MORTGAGE LOAN DILIGENCE
AGREEMENT
(BAYVIEW FINANCIAL REVOLVING ASSET
TRUST 2003-G,
BAYVIEW FINANCIAL REVOLVING ASSET
TRUST 2005-A and
BAYVIEW FINANCIAL REVOLVING ASSET
TRUST 2005-E)
This Mortgage Loan Diligence Agreement, dated
November 1, 2006 (this “Agreement”), is entered into by
and between Bayview Financial, L.P., a Delaware limited partnership
(“Bayview” or the “Agent”), and Bayview
Financial Securities Company, LLC, a Delaware limited liability
company (the “Depositor”).
WITNESSETH:
WHEREAS, the Depositor will acquire certain
mortgage loans identified on Schedule I hereto (the “Mortgage
Loans”) pursuant to an assignment agreement dated as of
November 1, 2006, by and between Bayview Financial Property Trust
II, as assignor, and the Depositor, as assignee;
WHEREAS, the Depositor intends to transfer the
Mortgage Loans in a securitization transaction pursuant to a
pooling and servicing agreement dated as of November 1, 2006 (the
“Pooling and Servicing Agreement”), among the
Depositor, Wells Fargo Bank, N.A., as master servicer, and U.S.
Bank National Association, as trustee (the “Trustee”),
and in connection with such sale will assign its rights under this
Agreement to the Trustee;
WHEREAS, the Agent, by and through its officers,
employees, agents, representatives and affiliates, has specialized
expertise in conducting diligence reviews of pools of mortgage
loans;
WHEREAS, the Depositor desires to avail itself,
for the term of this Agreement, of the expertise of the Agent in
such area, by retaining the Agent to undertake a review of the
Mortgage Loans in order to determine compliance with certain of the
applicable representations and warranties and requirements for
delivery of documents;
WHEREAS, the Agent is prepared to provide
certain services for the benefit of the Depositor in the manner and
on the terms set forth herein, including undertaking such review as
it deems appropriate to ascertain the accuracy of the substance of
certain representations and warranties; and
WHEREAS, the Agent will be obligated, as
provided herein, to purchase any defective Mortgage Loan tendered
by the Trustee for purchase for a price generally equal to the
unpaid principal balance thereof, plus accrued interest thereon,
plus the amount of any costs and damages incurred by the Trust Fund
as a result of any related violation of a predatory or abusive
lending law, plus any additional amounts specified in the Pooling
and Servicing Agreement;
NOW, THEREFORE, in consideration of the mutual
covenants contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Definitions . Capitalized terms used but not otherwise
defined in this Agreement shall have the meanings set forth in the
mortgage loan purchase agreement dated as of November 1, 2006 (the
“Mortgage Loan Purchase Agreement”), between Bayview,
as seller, and the Depositor, as purchaser, or if not defined
therein, as defined in the Pooling and Servicing
Agreement.
2. Appointment . The Depositor hereby appoints the Agent as the
Depositor's agent to render the diligence services described in
Section 3 hereof.
3. Diligence Services . The Agent shall undertake on behalf of the
Depositor such review as it determines is appropriate in its
reasonable judgment to ascertain, based upon a limited sample of
the Mortgage Loans or otherwise, (a) the accuracy of the substance
of the representations and warranties set forth in Subsections
6(a)-(z), (aa)-(kk) and (mm)-(nn) of the Mortgage Loan Purchase
Agreement; provided, however , that any such
representation and warranty made to the knowledge of the
“Seller” under the Mortgage Loan Purchase Agreement
shall be deemed to be made to the Agent’s knowledge, and (b)
the completeness of the Mortgage File, including the absence of any
material defect in the documents comprising such Mortgage File and
the delivery of each document required to be delivered as part of
such Mortgage File, each as provided in Section 4(b) of the
Mortgage Loan Purchase Agreement (the obligations set forth in (a)
and (b) above, the “Covered Obligations”). Any
out-of-pocket expenses incurred by the Agent in the course of such
review shall be paid by the Agent from its own funds.
The Depositor shall cooperate with the Agent to
facilitate the prompt performance by the Agent of its obligations
under this Section 3. The Agent may provide such services as
required by this Section 3 directly or may assign such duties to
one or more subagents pursuant to submanagement agreements;
provided, however , that any such subagent shall have been
approved by the Depositor; and provided, further, that
notwithstanding any such assignment, the Agent shall remain
primarily liable for performing its duties and obligations under
this Agreement.
4. Warranty of Performance . Within 90 days of receipt of notice by the
Agent of a breach of any Covered Obligation that materially and
adversely affects the value of any Mortgage Loan or the interest
therein of the Depositor or the Depositor’s assignee,
transferee or designee, the Agent promptly shall cure such defect
or breach in all material respects, or in the event such defect or
breach cannot be cured, the Agent shall either (i) repurchase the
affected Mortgage Loan at the Purchase Price (as such term is
defined in the Pooling and Servicing Agreement) or (ii) subject to
the approval of the Depositor or the Depositor’s assignee,
transferee or designee, cause the removal of such Mortgage Loan
from the Trust Fund and substitute one or more Qualified Substitute
Mortgage Loans. Notwithstanding the preceding sentence, if a breach
of representation or warranty cannot reasonably be cured within 90
days after written notice thereof, and the Agent shall have
commenced to cure such breach within such 90 day period and
thereafter diligently and expeditiously proceeds to cure the same,
such 90 day period shall be extended for so long as it shall
require the Agent in the exercise of due diligence to cure such
breach, it being agreed that no such extension shall be for a
period in excess of the lesser of 90 days or the period of time
during which the seller or the depositor is required to cure a
defect or breach or repurchase an affected Mortgage Loan pursuant
to any sale and/or securitization agreement or arrangement it may
enter into. The Agent shall indemnify the Trustee and the Trust
Fund for the amount of any costs and damages incurred by the Trust
Fund as a result of any violation of any predatory or abusive
lending law arising from or in connection with the origination of
such affected Mortgage Loan, to the extent that such costs or
damages are not covered by the applicable Purchase Price and result
in a reduction of amounts distributable on the
Certificates.
5. Agent Compensation . As compensation for its services, the Agent
will be entitled to payment of a fee equal to $75,000.
6. Limitation of Responsibility of the
Agent . The Agent shall
have no responsibility under this Agreement other than to render
the services called for hereunder and fulfill its obligations
hereunder. The Agent, its affiliates, directors, officers and
employees shall not be liable in any respect other than to the
extent of the remedies provided in this Agreement to the Depositor,
the Trustee, the Certificateholders or others, except by reason of
acts constituting bad faith, willful misfeasance or negligence in
the discharge of their duties.
7. Additional Obligations of
Agent . Unless otherwise specifically required by any provision
of the Pooling and Servicing Agreement or this Agreement or by
applicable law, the Agent shall use all reasonable efforts to
ensure that no action is taken by it would materially adversely
affect the Depositor for purposes of United States federal or state
law or any other law known to the Agent to be applicable to the
Depositor. The Agent covenants that it shall comply in all material
respects with all laws and regulations applicable to it in
connection with the performance of its duties under this
Agreement.
8. No Partnership or Joint Venture
. The Depositor and the Agent are not partners or joint venturers
with each other and nothing herein shall be construed to make them
such partners or joint venturers or impose any liability as such on
either of them. The Agent shall be, for all purposes herein, deemed
to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Depositor from time
to time, h
