Exhibit 10.1
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MORTGAGE LOAN PURCHASE AGREEMENT
Between
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
and
GREENPOINT MORTGAGE SECURITIES LLC,
as Purchaser
Dated as of ________, 200_
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Table of Contents
Page
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ARTICLE I Definitions .........................................................1
ARTICLE II Procedures for Purchase of Mortgage Loans; Conditions
Precedent; Settlements............................................1
Section 2.01. PURCHASE AND SALE........................................1
Section 2.02. DELIVERY OF DOCUMENTS; PURCHASE OF MORTGAGE LOANS........1
Section 2.03. [RESERVED]...............................................2
Section 2.04. [RESERVED]...............................................2
Section 2.05. SURVIVAL OF REPRESENTATIONS..............................2
Section 2.06. PROCEEDS OF MORTGAGE LOANS...............................3
Section 2.07. DEFECTIVE MORTGAGE LOANS.................................3
ARTICLE III Intent of Parties; Security Interest...............................3
Section 3.01. INTENT OF PARTIES; SECURITY INTEREST.....................3
ARTICLE IV Representations and Warranties......................................3
Section 4.01. REPRESENTATIONS AND WARRANTIES OF SELLER.................3
Section 4.02. REPRESENTATIONS AND WARRANTIES REGARDING MORTGAGE
LOANS..................................................5
Section 4.03. REPRESENTATIONS AND WARRANTIES OF PURCHASER.............16
Section 4.04. REMEDIES FOR BREACH OF REPRESENTATIONS AND
WARRANTIES; REPURCHASE OBLIGATION.....................17
ARTICLE V Covenants and Warranties of Seller..................................18
Section 5.01. AFFIRMATIVE COVENANTS...................................18
Section 5.02. NEGATIVE COVENANTS......................................20
ARTICLE VI Sale of Mortgage Loans from the Purchaser to the Trust.............21
Section 6.01. SALE AND SERVICING AGREEMENT............................21
ARTICLE VII Seller's Servicing Obligations....................................22
Section 7.01. SELLER'S SERVICING OBLIGATIONS..........................22
ARTICLE VIII Fees and Expenses................................................22
ARTICLE IX Termination; Additional Remedies...................................23
ARTICLE X Payment of Purchase Price...........................................23
Section 10.01. PURCHASE PRICE PAYMENTS.................................23
Section 10.02. THE PURCHASER NOTE......................................23
ARTICLE XI Confidentiality....................................................24
ARTICLE XII Term .............................................................25
ARTICLE XIII Exclusive Benefit of Parties; Assignment.........................25
ARTICLE XIV Amendment; Waivers................................................25
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ARTICLE XV Execution in Counterparts..........................................25
ARTICLE XVI Effect of Invalidity of Provisions................................25
ARTICLE XVII Governing Law....................................................26
ARTICLE XVIII Notices ........................................................26
ARTICLE XIX Entire Agreement..................................................26
ARTICLE XX Indemnities........................................................26
ARTICLE XXI RESPA Obligations.................................................27
ARTICLE XXII Survival ........................................................28
ARTICLE XXIII Right of Set-off................................................28
ARTICLE XXIV Consent to Service...............................................28
ARTICLE XXV Submission to Jurisdiction; Waiver of Trial by Jury...............28
ARTICLE XXVI Construction.....................................................29
ARTICLE XXVII Further Agreements..............................................29
EXHIBIT A Form of Non-Negotiable GreenPoint Mortgage Securities LLC
Promissory Note
SCHEDULE I: Mortgage Loan Schedule
ii
MORTGAGE LOAN PURCHASE AGREEMENT ("AGREEMENT") dated as of
________, 200_ between GreenPoint Mortgage Funding, Inc., a New York corporation
("SELLER"), and GreenPoint Mortgage Securities LLC, a Delaware limited liability
company ("PURCHASER").
WHEREAS, Seller desires to sell to Purchaser the Mortgage
Loans (as hereinafter defined), and Purchaser desires to purchase such Mortgage
Loans in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties, in consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
All capitalized terms used in this Agreement and not otherwise
defined herein, shall have the meanings assigned thereto in Annex A to the
Indenture dated as of ________, 200_, between the Issuer and the Indenture
Trustee, as the same may be amended and supplemented from time to time.
ARTICLE II
Procedures for Purchase of Mortgage Loans; Conditions Precedent;
Settlements
Section 2.01. PURCHASE AND SALE. (a) On the Closing Date in
consideration for the Purchase Price the Seller hereby sells, transfers,
assigns, sets over and otherwise conveys to the Purchaser, without recourse, all
of its right, title and interest in, to and under, whether now existing or
hereafter created, (i) each Mortgage Loan, including its Principal Balance (and
any Additional Balances) and all collections in respect thereof received after
the Cut-Off Date (excluding Interest Collections due on or prior to the Cut-off
Date); (ii) property that secured an Mortgage Loan that is acquired by
foreclosure or deed in lieu of foreclosure; (iii) the Seller's rights under the
related hazard insurance policies; and (iv) all proceeds with respect to the
foregoing (collectively, the "PURCHASED ASSETS"). The Purchase Price on the
Closing Date shall be payable in a combination of cash and credit for a capital
contribution made to the Purchaser by the Seller.
(b) To the extent that the fair market value of any Additional
Balance sold by the Seller to the Purchaser is greater than the cash
consideration paid by the Purchaser for such Additional Balance, the difference
between such fair market value and the amount of such cash consideration shall
be deemed to be a combination of a credit for a capital contribution made to the
Purchaser by the Seller and an increase in the principal amount of the Purchaser
Note pursuant to Article X.
Section 2.02. DELIVERY OF DOCUMENTS; PURCHASE OF MORTGAGE
LOANS. Prior to the purchase of the Mortgage Loans:
(a) Seller shall have delivered to the Purchaser or any agent
appointed by the Purchaser the Mortgage File for each of the Mortgage Loans.
(b) Purchaser shall have received a Mortgage Loan Schedule
pertaining to the related Mortgage Loans.
(c) Purchaser shall have received copies of the resolutions of
the Board of Directors of Seller, certified by its respective Secretary,
approving this Agreement.
(d) Purchaser shall have received the Certificate of
Incorporation of Seller certified by the Secretary of State of the State of New
York.
(e) Purchaser shall have received a certificate of the
Secretary or Assistant Secretary of Seller certifying (i) the names and
signatures of the officers authorized on its behalf to execute this Agreement,
and any other documents to be delivered by it hereunder and (ii) a copy of
Seller's By-laws.
(f) Purchaser shall have received an opinion of counsel to
Seller as to the due authorization, execution and delivery by the Seller of this
Agreement and as to the validity and enforceability of the transfers
contemplated hereunder and addressing such other matters as the Purchaser may
reasonably request.
(g) Seller shall have instructed the applicable debtor,
trustee, paying agent, authenticating agent, transfer agent, registrar,
predecessor in interest, owner (if the Mortgage Loans are in the form of a
security agreement), or servicer, if any, in respect of the related Mortgage
Loans to reflect on their books and records the transfer of such Mortgage Loans
to Purchaser, as owner or secured party (if the Mortgage Loans are in the form
of a security agreement).
(h) Purchaser shall have received the most recent available
standard servicing or lien reports in summary form, if any, with respect to all
of the mortgages in Seller's portfolio similar to the Mortgage Loans.
(i) The Purchaser shall be permitted to perform its standard
loan review of each Mortgage Loan to be purchased.
(j) UCC-1 financing statements duly executed by Seller as
debtor shall have been filed in New York naming the Purchaser as secured party
and the Indenture Trustee on behalf of the Trust as assignee.
Section 2.03. [RESERVED]
Section 2.04. [RESERVED].
Section 2.05. SURVIVAL OF REPRESENTATIONS. The terms and
conditions of the purchase of each Mortgage Loan shall be as set forth in this
Agreement. Seller will be deemed on the Closing Date to have made to Purchaser
the representations and warranties set forth in Article IV hereof and such
representations and warranties of Seller shall be true and correct on
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and as of the Closing Date. In addition, Seller shall reaffirm the
representations and warranties contained in Article IV on the date of
disposition of the Mortgage Loans by the Purchaser pursuant to the Sale and
Servicing Agreement.
Section 2.06. PROCEEDS OF MORTGAGE LOANS. The transfer and
sale hereby of all of the Seller's right, title and interest in and to each
Mortgage Loan shall include all proceeds, products and profits derived
therefrom, including, without limitation, all scheduled payments of principal of
and interest on such Mortgage Loans and other amounts due or payable or to
become due or payable in respect thereof and proceeds thereof, including,
without limitation, all moneys, goods and other tangible or intangible property
received upon the liquidation or sale thereof.
Section 2.07. DEFECTIVE MORTGAGE LOANS. If any Mortgage Loan
is re-transferred to the Purchaser pursuant to Section 2.03 or 2.05 of the Sale
and Servicing Agreement, the Seller shall, at the Purchaser's option, either (a)
repurchase such Mortgage Loan at the Loan Purchase Price, or (b) provide an
Eligible Substitute Mortgage Loan if the Seller has any such loans available for
sale at the time, subject to the terms and conditions of the Sale and Servicing
Agreement.
ARTICLE III
Intent of Parties; Security Interest
Section 3.01. INTENT OF PARTIES; SECURITY INTEREST. Purchaser
and Seller confirm that the transactions contemplated herein are intended as
purchases and sales rather than as loan transactions. In the event, for any
reason, and solely in such event, any transaction hereunder is construed by any
court or regulatory authority as a loan or other purchase and sale of the
related Purchased Assets, Seller shall be deemed to have hereby pledged to
Purchaser as security for the performance by Seller of all of its obligations
from time to time arising hereunder and under any and all Purchases effected
pursuant thereto, and shall be deemed to have granted to Purchaser a security
interest in, the related Purchased Assets and all distributions in respect
thereof, and the proceeds of any and all of the foregoing whether now owned or
hereafter acquired, (collectively, the "COLLATERAL"). In furtherance of the
foregoing, (i) this Agreement shall constitute a security agreement, (ii)
Purchaser shall have all of the rights of a secured party with respect to the
Collateral pursuant to applicable law and (iii) Seller shall execute all
documents, including, but not limited to, financing statements under the Uniform
Commercial Code as in effect in any applicable jurisdictions, as the Purchaser
may reasonably require to effectively perfect and evidence Purchaser's first
priority security interest in the Collateral. Seller also covenants not to
pledge, assign or grant any security interest to any other party in any Mortgage
Loan sold to Purchaser.
ARTICLE IV
Representations and Warranties
Section 4.01. REPRESENTATIONS AND WARRANTIES OF SELLER. The
Seller represents, warrants and covenants to the Purchaser as of the Closing
Date that:
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(i) the Seller is duly organized, validly existing and in good
standing under the laws of the State of New York and is duly authorized and
qualified to transact any and all business contemplated by this Agreement
to be conducted by the Seller in any state in which a Mortgaged Property is
located to the extent necessary to ensure the enforceability of each
Mortgage Loan and the servicing of the Mortgage Loan in accordance with the
terms of this Agreement;
(ii) the Seller has the full corporate power and authority to service
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and the
execution, delivery and performance of this Agreement by the Seller has
been duly authorized by all necessary corporate action on the part of the
Seller; and this Agreement, assuming the due authorization, execution and
delivery thereof by the Purchaser, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with
its respective terms, except to the extent that (a) the enforceability
thereof may be limited by federal or state bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought;
(iii) the execution and delivery of this Agreement by the Seller, the
servicing of the Mortgage Loans by the Seller hereunder, the consummation
by the Seller of the transactions herein contemplated, and the fulfillment
by the Seller of or compliance by the Seller with the terms hereof will not
(A) result in a breach of any term or provision of the charter or by-laws
of the Seller or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any other
material agreement or instrument to which the Seller is a party or by which
it may be bound, or any statute, order or regulation applicable to the
Seller of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Seller, which breach, violation, default
or non-compliance would have a material adverse effect on (a) the business,
operations, financial condition, properties or assets of the Seller taken
as a whole or (b) the ability of the Seller to perform its obligations
under this Agreement; and the Seller is not a party to, bound by, or in
material breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it, which materially and
adversely affects or, to the Seller's knowledge, would in the future
reasonably be expected to materially and adversely affect, (x) the ability
of the Seller to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Seller taken as a whole;
(iv) the Seller is, and currently intends to remain, in good standing
and qualified to do business in each jurisdiction where failure to be so
qualified or licensed would have a material adverse effect on (a) the
business, operations, financial condition, properties or assets of the
Seller taken as a whole or (b) the enforceability of any Mortgage Loan or
the servicing of the Mortgage Loans in accordance with the terms of this
Agreement;
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(v) there is no litigation or administrative proceeding pending or, to
the Seller's best knowledge, threatened against the Seller that would
materially and adversely affect the execution, delivery or enforceability
of this Agreement or the ability of the Seller to service the Mortgage
Loans or for the Seller to perform any of its other obligations hereunder
in accordance with the terms hereof;
(vi) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order not relating to a
future transaction is required, the Seller has obtained the same;
(vii) the Seller has caused to be performed any and all acts required
to preserve the rights and remedies of the Purchaser in any insurance
policies of the Seller or a mortgagee applicable to the Mortgage Loans sold
by the Seller; and
(viii) the Seller is solvent and will not be rendered insolvent by the
transactions described herein and, after giving effect to the transactions
described herein, the Seller will not be left with an unreasonably small
amount of capital with which to engage in the ordinary course of its
business, and the Seller does not intend to incur, nor does the Seller
believe that it has incurred, debts beyond its ability to pay as they
mature. The Seller does not contemplate the commencement of insolvency,
liquidation or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of the
Seller or any of its respective assets.
Section 4.02. REPRESENTATIONS AND WARRANTIES REGARDING
MORTGAGE LOANS. (a) Seller represents and warrants to Purchaser as of the
Closing Date with respect to each Mortgage Loan as follows:
(i) As of the Closing Date with respect to the Mortgage Loans and as
of the related Transfer Date with respect to any Eligible Substitute
Mortgage Loans and with respect to any HELOC Mortgage Loan, as of the date
any Additional Balance is created, the information set forth in the
Mortgage Loan Schedule for such Mortgage Loans is true and correct in all
material respects;
(ii) Each Mortgage Loan is being serviced by the Servicer and is being
serviced in compliance with applicable law;
(iii) The applicable Cut-Off Date Principal Balance has not been
assigned or pledged, and the Seller is the sole owner and holder of such
Cut-Off Date Principal Balance free and clear of any and all liens, claims,
encumbrances, participation interests, equities, pledges, charges or
security interests of any nature, and has full right and authority, under
all governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loans, to sell, assign or transfer the
same pursuant to this Agreement and upon its acquisition of the Mortgage
Loans, as of the Closing Date, the Sponsor will be the sole owner and
holder of such Mortgage Loans free and clear of any and all liens claims,
encumbrances, participating interests, equities, pledges, charges, or
security interests of any nature;
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(iv) Except with respect to liens released immediately prior to the
transfer herein contemplated, each Credit Line Agreement and each Mortgage
Note and related Mortgage has not been assigned or pledged and immediately
prior to the transfer and assignment herein contemplated, the Seller held
good, marketable and indefeasible title to, and was the sole owner and
holder of, each Mortgage Loan subject to no liens, charges, mortgages,
claims, participation interests, equities, pledges or security interests of
any nature, encumbrances or rights of others (collectively, a "LIEN"); the
Seller has full right and authority under all governmental and regulatory
bodies having jurisdiction over the Seller, subject to no interest or
participation of, or agreement with, any party, to sell and assign the same
pursuant to this Agreement; and immediately upon the transfers and
assignments herein contemplated, the Seller shall have transferred all of
its right, title and interest in and to each Mortgage Loan and the
Purchaser will hold good, marketable and indefeasible title, to, and be the
sole owner of, each Mortgage Loan subject to no Liens;
(v) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, the related Mortgage is a valid, enforceable and subsisting first or
second lien, as set forth on the Mortgage Loan Schedule with respect to
each related Mortgaged Property, and as of the applicable Cut-Off Date the
related Mortgaged Property is free and clear of all encumbrances and liens
having priority over the first or second lien, as applicable, of such
Mortgage except for liens for (i) real estate taxes and special assessments
not yet delinquent; (ii) any first mortgage loan secured by such Mortgaged
Property and specified on the Mortgage Loan Schedule; (iii) covenants,
conditions and restrictions, rights of way, easements and other matters of
public record as of the date of recording that are acceptable to mortgage
lending institutions generally or specifically reflected in the appraisals;
and (iv) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended to
be provided by such Mortgage;
(vi) As of and after the Closing Date with respect to the Mortgage
Loans and as of and after the applicable Transfer Date with respect to any
Eligible Substitute Mortgage Loans, there is no valid right to rescission,
offset, defense (including the defense of usury) or counterclaim of any
obligor under any Loan Agreement or Mortgage;
(vii) As of the Closing Date with respect to the Mortgage Loans and
the applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loans, there is no delinquent recording or other tax or fee or
assessment lien against any related Mortgaged Property;
(viii) As of the Closing Date with respect to the Mortgage Loans and
the applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loans, there is no proceeding pending or threatened for the total
or partial condemnation of any Mortgaged Property, nor is such a proceeding
currently occurring, and such property is in good repair and is undamaged
by waste, fire, earthquake or earth movement, windstorm, flood, other types
of water damage, 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;
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(ix) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, there are no mechanics' or similar liens or claims which have been
filed for work, labor or material affecting the related Mortgaged Property
which are, or may be, liens prior or equal to the lien of the related
Mortgage and no rights are outstanding which could give rise to such liens,
except liens which are fully insured against by the title insurance policy
or other title protection referred to in clause (xiv);
(x) No Minimum Monthly Payment is more than 59 days delinquent
(measured on a contractual basis);
(xi) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, for each Mortgage Loan, the related Mortgage File contains each of
the documents and instruments specified to be included therein;
(xii) The related Loan Agreement and the related Mortgage at
origination complied in all material respects with applicable state, local
and federal laws and regulations, including, without limitation, all
applicable predatory and abusive lending laws, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal credit
opportunity, recording or disclosure laws applicable to the Mortgage Loans
and consummation of the transactions contemplated hereby, including without
limitation the receipt of interest, will not involve the violation of such
laws;
(xiii) On the Closing Date with respect to the Mortgage Loans and to
the extent not already included in such filing, on the applicable Transfer
Date with respect to any Eligible Substitute Mortgage Loans, the Seller has
filed UCC-1 financing statements with respect to such Mortgage Loans;
(xiv) A lender's policy of title insurance, xxxxxxxXxxxx.xxx lender
master protection program (standard mortgage guaranty) or a commitment
(binder) to issue the same or an attorney's certificate or opinion of title
was effective on the date of the origination of each mortgage loan and each
such policy or certificate or opinion of title is valid and remains in full
force and effect;
(xv) As of the Closing Date with respect to the Mortgage Loans and the
applicable Transfer Date with respect to any Eligible Substitute Mortgage
Loans, none of the Mortgaged Properties is a mobile home or a manufactured
housing unit;
(xvi) As of the Cut-Off Date for the Mortgage Loans no more than
approximately _____% of the Mortgage Loans (by Pool Balance) are secured by
Mortgaged Properties located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Mortgage Loan was not
in excess of 100%;
(xviii) No selection procedure that identified the Mortgage Loans as
being less desirable or valuable than other comparable mortgage loans
originated or acquired by the
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Seller was utilized in selecting the Mortgage Loans for sale to the
Purchaser; PROVIDED, HOWEVER, that the Mortgage Loans were selected from
the pool of mortgage loans originated in connection with the Seller's
mortgage loan origination program;
(xix) The Seller has not transferred the Mortgage Loans to the
Purchaser with any intent to hinder, delay or defraud any of its creditors;
(xx) The Minimum Monthly Payment with respect to any Mortgage Loan is
not less than the interest accrued at the applicable Loan Rate on the
average daily Principal Balance during the interest period relating to the
date on which such Minimum Monthly Payment is due;
(xxi) As of the Closing Date with respect to the Mortgage Loans and
the applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loans, each Loan Agreement and each Mortgage Loan is genuine and
is a legal, valid, binding and enforceable obligation of the related
Mortgagor, except as the enforceability thereof may be limited by the
bankruptcy, insolvency or similar laws affecting creditors' rights
generally;
(xxii) As of the Closing Date with respect to the Mortgage Loans and
the applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loans, there has been no default, breach, violation or event of
acceleration of any senior mortgage loan related to a Mortgaged Property
that has not been cured by a party other than the Servicer;
(xxiii) The terms of each Mortgage Note and each Mortgage have not
been impaired, altered or modified in any respect, except by a written
instrument which (if such instrument is secured by real property) has been
recorded, if necessary, to protect the interest of the Noteholders and the
Insurer and which has been delivered to the Indenture Trustee. The
substance of any such alteration or modification is reflected on the
related Mortgage Loan Schedule and has been approved by the primary
mortgage guaranty insurer, if any;
(xxiv) The definition of "prime rate" in each Credit Line Agreement
relating to a HELOC Mortgage Loan does not differ materially from the
definition in the form of Credit Line Agreement in Exhibit D to the Sale
and Servicing Agreement;
(xxv) The weighted average remaining term to maturity of the Mortgage
Loans on a contractual basis as of the Cut-Off Date is approximately _____
months. On each date that the Loan Rates relating to HELOC Mortgage Loans
have been adjusted, interest rate adjustments on the HELOC Mortgage Loans
were made in compliance with the related Mortgages and Credit Line
Agreement and applicable law and all required notices of interest rate
adjustments were sent to each Mortgagor on a timely basis. Over the term of
each HELOC Mortgage Loan, the Loan Rate may not exceed the related Loan
Rate Cap, if any. The Loan Rate Cap for each of the HELOC Mortgage Loans is
_____%. With respect to the HELOC Mortgage Loans, the margins range between
______% and _____% and the weighted average margin is approximately ______%
as of the Cut-Off Date. The Loan Rates on the Mortgage Loans range between
______% and ______%, and the weighted average Loan Rate on the Mortgage
Loans is approximately ______%;
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(xxvi) As of the Closing Date with respect to the Mortgage Loans and
the applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loans, each Mortgaged Property consists of a single parcel of real
property with a one-to-four unit single family residence erected thereon,
or an individual condominium unit, planned unit development unit or
townhouse;
(xxvii) No more than approximately ______% (by Pool Balance) of the
Mortgage Loans are secured by real property improved by individual
condominium units, planned development units, manufactured housing or
two-to-four family residences erected thereon, and approximately ______%
(by Pool Balance) of the Mortgage Loans are secured by real property with a
one-family residence erected thereon;
(xxviii) Each Mortgage Note evidencing a Closed End Mortgage Loan is
comprised of one original promissory note and each such promissory note
constitutes an "instrument" for purposes of Section 9-102(A)(47) of the
UCC. There is no obligation on the part of the Seller or any other party to
make payments in addition to those made by the Mortgagor with respect to
the Closed End Mortgage Loans;
(xxix) The Credit Limits on the HELOC Mortgage Loans range between
$_______ and $_______ with an average of approximately $_______. The
average Credit Limit Utilization Rate (weighted by Credit Limit) of the
HELOC Mortgage Loans is approximately _____%. The Principal Balances on the
Mortgage Loans range between approximately $_______ and $_______ with an
average of approximately $_______;
(xxx) Approximately _____% of the Mortgage Loans are second liens, and
either (A) no consent for each Mortgage Loan was required by the holder of
the related senior lien, if any, prior to the making of such Mortgage Loan
or (B) such consent has been obtained and is contained in the related
Mortgage File;
(xxxi) This Agreement constitutes a valid transfer and assignment to
the Purchaser of all right, title and interest of the Seller in and to the
Cut-Off Date Principal Balances with respect to the applicable Mortgage
Loans, all monies due or to become due with respect thereto and all
proceeds of such Cut-Off Date Principal Balances with respect to the
Mortgage Loans and such funds as are from time to time deposited in the
Collection Account (excluding any investment earnings thereon) and all
other property specified in the definition of "Trust" as being part of the
corpus of the Trust conveyed to the Trust, and upon payment for the
Additional Balances, will constitute a valid transfer and assignment to the
Purchaser of all right, title and interest of the Seller in and to the
Additional Balances, all monies due or to become due with respect thereto,
and all proceeds of such Additional Balances and all other property
specified in the definition of "Trust" relating to the Additional Balances;
(xxxiii) As of the Closing Date no Mortgage Loan is the subject of
foreclosure proceedings and, to the best of the Sponsor's knowledge, no
obligor of any of the Mortgage Loans has filed for bankruptcy protection.
As of the applicable Transfer Date, no Eligible Substitute Mortgage Loan is
the subject of foreclosure proceedings and, to the best of the
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Sponsor's knowledge, no obligor of any of the Eligible Substitute Mortgage
Loans has filed for bankruptcy protection;
(xxxiii) The proceeds of each Closed End Mortgage Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee to make
future advances thereunder. Any and all requirements as to completion of
any on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing or recording such Closed End Mortgage Loans
were paid;
(xxxiv) Each Mortgage contains customary and enforceable provisions
which render the rights and remedies of the holder thereof adequate for the
realization against the related Mortgaged Property of the benefits of the
security, including (A) in the case of a Mortgage designated as a deed of
trust, by trustee's sale and (B) otherwise by judicial foreclosure. Subject
to applicable state law, there is no homestead or other exemption available
to the Mortgagor which would materially interfere with the rights to sell
the Mortgaged Property at a trustee's sale or the right to foreclose upon
the related Mortgage;
(xxxv) As of the Closing Date with respect to the Mortgage Loans and
the applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loan, except for events permissible under Section 4.02(a)(x) of
this Agreement, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Mortgage Note and
no event which, with the passage of time or with notice and the expiration
of any grace or cure period, would constitute a default, breach, violation
or event of acceleration; and the Seller has not waived any default,
breach, violation or event of acceleration;
(xxxvi) To the best knowledge of the Seller, all parties to the
Mortgage Note and the Mortgage had legal capacity to execute the Mortgage
Note and the Mortgage and each Mortgage Note and Mortgage have been duly
and properly executed by such parties; Each Mortgage and Mortgage Note is
the legal, valid and binding obligation of the related Mortgagor and is
enforceable by the Purchaser or any transferor of the Purchaser against the
Mortgagor in accordance with its terms, except only as such enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
by law; there is only one originally executed Mortgage Note or Credit Line
Agreement and promissory Note, as applicable, for each Mortgage Loan;
(xxxvii) As of the Cut-Off Date no more than approximately ____% of
the Principal Balance of the Mortgage Loans represent Mortgage Loans with
respect to which the related Mortgagor had a Credit Score of ___ or less at
the time of origination or whose Credit Score was unavailable.
(xxxviii) As of the Closing Date with respect to the Mortgage Loans
and the applicable Transfer Date with respect to any Eligible Substitute
Mortgage Loan, no Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement which has been approved by the
applicable title insurer (to the extent required by such title insurer) and
which is part of the Mortgage File delivered to the Indenture Trustee;
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(xxix) At the time of origination of each Mortgage Loan, the related
prior lien was not more than 30 days delinquent. Additionally, as of the
Closing Date, no senior mortgage loan on the related Mortgaged Property was
more than 59 days delinquent;
(xl) All required inspections, licenses and certificates with respect
to the use and occupancy of all occupied portions of all property securing
the Mortgages have been made, obtained or issued, as applicable;
(xli) If the improvements securing a Mortgage Loan were in a federally
designated special flood hazard area as of the date of origination, flood
insurance to the extent required in Section 3.04 of the Sale and Servicing
Agreement covers the related Mortgaged Property (either by coverage under
the federal flood insurance program or by coverage by private insurers);
(xlii) With respect to each Mortgage Loan, the related prior lien does
not provide for negative amortization;
(xliii) With respect to each Mortgage Loan, the maturity date of the
Mortgage Loan is prior to the maturity date of the related prior lien if
such prior lien provides for a balloon payment;
(xliv) All amounts received after the Cut-Off Date with respect to the
Mortgage Loans to which the Seller is not entitled will be deposited into
the Collection Account within one Business Day after the Closing Date;
(xlv) Each Mortgage Loan is secured by a property having an appraised
value as of origination of $_______ or less;
(xlvi) Except for events permissible under Section 4.02(a)(x) of this
Agreement, there are no defaults in complying with the terms of the
Mortgage, and either (1) any taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges or ground rents which
previously became due and owing have been paid, or (2) an escrow of funds
has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and
payable. There are no defaults in complying with the terms of any senior
mortgage on the related Mortgaged Property that have not been cured by
anyone other than the Servicer, except for any payment defaults of less
than 30 days. Except for payments in the nature of escrow payments,
including without limitation, taxes and insurance payments, the Seller has
not advanced funds, or induced, solicited or knowingly received any advance
of funds by a party other than the Mortgagor, directly or indirectly, for
the payment of any amount required by the Mortgage Note, except for
interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage proceeds, whichever is greater, to the day
which precedes by one month the Due Date of the first installment of
principal and interest;
(xlvii) With respect to each Mortgage Loan, the improvements upon each
Mortgaged Property are covered by a valid and existing hazard insurance
policy with a carrier generally acceptable to the Servicer that provides
for fire and extended coverage representing coverage not less than (a) the
Credit Limit of such HELOC Mortgage Loan or
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(b) the Cut-Off Date Principal Balance of such Closed End Mortgage Loan or
(c) the maximum insurable value of the Mortgaged Property;
(xlviii) No misrepresentation of a material fact or fraud in respect
of the origination, modification or amendment of any Mortgage Loan has
taken place on the part of any person, including, without limitation, the
related Mortgagor, any appraiser, any builder or developer or any party
involved in the origination of such Mortgage Loan;
(xlix) With respect to the Mortgage Loans, the terms of the Mortgage
Note and the Mortgage have not been impaired, altered or modified in any
material respect, except by a written instrument which has been recorded or
is in the process of being recorded, if necessary, to protect the interests
of the Insurer and the Purchaser and which has been or will be delivered to
the Indenture Trustee on behalf of the Purchaser; and no Mortgage has been
satisfied, cancelled or rescinded, in whole or in part, and the Mortgaged
Property securing the Mortgage 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 or rescission;
(li) As of the Cut-Off Date, no Mortgage Loan is more than 59 days
delinquent in payment of principal and interest;
(li) Except for Mortgage Loans that are delinquent for a time period
less than that set forth in (l) above, there is no default, breach,
violation or event of acceleration existing under any Mortgage or the
related Mortgage Note and no event which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; and neither the
Seller, nor any other entity involved in originating or servicing a
Mortgage Loan, has waived any default, breach, violation or event of
acceleration;
(lii) None of the Mortgage Loans is a cooperative share mortgage;
(liii) Each appraisal of a Mortgage Loan that was used to determine
the appraised value of the related Mortgaged Property was conducted
generally in accordance with the Seller's mortgage loan origination
program(s) and customary industry standards and included an assessment of
the fair market value of the related mortgaged property at the time of the
appraisal. The Mortgage File contains an appraisal of the applicable
Mortgaged Property;
(liv) All individual insurance policies contain a standard mortgagee
clause naming the Servicer, its successors and assigns, as mortgagee. All
premiums thereon have been paid. Each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the holder
of the Mortgage to obtain and maintain such insurance at the Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor;
(lv) Any advances made after the date of origination of a Mortgage
Loan but prior to the Cut-Off Date have been consolidated with the
outstanding principal amount secured by the related Mortgage, and the
secured principal amount, as consolidated, bears a
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single interest rate and single repayment term reflected on the Mortgage
Loan Schedule. The consolidated principal amount does not exceed the
original principal amount of the related Mortgage Loan;
(lvi) No improvement located on or being part of any Mortgaged
Property is in violation of any applicable zoning law or regulation. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of each Mortgaged Property and, with
respect to the use and occupancy of the same, including, but not limited
to, certificates of occupancy and fire underwriting certificates, have been
made or obtained from the appropriate authorities and such Mortgaged
Property is lawfully occupied under the applicable law and all improvements
which were included for the purpose of determining the appraised value of
the Mortgaged Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on adjoining
property encroach upon the Mortgage Property;
(lvii) The proceeds of each fixed rate and balloon Mortgage Loan have
been fully disbursed and there is no obligation on the part of the
mortgagee to make future advances thereunder and any and all requirements
as to completion of any on-site or off-site improvements and as to
disbursement of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making, closing or recording the
Mortgage Loans were paid and the Mortgagor is not entitled to any refund of
amounts paid or due under the Mortgage Note;
(lviii) No Mortgage Loan has a shared appreciation feature, or other
contingent interest feature;
(lix) All parties which have had any interest in the Mortgage Loan,
whether as originator, mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were):
(A) organized under the laws of such state, or (B) qualified to do business
in such state, or (C) federal savings and loan associations or national
banks having principal offices in such state, or (D) not doing business in
such state so as to require qualification or licensing, or (E) not
otherwise required or licensed in such state. To the best of Seller's
knowledge, all parties which have had any interest in the Mortgage Loan
were in compliance with any and all applicable licensing requirements of
the laws of the state wherein the Mortgaged Property is located or were not
required to be licensed in such state;
(lx) Each document or instrument in the related Mortgage File is in a
form generally acceptable to prudent mortgage lenders that regularly
originate or purchase mortgage loans comparable to the Mortgage Loans for
sale to prudent investors in the secondary market that invest in mortgage
loans such as the Mortgage Loans;
(lxi) 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;
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(lxii) No Mortgage Loan was originated under a buydown plan;
(lxiii) No Mortgage Loan is subject to the requirements of the Home
Ownership and Equity Protection Act of 1994 ("HOEPA") or is in violation of
any state or municipal law comparable to HOEPA;
(lxiv) The Servicer for each Mortgage Loan will accurately and fully
report its borrower credit files to all three credit repositories in a
timely manner;
(lxv) No proceeds from any Mortgage Loan were used to purchase
single-premium credit insurance policies;
(lxvi) No Mortgage Loan has a prepayment penalty term longer than five
years after its origination;
(lxvii) Each Mortgage Loan conforms, and all Mortgage Loans in the
aggregate conform, in all material respects, to the descriptions thereof
set forth in the Prospectus Supplement;
(lxviii) Each Mortgage Loan was originated on or after ________, 200_;
(lxix) The Seller represents and warrants that the Seller currently
operates or actively participates in an on-going business (A) to originate
single family mortgage loans ("LOANS"), and/or (B) to make periodic
purchases of Loans from originators or sellers, and/or (C) to issue and/or
purchase securities or bonds supported by the Loans, a portion of which
Loans are made to borrowers who are:
(a) low-income families (families with incomes of 80% or less of
area median income) living in low-income areas (a census tract or
block numbering area in which the median income does not exceed
80 percent of the area median income); or
(b) very low-income families (families with incomes of 60% or
less of area median income).
(lxx) Each Mortgage contains a provision for the acceleration of the
payment of the unpaid principal balance of the related Mortgage Loan in the
event the related Mortgaged Property is sold or transferred without the
prior consent of the mortgagee thereunder;
(lxxi) Each Mortgage Loan was originated substantially in accordance
with Seller's underwriting criteria, which conform to the underwriting
criteria set forth in the Prospectus Supplement;
(lxxii) There exists no violation of any local, state or federal
environmental law, rule or regulation in respect of any Mortgaged Property
which violation has or could have a material adverse effect on the market
value of such Mortgaged Property. Seller has no knowledge of any pending
action or proceeding directly involving any such Mortgaged Property in
which compliance with any environmental law, rule or regulation is in
issue; and,
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to the best of Seller's knowledge, nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to the use and enjoyment of any such Mortgaged
Property;
(lxxiii) The Seller has caused or will cause to be performed any and
all acts required to be performed to preserve the rights and remedies of
the Indenture Trustee in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of
insurers, assignment of policies or interests therein, and establishments
of co-insured, joint loss payee and mortgagee rights in favor of the
Indenture Trustee;
(lxxiv) The related Mortgage Note is not and has not been secured by
any collateral, pledged account or other security except the lien of the
corresponding Mortgage;
(lxxv) There is no obligation on the part of the Seller or any other
party to make payments in addition to those made by the Mortgagor;
(lxxvi) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under existing law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Noteholders or
the Trust to the trustee under the deed of trust, except in connection with
a trustee's sale after default by the Mortgagor;
(lxxvii) Each Mortgagor has executed a statement to the effect that
such Mortgagor has received all disclosure materials including the notice
of the right of cancellation or rescission required by applicable law with
respect to the making of the Mortgage Loan and any waiver of any right of
cancellation or rescission exercised by the Mortgagor was in accordance
with applicable law and is binding on the Mortgagor;
(lxxviii) The security interest created pursuant to Section 3.01
hereof is a valid and continuing security interest (as defined in the UCC)
in favor of the Purchaser in the property sold, transferred, assigned, set
over and otherwise conveyed from the Seller to the Purchaser pursuant to
this Agreement, which security interest is prior to all other Liens and is
enforceable as such against creditors of and purchasers from the Seller;
(lxxix) The Seller has not authorized the filing of and is not aware
of any financing statements against the Seller that include a description
of collateral covering the property sold, transferred, assigned, set over
and otherwise conveyed from the Seller to the Purchaser pursuant to this
Agreement other than any financing statement relating to the security
interest granted to the Purchaser hereunder that has not been terminated;
(lxxx) The Seller is not aware of any judgment or tax lien filings
against it;
(xxxi) None of the Mortgage Notes has any marks or notations
indicating that they have been pledged, assigned or otherwise conveyed to
any Person other than the Issuer.
(lxxxii) The pool tape from which the selection of the Mortgage Loans
being acquired on the Closing Date was made available to the accountants
that are providing a
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comfort letter to the Issuer in connection with the Prospectus Supplement
and with respect to the Mortgage Loans as of the Closing Date, the
information on the pool tape was complete and accurate as of its date and
included a description of the same Mortgage Loans that are described on the
Schedule of Mortgage Loans and the payments due thereunder as of the
Closing Date;
(lxxxiii) With respect to each Mortgage Loan, the payments required of
the related Mortgagor will be such that the Mortgage Loan will fully
amortize over its amortization term; and
(lxxxiv) The Sale, transfer, assignment and conveyance of the Mortgage
Loans by the Seller to the Purchaser pursuant to the Mortgage Loan Purchase
Agreement is not subject to and will not result in any tax, fee or
governmental charge payable by the Seller, the Sponsor, the Issuer or the
Indenture Trustee to any federal, state or local governments ("TRANSFER
TAXES") other than Transfer Taxes which have or will have been paid by the
Sponsor as due; PROVIDED, that in the event that the Trust or the Indenture
Trustee receives actual notice of any Transfer Taxes arising out of the
transfer, assignment or conveyance of the Mortgage Loans, on written demand
by the Issuer or the Indenture Trustee, or upon the Seller's otherwise
being given notice thereof by the Issuer or the Indenture Trustee, the
Seller shall pay, and otherwise indemnify and hold the Issuer, the
Indenture Trustee and the Insurer harmless, on an after-tax basis, from and
against any and all Transfer Taxes, it being understood that the
Noteholders, the Issuer, the Indenture Trustee and the Insurer shall have
no obligation to pay any such Transfer Taxes.
With respect to the representations and warranties set forth in this Section
4.02 that are made to the best of the Seller's knowledge or as to which the
Seller has no knowledge, if it is discovered by the Purchaser, the Servicer, the
Insurer or a Responsible Officer of the Indenture Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Seller's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty. Notwithstanding the foregoing, a breach of any of
the representations and warranties set forth in clauses (lxiii) through (lxvi)
of this Section 4.02 will be deemed to materially and adversely affect the value
of the related Mortgage Loan.
Section 4.03. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby makes the following representations and warranties, each of
which representations and warranties (i) is material and being relied upon by
Seller and (ii) is true in all respects as of the date of this Agreement:
(i) Purchaser has been duly organized and is validly existing as a
limited liability company under the laws of the State of Delaware.
(ii) Purchaser has the requisite power and authority and legal right
to execute and deliver, engage in the transactions contemplated by, and
perform and observe the terms and conditions of, this Agreement to be
performed by it.
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(iii) This Agreement has been duly authorized and executed by
Purchaser, is valid, binding and enforceable against Purchaser in
accordance with its terms, and the execution, delivery and performance by
Purchaser of this Agreement does not conflict with any material term or
provision of any other agreement to which Purchaser is a party or any term
or provision of the certificate of formation or the operating agreement of
the Purchaser, or any law, rule, equation, order, judgment, writ,
injunction or decree applicable to Purchaser of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Purchaser.
(iv) No consent, approval, authorization or order of, registration or
filing with, or notice to any governmental authority or court is required
under applicable law in connection with the execution and delivery by
Purchaser of this Agreement.
(v) There is no action, proceeding or investigation pending or, to the
best knowledge of Purchaser, threatened against Purchaser before any court,
administrative agency or other tribunal (i) asserting the invalidity of
this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement, or (iii) which is likely to
materially and adversely affect the performance by Purchaser of its
obligations under, or the validity or enforceability of, this Agreement.
(vi) Each purchase of Mortgage Loans hereunder shall constitute a
representation by Purchaser to Seller that Purchaser understands, and that
Purchaser has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of, its
investment in the relevant Mortgage Loans.
Section 4.04. REMEDIES FOR BREACH OF REPRESENTATIONS AND
WARRANTIES; REPURCHASE OBLIGATION. It is understood and agreed that the
representations and warranties set forth in Sections 4.01 and 4.02 shall survive
each sale of Mortgage Loans to the Purchaser and shall inure to the benefit of
the Purchaser and subsequent transferees and assignees notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Mortgage File. With
respect to the representations and warranties contained in Sections 4.01 and
4.02 which are made to the best of the Seller's knowledge or to the actual
knowledge of the Seller, if it is discovered by either the Seller, the Indenture
Trustee or the Issuer, or the Purchaser that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan or the Purchaser's
interest therein, then notwithstanding the Seller's lack of knowledge with
respect to the inaccuracy at the time the representation or warranty was made,
the Seller shall repurchase the related Mortgage Loan in accordance with this
Section 4.04 as if the applicable representation or warranty was breached,
subject to the terms and conditions of the Sale and Servicing Agreement. Upon
discovery by either the Seller, the Indenture Trustee, the Issuer or the
Purchaser of a breach of any of the foregoing representations and warranties
which materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser (or which materially and adversely affects the
interests of the Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the others.
17
Within 60 days of the earlier of either discovery by or notice
to the Seller of any breach of a representation or warranty which materially and
adversely affects the value of any Mortgage Loan or the Purchaser's interest
therein, the Seller shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured or is not cured or is
not being diligently pursued as evidenced by a notice acceptable to the
Purchaser, as evidenced by the Purchaser's agreement thereto, at the end of such
60-day period, the Seller shall, at the Purchaser's option, either (a)
repurchase such Mortgage Loan at the Loan Purchase Price or (b) provide an
Eligible Substitute Mortgage Loan, if the Seller has any such loans available
for sale at the time subject to the terms and conditions of the Sale and
Servicing Agreement.
At the time of repurchase or substitution, the Purchaser and
the Seller shall arrange for the assignment of such Mortgage Loan to the Seller
and the delivery by the Purchaser to the Seller of the related Mortgage Files.
In addition to such cure and repurchase obligation, the Seller
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the representations and warranties contained in this Article IV (notwithstanding
any limitation in such representation and warranty as to the Seller's
knowledge). It is understood and agreed that the obligations of the Seller set
forth in this Section 4.04 to cure or repurchase a defective Mortgage Loan and
to indemnify the Purchaser as provided in this Section 4.04 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.
Any cause of action against the Seller relating to or arising
out of the breach of any representations and warranties made in Sections 4.01 or
4.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser, the Indenture Trustee or the Insurer, or notice thereof by the
Seller to the Purchaser, the Indenture Trustee or the Insurer, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser, the Indenture Trustee
or the Insurer, for compliance with the relevant provisions of this Agreement.
ARTICLE V
Covenants and Warranties of Seller
So long as this Agreement remains in effect or Seller shall
have any obligations hereunder, Seller hereby covenants and agrees with
Purchaser as follows:
Section 5.01. AFFIRMATIVE COVENANTS.
(a) Until the later to occur of (i) the discharge and payment
of all of Seller's obligations under this Agreement and (ii) the Termination
Date of this Agreement, Seller shall, promptly upon preparation, but in no event
later than 60 days following the end of each such party's first three fiscal
quarters, deliver to Purchaser its unaudited company-prepared financial
statements as of the end of each such fiscal quarter, prepared in accordance
with GAAP. Seller
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shall, promptly upon preparation, but in no event later than 90 days following
the end of such party's fourth fiscal quarter, deliver to Purchaser its audited
and certified financial statements, prepared in accordance with GAAP, as of the
end of the most recently ended fiscal year, which audits and certifications
shall each be prepared by a nationally recognized independent accounting firm or
by a regionally recognized independent accounting firm with the prior written
consent of Purchaser, which consent shall not be unreasonably withheld. In all
cases, financial statements shall include, without limitation, a balance sheet,
a profit and loss statement and a statement of cash flows. Notwithstanding
anything in this Agreement to the contrary, if (x) the audited and certified
financial statements described in the immediately preceding sentence are not
delivered within the above-specified 90 days, (y) Seller is diligently using its
best efforts to deliver such financial statements, and (z) Seller provides
Purchaser with a notice specifying the reason for the delay and a date, within a
reasonable time period (as determined by Purchaser), on which such financial
statements will be delivered, and they are so delivered; then failure to deliver
such financial statements within the above-specified 90 days, as the case may
be, shall not be deemed to be an Event of Termination of this Agreement.
(b) Upon request of Purchaser, Seller shall, to the extent
lawful, promptly upon filing, deliver to Purchaser copies of all material public
filings made by Seller with any governmental or quasi-governmental body.
(c) Seller shall (i) with respect to any Mortgage Loans
serviced by Seller or any of its affiliates or otherwise use its best efforts to
cause to be delivered to Purchaser monthly, the report, if any, prepared by the
relevant trustee or servicer setting forth payment activity, defaults and
delinquencies with respect to each Mortgage Loan acquired by Purchaser and (ii)
prepare and deliver reports each month, detailing, with respect to all
Purchases, such information as the Purchaser may from time to time reasonably
request.
(d) Seller shall do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted
except where failure to maintain such authority would not have a material
adverse effect on the ability of Seller to conduct its business or to perform
its obligations under this Agreement.
(e) At all times during this Agreement, Seller shall possess
sufficient net capital and liquid assets (or ability to access the same) to
satisfy its obligations as they become due in the normal course of business.
(f) Seller will notify Purchaser in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same
and, if applicable, any remedial steps being taken with respect thereto;
(i) The occurrence or likelihood of occurrence of an Event of
Termination hereunder;
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(ii) The institution of any litigation, arbitration proceeding or
governmental proceeding which, in the opinion of counsel to Seller, will
have a material adverse effect on Seller or the Mortgage Loans;
(iii) The entry of any judgment or decree against Seller if the
aggregate amount of all judgments and decrees then outstanding against
Seller exceeds $10,000,000 after deducting (A) the amount with respect to
which Seller is insured and with respect to which the insurer has assumed
responsibility in writing, and (B) the amount for which Seller is otherwise
indemnified if the terms of such indemnification are reasonably
satisfactory to Purchaser; or
(iv) The occurrence or likelihood of any event which would allow the
obligee under any material loan agreement to which Seller is bound to
declare an event of default or accelerate the obligations of Seller
thereunder.
(g) Seller shall permit the Purchaser or its accountants,
attorneys or other agents access to all of the books and records relating to
Mortgage Loans purchased and retained by Purchaser for inspection and copying
during normal business hours at all places where Seller conducts business.
(h) Seller shall satisfy the obligation under any Credit Line
Agreement that provides for the funding of all future Draws thereunder.
Section 5.02. NEGATIVE COVENANTS.
(a) Seller shall not assign or attempt to assign this
Agreement or any rights hereunder, without first obtaining the specific written
consent of Purchaser.
(b) Seller shall not amend its Articles of Incorporation or
By-laws, which amendment shall have or is likely to have an adverse effect upon
Purchaser or its interests under this Agreement, without the prior written
consent of Purchaser.
(c) During the term of this Agreement, Seller shall not engage
in any business other than as a consumer and mortgage finance lender and
servicer, except with the prior written consent of Purchaser.
(d) Seller shall not (i) dissolve or terminate its existence
or (ii) transfer any assets to any affiliate except as otherwise expressly
permitted or contemplated hereby.
(e) Except with the written consent of the Purchaser, the
Seller shall not guarantee, endorse or otherwise in any way become or be
responsible for any obligations of any other person, entity or affiliate,
including, without limitation, whether directly or indirectly by agreement to
purchase the indebtedness of any other person or through the purchase of goods,
supplies or services, or maintenance of working capital or other balance sheet
covenants or conditions, or by way of stock purchase, capital contribution,
advance or loan for the purposes of paying or discharging any indebtedness or
obligation of such other person or otherwise; PROVIDED, HOWEVER, that nothing
contained herein shall prevent Seller from indemnifying its officers, directors
and agents pursuant to its By-laws and its Articles of Incorporation.
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(f) Seller will not commit any act in violation of applicable
laws, or regulations promulgated pursuant thereto that relate to the Mortgage
Loans or that materially and adversely affect the operations or financial
conditions of Seller.
(g) Seller, by entering into this Agreement, hereby covenants
and agrees that it will not at any time institute against the Issuer, or join in
any institution against the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or State bankruptcy or similar law in connection with
any obligations relating to the Notes or any of the Basic Documents.
ARTICLE VI
Sale of Mortgage Loans from the Purchaser to the Trust
Section 6.01. SALE AND SERVICING AGREEMENT. It is the intent
of the Seller and the Purchaser that with respect to the Mortgage Loans, the
Purchaser shall concurrently sell all of its right, title and interest to the
Mortgage Loans and all other property conveyed to it hereunder to the Trust
pursuant to the Sale and Servicing Agreement.
With respect to such sale, the Seller agrees:
(i) to cooperate fully with the Purchaser and the Trust with respect
to all reasonable requests and due diligence procedures including
participating in meetings with Rating Agencies, the Insurer and such other
parties as the Purchaser shall designate and participating in meetings with
the Trust and providing information reasonably requested by the Trust;
(ii) to execute the Sale and Servicing Agreement and all other
necessary documents to effect the transactions contemplated therein;
(iii) the Seller shall make the representations and warranties set
forth herein regarding the Seller and the Mortgage Loans as of the date of
the transfer to the Trust;
(iv) to deliver to the Purchaser for inclusion in any prospectus or
other offering material such publicly available information regarding the
Seller, its financial condition and the mortgage loan delinquency,
foreclosure and loss experience of its portfolio as is customarily set
forth in a prospectus supplement with respect to a comparable mortgage
pool, the underwriting of mortgage loans, the servicer, the servicing and
collection of mortgage loans, lending activities and loan sales of the
servicer, regulatory matters and delinquency and loss experience and any
additional information reasonably requested by the Purchaser, and to
deliver to the Purchaser unaudited consolidated financial statements of the
Seller, in which case the Purchaser shall bear the cost of having such
statements audited by certified public accountants if the Purchaser desires
such an audit, or as is otherwise reasonably requested by the Purchaser and
which the Seller is capable of providing without unreasonable effort or
expense, and to indemnify the Purchaser and its affiliates for material
misstatements or omissions contained in such information;
21
(v) to deliver to the Purchaser and to any person designated by the
Purchaser, at the Purchaser's expense, such statements and audit letters
issued by reputable, certified public accountants pertaining to information
provided by the Seller pursuant to clause (iv) above as shall be reasonably
requested by the Purchaser (it being acknowledged by Purchaser that the
delivery of such statements and letters is subject to the consent of such
accountants);
(vi) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house opinions of counsel as are
customarily delivered by originators or servicers, as the case may be, and
reasonably determined by the Purchaser to be necessary in connection with
the transactions contemplated by the Sale and Servicing Agreement, it being
understood that the cost of any opinions of outside special counsel that
may be required shall be the responsibility of the Seller;
(vii) to cooperate fully with the Purchaser and any prospective
Purchaser with respect to the preparation of Mortgage Loan documents and
other documents and with respect to servicing requirements reasonably
requested by the Rating Agencies and the Insurer; and
(viii) to negotiate and execute one or more custodial and servicing
agreements among the Purchaser, the Seller and a third party
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by the
Purchaser in its sole discretion after consultation with the Seller, in
either case for the purpose of securitizing the Mortgage Loans.
ARTICLE VII
Seller's Servicing Obligations
Section 7.01. SELLER'S SERVICING OBLIGATIONS. The Seller, as
an independent contract servicer, shall service and administer the Mortgage
Loans in accordance with the terms and provisions set forth in Articles III, IV,
V, VII and VIII of the Sale and Servicing Agreement which sections are hereby
incorporated in this Agreement in their entirety (with, however, the changes and
adjustments as provided in this Agreement) as if the same were contained in this
Article VII.
To the extent any provision of any definition set forth in the
Sale and Servicing Agreement shall conflict with any provision set forth in this
Agreement, the provision or definition in this Agreement shall govern.
ARTICLE VIII
Fees and Expenses
The Purchaser shall pay any salaries and other compensation
due its employees and the legal fees and expenses of its attorneys and
accountants. All other costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans pursuant to this Agreement or the
Sale and Servicing Agreement, including, without limitation, recording fees,
fees for title policy endorsements and continuations, and fees for recording
intervening
22
assignments of Mortgage, shall be paid by the Seller. To the extent not paid out
of the Trust pursuant to Section 8.7(d)(i) of the Indenture, the Seller shall
pay the on-going fees of any custodian or trustee under the Sale and Servicing
Agreement, the Trust Agreement or the Indenture. The Seller shall pay (i) the
acceptance and file review fees of any custodian or trustee under this
Agreement, the Indenture, the Trust Agreement or the Sale and Servicing
Agreement and (ii) the costs of legal counsel and legal opinions, accounting
comfort letters and fees, printing of disclosure documents, rating agency fees,
Insurer up-front fees, SEC filing fees and the costs of any and all related
document preparations associated with the Sale and Servicing Agreement, the
Trust Agreement, the Indenture or this Agreement. The Seller also agrees to pay
the fees and other amounts for which the Seller or Servicer is obligated under
the Insurance Agreement.
ARTICLE IX
Termination; Additional Remedies
Upon the occurrence of a Rapid Amortization Event due to an
act or omission of the Seller (an "EVENT OF TERMINATION"), the Purchaser and its
assignees shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of an Event of
Termination shall not deny to the Purchaser or its assignees any remedy in
addition to termination of its obligations to make purchases hereunder to which
the Purchaser or its assignee may be otherwise appropriately entitled, whether
by statute or applicable law, at law or in equity.
ARTICLE X
Payment of Purchase Price
Section 10.01. PURCHASE PRICE PAYMENTS. On the Closing Date
and on the next Business Day following each other day on which any Additional
Balances relating to Mortgage Loans are funded by the Seller, on the terms and
subject to the conditions of this Agreement, the Purchaser shall pay to the
Seller the applicable Purchase Price by (i) making or causing to be made a cash
payment to the Seller or its designee in such amount determined by the
Purchaser, (ii) crediting the Seller with an additional capital contribution to
the Purchaser, (iii) automatically increasing the principal amount outstanding
under the Purchaser Note by the amount of the excess of the Purchase Price to be
paid to the Seller for such purchased assets over the amount of any cash payment
made on such day to the Seller and/or any capital contribution made by the
Seller to the Purchaser, subject to a cap on such note at any time equal to $30
million or (iv) any combination of the foregoing.
Section 10.02. THE PURCHASER NOTE.
(a) On the Closing Date, the Purchaser shall deliver to the
Seller a promissory note, substantially in the form of EXHIBIT A, payable to the
order of the Seller (such promissory note, as the same has been or hereafter may
be amended, supplemented, endorsed or otherwise modified from time to time,
together with any promissory note issued from time to time in
23
substitution therefor or renewal thereof in accordance with this Agreement,
being herein called the "PURCHASER NOTE"), which Purchaser Note shall, in
accordance with its terms, be subordinated to all interests of the Trust, all
claims to the cash flows from Trust assets and all obligations of the Purchaser,
of any nature, now or hereafter arising under or in connection with the Sale and
Servicing Agreement. The Purchaser Note shall evidence all amounts incurred
thereunder subsequent to the Closing Date as provided in this Agreement. Subject
to the foregoing, the Purchaser Note shall be payable in full on the date which
is one year and one day after the Termination Date. The Purchaser Note shall
bear interest at the "prime rate" as determined by the Indenture Trustee from
time to time in effect. The Purchaser may prepay all or part of the outstanding
balance of the Purchaser Note and interest accrued thereon from time to time
without any premium or penalty, unless an Event of Default has occurred and is
continuing or would result from such prepayment or payment.
(b) The Servicer shall hold the Purchaser Note for the benefit
of the Seller, and shall make all appropriate recordkeeping entries with respect
to the Purchaser Note or otherwise to reflect the payments on and adjustments of
the Purchaser Note. The Servicer's books and records shall constitute rebuttable
presumptive evidence of the principal amount of and accrued interest on the
Purchaser Note at any time. The Seller hereby irrevocably authorizes the
Servicer to xxxx the Purchaser Note "CANCELLED" and to return the Purchaser Note
to the Purchaser upon the full and final payment thereof after the Termination
Date.
(c) The Seller hereby agrees not to transfer, assign, exchange
or otherwise convey or pledge, hypothecate or otherwise grant a security
interest in the Purchaser Note or any interest represented thereby, and any
attempt to transfer, assign, exchange, convey, pledge, hypothecate or grant a
security interest in the Purchaser Note or any interest represented thereby
shall be void and of no effect.
ARTICLE XI
Confidentiality
Purchaser and Seller each acknowledges that the information
heretofore provided to them pursuant to the operation of this Agreement, is
highly confidential, proprietary information of Seller or Purchaser, as the case
may be. Purchaser and Seller each agrees that it will hold such information in
strict confidence and will not disclose any part of such information to any
person or entity, other than to its accountants and lawyers to the extent
necessary for the performance of their duties and as required by law and other
than to such other persons to the extent necessary, as determined by the
Purchaser in its sole discretion, to complete the transactions contemplated
hereunder and in the Sale and Servicing Agreement including the offering and
issuance of the Notes; PROVIDED, HOWEVER, that copies of this Agreement may be
included as part of any filing made pursuant to the Securities Act of 1933 and
the Securities Exchange Act of 1934 and any regulations promulgated thereunder.
In furtherance of the foregoing, Purchaser and Seller each covenants that it
will adhere to its established procedures for the maintenance of confidentiality
with respect to such information. Purchaser and Seller each further agrees that
it will not distribute such information within its own organization except to
persons with a need to know such information in connection with the transactions
contemplated by this Agreement.
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ARTICLE XII
Term
This Agreement shall terminate on the Termination Date.
ARTICLE XIII
Exclusive Benefit of Parties; Assignment
This Agreement is for the exclusive benefit of the parties
hereto and their respective successors and assigns and shall not be deemed to
give any legal or equitable right to any other person except the Sponsor, the
Trust, the Noteholders and the Insurer. Notwithstanding the foregoing, the
Seller covenants and agrees that the representations and warranties contained in
this Agreement and the rights of the Purchaser hereunder are intended to benefit
the Trust, the Noteholders and the Insurer. This Agreement may not be assigned
by any party hereto without the prior written consent of the other party hereto
except to the Trust.
ARTICLE XIV
Amendment; Waivers
This Agreement may be amended from time to time only by
written agreement of Seller and Purchaser with the prior written consent of the
Insurer, which consent shall not be unreasonably withheld. Any forbearance,
failure, or delay by a party in exercising any right, power, or remedy hereunder
shall not be deemed to be a waiver thereof, and any single or partial exercise
by a party of any right, power or remedy hereunder shall not preclude the
further exercise thereof. Every right, power and remedy of a party shall
continue in full force and effect until specifically waived by it in writing. No
right, power or remedy shall be exclusive, and each such right, power or remedy
shall be cumulative and in addition to any other right, power or remedy, whether
conferred hereby or hereafter available at law or in equity or by statute or
otherwise.
ARTICLE XV
Execution in Counterparts
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same instrument.
ARTICLE XVI
Effect of Invalidity of Provisions
In case any one or more of the provisions contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.
25
ARTICLE XVII
Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its rules
regarding conflict of laws (other than sections 5-1401 and 5-1402 of the New
York General Obligations Law).
ARTICLE XVIII
Notices
Any notices, consents, directions, demands and other
communications given under this Agreement (unless otherwise specified herein)
shall be in writing and shall be deemed to have been duly given when personally
delivered at or telecopied to the respective addresses or facsimile numbers, as
the case may be, set forth on the signature page hereof for Seller and
Purchaser, or to such other address or facsimile number as either party shall
give notice to the other party pursuant to this Section. In the case of the
Insurer, notices shall be provided to [Insurer], [Insurer's Address] (Telephone
No. (___) ____-_____) (Telecopier No. (___) ____-____). Notices, consents, etc.,
may also be effected by first class mail, postage prepaid sent to the foregoing
addresses and will be effective upon receipt by the intended recipient.
ARTICLE XIX
Entire Agreement
This Agreement, including the Exhibits and Schedules hereto,
contains the entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements between
them, whether oral or written, of any nature whatsoever with respect to the
subject matter hereof.
ARTICLE XX
Indemnities
Without limiting any other rights which Purchaser or Seller
may have hereunder or under applicable law, and in addition to any other
indemnity provided hereunder, Seller hereby agrees to indemnify Purchaser and
its respective officers, directors, agents and employees (each, an "INDEMNIFIED
PARTY") from and against any and all Losses incurred by any of them relating to
or resulting from:
(1) any representation or warranty made by Seller (or any
officers, employees or agents of Seller) under or in connection with
this Agreement, any periodic report required to be furnished thereunder
or any other information or document delivered by Seller pursuant
hereto, which shall have been false or incorrect in any material
respect when made or deemed made;
26
(2) the failure by Seller to (a) comply with any applicable
law, rule or regulation with respect to any Purchase or (b) perform or
observe any material obligation or covenant hereunder; or
(3) the failure by Seller (if so requested by Purchaser) to
execute and properly file, or any delay in executing and properly
filing, financing statements or other similar instruments or documents
under the Uniform Commercial Code of any applicable jurisdiction or
other applicable laws with respect to the Mortgage Loans.
Promptly after receipt by an Indemnified Party under this
Article XX of notice of the commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Article XX, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to any Indemnified Party
otherwise than under this Article XX. In case any such action is brought against
any Indemnified Party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the Indemnified
Party promptly after receiving the aforesaid notice from such Indemnified Party,
to assume the defense thereof, with counsel satisfactory to such Indemnified
Party; PROVIDED, HOWEVER, that if the defendants in any such action include both
the Indemnified Party and the indemnifying party and the Indemnified Party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other Indemnified Parties that are different from
or additional to those available to the indemnifying party, the Indemnified
Party or parties shall have the right to elect separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such Indemnified Party or parties. Upon receipt of notice from the
indemnifying party to such Indemnified Party of its election so to assume the
defense of such action and approval by the Indemnified Party of counsel, the
indemnifying party will not be liable for any legal or other expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof, unless (i) the Indemnified Party shall have employed separate counsel
in connection with the assertion of legal defenses in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by you in the case of Article XX, representing the
Indemnified Parties under this Article XX, who are parties to such action), (ii)
the indemnifying party shall not have employed counsel satisfactory to the
Indemnified Party to represent the Indemnified Party within a reasonable time
after notice of commencement of the action or (iii) the indemnifying party has
authorized the employment of counsel for the Indemnified Party at the expense of
the indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall only be in respect of the counsel referred to in such
clause (i) or (iii).
ARTICLE XXI
RESPA Obligations
Seller agrees to discharge on Purchaser's behalf all
obligations, including, without limitation, all disclosure obligations, which
Purchaser may have under the Real Estate Settlement Procedures Act of 1974, as
amended, in connection with Purchaser's purchases of Mortgage Loans hereunder.
Purchaser agrees to provide Seller with such information as is reasonably
27
necessary for Seller to discharge such obligations and hereby appoints Seller as
its agent in its name for the purposes of, and only for the purposes of,
performing such obligations. Seller hereby agrees to indemnify Purchaser and its
respective officers, directors, agents and employees from any losses suffered by
any such party in connection with Seller's obligations under this Article XXI.
Notwithstanding anything to the contrary contained in this
Agreement or any document delivered herewith, all persons may disclose to any
and all persons, without limitation of any kind, the federal income tax
treatment of the Notes, any fact relevant to understanding the federal tax
treatment of the Notes, and all materials of any kind (including opinions or
other tax analyses) relating to such federal tax treatment.
ARTICLE XXII
Survival
All indemnities and undertakings of Seller and Purchaser
hereunder shall survive the termination of this Agreement.
ARTICLE XXIII
Right of Set-off
Upon the occurrence of any event or circumstance which
requires Seller to make a payment hereunder, Purchaser is hereby authorized then
or at any time or times thereafter, without notice to Seller (any such notice
being expressly waived by Seller), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final), at any time held and
other indebtedness at any time owing by Purchaser to or for the credit or the
account of Seller against any and all of the obligations of Seller now or
hereafter existing hereunder, irrespective of whether or not Purchaser shall
have made any demand hereunder. Purchaser agrees promptly to notify Seller after
any such set-off and application made by Purchaser; PROVIDED that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of Purchaser under this Article XXIII are in addition to other rights
and remedies which Purchaser may have.
ARTICLE XXIV
Consent to Service
Each party irrevocably consents to the service of process by
registered or certified mail, postage prepaid, to it at its address given
pursuant to Article XVIII hereof.
ARTICLE XXV
Submission to Jurisdiction; Waiver of Trial by Jury
With respect to any claim arising out of this Agreement each
party irrevocably submits to the exclusive jurisdiction of the courts of the
State of New York and the United States
00
Xxxxxxxx Xxxxx located in the Borough of Manhattan, City of New York, and each
party irrevocably waives any objection which it may have at any time to the
laying of venue of any suit, action or proceeding arising out of or relating
hereto brought in any such court, irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in any
inconvenient forum and further irrevocably waives the right to object, with
respect to such claim, suit, action or proceeding brought in any such court,
that such court does not have jurisdiction over such party; PROVIDED that
service of process is made as set forth in Article XXIV hereof, or by any other
lawful means. To the extent permitted by applicable law, Purchaser and Seller
each irrevocably waive all right of trial by jury in any action, proceeding or
counterclaim arising out of or in connection with this Agreement or any matter
arising hereunder.
ARTICLE XXVI
Construction
The headings in this Agreement are for convenience only and
are not intended to influence its construction. References to Articles,
Sections, Schedules and Exhibits in this Agreement are to the Articles, Sections
of and Schedules and Exhibits to this Agreement. The Schedules and Exhibits are
hereby incorporated into and form a part of this Agreement. In this Agreement,
the singular includes the plural, the plural the singular, the words "and" and
"or" are used in the conjunctive or disjunctive as the sense and circumstances
may require and the word "including" means "including, but not limited to."
Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each means "to but
excluding."
ARTICLE XXVII
Further Agreements
The Seller and the Purchaser each agree to execute and deliver
to the other such reasonable and appropriate additional documents, instruments
or agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
29
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the date first written above.
GREENPOINT MORTGAGE SECURITIES LLC,
as Purchaser
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxx # 00000
Xxxxxx, Xxxxxxxxxx 00000
By:
-------------------------------
Name:
Title:
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
By:
-------------------------------
Name:
Title:
[Mortgage Loan Purchase Agreement]
EXHIBIT A
FORM OF NON-NEGOTIABLE
GREENPOINT MORTGAGE SECURITIES LLC
PROMISSORY NOTE
_______, 200_
EXCEPT TO THE EXTENT PROVIDED IN THE PURCHASE AGREEMENT REFERRED TO BELOW, THIS
PROMISSORY NOTE AND ANY INTEREST REPRESENTED HEREBY SHALL NOT BE TRANSFERRED,
ASSIGNED, EXCHANGED, CONVEYED, PLEDGED, HYPOTHECATED OR OTHERWISE THE SUBJECT OF
THE GRANT OF A SECURITY INTEREST AND ANY ATTEMPT TO TRANSFER, ASSIGN, EXCHANGE,
CONVEY, PLEDGE, HYPOTHECATE OR GRANT A SECURITY INTEREST IN THIS PROMISSORY NOTE
OR ANY INTEREST REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.
For VALUE RECEIVED, the undersigned, GREENPOINT MORTGAGE SECURITIES
LLC, a Delaware limited liability company (the "PURCHASER"), promises to pay to
GREENPOINT MORTGAGE FUNDING, INC., a California corporation (the "SELLER"), on
the terms and subject to the conditions set forth herein and in the Purchase
Agreement referred to below, the aggregate unpaid Purchase Price of all assets
purchased and to be purchased by the Purchaser pursuant to the Purchase
Agreement; PROVIDED that such amount shall in no event exceed $30,000,000. Such
amount as shown in the records of the Seller will be rebuttable presumptive
evidence of the principal amount owing under this Note.
1. PURCHASE AND SALE AGREEMENT. This Note is the Purchaser Note
described in, and is subject to the terms and conditions set forth in, that
certain Mortgage Loan Purchase Agreement dated as of ________, 200_ (as the same
may be amended, supplemented, restated or otherwise modified in accordance with
its terms, the "PURCHASE AGREEMENT"), between the Seller and the Purchaser.
Reference is hereby made to the Purchase Agreement for a statement of certain
other rights and obligations of the Purchaser and the Seller.
2. DEFINITIONS. Capitalized terms used (but not defined) herein have
the meanings ascribed thereto in the Purchase Agreement. In addition, as used
herein, the following terms have the following meanings:
"BANKRUPTCY PROCEEDINGS" has the meaning set forth in clause (a) of
paragraph 7 hereof.
"FINAL MATURITY DATE" means the date that falls one year and one
day after the Termination Date.
"JUNIOR LIABILITIES" means all obligations of the Purchaser to the
Seller under this Note and under all similar notes issued by the Purchaser to
the Seller in connection with any previous or future securitization
transactions.
"SENIOR LIABILITIES" means all obligations of the Purchaser to the
Trust and any other obligations of the Purchaser arising under or in connection
with the Sale and Servicing Agreement, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or thereafter existing,
or due or to become due on or before the Final Maturity Date.
"SUBORDINATION PROVISIONS" means, collectively, clauses (a) through
(j) of paragraph 7 hereof.
3. INTEREST. Subject to the Subordination Provisions and paragraph 10
hereof, the Purchaser promises to pay interest on the aggregate unpaid principal
amount of this Note outstanding on each day, at a variable rate equal to the
rate publicly announced by the Indenture Trustee from time to time as its "prime
lending rate."
4. INTEREST PAYMENT DATES. Subject to the Subordination Provisions,
paragraph 10 hereof and Section 10.02 of the Purchase Agreement, the Purchaser
shall pay accrued interest on this Note on each Payment Date and on the Final
Maturity Date. The Purchaser also shall pay accrued interest on the principal
amount of each prepayment hereof on the date of each such prepayment.
5. BASIS OF COMPUTATION. Interest accrued hereunder shall be computed
for the actual number of days elapsed on the basis of a 360-day year.
6. PRINCIPAL PAYMENT DATES. Subject to the Subordination Provisions,
any unpaid principal of this Note shall be paid on the Final Maturity Date (or,
if such date is not a Business Day, the next succeeding Business Day). Subject
to the Subordination Provisions, paragraph 10 hereof and Section 10.02 of the
Purchase Agreement, the principal amount of and accrued interest on this Note
may be prepaid on any Business Day without premium or penalty.
7. SUBORDINATION PROVISIONS. The Purchaser covenants and agrees, and
the Seller, by its acceptance of this Note, likewise covenants and agrees, that
the payment of all Junior Liabilities is hereby expressly subordinated in right
of payment to the payment and performance of the Senior Liabilities to the
extent and in the manner set forth in the following clauses of this paragraph 7:
(a) (i) In the event of any dissolution, winding up, liquidation,
readjustment, reorganization or other similar event relating to the Purchaser,
whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency, receivership or other similar proceedings, or upon an
assignment for the benefit of creditors, or any other marshalling of the assets
and liabilities of the Purchaser or any sale of all or substantially all of the
assets of the Purchaser except pursuant to the Sale and Servicing Agreement
(such proceedings being herein collectively called "BANKRUPTCY PROCEEDINGS"),
and (ii) on and after the occurrence of an Event of Default, the Senior
Liabilities shall first be paid and performed in full and in cash before the
Seller shall be entitled to receive and to retain any payment or distribution in
respect of the Junior Liabilities. In order to implement the foregoing: (x) all
payments and distributions of any kind or character in respect of the Junior
Liabilities to which the Seller would be entitled shall be made directly to the
Indenture Trustee (for the benefit of the Noteholders, and the Insurer); and
A-2
(y) the Seller hereby irrevocably agrees that the Indenture Trustee (on behalf
of the Noteholders), in the name of the Seller or otherwise, may demand, xxx
for, collect, receive and receipt for any and all such payments or
distributions, and file, prove and vote or consent in any such Bankruptcy
Proceedings with respect to any and all claims of the Seller relating to the
Junior Liabilities, in each case until the Senior Liabilities shall have been
paid and performed in full and in cash.
(b) Following the occurrence of any of the events described in
CLAUSE (a)(i) OR (ii), in the event that the Seller receives any payment or
other distribution of any kind or character from the Purchaser or from any other
source whatsoever, in respect of the Junior Liabilities, such payment or other
distribution shall be received in trust for the Indenture Trustee and shall be
turned over by the Seller to the Indenture Trustee (for the benefit of the
Noteholders, and the Insurer) forthwith. All payments and distributions received
by the Indenture Trustee in respect of this Note, to the extent received in or
converted into cash, may be applied by the Indenture Trustee (for the benefit of
the Noteholders and the Insurer) first to the payment of any and all reasonable
expenses (including reasonable attorneys' fees and legal expenses) paid or
incurred by the Indenture Trustee, the Noteholders or the Insurer in enforcing
these Subordination Provisions, or in endeavoring to collect or realize upon the
Junior Liabilities, and any balance thereof shall, solely as between the Seller
and the Noteholders and the Insurer, be applied by the Indenture Trustee toward
the payment of the Senior Liabilities in a manner determined by the Indenture
Trustee to be in accordance with the Indenture; but as between the Purchaser and
its creditors, no such payments or distributions of any kind or character shall
be deemed to be payments or distributions in respect of the Senior Liabilities.
(c) Upon the final payment in full and in cash of all Senior
Liabilities, the Seller shall be subrogated to the rights of the Indenture
Trustee to receive payments or distributions from the Purchaser that are
applicable to the Senior Liabilities until the Junior Liabilities are paid in
full.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Seller, on the one hand, and the
Indenture Trustee (on behalf of Noteholders and the Insurer), on the other hand.
Nothing contained in these Subordination Provisions or elsewhere in this Note
(subject to paragraph 10 hereof) is intended to or shall impair, as between the
Purchaser, its creditors (other than the Noteholders and the Insurer) and the
Seller, the Purchaser's obligation, which is unconditional and absolute, to pay
the Junior Liabilities as and when the same shall become due and payable in
accordance with the terms hereof (subject to paragraph 10 hereof) and of the
Purchase Agreement or to affect the relative rights of the Seller and creditors
of the Purchaser (other than the Noteholders and the Insurer).
(e) The Seller shall not, until the Senior Liabilities have been
finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to any obligation of the Purchaser, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, or now or
thereafter existing, or due or to become due (other than the Senior
Liabilities), the Junior Liabilities or any rights in respect hereof or (ii)
convert the Junior Liabilities into an equity interest in the Purchaser, unless,
in the case of each of CLAUSES (i) AND (ii) above, the Seller shall have
received the prior written consent of the Indenture Trustee and the Insurer in
each case.
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(f) The Seller shall not, except without the advance written
consent of the Indenture Trustee and the Insurer commence, or join with any
other Person in commencing, any Bankruptcy Proceedings with respect to the
Purchaser until at least one year and one day have passed since the Termination
Date.
(g) If, at any time, any of the payment (in whole or in part) made
with respect to any Senior Liabilities is rescinded or must be restored or
returned by the Indenture Trustee or Noteholders or the Insurer (whether in
connection with any Bankruptcy Proceedings or otherwise), these Subordination
Provisions shall continue to be effective or shall be reinstated, as the case
may be, as though such payment had not been made.
(h) The Indenture Trustee (on behalf of Noteholders and the
Insurer) may, from time to time, with the consent of the Insurer without notice
to the Seller, and without waiving any of its rights under these Subordination
Provisions, take any or all of the following actions: retain or obtain an
interest in any property to secure any of the Senior Liabilities; (ii) retain or
obtain the primary or secondary obligations of any other obligor or obligors
with respect to any of the Senior Liabilities; (iii) extend or renew for one or
more periods (whether or not longer than the original period), alter or exchange
any of the Senior Liabilities, or release or compromise any obligation of any
nature with respect to any of the Senior Liabilities; (iv) amend, supplement,
amend and restate, or otherwise modify the Sale and Servicing Agreement or any
related document; and (v) release its security interest in or surrender, release
or permit any substitution or exchange for all or any part of any rights or
property securing any of the Senior Liabilities, or extend or renew for one or
more periods (whether or not longer than the original period) or release,
compromise, alter or exchange any obligations of any nature of any obligor with
respect to any such rights or property.
(i) The Seller hereby waives: (i) notice of acceptance of these
Subordination Provisions by any of the Noteholders and the Insurer, (ii) notice
of the existence, creation, non-payment or non-performance of all or any of the
Senior Liabilities; and (iii) all diligence in enforcement, collection or
protection of, or realization upon, the Senior Liabilities, or any thereof, or
any security therefor.
(j) These Subordination Provisions constitute a continuing offer
from the Purchaser to all Persons who become the holders of, or who continue to
hold, Senior Liabilities; and these Subordination Provisions are made for the
benefit of the Noteholders and the Insurer, and the Indenture Trustee may
proceed to enforce such provisions on behalf of each of such Persons.
8. GENERAL. No failure or delay on the part of the Seller in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Note shall in any event be effective unless (a) the same shall be in
writing and signed and delivered by the Purchaser and the Seller, and (b) all
consents required for such actions under the Purchase Agreement and the Sale and
Servicing Agreement shall have been received by the appropriate Persons. The
rights and remedies granted hereunder to the Indenture Trustee and the
Noteholders are subject to exercise as provided in the Purchase Agreement and
the Sale and Servicing Agreement.
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9. LIMITATION ON INTEREST. Notwithstanding anything in this Note to the
contrary, the Purchaser shall never be required to pay unearned interest on any
amount outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder at a rate in excess of the maximum
interest rate that may be contracted for, charged or received without violation
of applicable federal or state law.
10. ACKNOWLEDGMENT. The Seller acknowledges and agrees that it has no
rights to payment under this Note, and will not make any claim for payment
hereunder, unless funds are available for payment by the Purchaser in excess of
amounts due and payable by it at the time under the Indenture and the Sale and
Servicing Agreement and under all similar notes issued by the Purchaser to the
Seller in connection with any previous or future securitizations.
11. NO NEGOTIATION. This Note is not negotiable.
12. GOVERNING LAW. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).
13. CAPTIONS. Paragraph captions used in this Note are provided solely
for convenience of reference only and shall not affect the meaning or
interpretation of any provision of this Note.
GREENPOINT MORTGAGE SECURITIES LLC
By:
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Name:
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Title:
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SCHEDULE I
MORTGAGE LOAN SCHEDULE
