MORTGAGE LOAN DILIGENCE AGREEMENT (BAYVIEW FINANCIAL REVOLVING ASSET TRUST 2003-G, BAYVIEW FINANCIAL REVOLVING ASSET TRUST 2005-A and BAYVIEW FINANCIAL REVOLVING ASSET TRUST 2005-E)
(BAYVIEW
FINANCIAL REVOLVING ASSET TRUST 2003-G,
BAYVIEW
FINANCIAL REVOLVING ASSET TRUST 2005-A and
BAYVIEW
FINANCIAL REVOLVING ASSET TRUST 2005-E)
This
Mortgage Loan Diligence Agreement, dated November 1, 2006 (this “Agreement”), is
entered into by and between Bayview Financial, L.P., a Delaware limited
partnership (“Bayview” or the “Agent”), and Bayview Financial Securities
Company, LLC, a Delaware limited liability company (the
“Depositor”).
WITNESSETH:
WHEREAS,
the Depositor will acquire certain mortgage loans identified on Schedule I
hereto (the “Mortgage Loans”) pursuant to an assignment agreement dated as of
November 1, 2006, by and between Bayview Financial Property Trust II, as
assignor, and the Depositor, as assignee;
WHEREAS,
the Depositor intends to transfer the Mortgage Loans in a securitization
transaction pursuant to a pooling and servicing agreement dated as of November
1, 2006 (the “Pooling and Servicing Agreement”), among the Depositor, Xxxxx
Fargo Bank, N.A., as master servicer, and U.S. Bank National Association, as
trustee (the “Trustee”), and in connection with such sale will assign its rights
under this Agreement to the Trustee;
WHEREAS,
the Agent, by and through its officers, employees, agents, representatives
and
affiliates, has specialized expertise in conducting diligence reviews of pools
of mortgage loans;
WHEREAS,
the Depositor desires to avail itself, for the term of this Agreement, of the
expertise of the Agent in such area, by retaining the Agent to undertake a
review of the Mortgage Loans in order to determine compliance with certain
of
the applicable representations and warranties and requirements for delivery
of
documents;
WHEREAS,
the Agent is prepared to provide certain services for the benefit of the
Depositor in the manner and on the terms set forth herein, including undertaking
such review as it deems appropriate to ascertain the accuracy of the substance
of certain representations and warranties; and
WHEREAS,
the Agent will be obligated, as provided herein, to purchase any defective
Mortgage Loan tendered by the Trustee for purchase for a price generally equal
to the unpaid principal balance thereof, plus accrued interest thereon, plus
the
amount of any costs and damages incurred by the Trust Fund as a result of any
related violation of a predatory or abusive lending law, plus any additional
amounts specified in the Pooling and Servicing Agreement;
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
Capitalized terms used but not otherwise defined in this Agreement shall have
the meanings set forth in the mortgage loan purchase agreement dated as of
November 1, 2006 (the “Mortgage Loan Purchase Agreement”), between Bayview, as
seller, and the Depositor, as purchaser, or if not defined therein, as defined
in the Pooling and Servicing Agreement.
2. Appointment.
The
Depositor hereby appoints the Agent as the Depositor's agent to render the
diligence services described in Section 3 hereof.
3. Diligence
Services.
The
Agent shall undertake on behalf of the Depositor such review as it determines
is
appropriate in its reasonable judgment to ascertain, based upon a limited sample
of the Mortgage Loans or otherwise, (a) the accuracy of the substance of the
representations and warranties set forth in Subsections 6(a)-(z), (aa)-(kk)
and
(mm)-(nn) of the Mortgage Loan Purchase Agreement; provided,
however,
that
any such representation and warranty made to the knowledge of the “Seller” under
the Mortgage Loan Purchase Agreement shall be deemed to be made to the Agent’s
knowledge, and (b) the completeness of the Mortgage File, including the absence
of any material defect in the documents comprising such Mortgage File and the
delivery of each document required to be delivered as part of such Mortgage
File, each as provided in Section 4(b) of the Mortgage Loan Purchase Agreement
(the obligations set forth in (a) and (b) above, the “Covered Obligations”). Any
out-of-pocket expenses incurred by the Agent in the course of such review shall
be paid by the Agent from its own funds.
The
Depositor shall cooperate with the Agent to facilitate the prompt performance
by
the Agent of its obligations under this Section 3. The Agent may provide such
services as required by this Section 3 directly or may assign such duties to
one
or more subagents pursuant to submanagement agreements; provided,
however,
that
any such subagent shall have been approved by the Depositor; and provided,
further,
that
notwithstanding any such assignment, the Agent shall remain primarily liable
for
performing its duties and obligations under this Agreement.
4. Warranty
of Performance.
Within
90 days of receipt of notice by the Agent of a breach of any Covered Obligation
that materially and adversely affects the value of any Mortgage Loan or the
interest therein of the Depositor or the Depositor’s assignee, transferee or
designee, the Agent promptly shall cure such defect or breach in all material
respects, or in the event such defect or breach cannot be cured, the Agent
shall
either (i) repurchase the affected Mortgage Loan at the Purchase Price (as
such
term is defined in the Pooling and Servicing Agreement) or (ii) subject to
the
approval of the Depositor or the Depositor’s assignee, transferee or designee,
cause the removal of such Mortgage Loan from the Trust Fund and substitute
one
or more Qualified Substitute Mortgage Loans. Notwithstanding the preceding
sentence, if a breach of representation or warranty cannot reasonably be cured
within 90 days after written notice thereof, and the Agent shall have commenced
to cure such breach within such 90 day period and thereafter diligently and
expeditiously proceeds to cure the same, such 90 day period shall be extended
for so long as it shall require the Agent in the exercise of due diligence
to
cure such breach, it being agreed that no such extension shall be for a period
in excess of the lesser of 90 days or the period of time during which the seller
or the depositor is required to cure a defect or breach or repurchase an
affected Mortgage Loan pursuant to any sale and/or securitization agreement
or
arrangement it may enter into. The Agent shall indemnify the Trustee and the
Trust Fund for the amount of any costs and damages incurred by the Trust Fund
as
a result of any violation of any predatory or abusive lending law arising from
or in connection with the origination of such affected Mortgage Loan, to the
extent that such costs or damages are not covered by the applicable Purchase
Price and result in a reduction of amounts distributable on the
Certificates.
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5. Agent
Compensation.
As
compensation for its services, the Agent will be entitled to payment of a fee
equal to $75,000.
6. Limitation
of Responsibility of the Agent.
The
Agent shall have no responsibility under this Agreement other than to render
the
services called for hereunder and fulfill its obligations hereunder. The Agent,
its affiliates, directors, officers and employees shall not be liable in any
respect other than to the extent of the remedies provided in this Agreement
to
the Depositor, the Trustee, the Certificateholders or others, except by reason
of acts constituting bad faith, willful misfeasance or negligence in the
discharge of their duties.
7. Additional
Obligations of Agent.
Unless
otherwise specifically required by any provision of the Pooling and Servicing
Agreement or this Agreement or by applicable law, the Agent shall use all
reasonable efforts to ensure that no action is taken by it would materially
adversely affect the Depositor for purposes of United States federal or state
law or any other law known to the Agent to be applicable to the Depositor.
The
Agent covenants that it shall comply in all material respects with all laws
and
regulations applicable to it in connection with the performance of its duties
under this Agreement.
8.
No
Partnership or Joint Venture.
The
Depositor and the Agent are not partners or joint venturers with each other
and
nothing herein shall be construed to make them such partners or joint venturers
or impose any liability as such on either of them. The Agent shall be, for
all
purposes herein, deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Depositor from time
to
time, have no authority to act for or represent the Depositor in any way or
otherwise be deemed an agent of the Depositor.
9. Term.
This
Agreement shall continue in effect until the discharge of the obligations of
the
Depositor under the Pooling and Servicing Agreement.
10. [Reserved]
11. Termination.
This
Agreement may be terminated upon 30 days’ notice by either party hereto to the
other party. Upon such termination, the Agent shall as promptly as
practicable:
(a) Deliver
to the Depositor or its assignee or designee all property and documents of
the
Depositor or otherwise relating to the Mortgage Loans then in the custody of
the
Agent; and
(b) Deliver
to the Trustee an accounting with respect to the books and records delivered
to
the Depositor.
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Notwithstanding
such termination, (i) the Agent shall remain liable for its obligations under
Section 4 hereof and its acts or omissions giving rise thereto and for any
expenses, losses, damages, liabilities, demands, charges and claims of any
nature whatsoever (including reasonably attorneys' fees) in respect of or
arising out of a breach of the representations and warranties made by the Agent
in Sections 4 and 13 hereof or from any failure of the Agent to comply with
the
provisions of this Section 11 and (ii) the Depositor shall remain liable for
its
obligations under Section 6 hereof.
12. Additional
Activities of the Agent.
Nothing
herein shall prevent the Agent or any of its Affiliates from engaging in other
businesses, or from rendering services of any kind to the Depositor and its
Affiliates, the Trustee, the Certificateholders or any other Person or entity.
Without limiting the generality of the foregoing, the Agent, its Affiliates,
and
the directors, officers, employees and agents of the Agent and its Affiliates
may:
(a) serve
as
officers, employees, co-trustees, agents, nominees or signatories for the
Depositor or its Affiliates; and
(b) be
retained to provide services unrelated to this Agreement to the Depositor or
its
Affiliates and be paid therefor.
It
is
understood that the Agent and any of its Affiliates may engage in any other
business and furnish management and advisory services to others, including
Persons that may have investment policies similar to those followed by the
Agent
with respect to the Depositor. The Agent shall be free in its sole discretion
to
make recommendations to others, or effect transactions on behalf of itself
or
for others, which may be the same as, or different from, those effected with
respect to the Depositor.
13. Representations
and Warranties.
The
Agent hereby represents and warrants to the Depositor as follows:
(a) The
Agent
is a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full power and authority (i)
to
own its assets and to transact the business in which it is currently engaged
and
(ii) to execute and deliver this Agreement and perform its obligations under
this Agreement. The Agent is in good standing under the laws of each
jurisdiction in which its ownership or lease of property or the conduct of
its
business requires, or the performance of this Agreement would require, such
qualification, except for those jurisdictions in which the failure to be so
qualified, authorized or licensed would not have a material adverse effect
on
the business, operations, assets or financial condition of the Agent or on
the
ability of the Agent to perform its obligations hereunder, or on the validity
or
enforceability of this Agreement.
(b) The
Agent
has the necessary power and authority to execute, deliver and perform this
Agreement and all obligations required hereunder and has taken all necessary
corporate action to authorize this Agreement on the terms and conditions hereof
and the execution, delivery and performance of this Agreement and all
obligations required hereunder. No consent of any other person, including,
without limitation, creditors and depositors of the Agent, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is required
by the Agent in connection with this Agreement or the execution, delivery,
performance, validity or enforceability of this Agreement or the obligations
required hereunder. Each of this Agreement and any instrument and document
required hereunder has been delivered by a duly authorized officer of the Agent,
and each of this Agreement and any instrument and document required hereunder
constitutes the valid and legally binding obligation of the Agent enforceable
against the Agent in accordance with its terms, subject, as to enforcement,
to
(a) the effect of bankruptcy, insolvency or similar laws affecting generally
the
enforcement of creditors’ rights, as such laws would apply in the event of any
bankruptcy, receivership, insolvency or similar event applicable to the Agent
and (b) general equitable principles (whether enforceability of such principles
is considered in a proceeding at law or in equity).
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(c) The
execution, delivery and performance of this Agreement and the documents and
instruments required hereunder will not violate any provision of any existing
law or regulation binding the Agent, or any order, judgment, award or decree
of
any court, arbitrator or governmental authority binding on the Agent, or the
governing instruments of, or any securities issued by, the Agent or of any
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which the Agent is a party or by which the Agent or any of its
assets may be bound, the violation of which would have a material adverse effect
on the business operations, assets or financial condition of the Agent or any
of
its subsidiaries, and will not result in, or require the creation or imposition
of, any lien on any of its property, assets or revenues pursuant to the
provisions of any such mortgage, indenture, lease, contract or other agreement,
instrument or undertaking.
(d) No
authorization, consent, approval, license, exemption or other action by or
notice to or registration or filing with any governmental authority or
administrative or regulatory body is required for either the execution, delivery
or performance of this Agreement by the Agent or the consummation of the
transactions contemplated hereby, except such as shall have been made or
obtained on or prior to the Closing Date.
(e) There
is
no charge, investigation, action, suit or proceeding before or by any court
pending, or to the best knowledge of the Agent threatened, that, if determined
adversely to the Agent, would have a material adverse effect upon the
performance by the Agent of its duties under this Agreement.
(f) The
Agent
is not in default with respect to any order or decree of any court, regulation
or demand of any federal, state, municipal or governmental agency, which default
would materially and adversely affect the condition (financial or other) or
operations of the Agent or its properties or the consequences of which would
have a material adverse effect on the Agent’s ability to perform its obligations
under this Agreement.
14. Records;
Confidentiality.
The
Agent will maintain appropriate books of accounts and records relating to
services performed hereunder, and such books of account and records shall be
accessible for inspection by a representative of the Depositor, the Trustee,
the
Certificateholders and any independent accountants appointed by the Depositor
at
any time during the Agent’s normal business hours and upon not less than three
Business Days’ prior notice. The Agent shall keep confidential any and all
information obtained in connection with the services rendered hereunder and
shall not disclose any such information to non-affiliated third parties except
(i) with the prior written consent of the Depositor (which consent shall not
be
unreasonably withheld), (ii) such information as a Rating Agency shall
reasonably request in connection with the rating of the Certificates, (iii)
as
required under any applicable law or regulation, governing instrument or court
order or by the rules or regulations of any self-regulating organization, body
or official having jurisdiction over the Agent or as otherwise required by
law
or by regulatory or judicial process, (iv) to its professional advisors or
(v)
such information as shall have been publicly disclosed other than in violation
of this Agreement. For purposes of this Section 14, the Noteholders shall in
no
event be considered “non-affiliated third parties.”
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15. Trustee
as Beneficiary.
The
Trustee shall be an intended third-party beneficiary of this Agreement and
the
Trustee shall be entitled to enforce the rights of the Depositor hereunder
for
the benefit of the Certificateholders.
16. Assignment.
The
Agent may not assign its rights or delegate its duties under this Agreement
(other than (i) the delegation of the duties under this Agreement to one or
more
subagents approved by the Depositor or (ii) to a partnership, corporation or
other organization that is a successor by merger, consolidation or purchase
of
substantially all of the assets of the Agent) unless such assignment is
consented to in writing by both the Depositor and the Trustee. Notwithstanding
the foregoing, no delegation of the duties of the Agent under Section 4 hereof
may be made unless the Depositor and the Trustee have received a letter from
each Rating Agency to the effect that such delegation will not result in the
qualification, withdrawal or downgrade of the ratings assigned to any
outstanding Certificates issued under the Pooling and Servicing Agreement.
Such
an assignment or delegation, if so consented to, shall bind the assignee
hereunder in the same manner as the Agent is bound hereunder. This Agreement
shall not be assignable by the Depositor without the consent of the Agent,
except for assignment to the Trust Fund pursuant to the Pooling and Servicing
Agreement or assignment to a corporation or other organization that is a
successor by merger, consolidation or purchase of substantially all of the
assets to the Depositor, in which case such successor organization shall be
bound hereunder and by the terms of said assignment in the same manner as the
Depositor is bound hereunder. The Trustee shall succeed to the rights, but
not
the obligations, of the Depositor hereunder, and shall be entitled to enforce
such rights as if it were itself the Depositor.
17. Headings.
The
section headings hereof have been inserted for convenience and reference only
and shall not be construed to affect the meaning, construction or effect of
this
Agreement.
18. Amendments.
This
Agreement may not be amended, changed, modified or terminated except in writing
signed by the Agent and the Depositor and approved by the Trustee, such approval
not to be unreasonably withheld.
19. Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER
THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
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20. Notices.
All
notices, requests and other communications permitted or required hereunder
shall
be in writing and shall be deemed to have been duly given when
received.
If
to the
Agent, to:
Bayview
Financial, L.P.
0000
Xxxxx xx Xxxx Xxxxxxxxx, 0xx
Xxxxx
Xxxxx
Xxxxxx, Xxxxxxx 00000
Attn:
Xxxxxx Xxxxxx, Senior Vice President
If
to the
Depositor, to:
Bayview
Financial Securities Company, LLC
0000
Xxxxx Xx Xxxx Xxxxxxxxx, 0xx
Xxxxx
Xxxxx
Xxxxxx, Xxxxxxx 00000
or
to
such other address as either party may designate by notice to the other party
hereto, which shall be effective when received.
21. Counterparts.
This
Agreement may be executed in one or more counterparts, any of which shall
constitute an original as against any party whose signature appears on it,
and
all of which shall together constitute a single instrument. This Agreement
shall
become binding when one or more counterparts, individually or taken together,
bear the signatures of all parties.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the
day first above written.
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BAYVIEW
FINANCIAL, L.P.
By:
BAYVIEW FINANCIAL MANAGEMENT CORP.,
its
General Partner
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| By: | /s/ Xxxxx Xxxxxxxxxx | |
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Name: Xxxxx
Xxxxxxxxxx
Title: First
Vice President
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BAYVIEW
FINANCIAL SECURITIES COMPANY, LLC
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| By: | /s/ Xxxxx Xxxxxxxxxx | |
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Name: Xxxxx
Xxxxxxxxxx
Title: Vice
President
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SCHEDULE
I
Mortgage
Loan Schedule
2
