EXHIBIT 99.1
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▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING, INC.,
SELLER
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS, INC.,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
Dated as of October 1, 2004
Specialty Underwriting and Residential Finance Trust
(Mortgage Loan Asset-Backed Certificates, Series 2004-BC3)
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TABLE OF CONTENTS
Page
ARTICLE I CONVEYANCE OF MORTGAGE LOANS........................................................... 1
Section 1.01. Sale of Mortgage Loans....................................................... 1
Section 1.02. Delivery of Documents........................................................ 1
Section 1.03. Review of Documentation...................................................... 2
Section 1.04. Representations and Warranties Regarding the Seller.......................... 2
Section 1.05. Grant Clause................................................................. 9
Section 1.06. Assignment by Depositor...................................................... 9
ARTICLE II MISCELLANEOUS PROVISIONS............................................................... 9
Section 2.01. Binding Nature of Agreement; Assignment...................................... 9
Section 2.02. Entire Agreement............................................................. 9
Section 2.03. Amendment.................................................................... 9
Section 2.04. Governing Law................................................................ 10
Section 2.05. Severability of Provisions................................................... 10
Section 2.06. Indulgences; No Waivers...................................................... 10
Section 2.07. Headings Not to Affect Interpretation........................................ 10
Section 2.08. Benefits of Agreement........................................................ 10
Section 2.09. Counterparts................................................................. 10
SCHEDULE
SCHEDULE A Mortgage Loan Schedule
This MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT, dated as of October 1,
2004 (the "Agreement"), is executed by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage
Lending, Inc. (the "Seller") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Investors, Inc. (the
"Depositor").
All capitalized terms not defined herein shall have the same meanings
assigned to such terms in that certain Pooling and Servicing Agreement (the
"Pooling Agreement"), dated as of October 1, 2004, among the Depositor, JPMorgan
Chase Bank, as trustee (the "Trustee") and ▇▇▇▇▇▇ Loan Servicing, LP, as
servicer (the "Servicer").
W I T N E S S E T H:
WHEREAS, the Seller has acquired or originated certain mortgage loans
identified on the Mortgage Loan Schedule attached hereto as Schedule A (the
"Mortgage Loans");
WHEREAS, the Seller desires to sell, without recourse, all of its rights,
title and interest in the Mortgage Loans to the Depositor; and
WHEREAS, the Seller and the Depositor acknowledge and agree that the
Depositor will assign all of its rights and delegate all of its obligations
hereunder to the Trustee, and that each reference herein to the Depositor is
intended, unless otherwise specified, to mean the Depositor or the Trustee, as
assignee, whichever is the owner of the Mortgage Loans from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Seller and the Depositor agree as follows:
ARTICLE I
CONVEYANCE OF MORTGAGE LOANS
Section 1.01. Sale of Mortgage Loans. Concurrently with the execution and
delivery of this Agreement, the Seller does hereby transfer, assign, set over,
deposit with and otherwise convey to the Depositor, without recourse, subject to
Sections 1.03 and 1.04, all the right, title and interest of the Seller in and
to the Mortgage Loans identified on Schedule A hereto, having an aggregate
principal balance as of the Cut-off Date of approximately $650,002,380. Such
conveyance includes, without limitation, the right to all distributions of
principal and interest received on or with respect to the Mortgage Loans on or
after October 1, 2004 other than payments of principal and interest due on or
before such date, and all such payments due after such date but received prior
to such date and intended by the related Mortgagors to be applied after such
date, together with all of the Seller's right, title and interest in and to each
related account and all amounts from time to time credited to and the proceeds
of such account, any REO Property and the proceeds thereof, the Seller's rights
under any Insurance Policies related to the Mortgage Loans, and the Seller's
security interest in any collateral pledged to secure the Mortgage Loans,
including the Mortgaged Properties.
Concurrently with the execution hereof, the Depositor tenders the purchase
price for the Mortgage Loans.
Section 1.02. Delivery of Documents. In connection with such transfer and
assignment of the Mortgage Loans hereunder, the Seller does hereby deliver, or
cause to be delivered, to the Depositor (or
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its designee) the following documents or instruments with respect to each
Mortgage Loan (each a "Mortgage File") so transferred and assigned; provided
that for Mortgage Loans (if any) that have been prepaid in full after the
Cut-off Date and prior to the Closing Date, the Seller, in lieu of delivering
the related Mortgage Files, herewith delivers to the Depositor an Officer's
Certificate which shall include a statement to the effect that all amounts
received in connection with such prepayment that are required to be deposited in
the account maintained by the Servicer for such purpose have been so deposited.
(a) The Original Mortgage Note endorsed, "Pay to the order of JPMorgan
Chase Bank, as trustee - SURF 2004-BC3, without recourse" together with all
riders thereto. The Mortgage Note shall include all intervening endorsements
showing a complete chain of the title from the originator to the Seller.
(b) Except as provided below and for each Mortgage Loan that is not a MERS
Loan, the original recorded Mortgage together with all riders thereto, with
evidence of recording thereon, or, if the original Mortgage has not yet been
returned from the recording office, a copy of the original Mortgage together
with all riders thereto certified by the Seller to be true copy of the original
of the Mortgage that has been delivered for recording in the appropriate
recording office of the jurisdiction in which the Mortgaged Property is located
and in the case of each MERS Loan, the original Mortgage together with all
riders thereto, noting the presence of the MIN of the Loan and either language
indicating that the Mortgage Loan is a MOM Loan or if the Mortgage Loan was not
a MOM Loan at origination, the original Mortgage and the assignment thereof to
MERS, with evidence of recording indicated thereon, or a copy of the Mortgage
certified by the public recording office in which such Mortgage has been
recorded.
(c) In the case of each Mortgage Loan that is not a MERS Loan, the
original Assignment of each Mortgage, to "JPMorgan Chase Bank, as trustee - SURF
2004-BC3."
(d) The original policy of title insurance (or a preliminary title report,
commitment or binder if the original title insurance policy has not been
received from the title insurance company).
(e) Originals of any intervening assignments of the Mortgage, with
evidence of recording thereon or, if the original intervening assignment has not
yet been returned from the recording office, a copy of such assignment certified
to be a true copy of the original of the assignment which has been sent for
recording in the appropriate jurisdiction in which the Mortgaged Property is
located.
(f) Originals of all assumption and modification agreements, if any.
Section 1.03. Review of Documentation. The Depositor, by execution and
delivery hereof, acknowledges receipt of the Mortgage Files pertaining to the
Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof
by the trustee, JPMorgan Chase Bank (the "Trustee") for the Mortgage Loans for
the Depositor. The Trustee is required to review, within 60 days following the
Closing Date, each applicable Mortgage File. If in the course of such review the
Trustee finds any document or documents constituting a part of a Mortgage File
to be missing or defective (that is, mutilated, damaged, defaced or unexecuted)
in any material respect, the Seller shall be obligated to cure such defect or to
repurchase the related Mortgage Loan from the Depositor (or, at the direction of
and on behalf of the Depositor, from the Trust Fund), or to substitute a
Replacement Mortgage Loan therefor, in each case to the same extent and in the
same manner as the Depositor is obligated to the Trustee and the Trust Fund
under the Pooling Agreement.
Section 1.04. Representations and Warranties Regarding the Seller.
(a) The Seller hereby represents and warrants to the Depositor that as of
the date hereof that:
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(i) The Seller is a Delaware corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its property,
to carry on its business as presently conducted, and to enter into and
perform its obligations under this Agreement;
(ii) The execution and delivery by the Seller of this Agreement have
been duly authorized by all necessary corporate action on the part of the
Seller; neither the execution and delivery of this Agreement, nor the
consummation of the transactions herein contemplated, nor compliance with
the provisions hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any law, governmental
rule, regulation, judgment, decree or order binding on the Seller or its
properties or the federal stock charter or bylaws of the Seller;
(iii) The execution, delivery and performance by the Seller of this
Agreement and the consummation of the transactions contemplated hereby do
not require the consent or approval of, the giving of notice to, the
registration with, or the taking of any other action in respect of, any
state, federal or other governmental authority or agency, except such as
has been obtained, given, effected or taken prior to the date hereof;
(iv) This Agreement has been duly executed and delivered by the
Seller and, assuming due authorization, execution and delivery by the
Depositor, constitutes a valid and binding obligation of the Seller
enforceable against it in accordance with its terms except as such
enforceability may be subject to (A) applicable bankruptcy and insolvency
laws and other similar laws affecting the enforcement of the rights of
creditors generally and (B) general principles of equity regardless of
whether such enforcement is considered in a proceeding in equity or at
law; and
(v) There are no actions, suits or proceedings pending or, to the
knowledge of the Seller, threatened or likely to be asserted against or
affecting the Seller, before or by any court, administrative agency,
arbitrator or governmental body (A) with respect to any of the
transactions contemplated by this Agreement or (B) with respect to any
other matter which in the judgment of the Seller will be determined
adversely to the Seller and will if determined adversely to the Seller
materially and adversely affect it or its business, assets, operations or
condition, financial or otherwise, or adversely affect its ability to
perform its obligations under this Agreement.
(b) The Seller hereby represents and warrants to the Depositor the
following with respect to the Mortgage Loans as of the Closing Date. To the
extent that any fact, condition or event with respect to a Mortgage Loan
constitutes a breach of a representation or warranty of Seller under this
Agreement, the only right or remedy of the Depositor shall be the right to
enforce the obligations of the Seller under any applicable representation or
warranty made by it.
(i) The information set forth with respect to the Mortgage Loans on
the Mortgage Loan Schedule provides a true, complete, and accurate and
there are no material omissions of material facts.
(ii) Each Mortgage is a valid and enforceable lien on the Mortgaged
Property, subject only to (a) in the case of the second lien Mortgage
Loans, the related first lien,(b) the lien of non-delinquent real property
taxes and assessments not yet due and payable, (c) covenants, conditions
and restrictions, rights of way, easements and other matters of public
record as of the date of recording of such Mortgage, such exceptions
appearing of record being acceptable to mortgage lending institutions
generally, specifically referred to in the lender's title insurance policy
referred to in x below or referred to or otherwise considered in the
appraisal made in
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connection with the origination of the related Mortgage Loan, and (d)
other matters to which like properties are commonly subject that do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage.
(iii) Immediately prior to the assignment of the Mortgage Loans to
the Depositor, the Seller was the sole legal and beneficial owner of each
Mortgage Loan and had full right to transfer and sell the Mortgage Loan
free and clear of any encumbrance, equity. lien, pledge, charge, claim or
security interest.
(iv) There is no delinquent tax or assessment lien against any
Mortgaged Property.
(v) There is no valid set-offs or defense to any Mortgage Note or
Mortgage.
(vi) There are no mechanic's or similar liens or claims that have
been filed for work, labor or material and there are not outstanding
rights that under law, could give rise to such lien, which would affect
the Mortgaged Property as a lien senior to or equal to the lien of the
Mortgage Loan.
(vii) To the best of the Seller's knowledge each Mortgaged Property
is, (i ) undamaged by any toxic materials or other environmental hazards
on, in or potentially affecting such Mortgage Property; and (ii) free and
clear of damage and waste and there is no proceeding pending for the total
or partial condemnation.
(viii) Each Mortgage Loan is in compliance with local, state or
federal law or regulation designated to protect the health and safety of
the occupants of the Mortgaged Property.
(ix) As of the Closing Date, the Mortgage Loan has not been modified
in any material respect including as to prepayment penalties (except that
a Mortgage Loan may have been modified by a written instrument that has
been recorded or submitted for recordation, if necessary, to protect the
interests of the Certificate Holders).
(x) With respect to each first lien Mortgage Loan that is covered by
a lender's policy of title insurance, each such policy is enforceable, and
each such policy was issued by a title insurer qualified to do business in
the jurisdiction where the related Mortgaged Property is located and
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and is in a form acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, which policy insures the Seller and successor
owners of indebtedness secured by the related insured Mortgage, as to the
first priority lien of the related Mortgage; to the best of the Seller's
knowledge, no claims have been made under such mortgage title insurance
policy and no prior holder of the related Mortgage, including the Seller,
has done, by act or omission, anything that would impair the coverage of
such mortgage title insurance policy.
(xi) With respect to each second lien Mortgage Loan, either (a) no
consent for the second lien Mortgage Loan is required by the holder of the
related first lien or (b) such consent has been obtained and is contained
in the Mortgage File.
(xii) Intentionally omitted.
(xiii) To the best of the Seller's knowledge, as of the date of
origination all of the improvements that were included for the purpose of
determining the appraisal value of the Mortgaged Property lie wholly
within the boundaries and building restriction lines of such property, and
no improvements on adjoining properties encroach upon the Mortgaged
Property.
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(xiv) To the best of the Seller's knowledge, as of the date of
origination no improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation.
(xv) To the best of the Seller's knowledge, as of the date of
origination 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, have been made or obtained from the
appropriate authorities, and the Mortgaged Property is lawfully occupied
under applicable law.
(xvi) The Mortgage Note and the related Mortgage are genuine, and
each is the legal, valid and binding obligation of the maker thereof,
enforceable in accordance with its terms and under applicable law, except
that the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally. To the best of the Seller's knowledge, all parties to
the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have
been duly and properly executed by such parties.
(xvii) The proceeds of the Mortgage Loan have been fully disbursed,
there is no requirement for future advances thereunder and completion of
any on-site or off-site improvements and as to disbursements of any escrow
funds therefor have been complied with. All costs, fees and expenses
incurred in making, or closing or recording the Mortgage Loans were paid.
(xviii) The related Mortgage contains customary and enforceable
provisions that render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the
benefits of the security, including, (i) in the case of a Mortgage
designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure.
(xix) With respect to each Mortgage constituting a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been
properly designated and currently so serves and is named in such Mortgage,
and no fees or expenses are or will become payable by the Certificate
Holders to the trustee under the deed of trust, except in connection with
a trustee's sale after default by the Mortgagor.
(xx) There exist no deficiencies with respect to escrow deposits and
payments, if such are required, for which customary arrangements for
repayment thereof have not been made, and no escrow deposits or payments
of other charges or payments due to the Seller have been capitalized under
the Mortgage or the related Mortgage Note.
(xxi) The origination practices used by the Seller with respect to
each Mortgage Loan have been in compliance with any and all applicable
"doing business" and licensing requirements of the laws of the state where
the Mortgaged Property is located.
(xxii) The Mortgage Note is not, and has not been, secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property.
(xxiii) With respect to Mortgage Loans at the Cut-off Date, all
buildings on the Mortgaged Property are covered by a valid and existing
hazard insurance policy with a generally acceptable carrier that provides
for fire and extended coverage and coverage for such other hazards as are
customary in the area where the Mortgaged Property is located. All such
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individual insurance policies contain a standard mortgagee clause naming
the Seller or the original mortgagee, or its successors in interest, as
mortgagee, and the Seller has received no notice that any premiums due and
payable thereon have not been paid; the Mortgage obligates the Mortgagor
thereunder to maintain all such insurance, including flood insurance, at
the Mortgagor's cost and expense, and upon the Mortgagor's failure to do
so, authorizes the holder of the Mortgage to obtain and maintain such
insurance at the Mortgagor's cost and expense and to seek reimbursement
therefor from the Mortgagor.
(xxiv) With respect to Mortgage Loans, if the Mortgaged Property is
in an area identified on a Flood Hazard Map or Flood Insurance Rate Map
issued by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy in a form meeting the requirements of
the current guidelines of the Flood Insurance Administration is in effect
with respect to such Mortgaged Property.
(xxv) To the best of the Seller's knowledge, there is no proceeding
pending for the total or partial condemnation of the Mortgaged Property.
(xxvi) There is no material monetary default existing under any
Mortgage or the related Mortgage Note and, to the best of the Seller's
knowledge, there is no material event that, with the passage of time or
with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration under the
Mortgage or the related Mortgage Note; and the Seller has not waived any
default, breach, violation or event of acceleration.
(xxvii) Each Mortgaged Property is of a type described in the
Prospectus Supplement.
(xxviii) Each Mortgage Loan is being serviced by the Servicer.
(xxix) Prior to the approval of the Mortgage Loan application, an
appraisal of the related Mortgaged Property that satisfies the standards
of the Program Documents and the standards under the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 was obtained.
The appraisal was signed by a qualified appraiser, and whose compensation
is not affected by the approval or disapproval of the Mortgage Loan.
(xxx) The Mortgage Loans were selected from among the outstanding
one- to four-family mortgage loans in the Seller's portfolio at the
Closing Date as to which the representations and warranties made as to the
Mortgage Loans set forth in this Section 1.04(b) can be made.
(xxxi) The Mortgage Loans, individually and in the aggregate,
conform in all material respects to the descriptions thereof in the
Prospectus Supplement.
(xxxii) As of the Closing Date, each Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G of the Code (as determined
without regard to Treasury Regulations Section 1.860G-2(a)(3)(iii) or any
similar rule that provides that a defective obligation is a qualified
mortgage for a temporary period).
(xxxiii) Each prepayment penalty is permissible and enforceable in
accordance with its terms upon the Mortgagor's full and voluntary
Principal Prepayment (except to the extent that: (1) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership
and other similar laws relating to creditors' rights generally; (2) the
collectability thereof may be limited due to acceleration in connection
with a foreclosure or other involuntary prepayment; or
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(3) subsequent changes in applicable law may limit or prohibit
enforceability thereof) under applicable law.
(xxxiv) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in violation of
any comparable state law. Any breach of this representation with respect
to a Group One Mortgage Loan shall be deemed to materially and adversely
affect the interests of the owner of such Mortgage Loan and shall require
a repurchase of the affected Mortgage Loan.
(xxxv) The Seller has caused the servicer for each Mortgage Loan to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information on its
borrower credit files to Equifax, Experian, and Trans Union Credit
Information Company, on a monthly basis. Any breach of this representation
with respect to a Group One Mortgage Loan shall be deemed to materially
and adversely affect the interests of the owner of such Mortgage Loan and
shall require a repurchase of the affected Mortgage Loan.
(xxxvi) No proceeds from any Mortgage Loan to be used to finance
single-premium credit insurance policies. Any breach of this
representation with respect to a Group One Mortgage Loan shall be deemed
to materially and adversely affect the interests of the owner of such
Mortgage Loan and shall require a repurchase of the affected Mortgage
Loan.
(xxxvii) No Group One Mortgage Loan originated on or after October
1, 2002 will impose a prepayment premium for a term in excess of three
years. Any Mortgage Loans originated prior to such date will not impose
prepayment penalties in excess of five years. Any breach of this
representation with respect to a Group One Mortgage Loan shall be deemed
to materially and adversely affect the interests of the owner of such
Mortgage Loan and shall require a repurchase of the affected Mortgage
Loan.
(xxxviii) As of the Closing Date, no Mortgage Loan is in
foreclosure.
(xxxix) No Mortgage Loan provides for interest other than at either
(i) a single fixed rate in effect throughout the term of the Mortgage Loan
or (ii) a "variable rate" (within the meaning of Treasury Regulation
Section 1.860G-1(a)(3)) in effect throughout the term of the Mortgage
Loan.
(xl) As of the Closing Date, the Seller would not institute
foreclosure proceedings with respect to any of the Mortgage Loans prior to
the next scheduled payment date for such Mortgage Loan based on such
Mortgage Loan's delinquency status.
(xli) There is no Mortgage Loan that was originated on or after
October 1, 2002 and before March 7, 2003, which is secured by property
located in the state of Georgia. Any breach of this representation with
respect to a Group One Mortgage Loan shall be deemed to materially and
adversely affect the interests of the owner of such Mortgage Loan and
shall require a repurchase of the affected Mortgage Loan.
(xlii) There is no Mortgage Loan that was originated on or after
March 7, 2003 which is a "high cost home loan" as defined under the
Georgia Fair Lending Act.
(xliii) None of the Mortgage Loans (a) is a "High Cost Mortgage" as
defined in Regulation Z, Section 226.32 or otherwise subject to the
provisions of the Homeownership and Equity Protection Act of 1994 or any
similar state or local law or (b) was made or serviced in violation of the
provisions of any applicable predatory lending laws or regulations.
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(xliv) No Mortgage Loan is classified as a high cost mortgage loan
under HOEPA, and no Mortgage Loan is a "high cost home," "covered," "high
risk home" or "predatory" 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). Any breach of this representation with respect to a
Group One Mortgage Loan shall be deemed to materially and adversely affect
the interests of the owner of such Mortgage Loan and shall require a
repurchase of the affected Mortgage Loan.
(xlv) No Mortgage Loan is a "high cost," "covered" or other
similarly designated loan as defined under any state, local or federal
law, which law contains provisions that may result in liability to the
purchaser or assignee of such loan.
(xlvi) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws,
including, but not limited to, all applicable predatory or abusive lending
laws.
(xlvii) All Mortgage Loans were originated in compliance with all
applicable laws, including, but not limited to, all applicable
anti-predatory lending laws.
(xlviii) No Mortgage Loan is a High Cost Loan or Covered Loan, as
applicable (as such terms are defined in the then current Standard &
Poor's LEVELS(R) Glossary which is now Version 5.6 Revised, Appendix E)
and no Mortgage Loan originated on or after October 1, 2002 through March
6, 2003 is governed by the Georgia Fair Lending Act.
(xlix) None of the Mortgage Loans that are secured by property
located in the State of Illinois are in violation of the provisions of the
Illinois Interest Act.
(l) No Group One Mortgage Loan originated on or after August 1, 2004
requires the borrower to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan transaction.
Any breach of this representation with respect to a Group One Mortgage
Loan shall be deemed to materially and adversely affect the interests of
the owner of such Mortgage Loan and shall require a repurchase of the
affected Mortgage Loan.
It is understood and agreed that the representations and warranties set
forth in Sections 1.04(a) and (b) herein shall survive delivery of the Mortgage
Files and the Assignment of Mortgage of each Mortgage Loan to the Depositor.
Upon discovery by any of the Seller, the Depositor, the Servicer or the Trustee
of a breach of any of the foregoing representations and warranties that
adversely and materially affects the value of the related Mortgage Loan, payment
charges or the interest of the Certificate Holders, the party discovering such
breach shall give prompt written notice to the other parties. Within 90 days of
the discovery of any such breach, the Seller shall either (a) cure such breach
in all material respects, (b) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Depositor at the applicable Purchase Price
or (c) within the two year period following the Closing Date, substitute a
Replacement Mortgage Loan for the affected Mortgage Loan. The Seller indemnifies
and holds the Trust Fund, the Trustee, the Depositor, the Servicer, the NIM
Insurerand each Certificateholder harmless against any and all taxes, claims,
losses, penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments, and any other costs, fees and expenses that the Trust Fund, the
Trustee, the Depositor, the Servicer, the NIM Insurer and any Certificateholder
may sustain in connection with any actions of the Seller relating to a
repurchase of a Mortgage Loan other than in compliance with the terms of Section
2.03 of the Pooling Agreement and this Agreement, to the extent that any such
action causes (i) any federal or state tax to be imposed on the Trust Fund or
any REMIC provided for in the Pooling
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Agreement, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860(d)(1) of the Code, or (ii) any REMIC created
in the Pooling Agreement to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
Section 1.05. Grant Clause. It is intended that the conveyance of the
Seller's right, title and interest in and to Mortgage Loans and other property
conveyed pursuant to this Agreement shall constitute, and shall be construed as,
a sale of such property and not a grant of a security interest to secure a loan.
However, if such conveyance is deemed to be in respect of a loan, it is intended
that: (1) the rights and obligations of the parties shall be established
pursuant to the terms of this Agreement; (2) the Seller hereby grants to the
Depositor a first priority security interest in all of the Seller's right, title
and interest in, to and under, whether now owned or hereafter acquired, such
Mortgage Loans and other property; and (3) this Agreement shall constitute a
security agreement under applicable law.
Section 1.06. Assignment by Depositor. The Depositor shall have the right,
upon notice to but without the consent of the Seller, to assign, in whole or in
part, its interest under this Agreement with respect to the Mortgage Loans to
the Trustee, and the Trustee then shall succeed to all rights of the Depositor
under this Agreement. All references to the Depositor in this Agreement shall be
deemed to include its assignee or designee, specifically including the Trustee.
ARTICLE II
MISCELLANEOUS PROVISIONS
Section 2.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 2.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
Section 2.03. Amendment. This Agreement may be amended from time to time
by the Seller and the Depositor, without notice to or the consent of any of the
Certificate Holders, (i) to cure any ambiguity or correct any mistake, (ii) to
cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Certificates, the Trust
Fund, the Pooling Agreement or this Agreement in any Offering Document; or to
correct or supplement any provision herein which may be inconsistent with any
other provisions herein, (iii) to add any other provisions with respect to
matters or questions arising under this Agreement or (iv) to modify, alter, and
rescind or add any provisions to the extent necessary or desirable to comply
with any requirements imposed by the Code and the REMIC Provisions. No such
amendment effected pursuant to clauses (iii) and (iv) of the preceding sentence
shall adversely affect in any material respect the interests of any Holder. Any
such amendment shall be deemed not to adversely effect in any material respect
the interests of any Holder, if the Person requesting such amendment obtains (i)
an opinion of counsel addressed to the Trustee to such effect or (ii) a letter
from each Rating Agency that such amendment will not result in a reduction or
withdrawal of its rating of any Class of the Certificates.
(a) This Agreement may also be amended from time to time by the Seller and
the Depositor with the consent of the Certificate Holders of not less than
66-2/3% of the Class Certificate Principal
9
Amount (or Percentage Interest) of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Certificate Holders; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate or (ii) reduce
the aforesaid percentages of Class Principal Amount (or Percentage Interest) of
Certificates of each Class, the Certificate Holders of which are required to
consent to any such amendment without the consent of the Certificate Holders of
100% of the Class Principal Amount (or Percentage Interest) of each Class of
Certificates affected thereby. For purposes of this paragraph, references to
"Holder" or "Certificate Holders" shall be deemed to include, in the case of any
Class of Book-Entry Certificates, the related Certificate Owners.
(b) It shall not be necessary for the consent of Certificate Holders under
this Section 2.03 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificate Holders shall be subject to such reasonable
regulations as the Trustee may prescribe.
Section 2.04. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 2.05. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 2.06. Indulgences; No Waivers. Neither the failure nor any delay
on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
Section 2.07. Headings Not to Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 2.08. Benefits of Agreement. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties to this Agreement and
their successors hereunder, any benefit or any legal or equitable right, power,
remedy or claim under this Agreement.
Section 2.09. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
10
IN WITNESS WHEREOF, the Seller and the Depositor have caused their names
to be signed hereto by their respective duly authorized officers as of the date
first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE LENDING,
INC.
By: _____________________________
Name:
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ MORTGAGE INVESTORS,
INC.
By: _____________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
SCHEDULE A
MORTGAGE LOAN SCHEDULE
[Intentionally Omitted]