4. the Seller shall have delivered to the Indenture Trustee and
the Credit Enhancer a loan schedule containing a list of all
Home Equity Loans removed from the Trust;
5. the Seller shall represent and warrant that no selection
procedures which the Seller reasonably believes are adverse to
the interests of the Noteholders or the Credit Enhancer were
used by the Seller in selecting such Home Equity Loans;
6. in connection with any such transfer of Home Equity Loans, the
Rating Agencies and the Credit Enhancer shall have been
notified of the proposed transfer and prior to the Transfer
Date each Rating Agency has confirmed in writing that such
transfer would not result in a reduction or withdrawal of the
ratings assigned to the Notes without regard to the Policy;
7. the average CLTV of the Home Equity Loans, after giving effect
to the proposed transfer of Home Equity Loans on the Transfer
Date, shall be equal to or less than the average CLTV of the
Home Equity Loans prior to the Transfer Date and the average
Credit Score of the Home Equity Loans, after giving effect to
the proposed transfer of Home Equity Loans on the Transfer
Date, shall be equal to or greater than the average Credit
Score of the Home Equity Loans prior to the Transfer Date; and
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8. the Seller shall have delivered to the Indenture Trustee and
the Credit Enhancer an officer's certificate confirming the
conditions set forth in clauses (1) through (7) above.
Upon receiving the requisite information from the Seller, the
Servicer shall perform in a timely manner those acts required of it, as
specified above. Upon satisfaction of the above conditions, on the Transfer
Date the Indenture Trustee shall deliver, or cause to be delivered, to the
Seller the Mortgage File for each Home Equity Loan being so transferred, and
the Indenture Trustee shall execute and deliver to the Seller such other
documents prepared by the Seller as shall be reasonably necessary to transfer
such Home Equity Loans to the Seller. Any such transfer of the Trust's right,
title and interest in and to Home Equity Loans shall be without recourse,
representation or warranty by or of the Indenture Trustee or the Trust to the
Seller.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
Section 3.1. Seller Representations and Warranties. The Seller
represents and warrants to the Purchaser, as of the Closing Date (or if
otherwise specified below, as of the date so specified):
(a) As to the Seller:
(i) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has the corporate power to own its assets and to
transact the business in which it is currently engaged. The Seller
is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it
requires such qualification and in which the failure to so qualify
would have a material adverse effect on the business, properties,
assets or condition (financial or other) of the Seller;
(ii) The Seller has the power and authority to make, execute,
deliver and perform its obligations under this Agreement and all of
the transactions contemplated under this Agreement, and has taken
all necessary corporate action to authorize the execution, delivery
and performance of this Agreement. When executed and delivered, this
Agreement will constitute the legal, valid and binding obligation of
the Seller enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies;
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(iii) The Seller is not required to obtain the consent of any
other Person or any consent, license, approval or authorization
from, or registration or declaration with, any governmental
authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement,
except for such consents, license, approvals or authorization, or
registration or declaration, as shall have been obtained or filed,
as the case may be;
(iv) The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby by the Seller
will not violate in any material respect any provision of any
existing law or regulation or any order or decree of any court
applicable to the Seller or any provision of the Certificate of
Incorporation or Bylaws of the Seller, or constitute a material
breach of any mortgage, indenture, contract or other agreement to
which the Seller is a party or by which the Seller may be bound;
(v) No litigation or administrative proceeding of or before any
court, tribunal or governmental body is currently pending, or to the
knowledge of the Seller threatened, against the Seller or any of its
properties or with respect to this Agreement, the Notes or the
Certificates which in the opinion of the Seller has a reasonable
likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement;
(vi) This Agreement constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity
(whether considered in a proceeding at law or in equity);
(vii) This Agreement constitutes a valid transfer and
assignment to the Purchaser of all right, title and interest of the
Seller in and to the Cut-off Date Loan Balances with respect to the
Home Equity Loans, all monies due or to become due with respect
thereto, and all proceeds of such Cut-off Date Loan Balances with
respect to the Home Equity Loans and such funds as are from time to
time deposited in the Collection Account (excluding any investment
earnings thereon) as assets of the Trust and all other property
specified in the definition of "Trust Estate" as being part of the
corpus of the Trust conveyed to the Purchaser by the Seller, and
with respect to the Revolving Credit Loans, upon payment for the
Additional Balances, will constitute a valid transfer and assignment
to the Purchaser of all right, title and interest of the Seller in
and to the Additional Balances, all monies due or to become due with
respect thereto, and all proceeds of such Additional Balances and
all other property specified in the definition of "Trust Estate"
relating to the Additional Balances;
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(viii) The Seller is not in default with respect to any order
or decree of any court or any order, regulation or demand or any
federal, state, municipal or governmental agency, which default
might have consequences that would materially and adversely affect
the condition (financial or other) or operations of the Seller or
its properties or might have consequences that would materially
adversely affect its performance hereunder; and
(ix) Seller has not dealt with any broker, investment banker,
agent or other person, except Purchaser or Seller's affiliates, who
may be entitled to any commission or compensation in connection with
the sale of the Mortgage Loans, except as has been heretofore
disclosed to Purchaser.
(b) As to the Home Equity Loans:
(i) The information set forth in the Home Equity Loan Schedule
for such Home Equity Loans is true and correct in all material
respects as of the date or dates respecting which such information
is furnished;
(ii) The Cut-off Date Loan Balances have not been assigned or
pledged, the Seller has good indefeasable and marketable title
thereto and the Seller is the sole owner and holder of such Cut-off
Date Loan Balances free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges of
security interests of any nature and has full right and authority,
under all governmental and regulatory bodies having jurisdiction
over the ownership of the applicable Home Equity Loans to sell and
assign the same pursuant to this Agreement;
(iii) The related Mortgage Note and the Mortgage have not been
assigned or pledged, the Seller has good indefeasable and marketable
title thereto and the Seller is the sole owner and holder of the
Home Equity Loan free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges of
security interests of any nature and has full right and authority,
under all governmental and regulatory bodies having jurisdiction
over the ownership of the applicable Home Equity Loans to sell and
assign the same pursuant to this Agreement;
(iv) To the Seller's knowledge, there is no valid right of
rescission, set-off, claim, offset, defense or counterclaim of any
obligor under any Loan Agreement or Mortgage;
(v) To the Seller's knowledge, there is no delinquent recording
or other tax or fee or assessment lien against any related Mortgaged
Property;
(vi) To the Seller's knowledge, there is no proceeding pending
or threatened for the total or partial condemnation of the related
Mortgaged Property;
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(vii) To the Seller's knowledge, there are no mechanics' or
similar liens or claims which have been filed for work, labor or
material affecting the related Mortgaged Property which are, or may
be liens prior or equal to, or subordinate with, the lien of the
related Mortgage, except liens which are fully insured against by
the title insurance policy referred to in clause (xi);
(viii) As of the Cut-off Date none of the Home Equity Loans
were 30 days or more delinquent.
(ix) For each Home Equity Loan, to the Seller's knowledge, the
related Mortgage File contains each of the documents and instruments
specified in Section 2.1(c) of this Agreement to be included
therein;
(x) To the Seller's knowledge, the related Mortgage Note and
the related Mortgage at the time it was made complied with
applicable local, state and federal laws;
(xi) A policy of title insurance in the form and amount
required by the Seller's origination guidelines was effective as of
the closing of each Home Equity Loan in the first lien position or
with a Credit Limitation at origination of $50,000 or more with
respect to each Home Equity Loan and with respect to the other Home
Equity Loans, a title search or other assurance of title customary
in the relevant jurisdiction was obtained as to which no title
insurance policy or binder was issued;
(xii) None of the Mortgaged Properties is a mobile home or a
manufactured housing unit that is not permanently attached to its
foundation and constitutes real property under applicable state law;
(xiii) No more than 29.12%, 8.59%, 7.11% and 6.92% of the Home
Equity Loans, by Cut-off Date Loan Balance, are secured by Mortgaged
Properties located in California, Florida, New York and New Jersey,
respectively;
(xiv) As of the Cut-off Date the Combined Loan-to-Value Ratio
for each Home Equity Loan was not in excess of 110%;
(xv) [Reserved];
(xvi) The Seller has not transferred the Home Equity Loans to
the Purchaser with any intent to hinder, delay or defraud any of its
creditors;
(xvii) The Minimum Monthly Payment with respect to any
Revolving Credit Loan is not less than the interest accrued at the
applicable Loan Rate on the average daily Loan Balance during the
interest period relating to the date on which such Minimum Monthly
Payment is due;
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(xviii) The Seller will submit for filing or cause to be
submitted for filing UCC-1 financing statements in accordance with
the terms of this Agreement;
(xix) With respect to each Revolving Credit Loan and Mortgage
Loan, the related Loan Agreement and Mortgage are substantially
similar to the other and is a legal, valid and binding obligation of
the related Mortgagor enforceable in accordance with its terms;
(xx) To the Seller's knowledge, the physical property subject
to each Mortgage is free of material damage and is in good repair;
(xxi) To the Seller's knowledge, the Seller has not received a
notice of default of any senior mortgage loan related to a Mortgaged
Property which default has not been cured;
(xxii) With respect to the Revolving Credit Loans, the related
Credit Line Agreement has a substantially similar definition of
Prime as the Index applicable to the Loan Rate, and with respect to
the Mortgage Loans with adjustable Loan Rates, the related Mortgage
Notes has a substantially similar definition of One-Month LIBOR or
Six-Month LIBOR, as applicable, as the Index applicable to the Loan
Rate;
(xxiii) None of the Home Equity Loans are reverse mortgage
loans;
(xxiv) (A) No Revolving Credit Loan has an original term to
maturity in excess of 120 months. On each date that the Loan Rates
have been adjusted prior to the Cut-off Date interest rate
adjustments on the Home Equity Loans were made in compliance with
the related Mortgage and Mortgage Note and applicable law. Over the
term of any Home Equity Loan, the Loan Rate may not exceed the
related Maximum Loan Rate, if any. (B) The Revolving Credit Loans
and Mortgage Loans with adjustable Loan Rates have Maximum Loan
Rates which range between 7.250% and 18.000%, and the weighted
average Maximum Loan Rate is approximately 17.347%. The Gross
Margins for the Revolving Credit Loans range between -0.750% and
4.00%, and the weighted average Gross Margin for the Revolving
Credit Loans is approximately -0.106% as of the Cut-off Date. The
Gross Margins for the Mortgage Loans with adjustable Loan Rates
range between 1.375% and 2.125%, and the weighted average Gross
Margin for such Mortgage Loans is approximately 1.688% as of the
Cut-off Date. As of the Cut-off Date, the Loan Rates on the Home
Equity Loans range between 2.500% and 9.000% and the weighted
average Loan Rate is approximately 4.861%. The weighted average
remaining term to scheduled maturity of the Home Equity Loans on a
contractual basis as of the Cut-off Date Loan is approximately 132
months;
(xxv) (A) Each Mortgaged Property with respect to the Home
Equity Loans consists of a fee simple estate in a single parcel of
real property with a single family
11
(which may include two- to four-family properties) residence erected
thereon, or an individual condominium unit, planned development unit
or townhouse. (B) With respect to the Home Equity Loans (i)
approximately 9.89% (by Cut-off Date Loan Balance) are secured by
real property improved by individual condominium units, or
townhouses, and (ii) approximately 88.37% (by Cut-off Date Loan
Balance) are secured by real property with a single family residence
erected thereon;
(xxvi) (A) As of the Cut-off Date, no Home Equity Loan had a
principal balance in excess of $8,400,000. (B) As of the Cut-off
Date, the Credit Limits on the Revolving Credit Loans range between
approximately $5,000 and $4,000,000 with an average of $131,402, and
the weighted average Credit Limit Utilization Rate, based on the
Credit Limits of the Revolving Credit Loans is equal to
approximately 48.63%;
(xxvii) Approximately 34.50% and 65.50% of the Home Equity
Loans, by aggregate principal balance as of the Cut-off Date are
first and second liens, respectively, and none of the Home Equity
Loans are third or more junior liens;
(xxviii) For each Home Equity Loan, hazard insurance has been
obtained which meets all applicable requirements of Section 3.04 of
the Servicing Agreement;
(xxix) There is no material default, breach, violation or event
of acceleration existing under the terms of any Mortgage Note or
Mortgage and no event which, with notice and expiration of any grace
or cure period, would constitute a material default, breach,
violation or event of acceleration under the terms of any Mortgage
Note or Mortgage, and no such material default, breach, violation or
event of acceleration has been waived by the Seller or by any other
entity involved in originating or servicing a Home Equity Loan;
(xxx) No instrument of release or waiver has been executed in
connection with the Home Equity Loans, no Home Equity Loan has been
satisfied, cancelled or rescinded, and no Mortgagor has been
released, in whole or in part from its obligations in connection
with a Home Equity Loan, the terms of each Mortgage Note or Loan
Agreement and Mortgage have not been impaired, waived, altered or
modified in any respect, except by written instrument which has been
recorded if necessary to protect the interests of the Credit
Enhancer and delivered to the Indenture Trustee; the substance of
any such waiver, alteration or modification has been approved by the
applicable title insurer, to the extent required by the applicable
title insurance policy;
(xxxi) With respect to each Home Equity Loan that is a
subordinate lien, either (i) no consent for the Home Equity Loan was
required by the holder of the related prior lien or (ii) such
consent has been obtained and is contained in the mortgage file;
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(xxxii) The Mortgage contains a customary provision for the
acceleration of the payment of the unpaid principal balance of the
Home Equity Loan in the event the related Mortgaged Property is sold
without the prior consent of the mortgagee thereunder;
(xxxiii) No Mortgage Note, Credit Line Agreement or Mortgage
related to a Revolving Credit Loan provides for any right of offset
or defense to payment by the Mortgagor if the Servicer or Seller
fails to fund a Draw on such Revolving Credit Loan;
(xxxiv) Each Home Equity Loan has been serviced in accordance
with the related Mortgage Note and Mortgage and applicable law in
all material respects and each Home Equity Loan is being serviced by
the Servicer or by a Subservicer which is qualified to service the
Home Equity Loans;
(xxxv) Each Mortgage Loan has either (1) only one original
Mortgage Note not stamped as a duplicate or (2) a Lost Note
Affidavit and with respect to each Mortgage Loan for which there is
a Lost Note Affidavit, the Lost Note Affidavit is sufficient to
enable the Servicer to foreclose on the Mortgaged Property securing
the Mortgage Loan without the original Mortgage Note.
(xxxvi) Each Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property
of the benefits of the security, including by trustee's sale and by
judicial foreclosure and there is no homestead or other exemption
available to the related Mortgagor that would materially interfere
with the right to sell the related Mortgaged Property at a trustee's
sale or the right to foreclose upon the related Mortgaged Property;
(xxxvii) No Home Equity Loan was selected by the Seller for
inclusion in the Trust on any basis intended to adversely affect the
Trust or the Credit Enhancer;
(xxxviii) To the Seller's knowledge, there was no fraud
involved in the origination of any Home Equity Loans by the
mortgagee or the Mortgagor, any appraiser or any other party
involved in the origination of the Home Equity Loans;
(xxxix) All of the Home Equity Loans in the aggregate conform,
in all material respects to the description thereof set forth in the
Prospectus Supplement;
(xl) The computer tape from which the selection of Home Equity
Loans being acquired on the Cut-off Date was made available to the
Credit Enhancer and the accountants that are providing a comfort
letter to the Credit Enhancer in connection with any information
contained in the Prospectus Supplement and such information was
complete and accurate as of its dates and includes a description of
the same Home Equity
13
Loans that are described on the Home Equity Loan Schedule and the
payments due thereunder as of the Cut-off Date or date of
substitution, as applicable;
(xli) All Home Equity Loans were originated in accordance with
the Seller's underwriting guidelines or in accordance with
guidelines substantially similar in all material respects to those
of the Seller. The Seller's underwriting guidelines, to the extent
also addressed in the Prospectus Supplement, conform in all material
respects to the description set forth in the Prospectus Supplement;
(xlii) The Seller has no knowledge of any toxic or hazardous
substances affecting the Mortgaged Property or any violation of any
local, state or federal environmental law, rule or regulation.
Seller has no knowledge of any pending action or proceeding directly
involving any Mortgaged Property in which compliance with any
environmental law, rule or regulation is an issue.
(xliii) Each Home Equity Loan is a valid, enforceable first or
second lien on the related Mortgaged Property, including all
buildings on the related Mortgaged Property;
(xliv) The rights with respect to each Home Equity Loan are
assignable without the consent of any Person other than the consents
which will have been obtained on or before the Cut-off Date;
(xlv) There are no proceedings pending or to the best of the
Seller's knowledge, threatened, wherein the Mortgagor or any
governmental agency has alleged that a Home Equity Loan is illegal
or unenforceable;
(xlvi) All parties with an interest in each Home Equity Loan,
whether as Mortgagee, assignee , pledgee or otherwise, and
including, without limitation, the Seller are (or during the period
in which they held and disposed of such interest were) in compliance
with any and all applicable licensing requirements of the laws of
the state wherein the Mortgaged Property is located;
(xlvii) The Seller has duly fulfilled all obligations to be
fulfilled on the lender's part under or in connection with the
origination, acquisition and assignment of the Home Equity Loans and
the related Mortgage, Mortgage Note, Credit Line Agreement or Loan
Agreement, as applicable, including, without limitation, giving any
notices or consents necessary to effect the acquisition of the
Mortgage Loan and the related Mortgage and Mortgage Note or Loan
Agreement, as applicable, by the Indenture Trustee on behalf of the
Issuer, and has done nothing to impair the rights of the Indenture
Trustee, the Credit Enhancer or the Securityholders in payments with
respect thereto;
14
(xlviii) Each Home Equity Loan at the time it was made complied
in all material respects with applicable local, state, and federal
laws, including, but not limited to, all applicable predatory and
abusive lending laws;
(xlix) No Home Equity Loan is (a) a "high cost" loan under the
Home Ownership and Equity Protection Act of 1994 or (b) a "high
cost," "threshold," "covered" or "predatory" or similar loan under
any other applicable state, federal or local law. Any breach of this
representation shall be deemed to materially and adversely affect
the value of the affected Home Equity Loan and shall require a
repurchase of such Home Equity Loan;
(l) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable, and with respect to the foregoing, the terms "High Cost
Loan" and "Covered Loan" have the meaning assigned to them in the
Standard & Poor's LEVELS(R) Version 5.6 Glossary Revised, Appendix E
(the "Glossary") where (x) a "High Cost Loan" is each loan
identified in the column "Category under applicable anti-predatory
lending law" of the table entitled "Standard & Poor's High Cost Loan
Categorization" in the Glossary as each such loan is defined in the
applicable anti-predatory lending law of the State or jurisdiction
specified in such table and (y) a "Covered Loan" is each loan
identified in the column "Category under applicable anti-predatory
lending law" of the table entitled "Standard & Poor's High Covered
Loan Categorization" in the Glossary as each such loan is defined in
the applicable anti-predatory lending law of the State or
jurisdiction specified in such table;
(li) No Mortgage Loan originated on or after October 1, 2002
through March 6, 2003 is governed by the Georgia Fair Lending Act;
(lii) If the Mortgaged Property is located in an area
identified by the Federal Emergency Management Agency as having
special flood hazards under the National Flood Insurance Act of
1994, as amended, the Mortgage Loan is covered by a flood insurance
policy, in the amount required under the National Flood Insurance
Act of 1994, meeting the requirements of the current guidelines of
the Federal Insurance Administration which policy conforms to Xxxxxx
Mae requirements. Such policy was issued by an insurer acceptable
under the Xxxxxx Xxx Guides. The Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost
and expense, and on the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to maintain such insurance at the Mortgagor's
cost and expense and to seek reimbursement therefor from the
Mortgagor; and
(liii) The Mortgagor has not notified the Seller, and the
Seller has no knowledge of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act of 1940 as
amended, or other similar state statute.
15
(c) Upon discovery by Seller or upon notice from the Purchaser, the
Credit Enhancer, the Issuer, the Owner Trustee, the Indenture Trustee or any
Custodian, as applicable, of a breach of any representation or warranty in
clause (a) above which materially and adversely affects the interests of the
Securityholders or the Credit Enhancer, as applicable, in any Home Equity
Loan, the Seller shall, within 45 days of its discovery or its receipt of
notice of such breach, either (i) cure such breach in all material respects or
(ii) to the extent that such breach is with respect to a Home Equity Loan or a
Related Document, either (A) repurchase such Home Equity Loan from the Issuer
at the Repurchase Price, or (B) substitute one or more Eligible Substitute
Loans for such Home Equity Loan, in each case in the manner and subject to the
conditions and limitations set forth below.
Upon discovery by the Seller or upon notice from the Purchaser, the
Credit Enhancer, the Issuer, the Owner Trustee, the Indenture Trustee or any
Custodian, as applicable, of a breach of any representation or warranty in
clause (b) above with respect to any Home Equity Loan, or upon the occurrence
of a Repurchase Event, which materially and adversely affects the interests of
any Securityholders or the Credit Enhancer, as applicable, or of the Purchaser
in such Home Equity Loan (notice of which shall be given to the Purchaser by
the Seller, if it discovers the same), notwithstanding the Seller's lack of
knowledge or any qualification or representation or warranty with respect to
Seller's knowledge, with respect to the substance of such representation and
warranty, the Seller shall, within 90 days after the earlier of its discovery
or receipt of notice thereof, either cure such breach or Repurchase Event in
all material respects or either (i) repurchase such Home Equity Loan from the
Issuer at the Repurchase Price, or (ii) substitute one or more Eligible
Substitute Loans for such Home Equity Loan, in each case in the manner and
subject to the conditions set forth below. The Repurchase Price for any such
Home Equity Loan repurchased by the Seller shall be deposited or caused to be
deposited by the Servicer in the Collection Account maintained by it pursuant
to Section 3.02 of the Servicing Agreement.
In the event that the Seller elects to substitute an Eligible
Substitute Loan or Loans for a Deleted Loan pursuant to this Section 3.1, the
Seller shall deliver to the Custodian on behalf of the Issuer, with respect to
such Eligible Substitute Loan or Loans, the original Mortgage Note and all
other documents and agreements as are required by Section 2.1(c), with the
Mortgage Note endorsed as required by Section 2.1(c). No substitution will be
made in any calendar month after the Determination Date for such month.
Monthly payments due with respect to Eligible Substitute Loans in the month of
substitution shall not be part of the Owner Trust and will be retained by the
Servicer and remitted by the Servicer to the Seller on the next succeeding
Payment Date, provided that a payment at least equal to the applicable Minimum
Monthly Payment for such month in respect of the Deleted Loan has been
received by the Owner Trust. For the month of substitution, distributions to
the Payment Account pursuant to the Servicing Agreement will include the
monthly payment due on a Deleted Loan for such month and thereafter the Seller
shall be entitled to retain all amounts received in respect of such Deleted
Loan. The Servicer shall amend or cause to be amended the Home Equity Loan
Schedule to reflect the removal of such Deleted Loan and the substitution of
the Eligible Substitute Loan or
16
Loans and the Servicer shall deliver the amended Home Equity Loan Schedule to
the Owner Trustee. Upon such substitution, the Eligible Substitute Loan or
Loans shall be subject to the terms of this Agreement and the Servicing
Agreement in all respects, the Seller shall be deemed to have made the
representations and warranties with respect to the Eligible Substitute Loan
contained herein set forth in Section 3.1(b) (other than clauses (xiii), (xiv)
(xxiv)(B), (xxv)(B), (xxvi), and (xxvii) thereof) as of the date of
substitution, and the Seller shall be obligated to repurchase or substitute
for any Eligible Substitute Loan as to which a Repurchase Event has occurred
as provided herein. In connection with the substitution of one or more
Eligible Substitute Loans for one or more Deleted Loans, the Servicer will
determine the amount (such amount, a "Substitution Adjustment Amount"), if
any, by which the aggregate principal balance of all such Eligible Substitute
Loans as of the date of substitution is less than the aggregate principal
balance of all such Deleted Loans (after application of the principal portion
of the Monthly Payments due in the month of substitution that are to be
distributed to the Payment Account in the month of substitution). The Seller
shall deposit the amount of such shortfall into the Collection Account on the
day of substitution, without any reimbursement therefor.
Upon receipt by the Indenture Trustee on behalf of the Issuer and the
Custodian of written notification, signed by a Servicing Officer, of the
deposit of such Repurchase Price or of such substitution of an Eligible
Substitute Loan (together with the complete related Mortgage File) and deposit
of any applicable Substitution Adjustment Amount as provided above, the
Custodian, on behalf of the Indenture Trustee, shall release to the Seller the
related Mortgage File for the Home Equity Loan being repurchased or
substituted for and the Indenture Trustee on behalf of the Issuer shall
execute and deliver such instruments of transfer or assignment prepared by the
Servicer, in each case without recourse, as shall be necessary to vest in the
Seller or its designee such Home Equity Loan released pursuant hereto and
thereafter such Home Equity Loan shall not be an asset of the Issuer.
With respect to any Home Equity Loan with respect to which there
exists a breach of a representation or warranty in clause (b) above which
materially and adversely affects the interests of any Securityholders or the
Credit Enhancer, as applicable, which is liquidated during the 90-day cure
period discussed in the third preceding paragraph, the Seller shall deposit or
cause to be deposited into the Collection Account the amount, if any, of any
Liquidation Loss Amounts with respect to such Home Equity Loan.
It is understood and agreed that the obligation of the Seller to cure
any breach, or to repurchase or substitute for, any Home Equity Loan as to
which such a breach has occurred and is continuing, shall, except to the
extent provided in Section 6.1 of this Agreement, constitute the sole remedy
respecting such breach available to the Purchaser, the Issuer, the
Certificateholders (or the Owner Trustee on behalf of the Certificateholders)
and the Noteholders (or the Indenture Trustee on behalf of the Noteholders)
against the Seller.
17
It is understood and agreed that the representations and warranties
set forth in this Section 3.1 shall survive delivery of the respective
Mortgage Files to the Issuer, or the Custodian.
ARTICLE IV.
SELLER'S COVENANTS
Section 4.1. Covenants of the Seller. The Seller hereby covenants
that, except for the transfer hereunder, the Seller will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur or assume any
Lien on any Home Equity Loan, or any interest therein; the Seller will notify
the Issuer, as assignee of the Purchaser, of the existence of any Lien (other
than as provided above) on any Home Equity Loan immediately upon discovery
thereof; and the Seller will defend the right, title and interest of the
Issuer, as assignee of the Purchaser, in, to and under the Home Equity Loans
against all claims of third parties claiming through or under the Seller;
provided, however, that nothing in this Section 4.1 shall be deemed to apply
to any Liens for municipal or other local taxes and other governmental charges
if such taxes or governmental charges shall not at the time be due and payable
or if the Seller shall currently be contesting the validity thereof in good
faith by appropriate proceedings.
ARTICLE V.
SERVICING
Section 5.1. Servicing. The Seller will service the Home Equity
Loans pursuant to the terms and conditions of the Servicing Agreement and will
service the Home Equity Loans directly or through one or more sub-servicers in
accordance therewith.
ARTICLE VI.
INDEMNIFICATION BY THE SELLER
WITH RESPECT TO THE HOME EQUITY LOANS
Section 6.1. Indemnification With Respect to the Home Equity Loans.
The Seller shall indemnify and hold harmless the Purchaser, the Indenture
Trustee, the Issuer, the Custodian and the Credit Enhancer from and against
any loss, liability or expense arising from the breach by the Seller of its
representations and warranties in Section 3.1 of this Agreement which
materially and adversely affects the Purchaser's, the Indenture Trustee's, the
Issuer's, the Custodian's or the Credit Enhancer's interest in any Home Equity
Loan or from the failure by the Seller to perform its obligations under this
Agreement in any material respect, provided that the Seller shall have no
obligation to indemnify the Purchaser in respect of any loss, liability or
expense that arises as a result of the Purchaser's willful malfeasance, bad
faith or negligence or as a result of the breach by the Purchaser of its
obligations hereunder.
18
Section 6.2. Limitation on Liability of the Seller. None of the
directors, officers, employees or agents of the Seller shall be under any
liability to the Purchaser, it being expressly understood that all such
liability is expressly waived and released as a condition of, and as
consideration for, the execution of this Agreement. Except as and to the
extent expressly provided herein and in the Servicing Agreement, the Seller
shall not be under any liability to the Owner Trust, the Owner Trustee, the
Indenture Trustee or the Securityholders. The Seller and any director,
officer, employee or agent of the Seller 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.
ARTICLE VII.
TERMINATION
Section 7.1. Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall
terminate, except for the Seller's indemnity obligations as provided herein,
upon the termination of the Owner Trust pursuant to the terms of the Trust
Agreement.
ARTICLE VIII.
MISCELLANEOUS PROVISIONS
Section 8.1. Amendment. This Agreement may be amended from time
to time by the Seller and the Purchaser by written agreement signed by
the Seller and the Purchaser, with the consent of the Credit Enhancer.
Section 8.2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 8.3. 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 Seller:
Xxxxxx Xxxxxxx Xxxx Xxxxxx Credit Corporation
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
19
Attention: Vice President of Secondary Marketing
with a copy to the Law Division,
or, such other address as may hereafter be furnished to the Purchaser in
writing by the Seller.
(ii) if to the Purchaser:
Xxxxxx Xxxxxxx ABS Capital I, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or such other address as may hereafter be furnished to the Seller in writing
by the Purchaser.
Notices, requests, consents, demands and other communications
required under this Agreement or pursuant to any other instrument or document
delivered hereunder, in the case of the Credit Enhancer, shall be sent to
Ambac Assurance Corporation, Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: [o], Telephone No. [o] and Facsimile No. [o]
Section 8.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions of 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
of enforceability of the other provisions of this Agreement.
Section 8.5. 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 Seller shall be rendered as an
independent contractor and not as agent for the Purchaser.
Section 8.6. Counterparts. 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 and such counterparts, together, shall constitute one and the same
agreement.
Section 8.7. Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents,
instruments or agreements as may be necessary or appropriate to effectuate the
purposes of this Agreement.
Section 8.8. Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the Home
Equity Loans, rather than a loan by the Purchaser to the Seller secured by the
Home Equity Loans. Accordingly, the parties hereto each intend to
20
treat the transaction for Federal income tax purposes as a sale by the Seller,
and a purchase by the Purchaser, of the Home Equity Loans. The Purchaser will
have the right to review the Home Equity Loans and the Related Documents to
determine the characteristics of the Home Equity Loans which will affect the
Federal income tax consequences of owning the Home Equity Loans and the Seller
will cooperate with all reasonable requests made by the Purchaser in the
course of such review.
Section 8.9. Successors and Assigns; Assignment of This Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by
the Seller, Purchaser and their respective successors and assigns. The
obligations of the Seller under this Agreement cannot be assigned or delegated
to a third party without the consent of the Credit Enhancer and the Purchaser,
which consent shall be at the Credit Enhancer's and the Purchaser's sole
discretion, except that the Purchaser and the Credit Enhancer acknowledge and
agree that the Seller may assign its obligations hereunder to any Affiliate of
the Seller, to any Person succeeding to the business of the Seller, to any
Person into which the Seller is merged and to any Person resulting from any
merger, conversion or consolidation to which the Seller is a party; provided
that such resulting Person is of reasonably equivalent capitalization. The
parties hereto acknowledge that the Purchaser is acquiring the Home Equity
Loans for the purpose of contributing them to the Issuer. Pursuant to the
terms of the Trust Agreement, the Issuer will issue and transfer to or at the
direction of the Purchaser, the Certificates and pursuant to the terms of the
Indenture, the Issuer will issue and transfer to or at the direction of the
Purchaser, the Notes secured by the Home Equity Loans. As an inducement to the
Purchaser to purchase the Home Equity Loans, the Seller acknowledges and
consents to (i) the assignment by the Purchaser to the Issuer of all of the
Purchaser's rights against the Seller pursuant to this Agreement insofar as
such rights relate to Home Equity Loans transferred to the Issuer and to the
enforcement or exercise of any right or remedy against the Seller pursuant to
this Agreement by the Issuer, (ii) the enforcement or exercise of any right or
remedy against the Seller pursuant to this Agreement by or on behalf of the
Issuer and (iii) the Issuer's pledge of its interest in this Agreement to the
Indenture Trustee and the enforcement by the Indenture Trustee and/or the
Credit Enhancer of any such right or remedy against the Seller following an
Event of Default under the Indenture. Such enforcement of a right or remedy by
the Issuer or the Indenture Trustee, as applicable, shall have the same force
and effect as if the right or remedy had been enforced or exercised by the
Purchaser directly.
Section 8.10. Survival. The representations and warranties made
herein by the Seller and the provisions of Article VI hereof shall survive the
purchase of the Home Equity Loans hereunder.
Section 8.11. Third Party Beneficiary. The Credit Enhancer is an
intended third party beneficiary to this Home Equity Loan Purchase Agreement
entitled to enforce the provisions hereof as if a party hereto.
21
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Home Equity Loan Purchase Agreement by their
respective officers thereunto duly authorized as of the day and year first
above written.
XXXXXX XXXXXXX ABS CAPITAL I, INC.
as Purchaser
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Executive Director
XXXXXX XXXXXXX XXXX XXXXXX CREDIT CORPORATION
as Seller
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
22
Exhibit 1
HOME EQUITY LOAN SCHEDULE
EXHIBIT A
Form of Lost Note Affidavit
Loan No:
AFFIDAVIT OF LOST NOTE
______________________
I, ____________________, being duly sworn, do hereby state under oath
that:
1. I, ____________________, as the _______________ (title) of [____________]
(the "Seller") am authorized to make this Affidavit on behalf of the
Seller .
2. The Seller is the lawful owner of amounts payable under the following
described mortgage note (the "Note"):
Date:
Loan No.
Borrower(s):
Original Payee (if not the Seller):
Original Amount:
Rate of Interest (initial rate if ARM):
Address of Mortgage Property:
3. The Seller is the lawful owner of the Note, and the Seller has not
cancelled, altered, assigned, or hypothecated the Note.
4. The Note was not located after a thorough and diligent search which
consisted of the following actions: [insert actions taken]
5. Attached hereto is a true and correct copy of (i) the Note, endorsed "Pay
to the order of _____, without recourse", and (ii) the ___Mortgage or
___Deed of Trust [place "x" in applicable space] securing the Note is
recorded at ____________________________________.
6. This Affidavit is intended to be relied on by ___________, its successors
and assigns.
7. Seller (a) shall indemnify and hold harmless the Issuer, the Indenture
Trustee and the Credit Enhancer, their successors, and assigns, against
any loss, liability or damage, including reasonable attorney's fees,
resulting from the unavailability of any Notes, including but not limited
to any loss, liability or damage arising from (i) any false statement
contained in this Lost Note Affidavit, (ii) any claim of any party that
it has already purchased a mortgage loan evidenced by the lost Mortgage
Note or any interest in such mortgage loan, (iii) any claim of any
borrower with respect to the existence of terms of a Mortgage Loan
evidenced by the lost
1
Mortgage Note, (iv) the issuance of new instrument in lieu thereof and
(v) any claim whether or not based upon or arising from honoring or
refusing to honor the Original when presented by anyone.
EXECUTED THIS _____ day of __________, 200_.
By: _____________________________________________
Name: ___________________________________________
Title: __________________________________________
Date: ___________________________________________
2
On this _____ day of __________, 200__, before me appeared
____________________, to me personally known, who being duly sworn did say
that she/he is the ____________________ of the Seller, and that said Affidavit
of Lost Note was signed and sealed on behalf of the institution defined in
this document as the Seller, and said ____________________ acknowledged this
instrument to be the free act and deed of said Seller.
Notary Public in and for the
fState of
My Commission expires:
3
