Exhibit 99.2
EXECUTION COPY
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XXXXXXX XXXXX MORTGAGE LENDING, INC.,
SELLER
and
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
Dated as of March 1, 2007
Xxxxxxx Xxxxx Mortgage Investors Trust
(Mortgage Loan Asset-Backed Certificates, Series 2007-HE2)
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This MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT, dated as of March 1, 2007
(the "Agreement"), is executed by and between Xxxxxxx Xxxxx Mortgage Lending,
Inc. ("MLML" or the "Seller") and Xxxxxxx Xxxxx Mortgage Investors, Inc. (the
"Depositor").
All capitalized terms not defined herein shall have the same meanings
assigned to such terms in that certain Pooling and Servicing Agreement (the
"Pooling Agreement"), dated as of March 1, 2007, among the Depositor, Wilshire
Credit Corporation, as servicer, Option One Mortgage Corporation, as servicer
("Option One"), Xxxxxx Loan Servicing LP, as servicer (collectively, the
"Servicers"), LaSalle Bank National Association, as master servicer and
securities administrator (the "Securities Administrator"), and Citibank, N.A.,
as trustee (the "Trustee").
WITNESSETH:
WHEREAS, pursuant to the Amended and Restated Master Mortgage Loan Purchase
and Servicing Agreement, dated as of November 1, 2006, by and among the Seller,
Option One, as seller and servicer, Option One Mortgage Capital Corporation, as
seller and obligor, Option One Owner Trust 2001-1A, Option One Owner Trust
2001-1A, Option One Owner Trust 2001-1B, Option One Owner Trust 2001-2, Option
One Owner Trust 2002-3, Option One Owner Trust 2003-4, Option One Owner Trust
2003-5, Option One Owner Trust 2005-6, Option One Owner Trust 2005-7, Option One
Owner Trust 2005-8 and Option One Owner Trust 2005-9 (collectively, the
"Transferor") (the "Transfer Agreement"), the Seller has purchased or received
certain mortgage loans identified on the Mortgage Loan Schedule attached hereto
as Schedule A (the "Option One Mortgage Loans");
WHEREAS, the Transfer Agreement is supplemented by a letter, dated as of
March 30, 2007, between the Transferor and the Seller (the "Bring Down Letter");
WHEREAS, the Seller desires to sell, without recourse, all of its rights,
title and interest in the Mortgage Loans to the Depositor, to assign all of its
rights and interest under the Transfer Agreement and the Bring Down Letter, and
to delegate all of its obligations thereunder, to the Depositor; and
WHEREAS, the Seller and the Depositor acknowledge and agree that the
Depositor will assign all of its rights and delegate all of its obligations
hereunder to the Trustee, and that each reference herein to the Depositor is
intended, unless otherwise specified, to mean the Depositor or the Trustee, as
assignee, whichever is the owner of the Mortgage Loans from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein set forth,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Seller and the Depositor agree as follows:
ARTICLE I
CONVEYANCE OF MORTGAGE LOANS
Section 1.01. Sale of Mortgage Loans. Concurrently with the execution and
delivery of this Agreement, the Seller does hereby transfer, assign, set over,
deposit with and otherwise convey to the Depositor, without recourse, subject to
Sections 1.03 and 1.04, all the right, title and interest of the Seller in and
to the Option One Mortgage Loans identified on Schedule A hereto, having an
aggregate principal balance as of the Cut-off Date of $339,501,268.31. Such
conveyance includes, without limitation, the right to all distributions of
principal and interest received on or with respect to the Option One Mortgage
Loans on or after March 1, 2007, other than payments of principal and interest
due on or before such date, and all such payments due after such date but
received prior to such date and intended by the related Mortgagors to be applied
after such date, together with all of the Seller's right, title and interest in
and to each related account and all amounts from time to time credited to and
the proceeds of such account, any REO Property and the proceeds thereof, the
Seller's rights under any Insurance Policies related to the Option One Mortgage
Loans, and the Seller's security interest in any collateral pledged to secure
the Option One Mortgage Loans, including the Mortgaged Properties.
Concurrently with the execution and delivery of this Agreement, the Seller
hereby assigns to the Depositor all of its rights and interest under the
Transfer Agreement and the Bring Down Letter, other than any servicing rights
retained pursuant to the provisions of the Transfer Agreement and the Bring Down
Letter, to the extent relating to the Option One Mortgage Loans. Concurrently
with the execution hereof, the Depositor tenders the purchase price of
$339,501,268.31. The Depositor hereby accepts such assignment, and shall be
entitled to exercise all such rights of the Seller under the Transfer Agreement
and the Bring Down Letter, as if the Depositor had been a party to such
agreements.
Section 1.02. Delivery of Documents. In connection with such transfer and
assignment of the Option One Mortgage Loans hereunder, the Seller does hereby
deliver, or cause to be delivered, to the Depositor (or its designee) the
documents or instruments with respect to each Option One Mortgage Loan (each a
"Mortgage File") so transferred and assigned, as specified in the Transfer
Agreement.
(a) For Option One Mortgage Loans (if any) that have been prepaid in full
after the Cut-off Date and prior to the Closing Date, the Seller, in lieu of
delivering the related Mortgage Files, herewith delivers to the Depositor an
Officer's Certificate which shall include a statement to the effect that all
amounts received in connection with such prepayment that are required to be
deposited in the account maintained by the Servicer for such purpose have been
so deposited.
Section 1.03. Review of Documentation. The Depositor, by execution and
delivery hereof, acknowledges receipt of the Mortgage Files pertaining to the
Option One Mortgage Loans listed on the Mortgage Loan Schedule, subject to
review thereof by the Trustee or one or more of its Custodians on behalf of the
Depositor. The Trustee (or its Custodians) is required to review, within sixty
(60) days following the Closing Date, each applicable Mortgage File. If in the
course of such review the Trustee (or its Custodians) identifies any material
defect, the Seller shall be obligated to cure such defect or to repurchase the
related Option One Mortgage Loan from the Depositor (or, at the direction of and
on behalf of the Depositor, from the Trust Fund), or to substitute a Replacement
Mortgage Loan therefor, in each case to the same extent and in the same manner
specified in the Pooling Agreement.
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Section 1.04. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Depositor that as of
the date hereof that:
(i) The Seller is a Delaware corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its property,
to carry on its business as presently conducted and to enter into and
perform its obligations under this Agreement;
(ii) The execution and delivery by the Seller of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Seller; none of the execution and delivery of this Agreement, the
consummation of the transactions herein contemplated or compliance with the
provisions hereof will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Seller or its
properties or the federal stock charter or bylaws of the Seller;
(iii) The execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except such as
has been obtained, given, effected or taken prior to the date hereof;
(iv) This Agreement has been duly executed and delivered by the Seller
and, assuming due authorization, execution and delivery by the Depositor,
constitutes a valid and binding obligation of the Seller enforceable
against it in accordance with its terms except as such enforceability may
be subject to (A) applicable bankruptcy and insolvency laws and other
similar laws affecting the enforcement of the rights of creditors generally
and (B) general principles of equity regardless of whether such enforcement
is considered in a proceeding in equity or at law; and
(v) There are no actions, suits or proceedings pending or, to the
knowledge of the Seller, threatened or likely to be asserted against or
affecting the Seller, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the transactions
contemplated by this Agreement or (B) with respect to any other matter
which in the judgment of the Seller will be determined adversely to the
Seller and will if determined adversely to the Seller materially and
adversely affect it or its business, assets, operations or condition,
financial or otherwise, or adversely affect its ability to perform its
obligations under this Agreement.
(b) The representations and warranties of the Transferor with respect to
the Option One Mortgage Loans contained in the Transfer Agreement were made as
of the date of (or a date specified in) the Transfer Agreement and certain of
such representations and warranties have been brought forward to the Closing
Date pursuant to the terms of the Bring Down Letter and the Transfer Agreement.
The representations and warranties of the Transferor with respect to the Option
One Mortgage Loans contained in the applicable Bring Down Letter or Transfer
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Agreement are being made as of the Closing Date. To the extent that any fact,
condition or event with respect to an Option One Mortgage Loan constitutes a
breach of both (i) a representation or warranty of the Transferor under the
Transfer Agreement or Bring Down Letter and (ii) a representation or warranty of
the Seller under this Agreement, the sole right or remedy of the Depositor with
respect to a breach of such representation and warranty (other than a breach by
the Seller of the representations and warranties made pursuant to Sections
1.04(b)(vii) and 1.04(b)(viii) hereof) shall be the right to enforce the
obligations of the Transferor under such applicable representation or warranty
made by the Transferor.
The representations and warranties of the Seller with respect to the Option
One Mortgage Loans pursuant to Sections 1.04(b)(vii) and 1.04(b)(viii) hereof
shall be direct obligations of the Seller. The Depositor acknowledges and agrees
that the representations and warranties of the Seller in this Section 1.04(b)
(other than the representations and warranties made pursuant to Sections
1.04(b)(vii) and 1.04(b)(viii) hereof) are applicable only to facts, conditions
or events that do not also constitute a breach of any representation or warranty
made by the Transferor in the Transfer Agreement or Bring Down Letter. With
respect to a breach by the Transferor of any representation or warranty made by
the Transferor in the Transfer Agreement or Bring Down Letter, if the Transferor
fulfills its obligations under the provisions of the Transfer Agreement and
Bring Down Letter by substituting for the affected Option One Mortgage Loan a
mortgage loan which is not a Replacement Mortgage Loan, the Transferor shall, in
exchange for such substitute mortgage loan, provide the Depositor (a) with the
applicable Purchase Price for the affected Option One Mortgage Loan or (b)
within the two year period following the Closing Date, with a Qualified
Substitute Mortgage Loan for such affected Option One Mortgage Loan.
Subject to the foregoing, the Seller represents and warrants upon delivery
of the Option One Mortgage Loans to the Depositor hereunder, as to each, that as
of March 1, 2007 (unless otherwise specified):
(i) The information set forth with respect to the Option One Mortgage
Loans on the Mortgage Loan Schedule provides an accurate listing of the
Option One Mortgage Loans, and the information with respect to each Option
One Mortgage Loan on the Mortgage Loan Schedule is true and correct in all
material respects at the date or dates respecting which such information is
given;
(ii) As of the Closing Date, no Option One Mortgage Loan is in
foreclosure;
(iii) As of the Closing Date, each Option One Mortgage Loan is a
"qualified mortgage" within the meaning of Section 860G of the Code (as
determined without regard to Treas. Reg. Section 1.860G-2(a)(3) or any
similar rule that treats a defective obligation as a qualified mortgage for
a temporary period);
(iv) The representations and warranties of the Transferor contained in
Section 7.02 (1), (2), (3), (4, only for Option One Mortgage Loans with
respect to which such representation cannot be made as of the date of such
Whole Loan Transfer or Securitization), (14), (15), (17), (18), (23), (34),
(36), and (42) of the Transfer Agreement are hereby restated by the Seller
as of the Closing Date;
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(v) As of the Closing Date, no Option One Mortgage Loan provides for
interest other than at either (i) a single fixed rate in effect throughout
the term of the Option One Mortgage Loan or (ii) a "variable rate" (within
the meaning of Treas. Reg. Section 1.860G-1(a)(3)) in effect throughout the
term of the Option One Mortgage Loan;
(vi) As of the Closing Date, the Seller would not, based on the
delinquency status of the Option One Mortgage Loans, institute foreclosure
proceedings with respect to any of the Option One Mortgage Loans prior to
the next scheduled payment for such Option One Mortgage Loan;
(vii) None of the Option One Mortgage Loans are "high cost" as defined
by applicable predatory and abusive lending laws; No Option One Mortgage
Loan is a High Cost Loan or Covered Loan, as applicable (as such terms are
defined in the current Standard & Poor's LEVELS(R) Glossary which is now
Version 5.7 Revised, Appendix E);
(viii) Each Option One Mortgage Loan and the Prepayment Charge
associated with the Option One Mortgage Loan at the time it was made
complied with all applicable local, state and federal lending laws,
including, but not limited to, all applicable predatory and abusive lending
laws;
(ix) No first lien Mortgage Loan in Group One has an original
principal balance that exceeds the applicable Xxxxxxx Mac loan limit; and
(x) No mortgage loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act.
(c) In the event, a net interest margin securitization transaction is
entered into by the Seller or any of its affiliates in which any of the
Certificates serve as part or all of the collateral securing such transaction,
the Seller additionally represents and warrants as follows:
(i) The information set forth in the prepayment penalty schedule
(including the prepayment penalty summary attached thereto) is complete,
true and correct in all material respects on the date or dates when such
information is furnished and each prepayment penalty is permissible and
enforceable in accordance with its terms (except to the extent that the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws affecting creditor's rights
generally or the collectability thereof may be limited due to acceleration
in connection with a foreclosure) under applicable federal, state and local
law;
(ii) The Servicer will not waive any prepayment penalty or part of a
prepayment penalty unless such waiver would maximize recovery of total
proceeds taking into account the value of such prepayment penalty and
related mortgage loan and doing so is standard and customary in servicing
mortgage loans similar to the mortgage loans (including any waiver of a
prepayment penalty in connection with a refinancing of a mortgage loan that
is related to a default or a reasonably foreseeable default), and in no
event will it waive a prepayment penalty in connection with a refinancing
of a mortgage loan that is not related to a default or a reasonably
foreseeable default;
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(iii) The Seller shall ensure that the related Servicer will not waive
any part of any prepayment penalty unless the waiver relates to a default
or a reasonably foreseeable default, the prepayment penalty would cause an
undue hardship to the related borrower, the Mortgaged Property is sold by
the Mortgagor, the collection of any prepayment penalty would violate any
relevant law or regulation or the waiving of the prepayment penalty would
otherwise benefit the Trust Fund and it is expected that the waiver would
maximize recovery of total proceeds taking into account the value of the
prepayment penalty and related Option One Mortgage Loan and doing so is
standard and customary in servicing similar Option One Mortgage Loans
(including any waiver of a prepayment penalty in connection with a
refinancing of an Option One Mortgage Loan that is related to a default or
a reasonably foreseeable default). The Servicer will not waive a prepayment
penalty in connection with a refinancing of an Option One Mortgage Loan
that is not related to a default or a reasonably foreseeable default.
It is understood and agreed that the representations and warranties set
forth in Section 1.04(b) and (c) herein shall survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Option One Mortgage Loan to the
Depositor. Upon discovery by any of the Transferor, the Seller or the Depositor
of a breach of any of the foregoing representations and warranties that
adversely and materially affects the value of the related Option One Mortgage
Loan, and, that does not also constitute a breach of a representation or
warranty of the Transferor in the Transfer Agreement or Bring Down Letter, the
party discovering such breach shall give prompt written notice to the other
party. Within 60 days of the discovery of any such breach, the Seller shall
either (a) cure such breach in all material respects, (b) repurchase such Option
One Mortgage Loan or any property acquired in respect thereof from the Depositor
at the applicable Purchase Price or (c) within the two year period following the
Closing Date, substitute a Replacement Mortgage Loan for the affected Option One
Mortgage Loan. The Seller hereby indemnifies and holds the Trust Fund, the
Trustee, the Master Servicer, the Securities Administrator, the Depositor, the
Servicers and each Certificateholder harmless against any and all taxes, claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and any other costs, fees and expenses that the Trust Fund, the
Trustee, the Master Servicer, the Securities Administrator, the Depositor, the
Servicers and any Certificateholder may sustain in connection with any actions
of the Seller relating to a repurchase of an Option One Mortgage Loan other than
in compliance with the terms of Section 2.03 of the Pooling Agreement and this
Agreement, to the extent that any such action causes (i) any federal or state
tax to be imposed on the Issuing Entity or any REMIC provided for in the Pooling
Agreement, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860(d)(1) of the Code, or (ii) any REMIC created
in the Pooling Agreement to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
Section 1.05. Grant Clause. It is intended that the conveyance of the
Seller's right, title and interest in and to Option One Mortgage Loans and other
property conveyed pursuant to this Agreement shall constitute, and shall be
construed as, a sale of such property and not a grant of a security interest to
secure a loan. However, if such conveyance is deemed to be in respect of a loan,
it is intended that: (1) the rights and obligations of the parties shall be
established pursuant to the terms of this Agreement; (2) the Seller hereby
grants to the Depositor a first priority security interest in all of the
Seller's right, title and interest in, to and under, whether now owned
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or hereafter acquired, such Option One Mortgage Loans and other property; and
(3) this Agreement shall constitute a security agreement under applicable law.
Section 1.06. Assignment by Depositor. The Depositor shall have the right,
upon notice to but without the consent of the Seller, to assign, in whole or in
part, its interest under this Agreement with respect to the Option One Mortgage
Loans to the Trustee, and the Trustee then shall succeed to all rights of the
Depositor under this Agreement. All references to the Depositor in this
Agreement shall be deemed to include its assignee or designee, specifically
including the Trustee.
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.01. Binding Nature of Agreement; Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 2.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
Section 2.03. Amendment. This Agreement may be amended from time to time by
the Seller and the Depositor, without notice to or the consent of any of the
Holders, (i) to cure any ambiguity or correct any mistake, (ii) to cause the
provisions herein to conform to or be consistent with or in furtherance of the
statements made with respect to the Certificates, the Trust Fund, the Pooling
Agreement or this Agreement in any Offering Document; or to correct or
supplement any provision herein which may be inconsistent with any other
provisions herein, (iii) to make any other provisions with respect to matters or
questions arising under this Agreement or (iv) to modify, alter, amend, add to
or rescind any of the terms or provisions to the extent necessary or desirable
to comply with any requirements imposed by the Code and the REMIC Provisions. No
such amendment effected pursuant to clause (iii) of the preceding sentence shall
adversely affect in any material respect the interests of any Holder. Any such
amendment shall be deemed not to adversely affect in any material respect any
Holder, if the Trustee receives written confirmation from each Rating Agency
that such amendment will not cause such Rating Agency to reduce the then current
rating assigned to the Certificates (and any Opinion of Counsel requested by the
Trustee in connection with any such amendment may rely expressly on such
confirmation as the basis therefor).
(a) This Agreement may also be amended from time to time by the Seller and
the Depositor with the consent of the Holders of not less than 66-2/3% of the
Class Certificate Principal Amount (or Percentage Interest) of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders; provided,
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however, that no such amendment may (i) reduce in any manner the amount of, or
delay the timing of, payments received on Option One Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate or (ii) reduce the aforesaid percentages of Class Principal
Amount (or Percentage Interest) of Certificates of each Class, the Holders of
which are required to consent to any such amendment without the consent of the
Holders of 100% of the Class Principal Amount (or Percentage Interest) of each
Class of Certificates affected thereby. For purposes of this paragraph,
references to "Holder" or "Holders" shall be deemed to include, in the case of
any Class of Book-Entry Certificates, the related Certificate Owners.
(b) It shall not be necessary for the consent of Holders under this Section
2.03 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Holders shall be subject to such reasonable regulations as the
Trustee may prescribe.
Section 2.04. Governing Law. THIS AGREEMENT SHALL BE 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 WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 2.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 2.06. Indulgences; No Waivers. Neither the failure nor any delay on
the part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
Section 2.07. Headings Not to Affect Interpretation. The headings contained
in this Agreement are for convenience of reference only, and they shall not be
used in the interpretation hereof.
Section 2.08. Benefits of Agreement. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties to this Agreement and
their successors hereunder, any benefit or any legal or equitable right, power,
remedy or claim under this Agreement.
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Section 2.09. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, the Seller and the Depositor have caused their names to
be signed hereto by their respective duly authorized officers as of the date
first above written.
XXXXXXX XXXXX MORTGAGE LENDING, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
XXXXXXX XXXXX MORTGAGE INVESTORS, INC.
By:
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Name: Xxxx Park
Title: Authorized Signatory
SCHEDULE A
MORTGAGE LOAN SCHEDULE
On file at the offices of:
Dechert LLP
Xxxx Centre
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx
