MORTGAGE LOAN PURCHASE AGREEMENT
This
is a
Mortgage Loan Purchase Agreement (the “Agreement”), dated February 24, 2006,
between Long Beach Securities Corp., a Delaware corporation (the “Purchaser”)
and Long Beach Mortgage Company, a Delaware corporation (the
“Seller”).
Preliminary
Statement
The
Seller intends to sell certain mortgage loans and the swap agreement to the
Purchaser on the terms and subject to the conditions set forth in this
Agreement. The Purchaser intends to deposit the mortgage loans and the swap
agreement into a mortgage pool constituting the trust fund. The trust fund
will
issue asset backed certificates designated as Long Beach Mortgage Loan Trust
2006-2 Asset-Backed Certificates, Series 2006-2 (the “Certificates”). The
Certificates will consist of twenty-one classes of certificates. The
Certificates will be issued pursuant to a Pooling and Servicing Agreement,
dated
as of March 1, 2006 (the “Pooling and Servicing Agreement”), among the
Purchaser, as depositor, Deutsche Bank National Trust Company, as trustee (the
“Trustee”) and the Seller, as master servicer (in such capacity, the “Master
Servicer”). 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
March 7, 2006 (the “Closing Date”), certain fixed-rate and adjustable-rate
residential mortgage loans (the “Mortgage Loans”) and a swap
agreement,
dated
March 7, 2006 between Washington Mutual Bank and Bank of America, N.A. (the
“Counterparty”) as set forth on Schedule
A
attached
hereto (the “Trust Swap Agreement”). The Trust Swap Agreement will be novated to
the Seller pursuant to a novation dated as of March 7, 2006, among the
Counterparty, WMB and the Seller. The Trust Swap Agreement will be novated
to
the Purchaser pursuant to a novation dated as of March 7, 2006, among the
Counterparty, the Seller and the Purchaser.
| SECTION 2. |
Mortgage
Loan Schedule.
|
The
Purchaser and the Seller have agreed upon which of the mortgage loans owned
by
the Seller are to be purchased by the Purchaser pursuant to this Agreement
on
the Closing Date and the Seller shall 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. The Closing Schedule shall conform to the
requirements set forth in this Agreement and to the definition of “Mortgage Loan
Schedule” under the Pooling and Servicing Agreement. The Closing Schedule shall
be the Mortgage Loan Schedule under the Pooling and Servicing
Agreement.
| SECTION 3. |
Consideration.
|
In
consideration for the Mortgage Loans and the Trust Swap Agreement to be
purchased hereunder, the Purchaser shall on the Closing Date, as described
in
Section 8 hereof, (i) pay to or upon the order of the Seller in immediately
available funds an amount (the “Purchase Price”) equal to the proceeds of the
Class A Certificates and the Mezzanine Certificates, net of the aggregate amount
of the underwriting commissions and discounts applicable to such certificates
and the purchase price of the Class B Certificates; and (ii) deliver to the
Seller or Long Beach Asset Holdings Corp., upon the order of the Seller, the
Class C Certificates, the Class P Certificates, the Class R Certificates,
the Class R-CX Certificates and the Class R-PX Certificates (the “Long
Beach Certificates”).
The
Purchaser or any assignee, transferee or designee of the Purchaser shall be
entitled to (i) all scheduled payments of principal due after March 1, 2006
(the “Cut-off Date”), (ii) all unscheduled collections in respect of the
Mortgage Loans received after the Cut-off Date (other than the portion of such
collections due on or prior to the Cut-off Date), (iii) all other payments
of
principal due and collected after the Cut-off Date, and (iv) all payments of
interest on the Mortgage Loans due 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 belong to the Seller.
Pursuant
to the Pooling and Servicing Agreement, the Purchaser will transfer, assign,
set
over and otherwise convey to the Trustee without recourse for the benefit of
the
Certificateholders, all the right, title and interest of the Purchaser in and
to
the Mortgage Loans and the Trust Swap Agreement, together with its rights under
this Agreement (other than Section 17 hereof).
| SECTION 4. |
Transfer
of the Mortgage Loans and the Trust Swap Agreement.
|
(a) Possession
of Mortgage Files.
The
Seller does hereby sell, transfer, assign, set over and convey to the Purchaser,
without recourse, but subject to the terms of this Agreement, all of its right,
title and interest in, to and under the Mortgage Loans and the Trust Swap
Agreement. The contents of each Mortgage File related to a Mortgage Loan 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 and promptly transferred to the Trustee. Upon the sale of
the
Mortgage Loans, the ownership of each related Mortgage Note, the related
Mortgage and the other contents of the related Mortgage File shall be 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 promptly to the Purchaser or as otherwise directed by the
Purchaser.
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(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, the Trustee or their designee each of the following documents
for
each Mortgage Loan:
(i) the
original Mortgage Note, endorsed in blank or in the following form: “Pay to the
order of Deutsche Bank National Trust Company, as Trustee, under the applicable
agreement, without recourse,” with all prior and intervening endorsements,
showing a complete chain of endorsement from the originator to the Person so
endorsing to the Trustee or (in the case of not more than 1.00% of the Mortgage
Loans, by aggregate principal balance as of the Cut-off Date) a copy of such
original Mortgage Note with an accompanying Lost Note Affidavit executed by
the
Seller;
(ii) the
original Mortgage, noting the presence of the MIN of the Mortgage Loan and
language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan
is
a MOM loan, with evidence of recording thereon, and a copy, certified by the
appropriate recording office, of the recorded power of attorney, if the Mortgage
was executed pursuant to a power of attorney, with evidence of recording
thereon;
(iii) unless
the Mortgage Loan is registered on the MERS® System, an original Assignment in
blank;
(iv) the
original recorded Assignment or Assignments showing a complete chain of
assignment from the originator to the Person assigning the Mortgage to the
Trustee or in blank (or to MERS, if the Mortgage Loan is registered on the
MERS®
System and noting the presence of the MIN) as contemplated by the immediately
preceding clause (iii);
(v) the
original or copies of each assumption, modification, written assurance or
substitution agreement, if any; and
(vi) the
original lender’s title insurance policy, together with all endorsements or
riders issued with or subsequent to the issuance of such policy, insuring the
priority of the Mortgage as a first lien on the Mortgaged Property represented
therein as a fee interest vested in the Mortgagor, or in the event such title
policy is unavailable, a written commitment or uniform binder or preliminary
report of the title issued by the title insurance or escrow
company.
Except
with respect to any Mortgage Loan for which MERS is identified on the Mortgage
or on a properly recorded assignment of the Mortgage as the mortgagee of record,
the Seller shall promptly (and in no event later than thirty (30) Business
Days,
subject to extension upon a mutual agreement between the Seller and the
Purchaser) following the later of the Closing Date and the date of receipt
by
the Seller of the recording information for a Mortgage submit or cause to be
submitted for recording, at no expense to the Purchaser, in the appropriate
public office for real property records, each Assignment referred to in (iii)
and (iv) above and shall execute each original Assignment referred to in clause
(iii) above in the following form: “Deutsche Bank National Trust Company, as
Trustee under the applicable agreement, without recourse.” 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, the
Assignments referred to in (iii) and (iv) above shall not be required to be
completed and submitted for recording with respect to any Mortgage Loan if
each
Rating Agency does not require recordation for such Rating Agency to assign
the
initial ratings to the Class A Certificates, the Mezzanine Certificates,
the Class B Certificates and the Other NIM Notes and initial shadow rating
to
the Insured NIM Notes, without giving effect to any insurance policy issued
by
the NIMS Insurer; provided, however, each such Assignment referred to in (iii)
and (iv) above shall be submitted for recording by the Seller, in the manner
described above, at no expense to the Purchaser, Trust Fund or the Trustee,
upon
the earliest to occur of: (i) reasonable direction by Holders of Certificates
entitled to at least 25% of the Voting Rights, (ii) the occurrence of a Master
Servicer Event of Default, (iii) the occurrence of a bankruptcy, insolvency
or
foreclosure relating to the Seller, (iv) the occurrence of a servicing transfer
as described in Section 7.02 of the Pooling and Servicing Agreement and (v)
if
the Seller is not the Master Servicer and with respect to any one Assignment,
the occurrence of a bankruptcy, insolvency or foreclosure relating to the
Mortgagor under the related Mortgage.
3
In
connection with the assignment of any Mortgage Loan registered on the MERS®
System, the Seller further agrees that it shall cause, within 30 Business Days
after the Closing Date, the MERS® System to indicate that such Mortgage Loans
have been assigned by the Purchaser to the Trustee in accordance with the
Pooling and Servicing Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased
in
accordance with this Agreement) in such computer files (a) the code in the
field
which identifies the specific Trustee and (b) the code in the field “Pool Field”
which identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Seller further agrees that it shall not, and shall not
permit the Master Servicer to alter the codes referenced in this paragraph
with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this Agreement
and the Pooling and Servicing Agreement.
If
any
document referred to in Section 4(b)(ii), Section 4(b)(iii), Section 4(b)(iv),
or Section 4(b)(v) above (collectively, the “Recording Documents”) has as of the
Closing Date been submitted for recording but either (x) has not been returned
from the applicable public recording office or (y) has been lost or such public
recording office has retained the original of such document, the obligations
of
the Seller to deliver such Recording Documents shall be deemed to be satisfied
upon (1) delivery to the Purchaser, the Trustee or their designee of a copy
of
each such Recording Document certified by the Seller in the case of (x) above
or
the applicable public recording office in the case of (y) above to be a true
and
complete copy of the original that was submitted for recording and (2) if such
copy is certified by the Seller, delivery to the Purchaser, the Trustee or
their
designee upon receipt thereof, and in any event no later than one year after
the
Closing Date (except as provided below), of either the original or a copy of
such Recording Document certified by the applicable public recording office
to
be a true and complete copy of the original. In instances where, due to a delay
on the part of the applicable recording office where any such Recording
Documents have been delivered for recordation, the Recording Documents cannot
be
delivered to the Purchaser, the Trustee or their designee within one year after
the Closing Date, the Seller shall deliver to the Purchaser, the Trustee or
their designee within such time period an Officer’s Certificate stating the date
by which the Seller expects to receive such Recording Documents from the
applicable recording office. If the Recording Documents have still not been
received by the Seller and delivered to the Purchaser, the Trustee or their
designee by such date, the Seller shall deliver to the Purchaser, the Trustee
or
their designee by such date an additional Officer’s Certificate stating a
revised date by which Seller expects to receive the applicable Recording
Documents. This procedure shall be repeated until the Recording Documents have
been received by the Seller and delivered to the Purchaser, the Trustee or
their
designee. If the original or copy of the lender’s title insurance policy was not
delivered pursuant to Section 4(b)(vi) above, the Seller shall deliver or cause
to be delivered to the Purchaser, the Trustee or their designee promptly after
receipt thereof, and in any event within 120 days after the Closing Date such
title insurance policy. The Seller shall deliver or cause to be delivered to
the
Purchaser, the Trustee or their designee 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
Each
original document relating to a Mortgage Loan which is not delivered to the
Purchaser, the Trustee or their designee, if held by the Seller, shall be so
held for the benefit of the Purchaser, the Trustee or their designees. In the
event that any such original document is required pursuant to the terms of
this
Section to be a part of a Mortgage File, such document shall be delivered
promptly to the Purchaser, the Trustee or their designee. Any such original
document that is not required pursuant to the terms of this Section to be a
part
of a Mortgage File shall be held by the Seller in its capacity as Master
Servicer.
(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, on and 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 (other
than
Section 17 hereof), 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, and the Trustee shall succeed to the rights and obligations
hereunder of the Purchaser. Any expense reasonably incurred by or on behalf
of
the Purchaser, the Trustee, or the NIMS Insurer, if any, in connection with
enforcing any obligations of the Seller under this Agreement will be promptly
reimbursed by the Seller.
(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 at any time before or after the
Closing Date. If any such person makes such examination prior to the Closing
Date and identifies any Mortgage Loans with respect to which the Seller’s
representations and warranties contained in this Agreement are not correct,
such
Mortgage Loans shall be deleted from the Mortgage Loan 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 related 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 Seller.
|
The
Seller hereby represents and warrants and covenants to the Purchaser, as of
the
date hereof and as of the Closing Date:
(i) The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement to be conducted
by
the Seller in any state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such state, to
the
extent necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of the Pooling and
Servicing Agreement;
(ii) The
Seller had the full corporate power and authority to originate, hold and sell
each Mortgage Loan and has the full corporate power and authority to service
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the Purchaser,
constitutes a legal, valid and binding obligation of the Seller, enforceable
against the Seller in accordance with its terms, except to the extent that
the
enforceability thereof may be limited by (a) bankruptcy, insolvency, moratorium,
receivership, conservatorship, arrangement, moratorium and other similar laws
relating to creditors’ rights generally and (b) the general principles of
equity, whether such enforcement is sought in equity or at law;
(iii) The
execution and delivery of this Agreement by the Seller, the servicing of the
Mortgage Loans by the Seller under the Pooling and Servicing Agreement, the
consummation of any other of the transactions herein contemplated, and the
fulfillment of or compliance with the terms hereof are in the ordinary course
of
business of the Seller and does not (A) result in a breach of any term or
provision of the charter or by-laws of the Seller, (B) conflict with, result
in
a breach, violation or acceleration of, or result in a default under, the terms
of any other material agreement, instrument or indenture to which the Seller
is
a party or by which it may be bound, or any statute, order or regulation
applicable to the Seller of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over the Seller or any of its property
or
(C) 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; and the
Seller is not a party to, bound by, or in breach or violation of any indenture
or other agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and adversely
affects or, to the Seller’s knowledge, would in the future 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 or materially and adversely affect
(x)
the ability of the Seller to perform its obligations under this Agreement or
the
Pooling and Servicing Agreement or (y) the business, operations, financial
condition, properties or assets of the Seller taken as a whole;
6
(iv) No
consent, approval, authorization, or order of, any court or governmental agency
or body is required for the execution, delivery and performance by the Seller
of, or compliance by the Seller with, this Agreement or the consummation of
the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Seller has obtained the
same;
(v) The
Seller is an approved seller/servicer for Xxxxxx Xxx or Xxxxxxx Mac in good
standing and is a HUD approved mortgagee pursuant to Section 203 and Section
211
of the National Housing Act;
(vi) No
litigation or proceeding is pending or, to
the best
knowledge of the Seller,
threatened, against the Seller that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the Pooling and
Servicing Agreement or the issuance of the Certificates or the ability of the
Seller to service the Mortgage Loans or to perform any of its other obligations
hereunder in accordance with the terms hereof and the terms of the Pooling
and
Servicing Agreement or, that would result in a material adverse change in the
financial or operating conditions of the Seller;
(vii) No
certificate of an officer, statement or other information furnished in writing
or report delivered by the Seller to the Purchaser, any Affiliate of the
Purchaser or the Trustee for use in connection with the purchase of the Mortgage
Loans and the transactions contemplated hereunder and under the Pooling and
Servicing Agreement contains any untrue statement of a material fact, or omits
a
material fact necessary to make the information, certificate, statement or
report not misleading in any material respect;
(viii) 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;
7
(ix) Each
Mortgage Note, each Mortgage, each Assignment and any other document required
to
be delivered by or on behalf of the Seller under this Agreement or the Pooling
and Servicing Agreement to the Purchaser or any assignee, transferee or designee
of the Purchaser for each Mortgage Loan has been or will be, in accordance
with
Section 4(b) hereof, delivered to the Purchaser or any such assignee, transferee
or designee. With respect to each Mortgage Loan, the Seller is in possession
of
a complete Mortgage File in compliance with the Pooling and Servicing Agreement,
except for such documents that have been delivered (1) to the Purchaser or
any
assignee, transferee or designee of the Purchaser or (2) for recording to the
appropriate public recording office and have not yet been returned;
(x) The
Seller (A) is a solvent entity and is paying its debts as they become due,
(B)
immediately after giving effect to the transfer of the Mortgage Loans, will
be a
solvent entity and will have sufficient resources to pay its debts as they
become due and (C) did not sell the Mortgage Loans to the Purchaser with the
intent to hinder, delay or defraud any of its creditors; and
(xi) The
transfer of the Mortgage Loans to the Purchaser at the Closing Date will be
treated by the Seller for financial accounting and reporting purposes as a
sale
of assets.
| SECTION 6. |
Representations
and Warranties of the Seller Relating to the Individual Mortgage
Loans.
|
The
Seller hereby represents and warrants to the Purchaser, that as of the Closing
Date with respect to each Mortgage Loan:
(i) The
information set forth on the Mortgage Loan Schedule with respect to each
Mortgage Loan is true and correct in all material respects as of the Cut-off
Date, unless another date is set forth on the Mortgage Loan
Schedule;
(ii) [reserved];
(iii) Each
Mortgage is a valid and enforceable first or second lien on the Mortgaged
Property, including all improvements thereon, subject only to (a) the lien
of
non-delinquent 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 which do not materially interfere
with the benefits of the security intended to be provided by such Mortgage,
(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 and (d) in the case of a second lien, only to a first lien
on
such Mortgaged Property;
8
(iv) Immediately
prior to the assignment of the Mortgage Loans to the Purchaser, the Seller
had
good title to, and was the sole legal and beneficial owner of, each Mortgage
Loan, free and clear of any pledge, lien, encumbrance or security interest
and
has full right and authority, subject to no interest or participation of, or
agreement with, any other party to sell and assign the same. The form of
endorsement of each Mortgage Note satisfied the requirement, if any, of
endorsement in order to transfer all right, title and interest of the party
so
endorsing, as noteholder or assignee thereof, in and to that Mortgage Note;
and
each Assignment to be delivered hereunder is in recordable form and is
sufficient to effect the assignment of and to transfer to the assignee
thereunder the benefits of the assignor, as mortgagee or assignee thereof,
under
each Mortgage to which that Assignment relates;
(v) To
the
best of the Seller’s knowledge, there is no delinquent tax or assessment lien
against any Mortgaged Property;
(vi) There
is
no valid offset, defense or counterclaim to any Mortgage Note (including any
obligation of the Mortgagor to pay the unpaid principal of or interest on such
Mortgage Note) or the Mortgage, nor will the operation of any of the terms
of
the Mortgage Note and the Mortgage, or the exercise of any right thereunder,
render 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;
(vii) To
the
best of the Seller’s knowledge, 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 the related Mortgage, except those
which are insured against by the title insurance policy referred to in (xi)
below;
(viii) To
the
best of the Seller’s knowledge, each Mortgaged Property is free of material
damage and is at least in average repair;
(ix) Each
Mortgage Loan at origination complied in all material respects with applicable
local, state and federal laws, including, without limitation, predatory and
abusive lending, 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 does not involve the violation of any such laws;
(x) Neither
the Seller nor any prior holder of any Mortgage has modified the Mortgage in
any
material respect, satisfied, canceled or subordinated such Mortgage in whole
or
in part; released the related Mortgaged Property in whole or in part from the
lien of such Mortgage; or executed any instrument of release, cancellation,
modification or satisfaction with respect thereto (except that a Mortgage Loan
may have been modified by a written instrument signed by the Seller or a prior
holder of the Mortgage Loan which has been recorded, if necessary, to protect
the interests of the Seller and the Purchaser and which has been delivered
to
the Purchaser or any assignee, transferee or designee of the Purchaser as part
of the Mortgage File, and the terms of which are reflected in the Mortgage
Loan
Schedule);
9
(xi) A
lender’s policy of title insurance together with a condominium endorsement and
extended coverage endorsement, if applicable, and, with respect to each
Adjustable Rate Mortgage Loan, an adjustable rate mortgage endorsement in an
amount at least equal to the balance of the Mortgage Loan as of the Cut-off
Date
or a commitment (binder) to issue the same was effective on the date of the
origination of each Mortgage Loan, each such policy is valid and remains in
full
force and effect, the transfer of the related Mortgage Loan to the Purchaser
and
the Trustee does not affect the validity or enforceability of such policy and
each such policy was issued by a title insurer qualified to do business in
the
jurisdiction where the Mortgaged Property is located and acceptable to Xxxxxx
Mae or Xxxxxxx Mac and in a form acceptable to Xxxxxx Mae or Xxxxxxx Mac on
the
date of origination of such Mortgage Loan, which policy insures the Seller
and
successor owners of indebtedness secured by the insured Mortgage, as to the
first or second, as the case may be, priority lien of the Mortgage; to the
best
of the Seller’s knowledge, no claims have been made under such mortgage title
insurance policy and no prior holder of the related Mortgage, including the
Seller, has done, by act or omission, anything which would impair the coverage
of such mortgage title insurance policy;
(xii) Each
Mortgage Loan was originated by, or generated on behalf of, the Seller, or
originated by a savings and loan association, savings bank, commercial bank,
credit union, insurance company or similar institution which is supervised
and
examined by a federal or state authority, or by a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211
of
the National Housing Act;
(xiii) With
respect to each Adjustable Rate Mortgage Loan, on each Adjustment Date, the
Mortgage Rate will be adjusted to equal the Index plus the Gross Margin, rounded
to the nearest 0.125%, subject to the Periodic Rate Cap, the Maximum Mortgage
Rate and the Minimum Mortgage Rate. The related Mortgage Note is payable on
the
first day of each month in self-amortizing monthly installments of principal
and
interest (unless such Mortgage Loan is a mortgage loan that requires the payment
of interest only with respect to some or all of the related monthly payments
as
indicated on the Mortgage Loan Schedule), with interest payable in arrears,
and
requires a Monthly Payment which is sufficient to fully amortize the outstanding
principal balance of the Mortgage Loan over its remaining term and to pay
interest at the applicable Mortgage Rate. No Mortgage Loan is subject to
negative amortization. All rate adjustments have been performed in accordance
with the terms of the related Mortgage Note or subsequent modifications, if
any;
10
(xiv) To
the
best of the Seller’s knowledge, all of the improvements which were included for
the purpose of determining the Value of the Mortgaged Property lie wholly within
the boundaries and building restriction lines of such property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property;
(xv) All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect
to
the use and occupancy of the same, including but not limited to certificates
of
occupancy, have been made or obtained from the appropriate authorities and
to
the best of the Seller’s knowledge, the Mortgaged Property is lawfully occupied
under applicable law;
(xvi) All
parties which have had any interest in the Mortgage, whether as mortgagee,
assignee, pledgee or otherwise, are (or, during the period in which they held
and disposed of such interest, were) in compliance with any and all applicable
licensing requirements of the laws of the state wherein the Mortgaged Property
is located;
(xvii) The
Mortgage Note and the related Mortgage are genuine, and each is the legal,
valid
and binding obligation of the Mortgagor enforceable against the Mortgagor by
the
mortgagee or its representative in accordance with its terms, except only as
such enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and by law. To the best of the Seller’s knowledge, all parties to the
Mortgage Note and the Mortgage had full legal capacity to execute all Mortgage
Loan documents and to convey the estate purported to be conveyed by the Mortgage
and each Mortgage Note and Mortgage have been duly and validly executed by
such
parties;
(xviii) The
proceeds of each Mortgage Loan have been fully disbursed, there is no
requirement for future advances thereunder and any and all requirements as
to
completion of any on-site or off-site improvements and as to disbursements
of
any escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making, closing or recording the Mortgage Loans were
paid;
(xix) The
related Mortgage contains customary and enforceable provisions which render
the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii)
otherwise by judicial foreclosure. There is no homestead or other exemption
available to the Mortgagor which would interfere with the right to sell the
Mortgaged Property at a trustee’s sale or the right to foreclose the
Mortgage;
(xx) With
respect to each Mortgage constituting a deed of trust, a trustee, duly qualified
under applicable law to serve as such, has been properly designated and
currently so serves and is named in such Mortgage, and no fees or expenses
are
or will become payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee’s sale after default by the
Mortgagor;
11
(xxi) There
exist no deficiencies with respect to escrow deposits and payments, if such
are
required, for which customary arrangements for repayment thereof have not been
made, and no escrow deposits or payments of other charges or payments due the
Seller have been capitalized under the Mortgage or the related Mortgage
Note;
(xxii) The
origination, underwriting and collection practices used by the Seller with
respect to each Mortgage Loan have been in all material respects legal, proper,
prudent and customary in the subprime mortgage servicing business. Each Mortgage
Loan is currently being serviced by Washington Mutual Bank;
(xxiii) There
is
no pledged account or other security other than real estate securing the
Mortgagor’s obligations;
(xxiv) No
Mortgage Loan has a shared appreciation feature, or other contingent interest
feature;
(xxv) [reserved];
(xxvi) 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 extended coverage and coverage of such other hazards as are customarily
covered by hazard insurance policies with extended coverage in the area where
the Mortgaged Property is located representing coverage not less than the lesser
of the outstanding principal balance of the related Mortgage Loan or the minimum
amount required to compensate for damage or loss on a replacement cost basis.
All individual insurance policies and flood policies referred to in this clause
(xxvi) and in clause (xxvii) below contain a standard mortgagee clause naming
the Seller or the original mortgagee, and its successors in interest, as
mortgagee, and the Seller has received no notice that any premiums due and
payable thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance, including flood 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;
(xxvii) If
the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as subject to special flood hazards, a
flood
insurance policy in a form meeting the requirements of the current guidelines
of
the Flood Insurance Administration is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the original outstanding principal balance of
the
Mortgage Loan, (B) the minimum amount required to compensate for damage or
loss
on a replacement cost basis or (C) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973;
12
(xxviii) There
is
no default, breach, violation or event of acceleration existing under the
Mortgage or the related Mortgage Note; and neither the Seller nor any other
entity involved in originating or servicing the Mortgage Loan has waived any
default, breach, violation or event of acceleration;
(xxix) Each
Mortgaged Property is improved by a one- to four-family residential dwelling,
including condominium units and dwelling units in planned unit developments,
which, to the best of the Seller’s knowledge, does not include cooperatives and
does not constitute property other than real property under state
law;
(xxx) There
is
no obligation on the part of the Seller or any other party under the terms
of
the Mortgage or related Mortgage Note to make payments in addition to those
made
by the Mortgagor;
(xxxi) Any
future advances made prior to the Cut-off Date have been consolidated with
the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term
reflected on the related Mortgage Loan Schedule. The consolidated principal
amount does not exceed the original principal amount of the Mortgage
Loan;
(xxxii) Each
Mortgage Loan was underwritten in accordance with the Seller’s underwriting
guidelines as described in the Prospectus Supplement as applicable to its credit
grade in all material respects (the “Underwriting Guidelines”);
(xxxiii) Each
appraisal of a Mortgage Loan that was used to determine the appraised value
of
the related Mortgaged Property was conducted generally in accordance with the
Seller’s Underwriting Guidelines, and included an assessment by the appraiser of
the fair market value of the related Mortgaged Property at the time of the
appraisal. The Mortgage File contains an appraisal of the applicable Mortgaged
Property;
(xxxiv) None
of
the Mortgage Loans is a graduated payment Mortgage Loan, nor is any Mortgage
Loan subject to a temporary buydown or similar arrangement;
(xxxv) There
are
no Mortgage Loans with respect to which the monthly payment due thereon in
January, 2006 had not been made, none of the Mortgage Loans has been
contractually delinquent for more than 30 days more than once during the
preceding twelve months and, no Mortgage Loan has ever experienced a delinquency
of 60 or more days since the origination thereof;
13
(xxxvi) Each
Mortgage contains a provision that is, to the extent not prohibited by federal
or state law, enforceable for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder;
(xxxvii) To
the
best of the Seller’s knowledge no misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of any person, including, without limitation, the Mortgagor, any appraiser,
any
builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
(xxxviii) Each
Mortgage Loan constitutes a “qualified mortgage” within the meaning of Section
860G(a)(3) of the Code;
(xxxix) The
information set forth in the Prepayment Charge Schedule is complete, true and
correct in all material respects at the date or dates respecting which such
information is furnished and each Prepayment Charge is permissible and
enforceable in accordance with its terms under applicable law upon the
Mortgagor’s voluntary Principal Prepayment (except to the extent that: (1) the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally; or
(2) the collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary prepayment). No Mortgage Loan originated
before October 1, 2002 has a Prepayment Charge for a term in excess of five
years from the date of its origination and no Mortgage Loan originated on or
after October 1, 2002 has a prepayment charge for a term in excess of three
years from the date of its origination;
(xl) The
Loan-to-Value Ratio for each Mortgage Loan was no greater than 100% at the
time
of origination;
(xli) The
first
date on which each Mortgagor must make a payment on the related Mortgage Note
is
no later than 60 days from the date of this Agreement;
(xlii) With
respect to each Mortgage Loan, the related Mortgagor shall not fail or has
not
failed to make the first monthly payment due under the terms of the Mortgage
Loan by the second succeeding Due Date after the Due Date on which such monthly
payment was due;
(xliii) The
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by
the Seller pursuant to this Agreement are not subject to the bulk transfer
or
any similar statutory provisions in effect in any relevant jurisdiction, except
any as may have been complied with;
14
(xliv) 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, the Seller has not advanced
funds, or induced, solicited or knowingly received any advance of funds by
a
party other than the Mortgagor, directly or indirectly, for the payment of
any
amount required by the Mortgage Note, except for interest accruing from the
date
of the Mortgage Note or 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;
(xlv) There
is
no proceeding pending, or to best of the Seller’s knowledge threatened, for the
total or partial condemnation of the Mortgaged Property or the taking by eminent
domain of any Mortgaged Property;
(xlvi) No
Mortgage Loan is subject to the requirements of the Home Ownership and Equity
Protection Act of 1994, as amended, or is a “high cost” or “predatory” loan
under any state or local law or regulation applicable to the originator of
such
Mortgage Loan or which would result in liability to the purchaser or assignee
of
such Mortgage Loan under any predatory or abusive lending law. In the event
that
Financial Security Assurance, Inc. becomes a NIMS Insurer, no Mortgage Loan
is a
“covered” loan under the laws of the states of California, Colorado or
Ohio;
(xlvii) No
proceeds from any Mortgage Loans were used to finance single-premium credit
insurance policies. No borrower was required to purchase any credit life,
disability, accident or health insurance product as a condition of obtaining
the
extension of credit. No borrower obtained a prepaid single-premium credit life,
disability, accident or health insurance policy in connection with the
origination of the Mortgage Loan;
(xlviii) The
Seller did not select the Mortgage Loans with the intent to adversely affect
the
interests of the Purchaser;
(xlix) The
Seller has not received any notice that any Mortgagor has filed for any
bankruptcy or similar legal protection since the date of the origination of
such
Mortgage Loan. Prior to the date of the origination of any Mortgage Loan, the
Seller did not receive any notice that any Mortgagor has filed for bankruptcy
or
similar legal protection except as permitted under the Underwriting
Guidelines;
(l) No
Group I Mortgage Loan is a “High-Cost Home Loan” as defined in the Georgia
Fair Lending Act, as amended (the “Georgia Act”), and no Mortgage Loan that was
originated on or after October 1, 2002 and before March 7, 2003, is
secured by a Mortgaged Property located in the State of Georgia;
15
(li) No
Group I Mortgage Loan is a “High Cost Home Loan” as defined in the Kentucky
high-cost loan statute effective June 24, 2003 (Ky. Rev. Stat. Section
360.100);
(lii) No
Group I Mortgage Loan is a “High Cost Home Loan” as defined in the New
Jersey Home Ownership Act effective November 27, 2003 (N.J.S.A. 46;
10B-22 et seq.);
(liii) No
Group I Mortgage Loan is a subsection 10 mortgage under the Oklahoma Home
Ownership and Equity Protection Act;
(liv) No
Group I Mortgage Loan is a “High-Cost Home Loan” as defined in New York
Banking Law 6-1;
(lv) No
Group I Mortgage Loan is a “High Cost Home Loan” as defined in the Arkansas
Home Loan Protection Act effective July 16, 2003 (Act 1340 of
2003);
(lvi) No
Group I Mortgage Loan is a “High-Cost Home Loan” as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Am.
§§ 58-21A-1 et seq.);
(lvii) [reserved];
(lviii) Each
Group I Mortgage Loan was originated in compliance with the following
anti-predatory lending guidelines:
a. Each
Group I Mortgage Loan satisfies the eligibility for purchase requirements and
was originated in compliance with Lender Letter # LL03-00 dated April 11, 2000
for Xxxxxx Xxx Xxxxxxx (the “Lender Letter”);
b. No
borrower was encouraged or required by the Seller to select a Group I Mortgage
Loan product offered by the Group I Mortgage Loan’s originator which is a higher
cost product designed for less creditworthy borrowers, unless at the time of
the
Group I Mortgage Loan’s origination, such borrower did not qualify taking into
account credit history and debt-to-income ratios for a lower-cost credit product
then offered by the Group I Mortgage Loan’s originator or any affiliate of the
Group I Mortgage Loan’s originator;
c. The
methodology used in underwriting the extension of credit for each Group I
Mortgage Loan employs objective mathematical principles which relate the
borrower’s income, assets and liabilities to the proposed payment and such
underwriting methodology does not rely on the extent of the borrower’s equity in
the collateral as the principal determining factor in approving such credit
extension. Such underwriting methodology provided reasonable assurance that
at
the time of origination (application/approval) the borrower had a reasonable
ability to make timely payments on the Group I Mortgage Loan;
16
d. With
respect to any Group I Mortgage Loan that contains a provision permitting
imposition of a premium upon a prepayment prior to maturity, (i) the Seller’s
pricing methods include mortgage loans with and without prepayment premiums;
borrowers selecting Group I Mortgage Loans which include such prepayment
premiums receive a monetary benefit, including but not limited to a rate or
fee
reduction, in exchange for selecting a Group I Mortgage Loan with a prepayment
premium, (ii) prior to the Group I Mortgage Loan’s origination, the borrower had
the opportunity to choose between an array of mortgage loan products which
included mortgage loan products with prepayment premiums and mortgage loan
products that did not require payment of such a premium, (iii) the prepayment
premium is disclosed to the borrower in the loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or federal
law to the contrary, the Master Servicer shall not impose such prepayment
premium in any instance when the mortgage debt is accelerated as the result
of
the borrower’s default in making the loan payments;
e. All
points and fees related to each Group I Mortgage Loan were disclosed in writing
to the borrower in accordance with applicable state and federal law. Except
in
the case of a Group I Mortgage Loan in an original principal amount of less
than
$60,000 which would have resulted in an unprofitable origination, no borrower
was charged “points and fees” (whether or not financed) in an amount greater
than 5% of the principal amount of such loan, such 5% limitation calculated
in
accordance with the Lender Letter;
f. All
fees
and charges (including finance charges) and whether or not financed, assessed,
collected or to be collected in connection with the origination and servicing
of
each Group I Mortgage Loan have been disclosed in writing to the borrower in
accordance with applicable state and federal law and regulation;
(lix) No
Group
I Mortgage Loan had a principal balance at origination in excess of Xxxxxx
Mae’s
conforming loan balance limitations for single family loans set forth in the
Xxxxxx Xxx Charter Act and the Xxxxxx Mae Selling Guide in effect at the time
of
such Group I Mortgage Loan's origination;
(lx) With
respect to each Group I Mortgage Loan, information regarding the borrower credit
file related to such Mortgage Loan has been furnished to credit reporting
agencies in compliance with the provisions of the Fair Credit Reporting Act
and
the applicable implementing regulations;
(lxi) No
Mortgage Loan is a “High Cost Loan” or “Covered Loan” (as such terms are defined
in the Standard & Poor’s LEVELS® Glossary in effect on the Closing Date
which is now Version 5.6d Revised, Exhibit E, applicable portions of which
are
attached hereto as Exhibit A) and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia
Act;
17
(lxii) No
Group I Mortgage Loan is a “High Cost Home Mortgage Loan” as defined in the
Massachusetts Predatory Home Loan Practices Act effective November 7, 2004
(Mass. Xxx. Laws ch. 183C);
(lxiii) No
Group I Mortgage Loan is a “High Cost Home Loan” as defined in the Indiana
Home Loan Practices Act effective January 1, 2005 (Ind. Code Xxx.
§§ 24-9-1 through 24-9-9); and
(lxiv) With
respect to any Group I Mortgage Loan originated on or after August 1, 2004,
neither the related Mortgage nor the related Mortgage Note requires the
Mortgagor to submit to arbitration to resolve any dispute arising out of or
relating in any way to the Mortgage Loan transaction.
| SECTION 7. |
Repurchase
Obligation for Defective Documentation and for Breach of Representation
and Warranty.
|
(a) The
representations and warranties contained in Section 5(ix) and Section 6 shall
not be impaired by any review and examination of loan files or other documents
evidencing or relating to the Mortgage Loans 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 asset-backed certificates evidencing
an interest in all or a portion of the Mortgage Loans. With respect to the
representations and warranties contained herein which are made to the knowledge
or the best of knowledge of the Seller, or as to which the Seller has no
knowledge, if it is discovered that the substance of any such representation
and
warranty was inaccurate as of the date such representation and warranty was
made
or deemed to be made, and such inaccuracy materially and adversely affects
the
value of the related Mortgage Loan or the interest therein of the Purchaser
or
the Purchaser’s assignee, transferee or designee, then notwithstanding the lack
of knowledge by the Seller with respect to the substance of such representation
and warranty being inaccurate at the time the representation and warranty was
made, the Seller shall take such action described in the following paragraph
in
respect of such Mortgage Loan.
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 the Seller (as listed on the Trustee’s initial
certification), as part of any Mortgage File or of a breach of any of the
representations and warranties contained in Section 5 or Section 6 that
materially and adversely affects the value of any Mortgage Loan or the interest
of the Purchaser or the Purchaser’s assignee, transferee or designee (it being
understood that with respect to the representations and warranties set forth
in
the last sentence of (xxxix), (xlvi), the first sentence of (xlvii), (lxi)
and
(lxiv) of Section 6 herein, a breach of any such representation or warranty
shall in and of itself be deemed to materially and adversely affect the interest
therein of the Purchaser and the Purchaser’s assignee, transferee or designee)
in any Mortgage Loan, the party discovering the breach shall give prompt written
notice to the others. Within ninety (90) days of the earlier of the discovery
or
the Seller’s receipt of notice of any such missing documentation which was not
transferred to the Purchaser as described above or materially defective
documentation or any such breach of a representation and warranty, the Seller
promptly shall deliver such missing document or cure such defect or breach
in
all material respects, or in the event the Seller cannot deliver such missing
document or such defect or breach cannot be cured, the Seller shall, within
90
days of its discovery or receipt of notice, either (i) repurchase the affected
Mortgage Loan at a price equal to the Purchase Price (as defined in the Pooling
and Servicing Agreement) 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; provided,
however, that in the case of a breach of the representation and warranty
concerning the Mortgage Loan Schedule contained in Section 6(i), if such breach
relates to any field on the Mortgage Loan Schedule which identifies any
Prepayment Charge and such Prepayment Charge has been triggered pursuant to
the
terms of the related Mortgage Note, then in lieu of purchasing such Mortgage
Loan from the Trust Fund at the Purchase Price (as defined in the Pooling and
Servicing Agreement), the Seller shall pay the amount of the incorrectly
identified Prepayment Charge (net of any amount previously collected by or
paid
to the Trust Fund in respect of such Prepayment Charge), and the Seller shall
have no obligation to repurchase or substitute for such Mortgage Loan. In the
event of a substitution permitted hereunder, the Seller shall amend the Closing
Schedule to reflect the withdrawal of each removed Mortgage Loan from the terms
of this Agreement and the Pooling and Servicing Agreement and the addition
of
the Qualified Substitute Mortgage Loan(s). The Seller 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 deposit in the Collection Account of the amount
of
the Purchase Price (as defined in the Pooling and Servicing Agreement) in
accordance with Section 2.03 of the Pooling and Servicing Agreement. Any
repurchase or substitution required by this Section shall be made in a manner
consistent with Section 2.03 of the Pooling and Servicing Agreement and any
remedy by the Seller for a breach of a representation or warranty that
materially and adversely affects the value of any Prepayment Charge shall be
made in a manner consistent with Section 2.03(c) of the Pooling and Servicing
Agreement.
18
(b) It
is
understood and agreed that the obligations of the Seller set forth in this
Section 7 to cure, repurchase or substitute for a defective Mortgage Loan
constitute the sole remedies of the Purchaser against the Seller respecting
a
missing or defective document or a breach of the representations and warranties
contained in Section 5 or Section 6.
| SECTION 8. |
Closing;
Payment for the Mortgage Loans.
|
The
closing of the purchase and sale of the Mortgage Loans and the Trust Swap
Agreement shall be held at the Seattle office of Xxxxxx Xxxxxx LLP at 9:30
am
New York time on the Closing Date (or such other location or time as is mutually
agreeable to the parties).
The
Purchaser’s obligation to close the transactions contemplated by this Agreement
shall be subject to each of the following conditions:
(a) All
of
the representations and warranties of the Seller 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;
19
(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 to be complied with by Seller, 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 and the Trust
Swap
Agreement as specified in Section 3 of this Agreement, by delivery to the Seller
of the Purchase Price in immediately available funds and delivery of the Long
Beach Certificates to the Seller or, upon the direction of the Seller, to Long
Beach Asset Holdings Corp.
| 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:
(a) An
Officers’ Certificate of the Seller, dated the Closing Date, upon which the
Purchaser, Greenwich Capital Markets, Inc. (“Greenwich”) and WaMu Capital Corp.
(“WCC”, and together with Greenwich, the “Co-Representatives”) and the NIMS
Insurer, if any, may rely and attached thereto copies of the certificate of
incorporation, bylaws and certificate of good standing of the Seller under
the
laws of the State of Delaware;
(b) An
Officers’ Certificate of the Seller, dated the Closing Date, upon which the
Purchaser, the Co-Representatives and the NIMS Insurer, if any, may rely, with
respect to certain facts regarding the sale of the Mortgage Loans, by the Seller
to the Purchaser;
(c) An
Opinion of Counsel of the Seller (which may be in-house counsel of the Seller),
dated the Closing Date and addressed to the Purchaser, the Co-Representatives
and the NIMS Insurer, if any;
(d) Such
opinions of counsel as the Rating Agencies, the Co-Representatives, the Trustee
or the NIMS Insurer, if any, may reasonably request in connection with the
sale
of the Mortgage Loans and the Trust Swap Agreement by the Seller to the
Purchaser or the Seller’s execution and delivery of, or performance under, this
Agreement;
20
(e) A
letter
from Deloitte & Touche L.L.P., certified public accountants, dated the date
hereof and 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 Prospectus Supplement under
the
captions “Summary of Terms—Mortgage Loans,” “Risk Factors,” “The Sponsor,”
“Static Pool Information,” “The Mortgage Pool” and “Yield, Prepayment and
Maturity Considerations” and in “Appendix A” agrees with the records of the
Seller;
(f) The
Seller shall deliver or make available to the Purchaser for inclusion in the
Prospectus Supplement under the captions “The Sponsor,” “The Servicers” and
“Static Pool Information” or for inclusion in other offering materials, such
publicly available information regarding the Seller and Washington Mutual Bank,
their financial condition, Seller’s underwriting standards, lending activities
and loan sales, production, static pool information and master servicing
practices, and Washington Mutual Bank’s servicing and collection practices, and
any similar nonpublic, unaudited financial information and a computer tape
with
respect to the pool information, as the Co-Representatives may reasonably
request;
(g) Letters
from at least two nationally recognized statistical rating agencies rating
the
Offered Certificates (as defined in the Prospectus Supplement) and a letter
from
at least one nationally recognized statistical rating agency rating the Class
B
Certificates; and
(h) Such
further information, certificates, opinions and documents as the Purchaser
or
the Co-Representatives 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
and
the Trust Swap Agreement, including without limitation, recording fees, fees
for
title policy endorsements and continuations and the fees for recording
Assignments, the fees and expenses of the Seller’s in-house accountants and
in-house attorneys; the costs and expenses incurred in connection with
determining the Seller’s loan loss, foreclosure and delinquency experience, the
costs and expenses incurred in connection with obtaining the documents referred
to in Sections 9(d) and 9(e), the cost of an opinion of counsel regarding the
true sale of the Mortgage Loans and the Trust Swap Agreement and
non-consolidation of the Seller, the costs and expenses of printing (or
otherwise reproducing) and delivering this Agreement, the Pooling and Servicing
Agreement, the Certificates, the prospectus, any Preliminary Prospectus
Supplement, the Prospectus Supplement, any blue sky filings and private
placement memorandum relating to the Certificates and other related documents,
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 any
opinions of outside special counsel that may be required for the Seller 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.
21
| SECTION 11. |
Servicing.
|
The
Seller has represented to the Purchaser that the Mortgage Loans are being
serviced in accordance with the terms of the Pooling and Servicing Agreement,
and it is understood and agreed by and between the Seller and the Purchaser
that
any interim servicing arrangements with the Seller will be superseded by the
servicing arrangements set forth in the Pooling and Servicing
Agreement.
| SECTION 12. |
Mandatory
Delivery; Grant of Security Interest.
|
The
sale
and delivery on the Closing Date of the Mortgage Loans and the Trust Swap
Agreement 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 Closing Date 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 the Trust Swap
Agreement, and each document and instrument evidencing each such Mortgage Loan
and the Trust Swap Agreement to secure the performance by the Seller of its
obligation hereunder, and the Seller agrees that it holds such Mortgage Loans
and such Trust Swap Agreement in custody for the Purchaser, subject to (i)
the
Purchaser’s right, prior to the Closing Date, to reject any Mortgage Loan to the
extent permitted by this Agreement and (ii) the Purchaser’s obligation to
deliver or cause to be delivered the consideration for the Mortgage Loans and
the Trust Swap Agreement pursuant to Section 8 hereof. Any Mortgage Loan
rejected by the Purchaser shall concurrently therewith be automatically released
from the security interest created hereby. The Seller agrees that, upon
acceptance of the Mortgage Loans and the Trust Swap Agreement by the Purchaser
or its designee and delivery of payment to the Seller, that any security
interest held by the Seller in such Mortgage Loans and such Trust Swap Agreement
shall be released.
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. 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
Purchase Price, or shall not have delivered or caused to be delivered the Long
Beach Certificates to the Seller or, upon the direction of the Seller, to Long
Beach Asset Holding Corp., or any such condition shall not have been waived
or
satisfied and the Purchaser determines not to pay or cause to be paid the
Purchase Price or not to deliver or cause to be delivered the Long Beach
Certificates to the Seller or Long Beach Asset Holding Corp., the Purchaser
shall immediately effect the re-delivery of the Mortgage Loans and the Trust
Swap Agreement, if delivery to the Purchaser has occurred and any security
interest created by this Section 12 shall be deemed to have been
released.
22
| SECTION 13. |
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 telex or telegraph and
confirmed by a similar mailed writing, if to the Purchaser, addressed to the
Purchaser at 0000 Xxxxx Xxx., XXX0000, Xxxxxxx, Xxxxxxxxxx 00000, Attn: LBSC
Legal Counsel, or such other address as may hereafter be furnished to the Seller
in writing by the Purchaser; if to the Seller, addressed to the Seller at 0000
Xxxxx Xxx., XXX0000, Xxxxxxx, Xxxxxxxxxx 00000, Attn: LBMC Legal Counsel, or
to
such other address as the Seller may designate in writing to the
Purchaser.
| SECTION 14. |
Severability
of Provisions.
|
Any
part,
provision, representation or warranty of this Agreement which 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. 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 15. |
Agreement
of Parties.
|
The
Seller and the Purchaser each agree to execute and deliver such instruments
(including UCC financing statements and continuation statements) 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
and
the Pooling and Servicing Agreement.
| SECTION 16. |
Survival.
|
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 and its successors and
assigns, 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
the Trust Swap Agreement 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.
23
| SECTION 17. |
Indemnification,
Representative.
|
(a) The
Seller indemnifies and holds harmless the Purchaser, the Purchaser’s officers
and directors and 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”) or Section 20 of the
Exchange Act of 1934, as amended, (the “Exchange Act”), as follows:
(i) against
any and all losses, claims, expenses, damages or liabilities, joint or several,
to which the Purchaser or such controlling person may become subject under
the
1933 Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof), including, but not limited to, any loss, claim,
expense, damage or liability related to purchases and sales of the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates arise
out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Preliminary Prospectus Supplement or the
Prospectus Supplement, in the case of purchases and sales of the Class A
Certificates and the Mezzanine Certificates, or the Private Placement Memorandum
relating to the Class B Certificates dated March 1, 2006 (the “Private Placement
Memorandum”), in the case of purchases and sales of the Class B Certificates, or
any amendment or supplement thereto, or arise out of, or are based upon, the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements made therein not misleading;
and will reimburse, as incurred, the Purchaser and each such controlling person
for any legal or other expenses reasonably incurred by the Purchaser or such
controlling person in connection with investigating, defending against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Seller will be liable in any such case only to the extent that any
such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or omission, or alleged untrue statement or omission, made therein
in
reliance upon and in conformity with written information furnished to the
Purchaser by the Seller specifically for use in the preparation thereof (the
“Seller’s Information”);
(ii) against
any and all loss, liability, claim, damage and expense whatsoever, to the extent
of the aggregate amount paid in settlement of any litigation, or investigation
or proceeding by any governmental agency or body, commenced or threatened,
or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is effected with
the written consent of the Seller; and
(iii) against
any and all expense whatsoever (including the fees and disbursements of counsel
chosen by the Purchaser, subject to Section 17(c) below), reasonably
incurred in investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under clause (i) or clause (ii)
above.
This
indemnity agreement will be in addition to any liability which the Seller may
otherwise have.
(b) The
Purchaser agrees to indemnify and hold harmless the Seller, each of its
directors, each of its officers and each person, if any, who controls the Seller
within the meaning of Section 15 of the 1933 Act or Section 20 of the
Exchange Act, against any and all losses, claims, expenses, damages or
liabilities to which the Seller or any such director, officer or controlling
person may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the
Preliminary Prospectus Supplement or the Prospectus Supplement, in the case
of
purchases and sales of the Class A Certificates and the Mezzanine Certificates,
or the Private Placement Memorandum, in the case of purchases and sales of
the
Class B Certificates, other than in the Seller’s Information, or arise out of,
or are based upon, the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
made therein not misleading, and will reimburse any legal or other expenses
reasonably incurred by the Seller or any such director, officer or controlling
person in connection with investigating or defending any such loss, claim,
damage, liability or action. This indemnity agreement will be in addition to
any
liability which the Purchaser may otherwise have.
24
(c) Promptly
after receipt by an indemnified party under this Section 17 of notice of
the commencement of any action described therein, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under
this Section 17, notify the indemnifying party of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
under this Section 17 unless the indemnifying party is materially
prejudiced by such omission to notify and in any event the failure to notify
the
indemnifying party shall not relieve it from any liability which it may have
to
the indemnified party otherwise than under this Agreement. In case any such
action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be
entitled to participate therein, and, to the extent that it may wish to do
so,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party (who shall
not, except with the consent of the indemnified party (such consent not to
be
unreasonably withheld, conditioned or delayed), be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
under this Section 17, such indemnifying party shall not be liable for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of investigation
and preparation for a defense.
Any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of
such counsel shall be at the expense of such indemnified party unless:
(i) the employment thereof has been specifically authorized by the
indemnifying party in writing (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; (iii) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party
(in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (iv) the indemnifying
party has failed to assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects
to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing (i) by the Seller if the indemnified
parties under this Section 17 consist of the Seller or any of its officers,
directors or controlling persons, or (ii) the Purchaser, if the indemnified
party under this Section 17 consist of the Purchaser or any of the
Purchaser’s directors, officers or controlling persons.
25
Each
indemnified party, as a condition of the indemnity agreements contained in
Section 17(a) and Section 17(b), shall use its reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld, conditioned or delayed), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability (to the extent set forth in
Section 17(a) or Section 17(b) as applicable) by reason of such
settlement or judgment. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement (i) includes an unconditional release of such
indemnified party from all liability on any claims that are the subject of
such
action and (ii) does not include a statement as to, or an admission of,
fault, culpability or failure to act by or on behalf of an indemnified
party.
Notwithstanding
the foregoing paragraph, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and
expenses of counsel, the indemnifying party agrees that it shall be liable
for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement.
(d) If
the
indemnification provided for in Section 17(a) or 17(b) is unavailable
or insufficient to hold harmless an indemnified party under subsection (a)
or (b) above, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in subsection (a) or (b) above
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Purchaser on the one hand and the Seller on the other from
the
offering of the Class A Certificates, the Mezzanine Certificates and the Class
B
Certificates or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Purchaser on the one hand and the Seller on the other
in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. If the indemnification provided for in Section 17(b) is
unavailable or insufficient to hold harmless the indemnified party under
Section 17(b), then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities referred to in Section 17(b) in such proportion as
appropriate to reflect the relative fault of the Purchaser on one hand and
the
Seller on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the
Purchaser on the one hand and the Seller on the other shall be deemed to be
in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Purchaser bear to the total underwriting
discounts and commissions received by the Underwriters (as defined in the
Prospectus Supplement) and the total placement fees received by the Initial
Purchasers (as defined in the Private Placement Memorandum). The relative fault
shall be determined by reference to, among other things, whether the untrue
or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Purchaser or
by
the Seller and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to above in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this
subsection (d). No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
26
| SECTION 18. |
Representations
and Warranties of the Seller Relating to the Trust Swap
Agreement.
|
The
Seller hereby represents and warrants to the Purchaser, that as of the Closing
Date with respect to the Trust Swap Agreement:
(a) Immediately
prior to the novation of the Trust Swap Agreement to the Purchaser, the Seller
had good title to, and was the sole legal and beneficial owner of, the Trust
Swap Agreement, free and clear of any pledge, lien, security interest, charge,
claim, equity or encumbrance of any kind created by the Seller, and has full
right and authority, subject to no interest or participation of, or agreement
with, any other party to sell, assign and novate the same. Upon the delivery,
transfer or novation of the Trust Swap Agreement to the Purchaser as
contemplated herein, the Purchaser will receive the Trust Swap Agreement, free
and clear of any pledge, lien, security interest, charge, claim, equity or
encumbrance of any kind created by the Seller;
(b) The
Trust
Swap Agreement constitutes “general intangibles” within the meaning of the
applicable UCC;
(c) The
Seller has received all consents and approvals required by the terms of the
Trust Swap Agreement for the sale of such Trust Swap Agreement hereunder to
the
Purchaser;
(d) The
Seller has caused or will have caused, within ten days after the Closing Date,
the filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law as necessary to perfect
the security interest in the Trust Swap Agreement granted to the Purchaser
hereunder; and
27
(e) The
Seller has not authorized the filing of and is not aware of any financing
statements against Seller that include a description of collateral covering
either of the Trust Swap Agreement other than any financing statement
(a) relating to the security interest granted to the Purchaser hereunder or
(b) that has been terminated.
| SECTION 19. |
Governing
Law.
|
THIS
AGREEMENT AND THE RIGHTS, DUTIES, OBLIGATIONS AND RESPONSIBILITIES OF THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
AND DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF
LAW
PRINCIPLES. THE PARTIES HERETO INTEND THAT THE PROVISIONS OF SECTION 5-1401
OF
THE NEW YORK GENERAL OBLIGATIONS LAW SHALL APPLY TO THIS AGREEMENT.
| SECTION 20. |
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
and the Trust Swap Agreement by the Seller to the Purchaser as provided in
Section 4 hereof be, and be construed as, a sale of the Mortgage Loans and
the
Trust Swap Agreement by the Seller to the Purchaser and not as a pledge of
the
Mortgage Loans and the Trust Swap Agreement 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
and
the Trust Swap Agreement 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 and the Trust Swap Agreement 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, the Trust Swap Agreement and all amounts payable to the
holders of the Mortgage Loans and the Trust Swap Agreement 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 Collection Account whether in the form of cash,
instruments, securities or other property; (3) the possession by the Purchaser
or its agent of the Mortgage Notes, the Trust Swap Agreement, 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
Section 9-305 of 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 and the Trust Swap Agreement, 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.
28
| SECTION 21. |
Third
Party Beneficiary.
|
Each
of
the Trustee and the NIMS Insurer, if any, shall be a third-party beneficiary
hereof (except with respect to Section 17) and shall be entitled to enforce
the provisions hereof as if a party hereto, except the provisions of
Section 17 hereof. The Co-Representatives, on behalf of the Underwriters
(as defined in the Prospectus Supplement), and the Initial Purchasers, shall
be
third-party beneficiaries hereof solely with respect to Section 17 and shall
be
entitled to enforce the provisions of Section 17 as if it were a party
hereto.
29
IN
WITNESS WHEREOF, the Purchaser and the Seller have caused their names to be
signed by their respective officers thereunto duly authorized as of the date
first above written.
| LONG BEACH SECURITIES CORP. | ||
| |
|
|
| By: | ||
|
Name: Xxxxx Xxxx |
||
| Title: Authorized Officer | ||
| LONG BEACH MORTGAGE COMPANY | ||
| |
|
|
| By: | ||
|
Name: Xxxxx Xxxx |
||
| Title: First Vice President | ||
EXHIBIT
A TO MORTGAGE LOAN PURCHASE AGREEMENT
STANDARD
& POOR’S LEVELS®
GLOSSARY in effect on the CLOSING DATE
As
of
March 7, 0000
XXXXXXXX
X TO GLOSSARY FOR FILE FORMAT FOR LEVELS® VERSION 5.6c: Standard & Poor’s
Anti-Predatory Lending Categorization
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
|
|
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
|
A-1
Standard
& Poor’s High Cost 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
|
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
|
|
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)
|
||
|
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
|
A-2
Standard
& Poor’s High Cost Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending
Law/Effective Date
|
Category
under Applicable Anti-Predatory
Lending Law
|
|
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
|
|
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
|
|
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
|
|
West
Virginia
|
West
Virginia Residential Mortgage Lender,
Broker
and Servicer Act,
W.
Va. Code Xxx. §§ 31-17-1 et seq.
Effective
June 5, 2002
|
West
Virginia Mortgage Loan Act Loan
|
A-3
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
|
A-4
|
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)
|
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
|
A-5
SCHEDULE
A
Trust
Swap Agreement
|
Provider
|
Transaction
Reference
|
|
Bank
of America, N.A.
|
00000000
|
