SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT MORGAN STANLEY MORTGAGE CAPITAL INC., Purchaser LYDIAN PRIVATE BANK, Seller Dated as of September 1, 2006 Conventional, Fixed and Adjustable Rate Residential Mortgage Loans
Exhibit
99.12b
SECOND
AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
WARRANTIES AGREEMENT
XXXXXX
XXXXXXX MORTGAGE CAPITAL INC.,
Purchaser
LYDIAN
PRIVATE BANK,
Seller
Dated
as
of September 1, 2006
Conventional,
Fixed
and
Adjustable Rate
Residential
Mortgage Loans
TABLE
OF
CONTENTS
Page
|
SECTION
1.
|
DEFINITIONS.
|
1
|
|
SECTION
2.
|
AGREEMENT
TO PURCHASE.
|
15
|
|
SECTION
3.
|
MORTGAGE
SCHEDULES.
|
15
|
|
SECTION
4.
|
PURCHASE
PRICE.
|
15
|
|
SECTION
5.
|
EXAMINATION
OF MORTGAGE FILES.
|
16
|
|
SECTION
6.
|
CONVEYANCE
FROM SELLER TO PURCHASER.
|
17
|
|
SECTION
7.
|
SERVICING
OF THE MORTGAGE LOANS.
|
20
|
|
SECTION
8.
|
[RESERVED].
|
20
|
|
SECTION
9.
|
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR
BREACH.
|
20
|
|
SECTION
10.
|
CLOSING
|
40
|
|
SECTION
11.
|
CLOSING
DOCUMENTS.
|
41
|
|
SECTION
12.
|
COSTS.
|
42
|
|
SECTION
13.
|
COOPERATION
OF SELLER WITH A RECONSTITUTION.
|
43
|
|
SECTION
14.
|
THE
SELLER.
|
44
|
|
SECTION
15.
|
FINANCIAL
STATEMENTS.
|
46
|
|
SECTION
16.
|
MANDATORY
DELIVERY; GRANT OF SECURITY INTEREST.
|
46
|
|
SECTION
17.
|
NOTICES.
|
47
|
|
SECTION
18.
|
SEVERABILITY
CLAUSE.
|
48
|
|
SECTION
19.
|
COUNTERPARTS.
|
48
|
|
SECTION
20.
|
INTENTION
OF THE PARTIES.
|
48
|
|
SECTION
21.
|
SUCCESSORS
AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.
|
48
|
|
SECTION
22.
|
WAIVERS.
|
00
|
-x-
|
XXXXXXX
00.
|
EXHIBITS.
|
49
|
|
SECTION
24.
|
GENERAL
INTERPRETIVE PRINCIPLES.
|
49
|
|
SECTION
25.
|
REPRODUCTION
OF DOCUMENTS.
|
49
|
|
SECTION
26.
|
FURTHER
AGREEMENTS.
|
50
|
|
SECTION
27.
|
RECORDATION
OF ASSIGNMENTS OF MORTGAGE.
|
50
|
|
SECTION
28.
|
NO
SOLICITATION.
|
50
|
|
SECTION
29.
|
WAIVER
OF TRIAL BY JURY.
|
51
|
|
SECTION
30.
|
GOVERNING
LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS.
|
51
|
|
SECTION
31.
|
AMENDMENT.
|
51
|
|
SECTION
32.
|
CONFIDENTIALITY.
|
52
|
|
SECTION
33.
|
ENTIRE
AGREEMENT.
|
52
|
|
SECTION
34.
|
COMPLIANCE
WITH REGULATION AB.
|
52
|
EXHIBITS
|
EXHIBIT
A-1
|
MORTGAGE
LOAN DOCUMENTS
|
|
EXHIBIT
A-2
|
CONTENTS
OF EACH MORTGAGE FILE
|
|
EXHIBIT
B
|
FORM
OF INDEMNIFICATION AND CONTRIBUTION
AGREEMENT
|
|
EXHIBIT
C
|
FORM
OF SELLER’S OFFICER’S CERTIFICATE
|
|
EXHIBIT
D
|
FORM
OF OPINION OF COUNSEL TO THE SELLER
|
|
EXHIBIT
E
|
[RESERVED]
|
|
EXHIBIT
F
|
[RESERVED]
|
|
EXHIBIT
G
|
UNDERWRITING
GUIDELINES
|
|
EXHIBIT
H
|
FORM
OF ASSIGNMENT AND CONVEYANCE
AGREEMENT
|
-ii-
SECOND
AMENDED AND RESTATED
MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT
WARRANTIES AGREEMENT
This
SECOND AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
(“Agreement”),
dated as of September 1, 2006, by and between Xxxxxx Xxxxxxx Mortgage
Capital Inc., a New York corporation (the “Purchaser”), and
Lydian Private Bank, a federal savings bank (the “Seller”).
W I T N E S S ET H:
WHEREAS,
the Purchaser and the Seller are parties to that certain Master Mortgage Loan
Purchase and Warranties Agreement, dated as of May 1, 2005, as amended and
restated by that certain First Amended and Restated Mortgage Loans Purchase
and
Warranties Agreement, dated as of September 1, 2005 (the “Original Purchase
Agreement”) and the Seller desires to sell, from time to time, to the
Purchaser, and the Purchaser desires to purchase, from time to time, from the
Seller, certain conventional fixed and adjustable rate residential first-lien
mortgage loans (the “Mortgage Loans”) on a
servicing released basis as described herein, and which shall be delivered
in
pools of whole loans (each, a “Mortgage Loan
Package”) on various dates as provided herein (each, a “Closing
Date”);
WHEREAS,
at the present time, the Purchaser and the Seller desire to amend the Original
Purchase Agreement to make certain modifications with respect to all Mortgage
Loans acquired by the Purchaser pursuant to this Agreement or the Original
Purchase Agreement.
NOW,
THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller
agree
as follows:
SECTION
1. Definitions.
For
purposes of this Agreement the following capitalized terms shall have the
respective meanings set forth below.
Accepted
Servicing
Practices: With respect to any Mortgage Loan, those mortgage
servicing practices which are in accordance with accepted mortgage servicing
practices of prudent mortgage lending institutions which service mortgage loans
of the same type as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located.
Act: The
National Housing Act, as amended from time to time.
Adjustable
Rate Mortgage
Loan: A Mortgage Loan purchased pursuant to this Agreement,
the Mortgage Interest Rate of which is adjusted from time to time in accordance
with the terms of the related Mortgage Note.
Affiliate: With
respect to any specified Person, any other Person controlling or controlled
by
or under common control with such specified Person. For the purposes
of this definition, “control” when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.
Agency
Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac
Transfer.
Agreement: This
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement
including all exhibits, schedules, amendments and supplements
hereto.
ALTA: The
American Land Title Association or any successor thereto.
Appraised
Value: With respect to any Mortgaged Property, the lesser of
(i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by a
Qualified Appraiser and (ii) the purchase price paid for the related
Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan;
provided, however,
that in the case of
a Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely
upon the value determined by an appraisal made for the originator of such
Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage
Loan by a Qualified Appraiser.
Assignment
and Conveyance
Agreement: As defined in Subsection 6.01.
Assignment
of
Mortgage: An individual assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form and in blank, sufficient
under the laws of the jurisdiction in which the related Mortgaged Property
is
located to give record notice of the sale of the Mortgage to the
Purchaser.
Balloon
Mortgage
Loan: Any Mortgage Loan (a) that requires only payments
of interest until the stated maturity date of the Mortgage Loan or (b) for
which Monthly Payments of principal (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Business
Day: Any day other than (i) a Saturday or Sunday,
(ii) a day on which banking and savings and loan institutions, in the State
of New York or the State in which the Interim Servicer’s servicing operations
are located or (iii) the state in which the Custodian’s operations are
located, are authorized or obligated by law or executive order to be
closed.
Cash-Out
Refinance: A Refinanced Mortgage Loan in which the proceeds
received were in excess of the amount of funds required to repay the principal
balance of any existing first mortgage on the related Mortgaged Property, pay
related closing costs and satisfy any outstanding subordinate mortgages on
the
related Mortgaged Property and which provided incidental cash to the related
Mortgagor of more than one percent (1%) (or, if specified in the related
Underwriting Guidelines applicable to such Mortgage Loan, two percent (2%))
of
the original principal balance of such Mortgage Loan.
-2-
Closing
Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Closing
Documents: The documents required to be delivered on each
Closing Date pursuant to Section 11.
CLTA: The
California Land Title Association.
Code: The
Internal Revenue Code of 1986, as amended, or any successor statute
thereto.
Commission: The
United States Securities and Exchange Commission.
Condemnation
Proceeds: All awards, compensation and settlements in respect
of a taking of all or part of a Mortgaged Property, whether permanent or
temporary, partial or entire, by exercise of the power of condemnation or the
right of eminent domain, to the extent not required to be released to a
Mortgagor in accordance with the terms of the related Mortgage Loan
Documents.
Co-op: A
private, cooperative housing corporation, having only one class of stock
outstanding, which owns or leases land and all or part of a building or
buildings, including apartments, spaces used for commercial purposes and common
areas therein and whose board of directors authorizes the sale of stock and
the
issuance of a Co-op Lease.
Co-op
Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated
to
the related dwelling unit.
Co-op
Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered
Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor’s Glossary.
Custodial
Account: The separate trust account created and maintained
pursuant to Subsection 2.04
of the Interim Servicing Agreement (with respect to each Mortgage Loan, as
specified therein).
Custodial
Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in
effect at any given time, all of the individual Custodial Agreements shall
collectively be referred to as the “Custodial Agreement.”
-3-
Custodian: Deutsche
Bank Trust Company Americas, a New York banking corporation, and its successors
in interest, or any successor to the Custodian under the Custodial Agreement
as
therein provided.
Cut-off
Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan
Package.
Deemed
Material and Adverse
Representation: Each representation and warranty identified as
such in Section 9.02 of
this Agreement.
Deleted
Mortgage
Loan: A Mortgage Loan that is repurchased or to be repurchased
or replaced or to be replaced with a Qualified Substitute Mortgage Loan by
the
Seller in accordance with the terms of this Agreement.
Depositor: The
depositor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Determination
Date: The date specified in the Interim Servicing Agreement
(with respect to each Mortgage Loan, for an interim period, as specified
therein).
Due
Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow
Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by
the Mortgagor with the Mortgagee pursuant to the Mortgage or any other
document.
Exchange
Act: The Securities Exchange Act of 1934, as
amended.
Xxxxxx
Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx
Mae
Guides: The Xxxxxx Xxx Xxxxxxx’ Guide and the Xxxxxx Mae
Servicers’ Guide, as amended or restated from time to time.
Xxxxxx
Xxx
Transfer: As defined in Section 13.
FHA: The
Federal Housing Administration, an agency within the United States Department
of
Housing and Urban Development, or any successor thereto and including the
Federal Housing Commissioner and the Secretary of Housing and Urban Development
where appropriate under the FHA Regulations.
FIRREA: The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended
and in effect from time to time.
Fixed
Rate Mortgage
Loan: A fixed rate mortgage loan purchased pursuant to this
Agreement.
Xxxxxxx
Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
-4-
Xxxxxxx
Mac
Transfer: As defined in Section 13.
Gross
Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage
Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High
Cost
Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 (“HOEPA”),
(b) with an “annual percentage rate” or total “points and fees” (as each
such term is calculated under HOEPA) payable by the related Mortgagor that
exceed the thresholds set forth by HOEPA and its implementing regulations,
including 12 C.F.R. § 226.32(a)(1)(i) and (ii), (c) classified as
a “high cost home,” “threshold,” “covered,” (excluding New Jersey “Covered Home
Loans” as that term was defined in clause (1) of the definition of that
term in the New Jersey Home Ownership Security Act of 2002 that were originated
between November 26, 2003 and July 7, 2004), “high risk home,”
“predatory” or similar loan under any other applicable state, federal or local
law (or a similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees)
or
(d) a Mortgage Loan categorized as High Cost pursuant to Appendix E of
Standard & Poor’s Glossary. For avoidance of doubt, the parties
agree that this definition shall apply to any law regardless of whether such
law
is presently, or in the future becomes, the subject of judicial review or
litigation.
Home
Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor’s Glossary.
HUD: The
Department of Housing and Urban Development, or any federal agency or official
thereof which may from time to time succeed to the functions thereof with regard
to Mortgage Insurance issued by the FHA. The term “HUD,” for purposes
of this Agreement, is also deemed to include subdivisions thereof such as the
FHA and Government National Mortgage Association.
Index: The
index indicated in the related Mortgage Note for each Adjustable Rate Mortgage
Loan.
Insurance
Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest
Rate Adjustment
Date: With respect to each Adjustable Rate Mortgage Loan, the
date, specified in the related Mortgage Note and the related Mortgage Loan
Schedule, on which the Mortgage Interest Rate is adjusted.
Interim
Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim
Servicer: The servicer under the Interim Servicing Agreement,
or its successor in interest, or any successor to the Interim Servicer under
the
Interim Servicing Agreement, as therein provided.
-5-
Interim
Servicing
Agreement: The agreement to be entered into by the Purchaser
and the Interim Servicer, providing for the Interim Servicer to service the
Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With
respect to each MERS Designated Mortgage Loan, the Person named on the MERS
System as the investor pursuant to the MERS Procedures Manual.
Lifetime
Rate
Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the term
of each Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Adjustable Rate Mortgage Loan
by more than the amount per annum set forth on the related Mortgage Loan
Schedule.
Liquidation
Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee’s sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan, other than amounts received following the
acquisition of REO Property, Insurance Proceeds and Condemnation
Proceeds.
Loan-to-Value
Ratio: With respect to any Mortgage Loan, as of any date of
determination, the ratio (expressed as a percentage) the numerator of which
is
the outstanding principal balance of the Mortgage Loan as of the related Cut-off
Date (unless otherwise indicated), and the denominator of which is the lesser
of
(a) the Appraised Value of the Mortgaged Property at origination and
(b) if the Mortgage Loan was made to finance the acquisition of the related
Mortgaged Property, the purchase price of the Mortgaged Property.
LTV: Loan-to-Value
Ratio.
Manufactured
Home: A single family residential unit that is constructed in
a factory in sections in accordance with the Federal Manufactured Home
Construction and Safety Standards adopted on June 15, 1976, by the
Department of Housing and Urban Development (“HUD Code”), as
amended in 2000, which preempts state and local building codes. Each
unit is identified by the presence of a HUD Plate/Compliance Certificate
label. The sections are then transported to the site and joined
together and affixed to a pre-built permanent foundation (which satisfies the
manufacturer’s requirements and all state, county, and local building codes and
regulations). The manufactured home is built on a non-removable,
permanent frame chassis that supports the complete unit of walls, floors, and
roof. The underneath part of the home may have running gear (wheels,
axles, and brakes) that enable it to be transported to the permanent
site. The wheels and hitch are removed prior to anchoring the unit to
the permanent foundation. The manufactured home must be classified as
real estate and taxed accordingly. The permanent foundation may be on
land owned by the mortgager or may be on leased land.
MERS: Mortgage
Electronic Registration Systems, Inc., a Delaware corporation, and its
successors in interest.
-6-
MERS
Designated Mortgage
Loan: Mortgage Loans for which (a) the Seller has
designated or will designate MERS as, and has taken or will take such action
as
is necessary to cause MERS to be, the mortgagee of record, as nominee for the
Seller, in accordance with MERS Procedures Manual and (b) the Seller has
designated or will designate the Purchaser as the Investor on the MERS
System.
MERS
Procedures
Manual: The MERS Procedures Manual, as it may be amended,
supplemented or otherwise modified from time to time.
MERS
Report: The report from the MERS System listing MERS
Designated Mortgage Loans and other information.
MERS
System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly
Payment: With respect to any Mortgage Loan, the scheduled
payment of principal and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date.
Mortgage: With
respect to a Mortgage Loan that is not a Co-op Loan, the mortgage, deed of
trust
or other instrument securing a Mortgage Note, which creates a first lien on
the
Mortgaged Property. With respect to a Co-op Loan, the Security
Agreement.
Mortgage
File: With respect to any Mortgage Loan, the Mortgage Loan
Documents and the items listed in Exhibit A-2
hereto and any additional documents required to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Interest
Rate: With respect to each Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan from time to time in accordance
with the provisions of the related Mortgage Note.
Mortgage
Interest Rate
Cap: With respect to an Adjustable Rate Mortgage Loan, the
limit on each Mortgage Interest Rate adjustment as set forth in the related
Mortgage Note.
Mortgage
Loan: Each mortgage loan sold, assigned and transferred
pursuant to this Agreement and identified on the applicable Mortgage Loan
Schedule, which Mortgage Loan includes, without limitation, the Mortgage File,
the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased mortgage loans.
Mortgage
Loan
Documents: With respect to any Mortgage Loan, the documents
required to be delivered to the Custodian pursuant to Subsection 6.03.
Mortgage
Loan
Package: Each pool of Mortgage Loans, which shall be purchased
by the Purchaser from the Seller from time to time on each Closing
Date.
-7-
Mortgage
Loan
Schedule: The schedule of Mortgage Loans setting forth the
following information with respect to each Mortgage Loan in the related Mortgage
Loan Package: (1) the Seller’s Mortgage Loan identifying number;
(2) the Mortgagor’s name; (3) the social security number of the
Mortgagor; (4) a code indicating whether the Mortgagor’s race and/or
ethnicity is (i) native American or Alaskan native, (ii) Asian/Pacific
islander, (iii) African American, (iv) white, (v) Hispanic or
Latino, (vi) other minority, (vii) not provided by the Mortgagor,
(viii) not applicable (if the Mortgagor is an entity) and (ix) unknown
or missing; (5) the street address of the Mortgaged Property including the
city, state and zip code; (6) a code indicating whether the Mortgagor is
self-employed; (7) a code indicating whether the Mortgaged Property is
owner-occupied, investment property or a second home; (8) a code indicating
the number and type of residential units constituting the Mortgaged Property
(e.g. single family residence, two-family residence, three-family residence,
four-family residence, multifamily residence, condominium, manufactured housing,
mixed-use property, raw land and other non-residential properties, planned
unit
development or cooperative stock in a cooperative housing corporation);
(9) the original months to maturity or the remaining months to maturity
from the related Cut-off Date, in any case based on the original amortization
schedule and, if different, the maturity expressed in the same manner but based
on the actual amortization schedule; (10) the Loan-to-Value Ratio at
origination; (11) the Mortgage Interest Rate as of the related Cut-off
Date; (12) the date on which the first Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently
in
effect, the Due Date; (13) the stated maturity date; (14) the amount
of the Monthly Payment as of the related Cut-off Date; (15) whether the
Mortgage Loan has Monthly Payments that are interest-only for a period of time,
and the interest only period, if applicable; (16) the last payment date on
which a payment was actually applied to the outstanding principal balance;
(17) the schedule of the payment delinquencies in the prior 12 months;
(18) the Servicing Fee; (19) the original principal amount of the
Mortgage Loan; (20) the principal balance of the Mortgage Loan as of the
close of business on the related Cut-off Date, after deduction of payments
of
principal due and collected on or before the related Cut-off Date;
(21) with respect to each Mortgage Loan with a second lien behind it, the
combined principal balance of the Mortgage Loan and the applicable second lien
loan, at origination, (22) a code indicating whether there is a
simultaneous second; (23) with respect to Adjustable Rate Mortgage Loans,
the Interest Rate Adjustment Date; (24) with respect to Adjustable Rate
Mortgage Loans, the Gross Margin; (25) with respect to Adjustable Rate
Mortgage Loans, the Lifetime Rate Cap under the terms of the Mortgage Note;
(26) with respect to Adjustable Rate Mortgage Loans, a code indicating the
type of Index, including the methodology for rounding (e.g. rounded upward,
if
necessary, to the nearest ten thousandth (.0001)) and the applicable time frame
for determining the Index; (27) the product type of Mortgage Loan (i.e.,
Fixed Rate, Adjustable Rate); (28) a code indicating the purpose of the
loan (i.e., purchase, Rate/Term Refinance or Cash-Out Refinance); (29) a
code indicating the documentation style (i.e. no documents, full, alternative,
reduced, no income/no asset, stated income, no ration, reduced or NIV);
(30) asset verification (Y/N); (31) [Reserved]; (32) whether such
Mortgage Loan provides for a Prepayment Penalty; (33) the Prepayment
Penalty period of such Mortgage Loan, if applicable; (34) a description of
the Prepayment Penalty, if applicable, including whether the applicable
Prepayment Penalty provision is “hard” or “soft”; (35) the Mortgage
Interest Rate as of origination; (36) the credit risk score (FICO score);
(37) the date of origination; (38) with respect to Adjustable Rate
Mortgage Loans, the Mortgage Interest Rate adjustment period;
(39) [Reserved]; (40) with respect to Adjustable Rate Mortgage Loans,
the
-8-
Mortgage
Interest Rate floor; (41) the Mortgage Interest Rate calculation method
(i.e., 30/360, simple interest, other); (42) with respect to Adjustable
Rate Mortgage Loans, the Periodic Rate Cap as of the first Interest Rate
Adjustment Date; (43) with respect to each Adjustable Rate Mortgage Loan, a
code indicating whether the Mortgage Loan provides for negative amortization;
(44) a code indicating whether the Mortgage Loan has negative amortization
and the maximum of such negative amortization; (45) a code indicating
whether the Mortgage Loan is a Balloon Mortgage Loan; (46) a code
indicating whether the Mortgage Loan by its original terms or any modifications
thereof provides for amortization beyond its scheduled maturity date;
(47) [reserved]; (48) the original Monthly Payment due; (49) the
Appraised Value; (50) appraisal type; (51) appraisal date; (52) a
code indicating whether the Mortgage Loan is covered by a PMI Policy and, if
so,
identifying the PMI Policy provider; (54) the certificate number of the PMI
Policy, if applicable; (53) the amount of coverage of the PMI Policy, if
applicable; (54) in connection with a condominium unit, a code indicating
whether the condominium project where such unit is located is low-rise or
high-rise; (55) a code indicating whether the Mortgaged Property is a
leasehold estate; (56) with respect to the related Mortgagor, the
debt-to-income ratio; (57) sales price; (58) automated valuation model
(AVM); (59) a code indicating whether the Mortgage Loan is a MERS
Designated Mortgage Loan and the MERS Identification Number, if applicable;
(60) a field indicating whether such Mortgage Loan is a Home Loan; and
(61) the DU or LP number, if applicable. With respect to the
Mortgage Loans in the aggregate, the related Mortgage Loan Schedule shall set
forth the following information, as of the related Cut-off
Date: (1) the number of Mortgage Loans; (2) the current
aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average maturity of the Mortgage Loans; (5) the average principal
balance of the Mortgage Loans; (6) the applicable Cut-off Date; and
(7) the applicable Closing Date.
Mortgage
Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor, including any riders or addenda
thereto.
Mortgaged
Property: With respect to a Mortgage Loan that is not a Co-op
Loan, the Mortgagor’s real property securing repayment of a related Mortgage
Note, consisting of an unsubordinated estate in fee simple or, with respect
to
real property located in jurisdictions in which the use of leasehold estates
for
residential properties is a widely-accepted practice, a leasehold estate, in
a
single parcel or multiple parcels of real property improved by a Residential
Dwelling. With respect to a Co-op Loan, the stock allocated to a
dwelling unit in the residential cooperative housing corporation that was
pledged to secure such Co-op Loan and the related Co-op Lease.
Mortgagee: The
mortgagee or beneficiary named in the Mortgage and the successors and assigns
of
such mortgagee or beneficiary.
Mortgagor: The
obligor on a Mortgage Note, who is an owner of the Mortgaged Property and the
grantor or mortgagor named in the Mortgage and such grantor’s or mortgagor’s
successors in title to the Mortgaged Property.
Nonrecoverable
Advance: Any advance previously made or proposed to be made in
respect of a Mortgage Loan which, in the good faith judgment of the Interim
Servicer, will not
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or,
in
the case of a proposed advance, would not, be ultimately recoverable from
related Insurance Proceeds, Liquidation Proceeds or otherwise. The
determination by the Interim Servicer that it has made a Nonrecoverable Advance
or that any proposed advance of principal and interest, if made, would
constitute a Nonrecoverable Advance, shall be evidenced by an Officers’
Certificate delivered to the Purchaser.
Officer’s
Certificate: A certificate signed by the Chairman of the Board
or the Vice Chairman of the Board or a President or a Vice President and by
the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, and delivered to the Purchaser as required by this
Agreement.
Opinion
of
Counsel: A written opinion of counsel, who may be counsel for
the Seller, reasonably acceptable to the Purchaser, providedthat
any Opinion of Counsel
relating to (a) the qualification of any account required to be maintained
pursuant to the Interim Servicing Agreement as an Eligible Account (as defined
in the Interim Servicing Agreement), (b) qualification of the Mortgage
Loans in a REMIC or (c) compliance with the REMIC Provisions, must be
(unless otherwise stated in such Opinion of Counsel) an opinion of counsel
who
(i) is in fact independent of the Seller and any servicer of the Mortgage
Loans, (ii) does not have any material direct or indirect financial
interest in the Seller or any servicer of the Mortgage Loans or in an Affiliate
of either and (iii) is not connected with the Seller or any servicer of the
Mortgage Loans as an officer, employee, director or person performing similar
functions.
Periodic
Rate
Cap: With respect to each Adjustable Rate Mortgage Loan, the
provision of each Mortgage Note which provides for an absolute maximum amount
by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan
is the rate set forth as such on the related Mortgage Loan
Schedule.
Periodic
Rate
Floor: With respect to each Adjustable Rate Mortgage Loan, the
provision of each Mortgage Note which provides for an absolute maximum amount
by
which the Mortgage Interest Rate therein may decrease on an Interest Rate
Adjustment Date below the Mortgage Interest Rate previously in
effect.
Person: Any
individual, corporation, partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof.
PMI
Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to
do
business in the jurisdiction where the Mortgaged Property is
located.
Preliminary
Mortgage
Schedule: As defined in Section 3.
Prepayment
Penalty: With respect to each Mortgage Loan, the amount of any
premium or penalty required to be paid by the Mortgagor if the Mortgagor prepays
such Mortgage Loan as provided in the related Mortgage Note or
Mortgage.
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Principal
Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Penalty thereon, and which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
Purchase
Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of
this Agreement.
Purchase
Price and Terms
Agreement: Each agreement setting forth the general terms and
conditions of the purchase and sale of the Mortgage Loans to be purchased from
time to time under this Agreement.
Purchase
Price
Percentage: The percentage of par (expressed as decimal) set
forth in the related Purchase Price and Terms Agreement.
Purchaser: Xxxxxx
Xxxxxxx Mortgage Capital Inc., a New York corporation, and its successors in
interest and assigns, or any successor to the Purchaser under this Agreement
as
herein provided.
Qualified
Appraiser: An appraiser, duly appointed by the Seller, who had
no interest, direct or indirect, in the Mortgaged Property or in any loan made
on the security thereof, and whose compensation was not affected by the approval
or disapproval of the Mortgage Loan, and such appraiser and the appraisal made
by such appraiser both satisfied the requirements of Title XI of FIRREA and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
Qualified
Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are
satisfied: (i) such Mortgage Loans were originated pursuant to
an agreement between the Seller and such Person that contemplated that such
Person would underwrite mortgage loans from time to time, for sale to the
Seller, in accordance with underwriting guidelines designated by the Seller
(“Designated
Guidelines”) or guidelines that do not vary materially from such
Designated Guidelines; (ii) such Mortgage Loans were in fact underwritten
as described in clause (i) above and were acquired by the Seller within 180
days after origination; (iii) either (x) the Designated Guidelines
were, at the time such Mortgage Loans were originated, used by the Seller in
origination of mortgage loans of the same type as the Mortgage Loans for the
Seller’s own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage
loans
properly applied the underwriting criteria designated by the
Seller.
Qualified
Substitute
Mortgage Loan: A mortgage loan eligible to be substituted by
the Seller for a Deleted Mortgage Loan which must, on the date of such
substitution, be
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approved
by the Purchaser and (i) have an unpaid principal balance, after deduction
of all scheduled payments due in the month of substitution (or in the case
of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the unpaid principal balance
of
the Deleted Mortgage Loan (the amount of any shortfall will be deposited in
the
Custodial Account by the Seller in the month of substitution); (ii) have a
Mortgage Interest Rate not less than and not more than one percent (1%) greater
than the Mortgage Interest Rate of the Deleted Mortgage Loan; (iii) have a
remaining term to maturity not greater than and not more than one (1) year
less
than that of the Deleted Mortgage Loan; (iv) be of the same type as the
Deleted Mortgage Loan (i.e., fixed rate or adjustable rate with same Mortgage
Interest Rate Cap and Index); (v) comply as of the date of substitution
with each representation and warranty set forth in Section 9 of
this Agreement; (vi) be current in the payment of principal and interest;
(vii) be secured by a Mortgaged Property of the same type and occupancy
status as secured the Deleted Mortgage Loan; and (viii) have payment terms
that do not vary in any material respect from those of the Deleted Mortgage
Loan.
Rate/Term
Refinance: A Refinanced Mortgage Loan, in which the proceeds
received were not in excess of the amount of funds required to repay the
principal balance of any existing first mortgage loan on the related Mortgaged
Property, pay related closing costs and satisfy any outstanding subordinate
mortgages on the related Mortgaged Property and did not provide incidental
cash
to the related Mortgagor of more than one percent (1%) (or, if specified in
the
related Underwriting Guidelines applicable to such Mortgage Loan, two percent
(2%)) of the original principal balance of such Mortgage Loan.
Reconstitution: Any
Securitization Transaction or a Whole Loan Transfer.
Reconstitution
Agreements: The agreement or agreements entered into by the
Seller and the Purchaser and/or certain third parties on the Reconstitution
Date
or Dates with respect to any or all of the Mortgage Loans sold hereunder, in
connection with a Whole Loan Transfer, Agency Transfer or a Securitization
Transaction pursuant to Section 13,
including, but not limited to, a seller’s warranties and servicing agreement
with respect to a Whole Loan Transfer, and a pooling and servicing agreement
and/or seller/servicer agreements and related custodial/trust agreement and
documents with respect to a Securitization Transaction.
Reconstitution
Date: As defined in Section 13.
Refinanced
Mortgage
Loan: A Mortgage Loan the proceeds of which were not used to
purchase the related Mortgaged Property.
Regulation
AB: Subpart 229.1100 – Asset Backed Securities (Regulation
AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided
by
the Commission in the adopting release (Asset-Backed Securities, Securities
Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
REMIC: A
“real estate mortgage investment conduit” within the meaning of
Section 860D of the Code.
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REMIC
Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M
of Chapter 1, Subtitle A of the Code, and related provisions and
regulations, rulings or pronouncements promulgated thereunder, as the foregoing
may be in effect from time to time.
Remittance
Date: The date specified in the Interim Servicing Agreement
(with respect to each Mortgage Loan, as specified therein).
REO
Property: A Mortgaged Property acquired by the Interim
Servicer through foreclosure or deed in lieu of foreclosure.
Repurchase
Price: With respect to any Mortgage Loan, a price equal
to: (a) during the first year immediately following the
applicable Closing Date, an amount equal to the sum of (i) the product of
(x) the applicable Purchase Price Percentage and (y) the then
aggregate unpaid actual principal balance of such Mortgage Loan as of the date
of such repurchase, plus (ii) accrued interest on such Mortgage Loan at the
applicable Mortgage Interest Rate from the date to which interest had last
been
paid through the date of such repurchase, plus (iii) the amount of any
outstanding escrow or similar advances owed to the Purchaser or its designee,
and (b) after the first year, an amount equal to the sum of (i) then
aggregate unpaid actual principal balance of such Mortgage Loan as of the date
of such repurchase plus (ii) accrued interest thereon at the Mortgage
Interest Rate from the date to which interest had last been paid through the
date of such repurchase, plus (iii) the amount of any outstanding escrow or
similar advances owed to the Purchaser or its designee. In the event
the Purchaser has securitized or sold such Mortgage Loan, the price for such
repurchase shall be as set forth in clause (b) above.
Residential
Dwelling: Any one of the following: (i) a
detached one-family dwelling, (ii) a detached two- to four-family dwelling,
(iii) a one-family dwelling unit in a condominium project or (iv) a
one-family dwelling in a planned unit development, none of which is a
co-operative, mobile or Manufactured Home.
RESPA: Real
Estate Settlement Procedures Act, as amended from time to time.
Securities
Act: The Securities Act of 1933, as amended.
Securitization
Transaction: Any transaction involving either (1) a sale
or other transfer of some or all of the Mortgage Loans directly or indirectly
to
an issuing entity in connection with an issuance of publicly offered or
privately placed, rated or unrated mortgage-backed securities or (2) an
issuance of publicly offered or privately placed, rated or unrated securities,
the payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Security
Agreement: The agreement creating a security interest in the
stock allocated to a dwelling unit in the residential cooperative housing
corporation that was pledged to secure such Co-op Loan and the related Co-op
Lease.
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Seller: As
defined in the initial paragraph of the Agreement, together with its successors
in interest.
Seller
Information: As defined in Subsection
34.04(a).
Servicing
Fee: As to each Mortgage Loan Package, the amount of the fee
the Purchaser shall pay to the Seller for servicing the Mortgage Loans in
accordance with the terms of this Agreement, which shall, with respect to each
Mortgage Loan, be equal to $5.00 per calendar month.
Servicing
File: With respect to each Mortgage Loan, the file retained by
the Interim Servicer consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or the Custodian and copies of
the
Mortgage Loan Documents set forth in Section 2 of the
Custodial Agreement.
Servicing
Rights: Any and all of the following: (a) any
and all rights to service the Mortgage Loans; (b) any payments to or monies
received by the Seller for servicing the Mortgage Loans; (c) any late fees,
penalties or similar payments with respect to the Mortgage Loans; (d) all
agreements or documents creating, defining or evidencing any such servicing
rights to the extent they relate to such servicing rights and all rights of
the
Seller thereunder; (e) Escrow Payments or other similar payments with
respect to the Mortgage Loans and any amounts actually collected by the Seller
with respect thereto; (f) all accounts and other rights to payment related
to any of the property described in this paragraph; and (g) any and all
documents, files, records, servicing files, servicing documents, servicing
records, data tapes, computer records, or other information pertaining to the
Mortgage Loans or pertaining to the past, present or prospective servicing
of
the Mortgage Loans.
Sponsor: The
sponsor, as such term is defined in Regulation AB, with respect to any
Securitization Transaction.
Standard
&
Poor’s: Standard & Poor’s Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard
&
Poor’s
Glossary: The Standard & Poor’s LEVELS® Glossary, as may
be in effect from time to time.
Stated
Principal
Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the
related Cut-off Date after giving effect to payments of principal due on or
before such date, to the extent actually received, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related Mortgage
Loan representing payments or recoveries of principal on such Mortgage
Loan.
Static
Pool
Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor
Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03
and 14.01.
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Third-Party
Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Seller.
Transfer
Date: In the event the Interim Servicer is terminated as
servicer of a Mortgage Loan pursuant to the Interim Servicing Agreement, the
date on which the Purchaser, or its designee, shall receive the transfer of
servicing responsibilities and begin to perform the servicing of such Mortgage
Loans, and the Interim Servicer shall cease all servicing
responsibilities.
Underwriting
Guidelines: The underwriting guidelines of the Seller, a copy
of which is attached hereto as Exhibit G and a
then-current copy of which is attached as an exhibit to the related Assignment
and Conveyance.
Whole
Loan
Transfer: Any sale or transfer of some or all of the Mortgage
Loans, other than a Securitization Transaction.
SECTION
2. Agreement to
Purchase.
The
Seller agrees to sell from time to time, and the Purchaser agrees to purchase
from time to time, Mortgage Loans having an aggregate actual unpaid principal
balance on the related Cut-off Date in an amount as set forth in the related
Purchase Price and Terms Agreement, or in such other amount as agreed by the
Purchaser and the Seller as evidenced by the actual aggregate unpaid principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date,
together with the related Mortgage Files and all rights and obligations arising
under the documents contained therein.
SECTION
3. Mortgage
Schedules.
The
Seller from time to time shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on
each
Closing Date in accordance with the related Purchase Price and Terms Agreement
and this Agreement (each, a “Preliminary Mortgage
Schedule”).
The
Seller shall deliver the related Mortgage Loan Schedule for the Mortgage Loans
to be purchased on a particular Closing Date to the Purchaser at least two
(2)
Business Days prior to the related Closing Date. The related Mortgage
Loan Schedule shall be the related Preliminary Mortgage Schedule with those
Mortgage Loans which have not been funded prior to the related Closing Date
deleted.
SECTION
4. Purchase
Price.
The
Purchase Price for each Mortgage Loan and the related Servicing Rights shall
be
the percentage of par as stated in the related Purchase Price and Terms
Agreement (subject to adjustment as provided therein), multiplied by the
aggregate actual unpaid principal balance, as of the related Cut-off Date,
of
the Mortgage Loans listed on the related Mortgage Loan Schedule, after
application of scheduled payments of principal due on or before the related
Cut-off Date, but only to the extent such payments were actually
received. The initial principal amount of the related Mortgage Loans
shall be the aggregate actual unpaid principal balance of the
Mortgage
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Loans,
so
computed as of the related Cut-off Date. If so provided in the
related Purchase Price and Terms Agreement, portions of the Mortgage Loans
and/or the Servicing Rights shall be priced and paid for
separately.
In
addition to the Purchase Price as described above, the Purchaser shall pay
to
the Seller, at closing, accrued interest from the last “interest paid to” date
through the day immediately preceding the related Closing Date, inclusive,
on
the aggregate actual unpaid principal amount of the related Mortgage Loans
as of
the related Cut-off Date at the weighted average Mortgage Interest Rate of
those
Mortgage Loans. The Purchase Price plus accrued interest as set forth
in the preceding paragraph shall be paid to the Seller by wire transfer of
immediately available funds to an account designated by the Seller in
writing.
The
Purchaser shall be entitled to (1) all scheduled principal due after the
related Cut-off Date, (2) all other recoveries of principal collected on or
after the related Cut-off Date, and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any
such
payment which is allocable to the period prior to the related Cut-off
Date). The outstanding principal balance of each Mortgage Loan as of
the related Cut-off Date is determined after application of payments of
principal due on or before the related Cut-off Date, to the extent actually
collected, together with any unscheduled principal prepayments collected prior
to such Cut-off Date; provided, however,
that payments of
scheduled principal and interest paid prior to such Cut-off date, but to be
applied on a Due Date beyond the related Cut-off Date shall not be applied
to
the principal balance as of the related Cut-off Date. Such prepaid
amounts shall be the property of the Purchaser. The Seller shall
deposit any such prepaid amounts into the Custodial Account, which account
is
established for the benefit of the Purchaser for subsequent remittance by the
Seller to the Purchaser.
SECTION
5. Examination of Mortgage
Files.
At
least
ten (10) Business Days prior to the related Closing Date, the Seller shall
either (a) deliver to the Purchaser or its designee in escrow, for
examination with respect to each Mortgage Loan to be purchased, the related
Mortgage File, pertaining to each Mortgage Loan, or (b) make the related
Mortgage File available to the Purchaser for examination at such other location
as shall otherwise be acceptable to the Purchaser. Such examination
of the Mortgage Files may be made by the Purchaser or its designee at any
reasonable time before (or, if so provided in the related Purchase Price and
Terms Agreement, after) the related Closing Date. If the Purchaser
makes such examination prior to the related Closing Date and determines, in
its
sole discretion, that any Mortgage Loans do not conform to any of the
requirements set forth in the related Purchase Price and Terms Agreement, or
as
an Exhibit annexed thereto, the Purchaser may delete such Mortgage Loans from
the related Mortgage Loan Schedule, and such Deleted Mortgage Loan (or Loans)
may be replaced by a Qualified Substitute Mortgage Loan (or Loans) acceptable
to
the Purchaser. The Purchaser may, at its option and without notice to
the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its
designee has conducted or has failed to conduct any partial or complete
examination of the Mortgage Files shall not impair in any way the Purchaser’s
(or any of its successor’s) rights to demand repurchase, substitution or other
relief as provided in this Agreement. In the event that the Seller
fails to deliver the Mortgage File with
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respect
to any Mortgage Loan, the Seller shall, upon the request of the Purchaser,
repurchase such Mortgage Loan as the price and in the manner specified in Subsection 9.03.
SECTION
6. Conveyance from
Seller to
Purchaser.
Subsection
6.01 Conveyance of Mortgage
Loans.
The
Seller, simultaneously with the delivery of the Mortgage Loan Schedule with
respect to the related Mortgage Loan Package to be purchased on each Closing
Date, shall execute and deliver an Assignment and Conveyance Agreement in the
form attached hereto as Exhibit H (the “Assignment and Conveyance
Agreement”). The Seller shall ensure that the contents of each
Servicing File, which required to be retained by or delivered to the Interim
Servicer to service the Mortgage Loans pursuant to the Interim Servicing
Agreement and thus not delivered to the Purchaser, or its designee, are and
shall be held in trust by the Interim Servicer for the benefit of the Purchaser
as the owner thereof. The Seller agrees that the Interim Servicer’s
possession of any portion of each such Mortgage File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the Mortgage Loans
pursuant to this Agreement, and such retention and possession by the Interim
Servicer shall be in a custodial capacity only. The ownership of each
Mortgage Note, each Mortgage and the contents of each Mortgage File is vested
in
the Purchaser and the ownership of all records and documents with respect to
the
related Mortgage Loan prepared by or which come into the possession of the
Interim Servicer shall immediately vest in the Purchaser and shall be retained
and maintained, in trust, by the Interim Servicer at the will of the Purchaser
in such custodial capacity only. The Seller shall cause the Servicing
File retained by the Interim Servicer pursuant to this Agreement to be
appropriately identified in the Seller’s computer system and/or books and
records, as appropriate, to clearly reflect the sale of the related Mortgage
Loan to the Purchaser. The Seller shall cause the Interim Servicer to
release from its custody the contents of any Servicing File retained by it
only
in accordance with this Agreement or the Interim Servicing Agreement, except
when such release is required in connection with a repurchase of any such
Mortgage Loan pursuant to Subsection 9.03
or if required under applicable law or court order.
Subsection
6.02 Books and
Records.
Record
title to each Mortgage and the related Mortgage Note as of the related Closing
Date shall be in the name of the Seller, an Affiliate of the Seller, the
Purchaser or one or more designees of the Purchaser, as the Purchaser shall
select; provided, however,
that if a Mortgage
has been recorded in the name of MERS or its designee, the Seller is shown
as
the owner of the related Mortgage Loan on the records of MERS for purposes
of
the system of recording transfers of beneficial ownership of mortgages
maintained by MERS. Notwithstanding the foregoing, ownership of each
Mortgage and related Mortgage Note shall be vested solely in the Purchaser
or
the appropriate designee of the Purchaser, as the case may be. All
rights arising out of the Mortgage Loans including, but not limited to, all
funds received by the Seller or the Interim Servicer after the related Cut-off
Date on or in connection with a Mortgage Loan shall be vested in the Purchaser
or one or more designees of the Purchaser; provided, however,
that all funds
received on or in connection with a Mortgage Loan shall be received and held
by
the Seller or the Interim Servicer in trust for the benefit of the Purchaser
or
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the
appropriate designee of the Purchaser, as the case may be, as the owner of
the
Mortgage Loans pursuant to the terms of this Agreement.
The
Seller shall be or shall cause the Interim Servicer to be responsible for
maintaining, and shall maintain, a complete set of books and records for each
Mortgage Loan which shall be marked clearly to reflect the ownership of each
Mortgage Loan by the Purchaser. In particular, the Seller shall or
shall cause the Interim Servicer to maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the National Flood Insurance Act of 1968, as amended,
to
the Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the
extent that original documents are not required for purposes of realization
of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Seller
or the Interim Servicer may be in the form of microfilm or microfiche so long
as
the Seller or the Interim Servicer complies with the requirements of the Xxxxxx
Xxx Guides.
It
is the
express intention of the parties that the transactions contemplated by this
Agreement be, and be construed as, a sale of the related Mortgage Loans by
the
Seller and not a pledge of such Mortgage Loans by the Seller to the Purchaser
to
secure a debt or other obligation of the Seller. Consequently, the
sale of each Mortgage Loan shall be reflected as a purchase on the Purchaser’s
business records, tax returns and financial statements, and as a sale of assets
on the Seller’s business records, tax returns and financial
statements.
Subsection
6.03 Delivery of Mortgage
Loan
Documents.
The
Seller shall deliver and release to the Custodian no later than ten (10)
Business Days prior to the related Closing Date those Mortgage Loan Documents
set forth on Exhibit A-1
hereto as required by the Custodial Agreement with respect to each Mortgage
Loan
set forth on the related Mortgage Loan Schedule.
The
Custodian shall certify its receipt of all such Mortgage Loan Documents required
to be delivered pursuant to the Custodial Agreement for the related Closing
Date, as evidenced by the Initial Certification of the Custodian in the form
annexed to the Custodial Agreement. The Seller shall comply with the
terms of the Custodial Agreement and the Purchaser shall pay all fees and
expenses of the Custodian.
The
Seller shall or shall cause the Interim Servicer to forward to the Custodian,
or
to such other Person as the Purchaser shall designate in writing, original
documents evidencing an assumption, modification, consolidation or extension
of
any Mortgage Loan entered into in accordance with this Agreement within two
weeks of their execution, provided, however,
that the Seller
shall provide the Custodian, or to such other Person as the Purchaser shall
designate in writing, with a certified true copy of any such document submitted
for recordation within two weeks of its execution, and shall promptly provide
the original of any document submitted for recordation or a copy of such
document certified by the appropriate public recording office to be
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a
true
and complete copy of the original within two (2) weeks following receipt of
the original document by the Interim Servicer; provided, however,
that such original
recorded document or certified copy thereof shall be delivered to the Purchaser
no later than 180 days following the related Closing Date, unless there has
been a delay at the applicable recording office.
If
the
original or copy of any document submitted for recordation to the appropriate
public recording office is not delivered to the Purchaser or its designee within
180 days following the related Closing Date, the related Mortgage Loan
shall, upon the request of the Purchaser, be repurchased by the Seller at the
price and in the manner specified in Subsection 9.03. The
foregoing repurchase obligation shall not apply if the Seller cannot cause
the
Interim Servicer to deliver such original or copy of any document submitted
for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; providedthat
(i) the Seller
shall instead deliver a recording receipt of such recording office or, if such
recording receipt is not available, an officer’s certificate of a servicing
officer of the Seller, confirming that such document has been accepted for
recording, and (ii) such document is delivered within twelve (12)
months of the related Closing Date.
The
Seller shall pay all initial recording fees, if any, for the Assignments of
Mortgage and any other fees or costs in transferring all original documents
to
the Custodian or, upon written request of the Purchaser, to the Purchaser or
the
Purchaser’s designee. The Purchaser or the Purchaser’s designee shall
be responsible for recording the Assignments of Mortgage and shall be reimbursed
by the Seller for the costs associated therewith pursuant to the preceding
sentence.
Subsection
6.04 Quality Control
Procedures.
The
Seller shall, or shall cause the Interim Servicer to, have an internal quality
control program that verifies, on a regular basis, the existence and accuracy
of
the legal documents, credit documents, property appraisals, and underwriting
decisions. The program shall include evaluating and monitoring the
overall quality of the Seller loan production and the servicing activities
of
the Interim Servicer. The program is to ensure that the Mortgage
Loans are originated in accordance with the Underwriting Guidelines; guard
against dishonest, fraudulent, or negligent acts; and guard against errors
and
omissions by officers, employees, or other authorized persons.
Subsection
6.05 MERS Designated
Loans.
With
respect to each MERS Designated Mortgage Loan, the Seller shall, no later than
two Business Days after the related Closing Date, designate the Purchaser as
the
Investor and the Custodian as custodian, and no Person shall be listed as
Interim Funder on the MERS System. In addition, no later than two
Business Days after the related Closing Date, Seller shall provide the Custodian
and the Purchaser with a MERS Report listing the Purchaser as the Investor,
the
Custodian as custodian and no Person as Interim Funder with respect to each
MERS
Designated Mortgage Loan.
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SECTION
7. Servicing of the
Mortgage
Loans.
The
Mortgage Loans have been sold by the Seller to the Purchaser on a servicing
released basis. Subject to and upon the terms and conditions of this
Agreement and the Interim Servicing Agreement (with respect to each Mortgage
Loan, for an interim period, as specified therein), the Seller hereby sells,
transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The
Purchaser shall retain the Interim Servicer as contract servicer of the Mortgage
Loans for an interim period pursuant to and in accordance with the terms and
conditions contained in the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein). The
Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
The
Seller shall cause the Interim Servicer to transfer the servicing of the
Mortgage Loans on each Transfer Date in accordance with the terms of the Interim
Servicing Agreement.
SECTION
8. [RESERVED].
SECTION
9. Representations,
Warranties
and Covenants of the Seller; Remedies for Breach.
Subsection
9.01 Representations
and
Warranties Regarding the Seller.
The
Seller represents, warrants and covenants to the Purchaser that as of the date
hereof and as of each Closing Date:
(a) Due
Organization and
Authority. The Seller is a federal savings bank, validly
existing, and in good standing under the laws of the United States and has
all
licenses necessary to carry on its business as now being conducted and is
licensed, qualified and in good standing in the states where the Mortgaged
Property is located if the laws of such state require licensing or qualification
in order to conduct business of the type conducted by the Seller. The
Seller has corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Seller and the consummation of
the
transactions contemplated hereby have been duly and validly authorized; this
Agreement has been duly executed and delivered and constitutes the valid, legal,
binding and enforceable obligation of the Seller, except as enforceability
may
be limited by (i) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the enforcement
of
the rights of creditors and (ii) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law. All
requisite corporate action has been taken by the Seller to make this Agreement
valid and binding upon the Seller in accordance with its terms;
(b) No
Consent
Required. No consent, approval, authorization or order is
required for the transactions contemplated by this Agreement from any court,
governmental agency or body, or federal or state regulatory authority having
jurisdiction over the Seller is
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required
or, if required, such consent, approval, authorization or order has been or
will, prior to the related Closing Date, be obtained;
(c) Ordinary
Course of
Business. The consummation of the transactions contemplated by
this Agreement are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the Mortgages
by
the Seller pursuant to this Agreement are not subject to the bulk transfer
or
any similar statutory provisions in effect in any applicable
jurisdiction;
(d) No
Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with
the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller’s charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller
is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any
law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
(e) No
Litigation
Pending. There is no action, suit, proceeding or investigation
pending or threatened against the Seller, before any court, administrative
agency or other tribunal asserting the invalidity of this Agreement, seeking
to
prevent the consummation of any of the transactions contemplated by this
Agreement or which, either in any one instance or in the aggregate, may result
in any material adverse change in the business, operations, financial condition,
properties or assets of the Seller, or in any material impairment of the right
or ability of the Seller to carry on its business substantially as now
conducted, or in any material liability on the part of the Seller, or which
would draw into question the validity of this Agreement or the Mortgage Loans
or
of any action taken or to be taken in connection with the obligations of the
Seller contemplated herein, or which would be likely to impair materially the
ability of the Seller to perform under the terms of this Agreement;
(f) Ability
to Perform;
Solvency. The Seller does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement. The Seller is solvent and the sale of
the Mortgage Loans will not cause the Seller to become insolvent. The
sale of the Mortgage Loans is not undertaken with the intent to hinder, delay
or
defraud any of Seller’s creditors;
(g) Seller’s
Origination. The Seller’s decision to originate any mortgage
loan or to deny any mortgage loan application is an independent decision based
upon the Underwriting Guidelines, and is in no way made as a result of
Purchaser’s decision to purchase, or not to purchase, or the price Purchaser may
offer to pay for, any such mortgage loan, if originated;
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(h) Anti-Money
Laundering
Laws. The Seller has complied with all applicable anti-money
laundering laws, executive orders and regulations, including without limitation
the USA Patriot Act of 2001 (collectively, the “Anti-Money Laundering
Laws”); the Seller has established an anti-money laundering compliance
program as required by the Anti-Money Laundering Laws, has conducted the
requisite due diligence in connection with the origination of each Mortgage
Loan
for purposes of the Anti-Money Laundering Laws, including with respect to the
legitimacy of the applicable Mortgagor and the origin of the assets used by
the
said Mortgagor to purchase the property in question, and maintains, and will
maintain, sufficient information to identify the applicable Mortgagor for
purposes of the Anti-Money Laundering Laws;
(i) Financial
Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this
Agreement. All such financial statements fairly present the pertinent
results of operations and changes in financial position for each of such periods
and the financial position at the end of each such period of the Seller and
its
subsidiaries and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved,
except as set forth in the notes thereto. In addition, the Seller has
delivered information as to its loan gain and loss experience in respect of
foreclosures and its loan delinquency experience for the immediately preceding
three-year period, in each case with respect to mortgage loans owned by it
and
such mortgage loans serviced for others during such period, and all such
information so delivered shall be true and correct in all material
respects. There has been no change in the business, operations,
financial condition, properties or assets of the Seller since the date of the
Seller’s financial statements that would have a material adverse effect on its
ability to perform its obligations under this Agreement. The Seller
has completed any forms requested by the Purchaser in a timely manner and in
accordance with the provided instructions;
(j) Selection
Process. The Mortgage Loans were selected from among the
outstanding one- to four-family mortgage loans in the Seller’s portfolio at the
related Closing Date as to which the representations and warranties set forth
in
Subsection 9.02
could be made and such selection was not made in a manner so as to affect
adversely the interests of the Purchaser;
(k) Delivery
to the
Custodian. The Mortgage Note, the Mortgage, the Assignment of
Mortgage and any other documents required to be delivered with respect to each
Mortgage Loan pursuant to the Custodial Agreement shall be delivered to the
Custodian all in compliance with the specific requirements of the Custodial
Agreement. With respect to each Mortgage Loan, the Seller will be in
possession of a complete Mortgage File in compliance with Exhibit A
hereto, except for such documents as will be delivered to the
Custodian;
(l) Mortgage
Loan
Characteristics. The characteristics of the related Mortgage
Loan Package are as set forth on the description of the pool characteristics
for
the applicable Mortgage Loan Package delivered pursuant to Section 11 on
the related Closing Date in the form attached as Exhibit B to each related
Assignment and Conveyance Agreement;
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(m) No
Untrue
Information. Neither this Agreement nor any information,
statement, tape, diskette, report, form, or other document furnished or to
be
furnished pursuant to this Agreement or any Reconstitution Agreement or in
connection with the transactions contemplated hereby (including any
Securitization Transaction or Whole Loan Transfer) contains or will contain
any
untrue statement of fact or omits or will omit to state a fact necessary to
make
the statements contained herein or therein not misleading;
(n) No
Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(o) Sale
Treatment. The Seller expects to be advised by its independent
certified public accountants that under generally accepted accounting principles
the transfer of the Mortgage Loans will be treated as a sale on the books and
records of the Seller and the Seller has determined that the disposition of
the
Mortgage Loans pursuant to this Agreement will be afforded sale treatment for
tax and accounting purposes;
(p) Reasonable
Purchase
Price. The consideration received by the Seller upon the sale
of the Mortgage Loans under this Agreement constitutes fair consideration and
reasonably equivalent value for the Mortgage Loans; and
(q) Insured
Depository
Institution Representations. Seller is an “insured depository
institution” as that term is defined in Section 1813(c)(2) of Title 12
of the United States Code, as amended, and accordingly, Seller makes the
following additional representations and warranties:
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(i)
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This
Agreement between Purchaser and Seller conforms to all applicable
statutory and regulatory requirements;
and
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(ii)
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This
Agreement is (1) executed contemporaneously with the agreement
reached by Purchaser and Seller, (2) approved by a specific corporate
or banking association resolution by the Seller’s board of directors,
which approval shall be reflected in the minutes of said board, and
(3) an official record of the Seller. A copy of such
resolution, certified by a vice president or higher officer of Seller
has
been provided to Purchaser.
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Subsection
9.02 Representations
and
Warranties Regarding Individual Mortgage Loans.
The
Seller hereby represents and warrants to the Purchaser that, as to each Mortgage
Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage
Loans as
Described. The information set forth in the related Mortgage
Loan Schedule and in the payment histories provided by the Seller with respect
to Mortgage Loans originated more than 12 months prior to the related Closing
Date is complete, true and correct;
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(b) Payments
Current. All payments required to be made up to the related
Closing Date for the Mortgage Loan under the terms of the Mortgage Note have
been made and credited. No payment required under the Mortgage Loan
is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the more recent of the
origination date of the Mortgage Loan or the date which is 12 months prior
to
the related Closing Date;
(c) No
Outstanding
Charges. There are no defaults in complying with the terms of
the Mortgage, and all taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or an, with respect to Mortgage
Loans that provide Escrow Payments, escrow of funds has been established in
an
amount sufficient to pay for every such item on an annual basis. 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 under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement
of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes
by
one month the related Due Date of the first installment of principal and
interest;
(d) Original
Terms
Unmodified. The terms of the Mortgage Note and Mortgage have
not been impaired, waived, altered or modified in any respect, from the date
of
origination except by a written instrument which has been recorded, if necessary
to protect the interests of the Purchaser, and which has been delivered to
the
Custodian or to such other Person as the Purchaser shall designate in writing,
and the terms of which are reflected in the related Mortgage Loan
Schedule. The substance of any such waiver, alteration or
modification has been approved by the issuer of any related PMI Policy and
the
title insurer, if any, to the extent required by the policy, and its terms
are
reflected on the related Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with
an
assumption agreement, approved by the issuer of any related PMI Policy and
the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms
of
which are reflected in the related Mortgage Loan Schedule;
(e) No
Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject
to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto;
(f) Hazard
Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by
a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Underwriting
Guidelines. If required by the National Flood Insurance Act of 1968,
as amended, each Mortgage Loan is covered by a flood insurance policy meeting
the requirements of the current guidelines of the Federal Insurance
Administration as in effect which policy
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conforms
with the Underwriting Guidelines. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors and
assigns as mortgagee, and all premiums thereon have been paid. The
Mortgage obligates the Mortgagor thereunder to maintain the hazard insurance
policy at the Mortgagor’s cost and expense, and on the Mortgagor’s failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such insurance
at such Mortgagor’s cost and expense, and to seek reimbursement therefor from
the Mortgagor. Where required by state law or regulation, the
Mortgagor has been given an opportunity to choose the carrier of the required
hazard insurance, provided the policy is not a “master” or “blanket”
hazard
insurance policy covering a condominium, or any hazard insurance policy covering
the common facilities of a planned unit development. The hazard
insurance policy is the valid and binding obligation of the insurer, is in
full
force and effect, and will be in full force and effect and inure to the benefit
of the Purchaser upon the consummation of the transactions contemplated by
this
Agreement. The Seller has not engaged in, and has no knowledge of the
Mortgagor’s having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by
any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance
with Applicable
Laws. Any and all requirements of any federal, state or local
law including, without limitation, usury, truth-in-lending, real estate
settlement procedures, consumer credit protection, predatory abusive and fair
lending, equal credit opportunity and disclosure laws applicable to the Mortgage
Loan, including, without limitation, any provisions relating to a Prepayment
Penalty have been complied with, the consummation of the transactions
contemplated hereby will not involve the violation of any such laws or
regulations, and the Seller shall maintain in its possession, available for
the
Purchaser’s inspection, and shall deliver to the Purchaser upon demand, evidence
of compliance with all such requirements. This representation and
warranty is a Deemed Material and Adverse Representation;
(h) No
Satisfaction of
Mortgage. The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property
has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the
performance by the Mortgagor of any action, if the Mortgagor’s failure to
perform such action would cause the Mortgage Loan to be in default, nor has
the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Type
of Mortgaged
Property. With respect to a Mortgage Loan, the Mortgaged
Property is a fee simple estate (except with respect to each Mortgage Loan
secured by an interest in an leasehold estate) that consists of a single parcel
of real property with a detached single family residence erected thereon, or
a
two- to four-family dwelling, or an individual residential condominium unit
in a
condominium project, or an individual unit in a planned unit development (or,
with respect to each Co-op Loan, an individual unit in a residential cooperative
housing corporation); provided, however,
that any condominium
unit, planned unit development or residential cooperative housing corporation
shall conform with the
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Underwriting
Guidelines. No portion of the Mortgaged Property (or underlying
Mortgaged Property, in the case of a Co-op Loan) is used for commercial
purposes, and since the date of origination, no portion of the Mortgaged
Property has been used for commercial purposes; provided, that
Mortgaged Properties
which contain a home office shall not be considered as being used for commercial
purposes as long as the Mortgaged Property has not been altered for commercial
purposes and is not storing any chemicals or raw materials other than those
commonly used for homeowner repair, maintenance and/or household
purposes. None of the Mortgaged Properties are Manufactured Homes,
log homes, mobile homes, geodesic domes or other unique property
types. This representation and warranty is a Deemed Material and
Adverse Representation;
(j) Valid
First
Lien. The Mortgage is a valid, subsisting, enforceable and
perfected, first lien on the Mortgaged Property, including all buildings and
improvements on the Mortgaged Property and all installations and mechanical,
electrical, plumbing, heating and air conditioning systems located in or annexed
to such buildings, and all additions, alterations and replacements made at
any
time with respect to the foregoing. The lien of the Mortgage is
subject only to:
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(i)
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the
lien of current real property taxes and assessments not yet due and
payable;
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| (ii) | covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal; and |
| (iii) | 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 the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property. |
Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting, enforceable and perfected first lien and first priority security
interest on the property described therein and the Seller has full right to
sell
and assign the same to the Purchaser.
With
respect to any Co-op Loan, the related Mortgage is a valid, subsisting and
enforceable first priority security interest on the related cooperative shares
securing the Mortgage Note, subject only to (a) liens of the related
residential cooperative housing corporation for unpaid assessments representing
the Mortgagor’s pro rata share of the related residential cooperative housing
corporation’s payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments
to
which like collateral is commonly subject and (b) other matters to which
like collateral is commonly subject which do not materially interfere with
the
benefits of the security interest intended to be provided by the related
Security Agreement;
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(k) Validity
of Mortgage
Documents. The Mortgage Note and the Mortgage and any other
agreement executed and delivered by a Mortgagor in connection with a Mortgage
Loan are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms (including, without
limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the Mortgage
Loan
and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related
parties. No fraud, error, omission, misrepresentation, negligence or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of the Seller in connection with the origination of the Mortgage Loan or in
the
application of any insurance in relation to such Mortgage Loan. The
documents, instruments and agreements submitted for loan underwriting were
not
falsified and contain no untrue statement of material fact or omit to state
a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. No fraud, error, omission,
misrepresentation, negligence or similar occurrence with respect to a Mortgage
Loan has taken place on the part of any Person, including without limitation,
the Mortgagor, any appraiser, any builder or developer, or any other party
involved in the origination of the Mortgage Loan or in the application for
any
insurance in relation to such Mortgage Loan. The Seller has reviewed
all of the documents constituting the Servicing File and has made such inquiries
as it deems necessary to make and confirm the accuracy of the representations
set forth herein;
(l) Full
Disbursement of
Proceeds. The Mortgage Loan has been closed and the proceeds
of the Mortgage Loan have been fully disbursed and there is no requirement
for
future advances thereunder, and any and all requirements as to completion of
any
on-site or off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The
Seller is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by each Mortgage Note and upon the sale of the Mortgage
Loans to the Purchaser, the Seller will retain the Mortgage Files or any part
thereof with respect thereto not delivered to the Custodian, the Purchaser
or
the Purchaser’s designee, in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan. The Mortgage Loan is
not assigned or pledged, and the Seller has good, indefeasible and marketable
title thereto, and has full right to transfer and sell the Mortgage Loan to
the
Purchaser free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest, and has full right and
authority subject to no interest or participation of, or agreement with, any
other party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation interest,
lien, pledge, charge, claim or security interest. The Seller intends
to relinquish all rights to possess, control and monitor the Mortgage Loan,
except as may be required of the Seller in its capacity as Interim Servicer
of
such Mortgage Loan prior to the Transfer Date. After the related
Closing Date, the Seller will have no right to modify or alter the terms of
the
sale of the Mortgage Loan
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and
the
Seller will have no obligation or right to repurchase the Mortgage Loan or
substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing
Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were)
(1) in compliance with any and all applicable licensing requirements of the
laws of the state wherein the Mortgaged Property is located, and (2) either
(i) organized under the laws of such state, or (ii) qualified to do
business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank, or (3) not doing business in such
state;
(o) LTV,
PMI
Policy. No Mortgage Loan has an LTV greater than
100%. Any Mortgage Loan that had at the time of origination an LTV in
excess of 80% is insured as to payment defaults by a PMI Policy. Any
PMI Policy in effect covers the related Mortgage Loan for the life of such
Mortgage Loan. All provisions of such PMI Policy have been and are
being complied with, such policy is in full force and effect, and all premiums
due thereunder have been paid. No action, inaction, or event has
occurred and no state of facts exists that has, or will result in the exclusion
from, denial of, or defense to coverage. Any Mortgage Loan subject to
a PMI Policy obligates the Mortgagor thereunder to maintain the PMI Policy
and
to pay all premiums and charges in connection therewith. The Mortgage
Interest Rate for the Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net of any such insurance premium if the related PMI Policy is
lender-paid;
(p) Title
Insurance. With respect to a Mortgage Loan which is not a
Co-op Loan, the Mortgage Loan is covered by an ALTA or CLTA lender’s title
insurance policy or other generally acceptable form of policy or insurance
acceptable under the Underwriting Guidelines and each such title insurance
policy is issued by a title insurer acceptable under the Underwriting Guidelines
and qualified to do business in the jurisdiction where the Mortgaged Property
is
located, insuring the Seller, its successors and assigns, as to the first
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (or to the extent a Mortgage Note provides for negative amortization,
the
maximum amount of negative amortization in accordance with the Mortgage),
subject only to the exceptions contained in clauses (i) and (ii) of
clause (j) of this Subsection 9.02,
and in the case of Adjustable Rate Mortgage Loans, against any loss by reason
of
the invalidity or unenforceability of the lien resulting from the provisions
of
the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has
been given the opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender’s title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its
successor and assigns, are the sole insured of such lender’s title insurance
policy, and such lender’s title insurance policy is valid and remains in full
force and effect and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made
under such lender’s title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender’s title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has
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been
or
will be received, retained or realized by any attorney, firm or other person
or
entity, and no such unlawful items have been received, retained or realized
by
the Seller;
(q) No
Defaults. Other than payments due but not yet 30 days or
more delinquent, there is no default, breach, violation or event which would
permit acceleration existing under the Mortgage or the 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
which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration;
(r) No
Mechanics’
Liens. There are no mechanics’ or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with, the
lien of the related Mortgage;
(s) Location
of Improvements; No
Encroachments. All improvements which were considered in
determining the Appraised Value of the Mortgaged Property lay wholly within
the
boundaries and building restriction lines of the Mortgaged Property, and no
improvements on adjoining properties encroach upon the Mortgaged
Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or
regulation;
(t) Origination;
Payment
Terms. The Mortgage Loan was originated by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to
Sections 203 and 211 of the National Housing Act, a savings and loan
association, a savings bank, a commercial bank, credit union, insurance company
or other similar institution which is supervised and examined by a federal
or
state authority. Principal payments on the Mortgage Loan commenced no
more than seventy days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as, in the case of
an Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Rate
Cap and the Periodic Rate Floor are as set forth on the related Mortgage Loan
Schedule. The Mortgage Interest Rate is adjusted with respect to
Adjustable Rate Mortgage Loans, on each Interest Rate Adjustment Date to equal
the Index plus the Gross Margin (rounded up or down to the nearest 0.125%),
subject to the Periodic Rate Cap. Unless specified on the related
Mortgage Loan Schedule as an interest-only loan or a Balloon Mortgage Loan,
the
Mortgage Note is payable in equal monthly installments of principal (except
for
Mortgage Loans that provide for a fixed period of interest-only payments at
the
beginning of their term) and interest, which installments of interest, with
respect to Adjustable Rate Mortgage Loans, are subject to change due to the
adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment
Date,
with interest calculated and payable in arrears, sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than thirty (30) years from commencement of amortization. With
respect to any Mortgage Loan that provides for a fixed period of interest-only
payments at the beginning of its term, at the end of such interest-only period,
the Monthly Payment will be recalculated so as to require Monthly Payments
sufficient to amortize the Mortgage Loan fully by its stated maturity
date. Unless otherwise specified on the related Mortgage Loan
Schedule, the Mortgage Loan is payable on the first day of each
month. The Mortgage Loan by its
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original
terms or any modification thereof, does not provide for amortization beyond
its
scheduled maturity date. Except with respect to each Balloon Mortgage
Loan, the Mortgage Loan does not require a balloon payment on its stated
maturity date;
(u) Customary
Provisions. The Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits
of
the security provided thereby, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee’s sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan
and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver
good
and merchantable title to the Mortgaged Property. There is no
homestead or other exemption available to a Mortgagor which would interfere
with
the right to sell the Mortgaged Property at a trustee’s sale or the right to
foreclose the Mortgage, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or similar
law;
(v) Conformance
with Agency and
Underwriting Guidelines. The Mortgage Loan was underwritten in
accordance with the Underwriting Guidelines (a copy of which is attached to
the
related Assignment and Conveyance Agreement). The Mortgage Note and
Mortgage are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and no
representations have been made to a Mortgagor that are inconsistent with the
mortgage instruments used;
(w) Occupancy
of the Mortgaged
Property. As of the related Closing Date the Mortgaged
Property is lawfully occupied under applicable law. All inspections,
licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to certificates of occupancy
and fire underwriting certificates, have been made or obtained from the
appropriate authorities. Unless otherwise specified on the related
Mortgage Loan Schedule, the Mortgagor represented at the time of origination
of
the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as
the
Mortgagor’s primary residence;
(x) No
Additional
Collateral. The Mortgage Note is not and has not been secured
by any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred
to in
clause (j) above;
(y) Deeds
of
Trust. In the event the Mortgage constitutes a deed of trust,
a trustee, authorized and duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser
to
the trustee under the deed of trust, except in connection with a trustee’s sale
after default by the Mortgagor;
(z) Acceptable
Investment. There are no circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage
File or the Mortgagor’s credit standing that can reasonably be expected to cause
private institutional investors who invest in prime mortgage loans similar
to
the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment
cause the Mortgage Loan to become delinquent, or adversely affect the value
or
marketability of the Mortgage Loan, or cause the Mortgage
-30-
Loan
to
prepay during any period materially faster or slower than the mortgage loans
originated by the Seller generally;
(aa) Delivery
of Mortgage
Documents. The Mortgage Note, the Mortgage, the Assignment of
Mortgage and any other documents required to be delivered under the Custodial
Agreement for each Mortgage Loan have been delivered to the
Custodian. The Seller is in possession of a complete, true and
accurate Mortgage File in compliance with Exhibit A
attached hereto, except for such documents the originals of which have been
delivered to the Custodian;
(bb) Transfer
of Mortgage
Loans. The Assignment of Mortgage (except with respect to any
Mortgage that has been recorded in the name of MERS or its designee) with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property
is
located;
(cc) Due-On-Sale. With
respect to each Fixed Rate Mortgage Loan, the Mortgage contains an enforceable
provision for the acceleration of the payment of the unpaid principal balance
of
the Mortgage Loan in the event that the Mortgaged Property is sold or
transferred without the prior written consent of the Mortgagee
thereunder;
(dd) Assumability. With
respect to each Adjustable Rate Mortgage Loan, the Mortgage Loan Documents
provide that after the related first Interest Rate Adjustment Date, a related
Mortgage Loan may only be assumed if the party assuming such Mortgage Loan
meets
certain credit requirements stated in the Mortgage Loan Documents;
(ee) No
Buydown Provisions; No
Graduated Payments or Contingent Interests. The Mortgage Loan
does not contain provisions pursuant to which Monthly Payments are paid or
partially paid with funds deposited in any separate account established by
the
Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any
source other than the Mortgagor nor does it contain any other similar provisions
which may constitute a “buydown” provision. The Mortgage Loan is not
a graduated payment mortgage loan and the Mortgage Loan does not have a shared
appreciation or other contingent interest feature;
(ff) Consolidation
of Future
Advances. Any future advances made to the Mortgagor prior to
the applicable Cut-off Date have been consolidated with the outstanding
principal amount secured by the Mortgage, and the secured principal amount,
as
consolidated, bears a single interest rate and single repayment
term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first lien priority by a title insurance
policy, an endorsement to the policy insuring the Mortgagee’s consolidated
interest or by other title evidence acceptable to Xxxxxx Xxx and Xxxxxxx
Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(gg) Mortgaged
Property
Undamaged; No Condemnation Proceedings. There is no proceeding
pending or threatened for the total or partial condemnation of the Mortgaged
Property. The Mortgaged 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 and
-31-
each
Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(hh) Collection
Practices; Escrow
Deposits; Interest Rate Adjustments. The origination,
servicing and collection practices used by the Seller and the Interim Servicer
with respect to the Mortgage Loan have been in all respects in compliance with
Accepted Servicing Practices, applicable laws and regulations, and have been
in
all respects legal and proper. With respect to escrow deposits and
Escrow Payments, all such payments are in the possession of, or under the
control of, the Seller or the Interim Servicer and there exist no deficiencies
in connection therewith for which customary arrangements for repayment thereof
have not been made. All Escrow Payments have been collected in full
compliance with state and federal law and the provisions of the related Mortgage
Note and Mortgage. An escrow of funds is not prohibited by applicable
law and with respect to Mortgage Loans that provide for Escrow Payments, such
an
escrow has been established in an amount sufficient to pay on an annual basis
for every item that remains unpaid. No escrow deposits or Escrow
Payments or other charges or payments due the Seller have been capitalized
under
the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law
and
the terms of the related Mortgage and Mortgage Note on the related Interest
Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note,
another index was selected for determining the Mortgage Interest Rate, the
same
index was used with respect to each Mortgage Note which required a new index
to
be selected, and such selection did not conflict with the terms of the related
Mortgage Note. The Seller or the Interim Servicer executed and
delivered any and all notices required under applicable law and the terms of
the
related Mortgage Note and Mortgage regarding the Mortgage Interest Rate and
the
Monthly Payment adjustments. Any interest required to be paid
pursuant to state, federal and local law has been properly paid and
credited;
(ii) Conversion
to Fixed Interest
Rate. The Mortgage Loan does not contain a provision whereby
the Mortgagor is permitted to convert the Mortgage Interest Rate from an
adjustable rate to a fixed rate;
(jj) Other
Insurance Policies; No
Defense to Coverage. No action, inaction or event has occurred
and no state of facts exists or has existed on or prior to the Closing Date
that
has resulted or will result in the exclusion from, denial of, or defense to
coverage under any applicable hazard insurance policy, PMI Policy or bankruptcy
bond (including, without limitation, any exclusions, denials or defenses which
would limit or reduce the availability of the timely payment of the full amount
of the loss otherwise due thereunder to the insured), irrespective of the cause
of such failure of coverage. The Seller has caused or will cause to
be performed any and all acts required to preserve the rights and remedies
of
the Purchaser in any insurance policies applicable to the Mortgage Loans
including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. In
connection with the placement of any such insurance, no commission, fee, or
other compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
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(kk) No
Violation of
Environmental Laws. To the best of the Seller’s knowledge,
there is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation
is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done
to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(ll) Servicemembers
Civil Relief
Act. The Mortgagor has not notified the Seller, and the Seller
has no knowledge of any relief requested or allowed to the Mortgagor under
the
Servicemembers Civil Relief Act or other similar state statute;
(mm) Appraisal. The
Mortgage File contains an appraisal of the related Mortgaged Property signed
prior to the origination of the Mortgage Loan by a Qualified Appraiser, duly
appointed by the Seller, who had no interest, direct or indirect in the
Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Xxxxxx
Xxx or Xxxxxxx Mac and Title XI of FIRREA and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated;
(nn) Disclosure
Materials. The Mortgagor has received all disclosure materials
required by, and the Seller has complied with, all applicable law with respect
to the making of the Mortgage Loans. The Mortgage File contains
copies of all disclosure materials executed by the Mortgagor;
(oo) Construction
or
Rehabilitation of Mortgaged Property. No Mortgage Loan was
made in connection with the construction (other than a “construct-to-perm” loan)
or rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(pp) Escrow
Analysis. If applicable, with respect to each Mortgage Loan,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(qq) Credit
Information. As to each consumer report (as defined in the
Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from furnishing
the same to any subsequent or prospective purchaser of such
Mortgage. The Seller has and shall in its capacity as servicer, for
each Mortgage Loan, fully furnished, in accordance with the Fair Credit
Reporting Act and its implementing regulations, accurate and complete
information (e.g. favorable and unfavorable) on its borrower credit files
to Equifax, Experian and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis. This representation and
warranty is a Deemed Material and Adverse Representation;
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(rr) Leaseholds. If
the Mortgage Loan is secured by a leasehold estate, (1) the ground lease is
assignable or transferable; (2) the ground lease will not terminate earlier
than five years after the maturity date of the Mortgage Loan; (3) the
ground lease does not provide for termination of the lease in the event of
lessee’s default without the Mortgagee being entitled to receive written notice
of, and a reasonable opportunity to cure the default; (4) the ground lease
permits the mortgaging of the related Mortgaged Property; (5) the ground
lease protects the Mortgagee’s interests in the event of a property
condemnation; (6) all ground lease rents, other payments, or assessments
that have become due have been paid; and (7) the use of leasehold estates
for residential properties is a widely accepted practice in the jurisdiction
in
which the Mortgaged Property is located;
(ss) Prepayment
Penalty. Each Mortgage Loan that is subject to a Prepayment
Penalty as provided in the related Mortgage Note is identified on the related
Mortgage Loan Schedule. With respect to each Mortgage Loan that has a
Prepayment Penalty feature, each such Prepayment Penalty is enforceable and
will
be enforced by the Seller during the period the Seller is acting as Interim
Servicer for the benefit of the Purchaser, and each Prepayment Penalty is
permitted pursuant to federal, state and local law. Each such
Prepayment Penalty is in an amount not more than the maximum amount permitted
under applicable law and no such Prepayment Penalty may provide for a term
in
excess of five (5) years with respect to Mortgage Loans originated prior to
October, 1, 2002. With respect to Mortgage Loans originated on or
after October 1, 2002, the duration of the Prepayment Penalty period shall
not exceed three (3) years from the date of the Mortgage Note unless the
Mortgage Loan was modified to reduce the Prepayment Penalty period to no more
than three (3) years from the date of the related Mortgage Note and the
Mortgagor was notified in writing of such reduction in Prepayment Penalty
period. With respect to any Mortgage Loan that contains a provision
permitting imposition of a Prepayment Penalty upon a prepayment prior to
maturity: (i) the Mortgage Loan provides some benefit to the
Mortgagor (e.g., a rate
or fee reduction) in exchange for accepting such Prepayment Penalty,
(ii) prior to the Mortgage Loan’s origination, the Mortgagor was offered
the option of obtaining a mortgage loan that did not require payment of such
a
penalty and (iii) the Prepayment Penalty was adequately disclosed to the
Mortgagor in the mortgage loan documents pursuant to applicable state, local
and
federal law. This representation and warranty is a Deemed Material
and Adverse Representation;
(tt) Predatory
Lending
Regulations. No Mortgage Loan is a High Cost Loan or Covered
Loan, as applicable. No Mortgage Loan is covered by the Home
Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in violation
of any comparable state or local law. The Mortgaged Property is not
located in a jurisdiction where a breach of this representation with respect
to
the related Mortgage Loan may result in additional assignee liability to the
Purchaser, as determined by Purchaser in its reasonable
discretion. This representation and warranty is a Deemed Material and
Adverse Representation;
(uu) Single-premium
credit life
insurance policy. No Mortgagor was required to purchase any
single premium credit insurance policy (e.g., life, mortgage, disability,
property, accident, unemployment or health insurance product) or debt
cancellation agreement as a condition of obtaining the extension of
credit. No Mortgagor obtained a prepaid single-premium credit
insurance policy (e.g., life, mortgage, disability, property, accident,
unemployment, mortgage or health insurance) in connection with the origination
of the
-34-
Mortgage
Loan. No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies or debt cancellation agreements as part of
the
origination of, or as a condition to closing, such Mortgage
Loan. This representation and warranty is a Deemed Material and
Adverse Representation;
(vv) Qualified
Mortgage. The Mortgage Loan is a qualified mortgage under
Section 860G(a)(3) of the Code (without regard to sections (A)(i) and
(ii) thereof);
(ww) Tax
Service
Contract. Each Mortgage Loan is covered by a paid in full,
life of loan, tax service contract issued by First American Real Estate Tax
Service, and such contract is transferable. On the related Closing
Date, the Seller shall remit to the Purchaser a transfer fee of five dollars
($5.00) for each Mortgage Loan covered by such a tax service
contract. If such a tax service contract with First American Real
Estate Tax Service is not in place then a placement fee of seventy two dollars
($72.00) will apply for each such Mortgage Loan;
(xx)
Origination. No
predatory or deceptive lending practices, including, without limitation, the
extension of credit without regard to the ability of the Mortgagor to repay
and
the extension of credit which has no apparent benefit to the Mortgagor, were
employed in the origination of the Mortgage Loan;
(yy) Recordation. 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;
(zz)
Co-op
Loans. With respect to a Mortgage Loan that is a Co-op Loan,
the stock that is pledged as security for the Mortgage Loan is held by a person
as a tenant-stockholder (as defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the
Code);
(aaa) Mortgagor
Bankruptcy. The Mortgagor has not filed and to Seller’s
knowledge, will not file a bankruptcy petition or has not become the subject
and
will not, to Seller’s knowledge, become the subject of involuntary bankruptcy
proceedings or has not consented to or will not consent to the filing of a
bankruptcy proceeding against it or to a receiver being appointed in respect
of
the related Mortgaged Property;
(bbb) No
Prior
Offer. If the Mortgage Loan has previously been offered for
sale, such Mortgage Loan was not rejected from being purchased by such offeree
as a result of the offeree’s due diligence, unless such deficiency has since
been cured;
(ccc) Georgia
Fair Lending
Act. There is no Mortgage Loan that was originated (or
modified) on or after October 1, 2002 and before March 7, 2003 which
is secured by property located in the State of Georgia. There is no
Mortgage Loan that was originated on or after March 7, 2003 that is a “high
cost home loan” as defined under the Georgia Fair Lending Act. This
representation and warranty is a Deemed Material and Adverse
Representation;
-35-
(ddd) No
Arbitration. No Mortgagor with respect to any Mortgage Loan
originated on or after August 1, 2004 agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to the mortgage loan
transaction. This representation and warranty is a Deemed Material
and Adverse Representation;
(eee) Flood
Service
Contract. Each Mortgage Loan is covered by a paid in full,
life of loan, flood service contract issued by either First American Flood
Data
Services or Fidelity, and such contract is transferable. If no such
flood service contract is in place, or if such flood service contract is issued
by an insurer other than First American Flood Data Services or Fidelity, then
on
the related Closing Date, the Seller shall remit to the Purchaser a placement
fee of ten dollars ($10.00) for each such Mortgage Loan;
(fff) Origination
Practices/No
Steering. The Mortgagor was not encouraged or required to
select a mortgage loan product offered by the Mortgage Loan’s originator which
is a higher cost product designed for less creditworthy borrowers, unless at
the
time of the Mortgage Loan’s origination, such Mortgagor did not qualify taking
into account such facts as, without limitation, the Mortgage Loan’s requirements
and the Mortgagor’s credit history, income, assets and liabilities and
debt-to-income ratios for a lower-cost credit product then offered by the
Mortgage Loan’s originator or any affiliate of the Mortgage Loan’s
originator. If, at the time of loan application, the Mortgagor may
have qualified for a lower-cost credit product then offered by any mortgage
lending affiliate of the Mortgage Loan’s originator, the Mortgage Loan’s
originator referred the Mortgagor’s application to such affiliate for
underwriting consideration. For a Mortgagor who seeks financing
through a Mortgage Loan originator’s higher-priced subprime lending channel, the
Mortgagor was directed towards or offered the Mortgage Loan originator’s
standard mortgage line if the Mortgagor was able to qualify for one of the
standard products. This representation and warranty is a Deemed
Material and Adverse Representation;
(ggg) Underwriting
Methodology. The methodology used in underwriting the
extension of credit for each Mortgage Loan does not rely solely on the extent
of
the Mortgagor’s equity in the collateral as the principal determining factor in
approving such extension of credit. The methodology employed
objective criteria such as the Mortgagor’s income, assets and liabilities, to
the proposed mortgage payment and, based on such methodology, the Mortgage
Loan’s originator made a reasonable determination that at the time of
origination the Mortgagor had the ability to make timely payments on the
Mortgage Loan. Such underwriting methodology confirmed that at the
time of origination (application/approval) the Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(hhh) Points
and
Fees. No Mortgagor was charged “points and fees” (whether or
not financed) in an amount greater than (i) $1,000, or (ii) 5% of the
principal amount of such Mortgage Loan, whichever is greater. For
purposes of this representation, such 5% limitation is calculated in accordance
with Xxxxxx Mae’s anti-predatory lending requirements as set forth in the Xxxxxx
Xxx Guides and “points and fees” (x) include origination,
underwriting, broker and finder fees and charges that the mortgagee imposed
as a
condition of making the Mortgage Loan, whether they are paid to the mortgagee
or
a third party; and (y) exclude bona fide
discount points, fees paid for actual services rendered in connection with
the
origination of the
-36-
Mortgage
Loan (such as attorneys’ fees, notaries fees and fees paid for property
appraisals, credit reports, surveys, title examinations and extracts, flood
and
tax certifications, and home inspections), the cost of mortgage insurance or
credit-risk price adjustments, the costs of title, hazard, and flood insurance
policies, state and local transfer taxes or fees, escrow deposits for the future
payment of taxes and insurance premiums, and other miscellaneous fees and
charges which miscellaneous fees and charges, in total, do not exceed 0.25%
of
the principal amount of such Mortgage Loan. This representation and
warranty is a Deemed Material and Adverse Representation;
(iii)
Fees
Charges. All points, fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be collected
in
connection with the origination and servicing of each Mortgage Loan have been
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation. This representation and warranty is a
Deemed Material and Adverse Representation;
(jjj)
Balloon Mortgage Loans. No Balloon Mortgage Loan has an original
stated maturity of less than seven (7) years; and
(kkk) Negative
Amortization. Unless otherwise disclosed in the Mortgage Loan
Schedule, no Mortgage Loan is subject to negative amortization.
Subsection
9.03 Remedies for Breach
of
Representations and Warranties.
It
is
understood and agreed that the representations and warranties set forth in
Subsections 9.01
and 9.02 shall
survive the sale of the Mortgage Loans to the Purchaser and shall inure to
the
benefit of the Purchaser, 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 any
representation or warranty contained in Subsections 9.01
or 9.02 hereof
that is made to the Seller’s knowledge, if it is discovered by the Purchaser
that the substance of such representation and warranty was inaccurate as of
the
related Closing Date and such inaccuracy materially and adversely affect the
value of the related Mortgage Loan, then notwithstanding the Seller’s lack of
knowledge with respect to the inaccuracy at the time the representation or
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty. Upon discovery by either the Seller or
the Purchaser of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other relevant parties.
Within
sixty (60) days after 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 the Mortgage Loans or the interest of the Purchaser therein
(or which materially and adversely affects the value of the applicable Mortgage
Loan or the interest of the Purchaser therein in the case of a representation
and warranty relating to a particular Mortgage Loan), the Seller shall use
its
best efforts promptly to cure such breach in all material respects and, if
such
breach cannot be cured, the Seller shall, at the Purchaser’s option, repurchase
such Mortgage Loan or Mortgage Loans at the Repurchase
Price. Notwithstanding the above sentence, (i) within sixty (60)
days after the earlier of either discovery by, or notice to, the Seller of
any
breach of the representation and warranty set forth in clause (vv) of Subsection 9.02,
the Seller
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shall
repurchase such Mortgage Loan at the Repurchase Price and (ii) any breach
of a Deemed Material and Adverse Representation shall automatically be deemed
to
materially and adversely affects the value of the Mortgage Loans or the interest
of the Purchaser therein. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01,
and such breach cannot be cured within 60 days of the earlier of either
discovery by or notice to the Seller of such breach, all of the Mortgage Loans
affected by such breach shall, at the Purchaser’s option, be repurchased by the
Seller at the Repurchase Price. However, if the breach shall involve
a representation or warranty set forth in Subsection 9.02
(except as provided in the second sentence of this paragraph with respect to
certain breaches for which no substitution is permitted) and the Seller
discovers or receives notice of any such breach within 120 days of the
related Closing Date, the Seller shall, at the Purchaser’s option and providedthat
the Seller has a
Qualified Substitute Mortgage Loan, rather than repurchase the Mortgage Loan
as
provided above, remove such Mortgage Loan and substitute in its place a
Qualified Substitute Mortgage Loan or Qualified Substitute Mortgage Loans,
provided, however,
that any such
substitution shall be effected within such one hundred twenty (120) days after
the related Closing Date. If the Seller has no Qualified Substitute
Mortgage Loan, it shall repurchase the deficient Mortgage Loan at the Repurchase
Price. Any repurchase of a Mortgage Loan pursuant to the foregoing
provisions of this Subsection 9.03
shall occur on a date designated by the Purchaser, and acceptable to Seller,
and
shall be accomplished by either (a) if the Interim Servicing Agreement has
been entered into and is in effect, deposit in the Custodial Account of the
amount of the Repurchase Price for distribution to the Purchaser on the next
scheduled Remittance Date, after deducting therefrom any amount received in
respect of such repurchased Mortgage Loan or Loans and being held in the
Custodial Account for future distribution or (b) if the Interim Servicing
Agreement has not been entered into or is no longer in effect, by direct
remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser’s instructions.
At
the
time of repurchase of any deficient Mortgage Loan (or removal of any Deleted
Mortgage Loan), the Purchaser and the Seller shall arrange for the reassignment
of the repurchased Mortgage Loan (or Deleted Mortgage Loan) to the Seller or
its
designee and the delivery to the Seller of any documents held by the Custodian
relating to the repurchased Mortgage Loan (or Deleted Mortgage
Loan). In the event of a repurchase or substitution, the Seller
shall, simultaneously with such reassignment, give written notice to the
Purchaser that such repurchase or substitution has taken place, amend the
Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan
from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the related Mortgage Loan Schedule to reflect
the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall
be deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all
such
representations and warranties set forth in this Agreement shall be deemed
made
as of the date of such substitution. The Seller shall effect such
substitution by delivering to the Custodian or to such other party as the
Purchaser may designate in writing for such Qualified Substitute Mortgage Loan
the documents required by Subsection 6.03
and the Custodial Agreement, with the Mortgage Note endorsed as required by
Subsection 6.03
and the Custodial Agreement. No substitution will be made in any
calendar month after the Determination Date for such month. The
Seller shall cause the Interim Servicer to remit directly to the Purchaser,
or
its designee in accordance with the Purchaser’s instructions the
Monthly
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Payment
less the Servicing Fee due, if any, on such Qualified Substitute Mortgage Loan
or Loans in the month following the date of such
substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by
the
Seller. For the month of substitution, distributions to the Purchaser
shall include the Monthly Payment due on any Deleted Mortgage Loan in the month
of substitution, and the Seller shall thereafter be entitled to retain all
amounts subsequently received by the Seller in respect of such Deleted Mortgage
Loan. The Seller shall give written notice to the Purchaser that such
substitution has taken place and shall amend the related Mortgage Loan Schedule
to reflect the removal of such Deleted Mortgage Loan from the terms of this
Agreement and the substitution of the Qualified Substitute Mortgage
Loan. Upon such substitution, each Qualified Substitute Mortgage Loan
shall be subject to the terms of this Agreement in all respects, and the Seller
shall be deemed to have made with respect to such Qualified Substitute Mortgage
Loan, as of the date of substitution, the covenants, representations and
warranties set forth in Subsections 9.01 and 9.02.
For
any
month in which the Seller substitutes one or more Qualified Substitute Mortgage
Loans for one or more Deleted Mortgage Loans, the Seller shall determine the
amount (if any) by which the aggregate principal balance of all such Qualified
Substitute Mortgage Loans as of the date of substitution is less than the
aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of scheduled principal payments due in the month of
substitution). The amount of such shortfall shall be distributed by
the Seller directly to the Purchaser or its designee in accordance with the
Purchaser’s instructions within two (2) Business Days of such
substitution. Accordingly, on the date of such substitution, the
Seller will remit to the Purchaser from its own funds an amount equal to the
amount of such shortfall plus one month’s interest thereon at the applicable
Mortgage Interest Rate minus the related Servicing Fee.
In
addition to such repurchase or substitution obligation, the Seller shall
indemnify the Purchaser and its present and former directors, officers,
employees and agents and any Successor Servicer and its present and former
directors, officers, employees and agents and hold such parties harmless against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses
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 Seller representations and warranties contained in this Agreement
or any Reconstitution Agreement. It is understood and agreed that the
obligations of the Seller set forth in this Subsection 9.03
to cure, repurchase or substitute for a defective Mortgage Loan and to indemnify
the Purchaser and Successor Servicer as provided in this Subsection 9.03
and in Subsection 14.01
constitute the sole remedies of the Purchaser and Successor Servicer respecting
a breach of the foregoing representations and warranties. For
purposes of this paragraph “Purchaser” shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
“Purchasers” under this Agreement and “Successor Servicer” shall mean any Person
designated as the Successor Servicer pursuant to this Agreement and any and
all
Persons who previously were “Successor Servicers” pursuant to this
Agreement.
Any
cause
of action against the Seller relating to or arising out of the breach of any
representations and warranties made in Subsections 9.01
and 9.02 shall
accrue as to any
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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, substitute a Qualified Substitute Mortgage Loan, or repurchase such
Mortgage Loan as specified above and (iii) demand upon the Seller by the
Purchaser for compliance with this Agreement.
Subsection
9.04 Repurchase of Mortgage
Loans
with Early Payment Defaults.
If
a
Mortgagor of any Mortgage Loan originated on a date (x) not more than 12
months prior to the related Closing Date is delinquent with respect to any
of
the Mortgage Loan’s first three (3) Monthly Payments due and payable either
(i) after origination of such Mortgage Loan, or (ii) after the related
Closing Date, or (y) on or more than 12 months prior to the related Closing
Date is delinquent with respect to any of the Mortgage Loan’s first three (3)
Monthly Payments due and payable after the related Closing Date, then in
either case, the Seller, at the Purchaser’s option, shall repurchase such
Mortgage Loan from the Purchaser at a price equal to the Repurchase
Price. The Purchaser shall notify the Seller and request any such
repurchase within 180 days after the related Closing Date and the Seller shall
repurchase such delinquent Mortgage Loan within thirty (30) days of such
request.
Subsection
9.05 Premium
Recapture.
With
respect to any Mortgage Loan without Prepayment Penalties that prepays in full
during the first ninety (90) days following the related Closing Date, and with
respect to any Mortgage Loan that is repurchased pursuant to Subsection 9.04,
the Seller shall pay the Purchaser, within three (3) Business Days after such
prepayment in full or repurchase, an amount equal to the excess of the Purchase
Price Percentage for such Mortgage Loan over par, multiplied by the outstanding
principal balance of such Mortgage Loan as of the related Cut-off
Date.
SECTION
10. Closing
The
closing for the purchase and sale of each Mortgage Loan Package shall take
place
on the related Closing Date. At the Purchaser’s option, each Closing
shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties shall
agree.
The
closing for the Mortgage Loans to be purchased on each Closing Date shall be
subject to each of the following conditions:
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(i)
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at
least two Business Days prior to the related Closing Date, the Seller
shall deliver to the Purchaser a magnetic diskette, or transmit by
modem,
a listing on a loan-level basis of the necessary information to compute
the Purchase Price of the Mortgage Loans delivered on such Closing
Date
(including accrued interest), and prepare a Mortgage Loan
Schedule;
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(ii)
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all
of the representations and warranties of the Seller under this Agreement
and of the Interim Servicer under the Interim Servicing Agreement
(with
respect to each Mortgage Loan for an interim period, as specified
therein)
shall be true and correct as of the related Closing
Date
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and
no
event shall have occurred which, with notice or the passage of time, would
constitute a default under this Agreement or an Event of Default under the
Interim Servicing Agreement;
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(iii)
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the
Purchaser shall have received, or the Purchaser’s attorneys shall have
received in escrow, all closing documents as specified in Section 11
of this Agreement, in such forms as are agreed upon and acceptable
to the
Purchaser, duly executed by all signatories other than the Purchaser
as
required pursuant to the terms
hereof;
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(iv)
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the
Seller shall have delivered and released to the Custodian all documents
required pursuant to the Custodial Agreement;
and
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(v)
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all
other terms and conditions of this Agreement and the related Purchase
Price and Terms Agreement shall have been complied
with.
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Subject
to the foregoing conditions, the Purchaser shall pay to the Seller on the
related Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of
this Agreement, by wire transfer of immediately available funds to the account
designated by the Seller.
SECTION
11. Closing
Documents.
The
Closing Documents for the Mortgage Loans to be purchased on each Closing Date
shall consist of fully executed originals of the following
documents:
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1.
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this
Agreement (to be executed and delivered only for the initial Closing
Date);
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2.
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with
respect to the initial Closing Date, the Custodial Agreement, dated
as of
the initial Cut-off Date;
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3.
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the
related Mortgage Loan Schedule (one copy to be attached to the Custodian’s
counterpart of the Custodial Agreement in connection with the initial
Closing Date, and one copy to be attached to the related Assignment
and
Conveyance as the Mortgage Loan Schedule
thereto);
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4.
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a
Custodian’s Certification, as required under the Custodial Agreement, in
the form of Exhibit 2 to the Custodial
Agreement;
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5.
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with
respect to the initial Closing Date, an Officer’s Certificate, in the form
of Exhibit C
hereto with respect to the Seller, including all attachments thereto;
with
respect to subsequent Closing Dates, an Officer’s Certificate upon request
of the Purchaser;
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6.
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with
respect to the initial Closing Date, an Opinion of Counsel of the
Seller
(who may be an employee of the Seller), generally in the form of
Exhibit D
hereto (“Opinion
of Counsel of the Seller”); with respect
to
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subsequent
Closing Dates, an Opinion of Counsel of the Seller upon request of the
Purchaser;
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7.
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with
respect to the initial Closing Date, an Opinion of Counsel of the
Custodian (who may be an employee of the Custodian), in the form
of an
exhibit to the Custodial Agreement(s), if
required;
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8.
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a
security release certification, executed by any person, as requested
by
the Purchaser, if any of the Mortgage Loans have at any time been
subject
to any security interest, pledge or hypothecation for the benefit
of such
person;
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9.
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a
certificate or other evidence of merger or change of name, signed
or
stamped by the applicable regulatory authority, if any of the Mortgage
Loans were acquired by the Seller by merger or acquired or originated
by
the Seller while conducting business under a name other than its
present
name, if applicable;
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10.
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with
respect to the initial Closing Date, the Underwriting Guidelines
to be
attached hereto as Exhibit G
and with respect to each subsequent Closing Date, the Underwriting
Guidelines to be attached to the related Assignment and
Conveyance;
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11.
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Assignment
and Conveyance Agreement in the form of Exhibit H
hereto, and all exhibits thereto;
and
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12.
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a
MERS Report reflecting the Purchaser as Investor, the Custodian as
custodian and no Person as Interim Funder for each MERS Designated
Mortgage Loan.
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The
Seller shall bear the risk of loss of the closing documents until such time
as
they are received by the Purchaser or its attorneys.
SECTION
12. Costs.
The
Purchaser shall pay any commissions due its salesmen and the legal fees and
expenses of its attorneys and custodial fees. All other costs and
expenses incurred in connection with the transfer and delivery of the Mortgage
Loans and the Servicing Rights including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage,
and
the Seller’s attorney’s fees, shall be paid by the Seller.
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SECTION
13. Cooperation of Seller
with a
Reconstitution.
The
Seller and the Purchaser agree that with respect to some or all of the Mortgage
Loans, after the related Closing Date, on one or more dates (each, a “Reconstitution Date”)
at the Purchaser’s sole option, the Purchaser may effect a sale (each, a “Reconstitution”) of
some or all of the Mortgage Loans then subject to this Agreement, without
recourse, to:
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(i)
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Xxxxxx
Xxx under its Cash Purchase Program or MBS Program (Special Servicing
Option) (each, a “Xxxxxx
Mae
Transfer”); or
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(ii)
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Xxxxxxx
Mac (the “Xxxxxxx
Mac
Transfer”); or
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(iii)
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one
or more third party purchasers in one or more Whole Loan Transfers;
or
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(iv)
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one
or more trusts or other entities to be formed as part of one or more
Securitization Transactions.
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The
Seller agrees to execute in connection with any Agency Transfer, any and all
reasonably acceptable pool purchase contracts, and/or agreements among the
Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the case may be) and any
servicer in connection with a Whole Loan Transfer, a seller’s warranties and
servicing agreement or a participation and servicing agreement in form and
substance reasonably acceptable to the parties, and in connection with a
Securitization Transaction, a pooling and servicing agreement in form and
substance reasonably acceptable to the parties (collectively, the agreements
referred to herein are designated the “Reconstitution
Agreements”).
With
respect to each Whole Loan Transfer and each Securitization Transaction entered
into by the Purchaser, the Seller agrees (1) to cooperate fully with the
Purchaser and any prospective purchaser with respect to all reasonable requests
and due diligence procedures; (2) to execute, deliver and perform all
Reconstitution Agreements required by the Purchaser; (3) to restate the
representations and warranties set forth in Subsections 9.01
and 9.02 as of
the Transfer Date in connection with such Reconstitution or make the
representations and warranties set forth in the related selling/servicing guide
of the servicer or issuer, as the case may be, or such representations or
warranties as may be required by any rating agency or prospective purchaser
of
the related securities or such Mortgage Loans in connection with such
Reconstitution. The Seller shall provide to such servicer or issuer,
as the case may be, and any other participants or purchasers in such
Reconstitution: (i) any and all information and appropriate
verification of information which may be reasonably available to the Seller
or
its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request;
(ii) such additional representations, warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller or the Interim Servicer as are reasonably believed necessary
by
the Purchaser or any such other participant; and (iii) to execute, deliver
and satisfy all conditions set forth in any indemnity agreement required by
the
Purchaser or any such participant, including, without limitation, an
Indemnification and Contribution Agreement in substantially the form attached
hereto as Exhibit B. Moreover, the Seller agrees to cooperate
with all reasonable
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requests
made by the Purchaser to effect such Reconstitution Agreements. The
cost of services provided by any third parties (such as auditors or counsel)
engaged to satisfy a Purchaser request in connection with a reconstitution
shall
be borne by the Purchaser. The Seller shall indemnify the Purchaser,
each affiliate of the Purchaser participating in the Reconstitution and each
Person who controls the Purchaser or such affiliate and their respective present
and former directors, officers, employees and agents, and hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees
and expenses that each of them may sustain in any way related to any information
provided by or on behalf of, or approved by the Seller regarding the Seller,
the
Seller’s or other originator’s Static Pool Information, the Mortgage Loans or
the Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous
sentence, “Purchaser” shall mean the Person then acting as the Purchaser under
this Agreement and any and all Persons who previously were “Purchasers” under
this Agreement.
In
the
event the Purchaser has elected to have the Seller or the Interim Servicer
hold
record title to the Mortgages, prior to the Reconstitution Date, the Seller
shall prepare an assignment of mortgage in blank or to the prospective purchaser
or trustee, as applicable, from the Seller or the Interim Servicer, as
applicable, acceptable to the prospective purchaser or trustee, as applicable,
for each Mortgage Loan that is part of the Reconstitution and shall pay all
preparation and recording costs associated therewith. In connection
with the Reconstitution, the Seller shall execute or shall cause the Interim
Servicer to execute each assignment of mortgage, track such Assignments of
Mortgage to ensure they have been recorded and deliver them as required by
the
prospective purchaser or trustee, as applicable, upon the Seller’s receipt
thereof. Additionally, the Seller shall prepare and execute or shall
cause the Interim Servicer to execute, at the direction of the Purchaser, any
note endorsement in connection with any and all seller/servicer
agreements.
All
Mortgage Loans not sold or transferred pursuant to a Reconstitution shall remain
subject to this Agreement and, if the Interim Servicing Agreement shall remain
in effect with respect to the related Mortgage Loan Package, shall continue
to
be serviced in accordance with the terms of this Agreement and the Interim
Servicing Agreement and with respect thereto this Agreement shall remain in
full
force and effect.
SECTION
14. The
Seller.
Subsection
14.01 Additional Indemnification
by the Seller; Third Party Claims.
(a) The
Seller shall indemnify any Purchaser and its present and former directors,
officers, employees and agents and the Successor Servicer and its present and
former directors, officers, employees and agents, and hold such parties harmless
against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees and expenses (including legal fees and expenses incurred in
connection with the enforcement of the Seller’s indemnification obligation under
this Subsection 14.01)
and related costs, judgments, and any other costs, fees and expenses that such
parties may sustain in any way related to the failure of the Seller to perform
its duties and the Interim Servicer to service the Mortgage Loans in strict
compliance
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with
the
terms of this Agreement or any Reconstitution Agreement entered into pursuant
to
Section 13
or any breach of any of Seller’s representations, warranties and covenants set
forth in this Agreement. For purposes of this clause “Purchaser”
shall mean the Person then acting as the Purchaser under this Agreement and
any
and all Persons who previously were “Purchasers” under this Agreement and
“Successor Servicer” shall mean any Person designated as the Successor Servicer
pursuant to this Agreement and any and all Persons who previously were
“Successor Servicers” pursuant to this Agreement.
(b) Promptly
after receipt by an indemnified party under this Subsection 14.01
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
Subsection 14.01,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve the indemnifying
party from any liability which it may have to any indemnified party under this
Subsection 14.01,
except to the extent that it has been prejudiced in any material respect, or
from any liability which it may have, otherwise than under this Subsection 14.01. 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 reasonably satisfactory to such indemnified party; providedthat
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
which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select 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 to such indemnified
party for expenses incurred by the 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 (together with one local counsel, if
applicable)), (ii) the indemnifying party shall not have employed counsel
reasonably 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 in writing 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 be
only in respect of the counsel referred to in such clause (i) or
(iii).
Subsection
14.02 Merger or Consolidation
of
the Seller.
The
Seller will keep in full effect its existence, rights and franchises as a
corporation under the laws of the state of its incorporation except as permitted
herein, and will obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in
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which
such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any
Person into which the Seller may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Seller
shall
be a party, or any Person succeeding to the business of the Seller, shall be
the
successor of the Seller hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, anything herein
to
the contrary notwithstanding; provided, however,
that the successor
or surviving Person shall have a net worth of at least $25,000,000.
SECTION
15. Financial
Statements.
The
Seller understands that in connection with the Purchaser’s marketing of the
Mortgage Loans, the Purchaser shall make available to prospective purchasers
audited financial statements of the Seller for the most recently completed
three
fiscal years respecting which such statements are available, as well as a
Consolidated Statement of Condition of the Seller at the end of the last two
fiscal years covered by such Consolidated Statement of
Operations. The Seller shall also make available any comparable
interim statements to the extent any such statements have been prepared by
the
Seller (and are available upon request to members or stockholders of the Seller
or the public at large). The Seller, if it has not already done so,
agrees to furnish promptly to the Purchaser copies of the statements specified
above. The Seller shall also make available information on its
servicing performance with respect to loans serviced for others, including
delinquency ratios.
The
Seller also agrees to allow reasonable access to a knowledgeable financial
or
accounting officer for the purpose of answering questions asked by any
prospective purchaser regarding recent developments affecting the Seller or
the
financial statements of the Seller.
SECTION
16. Mandatory Delivery;
Grant of
Security Interest.
The
sale
and delivery on the related Closing Date of the Mortgage Loans described on
the
related Mortgage Loan Schedule is mandatory from and after the date of the
execution of the related Purchase Price and Terms Agreement, it being
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred
by
the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller’s failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage
Loans or (iii) one or more Mortgage Loans otherwise acceptable to the
Purchaser on or before the related Closing Date. The Seller hereby
grants to the Purchaser a lien on and a continuing security interest in each
Mortgage Loan and each document and instrument evidencing each such Mortgage
Loan to secure the performance by the Seller of its obligations under the
related Purchase Price and Terms Agreement, and the Seller agrees that it shall
hold such Mortgage Loans in custody for the Purchaser subject to the Purchaser’s
(a) right to reject any Mortgage Loan (or Qualified Substitute Mortgage
Loan) under the terms of this Agreement and to require another Mortgage Loan
(or
Qualified Substitute Mortgage Loan) to be substituted therefor, and
(b) obligation to pay the Purchase Price for the Mortgage
Loans. All rights and remedies of the Purchaser under
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this
Agreement are distinct from, and cumulative with, any other rights or remedies
under this Agreement or afforded by law or equity and all such rights and
remedies may be exercised concurrently, independently or
successively.
SECTION
17. Notices.
All
demands, notices and communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed, by registered or certified mail,
return receipt requested, or, if by other means, when received by the other
party at the address as follows:
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|
(i)
|
if
to the Seller:
|
Lydian
Private Bank
0000
XXX
Xxxxxxxxx
Xxxx
Xxxxx Xxxxxxx, XX 00000
Attention: General
Counsel
Fax: 000-000-0000
Email: xxxxx.xxxxxxx@xxxxxx.xxx
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|
(ii)
|
if
to the Purchaser:
|
Xxxxxx
Xxxxxxx Mortgage Capital Inc.
1221
Avenue of the Xxxxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention: Xxxxx
Xxxxxxxxxx - Whole Loan Operations Manager
Fax: 000-000-0000
Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx
with
copies to:
Xxxx
Xxxxxxxx
Xxxxxx
Xxxxxxx – Servicing Oversight
0000
X-Xxx Xxx
Xxxxx
000
Xxxx
Xxxxx, Xxxxxxx 00000
Fax: 000-000-0000
Email: xxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
Xxxxx
Xxxxxx
Xxxxxx
Xxxxxxx - RFPG
0000
Xxxxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax: 000-000-0000
Email: xxxxx.xxxxxx@xxxxxxxxxxxxx.xxx
or
such
other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be
deemed to have been received on the date
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delivered
to or received at the premises of the addressee (as evidenced, in the case
of
registered or certified mail, by the date noted on the return
receipt).
SECTION
18. Severability
Clause.
Any
part,
provision representation or warranty of this Agreement which is prohibited
or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition
or
unenforceability without invalidating the remaining provisions hereof, and
any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties
hereto waive any provision of law which prohibits or renders void or
unenforceable any provision hereof. If the invalidity of any part,
provision, representation or warranty of this Agreement shall deprive any party
of the economic benefit intended to be conferred by this Agreement, the parties
shall negotiate, in good-faith, to develop a structure the economic effect
of
which is nearly as possible the same as the economic effect of this Agreement
without regard to such invalidity.
SECTION
19. Counterparts.
This
Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and
all such counterparts shall constitute one and the same instrument.
SECTION
20. Intention of the
Parties.
It
is the
intention of the parties that the Purchaser is purchasing, and the Seller is
selling the Mortgage Loans and not a debt instrument of the Seller or another
security. Accordingly, the parties hereto each intend to treat the
transaction for federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the
arrangement under which the Mortgage Loans are held shall be consistent with
classification of such arrangement as a grantor trust in the event it is not
found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans
which
shall affect the federal income tax consequences of owning the Mortgage Loans
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION
21. Successors and Assigns;
Assignment of Purchase Agreement.
This
Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective permitted successors and assigns
of
the Seller and the successors and assigns of the Purchaser. This
Agreement shall not be assigned, pledged or hypothecated by the Seller to a
third party without the prior written consent of the Purchaser, which consent
may be withheld by the Purchaser in its sole discretion. This
Agreement may be assigned, pledged or hypothecated by the Purchaser in whole
or
in part, and with respect to one or more of the Mortgage Loans, without the
consent of the Seller. There shall be no limitation on the number of
assignments or transfers allowable by the Purchaser with respect to the Mortgage
Loans and this Agreement. In the event the Purchaser assigns this
Agreement, and the
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assignee
assumes any of the Purchaser’s obligations hereunder, the Seller acknowledges
and agrees to look solely to such assignee, and not to the Purchaser, for
performance of the obligations so assumed and the Purchaser shall be relieved
from any liability to the Seller with respect thereto.
SECTION
22. Waivers.
No
term
or provision of this Agreement may be waived or modified unless such waiver
or
modification is in writing and signed by the party against whom such waiver
or
modification is sought to be enforced.
SECTION
23. Exhibits.
The
exhibits to this Agreement are hereby incorporated and made a part hereof and
are an integral part of this Agreement.
SECTION
24. General Interpretive
Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) the
terms defined in this Agreement have the meanings assigned to them in this
Agreement and include the plural as well as the singular, and the use of any
gender herein shall be deemed to include the other gender;
(b) accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles;
(c) references
herein to “Articles,” “Sections,” “Subsections,” “Paragraphs,” and other
subdivisions without reference to a document are to designated Articles,
Sections, Subsections, Paragraphs and other subdivisions of this
Agreement;
(d) reference
to a Subsection without further reference to a Section is a reference to such
Subsection as contained in the same Section in which the reference appears,
and
this rule shall also apply to Paragraphs and other subdivisions;
(e) the
words “herein,” “hereof,” “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular provision; and
(f) the
terms “include” and “including” shall mean without limitation by reason of
enumeration.
SECTION
25. Reproduction of
Documents.
This
Agreement and all documents relating thereto, including, without limitation,
(a) consents, waivers and modifications which may hereafter be executed,
(b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic,
-49-
photostatic,
microfilm, micro-card, miniature photographic or other similar
process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not
such
reproduction was made by a party in the regular course of business, and that
any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION
26. 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.
SECTION
27. Recordation of Assignments
of Mortgage.
To
the
extent permitted by applicable law, each of the Assignments of Mortgage is
subject to recordation in all appropriate public offices for real property
records in all the counties or their comparable jurisdictions in which any
or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected at the
Seller’s expense in the event recordation is either necessary under applicable
law or requested by the Purchaser at its sole option.
SECTION
28. No
Solicitation.
From
and
after the related Closing Date, the Seller agrees that it will not take any
action or permit or cause any action to be taken by any of its agents or
affiliates, or by any independent contractors on the Seller’s behalf, to
personally, by telephone or mail (via electronic means or otherwise), solicit
a
Mortgagor under any Mortgage Loan for the purpose of refinancing a Mortgage
Loan, in whole or in part, without the prior written consent of the
Purchaser. Notwithstanding the foregoing, it is understood and agreed
that the Seller, or any of its respective affiliates:
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|
(i)
|
may
advertise its availability for handling refinancings of mortgages
in its
portfolio, including the promotion of terms it has available for
such
refinancings, through the sending of letters or promotional material,
so
long as it does not specifically target Mortgagors and so long as
such
promotional material either is sent to the mortgagors for all of
the
mortgages in the servicing portfolio of the Seller and any of its
affiliates (those it owns as well as those serviced for others);
and
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|
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(ii)
|
may
provide pay-off information and otherwise cooperate with individual
mortgagors who contact it about prepaying their mortgages by advising
them
of refinancing terms and streamlined origination arrangements that
are
available.
|
Promotions
undertaken by the Seller or by any affiliate of the Seller which are directed
to
the general public at large (including, without limitation, mass mailing based
on
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commercially
acquired mailing lists, newspaper, radio and television advertisements), shall
not constitute solicitation under this Section 28.
SECTION
29. Waiver of Trial
by
Jury.
THE
SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION
30. Governing Law Jurisdiction;
Consent to Service of Process. THIS AGREEMENT SHALL BE DEEMED
IN EFFECT WHEN A FULLY EXECUTED COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER
IN THE STATE OF NEW YORK AND SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE
OF
NEW YORK. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CHOICE OF LAW RULES AND
PRINCIPLES. EACH OF THE PURCHASER AND THE SELLER IRREVOCABLY
(I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE
DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR PROCEEDING IN ANY SUCH COURT;
(III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION OR PROCEEDING IN ANY SUCH
COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION BY
SUIT
ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW; AND (IV) CONSENTS
TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF BY CERTIFIED MAIL
ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
SECTION
31. Amendment. This
Agreement may be amended from time to time by the Purchaser and the Seller
by
written agreement signed by the parties hereto.
-51-
SECTION
32. Confidentiality. Each
of the Purchaser and the Seller shall employ proper procedures and standards
designed to maintain the confidential nature of the terms of this Agreement,
except to the extent: (a) the disclosure of which is reasonably
believed by such party to be required in connection with regulatory requirements
or other legal requirements relating to its affairs; (b) disclosed to any
one or more of such party’s employees, officers, directors, agents, attorneys or
accountants who would have access to the contents of this Agreement and such
data and information in the normal course of the performance of such Person’s
duties for such party, to the extent such party has procedures in effect to
inform such Person of the confidential nature thereof; (c) that is
disclosed in a prospectus, prospectus supplement or private placement memorandum
relating to a securitization of the Mortgage Loans by the Purchaser (or an
affiliate assignee thereof) or to any Person in connection with the resale
or
proposed resale of all or a portion of the Mortgage Loans by such party in
accordance with the terms of this Agreement; and (d) that is reasonably
believed by such party to be necessary for the enforcement of such party’s
rights under this Agreement.
Notwithstanding
any other express or implied agreement to the contrary, each of the Purchaser
and the Seller agree and acknowledge that each of them and each of their
employees, representatives, and other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure
of
the transaction and all materials of any kind (including opinions or other
tax
analyses) that are provided to any of them relating to such tax treatment and
tax structure, except to the extent that confidentiality is reasonably necessary
to comply with U.S. federal or state securities laws. For purposes of
this paragraph, the terms “tax treatment” and “tax structure” have the meanings
specified in Treasury Regulation section 1.6011-4(c).
SECTION
33. Entire
Agreement. This Agreement constitutes the entire agreement and
understanding relating to the subject matter hereof between the parties hereto
and any prior oral or written agreements between them shall be deemed to have
merged herewith.
SECTION
34. Compliance with
Regulation AB.
Subsection
34.01 Intent of the Parties;
Reasonableness.
The
Purchaser and the Seller acknowledge and agree that the purpose of Section 34 of
this Agreement is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of
the Commission. Although Regulation AB is applicable by its
terms only to offerings of asset-backed securities that are registered under
the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to
compliance with Regulation AB include provision of comparable disclosure in
private offerings.
Neither
the Purchaser nor any Depositor shall exercise its right to request delivery
of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission thereunder (or
the
provision in a private offering of disclosure comparable to that required under
the Securities Act). The Seller acknowledges that
-52-
interpretations
of the requirements of Regulation AB may change over time, whether due to
interpretive guidance provided by the Commission or its staff, consensus among
participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agrees to comply with requests made by the Purchaser or any
Depositor in good faith for delivery of information under these provisions
on
the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate
fully
with the Purchaser to deliver to the Purchaser (including any of its assignees
or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or
such
Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Seller, any Third-Party Originator and the
Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed
by
the Purchaser or any Depositor to be necessary in order to effect such
compliance.
Subsection
34.02 Additional Representations
and Warranties of the Seller.
(a) The
Seller shall be deemed to represent to the Purchaser and to any Depositor,
as of
the date on which information is first provided to the Purchaser or any
Depositor under Subsection 34.03
that, except as disclosed in writing to the Purchaser or such Depositor prior
to
such date: (i) the Seller is not aware and has not received
notice that any default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act or failure
to
act of the Seller; (ii) the Interim Servicer has not been terminated as
servicer in a residential mortgage loan securitization, either due to a
servicing default or to application of a servicing performance test or trigger;
(iii) no material noncompliance with the applicable servicing criteria with
respect to other securitizations of residential mortgage loans involving the
Interim Servicer as servicer has been disclosed or reported by the Seller;
(iv) no material changes to the Interim Servicer’s policies or procedures
with respect to the servicing function it will perform under the Interim
Servicing Agreement and any Reconstitution Agreement for mortgage loans of
a
type similar to the Mortgage Loans have occurred during the three-year period
immediately preceding the related Securitization Transaction; (v) there are
no aspects of the Interim Servicer’s financial condition that could have a
material adverse effect on the performance by the Interim Servicer of its
servicing obligations under the Interim Servicing Agreement or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator; and (vii) there
are no affiliations, relationships or transactions relating to the Seller,
Interim Servicer, any Subservicer or any Third-Party Originator with respect
to
any Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of
Regulation AB.
(b) If
so requested by the Purchaser or any Depositor on any date following the date
on
which information is first provided to the Purchaser or any Depositor under
Subsection 34.03,
the Seller shall, within five Business Days following such request, confirm
in
writing the accuracy of the representations and warranties set forth in
paragraph (a) of this Section or, if any such representation and warranty
is not accurate as of the date of such request, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting
party.
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Subsection
34.03 Information to Be
Provided
by the Seller.
In
connection with any Securitization Transaction the Seller shall (i) within
five Business Days following request by the Purchaser or any Depositor, provide
to the Purchaser and such Depositor (or, as applicable, cause each Third-Party
Originator to provide), in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, the information and materials
specified in paragraphs (a) and (b) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Seller, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (d) of this Section.
(a) If
so requested by the Purchaser or any Depositor, the Seller shall provide such
information regarding (i) the Seller, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
or
(ii) each Third-Party Originator, as is requested for the purpose of
compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a
minimum:
(A) the
originator’s form of organization;
(B) a
description of the originator’s origination program and how long the originator
has been engaged in originating residential mortgage loans, which description
shall include a discussion of the originator’s experience in originating
mortgage loans of a similar type as the Mortgage Loans; information regarding
the size and composition of the originator’s origination portfolio; and
information that may be material, in the good faith judgment of the Purchaser
or
any Depositor, to an analysis of the performance of the Mortgage Loans,
including the originators’ credit-granting or underwriting criteria for mortgage
loans of similar type(s) as the Mortgage Loans and such other information as
the
Purchaser or any Depositor may reasonably request for the purpose of compliance
with Item 1110(b)(2) of Regulation AB;
(C) a
description of any material legal or governmental proceedings pending (or known
to be contemplated) against the Seller and each Third-Party Originator;
and
(D) a
description of any affiliation or relationship between the Seller, each
Third-Party Originator and any of the following parties to a Securitization
Transaction, as such parties are identified to the Seller by the Purchaser
or
any Depositor in writing in advance of such Securitization
Transaction:
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(1)
|
the
sponsor;
|
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(2)
|
the
depositor;
|
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|
(3)
|
the
issuing entity;
|
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(4)
|
any
servicer;
|
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|
(5)
|
any
trustee;
|
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|
(6)
|
any
originator;
|
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(7)
|
any
significant obligor;
|
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|
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(8)
|
any
enhancement or support provider;
and
|
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|
(9)
|
any
other material transaction party.
|
(b) If
so requested by the Purchaser or any Depositor, the Seller shall provide (or,
as
applicable, cause each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a similar type as the
Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage
Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), and/or (ii) each Third-Party Originator. Such
Static Pool Information shall be prepared in form and substance reasonably
satisfactory to the Purchaser by the Seller (or Third-Party Originator) on
the
basis of its reasonable, good faith interpretation of the requirements of
Item 1105(a)(1)-(3) of Regulation AB. To the extent that
there is reasonably available to the Seller (or Third-Party Originator) Static
Pool Information with respect to more than one mortgage loan type, the Purchaser
or any Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. Such Static
Pool Information for each vintage origination year or prior securitized pool,
as
applicable, shall be presented in increments no less frequently than quarterly
over the life of the mortgage loans included in the vintage origination year
or
prior securitized pool. The most recent periodic increment must be as
of a date no later than 135 days prior to the date of the prospectus or other
offering document in which the Static Pool Information is to be included or
incorporated by reference. The Static Pool Information shall be
provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor,
as
applicable.
Promptly
following notice or discovery of a material error in Static Pool Information
provided pursuant to the immediately preceding paragraph (including an omission
to include therein information required to be provided pursuant to such
paragraph), the Seller shall provide corrected Static Pool Information to the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the
Seller.
If
so
requested by the Purchaser or any Depositor, the Seller shall provide (or,
as
applicable, cause each Third-Party Originator to provide), at the expense of
the
requesting party (to the extent of any additional incremental expense associated
with delivery pursuant to this Agreement), such agreed-upon procedures letters
of certified public accountants reasonably acceptable to the Purchaser or
Depositor, as applicable, pertaining to Static Pool Information relating to
prior securitized pools for securitizations closed on or after January 1,
2006 or, in the case of Static Pool Information with respect to the Seller’s or
Third-Party Originator’s originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the
benefit of such parties as the Purchaser or such Depositor shall designate,
which may include, by way of example, any Sponsor, any Depositor and any broker
dealer acting as underwriter, placement agent or initial purchaser with respect
to a Securitization Transaction. Any such statement or letter may
take the form of a standard, generally applicable document accompanied by a
reliance letter authorizing reliance by the addressees designated by the
Purchaser or such Depositor.
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(c) [Reserved]
(d) If
so requested by the Purchaser or any Depositor for the purpose of satisfying
its
reporting obligation under the Exchange Act with respect to any class of
asset-backed securities, the Seller shall (or shall cause each Third-Party
Originator to) (i) notify the Purchaser and any Depositor in writing of
(A) any material litigation or governmental proceedings pending against the
Seller or any Third-Party Originator and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Seller or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Section (and
any other parties identified in writing by the requesting party) with respect
to
such Securitization Transaction, and (ii) provide to the Purchaser and any
Depositor a description of such proceedings, affiliations or
relationships.
Subsection
34.04 Indemnification;
Remedies.
(a) The
Seller shall indemnify the Purchaser, each affiliate of the Purchaser, the
Depositor and each of the following parties participating in a Securitization
Transaction: each sponsor and issuing entity; each Person responsible
for the preparation, execution or filing of any report required to be filed
with
the Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under
the Exchange Act with respect to such Securitization Transaction; each broker
dealer acting as underwriter, placement agent or initial purchaser, each Person
who controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act);
and the respective present and former directors, officers, employees and agents
of each of the foregoing and of the Depositor, and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs,
fees
and expenses that any of them may sustain arising out of or based
upon:
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(i)
|
(A) any
untrue statement of a material fact contained or alleged to be contained
in any information, report, certification, accountants’ letter or other
material provided in written or electronic form under this Section 34
by or on behalf of the Seller, or provided under this Section 34
by or on behalf of any Third-Party Originator (collectively, the
“Seller
Information”), or (B) the omission or alleged omission to
state in the Seller Information a material fact required to be stated
in
the Seller Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not
misleading; provided, by way of clarification, that clause (B) of
this paragraph shall be construed solely by reference to the Seller
Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether
the
Seller Information or any portion thereof is presented together with
or
separately from such other
information;
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(ii)
|
any
failure by the Seller or any Third-Party Originator to deliver any
information, report, certification, accountants’ letter or other material
when and as required under this Section 34;
or
|
|
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(iii)
|
any
breach by the Seller of a representation or warranty set forth in
Subsection 34.02(a)
or in a writing furnished pursuant to Subsection 34.02(b)
and made as of a date prior to the closing date of the related
Securitization Transaction, to the extent that such breach is not
cured by
such closing date, or any breach by the Seller of a representation
or
warranty in a writing furnished pursuant to Subsection 34.02(b)
to the extent made as of a date subsequent to such closing
date.
|
In
the
case of any failure of performance described in clause (a)(ii) of this
Section, the Seller shall promptly reimburse the Purchaser, any Depositor,
as
applicable, and each Person responsible for the preparation, execution or filing
of any report required to be filed with the Commission with respect to such
Securitization Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants’ letter or other material not delivered as required by the Seller or
any Third-Party Originator.
(b) Any
failure by the Seller or any Third-Party Originator to deliver any information,
report, certification, accountants’ letter or other material when and as
required under this Section 34, or
any breach by the Seller of a representation or warranty set forth in Subsection 34.02(a)
or in a writing furnished pursuant to Subsection 34.02(b)
and made as of a date prior to the closing date of the related Securitization
Transaction, to the extent that such breach is not cured by such closing date,
or any breach by the Seller of a representation or warranty in a writing
furnished pursuant to Subsection 34.02(b)
to the extent made as of a date subsequent to such closing date, shall
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Seller under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Interim Servicer as servicer under the Interim Servicing
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Interim Servicer; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Interim Servicer as servicer, such
provision shall be given effect.
[Signature
Page Follows]
-57-
IN
WITNESS WHEREOF, the Seller and the Purchaser have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of
the
date first above written.
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XXXXXXX MORTGAGE
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EXHIBIT
A-1
MORTGAGE
LOAN
DOCUMENTS
With
respect to each Mortgage Loan, the Mortgage Loan Documents shall include each
of
the following items, which shall be available for inspection by the Purchaser
and any prospective Purchaser, and which shall be delivered to the Custodian,
or
to such other Person as the Purchaser shall designate in writing, pursuant
to
Section 6
of the Second Amended and Restated Mortgage Loan Purchase and Warranties
Agreement to which this Exhibit is attached (the “Agreement”):
(a) the
original Mortgage Note bearing all intervening endorsements, endorsed “Pay to
the order of _________, without recourse” and signed in the name of the last
endorsee (the “Last
Endorsee”) by an authorized officer. To the extent that there
is no room on the face of the Mortgage Notes for endorsements, the endorsement
may be contained on an allonge, if state law so allows and the Custodian is
so
advised by the Seller that state law so allows. If the Mortgage Loan
was acquired by the Seller in a merger, the endorsement must be by “[Last
Endorsee], successor by merger to [name of predecessor]”. If the
Mortgage Loan was acquired or originated by the Last Endorsee while doing
business under another name, the endorsement must be by “[Last Endorsee],
formerly known as [previous name]”;
(b) the
original of any guarantee executed in connection with the Mortgage
Note;
(c) with
respect to Mortgage Loans that are not Co-op Loans, the original Mortgage with
evidence of recording thereon. With respect to any Co-op Loan, an
original or copy of the Security Agreement. If in connection with any
Mortgage Loan, the Seller cannot deliver or cause to be delivered the original
Mortgage with evidence of recording thereon on or prior to the Closing Date
because of a delay caused by the public recording office where such Mortgage
has
been delivered for recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded Mortgage, the Seller
shall deliver or cause to be delivered to the Custodian, a photocopy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer’s Certificate of the Seller (or certified by the
title company, escrow agent, or closing attorney) stating that such Mortgage
has
been dispatched to the appropriate public recording office for recordation
and
that the original recorded Mortgage or a copy of such Mortgage certified by
such
public recording office to be a true and complete copy of the original recorded
Mortgage will be promptly delivered to the Custodian upon receipt thereof by
the
Seller; or (ii) in the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the
original recorded Mortgage;
(d) the
originals of all assumption, modification, consolidation or extension
agreements, if any, with evidence of recording thereon;
A-1-1
(e) with
respect to Mortgage Loans that are not Co-op Loans, the original Assignment
of
Mortgage for each Mortgage Loan, in form and substance acceptable for recording
(except with respect to MERS Designated Loans). The Assignment of
Mortgage must be duly recorded only if recordation is either necessary under
applicable law or commonly required by private institutional mortgage investors
in the area where the Mortgaged Property is located or on direction of the
Purchaser as provided in this Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to the
Purchaser. If the Assignment of Mortgage is not to be recorded, the
Assignment of Mortgage shall be delivered in blank. If the Mortgage
Loan was acquired by the Seller in a merger, the Assignment of Mortgage must
be
made by “[Seller], successor by merger to [name of predecessor]”. If
the Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by “[Seller], formerly
known as [previous name]”;
(f) with
respect to Mortgage Loans that are not Co-op Loans, the originals of all
intervening assignments of mortgage (if any) evidencing a complete chain of
assignment from the Seller to the Last Endorsee (or, in the case of a MERS
Designated Loan, MERS) with evidence of recording thereon, or if any such
intervening assignment has not been returned from the applicable recording
office or has been lost or if such public recording office retains the original
recorded assignments of mortgage, the Seller shall deliver or cause to be
delivered to the Custodian, a photocopy of such intervening assignment, together
with (i) in the case of a delay caused by the public recording office, an
Officer’s Certificate of the Seller (or certified by the title company, escrow
agent, or closing attorney) stating that such intervening assignment of mortgage
has been dispatched to the appropriate public recording office for recordation
and that such original recorded intervening assignment of mortgage or a copy
of
such intervening assignment of mortgage certified by the appropriate public
recording office to be a true and complete copy of the original recorded
intervening assignment of mortgage will be promptly delivered to the Custodian
upon receipt thereof by the Seller; or (ii) in the case of an intervening
assignment where a public recording office retains the original recorded
intervening assignment or in the case where an intervening assignment is lost
after recordation in a public recording office, a copy of such intervening
assignment certified by such public recording office to be a true and complete
copy of the original recorded intervening assignment;
(g) with
respect to Mortgage Loans that are not Co-op Loans, the original mortgagee
policy of title insurance or, in the event such original title policy is
unavailable, a certified true copy of the related policy binder or commitment
for title certified to be true and complete by the title insurance
company;
(h) the
original or, if unavailable, a copy of any security agreement, chattel mortgage
or equivalent document executed in connection with the Mortgage;
(i) with
respect to any Co-op Loan: (i) a copy of the Co-op Lease and the
assignment of such Co-op Lease, with all intervening assignments showing a
complete chain of title and an assignment thereof by Seller; (ii) the stock
certificate together with an undated stock power relating to such stock
certificate executed in blank; (iii) the recognition agreement of the
interests of the Mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan; and (iv) copies of the
financing statement filed by the originator as secured party
A-1-2
and,
if
applicable, a filed UCC-3 assignment of the subject security interest showing
a
complete chain of title, together with an executed UCC-3 assignment of such
security interest by the Seller in a form sufficient for filing;
and
(j) if
any of the above documents has been executed by a person holding a power of
attorney, an original or photocopy of such power certified by the holder of
the
original power of attorney to be a true and correct copy of the
original.
In
the
event an Officer’s Certificate of the Seller is delivered to the Purchaser
because of a delay caused by the public recording office in returning any
recorded document, the Seller shall deliver to the Purchaser, within 90 days
of
the related Closing Date, an Officer’s Certificate which shall (i) identify
the recorded document, (ii) state that the recorded document has not been
delivered to the Custodian due solely to a delay caused by the public recording
office, (iii) state the amount of time generally required by the applicable
recording office to record and return a document submitted for recordation,
and
(iv) specify the date the applicable recorded document will be delivered to
the Custodian; provided, however,
that any recorded
document shall in no event be delivered later than one year following the
related Closing Date. An extension of the date specified in
clause (iv) above may be requested from the Purchaser, which consent shall
not be unreasonably withheld.
X-0-0
XXXXXXX
X-0
CONTENTS
OF EACH MORTGAGE
FILE
With
respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, unless otherwise disclosed to the Purchaser on the data tape,
which shall be available for inspection by the Purchaser and which shall be
retained by the Interim Servicer or delivered to the Purchaser:
(a) Copies
of the Mortgage Loan Documents.
(b) Residential
loan application.
(c) Mortgage
Loan closing statement.
(d) Verification
of employment and income, if required.
(e) Verification
of acceptable evidence of source and amount of downpayment.
(f) Credit
report on Mortgagor, in a form acceptable to either Xxxxxx Mae or Xxxxxxx
Mac.
(g) Residential
appraisal report.
(h) Photograph
of the Mortgaged Property and photographs of comparable properties.
(i) Survey
of the Mortgaged Property, unless a survey is not required by the title
insurer.
(j) Copy
of each instrument necessary to complete identification of any exception set
forth in the exception schedule in the title policy, i.e., map or plat,
restrictions, easements, home owner association declarations, etc.
(k) Copies
of all required disclosure statements.
(l) If
applicable, termite report, structural engineer’s report, water potability and
septic certification.
(m) Sales
Contract, if applicable.
(n) Copy
of the owner’s title insurance policy or attorney’s opinion of title and
abstract of title, as applicable.
Evidence
of electronic notation of the hazard insurance policy, and, if required by
law,
evidence of the flood insurance policy.
A-2-1
EXHIBIT
B
FORM
OF INDEMNIFICATION AND
CONTRIBUTION AGREEMENT
This
INDEMNIFICATION AND CONTRIBUTION AGREEMENT (“Agreement”), dated
as
of [_______], 200_, among [________________] (the “Depositor”), a
[______________] corporation (the “Depositor”), Xxxxxx
Xxxxxxx Mortgage Capital Inc., a New York corporation (“Xxxxxx”) and Lydian
Private Bank, a federal savings bank (the “Seller”).
W I T N E S S E T H:
WHEREAS,
the Depositor is acting as depositor and registrant with respect to the
Prospectus, dated [________________], and the Prospectus Supplement to the
Prospectus, [________________] (the “Prospectus
Supplement”), relating to [________________] Certificates (the “Certificates”)
to be
issued pursuant to a Pooling and Servicing Agreement, dated as of
[________________] (the “P&S”), among
the
Depositor, as depositor, [________________], as servicer (the “Servicer”), and
[________________], as trustee (the “Trustee”);
WHEREAS,
as an inducement to the Depositor to enter into the P&S, and
[____________________] (the “Underwriter[s]”) to
enter into the Underwriting Agreement, dated [____________________] (the “Underwriting
Agreement”) between the Depositor and the Underwriter[s], and
[_______________] (the “Initial
Purchaser[s]”) to enter into the Certificate Purchase Agreement, dated
[____________] (the “Certificate Purchase
Agreement”) between the Depositor and the Initial Purchaser[s], Seller
has agreed to provide for indemnification and contribution on the terms and
conditions hereinafter set forth;
WHEREAS,
Xxxxxx purchased from Seller certain of the Mortgage Loans underlying the
Certificates (the “Mortgage Loans”)
pursuant to a Second Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of September 1, 2006 (the “Purchase Agreement”),
by and between Xxxxxx and Seller; and
WHEREAS,
pursuant to Section 13 of the Purchase Agreement, the Seller has agreed to
indemnify the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s]
and their respective affiliates, present and former directors, officers,
employees and agents.
NOW
THEREFORE, in consideration of the agreements contained herein, and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Depositor, Xxxxxx and the Seller agree as
follows:
1. Indemnification
and Contribution.
(a) The
Seller agrees to indemnify and hold harmless the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] and their respective affiliates and
their respective
B-1
present
and former directors, officers, employees and agents and each person, if any,
who controls the Depositor, Xxxxxx, the Underwriter[s] , the Initial
Purchaser[s] or such affiliate within the meaning of either Section 15 of
the Securities Act of 1933, as amended (the “1933 Act”), or
Section 20 of the Securities Exchange Act of 1934, as amended (the “1934 Act”), against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the 1933 Act, the 1934 Act or
other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based in whole or in part upon any untrue statement
or alleged untrue statement of a material fact contained in the Prospectus
Supplement, the Offering Circular, the ABS Informational and Computational
Materials or in the Free Writing Prospectus or any omission or alleged omission
to state in the Prospectus Supplement, the Offering Circular, the ABS
Informational and Computational Materials or in the Free Writing Prospectus
a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not misleading,
or any such untrue statement or omission or alleged untrue statement or alleged
omission made in any amendment of or supplement to the Prospectus Supplement,
the Offering Circular, the ABS Informational and Computational Materials or
in
the Free Writing Prospectus and agrees to reimburse the Depositor, Xxxxxx,
the
Underwriter[s], the Initial Purchaser[s] or such affiliates and each such
officer, director, employee, agent and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by any of them in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided, however,
that Seller shall be
liable in any such case only to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon (i) any breach of the
representation and warranty set forth in Section 2(vii) below or
(ii) any untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and in conformity with the Seller
Information. The foregoing indemnity agreement is in addition to any
liability which Seller may otherwise have to the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] their affiliates or any such director,
officer, employee, agent or controlling person of the Depositor, Xxxxxx, the
Underwriter[s], the Initial Purchaser[s] or their respective
affiliates.
As
used
herein:
“Seller
Information”
means any information relating to Seller, the Mortgage Loans and/or
the
underwriting guidelines relating to the Mortgage Loans set forth in the
Prospectus Supplement, the Offering Circular or the ABS Informational and
Computational Materials or the Free Writing Prospectus [and static pool
information regarding mortgage loans originated or acquired by the Seller and
included in the Prospectus Supplement, the Offering Circular or the ABS
Informational and Computational Materials [incorporated by reference from the
Seller’s website located at ______________].
“Free
Writing
Prospectus” means any written communication that constitutes a “free
writing prospectus,” as defined in Rule 405 under the 1933 Act.
“ABS
Informational and
Computational Material” means any written communication as defined in
Item 1101(a) of Regulation AB under the 1933 Act and the 1934 Act, as
may be amended from time to time.
B-2
“Offering
Circular”
means the offering circular, dated [__________] relating to the private
offering
of the [_______________] Certificates.
“Regulation AB”: Subpart 229.1100
– Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123,
as such may be amended from time to time, and subject to such clarification
and
interpretation as have been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed.
Reg. 1,506, 1,531 (January 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
(b) Promptly
after receipt by any indemnified party under this Section 1 of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 1,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided,
however,
that the
failure to notify an indemnifying party shall not relieve it from any liability
which it may have under this Section 1 except
to the extent it has been materially prejudiced by such failure; and provided, further,
however,
that the failure to
notify any indemnifying party shall not relieve it from any liability which
it
may have to any indemnified party otherwise than under this Section 1.
If
any
such claim or action shall be brought against an indemnified party, and it
shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any
other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election
to
assume the defense of such claim or action, except as provided in the following
paragraph, the indemnifying party shall not be liable to the indemnified party
under this Section 1 for
any legal or other expenses subsequently incurred by the indemnified party
in
connection with the defense thereof other than reasonable costs of
investigation.
Any
indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of
such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically
authorized by the indemnifying party in writing; (ii) such indemnified
party shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of such
counsel it is necessary or appropriate for such indemnified party to employ
separate counsel; or (iii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at
the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations
or
circumstances, be liable for the reasonable fees and expenses of more than
one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties.
B-3
Each
indemnified party, as a condition of the indemnity agreements contained in
this
Section 1,
shall cooperate with the indemnifying party in the defense of any such action
or
claim. No indemnifying party shall be liable for any settlement of
any such action effected without its written consent (which consent shall not
be
unreasonably withheld), but if settled with its written consent or if there
be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against
any
loss or liability by reason of such settlement or judgment.
Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for reasonable fees
and
expenses of counsel, the indemnifying party agrees that it shall be liable
for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement.
(c) If
the indemnification provided for in this Section 1 is
unavailable to an indemnified party, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or
liabilities, in such proportion as is appropriate to reflect the relative fault
of the indemnifying party and the indemnified party, respectively, in connection
with the statements or omissions that result in such losses, claims, damages
or
liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified party and
indemnifying party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such parties and their relative knowledge, access to information
and
opportunity to correct or prevent such statement or omission and any other
equitable considerations.
(d) The
indemnity and contribution agreements contained in this Section 1 and
the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the
Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s] their respective
affiliates, directors, officers, employees or agents or any person controlling
the Depositor, Xxxxxx, the Underwriter[s], the Initial Purchaser[s] or any
such
affiliate, and (iii) acceptance of and payment for any of the Offered
Certificates or the Private Certificates.
2. Representations
and
Warranties. Seller represents and warrants that:
(i) Seller
is validly existing and in good standing under the laws of its jurisdiction
of
formation or incorporation, as applicable, and has full power and authority
to
own its assets and to transact the business in which it is currently
engaged. Seller is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business transacted
by it or any properties owned or leased by it requires such qualification and
in
which the failure so to qualify would have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of
Seller;
B-4
(ii) Seller
is not required to obtain the consent of any other person or any consent,
license, approval or authorization from, or registration or declaration with,
any governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this
Agreement;
(iii) the
execution, delivery and performance of this Agreement by Seller will not violate
any provision of any existing law or regulation or any order decree of any
court
applicable to Seller or any provision of the charter or bylaws of Seller, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which Seller is a party or by which it may be bound;
(iv) (a) no
proceeding of or before any court, tribunal or governmental body is currently
pending or, (b) to the knowledge of Seller, threatened against Seller or
any of its properties or with respect to this Agreement or the Offered
Certificates, in either case, which would have a material adverse effect on
the
business, properties, assets or condition (financial or otherwise) of
Seller;
(v) Seller
has full power and authority to make, execute, deliver and perform this
Agreement and all of the transactions contemplated hereunder, and has taken
all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of each of Seller enforceable
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally, by the availability of
equitable remedies, and by limitations of public policy under applicable
securities law as to rights of indemnity and contribution
thereunder;
(vi) this
Agreement has been duly executed and delivered by Seller; and
(vii) the
Seller represents that the Seller Information satisfies the requirements of
the
applicable provisions of Regulation AB.
3. Notices. All
communications hereunder will be in writing and effective only on receipt,
and,
if sent to Seller, will be mailed, delivered or faxed or emailed and confirmed
by mail [______________________]; if sent to Xxxxxx, xxxx be mailed, delivered
or faxed or emailed and confirmed by mail to Xxxxxx Xxxxxxx Mortgage Capital
Inc., 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx Xxxxxxxxxx - Whole Loans Operations Manager,
Fax: [_______], Email: xxxxx.xxxxxxxxxx@xxxxxxxxxxxxx.xxx,
with copies to (i) Xxxxx X. Xxx, Xxxxxx Xxxxxxx – Legal Counsel,
Securities, Xxxxxx Xxxxxxx, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Fax [_____], Email: xxxxx.x.xxx@xxxxxxxxxxxxx.xxx, and
(ii) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx – SPG Finance, Xxxxxx Xxxxxxx, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Fax [_____],
Email: xxxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx; if to the Depositor, will be
mailed, delivered or telegraphed and confirmed to [____________________]; or
if
to the Underwriter[s], will be mailed, delivered or telegraphed and confirmed
to
[_____________________]; or if to the Initial Purchaser[s], will be mailed,
delivered or telegraphed and confirmed to [_____________________].
B-5
4. Miscellaneous. This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New York without giving effect to the conflict of laws
provisions thereof. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their successors and assigns and the
controlling persons referred to herein, and no other person shall have any
right
or obligation hereunder. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. This Agreement
may be executed in counterparts, each of which when so executed and delivered
shall be considered an original, and all such counterparts shall constitute
one
and the same instrument. Capitalized terms used but not defined
herein shall have the meanings provided in the P&S.
[SIGNATURE
PAGE FOLLOWS]
B-6
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers hereunto duly authorized, this __th day
of
[_____________].
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XXXXXX
XXXXXXX MORTGAGE
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B-7
EXHIBIT
C
SELLER’S
OFFICER’S
CERTIFICATE
I,
____________________, hereby certify that I am the duly elected
[Vice] President of Lydian Private Bank, a federally chartered institution
organized under the laws of the United States (the “Company”) and further
as follows:
1. Attached
hereto as Exhibit 1 is a
true, correct and complete copy of the charter of the Company which is in full
force and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification since ___________.
2. Attached
hereto as Exhibit 2 is a
true, correct and complete copy of the bylaws of the Company which are in effect
on the date hereof and which have been in effect without amendment, waiver,
rescission or modification since ___________.
3. Attached
hereto as Exhibit 3 is an
original certificate of good standing of the Company issued within ten days
of
the date hereof, and no event has occurred since the date thereof which would
impair such standing.
4. Attached
hereto as Exhibit 4 is a
true, correct and complete copy of the corporate resolutions of the Board of
Directors of the Company authorizing the Company to execute and deliver
(a) the Second Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as of September 1, 2006 (the “Purchase Agreement”),
by and between Xxxxxx Xxxxxxx Mortgage Capital Inc. (the “Purchaser”) and the
Company and (b) the Custodial Agreement, dated as of _______ __, 200_
(the “Custodial
Agreement”), by and among the Purchaser, the Company, _________________
(the “Interim
Servicer”) and [CUSTODIAN] (the “Custodian”),
[and to
endorse the Mortgage Notes and execute the Assignments of Mortgages by original
[or facsimile] signature], and such resolutions are in effect on the date hereof
and have been in effect without amendment, waiver, rescission or modification
since ____________.
5. Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Purchase
Agreement, [the sale of the mortgage loans] or the consummation of the
transactions contemplated by the agreements; or (ii) any required consent,
approval, authorization or order has been obtained by the Company.
6. Neither
the consummation of the transactions contemplated by, nor the fulfillment of
the
terms of the Purchase Agreement conflicts or will conflict with or results
or
will result in a breach of or constitutes or will constitute a default under
the
charter or by-laws of the Company, the terms of any indenture or other agreement
or instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court,
C-1
governmental
authority or regulatory body to which the Company is subject or by which it
is
bound.
7. To
the best of my knowledge, there is no action, suit, proceeding or investigation
pending or threatened against the Company which, in my judgment, either in
any
one instance or in the aggregate, may result in any material adverse change
in
the business, operations, financial condition, properties or assets of the
Company or in any material impairment of the right or ability of the Company
to
carry on its business substantially as now conducted or in any material
liability on the part of the Company or which would draw into question the
validity of the Purchase Agreement, or the mortgage loans or of any action
taken
or to be taken in connection with the transactions contemplated hereby, or
which
would be likely to impair materially the ability of the Company to perform
under
the terms of the Purchase Agreement.
8. Each
person listed on Exhibit 5
attached hereto who, as an officer or representative of the Company, signed
(a) the Purchase Agreement, and (b) any other document delivered or on
the date hereof in connection with any purchase described in the agreements
set
forth above was, at the respective times of such signing and delivery, and
is
now, a duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name on
Exhibit 5, and
the signatures of such persons appearing on such documents are their genuine
signatures.
9. The
Company is duly authorized to engage in the transactions described and
contemplated in the Purchase Agreement.
C-2
IN
WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of the
Company.
|
Dated:
|
By:
|
||||
| Name: | |||||
| [Seal] | Title: [Vice] President | ||||
I,
________________________, an [Assistant] Secretary of ______________[COMPANY],
hereby certify that ____________ is the duly elected, qualified and acting
[Vice] President of the Company and that the signature appearing above is [her]
[his] genuine signature.
IN
WITNESS WHEREOF, I have hereunto signed my name.
|
Dated:
|
By:
|
||||
| Name: | |||||
| [Seal] | Title: [Assistant] Secretary | ||||
C-3
EXHIBIT
5
to
Company’s
Officer’s Certificate
|
NAME
|
TITLE
|
SIGNATURE
|
||
C-4
EXHIBIT
D
FORM
OF OPINION OF COUNSEL
TO THE SELLER
(date)
Xxxxxx
Xxxxxxx Mortgage Capital Inc.
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Dear
Sirs:
You
have
requested [our] [my] opinion, as [Assistant] General Counsel to Lydian Private
Bank (the “Company”), with
respect to certain matters in connection with the sale by the Company of the
Mortgage Loans pursuant to that certain Second Amended and Restated Mortgage
Loan Purchase and Warranties Agreement by and between the Company and Xxxxxx
Xxxxxxx Mortgage Capital Inc. (the “Purchaser”), dated
as
of September 1, 2006 (the “Purchase Agreement”)
which sale is in the form of whole loans, delivered pursuant to a Custodial
Agreement dated as of _____ __, ____ among the Purchaser, the Company,
________________________ (the “Interim Servicer”)
and ______________________[CUSTODIAN] (the “Custodial Agreement”,
and collectively with the Purchase Agreement, the “Agreements”). Capitalized
terms not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We]
[I]
have examined the following documents:
|
|
1.
|
the
Purchase Agreement;
|
|
|
2.
|
the
Custodial Agreement;
|
|
|
3.
|
the
form of Assignment of Mortgage;
|
|
|
4.
|
the
form of endorsement of the Mortgage Notes;
and
|
|
|
5.
|
such
other documents, records and papers as we have deemed necessary and
relevant as a basis for this
opinion.
|
To
the
extent [we] [I] have deemed necessary and proper, [we] [I] have relied upon
the
representations and warranties of the Company contained in the Purchase
Agreement. As to factual matters, I have relied upon statements,
certificates and other assurances of public officials and officers and other
representatives of the Seller, and upon such other certificates as I deemed
appropriate, which factual matters have not been independently established
or
verified by me. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
D-1
Based
upon the foregoing, it is [our] [my] opinion that:
|
|
1.
|
The
Company is a federal savings bank duly organized, validly existing
and in
good standing under the laws of the United States and is qualified
to
transact business in, and is in good standing under, the laws of
the
United States.
|
|
|
2.
|
The
Company has the power to engage in the transactions contemplated
by the
Agreements and all requisite power, authority and legal right to
execute
and deliver the Agreements and to perform and observe the terms and
conditions of the Agreements.
|
|
|
3.
|
Each
of the Agreements has been duly authorized, executed and delivered
by the
Company, and is a legal, valid and binding agreement enforceable
in
accordance with its respective terms against the
Company.
|
|
|
4.
|
The
Company has been duly authorized to allow any of its officers to
execute
any and all documents by original signature in order to complete
the
transactions contemplated by the
Agreements.
|
|
|
5.
|
The
Company has been duly authorized to allow any of its officers to
execute
by original [or facsimile] signature the endorsements to the Mortgage
Notes and the Assignments of Mortgages, and the original
[or facsimile] signature of the officer at the Company executing the
endorsements to the Mortgage Notes and the Assignments of Mortgages
represents the legal and valid signature of said officer of the
Company.
|
|
|
6.
|
Either
(i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and
performance by the Company of or compliance by the Company with the
Agreements and the sale of the Mortgage Loans by the Company or the
consummation of the transactions contemplated by the Agreements or
(ii) any required consent, approval, authorization or order has been
obtained by the Company.
|
|
|
7.
|
Neither
the consummation of the transactions contemplated by, nor the fulfillment
of the terms of, the Agreements conflicts or will conflict with or
results
or will result in a breach of or constitutes or will constitute a
default
under the charter or by-laws of the Company, the terms of any indenture
or
other agreement or instrument to which the Company is a party or
by which
it is bound or to which it is subject, or violates any statute or
order,
rule, regulations, writ, injunction or decree of any court, governmental
authority or regulatory body to which the Company is subject or by
which
it is bound.
|
|
|
8.
|
There
is no action, suit, proceeding or investigation pending or, to the
best of
[our] [my] knowledge, threatened against the Company which, in [our]
[my]
judgment, either in any one instance or in the aggregate, may
result
|
D-2
in
any
material adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which
would
draw into question the validity of the Agreements or the Mortgage Loans or
of
any action taken or to be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the ability of the
Company to perform under the terms of the Agreements.
|
|
9.
|
The
sale of each Mortgage Note and Mortgage as and in the manner contemplated
by the Agreements is sufficient to fully transfer to the Purchaser
all
right, title and interest of the Company thereto as noteholder and
mortgagee.
|
|
|
10.
|
The
Mortgages have been duly assigned and the Mortgage Notes have been
duly
endorsed as provided in the Custodial Agreement. The
Assignments of Mortgage are in recordable form, except for the insertion
of the name of the assignee, and upon the name of the assignee being
inserted, are acceptable for recording under the laws of the state
where
each related Mortgaged Property is located. The endorsement of
the Mortgage Notes, the delivery to the Purchaser, or its designee,
of the
Assignments of Mortgage, and the delivery of the original endorsed
Mortgage Notes to the Purchaser, or its designee, are sufficient
to permit
the Purchaser to avail itself of all protection available under applicable
law against the claims of any present or future creditors of the
Company,
and are sufficient to prevent any other sale, transfer, assignment,
pledge
or hypothecation of the Mortgages and the Mortgage Notes by the Company
from being enforceable.
|
The
opinions above are subject to the following additional, exceptions,
qualifications and limitations:
|
|
A.
|
I
have assumed that all parties to the Agreements other than the Seller
have
all requisite power and authority to execute, deliver and perform
their
respective obligations under each of the Agreements, and that the
Agreements have been duly authorized by all necessary corporate action
on
the part of such parties, have been executed and delivered by such
parties
and constitute the legal, valid and binding obligations of such
parties.
|
|
|
B.
|
My
opinion is expressed in the paragraphs above are subject to the
qualifications that (i) the enforceability of the Purchase Agreement
may be limited by the effect of laws relating to (1) bankruptcy,
reorganization, insolvency, moratorium or other similar laws nor
or
hereafter in effect relating to creditors’ rights generally, including,
without limitation, the effect of statutes regarding fraudulent conveyance
or preferential transfers
|
D-3
and
(2) general principles of equity upon the specific enforceability of any of
the remedies, covenants or other provisions of the Purchase Agreement and upon
the availability of injunctive relief or other equitable remedies and the
application of principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law) as such principles relate
to,
limit or affect the enforcement of creditors’ rights generally and the
discretion of the court before which any proceeding for such enforcement may
be
brought; and (ii) I express no opinion herein with respect to the validity,
legality, binding effect or enforceability of provisions for indemnification
in
the Agreements to the extent such provisions may be held to be unenforceable
as
contrary to public policy.
|
|
C.
|
I
have assumed, without independent check or certification, that there
are
no agreements or understandings among the Seller, the Purchaser and
any
other party which would expand, modify or otherwise affect the terms
of
the documents described herein or the respective rights or obligations
of
the parties thereunder.
|
I
am
admitted to practice in the State of Florida and I render no opinion herein
as
to matters involving the laws of any jurisdiction other than the State of
Florida and the federal laws of the United States of America.
This
opinion is given to you for your sole benefit, and no other person or entity
is
entitled to rely hereon except that the purchaser or purchasers to which you
initially and directly resell the Mortgage Loans may rely on this opinion as
if
it were addressed to them as of the date of this opinion.
| Very truly yours, | |||
|
|
|
||
| Name | |||
|
[Assistant]
General Counsel
|
|||
|
|
D-4
EXHIBIT
E
[Reserved]
E-1
EXHIBIT
F
[Reserved]
F-1
EXHIBIT
G
UNDERWRITING
GUIDELINES
G-1
EXHIBIT
H
FORM
OF ASSIGNMENT AND
CONVEYANCE AGREEMENT
On
this
___ day of _______, 200_, Lydian Private Bank (“Seller”), as the
Seller under (i) that certain Purchase Price and Terms Agreement, dated as
of _________, 200__ (the “PPTA”), and
(ii) that certain Second Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of September 1, 2006 (the “Purchase Agreement”),
does hereby sell, transfer, assign, set over and convey to Xxxxxx Xxxxxxx
Mortgage Capital, Inc. (“Purchaser”) as the
Purchaser under the Agreements (as defined below) without recourse, but subject
to the terms of the Agreements, all right, title and interest of, in and to
the
Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit A (the
“Mortgage
Loans”), together with the Mortgage Files and the related Servicing
Rights and all rights and obligations arising under the documents contained
therein. Each Mortgage Loan subject to the Agreements was
underwritten in accordance with, and conforms to, the Underwriting Guidelines
attached hereto as Exhibit C. Pursuant
to Section 6 of the
Purchase Agreement, the Seller has delivered to the Custodian the documents
for
each Mortgage Loan to be purchased as set forth in the Purchase
Agreement. The contents of each Servicing File required to be
retained by the Interim Servicer to service the Mortgage Loans pursuant to
the
Interim Servicing Agreement and thus not delivered to the Purchaser are and
shall be held in trust by the Interim Servicer in its capacity as Interim
Servicer for the benefit of the Purchaser as the owner thereof. The
Interim Servicer’s possession of any portion of the Servicing File is at the
will of the Purchaser for the sole purpose of facilitating servicing of the
related Mortgage Loan pursuant to the Interim Servicing Agreement, and such
retention and possession by the Interim Servicer shall be in a custodial
capacity only. The ownership of each Mortgage Note, Mortgage and the
contents of the Mortgage File and Servicing File is vested in the Purchaser
and
the ownership of all records and documents with respect to the related Mortgage
Loan prepared by or which come into the possession of the Seller shall
immediately vest in the Purchaser and shall be retained and maintained, in
trust, by the Seller at the will of the Purchaser in a custodial capacity
only. The PPTA and the Purchase Agreement shall collectively be
referred to as the “Agreements”
herein.
The
Mortgage Loan Package characteristics of the Mortgage Loans subject hereto
are
set forth on Exhibit B hereto.
In
accordance with Section 6 of the
Purchase Agreement, the Purchaser accepts the Mortgage Loans listed on Exhibit A
attached hereto. Notwithstanding the foregoing the Purchaser does not
waive any rights or remedies it may have under the Agreements.
Capitalized
terms used herein and not otherwise defined shall have the meanings set forth
in
the Purchase Agreement.
[SIGNATURE
PAGE FOLLOWS]
H-1
| LYDIAN PRIVATE BANK | ||||
|
|
By:
|
|||
| Name: | ||||
| Title: | ||||
Accepted
and Agreed:
| XXXXXX XXXXXXX MORTGAGE CAPITAL INC. | |||||
|
By:
|
|
||||
|
|
Name |
|
|||
|
|
Title |
|
|||
H-2
EXHIBIT
A
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
THE
MORTGAGE
LOANS
H-3
EXHIBIT
B
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS
AND
WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool
Characteristics of the Mortgage Loan Package as delivered on the related Closing
Date:
No
Mortgage Loan has: (1) an outstanding principal balance less
than $_____; (2) an origination date earlier than __ months prior to the
related Cut-off Date; (3) an LTV of greater than ____%; (4) a FICO
Score of less than ___; or (5) a debt-to-income ratio of more than
___%. Each Mortgage Loan has a Mortgage Interest Rate of at least
___% per annum and an outstanding principal balance of less than
$______. Each Adjustable Rate Mortgage Loan has an Index of
[______].
H-4
EXHIBIT
C
TO
ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING
GUIDELINES
H-5
