EXECUTION COPY
MORTGAGE LOAN PURCHASE AGREEMENT
Between
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
and
GREENPOINT MORTGAGE SECURITIES INC.,
as Purchaser
Dated as of September 1, 2000
Table of Contents
Page
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ARTICLE I Definitions ...........................................................................................1
ARTICLE II Procedures for Purchase of Mortgage Loans; Conditions Precedent; Settlements...........................1
Section 2.01. Purchase and Sale...........................................................................1
Section 2.02. Delivery of Documents; Purchase of Mortgage Loans...........................................1
Section 2.03. Survival of Representations.................................................................2
Section 2.04. Proceeds of Mortgage Loans..................................................................2
Section 2.05. Defective Mortgage Loans....................................................................3
ARTICLE III Intent of Parties; Security Interest..................................................................3
Section 3.01. Intent of Parties; Security Interest........................................................3
ARTICLE IV Representations and Warranties.........................................................................3
Section 4.01. Representations and Warranties of Seller....................................................3
Section 4.02. Representations and Warranties Regarding Mortgage Loans.....................................5
Section 4.03. Representations and Warranties of Purchaser................................................16
Section 4.04. Remedies for Breach of Representations and Warranties; Repurchase Obligation...............17
ARTICLE V Covenants and Warranties of Seller.....................................................................18
Section 5.01. Affirmative Covenants......................................................................18
Section 5.02. Negative Covenants.........................................................................20
ARTICLE VI Sale of Mortgage Loans from the Purchaser to the Trust................................................20
Section 6.01. Sale and Servicing Agreement...............................................................20
ARTICLE VII Seller's Servicing Obligations.......................................................................22
Section 7.01. Seller's Servicing Obligations.............................................................22
ARTICLE VIII Fees and Expenses...................................................................................22
ARTICLE IX Termination; Additional Remedies......................................................................22
ARTICLE X Payment of Purchase Price..............................................................................23
Section 10.01. Purchase Price Payments....................................................................23
Section 10.02. The Purchaser Note.........................................................................23
ARTICLE XI Confidentiality.......................................................................................24
ARTICLE XII Term ................................................................................................24
ARTICLE XIII Exclusive Benefit of Parties; Assignment............................................................24
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ARTICLE XIV Amendment; Waivers...................................................................................25
ARTICLE XV Execution in Counterparts.............................................................................25
ARTICLE XVI Effect of Invalidity of Provisions...................................................................25
ARTICLE XVII Governing Law.......................................................................................25
ARTICLE XVIII Notices............................................................................................26
ARTICLE XIX Entire Agreement.....................................................................................26
ARTICLE XX Indemnities...........................................................................................26
ARTICLE XXI RESPA Obligations....................................................................................27
ARTICLE XXII Survival ...........................................................................................28
ARTICLE XXIII Right of Set-off...................................................................................28
ARTICLE XXIV Consent to Service..................................................................................28
ARTICLE XXV Submission to Jurisdiction; Waiver of Trial by Jury..................................................28
ARTICLE XXVI Construction........................................................................................29
ARTICLE XXVII Further Agreements.................................................................................29
EXHIBIT A Form of Non-Negotiable GreenPoint Mortgage Securities Inc.
Promissory Note
SCHEDULE I: Mortgage Loan Schedule
ii
MORTGAGE LOAN PURCHASE AGREEMENT ("Agreement") dated as of September 1, 2000
between GreenPoint Mortgage Funding, Inc., a New York corporation ("Seller"),
and GreenPoint Mortgage Securities Inc., a Delaware corporation ("Purchaser").
WHEREAS, Seller desires to sell to Purchaser the Mortgage Loans (as
hereinafter defined), and Purchaser desires to purchase such Mortgage
Loans in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties, in consideration of good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
and intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
All capitalized terms used in this Agreement and not otherwise defined
herein, shall have the meanings assigned thereto in Annex A to the
Pooling Agreement dated as of September 1, 2000, between the Issuer and the
Trustee, as the same may be amended and supplemented from time to time.
ARTICLE II
Procedures for Purchase of Mortgage Loans; Conditions Precedent; Settlements
Section 2.01. Purchase and Sale. (a) On the Closing Date in consideration for
the Purchase Price the Seller hereby sells, transfers, assigns, sets over and
otherwise conveys to the Purchaser, without recourse, all of its right, title
and interest in, to and under, whether now existing or hereafter created, (i)
each Mortgage Loan, including its Principal Balance (and any Additional
Balances) and all collections in respect thereof received on or after the
Cut-Off Date; (ii) property that secured a Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure; (iii) the Seller's rights under the
hazard insurance policies; and (iv) all proceeds with respect to the foregoing.
The Purchase Price on the Closing Date shall be payable in a combination of cash
and credit for a capital contribution made to the Purchaser by the Seller.
(b) To the extent that the fair market value of any Additional Balance
is greater than the cash consideration paid by the Purchaser for such Additional
Balance, the difference between such fair market value and the amount of such
cash consideration shall be deemed to be a combination of a credit for a capital
contribution made to the Purchaser by the Seller and an increase in the
principal amount of the Purchaser Notes pursuant to Article X.
Section 2.02. Delivery of Documents; Purchase of Mortgage Loans. Prior to the
purchase of the Mortgage Loans:
(a) Seller shall have delivered to the Purchaser or any agent appointed
by the Purchaser the Mortgage File for each of the Mortgage Loans.
(b) Purchaser shall have received a Mortgage Loan Schedule pertaining to
the related Mortgage Loans.
(c) Purchaser shall have received copies of the resolutions of the Board of
Directors of Seller, certified by its respective Secretary, approving this
Agreement.
(d) Purchaser shall have received the Certificate of Incorporation of
Seller certified by the Secretary of State of the State of New York.
(e) Purchaser shall have received a certificate of the Secretary or
Assistant Secretary of Seller certifying (i) the names and signatures of the
officers authorized on its behalf to execute this Agreement, and any other
documents to be delivered by it hereunder and (ii) a copy of Seller's By-laws.
(f) Purchaser shall have received an opinion of counsel to Seller as to
the due authorization, execution and delivery by the Seller of this Agreement
and as to the validity and enforceability of the transfers contemplated
hereunder and addressing such other matters as the Purchaser may reasonably
request.
(g) Seller shall have instructed the applicable debtor, trustee, paying
agent, authenticating agent, transfer agent, registrar, predecessor in interest,
owner (if the Mortgage Loans are in the form of a security agreement), or
servicer, if any, in respect of the related Mortgage Loans to reflect on their
books and records the transfer of such Mortgage Loans to Purchaser, as owner or
secured party (if the Mortgage Loans are in the form of a security agreement).
(h) Purchaser shall have received the most recent available standard
servicing or lien reports in summary form, if any, with respect to all of the
mortgages in Seller's portfolio similar to the Mortgage Loans.
(i) The Purchaser shall be permitted to perform its standard loan review
of each Mortgage Loan to be purchased.
(j) UCC-1 financing statements duly executed by Seller as debtor shall
have been filed in California and New York naming the Purchaser as secured party
and the Trustee on behalf of the Trust as assignee.
Section 2.03. Survival of Representations. The terms and conditions of the
purchase of each Mortgage Loan shall be as set forth in this Agreement. Seller
will be deemed on the Closing Date to have made to Purchaser the representations
and warranties set forth in Article IV hereof and such representations and
warranties of Seller shall be true and correct on and as of the Closing Date.
Section 2.04. Proceeds of Mortgage Loans. The transfer and sale hereby of all
of the Seller's right, title and interest in and to each Mortgage Loan shall
include all proceeds, products and profits derived therefrom, including, without
limitation, all scheduled payments of principal of and interest on such Mortgage
Loans and other amounts due or payable or to become
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due or payable in respect thereof and proceeds thereof, including, without
limitation, all moneys, goods and other tangible or intangible property received
upon the liquidation or sale thereof.
Section 2.05. Defective Mortgage Loans. If any Mortgage Loan is re-transferred
to the Purchaser pursuant to Section 2.03 of the Sale and Servicing Agreement,
the Seller shall, at the Purchaser's option, either (a) repurchase such Mortgage
Loan at the Repurchase Price, or (b) provide an Eligible Substitute Mortgage
Loan if the Seller has any such loans available for sale at the time, subject to
the terms and conditions of the Sale and Servicing Agreement.
ARTICLE III
Intent of Parties; Security Interest
Section 3.01. Intent of Parties; Security Interest. Purchaser and Seller
confirm that the transactions contemplated herein are intended as purchases and
sales rather than as loan transactions. In the event, for any reason, and solely
in such event, any transaction hereunder is construed by any court or regulatory
authority as a loan or other purchase and sale of the related Mortgage Loans,
Seller shall be deemed to have hereby pledged to Purchaser as security for the
performance by Seller of all of its obligations from time to time arising
hereunder and under any and all Purchases effected pursuant thereto, and shall
be deemed to have granted to Purchaser a security interest in, the related
Mortgage Loans and all distributions in respect thereof, and the proceeds of any
and all of the foregoing whether now owned or hereafter acquired, (collectively,
the "Collateral"). In furtherance of the foregoing, (i) this Agreement shall
constitute a security agreement, (ii) Purchaser shall have all of the rights of
a secured party with respect to the Collateral pursuant to applicable law and
(iii) Seller shall execute all documents, including, but not limited to,
financing statements under the Uniform Commercial Code as in effect in any
applicable jurisdictions, as the Purchaser may reasonably require to effectively
perfect and evidence Purchaser's first priority security interest in the
Collateral. Seller also covenants not to pledge, assign or grant any security
interest to any other party in any Mortgage Loan sold to Purchaser.
ARTICLE IV
Representations and Warranties
Section 4.01. Representations and Warranties of Seller. The Seller represents,
warrants and covenants to the Purchaser (i) as of the Closing Date and (ii) on
each date on which any Mortgage Loans are transferred from the Seller to the
Purchaser pursuant to Article II hereof, that:
(i) the Seller is duly organized, validly existing and in good standing
under the laws of the State of New York and is duly authorized and qualified
to transact any and all business contemplated by this Agreement to be
conducted by the Seller in any state in which a Mortgaged Property is located
to the extent necessary to ensure the enforceability of each Mortgage Loan
and the servicing of the Mortgage Loan in accordance with the terms of this
Agreement;
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(ii) the Seller has the full corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and the execution,
delivery and performance of this Agreement by the Seller has been duly
authorized by all necessary corporate action on the part of the Seller; and
this Agreement, assuming the due authorization, execution and delivery
thereof by the Purchaser, constitutes a legal, valid and binding obligation
of the Seller, enforceable against the Seller in accordance with its
respective terms, except to the extent that (a) the enforceability thereof
may be limited by federal or state bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors' rights generally
and (b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought;
(iii)the execution and delivery of this Agreement by the Seller, the
servicing of the Mortgage Loans by the Seller hereunder, the consummation by
the Seller of the transactions herein contemplated, and the fulfillment by
the Seller of or compliance by the Seller with the terms hereof will not (A)
result in a breach of any term or provision of the charter or by-laws of the
Seller or (B) conflict with, result in a breach, violation or acceleration
of, or result in a default under, the terms of any other material agreement
or instrument to which the Seller is a party or by which it may be bound, or
any statute, order or regulation applicable to the Seller of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Seller, which breach, violation, default or
non-compliance would have a material adverse effect on (a) the business,
operations, financial condition, properties or assets of the Seller taken as
a whole or (b) the ability of the Seller to perform its obligations under
this Agreement; and the Seller is not a party to, bound by, or in breach or
violation of any material indenture or other material agreement or
instrument, or subject to or in violation of any statute, order or regulation
of any court, regulatory body, administrative agency or governmental body
having jurisdiction over it, which materially and adversely affects or, to
the Seller's knowledge, would in the future reasonably be expected to
materially and adversely affect, (x) the ability of the Seller to perform its
obligations under this Agreement or (y) the business, operations, financial
condition, properties or assets of the Seller taken as a whole;
(iv) the Seller is, and currently intends to remain, in good standing and
qualified to do business in each jurisdiction where failure to be so
qualified or licensed would have a material adverse effect on (a) the
business, operations, financial condition, properties or assets of the Seller
taken as a whole or (b) the enforceability of any Mortgage Loan or the
servicing of the Mortgage Loans in accordance with the terms of this
Agreement;
(v) there is no litigation pending or, to the Seller's best knowledge,
threatened against the Seller that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of the
Seller to service the Mortgage Loans or for the Seller to perform any of its
other obligations hereunder in accordance with the terms hereof;
(vi) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or
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compliance by the Seller with, this Agreement or the consummation of
the transactions contemplated hereby, or if any such consent,
approval, authorization or order not relating to a future transaction
is required, the Seller has obtained the same;
(vii)the Seller has caused to be performed any and all acts required to
preserve the rights and remedies of the Purchaser in any insurance policies
of the Seller or a mortgagee applicable to the Mortgage Loans sold by the
Seller; and
(viii) the Seller is solvent and will not be rendered insolvent by the
transactions described herein and, after giving effect to the transactions
described herein, the Seller will not be left with an unreasonably small
amount of capital with which to engage in the ordinary course of its
business, and the Seller does not intend to incur, nor does the Seller
believe that it has incurred, debts beyond its ability to pay as they mature.
The Seller does not contemplate the commencement of insolvency, liquidation
or consolidation proceedings or the appointment of a receiver, liquidator,
conservator, trustee or similar official in respect of the Seller or any of
its respective assets.
Section 4.02. Representations and Warranties Regarding Mortgage Loans.
(a) Seller represents and warrants to Purchaser with respect to each
Mortgage Loan (i) as of the Closing Date and (ii) on the applicable Transfer
Date as follows:
(i) As of the Closing Date with respect to the Mortgage Loans and as of
the related Transfer Date with respect to any Eligible Substitute Mortgage
Loans and with respect to any HELOC Mortgage Loan, as of the date any
Additional Balance is created, the information set forth in the Mortgage Loan
Schedule for such Mortgage Loans is true and correct in all material
respects;
(ii) Each Mortgage Loan is being serviced by the Servicer;
(iii)The applicable Cut-Off Date Principal Balance has not been assigned
or pledged, and the Seller is the sole owner and holder of such Cut-Off Date
Principal Balance free and clear of any and all liens, claims, encumbrances,
participation interests, equities, pledges, charges or 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
Mortgage Loans, to sell, assign or transfer the same pursuant to this
Agreement and upon its acquisition of the Mortgage Loans, the Purchaser will
be the sole owner of the Cut-Off Date Principal Balance free and clear of any
and all liens claims, encumbrances, participating interests, equities,
pledges, charges, or security interests of any nature;
(iv) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Credit Line Agreement and each Mortgage
Note and related Mortgage has not been assigned or pledged and immediately
prior to the transfer and assignment herein contemplated, the Seller held
good, marketable and indefeasible title to, and was the sole owner and holder
of, each Mortgage Loan subject to no liens, charges, mortgages, claims,
participation interests, equities, pledges or security interests of any
nature, encumbrances or rights of others (collectively, a "Lien"); the Seller
has full right and authority under all governmental and regulatory bodies
having jurisdiction over the Seller,
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subject to no interest or participation of, or agreement with, any party,
to sell and assign the same pursuant to this Agreement; and immediately upon
the transfers and assignments herein contemplated, the Seller shall have
transferred all of its right, title and interest in and to each Mortgage Loan
and the Purchaser will hold good, marketable and indefeasible title, to, and
be the sole owner of, each Mortgage Loan subject to no Liens;
(v) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, the related Mortgage is a valid and subsisting first or second lien,
as set forth on the Mortgage Loan Schedule with respect to each related
Mortgaged Property, and as of the applicable Cut-Off Date the related
Mortgaged Property is free and clear of all encumbrances and liens having
priority over the first or second lien, as applicable, of such Mortgage
except for liens for (i) real estate taxes and special assessments not yet
delinquent; (ii) any first mortgage loan secured by such Mortgaged Property
and specified on the Mortgage Loan Schedule; (iii) covenants, conditions and
restrictions, rights of way, easements and other matters of public record as
of the date of recording that are acceptable to mortgage lending institutions
generally or specifically reflected in the appraisals; and (iv) other matters
to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage;
(vi) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there is no valid right to rescission offset, defense (including the
defense of usury) or counterclaim of any obligor under any Loan Agreement or
Mortgage;
(vii)As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there is no delinquent recording or other tax or fee or assessment
lien against any related Mortgaged Property;
(viii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there is no proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property, nor is such a proceeding currently
occurring, and such property is in good repair and is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty, so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were
intended;
(ix) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, 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 the lien of the related
Mortgage, except liens which are fully insured against by the title insurance
policy or other title protection referred to in clause (xiv);
(x) No Minimum Monthly Payment is more than 59 days delinquent (measured
on a contractual basis);
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(xi) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, for each Mortgage Loan, the related Mortgage File contains each of the
documents and instruments specified to be included therein;
(xii)The related Loan Agreement and the related Mortgage at origination
complied in all material respects with applicable state and federal laws,
including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, equal credit opportunity,
recording or disclosure laws applicable to the Mortgage Loans and
consummation of the transactions contemplated hereby, including without
limitation the receipt of interest, will not involve the violation or such
laws;
(xiii) On the Closing Date with respect to the Mortgage Loans and to the
extent not already included in such filing, on the applicable Transfer Date
with respect to any Eligible Substitute Mortgage Loans, the Seller has filed
UCC-1 financing statements with respect to such Mortgage Loans;
(xiv)A lender's policy of title insurance, xxxxxxxXxxxx.xxx lender master
protection program (standard mortgage guaranty) or a commitment (binder) to
issue the same or an attorney's certificate or opinion of title was effective
on the date of the origination of each mortgage loan and each such policy or
certificate or opinion of title is valid and remains in full force and
effect;
(xv) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, none of the Mortgaged Properties is a mobile home or a manufactured
housing unit;
(xvi)As of the Cut-Off Date for the Mortgage Loans no more than (a) 0.83%
of the Pool I Mortgage Loans (by Pool I Balance), or (b) 2.58% of the Pool II
Mortgage Loans (by Pool II Balance) are secured by Mortgaged Properties
located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Pool I Mortgage Loan was
not in excess of 100% and the Combined Loan-to-Value Ratio for each Pool II
Mortgage Loan was not in excess of 100%;
(xviii) Each Pool I Mortgage Loan conforms to all applicable loan
origination standards with respect to loan balances as of the date of
origination set forth by Xxxxxxx Mac.
(xix)No selection procedure reasonably believed by the Seller to be
adverse to the interests of the Securityholders, the Insurer or Xxxxxxx Mac
was utilized in selecting the Mortgage Loans for sale to the Purchaser,
provided, however, that the Mortgage Loans were selected from the pool of
mortgage loans originated in connection with the Seller's mortgage loan
origination program;
(xx) The Seller has not transferred the Mortgage Loans to the Purchaser
with any intent to hinder, delay or defraud any of its creditors;
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(xxi)The Minimum Monthly Payment with respect to any Mortgage Loan is not
less than the interest accrued at the applicable Loan Rate on the average
daily Principal Balance during the interest period relating to the date on
which such Minimum Monthly Payment is due;
(xxii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, each Loan Agreement and each Mortgage Loan is genuine and is a legal,
valid and binding obligation and is an enforceable obligation of the related
Mortgagor, except as the enforceability thereof may be limited by the
bankruptcy, insolvency or similar laws affecting creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there has been no default, breach, violation or event of acceleration
of any senior mortgage loan related to a Mortgaged Property that has not been
cured by a party other than the Servicer;
(xxiv) The terms of each Mortgage Note and each Mortgage have not been
impaired, altered or modified in any respect, except by a written instrument
which (if such instrument is secured by real property) has been recorded, if
necessary, to protect the interest of the Securityholders and which has been
delivered to the Trustee. The substance of any such alteration or
modification is reflected on the related Mortgage Loan Schedule and has been
approved by the primary mortgage guaranty insurer, if any;
(xxv)The definition of "prime rate" in each Credit Line Agreement relating
to a HELOC Mortgage Loan does not differ materially from the definition in
the form of Credit Line Agreement in Exhibit D to the Sale and Servicing
Agreement;
(xxvi) The weighted average remaining term to maturity of the Pool I
Mortgage Loans on a contractual basis as of the related Cut-Off Date is
approximately 205 months and for the Pool II Mortgage Loans is approximately
203 months. On each date that the Loan Rates relating to HELOC Mortgage Loans
have been adjusted, interest rate adjustments on the HELOC Mortgage Loans
were made in compliance with the related Mortgages and Credit Line Agreement
and applicable law. Over the term of each HELOC Mortgage Loan, the Loan Rate
may not exceed the related Loan Rate Cap, if any. With respect to the Pool I
HELOC Mortgage Loans, the weighted average Loan Rate Cap is approximately
18.00%. With respect to the Pool II HELOC Mortgage Loans, the weighted
average Loan Rate Cap is approximately 18.00%. With respect to the Pool I
HELOC Mortgage Loans, the margins range between 0.00% and 8.00% and the
weighted average margin is approximately 2.96% as of the related Cut-Off
Date. With respect to the Pool II HELOC Mortgage Loans, the margins range
between 0.00% and 6.52% and the weighted average margin is approximately
3.01% as of the related Cut-Off Date. The Loan Rates on the Pool I Mortgage
Loans range between 2.48% and 16.27%, the Loan Rates on the Pool II Mortgage
Loans range between 5.85% and 16.02% and the weighted average Loan Rate is
approximately 9.15% for Pool I and 9.95% for Pool II;
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(xxvii) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, each Mortgaged Property consists of a single parcel of real property
with a one-to-four unit single family residence erected thereon, or an
individual condominium unit, planned unit development unit or townhouse;
(xxviii) No more than 27.91% (by Pool I Balance) of the Pool I Mortgage
Loans are secured by real property improved by individual condominium units,
planned development units or two-to-four family residences erected thereon,
and approximately 72.09% (by Pool I Balance) of the Pool I Mortgage Loans are
secured by real property with a one-family residence erected thereon. No more
than 28.89% (by Pool II Balance) of the Pool II Mortgage Loans are secured by
real property improved by individual condominium units, planned development
units or two-to-four family residences erected thereon, and approximately
71.11% (by Pool II Balance) of the Pool II Mortgage Loans are secured by real
property with a one-family residence erected thereon;
(xxix) Each Mortgage Note evidencing a Closed End Mortgage Loan is
comprised of one original promissory note and each such promissory note
constitutes an "instrument" for purposes of Section 9-105(1)(i) of the UCC.
There is no obligation on the part of the Seller or any other party to make
payments in addition to those made by the Mortgagor with respect to the
Closed End Mortgage Loans;
(xxx)The Credit Limits on the Pool I HELOC Mortgage Loans range between
$7,500.00 and $316,000.00 with an average of approximately $66,400.00. The
Credit Limits on the Pool II HELOC Mortgage Loans range between $3,800.00 and
$700,000.00 with an average of approximately $99,760.00. The Principal
Balances on the Pool I HELOC Mortgage Loans range between $0.00 and
$280,197.00 with an average of approximately $50,800.00. The Principal
Balances on the Pool II HELOC Mortgage Loans range between $0.00 and
$700,000.00 with an average of approximately $63,000.00. The Principal
Balances on the Pool I Closed End Mortgage Loans range between $9,900.00 and
$125,000.00 with an average of approximately $41,000.00. The average Credit
Limit Utilization Rate (weighted by credit line) of the Pool I HELOC Mortgage
Loans is approximately 76.96% and of the Pool II HELOC Mortgage Loans is
approximately 69.42%;
(xxxi) Substantially all of the Mortgage Loans are second liens, and
either (A) no consent for each Mortgage Loan was required by the holder of
the related senior lien, if any, prior to the making of such Mortgage Loan or
(B) such consent has been obtained and is contained in the related Mortgage
File;
(xxxii) 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 Principal Balances with respect to the applicable Mortgage
Loans, all monies due or to become due with respect thereto and all proceeds
of such Cut-Off Date Principal Balances with respect to the Mortgage Loans
and such funds as are from time to time deposited in the Collection Account
(excluding any investment earnings thereon) and all other property specified
in the definition of "Trust" as being part of the corpus of the Trust
conveyed to the Trust, and upon payment for the Additional Balances, will
constitute a valid transfer and assignment to the
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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" relating to the Additional Balances;
(xxxiii) As of the Closing Date, no Mortgage Loan is the subject of
foreclosure proceedings and, to the best of the Seller's knowledge, no
obligor of any of the Mortgage Loans has filed for bankruptcy protection;
(xxxiv) The proceeds of each Closed End Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to make
future advances thereunder. Any and all requirements as to completion of any
on-site or off-site improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses incurred in
making or closing or recording such Closed End Mortgage Loans were paid;
(xxxv) Each Mortgage contains customary and enforceable provisions which
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 (A) in the case of a Mortgage designated as a deed of
trust, by trustee's sale and (B) otherwise by judicial foreclosure. Subject
to applicable state law, there is no homestead or other exemption available
to the Mortgagor which would materially interfere with the rights to sell the
Mortgaged Property at a trustee's sale or the right to foreclose upon the
related Mortgage;
(xxxvi) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loan, except for events permissible under Section 4.02(a)(x) of this
Agreement, there is no default, breach, violation or event of acceleration
existing under any Mortgage or the related Mortgage Note and no event which,
with the passage of time or with notice and the expiration of any grace or
cure period, would constitute a default, breach, violation or event of
acceleration; and the Seller has not waived any default, breach, violation or
event of acceleration;
(xxxvii) To the best knowledge of the Seller, all parties to the Mortgage
Note and the Mortgage had legal capacity to execute the Mortgage Note and the
Mortgage and each Mortgage Note and Mortgage have been duly and properly
executed by such parties; Each Mortgage and Mortgage Note is the legal, valid
and binding obligation of the related Mortgagor and is enforceable by the
Purchaser or any transferor of the Purchaser against the Mortgagor in
accordance with its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by law;
(xxxviii) As of the Cut-Off Date no more than 0.10% of the Principal
Balance of the Pool I Mortgage Loans nor more than 0.45% of the Principal
Balance of the Pool II Mortgage Loans represents Mortgage Loans with respect
to which the related Mortgagor had a Credit Score of 600 or less at the time
of origination or whose Credit Score was unavailable.
10
(xxxix) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loan, no Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement which has been approved by the
applicable title insurer (to the extent required by such title insurer) and
which is part of the Mortgage File delivered to the Trustee;
(xl) At the time of origination of each Mortgage Loan, the related prior
lien was not more than 30 days delinquent. Additionally, as of the Closing
Date, no senior mortgage loan on the related Mortgaged Property was more than
59 days delinquent;
(xli)All required inspections, licenses and certificates with respect to
the use and occupancy of all occupied portions of all property securing the
Mortgages have been made, obtained or issued, as applicable;
(xlii) If the improvements securing a Mortgage Loan were in a federally
designated special flood hazard area as of the date of origination, flood
insurance to the extent required in Section 3.04 of the Sale and Servicing
Agreement covers the related Mortgaged Property (either by coverage under the
federal flood insurance program or by coverage by private insurers);
(xliii) With respect to each Mortgage Loan, the related prior lien does
not provide for negative amortization;
(xliv) With respect to each Mortgage Loan, the maturity date of the
Mortgage Loan is prior to the maturity date of the related prior lien if such
prior lien provides for a balloon payment;
(xlv)All amounts received after the Cut-Off Date with respect to the
Mortgage Loans to which the Seller is not entitled will be deposited into the
Collection Account within one Business Day after the Closing Date;
(xlvi) Each Pool I Mortgage Loan is secured by a property having an
appraised value as of origination of $3,600,000 or less and each Pool II
Mortgage Loan is secured by a property having an appraised value as of
origination of $5,300,000 or less;
(xlvii) Except for events permissible under Section 4.02(a)(x) of this
Agreement, there are no defaults in complying with the terms of the Mortgage,
and either (1) any taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges or ground rents which previously became
due and owing have been paid, or (2) an escrow of funds has been established
in an amount sufficient to pay for every such item which remains unpaid and
which has been assessed but is not yet due and payable. There are no defaults
in complying with the terms of any senior mortgage on the related Mortgaged
Property that have not been cured by anyone other than the Servicer. Except
for payments in the nature of escrow payments, including without limitation,
taxes and insurance payments, the Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than
the Mortgagor, directly or indirectly, for the payment of any amount required
by the Mortgage Note, except for interest accruing from the date of the
Mortgage Note or
11
date of disbursement of the Mortgage proceeds, whichever is greater, to
the day which precedes by one month the Due Date of the first installment of
principal and interest;
(xlviii) With respect to each Mortgage Loan, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a carrier generally acceptable to the Servicer that provides for
fire and extended coverage representing coverage not less than (a) the Credit
Limit of such HELOC Mortgage Loan or (b) the Cut-Off Date Principal Balance
of such Closed End Mortgage Loan or (c) the maximum insurable value of the
Mortgaged Property;
(xlix) No misrepresentation of a material fact or fraud in respect of the
origination, modification or amendment of any Mortgage Loan has taken place
on the part of any person, including, without limitation, the related
Mortgagor, any appraiser, any builder or developer or any party involved in
the origination of such Mortgage Loan;
(l) With respect to the Pool I Mortgage Loans, the terms of the Mortgage
Note and the Mortgage have not been impaired, altered or modified in any
material respect, except by a written instrument which has been recorded or
is in the process of being recorded, if necessary, to protect the interests
of the Purchaser and which has been or will be delivered to the Trustee on
behalf of the Purchaser;
(li) As of the Cut-Off Date, no Mortgage Loan is 30 or more days
delinquent in payment of principal and interest. In addition, none of the
Mortgage Loans have been 30 or more days delinquent in the last 12 months and
none of the Mortgage Loans have been 30 or more days delinquent for two
payment periods in the last 12 months;
(lii)With respect to the Pool I Mortgage Loans, approximately 15.22% of
the Mortgage Loans, as of the Closing Date, are fixed rate fully amortizing
Mortgage Loans having an original term to maturity from the date on which the
first monthly payment is due of not more than 30 years. Each Mortgage Note
with respect to a fixed rate and balloon Mortgage Note will provide for a
schedule of substantially level and equal Monthly Payments which are
sufficient to amortize fully the principal balance of such Mortgage Loan over
a period of time equal to the amortization period of such Mortgage Note;
provided, however, that certain Mortgage Loans constituting approximately
7.91% of the Cut-Off Date Aggregate Loan Balance are balloon loans that
provide for final monthly payment substantially greater than the preceding
monthly payments. All such balloon loans provide for monthly payment based
upon a 30 year amortization schedule with a final balloon payment no later
than the 15th year.
(liii) Except for Mortgage Loans that are delinquent for a time period
less than that set forth in (li) above, there is no default, breach,
violation or event of acceleration existing under any Mortgage or the related
Mortgage Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration; and neither the Seller, nor any
other entity involved in originating or servicing a Mortgage Loan, has waived
any default, breach, violation or event of acceleration;
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(liv) None of the Mortgage Loans are cooperative share mortgages;
(lv) Each appraisal of a Mortgage Loan that was used to determine the
appraised value of the related Mortgaged Property was conducted generally in
accordance with the Seller's mortgage loan origination program(s) and
customary industry standards and included an assessment of the fair market
value of the related mortgaged property at the time of the appraisal. The
Mortgage File contains an appraisal of the applicable Mortgaged Property;
(lvi)All individual insurance policies contain a standard mortgagee clause
naming the Seller, its successors and assigns, as mortgagee. All premiums
thereon have been paid. Each Mortgage obligates the Mortgagor thereunder to
maintain all such insurance at the Mortgagor's cost and expense, and upon the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor;
(lvii) Any advances made after the date of origination of a Mortgage Loan
but prior to the Cut-Off Date have been consolidated with the outstanding
principal amount secured by the related Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term reflected on the Mortgage Loan Schedule. The consolidated principal
amount does not exceed the original principal amount of the related Mortgage
Loan;
(lviii) No improvement located on or being part of any Mortgaged Property
is in violation of any applicable zoning law or regulation. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of each Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities and such Mortgaged Property is lawfully occupied
under the applicable law and all improvements which were included for the
purpose of determining the appraised value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining property encroach upon the Mortgage
Property;
(lix)The proceeds of each fixed rate and balloon Mortgage Loan have been
fully disbursed and there is no obligation on the part of the mortgagee to
make future advances thereunder and any and all requirements as to completion
of any on-site or off-site improvements and as to disbursement of any escrow
funds therefor have been complied with. All costs, fees and expenses incurred
in making, closing or recording the Mortgage Loans were paid and the
Mortgagor is not entitled to any refund of amounts paid or due under the
Mortgage Note;
(lx) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature;
(lxi)All parties which have had any interest in the Mortgage Loan, whether
as originator, mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which
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they held and disposed of such interest, were): (A) organized under the
laws of such state, or (B) qualified to do business in such state, or (C)
federal savings and loan associations or national banks having principal
offices in such state, or (D) not doing business in such state so as to
require qualification or licensing, or (E) not otherwise required or licensed
in such state. To the best of Seller's knowledge, all parties which have had
any interest in the Mortgage Loan were in compliance with any and all
applicable licensing requirements of the laws of the state wherein the
Mortgaged Property is located or were not required to be licensed in such
state;
(lxii) Each document or instrument in the related Mortgage File is in a
form generally acceptable to prudent mortgage lenders that regularly
originate or purchase mortgage loans comparable to the Mortgage Loans for
sale to prudent investors in the secondary market that invest in mortgage
loans such as the Mortgage Loans;
(lxiii) Each original Mortgage was recorded and all subsequent assignments
of the original Mortgage (other than the assignment to the Purchaser) have
been recorded in the appropriate jurisdictions wherein such recordation is
necessary to perfect the lien thereof as against creditors of the Seller, or
is in the process of being recorded;
(lxiv) No Mortgage Loan was originated under a buydown plan;
(lxv)No Mortgage Loan is subject to the requirements of the Home Ownership
and Equity Protection Act of 1994 ("HOEPA") or is in violation of any state
or municipal law comparable to HOEPA;
(lxvi) The Servicer for each Mortgage Loan has accurately and fully
reported its borrower credit files to each of the credit repositories in a
timely manner;
(lxvii) No proceeds from any Mortgage Loan were used to purchase
single-premium credit insurance policies;
(lxviii) No Mortgage Loan has a prepayment penalty term longer than three
years after its origination;
(lxix) Each Mortgage Loan conforms, and all Mortgage Loans in the
aggregate conform, in all material respects, to the descriptions thereof set
forth in the Information Circular and the Prospectus Supplement;
(lxx) Each Mortgage Loan was originated on or after December 23, 1998;
(lxxi) The Seller represents and warrants that the Seller currently
operates or actively participates in an on-going business (A) to originate
single family mortgage loans ("Loans"), and/or (B) to make periodic purchases
of Loans from originators or sellers, and/or (C) to issue and/or purchase
securities or bonds supported by the Loans, a portion of which Loans are made
to borrowers who are:
(a) low-income families (families with incomes of 80% or less of
area median income) living in low-income areas (a census
tract or
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block numbering area in which the median income
does not exceed 80 percent of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(lxxii) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Mortgage Loan in the
event the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
(lxxiii) With respect to the Pool I Mortgage Loans, to the best of
Seller's knowledge, no Mortgage Loan that is a second-lien Mortgage Loan has
a principal balance as of the applicable Cut-Off Date in excess of half of
Xxxxxxx Mac's loan limits for such type of residence;
(lxxiv) To the best of Seller's knowledge, the pool of Mortgages backing
the Class A-1 Certificates does not contain the first and second lien
mortgage loans relating to a single Mortgaged Property if the aggregate
original principal balance of such mortgage loans exceeds Xxxxxxx Mac's loan
limits. To the best of Seller's knowledge, the pool of Mortgages backing the
Securities will not result in a violation of Xxxxxxx Mac's loan limitations;
(lxxv) Each Mortgage Loan was originated substantially in accordance with
Seller's underwriting criteria, which conform to the underwriting criteria
set forth in the Information Circular (for the Pool I loans) or the
Prospectus Supplement (for the Pool II loans).
(lxxvi) There exists no violation of any local, state or federal
environmental law, rule or regulation in respect of any Mortgaged Property
which violation has or could have a material adverse effect on the market
value of such Mortgaged Property. Sponsor has no knowledge of any pending
action or proceeding directly involving any such Mortgaged Property in which
compliance with any environmental law, rule or regulation is in issue; and,
to the best of Sponsor's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to the use and enjoyment of any such Mortgaged
Property;
(lxxvii) The Sponsor has caused or will cause to be performed any and all
acts required to be performed to preserve the rights and remedies of the
Trustee in any insurance policies applicable to the Mortgage Loans including,
without limitation, any necessary notifications of insurers, assignment of
policies or interests therein, and establishments of co-insured, joint loss
payee and mortgagee rights in favor of the Trustee;
(lxxviii) The related Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(lxxix) There is no obligation on the part of the Sponsor or any other
party to make payments in addition to those made by the Mortgagor;
15
(lxxx) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under existing law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Securityholders or
the Trust to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor;
(lxxxi) Each Mortgagor has executed a statement to the effect that such
Mortgagor has received all disclosure materials including the notice of the
right of cancellation or rescission required by applicable law with respect
to the making of the Mortgage Loan and any waiver of any right of
cancellation or rescission exercised by the Mortgagor was in accordance with
applicable law and is binding on the Mortgagor.
With respect to the representations and warranties set forth in this Section
4.02 that are made to the best of the Seller's knowledge or as to which the
Seller has no knowledge, if it is discovered by the Purchaser, the Servicer, the
Insurer, Xxxxxxx Mac or a Responsible Officer of the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
Section 4.03. Representations and Warranties of Purchaser. Purchaser hereby
makes the following representations and warranties, each of which
representations and warranties (i) is material and being relied upon by Seller
and (ii) is true in all respects as of the date of this Agreement:
(i) Purchaser has been duly organized and is validly existing as a
corporation under the laws of the State of Delaware.
(ii) Purchaser has the requisite power and authority and legal right to
execute and deliver, engage in the transactions contemplated by, and perform
and observe the terms and conditions of, this Agreement to be performed by
it.
(iii)This Agreement has been duly authorized and executed by Purchaser, is
valid, binding and enforceable against Purchaser in accordance with its
terms, and the execution, delivery and performance by Purchaser of this
Agreement does not conflict with any material term or provision of any other
agreement to which Purchaser is a party or any term or provision of the
Certificate of Incorporation or the By-laws of the Purchaser, or any law,
rule, equation, order, judgment, writ, injunction or decree applicable to
Purchaser of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Purchaser.
(iv) No consent, approval, authorization or order of, registration or
filing with, or notice to any governmental authority or court is required
under applicable law in connection with the execution and delivery by
Purchaser of this agreement.
(v) There is no action, proceeding or investigation pending or, to the
best knowledge of Purchaser, threatened against Purchaser before any court,
administrative
16
agency or other tribunal (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, or (iii) which is likely to
materially and adversely affect the performance by Purchaser of its
obligations under, or the validity or enforceability of, this Agreement.
(vi) By the purchase of Mortgage Loans, Purchaser represents to Seller
that Purchaser understands, and that Purchaser has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of, its investment in the Mortgage Loans.
Section 4.04. Remedies for Breach of Representations and Warranties;
Repurchase Obligation. It is understood and agreed that the representations and
warranties set forth in Sections 4.01 and 4.02 shall survive each sale of
Mortgage Loans to the Purchaser and shall inure to the benefit of the Purchaser
and subsequent transferees notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment of Mortgage or the examination or
failure to examine any Mortgage File. With respect to the representations and
warranties contained in Sections 4.01 and 4.02 which are made to the best of the
Seller's knowledge or to the actual knowledge of the Seller, if it is discovered
by either the Seller or the Purchaser that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan or the Purchaser's interest therein, then
notwithstanding the Seller's lack of knowledge with respect to the inaccuracy at
the time the representation or warranty was made, the Seller shall repurchase
the related Mortgage Loan in accordance with this Section 4.04 as if the
applicable representation or warranty was breached, subject to the terms and
conditions of the Sale and Servicing Agreement. Upon discovery by either the
Seller or the Purchaser of a breach of any of the foregoing representations and
warranties which materially and adversely affects the value of the Mortgage
Loans or the interest of the Purchaser (or which materially and adversely
affects the interests of the Purchaser in the related Mortgage Loan in the case
of a representation and warranty relating to a particular Mortgage Loan), the
party discovering such breach shall give prompt written notice to the others.
Within 60 days of the earlier of either discovery by or notice to the Seller
of any breach of a representation or warranty which materially and adversely
affects the value of any Mortgage Loan or the Purchaser's interest therein, the
Seller shall use its best efforts promptly to cure such breach in all material
respects and, if such breach cannot be cured or is not cured or is not being
diligently pursued as evidenced by a notice acceptable to the Purchaser, as
evidenced by the Purchaser's agreement thereto, at the end of such 60-day
period, the Seller shall, at the Purchaser's option, either (a) repurchase such
Mortgage Loan at the Repurchase Price or (b) provide an Eligible Substitute
Mortgage Loan, if the Seller has any such loans available for sale at the time
subject to the terms and conditions of the Sale and Servicing Agreement.
At the time of repurchase or substitution, the Purchaser and the Seller shall
arrange for the assignment of such Mortgage Loan to the Seller and the delivery
by the Purchaser to the Seller of the related Mortgage Files.
In addition to such cure and repurchase obligation, the Seller shall
indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures,
17
reasonable and necessary legal fees and related costs, judgments, and other
costs and expenses resulting from any claim, demand, defense or assertion based
on or grounded upon, or resulting from, a breach of the representations and
warranties contained in this Article IV (notwithstanding any limitation in such
representation and warranty as to the Seller's knowledge). It is understood and
agreed that the obligations of the Seller set forth in this Section 4.04 to cure
or repurchase a defective Mortgage Loan and to indemnify the Purchaser as
provided in this Section 4.04 constitute the sole remedies of the Purchaser
respecting a breach of the foregoing representations and warranties.
Any cause of action against the Seller relating to or arising out of the
breach of any representations and warranties made in Sections 4.01 or 4.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement.
ARTICLE V
Covenants and Warranties of Seller
So long as this Agreement remains in effect or Seller shall have any
obligations hereunder, Seller hereby covenants and agrees with Purchaser as
follows:
Section 5.01. Affirmative Covenants.
(a) Until the later to occur of (i) the discharge and payment of all of
Seller's obligations under this Agreement and (ii) the Termination Date of this
Agreement, Seller shall, promptly upon preparation, but in no event later than
60 days following the end of each such party's first three fiscal quarters,
deliver to Purchaser its unaudited company-prepared financial statements as of
the end of each such fiscal quarter, prepared in accordance with GAAP. Seller
shall, promptly upon preparation, but in no event later than 90 days following
the end of such party's fourth fiscal quarter, deliver to Purchaser its audited
and certified financial statements, prepared in accordance with GAAP, as of the
end of the most recently ended fiscal year, which audits and certifications
shall each be prepared by a nationally recognized independent accounting firm or
by a regionally recognized independent accounting firm with the prior written
consent of Purchaser, which consent shall not be unreasonably withheld. In all
cases, financial statements shall include, without limitation, a balance sheet,
a profit and loss statement and a statement of cash flows. Notwithstanding
anything in this Agreement to the contrary, if (x) the audited and certified
financial statements described in the immediately preceding sentence are not
delivered within the above-specified 90 days, (y) Seller is diligently using its
best efforts to deliver such financial statements, and (z) Seller provides
Purchaser with a notice specifying the reason for the delay and a date, within a
reasonable time period (as determined by Purchaser), on which such financial
statements will be delivered, and they are so delivered; then failure to deliver
such financial statements within the above-specified 90 days, as the case may
be, shall not be deemed to be an Event of Termination of this Agreement.
18
(b) Upon request of Purchaser, Seller shall, to the extent lawful, promptly
upon filing, deliver to Purchaser copies of all material public filings made by
Seller with any governmental or quasi-governmental body.
(c) Seller shall (i) with respect to any Mortgage Loans serviced by Seller or
any of its affiliates or otherwise use its best efforts to cause to be delivered
to Purchaser monthly, the report, if any, prepared by the relevant trustee or
servicer setting forth payment activity, defaults and delinquencies with respect
to each Mortgage Loan acquired by Purchaser and (ii) prepare and deliver reports
each month, detailing, with respect to all Purchases, such information as the
Purchaser may from time to time reasonably request.
(d) Seller shall do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted except where failure to
maintain such authority would not have a material adverse effect on the ability
of Seller to conduct its business or to perform its obligations under this
Agreement.
(e) At all times during this Agreement, Seller shall possess sufficient net
capital and liquid assets (or ability to access the same) to satisfy its
obligations as they become due in the normal course of business.
(f) Seller will notify Purchaser in writing of any of the following promptly
upon learning of the occurrence thereof, describing the same and, if applicable,
any remedial steps being taken with respect thereto;
(i) The occurrence or likelihood of occurrence of an Event of Termination
hereunder;
(ii) The institution of any litigation, arbitration proceeding or
governmental proceeding which, in the opinion of counsel to Seller, will have
a material adverse effect on Seller or the Mortgage Loans;
(iii)The entry of any judgment or decree against Seller if the aggregate
amount of all judgments and decrees then outstanding against Seller exceeds
$10,000,000 after deducting (A) the amount with respect to which Seller is
insured and with respect to which the insurer has assumed responsibility in
writing, and (B) the amount for which Seller is otherwise indemnified if the
terms of such indemnification are reasonably satisfactory to Purchaser; or
(iv) The occurrence or likelihood of any event which would allow the
obligee under any material loan agreement to which Seller is bound to declare
an event of default or accelerate the obligations of Seller thereunder.
(g) Seller shall permit the Purchaser or its accountants, attorneys or other
agents access to all of the books and records relating to Mortgage Loans
purchased and retained by Purchaser for inspection and copying during normal
business hours at all places where Seller conducts business.
19
Section 5.02. Negative Covenants.
(a) Seller shall not assign or attempt to assign this Agreement or any rights
hereunder, without first obtaining the specific written consent of Purchaser.
(b) Seller shall not amend its Articles of Incorporation or By-laws, which
amendment shall have or is likely to have an adverse effect upon Purchaser or
its interests under this Agreement, without the prior written consent of
Purchaser.
(c) During the term of this Agreement, Seller shall not engage in any business
other than as a consumer and mortgage finance lender and servicer, except with
the prior written consent of Purchaser.
(d) Seller shall not (i) dissolve or terminate its existence or (ii) transfer
any assets to any affiliate except as otherwise expressly permitted or
contemplated hereby.
(e) Except with the written consent of the Purchaser, the Seller shall not
guarantee, endorse or otherwise in any way become or be responsible for any
obligations of any other person, entity or affiliate, including, without
limitation, whether directly or indirectly by agreement to purchase the
indebtedness of any other person or through the purchase of goods, supplies or
services, or maintenance of working capital or other balance sheet covenants or
conditions, or by way of stock purchase, capital contribution, advance or loan
for the purposes of paying or discharging any indebtedness or obligation of such
other person or otherwise; provided, however, that nothing contained herein
shall prevent Seller from indemnifying its officers, directors and agents
pursuant to its By-laws and its Articles of Incorporation.
(f) Seller will not commit any act in violation of applicable laws, or
regulations promulgated pursuant thereto that relate to the Mortgage Loans or
that materially and adversely affect the operations or financial conditions of
Seller.
(g) Seller, by entering into this Agreement, hereby covenants and agrees that
it will not at any time institute against the Issuer, or join in any institution
against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceedings, or other proceedings under any United States federal
or State bankruptcy or similar law in connection with any obligations relating
to the Securities or any of the Basic Documents.
ARTICLE VI
Sale of Mortgage Loans from the Purchaser to the Trust
Section 6.01. Sale and Servicing Agreement. It is the intent of the Seller and
the Purchaser that with respect to the Mortgage Loans, the Purchaser shall
concurrently sell all of its right, title and interest to the Mortgage Loans and
all other property conveyed to it hereunder to the Trust pursuant to the Sale
and Servicing Agreement.
With respect to such sale, the Seller agrees:
20
(i) to cooperate fully with the Purchaser and the Trust with respect to
all reasonable requests and due diligence procedures including participating
in meetings with Rating Agencies, the Insurer, Xxxxxxx Mac and such other
parties as the Purchaser shall designate and participating in meetings with
the Trust and providing information reasonably requested by the Trust;
(ii) to execute the Sale and Servicing Agreement and all other necessary
documents to effect the transactions contemplated therein;
(iii)the Seller shall make the representations and warranties set forth
herein regarding the Seller and the Mortgage Loans as of the date of the
transfer to the Trust;
(iv) to deliver to the Purchaser for inclusion in any prospectus or other
offering material such publicly available information regarding the Seller,
its financial condition and the mortgage loan delinquency, foreclosure and
loss experience of its portfolio as is customarily set forth in a prospectus
supplement with respect to a comparable mortgage pool, the underwriting of
mortgage loans, the servicer, the servicing and collection of mortgage loans,
lending activities and loan sales of the servicer, regulatory matters and
delinquency and loss experience and any additional information reasonably
requested by the Purchaser, and to deliver to the Purchaser unaudited
consolidated financial statements of the Seller, in which case the Purchaser
shall bear the cost of having such statements audited by certified public
accountants if the Purchaser desires such an audit, or as is otherwise
reasonably requested by the Purchaser and which the Seller is capable of
providing without unreasonable effort or expense, and to indemnify the
Purchaser and its affiliates for material misstatements or omissions
contained in such information;
(v) to deliver to the Purchaser and to any person designated by the
Purchaser, at the Purchaser's expense, such statements and audit letters
issued by reputable, certified public accountants pertaining to information
provided by the Seller pursuant to clause (iv) above as shall be reasonably
requested by the Purchaser (it being acknowledged by Purchaser that the
delivery of such statements and letters is subject to the consent of such
accountants);
(vi) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house opinions of counsel as are
customarily delivered by originators or servicers, as the case may be, and
reasonably determined by the Purchaser to be necessary in connection with the
transactions contemplated by the Sale and Servicing Agreement, it being
understood that the cost of any opinions of outside special counsel that may
be required shall be the responsibility of the Seller;
(vii)to cooperate fully with the Purchaser and any prospective Purchaser
with respect to the preparation of Mortgage Loan documents and other
documents and with respect to servicing requirements reasonably requested by
the Rating Agencies, the Insurer and Xxxxxxx Mac; and
(viii) to negotiate and execute one or more custodial and servicing
agreements among the Purchaser, the Seller and a third party
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by
21
the Purchaser in its sole discretion after consultation with the Seller,
in either case for the purpose of securitizing the Mortgage Loans.
ARTICLE VII
Seller's Servicing Obligations
Section 7.01. Seller's Servicing Obligations. The Seller, as an independent
contract servicer, shall service and administer the Mortgage Loans in accordance
with the terms and provisions set forth in Articles III, IV, V, VII and VIII of
the Sale and Servicing Agreement which sections are hereby incorporated in this
Agreement in their entirety (with, however, the changes and adjustments as
provided in this Agreement) as if the same were contained in this Article VII.
To the extent any provision of any definition set forth in the Sale and
Servicing Agreement shall conflict with any provision set forth in this
Agreement, the provision or definition in this Agreement shall govern.
ARTICLE VIII
Fees and Expenses
The Purchaser shall pay any salaries and other compensation due its employees
and the legal fees and expenses of its attorneys and accountants. All other
costs and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans pursuant to this Agreement or the Sale and Servicing Agreement,
including, without limitation, recording fees, fees for title policy
endorsements and continuations, and fees for recording intervening assignments
of Mortgage, shall be paid by the Seller. To the extent not paid out of the
Trust pursuant to Section 8.7(d)(i) of the Pooling Agreement, the Seller shall
pay the on-going fees of any custodian or trustee under the Sale and Servicing
Agreement, the Trust Agreement or the Pooling Agreement. The Seller shall pay
(i) the acceptance and file review fees of any custodian or trustee under this
Agreement, the Pooling Agreement, the Trust Agreement or the Sale and Servicing
Agreement and (ii) the costs of legal counsel and legal opinions, accounting
comfort letters and fees, printing of disclosure documents, rating agency fees,
Insurer up-front fees, SEC filing fees and the costs of any and all related
document preparations associated with the Sale and Servicing Agreement, the
Trust Agreement, the Pooling Agreement or this Agreement. The Seller also agrees
to pay the fees and other amounts for which the Seller or Servicer is obligated
under the Insurance Agreement.
ARTICLE IX
Termination; Additional Remedies
Upon the occurrence of a Rapid Amortization Event due to an
act or omission of the Seller (an "Event of Termination"), the Purchaser and its
assignees shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies
22
provided under the UCC of each applicable jurisdiction and other applicable
laws, which rights shall be cumulative. Without limiting the foregoing, the
occurrence of an Event of Termination shall not deny to the Purchaser or its
assignees any remedy in addition to termination of its obligations to make
purchases hereunder to which the Purchaser or its assignee may be otherwise
appropriately entitled, whether by statute or applicable law, at law or in
equity.
ARTICLE X
Payment of Purchase Price
Section 10.01. Purchase Price Payments. On the Business Day following each day
other than the Closing Date on which any Mortgage Loans are purchased from the
Seller by the Purchaser pursuant to Article II hereof or Additional Balances
relating to Mortgage Loans are funded by the Seller, on the terms and subject to
the conditions of this Agreement, the Purchaser shall pay to the Seller the
applicable Purchase Price by (i) making or causing to be made a cash payment to
the Seller or its designee in such amount determined by the Purchaser, (ii)
crediting the Seller with an additional capital contribution to the Purchaser,
(iii) automatically increasing the principal amount outstanding under the
Purchaser Note by the amount of the excess of the Purchase Price to be paid to
the Seller for such purchased assets over the amount of any cash payment made on
such day to the Seller and/or any capital contribution made by the Seller to the
Purchaser, subject to a cap on such note at any time equal to $35 million or
(iv) any combination of the foregoing.
Section 10.02. The Purchaser Note.
(a) On the Closing Date, the Purchaser shall deliver to the Seller a
promissory note, substantially in the form of Exhibit A, payable to the order of
the Seller (such promissory note, as the same has been or hereafter may be
amended, supplemented, endorsed or otherwise modified from time to time,
together with any promissory note issued from time to time in substitution
therefor or renewal thereof in accordance with this Agreement, being herein
called the "Purchaser Note"), which Purchaser Note shall, in accordance with its
terms, be subordinated to all interests of the Trust, all claims to the cash
flows from Trust assets and all obligations of the Purchaser, of any nature, now
or hereafter arising under or in connection with the Sale and Servicing
Agreement. The Purchaser Note shall evidence all amounts outstanding thereunder
as of the Closing Date in addition to amounts subsequently incurred thereunder
as provided in this Agreement. Subject to the foregoing, the Purchaser Note
shall be payable in full on the date which is one year and one day after the
Termination Date. The Purchaser Note shall bear interest at the "prime rate" as
determined by the Trustee from time to time in effect. The Purchaser may prepay
all or part of the outstanding balance of the Purchaser Note and interest
accrued thereon from time to time without any premium or penalty, unless an
Event of Default has occurred and is continuing or would result from such
prepayment or payment.
(b) The Servicer shall hold the Purchaser Note for the benefit of the Seller,
and shall make all appropriate recordkeeping entries with respect to the
Purchaser Note or otherwise to reflect the payments on and adjustments of the
Purchaser Note. The Servicer's books and records shall constitute rebuttable
presumptive evidence of the principal amount of and accrued interest on the
Purchaser Note at any time. The Seller hereby irrevocably authorizes
23
the Servicer to xxxx the Purchaser Note "CANCELLED" and to return the Purchaser
Note to the Purchaser upon the full and final payment thereof after the
Termination Date.
(c) The Seller hereby agrees not to transfer, assign, exchange or otherwise
convey or pledge, hypothecate or otherwise grant a security interest in the
Purchaser Note or any interest represented thereby, and any attempt to transfer,
assign, exchange, convey, pledge, hypothecate or grant a security interest in
the Purchaser Note or any interest represented thereby shall be void and of no
effect.
ARTICLE XI
Confidentiality
Purchaser and Seller each acknowledges that the information heretofore
provided to them pursuant to the operation of this Agreement, is highly
confidential, proprietary information of Seller or Purchaser, as the case
may be. Purchaser and Seller each agrees that it will hold such information in
strict confidence and will not disclose any part of such information to any
person or entity, other than to its accountants and lawyers to the extent
necessary for the performance of their duties and as required by law and other
than to such other persons to the extent necessary, as determined by the
Purchaser in its sole discretion, to complete the transactions contemplated
hereunder and in the Sale and Servicing Agreement including the offering and
issuance of the Class A-1 Certificates and Class A-2 Notes; provided, however,
that copies of this Agreement may be included as part of any filing made
pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934
and any regulations promulgated thereunder. In furtherance of the foregoing,
Purchaser and Seller each covenants that it will adhere to its established
procedures for the maintenance of confidentiality with respect to such
information. Purchaser and Seller each further agrees that it will not
distribute such information within its own organization except to persons with a
need to know such information in connection with the transactions contemplated
by this Agreement.
ARTICLE XII
Term
This Agreement shall terminate on the Termination Date.
ARTICLE XIII
Exclusive Benefit of Parties; Assignment
This Agreement is for the exclusive benefit of the parties hereto and their
respective successors and assigns and shall not be deemed to give any legal or
equitable right to any other person except the Sponsor, the Trust, the holders
of the Class A-1 Certificates and Class A-2 Notes, the Insurer and Xxxxxxx Mac.
Notwithstanding the foregoing, the Seller covenants and agrees that the
representations and warranties contained in this Agreement and the rights of the
Purchaser hereunder are intended to benefit the Trust, the holders of the Class
A-1
24
Certificates and Class A-2 Notes, the Insurer and Xxxxxxx Mac. This Agreement
may not be assigned by any party hereto without the prior written consent of the
other party hereto except to the Trust.
ARTICLE XIV
Amendment; Waivers
This Agreement may be amended from time to time only by written agreement
of Seller and Purchaser with the prior written consent of the Insurer and of
Xxxxxxx Mac, which consent shall not be unreasonably withheld by either. Any
forbearance, failure, or delay by a party in exercising any right, power, or
remedy hereunder shall not be deemed to be a waiver thereof, and any single or
partial exercise by a party of any right, power or remedy hereunder shall not
preclude the further exercise thereof. Every right, power and remedy of a party
shall continue in full force and effect until specifically waived by it in
writing. No right, power or remedy shall be exclusive, and each such right,
power or remedy shall be cumulative and in addition to any other right, power or
remedy, whether conferred hereby or hereafter available at law or in equity or
by statute or otherwise.
ARTICLE XV
Execution in Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, and all of which shall constitute one and the
same instrument.
ARTICLE XVI
Effect of Invalidity of Provisions
In case any one or more of the provisions contained in this Agreement should
be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
in no way be affected, prejudiced or disturbed thereby.
ARTICLE XVII
Governing Law
This Agreement shall be governed by and construed in accordance with the laws
of the State of New York, without regard to its rules regarding conflict of
laws.
25
ARTICLE XVIII
Notices
Any notices, consents, directions, demands and other communications given
under this Agreement (unless otherwise specified herein) shall be in writing and
shall be deemed to have been duly given when personally delivered at or
telecopied to the respective addresses or facsimile numbers, as the case may be,
set forth on the signature page hereof for Seller and Purchaser, or to such
other address or facsimile number as either party shall give notice to the other
party pursuant to this Section. Notices, consents, etc., may also be effected by
first class mail, postage prepaid sent to the foregoing addresses and will be
effective upon receipt by the intended recipient.
ARTICLE XIX
Entire Agreement
This Agreement, including the Exhibits and Schedules hereto, contains the
entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements between them,
whether oral or written, of any nature whatsoever with respect to the subject
matter hereof.
ARTICLE XX
Indemnities
Without limiting any other rights which Purchaser or Seller may have
hereunder or under applicable law, and in addition to any other indemnity
provided hereunder, Seller hereby agrees to indemnify Purchaser and its
respective officers, directors, agents and employees (each, an "Indemnified
Party") from and against any and all Losses incurred by any of them relating to
or resulting from:
(1) any representation or warranty made by Seller (or any officers,
employees or agents of Seller) under or in connection with this Agreement,
any periodic report required to be furnished thereunder or any other
information or document delivered by Seller pursuant hereto, which shall have
been false or incorrect in any material respect when made or deemed made;
(2) the failure by Seller to (a) comply with any applicable law, rule or
regulation with respect to any Purchase or (b) perform or observe any
material obligation or covenant hereunder; or
(3) the failure by Seller (if so requested by Purchaser) to execute and
properly file, or any delay in executing and properly filing, financing
statements or other similar instruments or documents under the Uniform
Commercial Code of any applicable jurisdiction or other applicable laws with
respect to the Mortgage Loans.
26
Promptly after receipt by an Indemnified Party under this Article XX of
notice of the commencement of any action, such Indemnified Party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Article XX, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability that it may have to any Indemnified Party otherwise than
under this Article XX. In case any such action is brought against any
Indemnified Party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the Indemnified
Party promptly after receiving the aforesaid notice from such Indemnified Party,
to assume the defense thereof, with counsel satisfactory to such Indemnified
Party; provided, however, that if the defendants in any such action include both
the Indemnified Party and the indemnifying party and the Indemnified Party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other Indemnified Parties that are different from
or additional to those available to the indemnifying party, the Indemnified
Party or parties shall have the right to elect separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Party or parties. Upon receipt of notice from the
indemnifying party to such Indemnified Party of its election so to assume the
defense of such action and approval by the Indemnified Party of counsel, the
indemnifying party will not be liable for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof, unless (i) the Indemnified Party shall have employed separate counsel
in connection with the assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by you in the case of Article XX, representing the
Indemnified Parties under this Article XX, who are parties to such action), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
Indemnified Party to represent the Indemnified Party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the Indemnified Party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall only be in respect of the counsel referred to in such
clause (i) or (iii).
ARTICLE XXI
RESPA Obligations
Seller agrees to discharge on Purchaser's behalf all obligations, including,
without limitation, all disclosure obligations, which Purchaser may have under
the Real Estate Settlement Procedures Act of 1974, as amended, in connection
with Purchaser's purchases of Mortgage Loans hereunder. Purchaser agrees to
provide Seller with such information as is reasonably necessary for Seller to
discharge such obligations and hereby appoints Seller as its agent in its name
for the purposes of, and only for the purposes of, performing such obligations.
Seller hereby agrees to indemnify Purchaser and its respective officers,
directors, agents and employees from any losses suffered by any such party in
connection with Seller's obligations under this Article XXI.
27
ARTICLE XXII
Survival
All indemnities and undertakings of Seller and Purchaser hereunder shall
survive the termination of this Agreement.
ARTICLE XXIII
Right of Set-off
Upon the occurrence of any event or circumstance which requires Seller to
make a payment hereunder, Purchaser is hereby authorized then or at any time or
times thereafter, without notice to Seller (any such notice being expressly
waived by Seller), to set-off and apply any and all deposits (general or
special, time or demand, provisional or final), at any time held and other
indebtedness at any time owing by Purchaser to or for the credit or the account
of Seller against any and all of the obligations of Seller now or hereafter
existing hereunder, irrespective of whether or not Purchaser shall have made any
demand hereunder. Purchaser agrees promptly to notify Seller after any such
set-off and application made by Purchaser; provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of Purchaser under this Article XXIII are in addition to other rights and
remedies which Purchaser may have.
ARTICLE XXIV
Consent to Service
Each party irrevocably consents to the service of process by registered or
certified mail, postage prepaid, to it at its address given pursuant to
Article XVIII hereof.
ARTICLE XXV
Submission to Jurisdiction; Waiver of Trial by Jury
With respect to any claim arising out of this Agreement each party
irrevocably submits to the exclusive jurisdiction of the courts of the State of
New York and the United States District Court located in the Borough of
Manhattan, City of New York, and each party irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party; provided that service of process is made as set
forth in Article XXIV hereof, or by any other lawful means. To the extent
permitted by applicable law, Purchaser and Seller each irrevocably waive all
right of trial by jury in any action, proceeding or
28
counterclaim arising out of or in connection with this Agreement or any matter
arising hereunder.
ARTICLE XXVI
Construction
The headings in this Agreement are for convenience only and are not intended
to influence its construction. References to Articles, Sections, Schedules and
Exhibits in this Agreement are to the Articles, Sections of and Schedules and
Exhibits to this Agreement. The Schedules and Exhibits are hereby incorporated
into and form a part of this Agreement. In this Agreement, the singular includes
the plural, the plural the singular, the words "and" and "or" are used in the
conjunctive or disjunctive as the sense and circumstances may require and the
word "including" means "including, but not limited to." Unless otherwise stated
in this Agreement, in the computation of a period of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding."
ARTICLE XXVII
Further Agreements
The Seller and the Purchaser each agree to execute and deliver to the other
such reasonable and appropriate additional documents, instruments or agreements
as may be necessary or appropriate to effectuate the purposes of this Agreement.
29
IN WITNESS WHEREOF, the Purchaser and the Seller have caused their names
to be signed hereto by their respective officers thereunto duly authorized,
all as of the date first written above.
GREENPOINT MORTGAGE SECURITIES INC.,
as Purchaser
000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
By: /s/ Xxxxxxx X. XxxXxxxxxx
--------------------------------
Name: Xxxxxxx X. XxxXxxxxxx
Title: Executive Vice President/Chief
Financial Officer
[Mortgage Loan Purchase Agreement]
EXHIBIT A
FORM OF NON-NEGOTIABLE
GREENPOINT MORTGAGE SECURITIES INC.
PROMISSORY NOTE
September 26, 2000
EXCEPT TO THE EXTENT PROVIDED IN THE PURCHASE AGREEMENT REFERRED TO BELOW, THIS
PROMISSORY NOTE AND ANY INTEREST REPRESENTED HEREBY SHALL NOT BE TRANSFERRED,
ASSIGNED, EXCHANGED, CONVEYED, PLEDGED, HYPOTHECATED OR OTHERWISE THE SUBJECT OF
THE GRANT OF A SECURITY INTEREST AND ANY ATTEMPT TO TRANSFER, ASSIGN, EXCHANGE,
CONVEY, PLEDGE, HYPOTHECATE OR GRANT A SECURITY INTEREST IN THIS PROMISSORY NOTE
OR ANY INTEREST REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.
For VALUE RECEIVED, the undersigned, GREENPOINT MORTGAGE SECURITIES
INC., a Delaware corporation (the "Purchaser"), promises to pay to GREENPOINT
MORTGAGE FUNDING, INC., a California corporation (the "Seller"), on the terms
and subject to the conditions set forth herein and in the Purchase Agreement
referred to below, the aggregate unpaid Purchase Price of all assets purchased
and to be purchased by the Purchaser pursuant to the Purchase Agreement,
provided that such amount shall in no event exceed $35,000,000. Such amount as
shown in the records of the Seller will be rebuttable presumptive evidence of
the principal amount owing under this Note.
1. Purchase and Sale Agreement. This Note is the Purchaser Note
described in, and is subject to the terms and conditions set forth in, that
certain Mortgage Loan Purchase Agreement dated as of September 1, 2000 (as the
same may be amended, supplemented, restated or otherwise modified in accordance
with its terms, the "Purchase Agreement"), between the Seller and the Purchaser.
Reference is hereby made to the Purchase Agreement for a statement of certain
other rights and obligations of the Purchaser and the Seller.
2. Definitions. Capitalized terms used (but not defined) herein have
the meanings ascribed thereto in the Purchase Agreement. In addition, as used
herein, the following terms have the following meanings:
"Bankruptcy Proceedings" has the meaning set forth in clause (a) of
paragraph 7 hereof."
"Final Maturity Date" means the date that falls one year and
one day after the Termination Date.
"Junior Liabilities" means all obligations of the Purchaser to
the Seller under this Note and under all similar notes issued by the Purchaser
to the Seller in connection with any previous or future securitization
transactions.
A-1
"Senior Liabilities" means all obligations of the Purchaser to the
Trust and any other obligations of the Purchaser arising under or in connection
with the Sale and Servicing Agreement, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or thereafter existing,
or due or to become due on or before the Final Maturity Date.
"Subordination Provisions" means, collectively, clauses (a) through
(i) of paragraph 7 hereof.
3. Interest. Subject to the Subordination Provisions and paragraph 10
hereof, the Purchaser promises to pay interest on the aggregate unpaid principal
amount of this Note outstanding on each day, at a variable rate equal to the
rate publicly announced by the Trustee from time to time as its "prime lending
rate."
4. Interest Payment Dates. Subject to the Subordination Provisions,
paragraph 10 hereof and Section 10.02 of the Purchase Agreement, the Purchaser
shall pay accrued interest on this Note on each Payment Date and on the Final
Maturity Date. The Purchaser also shall pay accrued interest on the principal
amount of each prepayment hereof on the date of each such prepayment.
5. Basis of Computation. Interest accrued hereunder shall be computed
for the actual number of days elapsed on the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination Provisions,
any unpaid principal of this Note shall be paid on the Final Maturity Date (or,
if such date is not a Business Day, the next succeeding Business Day). Subject
to the Subordination Provisions, paragraph 10 hereof and Section 10.02 of the
Purchase Agreement, the principal amount of and accrued interest on this Note
may be prepaid on any Business Day without premium or penalty.
7. Subordination Provisions. The Purchaser covenants and agrees, and
the Seller, by its acceptance of this Note, likewise covenants and agrees, that
the payment of all Junior Liabilities is hereby expressly subordinated in right
of payment to the payment and performance of the Senior Liabilities to the
extent and in the manner set forth in the following clauses of this paragraph 7:
(a) (i) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Purchaser,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency, receivership or other similar proceedings, or upon an
assignment for the benefit of creditors, or any other marshalling of the assets
and liabilities of the Purchaser or any sale of all or substantially all of the
assets of the Purchaser except pursuant to the Sale and Servicing Agreement
(such proceedings being herein collectively called "Bankruptcy Proceedings"),
and (ii) on and after the occurrence of an Event of Default, the Senior
Liabilities shall first be paid and performed in full and in cash before the
Seller shall be entitled to receive and to retain any payment or distribution in
respect of the Junior Liabilities. In order to implement the foregoing: (x) all
payments and distributions of any kind or character in respect of the Junior
Liabilities to which the Seller would be entitled except for this clause (a)
shall be made directly to the Trustee (for the benefit of the Noteholders); and
A-2
(y) the Seller hereby irrevocably agrees that the Trustee (on behalf of the
Noteholders), in the name of the Seller or otherwise, may demand, xxx for,
collect, receive and receipt for any and all such payments or distributions, and
file, prove and vote or consent in any such Bankruptcy Proceedings with respect
to any and all claims of the Seller relating to the Junior Liabilities, in each
case until the Senior Liabilities shall have been paid and performed in full and
in cash.
(b) following the occurrence of any of the events described in clause
(a)(i) or (ii), in the event that the Seller receives any payment or other
distribution of any kind or character from the Purchaser or from any other
source whatsoever, in respect of the Junior Liabilities, such payment or other
distribution shall be received in trust for the Trustee and shall be turned over
by the Seller to the Trustee (for the benefit of the Noteholders) forthwith. All
payments and distributions received by the Trustee in respect of this Note, to
the extent received in or converted into cash, may be applied by the Trustee
(for the benefit of the Noteholders) first to the payment of any and all
reasonable expenses (including reasonable attorneys' fees and legal expenses)
paid or incurred by the Trustee or the Noteholders in enforcing these
Subordination Provisions, or in endeavoring to collect or realize upon the
Junior Liabilities, and any balance thereof shall, solely as between the Seller
and the Noteholders, be applied by the Trustee toward the payment of the Senior
Liabilities in a manner determined by the Trustee to be in accordance with the
Pooling Agreement; but as between the Purchaser and its creditors, no such
payments or distributions of any kind or character shall be deemed to be
payments or distributions in respect of the Senior Liabilities.
(c) Upon the final payment in full and in cash of all Senior
Liabilities, the Seller shall be subrogated to the rights of the Trustee to
receive payments or distributions from the Purchaser that are applicable to the
Senior Liabilities until the Junior Liabilities are paid in full.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Seller, on the one hand, and the
Trustee (on behalf of Noteholders), on the other hand. Nothing contained in
these Subordination Provisions or elsewhere in this Note (subject to paragraph
10 hereof) is intended to or shall impair, as between the Purchaser, its
creditors (other than the Noteholders) and the Seller, the Purchaser's
obligation, which is unconditional and absolute, to pay the Junior Liabilities
as and when the same shall become due and payable in accordance with the terms
hereof (subject to paragraph 10 hereof) and of the Purchase Agreement or to
affect the relative rights of the Seller and creditors of the Purchaser (other
than the Noteholders).
(e) The Seller shall not, until the Senior Liabilities have been
finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to any obligation of the Purchaser, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, or now or
thereafter existing, or due or to become due (other than the Senior
Liabilities), the Junior Liabilities or any rights in respect hereof or (ii)
convert the Junior Liabilities into an equity interest in the Purchaser, unless,
in the case of each of clauses (i) and (ii) above, the Seller shall have
received the prior written consent of the Trustee , the Insurer and Xxxxxxx Mac
in each case.
A-3
(f) The Seller shall not, except without the advance written
consent of the Trustee and the Controlling Party commence, or join with any
other Person in commencing, any Bankruptcy Proceedings with respect to the
Purchaser until at least one year and one day have passed since the Termination
Date.
(g) If, at any time, any of the payment (in whole or in part) made
with respect to any Senior Liabilities is rescinded or must be restored or
returned by the Trustee or Noteholders (whether in connection with any
Bankruptcy Proceedings or otherwise), these Subordination Provisions shall
continue to be effective or shall be reinstated, as the case may be, as though
such payment had not been made.
(h) The Trustee (on behalf of Noteholders) may, from time to time,
with the consent of the Controlling Party without notice to the Seller, and
without waiving any of its rights under these Subordination Provisions, take any
or all of the following actions: retain or obtain an interest in any property to
secure any of the Senior Liabilities; (ii) retain or obtain the primary or
secondary obligations of any other obligor or obligors with respect to any of
the Senior Liabilities; (iii) extend or renew for one or more periods (whether
or not longer than the original period), alter or exchange any of the Senior
Liabilities, or release or compromise any obligation of any nature with respect
to any of the Senior Liabilities; (iv) amend, supplement, amend and restate, or
otherwise modify the Sale and Servicing Agreement or any related document; and
(v) release its security interest in or surrender, release or permit any
substitution or exchange for all or any part of any rights or property securing
any of the Senior Liabilities, or extend or renew for one or more periods
(whether or not longer than the original period) or release, compromise, alter
or exchange any obligations of any nature of any obligor with respect to any
such rights or property.
(i) The Seller hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Noteholders, (ii) notice of the
existence, creation, non-payment or non-performance of all or any of the Senior
Liabilities; and (iii) all diligence in enforcement, collection or protection
of, or realization upon, the Senior Liabilities, or any thereof, or any security
therefor.
(j) These Subordination Provisions constitute a continuing offer
from the Purchaser to all Persons who become the holders of, or who continue to
hold, Senior Liabilities; and these Subordination Provisions are made for the
benefit of the Noteholders, the Insurer and the Guarantor, and the Trustee may
proceed to enforce such provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of the Seller in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Note shall in any event be effective unless (a) the same shall be in
writing and signed and delivered by the Purchaser and the Seller, and (b) all
consents required for such actions under the Purchase Agreement and the Sale and
Servicing Agreement shall have been received by the appropriate Persons. The
rights and remedies granted hereunder to the Trustee and the Noteholders are
subject to exercise as provided in the Purchase Agreement and the Sale and
Servicing Agreement.
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9. Limitation on Interest. Notwithstanding anything in this Note to the
contrary, the Purchaser shall never be required to pay unearned interest on any
amount outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder at a rate in excess of the maximum
interest rate that may be contracted for, charged or received without violation
of applicable federal or state law.
10. Acknowledgment. The Seller acknowledges and agrees that it has no
rights to payment under this Note, and will not make any claim for payment
hereunder, unless funds are available for payment by the Purchaser in excess of
amounts due and payable by it at the time under the Sale and Servicing Agreement
and under all similar notes issued by the Purchaser to the Seller in connection
with any previous or future securitizations.
11. No Negotiation. This Note is not negotiable.
12. GOVERNING LAW. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES.
13. Captions. Paragraph captions used in this Note are provided solely
for convenience of reference only and shall not affect the meaning or
interpretation of any provision of this Note.
GREENPOINT MORTGAGE SECURITIES INC.
By:_________________________________
Name:______________________________
Title:_______________________________
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SCHEDULE I
MORTGAGE LOAN SCHEDULE
[On file with Trustee]
