LEHMAN BROTHERS HOLDINGS
INC.,
SELLER
and
STRUCTURED ASSET SECURITIES
CORPORATION,
PURCHASER
MORTGAGE LOAN SALE AND ASSIGNMENT
AGREEMENT
Dated as of September 1,
2006
Structured Asset Securities
Corporation
Mortgage Pass-Through Certificates,
Series 2006-WF3
TABLE OF CONTENTS
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Page
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ARTICLE I.
CONVEYANCE OF MORTGAGE LOANS
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2
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Section
1.01.
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Sale of
Mortgage Loans.
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2
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Section
1.02.
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Delivery of
Documents.
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3
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Section
1.03.
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Review of
Documentation.
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3
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Section
1.04.
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Representations
and Warranties of the Seller.
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3
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Section
1.05.
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Grant
Clause.
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15
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Section
1.06.
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Assignment by
Depositor.
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16
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ARTICLE II.
MISCELLANEOUS PROVISIONS
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16
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Section
2.01.
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Binding Nature
of Agreement; Assignment.
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16
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Section
2.02.
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Entire
Agreement.
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16
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Section
2.03.
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Amendment.
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16
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Section
2.04.
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Valid
Assignment.
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17
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Section
2.05.
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Governing
Law.
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17
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Section
2.06.
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Severability of
Provisions.
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17
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Section
2.07.
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Indulgences; No
Waivers.
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18
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Section
2.08.
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Headings Not to
Affect Interpretation.
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18
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Section
2.09.
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Benefits of
Agreement.
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18
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Section
2.10.
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Counterparts.
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18
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SCHEDULE
A
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Mortgage Loan
Schedule (including Prepayment Charge Schedule)
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SCHEDULE
B
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Schedule of
First Payment Default Mortgage Loans
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EXHIBIT
A
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Certain Defined
Terms
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EXHIBIT
B
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Form of Terms
Letter
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This MORTGAGE LOAN SALE AND ASSIGNMENT AGREEMENT
dated as of September 1, 2006 (the “Agreement”), is
executed by and between Lehman Brothers Holdings Inc.
(“LBH” or the “Seller”) and Structured
Asset Securities Corporation (the
“Depositor”).
All capitalized terms used but not defined
herein or in Exhibit A attached hereto shall have the same meanings
assigned to such terms in that certain trust agreement (the
“Trust Agreement”) dated as of September 1, 2006, among
the Depositor, Aurora Loan Services LLC, as master servicer (the
“Master Servicer”), Risk Management Group, LLC, as
credit risk manager, Wells Fargo Bank, N.A., as securities
administrator, and U.S. Bank National Association, as trustee (the
“Trustee”).
W I T N E S S E T H:
WHEREAS, Lehman Brothers Bank, FSB (the
“Bank”), pursuant to (A) the Seller’s Warranties
and Servicing Agreement by and between the Bank, as purchaser and
Wells Fargo Bank, N.A., as seller (in such capacity, the
“Transferor”), dated as of April 1, 2006, and the
Master Seller’s Warranties and Servicing Agreement by and
between the Bank, as purchaser and the Transferor, dated as of May
1, 2006 (each, a “Transfer Agreement”) and (B) each of
the Commitment Letters WFHM 2006-M04, WFHM 2006-M05, and WFMH
2006-M08 dated March 24, 2006, April 21, 2006, and July 14 2006,
respectively, in each case from the Transferor to the Bank (each, a
“Commitment Letter”) has purchased or received from the
Transferor certain mortgage loans, each identified on the Mortgage
Loan Schedule attached hereto as Schedule A (the “Mortgage
Loans”);
WHEREAS, pursuant to an Assignment and
Assumption Agreement (the “Assignment and Assumption
Agreement”) dated as of September 1, 2006, between the Bank,
as assignor, and LBH, as assignee, the Bank has assigned all of its
right, title and interest in and to the Transfer Agreements, and
certain of its rights (as described below) under the Commitment
Letters, and the related Mortgage Loans as listed on Schedule A, to
LBH and LBH has accepted the rights and benefits of, and assumed
any obligations of the Bank under, the Transfer Agreements and the
Commitment Letters;
WHEREAS, LBH is a party to a Reconstituted
Servicing Agreement dated as of September 1, 2006 between LBH, as
seller, and Wells Fargo Bank, N.A., as servicer (the
“Servicer”), as acknowledged by the Master Servicer and
the Trustee (the “Servicing Agreement”);
WHEREAS, the Seller desires to sell, without
recourse, all of its rights, title and interest in and to the
Mortgage Loans to the Depositor, assign all of its rights and
interest under the Transfer Agreements, the Commitment Letters and
the Servicing Agreement (other than any servicing rights) relating
to the Mortgage Loans referred to above, and 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 on the Closing Date to the 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. Sale of 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 identified
on Schedule A hereto, having an aggregate principal balance as of
the Cut-off Date of $1,408,431,646.45. Such conveyance includes,
without limitation, the right to all distributions of principal and
interest received on or after the Cut-off Date with respect to the
Mortgage Loans, 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, all Prepayment Charges
received on or after the Cut-off Date with respect to the Mortgage
Loans, 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.
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 Agreements (except for
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; provided, however, that the
Seller hereby assigns to the Depositor all of its rights and
interest against the Transferor with respect to first payment date
defaults or early payment date defaults on the Mortgage Loans set
forth in Schedule B hereto (the “First Payment Default
Mortgage Loans”), assigned to the Seller as provided for
pursuant to each Commitment Letter) and the Servicing Agreement,
other than 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 any of the
Transfer Agreements (any such document, an “Assignment
Agreement”) and that 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 set forth in that certain Terms Letter
dated as of the date hereof, the form of which is attached as
Exhibit B hereto (the “Purchase Price”). The Depositor
hereby accepts such assignment and delegation, and shall be
entitled to exercise all the rights of the Seller under each
Transfer Agreement, each Servicing Agreement, other than any
servicing rights thereunder, and each Commitment Letter, in each
case as if the Depositor had been a party to each such
agreement.
(b) 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 shall
prepare on or prior to the Closing Date a final schedule describing
such mortgage loans (the “Mortgage Loan Schedule”),
attached as Schedule A hereto. 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 Transfer Agreements or the 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 Wells Fargo Bank, N.A. (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
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, carry on its business as presently conducted
and enter into and perform its obligations under the Assignment and
Assumption Agreement and this Agreement;
(ii) the execution and delivery by the Seller of the
Assignment and Assumption Agreement and this Agreement have been
duly authorized by all necessary corporate action on the part of
the Seller; neither the execution and delivery of the Assignment
and Assumption Agreement or this Agreement, nor the consummation of
the transactions therein or herein contemplated, nor compliance
with the provisions thereof or hereof, 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;
(iii) the execution, delivery and performance by the
Seller of the Assignment and Assumption Agreement and this
Agreement and the consummation of the transactions contemplated
thereby and hereby 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 the Assignment and Assumption Agreement
and this Agreement 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 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 the
Assignment and Assumption Agreement or this Agreement 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
the Assignment and Assumption Agreement or this
Agreement.
(b) The representations and warranties of the
Transferor with respect to the Mortgage Loans in the Transfer
Agreements were made as of their respective dates. 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 Agreements 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 (except in the case
of a breach by the Seller of the representations made by it
pursuant to Sections 1.04(b)(xiii), (xiv), (xv), (xvi), (xvii),
(xviii) and (xix) shall be the right to enforce the obligations of
such Transferor under any applicable representation or warranty
made by it. The representations made by the Seller pursuant to
Sections 1.04(b)(xiii), (xiv), (xv), (xvi), (xvii), (xviii) and
(xix) 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) (except in the case of those
representations and warranties made pursuant to Sections
1.04(b)(xiii), (xiv), (xv), (xvi), (xvii), (xviii) and (xix)) are
applicable only to facts, conditions or events that do not
constitute a breach of any representation or warranty made by the
Transferor in the Transfer Agreements. 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 (except in the case of those representations and warranties
made by it pursuant to Sections 1.04(b)(xiii), (xiv), (xv), (xvi),
(xvii), (xviii) and (xix) 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
Agreements, without regard to whether the related 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 Agreements 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, as to each, that, as of the Closing Date:
(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, 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 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 Fannie
Mae or Freddie Mac. 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 Depositor upon the consummation of the
transactions contemplated by this Agreement;
(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) In the case of approximately 96.65% and 3.35%
of the Mortgage Loans (by Scheduled Principal Balance as of the
Cut-off Date), the related Mortgage evidences a valid, subsisting,
enforceable and perfected first lien or second lien, respectively,
on the related Mortgaged Property (including all improvements on
the Mortgaged Property). The lien of the Mortgage is subject only
to: (1) the first Mortgage, in the case of a Mortgaged Property
that is secured by a perfected second lien, (2) 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, (3) 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 (4) 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. In the case of
approximately 96.65% of the Mortgage Loans (by Scheduled Principal
Balance as of the Cut-off Date), 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;
(viii) No foreclosure action is being threatened or
commenced with respect to any Mortgage Loan. 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 adve
