EXHIBIT 4.2
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ASSET BACKED FUNDING CORPORATION
as Purchaser
and
BANK OF AMERICA, NATIONAL ASSOCIATION
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Fixed Rate and Adjustable Rate Mortgage Loans
Asset Backed Funding Corporation Asset-Backed Certificates, Series 2006-OPT1
Dated as of July 1, 2006
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions .....................................................2
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans...........................................2
Section 2.02 Obligations of Seller Upon Sale..................................2
Section 2.03 Payment of Purchase Price for the Mortgage Loans.................4
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans...................................................4
Section 3.02 Seller Representations and Warranties............................9
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller.........................................10
ARTICLE V
TERMINATION
Section 5.01 Termination.....................................................11
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment.......................................................11
Section 6.02 Governing Law...................................................11
Section 6.03 Notices.........................................................11
Section 6.04 Severability of Provisions......................................12
Section 6.05 Counterparts....................................................12
Section 6.06 Further Agreements..............................................12
Section 6.07 Intention of the Parties........................................12
Section 6.08 Successors and Assigns; Assignment of this Agreement............12
Section 6.09 Survival........................................................13
Schedule I..- Mortgage Loan Schedule
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of July 1, 2006 (the
"Agreement"), between BANK OF AMERICA, NATIONAL ASSOCIATION ("Bank of America"
or the "Seller") and ASSET BACKED FUNDING CORPORATION (the "Purchaser").
W I T N E S S E T H:
WHEREAS, pursuant to (i) the Flow Sale and Servicing Agreement (the
"Option One Sale Agreement"), dated as of July 28, 2006, by and among Bank of
America, as the purchaser, Option One Mortgage Corporation, as company and
seller ("Option One"), and Option One Owner Trust 2001-1A, Option One Owner
Trust 2001-1B, Option One Owner Trust 2001-2, Option One Owner Trust 2002-3,
Option One Owner Trust 2003-4, Option One Owner Trust 2003-5, Option One Owner
Trust 2005-6, Option One Owner Trust 2005-7, Option One Owner Trust 2005-8 and
Option One Owner Trust 2005-9 (collectively, the "Option One Owner Trusts"), as
sellers, and the related Memorandum of Sale, dated as of July 28, 2006, between
Bank of America, Option One and the Option One Owner Trusts, and (ii) the
Mortgage Loan Purchase and Warranties Agreement (the "Ownit Sale Agreement" and
together with the Option One Sale Agreement, the "Underlying Sale Agreements"),
dated as of March 1, 2005, by and between Bank of America, as purchaser, and
Ownit Mortgage Solutions, Inc. ("Ownit Mortgage"), as seller, and the related
Memorandum of Sale, dated as of March 17, 2005, as amended by the Assignment,
Assumption and Recognition Agreement (the "Ownit AAR"), dated August 10, 2006,
among the Purchaser, Bank of America, Xxxxx Fargo Bank, N.A. ("Xxxxx Fargo
Bank"), Option One and Ownit Mortgage, the Seller is the owner of either the
notes or other evidence of indebtedness (the "Mortgage Notes") or other evidence
of ownership so indicated on Schedule I hereto, and the other documents or
instruments constituting the Mortgage File (collectively, the "Mortgage Loans");
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights (a) to any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise, and (b) to the proceeds of any
insurance policies covering the Mortgage Loans or the Mortgaged Properties or
the obligors on the Mortgage Loans;
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser and the Purchaser purchase the Mortgage Loans from the
Seller pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement,
dated as of July 1, 2006 (the "Pooling and Servicing Agreement"), among the
Purchaser, as depositor, Option One, as servicer (the "Servicer"), and Xxxxx
Fargo Bank, as trustee (the "Trustee"), the Purchaser will convey the Mortgage
Loans to the Trustee on behalf of the ABFC 2006-OPT1 Trust (the "Trust"), which
is created pursuant to the Pooling and Servicing Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms used but not defined
herein shall have the meanings assigned thereto in the Pooling and Servicing
Agreement.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans. The Seller does hereby agree to
and does hereby sell, assign, set over, and otherwise convey to the Purchaser,
without recourse, on the Closing Date (i) all of its right, title and interest
in and to each Mortgage Loan originated by Ownit Mortgage (the "Ownit Mortgage
Loans") and each Mortgage Loan originated by Option One (the "Option One
Mortgage Loans") and the related Cut-off Date Principal Balance thereof,
including any Related Documents; (ii) all payments on or collections in respect
of the Mortgage Loans due after the Cut-off Date; (iii) property which secured
such Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iv) its interest in any insurance policies in respect of the
Mortgage Loans; (v) the rights of the Seller under the Consulting Agreement,
(vi) the rights of the Seller in respect of the Option One Mortgage Loans under
Sections 3.03 and 4.22 of the Option One Sale Agreement and the sixth paragraph
of Section 3.04 of the Option One Sale Agreement, and (vii) all proceeds of any
of the foregoing.
Section 2.02 Obligations of Seller Upon Sale. (a) In connection with
any transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its
own expense, on or prior to the Closing Date, (x) to indicate in its books and
records that the Mortgage Loans have been sold to the Purchaser pursuant to this
Agreement and (y) to deliver to the Purchaser and the Trustee a computer file
containing a true and complete list of all the Mortgage Loans, specifying, among
other things, for each Mortgage Loan, as of the Cut-off Date, its account number
and Cut-off Date Principal Balance (such file, the "Mortgage Loan Schedule").
The Mortgage Loan Schedule is hereby incorporated into and made a part of this
Agreement.
In connection with such transfer and assignment of the Mortgage Loans,
the Seller shall, on behalf of the Purchaser, deliver to and deposit with the
Trustee the following documents or instruments (with respect to each Mortgage
Loan, a "Mortgage File") with respect to each Mortgage Loan so transferred and
assigned:
(i) the original Mortgage Note, endorsed in blank or with respect to
any lost Mortgage Note, a Lost Note Affidavit, together with a copy of the
related mortgage note;
(ii) the original Mortgage with evidence of recording thereon, and the
original recorded power of attorney, if the Mortgage was executed pursuant to a
power of attorney, with evidence of recording thereon or, if such Mortgage or
power of attorney has been submitted for recording but has not been returned
from the applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned in blank;
(iv) an original copy of any intervening assignment of Mortgage
showing a complete chain of assignments;
(v) the original or a certified copy of the lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any.
If any of the documents referred to in Section 2.02(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Seller to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Trustee no later than the Closing Date, of a
copy of each such document certified by the Seller or the related Originator in
the case of (x) above or the applicable public recording office in the case of
(y) above to be a true and complete copy of the original that was submitted for
recording and (2) if such copy is certified by the Seller, delivery to the
Trustee, promptly upon receipt thereof of either the original or a copy of such
document certified by the applicable public recording office to be a true and
complete copy of the original.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or deliver such missing document to the
Trustee or 150 days following the Closing Date, in the case of missing Mortgages
or Assignments (or within 90 days of the earlier of Seller's discovery or
receipt of notification if such defect would cause the related Mortgage Loan not
to be a "qualified mortgage" for REMIC purposes or that the Mortgage Loan is
defective in a manner that would cause it to be a "defective obligation" within
the meaning of Treasury regulations relating to REMICs). If the Seller does not
cure such defect or deliver such missing document within such time period, the
Seller shall either repurchase or substitute for such Mortgage Loan in
accordance with Section 2.03 of the Pooling and Servicing Agreement.
It is understood and agreed that the obligations of the Seller set
forth in this Section 2.02 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser respecting a missing
or defective document.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law. The Seller and the Purchaser shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Pooling and Servicing Agreement.
Section 2.03 Payment of Purchase Price for the Mortgage Loans. In
consideration of the sale of the Mortgage Loans from the Seller to the Purchaser
on the Closing Date, the Purchaser agrees (i) to pay to the Seller on the
Closing Date by transfer of immediately available funds, as directed by the
Seller, an amount equal to $[_________] and (ii) deliver to or at the direction
of the Seller on the Closing Date, the Class CE, Class P, Class R and Class R-X
Certificates, in respect of the Mortgage Loans (collectively, the "Purchase
Price"). The Seller shall pay, and be billed directly for, all reasonable
expenses incurred by the Purchaser in connection with the issuance of the
Certificates, including, without limitation, printing fees incurred in
connection with the prospectus relating to the Certificates, blue sky
registration fees and expenses, fees and reasonable expenses of Purchaser's
counsel, fees of the rating agencies requested to rate the Certificates,
accountant's fees and expenses and the fees and expenses of the Trustee and
other out-of-pocket costs, if any.
Section 2.04 Regulation AB Compliance Section.
For so long as the Trustee is required to file any report with the
Commission pursuant to Section 3.31 of the Pooling and Servicing Agreement, the
Seller shall furnish to the Trustee, no later than the Distribution Date, the
"significance estimate" of the Interest Rate Swap Agreement, in each case
calculated in accordance with Item 1115 of Regulation AB as of such Distribution
Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans The representations and warranties with respect to the Ownit
Mortgage Loans in the Ownit Sale Agreement were made by Ownit as of March 17,
2005. The representations and warranties with respect to the Option One Mortgage
Loans in the Option One Sale Agreement were made by Option One as of July 28,
2006.
The Seller's right, title and interest in such representations and
warranties and the remedies in connection therewith have been assigned to the
Purchaser pursuant to Section 2.01 of this Agreement and, with respect to the
Ownit Mortgage Loans, the Ownit AAR. To the extent that any fact, condition or
event with respect to a Mortgage Loan constitutes a breach of both (i) a
representation or warranty of Option One or Ownit under the related Underlying
Sale Agreement and (ii) a representation or warranty of the Seller under this
Agreement (other than Section 3.01(k) and 3.01(s) below), the only right or
remedy of the Purchaser shall be the right to enforce the obligations of Option
One or Ownit, as applicable, under any applicable representation or warranty
made by it. The Purchaser acknowledges and agrees that the representations and
warranties of the Seller in this Section 3.01 are applicable only to facts,
conditions or events that do not constitute a breach of any representation or
warranty made by the related Originator in the related Underlying Sale
Agreement. The Seller shall have no obligation or liability with respect to any
breach of a representation or warranty made by it with respect to the Mortgage
Loans (other than the representations made in Section 3.01(k) and 3.01(s) below)
if the fact, condition or event constituting such breach also constitutes a
breach of a representation or warranty made by Option One in the Option One Sale
Agreement or Ownit in the Ownit Sale Agreement, without regard to whether Option
One or Ownit, as applicable, fulfills its contractual obligations in respect of
such representation or warranty. If, however, an Originator fails to reimburse
the Trustee for any costs or damages incurred by the Trust in connection with a
breach of such Originator's representations and warranties relating to predatory
and abusive lending laws set forth in the related Underlying Sale Agreement
(such amount, the "Reimbursement Amount"), the Seller shall pay the
Reimbursement Amount to the Trust. The Reimbursement Amount shall be delivered
to the Servicer for deposit into the Collection Account within 10 days from the
date the Seller was notified by the Trustee of the amount of such costs and
damages. Subject to the foregoing, the Seller represents and warrants upon
delivery of the Mortgage Loans to the Purchaser hereunder, as to each, that:
(a) The information set forth with respect to the Mortgage Loans on
the Mortgage Loan Schedule attached hereto as Schedule I provides an accurate
listing of the Mortgage Loans, and the information with respect to each Mortgage
Loan on the Mortgage Loan Schedule is true and correct in all material respects
at the date or dates respecting which such information is given;
(b) No Mortgage Loan was 30 days or more contractually delinquent as
of the Cut-off Date. The Seller has not waived any default, breach, violation or
event of acceleration, and the Seller has not taken any action to waive any
default, breach, violation or event of acceleration, with respect to any
Mortgage Loan;
(c) There are no delinquent taxes, assessments that could become a
lien prior to the related Mortgage or insurance premiums affecting the related
Mortgaged Property;
(d) Each Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the related Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction, cancellation,
subordination, recission or release;
(e) Other than any Mortgage Loan that is less than 30 days
contractually delinquent as of the Cut-off Date, there is no material 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
material default, breach, violation or event of acceleration, and neither the
Seller nor its predecessors have waived any material default, breach, violation
or event of acceleration;
(f) Each Mortgaged Property is free of material damage that would
affect adversely the value of the Mortgaged Property as security for the
Mortgage Loan or the use for which the premises were intended;
(g) To the best of the Seller's knowledge, there is no proceeding
pending for the total or partial condemnation of the Mortgaged Property;
(h) Each Mortgaged Property is lawfully occupied under applicable law;
all inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of each Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities, except
where the failure would not have a material adverse effect upon the Mortgage
Loan;
(i) No Mortgage Loan is in foreclosure;
(j) Each Mortgage Loan is a "qualified mortgage" within the meaning of
Section 860G of the Code and Treas. Reg ss. 1.860G-2;
(k) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, consumer credit protections, all applicable predatory and abusive
lending laws, equal credit opportunity or disclosure laws applicable to the
origination of each Mortgage Loan have been complied with;
(l) No Mortgage Loan is a "high cost" loan as defined under any
federal, state or local law applicable to such Mortgage Loan at the time of its
origination;
(m) The Seller is the sole owner of record and holder of the Mortgage
Loan and the Mortgage Note and the Mortgage are not assigned or pledged, and the
Seller has good and marketable title thereto and has full right and authority to
transfer and sell the Mortgage Loan to the Purchaser. The Seller is transferring
the Mortgage Loan free and clear of any and all encumbrances, liens, pledges,
equities, participation interests, claims, agreements with other parties to sell
or otherwise transfer the Mortgage Loan, mechanics' or similar liens or claims
which have been filed for work, labor or material (and no rights are outstanding
that under the law could give rise to such liens), charges or security interests
of any nature encumbering such Mortgage Loan;
(n) The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the interests of
the Purchaser and maintain the lien priority of the Mortgage and which has been
delivered to the Purchaser or its designee. The substance of any such waiver,
alteration or modification has been approved by the title insurer, to the extent
required by the policy, and its terms are reflected on the Mortgage Loan
Schedule. No instrument of waiver, alteration or modification has been executed,
and no Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement approved by the title insurer, to the extent
required by the policy, and which assumption agreement is part of the Mortgage
File delivered to the Purchaser or its designee and the terms of which are
reflected on the Mortgage Loan Schedule;
(o) The Seller has not dealt with any broker, investment banker, agent
or other Person (other than the related Originator and the Underwriter) who may
be entitled to any commission or compensation in connection with the sale of the
Mortgage Loans;
(p) The Mortgage is a valid, subsisting enforceable and perfected
first or second lien and first priority security interest on the Mortgaged
Property, including all buildings on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing. The lien of the
Mortgage is subject only to:
(i) the lien of current real property taxes and assessments not yet
due and payable;
(ii) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
acceptable to mortgage lending institutions generally and specifically
referred to in the lender's title insurance policy delivered to the
originator of the Mortgage Loan and (i) referred to or to otherwise
considered in the appraisal made for the originator of the Mortgage Loan or
(ii) which do not adversely affect the appraised value of the Mortgaged
Property set forth in such appraisal;
(iii) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value or
marketability of the related Mortgaged Property; and
(iv) with respect to each second lien Mortgage a prior mortgage lien
on the Mortgaged Property;
(q) The Mortgage Loan is covered by (a) an attorney's opinion of title
and abstract of title the form and substance of which is acceptable to Xxxxxx
Xxx, (b) an ALTA lender's title insurance policy or (c) a CLTA lender's title
insurance policy or (d) another generally acceptable form of policy of insurance
issued by a title insurer qualified to do business in the jurisdiction where the
Mortgaged Property is located insuring the related Originator, its successors
and assigns, as to the first or second priority lien of the Mortgage in the
original principal amount of the Mortgage Loan subject only to the exceptions
contained in clauses (i), (ii) and (iii), and with respect to each second lien
Mortgage Loan clause (iv), of paragraph (p) of this Section 3.01, and against
any loss by reason of the invalidity of unenforceability of the lien resulting
from the provisions of the Mortgage providing for adjustment in the Mortgage
Interest Rate and Monthly Payment. Additionally, such lender's title insurance
policy affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. Where required by state law
or regulation, the Mortgagor has been given the opportunity to choose the
carrier of such lender's title insurance policy. The related Originator, its
successors and assigns, are the sole insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and remains in full
force and effect and will be in full force and effect upon the sale of the
Mortgage Loan to the Purchaser. No claims have been made under such lender's
title insurance policy, and no prior holder of the Mortgage, including the
related Originator or the Seller, has done anything which would impair the
coverage of such lender's title insurance policy. In connection with the
issuance of such lender's title insurance policy, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or will be
received, retained or realized by any attorney, firm or other person or entity,
and no such unlawful items have been received, retained or realized by the
related Originator or the Seller;
(r) Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting and enforceable (A) first lien and first priority
security interest with respect to each first lien Mortgage Loan, or (B) second
lien and second priority security interest with respect to each second lien
Mortgage Loan, in either case, on the property described therein and the related
Originator has full right to sell and assign the same to the Purchaser. The
Mortgaged Property was not, as of the date of origination of the Mortgage Loan,
subject to a mortgage, deed of trust, deed to secure debt or other security
instrument creating a lien subordinate to the lien of the Mortgage; and
(s) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the then-current S&P's LEVELS(R)
Glossary which is now Version 5.7, Appendix E) and no Mortgage Loan originated
on or after October 1, 2002 through March 6, 2003 is governed by the Georgia
Fair Lending Act.
With respect to the representations and warranties set forth in this
Section 3.01 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
or the Trustee that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan, Prepayment Charge or the interest therein of the
Purchaser or the Purchaser's assignee, transferee or designee 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.
Upon discovery by the Seller, the Servicer, the Purchaser or any
assignee, transferee or designee of the Purchaser of a breach of any of the
representations and warranties contained in this Article III that materially and
adversely affects the value of any Mortgage Loan, Prepayment Charge or the
interest therein of the Purchaser or the Purchaser's assignee, transferee or
designee, the party discovering the breach shall give prompt written notice to
the others. Subject to the second paragraph of this Section 3.01, within 90 days
of the earlier of its discovery or its receipt of notice of any such breach of a
representation or warranty, the Seller shall promptly cure such breach in all
material respects, or in the event such breach cannot be cured, the Seller shall
repurchase the affected Mortgage Loan or cause the removal of such Mortgage Loan
from the Trust Fund and substitute for it one or more Eligible Substitute
Mortgage Loans, in either case, in accordance with Section 2.03 of the Pooling
and Servicing Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive delivery of the respective Mortgage
Files to the Trustee on behalf of the Purchaser and the Closing Date and shall
inure to the benefit of the Certificateholders notwithstanding any restrictive
or qualified endorsement or assignment.
It is understood and agreed that the obligations of the Seller set
forth in this Section 3.01 to cure, repurchase or substitute for a Mortgage Loan
as a result of a breach of a representation or warranty, subject to the
limitation contained in the first paragraph of this Section 3.01, and to pay the
Reimbursement Amount constitute the sole remedies of the Purchaser respecting a
breach of the representations or warranties contained in this Section 3.01.
Section 3.02 Seller Representations and Warranties. The Seller hereby
represents and warrants to the Purchaser that as of the Closing Date or as of
such date specifically provided herein:
(a) The Seller is duly organized, validly existing and in good
standing as a national banking association and has the power and authority to
own its assets and to transact the business in which it is currently engaged.
The Seller is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure to so qualify would have a material adverse effect on (i) its business,
properties, assets or condition (financial or other), (ii) the performance of
its obligations under this Agreement, (iii) the value or marketability of the
Mortgage Loans, or (iv) its ability to foreclose on the related Mortgaged
Properties.
(b) The Seller has the power and authority to make, execute, deliver
and perform this Agreement and to consummate all of the transactions
contemplated hereunder and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the Seller's legal, valid and binding
obligation enforceable in accordance with its terms, except as enforcement of
such terms may be limited by (i) bankruptcy, insolvency, reorganization,
receivership, moratorium or similar laws affecting the enforcement of creditors'
rights generally or creditors of national banks and by the availability of
equitable remedies, (ii) general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law) or (iii) public
policy considerations underlying the securities laws, to the extent that such
policy considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities laws
liabilities.
(c) The Seller holds all necessary licenses, certificates and permits
from all governmental authorities necessary for conducting its business as it is
presently conducted, except for such licenses, certificates and permits the
absence of which, individually or in the aggregate, would not have a material
adverse effect on the ability of the Seller to conduct its business as it is
presently conducted. It is not required to obtain the consent of any other party
or any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consents, licenses, approvals or authorizations, or
registrations or declarations as shall have been obtained or filed, as the case
may be, prior to the Closing Date.
(d) The execution and delivery of this Agreement and the consummation
of the transactions contemplated herein (i) will not conflict with or constitute
a breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Seller pursuant
to any material contract, indenture, mortgage, loan agreement, note, lease or
other instrument, agreement or document to which the Seller is a party or by
which it may be bound or to which any of the property or assets of the Seller is
subject, (ii) will not result in any violation of the provisions of the charter
or by-laws of the Seller, or any law, administrative regulation or
administrative or court decree applicable to the Seller and (iii) will not
require any filing or registration with or notice to or consent, approval,
authorization or order of any court or governmental authority or agency.
(e) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(f) The Seller is not insolvent, nor will the Seller be made insolvent
by the transfer of the Mortgage Loans, nor is the Seller aware of any pending
insolvency.
(g) The Seller is not in violation of, and the execution and delivery
of this Agreement by it and its performance and compliance with the terms of
this Agreement will not constitute a violation with respect to any order or
decree of any court, or any order or regulation of any federal, state, municipal
or governmental agency having jurisdiction, which violation would materially and
adversely affect the Seller's condition (financial or otherwise) or operations
or any of the Seller's properties, or materially and adversely affect the
performance of any of its duties hereunder.
(h) There are no actions or proceedings against, or investigations of,
the Seller pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal (i) that, if determined adversely, would
prohibit the Seller from entering into this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or
(iii) that, if determined adversely, would prohibit or materially and adversely
affect the Seller's performance of any of its respective obligations under, or
the validity or enforceability of, this Agreement.
(i) The Seller is not transferring the Mortgage Loans to the Purchaser
hereunder with any intent to hinder, delay or defraud any of its creditors.
(j) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(k) The transfer, assignment and conveyance of the Mortgage Notes and
the Mortgages by the Seller pursuant to this Agreement are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller .The Seller hereby covenants that
except for the transfer hereunder, the Seller will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any lien on any Mortgage Loan, or any interest therein; the Seller will notify
the Trustee, as assignee of the Purchaser, of the existence of any lien on any
Mortgage Loan immediately upon discovery thereof, and the Seller will defend the
right, title and interest of the Trust, as assignee of the Purchaser, in, to and
under the Mortgage Loans, against all claims of third parties claiming through
or under the Seller; provided, however, that nothing in this Section 4.01 shall
prevent or be deemed to prohibit the Seller from suffering to exist upon any of
the Mortgage Loans any liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Seller shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
ARTICLE V
TERMINATION
Section 5.01 Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate
upon the termination of the Trust as provided in Article X of the Pooling and
Servicing Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
Section 6.01 Amendment. This Agreement may be amended from time to
time by the Seller and the Purchaser by written agreement signed by the Seller
and the Purchaser.
Section 6.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 6.03 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:
if to the Seller:
Bank of America, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: General Counsel
or such other address as may hereafter be furnished to the Purchaser in
writing by the Seller.
if to the Purchaser:
Asset Backed Funding Corporation
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx-Xxxxxx
or such other address as may hereafter be furnished to the Seller in writing
by the Purchaser.
Section 6.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 6.05 Counterparts. This Agreement may be executed in one or
more counterparts by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 6.06 Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of any Series
of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 6.07 Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than the pledging of the Mortgage Loans by the Seller to
secure a loan by the Purchaser to the Seller. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes and all
other purposes as a sale by the Seller and a purchase by the Purchaser of the
Mortgage Loans. The Purchaser will have the right to review the Mortgage Loans
and the related Mortgage Files to determine the characteristics of the Mortgage
Loans which will affect the Federal income tax consequences of owning the
Mortgage Loans and the Seller will cooperate with all reasonable requests made
by the Purchaser in the course of such review.
Section 6.08 Successors and Assigns; Assignment of this Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee. The obligations of the Seller under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser and which consent shall be at the Purchaser's sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations hereunder to any Person into which the Seller is merged or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party or any Person succeeding to the business of the Seller. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a series of
certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchaser's rights against the Seller pursuant to this Agreement
insofar as such rights relate to Mortgage Loans transferred to the Trustee and
to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Trustee. Such enforcement of a right or remedy
by the Trustee shall have the same force and effect as if the right or remedy
had been enforced or exercised by the Purchaser directly.
Section 6.09 Survival. The representations and warranties set forth in
Sections 3.01 and 3.02 hereof shall survive the purchase of the Mortgage Loans
hereunder.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
ASSET BACKED FUNDING CORPORATION,
as Purchaser
By: /s/ Xxxxxxx Xxxxx-Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxx-Xxxxxx
Title: Vice President
BANK OF AMERICA, NATIONAL ASSOCIATION
as Seller
By: /s/ Xxxxx X. Good
------------------------------------
Name: Xxxxx X. Good
Title: Vice President
STATE OF )
) ss.:
COUNTY OF )
On the 10 day of August, 2006 before me, a Notary Public in and for
said State, personally appeared Xxxxxxx Xxxxx-Xxxxxx known to me to be a Vice
President of Asset Backed Funding Corporation, the corporation that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------
Notary Public
STATE OF )
) ss.:
COUNTY OF )
On the 10th day of August, 2006 before me, a Notary Public in and for
said State, personally appeared Xxxxx X. Good, known to me to be a Vice
President of Bank of America, National Association, the company that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said association, and acknowledged to me that such association
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
-------------------------
Notary Public
Schedule I
[Intentionally Omitted]
