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