LEHMAN BROTHERS HOLDINGS INC., SELLER and STRUCTURED ASSET SECURITIES CORPORATION, PURCHASER MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT Dated as of March 1, 2008 Structured Adjustable Rate Mortgage Loan Trust (Mortgage Pass- Through Certificates,...
XXXXXX
BROTHERS HOLDINGS INC.,
SELLER
and
STRUCTURED
ASSET SECURITIES CORPORATION,
PURCHASER
Dated
as
of March 1, 2008
Structured
Adjustable Rate Mortgage Loan Trust
(Mortgage
Pass-Through Certificates, Series 2008-1)
TABLE
OF CONTENTS
Page
ARTICLE
I
CONVEYANCE
OF MORTGAGE LOANS
|
||
Section
1.01.
|
Mortgage
Loans
|
2
|
Section
1.02.
|
Delivery
of Documents
|
3
|
Section
1.03.
|
Review
of Documentation
|
3
|
Section
1.04.
|
Representations
and Warranties of the Seller
|
3
|
Section
1.05.
|
Grant
Clause
|
12
|
Section
1.06.
|
Assignment
by Depositor
|
12
|
ARTICLE
II
MISCELLANEOUS
PROVISIONS
|
||
Section
2.01.
|
Binding
Nature of Agreement; Assignment
|
12
|
Section
2.02.
|
Entire
Agreement
|
13
|
Section
2.03.
|
Amendment
|
13
|
Section
2.04.
|
Governing
Law
|
13
|
Section
2.05.
|
Severability
of Provisions
|
14
|
Section
2.06.
|
Indulgences;
No Waivers
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14
|
Section
2.07.
|
Headings
Not to Affect Interpretation
|
14
|
Section
2.08.
|
Benefits
of Agreement
|
14
|
Section
2.09.
|
Counterparts
|
14
|
SCHEDULES
SCHEDULE
A Mortgage
Loan Schedule
i
This
MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT, dated as of March 1, 2008 (the
“Agreement”), is executed by and between Xxxxxx Brothers Holdings Inc. (the
“Seller”) and Structured Asset Securities Corporation (the
“Depositor”).
All
capitalized terms not defined herein shall have the same meanings assigned
to
such terms in that certain Trust Agreement (the “Trust Agreement”), dated as of
March 1, 2008, among the Depositor, Aurora Loan Services LLC, as master servicer
(“Aurora”) and Xxxxx Fargo Bank, N.A., as trustee (the “Trustee”).
WHEREAS,
Xxxxxx Brothers Bank, FSB (the “Bank”), pursuant to the following specified
agreement (the “Transfer Agreement”), has purchased or received certain mortgage
loans identified on the Mortgage Loan Schedule attached hereto as Schedule
A
(the “Mortgage Loans”):
Flow
Mortgage Loan Purchase and Warranties Agreement, dated as of December 1, 2007,
by and between the Bank, Flagstar Capital Markets Corporation, a wholly-owned
subsidiary of Flagstar Bank, FSB (“Flagstar”)
and
joined by Flagstar Bank, FSB (“Flagstar
Bank”);
WHEREAS,
pursuant to (i) an Assignment and Assumption Agreement (the “Assignment and
Assumption Agreement”), dated as of March 1, 2008, between the Bank, as
assignor, and the Seller, as assignee, and (ii) certain bills of sale between
the Bank and the Seller (collectively, the “Xxxx of Sale”), the Bank has
assigned all of its right, title and interest in and to the Transfer Agreement
and the Mortgage Loans as listed on Schedule A and the Seller has accepted
the
rights and benefits of, and assumed the obligations of the Bank under, the
Transfer Agreement with respect to the Mortgage Loans;
WHEREAS,
the Seller is a party to the following servicing agreement (the “Servicing
Agreement”) pursuant to which the Mortgage Loans are serviced by Aurora (the
“Servicer”):
Servicing
Agreement, dated as of March 1, 2008, by and between the Seller and Aurora;
WHEREAS,
the Seller desires to sell, without recourse, all of its rights, title and
interest in and to the Mortgage Loans to the Depositor and to assign all of
its
rights and interest under the Transfer Agreement and the Servicing Agreement
relating to the Mortgage Loans referred to above, other than the servicing
rights retained by the Seller herunder, relating to the Mortgage Loans, and
to
delegate all of its obligations thereunder, to the Depositor; and
WHEREAS,
the Seller and the Depositor acknowledge and agree that the Depositor will
convey the Mortgage Loans to a Trust Fund created pursuant to the Trust
Agreement, assign all of its rights and delegate all of its obligations
hereunder to the Trustee for the benefit of the Certificateholders, and that
each reference herein to the Depositor is intended, unless otherwise specified,
to mean the Depositor or the Trustee, as assignee, whichever is the owner of
the
Mortgage Loans from time to time.
NOW,
THEREFORE, in consideration of the mutual agreements herein set forth, and
for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Seller and the Depositor agree as follows:
ARTICLE
I
CONVEYANCE
OF MORTGAGE LOANS
Section
1.01. Mortgage
Loans.
(a) Sale
of Mortgage Loans.
Concurrently with the execution and delivery of this Agreement, the Seller
does
hereby transfer, assign, set over, deposit with and otherwise convey to the
Depositor, without recourse, subject to Sections 1.03 and 1.04, all the right,
title and interest of the Seller in and to the Mortgage Loans (exclusive of
any
Retained Interest on such Mortgage Loans, if any) identified on Schedule A
hereto, having an aggregate principal balance as of the Cut-off Date of
approximately $154,863,333.71.
Such conveyance includes, without limitation, the right to all distributions
of
principal and interest received on or with respect to the Mortgage Loans on
or
after March 1, 2008 other than payments of principal and interest due on or
before such date, and all such payments due after such date but received prior
to such date and intended by the related Mortgagors to be applied after such
date, together with all of the Seller’s right, title and interest in and to each
related account and all amounts from time to time credited to and the proceeds
of such account, any REO Property and the proceeds thereof, the Seller’s rights
under any Insurance Policies relating to the Mortgage Loans, the Seller’s
security interest in any collateral pledged to secure the Mortgage Loans,
including the Mortgaged Properties, and any proceeds of the
foregoing.
(b) Concurrently
with the execution and delivery of this Agreement, the Seller hereby assigns
to
the Depositor all of its rights and interest under the Transfer Agreement and
the Servicing Agreement except for (A) any rights against the Transferor with
respect to (i) first payment date defaults or early payment date defaults or
(ii) reimbursement of any amount in excess of the Purchase Price for a breach
of
a representation or warranty and (B) any servicing rights retained thereunder,
and delegates to the Depositor all of its obligations thereunder, to the extent
relating to the Mortgage Loans.
The
Seller and the Depositor further agree that this Agreement incorporates the
terms and conditions of any assignment and assumption agreement or other
assignment document required to be entered into under the Transfer Agreement
(any such document an “Assignment Agreement”) and this Agreement constitutes an
Assignment Agreement under such Transfer Agreement, and the Depositor hereby
assumes the obligations of the assignee under each such Assignment Agreement.
Concurrently with the execution hereof, the Depositor tenders the purchase
price
of $154,863,333.71. The Depositor hereby accepts such assignment and delegation,
and shall be entitled to exercise all the rights of the Seller under the
Transfer Agreement and the Servicing Agreement, other than any servicing rights
thereunder, as if the Depositor had been a party to each such agreement.
2
(c) Schedules
of Mortgage Loans. The Depositor and the Seller have agreed upon which of the
Mortgage Loans owned by the Seller are to be purchased by the Depositor pursuant
to this Agreement and the Seller will prepare on or prior to the Closing Date
a
final schedule describing such Mortgage Loans (the “Mortgage Loan Schedule”).
The Mortgage Loan Schedule shall conform to the requirements of the Depositor
as
set forth in this Agreement and to the definition of “Mortgage Loan Schedule”
under the Trust Agreement.
Section
1.02. Delivery
of Documents.
(a) In
connection with such transfer and assignment of the Mortgage Loans hereunder,
the Seller, shall, at least three (3) Business Days prior to the Closing Date,
deliver, or cause to be delivered, to the Depositor (or its designee) the
documents or instruments with respect to each Mortgage Loan (each a “Mortgage
File”) so transferred and assigned, as specified in the related Transfer
Agreement or Servicing Agreement.
(b) For
Mortgage Loans (if any) that have been prepaid in full on or after the Cut-off
Date and prior to the Closing Date, the Seller, in lieu of delivering the
related Mortgage Files, herewith delivers to the Depositor an Officer’s
Certificate which shall include a statement to the effect that all amounts
received in connection with such prepayment that are required to be deposited
in
the Collection Account maintained by the Master Servicer for such purpose have
been so deposited.
Section
1.03. Review
of Documentation.
The
Depositor, by execution and delivery hereof, acknowledges receipt of the
Mortgage Files pertaining to the Mortgage Loans listed on the Mortgage Loan
Schedule, subject to review thereof by the custodian, U.S. Bank National
Association (the “Custodian”), for the Depositor. The Custodian is required to
review, within 45 days following the Closing Date, each applicable Mortgage
File. If in the course of such review the related Custodian identifies any
Material Defect, the Seller shall be obligated to cure such Material Defect
or
to repurchase the related Mortgage Loan from the Depositor (or, at the direction
of and on behalf of the Depositor, from the Trust Fund), or to substitute a
Qualifying Substitute Mortgage Loan therefor, in each case to the same extent
and in the same manner as the Depositor is obligated to the Trustee and the
Trust Fund under Section 2.02(c) of the Trust Agreement.
Section
1.04. Representations
and Warranties of the Seller.
(a) The
Seller hereby represents and warrants to the Depositor that as of the Closing
Date:
(i) The
Seller is a corporation duly organized, validly existing and in good standing
under the laws governing its creation and existence and has full corporate
power
and authority to own its property, to carry on its business as presently
conducted, and to enter into and perform its obligations under this Agreement,
the Assignment and Assumption Agreement and the Xxxx of Sale;
(ii) The
execution and delivery by the Seller of this Agreement, the Assignment and
Assumption Agreement and the Xxxx of Sale have been duly authorized by all
necessary corporate action on the part of the Seller; neither the execution
and
delivery of this Agreement, the Assignment and Assumption Agreement or the
Xxxx
of Sale, nor the consummation of the transactions herein or therein
contemplated, nor compliance with the provisions hereof or thereof, will
conflict with or result in a breach of, or constitute a default under, any
of
the provisions of any law, governmental rule, regulation, judgment, decree
or
order binding on the Seller or its properties or the certificate of
incorporation or bylaws of the Seller;
3
(iii) The
execution, delivery and performance by the Seller of this Agreement, the
Assignment and Assumption Agreement and the Xxxx of Sale and the consummation
of
the transactions contemplated hereby and thereby do not require the consent
or
approval of, the giving of notice to, the registration with, or the taking
of
any other action in respect of, any state, federal or other governmental
authority or agency, except such as has been obtained, given, effected or taken
prior to the date hereof;
(iv) Each
of
this Agreement, the Assignment and Assumption Agreement and the Xxxx of Sale
has
been duly executed and delivered by the Seller and, assuming due authorization,
execution and delivery by the Bank, in the case of the Assignment and Assumption
Agreement and the Xxxx of Sale, and the Depositor, in the case of this
Agreement, constitutes a valid and binding obligation of the Seller enforceable
against it in accordance with its respective terms, except as such
enforceability may be subject to (A) applicable bankruptcy and insolvency laws
and other similar laws affecting the enforcement of the rights of creditors
generally and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law; and
(v) There
are
no actions, suits or proceedings pending or, to the knowledge of the Seller,
threatened or likely to be asserted against or affecting the Seller, before
or
by any court, administrative agency, arbitrator or governmental body (A) with
respect to any of the transactions contemplated by this Agreement, the
Assignment and Assumption Agreement or the Xxxx of Sale or (B) with respect
to
any other matter which in the judgment of the Seller will be determined
adversely to the Seller and will if determined adversely to the Seller
materially and adversely affect it or its business, assets, operations or
condition, financial or otherwise, or adversely affect its ability to perform
its obligations under this Agreement, the Assignment and Assumption Agreement
or
the Xxxx of Sale.
(b) The
representations and warranties of the Transferor with respect to the Mortgage
Loans in the Transfer Agreement were made as of the date of the Transfer
Agreement. To the extent that any fact, condition or event with respect to
a
Mortgage Loan constitutes a breach of both (i) a representation or warranty
of
the Transferor under the Transfer Agreement and (ii) a representation or
warranty of the Seller under this Agreement, the sole right or remedy of the
Depositor with respect to a breach by the Seller of such representation and
warranty (other than a breach by the Seller of the representations and
warranties made by it pursuant to Sections 1.04(b)(xii), 1.04(b)(xiii),
1.04(b)(xvi), 1.04(b)(xvii) and 1.04(b)(xviii)) shall be the right to enforce
the obligations of the Transferor under any applicable representation or
warranty made by it. The representations made by the Seller pursuant to Sections
1.04(b)(xii), 1.04(b)(xiii), 1.04(b)(xvi), 1.04(b)(xvii) and 1.04(b)(xviii)
shall be direct obligations of the Seller. The Depositor acknowledges and agrees
that the representations and warranties of the Seller in this Section 1.04(b)
(other than the representations and warranties made pursuant to Sections
1.04(b)(xii), 1.04(b)(xiii), 1.04(b)(xvi), 1.04(b)(xvii) and 1.04(b)(xviii))
are
applicable only to facts, conditions or events that do not constitute a breach
of any representation or warranty made by the related Transferor in the
applicable Transfer Agreement. The Seller shall have no obligation or liability
with respect to any breach of a representation or warranty made by it with
respect to the Mortgage Loans if the fact, condition or event constituting
such
breach also constitutes a breach of a representation or warranty made by the
Transferor in the Transfer Agreement, without regard to whether the Transferor
fulfills its contractual obligations in respect of such representation or
warranty; provided, however, that if the Transferor fulfills its obligations
under the provisions of the Transfer Agreement by substituting for the affected
Mortgage Loan a mortgage loan which is not a Qualifying Substitute Mortgage
Loan, the Seller shall, in exchange for such substitute mortgage loan, provide
the Depositor (a) with the applicable Purchase Price for the affected Mortgage
Loan or (b) within the two-year period following the Closing Date, with a
Qualified Substitute Mortgage Loan for such affected Mortgage Loan. Subject
to
the foregoing, the Seller represents and warrants upon delivery of the Mortgage
Loans to the Depositor hereunder on the Closing Date, as to each,
that:
4
(i) The
information set forth with respect to the Mortgage Loans on the Mortgage Loan
Schedule provides an accurate listing of the Mortgage Loans, and the information
with respect to each Mortgage Loan on the Mortgage Loan Schedule is true and
correct in all material respects at the date or dates respecting which such
information is given;
(ii) There
are
no defaults (other than delinquency in payment) in complying with the terms
of
any Mortgage Loan, and the Seller has no notice as to any taxes, governmental
assessments, insurance premiums, water, sewer and municipal charges, leasehold
payments or ground rents which previously became due and owing but which have
not been paid;
(iii) Except
in
the case of Cooperative Loans, if any, each Mortgage Loan requires all buildings
or other improvements on the related Mortgaged Property to be insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the related Mortgaged
Property is located pursuant to insurance policies conforming to the
requirements of the guidelines of FNMA or FHLMC. If upon origination of a
Mortgage Loan, the Mortgaged Property was in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards (and such flood insurance has been made available) a flood insurance
policy meeting the requirements of the current guidelines of the Federal Flood
Insurance Administration is in effect which policy conforms to the requirements
of the current guidelines of the Federal Flood Insurance Administration. Each
Mortgage Loan obligates the related Mortgagor thereunder to maintain the hazard
insurance policy at the Mortgagor’s cost and expense, and on the Mortgagor’s
failure to do so, authorizes the holder of the Mortgage to obtain and maintain
such insurance at such Mortgagor’s cost and expense, and to seek reimbursement
therefor from the Mortgagor. Where required by state law or regulation, each
Mortgagor has been given an opportunity to choose the carrier of the required
hazard insurance, provided the policy is not a “master” or “blanket” hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure
to
the benefit of the Depositor upon the consummation of the transactions
contemplated by this Agreement;
5
(iv) Each
Mortgage has not been satisfied, cancelled, subordinated or rescinded, in whole
or in part, and the Mortgaged Property has not been released from the lien
of
the Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or
rescission;
(v) Each
Mortgage Loan evidences a valid, subsisting, enforceable and perfected first
lien on the related Mortgaged Property (including all improvements on the
Mortgaged Property). The lien of the Mortgage is subject only to: (1) liens
of
current real property taxes and assessments not yet due and payable and, if
the
related Mortgaged Property is a condominium unit, any lien for common charges
permitted by statute, (2) covenants, conditions and restrictions, rights of
way,
easements and other matters of public record as of the date of recording of
such
Mortgage acceptable to mortgage lending institutions in the area in which the
related Mortgaged Property is located and specifically referred to in the
lender’s Title Insurance Policy or attorney’s opinion of title and abstract of
title delivered to the originator of the applicable Mortgage Loan, and (3)
such
other matters to which like properties are commonly subject which do not,
individually or in the aggregate, materially interfere with the benefits of
the
security intended to be provided by the Mortgage. Any security agreement,
chattel mortgage or equivalent document related to, and delivered to the Trustee
in connection with, a Mortgage Loan establishes a valid, subsisting and
enforceable first lien on the property described therein and the Depositor
has
full right to sell and assign the same to the Trustee;
(vi) Immediately
prior to the transfer and assignment of the Mortgage Loans to the Depositor,
the
Seller was the sole owner of record and holder of each Mortgage Loan, and the
Seller had good and marketable title thereto, and has full right to transfer
and
sell each Mortgage Loan to the Depositor free and clear, except as described
in
paragraph (v) above, of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest, and has full right and authority,
subject to no interest or participation of, or agreement with, any other party,
to sell and assign each Mortgage Loan pursuant to this Agreement;
(vii) Each
Mortgage Loan other than any Cooperative Loan is covered by either (i) an
attorney’s opinion of title and abstract of title the form and substance of
which is generally acceptable to mortgage lending institutions originating
mortgage loans in the locality where the related Mortgaged Property is located
or (ii) an ALTA mortgagee Title Insurance Policy or other generally acceptable
form of policy of insurance, issued by a title insurer qualified to do business
in the jurisdiction where the Mortgaged Property is located, insuring the
originator of the Mortgage Loan, and its successors and assigns, as to the
first
priority lien of the Mortgage in the original principal amount of the Mortgage
Loan (subject only to the exceptions described in paragraph (v) above). If
the
Mortgaged Property is a condominium unit located in a state in which a title
insurer will generally issue an endorsement, then the related Title Insurance
Policy contains an endorsement insuring the validity of the creation of the
condominium form of ownership with respect to the project in which such unit
is
located. With respect to any Title Insurance Policy, the originator is the
sole
insured of such mortgagee Title Insurance Policy, such mortgagee Title Insurance
Policy is in full force and effect and will inure to the benefit of the
Depositor upon the consummation of the transactions contemplated by this
Agreement, no claims have been made under such mortgagee Title Insurance Policy
and no prior holder of the related Mortgage, including the Seller, has done,
by
act or omission, anything that would impair the coverage of such mortgagee
Title
Insurance Policy;
6
(viii) To
the
best of the Seller’s knowledge, no foreclosure action is being threatened or
commenced with respect to any Mortgage Loan.
(ix) There
is
no proceeding pending for the total or partial condemnation of any Mortgaged
Property (or, in the case of any Cooperative Loan, the related cooperative
unit)
and each such property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty, so as to have a material
adverse effect on the value of the related Mortgaged Property as security for
the related Mortgage Loan or the use for which the premises were
intended;
(x) There
are
no mechanics’ or similar liens or claims which have been filed for work, labor
or material (and no rights are outstanding that under the law could give rise
to
such liens) affecting the related Mortgaged Property which are or may be liens
prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xi) Each
Mortgage Loan was originated by a savings and loan association, savings bank,
commercial bank, credit union, insurance company or similar institution that
is
supervised and examined by a Federal or State authority, or by a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to Sections
203 and 211 of the National Housing Act;
(xii) Each
Mortgage Loan at the time it was originated complied in all material respects
with applicable local, state, and federal laws including, but not limited to,
all applicable predatory and abusive lending laws;
(xiii) As
of the
Closing Date, each Mortgage Loan is a “qualified mortgage” within the meaning of
Section 860G of the Code and Treas. Reg. §1.860G-2 (determined without regard to
Treas. Reg. §1.860G-2(f) or any similar rule that provides that a defective
obligation is a qualified mortgage for a temporary period);
(xiv) As
of the
Closing Date, no Mortgage Loan provides for interest other than at either (i)
a
single fixed rate in effect throughout the term of the Mortgage Loan or (ii)
a
single “variable rate” (within the meaning of Treas. Reg. §1.860G-1(a)(3)) in
effect throughout the term of the Mortgage Loan;
(xv) As
of the
Closing Date, based on delinquencies in payment on the Mortgage Loans, the
Seller would not initiate foreclosure proceedings with respect to any Mortgage
Loan prior to the next scheduled payment date on such Mortgage Loan;
(xvi) No
Mortgage Loan is a “high-cost,” “high-cost home,” “covered,” “high-risk home” or
“predatory” loan under any applicable federal, state or local predatory or
abusive lending law (or a similarly classified loan using different terminology
under a law imposing heightened regulatory scrutiny or additional legal
liability for residential mortgage loans having high interest rates, points
and/or fees); no Mortgage Loan originated on or after November 27, 2003 is
a
“High-Cost Home Loan” subject to the New Jersey Home Ownership Security Act of
2003 (N.J.S.A. 46:10B-22 et seq.); no Mortgage Loan is a “High-Cost Home Loan”
subject to the New Mexico Home Loan Protection Act (N.M. Stat. Xxx. §§ 58-21A-1
et seq.);
7
(xvii) No
Mortgage Loan is subject to the Home Ownership and Equity Protection Act of
1994
(15 U.S.C. § 1602(c)), Regulation Z (12 CFR 226.32) or any comparable state
law;
(xviii) No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable (as such terms
are defined in the then current version of Standard & Poor’s LEVELS®
Glossary) and no Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act; and
(c) In
addition to the representations and warranties set forth in Section 1.04(b),
all
of which are also made by the Seller as of the Closing Date (or as of such
other
date as is specified in particular representations and warranties), the Seller
hereby represents and warrants to the Depositor upon the delivery to the
Depositor on the Closing Date of any Mortgage Loans, as of the Closing
Date:
(i) With
respect to any hazard insurance policy covering a Mortgage Loan and the related
Mortgaged Property, the Seller has not engaged in, and has no knowledge of
the
Bank’s or the Mortgagor’s having engaged in, any act or omission which would
impair the coverage of any such policy, the benefits of the endorsement provided
for therein, or the validity and binding effect of either, including without
limitation, no unlawful fee, commission, kickback or other unlawful compensation
or value of any kind has been or will be received, retained or realized by
any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(ii) Neither
the Seller nor the Bank has waived the performance by the Mortgagor of any
action, if the Mortgagor’s failure to perform such action would cause a Mortgage
Loan to be in default, nor has the Seller or the Bank waived any default
resulting from any action or inaction by the Mortgagor;
(iii) The
terms
of the Mortgage Note and Mortgage 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 interests of the Depositor and which has been
delivered to the Custodian;
(iv) The
Mortgaged Property relating to each Mortgage Loan is a fee simple property
(or
in the case of certain property situated in Hawaii, property held under long
term residential lease) located in the state identified in the Mortgage Loan
Schedule and consists of a parcel of real property with a detached single family
residence erected thereon, or a two- to four-family dwelling, an individual
condominium unit in a low-rise condominium project, or an individual unit in
a
planned unit development or shares issued by cooperative housing corporations
and related leasehold interests; provided, however, that any condominium project
or planned unit development shall conform with the applicable FNMA and FHLMC
requirements regarding such dwellings. No portion of the Mortgaged Property
is
used for commercial purposes;
8
(v) 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. All parties to the Mortgage Note and the Mortgage and any other related
agreement had legal capacity to enter into the Mortgage Loan and to execute
and
deliver the Mortgage Note and the Mortgage and any other related agreement,
and
the Mortgage Note and the Mortgage have been duly and properly executed by
such
parties. To the best of the Seller’s knowledge, no fraud was committed in
connection with the origination of the Mortgage Loan;
(vi) Each
Mortgage Loan has been closed and the proceeds of the Mortgage Loan have been
fully disbursed and there is no requirement for future advances thereunder,
and
any and all requirements as to completion of any on-site or off-site improvement
and as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage Loan
and
the recording of the Mortgage were paid, and the Mortgagor is not entitled
to
any refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(vii) 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
a
default, breach, violation or event of acceleration, and neither the Seller
nor
its predecessors has waived any default, breach, violation or event of
acceleration;
(viii) All
improvements which were considered in determining the Appraised Value of the
Mortgaged Property lay wholly within the boundaries and building restriction
lines of the Mortgaged Property and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being part
of
the Mortgaged Property is in violation of any applicable zoning law or
regulation;
(ix) 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 or non-judicial foreclosure. There is no homestead or
other exemption available to the related Mortgagor which would materially
interfere with the right to sell the Mortgaged Property at a trustee’s sale or
the right to foreclose the Mortgage subject to the applicable federal and state
laws and judicial precedent with respect to bankruptcy and rights of redemption.
Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s
sale of, the Mortgaged Property pursuant to the proper procedures, the holder
of
the Mortgage Loan will be able to deliver good and merchantable title to the
property;
(x) The
Mortgage Note is not and has not been secured by any collateral except the
lien
of the corresponding Mortgage and the security interest of any applicable
security agreement or chattel mortgage;
9
(xi) In
the
event 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 the Mortgage, and no fees or expenses are or will become
payable by the Depositor to the trustee under the deed of trust, except in
connection with a trustee’s sale after default by the Mortgagor;
(xii) The
Mortgage Note, the Mortgage, the Assignment of Mortgage and any other documents
required to be delivered for the Mortgage Loan by the Seller under this
Agreement as set forth in Section 1.02 hereof have been delivered to the
Custodian. The Seller is in possession of a complete, true and accurate Mortgage
File in compliance with Section 1.02 hereof, except for such documents the
originals of which have been delivered to the Custodian;
(xiii) The
Assignment of Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the Mortgaged Property is
located;
(xiv) The
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of a Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent
of
the Mortgagee thereunder;
(xv) No
Mortgage Loan contains provisions pursuant to which Monthly Payments (as defined
in the Servicing Agreement) are paid or partially paid with funds deposited
in
any separate account established by the Mortgagor or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor, nor does any Mortgage
Loan contain any other similar provisions currently in effect which may
constitute a “buydown” provision. No Mortgage Loan is a graduated payment
mortgage loan and no Mortgage Loan has a shared appreciation or other contingent
interest feature;
(xvi) Any
future advances made prior to the Cut-off Date have been consolidated with
the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term.
The lien of the Mortgage securing the consolidated principal amount is insured
by a title insurance policy, an endorsement to the policy insuring the
mortgagee’s consolidated interest or by other title evidence acceptable to FNMA
and FHLMC. The consolidated principal amount does not exceed the original
principal amount of any Mortgage Loan;
(xvii) With
respect to escrow deposits and escrow payments, all such payments are in the
possession of the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made.
All
escrow payments have been collected in full compliance with state and federal
law. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item which remains unpaid
and which has been assessed but is not yet due and payable. No escrow deposits
or escrow payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest
Rate
(as defined in the Servicing Agreement) adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has
been
properly paid and credited;
10
(xviii) The
Mortgage File contains an appraisal of the related Mortgage Property signed
prior to the approval of the Mortgage Loan application by a qualified appraiser,
who had no interest, direct or indirect in the Mortgaged Property or in any
loan
made on the security thereof; and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and the appraisal and appraiser
both satisfy the requirements of Title XI of the Federal Institutions
Reform, Recovery, and Enforcement Act of 1989 and the regulations promulgated
thereunder, all as in effect on the date the Mortgage Loan was
originated;
(xix) The
Mortgaged Property is free from any and all toxic or hazardous substances and
there exists no violation of any local, state or federal environmental law,
rule
or regulation. There is no pending action or proceeding directly involving
any
Mortgaged Property of which the Seller is aware in which compliance with any
environmental law, rule or regulation is an issue; and to the best of the
Seller’s knowledge, nothing further remains to be done to satisfy in full all
requirements of each such law, rule or regulation;
(xx) The
Mortgage Loan does not contain a provision permitting or requiring conversion
to
a fixed interest rate Mortgage Loan;
(xxi) No
Mortgage Loan was made in connection with (i) the construction or rehabilitation
of a Mortgaged Property or (ii) facilitating the trade-in or exchange of a
Mortgaged Property;
(xxii) No
action, inaction or event has occurred and no state of facts exists or has
existed that has resulted or will result in the exclusion from, denial of,
or
defense to coverage under any applicable pool insurance policy, special hazard
insurance policy, primary mortgage loan insurance policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with the
placement of any such insurance, no commission, fee or other compensation has
been or will be received by the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director or employee had a
financial interest at the time of placement of such insurance;
(xxiii) Each
original Mortgage was recorded and, except for those Mortgage Loans subject
to
the MERS identification system, all subsequent assignments of the original
Mortgage (other than the assignment to the Depositor) have been recorded in
the
appropriate jurisdictions wherein such recordation is necessary to perfect
the
liens thereof as against creditors of the Seller, or are in the process of
being
recorded; and
(xxiv) Any
and
all requirements of any federal, state or local law, including, without
limitation, usury, truth in lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity or disclosure laws applicable to
each Mortgage Loan have been complied with.
It
is understood and agreed that the representations and warranties set forth
in
Sections 1.04(b) and 1.04(c) herein shall survive the Closing Date. Upon
discovery by either the Seller or the Depositor of a breach of any of the
foregoing representations and warranties (excluding a breach of subparagraphs
(xii),
(xiii), (xvi), (xvii) and (xviii) under
Section 1.04(b)), that adversely and materially affects the value of the related
Mortgage Loan, that does not also constitute a breach of a representation or
warranty of the Transferor in the Transfer Agreement, the party discovering
such
breach shall give prompt written notice to the other party; provided, however,
notwithstanding anything to the contrary herein, this paragraph shall be
specifically applicable to a breach by the Seller of the representations made
pursuant to subparagraphs (xii),
(xiii), (xvi), (xvii) and (xviii)
under Section 1.04(b) irrespective of the Transferor’s breach of a comparable
representation or warranty in the Transfer Agreement. Within 60 days of the
discovery of any such breach, the Seller shall either (a) cure such breach
in
all material respects, (b) repurchase such Mortgage Loan or any property
acquired in respect thereof from the Depositor at the applicable Purchase Price
or (c) within the two-year period following the Closing Date substitute a
Qualifying Substitute Mortgage Loan for the affected Mortgage Loan.
11
Section
1.05. Grant
Clause.
It is
intended that the conveyance of the Seller’s right, title and interest in and to
the Mortgage Loans and other property conveyed pursuant to this Agreement on
the
Closing Date shall constitute, and shall be construed as, a sale of such
property and not a grant of a security interest to secure a loan. However,
if
any such conveyance is deemed to be in respect of a loan, it is intended that:
(1) the rights and obligations of the parties shall be established pursuant
to
the terms of this Agreement; (2) the Seller hereby grants to the Depositor
a
first priority security interest in all of the Seller’s right, title and
interest in, to and under, whether now owned or hereafter acquired, the Mortgage
Loans and other property; and (3) this Agreement shall constitute a security
agreement under applicable law.
Section
1.06. Assignment
by Depositor.
Concurrently with the execution of this Agreement, the Depositor shall assign
its interest under this Agreement with respect to the Mortgage Loans to the
Trustee, and the Trustee then shall succeed to all rights of the Depositor
under
this Agreement. All references to the rights of the Depositor in this Agreement
shall be deemed to be for the benefit of and exercisable by its assignee or
designee, specifically including the Trustee.
ARTICLE
II
MISCELLANEOUS
PROVISIONS
Section
2.01. Binding
Nature of Agreement; Assignment.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
Section
2.02. Entire
Agreement.
This
Agreement contains the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof, and supersedes all prior
and
contemporaneous agreements, understandings, inducements and conditions, express
or implied, oral or written, of any nature whatsoever with respect to the
subject matter hereof. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof.
Section
2.03. Amendment.
This
Agreement may be amended from time to time by the Seller and the Depositor,
without notice to or the consent of any of the Holders, (i) to cure any
ambiguity, (ii) to cause the provisions herein to conform to or be consistent
with or in furtherance of the statements made with respect to the Certificates,
the Trust Fund, the Trust Agreement or this Agreement in the Prospectus
Supplement; or to correct or supplement any provision herein which may be
inconsistent with any other provisions herein, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement
or
(iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the REMIC
Provisions. No such amendment effected pursuant to clause (iii) of the preceding
sentence shall adversely affect in any material respect the interests of any
Holder. Any such amendment shall be deemed not to adversely affect in any
material respect any Holder, if the Trustee receives written confirmation from
each Rating Agency that such amendment will not cause such Rating Agency to
reduce the then current rating assigned to the Certificates, if any (and any
Opinion of Counsel requested by the Trustee in connection with any such
amendment may rely expressly on such confirmation as the basis
therefor).
12
(a) This
Agreement may also be amended from time to time by the Seller and the Depositor
with the consent of the Holders of not less than 66-2/3% of the Class Principal
Amount or Class Notional Amount (or Percentage Interest) of each Class of
Certificates affected thereby for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or
of modifying in any manner the rights of the Holders; provided, however, that
no
such amendment may (i) reduce in any manner the amount of, or delay the timing
of, payments received on Mortgage Loans which are required to be distributed
on
any Certificate without the consent of the Holder of such Certificate or (ii)
reduce the aforesaid percentages of Class Principal Amount or Class Notional
Amount (or Percentage Interest) of Certificates of each Class, the Holders
of
which are required to consent to any such amendment without the consent of
the
Holders of 100% of the Class Principal Amount or Class Notional Amount (or
Percentage Interest) of each Class of Certificates affected thereby. For
purposes of this paragraph, references to “Holder” or “Holders” shall be deemed
to include, in the case of any Class of Book-Entry Certificates, the related
Certificate Owners.
(b) It
shall
not be necessary for the consent of Holders under this Section 2.03 to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by Holders
shall be subject to such reasonable regulations as the Trustee may
prescribe.
Section
2.04. Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS (OTHER THAN SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section
2.05. Severability
of Provisions.
If any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this
Agreement.
13
Section
2.06. Indulgences;
No Waivers.
Neither
the failure nor any delay on the part of a party to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver thereof,
nor
shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other right,
remedy, power or privilege, nor shall any waiver of any right, remedy, power
or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver
shall
be effective unless it is in writing and is signed by the party asserted to
have
granted such waiver.
Section
2.07. Headings
Not to Affect Interpretation.
The
headings contained in this Agreement are for convenience of reference only,
and
they shall not be used in the interpretation hereof.
Section
2.08. Benefits
of Agreement.
Nothing
in this Agreement, express or implied, shall give to any Person, other than
the
parties to this Agreement and their successors hereunder, any benefit or any
legal or equitable right, power, remedy or claim under this
Agreement.
Section
2.09. Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original, and all of which together shall constitute one and
the
same instrument.
[SIGNATURE
PAGE IMMEDIATELY FOLLOWS]
14
IN
WITNESS WHEREOF, the Seller and the Depositor have caused their names to be
signed hereto by their respective duly authorized officers as of the date first
above written.
XXXXXX
BROTHERS HOLDINGS INC.
By:_______________________________________
Name:
Xxxxxxx
X. Xxxxxxxx
Title:
Senior Vice President
STRUCTURED
ASSET SECURITIES
CORPORATION
By:_______________________________________
Name:
Xxxxxxxx Xxxxxxx
Title:
Vice President
SCHEDULE
A
MORTGAGE
LOAN SCHEDULE
On
file
at the offices of:
Dechert
LLP
Xxxx
Centre
0000
Xxxx
Xxxxxx
Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000-0000
Attn:
Xxxxxx X. Xxxxxxx
Telephone:
(000) 000-0000
Telecopier:
(000) 000-0000
A-1