EXECUTION COPY
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MORTGAGE LOAN PURCHASE AGREEMENT
Between
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
and
GREENPOINT MORTGAGE SECURITIES INC.,
as Purchaser
Dated as of June 1, 2000
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Table of Contents
Page
ARTICLE I Definitions........................................................................................ 1
ARTICLE II Procedures for Purchase of Mortgage Loans; Conditions Precedent; Settlements...................... 1
Section 2.01. Purchase and Sale...................................................................... 1
Section 2.02. Delivery of Documents; Purchase of Mortgage Loans...................................... 1
Section 2.03. Survival of Representations............................................................ 2
Section 2.04. Proceeds of Mortgage Loans............................................................. 2
Section 2.05. Defective Mortgage Loans............................................................... 3
ARTICLE III Intent of Parties; Security Interest............................................................. 3
Section 3.01. Intent of Parties; Security Interest................................................... 3
ARTICLE IV Representations and Warranties.................................................................... 3
Section 4.01. Representations and Warranties of Seller............................................... 3
Section 4.02. Representations and Warranties Regarding Mortgage Loans................................ 5
Section 4.03. Representations and Warranties of Purchaser............................................ 15
Section 4.04. Remedies for Breach of Representations and Warranties; Repurchase Obligation........... 16
ARTICLE V Covenants and Warranties of Seller................................................................. 17
Section 5.01. Affirmative Covenants.................................................................. 17
Section 5.02. Negative Covenants..................................................................... 19
ARTICLE VI Sale of Mortgage Loans from the Purchaser to the Trust............................................ 20
Section 6.01. Sale and Servicing Agreement........................................................... 20
ARTICLE VII Seller's Servicing Obligations................................................................... 21
Section 7.01. Seller's Servicing Obligations......................................................... 21
ARTICLE VIII Fees and Expenses............................................................................... 21
ARTICLE IX Termination; Additional Remedies.................................................................. 22
ARTICLE X Payment of Purchase Price.......................................................................... 22
Section 10.01. Purchase Price Payments................................................................ 22
Section 10.02. The Purchaser Note..................................................................... 22
ARTICLE XI Confidentiality................................................................................... 23
ARTICLE XII Term............................................................................................. 24
ARTICLE XIII Exclusive Benefit of Parties; Assignment........................................................ 24
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ARTICLE XIV Amendment; Waivers............................................................................... 24
ARTICLE XV Execution in Counterparts......................................................................... 24
ARTICLE XVI Effect of Invalidity of Provisions............................................................... 25
ARTICLE XVII Governing Law................................................................................... 25
ARTICLE XVIII Notices........................................................................................ 25
ARTICLE XIX Entire Agreement................................................................................. 25
ARTICLE XX Indemnities....................................................................................... 25
ARTICLE XXI RESPA Obligations................................................................................ 27
ARTICLE XXII Survival........................................................................................ 27
ARTICLE XXIII Right of Set-off............................................................................... 27
ARTICLE XXIV Consent to Service.............................................................................. 27
ARTICLE XXV Submission to Jurisdiction; Waiver of Trial by Jury.............................................. 28
ARTICLE XXVI Construction.................................................................................... 28
ARTICLE XXVII Further Agreements............................................................................. 28
EXHIBIT A Form of Non-Negotiable GreenPoint Mortgage Securities Inc.
Promissory Note
SCHEDULE I: Mortgage Loan Schedule
ii
MORTGAGE LOAN PURCHASE AGREEMENT ("Agreement") dated as of
June 1, 2000 between GreenPoint Mortgage Funding, Inc., a New York corporation
("Seller"), and GreenPoint Mortgage Securities Inc., a Delaware corporation
("Purchaser").
WHEREAS, Seller desires to sell to Purchaser the Mortgage
Loans (as hereinafter defined), and Purchaser desires to purchase such Mortgage
Loans in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties, in consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
All capitalized terms used in this Agreement and not otherwise
defined herein, shall have the meanings assigned thereto in Annex A to the
Pooling Agreement dated as of June 1, 2000, between the Issuer and the Trustee,
as the same may be amended and supplemented from time to time.
ARTICLE II
Procedures for Purchase of Mortgage Loans; Conditions
Precedent; Settlements
Section 2.01. Purchase and Sale. (a) On the Closing Date
in consideration for the Purchase Price the Seller hereby sells, transfers,
assigns, sets over and otherwise conveys to the Purchaser, without recourse, all
of its right, title and interest in, to and under, whether now existing or
hereafter created, (i) each Mortgage Loan, including its Principal Balance (and
any Additional Balances) and all collections in respect thereof received on or
after the Cut-Off Date; (ii) property that secured a Mortgage Loan that is
acquired by foreclosure or deed in lieu of foreclosure; (iii) the Seller's
rights under the hazard insurance policies; and (iv) all proceeds with respect
to the foregoing. The Purchase Price on the Closing Date shall be payable in a
combination of cash and credit for a capital contribution made to the Purchaser
by the Seller.
(b) To the extent that the fair market value of any Additional
Balance is greater than the cash consideration paid by the Purchaser for such
Additional Balance, the difference between such fair market value and the amount
of such cash consideration shall be deemed to be a combination of a credit for a
capital contribution made to the Purchaser by the Seller and an increase in the
principal amount of the Purchaser Notes pursuant to Article X.
Section 2.02. Delivery of Documents; Purchase of Mortgage
Loans. Prior to the purchase of the Mortgage Loans:
(a) Seller shall have delivered to the Purchaser or any agent
appointed by the Purchaser the Mortgage File for each of the Mortgage Loans.
(b) Purchaser shall have received a Mortgage Loan Schedule
pertaining to the related Mortgage Loans.
(c) Purchaser shall have received copies of the resolutions of
the Board of Directors of Seller, certified by its respective Secretary,
approving this Agreement.
(d) Purchaser shall have received the Certificate of
Incorporation of Seller certified by the Secretary of State of the State of New
York.
(e) Purchaser shall have received a certificate of the
Secretary or Assistant Secretary of Seller certifying (i) the names and
signatures of the officers authorized on its behalf to execute this Agreement,
and any other documents to be delivered by it hereunder and (ii) a copy of
Seller's By-laws.
(f) Purchaser shall have received an opinion of counsel to
Seller as to the due authorization, execution and delivery by the Seller of this
Agreement and as to the validity and enforceability of the transfers
contemplated hereunder and addressing such other matters as the Purchaser may
reasonably request.
(g) Seller shall have instructed the applicable debtor,
trustee, paying agent, authenticating agent, transfer agent, registrar,
predecessor in interest, owner (if the Mortgage Loans are in the form of a
security agreement), or servicer, if any, in respect of the related Mortgage
Loans to reflect on their books and records the transfer of such Mortgage Loans
to Purchaser, as owner or secured party (if the Mortgage Loans are in the form
of a security agreement).
(h) Purchaser shall have received the most recent available
standard servicing or lien reports in summary form, if any, with respect to all
of the mortgages in Seller's portfolio similar to the Mortgage Loans.
(i) The Purchaser shall be permitted to perform its standard
loan review of each Mortgage Loan to be purchased.
(j) UCC-1 financing statements duly executed by Seller as
debtor shall have been filed in California naming the Purchaser as secured party
and the Trustee on behalf of the Trust as assignee.
Section 2.03. Survival of Representations. The terms and
conditions of the purchase of each Mortgage Loan shall be as set forth in this
Agreement. Seller will be deemed on the Closing Date to have made to Purchaser
the representations and warranties set forth in Article IV hereof and such
representations and warranties of Seller shall be true and correct on and as of
the Closing Date.
Section 2.04. Proceeds of Mortgage Loans. The transfer and
sale hereby of all of the Seller's right, title and interest in and to each
Mortgage Loan shall include all proceeds, products and profits derived
therefrom, including, without limitation, all scheduled payments of principal of
and interest on such Mortgage Loans and other amounts due or payable or to
become
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due or payable in respect thereof and proceeds thereof, including, without
limitation, all moneys, goods and other tangible or intangible property received
upon the liquidation or sale thereof.
Section 2.05. Defective Mortgage Loans. If any Mortgage Loan
is re-transferred to the Purchaser pursuant to Section 2.03 of the Sale and
Servicing Agreement, the Seller shall, at the Purchaser's option, either (a)
repurchase such Mortgage Loan at the Repurchase Price, or (b) provide an
Eligible Substitute Mortgage Loan if the Seller has any such loans available for
sale at the time, subject to the terms and conditions of the Sale and Servicing
Agreement.
ARTICLE III
Intent of Parties; Security Interest
Section 3.01. Intent of Parties; Security Interest.
Purchaser and Seller confirm that the transactions contemplated herein are
intended as purchases and sales rather than as loan transactions. In the event,
for any reason, and solely in such event, any transaction hereunder is construed
by any court or regulatory authority as a loan or other purchase and sale of the
related Mortgage Loans, Seller shall be deemed to have hereby pledged to
Purchaser as security for the performance by Seller of all of its obligations
from time to time arising hereunder and under any and all Purchases effected
pursuant thereto, and shall be deemed to have granted to Purchaser a security
interest in, the related Mortgage Loans and all distributions in respect
thereof, and the proceeds of any and all of the foregoing (collectively, the
"Collateral"). In furtherance of the foregoing, (i) this Agreement shall
constitute a security agreement, (ii) Purchaser shall have all of the rights of
a secured party with respect to the Collateral pursuant to applicable law and
(iii) Seller shall execute all documents, including, but not limited to,
financing statements under the Uniform Commercial Code as in effect in any
applicable jurisdictions, as the Purchaser may reasonably require to effectively
perfect and evidence Purchaser's first priority security interest in the
Collateral. Seller also covenants not to pledge, assign or grant any security
interest to any other party in any Mortgage Loan sold to Purchaser.
ARTICLE IV
Representations and Warranties
Section 4.01. Representations and Warranties of Seller. The
Seller represents, warrants and covenants to the Purchaser as of the Closing
Date that:
(i) the Seller is duly organized, validly existing and in good
standing under the laws of the State of New York 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 to the extent necessary to ensure the
enforceability of each Mortgage Loan and the servicing of the Mortgage
Loan in accordance with the terms of this Agreement;
(ii) the Seller 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 the execution, delivery and performance of
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this Agreement by the Seller has been duly authorized by all
necessary corporate action on the part of the Seller; 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 respective terms, except to the extent that (a) the
enforceability thereof may be limited by federal or state bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought;
(iii) the execution and delivery of this Agreement by the
Seller, the servicing of the Mortgage Loans by the Seller hereunder,
the consummation by the Seller of the transactions herein contemplated,
and the fulfillment by the Seller of or compliance by the Seller with
the terms hereof will not (A) result in a breach of any term or
provision of the charter or by-laws of the Seller or (B) conflict with,
result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument
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, which breach, violation, default or
non-compliance would have a material adverse effect on (a) the
business, operations, financial condition, properties or assets of the
Seller taken as a whole or (b) the ability of the Seller to perform its
obligations under this Agreement; and the Seller is not a party to,
bound by, or in breach or violation of any material indenture or other
material 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 reasonably be expected to materially and adversely
affect, (x) the ability of the Seller to perform its obligations under
this Agreement or (y) the business, operations, financial condition,
properties or assets of the Seller taken as a whole;
(iv) the Seller is, and currently intends to remain, in good
standing and qualified to do business in each jurisdiction where
failure to be so qualified or licensed would have a material adverse
effect on (a) the business, operations, financial condition, properties
or assets of the Seller taken as a whole or (b) the enforceability of
any Mortgage Loan or the servicing of the Mortgage Loans in accordance
with the terms of this Agreement;
(v) there is no litigation pending or, to the Seller's best
knowledge, threatened against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to service the Mortgage Loans or
for the Seller to perform any of its other obligations hereunder in
accordance with the terms hereof;
(vi) 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 not
relating to a future transaction is required, the Seller has obtained
the same; and
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(vii) the Seller has caused to be performed any and all acts
required to preserve the rights and remedies of the Purchaser in any
insurance policies of the Seller or a mortgagee applicable to the
Mortgage Loans sold by the Seller.
Section 4.02. Representations and Warranties Regarding
Mortgage Loans. (a) Seller represents and warrants to Purchaser as of the
Closing Date with respect to each Mortgage Loan as follows:
(i) As of the Closing Date with respect to the Mortgage Loans
and as of the related Transfer Date with respect to any Eligible
Substitute Mortgage Loans and with respect to any HELOC Mortgage Loan,
as of the date any Additional Balance is created, the information set
forth in the Mortgage Loan Schedule for such Mortgage Loans is true and
correct in all material respects;
(ii) Each Mortgage Loan is being serviced by the Servicer;
(iii) The applicable Cut-Off Date Principal Balance has not
been assigned or pledged, and the Seller is the sole owner and holder
of such Cut-Off Date Principal Balance free and clear of any and all
liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature, and has full
right and authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of the applicable Mortgage
Loans, to sell, assign or transfer the same pursuant to this Agreement;
(iv) Except with respect to liens released immediately prior
to the transfer herein contemplated, each Mortgage Note and related
Mortgage has not been assigned or pledged and immediately prior to the
transfer and assignment herein contemplated, the Seller held good,
marketable and indefeasible title to, and was the sole owner and holder
of, each Mortgage Loan subject to no liens, charges, mortgages, claims,
participation interests, equities, pledges or security interests of any
nature, encumbrances or rights of others (collectively, a "Lien"); the
Seller has full right and authority under all governmental and
regulatory bodies having jurisdiction over the Seller, subject to no
interest or participation of, or agreement with, any party, to sell and
assign the same pursuant to this Agreement; and immediately upon the
transfers and assignments herein contemplated, the Seller shall have
transferred all of its right, title and interest in and to each
Mortgage Loan and the Purchaser will hold good, marketable and
indefeasible title, to, and be the sole owner of, each Mortgage Loan
subject to no Liens;
(v) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, the related Mortgage is a valid and
subsisting first or second lien, as set forth on the Mortgage Loan
Schedule with respect to each related Mortgaged Property, and as of the
applicable Cut-Off Date the related Mortgaged Property is free and
clear of all encumbrances and liens having priority over the first or
second lien, as applicable, of such Mortgage except for liens for (i)
real estate taxes and special assessments not yet delinquent; (ii) any
first mortgage loan secured by such Mortgaged Property and specified on
the Mortgage Loan Schedule; (iii) covenants, conditions and
restrictions, rights of way, easements and other matters of public
record as of the date of recording that are acceptable to mortgage
lending institutions
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generally; and (iv) 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;
(vi) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there is no valid offset, defense or
counterclaim of any obligor under any Loan Agreement or Mortgage;
(vii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there is no delinquent recording or other
tax or fee or assessment lien against any related Mortgaged Property;
(viii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there is no proceeding pending or threatened
for the total or partial condemnation of any Mortgaged Property, nor is
such a proceeding currently occurring, and such property is undamaged
by waste, fire, earthquake or earth movement, windstorm, flood, tornado
or other casualty, so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the
premises were intended;
(ix) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there are no mechanics' or similar liens or
claims which have been filed for work, labor or material affecting the
related Mortgaged Property which are, or may be, liens prior or equal
to the lien of the related Mortgage, except liens which are fully
insured against by the title insurance policy referred to in clause
(xiv);
(x) No Minimum Monthly Payment is more than 59 days delinquent
(measured on a contractual basis);
(xi) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, for each Mortgage Loan, the related Mortgage
File contains each of the documents and instruments specified to be
included therein;
(xii) The related Loan Agreement and the related Mortgage at
origination complied in all material respects with applicable state and
federal laws, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws applicable to the Mortgage Loans
and consummation of the transactions contemplated hereby, including
without limitation the receipt of interest, will not involve the
violation or such laws;
(xiii) On the Closing Date with respect to the Mortgage Loans
and to the extent not already included in such filing, on the
applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loans, the Seller has filed UCC-1 financing statements with
respect to such Mortgage Loans.
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(xiv) A lender's policy of title insurance, xxxxxxxXxxxx.xxx
lender master protection program (standard mortgage guaranty) or a
commitment (binder) to issue the same or an attorney's certificate or
opinion of title was effective on the date of the origination of each
mortgage loan and each such policy or certificate or opinion of title
is valid and remains in full force and effect;
(xv) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, none of the Mortgaged Properties is a mobile
home or a manufactured housing unit;
(xvi) As of the Cut-Off Date for the Mortgage Loans no more
than (a) 0.63% of the Pool I Mortgage Loans (by Pool I Balance), or (b)
1.73% of the Pool II Mortgage Loans (by Pool II Balance) are secured by
Mortgaged Properties located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Pool I
Mortgage Loan was not in excess of 100% and the Combined Loan-to-Value
Ratio for each Pool II Mortgage Loan was not in excess of 100%;
(xviii) Each Pool I Mortgage Loan conforms to all applicable
loan origination standards with respect to loan balances as of the date
of origination set forth by Freddie Mac.
(xix) No selection procedure reasonably believed by the Seller
to be adverse to the interests of the Securityholders, the Insurer or
Freddie Mac was utilized in selecting the Mortgage Loans;
(xx) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its
creditors;
(xxi) The Minimum Monthly Payment with respect to any Mortgage
Loan is not less than the interest accrued at the applicable Loan Rate
on the average daily Principal Balance during the interest period
relating to the date on which such Minimum Monthly Payment is due;
(xxii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, each Loan Agreement and each Mortgage Loan
is a legal, valid and binding obligation and is an enforceable
obligation of the related Mortgagor, except as the enforceability
thereof may be limited by the bankruptcy, insolvency or similar laws
affecting creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, there has been no default of any senior
mortgage loan related to a Mortgaged Property that has not been cured
by a party other than the Servicer;
(xxiv) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a
written instrument which (if such instrument is secured by real
property) has been recorded, if necessary, to protect the interest
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of the Securityholders and which has been delivered to the Trustee. The
substance of any such alteration or modification is reflected on the
related Mortgage Loan Schedule and has been approved by the primary
mortgage guaranty insurer, if any;
(xxv) The definition of "prime rate" in each Credit Line
Agreement relating to a HELOC Mortgage Loan does not differ materially
from the definition in the form of Credit Line Agreement in Exhibit D
to the Sale and Servicing Agreement;
(xxvi) The weighted average remaining term to maturity of the
Pool I Mortgage Loans on a contractual basis as of the related Cut-Off
Date is approximately 205 months and for the Pool II Mortgage Loans is
approximately 203 months. On each date that the Loan Rates relating to
HELOC Mortgage Loans have been adjusted, interest rate adjustments on
the HELOC Mortgage Loans were made in compliance with the related
Mortgages and Credit Line Agreement and applicable law. Over the term
of each HELOC Mortgage Loan, the Loan Rate may not exceed the related
Loan Rate Cap, if any. With respect to the Pool I HELOC Mortgage Loans,
the weighted average Loan Rate Cap is approximately 18.000%. With
respect to the Pool II HELOC Mortgage Loans, the weighted average Loan
Rate Cap is approximately 18.000%. With respect to the Pool I HELOC
Mortgage Loans, the margins range between 0.000% and 7.500% and the
weighted average margin is approximately 2.903% as of the related
Cut-Off Date. With respect to the Pool II HELOC Mortgage Loans, the
margins range between 0.000% and 6.500% and the weighted average margin
is approximately 2.698% as of the related Cut-Off Date. The Loan Rates
on the Pool I Mortgage Loans range between 5.875% and 18.000%, the Loan
Rates on the Pool II Mortgage Loans range between 5.875% and 18% and
the weighted average Loan Rate is approximately 8.749% for Pool I and
8.977% for Pool II;
(xxvii) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loans, each Mortgaged Property consists of a single
parcel of real property with a one-to-four unit single family residence
erected thereon, or an individual condominium unit, planned unit
development unit or townhouse;
(xxviii) No more than 29.08% (by Pool I Balance) of the Pool I
Mortgage Loans are secured by real property improved by individual
condominium units, planned development units or two-to-four family
residences erected thereon, and approximately 70.92% (by Pool I
Balance) of the Pool I Mortgage Loans are secured by real property with
a one-family residence erected thereon;
No more than 27.89% (by Pool II Balance) of the Pool II
Mortgage Loans are secured by real property improved by individual
condominium units, planned development units or two-to-four family
residences erected thereon, and approximately 72.11% (by Pool II
Balance) of the Pool II Mortgage Loans are secured by real property
with a one-family residence erected thereon;
(xxix) Each Mortgage Note evidencing a Closed End Mortgage
Loan is comprised of one original promissory note and each such
promissory note constitutes an "instrument" for purposes of Section
9-105(1)(i) of the UCC. There is no obligation on the
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part of the Seller or any other party to make payments in addition to
those made by the Mortgagor with respect to the Closed End Mortgage
Loans;
(xxx) The Credit Limits on the Pool I HELOC Mortgage Loans
range between $10,000 and $241,000 with an average of approximately
$51,858. The Credit Limits on the Pool II HELOC Mortgage Loans range
between $4,800 and $750,000 with an average of approximately $128,173.
The Principal Balances on the Pool I HELOC Mortgage Loans range between
$0 and $240,318 with an average of approximately $40,287. The Principal
Balances on the Pool II HELOC Mortgage Loans range between $0 and
$750,000 with an average of approximately $91,494. The Principal
Balances on the Pool I Closed End Mortgage Loans range between $7,087
and $175,000 with an average of approximately $41,340. The average
Credit Limit Utilization Rate (weighted by credit line) of the Pool I
HELOC Mortgage Loans is approximately 77.69% and of the Pool II HELOC
Mortgage Loans is approximately 71.38%;
(xxxi) Substantially all of the Mortgage Loans are second
liens, and either (A) no consent for each Mortgage Loan was required by
the holder of the related senior lien, if any, prior to the making of
such Mortgage Loan or (B) such consent has been obtained and is
contained in the related Mortgage File;
(xxxii) This Agreement constitutes a valid transfer and
assignment to the Purchaser of all right, title and interest of the
Seller in and to the Cut-Off Date Principal Balances with respect to
the applicable Mortgage Loans, all monies due or to become due with
respect thereto and all proceeds of such Cut-Off Date Principal
Balances with respect to the Mortgage Loans and such funds as are from
time to time deposited in the Collection Account (excluding any
investment earnings thereon) and all other property specified in the
definition of "Trust" as being part of the corpus of the Trust conveyed
to the Trust, and upon payment for the Additional Balances, will
constitute a valid transfer and assignment to the Purchaser of all
right, title and interest of the Seller in and to the Additional
Balances, all monies due or to become due with respect thereto, and all
proceeds of such Additional Balances and all other property specified
in the definition of "Trust" relating to the Additional Balances;
(xxxiii) As of the Closing Date, no Mortgage Loan is the
subject of foreclosure proceedings and, to the best of the Seller's
knowledge, no obligor of any of the Mortgage Loans has filed for
bankruptcy protection;
(xxxiv) The proceeds of each Closed End Mortgage Loan have
been fully disbursed, and there is no obligation on the part of the
mortgagee to make future advances thereunder. 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 or closing or recording
such Closed End Mortgage Loans were paid;
(xxxv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including (A) in the case of a
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Mortgage designated as a deed of trust, by trustee's sale and (B)
otherwise by judicial foreclosure;
(xxxvi) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, there is no default, breach, violation or
event of acceleration existing under any Mortgage or the related
Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute
a default, breach, violation or event of acceleration; and the Seller
has not waived any default, breach, violation or event of acceleration;
(xxxvii) To the best knowledge of the Seller, all parties to
the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have
been duly and properly executed by such parties; Each Mortgage and
Mortgage Note is the legal, valid and binding obligation of the related
Mortgagor and is enforceable by the Purchaser or any transferor of the
Purchaser against the Mortgagor 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;
(xxxviii) As of the Cut-Off Date no more than 0.16% of the
Principal Balance of the Pool I Mortgage Loans nor more than 0.19% of
the Principal Balance of the Pool II Mortgage Loans represents Mortgage
Loans with respect to which the related Mortgagor had a Credit Score of
600 or less at the time of origination or whose Credit Score was
unavailable.
(xxxix) As of the Closing Date with respect to the Mortgage
Loans and the applicable Transfer Date with respect to any Eligible
Substitute Mortgage Loan, no Mortgagor has been released, in whole or
in part, except in connection with an assumption agreement which has
been approved by the applicable title insurer (to the extent required
by such title insurer) and which is part of the Mortgage File delivered
to the Trustee;
(xl) At the time of origination of each Mortgage Loan, the
related prior lien was not more than 30 days delinquent. Additionally,
as of the Closing Date, no senior mortgage loan on the related
Mortgaged Property was more than 59 days delinquent;
(xli) All required inspections, licenses and certificates with
respect to the use and occupancy of all occupied portions of all
property securing the Mortgages have been made, obtained or issued, as
applicable;
(xlii) With respect to the Pool I Mortgage Loans, if the
improvements securing a Mortgage Loan were in a federally designated
special flood hazard area as of the date of origination, flood
insurance to the extent required in Section 3.04 of the Sale and
Servicing Agreement covers the related Mortgaged Property (either by
coverage under the federal flood insurance program or by coverage by
private insurers);
(xliii) With respect to each Mortgage Loan, the related prior
lien does not provide for negative amortization;
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(xliv) With respect to each Mortgage Loan, the maturity date
of the Mortgage Loan is prior to the maturity date of the related prior
lien if such prior lien provides for a balloon payment;
(xlv) With respect to the Pool I Mortgage Loans, all amounts
received after the Cut-Off Date with respect to the Mortgage Loans to
which the Seller is not entitled will be deposited into the Collection
Account within one Business Day after the Closing Date;
(xlvi) Each Pool I Mortgage Loan is secured by a property
having an appraised value as of origination of $334,539 or less and
each Pool II Mortgage Loan is secured by a property having an appraised
value as of origination of $562,260 or less;
(xlvii) With respect to the Pool I Mortgage Loans, 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 changes 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. There are
no defaults in complying with the terms of any senior mortgage on the
related Mortgaged Property that have not been cured by anyone other
than the Servicer. 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;
(xlviii) With respect to each Mortgage Loan, the improvements
upon each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a carrier generally acceptable to the Servicer
that provides for fire and extended coverage representing coverage not
less than (a) the Credit Limit of such HELOC Mortgage Loan or (b) the
Cut-Off Date Principal Balance of such Closed End Mortgage Loan or (c)
the maximum insurable value of the Mortgaged Property;
(xlix) With respect to the Pool I Mortgage Loans, no
misrepresentation of a material fact or fraud in respect of the
origination, modification or amendment of any Mortgage Loan has taken
place on the part of any person, including, without limitation, the
related Mortgagor, any appraiser, any builder or developer or any party
involved in the origination of such Mortgage Loan;
(l) With respect to the Pool I Mortgage Loans, the terms of
the Mortgage Note and the Mortgage have not been impaired, altered or
modified in any material respect, except by a written instrument which
has been recorded or is in the process of being recorded, if necessary,
to protect the interests of the Purchaser and which has been or will be
delivered to the Document Custodian on behalf of the Purchaser;
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(li) With respect to the Pool I Mortgage Loans, as of the
Cut-Off Date, no Mortgage Loan is 30 or more days delinquent in payment
of principal and interest. In addition, none of the Mortgage Loans have
been 30 or more days delinquent in the last 12 months and none of the
Mortgage Loans have been 30 or more days delinquent for two payment
periods in the last 12 months;
(lii) With respect to the Pool I Mortgage Loans, 12.84% of the
Mortgage Loans, as of the Closing Date, are fixed rate Mortgage Loans
having an original term to maturity from the date on which the first
monthly payment is due of not more than 30 years. Each Mortgage Note
with respect to a fixed rate and balloon Mortgage Note will provide for
a schedule of substantially level and equal Monthly Payments which are
sufficient to amortize fully the principal balance of such Mortgage
Loan over a period of time equal to the amortization period of such
Mortgage Note; provided, however, that certain Mortgage Loans
constituting approximately 5.03% of the Cut-Off Date Aggregate Loan
Balance are balloon loans that provide for final monthly payment
substantially greater than the preceding monthly payments. All such
balloon loans provide for monthly payment based upon a 30 year
amortization schedule with a final balloon payment no later than the
15th year.
(liii) With respect to the Pool I Mortgage Loans, except for
Mortgage Loans that are delinquent for a time period less than that set
forth in (li) above, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event of acceleration; and neither the Seller, nor
any other entity involved in originating or servicing a Mortgage Loan,
has waived any default, breach, violation or event of acceleration;
(liv) With respect to the Pool I Mortgage Loans, none of the
Mortgage Loans are cooperative share mortgages;
(lv) With respect to the Pool I Mortgage Loans, 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 customary industry standards and included an assessment 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;
(lvi) With respect to the Pool I Mortgage Loans, all
individual insurance policies contain a standard mortgagee clause
naming the Seller, its successors and assigns, as mortgagee. All
premiums thereon have been paid. Each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the
holder of the Mortgage to obtain and maintain such insurance at the
Mortgagor's cost and expense and to seek reimbursement therefor from
the Mortgagor;
(lvii) With respect to the Pool I Mortgage Loans, any advances
made after the date of origination of a Mortgage Loan but prior to the
Cut-Off Date have been consolidated with the outstanding principal
amount secured by the related Mortgage, and the secured
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principal amount, as consolidated, bears a single interest rate and
single repayment term reflected on the Mortgage Loan Schedule. The
consolidated principal amount does not exceed the original principal
amount of the related Mortgage Loan;
(lviii) With respect to the Pool I Mortgage Loans, 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 changes 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. There are
no defaults in complying with the terms of any senior mortgage on the
related Mortgaged Property that have not been cured by anyone other
than the Servicer. 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;
(lix) With respect to the Pool I Mortgage Loans, no
improvement located on or being part of any Mortgaged Property is in
violation of any applicable zoning law or regulation. All inspections,
licenses and certificates required to be made or issued with respect to
all occupied portions of each Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities and such Mortgaged
Property is lawfully occupied under the applicable law;
(lx) With respect to the Pool I Mortgage Loans, the proceeds
of each fixed rate and balloon Mortgage Loan have been fully disbursed
and there is no obligation on the part of the mortgagee to make future
advances thereunder and any and all requirements as to completion of
any on-site or off-site improvements and as to disbursement of any
escrow funds therefor have been complied with. All costs , fees and
expenses incurred in making, closing or recording the Mortgage Loans
were paid and the Mortgagor is not entitled to any refund of amounts
paid or due under the Mortgage Note;
(lxi) With respect to the Pool I Mortgage Loans, no Mortgage
Loan has a shared appreciation feature, or other contingent interest
feature;
(lxii) With respect to the Pool I Mortgage Loans, all parties
which have had any interest in the Mortgage Loan, whether as
originator, mortgagee, assignee, pledgee or otherwise, are (or, during
the period in which they held and disposed of such interest, were): (A)
organized under the laws of such state, or (B) qualified to do business
in such state, or (C) federal savings and loan associations or national
banks having principal offices in such state, or (D) not doing business
in such state so as to require qualification or licensing, or (E) not
otherwise required or licensed in such state. To the best of Seller's
knowledge, all parties which have had any interest in the Mortgage Loan
were in compliance with any and all
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applicable licensing requirements of the laws of the state wherein
the Mortgaged Property is located or were not required to be licensed
in such state;
(lxiii) With respect to the Pool I Mortgage Loans, each
document or instrument in the related Mortgage File is in a form
generally acceptable to prudent mortgage lenders that regularly
originate or purchase mortgage loans comparable to the Mortgage Loans
for sale to prudent investors in the secondary market that invest in
mortgage loans such as the Mortgage Loans;
(lxiv) With respect to the Pool I Mortgage Loans, each
original Mortgage was recorded and all subsequent assignments of the
original Mortgage (other than the assignment to the Purchaser) have
been recorded in the appropriate jurisdictions wherein such recordation
is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(lxv) With respect to the Pool I Mortgage Loans, no Mortgage
Loan was originated under a buydown plan;
(lxvi) With respect to the Pool I Mortgage Loans, no Mortgage
Loan is subject to the requirements of the Home Ownership and Equity
Protection Act of 1994 or any comparable state law;
(lxvii) With respect to the Pool I Mortgage Loans, the
Servicer for each Mortgage Loan has accurately and fully reported its
borrower credit files to each of the credit repositories in a timely
manner;
(lxviii) With respect to the Pool I Mortgage Loans, no
proceeds from any Mortgage Loan were used to purchase single-premium
credit insurance policies;
(lxix) With respect to the Pool I Mortgage Loans, no Mortgage
Loan has a prepayment penalty term longer than three years after its
origination;
(lxx) With respect to the Pool I Mortgage Loans, each Mortgage
Loan conforms, and all Mortgage Loans in the aggregate conform, in all
material respects, to the descriptions thereof set forth in the
Information Circular and the Prospectus Supplement;
(lxxi) With respect to the Pool I Mortgage Loans, each
Mortgage Loan was originated on or after November 9, 1996;
(lxxii) With respect to the Pool I Mortgage Loans, the Seller
represents and warrants that the Seller currently operates or actively
participates in an on-going business (A) to originate single family
mortgage loans ("Loans"), and/or (B) to make periodic purchases of
Loans from originators or sellers, and/or (C) to issue and/or purchase
securities or bonds supported by the Loans, a portion of which Loans
are made to borrowers who are:
(a) low-income families (families with incomes of 80% or less
of area median income) living in low-income areas (a census
tract or
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block numbering area in which the median income does not
exceed 80 percent of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(lxxiii) With respect to the Pool I Mortgage Loans, each
Mortgage contains a provision for the acceleration of the payment of
the unpaid principal balance of the related Mortgage Loan in the event
the related Mortgaged Property is sold without the prior consent of the
mortgagee thereunder;
(lxxiv) With respect to the Pool I Mortgage Loans, to the best
of Seller's knowledge, no Mortgage Loan that is a second-lien Mortgage
Loan has a principal balance as of the applicable Cut-Off Date in
excess of half of Freddie Mac's loan limits for such type of residence;
(lxxv) To the best of Seller's knowledge, the pool of
Mortgages backing the Class A-1 Certificates does not contain the first
and second lien mortgage loans relating to a single Mortgaged property
if the aggregate original principal balance of such mortgage loans
exceeds Freddie Mac's loan limits. To the best of Seller's knowledge,
the pool of Mortgages backing the Securities will not result in a
violation of Freddie Mac's loan limitations;
(lxxvi) With respect to the Pool I Mortgage Loans, each
Mortgage Loan was originated substantially in accordance with Seller's
underwriting criteria, which conform to the underwriting criteria set
forth in the Information Circular.
With respect to the representations and warranties set forth in this Section
4.02 that are made to the best of the Seller's knowledge or as to which the
Seller has no knowledge, if it is discovered by the Purchaser, the Servicer, the
Insurer, Freddie Mac or a Responsible Officer of the Trustee that the substance
of such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
Section 4.03. Representations and Warranties of Purchaser.
Purchaser hereby makes the following representations and warranties, each of
which representations and warranties (i) is material and being relied upon by
Seller and (ii) is true in all respects as of the date of this Agreement:
(i) Purchaser has been duly organized and is validly existing
as a corporation under the laws of the State of Delaware.
(ii) Purchaser has the requisite power and authority and legal
right to execute and deliver, engage in the transactions contemplated
by, and perform and observe the terms and conditions of, this Agreement
to be performed by it.
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(iii)This Agreement has been duly authorized and executed by
Purchaser, is valid, binding and enforceable against Purchaser in
accordance with its terms, and the execution, delivery and performance
by Purchaser of this Agreement does not conflict with any material term
or provision of any other agreement to which Purchaser is a party or
any term or provision of the Certificate of Incorporation or the
By-laws of the Purchaser, or any law, rule, equation, order, judgment,
writ, injunction or decree applicable to Purchaser of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over Purchaser.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or
court is required under applicable law in connection with the execution
and delivery by Purchaser of this agreement.
(v) To the best knowledge of Purchaser, there is no action,
proceeding or investigation pending or threatened against Purchaser
before any court, administrative agency or other tribunal (i) asserting
the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement,
or (iii) which is likely to materially and adversely affect the
performance by Purchaser of its obligations under, or the validity or
enforceability of, this Agreement.
(vi) By the purchase of Mortgage Loans, Purchaser represents
to Seller that Purchaser understands, and that Purchaser has such
knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of, its investment in the
Mortgage Loans.
Section 4.04. Remedies for Breach of Representations and
Warranties; Repurchase Obligation. It is understood and agreed that the
representations and warranties set forth in Section 4.01 and 4.02 shall survive
each sale of Mortgage Loans to the Purchaser and shall inure to the benefit of
the Purchaser and subsequent transferees notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage File. With respect to the
representations and warranties contained in Sections 4.01 and 4.02 which are
made to the best of the Seller's knowledge or to the actual knowledge of the
Seller, if it is discovered by either the Seller or the Purchaser that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan or the
Purchaser's interest therein, then notwithstanding the Seller's lack of
knowledge with respect to the inaccuracy at the time the representation or
warranty was made, the Seller shall repurchase the related Mortgage Loan in
accordance with this Section 4.04 as if the applicable representation or
warranty was breached, subject to the terms and conditions of the Sale and
Servicing Agreement. Upon discovery by either the Seller or the Purchaser of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the others.
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Within 60 days of the earlier of either discovery by or notice
to the Seller of any breach of a representation or warranty which materially and
adversely affects the value of any Mortgage Loan or the Purchaser's interest
therein, the Seller shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured or is not cured or is
not being diligently pursued as evidenced by a notice acceptable to the
Purchaser, as evidenced by the Purchaser's agreement thereto, at the end of such
60-day period, the Seller shall, at the Purchaser's option, either (a)
repurchase such Mortgage Loan at the Repurchase Price, or (b) provide an
Eligible Substitute Mortgage Loan, if the Seller has any such loans available
for sale at the time subject to the terms and conditions of the Sale and
Servicing Agreement.
At the time of repurchase or substitution, the Purchaser and
the Seller shall arrange for the assignment of such Mortgage Loan to the Seller
and the delivery by the Purchaser to the Seller of the related Mortgage Files.
In addition to such cure and repurchase obligation, the Seller
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the representations and warranties contained in this Article IV (notwithstanding
any limitation in such representation and warranty as to the Seller's
knowledge). It is understood and agreed that the obligations of the Seller set
forth in this Section 4.04 to cure or repurchase a defective Mortgage Loan and
to indemnify the Purchaser as provided in this Section 4.04 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.
Any cause of action against the Seller relating to or arising
out of the breach of any representations and warranties made in Sections 4.01 or
4.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement.
ARTICLE V
Covenants and Warranties of Seller
So long as this Agreement remains in effect or Seller shall
have any obligations hereunder, Seller hereby covenants and agrees with
Xxxxxxxxx as follows:
Section 5.01. Affirmative Covenants.
(a) Until the later to occur of (i) the discharge and payment
of all of Seller's obligations under this Agreement and (ii) the Termination
Date of this Agreement, Seller shall, promptly upon preparation, but in no event
later than 60 days following the end of each such party's first three fiscal
quarters, deliver to Purchaser its unaudited company-prepared financial
statements as of the end of each such fiscal quarter, prepared in accordance
with GAAP. Seller shall, promptly upon preparation, but in no event later than
90 days following the end of such
17
party's fourth fiscal quarter, deliver to Purchaser its audited and certified
financial statements, prepared in accordance with GAAP, as of the end of the
most recently ended fiscal year, which audits and certifications shall each be
prepared by a nationally recognized independent accounting firm or by a
regionally recognized independent accounting firm with the prior written consent
of Purchaser, which consent shall not be unreasonably withheld. In all cases,
financial statements shall include, without limitation, a balance sheet, a
profit and loss statement and a statement of cash flows. Notwithstanding
anything in this Agreement to the contrary, if (x) the audited and certified
financial statements described in the immediately preceding sentence are not
delivered within the above-specified 90 days, (y) Seller is diligently using its
best efforts to deliver such financial statements, and (z) Seller provides
Purchaser with a notice specifying the reason for the delay and a date, within a
reasonable time period (as determined by Purchaser), on which such financial
statements will be delivered, and they are so delivered; then failure to deliver
such financial statements within the above-specified 90 days, as the case may
be, shall not be deemed to be an Event of Termination of this Agreement.
(b) Upon request of Purchaser, Seller shall, to the extent
lawful, promptly upon filing, deliver to Purchaser copies of all material public
filings made by Seller with any governmental or quasi-governmental body.
(c) Seller shall (i) with respect to any Mortgage Loans
serviced by Seller or any of its affiliates or otherwise use its best efforts to
cause to be delivered to Purchaser monthly, the report, if any, prepared by the
relevant trustee or servicer setting forth payment activity, defaults and
delinquencies with respect to each Mortgage Loan acquired by Purchaser and (ii)
prepare and deliver reports each month, detailing, with respect to all
Purchases, such information as the Purchaser may from time to time reasonably
request.
(d) Seller shall do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted
except where failure to maintain such authority would not have a material
adverse effect on the ability of Seller to conduct its business or to perform
its obligations under this Agreement.
(e) At all times during this Agreement, Seller shall possess
sufficient net capital and liquid assets (or ability to access the same) to
satisfy its obligations as they become due in the normal course of business.
(f) Seller will notify Purchaser in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same
and, if applicable, any remedial steps being taken with respect thereto;
(i) The occurrence or likelihood of occurrence of an Event of
Termination hereunder;
(ii) The institution of any litigation, arbitration proceeding
or governmental proceeding which, in the opinion of counsel to Seller,
will have a material adverse effect on Seller or the Mortgage Loans;
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(iii) The entry of any judgment or decree against Seller if
the aggregate amount of all judgments and decrees then outstanding
against Seller exceeds $10,000,000 after deducting (A) the amount with
respect to which Seller is insured and with respect to which the
insurer has assumed responsibility in writing, and (B) the amount for
which Seller is otherwise indemnified if the terms of such
indemnification are reasonably satisfactory to Purchaser; or
(iv) The occurrence or likelihood of any event which would
allow the obligee under any material loan agreement to which Seller is
bound to declare an event of default or accelerate the obligations of
Seller thereunder.
(g) Seller shall permit the Purchaser or its accountants,
attorneys or other agents access to all of the books and records relating to
Mortgage Loans purchased and retained by Purchaser for inspection and copying
during normal business hours at all places where Seller conducts business.
Section 5.02. Negative Covenants.
(a) Seller shall not assign or attempt to assign this
Agreement or any rights hereunder, without first obtaining the specific written
consent of Purchaser.
(b) Seller shall not amend its Articles of Incorporation or
By-laws, which amendment shall have or is likely to have an adverse effect upon
Purchaser or its interests under this Agreement, without the prior written
consent of Purchaser.
(c) During the term of this Agreement, Seller shall not engage
in any business other than as a consumer and mortgage finance lender and
servicer, except with the prior written consent of Purchaser.
(d) Seller shall not (i) dissolve or terminate its existence
or (ii) transfer any assets to any affiliate except as otherwise expressly
permitted or contemplated hereby.
(e) Except with the written consent of the Purchaser, the
Seller shall not guarantee, endorse or otherwise in any way become or be
responsible for any obligations of any other person, entity or affiliate,
including, without limitation, whether directly or indirectly by agreement to
purchase the indebtedness of any other person or through the purchase of goods,
supplies or services, or maintenance of working capital or other balance sheet
covenants or conditions, or by way of stock purchase, capital contribution,
advance or loan for the purposes of paying or discharging any indebtedness or
obligation of such other person or otherwise; provided, however, that nothing
contained herein shall prevent Seller from indemnifying its officers, directors
and agents pursuant to its By-laws and its Articles of Incorporation.
(f) Seller will not commit any act in violation of applicable
laws, or regulations promulgated pursuant thereto that relate to the Mortgage
Loans or that materially and adversely affect the operations or financial
conditions of Seller.
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ARTICLE VI
Sale of Mortgage Loans from the Purchaser to the Trust
Section 6.01. Sale and Servicing Agreement. It is the intent
of the Seller and the Purchaser that with respect to the Mortgage Loans, the
Purchaser shall concurrently sell all of its right, title and interest to the
Mortgage Loans and all other property conveyed to it hereunder to the Trust
pursuant to the Sale and Servicing Agreement.
With respect to such sale, the Seller agrees:
(i) to cooperate fully with the Purchaser and the Trust with
respect to all reasonable requests and due diligence procedures
including participating in meetings with Rating Agencies, the Insurer,
Freddie Mac and such other parties as the Purchaser shall designate and
participating in meetings with the Trust and providing information
reasonably requested by the Trust;
(ii) to execute the Sale and Servicing Agreement and all other
necessary documents to effect the transactions contemplated therein;
(iii)the Seller shall make the representations and warranties
set forth herein regarding the Seller and the Mortgage Loans as of the
date of the transfer to the Trust;
(iv) to deliver to the Purchaser for inclusion in any
prospectus or other offering material such publicly available
information regarding the Seller, its financial condition and the
mortgage loan delinquency, foreclosure and loss experience of its
portfolio as is customarily set forth in a prospectus supplement with
respect to a comparable mortgage pool, the underwriting of mortgage
loans, the servicer, the servicing and collection of mortgage loans,
lending activities and loan sales of the servicer, regulatory matters
and delinquency and loss experience and any additional information
reasonably requested by the Purchaser, and to deliver to the Purchaser
unaudited consolidated financial statements of the Seller, in which
case the Purchaser shall bear the cost of having such statements
audited by certified public accountants if the Purchaser desires such
an audit, or as is otherwise reasonably requested by the Purchaser and
which the Seller is capable of providing without unreasonable effort or
expense, and to indemnify the Purchaser and its affiliates for material
misstatements or omissions contained in such information;
(v) to deliver to the Purchaser and to any person designated
by the Purchaser, at the Purchaser's expense, such statements and audit
letters issued by reputable, certified public accountants pertaining to
information provided by the Seller pursuant to clause (iv) above as
shall be reasonably requested by the Purchaser (it being acknowledged
by Purchaser that the delivery of such statements and letters is
subject to the consent of such accountants);
(vi) to deliver to the Purchaser, and to any Person designated
by the Purchaser, such legal documents and in-house opinions of counsel
as are customarily delivered by originators or servicers, as the case
may be, and reasonably determined by the Purchaser to be necessary in
connection with the transactions contemplated by the Sale and Servicing
20
Agreement, it being understood that the cost of any opinions of outside
special counsel that may be required shall be the responsibility of the
Seller;
(vii) to cooperate fully with the Purchaser and any
prospective Purchaser with respect to the preparation of Mortgage Loan
documents and other documents and with respect to servicing
requirements reasonably requested by the Rating Agencies, the Insurer
and Freddie Mac; and
(viii) to negotiate and execute one or more custodial and
servicing agreements among the Purchaser, the Seller and a third party
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by the
Purchaser in its sole discretion after consultation with the Seller, in
either case for the purpose of securitizing the Mortgage Loans.
ARTICLE VII
Seller's Servicing Obligations
Section 7.01. Seller's Servicing Obligations. The Seller, as
an independent contract servicer, shall service and administer the Mortgage
Loans in accordance with the terms and provisions set forth in Articles III, IV,
V, VII and VIII of the Sale and Servicing Agreement which sections are hereby
incorporated in this Agreement in their entirety (with, however, the changes and
adjustments as provided in this Agreement) as if the same were contained in this
Article VII.
To the extent any provision of any definition set forth in the
Sale and Servicing Agreement shall conflict with any provision set forth in this
Agreement, the provision or definition in this Agreement shall govern.
ARTICLE VIII
Fees and Expenses
The Purchaser shall pay any salaries and other compensation
due its employees and the legal fees and expenses of its attorneys and
accountants. All other costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans pursuant to this Agreement or the
Sale and Servicing Agreement, including, without limitation, recording fees,
fees for title policy endorsements and continuations, and fees for recording
intervening assignments of Mortgage, shall be paid by the Seller. To the extent
not paid out of the Trust pursuant to Section 8.7(d)(i) of the Pooling
Agreement, the Seller shall pay the on-going fees of any custodian or trustee
under the Sale and Servicing Agreement, the Trust Agreement or the Pooling
Agreement. The
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Seller shall pay (i) the acceptance and file review fees of any custodian or
trustee under this Agreement, the Pooling Agreement, the Trust Agreement or the
Sale and Servicing Agreement and (ii) the costs of legal counsel and legal
opinions, accounting comfort letters and fees, printing of disclosure documents,
rating agency fees, Insurer up-front fees, SEC filing fees and the costs of any
and all related document preparations associated with the Sale and Servicing
Agreement, the Trust Agreement, the Pooling Agreement or this Agreement. The
Seller also agrees to pay the fees and other amounts for which the Seller or
Servicer is obligated under the Insurance Agreement.
ARTICLE IX
Termination; Additional Remedies
Upon the occurrence of a Rapid Amortization Event due to an
act or omission of the Seller (an "Event of Termination"), the Purchaser and its
assignees shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of an Event of
Termination shall not deny to the Purchaser or its assignees any remedy in
addition to termination of its obligations to make purchases hereunder to which
the Purchaser or its assignee may be otherwise appropriately entitled, whether
by statute or applicable law, at law or in equity.
ARTICLE X
Payment of Purchase Price
Section 10.01. Purchase Price Payments. On the Closing Date,
and on the Business Day following each other day on which any Mortgage Loans are
purchased from the Seller by the Purchaser pursuant to Article II hereof or
Additional Balances relating to Mortgage Loans are funded by the Seller, on the
terms and subject to the conditions of this Agreement, the Purchaser shall pay
to the Seller the applicable Purchase Price by (i) making or causing to be made
a cash payment to the Seller or its designee in such amount determined by the
Purchaser, (ii) crediting the Seller with an additional capital contribution to
the Purchaser, (iii) automatically increasing the principal amount outstanding
under the Purchaser Note by the amount of the excess of the Purchase Price to be
paid to the Seller for such purchased assets over the amount of any cash payment
made on such day to the Seller and/or any capital contribution made by the
Seller to the Purchaser, subject to a cap on such note at any time equal to $10
million or (iv) any combination of the foregoing. Such $10 million cap may be
increased upon the occurrence of and in the amount of any cash capital
contributions made by the Seller to the Purchaser.
Section 10.02. The Purchaser Note.
(a) On the Closing Date, the Purchaser shall deliver to the
Seller a promissory note, substantially in the form of Exhibit A, payable to the
order of the Seller (such promissory note, as the same has been or hereafter may
be amended, supplemented, endorsed or otherwise modified from time to time,
together with any promissory note issued from time to time in substitution
therefor or renewal thereof in accordance with this Agreement, being herein
called the "Purchaser Note"), which Purchaser Note shall, in accordance with its
terms, be subordinated to all interests of the Trust, all claims to the cash
flows from Trust assets and all obligations of the Purchaser, of any nature, now
or hereafter arising under or in connection with the Sale and Servicing
Agreement. The Purchaser Note shall evidence all amounts outstanding thereunder
as of the Closing Date in addition to amounts subsequently incurred thereunder
as provided in this
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Agreement. Subject to the foregoing, the Purchaser Note shall be payable in full
on the date which is one year and one day after the Termination Date. The
Purchaser Note shall bear interest at the "prime rate" as determined by the
Trustee from time to time in effect. The Purchaser may prepay all or part of the
outstanding balance of the Purchaser Note and interest accrued thereon from time
to time without any premium or penalty, unless an Event of Default has occurred
and is continuing or would result from such prepayment or payment.
(b) The Servicer shall hold the Purchaser Note for the benefit
of the Seller, and shall make all appropriate recordkeeping entries with respect
to the Purchaser Note or otherwise to reflect the payments on and adjustments of
the Purchaser Note. The Servicer's books and records shall constitute rebuttable
presumptive evidence of the principal amount of and accrued interest on the
Purchaser Note at any time. The Seller hereby irrevocably authorizes the
Servicer to mark the Purchaser Note "CANCELLED" and to return the Purchaser Note
to the Purchaser upon the full and final payment thereof after the Termination
Date.
(c) The Seller hereby agrees not to transfer, assign, exchange
or otherwise convey or pledge, hypothecate or otherwise grant a security
interest in the Purchaser Note or any interest represented thereby, and any
attempt to transfer, assign, exchange, convey, pledge, hypothecate or grant a
security interest in the Purchaser Note or any interest represented thereby
shall be void and of no effect.
ARTICLE XI
Confidentiality
Purchaser and Seller each acknowledges that the information
heretofore provided to them pursuant to the operation of this Agreement, is
highly confidential, proprietary information of Seller or Purchaser, as the case
may be. Purchaser and Seller each agrees that it will hold such information in
strict confidence and will not disclose any part of such information to any
person or entity, other than to its accountants and lawyers to the extent
necessary for the performance of their duties and as required by law and other
than to such other persons to the extent necessary, as determined by the
Purchaser in its sole discretion, to complete the transactions contemplated
hereunder and in the Sale and Servicing Agreement including the offering and
issuance of the Class A-1 Certificates and Class A-2 Notes; provided, however,
that copies of this Agreement may be included as part of any filing made
pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934
and any regulations promulgated thereunder. In furtherance of the foregoing,
Purchaser and Seller each covenants that it will adhere to its established
procedures for the maintenance of confidentiality with respect to such
information. Purchaser and Seller each further agrees that it will not
distribute such information within its own organization except to persons with a
need to know such information in connection with the transactions contemplated
by this Agreement.
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ARTICLE XII
Term
This Agreement shall terminate on the Termination Date.
ARTICLE XIII
Exclusive Benefit of Parties; Assignment
This Agreement is for the exclusive benefit of the parties
hereto and their respective successors and assigns and shall not be deemed to
give any legal or equitable right to any other person except the Sponsor, the
Trust, the holders of the Class A-1 Certificates and Class A-2 Notes, the
Insurer and Freddie Mac. Notwithstanding the foregoing, the Seller covenants and
agrees that the representations and warranties contained in this Agreement and
the rights of the Purchaser hereunder are intended to benefit the Trust, the
holders of the Class A-1 Certificates and Class A-2 Notes, the Insurer and
Freddie Mac. This Agreement may not be assigned by any party hereto without the
prior written consent of the other party hereto except to the Trust.
ARTICLE XIV
Amendment; Waivers
This Agreement may be amended from time to time only by
written agreement of Seller and Purchaser with the prior written consent of the
Insurer and of Freddie Mac, which consent shall not be unreasonably withheld by
either. Any forbearance, failure, or delay by a party in exercising any right,
power, or remedy hereunder shall not be deemed to be a waiver thereof, and any
single or partial exercise by a party of any right, power or remedy hereunder
shall not preclude the further exercise thereof. Every right, power and remedy
of a party shall continue in full force and effect until specifically waived by
it in writing. No right, power or remedy shall be exclusive, and each such
right, power or remedy shall be cumulative and in addition to any other right,
power or remedy, whether conferred hereby or hereafter available at law or in
equity or by statute or otherwise.
ARTICLE XV
Execution in Counterparts
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same instrument.
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ARTICLE XVI
Effect of Invalidity of Provisions
In case any one or more of the provisions contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.
ARTICLE XVII
Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its rules
regarding conflict of laws.
ARTICLE XVIII
Notices
Any notices, consents, directions, demands and other
communications given under this Agreement (unless otherwise specified herein)
shall be in writing and shall be deemed to have been duly given when personally
delivered at or telecopied to the respective addresses or facsimile numbers, as
the case may be, set forth on the signature page hereof for Seller and
Purchaser, or to such other address or facsimile number as either party shall
give notice to the other party pursuant to this Section. Notices, consents,
etc., may also be effected by first class mail, postage prepaid sent to the
foregoing addresses and will be effective upon receipt by the intended
recipient.
ARTICLE XIX
Entire Agreement
This Agreement, including the Exhibits and Schedules hereto,
contains the entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements between
them, whether oral or written, of any nature whatsoever with respect to the
subject matter hereof.
ARTICLE XX
Indemnities
Without limiting any other rights which Purchaser or Seller
may have hereunder or under applicable law, and in addition to any other
indemnity provided hereunder, Seller hereby agrees to indemnify Purchaser and
its respective officers, directors, agents and employees
25
(each, an "Indemnified Party") from and against any and all Losses incurred by
any of them relating to or resulting from:
(1) any representation or warranty made by Seller (or any
officers, employees or agents of Seller) under or in connection with
this Agreement, any periodic report required to be furnished thereunder
or any other information or document delivered by Seller pursuant
hereto, which shall have been false or incorrect in any material
respect when made or deemed made;
(2) the failure by Seller to (a) comply with any applicable
law, rule or regulation with respect to any Purchase or (b) perform or
observe any material obligation or covenant hereunder; or
(3) the failure by Seller (if so requested by Purchaser) to
execute and properly file, or any delay in executing and properly
filing, financing statements or other similar instruments or documents
under the Uniform Commercial Code of any applicable jurisdiction or
other applicable laws with respect to the Mortgage Loans.
Promptly after receipt by an Indemnified Party under this
Article XX of notice of the commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Article XX, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to any Indemnified Party
otherwise than under this Article XX. 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 elect by written notice delivered to the Indemnified
Party promptly after receiving the aforesaid notice from such Indemnified Party,
to assume the defense thereof, with counsel satisfactory to such Indemnified
Party; provided, however, that if the defendants in any such action include both
the Indemnified Party and the indemnifying party and the Indemnified Party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other Indemnified Parties that are different from
or additional to those available to the indemnifying party, the Indemnified
Party or parties shall have the right to elect separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Party or parties. Upon receipt of notice from the
indemnifying party to such Indemnified Party of its election so to assume the
defense of such action and approval by the Indemnified Party of counsel, the
indemnifying party will not be liable for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof, unless (i) the Indemnified Party shall have employed separate counsel
in connection with the assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by you in the case of Article XX, representing the
Indemnified Parties under this Article XX, who are parties to such action), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
Indemnified Party to represent the Indemnified Party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the Indemnified Party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall only be in respect of the counsel referred to in such
clause (i) or (iii).
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ARTICLE XXI
RESPA Obligations
Seller agrees to discharge on Purchaser's behalf all
obligations, including, without limitation, all disclosure obligations, which
Purchaser may have under the Real Estate Settlement Procedures Act of 1974, as
amended, in connection with Purchaser's purchases of Mortgage Loans hereunder.
Purchaser agrees to provide Seller with such information as is reasonably
necessary for Seller to discharge such obligations and hereby appoints Seller as
its agent in its name for the purposes of, and only for the purposes of,
performing such obligations. Seller hereby agrees to indemnify Purchaser and its
respective officers, directors, agents and employees from any losses suffered by
any such party in connection with Seller's obligations under this Article XXI.
ARTICLE XXII
Survival
All indemnities and undertakings of Seller and Purchaser
hereunder shall survive the termination of this Agreement.
ARTICLE XXIII
Right of Set-off
Upon the occurrence of any event or circumstance which
requires Seller to make a payment hereunder, Purchaser is hereby authorized then
or at any time or times thereafter, without notice to Seller (any such notice
being expressly waived by Seller), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final), at any time held and
other indebtedness at any time owing by Purchaser to or for the credit or the
account of Seller against any and all of the obligations of Seller now or
hereafter existing hereunder, irrespective of whether or not Purchaser shall
have made any demand hereunder. Purchaser agrees promptly to notify Seller after
any such set-off and application made by Purchaser; provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of Purchaser under this Article XXIII are in addition to other rights
and remedies which Purchaser may have.
ARTICLE XXIV
Consent to Service
Each party irrevocably consents to the service of process by
registered or certified mail, postage prepaid, to it at its address given
pursuant to Article XVIII hereof.
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ARTICLE XXV
Submission to Jurisdiction; Waiver of Trial by Jury
With respect to any claim arising out of this Agreement each
party irrevocably submits to the exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough of
Manhattan, City of New York, and each party irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party; provided that service of process is made as set
forth in Article XXIV hereof, or by any other lawful means. To the extent
permitted by applicable law, Purchaser and Seller each irrevocably waive all
right of trial by jury in any action, proceeding or counterclaim arising out of
or in connection with this Agreement or any matter arising hereunder.
ARTICLE XXVI
Construction
The headings in this Agreement are for convenience only and
are not intended to influence its construction. References to Articles,
Sections, Schedules and Exhibits in this Agreement are to the Articles, Sections
of and Schedules and Exhibits to this Agreement. The Schedules and Exhibits are
hereby incorporated into and form a part of this Agreement. In this Agreement,
the singular includes the plural, the plural the singular, the words "and" and
"or" are used in the conjunctive or disjunctive as the sense and circumstances
may require and the word "including" means "including, but not limited to."
Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to but
excluding."
ARTICLE XXVII
Further Agreements
The Seller and the Purchaser each agree to execute and deliver
to the other such reasonable and appropriate additional documents, instruments
or agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
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IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the date first written above.
GREENPOINT MORTGAGE SECURITIES INC.,
as Purchaser
000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
By: /s/ Xxxxxxx X. XxxXxxxxxx
---------------------------------
Name: Xxxxxxx X. XxxXxxxxxx
Title: Vice President
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
000 Xxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
By: /s/ Xxxxx Xxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Vice President
[Mortgage Loan Purchase Agreement]
EXHIBIT A
FORM OF NON-NEGOTIABLE
GREENPOINT MORTGAGE SECURITIES INC.
PROMISSORY NOTE
June 29, 2000
EXCEPT TO THE EXTENT PROVIDED IN THE PURCHASE AGREEMENT REFERRED TO BELOW, THIS
PROMISSORY NOTE AND ANY INTEREST REPRESENTED HEREBY SHALL NOT BE TRANSFERRED,
ASSIGNED, EXCHANGED, CONVEYED, PLEDGED, HYPOTHECATED OR OTHERWISE THE SUBJECT OF
THE GRANT OF A SECURITY INTEREST AND ANY ATTEMPT TO TRANSFER, ASSIGN, EXCHANGE,
CONVEY, PLEDGE, HYPOTHECATE OR GRANT A SECURITY INTEREST IN THIS PROMISSORY NOTE
OR ANY INTEREST REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.
For VALUE RECEIVED, the undersigned, GREENPOINT MORTGAGE SECURITIES INC., a
Delaware corporation (the "Purchaser"), promises to pay to GREENPOINT MORTGAGE
FUNDING, INC., a California corporation (the "Seller"), on the terms and subject
to the conditions set forth herein and in the Purchase Agreement referred to
below, the aggregate unpaid Purchase Price of all assets purchased and to be
purchased by the Purchaser pursuant to the Purchase Agreement, provided that
such amount shall in no event exceed [$__________]. Such amount as shown in the
records of the Seller will be rebuttable presumptive evidence of the principal
amount owing under this Note.
1. Purchase and Sale Agreement. This Note is the Purchaser
Note described in, and is subject to the terms and conditions set forth in, that
certain Mortgage Loan Purchase Agreement dated as of June 1, 2000 (as the same
may be amended, supplemented, restated or otherwise modified in accordance with
its terms, the "Purchase Agreement"), between the Seller and the Purchaser.
Reference is hereby made to the Purchase Agreement for a statement of certain
other rights and obligations of the Purchaser and the Seller.
2. Definitions. Capitalized terms used (but not defined)
herein have the meanings ascribed thereto in the Purchase Agreement. In
addition, as used herein, the following terms have the following meanings:
"Bankruptcy Proceedings" has the meaning set forth in clause
(a) of paragraph 7 hereof."
"Final Maturity Date" means the date that falls one year and
one day after the Termination Date.
"Junior Liabilities" means all obligations of the Purchaser to
the Seller under this Note and under all similar notes issued by the Purchaser
to the Seller in connection with any previous or future securitization
transactions.
A-1
"Senior Liabilities" means all obligations of the Purchaser to
the Trust and any other obligations of the Purchaser arising under or in
connection with the Sale and Servicing Agreement, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or thereafter
existing, or due or to become due on or before the Final Maturity Date.
"Subordination Provisions" means, collectively, clauses (a)
through (i) of paragraph 7 hereof.
3. Interest. Subject to the Subordination Provisions and
paragraph 10 hereof, the Purchaser promises to pay interest on the aggregate
unpaid principal amount of this Note outstanding on each day, at a variable rate
equal to the rate publicly announced by the Trustee from time to time as its
"prime lending rate."
4. Interest Payment Dates. Subject to the Subordination
Provisions, paragraph 10 hereof and Section 10.02 of the Purchase Agreement, the
Purchaser shall pay accrued interest on this Note on each Payment Date and on
the Final Maturity Date. The Purchaser also shall pay accrued interest on the
principal amount of each prepayment hereof on the date of each such prepayment.
5. Basis of Computation. Interest accrued hereunder shall be
computed for the actual number of days elapsed on the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination
Provisions, any unpaid principal of this Note shall be paid on the Final
Maturity Date (or, if such date is not a Business Day, the next succeeding
Business Day). Subject to the Subordination Provisions, paragraph 10 hereof and
Section 10.02 of the Purchase Agreement, the principal amount of and accrued
interest on this Note may be prepaid on any Business Day without premium or
penalty.
7. Subordination Provisions. The Purchaser covenants and
agrees, and the Seller, by its acceptance of this Note, likewise covenants and
agrees, that the payment of all Junior Liabilities is hereby expressly
subordinated in right of payment to the payment and performance of the Senior
Liabilities to the extent and in the manner set forth in the following clauses
of this paragraph 7:
(a) (i) In the event of any dissolution, winding up,
liquidation, readjustment, reorganization or other similar event relating to the
Purchaser, whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency, receivership or other similar proceedings, or upon an
assignment for the benefit of creditors, or any other marshalling of the assets
and liabilities of the Purchaser or any sale of all or substantially all of the
assets of the Purchaser except pursuant to the Sale and Servicing Agreement
(such proceedings being herein collectively called "Bankruptcy Proceedings"),
and (ii) on and after the occurrence of an Event of Default, the Senior
Liabilities shall first be paid and performed in full and in cash before the
Seller shall be entitled to receive and to retain any payment or distribution in
respect of the Junior Liabilities. In order to implement the foregoing: (x) all
payments and distributions of any kind or character in respect of the Junior
Liabilities to which the Seller would be entitled except for this clause (a)
shall be made directly to the Trustee (for the benefit of the Noteholders); and
A-2
(y) the Seller hereby irrevocably agrees that the Trustee (on
behalf of the Noteholders), in the name of the Seller or otherwise, may demand,
sue for, collect, receive and receipt for any and all such payments or
distributions, and file, prove and vote or consent in any such Bankruptcy
Proceedings with respect to any and all claims of the Seller relating to the
Junior Liabilities, in each case until the Senior Liabilities shall have been
paid and performed in full and in cash.
(b) following the occurrence of any of the events described in
clause (a)(i) or (ii), in the event that the Seller receives any payment or
other distribution of any kind or character from the Purchaser or from any other
source whatsoever, in respect of the Junior Liabilities, such payment or other
distribution shall be received in trust for the Trustee and shall be turned over
by the Seller to the Trustee (for the benefit of the Noteholders) forthwith. All
payments and distributions received by the Trustee in respect of this Note, to
the extent received in or converted into cash, may be applied by the Trustee
(for the benefit of the Noteholders) first to the payment of any and all
reasonable expenses (including reasonable attorneys' fees and legal expenses)
paid or incurred by the Trustee or the Noteholders in enforcing these
Subordination Provisions, or in endeavoring to collect or realize upon the
Junior Liabilities, and any balance thereof shall, solely as between the Seller
and the Noteholders, be applied by the Trustee toward the payment of the Senior
Liabilities in a manner determined by the Trustee to be in accordance with the
Pooling Agreement; but as between the Purchaser and its creditors, no such
payments or distributions of any kind or character shall be deemed to be
payments or distributions in respect of the Senior Liabilities.
(c) Upon the final payment in full and in cash of all Senior
Liabilities, the Seller shall be subrogated to the rights of the Trustee to
receive payments or distributions from the Purchaser that are applicable to the
Senior Liabilities until the Junior Liabilities are paid in full.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Seller, on the one hand, and the
Trustee (on behalf of Noteholders), on the other hand. Nothing contained in
these Subordination Provisions or elsewhere in this Note (subject to paragraph
10 hereof) is intended to or shall impair, as between the Purchaser, its
creditors (other than the Noteholders) and the Seller, the Purchaser's
obligation, which is unconditional and absolute, to pay the Junior Liabilities
as and when the same shall become due and payable in accordance with the terms
hereof (subject to paragraph 10 hereof) and of the Purchase Agreement or to
affect the relative rights of the Seller and creditors of the Purchaser (other
than the Noteholders).
(e) The Seller shall not, until the Senior Liabilities have
been finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to any obligation of the Purchaser, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, or now or
thereafter existing, or due or to become due (other than the Senior
Liabilities), the Junior Liabilities or any rights in respect hereof or (ii)
convert the Junior Liabilities into an equity interest in the Purchaser, unless,
in the case of each of clauses (i) and (ii) above, the Seller shall have
received the prior written consent of the Trustee , the Insurer and Freddie Mac
in each case.
A-3
(f) The Seller shall not, except without the advance written
consent of the Trustee and the Controlling Party commence, or join with any
other Person in commencing, any Bankruptcy Proceedings with respect to the
Purchaser until at least one year and one day have passed since the Termination
Date.
(g) If, at any time, any of the payment (in whole or in part)
made with respect to any Senior Liabilities is rescinded or must be restored or
returned by the Trustee or Noteholders (whether in connection with any
Bankruptcy Proceedings or otherwise), these Subordination Provisions shall
continue to be effective or shall be reinstated, as the case may be, as though
such payment had not been made.
(h) The Trustee (on behalf of Noteholders) may, from time to
time, with the consent of the Controlling Party without notice to the Seller,
and without waiving any of its rights under these Subordination Provisions, take
any or all of the following actions: retain or obtain an interest in any
property to secure any of the Senior Liabilities; (ii) retain or obtain the
primary or secondary obligations of any other obligor or obligors with respect
to any of the Senior Liabilities; (iii) extend or renew for one or more periods
(whether or not longer than the original period), alter or exchange any of the
Senior Liabilities, or release or compromise any obligation of any nature with
respect to any of the Senior Liabilities; (iv) amend, supplement, amend and
restate, or otherwise modify the Sale and Servicing Agreement or any related
document; and (v) release its security interest in or surrender, release or
permit any substitution or exchange for all or any part of any rights or
property securing any of the Senior Liabilities, or extend or renew for one or
more periods (whether or not longer than the original period) or release,
compromise, alter or exchange any obligations of any nature of any obligor with
respect to any such rights or property.
(i) The Seller hereby waives: (i) notice of acceptance of
these Subordination Provisions by any of the Noteholders, (ii) notice of the
existence, creation, non-payment or non-performance of all or any of the Senior
Liabilities; and (iii) all diligence in enforcement, collection or protection
of, or realization upon, the Senior Liabilities, or any thereof, or any security
therefor.
(j) These Subordination Provisions constitute a continuing
offer from the Purchaser to all Persons who become the holders of, or who
continue to hold, Senior Liabilities; and these Subordination Provisions are
made for the benefit of the Noteholders, and the Trustee may proceed to enforce
such provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of the Seller in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Note shall in any event be effective unless (a) the same shall
be in writing and signed and delivered by the Purchaser and the Seller, and (b)
all consents required for such actions under the Purchase Agreement and the Sale
and Servicing Agreement shall have been received by the appropriate Persons. The
rights and remedies granted hereunder to the Trustee and the Noteholders are
subject to exercise as provided in the Purchase Agreement and the Sale and
Servicing Agreement.
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9. Limitation on Interest. Notwithstanding anything in this
Note to the contrary, the Purchaser shall never be required to pay unearned
interest on any amount outstanding hereunder, and shall never be required to pay
interest on the principal amount outstanding hereunder at a rate in excess of
the maximum interest rate that may be contracted for, charged or received
without violation of applicable federal or state law.
10. Acknowledgment. The Seller acknowledges and agrees that it
has no rights to payment under this Note, and will not make any claim for
payment hereunder, unless funds are available for payment by the Purchaser in
excess of amounts due and payable by it at the time under the Sale and Servicing
Agreement and under all similar notes issued by the Purchaser to the Seller in
connection with any previous or future securitizations.
11. No Negotiation. This Note is not negotiable.
12. Governing Law. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
13. Captions. Paragraph captions used in this Note are
provided solely for convenience of reference only and shall not affect the
meaning or interpretation of any provision of this Note.
GREENPOINT MORTGAGE SECURITIES INC.
By:_________________________________
Name:______________________________
Title:_______________________________
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SCHEDULE I
MORTGAGE LOAN SCHEDULE
[On file with Trustee]
