EXECUTION
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XXXXXX BROTHERS HOLDINGS INC.,
SELLER
and
STRUCTURED ASSET SECURITIES CORPORATION,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
Dated as of May 1, 2001
Amortizing Residential Collateral Trust
(Mortgage Pass-Through Certificates Series 2001-BC4)
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TABLE OF CONTENTS
Page
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ARTICLE I CONVEYANCE OF MORTGAGE LOANS.........................................2
Section 1.01. Sale of Mortgage Loans........................................2
Section 1.02. Delivery of Documents.........................................3
Section 1.03. Review of Documentation.......................................3
Section 1.04. Representations and Warranties of the Seller..................3
Section 1.05. Grant Clause.................................................12
Section 1.06. Assignment by Depositor......................................12
ARTICLE II MISCELLANEOUS PROVISIONS...........................................13
Section 2.01. Binding Nature of Agreement; Assignment......................13
Section 2.02. Entire Agreement.............................................13
Section 2.03. Amendment....................................................13
Section 2.04. Governing Law................................................14
Section 2.05. Severability of Provisions...................................14
Section 2.06. Indulgences; No Waivers......................................14
Section 2.07. Headings Not to Affect Interpretation........................14
Section 2.08. Benefits of Agreement........................................14
Section 2.09. Counterparts.................................................14
SCHEDULES
SCHEDULE A Mortgage Loan Schedule
EXHIBIT A Underwriting Criteria of the Transferor
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This MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT, dated as of May 1,
2001 (the "Agreement"), is executed by and between Xxxxxx Brothers Holdings Inc.
("LBH" or the "Seller") and Structured Asset Securities Corporation (the
"Depositor").
All capitalized terms not defined herein shall have the same meanings
assigned to such terms in that certain Trust Agreement (the "Trust Agreement"),
dated as of May 1, 2001, among the Depositor, Xxxxx Fargo Bank Minnesota,
National Association, as trustee (the "Trustee"), The Murrayhill Company, as
loss mitigation advisor, and the Federal Home Loan Mortgage Corporation, as
guarantor (the "Guarantor").
W I T N E S S E T H:
WHEREAS, pursuant to the following specified mortgage loan purchase and
warranties, seller's warranties and servicing or assignment agreements (each a
"Transfer Agreement," and together the "Transfer Agreements"), Xxxxxx Capital, a
division of Xxxxxx Brothers Holdings Inc. ("Xxxxxx Capital"), or Xxxxxx Brothers
Bank, FSB, an affiliate of the Seller (the "Bank"), has purchased from BNC
Mortgage, Inc. (the "Transferor"), certain conventional, first lien, adjustable
and fixed rate, fully amortizing and balloon, residential mortgage loans
identified on the Mortgage Loan Schedule attached hereto as Schedule A
(collectively, the "Mortgage Loans"):
X. Xxxxxx Capital, as purchaser:
a. Purchase and Warranties Agreement, dated as of September 8,
1999, between Xxxxxx Capital, as Purchaser, and the Transferor;
and
b. Purchase and Warranties Agreement, dated as of October 13, 1999,
between Xxxxxx Capital, as Purchaser, and the Transferor;
II. Bank, as purchaser:
a. Mortgage Purchase and Warranties Agreement, dated as of December
10, 1999, between Bank, as Purchaser, and the Transferor;
b. Mortgage Purchase and Warranties Agreement, dated as of February
17, 2000, between Bank, as Purchaser, and the Transferor; and
c. Flow Purchase and Warranties Agreement, dated as of March 10,
2000, between Bank, as Purchaser, and the Transferor.
WHEREAS, pursuant to the following assignment and assumption
agreements, Bank has assigned all of its rights, title and interest in and to
the foregoing Transfer Agreements listed in II(a) through (e), including the
Mortgage Loans acquired by Bank thereunder, to the Seller:
a. Assignment and Assumption Agreement, dated and effective as of
September 14, 2000, between Bank, as assignor, and the Seller,
as assignee, with respect to the Transfer Agreement entered into
by Bank listed in II (a) above;
b. Assignment and Assumption Agreements, each dated and effective
as of November 6, 2000, between Bank, as assignor, and the
Seller, as assignee, with respect to each Transfer Agreement
entered into by Bank listed in II (b) and (c) above; and
c. Assignment and Assumption Agreement, dated and effective as of
April 6, 2001, between Bank, as assignor, and the Seller, as
assignee, with respect to the Transfer Agreement entered into by
Bank listed in II (c) above.
WHEREAS, the Seller is a party to the Servicing Agreement, dated as of
May 1, 2001 (the "Servicing Agreement"), between the Seller and Option One
Mortgage Corporation, as servicer, pursuant to which the Mortgage Loans are to
be serviced by the Servicer.
WHEREAS, the Seller desires to sell, without recourse, all of its
right, title and interest in and to the Mortgage Loans to the Depositor and to
assign all of its rights and interest under the Transfer Agreements and the
Servicing Agreement relating to the Mortgage Loans to the Depositor.
WHEREAS, the Seller and the Depositor acknowledge and agree that the
Depositor will convey the Mortgage Loans to a Trust Fund created pursuant to the
Trust Agreement, assign all of its rights and delegate all of its obligations
hereunder to the Trustee for the benefit of the Certificateholders and the
Guarantor, and that each reference herein to the Depositor is intended, unless
otherwise specified, to mean the Depositor or the Trustee, as assignee,
whichever is the owner of the Mortgage Loans from time to time.
WHEREAS, the Seller and the Depositor desire that the Guarantor be an
intended third-party beneficiary to this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Seller and the Depositor agree as follows:
ARTICLE I
CONVEYANCE OF MORTGAGE LOANS
Section 1.01. Sale of Mortgage Loans. Concurrently with the execution
and delivery of this Agreement, the Seller does hereby transfer, assign, set
over, deposit with and otherwise convey to the Depositor, without recourse,
subject to Sections 1.03 and 1.04, all the right, title and interest of the
Seller in and to the Mortgage Loans identified on Schedule A hereto, having an
aggregate Scheduled Principal Balance as of the Cut-off Date of $468,586,826.33.
Such conveyance includes, without limitation, the right to all distributions of
principal and interest received on or with respect to the Mortgage Loans on or
after the Cut-off Date (other than payments of principal and interest due on or
before such date), and all such payments due after such date but received prior
to such date and intended by the related Mortgagors to be applied after such
date, together with all of the Seller's right, title and interest in and to each
related account and all amounts from time to time credited to and the proceeds
of such account, any REO Property and the proceeds thereof, the Seller's rights
under any Insurance Policies relating to the Mortgage Loans, and the Seller's
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security interest in any collateral pledged to secure the Mortgage Loans,
including the Mortgaged Properties.
Concurrently with the execution and delivery of this Agreement, the
Seller hereby assigns to the Depositor all of its rights and interest under each
Transfer Agreement and the Servicing Agreement, and delegates to the Depositor
all of its obligations thereunder, to the extent relating to the Mortgage Loans.
Concurrently with the execution hereof, the Depositor tenders the purchase price
of $468,586,826.33. The Depositor hereby accepts such assignment and delegation,
and shall be entitled to exercise all the rights of the Seller under each
Transfer Agreement and the Servicing Agreement, as if the Depositor had been a
party to each such agreement.
Section 1.02. Delivery of Documents.
(a) In connection with such transfer and assignment of the Mortgage
Loans hereunder, the Seller does hereby deliver, or cause to be delivered, to
the Depositor (or its designee) the documents or instruments with respect to
each Mortgage Loan (each a "Mortgage File") so transferred and assigned, as
specified in the related Transfer Agreements or the Servicing Agreement.
(b) For Mortgage Loans (if any) that have been prepaid in full
after the Cut-off Date and prior to the Closing Date, the Seller, in lieu of
delivering the related Mortgage Files, herewith delivers to the Depositor an
Officer's Certificate which shall include a statement to the effect that all
amounts received in connection with such prepayment that are required to be
deposited in the Certificate Account maintained by the Trustee for such purpose
have been so deposited.
Section 1.03. Review of Documentation. The Depositor, by execution and
delivery hereof, acknowledges receipt of the Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof
by U.S. Bank Trust National Association (the "Custodian") for the Depositor. The
Custodian is required to review, within 45 days following the Closing Date, each
applicable Mortgage File. If in the course of such review the Custodian
discovers any document or documents constituting a part of a Mortgage File that
is missing, does not appear regular on its face (i.e., is mutilated, damaged,
defaced, torn or otherwise physically altered) or appears to be unrelated to the
Mortgage Loans identified in the Mortgage Loan Schedule (each a "Material
Defect"), the Seller shall be obligated to cure such Material Defect or to
repurchase the related Mortgage Loan from the Depositor (or, at the direction of
and on behalf of the Depositor, from the Trust Fund), or to substitute a
Qualifying Substitute Mortgage Loan therefor, in each case to the same extent
and in the same manner as the Depositor is obligated to the Trustee and the
Trust Fund under the Trust Agreement.
Section 1.04. Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Depositor that
as of the date hereof that:
(i) the Seller is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its property, to
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carry on its business as presently conducted, and to enter into and perform its
obligations under this Agreement;
(ii) the execution and delivery by the Seller of this Agreement
have been duly authorized by all necessary corporate action on the part of the
Seller; neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with the
provisions hereof, will conflict with or result in a breach of, or constitute a
default under, any of the provisions of any law, governmental rule, regulation,
judgment, decree or order binding on the Seller or its properties or the
certificate of incorporation or bylaws of the Seller;
(iii) the execution, delivery and performance by the Seller of
this Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any state,
federal or other governmental authority or agency, except such as has been
obtained, given, effected or taken prior to the date hereof;
(iv) this Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the Depositor,
constitutes a valid and binding obligation of the Seller enforceable against it
in accordance with its terms except as such enforceability may be subject to (A)
applicable bankruptcy and insolvency laws and other similar laws affecting the
enforcement of the rights of creditors generally and (B) general principles of
equity regardless of whether such enforcement is considered in a proceeding in
equity or at law; and
(v) there are no actions, suits or proceedings pending or, to
the knowledge of the Seller, threatened or likely to be asserted against or
affecting the Seller, before or by any court, administrative agency, arbitrator
or governmental body (A) with respect to any of the transactions contemplated by
this Agreement or (B) with respect to any other matter which in the judgment of
the Seller will be determined adversely to the Seller and will if determined
adversely to the Seller materially and adversely affect it or its business,
assets, operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement.
(b) The representations and warranties with respect to the Mortgage
Loans made by the Transferor to the Seller in the related Transfer Agreement
were made as of the date of such Transfer Agreement. To the extent that any
fact, condition or event with respect to a Mortgage Loan constitutes a breach of
a representation or warranty made under the applicable Transfer Agreement, the
Depositor shall have the right to require that the Seller cure such breach or
effect such other remedy as is specified in the last paragraph of subsection
(e).
(c) The Seller further represents and warrants to the Depositor, to
the Trustee on behalf of the Certificateholders and to the Guarantor upon the
delivery of the Mortgage Loans to be included in Pool 1 to the Depositor on the
Closing Date, but solely as to each Mortgage Loan to be included in Pool 1,
that:
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(i) 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;
(ii) As of the Cut-off Date, no Mortgage Loan has failed to pay
principal and interest due on the June 2001 payment due date. In addition, as of
the Cut-off Date, no more than 1.82% of the Mortgage Loans have failed to pay
principal and interest due on two consecutive payment due dates in the last 12
months (or since their origination, if less than 12 months) and no more than
0.45% of the Mortgage Loans have failed to pay principal and interest on two
consecutive due dates more than once in the last 12 months (or since their
origination, if less than 12 months). To the best of the Seller's knowledge, as
of the Closing Date, no more than 4.34% of the Mortgage Loans have failed to pay
principal and interest on the May 1, 2001 due date.
(iii) Each Mortgage Loan, as of the Closing Date, is either a
fixed rate or an adjustable rate, conventional, residential Mortgage Loan having
an original term to maturity from the date on which the first Scheduled Payment
is due of not more than 30 years. Each Mortgage Note with respect to the
Mortgage Loans will provide for a schedule of substantially level and equal
Scheduled 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 fixed rate Mortgage Loans
constituting approximately 0.43% of the Cut-Off Date-Balance are "balloon"
mortgage loans that provide for a final Scheduled Payment substantially greater
than the preceding monthly payment. 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.
(iv) No more than 1.5% and 43.46% of the Mortgage Loans, based
on the aggregate Cut-Off Date Balance of the Mortgage Loans, had Loan-to-Value
Ratios at origination exceeding 90% and 80%, respectively; and none of the
Mortgage Loans had Loan-to-Value Ratios at origination exceeding 95%;
(v) Each Mortgage Loan was originated, and the applicable
seller credit grade was applied, substantially in accordance with the
Transferor's underwriting criteria attached hereto as Exhibit A;
(vi) No more than 0.93% of the Mortgage Loans are secured by
manufactured housing, and none of the Mortgage Loans are secured by mobile
homes;
(vii) Each Mortgage transferred to the Trustee is a valid first
lien on the Mortgaged Property subject only to (A) the lien of current real
property taxes and assessments, (B) 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 appearing of record being acceptable
to mortgage lending institutions generally or specifically reflected in the
appraisal made in connection with the origination of the related mortgage loan
and (C) 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.
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(viii) There is no delinquent tax or assessment lien against
any Mortgaged Property;
(ix) There are no mechanics' liens or claims for work, labor or
material affecting any Mortgaged Property which are 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 included in the Mortgage File maintained by the
Custodian with respect to the related Mortgage Loan;
(x) Each Mortgage Loan at origination complied in all material
respects with applicable state and federal laws, including, without limitation,
usury, equal credit opportunity, real estate settlement procedures,
truth-in-lending and disclosure laws, and consummation of the transactions
contemplated hereby, including, without limitation, the receipt of interest,
will not involve the violation of any such laws;
(xi) None of the Mortgage Loans are cooperative share
mortgages;
(xii) If the improvements securing a Mortgage Loan were in a
federally designated special flood hazard area as of the date of origination,
flood insurance in the amount described in the Servicing Agreement (and to the
extent required by such agreement) covers the related Mortgaged Property (either
by coverage under the federal flood insurance program or by coverage by private
insurers);
(xiii) A lender's policy of title insurance 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;
(xiv) No selection procedure reasonably believed by the Seller
to be adverse to the interests of the Certificateholders or the Guarantor, was
used in selecting the Mortgage Loans for inclusion in the Trust Fund; provided,
however, that the Mortgage Loans were selected by the Seller from its portfolio
of mortgage loans originated in accordance with the Transferor's underwriting
criteria attached hereto as Exhibit A.
(xv) 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 Transferor's underwriting guidelines and
included an assessment of the fair market value of the related Mortgaged
Property at the time of the appraisal. At the time of origination, the value of
each Mortgaged Property adequately supported the original loan amount of the
related Mortgage Loan. The Mortgage File contains an appraisal of the applicable
Mortgaged Property;
(xvi) The information set forth with respect to the Mortgage
Loans on the Mortgage Loan Schedule provides an accurate listing of the Mortgage
Loans, and the information provided with respect to each Mortgage Loan on the
Mortgage Loan Schedule is true and correct in all material respects as of the
Cut-off Date or such other date respecting which such information is given;
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(xvii) Each Mortgage Loan constitutes a "qualified mortgage"
within the meaning of Section 860G(a)(3)(A) of the Code and Treasury Regulation
Section 1.860G-2(a)(1) and (3);
(xviii) Each Mortgage and Mortgage Note is the legal, valid and
binding obligation of the related Mortgagor and is enforceable by the Trustee or
any co-trustee appointed pursuant to the Trust Agreement against the Mortgagor
in accordance with its terms, except only as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and by law, and all
parties to each Mortgage Loan and the Mortgagee had full legal capacity to
execute all Mortgage Loan documents and to convey the estate therein purported
to be conveyed; and the Mortgage and each Mortgage Note have been duly and
validly executed by such parties;
(xix) 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;
(xx) 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;
(xxi) 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. Except for
payments in the nature of escrow payments, including without limitation, taxes
and insurance payments, to the best of Seller's knowledge, the Servicer 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 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;
(xxii) 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;
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(xxiii) The proceeds of each 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;
(xxiv) 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;
(xxv) No Mortgage Loan has a shared appreciation feature, or
other contingent interest feature;
(xxvi) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof adequate
remedy 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 or
non-judicial foreclosure. There is no homestead or other exemption available to
the related Mortgagor which would materially interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage subject to the applicable federal and state laws and judicial precedent
with respect to bankruptcy and rights of redemption. Upon default by a Mortgagor
on a Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage Loan will
be able to deliver good and merchantable title to the property;
(xxvii) 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 Certificate Account within one Business Day after the Closing
Date;
(xxviii) The Seller has not transferred the Mortgage Loans to
the Depositor, and the Depositor has not transferred the Mortgage Loans to the
Trust Fund, with any intent to hinder, delay or defraud any of its creditors;
(xxix) 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 they held and disposed of such interest, were): (A)
organized under the laws of the state wherein the Mortgaged Property is located,
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;
(xxx) 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;
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(xxxi) Each Mortgaged Property is improved by a single
(one-to-four) family residential dwelling, including, without limitation,
condominiums, townhouses and manufactured homes. Each manufactured home
constituting any portion of any Mortgaged Property constitutes real property
under applicable state law; and each manufactured home constituting any portion
of any Mortgaged Property is a "single-family residence" as defined in Section
25(e)(10) of the Code;
(xxxii) Except with respect to liens released immediately prior
to the transfer herein contemplated, each Mortgage Note and related Mortgage
have 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,
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
Trustee will hold good, marketable and indefeasible title, to, and be the sole
owner of, each Mortgage Loan subject to no Liens;
(xxxiii) No Mortgage Loan is subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of any Mortgage Note or Mortgage, or
the exercise of any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(xxxiv) The improvements upon each Mortgaged Property are
covered by a valid and existing hazard insurance policy with a generally
acceptable carrier that provides for fire and extended coverage representing
coverage described in the Servicing Agreement;
(xxxv) The terms of each 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 Certificateholders and
which has been or will be delivered to the Custodian on behalf of the Trustee;
(xxxvi) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the Trustee)
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;
(xxxvii) As of the Cut-off Date, 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 undamaged by
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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;
(xxxviii) No Mortgage Loan was originated under a buydown plan;
(xxxix) Except for Mortgage Loans that are delinquent for a
time period less than that set forth in (ii) 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 Seller, nor, to the best of
Seller's knowledge, any other entity involved in originating or servicing a
Mortgage Loan, has waived any default, breach, violation or event of
acceleration;
(xl) No Mortgage Loan is subject to the requirements of the
Home Ownership and Equity Protection Act of 1994 or any comparable state law;
(xli) The Servicer has accurately and fully reported its
borrowers credit files to each of the credit repositories in a timely manner;
(xlii) No proceeds from any Mortgage Loan were used to purchase
single-premium credit insurance policies as part of origination of, or as a
condition to closing, such Mortgage Loan;
(xliii) With respect to each Mortgage Loan insured under the
MGIC Insurance Policy, such Mortgage Loan satisfies the applicable loan
eligibility criteria set forth in the MGIC Insurance Policy;
(xliv) Each Mortgage Loan was originated on or after April 13,
1999;
(xlv) The Seller represents and warrants that it currently
operates or actively participates in an on-going business (A) to originate
single-family mortgage loans and/or (B) to make periodic purchases of mortgage
loans from originators or sellers, and/or (C) to issue and/or purchase
securities or bonds supported by the mortgage loans, a portion of which loans
are made to borrowers who are:
(1) low-income families (families with incomes of 80% or
less of area median income) living in low-income areas (a census tract or block
numbering area in which the median income does not exceed 80% of the area median
income); or
(2) very low-income families (families with incomes of
60% or less of area median income);
(xlvi) 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(s) thereunder;
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(xlvii) With respect to each Mortgage Loan secured by a
manufactured home: (A) the manufactured home is permanently affixed to a
foundation which is suitable for the soil conditions of the site; (B) all
foundations, both perimeter and interior, have footings that are located below
the frost line; (C) any wheels, axles and trailer hitches are removed from the
manufactured home; and (D) the Mortgage Loan is covered under a standard real
estate title insurance policy or attorney's title opinion or certificate that
identified the manufactured home as part of the real property and insures or
indemnifies against any loss if the manufactured home is determined not to be
part of the real property;
(xlviii) [Reserved];
(xlix) [Reserved];
(l) The Mortgage Loans backing the Group 1 Certificates do not
contain the first 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 Group 1 Certificates will not result in a violation of Xxxxxxx Mac's
loan limitations;
(li) No Mortgage Loan has a prepayment penalty longer than five
years after its origination, and each Servicing Agreement prohibits the Servicer
from waiving any prepayment penalty with respect to the Mortgage Loans (except
in the case of bankruptcy or default of such Mortgage Loan), without the prior
written consent of the Trustee, the Guarantor and the Seller;
(lii) As of May 1, 2001, no Mortgagor on any of the Mortgage
Loans has filed for bankruptcy protection;
(liii) The Servicer has not sent a notice of default with
respect to any Mortgage Loan; and
(liv) No Mortgage Loan has previously been rejected by Xxxxxxx
Mac for inclusion in a securitization trust sponsored by the Depositor.
With respect to any representation in this subsection (c) that is made
to the best of Seller's knowledge or as to which Seller has no knowledge, if it
is discovered by Seller, the Guarantor, the Trustee or the Custodian 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
and warranty was made, such inaccuracy shall be deemed a breach of the
applicable representation or warranty.
(d) The Seller further represents and warrants to the Depositor, to the
Trustee on behalf of the Certificateholders and to the Guarantor upon delivery
of such Mortgage Loans to be included in Pool 2 on the Closing Date, but solely
as to each Mortgage Loan to be included in Pool 2, the representations and
warranties set forth in subsection (c) paragraph (ii) (but substituting 6.44%
for 1.82%, 2.30% for 0.45% and 10.22% for 4.34%, in each case where such latter
11
percentages appear therein), paragraph (iii), but substituting 0.15% for 7.52%
where such latter percentages appear therein), paragraph (iv) (but substituting
1.81% for 1.5%, 43.19% for 43.46%, and "1.30%" for the word "None", in each case
where such latter percentages or word appears therein), paragraph (vi) (but
substituting the word "None" for "No more than 0.93%", where such words appear
therein), paragraphs (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xvi),
(xvii), (xviii), (xix), (xxi), (xxvi), (xxviii), (xxxii), (xxxiii), (xxxiv),
(xxxix), paragraph (xliv) (but substituting the date "August 27, 1999" for
"April 13, 1999") and paragraphs (li), (lii) and (liii).
(e) It is understood and agreed that the representations and warranties
set forth in subsections (c) and (d) of this Section 1.04 and the obligations of
the Seller set forth in this subsection (e) survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to the Depositor.
Upon discovery by any of the Seller, the Depositor, the Guarantor or the Trustee
of a breach of any of such foregoing representations and warranties in
subsection (c) with respect to the Pool 1 Mortgage Loans or subsection (d) with
respect to the Pool 2 Mortgage Loans or of any of the representations or
warranties made in the Transfer Agreements or the Servicing Agreement that
adversely and materially affects the value of the related Mortgage Loan (except
that any breach of the representations and warranties set forth in Sections
1.04(c)(xl), (xli), (xlii), and (li) shall be deemed to adversely and materially
affect the value of the related Mortgage Loan), the party discovering such
breach shall give prompt written notice to the other party. Within 90 days of
the discovery of any such breach, the Seller shall either (i) cure such breach
in all material respects, (ii) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Depositor at the applicable Purchase Price
or (iii) within the two-year period following the Closing Date, substitute a
Qualifying Substitute Mortgage Loan for the affected Mortgage Loan. In the event
of a breach of any of the representations and warranties made with respect to
the Mortgage Loans by the Transferor under the Transfer Agreements or the
Servicing Agreement, the Trustee may enforce its rights to cause a repurchase or
substitution of a defective Mortgage Loan directly against the Seller pursuant
to the immediately preceding sentence and shall not be required to first seek
redress of any remedies against the Transferor under the related Transfer
Agreement for the benefit of Certificateholders; provided, however, if such
remedy is enforced directly against the Seller, the Seller shall be subrogated
to the rights of the Trustee under the Transfer Agreement.
Section 1.05. Grant Clause. It is intended that the conveyance of the
Seller's right, title and interest in and to Mortgage Loans and other property
conveyed pursuant to this Agreement shall constitute, and shall be construed as,
a sale of such property and not a grant of a security interest to secure a loan.
However, if such conveyance is deemed to be in respect of a loan, it is intended
that: (a) the rights and obligations of the parties shall be established
pursuant to the terms of this Agreement; (b) the Seller hereby grants to the
Depositor a first priority security interest in all of the Seller's right, title
and interest in, to and under, whether now owned or hereafter acquired, the
Mortgage Loans and other property; and (c) this Agreement shall constitute a
security agreement under applicable law.
Section 1.06. Assignment by Depositor. Concurrently with the execution
of this Agreement, the Depositor shall assign its interest under this Agreement
with respect to the Mortgage Loans to the Trustee, and the Trustee then shall
succeed to all rights of the Depositor under this Agreement. All references to
the rights of the Depositor in this Agreement shall be deemed to be for the
benefit of and exercisable by its assignee or designee, specifically including
the Trustee.
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ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 2.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
Section 2.03. Amendment.
(a) This Agreement may be amended from time to time by the Seller
and the Depositor, without notice to or the consent of any of the
Certificateholders but with the consent of the Guarantor, (i) to cure any
ambiguity, (ii) to cause the provisions herein to conform to or be consistent
with or in furtherance of the statements made with respect to the Certificates,
the Trust Fund, the Trust Agreement or this Agreement in the Information
Circular; or to correct or supplement any provision herein which may be
inconsistent with any other provisions herein, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement or
(iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the REMIC
Provisions. No such amendment effected pursuant to clause (iii) of the preceding
sentence shall adversely affect in any material respect the interests of any
Certificateholder. Any such amendment shall be deemed not to adversely affect in
any material respect any Certificateholder, if the Trustee receives written
confirmation from each Rating Agency that such amendment will not cause such
Rating Agency to reduce the then current rating assigned to the Certificates
(and any Opinion of Counsel requested by the Trustee in connection with any such
amendment may rely expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Seller and the Depositor with the consent of the Certificateholders of not less
than 66-2/3% of the Class Principal Amount (or Percentage Interest) of each
Class of Certificates affected thereby for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Certificateholders;
provided, however, that no such amendment may (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the
Certificateholder of such Certificate or (ii) reduce the aforesaid percentages
of Class Principal Amount or Class Notional Amount (or Percentage Interest) of
Certificates of each Class, the Certificateholders of which are required to
consent to any such amendment without the consent of the Certificateholders of
100% of the Class Principal Amount or Class Notional Amount (or Percentage
Interest) of each Class of Certificates affected thereby.
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(c) It shall not be necessary for the consent of Certificateholders
under this Section 2.03 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Section 2.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 2.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 2.06. Indulgences; No Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
Section 2.07. Headings Not to Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 2.08. Benefits of Agreement. The parties to this Agreement
agree that it is appropriate, in furtherance of the intent of such parties set
forth herein, that the Guarantor enjoy the full benefit of the provisions of
this Agreement as an intended third party beneficiary; provided, however,
nothing in this Agreement, express or implied, shall give to any Person, other
than the parties to this Agreement and their successors hereunder, the Trustee,
the Certificateholders and the Guarantor, any benefit or legal or equitable
right, power, remedy or claim under this Agreement.
Section 2.09. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Seller and the Depositor have caused their
names to be signed hereto by their respective duly authorized officers as of the
date first above written.
XXXXXX BROTHERS HOLDINGS INC.,
as Seller
By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Senior Vice President
STRUCTURED ASSET SECURITIES
CORPORATION, as Purchaser
By: /s/ Xxxxx X. Xxxxxxx
----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
ACKNOWLEDGED BY:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION, as Trustee
By: /s/ Xxx Xxxxx
-----------------------------------------------
Name:
Title:
FEDERAL HOME LOAN MORTGAGE CORPORATION
as Guarantor
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Director, Securities Marketing Investors
SCHEDULE A
MORTGAGE LOAN SCHEDULE
EXHIBIT A
UNDERWRITING CRITERIA OF THE TRANSFEROR
Maintained in a separate closing binder at XxXxx Xxxxxx LLP
entitled "Underwriting Criteria"
