EXHIBIT 99.1
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 October 1, 2003
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Home Equity Loans
Table of Contents
Page
ARTICLE I.
DEFINITIONS.
Section 1.1. Definitions.......................................................................2
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.............................................8
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.........................................................21
Section 8.9. Successors and Assigns; Assignment of This Agreement.............................21
Section 8.10. Survival.........................................................................21
Section 8.11. Third Party Beneficiary..........................................................22
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Exhibits
Exhibit 1 Home Equity Loan Schedule
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This HOME EQUITY LOAN PURCHASE AGREEMENT (this "Agreement"), dated as
of October 1, 2003, 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 "Initial Revolving Credit
Loans") and the adjustable-rate and fixed-rate closed end mortgage loans (the
"Initial Mortgage Loans") indicated on the Home Equity Loan Schedule attached
as Exhibit 1 hereto (the Initial Revolving Credit Loans and the Initial
Mortgage Loans are collectively referred to as the "Initial 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 Initial Home Equity Loans;
WHEREAS, the parties hereto desire that the Seller sell the Cut-off
Date Loan Balances of the Initial Home Equity Loans to the Purchaser pursuant
to the terms of this Agreement together with the Related Documents on the
Closing Date, and thereafter, (i) with respect to the Revolving Credit Loans,
all Additional Balances created on or after the Cut-off Date and (ii) the
Cut-off Date Loan Balances of additional home equity lines of credit and
additional adjustable-rate and fixed-rate closed end mortgage loans (the
"Additional Home Equity Loans" indicated on the Subsequent Home Equity Loan
Schedule incorporated into and made part of the Home Equity Loan Schedule
attached as Exhibit 1 hereto, and together with the Initial Home Equity Loans,
the "Home Equity Loans") together with the Related Documents on one or more
dates after the Closing Date (each such date, a "Subsequent Closing 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 (i) on the Closing Date, the Initial Home Equity Loans and the
funds in the Additional Loan Account to the Issuer in exchange for the cash
proceeds of the Securities and (ii) on each Subsequent Closing Date, the
relevant Additional Home Equity Loans in exchange for funds on deposit in the
Additional Loan Account;
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 October 1, 2003 (the "Indenture"),
between MSDWCC HELOC Trust 2003-2, as issuer and Xxxxx Fargo Bank Minnesota,
N.A., 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; (iv) the Additional Loan Account; and (v) 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 Initial Home Equity Loans, as of the Closing
Date; (2) with respect to the Additional Home Equity Loans, as of the relevant
Subsequent Closing Date, subject to the receipt by the Seller of the
appropriate funds from the Additional Loan Account; and (3) 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.
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(b) In connection with such conveyance, the Seller further agrees, at its
own expense, on or prior to the Closing Date (or, with respect to the
Additional Home Equity Loans, on or prior to the relevant Subsequent 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, as amended or
supplemented on any Subsequent Closing Date, 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 (or, with respect to the Additional Home Equity
Loans, on or prior to the relevant Subsequent Closing Date), the following
documents or instruments with respect to each Home Equity Loan:
(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).
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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 April 29, 2004 (or, with respect to an
Additional Home Equity Loan, on or prior to the date which is six months after
the related Subsequent Closing Date), 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 full on or prior to April 29, 2004 (or, with respect to an
Additional Home Equity Loan, on or prior to the date which is six months after
the related Subsequent Closing Date), 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.
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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 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 Initial Home Equity
Loans, an amount equal to $365,591,844.65 in immediately available funds,
together with the Certificates, in respect of the Cut-off Date Loan Balances
thereof, (2) in the case of each Additional Home Equity Loan, the Cut-off Date
Loan Balance for such Additional Home Equity Loan and (3) 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.
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(b) In consideration of the sale of the Initial 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 each Initial Home Equity Loan. With respect
to each Additional Home Equity 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 Home Equity Loan from the Additional Loan Account. With respect to
each Revolving Credit Loan and any related Additional Balance transferred
hereunder with respect to any Home Equity 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 (3) 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)(3) hereof in an
amount equal to the related Draw, if then available from Principal Collections
during the related Collection Period on the Home Equity Loans, and (b) to the
extent aggregate Draws exceed Principal Collections on all of the Home Equity
Loans for such Collection Period, an increase in the aggregate principal
amount of the 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 Home Equity 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 aggregate principal amount of the 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 Certificateholder Interest as of such Transfer Date (after
giving effect to such removal) exceeds the Minimum Certificateholder
Interest;
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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
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.
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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, with respect to the
Additional Home Equity Loans, as of the related Subsequent 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;
(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;
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(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; and
(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.
(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
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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;
(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
(A) none of the Home Equity Loans were between 30 days and 59
days delinquent; and
(B) none of the Home Equity Loans were 60 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;
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(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 26%, 13%, 8% and 7% of the Initial 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;
(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;
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(xxii) With respect to the Revolving Credit Loans, the related
Mortgage Notes 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 Initial Revolving Credit Loans and Initial Mortgage Loans with
adjustable Loan Rates have Maximum Loan Rates which range between 7.000%
and 18.000%, and the weighted average Maximum Loan Rate is approximately
18.00%. The Gross Margins for the Initial Revolving Credit Loans range
between 0.00% and 6.00%, and the weighted average Gross Margin for the
Initial Revolving Credit Loans is approximately 0.181% as of the Cut-off
Date. The Gross Margins for the Initial Mortgage Loans with adjustable
Loan Rates range between 1.00% and 3.00%, and the weighted average Gross
Margin for such Mortgage Loans is approximately 1.784% as of the Cut-off
Date. As of the Cut-off Date, the Loan Rates on the Initial Home Equity
Loans range between 2.50% and 10.00% and the weighted average Loan Rate
is approximately 3.999%. The weighted average remaining term to scheduled
maturity of the Initial Home Equity Loans on a contractual basis as of
the Cut-off Date Loan is approximately 147 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 (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 Initial Home
Equity Loans (i) approximately 6.05% (by Cut-off Date Loan Balance) are
secured by real property improved by individual condominium units, or
townhouses, and (ii) approximately 81% (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 Initial Home Equity Loan had a
principal balance in excess of $11,000,000. (B) As of the Cut-off Date,
the Credit Limits on the Initial Revolving Credit Loans range between
approximately $0.00 and $2,150,000.00 with an average of $108,346, and
the weighted average Credit Limit Utilization Rate, based on the Credit
Limits of the Initial Revolving Credit Loans is equal to approximately
48.75%;
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(xxvii) Approximately 40.43% and 59.57% of the Initial 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;
(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 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;
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(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 Initial 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 Initial Home
Equity Loans being acquired on the Cutoff 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 Loans
that are described on the Home Equity Loan Schedule and the payments due
thereunder as of the Cutoff 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.
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(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 Cutoff Date or the
subsequent transfer date, as applicable;
(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 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;
(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) None of the Home Equity Loans are high-cost loans as defined
by the applicable predatory and abusive lending laws; and
(l) 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 Xxx requirements. Such policy was issued by an insurer
acceptable under the Xxxxxx Mae 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
15
maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor.
(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
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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 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 (viii)(A), (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
17
(or the Owner Trustee on behalf of the Certificateholders) and the Noteholders
(or the Indenture Trustee on behalf of the Noteholders) against the Seller.
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
18
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.
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
19
0000 Xxxx Xxxx Xxxx, 0 Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx - Vice President and Assistant
General Counsel, and Xxxxxxx X. Xxxxxx -
Senior Vice President and Treasurer
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 MBIA Insurance
Corporation 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Insured
Portfolio Management--Structured Finance ("IPM-SF")(MSDWCC HELOC Trust
2003-2), Telephone No. (000) 000-0000 and Facsimile No. (000)000-0000
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.
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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 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.
21
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.
22
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
23
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
1
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 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
State of
My Commission expires:
3
