EXHIBIT 10.1
FORM OF LOAN SALE AGREEMENT
LOAN SALE AGREEMENT
dated as of _____
by and among
_____________________________________
as Depositor,
_____________________________________
as an Originator
and
_____________________________________
as an Originator
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS .........................................................1
Section 1.01. Definitions.................................................1
ARTICLE II PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS.....................2
Section 2.01. Agreement to Purchase the Initial Mortgage Loans............2
Section 2.02. Agreement to Purchase the Subsequent Mortgage Loans.........3
Section 2.03. Purchase Price..............................................3
Section 2.04. Conveyance of Mortgage Loans; Possession of Mortgage
Files......................................................4
Section 2.05. Delivery of Mortgage Loan Documents.........................4
Section 2.06. Acceptance of Mortgage Loans................................5
Section 2.07. Transfer of Mortgage Loans; Assignment of Agreement.........6
Section 2.08. Examination of Mortgage Files...............................6
Section 2.09. Books and Records...........................................7
Section 2.10. Cost of Delivery and Recordation of Documents...............7
ARTICLE III REPRESENTATIONS AND WARRANTIES.....................................7
Section 3.01. Representations and Warranties as to the Originators........7
Section 3.02. [Reserved]..................................................9
Section 3.03. Representations and Warranties Relating to the Mortgage
Loans.....................................................9
Section 3.04. Representations and Warranties of the Depositor............18
Section 3.05. Repurchase Obligation for Defective Documentation and
for Breach of a Representation or Warranty.................19
ARTICLE IV THE ORIGINATORS....................................................22
Section 4.01. Covenants of the Originators...............................22
Section 4.02. Merger or Consolidation....................................22
Section 4.03. Costs......................................................22
Section 4.04. Indemnification............................................23
ARTICLE V CONDITIONS OF CLOSING...............................................25
Section 5.01. Conditions of Depositor's Obligations......................25
Section 5.02. Conditions of Originators' Obligations.....................27
Section 5.03. Termination of Depositor's Obligations.....................28
ARTICLE VI MISCELLANEOUS .....................................................28
Section 6.01. Notices....................................................28
Section 6.02. Severability of Provisions.................................28
Section 6.03. Agreement of Originators...................................29
Section 6.04. Survival...................................................29
Section 6.05. Effect of Headings and Table of Contents...................29
Section 6.06. Successors and Assigns.....................................29
Section 6.07. Confirmation of Intent; Grant of Security Interest.........29
Section 6.08. Miscellaneous..............................................30
Section 6.09. Amendments.................................................30
Section 6.10. Third-Party Beneficiaries..................................31
Section 6.11. GOVERNING LAW; CONSENT TO JURISDICTION;
WAIVER OF JURY TRIAL.......................................31
Section 6.12. Execution in Counterparts..................................32
SCHEDULES AND EXHIBITS
Schedule I - Mortgage Loan Schedule
Exhibit A - Form of Subsequent Transfer Agreement
This LOAN SALE AGREEMENT, dated as of _________ (this
"Agreement"), by and among ____________________, a ___________ corporation, (the
"Depositor"), and ____________________, a __________ corporation, and
____________________, a __________ corporation (together, the "Originators").
W I T N E S S E T H:
WHEREAS, Schedule I attached hereto and made a part hereof
lists certain fixed rate business and consumer purpose first and second lien
mortgage loans (the "Mortgage Loans") owned by the Originators that the
Originators desire to sell to the Depositor and that the Depositor desires to
purchase;
WHEREAS, it is the intention of the Originators and the
Depositor that simultaneously with the Originators' conveyance of the Mortgage
Loans to the Depositor on the Closing Date, (a) the Depositor shall sell the
Mortgage Loans to ____________________, a ________ business trust (the "Trust")
pursuant to a Sale and Servicing Agreement to be dated as of _____ (the "Sale
and Servicing Agreement"), to be entered into by and among the Depositor, as
depositor, the Trust, as issuer, ________, as servicer (in such capacity, the
"Servicer"), ________, a ________ banking association, as collateral agent (the
"Collateral Agent"), and ________, a ________banking corporation, as indenture
trustee (the "Indenture Trustee"), and (b) the Trust shall issue its Mortgage
Backed Notes (the "Notes"), pursuant to an Indenture, to be dated as of _____
(the "Indenture"), by and between the Trust and the Indenture Trustee, which
Notes will be secured by a pledge of the assets of the Trust.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) Whenever used herein, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article I:
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Prospectus" means the Prospectus dated _____ relating to the
offering by the Depositor from time to time of its Mortgage Backed Notes
(Issuable in Series) in the form in which it was or will be filed with the
Commission pursuant to Rule 424(b) under the Securities Act with respect to the
offer and sale of the Notes.
"Prospectus Supplement" means the Prospectus Supplement dated
_____, relating to the offering of the Notes in the form in which it was or will
be filed with the Commission pursuant to Rule 424(b) under the Securities Act
with respect to the offer and sale of the Notes.
"Registration Statement" means that certain registration
statement on Form S-3, as amended (Registration No. ________) relating to the
offering by the Depositor from time to
time of its Mortgage Backed Notes (Issuable in Series) as heretofore declared
effective by the Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Termination Event" means the existence of any one or more of
the following conditions:
(a) a stop order suspending the
effectiveness of the Registration Statement shall have been
issued or a proceeding for that purpose shall have been
initiated or threatened by the Commission; or
(b) subsequent to the execution and delivery
of this Agreement, a downgrading, or public notification of a
possible change, without indication of direction, shall have
occurred in the rating afforded any of the debt securities or
claims paying ability of any person providing any form of
credit enhancement for any of the Notes, by any "nationally
recognized statistical rating organization," as that term is
defined by the Commission for purposes of Rule 436(g)(2) under
the Securities Act; or
(c) subsequent to the execution and delivery
of this Agreement, there shall have occurred an adverse change
in the condition, financial or otherwise, earnings, affairs,
regulatory situation or business prospects of the Note Insurer
reasonably determined by the Depositor to be material; or
(d) subsequent to the date of this Agreement
there shall have occurred any of the following: (i) a
suspension or material limitation in trading in securities
substantially similar to the Notes; (ii) a general moratorium
on commercial banking activities in the State of New York
declared by either Federal or New York State authorities; or
(iii) the engagement by the United States in hostilities, or
the escalation of such hostilities, or any calamity or crisis,
if the effect of any such event specified in this clause (iii)
in the reasonable judgment of the Depositor makes it
impracticable or inadvisable to proceed with the public
offering or the delivery of the Notes on the terms and in the
manner contemplated in the Prospectus Supplement.
(b) Capitalized terms used herein that are not otherwise
defined shall have the respective meanings ascribed thereto in Appendix I to the
Indenture.
ARTICLE II
PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Agreement to Purchase the Initial Mortgage
Loans. (a) Subject to the terms and conditions of this Agreement, the
Originators agree to sell, and the Depositor agrees to purchase, the Mortgage
Loans having the Cut-Off Date Aggregate Principal Balance or, in accordance with
Section 2.08 hereof, such other balance as is evidenced by the actual Cut-Off
Date Aggregate Principal Balance of the Mortgage Loans accepted by the Depositor
on the Closing Date and listed in the Mortgage Loan Schedule.
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(b) Subject to Section 2.08 hereof, the Depositor and the
Originators have agreed upon which of the Originators' Mortgage Loans are to be
purchased by the Depositor on the Closing Date pursuant to this Agreement, and
the Originators has prepared a schedule describing the Mortgage Loans (the
"Mortgage Loan Schedule") setting forth all of the Mortgage Loans to be
purchased under this Agreement, which Mortgage Loan Schedule is attached hereto
as Schedule I. The Mortgage Loan Schedule shall conform to the requirements of
the Depositor and to the definition of "Mortgage Loan Schedule" in Appendix I to
the Indenture.
(c) The closing for the purchase and sale of the Mortgage
Loans shall take place at the offices of ________, New York, New York, at 10:00
a.m., New York time, on the Closing Date, or such other place and time as the
parties shall agree.
Section 2.02. Agreement to Purchase the Subsequent Mortgage
Loans. Subject to the satisfaction of the conditions set forth in Section
2.14(b) of the Indenture, in consideration of the Depositor's delivery on the
related Subsequent Transfer Dates to or upon the order of the Originators of all
or a portion of the balance of funds on deposit in the Pre-Funding Accounts, the
Originators shall on any Subsequent Transfer Date sell, transfer, assign, set
over and convey to the Depositor, without recourse, but subject to the terms and
provisions of this Agreement, all of the right, title and interest of the
Originators in and to the Subsequent Mortgage Loans, including all principal of,
and all interest due on, such Subsequent Mortgage Loans, and all other assets
included or to be included in the Trust Estate.
The amount released from a Pre-Funding Account with respect to
a transfer of Subsequent Mortgage Loans to the related Pool shall be one-hundred
percent (100%) of the Aggregate Principal Balance of such Subsequent Mortgage
Loans so transferred, as of the related Subsequent Cut-Off Date.
The obligation of the Depositor to purchase a Subsequent
Mortgage Loan on any Subsequent Transfer Date is subject to the satisfaction of
the requirements set forth in Section 2.14(b) of the Indenture.
Section 2.03. Purchase Price. (a) On the Closing Date, as
consideration for the Originators' sale of the Initial Mortgage Loans to the
Depositor, the Depositor will deliver to the Originators (i) an amount in cash
equal to the sum of (A) ___%, and ____% of the Original Note Principal Balance
as of the Closing Date of the Class A-1 Notes and Class A-2 Notes, respectively,
plus (B) accrued interest on the Original Note Principal Balance of the Class
A-1 Notes and Class A-2 Notes at the rate of ____% per annum and ___% per annum,
respectively, from (and including) _____ to (but not including) _____, minus (C)
the Original Pre-Funded Amount and the Original Capitalized Interest Amount for
each class of Notes, payable by wire transfer of same day funds and (ii) the
Trust Certificates to be issued pursuant to the Trust Agreement.
(a) On each Subsequent Transfer Date, as full consideration
for the Originators' sale of the Subsequent Mortgage Loans to the Depositor, the
Depositor will deliver to the Originators an amount in cash equal to the sum of
100% of the Aggregate Principal Balance of the Subsequent Mortgage Loans of the
related Pool as of the related Subsequent Cut-Off Date.
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Section 2.04. Conveyance of Mortgage Loans; Possession of
Mortgage Files. (a) On the Closing Date and on each Subsequent Transfer Date,
the Originators shall sell, transfer, assign, set over and convey to the
Depositor, without recourse, but subject to the terms of this Agreement, all
right, title and interest in and to the applicable Mortgage Loans, including all
principal outstanding as of, and all interest due after, the related Cut-Off
Date, the Insurance Policies relating to each such Mortgage Loan, all right,
title and interest in and to the proceeds of such Insurance Policies and all of
its rights under this Agreement with respect to the Mortgage Loans from and
after the related Cut-Off Date or the Subsequent Cut-Off Date, as applicable.
Upon payment of the purchase price for such Mortgage Loans as provided in
Section 2.03 of this Agreement, the Originators shall have hereby, and shall be
deemed to have, sold, transferred, assigned, set over and conveyed to the
Depositor such Mortgage Loans, the Insurance Policies relating to each such
Mortgage Loan, all right, title and interest in and to the proceeds of such
Insurance Policies and all of its rights under this Agreement with respect to
the Mortgage Loans from and after the related Cut-Off Date or the Subsequent
Cut-Off Date, as applicable.
(b) Upon the sale of such Mortgage Loans, the ownership of
each related Mortgage Note, each related Mortgage and the contents of the
related Mortgage File shall immediately vest in the Depositor and the ownership
of all related records and documents with respect to each Mortgage Loan prepared
by or which come into the possession of the Originators shall immediately vest
in the Depositor. The contents of any Indenture Trustee's Mortgage File in the
possession of the Originators at any time after such sale, and any principal
collected and interest due on the Mortgage Loans after the related Cut-Off Date
and received by the Originators, shall be held in trust by the Originators for
the benefit of the Depositor as the owner thereof, and shall be promptly
delivered by the Originators to or upon the order of the Depositor.
(c) Pursuant to the Sale and Servicing Agreement, the
Depositor shall, on the Closing Date, assign all of its right, title and
interest in and to the Initial Mortgage Loans to the Trust. Pursuant to the
Indenture, the Trust shall, on the Closing Date, pledge all of its right, title
and interest in and to the Initial Mortgage Loans to the Indenture Trustee, for
the benefit of the Noteholders and the Note Insurer.
Section 2.05. Delivery of Mortgage Loan Documents. (a) On or
prior to the Closing Date or Subsequent Transfer Date, as applicable, the
related Originator shall deliver to the Collateral Agent, on behalf of the
Indenture Trustee (as pledgee of the Trust pursuant to the Indenture, the Trust
being the assignee of the Depositor pursuant to the Sale and Servicing
Agreement), each of the documents for each applicable Mortgage Loan in
accordance with the provisions of Section 2.05 of the Sale and Servicing
Agreement.
(b) As promptly as practicable, but in any event within thirty
(30) days from the Closing Date or the Subsequent Transfer Date, as applicable,
the Depositor shall promptly submit, or cause to be submitted by the related
Originator, for recording in the appropriate public office for real property
records, each assignment referred to in Section 2.05(a)(iv) of the Sale and
Servicing Agreement. The Collateral Agent, on behalf of the Indenture Trustee,
shall be required to retain a copy of each assignment submitted for recording.
In the event that any such assignment is lost or returned unrecorded because of
a defect therein, the Depositor or such Originator shall promptly prepare a
substitute assignment or cure such defect, as the case may
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be, and thereafter the Depositor or such Originator shall submit each such
assignment for recording.
(c) The Depositor or the related Originator shall, within five
(5) Business Days after the receipt thereof, deliver or cause to be delivered to
the Collateral Agent, on behalf of the Indenture Trustee (as pledgee of the
Trust pursuant to the Indenture, the Trust being the assignee of the Depositor
pursuant to the Sale and Servicing Agreement): (i) the original recorded
Mortgage and related power of attorney, if any, in those instances where a copy
thereof certified by the related Originator was delivered to the Collateral
Agent, on behalf of the Indenture Trustee, pursuant to Section 2.05 of the Sale
and Servicing Agreement; (ii) the original recorded assignment of Mortgage from
the related Originator to the Indenture Trustee, which, together with any
intervening assignments of Mortgage, evidences a complete chain of assignment
from the originator of the Mortgage Loan to the Indenture Trustee in those
instances where copies of such assignments certified by the related Originator
were delivered to the Collateral Agent, on behalf of the Indenture Trustee,
pursuant to Section 2.05 of the Sale and Servicing Agreement; and (iii) the
title insurance policy or title opinion required in Section 2.05(a)(vi) of the
Sale and Servicing Agreement.
Notwithstanding anything to the contrary contained in this
Section 2.05, in those instances where the public recording office retains the
original Mortgage, power of attorney, if any, assignment or assignment of
Mortgage after it has been recorded or such original has been lost, the
Depositor or the related Originator shall be deemed to have satisfied its
obligations hereunder upon delivery to the Collateral Agent, on behalf of the
Indenture Trustee, of a copy of such Mortgage, power of attorney, if any,
assignment or assignment of Mortgage certified by the public recording office to
be a true copy of the recorded original thereof.
From time to time the Depositor or the related Originator may
forward or cause to be forwarded to the Collateral Agent, on behalf of the
Indenture Trustee, additional original documents evidencing an assumption or
modification of a Mortgage Loan.
(d) All original documents relating to the Mortgage Loans that
are not delivered to the Collateral Agent, on behalf of the Indenture Trustee,
as permitted by Section 2.05(a) hereof are and shall be held by the Servicer,
the Depositor or the related Originator in trust for the benefit of the
Indenture Trustee, on behalf of the Noteholders and the Note Insurer. In the
event that any such original document is required pursuant to the terms of this
Section 2.05 to be a part of an Indenture Trustee's Mortgage File, such document
shall be delivered promptly to the Collateral Agent, on behalf of the Indenture
Trustee. From and after the sale of the Mortgage Loans to the Depositor pursuant
hereto, to the extent that the related Originator retains legal title of record
to any Mortgage Loans prior to the vesting of legal title in the Indenture
Trustee, such title shall be retained in trust for the Trust as the owner of the
Mortgage Loans, as the Depositor's assignee, and the Indenture Trustee, as the
Trust's pledgee.
Section 2.06. Acceptance of Mortgage Loans. (a) To evidence
the transfer of the Mortgage Loans and related Mortgage Files to the Collateral
Agent, on behalf of the Indenture Trustee, the Collateral Agent shall deliver
the acknowledgement of receipt, the Initial Certification and the Final
Certification required to be delivered pursuant to Section 2.06(b) of the Sale
and Servicing Agreement.
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(b) The Sale and Servicing Agreement provides that, if the
Collateral Agent during the process of reviewing the Indenture Trustee's
Mortgage Files, finds any document constituting a part of a Indenture Trustee's
Mortgage File which is not executed, has not been received, is unrelated to the
Mortgage Loan identified in the Mortgage Loan Schedule, or does not conform to
the requirements of Section 2.05 of the Sale and Servicing Agreement or the
description thereof as set forth in the Mortgage Loan Schedule, the Collateral
Agent shall promptly so notify the Servicer, the Indenture Trustee, the related
Originator and the Note Insurer. The Originators agree that in performing any
such review, the Collateral Agent may conclusively rely on the Originators as to
the purported genuineness of any such document and any signature thereon. Each
of the Originators agrees to use reasonable efforts to remedy a material defect
in a document constituting part of an Indenture Trustee's Mortgage File of which
it is notified. If, however, within sixty (60) days after such notice none of
the Originators has remedied the defect and the defect materially and adversely
affects the interest of the Noteholders in the related Mortgage Loan or the
interests of the Note Insurer, then the Originators shall be obligated to either
substitute in lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan or
purchase such Mortgage Loan in the manner and subject to the conditions set
forth in Section 3.05 hereof.
(c) The failure of the Collateral Agent, the Indenture Trustee
or the Note Insurer to give any notice contemplated herein within the time
periods specified above shall not affect or relieve the Depositor's or the
Originators obligation to repurchase for any Mortgage Loan pursuant to this
Section 2.06 or Section 3.05 of this Agreement.
Section 2.07. Transfer of Mortgage Loans; Assignment of
Agreement. The Originators each hereby acknowledges and agrees that the
Depositor or the Trust may assign its interest under this Agreement to the
Indenture Trustee as may be required to effect the purposes of the Indenture and
the Sale and Servicing Agreement, without further notice to, or consent of, the
Originators, and the Indenture Trustee shall succeed to such of the rights and
obligations of the Depositor and the Trust hereunder as shall be so assigned.
The Depositor shall, pursuant to the Sale and Servicing Agreement, assign all of
its right, title and interest in and to the Mortgage Loans and its right to
exercise the remedies created by Sections 2.06 and 3.05 hereof for breaches of
the representations, warranties, agreements and covenants of the Originators
contained in Sections 2.05, 2.06 and 3.03 hereof to the Trust, and the Trust
shall, pursuant to the Indenture, pledge such right, title and interest to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. Each
of the Originators agrees that, upon such assignment to the Trust and pledge to
the Indenture Trustee, such representations, warranties, agreements and
covenants will run to and be for the benefit of the Indenture Trustee and the
Indenture Trustee may enforce, without joinder of the Depositor or the Trust,
the repurchase obligations of the Originators set forth herein with respect to
breaches of such representations, warranties, agreements and covenants.
Section 2.08. Examination of Mortgage Files. Prior to the
Closing Date and each Subsequent Transfer Date, as applicable, the Originators
shall make the Mortgage Files available to the Depositor or its designee for
examination at the Originators' offices or at such other place as the
Originators shall reasonably specify. Such examination may be made by the
Depositor or its designee at any time on or before the Closing
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Date or Subsequent Transfer Date, as the case may be. If the Depositor or its
designee makes such examination prior to the Closing Date or Subsequent Transfer
Date, as the case may be, and identifies any Mortgage Loans that do not conform
to the requirements of the Depositor as described in this Agreement, such
Mortgage Loans shall be deleted from the Mortgage Loan Schedule and may be
replaced, prior to the Closing Date or Subsequent Transfer Date, as the case may
be, by substitute Mortgage Loans acceptable to the Depositor. The Depositor may,
at its option and without notice to the Originators, purchase all or part of the
Mortgage Loans without conducting any partial or complete examination. The fact
that the Depositor, the Collateral Agent or the Indenture Trustee has conducted
or has failed to conduct any partial or complete examination of the Mortgage
Files shall not affect the rights of the Depositor or the Indenture Trustee to
demand repurchase or other relief as provided in this Agreement.
Section 2.09. Books and Records. The transfer of each Mortgage
Loan shall be reflected on each of the Originators' accounting and other
records, balance sheet and other financial statements as a sale of assets by the
Originators to the Depositor and by the Depositor to the Trust. Each of the
Originators shall be responsible for maintaining, and shall maintain, a complete
set of books and records for each Mortgage Loan which shall be clearly marked to
reflect the ownership of each Mortgage Loan by the Trust, and the pledge of each
Mortgage Loan by the Trust to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer.
Section 2.10. Cost of Delivery and Recordation of Documents.
The costs relating to the delivery and recordation of the documents in
connection with the Mortgage Loans as specified in this Article II and in
Article II of the Sale and Servicing Agreement shall be borne by the
Originators.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties as to the
Originators. Each of the Originators hereby represents and warrants to the
Depositor, as of the Closing Date, that:
(a) The Originator is a corporation duly
organized, validly existing and in good standing under the
laws of the State of ________ and has all licenses necessary
to carry on its business as now being conducted and is
licensed, qualified and in good standing in each state where a
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 Originator and to
perform its obligations as the Originator hereunder, and in
any event the Originator is in compliance with the laws of any
such state to the extent necessary to ensure the
enforceability of the related Mortgage Loan; the Originator
has the full power and authority, corporate and otherwise, to
execute and deliver this Agreement and to perform in
accordance herewith; the execution, delivery and performance
of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Originator and
the consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement evidences the
valid, binding and enforceable obligation of the Originator;
and all requisite corporate action
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has been taken by the Originator to make this Agreement valid
and binding upon the Originator in accordance with its terms;
(b) No consent, approval, authorization or
order of any court or governmental agency or body is required
for the execution, delivery and performance by the Originator
of, or compliance by the Originator with, this Agreement or
the sale of the Mortgage Loans pursuant to the terms of this
Agreement or the consummation of the transactions contemplated
by this Agreement, or if required, such approval has been
obtained prior to the Closing Date;
(c) Neither the execution and delivery of
this Agreement, the acquisition nor origination of the
Mortgage Loans by the Originator or the transactions
contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, has or will
conflict with or result in a breach of any of the terms,
conditions or provisions of the Originator's charter or
by-laws or any legal restriction or any agreement or
instrument to which the Originator is now a party or by which
it is bound or to which its property is subject, 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 Originator
or its property is subject, or impair the ability of the
Indenture Trustee (or the Servicer as the agent of the
Indenture Trustee) to realize on the Mortgage Loans, or impair
the value of the Mortgage Loans;
(d) Neither this Agreement nor the
information contained in the Prospectus Supplement (other than
the information under the caption "Underwriting") nor any
statement, report or other document prepared by the Originator
and furnished or to be furnished pursuant to this Agreement or
in connection with the transactions contemplated hereby
contains any untrue statement or alleged untrue statement of
any material fact or omits to state a material fact necessary
to make the statements contained herein or therein, in light
of the circumstances under which they were made, not
misleading;
(e) There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Originator,
threatened before a court, administrative agency or government
tribunal against the Originator 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 Originator, or in any
material impairment of the right or ability of the Originator
to carry on its business substantially as now conducted, or in
any material liability on the part of the Originator, or which
would draw into question the validity of this Agreement, the
Mortgage Loans, or of any action taken or to be taken in
connection with the obligations of the Originator contemplated
herein, or which would impair materially the ability of the
Originator to perform under the terms of this Agreement or
that will prohibit its entering into this Agreement or the
consummation of any of the transactions contemplated hereby;
(f) The Originator is not in violation of or
in default with respect to, and the execution and delivery of
this Agreement by the Originator and its performance of and
compliance with the terms hereof will not constitute a
violation or default with respect to, any order or decree of
any court or any order, regulation or demand of any federal,
state,
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municipal or governmental agency, which violation or default
might have consequences that would materially and adversely
affect the condition (financial or other) or operations of the
Originator or its properties or might have consequences that
would materially and adversely affect its performance
hereunder or under any subservicing agreement;
(g) Upon the receipt of each Mortgage File
by the Depositor (or its assignee) under this Agreement, the
Depositor (or its assignee) will have good title to each
related Mortgage Loan and such other items comprising the
corpus of the Trust Estate free and clear of any lien created
by the Originator (other than liens which will be
simultaneously released);
(h) The consummation of the transactions
contemplated by this Agreement are in the ordinary course of
business of the Originator, and the transfer, assignment and
conveyance of the Mortgage Notes and the Mortgages by the
Originator pursuant to this Agreement are not subject to the
bulk transfer or any similar statutory provisions in effect in
any applicable jurisdiction;
(i) With respect to any Mortgage Loan
purchased by the Originator, the Originator acquired title to
the Mortgage Loan in good faith, without notice of any adverse
claim;
(j) The Originator 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 Originator is solvent and the sale of the Mortgage Loans
by the Originator pursuant to the terms of this Agreement will
not cause the Originator to become insolvent. The sale of the
Mortgage Loans by the Originator pursuant to the terms of this
Agreement was not undertaken with the intent to hinder, delay
or defraud any of the Originator's creditors;
(k) The Mortgage Loans are not intentionally
selected in a manner so as to affect adversely the interests
of the Depositor or of any transferee of the Depositor
(including the Trust and the Indenture Trustee);
(l) The Originator has determined that it
will treat the disposition of the Mortgage Loans pursuant to
this Agreement as a sale for accounting and tax purposes;
(m) The Originator has not dealt with any
broker or agent or anyone else that may be entitled to any
commission or compensation in connection with the sale of the
Mortgage Loans to the Depositor other than to the Depositor or
an affiliate thereof; and
(n) The consideration received by the
Originator upon the sale of the Mortgage Loans under this
Agreement constitutes fair consideration and reasonably
equivalent value for the Mortgage Loans.
Section 3.02. [Reserved].
Section 3.03. Representations and Warranties Relating to the
Mortgage Loans. The Originators represent and warrant to the Depositor that, as
of the Closing Date, as to each
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Initial Mortgage Loan, and as of the Subsequent Transfer Date, as to each
Subsequent Mortgage Loan, immediately prior to the sale and transfer of such
Mortgage Loan by the Originators to the Depositor:
(a) The information set forth in each
Mortgage Loan Schedule is complete, true and correct;
(b) The information to be provided by the
Originators, directly or indirectly, to the Depositor in
connection with a Subsequent Mortgage Loan will be true and
correct in all material respects at the date or dates
respecting which such information is furnished;
(c) Each Mortgage is a valid first or second
lien on a fee simple (or its equivalent under applicable state
law) estate in the real property securing the amount owed by
the Mortgagor under the Mortgage Note subject only to (i) the
lien of current real property taxes and assessments which are
not delinquent, (ii) with respect to any Mortgage Loan
identified on the Mortgage Loan Schedule as secured by a
second lien, the related first mortgage loan, (iii) covenants,
conditions and restrictions, rights of way, easements and
other matters of public record as of the date of recording of
such Mortgage, such exceptions appearing of record being
acceptable to mortgage lending institutions generally in the
area wherein the property subject to the Mortgage is located
or specifically reflected in the appraisal obtained in
connection with the origination of the related Mortgage Loan
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 such Mortgage;
(d) Immediately prior to the transfer and
assignment by the related Originator to the Depositor, the
Originator, had good title to, and was the sole owner of each
Mortgage Loan, free of any interest of any other Person, and
the Originator has transferred all right, title and interest
in each Mortgage Loan to the Depositor;
(e) As of the applicable Cut-Off Date, no
payment of principal or interest on or in respect of any
Mortgage Loan remains unpaid for thirty (30) or more days past
the date the same was due in accordance with the related
Mortgage Note without regard to applicable grace periods;
(f) As of the Initial Cut-Off Date, no
Mortgage Loan has a Mortgage Interest Rate less than ___% per
annum in Pool I and ___% per annum in Pool II and the weighted
average Mortgage Interest Rate of the Mortgage Loans is ___%
in Pool I and ___% in Pool II;
(g) At origination, no Mortgage Loan in Pool
I or Pool II had an original term to maturity of greater than
___ months;
(h) As of the Initial Cut-Off Date, the
weighted average remaining term to maturity of the Mortgage
Loans is ___ months for the Mortgage Loans in Pool I and ___
months for the Mortgage Loans in Pool II;
10
(i) To the best knowledge of each of the
Originators, there is no mechanics' lien or claim for work,
labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the premises
subject to any Mortgage which is or may be a lien prior to, or
equal or coordinate with, the lien of such Mortgage, except
those which are insured against by the title insurance policy
referred to in (ff) below;
(j) To the best knowledge of each of the
Originators, there is no delinquent tax or assessment lien
against any Mortgaged Property;
(k) Such Mortgage Loan, the Mortgage, and
the Mortgage Note, including, without limitation, the
obligation of the Mortgagor to pay the unpaid principal of and
interest on the Mortgage Note, are each not subject to any
right of rescission (or any such rescission right has expired
in accordance with applicable law), set-off, counterclaim, or
defense, including 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 the defense of
usury, and no such right of rescission, set-off, counterclaim,
or defense has been asserted with respect thereto;
(l) To the best knowledge of each of the
Originators, the Mortgaged Property is free of material damage
and is in good repair, and there is no pending or threatened
proceeding for the total or partial condemnation of the
Mortgaged Property;
(m) None of the Originators have received a
notice of default of any first mortgage loan secured by the
Mortgaged Property which has not been cured by a party other
than the Originators;
(n) Each Mortgage Note and Mortgage are in
substantially the forms previously provided to the Depositor
and the Indenture Trustee on behalf of the Originators;
(o) No Mortgage Loan had, at the date of
origination, a CLTV in excess of 100%, and the weighted
average CLTV of all Mortgage Loans as of the Initial Cut-Off
Date is approximately ___% in Pool I and ___% in Pool II;
(p) The Mortgage Loan was not originated in
a program in which the amount of documentation in the
underwriting process was limited in comparison to the
originator's normal documentation requirements;
(q) No more than the following percentages
of the Mortgage Loans by Cut-Off Date Aggregate Principal
Balance are secured by Mortgaged Properties located in the
following states:
11
Pool I
-----------------------------------------------------------
State Percentage of Cut-Off
Date Aggregate
Principal Balance
-------------------------- --------------------------
--------------------------
100.00%
==========================
Pool II
-----------------------------------------------------------
State Percentage of Cut-Off
Date Aggregate
Principal Balance
-------------------------- --------------------------
--------------------------
100.00%
==========================
(r) The Mortgage Loans were not selected by
the Originators for sale hereunder or inclusion in the Trust
Estate on any basis adverse to the Trust Estate relative to
the portfolio of similar mortgage loans of the Originators;
(s) None of the Mortgage Loans constitutes a
lien on leasehold interests;
(t) Each Mortgage contains customary and
enforceable provisions which render the rights and remedies of
the holder thereof adequate for the realization against the
related Mortgaged Property of the benefits of the security
including (A) in the case of a Mortgage designated as a deed
of trust, by trustee's sale and (B) otherwise by judicial
foreclosure. To the best of the Originators' knowledge, there
is no homestead or other exemption available to the related
Mortgagor which would materially interfere with the right to
sell the related Mortgaged Property at a trustee's sale or the
right to foreclose the related Mortgage. The Mortgage contains
customary and enforceable provisions for the acceleration of
the payment of the Principal Balance of such Mortgage Loan in
the event all or any part of the related Mortgaged Property is
sold or otherwise transferred without the prior written
consent of the holder thereof;
(u) The proceeds of such Mortgage Loan have
been fully disbursed, including reserves set aside by the
Originators, there is no requirement for, and the Originators
shall not make any, future advances thereunder. Any future
advances made prior to the applicable Cut-Off Date have been
consolidated with the principal balance secured by the
Mortgage, and such principal balance, as consolidated, bears a
single interest rate and single repayment term reflected on
the applicable Mortgage Loan Schedule. The Principal Balance
as of the applicable Cut-Off Date does not exceed the original
principal amount of such Mortgage Loan. Except with respect to
no more than $150,000 of escrow funds, any and all
requirements as to completion of any on-site or off-site
improvements and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees, and
expenses incurred in making, or recording such Mortgage Loan
have been paid;
(v) All Mortgage Loans were originated in
compliance with the Originators' Underwriting Guidelines;
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(w) The terms of the Mortgage and the
Mortgage Note have not been impaired, waived, altered, or
modified in any respect, except by a written instrument which
has been recorded, if necessary, to protect the interest of
the Indenture Trustee and which has been delivered to the
Collateral Agent, on behalf of the Indenture Trustee. The
substance of any such alteration or modification is or as to
Subsequent Mortgage Loans will be reflected on the applicable
Mortgage Loan Schedule and, to the extent necessary, has been
or will be approved by (i) the insurer under the applicable
mortgage title insurance policy, and (ii) the insurer under
any other insurance policy required hereunder for such
Mortgage Loan where such insurance policy requires approval
and the failure to procure approval would impair coverage
under such policy;
(x) No instrument of release, waiver,
alteration, or modification has been executed in connection
with such Mortgage Loan, and no Mortgagor has been released,
in whole or in part, except in connection with an assumption
agreement which has been approved by the insurer under any
insurance policy required hereunder for such Mortgage Loan
where such policy requires approval and the failure to procure
approval would impair coverage under such policy, and which is
part of the Mortgage File and has been delivered to the
Collateral Agent, on behalf of the Indenture Trustee, and the
terms of which are reflected in the applicable Mortgage Loan
Schedule;
(y) Other than delinquencies described in
clause (e) above, there is no default, breach, violation, or
event of 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 such a default, breach, violation or event of
acceleration, and the Originators have not waived any such
default, breach, violation or event of acceleration. All
taxes, governmental assessments (including assessments payable
in future installments), insurance premiums, water, sewer, and
municipal charges, leaseholder payments, or ground rents which
previously became due and owing in respect of or affecting the
related Mortgaged Property have been paid. The Originators
have 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 by the Mortgage or the Mortgage Note;
(z) All of the improvements which were
included for the purposes of determining the Appraised Value
of the Mortgaged Property were completed at the time that such
Mortgage Loan was originated and lie wholly within the
boundaries and building restriction lines of such Mortgaged
Property. Except for de minimis encroachments, no improvements
on adjoining properties encroach upon the Mortgaged Property.
To the best of the Originators' knowledge, no improvement
located on or being part of the Mortgaged Property is in
violation of any applicable zoning law or regulation. All
inspections, licenses, and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged
Property (including all such improvements which were included
for the purpose of determining such Appraised Value) and, with
respect to the use and occupancy of the same, including but
not limited to certificates of occupancy and fire underwriters
certificates, have been made or obtained from the appropriate
authorities and the Mortgaged Property is lawfully occupied
under applicable law;
13
(aa) To the best of the Originators'
knowledge, there do not exist any circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, or the Mortgagor's credit standing that can be
reasonably expected to cause such Mortgage Loan to become
delinquent or adversely affect the value or marketability of
such Mortgage Loan, other than any such circumstances or
conditions permitted under the Originator's Underwriting
Guidelines;
(bb) All parties which have had any interest
in the Mortgage, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (i) in compliance with any
and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located and (ii) (A)
organized under the laws of such state, (B) qualified to do
business in such state, (C) federal savings and loan
associations or national banks having principal offices in
such state, (D) not doing business in such state, or (E) not
required to qualify to do business in such state;
(cc) The Mortgage Note and the Mortgage are
genuine, and each is the legal, valid and binding obligation
of the maker thereof, 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 and except that the equitable remedy of specific
performance and other equitable remedies are subject to the
discretion of the courts. All parties to the Mortgage Note and
the Mortgage had legal capacity to execute the Mortgage Note
and the Mortgage and convey the estate therein purported to be
conveyed, and the Mortgage Note and the Mortgage have been
duly and properly executed by such parties or pursuant to a
valid power-of-attorney that has been recorded with the
Mortgage;
(dd) The transfer of the Mortgage Note and
the Mortgage as and in the manner contemplated by this
Agreement is sufficient either (i) fully to transfer to the
Depositor all right, title, and interest of the Originators
thereto as note holder and mortgagee or (ii) to grant to the
Depositor the security interest referred to in Section 6.07
hereof. The Mortgage has been duly assigned and the Mortgage
Note has been duly endorsed. The Assignment of Mortgage
delivered to the Collateral Agent, on behalf of the Indenture
Trustee, pursuant to Section 2.04(a)(iv) of the Sale and
Servicing Agreement is in recordable form and is acceptable
for recording under the laws of the applicable jurisdiction.
The endorsement of the Mortgage Note, the delivery to the
Collateral Agent, on behalf of the Indenture Trustee, of the
endorsed Mortgage Note, and such Assignment of Mortgage, and
the delivery of such Assignment of Mortgage for recording to,
and the due recording of such Assignment of Mortgage in, the
appropriate public recording office in the jurisdiction in
which the Mortgaged Property is located are sufficient to
permit the Indenture Trustee to avail itself of all protection
available under applicable law against the claims of any
present or future creditors of the Originators, and are
sufficient to prevent any other sale, transfer, assignment,
pledge, or hypothecation of the Mortgage Note and Mortgage by
the Originators from being enforceable;
(ee) Any and all requirements of any
federal, state, or local law including, without limitation,
usury, truth-in-lending, real estate settlement procedures,
consumer
14
credit protection, equal credit opportunity, or disclosure
laws applicable to such Mortgage Loan have been complied with,
and the Servicer shall maintain in its possession, available
for the Indenture Trustee's inspection, and shall deliver to
the Indenture Trustee or its designee upon demand, evidence of
compliance with all such requirements. The consummation of the
transactions contemplated by this Agreement will not cause the
violation of any such laws;
(ff) Such Mortgage Loan is covered by an
ALTA mortgage title insurance policy or such other generally
used and acceptable form of policy, issued by and the valid
and binding obligation of a title insurer qualified to do
business in the jurisdiction where the Mortgaged Property is
located, insuring the Depositor, and its successors and
assigns, as to the first or second priority lien, as
applicable, of the Mortgage in the original principal amount
of such Mortgage Loan. The assignment to the Indenture Trustee
of the Depositor's interest in such mortgage title insurance
policy does not require the consent of or notification to the
insurer. Such mortgage title insurance policy is in full force
and effect and will be in full force and effect and inure to
the benefit of the Indenture Trustee upon the consummation of
the transactions contemplated by this Agreement. No claims
have been made under such mortgage title insurance policy and
none of the Originators nor any prior holder of the Mortgage
has done, by act or omission, anything which would impair the
coverage of such mortgage title insurance policy;
(gg) All improvements upon the Mortgaged
Property are insured against loss by fire, hazards of extended
coverage, and such other hazards as are customary in the area
where the Mortgaged Property is located pursuant to insurance
policies conforming to the requirements of Section 3.05
hereof. If the Mortgaged Property at origination was located
in an area identified on a flood hazard boundary map or flood
insurance rate map issued by the Federal Emergency Management
Agency as having special flood hazards (and such flood
insurance has been made available), such Mortgaged Property
was covered by flood insurance at origination. Each individual
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 Indenture
Trustee upon the consummation of the transactions contemplated
by this Agreement, and contain a standard mortgage clause
naming the originator of such Mortgage Loan, and its
successors and assigns, as mortgagee and loss payee. All
premiums thereon have been paid. The Mortgage obligates the
Mortgagor to maintain all such insurance at the Mortgagor's
cost and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain
such insurance at the Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor, and none of the
related Originators or any prior holder of the Mortgage has
acted or failed to act so as to impair the coverage of any
such insurance policy or the validity, binding effect, and
enforceability thereof;
(hh) If the Mortgage constitutes a deed of
trust, a trustee, duly qualified under applicable law to serve
as such, has been properly designated and currently so serves
and is named in such Mortgage, as no fees or expenses are or
will become payable by the trustee or the Noteholders to the
Indenture Trustee under the deed of trust, except in
connection with a trustee's sale after default by the
Mortgagor;
15
(ii) The Mortgaged Property consists of one
or more parcels of real property separately assessed for tax
purposes. To the extent there is erected thereon a detached or
an attached one-family residence or a detached two-to
six-family dwelling, or an individual condominium unit in a
low-rise condominium, or an individual unit in a planned unit
development, or a commercial property, a mobile home, or a
mixed use or multiple purpose property, such residence,
dwelling or unit is not (i) a unit in a cooperative apartment,
(ii) a property constituting part of a syndication, (iii) a
time share unit, (iv) a property held in trust, (v) a
manufactured dwelling, (vi) a log-constructed home, or (vii) a
recreational vehicle;
(jj) There exist no material deficiencies
with respect to escrow deposits and payments, if such are
required, for which customary arrangements for repayment
thereof have not been made or which the related Originator
expects not to be cured, and no escrow deposits or payments of
other charges or payments due the Depositor have been
capitalized under the Mortgage or the Mortgage Note;
(kk) Such Mortgage Loan was not originated
at a below market interest rate. Such Mortgage Loan does not
have a shared appreciation feature, or other contingent
interest feature;
(ll) The origination and collection
practices used by the Originators or the Servicer with respect
to such Mortgage Loan have been in all respects legal, proper,
prudent, and customary in the mortgage origination and
servicing business;
(mm) The Mortgagor has, to the extent
required by applicable law, executed a statement to the effect
that the Mortgagor has received all disclosure materials, if
any, required by applicable law with respect to the making of
fixed-rate mortgage loans. The Servicer shall maintain or
cause to be maintained such statement in the Mortgage File;
(nn) All amounts received by the Originators
with respect to such Mortgage Loan after the applicable
Cut-Off Date and required to be deposited in the related
Distribution Account have been so deposited in the related
Distribution Account and are, as of the Closing Date, or will
be as of the Subsequent Transfer Date, as applicable, in the
related Distribution Account;
(oo) The appraisal report with respect to
the Mortgaged Property contained in the Mortgage File was
signed prior to the approval of the application for such
Mortgage Loan by a qualified appraiser, duly appointed by the
originator of such Mortgage Loan, who had no interest, direct
or indirect, in the Mortgaged Property or in any loan made on
the security thereof and whose compensation is not affected by
the approval or disapproval of such application;
(pp) When measured by the Cut-Off Date
Aggregate Principal Balance, the Mortgagors with respect to at
least _______% of the Mortgage Loans in Pool I and _______% of
the Mortgage Loans in Pool II, represented at the time of
origination that the Mortgagor would occupy the Mortgaged
Property as the Mortgagor's primary residence;
16
(qq) Each of the Originators _______ has no
knowledge with respect to the Mortgaged Property of any
governmental or regulatory action or third party claim made,
instituted or threatened in writing relating to a violation of
any applicable federal, state or local environmental law,
statute, ordinance, regulation, order, decree or standard;
(rr) [Reserved];
(ss) With respect to second lien Mortgage
Loans:
(i) the Originators have
no knowledge that the Mortgagor has received
notice from the holder of the prior mortgage
that such prior mortgage is in default,
(ii) no consent from the
holder of the prior mortgage is needed for
the creation of the second lien Mortgage or,
if required, has been obtained and is in the
related Mortgage File,
(iii) if the prior
mortgage has a negative amortization, the
CLTV was determined using the maximum loan
amount of such prior mortgage,
(iv) the related first
mortgage loan encumbering the related
Mortgaged Property does not have a mandatory
future advance provision, and
(v) the Mortgage Loans
conform in all material respects to the
description thereof in the Prospectus
Supplement.
(tt) Each of the Originators further represents and warrants
to the Indenture Trustee, the Note Insurer and the Noteholders that as of the
Subsequent Cut-Off Date all representations and warranties set forth in clauses
(a) through (ss) above will be correct in all material respects as to each
Subsequent Mortgage Loan, and the representations so made in this subsection
(tt) as to the following matters will be deemed to be correct if: (i) each
Subsequent Mortgage Loan may not be thirty (30) or more days contractually
delinquent as of the related Subsequent Cut-Off Date; (ii) the original term to
maturity of such Subsequent Mortgage Loan may not exceed _______ months for Pool
I and _______ months for Pool II; (iii) such Subsequent Mortgage Loan must have
a mortgage interest rate of at least _______% for Pool I and _______% for Pool
II; (iv) the purchase of the Subsequent Mortgage Loans is consented to by the
Note Insurer and the Rating Agencies, notwithstanding the fact that the
Subsequent Mortgage Loans meet the parameters stated herein; (v) the principal
balance of any such Subsequent Mortgage Loan may not exceed $_______ for Pool I
and $_______ for Pool II; (vi) no more than _______% for Pool I and _______% for
Pool II of the aggregate principal balance of such Subsequent Mortgage Loans may
be Second Liens; (vii) no such Subsequent Mortgage Loan shall have a CLTV of
more than (a) for consumer purpose loans, _______% for Pool I and _______% for
Pool II, and (b) for business purpose loans, _______% for Pool I and _______%
for Pool II; (viii) no more than _______% for Pool I and _______% for Pool II of
such Subsequent Mortgage Loans may be Balloon Loans; (ix) no more than __% for
Pool I and __% for Pool II of such Subsequent Mortgage Loans may be secured by
mixed-use properties, commercial properties, or five or more
17
unit multifamily properties; and (x) following the purchase of such Subsequent
Mortgage Loans by the Trust, the Mortgage Loans (including the Subsequent
Mortgage Loans), (a) will have a weighted average mortgage interest rate, (I)
for consumer purpose loans, of at least _______% for Pool I and _______% for
Pool II and (II) for business purpose loans, of at least _______% for Pool I and
_______% for Pool II; and (b) will have a weighted average CLTV of not more than
(I) for consumer purpose loans, _______% for Pool I and _______% for Pool II,
and (II) for business purpose loans, _______% for Pool I and _______% for Pool
II.
(uu) To the best of the Originators' knowledge, no error,
omission, misrepresentation, negligence, fraud 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 of any insurance in relation to such Mortgage Loan;
(vv) Each Mortgaged Property is in compliance with all
environmental laws, ordinances, rules, regulations and orders of federal, state
or governmental authorities relating thereto. No hazardous material has been or
is incorporated in, stored on or under, released from, treated on, transported
to or from, or disposed of on or from, any Mortgaged Property such that, under
applicable law (A) any such hazardous material would be required to be
eliminated before the Mortgaged Property could be altered, renovated, demolished
or transferred, or (B) the owner of the Mortgaged Property, or the holder of a
security interest therein, could be subjected to liability for the removal of
such hazardous material or the elimination of the hazard created thereby.
Neither the Originators nor any Mortgagor has received notification from any
federal, state or other governmental authority relating to any hazardous
materials on or affecting the Mortgaged Property or to any potential or known
liability under any environmental law arising from the ownership or operation of
the Mortgaged Property. For the purposes of this subsection, the term "hazardous
materials" shall include, without limitation, gasoline, petroleum products,
explosives, radioactive materials, polychlorinated biphenyls or related or
similar materials, asbestos or any material containing asbestos, lead,
lead-based paint and any other substance or material as may be defined as a
hazardous or toxic substance by any federal, state or local environmental law,
ordinance, rule, regulation or order, including, without limitation, CERCLA, the
Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act,
the Toxic Substances Control Act and any regulations promulgated pursuant
thereto; and
(ww) With respect to any business purpose loan, the related
Mortgage Note contains an acceleration clause, accelerating the maturity date
under the Mortgage Note to the date the individual guarantying such loan becomes
subject to any bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting the enforcement of creditors' rights generally.
Section 3.04 Representations and Warranties of the Depositor.
The Depositor hereby represents, warrants and covenants to the Originators, as
of the date of execution of this Agreement and the Closing Date, that:
18
(a) The Depositor is a corporation duly
organized, validly existing and in good standing under the
laws of the State of _______;
(b) The Depositor has the corporate power
and authority to purchase each Mortgage Loan and to execute,
deliver and perform, and to enter into and consummate all the
transactions contemplated by this Agreement;
(c) This Agreement has been duly and validly
authorized, executed and delivered by the Depositor, and,
assuming the due authorization, execution and delivery hereof
by the Originators, constitutes the legal, valid and binding
agreement of the Depositor, enforceable against the Depositor
in accordance with its terms, except as such enforcement may
be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the
rights of creditors generally, and by general equity
principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law);
(d) No consent, approval, authorization or
order of or registration or filing with, or notice to, any
governmental authority or court is required for the execution,
delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of
any of the transactions contemplated hereby, except such as
have been made on or prior to the Closing Date;
(e) The Depositor has filed or will file the
Prospectus and Prospectus Supplement with the Commission in
accordance with Rule 424(b) under the Securities Act; and
(f) None of the execution and delivery of
this Agreement, the purchase of the Mortgage Loans from the
Originators, the consummation of the other transactions
contemplated hereby, or the fulfillment of or compliance with
the terms and conditions of this Agreement, (i) conflicts or
will conflict with the charter or bylaws of the Depositor or
conflicts or will conflict with or results or will result in a
breach of, or constitutes or will constitute a default or
results or will result in an acceleration under, any term,
condition or provision of any indenture, deed of trust,
contract or other agreement or other instrument to which the
Depositor is a party or by which it is bound and which is
material to the Depositor, or (ii) results or will result in a
violation of any law, rule, regulation, order, judgment or
decree of any court or governmental authority having
jurisdiction over the Depositor.
Section 3.05 Repurchase Obligation for Defective Documentation
and for Breach of a Representation or Warranty. (a) Each of the representations
and warranties contained in Sections 3.01 and 3.03 shall survive the purchase by
the Depositor of the Mortgage Loans, the subsequent transfer thereof by the
Depositor to the Trust and the subsequent pledge thereof by the Trust to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, and
shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent
termination of this Agreement, the Sale and Servicing Agreement or the
Indenture.
19
(b) With respect to any representation or warranty contained
in Sections 3.01 or 3.03 hereof that is made to the best of the Originators'
knowledge, if it is discovered by the Servicer, any Subservicer, the Indenture
Trustee, the Collateral Agent, the Depositor, the Note Insurer or any Noteholder
that the substance of such representation and warranty was inaccurate as of the
Closing Date or the Subsequent Transfer Date, as applicable, and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan, then
notwithstanding the Originators' 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 the Originators, the Servicer, any Subservicer, the Indenture
Trustee, the Collateral Agent, the Note Insurer, the Depositor or any Noteholder
of a breach of any of such representations and warranties which materially and
adversely affects the value of Mortgage Loans or the interest of the
Noteholders, or which materially and adversely affects the interests of the Note
Insurer or the Noteholders in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan
(notwithstanding that such representation and warranty was made to the
Originators' best knowledge), the party discovering such breach shall give,
pursuant to this Section 3.05(b) and pursuant to Section 4.02 of the Sale and
Servicing Agreement, prompt written notice to the others. Subject to the next to
last paragraph of this Section 3.05(b), within sixty (60) days of the earlier of
its discovery or its receipt of notice of any breach of a representation or
warranty, the Originators shall (a) promptly cure such breach in all material
respects, or (b) purchase such Mortgage Loan at a purchase price equal to the
Loan Repurchase Price, or (c) remove such Mortgage Loan from the Trust Estate
(in which case it shall become a Deleted Mortgage Loan) and substitute one or
more Qualified Substitute Mortgage Loans. Any such substitution shall be
accompanied by payment by the Originators of the Substitution Adjustment, if
any, to be deposited in the related Distribution Account pursuant to the Sale
and Servicing Agreement.
The Originators shall cooperate with the Depositor to cure any
breach and shall reimburse the Depositor for the costs and expenses related to
any cure, substitution (including any Substitution Adjustment) or repurchase
incurred by the Depositor pursuant to this Section 3.05.
(c) As to any Deleted Mortgage Loan for which the Depositor or
an Originator substitutes a Qualified Substitute Mortgage Loan or Loans, the
Depositor or such Originator shall effect such substitution by delivering to the
Indenture Trustee and the Collateral Agent, a certification in the form attached
to the Sale and Servicing Agreement as Exhibit H, executed by a Servicing
Officer and the documents described in Section 2.05(a) of the Sale and Servicing
Agreement for such Qualified Substitute Mortgage Loan or Loans. Pursuant to the
Sale and Servicing Agreement, upon receipt by the Indenture Trustee and the
Collateral Agent of a certification of a Servicing Officer of such substitution
or purchase and, in the case of a substitution, upon receipt by the Collateral
Agent, on behalf of the Indenture Trustee of the related Mortgage File, and the
deposit of certain amounts in the related Distribution Account pursuant to
Section 2.07(b) of the Sale and Servicing Agreement (which certification shall
be in the form of Exhibit H to the Sale and Servicing Agreement), the Collateral
Agent, on behalf of the Indenture Trustee, shall be required to release to the
Servicer for release to the Depositor the related Indenture Trustee's Mortgage
File and shall be required to execute, without recourse, and deliver such
instruments of transfer furnished by the Depositor as may be necessary to
transfer such Mortgage Loan to the Depositor or such Originator.
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(d) Pursuant to the Sale and Servicing Agreement, the Servicer
shall deposit in the related Distribution Account all payments received in
connection with such Qualified Substitute Mortgage Loan or Loans after the date
of such substitution. Monthly Payments received with respect to Qualified
Substitute Mortgage Loans on or before the date of substitution will be retained
by the Depositor. The Trust will own all payments received on the Deleted
Mortgage Loan on or before the date of substitution, and the Depositor shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Deleted Mortgage Loan. Pursuant to the Sale and Servicing Agreement, the
Servicer shall be required to give written notice to the Indenture Trustee, the
Collateral Agent and the Note Insurer that such substitution has taken place and
shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of the Sale and Servicing Agreement and the
substitution of the Qualified Substitute Mortgage Loan. The parties hereto agree
to amend the Mortgage Loan Schedule accordingly. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of the
Indenture, the Sale and Servicing Agreement and this Agreement in all respects,
and the Depositor shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties set forth in Sections 3.02 and 3.03 herein. On
the date of such substitution, the Depositor will remit to the Servicer and,
pursuant to the Sale and Servicing Agreement, the Servicer will deposit into the
related Distribution Account, an amount equal to the Substitution Adjustment, if
any.
(e) [Reserved];
(f) It is understood and agreed that the obligations of the
Depositor and the Originator set forth in Section 2.06 and this Section 3.05 to
cure, purchase or substitute for a defective Mortgage Loan as provided in
Section 2.06 and this Section 3.05 constitute the sole remedies of the
Depositor, the Indenture Trustee, the Note Insurer and the Noteholders
respecting a breach of the foregoing representations and warranties.
(g) The Originator shall be obligated to indemnify the
Indenture Trustee, the Trust, the Depositor, the Owner Trustee, the Collateral
Agent, the Noteholders and the Note Insurer (in their individual and trust
capacities) and their successors, assigns, agents and servants (collectively,
the "Indemnified Parties") from and against, any and all liabilities,
obligations, losses, damages, taxes, claims, actions and suits, and any and all
reasonable costs, expenses and disbursements (including reasonable legal fees
and expenses) of any kind and nature whatsoever (collectively, "Expenses") which
may at any time be imposed on, incurred by, or asserted against any Indemnified
Party in any way relating to or arising out of a breach of the related
Originator of the representations or warranties herein. The indemnities
contained in this Section 3.05 shall survive the resignation or termination of
the Owner Trustee or the termination of this Agreement.
(h) Each of the Originators shall be jointly and severally
responsible for any repurchase, cure or substitution obligation of any of the
Originators under this Agreement, the Indenture and the Sale and Servicing
Agreement.
(i) Any cause of action against an Originator relating to or
arising out of the breach of any representations and warranties or covenants
made in Sections 2.06 or 3.03 shall accrue as to any Mortgage Loan upon (i)
discovery of such breach by any party and notice
21
thereof to such Originator, (ii) failure by such Originator to cure such breach
or purchase or substitute such Mortgage Loan as specified above, and (iii)
demand upon such Originator by the Indenture Trustee for all amounts payable in
respect of such Mortgage Loan.
ARTICLE IV
THE ORIGINATORS
Section 4.01 Covenants of the Originators. Each of the
Originators covenants to the Depositor as follows:
(a) The Originators shall cooperate with the
Depositor and the firm of independent certified public
accountants retained with respect to the issuance of the Notes
in making available all information and taking all steps
reasonably necessary to permit the accountants' letters
required hereunder to be delivered within the times set for
delivery herein.
(b) The Originators hereby agree to do all
acts, transactions, and things and to execute and deliver all
agreements, documents, instruments, and papers by and on
behalf of the Originators as the Depositor or its counsel may
reasonably request in order to consummate the transfer of the
Mortgage Loans to the Depositor and the subsequent transfer
thereof to the Indenture Trustee, and the rating, issuance and
sale of the Notes.
Section 4.02 Merger or Consolidation. Each of the Originators
will keep in full effect its existence, rights and franchises as a corporation
and will obtain and preserve its qualification to do business as a foreign
corporation, in each jurisdiction 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 any of the Originators may be
merged or consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Originators shall be a party, or any Person
succeeding to the business of the Originators, shall be approved by the Note
Insurer which approval shall not be unreasonably withheld. If the approval of
the Note Insurer is not required, the successor shall be an established mortgage
loan servicing institution that is a Permitted Transferee and in all events
shall be the successor of the Originators or the 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. The Originators shall send
notice of any such merger or consolidation to the Indenture Trustee and the Note
Insurer.
Section 4.03 Costs. In connection with the transactions
contemplated under this Agreement, the Trust Agreement, the Indenture and the
Sale and Servicing Agreement, shall promptly pay (or shall promptly reimburse
the Depositor to the extent that the Depositor shall have paid or otherwise
incurred): (a) the fees and disbursements of the Depositor's, and the
Originators' counsel; (b) the fees of S&P and βββββ'β; (c) any of the fees of
the Indenture Trustee and the fees and disbursements of the Indenture Trustee's
counsel; (d) any of the fees of the Owner Trustee and the fees and disbursements
of the Owner Trustee's counsel; (e) expenses incurred in connection with
printing the Prospectus, the Prospectus Supplement, any amendment or supplement
thereto, any preliminary prospectus and the Notes; (f) fees and expenses
relating to the filing of documents with the Commission (including without
limitation periodic reports
22
under the Exchange Act); (g) the shelf registration amortization fee of _______%
of the Note Principal Balance of the Notes on the Closing Date, paid in
connection with the issuance of Notes; (h) the fees and disbursements for
______________, accountants for the Originators; and (i) all of the initial
expenses (not to exceed $_______) of the Note Insurer including, without
limitation, legal fees and expenses, accountant fees and expenses and expenses
in connection with due diligence conducted on the Mortgage Files but not
including the initial premium paid to the Note Insurer. For the avoidance of
doubt, the parties hereto acknowledge that it is the intention of the parties
that the Depositor shall not pay any of the Indenture Trustee's or Owner
Trustee's fees and expenses in connection with the transactions contemplated by
this Agreement, the Trust Agreement, the Indenture and the Sale and Servicing
Agreement. All other costs and expenses in connection with the transactions
contemplated hereunder shall be borne by the party incurring such expenses.
Section 4.04 Indemnification. (a) The Originators jointly and
severally, agree
(i) to indemnify and hold harmless the
Depositor, each of its directors, each of its officers who
have signed the Registration Statement, and each of its
directors and each person or entity who controls the Depositor
or any such person, within the meaning of Section 15 of the
Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, to which the Depositor or any
such person or entity may become subject, under the Securities
Act or otherwise, and will reimburse the Depositor and each
such controlling person for any legal or other expenses
incurred by the Depositor or such controlling person in
connection with investigating or defending any such loss,
claim, damage, liability or action, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the
Prospectus Supplement or any amendment or supplement to the
Prospectus Supplement or the omission or the alleged omission
to state therein a material fact required to be stated therein
or necessary to make the statements in the Prospectus
Supplement or any amendment or supplement to the Prospectus
Supplement approved in writing by the Originators, in light of
the circumstances under which they were made, not misleading,
but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission relates to
the information contained in the Prospectus Supplement
referred to in Section 3.01(d). This indemnity agreement will
be in addition to any liability which the Originators may
otherwise have; and
(ii) to indemnify and to hold the Depositor
harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that the Depositor may sustain
in any way related to the failure of any of the Originators to
perform its duties in compliance with the terms of this
Agreement. The Originators shall immediately notify the
Depositor if a claim is made by a third party with respect to
this Agreement, and the Originators shall assume the defense
of any such claim and pay all expenses in connection
therewith, including reasonable counsel fees, and promptly
pay, discharge and satisfy any judgment or decree which may be
entered against the Depositor in respect of such claim.
23
(b) The Depositor agrees to indemnify and hold harmless each
of the Originators, each of their respective directors and each person or entity
who controls the Originators or any such person, within the meaning of Section
15 of the Securities Act, against any and all losses, claims, damages or
liabilities, joint and several, to which the Originators or any such person or
entity may become subject, under the Securities Act or otherwise, and will
reimburse the Originators and any such director or controlling person for any
legal or other expenses incurred by such party or any such director or
controlling person in connection with investigating or defending any such loss,
claim, damage, liability or action, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, the Prospectus, the Prospectus Supplement, any
amendment or supplement to the Prospectus or the Prospectus Supplement or the
omission or the alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission is other than a statement or omission relating to the information set
forth in subsection (a)(i) of this Section 4.04; provided, however, that in no
event shall the Depositor be liable to the Originators under this paragraph (b)
in an amount in excess of the Depositor's resale profit or the underwriting fee
on the sale of the Notes. This indemnity agreement will be in addition to any
liability which the Depositor may otherwise have. Pursuant to the Indenture, the
Indenture Trustee shall reimburse the Depositor in accordance with the Indenture
for all amounts advanced by the Depositor pursuant to the preceding sentence
except when the claim relates directly to the failure of the Depositor to
perform its duties in compliance with the terms of this Agreement.
(c) Promptly after receipt by an indemnified party under this
Section 4.04 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 Section 4.04, notify the indemnifying party in writing of the
commencement thereof, but the omission to so notify the indemnifying party will
not relieve the indemnifying party from any liability which the indemnifying
party may have to any indemnified party hereunder except to the extent such
indemnifying party has been prejudiced thereby. 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. After notice from the indemnifying party
to such indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 4.04 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it that 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. The indemnifying party shall not be liable for the
expenses of more than one separate counsel.
24
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the preceding
parts of this Section 4.04 is for any reason held to be unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or
subsection (b) of this Section 4.04 in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) subject to the limits set forth in subsection (a)
and subsection (b) of this Section 4.04; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. In determining the amount of
contribution to which the respective parties are entitled, there shall be
considered the relative benefits received by the Originators on the one hand,
and the Depositor on the other, the Originators', the Depositor's relative
knowledge and access to information concerning the matter with respect to which
the claim was asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate in the
circumstances. The Originators, the Depositor agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per
capita allocation. For purposes of this Section 4.04, each director of the
Depositor, each officer of the Depositor who signed the Registration Statement,
and each person, if any who controls the Depositor within the meaning of Section
15 of the Securities Act, shall have the same rights to contribution as the
Depositor, and each director of the Originators, and each person, if any who
controls the Originators within the meaning of Section 15 of the Securities Act,
shall have the same rights to contribution as the Originators.
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01 Conditions of Depositor's Obligations. The
obligations of the Depositor to purchase the Mortgage Loans will be subject to
the satisfaction on the Closing Date of the following conditions. Upon payment
of the purchase price for the Mortgage Loans, such conditions shall be deemed
satisfied or waived.
(a) Each of the obligations of the
Originators required to be performed by it on or prior to the
Closing Date pursuant to the terms of this Agreement shall
have been duly performed and complied with and all of the
representations and warranties of the Originators under this
Agreement shall be true and correct as of the Closing Date and
no event shall have occurred which, with notice or the passage
of time, would constitute a default under this Agreement, and
the Depositor shall have received a certificate to the effect
of the foregoing signed by an authorized officer of the
Originators.
(b) The Depositor shall have received a
letter dated the date of this Agreement, in form and substance
acceptable to the Depositor and its counsel, prepared by
Deloitte & Touche LLP, independent certified public
accountants, regarding the numerical information contained in
the Prospectus Supplement including, but not limited to the
information under the captions "_____________" and "_________"
regarding any
25
numerical information in any marketing materials relating to
the Notes and regarding any other information as reasonably
requested by the Depositor.
(c) The Mortgage Loans will be acceptable to
the Depositor, in its sole reasonable discretion.
(d) The Depositor shall have received the
following additional closing documents, in form and substance
reasonably satisfactory to the Depositor and its counsel:
(i) the Mortgage Loan
Schedule;
(ii) this Agreement, the
Sale and Servicing Agreement, the Indenture,
the Trust Agreement, and the Underwriting
Agreement dated as of _____ between the
Depositor, the Originators, the Sponsor and
_________ and all documents required
thereunder, duly executed and delivered by
each of the parties thereto other than the
Depositor;
(iii) officer's
certificates of an officer of each of the
Originators, dated as of the Closing Date,
and attached thereto resolutions of the
board of directors and a copy of the charter
and by-laws;
(iv) copy of each of the
Originators charter and all amendments,
revisions, and supplements thereof,
certified by a secretary of each entity;
(v) an opinion of the
counsel for the Originators and the as to
various corporate matters in a form
acceptable to the Depositor, its counsel,
the Note Insurer, S&P and βββββ'β (it being
agreed that the opinion shall expressly
provide that the Indenture Trustee shall be
entitled to rely on the opinion);
(vi) opinions of counsel
for the Originators, in forms acceptable to
the Depositor, its counsel, the Note
Insurer, S&P and βββββ'β as to such matters
as shall be required for the assignment of a
rating to the Notes of "AAA" by S&P, and
"Aaa" by βββββ'β (it being agreed that such
opinions shall expressly provide that the
Indenture Trustee shall be entitled to rely
on such opinions);
(vii) a letter from
βββββ'β that it has assigned a rating of
"Aaa" to the Notes;
(viii) a letter from S&P
that it has assigned a rating of "AAA" to
the Notes;
(ix) an opinion of counsel
for the Indenture Trustee in form and
substance acceptable to the Depositor, its
counsel, the Note Insurer, βββββ'β and S&P
(it being agreed that the opinion shall
expressly provide that the Originators shall
be entitled to rely on the opinion);
(x) an opinion of counsel
for the Owner Trustee in form and substance
acceptable to the Depositor, its counsel,
the Note Insurer, βββββ'β and S&P (it
26
being agreed that the opinion shall
expressly provide that the Originators shall
be entitled to rely on the opinion);
(xi) an opinion or
opinions of counsel for the Servicer, in
form and substance acceptable to the
Depositor, its counsel, the Note Insurer,
βββββ'β and S&P (it being agreed that the
opinion shall expressly provide that the
Originators shall be entitled to rely on the
opinion); and
(xii) an opinion or
opinions of counsel for the Note Insurer, in
each case in form and substance acceptable
to the Depositor, its counsel, βββββ'β and
S&P (it being agreed that the opinion shall
expressly provide that the Originators shall
be entitled to rely on the opinion).
(e) The Note Insurance Policy shall have
been duly executed, delivered and issued with respect to the
Notes.
(f) All proceedings in connection with the
transactions contemplated by this Agreement and all documents
incident hereto shall be satisfactory in form and substance to
the Depositor and its counsel.
(g) The Originators shall have furnished the
Depositor with such other certificates of its officers or
others and such other documents or opinions as the Depositor
or its counsel may reasonably request.
Section 5.02 Conditions of Originators Obligations. The
obligations of the Originators under this Agreement shall be subject to the
satisfaction, on the Closing Date, of the following conditions:
(a) Each of the obligations of the Depositor
required to be performed by it at or prior to the Closing Date
pursuant to the terms of this Agreement shall have been duly
performed and complied with and all of the representations and
warranties of the Depositor contained in this Agreement shall
be true and correct as of the Closing Date and the Originators
shall have received a certificate to that effect signed by an
authorized officer of the Depositor.
(b) The Originators shall have received the
following additional documents:
(i) this Agreement and the
Sale and Servicing Agreement, and all
documents required thereunder, in each case
executed by the Depositor as applicable; and
(ii) a copy of a letter
from βββββ'β to the Depositor to the effect
that it has assigned a rating of "Aaa" to
the Notes and a copy of a letter from S&P to
the Depositor to the effect that it has
assigned a rating of "AAA" to the Notes.
(iii) an opinion of
counsel for the Indenture Trustee in form
and substance acceptable to the Originators
and their counsel;
27
(iv) an opinion of counsel
for the Owner Trustee in form and substance
acceptable to the Originators and their
counsel;
(v) an opinion of counsel
for the Note Insurer in form and substance
acceptable to the Originators and their
counsel;
(vi) an opinion of the
counsel for the Depositor as to securities
and tax matters; and
(vii) an opinion of the
counsel for the Depositor as to true sale
matters.
(c) The Depositor shall have furnished the
Originators with such other certificates of its officers or
others and such other documents to evidence fulfillment of the
conditions set forth in this Agreement as the Originators may
reasonably request.
Section 5.03 Termination of Depositor's Obligations. The
Depositor may terminate its obligations hereunder by notice to the Originators
at any time before delivery of and payment of the purchase price for the
Mortgage Loans if: (a) any of the conditions set forth in Section 5.01 are not
satisfied when and as provided therein; (b) there shall have been the entry of a
decree or order by a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Originators, or for the
winding up or liquidation of the affairs of the Originators; (c) there shall
have been the consent by the Originators to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the Originators
or of or relating to substantially all of the property of the Originators; (d)
any purchase and assumption agreement with respect to the Originators or the
assets and properties of the Originators shall have been entered into; or (e) a
Termination Event shall have occurred. The termination of the Depositor's
obligations hereunder shall not terminate the Depositor's rights hereunder or
its right to exercise any remedy available to it at law or in equity.
ARTICLE VI
MISCELLANEOUS
Section 6.01 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered to or mailed by registered mail, postage prepaid, or
transmitted by telex or telegraph and confirmed by a similar mailed writing, if
to the Depositor, addressed to the Depositor at ________, Attention: ________,
or to such other address as the Depositor may designate in writing to the
Originators and if to an Originator, addressed to such Originator at ________,
Attention: ________, or to such other address as such Originator may designate
in writing to the Depositor.
Section 6.02 Severability of Provisions. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
which is held to be void or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without
28
invalidating the remaining provisions hereof. Any part, provision,
representation, warranty or covenant of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective 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.
Section 6.03 Agreement of Originators. The Originators agree
to execute and deliver such instruments and take such actions as the Depositor
may, from time to time, reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement.
Section 6.04 Survival. The parties to this Agreement agree
that the representations, warranties and agreements made by each of them herein
and in any Note or other instrument delivered pursuant hereto shall be deemed to
be relied upon by the other party hereto, notwithstanding any investigation
heretofore or hereafter made by such other party or on such other party's
behalf, and that the representations, warranties and agreements made by the
parties hereto in this Agreement or in any such certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans.
Section 6.05 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 6.06 Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as expressly permitted by
the terms hereof, this Agreement may not be assigned, pledged or hypothecated by
any party hereto to a third party without the written consent of the other party
to this Agreement and the Note Insurer; provided, however, that the Depositor
may assign its rights hereunder without the consent of the Originators.
Section 6.07 Confirmation of Intent; Grant of Security
Interest. It is the express intent of the parties hereto that the conveyance of
the Mortgage Loans by the Originators to the Depositor as contemplated by this
Loan Sale Agreement be, and be treated for accounting purposes as, a sale of the
Mortgage Loans. It is, further, not the intention of the parties that any such
conveyance be deemed a pledge of the Mortgage Loans by the Originators to the
Depositor to secure a debt or other obligation of the Originators. However, in
the event that, notwithstanding the intent of the parties, the Mortgage Loans
are held to continue to be property of the Originators then (a) this Loan Sale
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the Uniform Commercial Code; (b) the transfer of the
Mortgage Loans provided for herein shall be deemed to be a grant by the
Originators to the Depositor of a security interest in all of such parties'
right, title and interest in and to the Mortgage Loans and all amounts payable
on the Mortgage Loans in accordance with the terms thereof and all proceeds of
the conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property; (c) the possession by the Depositor
(or its assignee) of Mortgage Notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-305 of the Uniform Commercial Code; and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Depositor (or its
29
assignee) for the purpose of perfecting such security interest under applicable
law. Any assignment of the interest of the Depositor pursuant to any provision
hereof shall also be deemed to be an assignment of any security interest created
hereby. The Originators and the Depositor shall, to the extent consistent with
this Loan Sale Agreement, take such actions as may be necessary to ensure that,
if this Loan Sale Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement.
Section 6.08 Miscellaneous. This Agreement supersedes all
prior agreements and understandings relating to the subject matter hereof.
Section 6.09 Amendments. (a) This Agreement may be amended
from time to time by the Originators and the Depositor by written agreement,
upon the prior written consent of the Note Insurer, without notice to or consent
of the Noteholders to cure any ambiguity, to correct or supplement any
provisions herein, to comply with any changes in the Code, or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel, at
the expense of the party requesting the change, delivered to the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder; and provided, further, that no such amendment shall reduce in any
manner the amount of, or delay the timing of, payments received on Mortgage
Loans which are required to be distributed on any Note without the consent of
the Holder of such Note, or change the rights or obligations of any other party
hereto without the consent of such party.
(b) This Agreement may be amended from time to time by the
Originators and the Depositor with the consent of the Note Insurer, the Majority
Noteholders and the Holders of the majority of the Percentage Interest in the
Trust Certificates for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders; provided, however, that no
such amendment shall reduce in any manner the amount of, or delay the timing of,
payments received on Mortgage Loans which are required to be distributed on any
Note without the consent of the Holder of such Note or reduce the percentage for
each Class the Holders of which are required to consent to any such amendment
without the consent of the Holders of 100% of each Class of Notes affected
thereby.
(c) It shall not be necessary for the consent of Holders under
this Section 6.09 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof.
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Section 6.10 Third-Party Beneficiaries. The parties agree that
each of the Trust, the Owner Trustee, the Note Insurer and the Indenture Trustee
is an intended third-party beneficiary of this Agreement to the extent necessary
to enforce the rights and to obtain the benefit of the remedies of the Depositor
under this Agreement which are assigned to the Trust and then to the Indenture
Trustee, for the benefit of the Noteholders and the Note Insurer, pursuant to
the Sale and Servicing Agreement and the Indenture, respectively, and to the
extent necessary to obtain the benefit of the enforcement of the obligations and
covenants of the Originators under Section 4.01 and 4.04(a)(i) of this
Agreement. The parties further agree that __________________ and each of its
directors and each person or entity who controls ____________________ or any
such person, within the meaning of Section 15 of the Securities Act (each, an
"Underwriter Entity") is an intended third-party beneficiary of this Agreement
to the extent necessary to obtain the benefit of the enforcement of the
obligations and covenants of the Depositor with respect to each Underwriter
Entity under Section 4.04(a)(ii) of this Agreement.
Section 6.11 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF NEW YORK.
(b) THE ORIGINATORS AND THE DEPOSITOR EACH HEREBY SUBMIT TO
THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO
THE ADDRESS SET FORTH IN SECTION 6.01 OF THIS AGREEMENT AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL HAVE BEEN
DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE ORIGINATORS AND THE DEPOSITOR
EACH HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE ORIGINATORS AND THE
DEPOSITOR TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT
EITHER'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER
JURISDICTION.
(c) THE ORIGINATORS AND THE DEPOSITOR EACH HEREBY WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN
CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE
RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
31
Section 6.12 Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[Remainder of Page Intentionally Left Blank]
32
IN WITNESS WHEREOF, the parties to this Loan Sale Agreement
have caused their names to be signed by their respective officers thereunto duly
authorized as of the date first above written.
___________________, as an Originator
By: _________________________________
Name:
Title:
___________________, as an Originator
By: _________________________________
Name:
Title:
___________________, as Depositor
By: _________________________________
Name:
Title:
EXHIBIT A
FORM OF SUBSEQUENT
TRANSFER AGREEMENT
This SUBSEQUENT TRANSFER AGREEMENT, dated as of ________, _____ (the
"Subsequent Transfer Date"), is entered into by and among ________, as an
originator, and ___________, as an originator, (together, the "Originators"),
and ________, as depositor (the "Depositor").
W I T N E S S E T H:
Reference is hereby made to (x) that certain Loan Sale Agreement, dated
as of _____ (the "Loan Sale Agreement"), by and among the Originators and the
Depositor, and (y) that certain Indenture, dated as of _____ (the "Indenture"),
by and between the ________ (the "Trust") and ________, as indenture trustee
(the "Indenture Trustee"). Pursuant to the Loan Sale Agreement, the Originators
have agreed to sell, assign and transfer, the Depositor has agreed to accept,
from time to time, Subsequent Mortgage Loans (as defined below). The Loan Sale
Agreement provides that each such sale of Subsequent Mortgage Loans be evidenced
by the execution and delivery of a Subsequent Transfer Agreement such as this
Subsequent Transfer Agreement.
The assets sold to the Depositor pursuant to this Subsequent Transfer
Agreement consist of (a) the Subsequent Mortgage Loans in Pool I and Pool II
listed in the Mortgage Loan Schedule attached hereto (including property that
secures a Subsequent Mortgage Loan that becomes an REO Property), including the
related Mortgage Files delivered or to be delivered to the Collateral Agent, on
behalf of the Indenture Trustee, including all payments of principal received,
collected or otherwise recovered after the Subsequent Cut-Off Date for each
Subsequent Mortgage Loan, all payments of interest due on each Subsequent
Mortgage Loan after the Subsequent Cut-Off Date therefor whenever received and
all other proceeds received in respect of such Subsequent Mortgage Loans, (b)
the Insurance Policies relating to the Subsequent Mortgage Loans, and (c) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all insurance
proceeds and condemnation awards.
The "Subsequent Mortgage Loans" are those listed on the Schedule of
Mortgage Loans attached hereto. The Aggregate Principal Balance of such
Subsequent Mortgage Loans as of the Subsequent Cut-Off Date is $__________ in
Pool I and $__________ in Pool II.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
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Section 1. Definitions. For the purposes of this Subsequent Transfer
Agreement, capitalized terms used herein but not otherwise defined shall have
the respective meanings assigned to such terms in Appendix I to the Indenture.
Section 2. Sale, Assignment and Transfer. In consideration of the
receipt of $__________ (such amount being approximately 100% of the Aggregate
Principal Balance of the Subsequent Mortgage Loans) from the Depositor, each of
the Originators hereby sells, assigns and transfers to the Depositor, without
recourse, all of their respective right, title and interest in, to, and under
the Subsequent Mortgage Loans and related assets described above, whether now
existing or hereafter arising.
In connection with each such sale, assignment and transfer, the
Originators shall satisfy the document delivery requirements set forth in
Section 2.05 of the Sale and Servicing Agreement with respect to each Subsequent
Mortgage Loan.
Section 3. Representations and Warranties of the Originators. With
respect to each Subsequent Mortgage Loan, each of the Originators hereby remake
each of the representations, warranties and covenants made by the Originators in
Section 3.03 of the Loan Sale Agreement, on which the Depositor relies in
accepting the Subsequent Mortgage Loans. Such representations and warranties
speak as of the Subsequent Transfer Date unless otherwise indicated, and shall
survive each sale, assignment, transfer and conveyance of the Subsequent
Mortgage Loans to the Depositor.
Each of the Originators hereby acknowledge that the Depositor is
transferring the Subsequent Mortgage Loans to the Trust, and that the Trust is
pledging the Subsequent Mortgage Loans to the Indenture Trustee, for the benefit
of the Noteholders and the Note Insurer, on the date hereof. Each of the
Originators hereby acknowledge and agree that the Depositor may assign to the
Trust, and the Trust may assign to the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer, its interest in the representations and
warranties set forth in this Section 3. Each of the Originators agrees that,
upon such assignment to the Trust and pledge to the Indenture Trustee, such
representations, warranties, agreements and covenants will run to and be for the
benefit of the Indenture Trustee and the Indenture Trustee may enforce, without
joinder of the Depositor or the Trust, the repurchase and indemnification
obligations of he Originators set forth herein with respect to breaches of such
representations, warranties, agreements and covenants.
Section 4. Repurchase of Subsequent Mortgage Loans. Upon discovery by
any of the Depositor, an Originator, the Indenture Trustee, the Servicer on
behalf of the Trust, the Note Insurer or any Noteholder of a breach of any of
the representations and warranties made by the Originators pursuant to Section
3.03 of the Loan Sale Agreement or this Section 3, the party discovering such
breach shall give prompt written notice to each other Person; provided, that the
Indenture Trustee shall have no duty to inquire or to investigate the breach of
any such representations and warranties. The Originators and the Depositor will
be obligated to repurchase a Subsequent Mortgage Loan which breaches a
representation or warranty in accordance with the provisions of Section 4.02 of
the Sale and Servicing Agreement or to indemnify as described in Section 3.05(g)
of the Loan Sale Agreement. Such repurchase and indemnification obligation of
the
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Originators and the Depositor shall constitute the sole remedy against the
Originators and the Depositor, and the Trust for such breach available to the
Servicer, the Trust, the Indenture Trustee, the Note Insurer and the
Noteholders.
Section 5. Amendment. This Subsequent Transfer Agreement may be amended
from time to time by the Originators, and the Depositor only with the prior
written consent of the Note Insurer (or, in the event of a Note Insurer Default,
the Majority Holders).
Section 6. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS SUBSEQUENT
TRANSFER AGREEMENT AND ANY AMENDMENT HEREOF PURSUANT TO SECTION 5 SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUBSEQUENT TRANSFER
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.
Section 7. Counterparts. This Subsequent Transfer Agreement may be
executed in counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.
Section 8. Binding Effect; Third-Party Beneficiaries. This Subsequent
Transfer Agreement will inure to the benefit of and be binding upon the parties
hereto, the Note Insurer, the Trust, the Noteholders, and their respective
successors and permitted assigns.
Section 9. Headings. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 10. Exhibits. The exhibits attached hereto and referred to
herein shall constitute a part of this Subsequent Transfer Agreement and are
incorporated into this Subsequent Transfer Agreement for all purposes.
Section 11. Intent of the Parties; Security Agreement. The Originators
and the Depositor intend that the conveyance of all right, title and interest in
and to the Subsequent Mortgage Loans and related assets described above by the
Originators to the Depositor pursuant to this Subsequent Transfer Agreement
shall be, and be construed as, a sale of the Subsequent Mortgage Loans from the
Originators to the Depositor.
It is, further, not intended that such conveyances be deemed to be
pledges of the Subsequent Mortgage Loans by the Originators to the Depositor to
secure a debt or other obligation of the Originators. However, in the event that
the Subsequent Mortgage Loans are held to be property of the Originators, or if
for any reason this Subsequent Transfer Agreement is held or deemed to create a
security interest in the Subsequent Mortgage Loans, then it is intended that:
(a) this Subsequent Transfer Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the Uniform Commercial Code
of any other applicable jurisdiction; (b) the conveyance provided for in
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this Subsequent Transfer Agreement shall be deemed to be a grant by the
Originators to the Depositor of a security interest in all of the Originators'
respective right, title and interest, whether now owned or hereafter acquired,
in and to the Subsequent Mortgage Loans and related assets described above. The
Originators, to the extent consistent with this Subsequent Transfer Agreement,
take such reasonable actions as may be necessary to ensure that, if this
Subsequent Transfer Agreement were deemed to create a security interest in the
Subsequent Mortgage Loans and the other property described above, such interest
would be deemed to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the term of this
Subsequent Transfer Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Originators and the Depositor have caused this
Subsequent Transfer Agreement to be duly executed by their respective officers
as of the day and year first above written.
________________________, as an Originator
By: _____________________________________
Name:
Title:
________________________, as an Originator
By: _____________________________________
Name:
Title:
________________________, as Depositor
By: _____________________________________
Name:
Title:
[Signature Page to Subsequent Transfer Agreement]
