STRUCTURED ASSET SECURITIES
CORPORATION,
as Purchaser,
and
FIELDSTONE INVESTMENT
CORPORATION,
as Seller,
______________________________________________
MORTGAGE LOAN PURCHASE
AGREEMENT
Dated as of February 1, 2005
______________________________________________
Adjustable Rate Mortgage Loans
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1.
Definitions
1
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
SECTION 2.1.
Sale of Mortgage
Loans
1
SECTION 2.2.
Obligations of Seller
Upon Sale
2
SECTION 2.3.
Payment of Purchase
Price for the Mortgage Loans
2
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
SECTION 3.1.
Seller Representations
and Warranties
3
SECTION 3.2.
Seller Representations
and Warranties Relating to the Mortgage Loans
5
SECTION 3.3.
Remedies for
Breach
17
ARTICLE IV
SELLER’S COVENANTS
SECTION 4.1.
Covenants of the
Seller
18
ARTICLE V
SERVICING
SECTION 5.1.
Servicing
18
ARTICLE VI
INDEMNIFICATION BY THE SELLER WITH RESPECT TO THE MORTGAGE
LOANS
SECTION 6.1.
Indemnification.
18
ARTICLE VII
TERMINATION
SECTION 7.1.
Termination
19
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 8.1.
Amendment
19
SECTION 8.2.
Governing Law
19
SECTION 8.3.
Notices
19
SECTION 8.4.
Severability of
Provisions
19
SECTION 8.5.
Counterparts
20
SECTION 8.6.
Further
Agreements
20
SECTION 8.7.
Intention of the
Parties
21
SECTION 8.8.
Successors and Assigns:
Assignment of Purchase Agreement
21
SECTION 8.9.
Survival
21
SECTION 8.10.
Third Party
Beneficiaries
22
MORTGAGE LOAN PURCHASE AGREEMENT (the
“Agreement”), dated as of February 1, 2005, between
FIELDSTONE INVESTMENT CORPORATION (the “Seller”) and
STRUCTURED ASSET SECURITIES CORPORATION (the
“Purchaser”).
W I T N E S S E T
H
WHEREAS, the Seller is the owner
of the notes or other evidence of indebtedness (the
“Mortgage Notes”) so indicated on Schedule I
hereto referred to below, and Related Documents (as defined below)
(collectively, the “Mortgage Loans”);
WHEREAS, the Seller as of the date hereof
owns the mortgages (the “Mortgages”) on the properties
(the “Mortgaged Properties”) securing such Mortgage
Loans, including rights to (a) any property acquired by
foreclosure or deed in lieu of foreclosure or otherwise and
(b) the proceeds of any insurance policies covering the
Mortgage Loans or the Mortgaged Properties or the obligors on the
Mortgage Loans;
WHEREAS, the parties hereto desire that
the Seller sell the Mortgage Loans to the Purchaser pursuant to the
terms of this Agreement;
WHEREAS, the Purchaser will assign to
Fieldstone Mortgage Investment Trust, Series 2005-1 (the
“Trust” or the “Issuer”) all of the
Purchaser’s rights against the Seller pursuant to this
Agreement as described herein pursuant to the terms of a Transfer
and Servicing Agreement dated as of February 1, 2005 (the
“Transfer and Servicing Agreement”) among the
Purchaser, as depositor, the Trust, Wells Fargo Bank, N.A., as
master servicer and trust administrator (the “Trust
Administrator”), HSBC Bank USA, as indenture trustee,
Fieldstone Servicing Corp., as servicer, the Seller, and Chase Home
Finance LLC, as subservicer; and
WHEREAS, the Trust will pledge to the
Indenture Trustee all of its rights against the Seller pursuant to
this Agreement and the Transfer and Servicing Agreement as
described herein and therein, respectively, pursuant to the terms
of an Indenture dated as of February 1, 2005 (the
“Indenture”) among the Trust, the Trust Administrator
and the Indenture Trustee.
NOW, THEREFORE, in consideration of the
mutual covenants herein contained, the parties hereto agree as
follows:
ARTICLE
I
DEFINITIONS
SECTION
1.1.
Definitions .
All capitalized terms used but not defined herein shall have
the meanings assigned thereto in the Transfer and Servicing
Agreement.
ARTICLE
II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE
PRICE
SECTION
2.1.
Sale of
Mortgage Loans . The
Seller, concurrently with the execution and delivery of this
Agreement, does hereby sell, assign, set over, and otherwise convey
to the Purchaser, without recourse, all of its right, title and
interest in (other than any servicing rights relating to the
Mortgage Loans), to and under the following, whether now existing
or hereafter acquired and wherever located: (i) the Mortgage
Loans, including the related Cut-off Date Balance, all payments in
respect of the Mortgage Loans received after the Cut-off Date
(exclusive of payments in respect of principal and interest on the
delinquent Mortgage Loans due prior to the Cut-off Date and
received thereafter); (ii) property which secured a Mortgage
Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iii) the interest of the Seller in any insurance
policies in respect of the Mortgage Loans; (iv) all rights
under any guaranty and/or additional security agreement executed in
connection with a Mortgage Loan; and (v) all proceeds of the
foregoing.
SECTION
2.2.
Obligations of Seller Upon Sale
. In connection with any transfer
pursuant to Section 2.1 hereof, the Seller further agrees, at its
own expense, on or prior to the Closing Date, (a) to indicate
in its books and records, other than for accounting and federal
income tax purposes, that the Mortgage Loans have been sold to the
Owner Trustee, as assignee of the Purchaser pursuant to this
Agreement and (b) to deliver to the Purchaser a computer file
containing a true and complete list of all such Mortgage Loans
specifying for each such Mortgage Loan, as of the related Cut-off
Date, (i) its account number and (ii) the Cut-off Date
Balance. Such file shall also be marked as Schedule I to this
Agreement and is hereby incorporated into and made a part of this
Agreement.
In connection with any conveyance by the
Seller, the Seller shall on behalf of the Purchaser and the Issuer
deliver to, and deposit with the Custodian, as custodian on behalf
of the Indenture Trustee, as assignee of the Purchaser, on or
before the Closing Date (except as noted below) the documents or
instruments with respect to each Mortgage Loan (collectively, the
“Mortgage File” or, other than the Mortgage Note, the
“Related Documents”) listed in Section 2.01(b) of the
Transfer and Servicing Agreement.
The parties hereto intend that the
transaction set forth herein be a sale for all purposes other than
accounting and federal income tax purposes by the Seller to the
Purchaser of all the Seller’s right, title and interest in
and to the Mortgage Loans and other property described above.
In the event the transaction set forth herein is deemed not
to be a sale, the Seller hereby grants to the Purchaser a security
interest in all of the Seller’s right, title and interest in,
to and under the Mortgage Loans and the Related Documents and other
property described above, whether now existing or hereafter
created, to secure all of the Seller’s obligations hereunder;
and this Agreement shall constitute a security agreement under
applicable law. The parties hereto intend that for federal
income tax purposes the transaction set forth herein be treated not
as a sale, but as though the Seller retained the tax ownership of
the Mortgage Loans through the Trust as a disregarded entity with
the Seller as the borrower under the Notes.
SECTION
2.3.
Payment of
Purchase Price for the Mortgage Loans . In consideration of the sale of the
Mortgage Loans from the Seller to the Purchaser and the payment of
the Expense Reimbursement Amount (as defined below) on the Closing
Date, and in consideration of the deposit of the Initial Deposit
(as defined in the Transfer and Servicing Agreement) made by the
Seller as provided in the Transfer and Servicing Agreement, the
Purchaser agrees on the Closing Date (i) to pay to the Seller by
transfer of immediately available funds, an amount equal to
$726,803,437.50, (ii) to deliver to the Seller the Class A-IO and
Class M10 Notes ((i) and (ii) together, the “Purchase
Price”) and (iii) to transfer to the Seller or one of its
Affiliates on the Closing Date the Ownership Certificate. The
Seller shall reimburse the Purchaser for, among other things, the
current Securities and Exchange Commission registration statement
fees for the amount of registered securities issued on the Closing
Date. The Seller shall pay, and be billed directly for, all
expenses incurred by the Purchaser in connection with the issuance
of the Notes, including, without limitation, printing fees incurred
in connection with the prospectus relating to the Notes, blue sky
registration fees and expenses, fees and expenses of McKee Nelson
LLP, fees of the rating agencies requested to rate the Notes,
accountant’s fees and expenses, Custodian fees, loan level
due diligence fees, the fees and expenses of the Indenture Trustee
and the Owner Trustee and other out-of-pocket costs, if any.
ARTICLE
III
REPRESENTATIONS AND WARRANTIES;
REMEDIES FOR BREACH
SECTION
3.1.
Seller
Representations and Warranties . The Seller represents and warrants to the
Purchaser as of the Closing Date that:
(i)
the Seller is a Maryland corporation,
duly organized validly existing and in good standing under the laws
of the State of Maryland, and has the corporate power to own its
assets and to transact the business in which it is currently
engaged. The Seller is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in
which the character of the business transacted by it or any
properties owned or leased by it requires such qualification and in
which the failure so to qualify would have a material adverse
effect on the business, properties, assets, or condition (financial
or other) of the Seller;
(ii)
the Seller has the corporate power and
authority to make, execute, deliver and perform this Agreement and
all of the transactions contemplated under the Agreement, including
the power, authority and capacity to hold and sell each Mortgage
Loan, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal,
valid and binding obligation of the Seller enforceable in
accordance with its terms, except as enforcement of such terms may
be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally and by the
availability of equitable remedies;
(iii)
the Seller is not required to obtain the
consent of any other party or any consent, license, approval or
authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of
this Agreement, except for such consent, license, approval or
authorization, or registration or declaration, as shall have been
obtained or filed, as the case may be, prior to the Closing
Date;
(iv)
it is not in violation of, and the
execution, delivery and performance of this Agreement by the Seller
will not violate, any provision of any existing law or regulation
or any order or decree of any court or any order or decree of any
federal, state or municipal governmental agency applicable to the
Seller or any provision of the articles of incorporation or bylaws
of the Seller, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Seller is a
party or by which the Seller may be bound;
(v)
no litigation or administrative
proceeding of or before any court, tribunal or governmental body is
currently pending, or to the knowledge of the Seller threatened,
against the Seller or any of its properties or with respect to this
Agreement which in the opinion of the Seller has a reasonable
likelihood of resulting in a material adverse effect on the
transactions contemplated by this Agreement;
(vi)
the Seller has been organized in
conformity with the requirements for qualification as a REIT; the
Seller will file with its federal income tax return for its taxable
year ended December 31, 2004, an election to be treated as a REIT
for federal income tax purposes; and the Seller currently qualifies
as, and it proposes to operate in a manner that will enable it to
continue to qualify as a REIT;
(vii)
the Mortgage Loans are not being
transferred by the Seller with any intent to hinder, delay or
defraud any creditors of the Seller;
(viii)
immediately prior to the delivery of each
Mortgage Loan, the related Mortgage was held of record solely for
the account of the Seller and the Seller was the owner of the
related Mortgage Note, in the event that it retains record title,
it shall retain such record title to each Mortgage, each related
Mortgage Note and the related Mortgage Files with respect thereto
in trust for the Purchaser or its assignee as the owner thereof and
only for the purpose of servicing or supervising the servicing of
each such Mortgage Loan;
(ix)
the consummation of the transactions
contemplated by this Agreement are in the Seller’s ordinary
course of business, and the transfer, assignment and conveyance of
the Mortgage Notes and the Mortgages by it pursuant to this
Agreement are not subject to the bulk transfer or any similar
statutory provisions; and
(x)
the written statements, reports and other
documents prepared and furnished or to be prepared and furnished by
the Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby taken in the aggregate do not
contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements contained therein
not misleading.
It is understood and agreed that the
representations and warranties set forth in this Section 3.1 shall
survive the sale and assignment of the Mortgage Loans to the
Purchaser.
SECTION
3.2.
Seller
Representations and Warranties Relating to the Mortgage
Loans . The Seller
represents and warrants to the Purchaser as of the Closing Date
that:
(i)
the information set forth in the Mortgage
Loan Schedule relating to the Mortgage Loans is true and correct in
all material respects as of the related Cut-off Date;
(ii)
as of the Closing Date, the Mortgage File
relating to each Mortgage Loan contains each of the documents and
instruments specified to be included therein;
(iii)
the Seller has received a written
acknowledgment from the Custodian that the Custodian is acting
solely as agent of the Indenture Trustee;
(iv)
each Mortgaged Property is improved by a
one- to four-family residential dwelling. No Mortgaged
Property is a mobile home. No Mortgaged Property securing any
Mortgage Loans is a manufactured home;
(v)
each Mortgage Loan is a closed-end
mortgage loan and all amounts due under the related Mortgage Note
have been advanced. Each Mortgage Loan has an original term
to maturity from the date on which the first Scheduled Payment is
due of not more than 30 years. Each mortgage note calls for a
scheduled payment of principal and interest that, once it enters
its amortization period, is sufficient to fully amortize the
original Principal Balance of the Mortgage Loan in equal monthly
installments by its maturity date;
(vi)
each Mortgage Note in respect of a
Mortgage Loan provides for level monthly payments sufficient to
fully amortize the principal balance of such Mortgage Note on its
maturity date, except for no more than 68.19% of the Mortgage Loans
(by Cut-off Date Balance) which provide for payments of interest
only during the first five years of the Mortgage Loan before
adjusting to a fully amortizing Mortgage Loan over the remaining
term;
(vii)
each lien that attached to a Mortgage
Loan immediately prior to the transfer and assignment contemplated
in this Agreement has been released and immediately prior to the
transfer and assignment contemplated in this Agreement, the Seller
held good, marketable and indefeasible title to, and was the sole
owner and holder of, each Mortgage Loan subject to no liens; the
Seller has full right and authority under all governmental and
regulatory bodies having jurisdiction over the Seller, subject to
no interest or participation of, or agreement with, any party, to
sell and assign the same pursuant to this Agreement; and
immediately upon the transfer and assignment therein contemplated,
the Seller shall have transferred all of its right, title and
interest in and to each Mortgage Loan to the Purchaser;
(viii)
the Mortgage Notes constitute
“instruments” within the meaning of the New York
UCC;
(ix)
the Seller has not authorized the filing
of and is not aware of any financing statements against the Seller
that include a description of collateral covering the Mortgage
Loans other than any financing statement relating to the security
interest granted to the Purchaser under this Agreement. The
Seller is not aware of any judgment or tax lien filings against
it;
(x)
except in the case of Cooperative Loans,
if any, each Mortgage 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 the 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 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 Purchaser upon the
consummation of the transactions contemplated by this
Agreement;
(xi)
each Mortgage has not been satisfied,
cancelled, subordinated or rescinded, in whole or in part, and (a)
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 and (b) no Mortgagor has been released, in whole or in
part, from its obligations under the related Mortgage
Note;
(xii)
each Mortgage evidences a valid,
subsisting, enforceable and perfected first lien on the related
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 such 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 Indenture
Trustee in connection with, a Mortgage Loan establishes a valid,
subsisting and enforceable first lien on the property described
therein and the Purchaser has full right to sell and assign the
same to the Indenture Trustee;
(xiii)
except with respect to liens released
immediately prior to the transfer herein contemplated, each
Mortgage Note and related Mortgage have not been assigned or
pledged and immediately prior to the transfer and assignment herein
contemplated, the Seller was the sole owner and holder of, each
Mortgage Loan subject to no liens, charges, mortgages, claims,
participation interests, equities, pledges or security interests of
any nature, encumbrances or rights of others (collectively, a
“Lien”); the Seller has full right and authority under
all governmental and regulatory bodies having jurisdiction over the
Seller, subject to no interest or participation of, or agreement
with, any party, to sell and assign the same pursuant to this
Agreement; and immediately upon the transfer and assignment herein
contemplated, the Seller shall have transferred all of its right,
title and interest in and to each Mortgage Loan to the Purchaser
(or its assignee);
(xiv)
no more than 0.10% of the Mortgage Loans
was more than one calendar month delinquent as of the Cut-off Date,
and none of the of the Mortgage Loans was more than two calendar
months delinquent as of the Cut-off Date; the Seller has not
advanced funds to, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the Mortgaged
Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan;
(xv)
there is no delinquent tax, fee or
assessment lien on any Mortgaged Property, and each Mortgaged
Property is free of material damage and is in good
repair;
(xvi)
no Mortgage Loan is subject to any right
of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of any
Mortgage Note or Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable in
whole or in part, or subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, and no
such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(xvii)
none of the Mortgage Loans are retail
installment contracts for goods or services or are home improvement
loans for goods or services, which would be either “consumer
credit contracts” or “purchase money loans” as
such terms are defined in 16 C.F.R. § 433.1;
(xviii)
no Mortgagor has or will have a claim or
defense against the Seller or any assignor or assignee of the
Seller under any express or implied warranty with respect to goods
or services provided in connection with any Mortgage
Loan;
(xix)
the Mortgage, the Mortgage Note and the
other Related Documents contain the entire agreement of the parties
and all obligations of the Seller under the related Mortgage Loan,
and no other agreement defines, modifies or expands the obligations
of the Seller under the Mortgage Loan;
(xx)
there is no mechanics’ lien or
claim for work, labor or material affecting any Mortgaged Property
which is or may be a lien prior to, or equal or coordinate with,
the lien of the related Mortgage, and no rights are outstanding
that under law could give rise to such a lien except those which
are insured against by the title insurance policy referred to in
Section 3.2(xxii) below;
(xxi)
each Mortgage Loan at the time it was
made complied with, and each Mortgage Loan at all times was
serviced in compliance with, in each case, in all material
respects, applicable local, state and federal laws and regulations,
including, without limitation, usury, equal credit opportunity,
consumer credit, truth-in-lending, disclosure laws and predatory
and abusive lending laws;
(xxii)
with respect to each Mortgage Loan,
either (a) a lender’s title insurance policy, issued in
standard American Land Title Association or California Land Title
Association form, or other form acceptable in a particular
jurisdiction, by a title insurance company authorized to transact
business in the state in which the related Mortgaged Property is
situated in an amount at least equal to the original principal
balance of such Mortgage Loan insuring the mortgagee’s
interest under the related Mortgage Loan as the holder of a valid
first mortgage lien of record on the real property described in the
Mortgage, subject only to the exceptions of the character referred
to in Section 3.2(xii) above, was valid and in full force and
effect on the date of the origination of such Mortgage Loan and as
of the Closing Date or (b) an attorney’s opinion of title was
prepared in connection with the origination of such Mortgage
Loan;
(xxiii)
the improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance
policy with a generally acceptable carrier that provides for fire
and extended coverage representing coverage described in the
Section of the Transfer and Servicing Agreement entitled
“Standard Hazard and Flood Insurance
Policies”;
(xxiv)
a flood insurance policy is in effect
with respect to each Mortgaged Property with a generally acceptable
carrier in an amount representing coverage described in the Section
of the Transfer and Servicing Agreement entitled “Standard
Hazard and Flood Insurance Policies”, if and to the extent
required by such Section of the Transfer and Servicing
Agreement;
(xxv)
each Mortgage Note and the related
Mortgage are genuine, and each Mortgage and Mortgage Note is the
legal, valid and binding obligation of the related Mortgagor and is
enforceable in accordance with its terms, except only as such
enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general
principles of equity (whether considered in a proceeding or action
in equity or at law), and all parties to each Mortgage Loan and the
Mortgagee had full legal capacity to execute all Mortgage Loan
documents and to convey the estate therein purported to be
conveyed. The Mortgagor is a natural person who is a party to
the Mortgage Note and the Mortgage in an individual capacity, and
not in the capacity of a trustee or otherwise;
(xxvi)
no more than 0.44% of the Mortgage Loans
(by the Cut-off Date Balance) are secured by Mortgaged Properties
located within any single zip code area;
(xxvii)
the
