Exhibit 99.10(b)
EXECUTION COPY
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FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE
AND WARRANTIES AGREEMENT
___________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.,
Purchaser
MORTGAGEIT, INC.,
Seller
___________________________
Dated as of March 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......................................................15
SECTION 3. MORTGAGE SCHEDULES.........................................................16
SECTION 4. PURCHASE PRICE.............................................................16
SECTION 5. EXAMINATION OF MORTGAGE FILES..............................................17
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER........................................17
SECTION 7. SERVICING OF THE MORTGAGE LOANS............................................20
SECTION 8. [RESERVED].................................................................21
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR
BREACH.....................................................................21
SECTION 10. CLOSING....................................................................41
SECTION 11. CLOSING DOCUMENTS..........................................................42
SECTION 12. COSTS......................................................................43
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION................................43
SECTION 14. THE SELLER.................................................................45
SECTION 15. FINANCIAL STATEMENTS.......................................................46
SECTION 16. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.............................47
SECTION 17. NOTICES....................................................................47
SECTION 18. SEVERABILITY CLAUSE........................................................48
SECTION 19. COUNTERPARTS...............................................................48
SECTION 20. INTENTION OF THE PARTIES...................................................48
SECTION 21. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT...................49
SECTION 22. WAIVERS....................................................................49
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SECTION 23. EXHIBITS...................................................................49
SECTION 24. GENERAL INTERPRETIVE PRINCIPLES............................................49
SECTION 25. REPRODUCTION OF DOCUMENTS..................................................50
SECTION 26. FURTHER AGREEMENTS.........................................................50
SECTION 27. RECORDATION OF ASSIGNMENTS OF MORTGAGE.....................................50
SECTION 28. NO SOLICITATION............................................................50
SECTION 29. WAIVER OF TRIAL BY JURY....................................................51
SECTION 30. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS..................51
SECTION 31. AMENDMENT..................................................................52
SECTION 32. CONFIDENTIALITY............................................................52
SECTION 33. ENTIRE AGREEMENT...........................................................52
SECTION 34. COMPLIANCE WITH REGULATION AB..............................................52
EXHIBITS
EXHIBIT A-1 MORTGAGE LOAN DOCUMENTS
EXHIBIT A-2 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B FORM OF 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 UNDERWRITING GUIDELINES
EXHIBIT H FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
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FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE
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AND WARRANTIES AGREEMENT
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This FOURTH AMENDED AND RESTATED MORTGAGE LOAN PURCHASE AND
WARRANTIES AGREEMENT ("Agreement"), dated as of March 1, 2006, by and between
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., a New York corporation (the
"Purchaser"), and MortgageIT, Inc., a New York corporation (the "Seller").
W I T N E S S E T H:
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WHEREAS, the Purchaser and the Seller are parties to that certain
Mortgage Loan Purchase and Warranties Agreement, dated as of October 1, 2004,
as amended by that certain Amended and Restated Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended by that certain
Second Amended and Restated Mortgage Loan Purchase and Warranties Agreement,
dated as of March 1, 2005, as amended by that certain Third Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of December
1, 2005 (the "Original Purchase Agreement") and the Seller desires to sell,
from time to time, to the Purchaser, and the Purchaser desires to purchase,
from time to time, from the Seller, certain conventional fixed and adjustable
rate residential first-lien and second-lien mortgage loans (the "Mortgage
Loans") on a servicing released basis as described herein, and which shall be
delivered in pools of whole loans (each, a "Mortgage Loan Package") on various
dates as provided herein (each, a "Closing Date");
WHEREAS, the Purchaser and the Seller desire to enter into this
Agreement to amend and restate the Original Purchase Agreement to make certain
modifications as set forth herein with respect to all Mortgage Loans subject
to this Agreement or the Original Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Purchaser
and the Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices which are in accordance with accepted
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to
this Agreement, the Mortgage Interest Rate of which is adjusted from time to
time in accordance with the terms of the related Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A ▇▇▇▇▇▇ Mae Transfer or a ▇▇▇▇▇▇▇ Mac Transfer.
Agreement: This Fourth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement including all exhibits, schedules, amendments and
supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgaged Property, the lesser
of (i) the value thereof as determined by an appraisal made for the originator
of the Mortgage Loan at the time of origination of the Mortgage Loan by a
Qualified Appraiser and (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan; provided,
however, that in the case of a Refinanced Mortgage Loan, such value of the
Mortgaged Property is based solely upon the value determined by an appraisal
made for the originator of such Refinanced Mortgage Loan at the time of
origination of such Refinanced Mortgage Loan by a Qualified Appraiser.
Assignment and Conveyance Agreement: As defined in Subsection 6.01.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form and in blank,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to give record notice of the sale of the Mortgage to the
Purchaser.
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage Loan or
(b) for which Monthly Payments of principal (not including the payment due on
its stated maturity date) are based on an amortization schedule that would be
insufficient to fully amortize the principal thereof by the stated maturity
date of the Mortgage Loan.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions, in the State of New
York or the State in which the Interim Servicer's servicing operations are
located or (iii) the state in which the Custodian's operations are located,
are authorized or obligated by law or executive order to be closed.
Cash-Out Refinance: A Refinanced Mortgage Loan in which the proceeds
received were in excess of the amount of funds required to repay the principal
balance of any existing first mortgage on the related Mortgaged Property, pay
related closing costs and satisfy
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any outstanding subordinate mortgages on the related Mortgaged Property and
which provided incidental cash to the related Mortgagor of more than 1% of the
original principal balance of such Mortgage Loan.
Closing Date: The date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Closing Documents: The documents required to be delivered on each
Closing Date pursuant to Section 11.
CLTA: The California Land Title Association.
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.
Code: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking of all or part of a Mortgaged Property, whether permanent
or temporary, partial or entire, by exercise of the power of condemnation or
the right of eminent domain, to the extent not required to be released to a
Mortgagor in accordance with the terms of the related Mortgage Loan Documents.
Co-op: A private, cooperative housing corporation, having only one
class of stock outstanding, which owns or leases land and all or part of a
building or buildings, including apartments, spaces used for commercial
purposes and common areas therein and whose board of directors authorizes the
sale of stock and the issuance of a Co-op Lease.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated
to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
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Custodial Account: The separate trust account created and maintained
pursuant to Subsection 2.04 of the Interim Servicing Agreement (with respect
to each Mortgage Loan, as specified therein).
Custodial Agreement: The agreement(s) governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively
be referred to as the "Custodial Agreement."
Custodian: LaSalle Bank National Association, a national banking
association and its successors in interest, or any successor to the Custodian
under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material and Adverse Representation: Each representation and
warranty identified as such in Section 9.02 of this Agreement.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or to be
repurchased or replaced or to be replaced with a Qualified Substitute Mortgage
Loan by the Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, for an interim period, as
specified therein).
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the Mortgagee pursuant to the Mortgage or any other
document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
▇▇▇▇▇▇ ▇▇▇: The Federal National Mortgage Association, or any
successor thereto.
▇▇▇▇▇▇ Mae Guides: The ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇' Guide and the ▇▇▇▇▇▇ Mae
Servicers' Guide, as amended or restated from time to time.
▇▇▇▇▇▇ ▇▇▇ Transfer: As defined in Section 13.
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FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto
and including the Federal Housing Commissioner and the Secretary of Housing
and Urban Development where appropriate under the FHA Regulations.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage on
the related Mortgaged Property.
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, (b) classified as a "high cost home,"
"threshold," "covered," (excluding New Jersey "Covered Home Loans" as that
term was defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002 that were originated between
November 26, 2003 and July 7, 2004), "high risk home," "predatory" or similar
loan under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans having high interest rates, points and/or fees) or (c) a Mortgage Loan
categorized as High Cost pursuant to Appendix E of Standard & Poor's Glossary.
For avoidance of doubt, the parties agree that this definition shall apply to
any law regardless of whether such law is presently, or in the future becomes,
the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as 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.
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Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Interim Servicer: The servicer under the Interim Servicing
Agreement, or its successor in interest, or any successor to the Interim
Servicer under the Interim Servicing Agreement, as therein provided.
Interim Servicing Agreement: The agreement to be entered into by the
Purchaser and the Interim Servicer, providing for the Interim Servicer to
service the Mortgage Loans as specified by the Interim Servicing Agreement.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Adjustable Rate Mortgage Loan
by more than the amount per annum set forth on the related Mortgage Loan
Schedule.
Liquidation Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, other than amounts
received following the acquisition of REO Property, Insurance Proceeds and
Condemnation Proceeds.
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of any
date of determination, the ratio (expressed as a percentage) the numerator of
which is the outstanding principal balance of the Mortgage Loan as of the
related Cut-off Date (unless otherwise indicated), and the denominator of
which is the lesser of (a) the Appraised Value of the Mortgaged Property at
origination and (b) if the Mortgage Loan was made to finance the acquisition
of the related Mortgaged Property, the purchase price of the Mortgaged
Property.
LTV: Loan-to-Value Ratio.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal
Manufactured Home Construction and Safety Standards adopted on June 15, 1976,
by the Department of Housing and Urban Development
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("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 MERS Procedures Manual and (b) the
Seller has designated or will designate the Purchaser as the Investor on the
MERS System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
payment of principal and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan,
the mortgage, deed of trust or other instrument securing a Mortgage Note,
which creates a first lien, in the case of a First Lien Loan, or a second
lien, in the case of a Second Lien Loan, on the related Mortgaged Property.
With respect to a Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage Loan
Documents and the items listed in Exhibit A-2 hereto and any additional
documents required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time
in accordance with the provisions of the related Mortgage Note.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set
forth in the related Mortgage Note.
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Mortgage Loan: Each mortgage loan sold, assigned and transferred
pursuant to this Agreement and identified on the applicable Mortgage Loan
Schedule, which Mortgage Loan includes, without limitation, the Mortgage File,
the Monthly Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, Servicing Rights and all other
rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: With respect to any Mortgage Loan, the
documents required to be delivered to the Custodian pursuant to Subsection
6.03.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans setting forth
the following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the social security number of the Mortgagor; (4) a
code indicating whether the Mortgagor's race and/or ethnicity is (i) native
American or Alaskan native, (ii) Asian/Pacific islander, (iii) African
American, (iv) white, (v) Hispanic or Latino, (vi) other minority, (vii) not
provided by the Mortgagor, (viii) not applicable (if the Mortgagor is an
entity) and (ix) unknown or missing; (5) the street address of the Mortgaged
Property including the city, state and zip code; (6) a code indicating whether
the Mortgagor is self-employed; (7) a code indicating whether the Mortgaged
Property is owner-occupied, investment property or a second home; (8) a code
indicating the number and type of residential units constituting the Mortgaged
Property (e.g., single family residence, two-family residence, three-family
residence, four-family residence, multifamily residence, condominium,
manufactured housing, mixed-use property, raw land and other non residential
properties, planned unit development or cooperative stock in a cooperative
housing corporation); (9) the original months to maturity or the remaining
months to maturity from the related Cut-off Date, in any case based on the
original amortization schedule and, if different, the maturity expressed in
the same manner but based on the actual amortization schedule; (10) the LTV or
CLTV, as applicable, at origination; (11) the Mortgage Interest Rate as of the
related Cut-off Date; (12) the date on which the first Monthly Payment was due
on the Mortgage Loan and, if such date is not consistent with the Due Date
currently in effect, the Due Date; (13) the stated maturity date; (14) the
amount of the Monthly Payment as of the related Cut-off Date; (15) whether the
Mortgage Loan has Monthly Payments that are interest-only for a period of
time, and the interest-only period, if applicable (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); (16) the last payment date on which a payment was
actually applied to the outstanding principal balance; (17) the schedule of
the payment delinquencies in the prior 12 months; (18) the Servicing Fee Rate;
(19) the original principal amount of the Mortgage Loan; (20) the principal
balance of the Mortgage Loan as of the close of business on the related
Cut-off Date, after deduction of payments of principal due and collected on or
before the related Cut-off Date; (21) with respect to each Mortgage Loan with
a second lien behind it, the combined principal balance of the Mortgage Loan
and the applicable second lien loan, at origination, (22) a code indicating
whether there is a simultaneous second; (23) with respect to Adjustable Rate
Mortgage Loans, the Interest Rate Adjustment Date; (24) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (25) with respect to
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Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (26) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index, including the methodology for rounding (e.g.,
rounded upward, if necessary, to the nearest ten thousandth (.0001)) and the
applicable time frame for determining the Index; (27) the product type of
Mortgage Loan (i.e., Fixed Rate, Adjustable Rate, First Lien Loan or Second
Lien Loan), and with respect to each Second Lien Loan, the product type of the
related first lien loan; (28) a code indicating the purpose of the loan (i.e.,
purchase, Rate/Term Refinance or Cash-Out Refinance); (29) a code indicating
the documentation style (i.e., no documents, full, alternative, reduced, no
income/no asset, stated income, no ration, reduced or NIV); (30) asset
verification (Y/N); (31) the loan credit classification (as described in the
Underwriting Guidelines); (32) whether such Mortgage Loan provides for a
Prepayment Penalty; (33) the Prepayment Penalty period of such Mortgage Loan,
if applicable; (34) a description of the Prepayment Penalty, if applicable;
(35) the Mortgage Interest Rate as of origination; (36) the credit risk score
(FICO score); (37) the date of origination; (38) with respect to Adjustable
Rate Mortgage Loans, the Mortgage Interest Rate adjustment period; (39) with
respect to Adjustable Rate Mortgage Loans, the Mortgage Interest Rate
adjustment percentage; (40) with respect to Adjustable Rate Mortgage Loans,
the Mortgage Interest Rate floor; (41) the Mortgage Interest Rate calculation
method (i.e., 30/360, simple interest, other); (42) with respect to Adjustable
Rate Mortgage Loans, the Periodic Rate Cap as of the first Interest Rate
Adjustment Date; (43) with respect to each Adjustable Rate Mortgage Loan, a
code indicating whether the Mortgage Loan provides for negative amortization;
(44) a code indicating whether the Mortgage Loan has negative amortization and
the maximum of such negative amortization; (45) a code indicating whether the
Mortgage Loan is a Balloon Mortgage Loan; (46) a code indicating whether the
Mortgage Loan by its original terms or any modifications thereof provides for
amortization beyond its scheduled maturity date; (47) the original Monthly
Payment due; (48) the Appraised Value; (49) appraisal type; (50) appraisal
date; (51) a code indicating whether the Mortgage Loan is covered by a PMI
Policy and, if so, identifying the PMI Policy provider; (54) the certificate
number of the PMI Policy, if applicable; (52) the amount of coverage of the
PMI Policy, if applicable; (53) in connection with a condominium unit, a code
indicating whether the condominium project where such unit is located is
low-rise or high-rise; (54) a code indicating whether the Mortgaged Property
is a leasehold estate; (55) with respect to the related Mortgagor, the
debt-to-income ratio; (56) sales price; (57) automated valuation model (AVM);
(58) a code indicating whether the Mortgage Loan is a MERS Designated Mortgage
Loan and the MERS Identification Number, if applicable; (59) a field
indicating whether such Mortgage Loan is a Home Loan; and (60) the DU or LP
number, if applicable. With respect to the Mortgage Loans in the aggregate,
the related Mortgage Loan Schedule shall set forth the following information,
as of the related Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; (4) the
weighted average maturity of the Mortgage Loans; (5) the average principal
balance of the Mortgage Loans; (6) the applicable Cut-off Date; and (7) the
applicable Closing Date.
Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor, including any riders or addenda
thereto.
Mortgaged Property: With respect to a Mortgage Loan that is not a
Co-op Loan, the Mortgagor's real property securing repayment of a related
Mortgage Note, consisting of an
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unsubordinated estate in fee simple or, with respect to real property located
in jurisdictions in which the use of leasehold estates for residential
properties is a widely-accepted practice, a leasehold estate, in a single
parcel or multiple parcels of real property improved by a Residential
Dwelling. With respect to a Co-op Loan, the stock allocated to a dwelling unit
in the residential cooperative housing corporation that was pledged to secure
such Co-op Loan and the related Co-op Lease.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of the
Mortgaged Property and the grantor or mortgagor named in the Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged Property.
Nonrecoverable Advance: Any advance previously made or proposed to
be made in respect of a Mortgage Loan which, in the good faith judgment of the
Interim Servicer, will not or, in the case of a proposed advance, would not,
be ultimately recoverable from related Insurance Proceeds, Liquidation
Proceeds or otherwise. The determination by the Interim Servicer that it has
made a Nonrecoverable Advance or that any proposed advance of principal and
interest, if made, would constitute a Nonrecoverable Advance, shall be
evidenced by an Officers' Certificate delivered to the Purchaser.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Chief Executive
Officer or a Chief Financial Officer or an Executive Vice President and by the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, and delivered to the Purchaser as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required
to be maintained pursuant to the Interim Servicing Agreement as an Eligible
Account, (b) qualification of the Mortgage Loans in a REMIC or (c) compliance
with the REMIC Provisions, must be (unless otherwise stated in such Opinion of
Counsel) an opinion of counsel who (i) is in fact independent of the Seller
and any servicer of the Mortgage Loans, (ii) does not have any material direct
or indirect financial interest in the Seller or any servicer of the Mortgage
Loans or in an Affiliate of either and (iii) is not connected with the Seller
or any servicer of the Mortgage Loans as an officer, employee, director or
person performing similar functions.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase or
decrease on an Interest Rate Adjustment Date above or below the Mortgage
Interest Rate previously in effect. The Periodic Rate Cap for each Adjustable
Rate Mortgage Loan is the rate set forth as such on the related Mortgage Loan
Schedule.
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Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate previously in
effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of any premium or penalty required to be paid by the Mortgagor if the
Mortgagor prepays such Mortgage Loan as provided in the related Mortgage Note
or Mortgage.
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty thereon, and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Each agreement setting forth the
general terms and conditions of the purchase and sale of the Mortgage Loans to
be purchased from time to time under this Agreement.
Purchase Price Percentage: The percentage of par (expressed as a
decimal) set forth in the related Purchase Price and Terms Agreement.
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 FIRREA and the regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were
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originated pursuant to an agreement between the Seller and such Person that
contemplated that such Person would underwrite mortgage loans from time to
time, for sale to the Seller, in accordance with underwriting guidelines
designated by the Seller ("Designated Guidelines") or guidelines that do not
vary materially from such Designated Guidelines; (ii) such Mortgage Loans were
in fact underwritten as described in clause (i) above and were acquired by the
Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the
time such Mortgage Loans were underwritten, designated by the Seller on a
consistent basis for use by lenders in originating mortgage loans to be
purchased by the Seller; and (iv) the Seller employed, at the time such
Mortgage Loans were acquired by the Seller, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of
a sample of mortgage loans purchased during a particular time period or
through particular channels) designed to ensure that Persons from which it
purchased mortgage loans properly applied the underwriting criteria designated
by the Seller.
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date
of such substitution, be approved by the Purchaser and (i) have an unpaid
principal balance, after deduction of all scheduled payments due in the month
of substitution (or in the case of a substitution of more than one mortgage
loan for a Deleted Mortgage Loan, an aggregate principal balance), not in
excess of the unpaid principal balance of the Deleted Mortgage Loan (the
amount of any shortfall will be deposited in the Custodial Account by the
Seller in the month of substitution); (ii) have a Mortgage Interest Rate not
less than and not more than one percent (1%) greater than the Mortgage
Interest Rate of the Deleted Mortgage Loan; (iii) have a remaining term to
maturity not greater than and not more than one (1) year less than that of the
Deleted Mortgage Loan; (iv) be of the same type as the Deleted Mortgage Loan
(i.e., fixed rate or adjustable rate with same Mortgage Interest Rate Cap and
Index); (v) comply as of the date of substitution with each representation and
warranty set forth in Section 9 of this Agreement; (vi) be current in the
payment of principal and interest; (vii) be secured by a Mortgaged Property of
the same type and occupancy status as secured the Deleted Mortgage Loan; and
(viii) have payment terms that do not vary in any material respect from those
of the Deleted Mortgage Loan.
Rate/Term Refinance: A Refinanced Mortgage Loan, in which the
proceeds received were not in excess of the amount of funds required to repay
the principal balance of any existing first mortgage loan on the related
Mortgaged Property, pay related closing costs and satisfy any outstanding
subordinate mortgages on the related Mortgaged Property and did not provide
incidental cash to the related Mortgagor of more than one percent (1%) of the
original principal balance of such Mortgage Loan.
Reconstitution: Any Securitization Transaction or a Whole Loan
Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 13, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
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Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to
a Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were
not used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. 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
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of
Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
REO Property: A Mortgaged Property acquired by the Interim Servicer
through foreclosure or deed in lieu of foreclosure.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to the unpaid principal balance of the Mortgage Loan to be repurchased, plus
accrued interest thereon at the Mortgage Interest Rate and including the last
Due Date through which interest had last been paid through the date of such
repurchase, plus the amount of any outstanding advances owed to any servicer,
plus all costs and expenses incurred by the Purchaser or any servicer arising
out of or based upon such breach, including without limitation costs and
expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder.
Residential Dwelling: Any one of the following: (i) a detached
one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a
one-family dwelling unit in a condominium project or (iv) a one-family
dwelling in a planned unit development, none of which is a co-operative,
mobile or Manufactured Home.
RESPA: The 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.
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Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or
(2) an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Security Agreement: The agreement creating a security interest in
the stock allocated to a dwelling unit in the residential cooperative housing
corporation that was pledged to secure such Co-op Loan and the related Co-op
Lease.
Seller: As defined in the initial paragraph of the Agreement,
together with its successors in interest.
Seller Information: As defined in Subsection 34.04(a).
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to 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 shall be
pro-rated for any portion of a month during which the Mortgage Loan is
serviced by the Interim Servicer under the Interim Servicing Agreement. 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 Interim
Servicer, or as otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of originals of all documents in
the Mortgage File which are not delivered to the Purchaser or the Custodian
and copies of the Mortgage Loan Documents set forth in Section 2 of the
Custodial Agreement.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received
by the Seller for servicing the Mortgage Loans; (c) any late fees, penalties
or similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage
Loans.
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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.
Stated Principal Balance: As to each Mortgage Loan on any date of
determination, (i) the principal balance of such Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before
such date, to the extent actually received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal on such Mortgage Loan.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: In the event the Interim Servicer is terminated as
servicer of a Mortgage Loan pursuant to the Interim Servicing Agreement, the
date on which the Purchaser, or its designee, shall receive the transfer of
servicing responsibilities and begin to perform the servicing of such Mortgage
Loans, and the Interim Servicer shall cease all servicing responsibilities.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit G and a then-current copy of
which is attached as an exhibit to the related Assignment and Conveyance.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase.
The Seller agrees to sell from time to time, and the Purchaser
agrees to purchase from time to time, Mortgage Loans having an aggregate
actual unpaid principal balance on the related Cut-off Date in an amount as
set forth in the related Purchase Price and Terms Agreement, or in such other
amount as agreed by the Purchaser and the Seller as evidenced by the actual
aggregate unpaid principal balance of the Mortgage Loans accepted by the
Purchaser on each Closing Date, together with the related Mortgage Files and
all rights and obligations arising under the documents contained therein.
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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 and the related Servicing
Rights shall be the percentage of par as stated in the related Purchase Price
and Terms Agreement (subject to adjustment as provided therein), multiplied by
the aggregate actual unpaid principal balance, as of the related Cut-off Date,
of the Mortgage Loans listed on the related Mortgage Loan Schedule, after
application of scheduled payments of principal due on or before the related
Cut-off Date, but only to the extent such payments were actually received. The
initial principal amount of the related Mortgage Loans shall be the aggregate
actual unpaid principal balance of the Mortgage Loans, so computed as of the
related Cut-off Date. If so provided in the related Purchase Price and Terms
Agreement, portions of the Mortgage Loans and/or the Servicing Rights shall be
priced and paid for separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest from the last "interest
paid to" date through the day immediately preceding the related Closing Date,
inclusive, on the aggregate actual unpaid principal amount of the related
Mortgage Loans as of the related Cut-off Date at the weighted average Mortgage
Interest Rate of those Mortgage Loans. The Purchase Price plus accrued
interest as set forth in the preceding paragraph shall be paid to the Seller
by wire transfer of immediately available funds to an account designated by
the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the related Cut-off Date, (2) all other recoveries of principal
collected on or after the related Cut-off Date, and (3) all payments of
interest on the Mortgage Loans net of applicable Servicing Fees (minus that
portion of any such payment which is allocable to the period prior to the
related Cut-off Date). The outstanding principal balance of each Mortgage Loan
as of the related Cut-off Date is determined after application of payments of
principal due on or before the related Cut-off Date, to the extent actually
collected, together with any unscheduled principal prepayments collected prior
to such Cut-off Date; provided, however, that payments of scheduled principal
and interest paid prior to such Cut-off date, but to be applied on a Due Date
beyond the related Cut-off Date shall not be applied to the principal balance
as of the related Cut-off Date. Such prepaid amounts shall be the property of
the Purchaser. The Seller shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the
Purchaser for subsequent remittance by the Seller to the Purchaser.
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SECTION 5. Examination of Mortgage Files.
At least ten (10) Business Days prior to the related Closing Date,
the Seller shall either (a) deliver to the Purchaser or its designee in
escrow, for examination with respect to each Mortgage Loan to be purchased,
the related Mortgage File, 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 of the Mortgage
Files 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 do not conform to any of the requirements
set forth in the related Purchase Price and Terms Agreement, or as an Exhibit
annexed thereto, the Purchaser may delete such Mortgage Loans from the related
Mortgage Loan Schedule, and such Deleted Mortgage Loan (or Loans) may be
replaced by a Qualified Substitute Mortgage Loan (or Loans) acceptable to the
Purchaser. The Purchaser may, at its option and without notice to the Seller,
purchase some or all of the Mortgage Loans without conducting any partial or
complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files shall not impair in any way the Purchaser's (or any of its
successor's) rights to demand repurchase, substitution or other relief as
provided in this Agreement. In the event that the Seller fails to deliver the
Mortgage File with respect to any Mortgage Loan, the Seller shall, upon the
request of the Purchaser, repurchase such Mortgage Loan as the price and in
the manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, simultaneously with the delivery of the Mortgage Loan
Schedule with respect to the related Mortgage Loan Package to be purchased on
each Closing Date, shall execute and deliver an Assignment and Conveyance
Agreement in the form attached hereto as Exhibit H (the "Assignment and
Conveyance Agreement"). The Seller shall ensure that the contents of each
Servicing File, which are required to be retained by or delivered to the
Interim Servicer to service the Mortgage Loans pursuant to the Interim
Servicing Agreement and thus not delivered to the Purchaser, or its designee,
are and shall be held in trust by the Interim Servicer for the benefit of the
Purchaser as the owner thereof. The Seller agrees that the Interim Servicer's
possession of any portion of each such Mortgage File is at the will of the
Purchaser for the sole purpose of facilitating servicing of the Mortgage Loans
pursuant to this Agreement, and such retention and possession by the Interim
Servicer shall be in a custodial capacity only. The ownership of each Mortgage
Note, each Mortgage and the contents of each Mortgage File is vested in the
Purchaser and the ownership of all records and documents with respect to the
related Mortgage Loan prepared by or which come into the possession of the
Interim Servicer shall immediately vest in the Purchaser and shall be retained
and maintained, in trust, by the Interim Servicer at the will of the Purchaser
in such custodial capacity only. The Seller shall cause the Servicing File
retained by the Interim Servicer pursuant to this Agreement to be
appropriately identified in the Seller's computer system and/or books and
records, as appropriate, to clearly reflect the sale of the related Mortgage
Loan to the Purchaser. The Seller shall cause the Interim Servicer to release
from its custody the contents of any Servicing File retained by it
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only in accordance with this Agreement or the Interim Servicing Agreement,
except when such release is required in connection with a repurchase of any
such Mortgage Loan pursuant to Subsection 9.03 or if required under applicable
law or court order. Subsection 6.02 Books and Records.
Record title to each Mortgage and the related Mortgage Note as of
the related Closing Date shall be in the name of the Seller, an Affiliate of
the Seller, the Purchaser or one or more designees of the Purchaser, as the
Purchaser shall select; provided, however, that if a Mortgage has been
recorded in the name of MERS or its designee, the Seller is shown as the owner
of the related Mortgage Loan on the records of MERS for purposes of the system
of recording transfers of beneficial ownership of mortgages maintained by
MERS. Notwithstanding the foregoing, ownership of each Mortgage and related
Mortgage Note shall be vested solely in the Purchaser or the appropriate
designee of the Purchaser, as the case may be. All rights arising out of the
Mortgage Loans including, but not limited to, all funds received by the Seller
or the Interim Servicer after the related Cut-off Date on or in connection
with a Mortgage Loan shall be vested in the Purchaser or one or more designees
of the Purchaser; provided, however, that all funds received on or in
connection with a Mortgage Loan shall be received and held by the Seller or
the Interim Servicer in trust for the benefit of the Purchaser or the
appropriate designee of the Purchaser, as the case may be, as the owner of the
Mortgage Loans pursuant to the terms of this Agreement.
The Seller shall be or shall cause the Interim Servicer to be
responsible for maintaining, and shall maintain, a complete set of books and
records for each Mortgage Loan which shall be marked clearly to reflect the
ownership of each Mortgage Loan by the Purchaser. In particular, the Seller
shall or shall cause the Interim Servicer to maintain in its possession,
available for inspection by the Purchaser, and shall deliver to the Purchaser
upon demand, evidence of compliance with all federal, state and local laws,
rules and regulations, and requirements of ▇▇▇▇▇▇ ▇▇▇ 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 or the Interim Servicer may be in the form
of microfilm or microfiche so long as the Seller or the Interim Servicer
complies with the requirements of the ▇▇▇▇▇▇ ▇▇▇ Guides.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the related
Mortgage Loans by the Seller and not a pledge of such Mortgage Loans by the
Seller to the Purchaser to secure a debt or other obligation of the Seller.
Consequently, the sale of each Mortgage Loan shall be reflected as a purchase
on the Purchaser's business records, tax returns and financial statements, and
as a sale of assets on the Seller's business records, tax returns and
financial statements.
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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-1 hereto as required by the Custodial
Agreement with respect to each Mortgage Loan set forth on the related Mortgage
Loan Schedule.
In connection with the foregoing, 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 based on or grounded upon, or
resulting from, the fact that any Mortgage Loan is not covered by an ALTA or
CLTA lender's title insurance policy. 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 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.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the
Custodian in the form annexed to the Custodial Agreement. The Seller shall
comply with the terms of the Custodial Agreement and the Purchaser shall pay
all fees and expenses of the Custodian.
The Seller shall or shall cause the Interim Servicer to forward to
the Custodian, or to such other Person as the Purchaser shall designate in
writing, original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance
with this Agreement within two weeks of their execution, provided, however,
that the Seller shall provide the Custodian, or to such other Person as the
Purchaser shall designate in writing, with a certified true copy of any such
document submitted for recordation within two weeks of its execution, and
shall promptly provide the original of any document submitted for recordation
or a copy of such document certified by the appropriate public recording
office to be a true and complete copy of the original within two (2) weeks
following receipt of the original document by the Interim Servicer; provided,
however, that such original recorded document or certified copy thereof shall
be delivered to the Purchaser no later than 180 days following the related
Closing Date, unless there has been a delay at the applicable recording
office.
If the original or copy of any document submitted for recordation to
the appropriate public recording office is not delivered to the Purchaser or
its designee within 180 days following the related Closing Date, the related
Mortgage Loan shall, upon the request of the Purchaser, be repurchased by the
Seller at the price and in the manner specified in Subsection 9.03. The
foregoing repurchase obligation shall not apply if the Seller cannot cause the
Interim Servicer to deliver such original or copy of any document submitted
for recordation to the appropriate public recording office within the
specified period due to a delay caused by the recording office in the
applicable jurisdiction; provided that (i) the Seller shall instead deliver a
recording receipt of such recording office or, if such recording receipt is
not available, an
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officer's certificate of a servicing officer of the Seller, confirming that
such document has been accepted for recording, and (ii) such document is
delivered within twelve (12) months of the related Closing Date.
The Seller shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in transferring all
original documents to the Custodian or, upon written request of the Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's
designee shall be responsible for recording the Assignments of Mortgage and
shall be reimbursed by the Seller for the costs associated therewith pursuant
to the preceding sentence.
Subsection 6.04 Quality Control Procedures.
The Seller shall, or shall cause the Interim Servicer to, have an
internal quality control program that verifies, on a regular basis, the
existence and accuracy of the legal documents, credit documents, property
appraisals, and underwriting decisions. The program shall include evaluating
and monitoring the overall quality of the Seller's loan production and the
servicing activities of the Interim Servicer. The program is to ensure that
the Mortgage Loans are originated in accordance with the Underwriting
Guidelines; guard against dishonest, fraudulent, or negligent acts; and guard
against errors and omissions by officers, employees, or other authorized
persons.
Subsection 6.05 MERS Designated Loans.
With respect to each MERS Designated Mortgage Loan, the Seller
shall, 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, 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.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of
this Agreement and the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein), the Seller hereby
sells, transfers, assigns, conveys and delivers to the Purchaser the Servicing
Rights.
The Purchaser shall retain the Interim Servicer as contract servicer
of the Mortgage Loans for an interim period pursuant to and in accordance with
the terms and conditions contained in the Interim Servicing Agreement (with
respect to each Mortgage Loan, for an interim period, as specified therein).
The Seller shall cause the Interim Servicer to execute the Interim Servicing
Agreement on the initial Closing Date.
The Seller shall cause the Interim Servicer to transfer the
servicing of the Mortgage Loans on each Transfer Date in accordance with the
terms of the Interim Servicing Agreement.
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SECTION 8. [RESERVED].
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of the date hereof and as of each Closing Date:
(a) Due Organization and Authority. The Seller is a New York
corporation, 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
or by-laws or any legal restriction or any agreement or instrument to which
the Seller is now a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or result in the
violation of any law, rule, regulation, order, judgment or decree to which the
Seller or its
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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, to the knowledge of the Seller, 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 as required by the Anti-Money Laundering Laws,
has conducted the requisite due diligence in connection with the origination
of each Mortgage Loan for purposes of the Anti-Money Laundering Laws,
including with respect to the legitimacy of the applicable Mortgagor and the
origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws;
(i) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present, in all material respects, the
pertinent results of operations and changes in financial position for each of
such periods and the financial position at the end of each such period of the
Seller and its subsidiaries and have been prepared in accordance with
generally accepted accounting principles
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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) 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;
(l) 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, in light of
the circumstances in which it was made, not misleading;
(m) 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;
(n) 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; and
(o) 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.
Subsection 9.02 Representations and Warranties Regarding Individual Mortgage
Loans.
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Subsection 9.02 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as
to each Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule 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 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;
(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 approved by the issuer of any related PMI Policy and
the title insurer, if any, to the extent required by the policy, and its terms
are reflected on the related Mortgage Loan Schedule, if applicable. No
Mortgagor has been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of any related PMI Policy and the
title insurer, to the extent required by the policy, and which assumption
agreement is part of the Mortgage Loan File delivered to the Custodian or to
such other Person as the Purchaser shall designate in writing and the terms of
which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation
-24-
the defense of usury, and no such right of rescission, set-off, counterclaim
or defense has been asserted with respect thereto;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Underwriting
Guidelines. If required by the National Flood Insurance Act of 1968, as
amended, each Mortgage Loan is covered by a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
as in effect which policy conforms with the Underwriting Guidelines. All
individual insurance policies contain a standard mortgagee clause naming the
Seller and its successors and assigns as mortgagee, and all premiums thereon
have been paid. The Mortgage obligates the Mortgagor thereunder to maintain
the hazard insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to obtain
and maintain such insurance at such Mortgagor's cost and expense, and to seek
reimbursement therefor from the Mortgagor. Where required by state law or
regulation, the Mortgagor has been given an opportunity to choose the carrier
of the required hazard insurance, provided the policy is not a "master" or
"blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and effect and
inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in,
and has no knowledge (based upon reasonable and diligent inquiry) of the
Mortgagor's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of either including, without
limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, predatory and abusive lending, equal credit opportunity and
disclosure laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to a Prepayment Penalty have been complied
with, the consummation of the transactions contemplated hereby will not
involve the violation of any such laws or regulations, and the Seller shall
maintain in its possession, available for the Purchaser's inspection, and
shall deliver to the Purchaser upon demand, evidence of compliance with all
such requirements. This representation and warranty is a Deemed Material and
Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission. The Seller has not
waived the performance by the Mortgagor of any action, if the Mortgagor's
failure to perform such action would cause the Mortgage Loan to be in default,
nor has the Seller waived any default resulting from any action or inaction by
the Mortgagor;
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(i) Type of Mortgaged Property. With respect to a Mortgage Loan that
is not a Co-op Loan and is not secured by an interest in a leasehold estate,
the Mortgaged Property is a fee simple estate that consists of a single parcel
of real property with a detached single family residence erected thereon, or a
two- to four-family dwelling, or an individual residential condominium unit in
a condominium project, or an individual unit in a planned unit development
(or, with respect to each Co-op Loan, an individual unit in a residential
cooperative housing corporation); provided, however, that any condominium
unit, planned unit development or residential cooperative housing corporation
shall conform with the Underwriting Guidelines. No portion of the Mortgaged
Property (or underlying Mortgaged Property, in the case of a Co-op Loan) is
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. None of the Mortgaged Properties are Manufactured
Homes, log homes, mobile homes, geodesic domes or other unique property types.
This representation and warranty is a Deemed Material and Adverse
Representation;;
(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:
(i) with respect to a Second Lien Loan only, the lien of the first
mortgage on the Mortgaged Property;
(ii) the lien of current real property taxes and assessments not yet
due and payable;
(iii) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date
of recording acceptable to prudent mortgage lending
institutions generally and specifically referred to in the
lender's title insurance policy delivered to the originator of
the Mortgage Loan and (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
(iv) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged
Property.
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Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected first lien (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.
With respect to any Co-op Loan, the related Mortgage is a valid,
subsisting and enforceable first priority security interest on the related
cooperative shares securing the Mortgage Note, subject only to (a) liens of
the related residential cooperative housing corporation for unpaid assessments
representing the Mortgagor's pro rata share of the related residential
cooperative housing corporation's payments for its blanket mortgage, current
and future real property taxes, insurance premiums, maintenance fees and other
assessments to which like collateral is commonly subject and (b) other matters
to which like collateral is commonly subject which do not materially interfere
with the benefits of the security interest intended to be provided by the
related Security Agreement;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its
terms (including, without limitation, any provisions therein relating to
Prepayment Penalties). All parties to the Mortgage Note, the Mortgage and any
other such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by other such related parties.
No fraud, error, omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of the Seller in
connection with the origination of the Mortgage Loan or in the application of
any insurance in relation to such Mortgage Loan. The documents, instruments
and agreements submitted for loan underwriting were not falsified and contain
no untrue statement of material fact or omit to state a material fact required
to be stated therein or necessary to make the information and statements
therein not misleading. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken
place on the part of any Person, including without limitation, the Mortgagor,
any appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance in
relation to such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set forth
herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder, and any and all requirements as
to completion of any on-site or off-site improvement and as to disbursements
of any escrow funds therefor have been complied with. All costs, fees and
expenses incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
-27-
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and
upon the sale of the Mortgage Loans to the Purchaser, the Seller will retain
the Mortgage Files or any part thereof with respect thereto not delivered to
the Custodian, the Purchaser or the Purchaser's designee, in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan.
The Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each
Mortgage Loan, such Mortgage Loan will be free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest. The Seller intends to relinquish all rights to possess, control and
monitor the Mortgage Loan, except as may be required of the Seller in its
Mortgage capacity as Servicer of such 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 a CLTV 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. With respect to a Mortgage Loan which is not a
Co-op Loan, the Mortgage Loan is covered by an ALTA lender's title insurance
policy or other generally acceptable form of policy or insurance acceptable
under the Underwriting Guidelines and each such title insurance policy is
issued by a title insurer acceptable under the Underwriting Guidelines and
qualified to do business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, its successors and assigns, as to the first
(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
-28-
negative amortization, the maximum amount of negative amortization in
accordance with the Mortgage), subject only to the exceptions contained in
clauses (i), (ii), (iii) and (iv) of paragraph (j) of this Subsection 9.02,
and in the case of Adjustable Rate Mortgage Loans, against any loss by reason
of the invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment to the Mortgage Interest
Rate and Monthly Payment. Where required by state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or upon
the Mortgaged Property or any interest therein. The Seller, its successor and
assigns, are the sole insured of such lender's title insurance policy, and
such lender's title insurance policy is valid and remains in full force and
effect and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates
nor any of their respective predecessors, have waived any default, breach,
violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties encroach
upon the Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings and
loan association, a savings bank, a commercial bank, credit union, insurance
company or other similar institution which is supervised and examined by a
federal or state authority. Principal payments on the Mortgage Loan commenced
no more than seventy days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Rate Cap
and the Periodic Rate Floor are
-29-
as set forth on the related Mortgage Loan Schedule. The Mortgage Interest Rate
is adjusted with respect to Adjustable Rate Mortgage Loans, on each Interest
Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or
down to the nearest 0.125%), subject to the Periodic Rate Cap. 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. The Mortgage Loan is payable on the first day of each month. The
Mortgage Loan does not require a balloon payment on its stated maturity date;
and by its original terms or any modification thereof, does not provide for
amortization beyond its scheduled 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, subject to applicable federal and state laws and
judicial precedent with respect to bankruptcy and right of redemption or
similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines
(a copy of which is attached to the related Assignment and Conveyance
Agreement). The Mortgage Note and Mortgage are on forms acceptable to ▇▇▇▇▇▇▇
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, to the
best of the Seller's knowledge. 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 clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve
as such, has been properly designated and currently so serves and is named in
the Mortgage, and no fees or expenses are or will become payable by the
Purchaser to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor;
(z) Acceptable Investment. To the Seller's knowledge based upon
reasonable and diligent inquiry, there are no circumstances or conditions with
respect to the Mortgage, the Mortgaged Property, the Mortgagor, the Mortgage
File or the Mortgagor's credit standing that can reasonably be expected to
cause private institutional investors who invest in prime mortgage loans
similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable
investment cause the Mortgage Loan to become delinquent, or adversely affect
the value or marketability of the Mortgage Loan, or cause the Mortgage Loan to
prepay during any period materially faster or slower than the mortgage loans
originated by the Seller generally. No Mortgaged Property is located in a
state, city, county or other local jurisdiction which the Purchaser has
determined in its sole good faith discretion would cause the related Mortgage
Loan to be ineligible for whole loan sale or securitization in a transaction
consistent with the prevailing sale and securitization industry (including,
without limitation, the practice of the rating agencies) with respect to
substantially similar mortgage loans;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to be
delivered under the Custodial Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete, true
and accurate Mortgage File in compliance with Exhibit A attached hereto,
except for such documents the originals of which have been delivered to the
Custodian;
(bb) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee) with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(cc) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the Mortgagee thereunder;
(dd) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed if
the party assuming such Mortgage Loan meets certain credit requirements stated
in the Mortgage Loan Documents;
(ee) No Buydown Provisions; No Graduated Payments or Contingent
Interests. Unless otherwise agreed by the Purchaser in writing, the Mortgage
Loan does not contain
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provisions pursuant to which Monthly Payments are paid or partially paid with
funds deposited in any separate account established by the Seller, the
Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other
than the Mortgagor nor does it contain any other similar provisions which may
constitute a "buydown" provision. The Mortgage Loan is not a graduated payment
mortgage loan and the Mortgage Loan does not have a shared appreciation or
other contingent interest feature;
(ff) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated with
the outstanding principal amount secured by the Mortgage, and the secured
principal amount, as consolidated, bears a single interest rate and single
repayment term. The lien of the Mortgage securing the consolidated principal
amount is expressly insured as having first (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;
(gg) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending, to the knowledge of the Seller, or threatened
for the total or partial condemnation of the Mortgaged Property. The Mortgaged
Property is undamaged by waste, fire, earthquake or earth movement, windstorm,
flood, tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each Mortgaged Property is in good repair. There
have not been any condemnation proceedings with respect to the Mortgaged
Property and the Seller has no knowledge of any such proceedings in the
future;
(hh) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller and the Interim Servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Practices, applicable laws
and regulations, and have been in all respects legal and proper. With respect
to escrow deposits and Escrow Payments, all such payments are in the
possession of, or under the control of, the Seller or the Interim Servicer and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. All Escrow Payments
have been collected in full compliance with state and federal law and the
provisions of the related Mortgage Note and Mortgage. An escrow of funds is
not prohibited by applicable law and 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 or the Interim Servicer executed and delivered any and all notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate and
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the Monthly Payment adjustments. Any interest required to be paid pursuant to
state, federal and local law has been properly paid and credited;
(ii) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the Mortgage
Interest Rate from an adjustable rate to a fixed rate;
(jj) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed on
or prior to the Closing Date that has resulted or will result in the exclusion
from, denial of, or defense to coverage under any applicable hazard insurance
policy, PMI Policy or bankruptcy bond (including, without limitation, any
exclusions, denials or defenses which would limit or reduce the availability
of the timely payment of the full amount of the loss otherwise due thereunder
to the insured), irrespective of the cause of such failure of coverage. The
Seller has caused or will cause to be performed any and all acts required to
preserve the rights and remedies of the Purchaser in any insurance policies
applicable to the Mortgage Loans including, without limitation, any necessary
notifications of insurers, assignments of policies or interests therein, and
establishments of coinsured, joint loss payee and mortgagee rights in favor of
the Purchaser. In connection with the placement of any such insurance, no
commission, fee, or other compensation has been or will be received by the
Seller or by any officer, director, or employee of the Seller or any designee
of the Seller or any corporation in which the Seller or any officer, director,
or employee had a financial interest at the time of placement of such
insurance;
(kk) No Violation of Environmental Laws. To the best of the Seller's
knowledge, there is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule
or regulation with respect to the Mortgage Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule
or regulation constituting a prerequisite to use and enjoyment of said
property;
(ll) Servicemembers Civil Relief Act. The Mortgagor has not notified
the Seller, and the Seller has no knowledge of any relief requested or allowed
to the Mortgagor under the Servicemembers Civil Relief Act or other similar
state statute;
(mm) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the 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 at the time of origination, 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 FIRREA and the regulations promulgated thereunder, all as
in effect on the date the Mortgage Loan was originated;
(nn) 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;
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(oo) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(pp) Escrow Analysis. If applicable, with respect to each Mortgage
Loan, the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(qq) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded from
furnishing the same to any subsequent or prospective purchaser of such
Mortgage. The Seller has and shall in its capacity as servicer, for each
Mortgage Loan, fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (e.g.
favorable and unfavorable) on its borrower credit files to Equifax, Experian
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis. This representation and warranty is a Deemed Material and
Adverse Representation;
(rr) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, (1) the ground lease is assignable or transferable; (2) the ground
lease will not terminate earlier than five years after the maturity date of
the Mortgage Loan; (3) the ground lease does not provide for termination of
the lease in the event of lessee's default without the Mortgagee being
entitled to receive written notice of, and a reasonable opportunity to cure
the default; (4) the ground lease permits the mortgaging of the related
Mortgaged Property; (5) the ground lease protects the Mortgagee's interests in
the event of a property condemnation; (6) all ground lease rents, other
payments, or assessments that have become due have been paid; and (7) the use
of leasehold estates for residential properties is a widely accepted practice
in the jurisdiction in which the Mortgaged Property is located;
(ss) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified on
the related Mortgage Loan Schedule. With respect to each Mortgage Loan that
has a Prepayment Penalty feature, each such Prepayment Penalty is enforceable
and will be enforced by the Seller during the period the Seller is acting as
Interim Servicer for the benefit of the Purchaser, and each Prepayment Penalty
is permitted pursuant to federal, state and local law. Each such Prepayment
Penalty is in an amount not more than the maximum amount permitted under
applicable law and no such Prepayment Penalty may be imposed 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.
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With respect to any Mortgage Loan that contains a provision permitting
imposition of a premium upon a prepayment prior to maturity: (i) prior to the
Mortgage Loan's origination, the Mortgagor agreed to such premium in exchange
for a monetary benefit, including but not limited to a rate or fee reduction,
(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
premium, and (iii) the Prepayment Penalty is disclosed to the Mortgagor in the
mortgage loan documents pursuant to applicable state, local and federal law.
This representation and warranty is a Deemed Material and Adverse
Representation;
(tt) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable. No Mortgage Loan is covered by the Home
Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in
violation of any comparable state or local law. The Mortgaged Property is not
located in a jurisdiction where a breach of this representation with respect
to the related Mortgage Loan may result in additional assignee liability to
the Purchaser, as determined by Purchaser in its reasonable discretion. This
representation and warranty is a Deemed Material and Adverse Representation;
(uu) Single-premium credit life insurance policy. No Mortgagor was
required to purchase any single premium credit insurance policy (e.g., life,
credit disability, property, accident, credit unemployment or credit property
insurance policy) 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, disability, property, accident, unemployment,
mortgage or health insurance) in connection with the origination of the
Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies or debt cancellation agreements as part of
the origination of, or as a condition to closing, such Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse Representation;
(vv) Qualified Mortgage. The Mortgage Loan is a qualified mortgage
under Section 860G(a)(3) of the Code;
(ww) 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 two dollars ($2.00) for each Mortgage Loan covered
by such a tax service contract. If such a tax service contract with First
American Real Estate Tax Service is not in place then a placement fee of
seventy two dollars ($72.00) will apply for each such Mortgage Loan
(xx) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan;
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(yy) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein
such recordation is necessary to perfect the lien thereof as against creditors
of the Seller, or is in the process of being recorded;
(zz) Co-op Loans. With respect to a Mortgage Loan that is a Co-op
Loan, the stock that is pledged as security for the Mortgage Loan is held by a
person as a tenant-stockholder (as defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the Code);
(aaa) Mortgagor Bankruptcy. On or prior to the date 60 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;
(bbb) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(ccc) Georgia Fair Lending Act. There is no Mortgage Loan that was
originated (or modified) on or after October 1, 2002 and before March 7, 2003
which is secured by property located in the State of Georgia. There is no
Mortgage Loan that was originated on or after March 7, 2003 that is a "high
cost home loan" as defined under the Georgia Fair Lending Act. This
representation and warranty is a Deemed Material and Adverse Representation;;
(ddd) No Arbitration. No Mortgagor with respect to any Mortgage Loan
originated on or after August 1, 2004 agreed to submit to arbitration to
resolve any dispute arising out of or relating in any way to the mortgage loan
transaction. This representation and warranty is a Deemed Material and Adverse
Representation;
(eee) Flood Service Contract. Each Mortgage Loan is covered by a
paid in full, life of loan, flood service contract issued by either First
American Flood Data Services or Fidelity, and such contract is transferable.
If no such flood service contract is in place, or if such flood service
contract is issued by an insurer other than First American Flood Data Services
or Fidelity, then on the related Closing Date, the Seller shall remit to the
Purchaser a placement fee of ten dollars ($10.00) for each such Mortgage Loan;
(fff) Negative Amortization. Unless otherwise disclosed in the
Mortgage Loan Schedule, no Mortgage Loan is subject to negative amortization;
(ggg) Origination Practices/No Steering. No Mortgagor was 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 credit history and
debt-to-income ratios for a lower-cost credit product then offered by the
Mortgage Loan's originator or any affiliate of the Mortgage Loan's originator.
If, at the time of loan application, the Mortgagor may have qualified for a
lower-cost credit product then offered by any mortgage lending affiliate of
the Mortgage Loan's originator, the Mortgage Loan's originator referred the
Mortgagor's
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application to such affiliate for underwriting consideration. This
representation and warranty is a Deemed Material and Adverse Representation;
(hhh) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs, in part, objective
mathematical principles which relate the Mortgagor's income, assets and
liabilities to the proposed payment and such underwriting methodology does not
rely on the extent of the Mortgagor's equity in the collateral as the
principal determining factor in approving such credit extension. 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;
(iii) 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 that, 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;
(jjj) Fees Charges. All points, fees and charges (including finance
charges) and whether or not financed, assessed, collected or to be collected
in connection with the origination and servicing of each Mortgage Loan have
been disclosed in writing to the Mortgagor in accordance with applicable state
and federal law and regulation. This representation and warranty is a Deemed
Material and Adverse Representation; and
(kkk) 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;
(ii) Request for Notice; No Consent Required. 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 such 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
such senior lienholder. Either (a) no consent for the Second
Lien Loan is required by
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the holder of the related first lien loan or (b) such consent
has been obtained and is contained in the related Mortgage
File;
(iii) No Default Under First Lien. To the best of Seller's
knowledge, the related first lien loan is in full force and
effect, and there is no default lien, breach, violation or
event which would permit acceleration existing under such first
lien 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 under such first lien
loan; and
(iv) Right to Cure First Lien. 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.
Subsection 9.03 Remedies for Breach of Representations and
Warranties.
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser,
notwithstanding any restrictive or qualified endorsement on any Mortgage Note
or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. With respect to any representation or warranty contained in
Subsections 9.01 or 9.02 hereof that is made to the Seller's knowledge, if it
is discovered by the Purchaser that the substance of such representation and
warranty was inaccurate as of the related Closing Date and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan, then
notwithstanding the Seller's lack of knowledge with respect to the inaccuracy
at the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty. Upon discovery
by either the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties, the party discovering such breach shall give
prompt written notice to the other relevant parties.
Within sixty (60) days after the earlier of either discovery by or
notice to the Seller of any breach of a representation or warranty, which
materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser therein (or which materially and adversely affects
the value of the applicable Mortgage Loan or the interest of the Purchaser
therein in the case of a representation and warranty relating to a particular
Mortgage Loan), the Seller shall use its best efforts promptly to cure such
breach in all material respects and, if such breach cannot be cured, the
Seller shall, at the Purchaser's option, repurchase such Mortgage Loan or
Mortgage Loans at the Repurchase Price. Notwithstanding the above sentence,
(i) within sixty (60) days after the earlier of either discovery by, or notice
to, the Seller of any breach of the representation and warranty set forth in
clause (vv) of Subsection 9.02, the Seller shall repurchase such Mortgage Loan
at the Repurchase Price and (ii) any breach of a Deemed Material and Adverse
Representation shall automatically be deemed to materially and adversely
affects the value of the Mortgage Loans or the interest of the Purchaser
therein. In the event that a breach shall involve any representation or
warranty set forth in Subsection 9.01, and such breach cannot be cured within
60 days of the earlier of either discovery by or notice to the Seller
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of such breach, all of the Mortgage Loans affected by such breach shall, at
the Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 9.02 (except as provided in the second sentence of this paragraph
with respect to certain breaches for which no substitution is permitted) and
the Seller discovers or receives notice of any such breach within 120 days of
the related Closing Date, the Seller shall, at the Purchaser's option and
provided that the Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan and
substitute in its place a Qualified Substitute Mortgage Loan or Qualified
Substitute Mortgage Loans, provided, however, that any such substitution shall
be effected within such one hundred twenty (120) days after the related
Closing Date. If the Seller has no Qualified Substitute Mortgage Loan, it
shall repurchase the deficient Mortgage Loan at the Repurchase Price. Any
repurchase of a Mortgage Loan pursuant to the foregoing provisions of this
Subsection 9.03 shall occur on a date designated by the Purchaser, and
acceptable to Seller, and shall be accomplished by either (a) if the Interim
Servicing Agreement has been entered into and is in effect, deposit in the
Custodial Account of the amount of the Repurchase Price for distribution to
the Purchaser on the next scheduled Remittance Date, after deducting therefrom
any amount received in respect of such repurchased Mortgage Loan or Loans and
being held in the Custodial Account for future distribution or (b) if the
Interim Servicing Agreement has not been entered into or is no longer in
effect, by direct remittance of the Repurchase Price to the Purchaser or its
designee in accordance with the Purchaser's instructions.
At the time of repurchase of any deficient Mortgage Loan (or removal
of any Deleted Mortgage Loan), the Purchaser and the Seller shall arrange for
the reassignment of the repurchased Mortgage Loan (or Deleted Mortgage Loan)
to the Seller or its designee and the delivery to the Seller of any documents
held by the Custodian relating to the repurchased Mortgage Loan (or Deleted
Mortgage Loan). In the event of a repurchase or substitution, the Seller
shall, simultaneously with such reassignment, give written notice to the
Purchaser that such repurchase or substitution has taken place, amend the
Mortgage Loan Schedule to reflect the withdrawal of the Deleted Mortgage Loan
from this Agreement, and, in the case of substitution, identify a Qualified
Substitute Mortgage Loan and amend the related Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be
deemed to have made as to such Qualified Substitute Mortgage Loan the
representations and warranties set forth in this Agreement except that all
such representations and warranties set forth in this Agreement shall be
deemed made as of the date of such substitution. The Seller shall effect such
substitution by delivering to the Custodian or to such other party as the
Purchaser may designate in writing for such Qualified Substitute Mortgage Loan
the documents required by Subsection 6.03 and the Custodial Agreement, with
the Mortgage Note endorsed as required by Subsection 6.03 and the Custodial
Agreement. No substitution will be made in any calendar month after the
Determination Date for such month. The Seller shall cause the Interim Servicer
to remit directly to the Purchaser, or its designee in accordance with the
Purchaser's instructions the Monthly Payment less the Servicing Fee due, if
any, on such Qualified Substitute Mortgage Loan or Loans in the month
following the date of such substitution. Monthly Payments due with respect to
Qualified Substitute Mortgage Loans in the month of substitution shall be
retained by the Seller. For the month of substitution, distributions to the
Purchaser shall include the Monthly Payment due on any Deleted Mortgage Loan
in the month of substitution, and the Seller shall
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thereafter be entitled to retain all amounts subsequently received by the
Seller in respect of such Deleted Mortgage Loan. The Seller shall give written
notice to the Purchaser that such substitution has taken place and shall amend
the related Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan. Upon such substitution, each Qualified
Substitute Mortgage Loan shall be subject to the terms of this Agreement in
all respects, and the Seller shall be deemed to have made with respect to such
Qualified Substitute Mortgage Loan, as of the date of substitution, the
covenants, representations and warranties set forth in Subsections 9.01 and
9.02.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
shall determine the amount (if any) by which the aggregate principal balance
of all such Qualified Substitute Mortgage Loans as of the date of substitution
is less than the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans (after application of scheduled principal payments due in the
month of substitution). The amount of such shortfall shall be distributed by
the Seller directly to the Purchaser or its designee in accordance with the
Purchaser's instructions within two (2) Business Days of such substitution.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser and its present and former directors,
officers, employees and agents and any Successor Servicer and its present and
former directors, officers, employees and agents and hold such parties
harmless against any losses, damages, penalties, fines, forfeitures, legal
fees and expenses and related costs, judgments, and other costs and expenses
resulting from any claim, demand, defense or assertion based on or grounded
upon, or resulting from, a breach of the Seller representations and warranties
contained in this Agreement or any Reconstitution Agreement. It is understood
and agreed that the obligations of the Seller set forth in this Subsection
9.03 to cure, repurchase or substitute for a defective Mortgage Loan and to
indemnify the Purchaser and Successor Servicer as provided in this Subsection
9.03 and in Subsection 14.01 constitute the sole remedies of the Purchaser and
Successor Servicer respecting a breach of the foregoing representations and
warranties. For purposes of this paragraph "Purchaser" shall mean the Person
then acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer"
shall mean any Person designated as the Successor Servicer pursuant to this
Agreement and any and all Persons who previously were "Successor Servicers"
pursuant to this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure
by the Seller to cure such breach, substitute a Qualified Substitute Mortgage
Loan, or repurchase such Mortgage Loan as specified above and (iii) demand
upon the Seller by the Purchaser for compliance with this Agreement.
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Subsection 9.04 Repurchase of Mortgage Loans with First Payment
Defaults.
If the related Mortgagor is delinquent with respect to the Mortgage
Loan's first Monthly Payment either (i) after origination of such Mortgage
Loan, or (ii) after the related Closing Date, the Seller, at the Purchaser's
option, shall repurchase such Mortgage Loan from the Purchaser at a price
equal to the Repurchase Price. The Seller shall repurchase such delinquent
Mortgage Loan within thirty (30) days of such request.
Subsection 9.05 Premium Recapture.
With respect to any Mortgage Loan without Prepayment Penalties that
prepays in full during the first 90 days following the related Closing Date,
and with respect to any Mortgage Loan that is repurchased pursuant to
Subsection 9.04, the Seller shall pay the Purchaser, within 30 calendar days
after giving notice of such prepayment in full or repurchase, an amount equal
to the excess of the Purchase Price Percentage for such Mortgage Loan over
par, multiplied by the outstanding principal balance of such Mortgage Loan as
of the related Cut-off Date.
SECTION 10. Closing
The closing for the purchase and sale of each Mortgage Loan Package
shall take place on the related Closing Date. At the Purchaser's option, each
Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree, or conducted in person, at such place as the parties
shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(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 and of the Interim Servicer under the Interim
Servicing Agreement (with respect to each Mortgage Loan for an
interim period, as specified therein) shall be true and correct
as of the related Closing Date and no event shall have occurred
which, with notice or the passage of time, would constitute a
default under this Agreement or an Event of Default under the
Interim Servicing Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 11 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
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(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement; and
(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.
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. with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date;
3. the related Mortgage Loan Schedule (one copy to be attached to
the Custodian's counterpart of the Custodial Agreement in
connection with the initial Closing Date, and one copy to be
attached to the related Assignment and Conveyance as the
Mortgage Loan Schedule thereto);
4. a Custodian's Certification, as required under the Custodial
Agreement, in the form of Exhibit 2 to the Custodial Agreement;
5. with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit C hereto with respect to
the Seller, including all attachments thereto; with respect to
subsequent Closing Dates, an Officer's Certificate upon request
of the Purchaser;
6. with respect to the initial Closing Date, an Opinion of Counsel
of the Seller (who may be an employee of the Seller), generally
in the form of Exhibit D hereto ("Opinion of Counsel of the
Seller"); with respect to subsequent Closing Dates, an Opinion
of Counsel of the Seller upon request of the Purchaser;
7. with respect to the initial Closing Date, an Opinion of Counsel
of the Custodian (who may be an employee of the Custodian), in
the form of an exhibit to the Custodial Agreement(s), if
required;
8. a Security Release Certification, in the form of Exhibit E or
F, as applicable, hereto executed by any person, as requested
by the Purchaser,
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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;
9. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by merger
or acquired or originated by the Seller while conducting
business under a name other than its present name, if
applicable;
10. with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit G and with respect
to each subsequent Closing Date, the Underwriting Guidelines to
be attached to the related Assignment and Conveyance;
11. Assignment and Conveyance Agreement in the form of Exhibit H
hereto, and all exhibits thereto; and
12. a MERS Report reflecting the Purchaser as Investor, the
Custodian as custodian and no Person as Interim Funder for each
MERS Designated Mortgage Loan.
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
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(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 reasonably acceptable pool purchase contracts, and/or agreements
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 or a participation and servicing agreement,
each in form and substance reasonably acceptable to the parties, and in
connection with a Securitization Transaction, a pooling and servicing
agreement in form and substance reasonably acceptable to the parties
(collectively, the agreements referred to herein are designated the
"Reconstitution Agreements"), together with an opinion of counsel with respect
thereto.
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 Subsections 9.01 and
9.02 as of the settlement or closing date in connection with such
Reconstitution; or make the representations and warranties set forth in the
related selling/servicing guide of the servicer or issuer (solely to the
extent such representations and warranties are substantially the same as the
representations and warranties contained herein), as the case may be, or such
representations or warranties as may be required by any rating agency or
prospective purchaser of the related securities or such Mortgage Loans in
connection with such Reconstitution (solely to the extent such representations
and warranties are substantially the same as the representations and
warranties contained herein); The Seller shall provide to such servicer or
issuer, as the case may be, and any other participants or purchasers in such
Reconstitution: (i) any and all information and appropriate verification of
information which may be reasonably available to the Seller or its affiliates,
whether through letters of its auditors and counsel or otherwise, as the
Purchaser or any such other participant shall request; (ii) such additional
representations, warranties, covenants, opinions of counsel, letters from
auditors, and certificates of public officials or officers of the Seller or
the Interim Servicer as are reasonably believed necessary by the Purchaser or
any such other participant, at the sole expense of the Purchaser or 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 and each Person who controls the Purchaser or such affiliate
and their respective present and former directors, officers, employees and
agents, and hold each of them harmless from and against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that each of them may
sustain in any way related to any information provided by the Seller regarding
the Seller, the Mortgage Loans or the Underwriting Guidelines set forth in any
offering document prepared in connection with any Reconstitution. For purposes
of the previous sentence, "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement.
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All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and, if the Interim
Servicing Agreement shall remain in effect with respect to the related
Mortgage Loan Package, shall continue to be serviced in accordance with the
terms of this Agreement and the Interim Servicing Agreement and with respect
thereto this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
(a) The Seller shall indemnify any Purchaser and its present and
former directors, officers, employees and agents and the Successor Servicer
and its present and former directors, officers, employees and agents, and hold
such parties harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees and expenses (including legal fees and expenses
incurred in connection with the enforcement of the Seller's indemnification
obligation under this Subsection 14.01) and related costs, judgments, and any
other costs, fees and expenses that such parties may sustain in any way
related to the failure of the Seller to perform its duties and the Interim
Servicer to service the Mortgage Loans in strict compliance with the terms of
this Agreement or any Reconstitution Agreement entered into pursuant to
Section 13 or any breach of any of Seller's representations, warranties and
covenants set forth in this Agreement. For purposes of this clause "Purchaser"
shall mean the Person then acting as the Purchaser under this Agreement and
any and all Persons who previously were "Purchasers" under this Agreement and
"Successor Servicer" shall mean any Person designated as the Successor
Servicer pursuant to this Agreement and any and all Persons who previously
were "Successor Servicers" pursuant to this Agreement.
(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
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indemnifying party will not be liable to such indemnified party for expenses
incurred by the indemnified party in connection with the defense thereof
unless (i) the indemnified party shall have employed separate counsel in
connection with the assertion of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with one local counsel, if applicable)), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
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 MortgageIT Holdings,
Inc., the Seller's direct parent company, 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, unless such access
contravenes federal or state securities laws, regulations and reasonable
interpretations thereof.
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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
fully-executed 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:
MortgageIT, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 10038
Attention: General Counsel
(ii) if to the Purchaser:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
1221 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loan Operations Manager
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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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.
SECTION 19. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to
treat the transaction for federal income tax purposes as a sale by the Seller,
and a purchase by the Purchaser, of the Mortgage Loans.
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Moreover, the arrangement under which the Mortgage Loans are held shall be
consistent with classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Loan Files to determine the characteristics of the Mortgage Loans
which shall affect the federal income tax consequences of owning the Mortgage
Loans and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION 21. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by
the Seller to a third party without the prior written consent of the
Purchaser, which consent may be withheld by the Purchaser in its sole
discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller. There shall be no limitation on the
number of assignments or transfers allowable by the Purchaser with respect to
the Mortgage Loans and this Agreement. In the event the Purchaser assigns this
Agreement, and the assignee assumes any of the Purchaser's obligations
hereunder, the Seller acknowledges and agrees to look solely to such assignee,
and not to the Purchaser, for performance of the obligations so assumed and
the Purchaser shall be relieved from any liability to the Seller with respect
thereto.
SECTION 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party
against whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
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(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which
the reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the terms "include" and "including" shall mean without
limitation by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may
hereafter be executed, (b) documents received by any party at the closing, and
(c) financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding, whether or
not the original is in existence and whether or not such reproduction was made
by a party in the regular course of business, and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence.
SECTION 26. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
SECTION 27. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for
real property records in all the counties or their comparable jurisdictions in
which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Seller's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option.
SECTION 28. No Solicitation.
From and after the related Closing Date, the Seller agrees that it
will not take any action or permit or cause any action to be taken by any of
its agents or affiliates, or by any independent contractors on the Seller's
behalf, to personally, by telephone or mail (via electronic means or
otherwise), solicit a Mortgagor under any Mortgage Loan for the purpose of
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refinancing a Mortgage Loan, in whole or in part, without the prior written
consent of the Purchaser. Notwithstanding the foregoing, it is understood and
agreed that the Seller, or any of its respective affiliates:
(i) may advertise its availability for handling refinancings of
mortgages in its portfolio, including the promotion of terms it
has available for such refinancings, through the sending of
letters or promotional material, so long as it does not
specifically target Mortgagors and so long as such promotional
material either is sent to the mortgagors for all of the
mortgages in the servicing portfolio of the Seller and any of
its affiliates (those it owns as well as those serviced for
others); and
(ii) may provide pay-off information and otherwise cooperate with
individual mortgagors who contact it about prepaying their
mortgages by advising them of refinancing terms and streamlined
origination arrangements that are available.
Promotions undertaken by the Seller or by any affiliate of the
Seller which are directed to the general public at large (including, without
limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements), shall not constitute
solicitation under this Section 28.
SECTION 29. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 30. Governing Law Jurisdiction; Consent to Service of
Process.
THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER
AND THE SELLER IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR
PROCEEDING IN ANY SUCH COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION
OR PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
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PROVIDED BY LAW; AND (IV) CONSENTS TO SERVICE OF PROCESS UPON IT BY MAILING A
COPY THEREOF BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES
HEREUNDER.
SECTION 31. Amendment.
This Agreement may be amended from time to time by the Purchaser and
the Seller by written agreement signed by the parties hereto.
SECTION 32. Confidentiality.
Each of the Purchaser and the Seller shall employ proper procedures
and standards designed to maintain the confidential nature of the terms of
this Agreement, except to the extent: (a) the disclosure of which is
reasonably believed by such party to be required in connection with regulatory
requirements or other legal requirements relating to its affairs; (b)
disclosed to any one or more of such party's employees, officers, directors,
agents, attorneys or accountants who would have access to the contents of this
Agreement and such data and information in the normal course of the
performance of such Person's duties for such party, to the extent such party
has procedures in effect to inform such Person of the confidential nature
thereof; (c) that is disclosed in a prospectus, prospectus supplement or
private placement memorandum relating to a securitization of the Mortgage
Loans by the Purchaser (or an affiliate assignee thereof) or to any Person in
connection with the resale or proposed resale of all or a portion of the
Mortgage Loans by such party in accordance with the terms of this Agreement;
and (d) that is reasonably believed by such party to be necessary for the
enforcement of such party's rights under this Agreement.
Notwithstanding any other express or implied agreement to the
contrary, each of the Purchaser and the Seller agree and acknowledge that each
of them and each of their employees, representatives, and other agents may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to any of them
relating to such tax treatment and tax structure, except to the extent that
confidentiality is reasonably necessary to comply with U.S. federal or state
securities laws. For purposes of this paragraph, the terms "tax treatment" and
"tax structure" have the meanings specified in Treasury Regulation section
1.6011-4(c).
SECTION 33. Entire Agreement.
This Agreement constitutes the entire agreement and understanding
relating to the subject matter hereof between the parties hereto and any prior
oral or written agreements between them shall be deemed to have merged
herewith.
SECTION 34. Compliance with Regulation AB
Subsection 34.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose
of Section 34 of this Agreement is to facilitate compliance by the Purchaser
and any Depositor with
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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 Company acknowledges that investors in privately offered securities
may require that the Purchaser or any Depositor provide comparable disclosure
in unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Seller acknowledges
that interpretations of the requirements of Regulation AB may change over
time, whether due to interpretive guidance provided by the Commission or its
staff, consensus among participants in the asset-backed securities markets,
advice of counsel, or otherwise, and agrees to comply with requests made by
the Purchaser or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate
fully with the Purchaser to deliver to the Purchaser (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or
such Depositor to comply with the provisions of Regulation AB, together with
such disclosures relating to the Seller, any Third-Party Originator and the
Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed by
the Purchaser or any Depositor to be necessary in order to effect such
compliance.
Subsection 34.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 34.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller
is not aware and has not received notice that any default, early amortization
or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Seller; (ii) the
Interim Servicer has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (iii) no material noncompliance with
the applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Interim Servicer as servicer has been
disclosed or reported by the Seller; (iv) no material changes to the Interim
Servicer's policies or procedures with respect to the servicing function it
will perform under the Interim Servicing Agreement and any Reconstitution
Agreement for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Interim Servicer's
financial condition that could have a material adverse effect on the
performance by the Interim Servicer of its servicing obligations under the
Interim Servicing Agreement or any Reconstitution Agreement; (vi) there are no
material legal or governmental proceedings pending (or known to be
contemplated) against the Seller, Interim Servicer, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations, relationships or
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transactions relating to the Seller, Interim Servicer, any Subservicer or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 34.03, the Seller shall, within ten 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.
Subsection 34.03 Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within ten Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable,
cause each Third-Party Originator to provide), in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor, the
information and materials specified in paragraphs (a) and (b) of this Section,
and (ii) as promptly as practicable following notice to or discovery by the
Seller, provide to the Purchaser and any Depositor (in writing and in form and
substance reasonably satisfactory to the Purchaser and such Depositor) the
information specified in paragraph (d) of this Section.
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and how
long the originator has been engaged in originating residential
mortgage loans, which description shall include a discussion of
the originator's experience in originating mortgage loans of a
similar type as the Mortgage Loans; information regarding the
size and composition of the originator's origination portfolio;
and information that may be material, in the good faith
judgment of the Purchaser or any Depositor, to an analysis of
the performance of the Mortgage Loans, including the
originators' credit-granting or underwriting criteria for
mortgage loans of similar type(s) as the Mortgage Loans and
such other information as the Purchaser or any Depositor may
reasonably request for the purpose of compliance with Item
1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Seller and
each Third-Party Originator; and
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(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:
(2) the sponsor;
(3) the depositor;
(4) the issuing entity;
(5) any servicer;
(6) any trustee;
(7) any originator;
(8) any significant obligor;
(9) any enhancement or support provider; and
(10) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to
provide) Static Pool Information with respect to the mortgage loans (of a
similar type as the Mortgage Loans, as reasonably identified by the Purchaser
as provided below) originated by (i) the Seller, if the Seller is an
originator of Mortgage Loans (including as an acquirer of Mortgage Loans from
a Qualified Correspondent), and/or (ii) each Third-Party Originator; provided,
that such obligation to provide Static Pool Information shall be subject to
the provisions of the last paragraph of Subsection 34.03(d). Such Static Pool
Information shall be prepared in form and substance reasonably satisfactory to
the Purchaser by the Seller (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB. To the extent that there is reasonably
available to the Seller (or Third-Party Originator) Static Pool Information
with respect to more than one mortgage loan type, the Purchaser or any
Depositor shall be entitled to specify whether some or all of such information
shall be provided pursuant to this paragraph. Such Static Pool Information for
each vintage origination year or prior securitized pool, as applicable, shall
be presented in increments no less frequently than quarterly over the life of
the mortgage loans included in the vintage origination year or prior
securitized pool. The most recent periodic increment must be as of a date no
later than 135 days prior to the date of the prospectus or other offering
document in which the Static Pool Information is to be included or
incorporated by reference. The Static Pool Information shall be provided in an
electronic format that provides a permanent record of the information
provided, such as a portable document format (pdf) file, or other such
electronic format reasonably required by the Purchaser or the Depositor, as
applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same
format in which Static Pool Information was previously provided to such party
by the Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party
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(to the extent of any additional incremental expense associated with delivery
pursuant to this Agreement), such agreed-upon procedures letters of certified
public accountants reasonably acceptable to the Purchaser or Depositor, as
applicable, pertaining to Static Pool Information relating to prior
securitized pools for securitizations closed on or after January 1, 2006 or,
in the case of Static Pool Information with respect to the Seller's or
Third-Party Originator's originations or purchases, to calendar months
commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the benefit
of such parties as the Purchaser or such Depositor shall designate, which may
include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form of
a standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(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.
With respect to those Mortgage Loans that were originated by Seller
and sold to the Purchaser pursuant to this Agreement and subsequently
securitized by the Purchaser or any of its Affiliates, the Purchaser shall, to
the extent consistent with then-current industry practice, cause the servicer
(or another party to such securitization) under the securitization to be
obligated to provide information with respect to the Mortgage Loans from and
after cut-off date of such securitization necessary for the Seller to comply
with its obligations under Regulation AB, including, without limitation,
providing to the Seller static pool information, as set forth in Item
1105(a)(2) and (5) of Regulation AB.
Subsection 34.04 Indemnification; Remedies.
(a) The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, 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
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against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, accountants' letter or other material provided
in written or electronic form under this Section 34 by or on
behalf of the Seller, or provided under this Section 34 by or
on behalf of any Third-Party Originator (collectively, the
"Seller Information"), or (B) the omission or alleged omission
to state in the Seller Information a material fact required to
be stated in the Seller Information or necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Seller Information and not
to any other information communicated in connection with a sale
or purchase of securities, without regard to whether the Seller
Information or any portion thereof is presented together with
or separately from such other information;
(ii) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants'
letter or other material when and as required under this
Section 34; or
(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 34.02(a) or in a writing furnished pursuant
to Subsection 34.02(b) and made as of a date prior to the
closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or
any breach by the Seller of a representation or warranty in a
writing furnished pursuant to Subsection 34.02(b) to the extent
made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller shall promptly reimburse the Purchaser,
any Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission
with respect to such Securitization Transaction, or for execution of a
certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange
Act with respect to such Securitization Transaction, for all costs reasonably
incurred by each such party in order to obtain the information, report,
certification, accountants' letter or other material not delivered as required
by the Seller or any Third-Party Originator.
(b) Any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or other
material when and as required under this Section 34, or any breach by the
Seller of a representation or warranty set forth in Subsection 34.02(a) or in
a writing furnished pursuant to Subsection 34.02(b) and made as of a date
prior to the closing date of the related Securitization Transaction, to the
extent that such breach is not cured by such closing date, or any breach by
the Seller of a representation or
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warranty in a writing furnished pursuant to Subsection 34.02(b) to the extent
made as of a date subsequent to such closing date, shall immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Seller under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Interim Servicer as servicer under the Interim Servicing Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement or any applicable Reconstitution Agreement to the
contrary) of any compensation to the Interim Servicer; provided that to the
extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Interim Servicer as servicer, such
provision shall be given effect.
[Signature Page Follows]
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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.
By:
______________________________________
Name:
Title:
MORTGAGEIT, INC.
By:
______________________________________
Name:
Title:
EXHIBIT A-1
MORTGAGE LOAN DOCUMENTS
With respect to each Mortgage Loan, the Mortgage Loan Documents
shall include each of the following items, which shall be available for
inspection by the Purchaser and any prospective Purchaser, and which shall be
delivered to the Custodian, or to such other Person as the Purchaser shall
designate in writing, pursuant to Section 6 of the Fourth Amended and Restated
Mortgage Loan Purchase and Warranties Agreement to which this Exhibit is
attached (the "Agreement"):
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. To
the extent that there is no room on the face of the Mortgage Notes for
endorsements, the endorsement may be contained on an allonge, if state law so
allows and the Custodian is so advised by the Seller that state law so allows.
If the Mortgage Loan was acquired by the Seller in a merger, the endorsement
must be substantially in the form "[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
substantially in the form "[Last Endorsee], formerly known as [previous
name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) with respect to Mortgage Loans that are not Co-op Loans, the
original Mortgage with evidence of recording thereon. With respect to any
Co-op Loan, an original or copy of the Security Agreement. If in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered the
original Mortgage with evidence of recording thereon on or prior to the
Closing Date because of a delay caused by the public recording office where
such Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that the original recorded Mortgage or a
copy of such Mortgage certified by such public recording office to be a true
and complete copy of the original recorded Mortgage will be promptly delivered
to the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded
Mortgage or in the case where a Mortgage is lost after recordation in a public
recording office, a copy of such Mortgage certified by such public recording
office to be a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
A-1-1
(e) with respect to Mortgage Loans that are not Co-op Loans, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording (except with respect to MERS Designated Loans). The
Assignment of Mortgage must be duly recorded only if recordation is either
necessary under applicable law or commonly required by private institutional
mortgage investors in the area where the Mortgaged Property is located or on
direction of the Purchaser as provided in this Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to the Purchaser.
If the Assignment of Mortgage is not to be recorded, the Assignment of
Mortgage shall be delivered in blank. If the Mortgage Loan was acquired by the
Seller in a merger, the Assignment of Mortgage must be made by "[Seller],
successor by merger to [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another name,
the Assignment of Mortgage must be by "[Seller], formerly known as [previous
name]";
(f) with respect to Mortgage Loans that are not Co-op Loans, the
originals of all intervening assignments of mortgage (if any) evidencing a
complete chain of assignment from the Seller to the Last Endorsee (or, in the
case of a MERS Designated Loan, MERS) with evidence of recording thereon, or
if any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office retains
the original recorded assignments of mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Seller (or certified by the
title company, escrow agent, or closing attorney) stating that such
intervening assignment of mortgage has been dispatched to the appropriate
public recording office for recordation and that such original recorded
intervening assignment of mortgage or a copy of such intervening assignment of
mortgage certified by the appropriate public recording office to be a true and
complete copy of the original recorded intervening assignment of mortgage will
be promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office,
a copy of such intervening assignment certified by such public recording
office to be a true and complete copy of the original recorded intervening
assignment;
(g) with respect to Mortgage Loans that are not Co-op Loans, the
original mortgagee policy of title insurance or, in the event such original
title policy is unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and complete by the title
insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage;
(i) with respect to any Co-op Loan: (i) a copy of the Co-op Lease
and the assignment of such Co-op Lease, with all intervening assignments
showing a complete chain of title and an assignment thereof by Seller; (ii)
the stock certificate together with an undated stock power relating to such
stock certificate executed in blank; (iii) the recognition agreement of the
interests of the Mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan; and (iv) copies of the
financial statement filed by the originator as secured party
A-1-2
and, if applicable, a filed UCC-3 assignment of the subject security interest
showing a complete chain of title, together with an executed UCC-3 assignment
of such security interest by the Seller in a form sufficient for filing; and
(j) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power certified
by the 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 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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, unless otherwise disclosed to the Purchaser on
the data tape, which shall be available for inspection by the Purchaser and
which shall be retained by the Interim Servicer or delivered to the Purchaser:
(a) Copies of the Mortgage Loan Documents.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income, if required.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on Mortgagor, in a form acceptable to either
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property and photographs of
comparable properties.
(i) Survey of the Mortgaged Property, unless a survey is not
required by the title insurer.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e.,
map or plat, restrictions, easements, home owner association declarations,
etc.
(k) Copies of all required disclosure statements.
(l) If applicable, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales Contract, if applicable.
(n) Copy of the owner's title insurance policy or attorney's opinion
of title and abstract of title, as applicable.
Evidence of electronic notation of the hazard insurance policy, and,
if required by law, evidence of the flood insurance policy.
A-2-1
EXHIBIT B
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
This INDEMNIFICATION AND CONTRIBUTION AGREEMENT ("Agreement"), dated
as of [_______], 200_, among [________________] (the "Depositor"), a
[______________] corporation (the "Depositor"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage
Capital Inc., a New York corporation ("▇▇▇▇▇▇") and [_____________], 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 Fourth
Amended and Restated Mortgage Loan Purchase and Warranties Servicing
Agreement, dated as of [DATE] (the "Purchase Agreement"), by and between
▇▇▇▇▇▇ and Seller; and
WHEREAS, pursuant to Section 13 of the Purchase Agreement, the
Seller has agreed to indemnify, to the extent set forth herein, 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:
1. 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
(Jan. 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
2. Representations and Warranties. Seller represents and warrants
that:
(i) Seller is validly existing and in good standing under the laws
of its jurisdiction of formation or incorporation, as applicable, and has
full power and authority to own its assets and to transact the business
in which it is currently engaged. Seller is duly qualified to do business
and is in good standing in each jurisdiction in which the character of
the business transacted by it or any properties owned or leased by it
requires such qualification and in which the failure so to qualify would
have a material adverse effect on the business, properties, assets or
condition (financial or otherwise) of Seller;
(ii) Seller is not required to obtain the consent of any other
person or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance, validity
or enforceability of this Agreement (except as have been obtained by
Seller);
(iii) the execution, delivery and performance of this Agreement by
Seller will not violate any provision of any existing law or regulation
or any order decree of any court applicable to Seller or any provision of
the charter or bylaws of Seller, or constitute a material breach of any
mortgage, indenture, contract or other agreement to which Seller is a
party or by which it may be bound;
(iv) (a) no proceeding of or before any court, tribunal or
governmental body is currently pending or, (b) to the knowledge of
Seller, threatened against Seller or any of its properties or with
respect to this Agreement or the Offered Certificates, in either case,
which would have a material adverse effect on the business, properties,
assets or condition (financial or otherwise) of Seller;
(v) Seller has full power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated
hereunder, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of each of Seller enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally, by the availability of
equitable remedies, and by limitations of public policy under applicable
securities law as to rights of indemnity and contribution thereunder;
(vi) this Agreement has been duly executed and delivered by Seller;
and (vii) the Seller represents that the Seller Information satisfies the
requirements of the applicable provisions of Regulation AB.
3. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to Seller, will be mailed, delivered
or faxed or emailed and confirmed by mail [______________________]; if sent to
▇▇▇▇▇▇, ▇▇▇▇ be mailed, delivered or faxed or emailed and confirmed by mail to
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc., ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ - Whole Loans
B-5
Operations Manager, Fax: [_______], Email: ▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇,
with 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
[_____________________].
4. Miscellaneous. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
the conflict of laws provisions thereof. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
assigns and the controlling persons referred to herein, and no other person
shall have any right or obligation hereunder. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. This Agreement may be
executed in counterparts, each of which when so executed and delivered shall
be considered an original, and all such counterparts shall constitute one and
the same instrument. Capitalized terms used but not defined herein shall have
the meanings provided in the P&S.
[SIGNATURE PAGE FOLLOWS]
B-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, this
__th day of [_____________].
[DEPOSITOR]
By: ___________________________________________
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: ___________________________________________
Name:
Title:
[SELLER]
By: ___________________________________________
Name:
Title:
B-7
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
------------------------------
I, ____________________, hereby certify that I am the duly elected
[Vice] President of ________________[COMPANY], a [state] [federally] chartered
institution organized under the laws of the [state of ____________] [United
States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the
date hereof and which has been in effect without amendment, waiver,
rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and
which have been in effect without amendment, waiver, rescission or
modification since ___________.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no
event has occurred since the date thereof which would impair such
standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver the Fourth Amended and
Restated 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 to
endorse the Mortgage Notes and execute the Assignments of Mortgages by
original [or facsimile] signature], and such resolutions are in effect on
the date hereof and have been in effect without amendment, waiver,
rescission or modification since ____________.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Company of or compliance by the Company
with the Purchase Agreement, [the sale of the mortgage loans] or the
consummation of the transactions contemplated by the agreements; or (ii)
any required consent, approval, authorization or order has been obtained
by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Purchase Agreement conflicts with or
results in a breach of or constitutes a default under the charter or
by-laws of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or to
which it is subject, or any statute or order, rule, regulations, writ,
injunction or decree of any court, governmental authority or regulatory
body to which the Company is subject or by which it is bound.
C-1
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial
condition, properties or assets of the Company or in any material
impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity of
the Purchase Agreement, or the Mortgage Loans or of any action taken or
to be taken in connection with the transactions contemplated hereby, or
which would be reasonably likely to impair materially the ability of the
Company to perform under the terms of the Purchase Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed (a) the Purchase
Agreement, and (b) any other document delivered or on the date hereof in
connection with any purchase described in the agreements set forth above
was, at the respective times of such signing and delivery, and is now, a
duly elected or appointed, qualified and acting officer or representative
of the Company, who holds the office set forth opposite his or her name
on Exhibit 5, and the signatures of such persons appearing on such
documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Purchase Agreement.
C-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated: ______________________________ By:_________________________________
Name:
Title: [Vice] President
[Seal]
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
[Seal]
C-3
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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C-4
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to ___________________ (the "Company"), with respect to certain
matters in connection with the sale by the Company of the Mortgage Loans
pursuant to that certain Fourth Amended and Restated Mortgage Loan Purchase
and Warranties Agreement by and between the Company and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. (the "Purchaser"), dated as of _________ __, 200_ (the
"Purchase Agreement") which sale is in the form of whole loans, delivered
pursuant to a Custodial Agreement dated as of _____ __, ____ among the
Purchaser, the Company, ___________________________ (the "Interim Servicer")
and ___________________________ [CUSTODIAN] (the "Custodial Agreement", and
collectively with the Purchase Agreement, the "Agreements"). Capitalized terms
not otherwise defined herein have the meanings set forth in the Purchase
Agreement.
[We] [I] have examined the following documents:
1. the Purchase Agreement;
2. the Custodial Agreement;
3. the form of Assignment of Mortgage;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained
in the Purchase Agreement. [We] [I] have assumed the authenticity of all
documents submitted to [us] [me] as originals, the genuineness of all
signatures, the legal capacity of natural persons and the conformity to the
originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of the [United
States] and is qualified to
D-1
transact business in, and is in good standing under, the laws
of [the state of incorporation/formation].
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver the Agreements
and to perform and observe the terms and conditions of the
Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, 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.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original signature
in order to complete the transactions contemplated by the
Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance by the Company with the Agreements and the sale of
the Mortgage Loans by the Company or the consummation of the
transactions contemplated by the Agreements or (ii) any
required consent, approval, authorization or order has been
obtained by the Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or other
agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or violates any
statute or order, rule, regulations, writ, injunction or decree
of any court, governmental authority or regulatory body to
which the Company is subject or by which it is bound.
D-2
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against the
Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements or the
Mortgage Loans or of any action taken or to be taken in
connection with the transactions contemplated thereby, or which
would be likely to impair materially the ability of the Company
to perform under the terms of the Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Agreements is sufficient to fully
transfer to the Purchaser all right, title and interest of the
Company thereto as noteholder and mortgagee.
10. The Mortgages have been duly assigned and the Mortgage Notes
have been duly endorsed as provided in the Custodial Agreement.
The Assignments of Mortgage are in recordable form, except for
the insertion of the name of the assignee, and upon the name of
the assignee being inserted, are acceptable for recording under
the laws of the state where each related Mortgaged Property is
located. The endorsement of the Mortgage Notes, the delivery to
the Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to the
Purchaser, or its designee, are sufficient to permit the
Purchaser to avail itself of all protection available under
applicable law against the claims of any present or future
creditors of the Company, and are sufficient to prevent any
other sale, transfer, assignment, pledge or hypothecation of
the Mortgages and the Mortgage Notes by the Company from being
enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
________________________________
[Name]
[Assistant] General Counsel
D-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 to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mortgage Capital Inc. under a Fourth Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of March 1, 2006, certain mortgage
loans originated by the Association. 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.
E-1
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 Fourth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of March 1,
2006, 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
UNDERWRITING GUIDELINES
G-1
EXHIBIT H
FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
-------------------------------------------
On this ___ day of _______, 200_, [____________] ("Seller"), as the
Seller under (i) that certain Purchase Price and Terms Agreement, dated as of
_________, 200__ (the "PPTA"), and (ii) that certain Fourth Amended and
Restated Mortgage Loan Purchase and Warranties Agreement, dated as of March 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 contents of each
Servicing File required to be retained by the Interim Servicer to service the
Mortgage Loans pursuant to the Interim Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Interim
Servicer in its capacity as Interim Servicer for the benefit of the Purchaser
as the owner thereof. The Interim Servicer's possession of any portion of the
Servicing File is at the will of the Purchaser for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to the Interim
Servicing Agreement, and such retention and possession by the Interim Servicer
shall be in a custodial capacity only. The ownership of each Mortgage Note,
Mortgage and the contents of the Mortgage File and Servicing File is vested in
the Purchaser and the ownership of all records and documents with respect to
the related Mortgage Loan prepared by or which come into the possession of the
Seller shall immediately vest in the Purchaser and shall be retained and
maintained, in trust, by the Seller at the will of the Purchaser in a
custodial capacity only. The PPTA and the Purchase Agreement shall
collectively be referred to as the "Agreements" herein.
The Mortgage Loan Package characteristics of the Mortgage Loans
subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Purchase Agreement, the
Purchaser accepts the Mortgage Loans listed on Exhibit A attached hereto.
Notwithstanding the foregoing the Purchaser does not waive any rights or
remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
H-1
[SELLER]
By: ___________________________________
Name:______________________________
Title:_____________________________
Accepted and Agreed:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE CAPITAL INC.
By: ___________________________________________
Name:
Title:
H-2
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
--------------------------------------
THE MORTGAGE LOANS
H-3
EXHIBIT B
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
-------------------------------------------------------
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
---------------------------------------------
Pool Characteristics of the Mortgage Loan Package as delivered on the related
Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance less than $_____;
(2) an origination date earlier than __ months prior to the related Cut-off
Date; (3) an LTV of greater than ____%; (4) a FICO Score of less than ___; or
(5) a debt-to-income ratio of more than ___%. Each Mortgage Loan has a
Mortgage Interest Rate of at least ___% per annum and an outstanding principal
balance of less than $______. Each Adjustable Rate Mortgage Loan has an Index
of [______].
H-4
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
-----------------------
H-5