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Exhibit 10.4
WHOLE LOAN PURCHASE AND SALE AGREEMENT
among
AMERICAN HOME MORTGAGE CORP.
Seller
AMERICAN HOME MORTGAGE INVESTMENT CORP.
Seller
and
AMERICAN HOME MORTGAGE SERVICING, INC.
Servicer
and
ASPEN FUNDING CORP.
Purchaser
GEMINI SECURITIZATION CORP., LLC
Purchaser
NEWPORT FUNDING CORP.
Purchaser
SEDONA CAPITAL FUNDING CORP., LLC
Purchaser
DATED: September 22, 2006
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TABLE OF CONTENTS
Page
Section 1.
Definitions........................................................1
Section 2. Procedures for Purchases of Mortgage
Loans.........................9
Section 3. Sale of Mortgage Loans to Takeout
Investor........................11
Section 4. Completion
Fee....................................................14
Section 5. Servicing of the Mortgage
Loans...................................15
Section 6. Trade
Assignments.................................................17
Section 7. Transfers of Beneficial Interest in Mortgage Loans
by
Purchasers........................................................17
Section 8. Record Title to Mortgage Loans; Intent of Parties;
Security
Interest..........................................................17
Section 9. Representations and
Warranties....................................18
Section 10. Covenants of
Sellers..............................................28
Section 11.
Term..............................................................31
Section 12. Exclusive Benefit of Parties;
Assignment..........................31
Section 13. Amendments; Waivers; Cumulative
Rights............................32
Section 14. Execution in
Counterparts.........................................32
Section 15. Effect of Invalidity of
Provisions................................32
Section 16. Governing
Law.....................................................32
Section 17.
Notices...........................................................32
Section 18. Entire
Agreement..................................................32
Section 19. Costs of
Enforcement..............................................33
Section 20. Consent to
Service................................................33
Section 21. Submission to
Jurisdiction........................................33
Section 22. Jurisdiction Not
Exclusive........................................33
Section 23. WAIVER OF JURY
TRIAL..............................................33
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Section 24.
Construction......................................................33
Section 25. Further
Assurances................................................33
Section 26. Joint and Several
Liability.......................................34
Section 27.
Expenses..........................................................34
Section 28. Intent of the
Parties.............................................34
EXHIBITS
Exhibit A-1 Trade Assignment
Exhibit A-2 Trade Assignment (Blanket)
Exhibit B Purchaser's Wire Instructions
Exhibit C Form of Confirmation
Exhibit D Reserved
Exhibit E Settlement Modification Letter
Exhibit F Seller's Officer's Certificate
Exhibit G Seller's Officer's Certificate
Exhibit H Mortgage Loan Schedule
Exhibit I Form of Transaction Notice
Exhibit J Seller's Wire Instructions
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WHOLE LOAN PURCHASE AND SALE AGREEMENT
This Whole Loan Purchase and Sale Agreement ("Agreement"), dated
as
of the date set forth on the cover page hereof, is by and among
Aspen Funding
Corp., Gemini Securitization Corp., LLC, Newport Funding Corp.
and Sedona
Capital Funding Corp., LLC, each having an address at 60 Wall
Street, New York,
New York 10005 (each individually, a "Purchaser" and together,
the
"Purchasers"), American Home Mortgage Corp., having an address
at 538
Broadhollow Road, Melville, New York 11747 ("AHMC") and American
Home Mortgage
Investment Corp., having an address at 538 Broadhollow Road,
Melville, New York
11747 ("AHMI" and together with AHMC, each individually, a
"Seller" and
together, the "Sellers"), and American Home Mortgage Servicing,
Inc., having an
address at 4600 Regent Blvd., Suite 200, Irving, Texas 75063
(the "Servicer").
PRELIMINARY STATEMENT
Sellers may offer to sell to Purchasers from time to time a
100%
undivided ownership interest in certain Mortgage Loans, and
Purchasers, in their
sole discretion, may agree to purchase such Mortgage Loans from
Sellers on a
servicing-released basis in accordance with the terms and
conditions set forth
in this Agreement. The related Seller, subject to the terms
hereof, will cause
each Mortgage Loan purchased by a Purchaser hereunder to be
purchased by a
Takeout Investor. During the period from the purchase of a
Mortgage Loan by a
Purchaser to the sale of the Mortgage Loan to Takeout Investor,
the Servicer
shall interim service such Mortgage Loan for the benefit of
Purchasers pursuant
to the terms of this Agreement.
The parties hereto hereby agree as follows:
Section 1. Definitions.
Capitalized terms used but not defined herein shall have the
meanings
set forth in the Custodial Agreement. As used in this Agreement,
the following
terms shall have the following meanings:
"Act of Insolvency": With respect to either Seller, (i) the
filing of
a petition, commencing, or authorizing the commencement of any
case or
proceeding under any bankruptcy, insolvency, reorganization,
liquidation,
dissolution or similar law relating to the protection of
creditors, or suffering
any such petition or proceeding to be commenced by another
against a Seller,
American Home Mortgage Acceptance, Inc. ("AHMA"), American Home
Mortgage
Holdings, Inc. ("AHMH") and American Home Mortgage Servicing,
Inc. ("AHMS" and
collectively with AHMA and AHMH, the "American Home
Affiliates"); (ii) seeking
the appointment of a receiver, trustee, custodian or similar
official for either
Seller or the American Home Affiliates or any substantial part
of the property
of either, (iii) the appointment of a receiver, conservator, or
manager for
either Seller or the American Home Affiliates by any
governmental agency or
authority having the jurisdiction to do so; (iv) the making or
offering by
either Seller or the American Home Affiliates of a concession
with its creditors
or a general
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assignment for the benefit of creditors, (v) the admission by
either Seller or
the American Home Affiliates of Seller's or any of the American
Home Affiliates'
inability to pay its debts or discharge its obligations as they
become due or
mature; or (vi) any governmental authority or agency or any
person, agency or
entity acting or purporting to act under governmental authority
shall have taken
any action to condemn, seize or appropriate, or to assume
custody or control of,
all or any substantial part of the property of either Seller or
the American
Home Affiliates, provided, however, that with respect to any
involuntary filing,
the Seller or the American Home Affiliates, as applicable, shall
have sixty (60)
days to dismiss such filing before such event constitutes an Act
of Insolvency.
"Affiliate": With respect to any specified Person, any other
Person
controlling or controlled by or under common control with such
specified Person.
For the purposes of this definition, "control" means the power
to direct the
management and policies of such Person, directly or indirectly,
through the
ownership of voting equity.
"Appraised Value": With respect to any Mortgaged Property, the
value
thereof set forth in an appraisal made for the originator of the
Mortgage Loan
at the time of origination of the Mortgage Loan by an appraiser
who met the
minimum requirements of FNMA and FHLMC. Each appraisal has been
made in
accordance with and satisfies the provisions of the Financial
Institutions
Reform, Recovery, and Enforcement Act of 1989.
"Assignee": As defined in Section 7.
"Bankruptcy Code": The United States Bankruptcy Code of 1978
as
amended from time to time.
"Business Day": Any day other than (a) a Saturday, Sunday or
other
day on which banks located in The City of New York, New York are
authorized or
obligated by law or executive order to be closed or (b) any day
on which a
Seller, Servicer, Purchaser or Custodian is authorized or
obligated by law or
executive order to be closed.
"Collateral": As defined in Section 8(c).
"Combined Loan-to-Value Ratio" or "CLTV" means with respect to
any
Mortgage Loan or second lien Mortgage Loan, the sum of the
original principal
balance of such first lien Mortgage Loan or second lien Mortgage
Loan, as
applicable, at the time of origination and the outstanding
principal balance of
any related first lien loan or second lien loan, as applicable
as of the date of
origination of such first lien Mortgage Loan or second lien
Mortgage Loan, as
applicable, divided by the lesser of (a) the Appraised Value of
the related
Mortgage Property as of the date of origination of such first
lien Mortgage Loan
or second lien Mortgage Loan, as applicable and (b) if the
related Mortgaged
Property was purchased within twelve (12) months of the
origination of such
first lien Mortgage Loan or second lien Mortgage Loan, as
applicable, the
purchase price of such Mortgaged Property.
"Commitment Amount": The aggregate outstanding principal amount
of
Mortgage Loans to be purchased pursuant to a Takeout Commitment.
If the
Commitment
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Amount is expressed as a fixed amount plus or minus a percentage
in the related
Takeout Confirmation, then the amount required to be delivered
by the related
Seller shall be the minimum amount of such range.
"Commitment Date": The date set forth in a Takeout Confirmation
as
the commitment date.
"Commitment Guidelines": The guidelines, if any, issued by a
Takeout
Investor regarding the issuance of Takeout Commitments, as
amended from time to
time by such Takeout Investor.
"Commitment Number": With respect to a Takeout Commitment, the
number
identified on the Takeout Confirmation as the commitment number,
if applicable.
"Completion Fee": The meaning assigned thereto in the Pricing
Side
Letter.
"Confirmation": A written confirmation of a Purchaser's intent
to
purchase a Mortgage Loan Pool, which written confirmation shall
be substantially
in the form attached hereto as Exhibit C.
"Control Bank": (i) JPMorgan Chase Bank, N.A. and its
successors
thereto, or (ii) such other bank as may be mutually acceptable
among Sellers and
Purchasers.
"Credit File": All Mortgage Loan papers and documents required
to be
maintained pursuant to the Sale Agreement, and all other papers
and records of
whatever kind or description in Seller's possession whether
developed or
originated by the related Seller or others, required to document
or service the
Mortgage Loan and would customarily be required by a secondary
market purchaser;
provided, however, that such Mortgage Loan papers, documents and
records shall
not include any Mortgage Loan papers, documents or records which
are contained
in the Custodial File.
"Cure Date": With respect to a Mortgage Loan, the date occurring
15
calendar days after the expiration of the Takeout Commitment, or
if such date is
not a Business Day, the immediately preceding Business Day.
"Custodial Account": As defined in Section 5(b).
"Custodial Account Control Agreement": The collection account
control
agreement among the Sellers, the Purchasers and the Control Bank
dated as of
[___], 2006.
"Custodial Agreement": The Custodial Agreement, dated as of the
date
set forth on the cover page thereof, among Sellers, Servicer,
Purchasers and
Custodian.
"Custodial File": With respect to each Mortgage Loan, the
documents
that are required to be delivered to the Custodian pursuant to
the Custodial
Agreement.
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"Custodian": The Custodian whose name is set forth on the cover
page
of the Custodial Agreement and its permitted successors
thereunder.
"Cut-off Date": With respect to a Mortgage Loan, the latest day
of a
month on which the Settlement Date can occur if accrued interest
for such month
is to be collected by Takeout Investor.
"Defective Mortgage Loan": With respect to any Mortgage Loan,
either
(i) the Document File does not contain a document required to be
contained
therein, (ii) a document within a Document File is, in the
judgment of any
Purchaser or Takeout Investor, defective or inaccurate in any
material respect,
as determined upon evaluation of the Document File against the
requirements of
the this Agreement, Sale Agreement or the pricing requirements
of the related
Takeout Investor, (iii) a document in the Document File is not
legal, valid and
binding, or (iv) as to such Mortgage Loan, one of the
representations and
warranties in Section 9 hereof has been breached and such breach
materially and
adversely affects the value of such Mortgage Loan or the related
Purchaser's
interest in such Mortgage Loan and, with respect to any Wet
Mortgage Loan, if a
Custodial File is not received by Custodian within seven (7)
Business Days of
the related Purchase Date.
"Discount": The meaning assigned thereto in the Pricing Side
Letter.
"Document File": The Credit File and the Custodial File.
"Due Date": The day of the month on which the Monthly Payment is
due
on a Mortgage Loan.
"Electronic Agent": Shall have the meaning assigned to such term
in
Section 2 of the Electronic Tracking Agreement.
"Electronic Tracking Agreement": The Electronic Tracking
Agreement,
dated as of the date hereof, among the Purchasers, the Sellers,
the Servicer,
the Electronic Agent and MERS, as the same shall be amended,
supplemented or
otherwise modified from time to time.
"Early Payment Default": as defined in Section 3(c)(1)
hereof.
"Expiration Date": With respect to any Takeout Commitment,
the
expiration date thereof.
"FDIC": Federal Deposit Insurance Corporation or any
successor
thereto.
"FHLMC": Freddie Mac or any successor thereto.
"FNMA": Fannie Mae or any successor thereto.
"GAAP": Generally accepted accounting principles as in effect
from
time to time in the United States of America.
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"HUD": United States Department of Housing and Urban Development
or
any successor thereto.
"Indebtedness": shall mean, for any Person, all items of
indebtedness
which, in accordance with GAAP, would be included in determining
liabilities as
shown on the liability side of a balance sheet of such Person as
of the date as
of which indebtedness is to be determined, including, without
limitation, all
obligations for money borrowed, and shall also include all
indebtedness and
liabilities of others assumed or guaranteed by such Person or in
respect of
which such Person is secondarily or contingently liable (other
than by
endorsement of instruments in the course of collection) whether
by reason of any
agreement to acquire such indebtedness or to supply or advance
sums or
otherwise.
"Loan to Value Ratio" or "LTV" means with respect to any
Mortgage
Loan, the ratio of the original outstanding principal amount of
the Mortgage
Loan, as of the date of origination, to the lesser of (a) the
Appraised Value of
the related Mortgaged Property at origination or (b) if the
Mortgaged Property
was purchased within 12 months of the origination of such
Mortgage Loan, the
purchase price of the related Mortgaged Property.
"Losses": Any and all losses, claims, damages, liabilities
or
expenses (including reasonable attorney's fees) incurred by any
Person
specified.
"LIBOR": With respect to each day (or if such day is not a
Business
Day, the next succeeding Business Day), the rate per annum equal
to the rate
published by Bloomberg or if such rate is not available, the
rate appearing at
page 3750 of the Telerate Screen, as one-month LIBOR on such
date, and if such
rate shall not be so quoted, the rate per annum at which the
Purchasers are
offered Dollar deposits at or about 11:00 A.M., New York City
time, on such date
by prime banks in the interbank eurodollar market where the
eurodollar and
foreign currency and exchange operations in respect of its
transactions are then
being conducted for delivery on such day for a period of one
month and in an
amount comparable to the amount of the transactions hereunder to
be outstanding
on such day.
"Maximum Aggregate Purchase Price": The aggregate Purchase Price
of
all Mortgage Loans acquired by Purchasers from Sellers under
this Agreement,
held by Purchasers at any one time and not yet delivered to and
funded by a
Takeout Investor, which amount shall not, at any time, exceed
$2,000,000,000.
"MERS": Mortgage Electronic Registration Systems, Inc., a
Delaware
corporation, or any successor in interest thereto.
"MERS Mortgage Loan": Any Mortgage Loan as to which the
related
Mortgage or assignment of Mortgage has been recorded in the name
of MERS, as
agent for the holder from time to time of the Mortgage Note and
which is
identified as a MERS Mortgage Loan on the related Mortgage Loan
Schedule.
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"MERS System": The system of recording transfers of
Mortgages
electronically maintained by MERS.
"MIN": The mortgage identification number of Mortgage Loans
registered with MERS on the MERS System.
"Monthly Payment": The scheduled monthly payment of principal
and/or
interest on a Mortgage Loan.
"Mortgage": The mortgage, deed of trust or other instrument
creating
a first or second lien on an estate in fee simple in real
property securing a
Mortgage Note.
"Mortgage Interest Rate": The annual rate of interest borne on
a
Mortgage Note.
"Mortgage Loan": Each first or second lien, one- to
four-family
residential mortgage loan sold, assigned and transferred
pursuant to this
Agreement and which satisfies the requirements of the related
Sale Agreement as
the same may be modified from time to time, subject to the
consent of the
Purchasers and if modified so as to adversely affect the rights
or obligations
of the Sellers, the consent of the Sellers.
"Mortgage Loan Pool": The groups of Mortgage Loans purchased by
the
Purchaser hereunder for which a Mortgage Loan Schedule is
provided to the
Purchasers in accordance with this Agreement.
"Mortgage Loan Schedule": The schedule of Mortgage Loans,
attached
hereto as Exhibit H, delivered to the related Purchaser as
communicated to such
Purchaser by the related Seller prior to each Purchase Date in a
form, and
containing information, acceptable to such Purchaser and the
related Seller.
"Mortgage Note": The note or other evidence of the indebtedness
of a
Mortgagor secured by a Mortgage.
"Mortgaged Property": The property subject to the lien of
the
Mortgage securing a Mortgage Note.
"Mortgagor": The obligor on a Mortgage Note.
"NCUA": National Credit Union Administration, or any
successor
thereto.
"Net Carry Adjustment": The meaning assigned thereto in the
Pricing
Side Letter.
"Option-ARM Mortgage Loan": An adjustable rate Mortgage Loan
which
(i) provides the Mortgagor with multiple payment options and
(ii) may result in
negative amortization.
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"OTS": Office of Thrift Supervision or any successor
thereto.
"Parent Company": A corporation or other entity owning at least
50%
of the outstanding shares of voting stock of a Seller.
"Pass-Through Rate": As defined in the Pricing Side Letter as
the
Pass-Through Rate.
"Person": Any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability
company, trust,
unincorporated association or government (or any agency,
instrumentality or
political subdivision thereof).
"Pricing Side Letter": The pricing side letter, dated as of the
date
hereof, among the Sellers, the Servicer and the Purchasers, as
the same may be
amended, supplemented or modified from time to time.
"Program Documents": This Agreement, the Custodial Agreement,
the
Pricing Side Letter, the Custodial Account Control Agreement,
the Electronic
Tracking Agreement and any other agreement entered into by a
Seller, on the one
hand, and a Purchaser and/or any of its Affiliates or
Subsidiaries (or Custodian
on its behalf) on the other, in connection herewith or
therewith.
"Purchase Date": With respect to any Mortgage Loan Pool
purchased by
a Purchaser hereunder, the date of payment thereof by Purchaser
to the related
Seller and/or any warehouse lenders, as applicable, of the
Purchase Price.
"Purchase Price": With respect to each Mortgage Loan Pool
purchased
by a Purchaser hereunder, the amount specified in the related
Confirmation and
calculated in accordance with the Pricing Side Letter.
"Purchaser": Any of Aspen Funding Corp., Gemini Securitization
Corp.,
LLC, Newport Funding Corp. and Sedona Capital Funding Corp., LLC
and its
respective successors in interest, including, but not limited
to, a party to
whom a Trust Receipt is assigned as provided hereunder and in
the Custodial
Agreement.
"Purchaser's Wire Instructions": The wire instructions set forth
in a
letter in the form of Exhibit B.
"Sale Agreement": The agreement providing for the purchase by
Takeout
Investor of Mortgage Loans from the related Seller.
"SEC": The Securities Exchange Commission or any successor
thereto.
"Seller": Each Seller whose name is set forth on the cover
page
hereof and its permitted successors hereunder.
"Seller's Wire Instructions": The wire instructions set forth in
a
letter in the form of Exhibit J.
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"Settlement Account": The meaning assigned thereto in the
Custodial
Agreement.
"Settlement Date": With respect to any Mortgage Loan, the date
of
payment thereof by Takeout Investor to the related Purchaser of
the Takeout
Proceeds.
"Settlement Modification Letter": A letter in the form of
Exhibit E.
"Servicer": American Home Mortgage Servicing, Inc, its
successors and
permitted assigns.
"Successor Servicer": An entity designated by the Purchasers,
with
notice provided in conformity with Section 17, to replace the
Servicer as
servicer of the Mortgage Loans.
"Takeout Commitment": A commitment of the related Seller to sell
one
or more Mortgage Loans to Takeout Investor and of Takeout
Investor to purchase
one or more Mortgage Loans from such Seller. Each Takeout
Commitment must be
acceptable to the related Purchaser in its sole discretion.
"Takeout Confirmation": The written notification to the
related
Seller from Takeout Investor containing all of the relevant
details of the
Takeout Commitment, which notification may take the form of a
trade
confirmation.
"Takeout Investor": An investor approved by Purchasers in their
sole
discretion.
"Takeout Proceeds": With respect to any Mortgage Loan Pool,
the
related Trade Principal plus accrued interest as calculated in
accordance with
Section 4, as amended by any related Settlement Modification
Letter accepted by
the related Purchaser.
"Tangible Net Worth": With respect to any Person, as of any date
of
determination, the excess of total assets of such Person over
the total
liabilities of such Person determined in accordance with GAAP on
a consolidated
basis, but excluding from the determination of total assets: (a)
all assets
which would be classified as intangible assets under GAAP,
including, without
limitation, goodwill (whether representing the excess cost over
book value of
assets acquired or otherwise), patents, trademarks, trade names,
copyrights,
franchises and deferred charges (including, without limitation,
unamortized debt
discount and expense, organization costs and research and
product development
costs), (b) loans or other extensions of credit to officers,
employees,
shareholders or Affiliates of such Person, and (c) investments
in subsidiaries
of such Person.
"Third Party Underwriter": A third party, including but not
limited
to a mortgage loan pool insurer, who underwrites the Mortgage
Loan(s) prior to
the purchase by the related Purchaser of the related Mortgage
Loan Pool.
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"Third Party Underwriter's Certificate": A certificate issued by
a
Third Party Underwriter with respect to a Mortgage Loan,
certifying that such
Mortgage Loan complies with the third party underwriting
requirements.
"Trade Assignment": The assignment by the related Seller to
the
related Purchaser of such Seller's rights under a specific
Takeout Commitment,
in the form of Exhibit A-1, or of such Seller's rights under all
Takeout
Commitments, in the form of Exhibit A-2.
"Trade Price": The trade price set forth on a Takeout Commitment
as
modified pursuant to any Settlement Modification Letter
consented to by the
related Purchaser.
"Trade Principal": With respect to any Mortgage Loan Pool,
the
aggregate outstanding principal balance of such Mortgage Loan
Pool multiplied by
a percentage equal to the Trade Price.
"Transaction Notice": A notice in the form attached hereto as
Exhibit
I.
"Trust Receipt": A trust receipt issued by the Custodian
evidencing
the Mortgage Loan Pool it holds for a Purchaser, in the form
attached as Exhibit
A-1 (or A-2 with respect to Wet Mortgage Loans) to the Custodial
Agreement, and
delivered to the related Purchaser by the Custodian in
accordance with Section 2
hereof.
"Warehouse Lender": Any lender providing financing to the
related
Seller for the purpose of originating or purchasing Mortgage
Loans which prior
to the Purchase Date has a security interest in such Mortgage
Loans as
collateral for the obligations of such Seller to such
lender.
"Warehouse Lender's Wire Instructions": The wire instructions
set
forth in Exhibit E to the Custodial Agreement.
"Wet Mortgage Loan": Mortgage Loans for which the Custodian has
not
yet received a completed Custodial File.
Section 2. Procedures for Purchases of Mortgage Loans.
(a) Any Purchaser may, in its sole discretion, from time to
time,
purchase one or more Mortgage Loan Pools from either or both
Sellers. Any
request by Seller that a Purchaser purchase any Mortgage Loans
hereunder shall
be provided by delivery of a Transaction Notice together with a
Mortgage Loan
Schedule attached, no later than 3:00 p.m. (New York City time)
one (1) Business
Day prior to the requested Purchase Date with respect to any
Mortgage Loans
other than Wet Mortgage Loans. With respect to Wet Mortgage
Loans, the related
Seller shall notify the related Purchaser of an estimate of the
Purchase Price
of such Wet Mortgage Loans no later than 3:00 p.m. (New York
City time) one (1)
Business Day prior to the requested Purchase Date. Prior to any
Purchaser's
actual purchase of any Mortgage Loan Pool, such Purchaser shall
have received
(a) from Custodian by facsimile or electronic transmission
acceptable to related
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Purchaser, the Trust Receipt covering all Mortgage Loans being
purchased on such
day fully completed and authenticated by Custodian, and a
cumulative Trust
Receipt covering all Mortgage Loans purchased by Purchasers (but
not settled by
any Takeout Investor pursuant to a Takeout Commitment or
otherwise repurchased
by either Seller) with the original Trust Receipts sent by
overnight mail to
arrive on the Business Day after the day they are sent by
facsimile, and (b)
from the Seller (i) a copy of the Takeout Confirmation related
to the Mortgage
Loan(s) in such Mortgage Loan Pool, executed by the related
Seller and Takeout
Investor or such other notification acceptable to the Purchaser
in its sole
discretion and (ii) an original letter in the form of Exhibit E
to the Custodial
Agreement from the applicable Warehouse Lender (if any), or an
original letter
in the form of Exhibit F to the Custodial Agreement in the event
that there is
no Warehouse Lender. In addition to the foregoing, the related
Seller shall use
its best efforts to obtain a Trade Assignment executed by the
related Seller and
Takeout Investor in the form of Exhibit A-1 or Exhibit A-2. This
Agreement is
not a commitment by any Purchaser to enter into transactions
with either Seller
but rather sets forth the procedures to be used in connection
with periodic
requests for a Purchaser to enter into transactions with a
Seller. Sellers
hereby acknowledge that Purchasers are under no obligation to
agree to enter
into, or to enter into, any transaction pursuant to this
Agreement.
(b) If any Purchaser elects to purchase any Mortgage Loan
Pool,
Purchaser shall provide to Seller a Confirmation of such
purchase in the form of
Exhibit C attached hereto and such Purchaser shall pay the
amount of the
Purchase Price for such Mortgage Loan Pool by wire transfer of
immediately
available funds in accordance with the Warehouse Lender's Wire
Instructions or
if there is no Warehouse Lender, the related Seller's Wire
Instructions. Upon
such payment and not otherwise, Purchaser shall be deemed to
have accepted the
related Trade Assignment. Sellers shall not offer for sale to
any Purchaser any
Mortgage Loan as to which the Expiration Date of the related
Takeout Commitment
is five (5) Business Days or less following the Purchase
Date.
(c) Simultaneously with the payment by a Purchaser of the
Purchase
Price, in accordance with the Warehouse Lender's Wire
Instructions or the
related Seller's Wire Instructions, as applicable, with respect
to a Mortgage
Loan Pool, such Seller hereby conveys to the related Purchaser
all of such
Seller's right, title and interest in and to the related
Mortgage Loan(s) free
and clear of any lien, claim or encumbrance other than the
Takeout Commitment.
Notwithstanding the satisfaction by the related Seller of the
conditions
specified in this Section 2, no Purchaser is obligated to
purchase any Mortgage
Loans offered to it hereunder.
(d) In the event that a Purchaser rejects a Mortgage Loan
for
purchase for any reason and/or does not transmit the applicable
Purchase Price,
(i) the Trust Receipt, if any, delivered by Custodian to such
Purchaser in
anticipation of such purchase shall automatically be null and
void with respect
to the Mortgage Loans that have been rejected by such Purchaser
and valid for
all other Mortgage Loans that were purchased by a Purchaser and
not rejected,
pending the delivery by the Custodian of an updated Trust
Receipt pursuant to
Section [__] of the Custodial Agreement and (ii) if such
Purchaser shall
nevertheless receive any portion of the related Takeout
Proceeds, such Purchaser
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shall within one (1) Business Day pay such Takeout Proceeds to
the related
Seller in accordance with such Seller's Wire Instructions.
(e) The terms and conditions of the purchase of each Mortgage
Loan
Pool shall be as set forth in this Agreement.
Section 3. Sale of Mortgage Loans to Takeout Investor.
(a) With respect to Mortgage Loan(s) that a Purchaser has
elected to
purchase, such Purchaser may, at its option, either (i) instruct
Custodian to
deliver to Takeout Investor, in accordance with Takeout
Investor's instructions,
the Custodial File in respect of such Mortgage Loans, in the
manner and at the
time set forth in the Custodial Agreement, or (ii) provide for
the delivery of
the Custodial File through an escrow arrangement satisfactory to
such Purchaser
and Takeout Investor. The related Seller shall in accordance
with the related
Sale Agreement, deliver to Takeout Investor any and all
documents required to be
delivered pursuant to the Sale Agreement to enable Takeout
Investor to purchase
such Mortgage Loan(s) on or before the related Expiration
Date.
(b) (1) Upon receipt by the related Purchaser, prior to the
Cure
Date, of a Settlement Modification Letter, duly executed by
Takeout Investor and
the related Seller, such Purchaser may, at its election, agree
to the
postponement of the Settlement Date and such other matters as
are set forth in
the Settlement Modification Letter. If such Purchaser elects to
accept a
Settlement Modification Letter, such Purchaser shall, not later
than two (2)
Business Days or earlier if reasonably required by the Takeout
Investor or the
Seller after receipt of such Settlement Modification Letter
execute the
Settlement Modification Letter and send, via facsimile, copies
of such fully
executed Settlement Modification Letter to the related Seller
and Takeout
Investor.
(b) (2) The Seller is required to provide certain
representations and
warranties to the Takeout Investor pursuant to the Sale
Agreement as of the
Settlement Date. To the extent that the Seller has knowledge
that any such
representations and warranties are not true, Seller shall have
no obligation to
provide any such representation and warranty.
(c) (1) If a breach by Sellers of this Agreement results in
any
Mortgage Loan being a Defective Mortgage Loan at the time of the
delivery of the
related Trust Receipt to the related Purchaser, or in the event
that the first
Monthly Payment due on the Mortgage Loan following the Purchase
Date is not made
within 30 days of its Due Date (an "Early Payment Default"),
such Purchaser, at
its election, may require that such Seller, upon receipt of
notice from such
Purchaser of its exercise of such right, immediately repurchase
such Purchaser's
ownership interest in such Mortgage Loan by remitting to such
Purchaser (in
immediately available funds in accordance with Purchaser's Wire
Instructions)
the amount paid by such Purchaser for such Mortgage Loan plus
all interest at
the Pass-Through Rate on the principal amount thereof from the
related Purchase
Date to the date of such repurchase.
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<PAGE>
(c) (2) The Servicer's rights and obligations to interim service
each
Mortgage Loan as provided in this Agreement, shall terminate on
the later of the
related Settlement Date or the date which is thirty days
following the related
Purchase Date; provided that, the related Purchaser may in its
sole discretion
extend such 30 day interim servicing period by one or more
additional 30 day
periods by providing written notice to the Servicer prior to the
termination of
such interim servicing period. If an Act of Insolvency or any
other material
default hereunder by the Servicer occurs at any time, the
Servicer's rights and
obligations to service the Mortgage Loan(s), as provided in this
Agreement,
shall terminate immediately, without any notice or action by
Purchaser subject
to the rights of any Takeout Investor. Upon any such
termination, Purchaser is
hereby authorized and empowered to sell and transfer such rights
to service the
Mortgage Loan(s) for such price and on such terms and conditions
as Purchaser
shall reasonably determine subject to the rights of any Takeout
Investor, and
neither the Servicer nor the Sellers shall have any right to
attempt to sell or
transfer such rights to service. The Servicer shall perform all
acts and take
all actions so that the Mortgage Loan(s) and all files and
documents relating to
such Mortgage Loan(s) held by the Servicer, together with all
escrow amounts
relating to such Mortgage Loan(s), are delivered to Successor
Servicer. To the
extent that the approval of any Takeout Investor, Third Party
Underwriter or any
other insurer or guarantor is required for any such sale or
transfer, the
Sellers and the Servicer shall fully cooperate with Purchaser to
obtain such
approval. All amounts paid by any purchaser of such rights to
service the
Mortgage Loan(s) shall be the property of the Purchasers. Upon
exercise by
Purchasers of the remedies under this Section 3(c)(2),
Purchasers' obligation to
pay and Sellers' and Servicer's right to receive any portion of
the Completion
Fee relating to such Mortgage Loan(s) shall automatically be
canceled and become
null and void, provided that such cancellation shall in no way
relieve such
Seller or otherwise affect the obligation of such Seller to
indemnify and hold
the Purchasers harmless as specified in Section 3(e).
(d) Subject to the rights of a Takeout Investor, each Mortgage
Loan
delivered to any Purchaser hereunder shall be delivered on a
servicing released
basis free of any servicing rights in favor of the related
Seller and free of
any title, interest, lien, encumbrance or claim of any kind of
such Seller and
such Seller hereby waives its right to assert any interest,
lien, encumbrance or
claim of any kind. Subject to the rights of a Takeout Investor,
upon transfer of
such servicing rights to any Successor Servicer, the Servicer
and the related
Seller shall deliver or cause to be delivered all files and
documents relating
to each Mortgage Loan held by the Servicer or such Seller to
Successor Servicer.
The related Seller and the Servicer shall promptly take such
actions and furnish
to the related Purchaser such documents that such Purchaser
reasonably deems
necessary or appropriate to enable such Purchaser to cure any
defect in each
such Mortgage Loan or to enforce such Mortgage Loans, as
appropriate.
(e) Sellers agree to indemnify, defend and hold harmless
each
Purchaser and its assigns from and against all Losses resulting
from any breach
or failure to perform by Sellers of any representation,
warranty, covenant, term
or condition made or to be performed by Sellers under the
Program Documents. For
the avoidance of doubt, the indemnity set forth in this Section
3(e) shall not
be subject to any limit or cap.
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<PAGE>
(f) [Reserved]
(g) In addition to the indemnity provided pursuant to Section
3(e)
above, the Sellers agree to indemnify and hold each Purchaser
and its assigns
harmless from and against all Losses related to the Mortgage
Loans and the
transactions contemplated hereunder, including, without
limitation, any Losses
resulting from or relating to any breach or failure to perform
by any Takeout
Investor, any credit losses on the Mortgage Loans, uninsured
hazard losses,
Shortfalls and delinquency (other than the one month Early
Payment Default),
provided that, the aggregate liability of the Sellers pursuant
to this Section
3(g) for any such Losses (not taking into account any Losses
under Section 3(e)
resulting from or relating to any breach or failure to perform
by Sellers of any
representation, warranty, covenant, term or condition made or to
be performed by
Sellers or any repurchases of Defective Mortgage Loans or of any
Mortgage Loans
subject to an Early Payment Default under Section 3(c)(1) and
any Losses under
Section 19) shall not exceed 5% of the sum of the aggregate
Purchase Prices and
the Completion Fees for any Mortgage Loans in the related
Mortgage Loan Pool
sold to a particular Takeout Investor determined on a Mortgage
Loan Pool basis.
For the purposes of this Section 3(g), "Shortfall" shall mean
the excess, if
any, of (i) the Purchase Price paid by such Purchaser to Seller
plus the
Pass-Through Rate for the related Mortgage Loans, over (ii) the
actual Takeout
Proceeds (including accrued interest) paid by the particular
Takeout Investor to
the related Purchaser. No exercise by a Purchaser of its rights
under this
Section 3 shall relieve Sellers of responsibility or liability
for any breach of
the Program Documents.
(h) In addition to any rights and remedies of Purchasers
provided by
this Agreement and by law, each Purchaser shall have the right,
without prior
notice to Sellers, any such notice being expressly waived by
Sellers to the
extent permitted by applicable law, upon any amount becoming due
and payable
(and has not been paid by the Sellers as required) by Sellers
hereunder to
set-off and appropriate and apply against such amount any and
all property and
deposits (general or special, time or demand, provisional or
final), in any
currency, and any other credits, indebtedness or claims, in any
currency, in
each case whether direct or indirect, absolute or contingent,
matured or
unmatured, at any time held or owing by such Purchaser to or for
the credit or
the account of Sellers (including, without limitation, the
amount of any accrued
and unpaid Completion Fee). Each Purchaser may also set-off cash
and all other
sums or obligations owed by such Purchaser to Sellers under the
Program
Documents against all of such Seller's obligations to such
Purchaser, whether or
not such obligations are then due. The exercise of any such
right of set-off
shall be without prejudice to any Purchaser's right to recover
any deficiency.
(i) Sellers agree that, with respect to any Mortgage Loan
Pool
purchased by a Purchaser, the related Takeout Commitment shall
have an
Expiration Date which is not later than 60 calendar days after
the related
Purchase Date. Sellers further agree that any additional Takeout
Commitment that
they obtain with respect to such Mortgage Loan Pool if the
initial Takeout
Investor does not perform under such Takeout Commitment shall
have an Expiration
Date which is not later than 75 calendar days after the related
Purchase Date.
Sellers have not and will not take any action, or fail
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<PAGE>
to act where action is required, the result of which would be to
impair any
Trade Assignment.
(j) Sellers shall notify and provide the related Purchaser
with
copies of any changes made to the Sale Agreement or any other
correspondent
agreements between Sellers and any Takeout Investor within two
(2) Business Days
of such change.
(k) In no event shall the Purchasers be liable to the
Takeout
Investor for any pair-off, breakage or other similar fees in the
event that a
Takeout Investor asserts any such right under any Takeout
Commitment.
Section 4. Completion Fee.
(a) With respect to each Mortgage Loan Pool that a Purchaser
elects
to purchase hereunder, such Purchaser shall pay to the related
Seller the
Completion Fee subject to the terms of this Agreement. The
Completion Fee shall
be payable by such Purchaser as provided in subsection (c)
below.
(b) If a Mortgage Loan Pool is purchased by
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