EXECUTION VERSION
FINANCIAL GUARANTY INSURANCE COMPANY,
as Certificate Insurer,
BAYVIEW FINANCIAL, L.P.,
as Seller
BAYVIEW FINANCIAL SECURITIES COMPANY,
LLC,
as Depositor
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
INSURANCE AND
INDEMNITY AGREEMENT
BAYVIEW FINANCIAL MORTGAGE PASS-THROUGH
TRUST 2005-D
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2005-D
Dated as of November 10, 2005
TABLE OF CONTENTS
(This Table of Contents is for
convenience of reference only and shall not be deemed to be part of
this Agreement. All capitalized terms used in this Agreement and
not otherwise defined shall have the meanings set forth in Article
I of this Agreement.)
Page
ARTICLE I
DEFINITIONS
Section 1.01
Defined
Terms.
1
Section 1.02
Other Definitional
Provisions.
4
ARTICLE
II
REPRESENTATIONS, WARRANTIES
AND COVENANTS
Section 2.01
Representations and
Warranties of the Seller and the Depositor.
5
Section 2.02
Affirmative Covenants
of the Seller and the Depositor.
8
Section 2.03
Negative Covenants of
the Seller and the Depositor.
11
Section 2.04
Representations,
Warranties and Covenants of the Certificate Insurer.
11
ARTICLE
III
THE CERTIFICATE INSURANCE
POLICY; REIMBURSEMENT
Section 3.01
Issuance of the
Certificate Insurance Policy.
14
Section 3.02
Payment of Fees and
Premium.
16
Section 3.03
Reimbursement
Obligation.
16
Section 3.04
Indemnification.
18
Section 3.05
Payment
Procedure.
20
Section 3.06
Liability of the
Seller.
20
ARTICLE
IV
FURTHER
AGREEMENTS
Section 4.01
Effective Date; Term of
the Insurance Agreement.
20
Section 4.02
Further Assurances and
Corrective Instruments.
21
Section 4.03
Obligations
Absolute.
21
Section 4.04
Assignments;
Reinsurance; Third-Party Rights.
22
Section 4.05
Liability of the
Certificate Insurer.
23
Section 4.06
Subrogration.
23
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01
Defaults.
24
Section 5.02
Remedies; No Remedy
Exclusive.
25
Section 5.03
Waivers.
26
ARTICLE
VI
MISCELLANEOUS
Section 6.01
Amendments,
Etc.
26
Section 6.02
Notices.
26
Section 6.03
Severability.
27
Section 6.04
Governing
Law.
27
Section 6.05
Consent to
Jurisdiction.
27
Section 6.06
Consent of the
Certificate Insurer.
28
Section 6.07
Counterparts.
28
Section 6.08
Headings.
28
Section 6.09
Trial by Jury
Waived.
29
Section 6.10
Limited
Liability.
29
Section 6.11
Limitation of Liability
of Trustee.
29
Section 6.12
[Reserved]
29
Section 6.13
Entire
Agreement.
29
Section 6.14
[Reserved].
30
Section 6.15
Third Party
Beneficiary.
30
INSURANCE AND INDEMNITY AGREEMENT (as may
be amended, modified or supplemented from time to time, this
“ Insurance Agreement ”), dated as of November
10, 2005, by and among FINANCIAL GUARANTY INSURANCE COMPANY, as
Certificate Insurer, BAYVIEW FINANCIAL, L.P., as Seller, BAYVIEW
FINANCIAL SECURITIES COMPANY, LLC, as Depositor and WACHOVIA BANK,
NATIONAL ASSOCIATION, as Trustee.
PRELIMINARY STATEMENT
The Pooling and Servicing Agreement,
dated as of October 1, 2005 (as may be amended, modified or
supplemented from time to time as set forth therein, the “
Pooling and Servicing Agreement ”), among the
Depositor, Wells Fargo Bank, N.A., as Master Servicer, and the
Trustee, provides for, among other things, the issuance of the
Certificates. The Seller has requested that the Certificate
Insurer issue and the Certificate Insurer is willing to issue a
surety bond (the “ Certificate Insurance Policy
”) to guarantee payment of Insured Amounts (as defined in the
Certificate Insurance Policy) to the Trustee for the benefit of the
Insured Certificateholders upon such terms and conditions as were
mutually agreed upon by the parties and subject to the terms and
conditions of the Certificate Insurance Policy. The
Certificate Insurer shall be paid a Premium as set forth herein.
Each of the Seller and the Depositor has undertaken certain
obligations in consideration for the Certificate Insurer’s
issuance of its Certificate Insurance Policy. The parties
hereto desire to specify the conditions precedent to the issuance
of the Certificate Insurance Policy by the Certificate Insurer and
to provide for certain other matters.
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein contained, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01
Defined Terms.
Unless the context clearly requires
otherwise, all capitalized terms used but not defined herein shall
have the respective meanings assigned to them in the Pooling and
Servicing Agreement or, if not defined therein, in the Certificate
Insurance Policy described below. For purposes of this
Insurance Agreement, the following terms shall have the following
meanings:
“ Certificates ” means
the Mortgage Pass-Through Certificates, Series 2005-D, as issued
pursuant to the Pooling and Servicing Agreement.
“ Certificate Insurance
Policy ” means the Surety Bond Policy, No. 05030130,
together with all endorsements thereto, issued by the Certificate
Insurer in favor of the Trustee, for the benefit of the Insured
Certificateholders.
“ Certificate Insurer
” means Financial Guaranty Insurance Company, or any
successor thereto, as issuer of the Certificate Insurance
Policy.
“ Certificate Insurer
Information ” means the information in the Offering
Documents regarding the Certificate Insurer and the Certificate
Insurance Policy, which consists solely of the information set
forth under the caption “The Class A-F5 Insurance
Policy” and including the financial statements of the
Certificate Insurer incorporated therein by reference as of
December 31, 2003 and December 31, 2004, and for each of
the years in the three-year period ended December 31, 2004,
and for the nine month periods ended September 30, 2005 and 2004,
and the notes thereto. The Certificate Insurer Information
does not include any other information. Without limiting the
generality of the foregoing, the Certificate Insurer Information
does not include any information in any Computational Materials.
The Certificate Insurer has provided the Certificate Insurer
Information in connection with its role as credit enhancer, which
consists solely of the obligation to pay claims, if any, under and
in accordance with the express terms of the Certificate Insurance
Policy.
“ Closing Date ” means
November 10, 2005.
“ Computational Materials
” means in the aggregate, (i) “computational
materials” as defined in the No-Action Letter of May 20, 1994
issued by the Securities and Exchange Commission (the
“Commission”) to Kidder, Peabody Acceptance Corporation
I, Kidder, Peabody & Co. Incorporated and Kidder Structured
Asset Corporation, as modified by a no-action letter issued by the
staff of the Commission on May 27, 1994 to the Public Securities
Association (the “PSA”) as made applicable to other
issuers and underwriters by the Commission in response to the
request of the PSA and (ii) “structural term sheets”
and “collateral term sheets” as defined in the
no-action letter of February 17, 1995 issued by the Commission to
the PSA.
“ Default ” means any
event which results, or which with the giving of notice or the
lapse of time or both would result, in an Event of
Default.
“ Documents ” has the
meaning given such term in Section 2.01(j) of this Insurance
Agreement.
“ Event of Default ”
means any event of default specified in Section 5.01 of this
Insurance Agreement.
“ Financial Statements
” means the statements of financial condition of the Seller
as of December 31, 2004, the statements of operations,
stockholders’ equity and cash flows of the Seller for the
year ended December 31, 2004, and for the nine month periods
ended September 30, 2005 and 2004, and the notes
thereto.
“ Fitch ” means Fitch,
Inc., and any successor thereto.
“ Indemnification Agreement
” means the underwriter indemnification agreement, dated as
of November 1, 2005, by and among the Certificate Insurer and the
Underwriters.
“ Insurance Agreement
” has the meaning given such term in the initial paragraph
hereof.
“ Insured Certificateholder
” has the meaning given such term in the Certificate
Insurance Policy.
“ Insured Certificates
” means the Class A-F5 Certificates.
“ Investment Company Act
” means the Investment Company Act of 1940, including, unless
the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
“ Late Payment Rate ”
means the lesser of (a) the greater of (i) the per annum
rate of interest publicly announced from time to time by Citibank,
N.A. as its prime or base lending rate (any change in such rate of
interest to be effective on the date such change is announced by
Citibank, N.A.) plus 2.00%, and (ii) the then applicable
highest rate of interest on the Insured Certificates and
(b) the maximum rate permissible under applicable usury or
similar laws limiting interest rates as determined by the
Certificate Insurer. The Late Payment Rate shall be computed
on the basis of the actual number of days elapsed over a year of
360 days.
“ Material Adverse Change
” means, in respect of any Person, a material adverse change,
as determined by the Certificate Insurer, in (i) the ability
of such Person to perform its obligations under any of the
Operative Documents or (ii) the business, financial condition,
results of operations or properties of such Person.
References to a “Material Adverse Change” herein
which do not refer to a particular Person mean a Material Adverse
Change with regard to the Seller, the Depositor or the Trust
Fund.
“ Moody’s ”
means Moody’s Investors Service, Inc., and any successor
thereto.
“ Offering Documents ”
means the Prospectus, dated April 1, 2005, as supplemented by the
Prospectus Supplement, dated November 8, 2005 relating to the
offering of the Certificates, and shall be deemed to refer to and
include any documents incorporated into the related Registration
Statement by reference therein pursuant to Item 12 of Form S-3
under the Securities Act.
“ Operative Documents
” means this Insurance Agreement, the Certificates, the
Pooling and Servicing Agreement, the Purchase Agreement, the
Servicing Agreements, the Assignment Agreements, the BFPT II
Assignment Agreement, the Diligence Agreement and any other
agreements relating to the servicing of the Mortgage Loans, the Cap
Agreement and any amendment or supplement to any such
document.
“ Person ” means an
individual, joint stock company, trust, unincorporated association,
joint venture, corporation, business, real estate investment trust,
or owner trust, partnership or other organization or entity
(whether governmental or private).
“ Pooling and Servicing
Agreement ” has the meaning given such term in the
Preliminary Statement hereof.
“ Premium ” means the
premium payable in accordance with the Certificate Insurance Policy
which shall be an amount equal to 1/12th of the product of
(i) the Premium Percentage and (ii) the aggregate Class
Certificate Balance of the Insured Certificates on each
Distribution Date (prior to giving effect to any distributions of
principal to be made on such Distribution Date).
“ Premium Percentage ”
shall mean with respect to the Insured Certificates, 0.12% per
annum.
“ Rating Agencies ”
shall mean collectively Moody’s, S&P and
Fitch.
“ Registration Statement
” means the Depositor’s registration statement on Form
S-3, including a prospectus, relating to the Certificates,
including any information included therein by reference.
“ Revolving Trust Seller
” means Bayview Financial Property Trust II.
“ S&P ” means
Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., and any successor thereto.
“ Securities Act ”
means the Securities Act of 1933, including, unless the context
otherwise requires, the rules and regulations thereunder, as
amended from time to time.
“ Securities Exchange Act
” means the Securities Exchange Act of 1934, including,
unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
“ Transaction ” means
the transactions contemplated by the Operative Documents, including
the transactions described in the Offering Documents.
“ Trust ” means
Bayview Financial Mortgage Pass-Through Trust 2005-D, a New York
common law trust created pursuant to the Pooling and Servicing
Agreement.
“ Trustee ” means
Wachovia Bank, National Association, a national banking
association, as Trustee under the Pooling and Servicing Agreement,
and any successor thereto under the Pooling and Servicing
Agreement.
“ Underwriters ” means
Lehman Brothers Inc., Citigroup Global Markets Inc. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated.
“ Underwriter Information
” has the meaning given such term in the Indemnification
Agreement.
“ Underwriting Agreement
” means the underwriting agreement, dated as of November 1,
2005, among the Underwriters and the Depositor.
Section 1.02
Other Definitional Provisions.
The words “hereof,”
“herein” and “hereunder” and words of
similar import when used in this Insurance Agreement shall refer to
this Insurance Agreement as a whole and not to any particular
provision of this Insurance Agreement, and Section, subsection,
Schedule and Exhibit references are to this Insurance Agreement
unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and
plural forms of such terms. The words “include”
and “including” shall be deemed to be followed by the
phrase “without limitation.”
ARTICLE
II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.01
Representations and Warranties of the
Seller and the Depositor.
Each of the Seller and the Depositor
represents and warrants to the Certificate Insurer as of the
Closing Date, as follows:
(a)
Due Organization and
Qualification . The
Seller is a Delaware limited partnership and the Depositor is a
Delaware limited liability company, and each is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its formation. Each of the Seller and the
Depositor is duly qualified to do business, is in good standing and
has obtained all necessary consents, licenses, permits, charters,
registrations and approvals (together, “approvals”)
necessary for the conduct of its business as currently conducted
and as described in the Offering Documents and the performance of
its obligations under the Operative Documents to which it is a
party in each jurisdiction in which the failure to be so qualified
or to obtain such approvals would render any Operative Document to
which it is a party unenforceable in any material respect or would
have a material adverse effect upon the Transaction.
(b)
Power and Authority
. Each of the Seller and the
Depositor has all necessary corporate or other power and authority
to conduct its business as currently conducted and as described in
the Offering Documents, to execute and deliver, and to perform its
obligations under, the Operative Documents to which it is a party
and to consummate the Transaction.
(c)
Due Authorization
. The execution, delivery and
performance of the Operative Documents to which it is a party by
each of the Seller and the Depositor have been duly authorized by
all necessary corporate or other action and does not require any
additional approvals or consents, or other action by or any notice
to or filing with any Person, including any governmental entity or
any of the partners or members or other owners of the Seller or the
Depositor, which have not previously been obtained or given by the
Seller or the Depositor.
(d)
Noncontravention
. The execution and delivery by
each of the Seller and the Depositor of the Operative Documents to
which it is a party, the consummation of the Transaction and the
satisfaction of the terms and conditions of the Operative Documents
do not and will not:
(i)
conflict with or result in any breach or
violation of any provision of the applicable organizational
documents of the Seller or the Depositor or any law, rule,
regulation, order, writ, judgment, injunction, decree,
determination or award currently in effect having applicability to
the Seller or the Depositor or any of their respective material
properties, including regulations issued by any administrative
agency or other governmental authority having supervisory powers
over the Seller or the Depositor, which conflict, breach or are in
violation which reasonably could be expected to result in a
Material Adverse Change;
(ii)
constitute a default by the Seller or the
Depositor under, result in the acceleration of any obligation
under, or breach any provision of any loan agreement, mortgage,
indenture or other agreement or instrument to which the Seller or
the Depositor is a party or by which any of their respective
properties is or may be bound or affected, which default,
acceleration or breach reasonably could be expected to result in a
Material Adverse Change; or
(iii)
result in or require the creation of any
lien upon or in respect of any assets of the Seller or the
Depositor, which lien reasonably could be expected to result in a
Material Adverse Change, except as otherwise contemplated by the
Operative Documents.
(e)
Legal Proceedings
. There is no action, proceeding or
investigation by or before any court, governmental or
administrative agency or arbitrator against or affecting the Seller
or the Depositor or any of their respective subsidiaries, any
properties or rights of the Seller, the Depositor or the Trust or
any of their respective subsidiaries or any of the Mortgage Loans
pending or, to the knowledge of the Seller or the Depositor after
reasonable inquiry, threatened, which, in any case, if decided
adversely to the Seller or the Depositor or any such subsidiary
could result in a Material Adverse Change.
(f)
Valid and Binding
Obligations . The
Operative Documents (other than the Certificates), when executed
and delivered by the Seller, the Depositor and the other parties
thereto, will constitute the legal, valid and binding obligations
of the Seller and the Depositor, as applicable, enforceable in
accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
creditors’ rights generally and general equitable principles
and public policy considerations as to rights of indemnification
for violations of federal securities laws. The Certificates,
when executed, authenticated and delivered in accordance with the
Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits of the Pooling and
Servicing Agreement. Each of the Seller and the Depositor
will not at any time in the future deny that the Operative
Documents to which it is a party constitute the legal, valid and
binding obligations of the Seller and the Depositor, as
applicable.
(g)
Financial Information
. The Financial Statements of the
Seller, copies of which have been furnished to the Certificate
Insurer, (i) are, as of the dates and for the periods referred
to therein, complete and correct in all material respects,
(ii) present fairly the financial condition and results of
operations of the Seller as of the dates and for the periods
indicated and (iii) have been prepared in accordance with
generally accepted accounting principles consistently applied,
except as noted therein (subject as to interim statements to normal
year-end adjustments). Since the date indicated in the
financial information provided to the Certificate Insurer, there
has been no Material Adverse Change in respect of the Seller or the
Depositor. Neither the Seller nor the Depositor is subject to
any contingent liabilities or commitments that, individually or in
the aggregate, have a material possibility of causing a Material
Adverse Change in respect of the Seller or the
Depositor.
(h)
Compliance With Law, Regulations,
Etc . Except as
previously disclosed in writing to the Certificate Insurer or in
the Offering Documents, neither the Seller nor the Depositor has
notice or any reason to believe that any practice, procedure or
policy employed by the Seller or the Depositor in the conduct of
its business violates, any law, regulation, judgment or agreement
applicable to the Seller or the Depositor which, if enforced, would
have a material adverse effect on the ability of the Seller or the
Depositor to perform its obligations under the Operative
Documents.
(i)
Taxes . Each of the Seller and the Depositor has
filed prior to the date hereof all federal and state tax returns
that are required to be filed and has paid all taxes, including any
assessments received by it that are not being contested in good
faith, to the extent that such taxes have become due, except with
respect to any failures to file or pay that, individually or in the
aggregate, would not result in a Material Adverse Change with
respect to the Seller or the Depositor. Any taxes, fees and
other governmental charges payable by or prior to the Closing Date
by the Seller, the Depositor or the Trust in connection with the
Transaction, the execution and delivery of the Operative Documents
and the issuance of the Certificates have been paid or shall have
been paid on or prior to the Closing Date.
(j)
Accuracy of Information
. Neither the Operative Documents,
the Offering Documents (excluding the Underwriter Information and
the Certificate Insurer Information) nor other material information
relating to the Mortgage Loans or the operations of the Seller or
the Depositor as amended, supplemented or superseded, furnished to
the Certificate Insurer in writing or in electronic form by the
Seller or the Depositor in connection with the Transaction,
including, without limitation, the electronic tape containing
statistical data with respect to the Mortgage Loans (collectively,
the “ Documents ”), contains any statement of a
material fact which was untrue or misleading in any material
respect when made. Neither the Seller nor the Depositor has
any knowledge of any circumstances that could reasonably be
expected to cause the Documents to include a statement of material
fact which is untrue or misleading or could reasonably be expected
to cause a Material Adverse Change with respect to the Seller, or
the Depositor. Since the furnishing of the Operative
Documents, there has been no change nor any development or event
involving a prospective change known to the Seller or the Depositor
that would render any of the Documents untrue or misleading in any
material respect.
(k)
Compliance With Securities
Laws . The offer and
sale of the Certificates complies in all material respects with all
requirements of law, including all registration requirements of
applicable securities laws. Without limiting the foregoing,
the Offering Documents (excluding the Underwriter Information and
the Certificate Insurer Information) do not contain any untrue
statement of a material fact and does not omit to state a material
fact necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading;
provided, however , that no representation is made with
respect to the Underwriter Information or Certificate Insurer
Information. The offer and sale of the Certificates has not
been and will not be in violation of the Securities Act or any
other federal or state securities laws. The Seller and the
Depositor shall satisfy in all material respects any of the
information reporting requirements of the Securities Act arising
out of the Transaction to which they or the Seller or the Depositor
are subject.
(l)
Operative Documents
. Each of the representations and
warranties of the Seller or the Depositor contained in the
applicable Operative Documents is true and correct in all material
respects when made and each of the Seller and the Depositor hereby
makes each such representation and warranty to, and for the benefit
of, the Certificate Insurer as if the same were set forth in full
herein.
(m)
Solvency; Fraudulent
Conveyance . Each of the
Seller and the Depositor and is solvent and will not be
rendered insolvent by the Transaction, is adequately capitalized in
light of its anticipated business activities and, after giving
effect to the Transaction, none of the Seller or the Depositor will
be left with an unreasonably small amount of capital with which to
engage in the ordinary course of its business, and neither the
Depositor nor the Seller intends to incur, nor does the Depositor
or the Seller believe that it has incurred, debts beyond its
ability to pay as they mature. Neither the Seller nor the
Depositor contemplates the commencement of insolvency, liquidation
or consolidation proceedings or the appointment of a receiver,
liquidator, conservator, trustee or similar official in respect of
the Depositor or the Seller or any of their respective assets.
The amount of consideration being received by the Seller upon
the sale of the Mortgage Loans to the Depositor constitutes
reasonably equivalent value and fair consideration for the Mortgage
Loans. The amount of consideration being received by the
Depositor upon the sale of the Certificates constitutes reasonably
equivalent value and fair consideration for the Certificates.
The Seller is not transferring the Mortgage Loans to the
Depositor, the Depositor is not transferring the Mortgage
Loans to Trust nor is the Depositor selling the Certificates, as
provided in the Operative Documents, with any intent to hinder,
delay or defraud any of the creditors of the Seller, the Depositor,
or their respective creditors.
(n)
Mortgage Loan
Representations . The
Seller hereby makes the representations and warranties set forth in
the Purchase Agreement with respect to each Mortgage Loan to the
Certificate Insurer as of the Closing Date.
Section 2.02
Affirmative Covenants of the Seller and
the Depositor.
Each of the Seller and the Depositor
hereby agrees that during the term of this Insurance Agreement,
unless the Certificate Insurer shall otherwise expressly consent in
writing:
(a)
Compliance With Agreements and Applicable Laws .
Each of the Seller and the Depositor shall comply in all
material respects with the terms and conditions of and perform its
obligations under the Operative Documents to which it is a party in
all cases in which failure to so comply or perform would result in
a default thereunder and shall comply with all requirements of any
law, rule or regulation applicable to it in all circumstances where
non-compliance reasonably could be expected to result in a Material
Adverse Change.
(b)
Existence . Each of the Seller and the Depositor and
their respective successors and assigns shall maintain their
existence as a legal entity and shall at all times continue to be
duly organized under the laws of their respective jurisdictions of
incorporation or organization and duly qualified and duly
authorized (as described in subsections 2.01(a), (b) and
(c) hereof) and shall conduct its business in accordance with the
terms of its applicable organizational documents and shall observe
all the formalities necessary to preserve its existence as a legal
entity under the laws of the jurisdiction of its formation,
including, as applicable, (i) the obligation to hold annual
meetings of its partners members or beneficial owners, if required
by applicable law, and (ii) the obligation to prepare and file
annual income, franchise and other tax returns.
(c)
Financial Statements;
Accountants’ Reports; Other Information
. Each of the Seller and the
Depositor shall keep or cause to be kept in reasonable detail books
and records of account of its assets and business, including books
and records relating to the Transaction, and shall clearly reflect
therein the transfer of the Mortgage Loans to the Depositor and
then to the Trust as a sale of the Seller’s and the
Depositor’s, as the case may be, interest therein. Upon
request, the Seller shall furnish or cause to be furnished to the
Certificate Insurer the audited consolidated statements of
financial condition of Seller and its subsidiaries as of the end of
such fiscal year and the related audited consolidated statements of
operations, stockholders’ equity and cash flows for such
fiscal year, all in reasonable detail and stating in comparative
form the respective figures for the corresponding date and period
in the preceding fiscal year, prepared in accordance with generally
accepted accounting principles, consistently applied, and
accompanied by the audit opinion of Seller’s independent
accountants (which shall be a nationally recognized independent
public accounting firm or otherwise acceptable to the Certificate
Insurer).
(d)
Closing Documents; Post Closing
Matters . Each of the
Seller and the Depositor shall cause to be delivered within 90 days
of the Closing Date two closing sets to the Certificate Insurer and
one closing set to its counsel, which closing sets shall include
execution copies of each of the Operative Documents other than the
Certificates. All closing conditions contained herein and in
any Operative Document which are temporarily waived pursuant to a
written letter, if any, signed by the Certificate Insurer shall be
satisfied within the period set forth in such letter or if no date
is specified in such letter, within 30 days from the Closing Date.
No closing condition may be waived except pursuant to a
written letter signed by the Certificate Insurer.
(e)
Access to Records; Discussions with
Officers and Accountants .
On an annual basis, or if the Certificate Insurer reasonably
believes that a Material Adverse Change may have occurred, the
Seller and the Depositor shall, upon the reasonable request of the
Certificate Insurer, permit the Certificate Insurer or its
authorized agents, or cause the Certificate Insurer or its
authorized agents to be permitted to inspect the books and records
of the Seller, the Depositor as they may relate to the Insured
Certificates, the obligations of the Seller and the Depositor under
the Operative Documents to which it is a party and the Transaction
(including, without limitation, access to information reasonably
required for purposes of complying with FASB Financial
Interpretation Number 46; provided that the Certificate
Insurer will maintain confidentiality with respect to such
information in accordance with its internal policies).
Such inspections and discussions shall be
conducted during normal business hours and shall not unreasonably
disrupt the business of the Seller or the Depositor. The
books and records of the Seller and the Depositor shall be
maintained at the address of the Seller designated herein for
receipt of notices, unless the Seller shall otherwise advise the
parties hereto in writing.
(f)
Notice of Material Events
. The Seller and the Depositor
shall be obligated (which obligation shall be satisfied as to each
if performed by the Seller or the Depositor) promptly to inform the
Certificate Insurer in writing of the occurrence of any of the
following:
(i)
the submission of any claim or the
initiation or threat of any legal process, litigation or
administrative or judicial investigation, or rule making or
disciplinary proceeding by or against the Seller, the Depositor or
the Trust that (A) would be required to be disclosed to the
Commission if the Certificates were publicly registered or to the
Seller’s members that relates to the Mortgage Loans, the
Transaction or the Seller’s or the Depositor’s ability
to perform its obligations under any Operative Documents or (B)
could result in a Material Adverse Change, or the initiation of any
proceeding or the promulgation of any proposed or final rule which
would likely result in a Material Adverse Change;
(ii)
any change in the organizational
jurisdictions of the Seller or the Depositor;
(iii)
the occurrence of any Default or Event of
Default or any Material Adverse Change with respect to the Seller
or the Depositor;
(iv)
the commencement of any proceedings by or
against the Seller or the Depositor under any applicable
bankruptcy, reorganization, liquidation, rehabilitation, insolvency
or other similar law now or hereafter in effect or of any
proceeding in which a receiver, liquidator, conservator, trustee or
similar official shall have been, or may be, appointed or requested
for the Seller, the Depositor or any of their respective assets;
or
(v)
the receipt of notice that (A) the Seller
or the Depositor is being placed under regulatory supervision, (B)
any license, permit, charter, registration or approval materially
necessary for the conduct of the Seller’s or the
Depositor’s business is to be, or may be, suspended or
revoked or (C) the Seller or the Depositor is to cease and
desist any practice, procedure or policy employed by the Seller or
the Depositor in the conduct of their respective business, and such
suspension, revocation or cessation may reasonably be expected to
result in a Material Adverse Change.
(g)
Further Assurances.
Each of the Seller and the
Depositor shall, upon the reasonable request of the Certificate
Insurer, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, within ten days
of such request, such amendments hereto and such further
instruments and take such further action as may be reasonably
necessary to effectuate the intention, performance and provisions
of the Operative Documents, and the Trustee shall cause the Trust
to do the same.
(h)
Maintenance of Licenses.
Each of the Seller and the
Depositor, and any successors thereof, has and shall maintain all
licenses, permits, charters and registrations the loss or
suspension of which, or the failure to hold which, could reasonably
be expected to result in a Material Adverse Change.
(i)
Retirement of Certificates
. The Depositor shall instruct the
Trustee, upon a retirement or other payment of all of the
Certificates, to surrender the Certificate Insurance Policy to the
Certificate Insurer for cancellation.
(j)
Rating Agencies
. Each of the Seller and the
Depositor, and any successors thereof, will cooperate with S&P,
Fitch and Moody’s in connection with any review of the
Transaction that may be undertaken by S&P, Fitch and
Moody’s after the date hereof.
(k)
Third-Party Beneficiary
. Each of the Seller and the
Depositor agrees that the Certificate Insurer shall have all rights
provided to the Certificate Insurer in the Operative Documents and
that the Certificate Insurer shall constitute a third-party
beneficiary with respect to such rights in respect of the Operative
Documents and hereby incorporates and restates its representations,
warranties and covenants as set forth therein for the benefit of
the Certificate Insurer.
(l)
Special Covenant of the
Seller . The Seller
shall cause each of the Revolving Trust Seller and the Depositor to
perform all of their respective obligations under each of the
Operative Documents to which they are a party.
(m)
Disclosure Document
. Each Offering Document delivered
with respect to the Certificates that refers to the Certificate
Insurance Policy issued by the Certificate Insurer shall clearly
disclose that the Certificate Insurance Policy is not covered by
the property/casualty insurance certificate fund specified in
Article 76 of the New York Insurance Law (or any successor
provision thereto).
(n)
Collection Account . Monies on
deposit in the Collection Account shall be invested in Permitted
Investments maturing as provided in the Pooling and Servicing
Agreement.
Section 2.03
Negative Covenants of the Seller and the
Depositor.
Each of the Seller and the Depositor
hereby agrees that during the term of this Insurance Agreement,
unless the Certificate Insurer shall otherwise expressly consent in
writing:
(a)
Impairment of Rights
. Neither the Seller nor the
Depositor shall take any action, or fail to take any action, if
such action or failure to take action may result in a material
adverse change as described in clause (i) of the definition of
Material Adverse Change, nor interfere in any material respect with
the enforcement of any rights of the Certificate Insurer under or
with respect to any of the Operative Documents. The Seller
and the Depositor shall give the Certificate Insurer written
notice when any event, action or, to the knowledge of the Seller or
the Depositor, omission to act, may result in a material adverse
change as described in cause (i) of the definition of Material
Adverse Change, on the earlier of: (i) the date upon
which any publicly available filing or release is made with respect
to such event, action or omission to act and (ii) promptly
prior to the date of occurrence of such event, action or failure to
act. Each of the Seller and the Depositor shall furnish to
the Certificate Insurer all information reasonably requested by it
that is necessary to determine compliance with this
paragraph.
(b)
Waiver, Amendments, Etc .
Except as provided in and in accordance with the Operative
Documents, neither the Seller nor the Depositor shall modify, waive
or amend, or consent to any modification, waiver or amendment of,
any of the terms, provisions or conditions of the Operative
Documents to which it is a party (other than any amendment to the
Offering Documents required by law) without the prior written
consent of the Certificate Insurer thereto, which consent shall not
be unreasonably withheld, conditioned or delayed.
Section 2.04
Representations, Warranties and Covenants
of the Certificate Insurer.
The Certificate Insurer represents,
warrants and covenants to the Seller and the Depositor as
follows:
(a)
Organization and Licensing
. The Certificate Insurer is a duly
organized, validly existing and in good standing New York stock
insurance company duly qualified to conduct an insurance business
in the State of New York.
(b)
Corporate Power
. The Certificate Insurer has the
corporate power and authority to issue the Certificate Insurance
Policy and execute and deliver this Insurance Agreement and to
perform all of its obligations hereunder and thereunder.
(c)
Authorization; Approvals.
Proceedings legally required for
the issuance and execution of the Certificate Insurance Policy and
the execution, delivery and performance of this Insurance Agreement
have been taken and licenses, orders, consents or other
authorizations or approvals of any governmental boards or bodies
legally required for the enforceability of the Certificate
Insurance Policy and the conduct by the Certificate Insurer of the
business and activities contemplated by the Transaction have been
obtained; any proceedings not taken and any licenses,
authorizations or approv
