EXHIBIT 10.2
MORTGAGE LOAN PURCHASE AGREEMENT
This Mortgage Loan Purchase Agreement (the "Agreement"), dated as of
September 28, 2006, is between Xxxxx Fargo Asset Securities Corporation, a
Delaware corporation (the "Company"), and Xxxxx Fargo Bank, N.A., a national
banking association (the "Seller" or "Xxxxx Fargo Bank").
The Company and the Seller hereby recite and agree as follows:
1. Defined Terms. Terms used without definition herein shall
have the respective meanings assigned to them in the Pooling and Servicing
Agreement, dated as of September 28, 2006 (the "Pooling and Servicing
Agreement"), among the Company, Xxxxx Fargo Bank, as master servicer (the
"Master Servicer"), and HSBC Bank USA, National Association, as trustee (the
"Trustee"), relating to the issuance of the Company's Mortgage Pass-Through
Certificates, Series 2006-AR17 (the "Certificates") or, if not defined therein,
in the underwriting agreement, dated February 15, 2006, and terms agreement,
dated August 24, 2006 (together, the "Underwriting Agreement"), among the
Company, Xxxxx Fargo Bank and Deutsche Bank Securities Inc. ("Deutsche Bank"),
or in the purchase agreement, dated May 10, 2004, and the purchaser terms
agreement, dated August 24, 2006 (together, the "Purchase Agreement"), among the
Company, Xxxxx Fargo Bank and Deutsche Bank.
2. Assignment of Servicing Agreements. The Seller agrees to
sell, and the Company agrees to purchase, the mortgage loans (the "Mortgage
Loans") listed on the Mortgage Loan Schedule and all of the Seller's interest
with respect to the Mortgage Loans as the owner in, to and under each Servicing
Agreement.
3. Purchase Price; Purchase and Sale. The purchase price (the
"Purchase Price") for the Mortgage Loans shall consist of $[________________]
payable by the Company to the Seller on the Closing Date in immediately
available funds.
Upon payment of the Purchase Price, the Seller shall be deemed
to have transferred, assigned, set over and otherwise conveyed to the Company
all the right, title and interest of the Seller in and to the Mortgage Loans
including all interest and principal received or receivable by the Seller on or
with respect to the Mortgage Loans after the Cut-Off Date (and including
scheduled payments of principal and interest due after the Cut-Off Date but
received by the Seller on or before the Cut-Off Date and Principal Prepayments
received or applied on the Cut-Off Date, but not including payments of principal
and interest due on the Mortgage Loans on or before the Cut-Off Date), together
with all of the Seller's right, title and interest in and to the proceeds of any
related title, hazard, primary mortgage or other insurance policies, the
Seller's right to receive amounts, if any, payable on behalf of any Mortgagor
from the Subsidy Account relating to any Subsidy Loan, the Seller's right, title
and interest in and to the proceeds of the Letters of Credit, all of the
Seller's rights described in Section 2 above, and all other property and rights
described in the first paragraph of Section 2.01(a) of the Pooling and Servicing
Agreement. The Company hereby directs the Seller, and the Seller hereby agrees,
to deliver to the Trustee or Custodian on behalf of the Trustee, all documents,
instruments and agreements required to be delivered by the Company to the
Trustee under the Pooling and Servicing Agreement; including, without
limitation, the documents required to be delivered under Section 2.01(a) of the
Pooling and Servicing Agreement; and upon the occurrence of a Document Transfer
Event, the documents required to be delivered under Section 2.01(b). The Seller
further agrees to deliver such other documents, instruments and agreements as
the Company or the Trustee shall reasonably request.
4. Representations and Warranties; Covenants. The Seller
hereby represents and warrants to the Company that (i) the Company's
representations and warranties to the Trustee pursuant to Section 2.03(b) of the
Pooling and Servicing Agreement are true and correct, as of the date thereof,
and (ii) Seller has not dealt with any broker, investment banker, agent or other
person (other than the Company and Deutsche Bank) who may be entitled to any
commission or compensation in connection with the sale of the Mortgage Loans.
The Seller hereby agrees to cure any breach of such representations and
warranties in accordance with the terms of the Pooling and Servicing Agreement.
The Seller hereby agrees to continue to pay on behalf of the
Company and its successors and assignees, promptly as they become due, any
lender-paid primary mortgage insurance premiums ("LPMI Premiums") with respect
to any lender-paid primary mortgage insurance policy (an "LPMI Policy") on each
Mortgage Loan so insured as of the Cut-Off Date, until such Mortgage Loan has
been paid in full or otherwise liquidated; provided, however, that the foregoing
obligation of the Seller shall terminate with respect to all such Mortgage Loans
in the event that either (i) another entity acceptable to the insurers of such
LPMI Policies (the "LPMI Insurers") and the rating agencies rating the
Certificates undertakes to pay such LPMI Premiums, or (ii) the Seller pays
one-time premiums to such LPMI Insurers such that all outstanding LPMI Policies
will remain in force until the related Mortgage Loans have been paid in full or
otherwise liquidated, without the requirement of any further premium payments.
5. Repurchase or Substitution. (a) The Seller hereby agrees to
repurchase any Mortgage Loan (i) for which any document is not delivered, as
provided in paragraph 3 above, (ii) which is found by the Trustee or the
Custodian to be defective in any material respect, as provided in the Pooling
and Servicing Agreement, or (iii) which is discovered at any time not to be in
conformance with the representations and warranties referred to in paragraph 4
above and which document relating thereto the Seller does not deliver or which
defect or breach the Seller does not cure (as provided in paragraph 4 above)
within 60 days after the date of notice thereof from the Trustee or the Company,
at a price equal to the Repurchase Price. In addition, the Seller hereby agrees
to reimburse the Company for any Reimbursement Amount. Alternatively, the Seller
hereby agrees, if so requested by the Company to substitute for any such
Mortgage Loan, a new mortgage loan having characteristics such that the
representations and warranties referred to in paragraph 4 above would not have
been incorrect (except for representations and warranties as to the correctness
of the Mortgage Loan Schedule) had such substitute mortgage loan originally been
a Mortgage Loan. The Seller further agrees that a substituted mortgage loan will
have (i) an unpaid principal balance no greater than the Scheduled Principal
Balance of the Mortgage Loan for which it is substituted (after giving effect to
the scheduled principal payment due in the month of substitution on the Mortgage
Loan for which such mortgage loan is substituted), (ii) a Net Mortgage Interest
Rate equal to and a Loan-to-Value Ratio no greater than, that of the Mortgage
Loan for which it is substituted, (iii) the same Gross Margin and Index as that
of the Mortgage Loan for which it is substituted and (iv) the same frequency of
mortgage rate adjustment as that of the Mortgage Loan for which it is
substituted. The Seller shall remit to the Company, in cash, the difference
between the unpaid principal balance of the Mortgage Loan to be substituted and
the unpaid principal balance of the substitute mortgage loan.
(b) In the event that the Seller has a right against the
originator or former owner of a Mortgage Loan (the "Prior Holder") for breach of
a representation or warranty regarding the characteristics of such Mortgage Loan
made by the Prior Holder, the Seller may request the Company to repurchase the
Mortgage Loan from the Trust Estate pursuant to Section 3.08 of the Pooling and
Servicing Agreement and the Seller agrees that at the time of the repurchase by
the Company, the Seller will repurchase the Mortgage Loan from the Company at a
price equal to the Repurchase Price.
At the time of any such repurchase by the Seller, the Seller
agrees either to promptly (i) liquidate such Mortgage Loan, to the extent that
the Seller's rights in respect of the Prior Holder consist of a claim for
indemnity or (ii) transfer such Mortgage Loan to the Prior Holder at a price not
less than that paid by the Seller to the Company.
6. Underwriting. The Seller hereby agrees to furnish any and
all information, documents, certificates, letters or opinions with respect to
the Mortgage Loans, reasonably requested by the Company in order to perform any
of its obligations or satisfy any of the conditions on its part to be performed
or satisfied pursuant to the Underwriting Agreement or the Purchase Agreement at
or prior to the Closing Date.
7. Costs. The Company shall pay all expenses incidental to the
performance of its obligations under the Underwriting Agreement and the Purchase
Agreement, including without limitation (i) any recording fees or fees for title
policy endorsements and continuations, (ii) the expenses of preparing, printing
and reproducing the Prospectus, the Prospectus Supplement, the Underwriting
Agreement, the Private Placement Memorandum, the Purchase Agreement, the Pooling
and Servicing Agreement and the Certificates and (iii) the cost of delivering
the Certificates to the offices of Deutsche Bank insured to the satisfaction of
Deutsche Bank.
8. Servicing. (a) The Seller hereby represents to the Company
that the Mortgage Loans are serviced by the Servicers. The Seller has delivered
copies of each Servicing Agreement to the Company, though omitting schedules of
mortgage loans which are serviced thereunder, but which are not being sold in
this transaction.
(b) With respect to each Mortgage Loan, the Servicing Fee Rate
and the Master Servicing Fee Rate (which is in addition to the Servicing Fee
Rate) shall be as set forth on the Mortgage Loan Schedule.
(c) On the Closing Date, the Seller shall assign to the
Company its interest with respect to the Mortgage Loans in, to and under each
Servicing Agreement.
9. Notices. All demands, notices and communications hereunder
shall be in writing, shall be effective only upon receipt and shall, if sent to
the Company, be addressed to it at Xxxxx Fargo Asset Securities Corporation,
0000 Xxx Xxxxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxx 00000, Attn: Vice President,
Structured Finance, or, if sent to the Seller, be addressed to it at Xxxxx Fargo
Bank, N.A., 0000 Xxx Xxxxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxx, 00000, Attn: Vice
President, Structured Finance.
10. Trustee Beneficiary. The representations, warranties and
agreements made by the Seller in this Agreement are made for the benefit of, and
may be enforced by, the Trustee and the holders of Certificates to the same
extent that the Trustee and the holders of Certificates, respectively, have
rights against the Company under the Pooling and Servicing Agreement in respect
of representations, warranties and agreements made by the Company therein.
11. Recharacterization. The parties hereto intend the
conveyance by the Seller to the Company of all of its right, title and interest
in and to the Mortgage Loans pursuant to this Agreement to constitute a purchase
and sale and not a loan. Notwithstanding the foregoing, to the extent that such
conveyance is held not to constitute a sale under applicable law, it is intended
that this Agreement shall constitute a security agreement under applicable law
and that the Seller shall be deemed to have granted to the Company a first
priority security interest in all of the Seller's right, title and interest in
and to the Mortgage Loans.
12. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated
except by a writing signed by the party against whom enforcement of such change,
waiver, discharge or termination is sought. This Agreement may not be changed in
any manner which would have a material adverse effect on holders of Certificates
without the prior written consent of the Trustee. The Trustee shall be protected
in consenting to any such change to the same extent provided in Article VIII of
the Pooling and Servicing Agreement. This Agreement may be signed in any number
of counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument. This Agreement shall bind and
inure to the benefit of and be enforceable by the Company and the Seller and
their respective successors and assigns.
IN WITNESS WHEREOF, the Company and the Seller have caused this Agreement
to be duly executed by their respective officers as of the day and year first
above written.
XXXXX FARGO ASSET SECURITIES
CORPORATION
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
XXXXX FARGO BANK, N.A.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Vice President
