MORTGAGE LOAN PURCHASE AGREEMENT
This
is a
Mortgage Loan Purchase Agreement (this “Agreement”), dated July 12, 2007,
among EMC MORTGAGE CORPORATION, a Delaware corporation (the “Responsible
Party”), XXXXXXXXXX SECURITIES, LP, a Delaware limited partnership (the
“Seller”) and STANWICH ASSET ACCEPTANCE COMPANY, L.L.C., a Delaware limited
liability company (the “Purchaser”).
Preliminary
Statement
The
Seller intends to sell the Mortgage Loans (as hereinafter identified) to the
Purchaser on the terms and subject to the conditions set forth in this
Agreement. The Purchaser intends to deposit the Mortgage Loans into a mortgage
pool comprising the Trust Fund. The Trust Fund will be evidenced by a single
series of mortgage pass-through certificates designated as Xxxxxxxxxx Mortgage
Loan Trust, Series 2007-HE1, Asset-Backed Pass-Through Certificates (the
“Certificates”). The Certificates will consist of eighteen classes of
certificates and will be issued pursuant to a Pooling and Servicing Agreement,
dated as of June 1, 2007 (the “Pooling and Servicing Agreement”), among the
Depositor as depositor, Xxxxx Fargo Bank, N.A., as master servicer (the “Master
Servicer”) and as securities administrator (the “Securities Administrator”), EMC
Mortgage Corporation, as interim servicer (the “Interim Servicer”), Xxxxxxxxxx
Mortgage Services, LLC, as servicer (the “Servicer”) and HSBC Bank USA, National
Association, as trustee (the “Trustee”). Capitalized terms used but not defined
herein shall have the meanings set forth in the Pooling and Servicing
Agreement.
The
parties hereto agree as follows:
SECTION
1 Agreement
to Purchase.
The
Seller agrees to sell and the Purchaser agrees to purchase, on or before
July 12, 2007 (the “Closing Date”), certain adjustable-rate and fixed-rate,
interest-only and fully-amortizing, first lien and second lien, one- to
four-family residential mortgage loans purchased by the Seller from the
Responsible Party (the “Mortgage Loans”) pursuant to that certain Master
Mortgage Loan Purchase and Interim Servicing Agreement (the “Master Mortgage
Loan Purchase Agreement”) dated as of the date hereof between the Responsible
Party, as seller and interim servicer, and the Seller, as initial purchaser,
having an aggregate principal balance as of the close of business on June 1,
2007 (the “Cut-off Date”) of $384,437,480.12 (the “Closing Balance”), after
giving effect to all payments due on the Mortgage Loans on or before the Cut-off
Date, whether or not received including the right to any Prepayment Charges
payable by the related Mortgagors in connection with any Principal Prepayments
on the Mortgage Loans, on servicing released basis.
SECTION
2 Mortgage
Loan Schedule.
The
Purchaser and the Seller have agreed upon which of the Mortgage Loans are to
be
purchased by the Purchaser pursuant to this Agreement and the Seller will
prepare or cause to be prepared on or prior to the Closing Date a final schedule
(the “Closing Schedule”) that shall describe such Mortgage Loans and set forth
all of the Mortgage Loans to be purchased under this Agreement, including the
Prepayment Charges. The Closing Schedule will conform to the requirements set
forth in this Agreement and, with respect to the Mortgage Loans subject to
this
Agreement, to the definition of “Mortgage Loan Schedule” under the Pooling and
Servicing Agreement. The Closing Schedule shall be used as part of the Mortgage
Loan Schedule under the Pooling and Servicing Agreement and shall be based
on
information provided by the Responsible Party.
SECTION
3 Consideration.
(a) In
consideration for the Mortgage Loans to be purchased hereunder the Purchaser
shall, as described in Section 8, pay to or upon the order of the Seller in
immediately available funds an amount (the “Aggregate Purchase Price”) equal to
(i) the net sale proceeds of the Class A Certificates and the Mezzanine
Certificates and (ii) the Class CE-1 Certificates, Class CE-2 Certificates
and
the Class P Certificates.
(b) The
Purchaser or any assignee, transferee or designee of the Purchaser shall be
entitled to all scheduled payments of principal due after the Cut-off Date,
all
other payments of principal due and collected after the Cut-off Date, and all
payments of interest on the Mortgage Loans allocable to the period after the
Cut-off Date. All scheduled payments of principal and interest due on or before
the Cut-off Date and collected after the Cut-off Date shall not belong to the
Purchaser.
(c) Pursuant
to the Pooling and Servicing Agreement, the Purchaser will assign all of its
right, title and interest in and to the Mortgage Loans, together with its rights
under this Agreement, to the Trustee for the benefit of the
Certificateholders.
SECTION
4 Transfer
of the Mortgage Loans.
(a) Possession
of Mortgage Files.
The
Seller does hereby sell, and in connection therewith hereby assigns, to the
Purchaser, effective as of the Closing Date, without recourse but subject to
the
terms of this Agreement, all of its right, title and interest in, to and under
the Mortgage Loans, including the related Prepayment Charges. The contents
of
each Mortgage File not delivered to the Purchaser or to any assignee, transferee
or designee of the Purchaser on or prior to the Closing Date are and shall
be
held in trust by the Seller for the benefit of the Purchaser or any assignee,
transferee or designee of the Purchaser. Upon the sale of the Mortgage Loans,
the ownership of each Mortgage Note, the related Mortgage and the other contents
of the related Mortgage File is vested in the Purchaser and the ownership of
all
records and documents with respect to the related Mortgage Loan prepared by
or
that come into the possession of the Seller on or after the Closing Date shall
immediately vest in the Purchaser and shall be delivered immediately to the
Purchaser or as otherwise directed by the Purchaser.
(b) Delivery
of Mortgage Loan Documents.
The
Seller will, on or prior to the Closing Date, deliver or cause to be delivered
to the Purchaser or any assignee, transferee or designee of the Purchaser each
of the following documents for each Mortgage Loan:
(i) the
original Mortgage Note, including any riders thereto, endorsed without recourse
to the order of blank or to “HSBC Bank USA, National Association, as Trustee”
and showing to the extent available to the related Seller an unbroken chain
of
endorsements from the original payee thereof to the Person endorsing it to
the
Purchaser or any assignee, transferee or designee of the Purchaser;
-2-
(ii) The
original Mortgage and, if the related Mortgage Loan is a MOM Loan, noting the
presence of the MIN and language indicating that such Mortgage Loan is a MOM
Loan, which shall have been recorded (or, if the original is not available,
a
copy), with evidence of such recording indicated thereon (or if clause
(x)
in the
proviso below applies, shall be in recordable form);
(iii) the
original or copy of any guarantee executed in connection with the Mortgage
Note,
if any;
(iv) if
the
Mortgage Note, the Mortgage, any Assignment, or any other related document
has
been signed by a Person on behalf of the Mortgagor, the original or copy of
the
original power of attorney or other instrument that authorized and empowered
such Person to sign;
(v) the
original or copy of the original of any security agreement, chattel mortgage
or
equivalent document executed in connection with the Mortgage, if
any
(vi) Unless
the Mortgage Loan is a MERS Designated Mortgage Loan, the assignment (either
an
original or a copy, which may be in the form of a blanket assignment if
permitted in the jurisdiction in which the Mortgaged Property is located) to
the
Purchaser or any assignee, transferee or designee of the Purchaser of the
Mortgage with respect to each Mortgage Loan in the name of “HSBC Bank USA,
National Association, as Trustee”, which shall have been recorded (or if
clause
(x)
in the
proviso below applies, shall be in recordable form);
(vii) An
original or a copy of all intervening assignments of the Mortgage, if any,
to
the extent available to the Seller, with evidence of recording
thereon;
(viii) With
respect to any first or second lien Mortgage Loan , the original policy of
title
insurance or mortgagee’s certificate of title insurance or commitment or binder
for title insurance or, in the event such original title policy has not been
received from the title insurer, such original title policy will be delivered
within one year of the Closing Date or, in the event such original title policy
is unavailable, a photocopy of such title policy or, in lieu thereof, a current
lien search on the related Mortgaged Property; and with respect to any piggyback
loan, the original policy of title insurance or mortgagee’s certificate of title
insurance or commitment or binder for title insurance issued as to the related
first lien Mortgage Loan or, in lieu thereof, a lien search on the related
Mortgaged Property that was conducted in connection with the related first
lien
Mortgage Loan; and
(ix) Originals
or copies of all assumption, modification or substitution agreements, if any,
or
if such assumption, modification, consolidation or extension agreements have
been lost, a copy of such assumption, modification, consolidation or extension
agreements;
-3-
provided,
however,
that in
lieu of the foregoing, the Seller may deliver the following documents, under
the
circumstances set forth below: (x) if any Mortgage, assignment thereof to the
Purchaser or any assignee, transferee or designee of the Purchaser or
intervening assignments thereof have been delivered or are being delivered
to
recording offices for recording and have not been returned in time to permit
their delivery as specified above, the Seller may deliver a true copy thereof
with a certification, on the face of such copy, substantially as follows:
“Certified to be a true and correct copy of the original”; (y) in lieu of the
Mortgage, assignment to the Purchaser or any assignee, transferee or designee
of
the Purchaser or in blank or intervening assignments thereof, if the applicable
jurisdiction retains the originals of such documents (in each case, as evidenced
by a certification to such effect), the Seller may deliver photocopies of such
documents containing an original certification by the judicial or other
governmental authority of the jurisdiction where such documents were recorded;
and (z) in lieu of the Mortgage Notes, the Seller may deliver a lost note
affidavit and indemnities of the Seller and a copy of the original note, if
available, and provided, further, however, that in the case of Mortgage Loans
which have been prepaid in full after the Cut-off Date and prior to the Closing
Date, the Seller, in lieu of delivering the above documents, may deliver to
the
Purchaser or any assignee, transferee or designee of the Purchaser a
certification by the Seller to such effect. The Seller shall cause, at its
expense, the Mortgage and intervening assignments, if any, and to the extent
required in accordance with the foregoing, the assignment of the Mortgage to
the
Purchaser or any assignee, transferee or designee of the Purchaser to be
submitted for recording promptly after the Closing Date; provided
that the
Seller need not cause to be recorded any Assignment (a) in any jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel addressed to
the
Trustee delivered by the Seller) to the Trustee, and the Rating Agencies, the
recordation of such assignment is not necessary to protect the Trustee’s
interest in the related Mortgage Loan or (b) if a Mortgage Loan is a MERS
Designated Mortgage Loan. For the purposes of this Agreement, a “MERS Designated
Mortgage Loan” is a Mortgage Loan for which (a) the Seller has designated or
will designate MERS as, and has taken or will take such action as is necessary
to cause MERS to be, the mortgagee of record, as nominee for the Seller,
pursuant to the MERS System and (b) the Seller has designated or will designate
the Purchaser or any assignee, transferee or designee of the Purchaser as the
Person named as the investor on the MERS System.
With
respect to a maximum of approximately 2.0% of the Original Mortgage Loans,
by
outstanding principal balance of the Original Mortgage Loans as of the Cut-off
Date, if any original Mortgage Note referred to in Section 4(b)(i) above cannot
be located, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon delivery to the Purchaser of a photocopy of such
Mortgage Note, if available, with a lost note affidavit substantially in the
form of Exhibit I attached to the Pooling and Servicing Agreement. If any of
the
original Mortgage Notes for which a lost note affidavit was delivered to the
Purchaser is subsequently located, such original Mortgage Note shall be
delivered to the Purchaser within three Business Days.
If
the
original lender’s title insurance policy was not delivered pursuant to Section
4(b)(viii) above, the Seller shall deliver or cause to be delivered to the
Purchaser, promptly after receipt thereof, the original lender’s title insurance
policy. The Seller shall deliver or cause to be delivered to the Purchaser
promptly upon receipt thereof any other original documents constituting a part
of a Mortgage File received with respect to any Mortgage Loan, including, but
not limited to, any original documents evidencing an assumption or modification
of any Mortgage Loan.
-4-
The
Seller shall (at the expense of the Responsible Party) promptly (within sixty
Business Days following the later of the Closing Date and the date of receipt
by
the Seller of the recording information for a Mortgage, but in no event later
than ninety days following the Closing Date) submit or cause to be submitted
for
recording, at no expense to the Trust Fund, the Trustee or the Purchaser, in
the
appropriate public office for real property records, each Assignment referred
to
in Sections 4(b)(vi) above and the Seller shall execute each original Assignment
or cause each original Assignment to be executed in the following form: “HSBC
Bank USA, National Association, as Trustee under the applicable agreement.” In
the event that any such Assignment is lost or returned unrecorded because of
a
defect therein, the Seller shall promptly prepare or cause to be prepared a
substitute Assignment or cure or cause to be cured such defect, as the case
may
be, and thereafter cause each such Assignment to be duly recorded.
Notwithstanding
the foregoing, however, for administrative convenience and facilitation of
servicing and to reduce closing costs, the Assignments shall not be recorded
unless the Trustee or the Purchaser receives notice from a Rating Agency, the
Seller or the Purchaser that such failure to record would result in a withdrawal
or a downgrading by such Rating Agency of the rating on any Class of
Certificates. Upon receipt of such written notice that recording of the
Assignments is required pursuant to the condition set forth in the preceding
sentence, the Seller shall be required to deliver such Assignments or shall
cause such Assignments to be delivered within 30 days following receipt of
such
notice.
Each
original document relating to a Mortgage Loan which is not delivered to the
Purchaser or its assignee, transferee or designee, if held by the Seller, shall
be so held for the benefit of the Purchaser, its assignee, transferee or
designee.
(c) Acceptance
of Mortgage Loans.
The
documents delivered pursuant to Section 4(b) hereof shall be reviewed by the
Purchaser or any assignee, transferee or designee of the Purchaser at any time
before or after the Closing Date (and with respect to each document permitted
to
be delivered after the Closing Date, within seven days of its delivery) to
ascertain that all required documents have been executed and received and that
such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule.
(d) Transfer
of Interest in Agreements.
The
Purchaser has the right to assign its interest under this Agreement, in whole
or
in part, to the Trustee, as may be required to effect the purposes of the
Pooling and Servicing Agreement, without the consent of the Seller or the
Responsible Party, and the assignee shall succeed to the rights and obligations
hereunder of the Purchaser. Any expense reasonably incurred by or on behalf
of
the Purchaser or the Trustee in connection with enforcing any obligations of
the
Seller or the Responsible Party under this Agreement will be promptly reimbursed
by the Seller or the Responsible Party, as applicable.
(e) Examination
of Mortgage Files.
Prior
to the Closing Date, the Seller shall either (i) deliver in escrow to the
Purchaser, or to any assignee, transferee or designee of the Purchaser for
examination, the Mortgage File pertaining to each Mortgage Loan or (ii) make
such Mortgage Files available to the Purchaser or to any assignee, transferee
or
designee of the Purchaser for examination. Such examination may be made by
the
Purchaser or the Trustee, and their respective designees, upon reasonable notice
to the Seller during normal business hours before the Closing Date and within
60
days after the Closing Date. If any such person makes such examination prior
to
the Closing Date and identifies any Mortgage Loans that do not conform to the
requirements of the Purchaser as described in this Agreement, such Mortgage
Loans shall be deleted from the Closing Schedule. The Purchaser may, at its
option and without notice to the Seller, purchase all or part of the Mortgage
Loans without conducting any partial or complete examination. The fact that
the
Purchaser or any person has conducted or has failed to conduct any partial
or
complete examination of the Mortgage Files shall not affect the rights of the
Purchaser or any assignee, transferee or designee of the Purchaser to demand
repurchase or other relief as provided herein or under the Pooling and Servicing
Agreement.
-5-
SECTION
5 Representations,
Warranties and Covenants of the Responsible Party
and the Seller.
(a) The
Responsible Party hereby represents, warrants and covenants to the Seller and
the Purchaser, as of the date hereof that:
(i) The
Responsible Party is duly organized, validly existing and in good standing
under
the laws of the state of Delaware and is and will remain in compliance with
the
laws of each state in which any Mortgaged Property is located to the extent
necessary to ensure the enforceability of its obligations under this Agreement
and each Mortgage Loan;
(ii) The
Responsible Party has the full power and authority to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated by
this
Agreement which are applicable to the Responsible Party. The Responsible Party
has duly authorized the execution, delivery and performance of this Agreement,
has duly executed and delivered this Agreement, and this Agreement, assuming
due
authorization, execution and delivery by the Seller and the Purchaser,
constitutes a legal, valid and binding obligation of the Responsible Party,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization;
(iii) The
execution and delivery of this Agreement by the Responsible Party and the
performance of and compliance with the terms of this Agreement which are
applicable to the Responsible Party will not violate the Responsible Party’s
articles of incorporation or bylaws or constitute a default under or result
in a
breach or acceleration of, any material contract, agreement or other instrument
to which the Responsible Party is a party or which may be applicable to the
Responsible Party or its assets;
(iv) The
Responsible Party is not in violation of, and the execution and delivery of
this
Agreement by the Responsible Party and its performance and compliance with
the
terms of this Agreement which are applicable to the Responsible Party and will
not constitute a violation with respect to, any order or decree of any court
or
any order or regulation of any federal, state, municipal or governmental agency
having jurisdiction over the Responsible Party or its assets, which violation
will likely have consequences that would materially and adversely affect the
condition (financial or otherwise) or the operation of the Responsible Party
or
its assets or will likely have consequences that would materially and adversely
affect the performance of its obligations and duties hereunder;
-6-
(v) The
Responsible Party does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant of the Responsible
Party
contained in this Agreement;
(vi) There
are
no actions or proceedings against, or investigations of, the Responsible Party
before any court, administrative agency or other tribunal (A) that are likely
to
prohibit its entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement or (C) that
are
likely to prohibit or materially and adversely affect the performance by the
Responsible Party of its obligations under, or the validity or enforceability
of, this Agreement
(vii) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Responsible
Party of, or compliance by the Responsible Party with, this Agreement or the
consummation of the transactions contemplated by this Agreement which are
applicable to the Responsible Party, except for such consents, approvals,
authorizations or orders, if any, that have been obtained prior to the Closing
Date; and
(viii) The
consummation of the transactions contemplated by this Agreement which are
applicable to the Responsible Party are in the ordinary course of business
of
the Responsible Party.
(b) The
Seller hereby represents and warrants to the Responsible Party and the
Purchaser, as of the date hereof and as of the Closing Date, and covenants,
that:
(i) The
Seller is duly organized, validly existing and in good standing as a limited
partnership under the laws of the State of Delaware with full limited
partnership power and authority to conduct its business as presently conducted
by it to the extent material to the consummation of the transactions
contemplated herein. The Seller has the full limited partnership power and
authority to own the Mortgage Loans and to transfer and convey the Mortgage
Loans to the Purchaser and has the full limited partnership power and authority
to execute and deliver, engage in the transactions contemplated by, and perform
and observe the terms and conditions of this Agreement.
(ii) The
Seller has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the Responsible Party
and
the Purchaser, constitutes a legal, valid and binding obligation of the Seller,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or reorganization.
(iii) The
execution, delivery and performance of this Agreement by the Seller (x) does
not
conflict and will not conflict with, does not breach and will not result in
a
breach of and does not constitute and will not constitute a default (or an
event, which with notice or lapse of time or both, would constitute a default)
under (A) any terms or provisions of the certificate of formation or limited
partnership agreement of the Seller, (B) any term or provision of any material
agreement, contract, instrument or indenture, to which the Seller is a party
or
by which the Seller or any of its property is bound or (C) any law, rule,
regulation, order, judgment, writ, injunction or decree of any court or
governmental authority having jurisdiction over the Seller or any of its
property and (y) does not create or impose and will not result in the creation
or imposition of any lien, charge or encumbrance which would have a material
adverse effect upon the Mortgage Loans or any documents or instruments
evidencing or securing the Mortgage Loans.
-7-
(iv) No
consent, approval, authorization or order of, registration or filing with,
or
notice on behalf of the Seller to any governmental authority or court is
required, under federal laws or the laws of the State of Delaware, for the
execution, delivery and performance by the Seller of, or compliance by the
Seller with, this Agreement or the consummation by the Seller of any other
transaction contemplated hereby; provided, however, that the Seller makes no
representation or warranty regarding federal or state securities laws in
connection with the sale or distribution of the Certificates.
(v) This
Agreement does not contain any untrue statement of material fact or omit to
state a material fact necessary to make the statements contained herein not
misleading. The written statements, reports and other documents furnished by
the
Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby taken in the aggregate do not contain any untrue statement
of material fact or omit to state a material fact necessary to make the
statements contained therein not misleading.
(vi) The
Seller is not in violation of, and the execution and delivery of this Agreement
by the Seller and its performance and compliance with the terms of this
Agreement will not constitute a violation with respect to, any order or decree
of any court or any order or regulation of any federal, state, municipal or
governmental agency having jurisdiction over the Seller or its assets, which
violation might have consequences that would materially and adversely affect
the
condition (financial or otherwise) or the operation of the Seller or its assets
or might have consequences that would materially and adversely affect the
performance of its obligations and duties hereunder.
(vii) The
Seller does not believe, nor does it have any reason or cause to believe, that
it cannot perform each and every covenant contained in this
Agreement.
(viii) Immediately
prior to the sale of the Mortgage Loans to the Purchaser as herein contemplated,
the Seller will be the owner of the related Mortgage and the indebtedness
evidenced by the related Mortgage Note, and, upon the payment to the Seller
of
the Aggregate Purchase Price, in the event that the Seller retains or has
retained record title, the Seller shall retain such record title to each
Mortgage, each related Mortgage Note and the related Mortgage Files with respect
thereto in trust for the Purchaser as the owner thereof from and after the
date
hereof.
(ix) There
are
no actions or proceedings against, or investigations known to it of, the Seller
before any court, administrative or other tribunal (A) that might prohibit
its
entering into this Agreement, (B) seeking to prevent the sale of the Mortgage
Loans by the Seller or the consummation of the transactions contemplated by
this
Agreement or (C) that might prohibit or materially and adversely affect the
performance by the Seller of its obligations under, or validity or
enforceability of, this Agreement.
-8-
(x) The
consummation of the transactions contemplated by this Agreement are in the
ordinary course of business of the Seller, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the Seller are not subject
to the bulk transfer or any similar statutory provisions.
(xi) The
Seller has not dealt with any broker, investment banker, agent or other person,
except for the Purchaser or any of its affiliates, that may be entitled to
any
commission or compensation in connection with the sale of the Mortgage
Loans.
(xii) There
is
no litigation currently pending or, to the best of the Seller’s knowledge
without independent investigation, threatened against the Seller that would
reasonably be expected to adversely affect the transfer of the Mortgage Loans,
the issuance of the Certificates or the execution, delivery, performance or
enforceability of this Agreement, or that would result in a material adverse
change in the financial condition of the Seller.
(xiii) The
Seller is solvent and will not be rendered insolvent by the consummation of the
transactions contemplated hereby. The Seller is not transferring any Mortgage
loan with any intent to hinder, delay or defraud any of its
creditors.
(xiv) The
Seller makes each of the additional representations and warranties set forth
on
Schedule I hereto.
SECTION
6 Representations
and Warranties of the Responsible Party Relating to the Mortgage
Loans.
The
Responsible Party hereby represents and warrants to the Seller and the Purchaser
that as to each Mortgage Loan as of the Closing Date or as of such other date
as
specified herein:
(i) The
information set forth in the Mortgage Loan Schedule is true and correct in
all
material respects;
(ii) Each
Mortgage Loan at the time it was made complied in all material respects with
all
applicable local, state and federal laws and regulations, including, without
limitation, usury, equal credit opportunity, disclosure and recording laws
and
all applicable predatory, abusive and fair lending laws; and each Mortgage
Loan
has been serviced in all material respects in accordance with all applicable
local, state and federal laws and regulations, including, without limitation,
usury, equal credit opportunity, disclosure and recording laws and all
applicable anti-predatory lending laws and the terms of the related Mortgage
Note, the Mortgage and other loan documents;
(iii) There
is
no monetary default existing under any Mortgage or the related Mortgage Note
and
there is no material event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach
or event of acceleration; and neither the Responsible Party, any of its
affiliates nor any servicer of any related Mortgage Loan has taken any action
to
waive any default, breach or event of acceleration; and no foreclosure action
is
threatened or has been commenced with respect to the Mortgage Loan;
-9-
(iv) The
terms
of the Mortgage Note and the Mortgage have not been impaired, waived, altered
or
modified in any respect, except by written instruments, (i) if required by
law
in the jurisdiction where the Mortgaged Property is located, or (ii) to protect
the interests of the Trustee on behalf of the Certificateholders;
(v) No
selection procedure reasonably believed by the Responsible Party to be adverse
to the interests of the Certificateholders was utilized in selecting the
Mortgage Loans;
(vi) Each
Mortgage is a valid and enforceable first or second lien on the property
securing the related Mortgage Note and each Mortgaged Property is owned by
the
Mortgagor in fee simple (except with respect to common areas in the case of
condominiums, planned unit developments (“PUDs”) and de minimis PUDs) or by
leasehold for a term longer than the term of the related Mortgage, subject
only
to (i) the lien of current real property taxes and assessments, (ii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such exceptions
being acceptable to mortgage lending institutions generally or specifically
reflected in the appraisal obtained in connection with the origination of the
related Mortgage Loan or referred to in the lender’s title insurance policy
delivered to the originator of the related Mortgage Loan and (iii) 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;
(vii) There
is
no mechanics’ lien or claim for work, labor or material affecting the premises
subject to any Mortgage which is or may be a lien prior to, or equal with,
the
lien of such Mortgage except those which are insured against by the title
insurance policy referred to in (xii) below;
(viii) There
was
no delinquent tax or assessment lien against the property subject to any
Mortgage, except where such lien was being contested in good faith and a stay
had been granted against levying on the property;
(ix) There
is
no valid offset, defense or counterclaim to any Mortgage Note or Mortgage,
including the obligation of the Mortgagor to pay the unpaid principal and
interest on such Mortgage Note;
(x) The
physical property subject to any Mortgage is free of material damage and is
in
good repair and there is no proceeding pending or threatened for the total
or
partial condemnation of any Mortgaged Property;
(xi) The
Mortgaged Property and all improvements thereon comply with all requirements
of
any applicable zoning and subdivision laws and ordinances;
-10-
(xii) With
respect to any first lien Mortgage Loan, a lender’s title insurance policy (on
an American Land Title Association (“ALTA”) or California Land Title Association
(“CLTA”) form) or binder, or other assurance of title customary in the relevant
jurisdiction therefor in a form acceptable to Xxxxxx Xxx or Xxxxxxx Mac, was
issued on the date that each Mortgage Loan was created by a title insurance
company which, to the best of the Responsible Party’s knowledge, was qualified
to do business in the jurisdiction where the related Mortgaged Property is
located, insuring the Responsible Party and its successors and assigns that
the
Mortgage is a first priority lien on the related Mortgaged Property in the
original principal amount of the Mortgage Loan; and the Responsible Party is
the
sole insured under such lender’s title insurance policy, and such policy, binder
or assurance is valid and remains in full force and effect, and each such
policy, binder or assurance shall contain all applicable endorsements including
a negative amortization endorsement, if applicable; with respect to any junior
lien Mortgage Loan, other than any piggyback loan that has an initial principal
amount less than or equal to $200,000, (a) a lender’s title insurance policy or
binder, or other assurance of title customary in the relevant jurisdiction
therefore in a form acceptable to Xxxxxx Mae or Xxxxxxx Mac, was issued on
the
date that each Mortgage Loan was created by a title insurance company which,
to
the best of the Responsible Party’s knowledge, was qualified to do business in
the jurisdiction where the related Mortgaged Property is located, insuring
the
related seller and its successors and assigns; and the Responsible Party is
the
sole insured under such lender’s title insurance policy, and such policy, binder
or assurance is valid and remains in full force and effect, and each such
policy, binder or assurance shall contain all applicable endorsements including
a negative amortization endorsement, if applicable, or (b) a lien search was
conducted at the time of origination with respect to the related Mortgaged
Property;
(xiii) At
the
time of origination, each Mortgaged Property was the subject of an appraisal
which conformed to the underwriting requirements of the originator of the
Mortgage Loan and, the appraisal is in a form acceptable to Xxxxxx Mae or
Xxxxxxx Mac;
(xiv) The
improvements on each Mortgaged Property securing a Mortgage Loan are insured
(by
an insurer which is acceptable to the Responsible Party) against loss by fire
and such hazards as are covered under a standard extended coverage endorsement
in the locale in which the Mortgaged Property is located, in an amount which
is
not less than the lesser of the maximum insurable value of the improvements
securing such Mortgage Loan or the outstanding principal balance of the Mortgage
Loan, but in no event in an amount less than an amount that is required to
prevent the Mortgagor from being deemed to be a co-insurer thereunder; if the
improvement on the Mortgaged Property is a condominium unit, it is included
under the coverage afforded by a blanket policy for the condominium project;
if
upon origination of the related Mortgage Loan, the improvements on the Mortgaged
Property were in an area identified as a federally designated flood area, a
flood insurance policy is in effect in an amount representing coverage not
less
than the least of (i) the outstanding principal balance of the Mortgage Loan,
(ii) the restorable cost of improvements located on such Mortgaged Property
or
(iii) the maximum coverage available under federal law; and each Mortgage
obligates the Mortgagor thereunder to maintain the insurance referred to above
at the Mortgagor’s cost and expense;
-11-
(xv) Each
Mortgage Loan constitutes a "qualified mortgage" under Section 860G(a)(3)(A)
of
the Code and Treasury Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6),
(7)
and (9) without reliance on the provisions of Treasury Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G-2(f)(2) or any other
provision that would allow a Mortgage Loan to be treated as a “qualified
mortgage” notwithstanding its failure to meet the requirements of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section 1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9);
(xvi) None
of
the Mortgage Loans are (a) loans subject to 12 CFR Part 226.31, 12 CFR Part
226.32 or 12 CFR Part 226.34 of Regulation Z, the regulation implementing TILA,
which implements the Home Ownership and Equity Protection Act of 1994, as
amended or (b) “high cost home,” “covered” (excluding home loans defined as
“covered home loans” in the New Jersey Home Ownership Security Act of 2002 that
were originated between November 26, 2003 and July 7, 2004), “high risk home” or
“predatory” loans under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees);
(xvii) The
data
files containing information with respect to the Mortgage Loans as transmitted
by modem to the Purchaser by the Responsible Party or any of its affiliates
(as
such transmitted information may have been amended or supplemented in writing
by
the Responsible Party or any of its affiliates with the written consent of
the
Purchaser subsequent to such transmission) is true and correct in all material
respects;
(xviii) No
Mortgage Loan (a) is a High Cost Loan or Covered Loan as applicable (as such
terms are defined in the then current Standard & Poor’s LEVELS® Glossary,
which is now Version 6.0, Appendix E, attached hereto as Exhibit 6 or (b) was
originated on or after October 1, 2002 through March 6, 2003 and is governed
by
the Georgia Fair Lending Act;
(xix) Each
Mortgage Loan was originated in accordance with the underwriting guidelines
of
the related originator;
(xx) Each
original Mortgage has been recorded or is in the process of being recorded
in
accordance with the requirements of Section 2.01 of the Pooling and Servicing
Agreement in the appropriate jurisdictions wherein such recordation is required
to perfect the lien thereof for the benefit of the Trust Fund;
(xxi) The
related Mortgage File contains each of the documents and instruments listed
in
Section 2.01 of the Pooling and Servicing Agreement, subject to any exceptions,
substitutions and qualifications as are set forth in such Section;
(xxii) The
Mortgage Loans are currently being serviced in accordance with accepted
servicing practices;
(xxiii) With
respect to each Mortgage Loan that has a prepayment penalty feature, each such
prepayment penalty is enforceable and will be enforced by the Responsible Party
and each prepayment penalty is permitted pursuant to applicable federal, state
and local law. In addition, with respect to each Mortgage Loan (i) no Mortgage
Loan will impose a prepayment penalty for a term in excess of five years from
the date such Mortgage Loan was originated and (ii) such prepayment penalty
is
equal to the lesser of (A) the maximum amount permitted under applicable law
or
(B) six months interest at the related Mortgage Rate on the amount prepaid
in
excess of 20% of the original principal balance of such Mortgage
Loan;
-12-
(xxiv) If
any of
the Mortgage Loans are secured by a leasehold interest, with respect to each
leasehold interest: the use of leasehold estates for residential properties
is
an accepted practice in the area where the related Mortgaged Property is
located; residential property in such area consisting of leasehold estates
is
readily marketable; the lease is recorded and no party is in any way in breach
of any provision of such lease; the leasehold is in full force and effect and
is
not subject to any prior lien or encumbrance by which the leasehold could be
terminated or subject to any charge or penalty; and the remaining term of the
lease does not terminate less than five years after the maturity date of such
Mortgage Loan; and
(xxv) The
first
Monthly Payment was or shall be made with respect to the Mortgage Loan on its
Due Date or by the 15th
calendar
day of the month following such Due Date or if such day is not a Business Day,
then the next succeeding Business Day and the first Monthly Payment following
the Closing Date shall be made with respect to the Mortgage Loan on its Due
Date
or by the 15th
calendar
day of the month following such Due Date or if such day is not a Business Day,
then the next succeeding Business Day, all in accordance with the terms of
the
related Mortgage Note.
SECTION
7 Repurchase
Obligation for Defective Documentation and for Breach of Representation and
Warranty.
(a) The
representations and warranties contained in Section 6 shall not be impaired
by
any review and examination of Mortgage Files or any failure on the part of
the
Seller or the Purchaser to review or examine such documents and shall inure
to
the benefit of any assignee, transferee or designee of the Purchaser, including
the Trustee for the benefit of holders of the Certificates. With respect to
the
representations and warranties contained herein that are made to the knowledge
or the best knowledge of the Responsible Party or as to which the Responsible
Party has no knowledge, if it is discovered that the substance of any such
representation and warranty is inaccurate and the inaccuracy materially and
adversely affects the value of the related Mortgage Loan, or the interest
therein of the Purchaser or the Purchaser’s assignee, designee or transferee,
then notwithstanding the Responsible Party’s lack of knowledge with respect to
the substance of such representation and warranty being inaccurate at the time
the representation and warranty was made, such inaccuracy shall be deemed a
breach of the applicable representation and warranty and the Responsible Party
shall take such action described in the following paragraphs in respect of
such
Mortgage Loan.
-13-
Upon
discovery by the Seller, the Purchaser or any assignee, transferee or designee
of the Purchaser of any materially defective document in, or that any material
document was not transferred by or at the direction of the Seller (as listed
on
the Trustee’s Preliminary Exception Report) as part of any Mortgage File, or of
a breach of any of the representations and warranties contained in Section
6
that materially and adversely affects the value of any Mortgage Loan or the
interest therein of the Purchaser or the Purchaser’s assignee, transferee or
designee, the party discovering such breach shall give prompt written notice
to
the Responsible Party and the Seller. Within sixty (60) days of its discovery
or
its receipt of notice of any such missing documentation that was not transferred
to the Purchaser as described above, or of materially defective documentation,
or of any such breach of a representation and warranty, the Responsible Party
or
the Seller (or their related designee), as applicable, promptly shall deliver
such missing document or cure such defect or breach in all material respects
or,
in the event the Responsible Party or the Seller (or their related designee)
cannot deliver such missing document or cannot cure such defect or breach,
the
Responsible Party or the Seller, as applicable, shall, within ninety (90) days
of its discovery or receipt of notice, either (i) repurchase the affected
Mortgage Loan at the Purchase Price or (ii) pursuant to the provisions of the
Pooling and Servicing Agreement, cause the removal of such Mortgage Loan from
the Trust Fund and substitute one or more Qualified Substitute Mortgage Loans.
The Responsible Party or the Seller, as applicable, shall amend the Closing
Schedule to reflect the withdrawal of such Mortgage Loan from the terms of
this
Agreement and the Pooling and Servicing Agreement. The Responsible Party or
the
Seller, as applicable, shall deliver to the Purchaser such amended Closing
Schedule and shall deliver such other documents as are required by this
Agreement or the Pooling and Servicing Agreement within five (5) days of any
such amendment. Any repurchase pursuant to this Section 7(a) shall be
accomplished by transfer to an account designated by the Purchaser of the amount
of the Purchase Price in accordance with Section 2.03 of the Pooling and
Servicing Agreement. Any repurchase required by this Section shall be made
in a
manner consistent with Section 2.03 of the Pooling and Servicing
Agreement.
Notwithstanding
the foregoing, the breach of the representations of the Responsible Party set
forth in Section 6(xvi) and (xviii)(b) above will be deemed to materially and
adversely affect the interests of the Certificateholders and shall require
the
repurchase, substitution or, to the extent applicable, a cure of the affected
Mortgage Loan(s) as provided in this Section 7.
Notwithstanding
the foregoing, within 90 days of the earlier of discovery by the Responsible
Party or receipt of notice by the Responsible Party of the breach of the
representation of the Responsible Party set forth in Section 6(xxiii) above
which materially and adversely affects the interests of the Holders of the
Class
P Certificates in any Prepayment Charge, the Responsible Party shall pay the
amount of the scheduled Prepayment Charge, for the benefit of the Holders of
the
Class P Certificates by remitting such amount to the applicable servicer for
deposit into the Custodial Account, net of any amount previously collected
by
the applicable servicer or paid by the applicable servicer, for the benefit
of
the Holders of the Class P Certificates in respect of such Prepayment
Charge.
Notwithstanding
the foregoing, upon notice of the breach of the representation of the
Responsible Party set forth in Section 6(xxv) above (which notice may include
receipt of a monthly remittance advice reflecting such breach), the Purchaser
shall request any repurchase pursuant to this Section 7 in writing within
120
days of receipt of such notice (the "Purchaser Notice Period"); provided,
however that the Responsible Party’s obligation to repurchase the related
Mortgage Loan shall expire 120 days following the Closing Date unless the
Purchaser has made a written request to the Responsible Party to repurchase
the
related Mortgage Loan within such 120 day period. Upon receipt of such request,
the Responsible Party shall have 30 days to repurchase the related Mortgage
Loan. The Responsible Party shall have no obligation to repurchase any Mortgage
Loan as to which a request for repurchase pursuant to this Section 7 was
received after the Purchaser Notice Period.
-14-
(b) Notwithstanding
the foregoing, with respect to an alleged breach of a representation and
warranty which breach is covered by a title insurance policy, the Purchaser
shall use reasonable efforts to enforce the provisions of any related title
insurance policy prior to seeking a remedy against the Responsible Party or
the
Seller hereunder.
(c) It
is
understood and agreed that the obligations of the Responsible Party or the
Seller set forth in this Section 7 to cure or repurchase a defective Mortgage
Loan constitute the sole remedies of the Purchaser against the Responsible
Party
or the Seller respecting a missing document or a breach of the representations
and warranties contained in Section 6.
SECTION
8 Closing;
Payment for the Mortgage Loans.
The
closing of the purchase and sale of the Mortgage Loans shall be held at the
New
York City office of Mayer, Brown, Xxxx & Maw LLP at 10:00 a.m. New York City
time on the Closing Date.
The
closing shall be subject to each of the following conditions:
(a) All
of
the representations and warranties of the Seller and the Responsible Party
under
this Agreement shall be true and correct in all material respects as of the
date
as of which they are made and no event shall have occurred which, with notice
or
the passage of time, would constitute a default under this
Agreement;
(b) The
Purchaser shall have received, or the attorneys of the Purchaser shall have
received in escrow (to be released from escrow at the time of closing), all
Closing Documents as specified in Section 9 of this Agreement, in such forms
as
are agreed upon and acceptable to the Purchaser, duly executed by all
signatories other than the Purchaser as required pursuant to the respective
terms thereof;
(c) The
Seller shall have delivered or caused to be delivered and released to the
Purchaser or to its designee, all documents (including without limitation,
the
Mortgage Loans) required to be so delivered by the Purchaser pursuant to Section
2.01 of the Pooling and Servicing Agreement; and
(d) All
other
terms and conditions of this Agreement and the Pooling and Servicing Agreement
shall have been complied with.
Subject
to the foregoing conditions, the Purchaser shall deliver or cause to be
delivered to the Seller on the Closing Date, against delivery and release by
the
Seller to the Trustee of all documents required pursuant to the Pooling and
Servicing Agreement, the consideration for the Mortgage Loans as specified
in
Section 3 of this Agreement, by delivery to the Seller of the Aggregate Purchase
Price.
SECTION
9 Closing
Documents.
Without
limiting the generality of Section 8 hereof, the closing shall be subject to
delivery of each of the following documents:
-15-
(a) An
Officer’s Certificate of the Seller, dated the Closing Date, in form
satisfactory to and upon which the Purchaser, the Responsible Party and Bear,
Xxxxxxx & Co. Inc. (the “Representative”) may rely, and attached thereto
copies of the certificate of formation, limited liability company agreement
and
certificate of good standing of the Seller;
(b) An
Opinion of Counsel of the Seller, dated the Closing Date, in form satisfactory
to and addressed to the Purchaser, the Responsible Party and the
Representative;
(c) An
Officer’s Certificate of the Responsible Party, dated the Closing Date, in form
satisfactory to and upon which the Purchaser and the Representative may rely,
and attached thereto copies of the certificate of incorporation, by-laws and
certificate of good standing of the Responsible Party;
(d) An
Opinion of Counsel of the Responsible Party, dated the Closing Date, in form
satisfactory to and addressed to the Purchaser and the
Representative;
(e) Such
opinions of counsel as the Rating Agencies or the Trustee may request in
connection with the sale of the Mortgage Loans by the Seller to the Purchaser
or
the Seller’s execution and delivery of, or performance under, this
Agreement;
(f) A
letter
from Deloitte & Touche LLP, certified public accountants, to the effect that
they have performed certain specified procedures as a result of which they
determined that certain information of an accounting, financial or statistical
nature set forth in the Purchaser’s prospectus supplement for Series 2007-HE1,
dated July 10, 2007 (the “Prospectus Supplement”) relating to the Offered
Certificates contained under the captions “Summary—The Mortgage Pool,” “Legal
Proceedings,” “Risk Factors,” (to the extent of information concerning the
Mortgage Loans contained therein) and “Description of the Mortgage Pool” agrees
with the records of the Originator; and
(g) Such
further information, certificates, opinions and documents as the Purchaser
or
the Representative may reasonably request.
SECTION
10 Costs.
The
Seller shall pay (or shall reimburse the Purchaser or any other Person to the
extent that the Purchaser or such other Person shall pay) all costs and expenses
incurred in connection with the transfer and delivery of the Mortgage Loans,
including without limitation, recording fees, fees for title policy endorsements
and continuations and, except as set forth in Section 4(b), the fees for
recording Assignments.
The
Seller shall pay (or shall reimburse the Purchaser or any other Person to the
extent that the Purchaser or such other Person shall pay) the fees and expenses
of the Seller’s accountants and attorneys, the costs and expenses incurred in
connection with producing the Interim Servicer’s or any Subservicer’s loan loss,
foreclosure and delinquency experience, the costs and expenses incurred in
connection with obtaining the documents referred to in Section 9, the costs
and
expenses of printing (or otherwise reproducing) and delivering this Agreement,
the Pooling and Servicing Agreement, the Certificates, the prospectus and
Prospectus Supplement, and any private placement memorandum relating to the
Certificates and other related documents, the initial fees, costs and expenses
of the Trustee, the fees and expenses of the Purchaser’s counsel in connection
with the preparation of all documents relating to the securitization of the
Mortgage Loans, the filing fee charged by the Securities and Exchange Commission
for registration of the Certificates, the cost of outside special counsel that
may be required by the Originator and the fees charged by any rating agency
to
rate the Certificates. All other costs and expenses in connection with the
transactions contemplated hereunder shall be borne by the party incurring such
expense.
-16-
SECTION
11 [Reserved].
SECTION
12 Indemnification.
The
Responsible Party shall indemnify and hold harmless each of (i) the Purchaser,
(ii) the assignee pursuant to Section 2.01 of the Pooling and Servicing
Agreement and (iii) each person, if any, who controls the Purchaser within
the
meaning of Section 15 of the Securities Act of 1933, as amended (the “1933 Act”)
((i) through (iii) collectively, the “Indemnified Party”) against any and all
losses, claims, expenses, damages or liabilities, insofar as such losses,
claims, expenses, damages or liabilities (or actions in respect thereof) arise
out of or are based upon (a) any untrue statement or alleged untrue
statement of any material fact contained in the data files containing
information with respect to the Mortgage Loans as transmitted by modem to the
Purchaser by the Responsible Party or any of its affiliates (as such transmitted
information may have been amended or supplemented in writing by the Responsible
Party or any of its affiliates with the written consent of the Purchaser
subsequent to such transmission), (b) any representation, warranty or covenant
made by the Responsible Party herein, on which the Purchaser has relied, being,
or alleged to be, untrue or incorrect; provided, however, that to the extent
that any such losses, claims, expenses, damages or liabilities to which the
Indemnified Party may become subject arise out of or are based upon both (1)
statements, omissions, representations, warranties or covenants of the Seller
described in clause (a) or (b) above and (2) any other factual basis, the Seller
shall indemnify and hold harmless the Indemnified Party only to the extent
that
the losses, claims, expenses, damages, or liabilities of the person or persons
asserting the claim are determined to rise from or be based upon matters set
forth in clause (1) above and do not result from the gross negligence or willful
misconduct of such Indemnified Party. This indemnity shall be in addition to
any
liability that the Seller may otherwise have.
SECTION
13 Intent
of the Parties, Mandatory Delivery; Grant of Security Interest.
The
sale of the Mortgage Loans as contemplated hereby is absolute and is intended
by
both the Seller and the Purchaser to constitute a sale of the such Mortgage
Loans by the Seller to the Purchaser.
The
sale
and delivery on the Closing Date of the Mortgage Loans described on the Mortgage
Loan Schedule in accordance with the terms and conditions of this Agreement
is
mandatory. It is specifically understood and agreed that each Mortgage Loan
is
unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser in the event of the Seller’s failure to deliver the
Mortgage Loans on or before the Closing Date. The Seller hereby grants to the
Purchaser a lien on and a continuing security interest in the Seller’s interest
in each Mortgage Loan and each document and instrument evidencing each such
Mortgage Loan to secure the performance by the Seller of its obligation
hereunder, and the Seller agrees that it holds such Mortgage Loans in custody
for the Purchaser, subject to the Purchaser’s (i) right, prior to the Closing
Date, to reject any Mortgage Loan to the extent permitted by this Agreement,
and
(ii) obligation to deliver or cause to be delivered the consideration for the
Mortgage Loans pursuant to Section 8 hereof. Any Mortgage Loans rejected by
the
Purchaser shall concurrently therewith be released from the security interest
created hereby. All rights and remedies of the Purchaser under this Agreement
are distinct from, and cumulative with, any other rights or remedies under
this
Agreement or afforded by law or equity and all such rights and remedies may
be
exercised concurrently, independently or successively.
-17-
Notwithstanding
the foregoing, if on the Closing Date, each of the conditions set forth in
Section 8 hereof shall have been satisfied and the Purchaser shall not have
paid
or caused to be paid the Aggregate Purchase Price, or any such condition shall
not have been waived or satisfied and the Purchaser determines not to pay or
cause to be paid the Aggregate Purchase Price, the Purchaser shall immediately
effect the re-delivery of the Mortgage Loans, if delivery to the Purchaser
has
occurred, and the security interest created by this Section 13 shall be deemed
to have been released.
SECTION
14 Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if personally delivered to or mailed by
registered mail, postage prepaid, or transmitted by fax and, receipt of which
is
confirmed by telephone, if to the Purchaser, addressed to Stanwich Asset
Acceptance Company, L.L.C., Seven Greenwich Office Park, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxx 00000 (Telecopy: (212-272-7206)), Attention: Xxxxxx
Xxxxx; or such other address as may hereafter be furnished to the Responsible
Party and the Seller in writing by the Purchaser; if to the Responsible Party,
addressed to the Responsible Party at 0000 Xxxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxx
00000, Attention: General Counsel, or such other address as may hereafter be
furnished to the Seller and the Purchaser in writing by the Responsible Party;
if to the Seller, addressed to the Seller at Xxxxxxxxxx Securities, LP, Seven
Greenwich Office Park, 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000
(Telecopy: (212-272-7206)), Attention: Xxxxx X. Xxxx, or to such other address
as the Seller may designate in writing to the Purchaser and the Responsible
Party.
SECTION
15 Severability
of Provisions.
Any
part, provision, representation or warranty of this Agreement that is prohibited
or that is held to be void or unenforceable shall be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof. Any part, provision, representation or warranty of this
Agreement that is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating
the
remaining provisions hereof, and any such prohibition or unenforceability in
any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.
SECTION
16 Agreement
of Parties.
The
Seller, the Responsible Party and the Purchaser each agree to execute and
deliver such instruments and take such actions as either of the others may,
from
time to time, reasonably request in order to effectuate the purpose and to
carry
out the terms of this Agreement.
SECTION
17 Survival.
(a) The
Seller agrees that the representations, warranties and agreements made by it
herein and in any certificate or other instrument delivered pursuant hereto
shall be deemed to be relied upon by the Purchaser, notwithstanding any
investigation heretofore or hereafter made by the Purchaser or on its behalf,
and that the representations, warranties and agreements made by the Seller
herein or in any such certificate or other instrument shall survive the delivery
of and payment for the Mortgage Loans and shall continue in full force and
effect, notwithstanding any restrictive or qualified endorsement on the Mortgage
Notes and notwithstanding subsequent termination of this Agreement, the Pooling
and Servicing Agreement or the Trust Fund.
-18-
(b) The
Responsible Party agrees that the representations, warranties and agreements
made by it herein and in any certificate or other instrument delivered pursuant
hereto shall be deemed to be relied upon by the Seller and the Purchaser,
notwithstanding any investigation heretofore or hereafter made by the Seller
or
the Purchaser or on the behalf of either of them, and that the representations,
warranties and agreements made by the Responsible Party herein or in any such
certificate or other instrument shall continue in full force and effect as
of
the date such representation, warranty and agreements were made, notwithstanding
subsequent termination of this Agreement, the Pooling and Servicing Agreement
or
the Trust Fund.
SECTION
18 GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).
SECTION
19 Miscellaneous.
This
Agreement may be executed in two or more counterparts, each of which when so
executed and delivered shall be an original, but all of which together shall
constitute one and the same instrument. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. This Agreement supersedes all prior agreements and
understandings relating to the subject matter hereof. Neither this Agreement
nor
any term hereof may be changed, waived, discharged or terminated orally, but
only by an instrument in writing signed by the party against whom enforcement
of
the change, waiver, discharge or termination is sought. The headings in this
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.
It
is the
express intent of the parties hereto that the conveyance of the Mortgage Loans
by the Seller to the Purchaser as provided in Section 4 hereof be, and be
construed as, a sale of the Mortgage Loans by the Seller to the Purchaser and
not as a pledge of the Mortgage Loans by the Seller to the Purchaser to secure
a
debt or other obligation of the Seller. However, in the event that,
notwithstanding the aforementioned intent of the parties, the Mortgage Loans
are
held to be property of the Seller, then (a) it is the express intent of the
parties that such conveyance be deemed a pledge of the Mortgage Loans by the
Seller to the Purchaser to secure a debt or other obligation of the Seller
and
(b) (1) this Agreement shall also be deemed to be a security agreement within
the meaning of Articles 8 and 9 of the New York Uniform Commercial Code; (2)
the
conveyance provided for in Section 4 hereof shall be deemed to be a grant by
the
Seller to the Purchaser of a security interest in all of the Seller’s right,
title and interest in and to the Mortgage Loans and all amounts payable to
the
holders of the Mortgage Loans in accordance with the terms thereof and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all amounts, other than investment earnings, from time to time held or invested
in the Custodial Account whether in the form of cash, instruments, securities
or
other property; (3) the possession by the Purchaser or its agent of Mortgage
Notes, the related Mortgages and such other items of property that constitute
instruments, money, negotiable documents or chattel paper shall be deemed to
be
“possession” by the secured party for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code; and (4) notifications
to persons holding such property and acknowledgments, receipts or confirmations
from persons holding such property shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Purchaser for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest
of
the Purchaser pursuant to Section 4(d) hereof shall also be deemed to be an
assignment of any security interest created hereby. The Seller and the Purchaser
shall, to the extent consistent with this Agreement, take such actions as may
be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be
a
perfected security interest of first priority under applicable law and will
be
maintained as such throughout the term of this Agreement and the Pooling and
Servicing Agreement.
[Signatures
follow]
-19-
IN
WITNESS WHEREOF, the Purchaser, the Seller and the Responsible Party have caused
their names to be signed by their respective officers thereunto duly authorized
as of the date first above written.
STANWICH
ASSET ACCEPTANCE
COMPANY,
L.L.C., as Purchaser
By:
/s/Xxxxx X.
Xxxx
Name:
Xxxxx X. Xxxx
Title:
President
XXXXXXXXXX
SECURITIES, LP, as Seller
By:
Xxxxxxxxxx Capital Management, LLC,
as
its
general partner
By:
/s/Xxxxx X.
Xxxx
Name:
Xxxxx X. Xxxx
Title:
President
EMC
MORTGAGE CORPORATION, as
Responsible
Party
By:
/s/Xxxxxx
Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Senior Vice President
S-1
Schedule
I
The
Seller hereby represents, warrants, and covenants to the Purchaser as follows
on
the Closing Date and on each Distribution Date thereafter:
General
1. This
Agreement creates a valid and continuing security interest (as defined in the
applicable Uniform Commercial Code (“UCC”)) in the Mortgage Loans in favor of
the Purchaser which security interest is prior to all other liens, and is
enforceable as such as against creditors of and purchasers from the
Seller.
2. The
Mortgage Loans constitute “general intangibles” or “instruments” within the
meaning of the applicable UCC.
3. The
Custodial Account and all subaccounts thereof constitute either a deposit
account or a securities account.
4. To
the
extent that payments and collections received or made with respect to the
Mortgage Loans constitute securities entitlements, such payments and collections
have been and will have been credited to the Custodial Account. The securities
intermediary for the Custodial Account has agreed to treat all assets credited
to the Custodial Account as “financial assets” within the meaning of the
applicable UCC.
Creation
5. The
Seller owns and has good and marketable title to the Mortgage Loans free and
clear of any lien, claim or encumbrance of any Person, excepting only liens
for
taxes, assessments or similar governmental charges or levies incurred in the
ordinary course of business that are not yet due and payable or as to which
any
applicable grace period shall not have expired, or that are being contested
in
good faith by proper proceedings and for which adequate reserves have been
established, but only so long as foreclosure with respect to such a lien is
not
imminent and the use and value of the property to which the lien attaches is
not
impaired during the pendency of such proceeding.
6. The
Seller has received all consents and approvals to the sale of the Mortgage
Loans
hereunder to the Purchaser required by the terms of the Mortgage Loans that
constitute instruments.
7. To
the
extent the Custodial Account or subaccounts thereof constitute securities
entitlements, certificated securities or uncertificated securities, the Seller
has received all consents and approvals required to transfer to the Purchaser
its interest and rights in the Custodial Account hereunder.
Perfection
8. The
Seller has caused or will have caused, within ten days after the effective
date
of this Agreement, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law
in
order to perfect the sale of the Mortgage Loans from the Seller to the Purchaser
and the security interest in the Mortgage Loans granted to the Purchaser
hereunder.
9. With
respect to the Custodial Account and all subaccounts that constitute deposit
accounts, either:
(i) the
Seller has delivered to the Purchaser a fully-executed agreement pursuant to
which the bank maintaining the deposit accounts has agreed to comply with all
instructions originated by the Purchaser directing disposition of the funds
in
the Custodial Account without further consent by the Seller; or
(ii) the
Seller has taken all steps necessary to cause the Purchaser to become the
account holder of the Custodial Account.
10. With
respect to the Custodial Account or subaccounts thereof that constitute
securities accounts or securities entitlements, either:
(i) the
Seller has caused or will have caused, within ten days after the effective
date
of this Agreement, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law
in
order to perfect the security interest in the Custodial Account granted by
the
Seller to the Purchaser; or
(ii) the
Seller has delivered to the Purchaser a fully-executed agreement pursuant to
which the securities intermediary has agreed to comply with all instructions
originated by the Purchaser relating to the Custodial Account without further
consent by the Purchaser; or
(iii) the
Seller has taken all steps necessary to cause the securities intermediary to
identify in its records the Purchaser as the person having a security
entitlement against the securities intermediary in the Custodial
Account.
Priority
11. Other
than the transfer of the Mortgage Loans to the Purchaser pursuant to this
Agreement, the Seller has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Mortgage Loans. The Seller has
not
authorized the filing of, or is not aware of any financing statements against
the Seller that include a description of collateral covering the Mortgage Loans
other than any financing statement relating to the security interest granted
to
the Purchaser hereunder or that has been terminated.
12. The
Seller is not aware of any judgment, ERISA or tax lien filings against the
Seller.
13. The
Trustee has in its possession all original copies of the Mortgage Notes that
constitute or evidence the Mortgage Loans. To the Seller’s knowledge, none of
the instruments that constitute or evidence the Mortgage Loans has any marks
or
notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than the Purchaser or its designee. All financing statements
filed or to be filed against the Seller in favor of the Purchaser in connection
herewith describing the Mortgage Loans contain a statement to the following
effect: “A purchase of or security interest in any collateral described in this
financing statement will violate the rights of the Purchaser.”
14. Neither
the Custodial Account nor any subaccount thereof is in the name of any person
other than the Seller or the Purchaser or in the name of its nominee. The Seller
has not consented for the securities intermediary of the Custodial Account
to
comply with entitlement orders of any person other than the Purchaser or its
designee.
15. Survival
of Perfection Representations.
Notwithstanding any other provision of this Agreement or any other transaction
document, the Perfection Representations contained in this Schedule shall be
continuing, and remain in full force and effect (notwithstanding any replacement
of the applicable servicer or termination of the applicable servicer’s rights to
act as such) until such time as all obligations under this Agreement have been
finally and fully paid and performed.
16. No
Waiver.
The
parties to this Agreement (i) shall not, without obtaining a confirmation of
the
then-current rating of the Certificates waive any of the Perfection
Representations, and (ii) shall provide the Rating Agencies with prompt written
notice of any breach of the Perfection Representations, and shall not, without
obtaining a confirmation of the then-current rating of the Certificates (as
determined after any adjustment or withdrawal of the ratings following notice
of
such breach) waive a breach of any of the Perfection
Representations.
17. Seller
to Maintain Perfection and Priority.
The
Seller covenants that, in order to evidence the interests of the Seller and
the
Purchaser under this Agreement, the Seller shall take such action, or execute
and deliver such instruments (other than effecting a Filing (as defined below),
unless such Filing is effected in accordance with this paragraph) as may be
necessary or advisable (including, without limitation, such actions as are
requested by the Purchaser) to maintain and perfect, as a first priority
interest, the Purchaser’s security interest in the Mortgage Loans. The Seller
shall, from time to time and within the time limits established by law, prepare
and present to the Purchaser or its designee to authorize (based in reliance
on
the Opinion of Counsel hereinafter provided for) the Seller to file, all
financing statements, amendments, continuations, initial financing statements
in
lieu of a continuation statement, terminations, partial terminations, releases
or partial releases, or any other filings necessary or advisable to continue,
maintain and perfect the Purchaser’s security interest in the Mortgage Loans as
a first-priority interest (each a “Filing”). The Seller shall present each such
Filing to the Purchaser or its designee together with (x) an Opinion of Counsel
to the effect that such Filing is (i) consistent with the grant of the security
interest to the Purchaser pursuant to Section 19 of this Agreement, (ii)
satisfies all requirements and conditions to such Filing in this Agreement
and
(iii) satisfies the requirements for a Filing of such type under the Uniform
Commercial Code in the applicable jurisdiction (or if the Uniform Commercial
Code does not apply, the applicable statute governing the perfection of security
interests), and (y) a form of authorization for the Purchaser’s signature. Upon
receipt of such Opinion of Counsel and form of authorization, the Purchaser
shall promptly authorize in writing the Seller to, and the Seller shall, effect
such Filing under the UCC without the signature of the Seller or the Purchaser
where allowed by applicable law. Notwithstanding anything else in the
transaction documents to the contrary, the Seller shall not have any authority
to effect a Filing without obtaining written authorization from the Purchaser
or
its designee.
Exhibit
1
APPENDIX
E OF THE STANDARD & POOR’S GLOSSARY FOR
FILE
FORMAT FOR LEVELS®
VERSION
6.0
APPENDIX
E - Standard & Poor’s Predatory Lending Categories
Standard
& Poor’s has categorized loans governed by anti-predatory lending laws in
the Jurisdictions listed below into three categories based upon a combination
of
factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor’s High Cost Loan Category because they included thresholds
and tests that are typical of what is generally considered High Cost by the
industry.
Standard
& Poor’s High Cost Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Arkansas
|
Arkansas
Home Loan Protection Act, Ark. Code Xxx. §§ 00-00-000 et seq.
Effective
July 16, 2003
|
High
Cost Home Loan
|
|
Cleveland
Heights, OH
|
Ordinance
No. 72-2003 (PSH), Mun. Code §§ 757.01 et seq.
Effective
June 2, 2003
|
Covered
Loan
|
|
Colorado
|
Consumer
Equity Protection, Colo. Stat. Xxx. §§ 5-3.5-101 et seq.
Effective
for covered loans offered or entered into on or after January 1,
2003.
Other provisions of the Act took effect on June 7, 2002
|
Covered
Loan
|
|
Connecticut
|
Connecticut
Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746
et seq.
Effective
October 1, 2001
|
High
Cost Home Loan
|
Standard
& Poor’s High Cost Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
District
of Columbia
|
Home
Loan Protection Act, D.C. Code §§ 26-1151.01 et seq.
Effective
for loans closed on or after January 28, 2003
|
Covered
Loan
|
|
Florida
|
Fair
Lending Act, Fla. Stat. Xxx. §§ 494.0078 et seq.
Effective
October 2, 2002
|
High
Cost Home Loan
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
High
Cost Home Loan
|
|
Georgia
as amended (Mar. 7, 2003 - current)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
for loans closed on or after March 7, 2003
|
High
Cost Home Loan
|
|
HOEPA
Section 32
|
Home
Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R.
§§ 226.32 and 226.34
Effective
October 1, 1995, amendments October 1, 2002
|
High
Cost Loan
|
|
Illinois
|
High
Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et
seq.
Effective
January 1, 2004 (prior to this date, regulations under Residential
Mortgage License Act effective from May 14, 2001)
|
High
Risk Home Loan
|
|
Indiana
|
Indiana
Home Loan Practices Act, Ind. Code Xxx. §§ 24-9-1-1 et seq.
Effective
January 1, 2005; amended by 2005 HB 1179, effective July 1,
2005
|
High
Cost Home Loans
|
|
Kansas
|
Consumer
Credit Code, Kan. Stat. Xxx. §§ 16a-1-101 et seq.
Sections
16a-1-301 and 16a-3-207 became effective April 14, 1999; Section
16a-3-308a became effective July 1, 1999
|
High
Loan to Value Consumer Loan (id.§
16a-3-207) and;
|
|
High
APR Consumer Loan (id.§
16a-3-308a)
|
Standard
& Poor’s High Cost Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Kentucky
|
2003
KY H.B. 000 - Xxxx Xxxx Xxxx Xxxx Xxx, Xx. Rev. Stat. §§ 360.100
et seq.
Effective
June 24, 2003
|
High
Cost Home Loan
|
|
Maine
|
Truth
in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et seq.
Effective
September 29, 1995 and as amended from time to time
|
High
Rate High Fee Mortgage
|
|
Massachusetts
|
Part
40 and Part 32, 209 C.M.R. §§ 32.00 et seq.
and 209 C.M.R. §§ 40.01 et seq.
Effective
March 22, 2001 and amended from time to time
|
High
Cost Home Loan
|
|
Nevada
|
Assembly
Xxxx No. 284, Nev. Rev. Stat. §§ 598D.010 et seq.
Effective
October 1, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
for loans closed on or after November 27, 2003
|
High
Cost Home Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
High
Cost Home Loan
|
|
N.Y.
Banking Law Article 6-l
Effective
for applications made on or after April 1, 2003
|
High
Cost Home Loan
|
Standard
& Poor’s High Cost Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
High
Cost Home Loan
|
|
Ohio
|
H.B.
386 (codified in various sections of the Ohio Code), Ohio Rev. Code
Xxx.
§§ 1349.25 et seq.
Effective
May 24, 2002
|
Covered
Loan
|
|
Rhode
Island
|
Rhode
Island Home Loan Protection Act, R.I. Gen. Laws §§ 34-25.2-1 et seq.
Effective December 31, 2006
|
High
Cost Home Loan
|
|
Oklahoma
|
Consumer
Credit Code (codified in various sections of Title 14A)
Effective
July 1, 2000; amended effective January 1, 2004
|
Subsection
10 Mortgage
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code Xxx. §§ 37-23-10
et seq.
Effective
for loans taken on or after January 1, 2004
|
High
Cost Home Loan
|
|
Tennessee
|
Tennessee
Home Loan Protection Act, Tenn. Code Xxx. §§ 00-00-000 et seq. Effective
January 1, 2007
|
High
Cost Home Loan
|
|
West
Virginia
|
West
Virginia Residential Mortgage Lender, Broker and Servicer Act, W.
Va. Code
Xxx. §§ 31-17-1 et seq.
Effective
June 5, 0000
|
Xxxx
Xxxxxxxx Mortgage Loan Act Loan
|
Standard
& Poor’s Covered Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
Covered
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
November 27, 2003 - July 5, 2004
|
Covered
Home Loan
|
Standard
& Poor’s Home Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective
Date
|
Category
under
Applicable
Anti-
Predatory
Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et seq.
Effective
October 1, 2002 - March 6, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et seq.
Effective
for loans closed on or after November 27, 2003
|
Home
Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
Home
Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of
credit)
|
Consumer
Home Loan
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code Xxx. §§ 37-23-10
et seq.
Effective
for loans taken on or after January 1, 2004
|
Consumer
Home Loan
|
