Exhibit 99.8b
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
______________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
Purchaser
OPTEUM FINANCIAL SERVICES LLC,
Seller
______________________
Dated as of August 1, 2006
Conventional,
Fixed and Adjustable Rate, Residential Mortgage Loans
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................1
SECTION 2. AGREEMENT TO PURCHASE.............................................14
SECTION 3. MORTGAGE SCHEDULES................................................14
SECTION 4. PURCHASE PRICE....................................................14
SECTION 5. EXAMINATION OF MORTGAGE FILES.....................................15
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER...............................15
SECTION 7. SERVICING OF THE MORTGAGE LOANS...................................18
SECTION 8. TRANSFER OF SERVICING.............................................19
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER;
REMEDIES FOR BREACH...............................................22
SECTION 10. CLOSING...........................................................42
SECTION 11. CLOSING DOCUMENTS.................................................42
SECTION 12. COSTS.............................................................44
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION.......................44
SECTION 14. THE SELLER........................................................46
SECTION 15. FINANCIAL STATEMENTS..............................................47
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST....................48
SECTION 17. NOTICES...........................................................48
SECTION 18. SEVERABILITY CLAUSE...............................................49
SECTION 19. COUNTERPARTS......................................................50
SECTION 20. GOVERNING LAW.....................................................50
SECTION 21. INTENTION OF THE PARTIES..........................................50
SECTION 22. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT..........50
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SECTION 23. WAIVERS...........................................................51
SECTION 24. EXHIBITS..........................................................51
SECTION 25. GENERAL INTERPRETIVE PRINCIPLES...................................51
SECTION 26. REPRODUCTION OF DOCUMENTS.........................................51
SECTION 27. FURTHER AGREEMENTS................................................52
SECTION 28. RECORDATION OF ASSIGNMENTS OF MORTGAGE............................52
SECTION 29. NO SOLICITATION...................................................52
SECTION 30. WAIVER OF TRIAL BY JURY...........................................53
SECTION 31. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS.........53
SECTION 32. COMPLIANCE WITH REGULATION AB.....................................53
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT H UNDERWRITING GUIDELINES
EXHIBIT I FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
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MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
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This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of August 1, 2006, by and between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc., having an office at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Purchaser"), and Opteum Financial Services LLC, having an
office at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Seller").
W I T N E S S E T H:
WHEREAS, 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 first and second lien, adjustable-rate and fixed-rate
residential 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, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule
for the related Mortgage Loan Package;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner of
the conveyance, servicing by the Seller, as interim servicer, and control of
the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
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 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 and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
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 ▇▇▇▇▇▇ Mae Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of
the Mortgaged Property.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to
reflect 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 Seller'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.
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.
CLTV: As of any date and as to any Second Lien Loan, the ratio,
expressed as a percentage, of (a) the sum of (i) the outstanding principal
balance of the Second Lien Loan and (ii) the outstanding principal balance as
of such date of any mortgage loan or mortgage loans that are senior or equal
in priority to the Second Lien Loan and which are secured by the same
Mortgaged Property to (b) the Appraised Value as determined pursuant to the
Underwriting Guidelines of the related Mortgaged Property as of the
origination of the Second Lien Loan.
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Code: Internal Revenue Code of 1986, as amended.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
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 Section 7.
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: The Person specified as such in the related Purchase Price
and Terms Agreement.
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
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquency Collection Policies and Procedures: The delinquency
collection policies and procedures of the Seller, as interim servicer, a copy
of which has been provided to the Purchaser.
Depositor: The depositor, as such term is defined in Regulation AB,
which respect to any Securitization Transaction.
Determination Date: With respect to each Remittance Date, the last
day of the month preceding the month in which such Remittance Date occurs.
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 Account: The separate account created and maintained pursuant
to Section 7.
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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.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ Mae
Servicers' Guide and all amendments or additions thereto.
▇▇▇▇▇▇ ▇▇▇ 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.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
▇▇▇▇▇▇▇ 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" payable by the related Mortgagor (as each such term
is calculated under HOEPA) that exceeds the thresholds set forth by HOEPA and
its implementing regulations, including 12 C.F.R. ss. 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 is 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," or "predatory" loan under any other applicable federal, state or local
law (or a similarly classified loan using different
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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) 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 a 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 Period: With respect to the servicing of the Mortgage Loans,
the period beginning on the related Closing Date and ending on the related
Transfer Date.
Interim Servicer: The Seller in its capacity as interim servicer
under this 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.
IRS: The Internal Revenue Service.
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.
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Liquidation Proceeds: Cash 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.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the related Cut-off Date (unless otherwise indicated), to
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.
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 July 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.
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 the MERS Procedures Manual and (b)
the Seller has designated or will designate the Purchaser as the Investor on
the MERS System.
MERS Identification Number: The eighteen digit number permanently
assigned to each MERS Designated Mortgage Loan.
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: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
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Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first lien, in the case of a First Lien Loan,
or a second lien, in the case of a Second Lien Loan, on the Mortgaged
Property.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
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: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this
Agreement being 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: The documents required to be delivered to
the Custodian pursuant to Subsection 6.03 hereof with respect to any Mortgage
Loan.
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.
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 street address of the Mortgaged Property
including the city, state and zip code; (4) a code indicating whether the
Mortgagor is self-employed; (5) a code indicating whether the Mortgaged
Property is owner-occupied; (6) the number and type of residential units
constituting the Mortgaged Property; (7) 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;
(8) with respect to each First Lien Loan, the Loan-to-Value Ratio at
origination, and with respect to each Second Lien Loan, the CLTV at
origination; (9) the Mortgage Interest Rate as of the related Cut-off Date;
(10) the date on which the Monthly Payment was due on the Mortgage Loan and,
if such date is not consistent with the Due Date currently in effect, such Due
Date; (11) the stated maturity date; (12) the first payment date; (13) the
amount of the Monthly Payment as of the related Cut-off Date; (14) the last
payment date on which a payment was actually applied to the outstanding
principal balance; (15) the original principal amount of the Mortgage Loan;
(16) 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
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the related Cut-off Date; (17) delinquency status as of the related Cut-off
Date; (18) with respect to each Adjustable Rate Mortgage Loan, the Interest
Rate Adjustment Date; (19) with respect to each Adjustable Rate Mortgage Loan,
the Gross Margin; (20) with respect to each Adjustable Rate Mortgage Loan, the
Lifetime Rate Cap under the terms of the Mortgage Note; (21) with respect to
each Adjustable Rate Mortgage Loan, a code indicating the type of Index; (22)
the type of Mortgage Loan (i.e., Fixed or Adjustable Rate Mortgage Loan, First
or Second Lien Loan) and with respect to each Second Lien Loan, the product
type of the related first lien loan; (23) a code indicating the purpose of the
loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(24) a code indicating the documentation style (i.e., full, alternative or
reduced); (25) asset verification (Y/N); (26) the loan credit classification
(as described in the Underwriting Guidelines); (27) whether such Mortgage Loan
provides for a Prepayment Penalty and, if applicable, the Prepayment Penalty
period and the type or amount of Prepayment Penalty, including whether the
applicable Prepayment Penalty provision is "hard" or "soft"; (28) the Mortgage
Interest Rate as of origination; (29) the credit risk score (FICO score); (30)
the date of origination; (31) with respect to Adjustable Rate Mortgage Loans,
the Mortgage Interest Rate adjustment period; (32) with respect to each
Adjustable Rate Mortgage Loan, the Mortgage Interest Rate adjustment
percentage; (33) with respect to each Adjustable Rate Mortgage Loan, the
Mortgage Interest Rate floor; (34) with respect to each Adjustable Rate
Mortgage Loan, the Mortgage Interest Rate Cap as of the first Interest Rate
Adjustment Date; (35) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap subsequent to the first Interest Rate Adjustment Date; (36)
with respect to each Adjustable Rate Mortgage Loan, a code indicating whether
the Mortgage Loan provides for negative amortization; (37) with respect to
each Adjustable Rate Mortgage Loan with negative amortization, the negative
amortization limit; (38) a code indicating whether the Mortgage Loan is a Home
Loan; (39) a code indicating whether the Mortgage Loan is a Balloon Mortgage
Loan; (40) the Due Date for the first Monthly Payment; (41) the original
Monthly Payment due; (42) a code indicating the PMI Policy provider and
percentage of coverage, if applicable; (43) Appraised Value; (44) appraisal
type; (45) automated valuation model (AVM); (46) appraisal date; (47) with
respect to the related Mortgagor, the debt-to-income ratio; and (48) the MERS
Identification Number, if applicable. With respect to the Mortgage Loans in
the aggregate, the 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 applicable Cut-off
Date; and (6) the applicable Closing Date.
In addition, with respect to each Mortgage Loan in a Mortgage Loan
Package, which the related Purchase Price and Terms Agreement refers to as
including "prime" or "Alt-A" Mortgage Loans, the following: (1) the social
security number of the Mortgagor; (2) 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;
(3) whether the Mortgage Loan has Monthly Payments that are interest-only for
a period of time, and the interest-only period, if applicable (and with
respect to each Second Lien Loan, whether the related first lien mortgage loan
has monthly payments that are interest-only for a period of time, and the
interest-only period, if applicable); (4) the schedule of the payment
delinquencies in the prior 12 months; (5) the Servicing Fee Rate; (6) a code
indicating whether there is a simultaneous second; (7) a code indicating
whether the
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Mortgage Loan by its original terms or any modifications thereof provides for
amortization beyond its scheduled maturity date; (8) the certificate number of
the PMI Policy, if applicable; (9) the amount of coverage of the PMI Policy,
if applicable; (10) in connection with a condominium unit, a code indicating
whether the condominium project where such unit is located is low-rise or
high-rise; (11) a code indicating whether the Mortgaged Property is a
leasehold estate; (12) sales price; (13) the DU or LP number, if applicable;
and (14) with respect to the Mortgage Loans in such Mortgage Loan Package, in
the aggregate, the related Mortgage Loan Schedule shall set forth the average
principal balance of such Mortgage Loans as of the related Cut-off Date.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage 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.
Mortgagor: The obligor on a Mortgage Note.
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 this Agreement as an Eligible Account, (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: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan 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.
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.
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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 penalty
if the Mortgagor prepays such Mortgage Loan as provided in the related
Mortgage Note or Mortgage.
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 or premium 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: Those certain agreements setting
forth the general terms and conditions of the transactions consummated herein
and identifying the Mortgage Loans to be purchased from time to time
hereunder, by and between the Seller and the Purchaser.
Purchaser: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
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
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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, (i) have an outstanding 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
outstanding 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 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 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 Caps); and (v) comply with each
representation and warranty (respecting individual Mortgage Loans) set forth
in Section 9.
Rating Agency: Any of Fitch, ▇▇▇▇▇'▇ or Standard & Poor's, or their
respective successors designated by the Purchaser.
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 an assignment and recognition agreement with respect to a
Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB. Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.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.
Relief Act: The Servicemembers' Civil Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
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REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of
Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The 15th day of any month (or, if such 15th day is
not a Business Day, the following Business Day).
Repurchase Price: As defined in the related Purchase Price and Terms
Agreement.
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 dwelling unit in a
residential cooperative housing corporation, mobile home or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time to
time.
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
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.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Seller Information: As defined in Subsection 32.04(a).
Servicing Fee: With respect to each Mortgage Loan serviced by the
Seller, as interim servicer, a fee payable monthly equal to (i) when the
Servicing Fee Rate is calculated based on a per loan basis, a dollar amount
per loan, and (ii) when the Servicing Fee Rate is calculated based on an
amount per annum, one-twelfth of the product of (a) the Servicing Fee Rate and
(b) the outstanding principal balance of such Mortgage Loan. Such fee shall be
payable monthly and in the case of clause (ii) above shall be pro-rated for
any portion of a month during which the Mortgage Loan is serviced by the
Seller hereunder. The obligation of the Purchaser to pay the Servicing Fee is
limited to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the extent permitted by this Agreement) of such Monthly Payment collected by
the Seller, as interim servicer, or as otherwise provided under this
Agreement.
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Servicing Fee Rate: An amount per annum or per loan as set forth in
the related Purchase Price and Terms Agreement.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Seller, as 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.
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 ▇▇▇▇▇▇-▇▇▇▇ Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R) Glossary,
as may be in effect from time to time.
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.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: The date on which the Purchaser, or its designee,
shall receive the transfer of servicing responsibilities and begin to perform
the servicing of the Mortgage Loans with respect to the related Mortgage Loan
Package, and the Seller shall cease all servicing responsibilities.
Underwriting Guidelines: The underwriting guidelines of the Seller, a
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.
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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 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 principal
balance of the Mortgage Loans accepted by the Purchaser on each Closing Date.
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 five (5) 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 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 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 received. The initial principal amount of the related
Mortgage Loans shall be the aggregate 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 shall be
priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current 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
received, together with any unscheduled principal prepayments
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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 five (5) Business Days prior to the related Closing Date,
the Seller shall (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, including a copy of the Assignment of Mortgage, 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 may be made by the Purchaser or
its designee at any reasonable time before or 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 are unacceptable
to the Purchaser for any reason, such Mortgage Loans shall be deleted from the
related Mortgage Loan Schedule, and 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 affect the
Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief as provided herein. If the Seller fails to
deliver, or make available for inspection, a Mortgage Loan file as specified
in this Section, and Purchaser nevertheless purchases such Mortgage Loan, the
Seller waives any claims under this Section.
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 G (the "Assignment and
Conveyance Agreement"). The Seller shall cause the Servicing File retained by
the Seller, as 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 release from its custody the contents
of any Servicing File retained by it only in accordance with this Agreement,
except when such release is required in connection with a repurchase of any
such Mortgage Loan pursuant to Subsection 9.03.
Subsection 6.02 Books and Records.
Record title to each Mortgage 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,
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as the Purchaser shall select. Notwithstanding the foregoing, each Mortgage
and related Mortgage Note shall be possessed solely by 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 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 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.
The Seller shall 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 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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ 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 may be in the form of microfilm or
microfiche so long as the Seller complies with the requirements of the ▇▇▇▇▇▇
▇▇▇ Guides.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the
Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Custodian no later than
two (2) Business Days prior to the related Closing Date those Mortgage Loan
Documents set forth on Exhibit A 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 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
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document certified by the appropriate public recording office to be a true and
complete copy of the original within ninety days of its submission for
recordation.
In the event any document required to be delivered to the Custodian
in the Custodial Agreement, including an original or copy of any document
submitted for recordation to the appropriate public recording office, is not
so delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, within 90 days following the related Closing Date (other
than with respect to the Assignments of Mortgage which shall be delivered to
the Custodian in blank and recorded subsequently by the Purchaser or its
designee), and in the event that the Seller does not cure such failure within
30 days of discovery or receipt of written notification of such failure from
the Purchaser, 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 in the event that the Seller cannot deliver an original 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 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 documents have been submitted for recording; provided
that, upon request of the Purchaser and delivery by the Purchaser to the
Seller of a schedule of the related Mortgage Loans, the Seller shall reissue
and deliver to the Purchaser or its designee said officer's certificate.
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 reasonable costs associated
therewith pursuant to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall 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's loan production and the servicing activities of the Seller, as
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 Mortgage Loans.
With respect to each MERS Designated Mortgage Loan, the Seller shall,
on or prior to 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, on or prior to the related
Closing Date, the Seller shall provide the Custodian and the Purchaser with a
MERS Report listing the Purchaser as the Investor, the Custodian as custodian
and no Person as Interim Funder with respect to each MERS Designated Mortgage
Loan.
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SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on a
servicing released basis. Subject to, and upon the terms and conditions of
this Agreement the Seller hereby sells, transfers, assigns, conveys and
delivers to the Purchaser the Servicing Rights.
The Purchaser shall retain the Seller as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions set forth in this section provided that if the related
Transfer Date has not occurred on or prior to the date which is 30 days after
the related Closing Date, the Purchaser and the Seller hereby agree to
negotiate in good faith and enter into a more detailed interim servicing
agreement mutually acceptable to the parties. The Seller shall service the
Mortgage Loans on an "actual/actual" basis and otherwise in compliance with
Accepted Servicing Practices and the following provisions of this section. In
addition, the Seller shall be entitled to a Servicing Fee with respect to the
Mortgage Loans until the applicable Transfer Date.
In servicing the Mortgage Loans, the Seller shall comply with all
applicable laws, rules and regulations with respect thereto. The Seller shall
take no action with respect to any Mortgage Loan, including entering into any
litigation, or any agreement with the related borrower, without the prior
written consent of the Purchaser. The Seller shall promptly notify the
Purchaser in writing of any action which should be taken with respect to any
Mortgage Loan in accordance with prudent servicing practices. The Seller shall
take no action, and shall not refrain from taking action, which, in either
case, (a) would impair the ability of the Purchaser to realize on or enforce
the Mortgage Note or the lien of the Mortgage or any other document related
thereto or (b) would jeopardize the rights or remedies available to the
Purchaser with respect to any Mortgage Loan or otherwise impair the ability of
the Purchaser to realize on the Mortgaged Property with respect to such
Mortgage Loan. In addition, prior to commencing foreclosure proceedings in
connection with a defaulted Mortgage Loan, the Seller shall obtain the prior
written consent of the Purchaser.
The Seller shall be obligated to make all advances on the Mortgage
Loans with respect to taxes and insurance premiums due and owing (the "T&I
Servicing Advances"). Any other servicing advances in excess of $2500 that are
in connection with any default related workouts or foreclosure expenditures
shall be made with 5 Business Days' prior written consent of the Purchaser.
The Seller shall be required to notify the Purchaser in writing with 5
Business Days' notice of all advances in excess of $2500 required to be made
in order to further protect and preserve the Purchaser's interest in the
Mortgage Loans and the underlying Mortgaged Property (the "Other Servicing
Advances," together with the T&I Servicing Advances, the "Servicing
Advances"), and shall make such Other Servicing Advances in a timely fashion
unless otherwise instructed by the Purchaser. The Seller shall be entitled to
reimbursement for all Servicing Advances from the Purchaser within 15 business
days following the Transfer Date.
The Seller shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans separate and apart from any of its own funds
and general assets and shall establish one or more Custodial Accounts, in the
form of time deposit or demand accounts, to be maintained under the sole
dominion and control of the Purchaser and titled "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc. re: _____________________, Fixed Rate, Residential Mortgage
Loans,
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Group No. ____ _". The Custodial Account shall be established with a Qualified
Depository acceptable to the Purchaser. Any funds deposited in the Custodial
Account shall at all times be fully insured to the full extent permitted under
applicable law. The creation of any Custodial Account shall be evidenced by a
certification, in the case of an account established with the Seller, or by a
letter agreement, in the case of an account held by a depository other than
the Seller. A copy of such certification or letter agreement shall be
furnished to the Purchaser and, upon request, to any subsequent purchaser.
The Seller shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts,
titled, "__________________________ , in trust for Purchasers of Residential
Adjustable Rate Mortgage Loans and Fixed Rate Mortgage Loans, and various
Mortgagors". The Escrow Account shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. Funds deposited in the Escrow Accounts may be drawn on by the
Seller as set forth above with respect to Servicing Advances in accordance
with Accepted Servicing Practices. The creation of any Escrow Account shall be
evidenced by a certification, in the case of an account established with the
Seller, or by a letter agreement, in the case of an account held by a
depository other than the Seller. A copy of such certification shall be
furnished to the Purchaser and, upon request, to any subsequent Purchaser.
The Seller shall remit to the Purchaser on each Remittance Date all
amounts received from any source with respect to the Mortgage Loans and
previously deposited in the Custodial Account. On or prior to each Remittance
Date the Seller shall deliver to the Purchaser a remittance advice in hard
copy and electronic format acceptable to the Purchaser as to the accompanying
remittance and the period ending on the related Determination Date and shall
additionally specify the number of days which each Mortgage Loan is
delinquent, and shall contain an explanation of all Servicing Advances made,
the status of all Mortgage Loans in foreclosure or otherwise the subject of
litigation, and the status of all other collection efforts with respect to
each Mortgage Loan.
The Seller shall indemnify and hold harmless the Purchaser, its
affiliates and their respective present and former directors, officers,
employees and agents from and against any and all claims, losses, damages,
penalties, fines, forfeitures, legal fees and expenses (including, without
limitation, any legal fees and expenses, judgments or expenses relating to
such liability, claim, loss or damage) and related costs, judgments, and any
other costs, fees and expenses resulting from the breach by the Seller of any
of the covenants set forth herein.
SECTION 8. Transfer of Servicing.
On the applicable Transfer Date, the Purchaser, or its designee,
shall assume all servicing responsibilities related to, and the Seller shall
cease all servicing responsibilities related to, the related Mortgage Loans
subject to such Transfer Date.
On the related Transfer Date, the Seller, the Successor Servicer and
the Purchaser shall enter into an acknowledgement agreement in form and
substance satisfactory to the parties in which the Seller agrees, among other
things, to (i) comply with all servicing transfer
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provisions set forth in this Agreement, and (ii) recognize the Successor
Servicer as being entitled to the rights, benefits and indemnities provided to
a "Successor Servicer" in this Agreement.
In addition, on or prior to the applicable Transfer Date, the Seller
shall, at its sole cost and expense, take such steps as may be necessary or
appropriate to effectuate and evidence the transfer of the servicing of the
related Mortgage Loans to the Purchaser, or its designee, including but not
limited to the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee,
in accordance with the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ National Affordable Housing Act of
1990; provided, however, the content and format of the letter shall have the
prior approval of the Purchaser. The Seller shall provide the Purchaser with
copies of all such related notices no later than the Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the Transfer
Date. The Seller shall provide the Purchaser with copies of all such notices
no later than the Transfer Date.
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in
the Seller's possession relating to each related Mortgage Loan (with respect
to each such Mortgage Loan, for an interim period, as specified therein).
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of
the net Escrow Payments and suspense balances and all loss draft balances
associated with the related Mortgage Loans. The Seller shall provide the
Purchaser with an accounting statement, in electronic format acceptable to the
Purchaser in its sole discretion, of Escrow Payments and suspense balances and
loss draft balances sufficient to enable the Purchaser to reconcile the amount
of such payment with the accounts of the Mortgage Loans. Additionally, the
Seller shall wire transfer to the Purchaser the amount of any agency, trustee
or prepaid Mortgage Loan payments and all other similar amounts held by the
Seller, as interim servicer.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller, as interim servicer, on the related Mortgage Loans
from the related Cut-off Date to the Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
Transfer Date all payments received by the Seller on each related Mortgage
Loan shall be properly applied by the Seller to the account of the particular
Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of any
related Monthly Payments received by the Seller after the Transfer Date shall
be forwarded to the Purchaser by overnight mail on the date of receipt. The
Seller shall notify the Purchaser of
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the particulars of the payment, which notification requirement shall be
satisfied if the Seller forwards with its payment sufficient information to
permit appropriate processing of the payment by the Purchaser. The Seller
shall assume full responsibility for the necessary and appropriate legal
application of such Monthly Payments received by the Seller after the Transfer
Date with respect to related Mortgage Loans then in foreclosure or bankruptcy;
provided, for purposes of this Agreement, necessary and appropriate legal
application of such Monthly Payments shall include, but not be limited to,
endorsement of a Monthly Payment to the Purchaser with the particulars of the
payment such as the account number, dollar amount, date received and any
special Mortgagor application instructions and the Seller shall comply with
the foregoing requirements with respect to all Monthly Payments received by
the Seller after the Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring prior to the applicable Transfer Date and discovered after
the Transfer Date shall immediately notify the other party;
(iii) If a misapplied payment which occurred prior to the
Transfer Date cannot be identified and said misapplied payment has
resulted in a shortage in a Custodial Account or Escrow Account, the
Seller shall be liable for the amount of such shortage. The Seller
shall reimburse the Purchaser for the amount of such shortage within
thirty (30) days after receipt of written demand therefor from the
Purchaser;
(iv) If a misapplied payment which occurred prior to the
Transfer Date has created an improper Purchase Price as the result of
an inaccurate outstanding principal balance, a check shall be issued
to the party shorted by the improper payment application within five
(5) Business Days after notice thereof by the other party; and
(v) Any check issued under the provisions of this Section
8(h) shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the Transfer Date, the books, records and
accounts of the Seller with respect to the related Mortgage Loans shall be in
accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the Transfer Date,
reconcile principal balances and make any monetary adjustments required by the
Purchaser. Any such monetary adjustments will be transferred between the
Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
or any other IRS form legally required to be filed on or before the Transfer
Date in relation to the servicing and ownership of the related Mortgage Loans.
The Seller shall provide copies of such
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forms to the Purchaser upon request and shall reimburse the Purchaser for any
costs or penalties incurred by the Purchaser due to the Seller's failure to
comply with this paragraph.
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 limited liability
company, validly existing, and in good standing under the laws of its
jurisdiction of incorporation or formation 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;
(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,
by-laws or other organizational documents 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
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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;
(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 to the extent 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
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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 of the United States 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;
(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;
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(p) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon
recordation the Seller will be the owner of record of each Mortgage 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
with respect thereto in trust only for the purpose of servicing and
supervising the servicing of each Mortgage Loan; and
(q) 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
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 is complete, true and correct;
(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, other than payments not yet 30 days delinquent, 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 origination of the Mortgage Loan. The first
Monthly Payment shall be made with respect to the Mortgage Loan on its related
Due Date or within the grace period, all in accordance with the terms of the
related Mortgage Note;
(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 escrow of
funds has been established in an amount sufficient to pay for every such item
which remains unpaid and which has been assessed but is not yet due and
payable. 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
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approved by 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 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 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 ▇▇▇▇▇▇ ▇▇▇ Guides
or by ▇▇▇▇▇▇▇ Mac. 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 to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac requirements.
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. Neither the Seller nor the
related Mortgagor has engaged in any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory, abusive
and fair lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to the Illinois Interest Act and
Prepayment Penalties, have been complied with, the consummation of the
transactions contemplated hereby will not involve
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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. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which the
use of a leasehold estate for residential properties is a widely-accepted
practice, 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 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 is used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for commercial
purposes; provided, that Mortgaged Properties which contain a home office
shall not be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. None of the Mortgaged
Properties are Manufactured Homes, log homes, mobile homes, geodesic domes or
other unique property types. This representation and warranty is a Deemed
Material and Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan) or
second lien (with respect to a Second Lien Loan) 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:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to
-27-
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 (A) specifically referred to or
otherwise considered in the appraisal made for the originator of the
Mortgage Loan or (B) which do not adversely affect the Appraised
Value of the Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected first lien (with respect to a
First Lien Loan) or second lien (with respect to a Second Lien Loan) and first
priority (with respect to a First Lien Loan) or second priority (with respect
to a Second Lien Loan) security interest on the property described therein and
the Seller has full right to sell and assign the same to the Purchaser;
(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. 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
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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.
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;
(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 having a principal office in such state, or (3) not doing
business in such state;
(o) CLTV, LTV and PMI Policy. No Mortgage Loan that is a Second Lien
Loan has an LTV greater than 100%. 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. The Mortgage Loan is covered by an ALTA lender's
title insurance policy, or with respect to any Mortgage Loan for which the
related Mortgaged Property is located in California a CLTA lender's title
insurance policy, or other generally acceptable form of policy or insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and each such title insurance policy
is issued by a title insurer acceptable to ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac 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
(with respect to a First Lien Loan) or second (with respect to a Second Lien
Loan) 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 (A), (B),
(C) and (D) of paragraph (j) of this
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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 insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and remains in full
force and effect and will be in 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;
(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 the 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. At the time the Mortgage Loan was
originated, either (a) the originator was a mortgagee approved by the
Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act or a savings and loan association, a savings bank, a
commercial bank or similar banking institution which is supervised and
examined by a Federal or State authority or (b) the following requirements
have been met with respect to the Mortgage Loan: Seller meets the requirements
set forth in clause (a), and (i) such Mortgage Loan was underwritten in
accordance with standards established by Seller, using application forms and
related credit documents approved by Seller, (ii) Seller approved each
application and the related credit documents before a commitment by the
correspondent was issued, and no such commitment was issued until Seller
agreed to fund such
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Mortgage Loan, (iii) the closing documents for such Mortgage Loan were
prepared on forms approved by Seller, and (iv) such Mortgage Loan was
purchased by Seller at closing or soon thereafter. 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 Cap are as set forth on the related Mortgage Loan Schedule. 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. Except for Balloon
Mortgage Loans, the Mortgage Loan does not require a balloon payment on its
stated maturity date;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise
by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver
good and merchantable title to the Mortgaged Property. There is no homestead
or other exemption available to a Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the right to
foreclose the Mortgage other than 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 each related Assignment and Conveyance Agreement). The
Mortgage Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇ Mac or ▇▇▇▇▇▇
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;
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(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 paragraph (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 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 Loans
to prepay during any period materially faster or slower than the mortgage
loans originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the Mortgage,
the Assignment of Mortgage and any other documents required to be delivered
under the Custodial Agreement for each Mortgage Loan have been delivered to
the Custodian. The Seller is in possession of a complete, true and accurate
Mortgage File in compliance with Exhibit A hereto, except for such documents
the originals of which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the
Mortgaged Property meets the guidelines set forth in the Originator's
Underwriting Guidelines;
(cc) 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. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) 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 and such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a
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related Mortgage Loan may only be assumed if the party assuming such Mortgage
Loan meets certain credit requirements stated in the Mortgage Loan Documents;
(ff) 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;
(gg) 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 (with respect to a First Lien
Loan) or second (with respect to a Second Lien Loan) 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 ▇▇▇▇▇▇ ▇▇▇ and
▇▇▇▇▇▇▇ Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) 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;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller 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 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 has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. 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 executed and delivered any and all
notices required under
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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;
(jj) 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 and adjustable rate to a fixed rate;
(kk) 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. 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;
(ll) No Violation of Environmental Laws. 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
Mortgaged 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;
(mm) 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 Relief Act or other similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application 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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac and Title XI of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that 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 Seller shall maintain such statement in the
Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or
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rehabilitation of a Mortgaged Property or facilitating the trade-in or
exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which the
Mortgaged Property is located, the original lender has filed for record a
request for notice of any action by the related senior lienholder, and the
Seller has notified the senior lienholder in writing of the existence of the
Second Lien Loan and requested notification of any action to be taken against
the Mortgagor by the senior lienholder. Either (a) no consent for the Second
Lien 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;
(rr) [Reserved];
(ss) Escrow Analysis. If applicable, with respect to each Mortgage,
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;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(uu) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and effect,
and there is no default, breach, violation or event which would permit
acceleration existing under such first Mortgage or 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 thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien Loan,
the related first lien Mortgage contains a provision which provides for giving
notice of default or breach to the mortgagee under the Mortgage Loan and
allows such mortgagee to cure any default under the related first lien
Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the Mortgaged
Property which has not been cured;
(xx) 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 shall hold the Purchaser harmless from any and all
damages, losses, costs and expenses (including attorney's fees) arising from
disclosure of credit information in connection with the Purchaser's secondary
marketing operations and the purchase and sale of mortgages or Servicing
Rights thereto. This representation and warranty is a Deemed Material and
Adverse Representation;
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(yy) 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;
(zz) 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;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or
after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair
Lending Act. 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. This representation and warranty is a Deemed Material and
Adverse Representation;
(bbb) 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
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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;
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is either (x) a First
Lien Loan 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,
or (y) a Second Lien Loan subordinate to a First Lien Loan which, to the best
of Seller's knowledge, 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;
(eee) 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;
(fff) Recordation. Each original Mortgage and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been submitted for recording 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;
(ggg) Mortgagor Bankruptcy. On or prior to the date 30 days after the
related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not 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;
(hhh) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(iii) ▇▇▇▇▇▇ ▇▇▇ Guides Anti-Predatory Lending Eligibility: Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility for
purchase requirements of ▇▇▇▇▇▇ Mae Guides;
(jjj) 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
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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;
(kkk) 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;
(lll) 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
▇▇▇▇▇▇ Mae's anti-predatory lending requirements as set forth in the ▇▇▇▇▇▇
Mae 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;
(mmm) Disclosure of Fees and 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;
(nnn) Balloon Mortgage Loans. No Balloon Mortgage Loan has an
original stated maturity of less than seven (7) years;
(ooo) No Arbitration. No Mortgage Loan originated on or after July 1,
2004 requires the related Mortgagor to submit to arbitration to resolve any
dispute arising out of or
-38-
relating in any way to the Mortgage Loan transaction. This representation and
warranty is a Deemed Material and Adverse Representation;
(ppp) 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;
(qqq) Negative Amortization. No Mortgage Loan is subject to negative
amortization; and
(rrr) Second Lien Loans. With respect to each Second Lien Loan:
(i)No Negative Amortization of Related First Lien Loan. The
related first lien loan does not permit negative amortization; and
(ii) Principal Residence. The related Mortgaged Property is
the Mortgagor's principal residence. This representation and warranty
is a Deemed Material and Adverse Representation.
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. 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.
Within 60 days of the earlier of either discovery by or notice to the
Seller of any such 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 at the Repurchase Price.
Notwithstanding the above sentence, (i) within 60 days of the earlier of
either discovery by, or notice to, the Seller of any breach of the
representations or warranties set forth in Paragraphs (ccc), (iii) and (nnn)
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
affect 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
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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 (a "Deleted Mortgage Loan") and
substitute in its place a Qualified Substitute Mortgage Loan or Loans,
provided that any such substitution shall be effected not later than 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 or Loans pursuant to the
foregoing provisions of this Subsection 9.03 shall be accomplished by either,
at Purchaser's discretion, (a) 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) by direct remittance of the
Repurchase Price to the Purchaser or its designee in accordance with the
Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by the Custodian
relating to the 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 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.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the
amount (if any) by which the aggregate principal balance of all Qualified
Substitute Mortgage Loans as of the date of
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substitution is less than the aggregate outstanding principal balance of all
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; provided,
however, the Successor Servicer indemnification set forth above shall apply
only in connection with a breach of the representation in Paragraph (tt). It
is understood and agreed that the obligations of the Seller set forth in this
Subsection 9.03 to cure, substitute for or repurchase 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 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 or repurchase such Mortgage Loan as
specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults.
With respect to any Mortgage Loan, in the event that any one of the
first three (3) scheduled payments of principal and interest due either (i)
after origination of such Mortgage Loan, or (ii) after the related Closing
Date is not paid by the related Mortgagor to the Purchaser within thirty (30)
days of such Due Date, the Seller, at the Purchaser's option, shall repurchase
such Mortgage Loan from the Purchaser at a price equal to the related Purchase
Price Percentage multiplied by the then outstanding principal balance of such
Mortgage Loan, plus accrued and unpaid interest thereon from the date to which
interest was last paid through the day prior to the repurchase date at the
applicable Mortgage Interest Rate, plus any outstanding advances owed to any
servicer in connection with such Mortgage Loan.
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Subsection 9.05 Premium Recapture.
With respect to any Mortgage Loan without Prepayment Penalties that
prepays in full during the first six (6) months following the related Closing
Date, the Seller shall pay the Purchaser, within three (3) Business Days after
such prepayment in full, 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:
(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;
(ii) all of the representations and warranties of the Seller
under this 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;
(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;
(iv) the Seller shall have delivered and released to the
Custodian all documents required pursuant to the Custodial Agreement;
and
(v)all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been complied
with.
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.
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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:
(1) this Agreement (to be executed and delivered only for
the initial Closing Date);
(2) [Reserved];
(3) with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
(4) 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);
(5) a Custodian's Certification, as required under the
Custodial Agreement;
(6) with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to each of
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon request of
the Purchaser;
(7) with respect to the initial Closing Date, an Opinion of
Counsel of the Seller (who may be an employee of the Seller), 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;
(8) 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);
(9) a Security Release Certification, in the form of Exhibit
E or F, as applicable, hereto 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;
(10) 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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(11) Assignment and Conveyance Agreement in the form of
Exhibit G hereto, and all exhibits thereto;
(12) with respect to the initial Closing Date, the
Underwriting Guidelines to be attached hereto as Exhibit H and with
respect to each subsequent Closing Date, the Underwriting Guidelines
to be attached to the related Assignment and Conveyance; and
(13) a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for each MERS
Designated Mortgage Loan.
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.
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:
(i) ▇▇▇▇▇▇ ▇▇▇ under its Cash Purchase Program or MBS
Program (Special Servicing Option) (each, a "▇▇▇▇▇▇ Mae Transfer"); or
(ii) ▇▇▇▇▇▇▇ Mac (the "▇▇▇▇▇▇▇ Mac Transfer"); or
(iii) one or more third party purchasers in one or more
Whole Loan Transfers; or
(iv) one or more trusts or other entities to be formed as
part of one or more Securitization Transactions.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable
to the Seller among the Purchaser, the Seller, ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac (as
the case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement in form and substance reasonably
acceptable to the parties, and in connection with a Securitization
Transaction, an Assignment and Recognition Agreement substantially in the form
attached
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hereto as Exhibit I (collectively, the agreements referred to herein as
designated, the "Reconstitution Agreements"), together with an opinion of
counsel with respect to such 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; and (3) to
restate the representations and warranties set forth in Subsection 9.01 as of
the "Reconstitution Date" and to restate the representations and warranties
set forth in Subsection 9.02 as of the Transfer Date (in connection with
servicing related representations and warranties) or "Reconstitution Date" (in
connection with all other representations and warranties). The Seller shall
provide to any issuer, servicer, trustee, Rating Agency, investor and any
other participants 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 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 Seller shall
indemnify the Purchaser, each affiliate of the Purchaser participating in the
Reconstitution, each underwriter or placement agent participating in the
Reconstitution and each Person who controls the Purchaser, such affiliate,
underwriter or placement agent 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 arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
information provided by or on behalf of the Seller regarding the Seller, the
Mortgage Loans or the Underwriting Guidelines set forth in any offering
document (including, without limitation, structural term sheets, collateral
term sheets and computational materials) prepared in connection with any
Reconstitution. For purposes of the previous sentence, "Purchaser" shall mean
the Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement.
In the event the Purchaser has elected to have the Seller 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 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 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, at the direction of the
Purchaser, any note endorsement in connection with any and all seller/servicer
agreements.
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All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and shall continue to be
serviced in accordance with the terms of this 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 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 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 Seller, as
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 (provided that such costs shall not
include any lost profits). 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.
(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
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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.
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.
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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.
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:
Opteum Financial Services LLC
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
(ii) if to the Purchaser:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with copies to:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Servicing Oversight
▇▇▇▇ ▇-▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - RFPG
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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).
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.
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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. Governing Law.
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. The 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 the substantive laws of the State of New York
(without regard to conflicts of laws principles), except to the extent
preempted by Federal law.
SECTION 21. 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 22. 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.
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SECTION 23. 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 24. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 25. 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 term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 26. 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.
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SECTION 27. 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 28. 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 29. 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 29.
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SECTION 30. 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 31. 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 32. Compliance with Regulation AB
Subsection 32.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose
of Section 32 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
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the asset-backed securities markets, advice of counsel, or otherwise, and
agrees to comply with requests made by the Purchaser or any Depositor in good
faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any
Securitization Transaction, the Seller shall cooperate fully with the
Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of
the Purchaser or any Depositor to permit the Purchaser or such Depositor to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Seller, any Third-Party Originator and the Mortgage Loans, or
the servicing of the Mortgage Loans, reasonably believed by the Purchaser or
any Depositor to be necessary in order to effect such compliance.
Subsection 32.02 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 32.03 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 this 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 this 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 32.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or,
if any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
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Subsection 32.03 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), 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.
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(b) [Reserved]
(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 32.04 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 32 by or on
behalf of the Seller, or provided under this Section 32 by or
on behalf of any Third-Party Originator (collectively, the
"Seller Information"), or (B) the omission or alleged omission
to state in the Seller Information a material fact required to
be stated in the Seller Information or necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the
Seller Information and not to any other information
communicated in connection with a sale or purchase of
securities, without regard to whether the Seller Information
or any portion thereof is presented together with or
separately from such other information;
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(ii) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants'
letter or other material when and as required under this
Section 32; or
(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 32.02(a) or in a writing furnished
pursuant to Subsection 32.02(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 32.02(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.
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 32, or any breach by the Seller of a
representation or warranty set forth in Subsection 32.02(a) or in a writing
furnished pursuant to Subsection 32.02(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
32.02(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 this 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]
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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.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
(Purchaser)
By:____________________________________
Name:__________________________________
Title:_________________________________
OPTEUM FINANCIAL SERVICES LLC
(Seller)
By:____________________________________
Name:__________________________________
Title:_________________________________
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File 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 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) the original Mortgage with evidence of recording thereon. 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
(e) the original Assignment of Mortgage for each Mortgage Loan, in
form and substance acceptable for recording (except with respect to MERS
Designated Mortgage 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) 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 Mortgage 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) 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; and
(i) 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 Seller 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
A-2
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.
A-3
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"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc., a New York corporation ("▇▇▇▇▇▇") and Opteum Financial Services
LLC, a [_______________] (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, ▇▇▇▇▇▇ purchased from Seller certain of the Mortgage
Loans underlying the Certificates (the "Mortgage Loans") pursuant to a
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2006
(the "Purchase Agreement"), by and between ▇▇▇▇▇▇ and Seller; and
WHEREAS, pursuant to Section 13 of the Purchase Agreement, the
Seller has agreed to indemnify the Depositor, ▇▇▇▇▇▇, the Underwriter[s], the
Initial Purchaser[s] and their respective affiliates, present and former
directors, officers, employees and agents.
B-1
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Depositor, ▇▇▇▇▇▇ and the Seller agree as follows:
(i) Indemnification and Contribution.
(A) The Seller agrees to indemnify and hold harmless the Depositor,
▇▇▇▇▇▇, 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,
▇▇▇▇▇▇, 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
the Free Writing Prospectus and agrees to reimburse the Depositor, ▇▇▇▇▇▇, 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,
▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] their affiliates or any
such director, officer, employee, agent or controlling person of the
Depositor, ▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] or their
respective affiliates.
As used herein:
"Seller Information" means any information relating to Seller, the
Mortgage Loans and/or the underwriting guidelines relating to the Mortgage
Loans set forth in the Prospectus Supplement, the Offering Circular, 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
B-2
Circular, the ABS Informational and Computational Materials or the Free Writing
Prospectus] [incorporated by reference from the 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.
"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. ss.ss.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
B-3
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.
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,
▇▇▇▇▇▇, the Underwriter[s], the Initial Purchaser[s] their respective
affiliates, directors, officers, employees or agents or any person controlling
the Depositor, ▇▇▇▇▇▇, 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.
B-4
(ii) Representations and Warranties. Seller represents and warrants
that:
(1)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;
(2)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;
(3)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;
(4)(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;
(5)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;
(6)this Agreement has been duly executed and delivered by
Seller; and
(7)the Seller represents that the Seller Information
satisfies the requirements of the applicable provisions of Regulation
AB.
(iii) 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
▇▇▇▇▇▇, ▇▇▇▇ be mailed, delivered or faxed or emailed and confirmed by mail to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loans Operations Manager,
Fax: [_______], Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, with
B-5
copies to (i) ▇▇▇▇▇ ▇. ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - Legal Counsel, Securities, ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax [_____],
Email: ▇▇▇▇▇.▇.▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
- SPG Finance, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Fax [_____], Email: ▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇; 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
[_____________________].
(iv) 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:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:____________________________________
Name:
Title:
OPTEUM FINANCIAL SERVICES LLC
By:____________________________________
Name:
Title:
B-7
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of Opteum Financial Services LLC, a [ ] organized under the
laws of [ ] (the "Company") and further as follows:
(i)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 _______________.
(ii) 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 ___________.
(iii) 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.
(iv) 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 Mortgage Loan Purchase and Warranties Agreement,
dated as of _______ __, 200_ (the "Purchase Agreement"), by and
between ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 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 ____________.
(v)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.
(vi) 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 or, to the best of my
knowledge, the terms of any indenture or other agreement or
instrument to which
C-1
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.
(vii) 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.
(viii) 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.
(ix) 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:_________________________
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 SELLER
[ ], 200[ ]
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested our opinion, as outside counsel to Opteum
Financial Services LLC (the "Company"), with respect to certain matters in
connection with the sale by the Company of the Mortgage Loans pursuant to that
certain Mortgage Loan Purchase and Warranties Agreement by and between the
Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. (the "Purchaser"), dated as
of August 1, 2006 (the "Agreement") which sale is in the form of whole loans.
Capitalized terms not otherwise defined herein have the meanings set forth in
the Purchase Agreement.
We have examined the following documents:
(i) the Agreement;
(ii) that certain Seller's Officer's Certificate, executed in
connection with the Agreement ( the "Seller's Certificate");
(iii) Company's Operating Agreement dated as of [ ];
(iv) the form of endorsement of the Mortgage Notes; and
(v) such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent we have deemed necessary and proper, we have relied
upon the representations and warranties of the Company contained in the
Agreement. We have assumed the authenticity of all documents submitted to us
as originals, the genuineness of all signatures, the legal capacity of natural
persons and the conformity to the originals of all documents. We have also
assumed execution of the Agreement.
As to various questions of fact material to this opinion, we have made
such factual inquiries to the Company as we have deemed necessary; however,
where we state that a matter is "to the best of our knowledge," we have relied
only upon our actual knowledge of the Company, after due inquiry of the
Company, with no other substantiation of the facts.
D-1
The Agreement states that New York law governs. We have assumed that the
laws of New York and Delaware, the Company's state of organization, do not
differ in any material respect from the laws of Georgia with respect to our
opinions, which are offered only relative to Georgia law, except as to
opinions (i) and (ii) below, which are also given under the Delaware Limited
Liability Company Act even though no member of our firm is licensed to
practice in Delaware.
Based upon the foregoing, it is our opinion that:
(i) The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the
State of Delaware and is qualified to transact business in,
and is in good standing under, the laws of the state of
Delaware.
(ii) The Company has the power to engage in the transactions
contemplated by the Agreement and all requisite power,
authority and legal right to execute and deliver the
Agreement and to perform and observe the terms and
conditions of the Agreement.
(iii) The Agreement has been duly authorized, executed and
delivered by the Company, and are the legal, valid and
binding agreement enforceable in accordance with its terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially
interfere with the realization of the benefits provided
thereunder or with the Purchaser's ownership of the Mortgage
Loans.
(iv) The Company has been duly authorized to allow the officers
designated in the Seller's Certificate to execute any and
all documents by original signature in order to complete the
transactions contemplated by the Agreement and by original
signature in order to execute the endorsements to the
Mortgage Notes.
(v) 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 Agreement and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreement or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
(vi) Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of, the Agreement
conflict or will conflict with or result or will result in a
breach of or constitute or will constitute a default under
the charter or by-laws of the Company or, to the best of my
D-2
knowledge, the material 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.
(vii) To the best of our knowledge, there is no action, suit,
proceeding or investigation pending or threatened against
the Company which, in our 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 Agreement
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 Agreement.
(viii) The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreement is sufficient to fully
transfer to the Purchaser all right, title and interest of
the Company thereto as note holder and mortgagee.
This opinion is rendered as of the date hereof, and we hereby
disclaim any duty to advise you or any other party entitled to rely upon it of
any change in any matter set forth herein.
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,
D-3
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
--------------------------
--------------------------
--------------------------
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ____________________[COMPANY] a
[type of entity], organized pursuant to the laws of [the State of
incorporation] (the "Company") has committed to sell certain mortgage loans to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. under a Mortgage Loan Purchase and
Warranties Agreement. The Company warrants that the mortgage loans to be sold
to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. are in addition to and beyond any
collateral required to secure advances made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. shall not be used as additional or
substitute collateral for advances made by the Association. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. understands that the balance of the Company's mortgage
loan portfolio may be used as collateral or additional collateral for advances
made by the Association, and confirms that it has no interest therein.
Execution of this letter by the Association shall constitute a
full and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc.
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Very truly yours,
----------------------------
By:__________________________
Name:________________________
Title:_______________________
Date:________________________
Acknowledged and approved:
[FEDERAL HOME LOAN BANK OF]
--------------------------
By:______________________________
Name:____________________________
Title:___________________________
Date:____________________________
E-2
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title, interest, lien or claim of any kind it may have in all
mortgage loans described on the attached Schedule A (the "Mortgage Loans"),
---------- --------------- to be purchased by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital
Inc. from the company named on the next page (the "Company") pursuant to that
certain Mortgage Loan ------- Purchase and Warranties Agreement, dated as of
______ __, 200_, and certifies that all notes, mortgages, assignments and
other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Company or its designees, as of the date and
time of the sale of such Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital
Inc. Such release shall be effective automatically without any further action
by any party upon payment in one or more installments, in immediately
available funds, of $_____________, in accordance with the wire instructions
set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
_________________________________
_________________________________
_________________________________
By:______________________________
F-1
II. Certification of Release
The Company named below hereby certifies to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. that, as of the date and time of the sale of the
above-mentioned Mortgage Loans to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. the
security interests in the Mortgage Loans released by the above-named financial
institution comprise all security interests relating to or affecting any and
all such Mortgage Loans. The Company warrants that, as of such time, there are
and will be no other security interests affecting any or all of such Mortgage
Loans.
------------------------------
By:___________________________
Title:________________________
Date:_________________________
F-2
EXHIBIT G
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
On this ___ day of ____________, ________, _______________
("Seller"), as the Seller under (i) that certain Purchase Price and Terms
Agreement, dated as of _________, ____ (the "PPTA"), and (ii) that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of August 1, 2006
(the "Purchase Agreement"), does hereby sell, transfer, assign, set over and
convey to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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 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]
G-1
OPTEUM FINANCIAL SERVICES LLC
By: __________________________________
Name: _____________________________
Title: ____________________________
Accepted and Agreed:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By:_________________________________
Name:
Title:
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EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
------------------
G-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) a CLTV 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 [______].
G-4
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
-----------------------
G-5
EXHIBIT H
UNDERWRITING GUIDELINES
-----------------------
H-1
EXHIBIT I
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated [____________ __,
20__] ("Agreement"), among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc. ("Assignor"),
[____________________] ("Assignee") and [SELLER] (the "Company"):
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment and Conveyance
-------------------------
1. The Assignor hereby conveys, sells, grants, transfers and
assigns to the Assignee all of the right, title and interest of the Assignor,
as purchaser, in, to and under (a) those certain Mortgage Loans listed on the
schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans") and (b) except as described below, that certain Mortgage
Loan Purchase and Warranties Agreement (the "Purchase Agreement"), dated as of
August 1, 2006, between the Assignor, as purchaser (the "Purchaser"), and the
Company, as seller, solely insofar as the Purchase Agreement relates to the
Mortgage Loans.
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement which are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 9.04 of the Purchase Agreement.
Recognition of the Company
--------------------------
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to
[__________________] (the "Trust") created pursuant to a Pooling and Servicing
Agreement, dated as of [______], 200_ (the "Pooling Agreement"), among the
Assignee, the Assignor, [___________________], as trustee (including its
successors in interest and any successor trustees under the Pooling Agreement,
the "Trustee"), [____________________], as servicer (including its successors
in interest and any successor servicer under the Pooling Agreement, the
"Servicer"). The Company hereby acknowledges and agrees that from and after
the date hereof (i) the Trust will be the owner of the Mortgage Loans, (ii)
the Company shall look solely to the Trust for performance of any obligations
of the Assignor insofar as they relate to the Mortgage Loans, (iii) the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) shall
have all the rights and remedies available to the Assignor, insofar as they
relate to the Mortgage Loans, under the Purchase Agreement, including, without
limitation, the enforcement of the document delivery requirements set forth in
Section 6 of the Purchase Agreement, and shall be entitled to enforce all of
the obligations of the Company thereunder insofar as they relate to the
Mortgage Loans, and (iv) all references to the Purchaser, the
I-1
Custodian or the Bailee under the Purchase Agreement insofar as they relate to
the Mortgage Loans, shall be deemed to refer to the Trust (including the
Trustee and the Servicer acting on the Trust's behalf). Neither the Company
nor the Assignor shall amend or agree to amend, modify, waiver, or otherwise
alter any of the terms or provisions of the Purchase Agreement which
amendment, modification, waiver or other alteration would in any way affect
the Mortgage Loans or the Company's performance under the Purchase Agreement
with respect to the Mortgage Loans without the prior written consent of the
Trustee.
Representations and Warranties of the Company
---------------------------------------------
3. The Company warrants and represents to the Assignor, the
Assignee and the Trust as of the date hereof that:
(a) The Company is duly organized, validly existing and in
good standing under the laws of the jurisdiction of
its incorporation;
(b) The Company has full power and authority to execute,
deliver and perform its obligations under this
Agreement and has full power and authority to perform
its obligations under the Purchase Agreement. The
execution by the Company of this Agreement is in the
ordinary course of the Company's business and will not
conflict with, or result in a breach of, any of the
terms, conditions or provisions of the Company's
charter or bylaws or any legal restriction, or any
material agreement or instrument to which the Company
is now a party or by which it is bound, or result in
the violation of any law, rule, regulation, order,
judgment or decree to which the Company or its
property is subject. The execution, delivery and
performance by the Company of this Agreement have been
duly authorized by all necessary corporate action on
part of the Company. This Agreement has been duly
executed and delivered by the Company, and, upon the
due authorization, execution and delivery by the
Assignor and the Assignee, will constitute the valid
and legally binding obligation of the Company,
enforceable against the Company in accordance with its
terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or
other similar laws now or hereafter in effect relating
to creditors' rights generally, and by general
principles of equity regardless of whether
enforceability is considered in a proceeding in equity
or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any
governmental entity is required to be obtained or made
by the Company in connection with the execution,
delivery or performance by the Company of this
Agreement; and
(d) There is no action, suit, proceeding or investigation
pending or threatened against the Company, before any
court, administrative agency or other tribunal, which
would draw into question the validity of this
Agreement or the Purchase Agreement, or which, either
in any one instance or in the aggregate, would result
in any material adverse change in the ability of the
Company to perform its
I-2
obligations under this Agreement or the Purchase
Agreement, and the Company is solvent.
4. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section
9.02 of the Purchase Agreement are true and correct as of the date hereof as
if such representations and warranties were made on the date hereof unless
otherwise specifically stated in such representations and warranties.
Remedies for Breach of Representations and Warranties
-----------------------------------------------------
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee
and the Servicer acting on the Trust's behalf) in connection with any breach
of the representations and warranties made by the Company set forth in
Sections 3 and 4 hereof shall be as set forth in Subsection 9.03 of the
Purchase Agreement as if they were set forth herein (including without
limitation the repurchase and indemnity obligations set forth therein).
Miscellaneous
-------------
6. This Agreement shall be construed in accordance with the laws
of the State of New York, without regard to conflicts of law principles, and
the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
7. 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, with
the prior written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee
and the Servicer acting on the Trust's behalf). Any entity into which
Assignor, Assignee or Company may be merged or consolidated shall, without the
requirement for any further writing, be deemed Assignor, Assignee or Company,
respectively, hereunder.
9. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by Assignor to Assignee and by
Assignee to the Trust and nothing contained herein shall supersede or amend
the terms of the Purchase Agreement.
10. 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.
11. In the event that any provision of this Agreement conflicts
with any provision of the Purchase Agreement with respect to the Mortgage
Loans, the terms of this Agreement shall control.
I-3
12. Capitalized terms used in this Agreement (including the
exhibits hereto) but not defined in this Agreement shall have the meanings
given to such terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
OPTEUM FINANCIAL SERVICES LLC
By: __________________________________
Name:_______________________________
Its:________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: __________________________________
Name:_______________________________
Its:________________________________
[--------------------------]
By: __________________________________
Name:_______________________________
Its:________________________________
I-4
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
-------------------------------------------------
Mortgage Loan Schedule
I-5